author: GAIDRY, J.

text:
    GUEST HOUSE OF SLIDELL v. Sam HILLS, individually and on behalf of Leroy Gilley.
    No. 2010 CA 1949.
    Court of Appeal of Louisiana, First Circuit.
    Aug. 17, 2011.

      Ann Marie LeBlanc, New Orleans, LA, for Plaintiff/Appellant CommCare Corporation d/b/a Guest House of Slidell.
    Gary J. Williams, Slidell, LA, for Defendant/Appellee Sam Hills, Individually and on Behalf of Leroy Gilley.
    Before CARTER, C.J., GAIDRY AND WELCH, JJ.
   GAIDRY, J.

|2In this suit on open account, a nursing home appeals a trial court judgment dismissing its petition based upon a finding that the defendant’s signature on an admission agreement did not obligate him to pay the costs of his stepfather’s care. We affirm.

FACTS AND PROCEDURAL HISTORY

Guest House of Slidell, L.L.C. (“Guest House”) filed a petition on open account on December 4, 2009 against Sam Hills, individually and on behalf of Leroy Gilley, seeking to recover $9,159.95 for services rendered on behalf of Mr. Hills’s stepfather, Mr. Gilley. Guest House alleged that the open account was created by an Admission Agreement signed by Mr. Hills on September 5, 2008, which obligated Mr. Hills to pay basic daily room charges for Mr. Gilley. Mr. Hills denied any obligation for the charges incurred by Mr. Gilley.

After a bench trial, the court rendered judgment in favor of Mr. Hills. The pivotal issue, in the court’s opinion, was whether Mr. Hills, by signing the Admission Agreement in the space designated for the “Responsible Party,” individually and on behalf of the resident in his capacity as “Authorized Agent and/or health care surrogate,” obligated himself to pay the costs of care provided to Mr. Gilley, even though Mr. Gilley was listed as the responsible party on the first page of the Admission Agreement. Considering the evidence, the court found that the contract was clear that Mr. Gilley was the responsible party and that Mr. Hills’s signature as a responsible party was only given in his capacity as “Authorized Agent and/or health care surrogate.” Furthermore, in regard to Guest House’s claims against Mr. Hills on behalf of Mr. Gilley, the court noted that no evidence |swas presented to prove that Mr. Hills was Mr. Gilley’s succession representative so as to make him the proper party defendant under La. C.C.P. art. 734. Therefore, the court concluded that Mr. Hills had no legal obligation under the contract and rendered judgment in favor of Mr. Hills, dismissing Guest House’s claims against him with prejudice.

Guest House has appealed this judgment, arguing that the trial court’s interpretation of the contract was erroneous.

DISCUSSION

We are obligated to give legal effect to contracts according to the true intent of the parties. See La. C.C. art. 2045. The true intent of the parties to a contract is to be determined by the words of the contract when they are clear, explicit, and lead to no absurd consequences. See La. C.C. art. 2046. When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties’ intent. Id. In such cases, the meaning and intent of the parties to the written contract must be sought within the four corners of the instrument and cannot be explained or contradicted by parol evidence. See La. C.C. art. 1848. Contracts, subject to interpretation from the instrument’s four corners without the necessity of extrinsic evidence, are to be interpreted as a matter of law, and the use of extrinsic evidence is proper only where a contract is ambiguous after an examination of the four corners of the agreement. In cases in which the contract is ambiguous, the agreement shall be construed according to the intent of the parties. Intent is an issue of fact which is to be inferred from all of the surrounding circumstances. A doubtful provision must be determined in light of the nature of the contract, equity, usages, the conduct of the parties before and after the formation of the contract, and other contracts of a like nature between the same parties. |4La. C.C. art. 2058. Interpretation of ambiguous terms in a contract requires construction against the contract’s drafter. La. C.C. art. 2056.

Thus, our first inquiry is whether, looking within the four corners of the Admission Agreement, the contract is ambiguous. Whether a contract is ambiguous or not is a question of law and subject to the de novo standard of review on appeal. Where factual findings are pertinent to the interpretation of a contract, those factual findings are not to be disturbed absent manifest error. Amitech U.S.A., Ltd. v. Nottingham Const. Co., 09-2048, pp. 18-19 (La.App. 1 Cir. 10/29/10), 57 So.3d 1043, 1058, writs denied, 11-0866, 11-0953 (La.6/17/11), 63 So.3d 1036, 1043. A contract is considered ambiguous on the issue of intent when it lacks a provision bearing on the issue, its written terms are susceptible to more than one interpretation, there is uncertainty as to its provisions, or the parties’ intent cannot be ascertained from the language used. Campbell v. Melton, 01-2578, p. 6 (La.5/14/02), 817 So.2d 69, 75.

The heading on the first page of the Admission Agreement provides that it is an agreement “By and Between” the following parties:

Provider: ComCare of LA

Facility (d/b/a): Guest House of Slidell

Resident: Leroy Gilley

Responsible Party: Leroy Gilley

Relationship/Representative Capacity:Self

The final page of the Admission Agreement contains lines for the signatures of the authorized facility representative, the resident, the responsible party, additional co-responsible parties, and witnesses. There is an “X” and a mark (presumably made by Mr. Gilley) on the line for the resident’s signature. Under the signature line for the responsible party is the following language:

|sSignature of Responsible Party in His/ Her Individual Capacity and on behalf of the Resident in the following capacity (Circle one or more:
(1) Authorized Agent and/or health care surrogate;
(2) Curator;
(3) Power of Attorney)

Mr. Hills signed on the line for the responsible party, and under his signature, “(1) Authorized Agent and/or health care surrogate” was circled. There were no co-responsible parties listed.

Although the trial court found the contract to be clear and unambiguous, in our de novo review, viewing the agreement as a whole, we find that the intent of the contract as to the identity of the responsible party and the capacity in which Sam Hills signed was unclear. Mr. Hills is not listed as a party to the agreement on the first page; however, Mr. Hills signed the contract as the responsible party both in his individual capacity and on behalf of the resident. Guest House alleges that Mr. Hills was the intended responsible party, and Mr. Gilley’s name was only listed on the first page because the form was pre-printed before Guest House was aware that Mr. Hills would be the responsible party. However, no explanation was given as to why the forms were not reprinted when it was discovered that Mr. Hills would be the responsible party. Mr. Hills alleges that the intent was never for him to be the responsible party, and he only signed the contract on Mr. Gilley’s behalf, despite the fact that the language below his signature states that he is signing individually and on behalf of the resident. Because the trial court erroneously concluded that the contract was clear and unambiguous, it was restricted to looking within the four corners of the agreement and could not consider any extrinsic evidence in interpreting the contract. Having concluded as we did that the contract’s terms are |r,ambiguous, we must now conduct a de novo review of the facts, looking to the surrounding circumstances to determine the parties’ intent.

