author: WELCH, J.

text:
    Cynthia BRIDGES, Secretary of the Department of Revenue for the State of Louisiana v. The OFFSHORE DRILLING COMPANY, formerly R & B Falcon Drilling USA, Inc.
    No. 2010 CA 2214.
    Court of Appeal of Louisiana, First Circuit.
    July 18, 2011.

      Frederick Mulhearn, Antonio Ferachi, Baton Rouge, LA, for Plaintiff-Appellant Cynthia Bridges, Secretary of the Department of Revenue, State of Louisiana.
    Stephen H. Myers, Lafayette, LA, for Defendant-Appellee The Offshore Drilling Co. Formerly R & B Falcon Drilling USA, Inc.
    Before CARTER, C.J., GAIDRY and WELCH, JJ.
   WELCH, J.

[ 2Cynthia Bridges, in her capacity as the Secretary of the Department of Revenue for the State of Louisiana (“DOR”) challenges a judgment of the trial court affirming and upholding a decision of the Board of Tax Appeals (“Board”). The decision of the Board was primarily in favor of the taxpayer, The Offshore Drilling Company (“TODCO”), formerly R & B Falcon Drilling USA, Inc. (“R & B”), and essentially determined that certain sales, services or transactions during the audit period (January 1, 1997 through December 31, 1999) were- exempt or excluded from sales and use taxes. For reasons that follow, we vacate the judgment of the trial court and remand to the Board, with instructions.

I. FACTUAL AND PROCEDURAL HISTORY

R & B was a contractor for drilling oil and gas wells and operated primarily in the Gulf of Mexico in state, federal, and international waters. The DOR conducted a sales and use tax audit of a particular division of R & B (referred to as Shallow Water Offshore Operations or the Brous-sard Division) for the time period of January 1, 1997 through December 31, 1999. Based on the audit, on December 22, 2003, the DOR issued a notice of assessment to TODCO, formerly R & B, showing: taxes due in the amount of $447,864.03, interest to February 20, 2004 in the amount of $364,401.41, delinquent penalty in the amount of $109,383.02, a credit for payment in the amount $100,151.09, with the total amount of $821,497.37 due and payable. In response, on January 8, 2004, TODCO filed, with the Board, a petition for redetermination of sales and use tax assessment, claiming that La. R.S. 47:305.1(B) provided an exemption from sales and use taxes for purchases of materials or supplies operating in foreign or interstate coastwise commerce; that it operates drilling vessels that provide drilling services to | ¡¡operators in Louisiana, Texas, Mississippi, and Alabama, both in and outside of state waters; that it utilizes supplies and materials to manpower these drilling vessels; that its drilling vessels have a need for repair as they are in continuous service; that its drilling vessels are of a fifty tons displacement or better; and that its workers are provided meals while working on these drilling vessels. As such, it claimed that all meals, supplies, equipment, and repairs, including drill pipe, (which were the subject of the audit) were supplies and materials used or consumed during the operation of a vessel of fifty tons displacement while operating in interstate or foreign coastwise commerce and were exempt from tax under La. R.S. 47:302, 47:305(E) and (I), and 47:305.1. Accordingly, TODCO sought a redetermi-nation of the taxes it allegedly owed.

Before the Board, the DOR contended that the taxes due, as set forth in the assessment, were based on five categories of transactions discovered during the audit: (1) catering services, (2) additional tax due on repairs, (3) additional tax due on purchases, (4) additional tax due on assets, and (5) additional tax due on fair market value assets. Additionally, before the Board, TODCO claimed several “exceptions” to the audit. Specifically, TODCO claimed “exceptions” (with subparts) as follows: Exception 1 — Repairs—(a) equipment imported from outer-continental shelf waters into Louisiana for repair and immediately returned offshore for use in international waters, (b) repairs made in international waters, and (c) international waters — first use offshore; Exception 2— Repairs and Materials — (a)(i) repairs made in Texas and then returned to international waters, (a)(ii) repairs made in Louisiana and then returned to international waters, (a)(iii) repairs made to equipment in international waters off Louisiana and Texas, and (b) first use offshore; Exception 3— Transportation, Freight, Shipping; and Similar h Services; Exception 4 — Incorrect Invoice Amounts and Duplication of Invoices; Exception 5 — Non-Taxable Services; Exception 6 — Extraterritorial Fabrication of Rigs; Exception 7 — Pipe & Collars-Use Tax — (a) Texas pipe that stayed in Texas (extraterritorial), and (b) marshaled for export to international rigs in outer continental shelf waters off Texas; Exception 8 — Supplies for International Rigs Operating Overseas — (a) supplies for rigs in foreign commerce, and (b) supplies for export to rigs in Nigeria or South America; Exception 9 — Taxes Paid Direct on Sales/Use Tax Return; Exception 10— Credit for Taxes Paid But Not Credited; and Exception 11 — Catering.

A hearing before the Board was held on July 17, 2007. With respect to the exceptions of TODCO, the Board issued reasons for judgment and specifically found in favor of the DOR on exceptions 1(a) and 2(a)(ii) and in favor of TODCO on exceptions 1(b), 1(c), 2(a)(i), 2(a)(iii), 2(b), 3, 5, 6, 7(a), 7(b), 8(a), 8(b), and 11. With respect to exception 4, the Board determined that transactions that had already been taxed more than once due to incorrect invoice amounts or duplication of invoices were taxable only once; and concerning exceptions 9 and 10, the Board found that if TODCO could demonstrate it had already paid sales or use taxes to Louisiana (or to a vendor who had not paid the state), then no further sales or use taxes would be due and that TODCO would be given credit for such payments.

A judgment reflecting the Board’s decision was signed on January 15, 2008. The judgment specifically provided as follows: that all repair transactions (Exceptions 1(a) and 2(a)(ii)) which actually took place in Louisiana were taxable and that there be judgment against TODCO in that amount, plus interest from the date of the assessment until paid; that all repairs (Exceptions 1(b), 1(c), 2(a)(i), and 2(a)(iii)) made in international waters or in Texas were not taxable; that all sales of materials and supplies (Exception 1(c) and 2(b)) for, on, or in drilling vessels for first use offshore were not taxable; that transportation, freight and shipping 1 ¡¡services (Exception 3) were not taxable; that any transaction that had been taxed more that once due to incorrect invoice amounts or duplication of invoices (Exception 4) were taxable only once; that all services for pipe inspection, pipe cleaning, testing and certification (Exception 5) were not taxable; that all repairs and modifications to rigs (Exception 6) done out of state, offshore, in international waters or in a foreign country were not taxable; that all purchases of pipe and collars in Texas and used in international waters (Exception 7(a)) were not taxable; that property purchased or imported into Louisiana and earmarked for use offshore and first used outside of Louisiana (Exception 7(b)) were not taxable; that sales by Louisiana vendors, where the items purchased were shipped by the vendor or common carrier to a port of debarkation for further shipment to Nigeria, Africa, and South America (Exceptions 8(a) and 8(b)) were not taxable; that TODCO was to receive credit for all sales tax paid to vendors who did not forward or pay these taxes to the state (Exception 10); and that the value of all meals provided all workers living, operating, and working on drilling rigs (Exception 11) were not taxable.

On January 29, 2008, the DOR filed a petition for judicial review of the decision of the Board. In proceedings before the trial court, the DOR contended: (1) that the Board erred in determining that R & B’s sales of meals (Exception 11) were not taxable; (2) that the Board incorrectly applied La. R.S. 47:305.1 (Exceptions 1(c)); (3) that the Board incorrectly applied La. R.S. 47:305.10 (Exceptions 1(c), 2(a)(iii), 2(b), and 7(b)); (4) that the Board incorrectly applied La. R.S. 47:305(E) (Exceptions 2(a)(iii) and 7(b)); (5) that the Board erroneously made “findings of fact” concerning transactions that were not included in the audit or assessment; and (6) that the Board erred in failing to address penalties. As such, the DOR contended that the amount of the unpaid assessed taxes totaled |fi$347,712.94, with $16,406.24 relating to the sales of meals; $165,188.05 relating to taxable repairs; $47,321.08 relating to purchases of tangible personal property; $122,261.40 relating to equipment purchased out of state, tax-free and subsequently brought into Louisiana for taxable use; and a credit of $3,463.83 for payment of too much advanced sales tax.

First and foremost, in the proceedings before the trial court, the DOR conceded that transportation, freight, and shipping services (Exception 3) were not taxable and believed that those transactions had since been removed from the assessment and that fabrication of rigs in Texas, Mississippi, and Alabama that did not enter Louisiana during the audit period (Exception 6) were not taxable, and therefore, should be removed from the assessment.

However, the DOR contended that TODCO- presented several exceptions- to transactions that were not included in the final assessment. Specifically, the DOR agreed that repairs made in Texas and then returned to international waters (Exception 2(a)(i)) were not taxable and were not contained in the assessment; duplications of invoices (Exception 4) were removed from the audit and not included in the final assessment; all services for pipe inspection, pipe cleaning, testing, and certification (Exception 5) were not taxable and removed from the assessment; the purchases of pipes and collars in Texas and used in international waters (Exception 7(a)) and that did not enter Louisiana during the audit period were not taxable (although the assessment did include use taxes on the reasonable market value of pipe purchased out of state, used out of state, and then brought into Louisiana and that the Board correctly noted that those assets, if subsequently brought into Louisiana, could be subject to a use tax upon use in this state); sales by Louisiana vendors, where the items purchased were shipped by the vendor or common carrier to a port of debarkation for further shipment to Nigeria, Africa, and South America (Exceptions 8(a) and 8(b)) were not taxable and not included in |7the final audit or assessment; that the division of R & B at issue (Shallow Water Offshore Operations) was not entitled to credit for taxes paid directly on sales and use tax returns (Exception 9) because that division was not registered with Louisiana for sales taxes and did not file sales tax returns; and the issue of credit for all sales tax paid to vendors who did not forward or pay these taxes to the state (Exception 10) had been already resolved.

Following a hearing, the trial court rendered and signed a judgment on September 21, 2010 affirming and upholding the decision of the Board in its entirety. From this judgment, the DOR appeals. On appeal, the DOR raises the same assignments of error presented to the trial court, essentially challenging those portions of the Board’s decision that are adverse to it.

II. STANDARD OF REVIEW

With regard to the appropriate standard of review for those decisions issued by the Board, La. R.S. 47:1435 is instructive and provides- that reviewing courts may reverse or modify decisions of the Board, with or without remanding the case, if those decisions are not in accordance with law. R & B Falcon Drilling USA, Inc. v. Secretary, Department of Revenue, 2009-0256, p. 3 (La.App. 1st Cir.1/11/10), 31 So.3d 1083, 1085. Judicial review of a decision of the Board is rendered on the record as made up before the Board and is limited to facts on the record and questions of law. Id.; see La. R.S. 47:1434. The Board’s findings of fact should be accepted where there is substantial evidence in the record to support them and should not be set aside unless they are manifestly erroneous in view of the evidence on the entire record. R & B Falcon v. Secretary, 2009-0256 at pp. 3-4, 31 So.3d at 1085. Furthermore, if the Board has correctly applied the law and adhered to correct procedural standards, its judgment should be affirmed. R & B Falcon v. Secretary, 2009-0256 at p. 4, 31 So.3d at 1085.

]RIII. LAW AND DISCUSSION

A. Sales of Meals (Exception 11)

According to the DOR, various oil companies contracted with R & B to provide a drilling system unit, equipment, and personnel to drill on the respective oil company’s lease. Included within the contract were catering and linen services for R & B’s personnel plus two oil company representatives. However, since R & B was not able to provide every function necessary to maintain the oil drilling operation, third party personnel, who were not provided for in the contract, were necessary to perform these functions. R & B’s drilling contracts with the oil companies stipulated that the oil company would be charged a set amount for all additional meals and lodging provided to these third parties. Specifically, the drilling contract provided that three meals per day were provided for everyone on the rig, and that any meal served to non-contract personnel would be charged to the oil company at $12.00 per day per person. According to the reports and billing records provided by R & B, meals were served to non-contract personnel on a daily basis. The DOR considered this catering service as a business because, on any given day, non-contract personnel were on the rig and R & B consistently billed the oil companies for these additional meals. However, R & B did not charge tax on any additional meals charged to the oil companies and served to the third party personnel. Thus, the DOR contended that R & B was providing meals on a consistent basis, and therefore was in the business of providing catering services, such that its sales of extra meals were taxable.