Mr. Hills testified at trial that Mr. Gilley was his step-father, and his mother had been deceased for several years, but he had allowed Mr. Gilley to continue living in his house after her death because he felt it was the right thing to do. Mr. Hills had a power of attorney which gave him the authority to draft, endorse, and accept checks for Mr. Gilley. Mr. Gilley was initially admitted to the hospital after Mr. Hills found him face down on the floor of his bedroom after not seeing him for several days. Mr. Hills testified that he was asked in the emergency room to sign Mr. Gilley in, but he declined to do so because he said he was not responsible for Mr. Gilley. When Mr. Gilley was able to be discharged from the hospital, he was delirious and unable to care for himself, and Mr. Hills was unable to care for him, so Mr. Gilley was transferred from the hospital to Guest House. Mr. Hills testified that the hospital transported Mr. Gilley to Guest House and that he received a call from Guest House requesting that he sign in Mr. Gilley. Mr. Hills did not go sign Mr. Gilley in at Guest House right away, but after repeated calls from Guest House and being told that if someone did not come to sign Mr. Gilley in, he would be evicted, he went to Guest House. He testified that he told Sue McIntyre, the Guest House employee who presented him with the Admission Agreement, that he was not responsible for Mr. Gilley and could not take on any financial responsibility for him, and he was told that the signing was just a formality required for Mr. Gilley to be admitted. Mr. Hills refused to sign the Medicare Part A and Part B Rate Structure forms | presented to him because he was told that he would incur financial responsibility for the portion not paid by Medicare by signing. However, since he believed the Admission Agreement made Mr. Gilley the responsible party, he signed on behalf of Mr. Gilley over “Authorized Agent and/or health care surrogate,” which was circled for him. When private payments were required to be made to Guest House during Mr. Gilley’s stay, Mr. Hills filled out the checks drawn on Mr. Gilley’s account and Mr. Gilley signed them.

Nancy Ann Baker, Guest House’s accounts manager, testified that it was normally her job to handle admission agreements, but she was not there at the time Mr. Hills signed the agreement because it was after business hours. Although she signed the agreement as a witness, she was not there when Mr. Hills signed the agreement and did not go over the agreement with him. She did speak to Mr. Hills within the first two or three weeks of Mr. Gilley’s stay regarding payment for services once Medicare stopped paying for services for Mr. Gilley. She explained to Mr. Hills that once Mr. Gilley was discharged from skilled nursing care, Medicare would stop paying, and Mr. Gilley would have to either apply for Medicaid or become a private pay patient. She asked Mr. Hills whether he could afford private pay, and he responded that he could not, so she told him he would have to complete a Medicaid application for Mr. Gilley. Mr. Hills did not want to fill out the Medicaid application for Mr. Gilley, but after Mr. Gilley was unable to supply the information and told Ms. Baker to talk to Mr. Hills, Mr. Hills eventually supplied Guest House with the requested information regarding Mr. Gilley’s finances.

Gwen Sue McIntyre, who works for Guest House in medical records, testified that she completed the admissions packet with Mr. Hills because |sNancy Baker was out at the time. She prepared the admissions packet, including the Admission Agreement, prior to meeting Mr. Gilley or Mr. Hills. Mr. Hills had no input as to the content of the agreement. She testified that Mr. Hills had to sign the Admission Agreement for Mr. Gilley because Mr. Gil-ley was unable to sign for himself. She read the Admission Agreement aloud to Mr. Hills, and he asked no questions before signing the agreement. She testified that Mr. Hills circled “Authorized Agent and/or health care surrogate” under his signature.

Guest House argues on appeal that the latest expression of the parties evidences their true intent, and since Mr. Gilley’s name was pre-printed on the Admission Agreement as the responsible party prior to his admission, but Mr. Hills’s signature on the line for the responsible party on the signature page was added at the time of admission, the court should recognize the latter as evidencing the parties’ true intent. We disagree. At the time Mr. Hills signed the agreement, the capacity in which he was signing, “Authorized Agent and/or health care surrogate,” was also selected. Thus, the parties’ “latest expression” was ambiguous and not dispositive of the issue of whether Mr. Hills was signing only in his capacity as Mr. Gilley’s agent or in both his individual and representative capacity.

Considering the entirety of the circumstances surrounding the signing of the Admission Agreement, and viewing the ambiguous language in light of the nature of the contract, equity, usages, the conduct of the parties before and after the formation of the contract, and other contracts of a like nature between the same parties, we find that the parties to the contract intended for Mr. Gilley, not Mr. Hills, to be the responsible party. Guest House’s arguments on appeal are without merit.

laDECREE

For the reasons set forth above, the judgment of the trial court dismissing Guest House’s claims against Sam Hills is affirmed. Costs of this appeal are assessed to Guest House.

AFFIRMED.

      . The petition also sought interest, attorney’s fees, and costs.

      . When an error of law skews the trial court’s finding of a material issue of fact and causes it to pretermit other issues, the appellate court is required, if it can, to render judgment on the record by applying the correct law and determining the essential material facts de novo. Evans v. Lungrin, 97-0541, 97-0577, p. 6 (La.2/6/98), 708 So.2d 731, 735.


source: Caselaw Access Project

license: Public Domain

text:
    TERREBONNE CONCRETE, LLC v. CEC ENTERPRISES, LLC.
    Nos. 2011 CA 0072, 2011 CA 0073, 2011 CA 0074, 2011 CA 0075, 2011 CA 0076, 2011 CA 0077, 2011 CA 0078, 2011 CA 0079.
    Court of Appeal of Louisiana, First Circuit.
    Aug. 17, 2011.

      Mark D. Plaisance, Baker, LA, Mark M. Lazarre, Jr., Baton Rouge, LA, for Appellant Terri Matthews.
    Mark M. Lazarre, Jr., Baton Rouge, LA, for Appellee Terri Matthews, Inc.
    Barry P. Vice, Houma, LA, for Appel-lees Terrebonne Concrete, LLC and Morrison Terrebonne Lumber Center, LLC.
    Stanwood R. Duval, C. Berwick Duval, II, Houma, LA, for Appellee CEC Enterprises, LLC.
    Alexander M. Crighton, III, Houma, LA, for Appellees RH Paint Contracting, Inc., Rob Hamilton Construction, Inc. and Lee’s A/C & Electric, LLC.
    Before CARTER, C.J., GAIDRY and WELCH, JJ.
   GAIDRY, J.

l-jThe corporate president of a construction contractor appeals a judgment rendered in favor of his company’s customer and against him personally based upon his alleged fraud in delaying payment to subcontractors after receiving progress payments from the customer. For the following reasons, we reverse the judgment against the appellant.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

These consolidated actions arise from a contract of January 18, 2007, between the appellee, CEC Enterprises, L.L.C. (CEC), and Terri Matthews, Inc. (TMI), a construction contractor, for the construction of a restaurant building for CEC in Hou-ma, Louisiana. The appellant, Terri Matthews, is the president and a substantial shareholder of TMI, an Oklahoma-based corporation licensed to do business in Louisiana. At the time of the execution of the contract, Mr. Matthews owned 35.1% of the TMI’s corporate stock; his wife, Carolyn Matthews, owned 34.9%; Ron Mittel-stedt, TMI’s vice-president of operations, owned 20%; and Jason Elkins, its senior project manager, owned 10%.