R & B contended however, that the meals provided by R & B to its employees and other workers while living on the drilling vessels were supplies needed to maintain drilling operations, and as such constituted supplies and materials utilized by drilling vessels of fifty tons displacement or more, therefore, no sales or use tax could be imposed on those materials, supplies, and equipment funder La. R.S. 47:305.1(B). Furthermore, R & B contended that those transactions did not fall within those activities that could be taxed under Title 47 of the Louisiana Revised Statutes, because it did not hold itself out as being engaged in that business.

The Board found that the evidence and testimony at the hearing established that R & B purchased from caterers meals that were provided and consumed during the drilling operations by R & B’s employees, along with a small and insignificant amount for other individuals living, operating, and working on the drilling rigs. Therefore, the Board concluded that there was no sales tax due on the value of these meals and catering.

However, following the Board’s decision in this regard, this court issued its opinion in R & B Falcon v. Secretary, 2009-0256 at pp. 4-7, 31 So.3d at 1085-1087, which specifically addressed the issue of whether R & B’s sales of extra meals (by a different division of the company than the division at issue in this ease) for the benefit of its customers’ personnel were taxable under state sales and use tax provisions. This court noted that the sales of extra meals for the benefit of customer personnel were not isolated and occasional, but rather that they were made frequently, routinely, and continuously. R & B Falcon v. Secretary, 2009-0256 at p. 6, 31 So.3d at 1087. And although R & B’s primary business was not the sale of meals, this court concluded that it should be construed to be engaged in that business for purposes of levying sales taxes, and therefore, the sales of those extra meals were taxable. R & B Falcon v. Secretary, 2009-0256 at p. 7, 31 So.3d at 1087.

The Board, when it issued its decision, did not have the benefit of this court’s opinion in R & B Falcon v. Secretary, 2009-0256 at pp. 4-7, 31 So.3d at 1085-1087, although based on the reasoning set forth therein, in the case before us, R & B’s sales of extra meals may be taxable. However, in R & B Falcon v. 10Secretary, 2009-0256 at p.3 n. 3, 31 So.3d at 1085 n. 3, all of the sales of extra meals at issue and subject to the audit occurred in Louisiana inland waters. In this case, the record before us is not clear as to whether these sales of extra meals occurred in Louisiana inland waters or whether they occurred in federal or international waters (and therefore, beyond the taxing jurisdiction of Louisiana or the DOR). While the testimony offered by the DOR suggested that only meals served in Louisiana inland waters were included in the assessment, the testimony offered by TODCO established that this division of R & B operates 80-90% of the time outside of Louisiana waters in federal or international waters, and as such, 80-90% of the extra meals are served and consumed in federal or international waters. Accordingly, we are unable to determine whether the Board’s decision was in accordance with law. Therefore, we remand this issue to the Board for consideration of this court’s opinion in R & B Falcon v. Secretary, 2009-0256 at pp. 4-7, 31 So.3d at 1085-1087, and for a determination of whether the sales of extra meals during the audit period were taxable under Louisiana law.

B. Louisiana Revised Statutes 1.7:805.1 (Exceptions 1(c))

According to the DOR, R & B made numerous purchases in Louisiana during periods that its rigs were operating within the territorial waters of Louisiana, in another state, or in another country that were not for the maintenance of a component part of the rigs; however, R & B did not pay sales tax or accrue use tax on any of the purchases.

R & B claimed that the transactions involved represented purchases of materials and supplies for drilling vessels operating in foreign or interstate coastwise commerce, in that the purchases were shipped by a third-party common carrier to a port of debarkation and shipped offshore to international waters, and received by R & B on location. R & B contended that as purchases of supplies or materials for drilling vessels operating in foreign or interstate coastwise commerce, | pthey were exempt from tax under La. R.S. 47:305.1 and La. R.S. 47:305.10. The Board ruled that the purchases of materials and supplies for first use in or on drilling vessels operating in foreign or international waters were not a taxable transaction.

Thus, we first address the exemption from sales and use taxes on purchases of supplies and materials in Louisiana as provided in La. R.S. 47:305.1. At the time of R & B’s purchase of the materials (i.e., during the audit period), La. R.S. 47:305.1 provided :

A. The tax imposed by [La.] R.S. 47:302(A)(1), 321(A)(1), and 331(A)(1) shall not apply to sales of materials, equipment, and machinery which enter into and become component parts of ships, vessels, or barges, including commercial fishing vessels, drilling ships, or drilling barges, of fifty tons load displacement and over, built in Louisiana nor to the gross proceeds from the sale of such ships, vessels, or barges, when sold by the builder thereof.

B. The taxes imposed by [La.] R.S. 47:302 and [La.] R.S. 47:321 shall not apply to materials and supplies purchased by the owners or operators of ships or vessels operating exclusively in foreign or interstate coastwise commerce, where such materials and supplies are loaded upon the ship or vessel for use or consumption in the maintenance and operation thereof; nor to repair services performed upon ships or vessels operating exclusively in foreign or interstate coastwise commerce; nor to the materials and supplies used in such repairs where such materials and supplies enter into and become a component part of such ships or vessels; nor to laundry services performed for the owners or operators of such ships or vessels operating exclusively in foreign or interstate coastwise commerce, where the laundered articles are to be used in the course of the operation of such ships or vessels.

C. The exemption from the state sales tax provided in this Section shall be applicable to any sales tax levied by a local governmental subdivision or school board.

|12P. Repealed by Acts 1982, No. 56, § 4, eff. July 10,1982.

The exemption provided in La. R.S. 47:305.1(B) only applied to “ships or vessels;” it did not apply to drilling barges. See Mallard Bay Drilling, Inc. v. Kennedy, 2004-1089, pp. 21-22 (La.6/29/05), 914 So.2d 533, 548-549; R&B Falcon v. Secretary, 2009-0256 at p. 8, 31 So.3d at 1088. As the party claiming the exemption, R&B had the burden of establishing that its rigs were “ships or vessels” for purposes of La. R.S. 47:305.1. The evidence in the record only established that the particular division of R & B that was being audited operated a fleet of jack-up rigs and submersible rigs. However, the Board (nor the trial court) made a factual finding as to whether the jack-up rigs and submersible rigs of R & B were “ships or vessels” as contemplated by La. R.S. 47:305.1.

In R&B Falcon Drilling USA, Inc. v. Terrebonne Parish Sales and Use Tax Department, 2008-0843, p. 3 (La.App. 1st Cir.11/3/08), 996 So.2d 701 (unpublished opinion) this court found no manifest error in the trial court’s factual finding that R & B’s jack-up rigs were essentially barges, and did not qualify as a “ship or vessel” for purposes of La. R.S. 47:305(B). Again, the Board, when it issued its decision, did not have the benefit of this court’s opinion in R & B Falcon v. Secretary, 2009-0256 at pp. 4-7, 31 So.3d at 1085-1087. Accordingly, we remand this issue to the Board for a determination of whether R & B’s jack-up rigs and submersible rigs are “ships or vessels” for purposes of La. R.S. 47:305(B) (thereby entitling it to the exemption set forth therein) or whether the jack-up rigs and submersible rigs are essentially barges, and therefore not entitled to the exemption set forth in La. R.S. 47:305(B).

C. La. R.S. Jp7:305.10 (Exceptions 1(c), 2(a) (iii), 2(b), and 7(b))

Louisiana Revised Statutes 47:305.10 provides an exemption for purchases of tangible personal property for first use exclusively beyond the territorial limits 1 i3of Louisiana. With regard to certain transactions included in the assessment, R & B contended that many of the transactions were exempt under the provisions of La. R.S. 47:305.10. Specifically, R & B claimed that the transactions involved purchases of materials or supplies documented for use outside the United States in international waters or in the territorial waters of a foreign nation (Exception 1(c)); repairs made to equipment on the rig itself while in international waters (or extraterritorial transactions) (Exception 2(a)(iii)); purchases that were dedicated sales of materials and supplies for operating in international waters, which were shipped by the vendor or third party to R & B in international waters (Exception 2(b)); and purchases of materials, supplies, and equipment that was collected and earmarked for delivery to drilling vessels in outer-continental shelf waters (Exception 7(b)). However, the DOR contended that R & B failed to establish it had fulfilled the statutory requirements to qualify for the exemption and that R & B was not registered for sales and use tax in Louisiana.

Louisiana Revised Statutes 47:305.10 provides:

A. There shall be no sales or use tax due upon the sale at retail or use of tangible personal property, including diesel fuel, purchased within or imported into Louisiana for first use exclusively beyond the territorial limits of Louisiana as specifically provided hereinafter in this Section.
B. If the first use of tangible personal property purchased within or imported into Louisiana for first use beyond the territorial limits of the state occurs in a state which imposes a sales or use tax, the exemption provided herein shall apply only if:
(1) The purchaser is properly registered for sales and use tax purposes in the state of use and regularly reports and pays sales and use tax in such other state; and
(2) The state in which the first use occurs grants on a reciprocal basis a similar exemption on purchases within that state for use in Louisiana; and
(3) The purchaser obtains from the secretary of the Department of Revenue a certificate authorizing him to make the nontaxable purchases authorized under this Subsection; or
| u(4) The property is subject to registration as a motor boat subject to registration by the state of Louisiana and such property is not registered for use in this state.
C.If the first use of tangible personal property purchased within or imported into Louisiana occurs offshore beyond the territorial limits of any state, the exemption provided herein shall apply only if:
(1) The purchaser or importer has determined the location of the first use of the tangible personal property at the time of its purchase and has notified the vendor of that location; or
(2) The purchaser or importer has not determined the intended offshore location of first use at the time of purchase or importation, but has obtained from the secretary of the Department of Revenue an “offshore registration number” authorizing him to claim the exemption under the conditions provided in this Paragraph:
(a) Said offshore registration number shall be issued only if the purchaser or importer has shown, to the satisfaction of the secretary, that records, reports, and business practices are sufficient to permit verification that tangible personal property purchased or imported tax-free under this Subsection is, in fact, being purchased or imported for use offshore beyond the territorial limits of any state. In cases of purchases of fungible goods, including vessel fuel and lubricants, the required records shall include purchase invoices, vessel logs, fuel usage records, fuel transfer records and other reports and records that will enable the secretary to determine the amount of fungible goods consumed within Louisiana so as to be subject to the sales and use tax, and the amount of fungible goods delivered to or consumed at offshore locations beyond the territorial limits of the state, so as not to be subject to the sales and use tax. For the purpose of the Section, the term “fungible goods” means goods of which any unit is unidentifiable and is, from its nature or by mercantile custom, treated as the equivalent of any other unit and shall include crude petroleum and its refined products.
(b) The offshore registration number issued by the secretary under this Subsection may be revoked by the secretary at any time if the purchaser or importer fails to meet the conditions set herein, or if the secretary finds that the purchaser or importer is consistently using the certificate to purchase or import tax-free tangible personal property for first use in state.
(c) If the offshore registration number is revoked, all tangible personal property purchased or imported tax-free under this Paragraph and in the possession of the purchaser or importer within this state shall be deemed taxable unless otherwise exempt under the provisions of Paragraph (1) of this Subsection. If the provisions of Paragraph (1) of this Subsection are not complied with, any subsequent purchase or import of tangible personal property will be taxable, whether for instate or offshore use, until the certificate and offshore number are |! ¿reissued.
(d)Whenever there is a conflict between a purchaser or importer and the secretary as to whether an offshore registration number shall be issued, reissued, or revoked, it shall be the responsibility of the purchaser or importer to show that he meets the conditions and requirements set herein for having and retaining said certificate and offshore registration number.
(3) Except for purchases or importation of tangible personal property in accordance with Paragraphs (1) and (2) of this Subsection, any purchase or importation of property is taxable at the time of purchase or import unless otherwise exempt.
D. If tangible personal property purchased or imported tax-free under the provisions of this Section is subsequently used for any taxable purpose within the state, use tax shall be paid by the purchaser or importer as of the time of its use in this state. Storage of property purchased or imported tax-free under this Section which is ultimately used in another state will be considered a “subsequent use for a taxable purpose”.
E. If tangible personal property purchased within or imported into the state tax-free under the provisions of this Section is later returned to Louisiana for use for a taxable purpose, the property shall be subject to the Louisiana use tax as of the time it is brought into the state, subject to the credit provided in R.S. 47:303(A).
F. “Use for a taxable purpose” shall not include, for purposes of this Section, transportation beyond the territorial limits of the state; transportation back into the state; and repairing, modifying, further fabrication, and storing for first use offshore beyond the territorial limits of any state. Storage and withdrawal from storage for first use offshore beyond the territorial limits of any state is not a taxable use for purposes of this Section. Charges for repairs in Louisiana to tangible personal property for use in offshore areas are taxable, except those described in R.S. 47:305(1).
G. If fungible goods are purchased or imported tax-free for use or consumption at locations both within Louisiana and offshore beyond the territorial limits of any state, under the exemption certificate and offshore registration number provided for in this Section, only that portion of the fungible goods delivered to a location offshore beyond the territorial limits of any state and used or consumed at that location shall be exempt. For the purpose of this Section, the term “fungible goods” means goods of which any unit is unidentifiable and is, from its nature or by mercantile custom, treated as the equivalent of any other unit and shall include crude petroleum and its refined products.
H. The secretary of the Department of Revenue shall promulgate rules and regulations necessary for the implementation of this Section.
ha!. The exemptions from the state sales and use tax provided in this Section shall be applicable to any sales and use tax levied by a local political subdivision or school board.