TMI was the lower of two bidders for the construction contract. Its original bid was for the fixed amount of $901,471.00. The contract was a standard AIA (American Institute of Architects) form agreement between an owner and a contractor. It provided that for the stated amount, TMI would substantially complete the work no later than 115 days from the date of commencement established in a “notice to proceed.” During the course of the project, regular periodic progress payments would be made to TMI after application to the supervising architect, Carl P. Blum, and certification of |4payment by him. The project manual, forming part of the contract documents, required TMI to “promptly pay each [subcontractor, upon receipt of payment by the [o]wner,” an appropriate amount from the progress payments, based upon each subcontractor’s portion of the work done up to that time.

The contract further provided that TMI and its surety would be liable for liquidated damages of $500.00 per day for each day of delay in substantial completion and that TMI would receive bonus payments of $500.00 per day for each day for which substantial completion was completed in advance of the scheduled date. Clint Col-gin, CEC’s owner, was designated as the project owner’s representative and executed the contract on CEC’s behalf. Carl Blum was listed in the contract as the supervising architect for CEC. Ron Mit-telstedt was designated as the contractor’s representative in the contract, and Jason Elkins executed the contract on behalf of TMI.

The supervising architect sent TMI the “notice to proceed” on February 5, 2007, with an effective date of February 7, 2007. The corresponding completion date was June 2, 2007. TMI contracted with various subcontractors and material suppliers for the project. Mr. Matthews, as TMI’s president, initially was not actively involved in the daily operations of the project and did not sign any of the subcontracts, either in a representative or personal capacity.

Because TMI’s low bid was higher than CEC’s construction budget, the parties negotiated a change order reducing the amount of the contract by $123,601.00 to $777,870.00. TMI was represented by Mr. Mittelstedt in those negotiations. The change order was effective on February 8, 2007, the date it was signed by Mr. Elkins on behalf of TMI. Work commenced, and |fiCEC made an initial progress payment to TMI in the net amount of $92,673.00 on March 15, 2007. On April 25, 2007, a second progress payment in the net amount of $209,989.80 was made.

In March 2007, Mr. Mittelstedt left TMI’s employment to start his own competitive business, having recruited 50-70% of TMI’s employees and acquiring 60-70% of TMI’s customer base. That circumstance and the status of other projects undertaken by TMI disrupted TMI’s financial situation and liquidity and forced Mr. Matthews to assume a more active role in corporate management and operations.

In late April 2007, CEC began to receive complaints of nonpayment from various subcontractors and material suppliers. Upon learning of TMI’s failure to pay subcontractors and suppliers following the progress payments, Mr. Blum, the supervising architect, contacted representatives of TMI to discuss the situation. The parties mutually agreed that in order to facilitate the completion of the stalled project, CEC would pay various subcontractors and suppliers directly in lieu of making further progress payments to TMI. The project was eventually completed some 240 days after its original scheduled date of substantial completion.

Terrebonne Concrete, L.L.C., a supplier of ready-mix concrete for the project, filed suit against CEC on April 25, 2008, for an open account and recognition of its materi-alman’s privilege on the property. Six other civil actions were instituted against CEC and TMI by various subcontractors and suppliers involved in the project, resulting in liens being recorded against the property. CEC also eventually filed suit against TMI and Mr. Matthews for damages based upon breach of contract, including liquidated damages, and based upon their alleged fraud. All of the actions were consolidated for trial.

|fiThe trial of the consolidated actions was conducted on January 26, 27, and 28, 2010. At the conclusion of the trial, the trial court issued its ruling and oral reasons for judgment. In addition to rendering judgment in favor of the various subcontractors and material suppliers, the trial court rendered a separate judgment in the action filed by CEC against TMI and Mr. Matthews, finding both defendants liable to CEC. The trial court’s judgment in that regard was signed on March 1, 2010, holding TMI liable to CEC for (1) $120,000.00 in liquidated damages for construction delay, per the terms of the contract; (2) $50,000.00 in statutory civil penalties for failure to apply progress payments to settle the claims of material suppliers and laborers, baséd upon the provisions of La. R.S. 9:4814; (3) $60.00 for the cost of recordation of the certificate of substantial completion; (4) $25,000.00 for attorney fees; (5) $24,000.00 for the cost of settlement with one subcontractor, who assigned its rights against TMI to CEC; (6) judgment for indemnity for all of the cross-claims and third-party demands asserted by CEC in the other consolidated actions; and (7) all costs and legal interest. The court also rendered judgment in favor of CEC and against Mr. Matthews for the sum of $100,000.00, based upon “a finding of fraud on the part of Terri Matthews as shareholder of Terri Matthews, Inc.”

Mr. Matthews appeals the judgment award rendered against him personally.

ASSIGNMENTS OF ERROR

Mr. Matthews assigns the following error by the trial court:

Because the evidence does not demonstrate that Terri Matthews misrepresented the corporation’s financial condition to CEC, the trial court erred in finding that Matthews committed fraud.

Additionally, because CEC failed to demonstrate that Matthews commingled his personal funds with that of TMI, the trial court erred in piercing the corporate veil.

DISCUSSION

A corporation, as a juridical person, is separate and distinct from its members or shareholders. See La. C.C. art. 24 and Riggins v. Dixie Shoring Co., Inc., 590 So.2d 1164, 1167 (La.1991). A shareholder of a corporation generally cannot be held liable personally for any debt or liability of the corporation. See La. R.S. 12:93(B). Under our law, a single person may form a Corporation. See La. R.S. 12:21. Accordingly, the fact that one person owns all or a majority of the stock of a corporation does not in itself make that person liable for corporate debts. Riggins, 590 So.2d at 1168. Generally, unless the directors or officers of a corporation purport to bind themselves individually, they do not incur personal liability for corporate debts. Id. at 1168-69.

There are limited exceptions to the rule of nonliability of shareholders for the debts of a corporation. Louisiana courts have allowed the piercing of the corporate veil under only two exceptional circumstances: (1) where the shareholders acting through the corporation practice fraud and deceit on a third party; and (2) the alter ego doctrine, where the shareholders have failed to conduct the business on a corporate footing, disregarding the corporate entity to such an extent that they and it become indistinguishable, thus in effect making the corporation simply their alter ego. McDonough Marine Serv. v. Doucet, 95-2087, pp. 5-6 (La.App. 1st Cir.6/28/96), 694 So.2d 305, 308-09.

In its petition, CEC alleged that Mr. Matthews was “the sole or main shareholder of TMI,” and that “TMI is the alter ego of Terri Matthews” (and vice versa). It alleged that TMI’s “performance under the contract, its | sunworkmanIike manner [sic], its failure to pay subcontractors,” and other actions constituted fraud on its part and that of Mr. Matthews. It further alleged that “Terri Matthews used the funds received from CEC per the progress payments for its [sic ] personal use and for other projects, and it [sic] failed to pay the subcontractors as per the terms of the contract.” According to the petition, such action “constitutes fraud and a comingling [sic] of funds, thereby allowing CEC to pierce the corporate veil of TMI and go after its shareholder, Terri Matthews.”