The Board ruled that the purchases of materials and supplies for first use in or on drilling vessels operating in foreign or international waters (Exception 1(c)) were not taxable transactions, that repairs made to equipment on a rig in international waters (Exception 2(a)(iii)) were not taxable services, that the sales of materials and supplies which were delivered for first use in international waters (Exception 2(b)) were not taxable, and that property purchased or imported into Louisiana earmarked for first use outside of the territorial limits of Louisiana and first used out of state (Exception 7(b)) was not taxable.

Although R & B presented evidence at the hearing that the transactions involved the purchase of supplies and materials that were sent directly by the vendor or common carrier to the port of debarkation and shipped to international waters, with delivery being made in international waters, again the Board did not make a factual finding as to whether R & B established that it had fulfilled the statutory requirements to qualify for the exemption under La. R.S. 47:305.10. Accordingly, we are unable to determine whether the Board’s factual findings were reasonably supported by the record (or manifestly erroneous) or whether the Board’s ruling was in accordance with law. Therefore, we remand this matter to the Board for a determination of this issue.

D. La. R.S. í7:305(E) (Exceptions 2(a)(iii) and 7(b))

In this assignment of error, the DOR contends that the Board incorrectly applied La. R.S. 47:305(E), which provides:

It is not the intention of any taxing authority to levy a tax upon articles of tangible personal property imported into this state, or produced or manufactured in this state, for export; nor is it the intention of any taxing authority to levy a tax on bona fide interstate commerce; however, nothing herein shall prevent the collection of the taxes due on sales of tangible personal property into this state which are | ^promoted through the use of catalogs and other means of sales promotion and for which federal legislation or federal jurisprudence enables the enforcement of the sales tax of a taxing authority upon the conduct of such business. It is, however, the intention of the taxing authorities to levy a tax on the sale at retail, the use, the consumption, the distribution, and the storage to be used or consumed in this state, of tangible personal property after it has come to rest in this state and has become a part of the mass of property in this state. At such time as federal legislation or federal jurisprudence as to sales in interstate commerce promoted through the use of catalogs and other means of sales promotions enables the enforcement of this Chapter or any other law or local ordinance imposing a sales tax against vendors that have no other nexus with the taxing jurisdiction, the following provisions shall apply to such sales on which sales and use tax would not otherwise be collected.

TODCO claimed that purchases for repairs made to equipment on the rig itself while in international waters (Exception 2(a)(iii)) and purchases of materials, supplies, and equipment that was collected and earmarked for delivery to drilling vessels in outer-continental shelf waters (Exception 7(b)) were exempt from taxation under this provision, and that to impose taxes on those purchases would unduly burden its interstate commerce and foreign coastwise commerce. However, again, the Board only ruled that the purchases were not taxable and did not expressly rule on the applicability of La. R.S. 47:305(E) and whether the taxes sought to be imposed by DOR would unduly burden interstate commerce or foreign coastwise commerce; or whether any of the tangible personal property that was the subject of the audit had come to rest in Louisiana and became part of the common mass of property located in Louisiana during the audit period. Accordingly, we remand this matter to the Board for a determination of this issue. We also instruct the Board to consider, in its determination of this issue, the interpretation of La. R.S. 47:305(E) and the “taxable moment doctrine” as set forth in Word of Life Christian Center v. West, 2004-1484 (La.4/17/06), 936 So.2d 1226; see also R & B Falcon v. Terrebonne, 2008-0843 at pp. 3-4, 996 So.2d 701.

E. The Board’s “findings of fact” concerning transactions not included in the audit or assessment

|18In this assignment of error, the DOR challenges the Board’s reasons for judgment contending that its ruling simply contained “equivocal statements rather than definitive rulings on factual issues” and that the Board issued rulings on matters that were not contained in the final audit or assessment.

We have reviewed the Board’s reasons for judgment and the judgment, and as we have already noted herein, find that they failed to adequately address all of the factual issues raised during the hearing before it. Therefore, we have remanded this matter to the Board for the determination of such issues. To the extent that the Board’s decision included “rulings” on matters that were not before it or not contained in the final audit, we are unclear as to what remedy the DOR seeks from this court in this regard. Therefore, we find no merit to this assignment of error.

F. Penalties

In the DOR’s final assignment of error, it challenges the Board’s failure to address delinquent penalties and interest in accordance with La. R.S. 47:1601 and 1602.

Louisiana Revised Statutes 47:1601 provides, in pertinent part:

A. (1) When any taxpayer fails to pay a tax, or any portion thereof, on or before the day where it is required to be paid under the provisions of this Subtitle, interest shall be added to the amount of tax due and such interest shall be computed from the statutory payment date of the tax until the tax is paid. The rate of interest shall be as provided for in Paragraph (A)(2) of this Subsection. However, in the case of a waiver of restrictions and delays as provided for in R.S. 47:1565.1, if the taxpayer pays the tax due within ten days after the notice of assessment is mailed to him, the interest shall be computed to the thirtieth day after the filing of such waiver or to the date the deficiency is paid, whichever is earlier. The interest provided for herein shall be an obligation to be collected and accounted for in the same manner as if it were a part of the tax due and can be enforced in a separate action or in the same action for collection of the tax and, unless otherwise provided for in this Title, shall not be waived or remitted.