Despite the allegations of CEC’s petition, there was no testimony or other evidence at trial that Mr. Matthews diverted finances of the corporation for his personal use, commingled corporate assets or funds with his own, or misapplied or misdirected payments from CEC for his own benefit, or that he directed any other officer or employee of the corporation to do so. In its brief on appeal, CEC concedes that the judgment against Mr. Matthews is not predicated upon application of the alter ego doctrine for piercing the corporate veil, and that “it is perfectly clear that CEC was relying on fraud in order to hold [Mr.] Matthews personally liable” at trial. It is likewise clear from a reading of the trial court’s judgment and its oral reasons that there was no finding that Mr. Matthews individually, as opposed to TMI as contractor, violated the penalty provisions of La. R.S. 9:4814. 1 flRather, the judgment against him in his individual capacity was expressly predicated upon “a finding of fraud on [his] part ... as shareholder of [TMI],” presumably under the authority of La. R.S. 12:95.

Fraud is defined in our civil code as “a misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss or inconvenience to the other.” La. C.C. art. 1958. Fraud may also result from silence or inaction. Id. There are three basic elements to an action for fraud: (1) a misrepresentation, suppression, or omission of true information; (2) the intent to obtain an unjust advantage or to cause damage or inconvenience to the other party; and (3) the resulting error must relate to a circumstance substantially influencing the other party’s contractual consent. Shelton v. Standard/700 Associates, 01-0587, p. 5 (La.10/16/01), 798 So.2d 60, 64. See La. C.C. arts. 1958, 1955.

In order to find fraud from silence or suppression of the truth, there must exist a duty to speak or disclose information. Greene v. Gulf Coast Bank, 593 So.2d 630, 632 (La.1992); Boncosky Services, Inc. v. Lampo, 98-2239, p. - (La.App. 1st Cir.11/5/99), 751 So.2d 278, 287, writ denied, 00-0322 (La.3/24/00), 758 So.2d 798. And while fraud may indeed result from a party’s silence or inaction, mere silence or inaction without fraudulent intent does not constitute fraud. Fraudulent intent, or the intent to deceive, is a necessary and inherent element of fraud. See Whitehead v. Am. 10Coachworks, Inc., 02-0027, p. 6 (La.App. 1st Cir.12/20/02), 837 So.2d 678, 682. Fraud cannot be predicated upon mistake or negligence, no matter how gross. Id.

CEC claims that a “special relationship existed between CEC and TMI and Matthews” by virtue of TMI’s contractual and statutory obligation to pay its subcontractors and suppliers and that Mr. Matthews personally owed it a fiduciary duty to disclose TMI’s precarious cash-flow condition. Based upon the trial testimony of Mr. Colgin and Mr. Blum that prior knowledge of such a financial problem would have “affected” the decision to retain TMI as contractor, and upon Mr. Matthews’s position as president of TMI and purported status as its “ultimate decision maker,” CEC contends that Mr. Matthews is personally liable for fraud under La. R.S. 12:95.

Generally, the existence of a fiduciary duty and the extent of that duty depend upon the facts and circumstances of the case and the relationship of the parties. Basically, for a fiduciary duty to exist, there must be a fiduciary relationship between the parties. Scheffler v. Adams & Reese, LLP, 06-1774, p. 6 (La.2/22/07), 950 So.2d 641, 647. The defining characteristic of a fiduciary relationship is the special relationship of confidence or trust imposed by one in another who undertakes to act primarily for the benefit of the principal in a particular endeavor. Id., 06-1774 at p. 7, 950 So.2d at 648. See Black’s Law Dictionary 658 (8th ed.2004). A fiduciary cannot further his own interests and enjoy the fruits of an advantage taken of such a relationship and must make a full disclosure of all material facts surrounding the transaction that might affect the decision of his principal. See Plaquemines Parish Comm’n Council v. Delta Dev. Co., Inc., 502 So.2d 1034, 1040 (La.1987).

_]jjWhether a legal duty is owed is a question of law. Smith v. Roussel, 00-1028, p. 6 (La.App. 1st Cir.6/22/01), 809 So.2d 159, 165. Corporate officers and directors owe a fiduciary duty to their corporation and its shareholders. La. R.S. 12:91(A) and 12:226(A). They do not, however, owe such a duty to persons or entities that contract with the corporation. McDonough Marine Serv., 95-2087 at pp. 11-12, 694 So.2d at 312; Dutton & Vaughan, Inc. v. Spurney, 600 So.2d 693, 697 (La.App. 4th Cir.), writ denied, 601 So.2d 663 (La.1992). Mr. Matthews, therefore, as president and shareholder of TMI, owed no fiduciary duty to CEC by reason of the construction contract and its obligations. See Dutton & Vaughan, supra. All contracts must be performed in good faith, and the conduct of both parties to a contract is governed by the standard of good faith. La. C.C. arts. 1759, 1983. This principle alone, however, does not serve to elevate a contractual relationship to a fiduciary relationship between the parties.

The existence of fraud is a question of fact. Whitehead, 02-0027 at p. 6, 837 So.2d at 682. Any circumstances constituting fraud must be alleged “with particularity.” La. C.C.P. art. 856. With regard to the standard of proof of fraud, La. C.C. art. 1957 provides that fraud need only be proven by a preponderance of the evidence, and that such proof also “may be established by circumstantial evidence.” Circumstantial evidence, including highly suspicious facts and circumstances surrounding a transaction, may be considered in determining whether a fraud has been committed. Williamson v. Haynes Best Western of Alexandria, 95-1725, p. 85 (La.App. 4th Cir.1/29/97), 688 So.2d 1201, 1239, writ denied, 97-1145 (La.6/20/97), 695 So.2d 1355.

Mr. Colgin, CEC’s owner, testified at trial that no representative of TMI ever advised him that TMI was experiencing a “cash flow problem,” 112and if he had been aware of such a problem, it would have “affected [his] decision to enter into a construction contract with [TMI].” Under cross-examination, however, Mr. Colgin confirmed that over the course of their discussions to resolve the construction delays and nonpayment of subcontractors, Mr. Matthews expressed his intention that TMI would finish the project it had undertaken and that in fact TMI did complete the construction of the restaurant. CEC introduced at trial extensive e-mail correspondence between the parties and numerous internal e-mails of TMI relating to the problems with the project, documenting TMI’s financial dilemma and difficulty meeting the construction schedule. However, CEC has not identified any “smoking gun” or convincing evidence of fraud on Mr. Matthews’s part, such as suspicious or unexplained corporate transactions bene-fitting him personally, intentional underca-pitalization on his part, or other hallmarks of fraud.

Mr. Matthews testified that TMI had been in existence since at least 1990 and was still in business as of the time of trial. Upon learning of the financial crisis facing the corporation, Mr. Matthews and his wife, as majority shareholders, undertook to recapitalize the corporation from their personal resources by selling property and mortgaging their home, eventually investing more than $300,000.00 in TMI. He attributed the delay in completing construction and in paying the subcontractors and suppliers to the project being underbid by approximately $200,000.00 by Mr. Mittelstedt, TMI’s former vice-president; the change order reducing the contract price; and other administrative and financial difficulties unrelated to the project at issue. On cross-examination, Mr. Matthews explained that TMI did not segregate the progress payments received from CEC in its operating checking account and conceded that meeting TMI’s payroll obligations to its 11semployees was initially given preference over timely payment of the subcontractors and material suppliers on the project at issue. At the conclusion of the project, TMI had paid the net sum of $105,961.80 in excess of the payments made by CEC.

The trial court explained its finding of fraud on the part of Mr. Matthews as follows:

[The] [c]ourt finds that based on the testimony ... with respect to ... those claims that were filed with those four or five lawsuits, it is apparent that as a result [sic ] of what happened, there was inadequate supervision....
Mr. Matthews is a primary shareholder in this corporation, and he is basically the person in charge.... Basically he was in charge, and what is very clear, and it’s not disputed, that there were two progress payments that were made, and that those moneys were not immediately paid to the [subcontractors....
[The] [c]ourt is of the opinion that there is some fraud because — and some personal liability because I don’t believe Mr. Matthews can sit here by silence or inaction and say — and with respect to his corporation say, well, somebody else was handling it, I don’t know what’s going on. That’s all his responsibility. And once he became aware of the problem, ...; Mr. Matthews came down to Houma, Louisiana.

(Emphasis added.)

After reciting those reasons for finding Mr. Matthews personally liable, the trial court remarked: “And I think it says a lot in this case that he’s tried to hold this together, that he tried to finish the project....” Thus, in its oral reasons, the trial court commended Mr. Matthews for his efforts toward ultimately fulfilling his company’s obligations under the contract while at the same time finding that he personally committed fraud. By way of contrast, the trial court in McDonough Marine Service found no fraudulent intent where “the evidence established that the shareholders were concerned about the mounting debts, but were determined to work harder to meet their | ufinancial obligations.” McDonough Marine Serv., 95-2087 at p. 11, 694 So.2d at 311.

In its reasons, the trial court described the judgment against Mr. Matthews as a “limited amount” of “some personal liability,” based upon “some fraud” involving the “silence and inaction” of Mr. Matthews and the delay in payment to subcontractors. The trial court’s reasons do not specify the time and factual context of Mr. Matthews’s “silence and inaction” or how those factors amounted to “a misrepresentation or suppression of the truth.” In its appellate brief, CEC emphasizes that Mr. Matthews did not affirmatively inform CEC of TMI’s “cash-flow problem” prior to or at the time that the parties entered into the contract. In doing so, however, CEC fails to identify the basis for any legal duty on Mr. Matthews’s part to do so in the context of a typical, arm’s-length commercial construction contract. As previously noted, Mr. Matthews owed no fiduciary duty to CEC simply by virtue of his position as TMI’s president and status as one of its primary shareholders. While no TMI representative volunteered its internal financial information to CEC, conversely there was no evidence that CEC requested or sought such information prior to its bid being accepted and the contract being signed. The self-serving testimony of Mr. Colgin and Mr. Blum regarding the supposed relevance of that information to CEC must necessarily be viewed in light of the latter circumstance.

11BIt is well settled that fraud cannot be predicated on unfulfilled promises or statements as to future events, and statements promissory in their nature and relating to future actions do not constitute actionable fraud. Bass v. Coupel, 93-1270, pp. 11-12 (La.App. 1st Cir.6/23/95), 671 So.2d 344, 351, writ denied, 95-3094 (La.3/15/96), 669 So.2d 426. Thus, TMI’s later breach of its contractual obligation to timely pay its subcontractors and material suppliers from the progress payments made by CEC cannot serve to make the contract negotiations and TMI’s execution and performance of the contract fraudulent in nature.

The trial court’s finding of liability on the part of Mr. Matthews was obviously based primarily, if not exclusively, upon his status as TMI’s president, “the person in charge” of “his” corporation, rather than upon any legal duty owed by him personally to CEC or upon any actual evidence of fraudulent intent on his part. Corporate officers and directors cannot be held personally liable to third persons for negligence, maladministration of corporate affairs, or omission of duty for acts done on behalf of the corporation, especially in a commercial context, such as that of this case. See Korson v. Independence Mall I, Ltd., 595 So.2d 1174, 1178-79 (La.App. 5th Cir.1992). Unless a corporate officer, director, or agent owes a personal duty toward a third person, greater than a general administrative responsibility, he cannot be held personally liable to that person for actions taken on behalf of the corporation. See Manning v. United Med. Corp. of New Orleans, 04-0035, pp. 6-7 (La.App. 4th Cir.4/20/05), 902 So.2d 406, 411, writ denied, 05-1313 (La.12/9/05), 916 So.2d 1063. And if the corporate officer, director, or agent delegated his general responsibility with due care to some subordinate or subordinates, he is not personally liable for the negligent performance of that responsibility. Id.

hfiCEC also emphasizes the testimony of the architect, Mr. Blum, to the effect that when he met with Mr. Matthews to discuss TMI’s failure to pay its subcontractors, Mr. Matthews “[held] himself out as a person who [was] ultimately responsible.” That testimony, standing alone and without further explanation, plainly falls short of proof of a personal guarantee or binding assumption of personal liability for TMI’s corporate obligations. The mere fact that the chief executive officer of a corporation acknowledges general administrative responsibility for the overall operation of the corporation, or personally stands behind its good name in an effort to see that its obligations are met, hardly constitutes a basis for disregarding the corporation’s status as a separate entity and imposing personal liability upon him. Such a result would effectively defeat the fundamental public policy behind legal recognition of corporate existence.

We further note that the amount of the award, $100,000.00, is unexplained by the trial court and bears no discernible relation to the amount of liquidated damages awarded CEC under the contract or to any of the other awards made in the judgment. Moreover, the judgment does not identify Mr. Matthews’s liability in that regard as either joint or solidary with that of TMI for any of the previously-stated awards. Rather, the judgment simply seems to award a separate, additional monetary amount against Mr. Matthews for “fraud.”

A reviewing court must do more than simply review the record for some evidence which supports or controverts the trial court’s finding. The reviewing court must review the record in its entirety to determine whether the trial court’s finding was clearly wrong or manifestly erroneous. Stobart v. State ex rel. Dep’t of Transp. & Dev., 617 So.2d 880, 882 (La.1993). A reviewing court cannot shirk its duty of appellate review of fact by simply 117deferring to a trial court’s factual determinations because its reasons for judgment are couched in terms of a credibility call. Rogers v. City of Baton Rouge, 04-1001, p. 9 (La.App. 1st Cir.6/29/05), 916 So.2d 1099, 1104, writ denied, 05-2022 (La.2/3/06), 922 So.2d 1187. At some point, even a bare transcript may be so deficient in terms of quality of evidence that the trial court’s error is manifest, even if some credibility determinations were necessarily made. Id. Such is the case here.