Additionally, La. R.S. 47:1602(A) provides, in pertinent part, that:

When any taxpayer fails to make and file any return required to be made under the provisions of this Subtitle before the time that the |inreturn becomes delinquent or when any taxpayer fails to timely remit to the secretary of the Department of Revenue the total amount of tax that is due on a return which he has filed, there shall be imposed, in addition to any other penalties provided, a specific penalty to be added to the tax.

We note that the Board, in its ruling and judgment, specifically addressed and awarded interest on taxes due for all repair transactions which actually took place in Louisiana (Exceptions 1(a) and 2(a)(ii)). However, we agree that the Board should have also addressed the issue of penalties and that it failed to do so. Therefore, on remand, we order the Board to address the issue of penalties in accordance with La. R.S. 47:1602; and further with regard to any transactions that it determines are taxable, to also address the issue of interest on those taxes.

CONCLUSION

For all of the above and foregoing reasons, the judgment of the trial court affirming and upholding the decision of the Board of Tax Appeals is vacated and this matter is remanded to the Board of Tax Appeals for consideration and a ruling on the issues detailed in this opinion. The assessment of all costs of this appeal are deferred until a final disposition in this matter.

JUDGEMENT VACATED; REMANDED TO THE BOARD OF TAX APPEALS.

GAIDRY, J., concurs.

CARTER, C.J., concurs.

      . Previously, on June 17, 2003, the DOR issued a notice of proposed tax due showing: taxes due in the amount of $447,864.03, interest to July 17, 2003 in the amount of $333,274.15, delinquent penalty in the amount of $109,383.02, a credit for payment in the amount $100,151.09, with the total amount of $790,370.11 due and payable.

      . Exceptions 2(a)(i), 2(a)(ii), 2(a)(iii), and 2(b) are also referred to in the record as Exceptions 2(1), 2(2), 2(3), and 2(4), respectively.

      . See La. R.S. 47:1434.

      . The Louisiana Legislature amended La. R.S. 47:305.1 in 2002 (which is after the tax period in question) to define "foreign or interstate coastwise commerce.” See current La. R.S. 47:305.1(0; 2002 La. Acts, No. 40, § 1, effective June 25, 2002; 2002 La. Acts, No. 41, § 1, effective June 25, 2002. Despite the Legislature's statement that the amendment was "interpretive,” the Louisiana Supreme Court held that subsection (C) was prospective only. Mallard Bay Drilling, Inc. v. Kennedy, 2004-1089, p. 1 (La.6/29/05), 914 So.2d 533, 537. Additionally, in 2006, the Legislature amended subsection B to include "barges” and "drilling ships.” See current La. R.S. 47:305.1(B); 2006 La. Acts, 1st Ex.Sess., No. 34, § 1, effective February 23, 2006. Again, despite the Legislature’s statement that the amendment was interpretive, in R&B Falcon Drilling USA, Inc. v. Lafourche Parish School Board, 2006-0064, p. 6 (La.App. 1st Cir.11/3/06), 950 So.2d 696, 700-701, this court held that the amendment to subsection (B) only had prospective effect.


source: Caselaw Access Project

author: SAUNDERS, Judge. GREMILLION, J.,

license: Public Domain

text:
    John GOULAS and Vernon Wilkins v. B & B OILFIELD SERVICES, INC. consolidated with John Goulas, et al. v. B & B Oilfield Services, Inc.
    Nos. 10-934, 10-1393.
    Court of Appeal of Louisiana, Third Circuit.
    Aug. 10, 2011.

      Bernard E. Boudreaux, Jr., Peter J. Butler, Jr., Richard Gary Passler, Breaz-eale, Sachse & Wilson, L.L.P., New Orleans, LA, for Defendant/Respondent, B & B Oilfield Services, Inc.
    Alan K. Breaud, Timothy Wayne Bas-den, Breaud & Meyers, Lafayette, LA, for Plaintiffs/Applicants, John Goulas Vernon Wilkins.
    Court composed of JOHN D. SAUNDERS, BILLY HOWARD EZELL, JAMES DAVID PAINTER, JAMES T. GENOVESE, and SHANNON J. GREMILLION, Judges.
   SAUNDERS, Judge.

11 This is a case where two employees filed an unpaid wage claim against their employer under La.R.S. 23:631 and La. R.S. 23:632. The employer filed an exception of unauthorized use of summary proceedings based on the assertion that both employees’ claims for unpaid wages were novated, one by written agreement, the other by oral agreement.

The trial court found that both employees entered into novations with their employer, granted the employer’s exception, and dismissed the employees’ claims for unpaid wages. The employees appeal. We affirm in part, reverse in part, and render.

FACTS AND PROCEDURAL HISTORY:

Johnny Goulas (Goulas) and Vernon Wilkins (Wilkins) were salesmen at B & B Oilfield Services, Inc. (B & B,) and each earned a $10,000.00 monthly salary plus commissions. For all sales generated by Goulas and/or Wilkins, they earned a joint, four percent (4%) commission that was equally divided between them.

B & B had a regular procedure of deferred payment of commissions where all commissions earned quarterly were totaled, then dispersed in equal installments two quarters later. According to the parties, this deferment allowed for the money generated from the sales to be collected prior to the commissions being dispersed.

Goulas and Wilkins worked for B & B from January 2005 until 2009, at which time both resigned at differing points. B & B owed commissions to each Goulas and Wilkins when they resigned.

Wilkins resigned on January 5, 2009. According to B & B, Wilkins agreed to be paid his salary and benefits until March 31, 2009, in lieu of the outstanding commissions B & B owed to him,.and Wilkins was paid as such prior to this litigation. Wilkins asserts that he remained on B & B’s staff while also performing his new job [2at a different company and that his pay from January through March of 2009 simply reflected his agreed-upon salary for the work he was actually doing for B & B during that time.

Goulas resigned on July 6, 2009. Goulas and B & B entered into a post-resignation agreement whereby B & B would pay Gou-las his commissions in six, equal, monthly installments rather than pay the entire amount of his outstanding commissions collectively. B & B paid the first installment, then transferred a building to Gou-las in lieu of the second installment. B & B failed to make any other payments to Goulas.

On February 4, 2010, Goulas and Wilkins filed a petition for unpaid wages, penalty wages, and attorney fees as a summary proceeding under La.R.S. 23:631 and La.R.S. 23:632, setting the matter for trial on a rule to show cause. On March 24, 2010, B & B responded by filing a dilatory exception of unauthorized use of summary proceedings.

On March 30, 2010, the parties agreed to the trial court hearing the merits of both Goulas and Wilkins’ petition and B & B’s exception simultaneously. At the hearing, the trial court heard testimony from Gou-las, Wilkins, and three former employees of B & B. On May 24, 2010, the trial court issued a judgment that granted B & B’s exception with respect to both Goulas and Wilkins. It did so based on its finding that novation extinguished B & B’s wage debts to each and substituted in the wage debts’ place a different type of debt whose recovery is not authorized to be sought via summary proceedings. The trial court’s judgment also dismissed Goulas and Wilkins’ petition. Goulas and Wilkins now appeal this May 24, 2010 judgment.

^ASSIGNMENTS OF ERROR:

Goulas and Wilkins assert five assignments of error. Therefore, we must decide whether:

1. The trial court erred in granting the exception of unauthorized use of summary proceedings and dismissing the petition for unpaid commissions (wages) and for penalty wages and attorney fees.
2. The trial court erred in ruling that John Goulas and Vernon Wilkins entered into novation contracts which extinguished the obligations of B & B Oilfield to pay commissions.
3. The trial court erred in denying the petition rather than ordering that any deficiency subject to the dilatory exception be cured through amendment.
4. The trial court erred in ruling that the filing of suit did not constitute demand for the Louisiana Wage Law, La.R.S. 23:631, et seq.
5. The trial court erred in not awarding commissions as wages, including penalty wages and attorney fees to John Goulas and Vernon Wilkins.

ASSIGNMENT OF ERROR NUMBER ONE:

Goulas and Wilkins contend in their first assignment of error that the trial court erred in granting B & B’s exception of unauthorized use of summary proceedings. We agree.

Whether the trial court was correct in granting B & B’s exception raises a question of law. Questions of law are subject to a de novo review of whether the trial court was legally correct in its finding. Guillory v. Allied Waste Indus., Inc., 10-159 (La.App. 3 Cir. 10/6/10), 47 So.3d 23.

Louisiana Code Civil Procedure Article 2592(12) authorizes the use of summary proceedings in all matters in which it is permitted. An employee is granted the right to proceed against an employer for a wage claim via summary proceeding, band commissions are “wages” under La.R.S. 23:631. See Dugas v. Aaron Rents, Inc., 02-1276 (La.App. 3 Cir. 3/5/03), 839 So.2d 1205; Brown v. Navarre Chevrolet, Inc., 610 So.2d 165 (La.App. 3 Cir.1992).

It is clear from Goulas and Wilkins’ petition that they are entitled to summary proceedings. Both alleged that they were employees of B & B and that they were owed commissions upon termination that each was not paid. Therefore, it is clear when reading La.Code Civ.P. art. 2592(12) and La.R.S. 23:631 together that the trial court erred in granting B & B’s exception. As such, we reverse the trial court in this regard.

ASSIGNMENT OF ERROR NUMBER TWO:

In their second assignment of error, Goulas and Wilkins assert that the trial court erred in ruling that a novation occurred between them and B & B, respectively, which extinguished the obligations of B & B to pay commissions. The trial court based its granting of B & B’s exception on its finding that both Goulas and Wilkins entered into novations with B & B. We have already determined that the trial court was legally incorrect in granting B & B’s exception. Therefore, this assignment of error is moot.

ASSIGNMENT OF ERROR NUMBER THREE:

Goulas and Wilkins contend that the trial court erred in denying their petitions rather than ordering that any deficiency subject to the dilatory exception of unauthorized use of a summary procedure should have been allowed to be cured through amendment. Our finding in assignment of error number one that Goulas and Wilkins’ petition can be properly adjudicated through summary proceedings pre-termits this assignment of error. ASSIGNMENT OF ERROR NUMBER FOUR:

1 r,Goulas and Wilkins, in their fourth assignment of error, contend that the trial court erred in ruling that the filing of suit did not constitute a demand for wages under La.R.S. 28:681 and La.R.S. 23:632. We need not address this assignment of error.

Our review of the trial court’s judgment and reasons for judgment indicates no finding by the trial court regarding whether proper demand was made by Goulas and Wilkins for purposes of La.R.S. 23:631 and La.R.S. 23:632. The trial court’s judgment is silent on the issue. Moreover, the trial court’s reasons for judgment only reference Goulas failing to demand commissions upon separation as evidence that it found tended to show Goulas’ intention to novate, not that Goulas failed to make proper demand of B & B for purposes of La.R.S. 23:631 and La.R.S. 23:632.

ASSIGNMENT OF ERROR NUMBER FIVE:

Finally, Goulas and Wilkins assert that the trial court erred in not awarding each commission as wages, penalty wages, and attorney fees. We find merit in this assignment.

The trial court did not address the issues raised in the assignment of error due to its erroneously granting B & B’s exception of unauthorized use of summary proceedings. However, “[t]he appellate court shall render any judgment which is just, legal, and proper upon the record on appeal.” La.Code Civ.P. art. 2164. The Louisiana Supreme Court, in Gonzales v. Xerox Corp., 254 La. 182, 320 So.2d 163, 165-66 (1975) (citations and footnote omitted), stated the following:

While the trial court remains the original forum for resolving factual and legal issues, the Louisiana Constitution expressly extends the jurisdiction of appellate courts in civil cases to the review of facts as well as law....
In addition to the constitutional authority, and consistent with it, there is a very practical consideration which encourages our appellate courts to exercise their jurisdiction to review factual findings: judicial [ (¡economy. When the entire record is before the appellate court, remand for a new trial produces delay of the final outcome and congestion of crowded dockets while adding little to the judicial determination process. Although the appellate court does not gain the benefit of personally viewing the witnesses, it does have a complete record and the constitutional authority to decide.