In summary, after a careful review of all of the evidence presented at trial, the conclusion is inescapable that even circumstantial evidence of any fraud on Mr. Matthews’s individual part is singularly lacking. There is no evidence of any breach of duty by affirmative misrepresentation or knowing concealment of information on the part of Mr. Matthews and no evidence of any intent on his part to secure personal benefit to the detriment of CEC. See, e.g., Carter v. State ex rel. Dep’t of Transp. & Dev., 45,506, pp. 8-9 (La.App. 2nd Cir.8/11/10), 46 So.3d 787, 792. In short, there is no competent evidentiary basis of fraud to support the judgment against Mr. Matthews individually. The trial court’s finding in that regard is manifestly erroneous. The judgment of the trial court is reversed in part insofar as it holds Mr. Matthews personally liable to the appellee, CEC Enterprises, L.L.C. All costs of this appeal are assessed to the appellee, CEC Enterprises, L.L.C.

REVERSED IN PART.

      . At the time of trial, TMI had three shareholders: Terri Matthews, Carolyn Matthews, and Jason Elkins.

      . TMI has not appealed the judgment against it in favor of CEC, nor any other judgment against it in any of the other consolidated actions.

      . Louisiana Revised Statutes 9:4814(A) provides, in pertinent part, that "[n]o contractor ..., or agent of a contractor ..., who has received money on account of a contract for the construction, erection, or repair of a building, structure, or other improvement, ... shall knowingly fail to apply the money received as necessary to settle claims to sellers of movables or laborers due for the construction or under the contract.” The statute provides for civil penalties of $500.00 to $1,000.00 for each $1,000.00 in "misapplied funds,” where the amount misapplied exceeds $1,000.00. La. R.S. 9:4814(C). However, it is clear that the right to seek recovery of civil penalties, unpaid claims, and attorney fees under the statute is limited to "[a]ny seller of movables or laborer whose claims have not been settled,” and does not exist in favor of the owner of the building or property. See La. R.S. 9:4814(A). CEC did not even allege entitlement to civil penalties in its petition. Although the statute was briefly mentioned in its pretrial memorandum, CEC first claimed relief under La. 9:4814 in its closing argument at trial. Thus, the award in favor of CEC under the statute appears to have been in error. But as the validity of that award is not challenged on appeal, we mention this point only insofar as it bears upon the nature of the award against Mr. Matthews personally-

      . Louisiana Revised Statutes 12:95 provides:
      Nothing in this Chapter shall be construed as in derogation of any rights which any person may by law have against a promoter, subscriber, shareholder, director or officer, or the corporation, because of any fraud practiced upon him by any of such persons or the corporation, or in derogation of any right which the corporation may have because of any fraud practiced upon it by any of these persons.

      . In the "Instructions to Bidders” document forming part of the project manual, under the section entitled "BIDDERS [sz'c] QUALIFICATIONS,” it was specified only that all bidders must be licensed under Louisiana law and that "[a]ny [b]idder may be required to furnish satisfactory evidence to the Owner that he and his proposed subcontractors have sufficient means and experience in the type of work called for to assure completion of the Contract in a satisfactory manner." There was no requirement that each bidder provide detailed financial information as a condition of submitting a bid, nor any evidence that CEC requested that such information be furnished. The circumstances that the contract was secured by a competitive bid process and that TMI was required to provide a performance bond from a surety in favor of CEC also call into question CEC’s claimed detrimental reliance on TMI’s financial condition.


author: HUGHES, J.

text:
    GRADY CRAWFORD CONSTRUCTION, INC. v. CITY OF BATON ROUGE and the Parish of East Baton Rouge.
    No. 2011 CA 0377.
    Court of Appeal of Louisiana, First Circuit.
    Aug. 17, 2011.

      Mary Roper, Frank Gremillion, Ashley Beck, Baton Rouge, LA, for Defendants/Appellants City of Baton Rouge and the Parish of East Baton Rouge.
    R. Gray Sexton, Todd Hebert, Baton Rouge, LA, for Plaintiff/Appellee Grady Crawford Construction, Inc.
    Casey Faucon, G. Trippe Hawthorne, Baton Rouge, LA, for Intervenor/Appellee RMD Holdings, Ltd.
    Before PARRO, GUIDRY, and HUGHES, JJ.
   HUGHES, J.

RThis is an appeal of a judgment that granted a request for preliminary injunc-tive relief, permanent injunctive relief, declaratory relief, and mandamus in favor of plaintiff/appellee, Grady Crawford Construction, Inc. (Crawford), ordering that defendants/appellants, the City of Baton Rouge and the Parish of East Baton Rouge (collectively, Baton Rouge) award the contract at issue to Crawford. RMD Holdings, Ltd. (RMD), intervenor/appel-lant, and Baton Rouge appeal the judgment. For the reasons that follow, we affirm.

FACTS AND PROCEDURAL HISTORY

On June 18, 2010 Baton Rouge first published a “Notice to Contractors” soliciting bids for Project Number 09-PS-BD-0037, known as “Standby Generator Installations for Sewer Lift Stations.” The notice to contractors stated that “for bidding, Contractors must hold an active license issued by the Louisiana State Licensing Board for Contractors in the classification of ‘Municipal and Public Works Construction’.” (Emphasis added.) Bids were to be submitted prior to 2:00 p.m. on July 29, 2010. RMD and Crawford submitted bids for the project. RMD was the lowest bidder but was not approved for the “Municipal and Public Works Construction” classification until sometime on the day of the bid opening, during a meeting of the Louisiana State Licensing Board for Contractors (the Licensing Board.)

Nevertheless, on August 11, 2010 the Baton Rouge Metropolitan Council (Metro Council) voted to award the contract to RMD. Crawford filed suit for a temporary restraining order and injunctive relief, seeking to enjoin Baton Rouge |3from awarding the project to RMD, and for a declaratory judgment and mandamus, seeking to declare Crawford the lowest, “responsive bidder” and to be awarded the project. Crawford alleged that RMD was not a “responsive bidder” because at the time that it submitted its bid it did not hold an active license with a “Municipal and Public Works Construction” classification. Following a hearing, the trial court rendered judgment in favor of Crawford. RMD and Baton Rouge appeal.

RMD, in its assignments of error, alleges that the trial court erred: in conducting a de novo review of an agency decision as opposed to applying the arbitrary and capricious standard of review; in placing the burden of proof on Baton Rouge, the defendant, and RMD, the intervenor, instead of Crawford; in admitting a digital recording of the Licensing Board’s meeting of July 29, 2010 for the purpose of establishing the time of the approval of RMD’s license classification; and in finding that Crawford supported its claims by a preponderance of the evidence.

Baton Rouge also alleges that the trial court erred: in issuing a permanent injunction where the rights to that injunction had not been proved by a preponderance of the evidence; in failing to give deference to the Metro Council’s determination that RMD’s bid was in compliance with the bid requirements; and in substituting its own judgment for the “good faith reasonable” judgment of the Metro Council.

|4LAW and analysis

The primary issue to be resolved in this appeal is whether RMD was a “responsive bidder,” given the fact that it was not approved for the “Municipal and Public Works Construction” classification on its general contractor’s license when its bid was submitted.

I. Evidentiary Errors

RMD alleges that the trial court erred in admitting the audio recording of the meeting of the Licensing Board for the purpose of establishing the time that RMD’s application for an additional classification to its license was approved. We address alleged evidentiary errors first on appeal and note that the trial court is granted broad discretion in its evidentiary rulings and its determinations will not be disturbed on appeal absent a clear abuse of that discretion. Wright v. Bennett, 2004-1944 (La.App. 1st Cir.9/28/05), 924 So.2d 178, 182-83, citing Turner v. Ostrowe, 2001-1935 (La.App. 1 Cir. 9/27/02), 828 So.2d 1212, 1216, writ denied, 2002-2940 (La.2/7/03), 836 So.2d 107.

We emphasize that it is clear from the transcript of the trial and from RMD’s brief that RMD’s objection was not to the admissibility of the audio recording as a recording of the meeting, but only as to its admissibility as a time-keeping device. Under LSA-C.E. art. 803(6), “[a] memorandum, report, record, or data compilation, in any form, ... made at or near the time by, or from information transmitted by, a person with knowledge, if made and kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make and to keep the memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness, unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness” are not excluded by the hearsay rule and are admissible in court. | BAt the trial of the matter, RMD called Ms. Kris Fitch to testify. She stated that, among other duties, she is the custodian of records for the Licensing Board and that she personally attended the meeting on July 29, 2010. She stated that it was the regular business practice of the Licensing Board to record the hearings. She further testified with certainty that the meeting began at 9:30 a.m., the recording was started at that time, and the recording ran “straight through” the meeting continuously from start to finish. She explained that the audio is first recorded onto a server and then a CD recording is made for the “official document.”

We find no clear abuse of discretion by the trial court in admitting the audio recording into evidence. In regard to what weight the trial court gave to its ability to evidence the length of the meeting, we conclude that issue to be a fact question for the trier-of-fact and therefore subject to the manifest error standard of review. Because we find that a reasonable basis exists for the inference that RMD’s additional license classification was not awarded until after 2:00 p.m., based on the recording, we will not disturb that finding. This assignment of error lacks merit.

II. Standard of Review

The basic statutory law governing this case is contained in LSA-R.S. 38:2211, et seq., Louisiana’s Public Bid Law, which provides that public work projects exceeding the sum of $150,000 be advertised for bid and that the contract be awarded to the “lowest responsible bidder.” See LSA-R.S. 38:2212(A)(l)(a) and (d). The Public Bid Law is a prohibitory law founded on public policy and the legislature has specifically prescribed the conditions upon which it will permit public work to be done on its behalf or on behalf of its political subdivisions. Broadmoor, L.L.C. v. Ernest N. Mortal New Orleans Exhibition Hall Authority, 2004-0211 (La.3/18/04), 867 So.2d 651.

“It is well settled under Louisiana law that the judicial branch may not ordinarily enjoin a municipal body from acting under the guise of its legislative 16powers.” La. Associated Gen. Contr., Inc. v. Calcasieu Parish School Bd., 586 So.2d 1354, 1359 (La.1991). However, where the threatened action of a municipal body is in direct violation of a prohibitory law, a court of equity may enjoin the threatened action. La. Associated Gen. Contr., Inc., 586 So.2d at 1359. A political entity has no authority to take any action which is inconsistent with the Public Bid Law. La. Associated Gen. Contr., Inc., 586 So.2d at 1362.

Louisiana Revised Statutes 38:2212 A(l)(b)(i), contained within the Public Bid Law, states “[t]he provisions and requirement of this Section, those stated in the advertisement for bids, and those required on the bid form shall not be waived by any entity.” In a discussion of an earlier version of LSA-R.S. 38:2212 A(l)(b), the Louisiana Supreme Court has recognized that:

As it stands now, the Authority [agency] cannot waive any requirements contained in its bid requirements. The language of LSA-R.S. 38:2212(A)(l)(b) is clear and unambiguous: when a public entity elects to place certain requirements in its advertisements for bids and on its bid forms, that entity is bound by those requirements and may not choose to waive them at a later date.

Broadmoor, 867 So.2d at 657.

The then Chief Justice Calogero concurred and pointed out that “[t]here is no level playing field for the bidders on public projects unless all of them are required to comply with the bid documents.” Broadmoor, 867 So.2d at 664. Justice Weimer dissented but agreed with the majority “to the extent that the majority opinion correctly recognizes the public bid law’s clear and unambiguous prohibition against the waiver of bid requirements.” Broadmoor, 867 So.2d at 666-67.

Therefore, if it is concluded that the language of the bid advertisement (the “Notice to Contractors”) required that, at the time of the submission of its bid, the bidder must have already held an active license with the proper classification, the 17entity had no authority to waive that requirement and in doing so, acted in excess of its statutory authority and outside of its discretionary authority.

III. The Classification Requirement

The “Notice to Contractors” stated that:

... bids will be received until 2:00 p.m. Local Time, THURSDAY, JULY 22, 2010, ... No bids will be received after 2:00 p.m. on the same day and date [July 22, 2010].
[A]fter the bid closing time all electronic bids will be downloaded and publicly read aloud along with all paper bids received, if any, in Room 312 of the Municipal Building immediately after the 2:00 p.m. bid closing.
All Contractors bidding on this work shall comply with all provisions of the State Licensing Law for Contractors, R.S. 37:2150-2163, as amended, for all public contracts. It shall also be the responsibility of the General Contractor to assure that all subcontractors comply with this law. If required for bidding, Contractors must hold an active license issued by the Louisiana State Licensing Board for Contractors in the classification of “Municipal and Public Works Construction” and must show their license number on the face of the bid envelope and the Uniform Public Works Bid Form.

On July 16, 2010 the Baton Rouge Department of Public Works, Sewer Engineering Division, issued an “Addendum No. 1” to all prospective bidders. The addendum stated:

Acting in accordance with Louisiana Revised Statutes 38:2212, (C)(2)(a), the bid opening date is postponed by seven (7) calendar days. Bids will be opened at 2:00 P.M. Thursday, July 29, 2010 in
Room 312 of the Municipal Building, in lieu of at 2:00 P.M. on July 22.2010 in Room 312 of the Municipal Building.

|sThe “Notice to Contractors” requires that bidding contractors comply with all provisions of the “State Licensing Law for Contractors, R.S. 37:2150-2168.” We find the following provisions of LSA-R.S. 37:2153 applicable to this case:

A. The board shall have the power to make by-laws, rules and regulations for the proper administration of this Chapter; to employ such administrative assistants as are necessary; and to fix their compensation. The board is hereby vested with the authority requisite and necessary to carry out the intent of the provisions of this Chapter.
B. Any bylaws or rules or regulations enacted by the Board shall be adopted and promulgated pursuant to the provisions of R.S. 49:951 et seq.

Pursuant to that power, the board promulgated the “Professional and Occupational Standards for Contractors,” found in the Louisiana Administrative Code, Title 46, Part XXIX. Rule 1103(A) states that:

All licensed contractors bidding in the amount of $50,000 or more shall be required to have qualified for the classification in which they bid. (Emphasis added.)

Additionally, LSA-R.S. 37:2163 states, in pertinent part, that:

A. (1) It is the intent of this Section that only contractors who hold an active license be awarded contracts either by bid or through negotiation. All architects, engineers, and awarding authorities shall place in their bid specifications the requirement that a contractor shall certify that he holds an active license under the provisions of this Chapter and show his license number on the bid envelope. In the case of an electronic bid proposal, a contractor may submit an authentic digital signature on the electronic bid proposal accompanied by the contractor’s license number in order to meet the requirements of this Paragraph. Except as otherwise provided herein, if the bid does not contain the contractor’s certification and show the contractor’s license number on the bid envelope, the bid shall be automatically rejected, shall be returned to the bidder marked “Rejected”, and shall not be read aloud. (Emphasis added.)

It was stipulated at the trial that the sewer project is a public work and subject to the Public Bid Law. The advertisement for bids clearly requires the contractors to comply with all provisions of the State Licensing Law for Contractors. Because the “Notice to Contractors” required that all bidding |flcontractors must hold an active license in the classification of “Municipal and Public Works Construction” and all bids must be received by 2:00 p.m., July 29, 2010, we conclude that the mere submission of an application to the Licensing Board for said classification is insufficient. Rather, we conclude that the contractor must have actually “held” the “Municipal and Public Works Construction” classification at the time its bid was submitted.

IV. Burden of Proof

We now address whether Crawford met its burden of proof to establish that RMD did not possess the requisite classification at the time its bid was submitted. At the trial of this matter, Crawford called two witnesses: Ms. Kris Fitch, the record custodian, public information officer, and confidential assistant to the executive director for the Licensing Board, and Mr. Bryan Harmon, the Deputy Director of Public Works for the Department of Public Works. Crawford also submitted the “Notice to Contractors,” along with Addendum No. 1 and the audio recording of the July 29, 2010 meeting of the Licensing Board.

Mr. Harmon testified that the sewer project was under his direct supervision and that he determined that the job required the “Municipal and Public Works Construction” classification. The following colloquy took place at trial:

Q. WOULD IT BE FAIR TO SAY THEN THAT CONTRACTORS WHO CHOSE TO BID ON THIS PARTICULAR PROJECT WERE REQUIRED TO BE LICENSED BY THE CONTRACTORS LICENSING BOARD AND WERE REQUIRED TO BE LICENSED IN THE CLASSIFICATION OF MUNICIPAL AND PUBLIC WORKS CONSTRUCTION?
A. YES, THEY WERE.
Q. AM I CORRECT THEN IN ASSUMING THAT IF A CONTRACTOR CHOSE TO SUBMIT A BID AT THE TIME OF THE BID OPENING WHO DID NOT POSSESS THE REQUISITE CLASSIFICATION AND LICENSE, THAT BID WOULD HAVE BEEN REJECTED?
A. YES.
Jj/
Q. SO IT WOULD BE FAIR TO SAY THAT BIDS HAD TO BE SUBMITTED BY PROPERLY LICENSED CONTRACTORS WITH THE CORRECT CLASSIFICATION PRIOR TO 2:00 P.M. ON JULY 29, 2010?
A. CORRECT.

The audio recording of the meeting introduced by Crawford at the trial was authenticated by Ms. Kris Fitch, the custodian of records in charge of the recording. Ms. Fitch testified that she personally attended the meeting on July 29, 2010. She testified that the meeting began promptly at 9:30 a.m. and that there were no breaks or executive sessions at that meeting that would have required an interruption of the recording. As such, she stated with certainty that the audio recording began at 9:30 a.m. and recorded continuously from the beginning of the meeting “straight through” to the end. Counsel offered the recording to the court. According to the recording, the meeting lasted five hours and 2 minutes and the approval of RMD’s license classification occurred exactly four hours and fifty-four minutes into the recording, or at 2:24 p.m.

We interpret the language in Rule 1103(A) to require that the contractor must have qualified, and the classification must have been obtained, prior to the bid opening. Pursuant to LSA-R.S. 37:2163(A)(1), the bid must contain the contractor’s certification. This language can only be interpreted to mean that the required classification has been previously obtained at the time the bid is submitted. The evidence establishes by a preponderance that these requirements were not met in this case.

Because the meeting of the Licensing Board was proceeding simultaneously with the bid opening and the evidence supports the claim that the application for the additional classification was not approved until after the bid opening, it was impossible for RMD to hold an active license with the requisite classification at the Intime its bid was submitted. Therefore, RMD’s bid was not “responsive,” was statutorily impermissible, and was required to be rejected.

CONCLUSION

For the reasons assigned herein, the judgment of the trial court is affirmed. All costs of this appeal are assessed to the intervenor, RMD Holdings, Ltd., and the defendants, the City of Baton Rouge and the Parish of East Baton Rouge, equally.

AFFIRMED.

PARRO, J., concurs.

      . After the bids were opened, in an effort to confirm RMD’s qualifications, Bryan Harmon, the Deputy Director of Public Works for the Baton Rouge Department of Public Works, checked the Licensing Board’s website regarding . RMD’s license and required classification. Because the website did not indicate that RMD possessed the proper classification, RMD was notified that its bid appeared non-responsive. However, after contacting the Licensing Board directly and learning that RMD’s license classification was approved "effective July 29, 2010,” the day the bids were opened, Mr. Harmon then determined that RMD’s bid was responsive.

      . Title 34, Part I, Section 527(B) of the Louisiana Administrative Code defines a "responsive bidder” as "a person who has submitted a bid under R.S. 39:1594 which conforms in all substantive respects to the invitation for bids including the specifications set forth in the invitation.”

      .RMD and Baton Rouge both urge that deference is owed to the discretionary decision of the Metro Council in awarding the contract to RMD. However, under the provisions of the Public Bid Law, "... any interested party may bring suit in the district court through summary proceeding to enjoin the award of a contract or to seek other appropriate injunc-tive relief to prevent the award of a contract which would be in violation of this Part, or through ordinary proceeding to seek appropriate remedy to nullify a contract entered into in violation of this Part.” LSA-R.S. 38:2220(B). The district court is thus exercising its original jurisdiction and not acting as a court of review of an administrative decision.

      . While the language of Addendum No. 1 clearly states that the date of the opening of bids was postponed by a week, the deadline for receiving bids was not specifically extended. However, it appears from the record, briefs, and arguments of counsel that all parties agree that the bid submission deadline was also postponed.

      . It was stipulated that Crawford's bid was “responsive” and was the second lowest bid. Therefore, the award of the contract to Crawford was proper.