A full hearing on the merits of Goulas and Wilkins’ petition was held. Goulas, Wilkins, and B & B submitted exhibits and testimony regarding the facts surrounding the issues, and no party contends that there is any other evidence available that is relevant to the adjudication of the issues before us. Thus, we find that the record is complete with regard to the issues presented by Goulas and Wilkins’ petition.

Discussion of the Merits — Goulas

The facts surrounding Goulas’ petition are not in dispute. B & B admitted that it owed Goulas earned commissions when he resigned. Goulas and B & B signed a post-resignation agreement wherein B & B acknowledged that it owed Goulas six, equal installments of $10,127.79 to be paid monthly. B & B paid the first installment as directed by the post-resignation agreement. Goulas then accepted a building from B & B in lieu of the second installment. Thereafter, B & B paid no other installments to Goulas. B & B has candidly admitted that it owes Goulas the final four payments made under the post-resignation agreement totaling $40,511.16. B & B’s argument is that should Goulas’ action be converted to ordinary proceedings, they would be entitled to a set-off based on a suit that, according to the state of the record, is still pending against Goulas. Nevertheless, it is clear that Goulas is entitled to summary proceedings by virtue of La.R.S. 28:68KB).

17Goulas’ petition alleges that he is entitled to unpaid wages, penalty wages, and attorney fees under La.R.S. 23:631 and La.R.S. 23:632. Louisiana Revised Statutes 23:631(A)(l)(b) states:

Upon the resignation of any laborer or other employee of any kind whatever, it shall be the duty of the person employing such laborer or other employee to pay the amount then due under the terms of employment, whether the employment is by the hour, day, week, or month, on or before the next regular payday for the pay cycle during which the employee was working at the time of separation or no later than fifteen days following the date of resignation, whichever occurs first.

Louisiana Revised Statutes 23:632 states:

Any employer who fails or refuses to comply with the provisions of [La.]R.S. 23:631 shall be liable to the employee either for ninety days wages at the employee’s daily rate of pay, or else for full wages from the time the employee’s demand for payment is made until the employer shall pay or tender the amount of unpaid wages due to such employee, whichever is the lesser amount of penalty wages. Reasonable attorney fees shall be allowed the laborer or employee by the court which shall be taxed as costs to be paid by the employer, in the event a well-founded suit for any unpaid wages whatsoever be filed by the laborer or employee after three days shall have elapsed from time of making the first demand following discharge or resignation.

Commissions as Wages — Goulas:

It is clear that B & B owes Goulas wages in the form of his commissions. B & B admits that it owes Goulas the final four payments made under the post-resignation agreement totaling $40,511.16. Thus, we render judgment awarding Gou-las that amount as wages.

Penalty Wages — Goulas:

In order to be awarded penalty wages under La.R.S. 23:632, the plaintiff must “show that (1) wages were due and owing; (2) demand for payment thereof was made where the employee was customarily paid; and (3) the employer did not pay upon demand.” Hebert v. Ins. Ctr., Inc., 97-298, p. 9 (La.App. 3 Cir. 1/7/98), 706 So.2d 81007, 1013, unit denied, 98-353 (La.3/27/98), 716 So.2d 888.

Goulas has met these three criteria. B & B has admitted that Goulas’ wages or commissions are due. He has made proper demand of what B & B admittedly owes him, and B & B has not remitted these wages or commissions to Goulas.

The language of La.R.S. 23:632 seemingly is such that penalty wages are mandatory regardless of any equitable defenses presented by an employer. However, the language has been interpreted otherwise. Our supreme court, in Wyatt v. Avoyelles Parish School Board, 01-3180, 02-131, 02-259, p. 15 (La.12/4/02), 831 So.2d 906, 916-17, pronounced:

[Louisiana Revised Statutes] 23:632 is a penal statute that must be strictly construed and may yield to equitable results. Beard [v. Summit Inst. of Pulmonary Med. & Rehab., Inc.], 97-1784[,] at p. 7 [ (La.3/4/98) ], [707] So.2d [1233] at 1236 (citing Bannon v. Techeland Oil Corp., 205 La. 689, 693, 17 So.2d 921 (1944)). This court has previously stated that “a good-faith non-arbitrary defense to liability for unpaid wages, i.e., a reasonable basis for resisting liability” permits a court to decline to impose penalty wages on an employer. Beard, 707 So.2d at 1236 (citing Carriere v. Pee Wee’s Equipment Co., 364 So.2d 555, 557 (La.1978)).

Given this directive by our supreme court, we must look to whether B & B has any non-arbitrary, good-faith defense or reasonable basis for not paying Goulas his earned commissions. Louisiana courts have opined that a determination of whether an employer has an equitable defense under La.R.S. 23:631 and La.R.S. 23:632 is dependant on the facts of each case and should be recognized if greater justice will be served by the refusal to award penalty wages. Becker v. Choate, 204 So.2d 680 (La.App. 3 Cir.1967), overruled on other grounds by Carriere, 364 So.2d 555.

B & B first asserts as an equitable defense that it is entitled to a set-off with Goulas for the remaining outstanding commissions. We find this assertion lacks merit.

|9B & B has not produced any evidence of set-off other than vague testimony from Jeff Jeurgens, then chief executive officer of B & B, alluding to certain actions by Goulas. This court is aware that another matter is pending between Goulas and B & B. However, the record contains no description of what exactly that matter entails nor any evidence showing a likelihood of success by B & B in obtaining a judgment for damages against Goulas to act as a set-off to what B & B clearly owes Goulas.

This court can only consider items in the record before it. La.Code Civ.P. art. 2164. The record contains no evidence of a likely set-off between Goulas and B & B. Accordingly, given the framework from which this issue is to be adjudicated, we cannot say that the greater justice is in denying Gou-las penalty wages based on a potential set-off between he and B & B.

Next, B & B asserts that it has an equitable defense in that the post-resignation contract with Goulas evidences a good-faith belief that any claims by Goulas under La.R.S. 23:631 and La.R.S. 23:632 were satisfied via novation. We find this assertion to be without merit.

Louisiana Civil Code Article 1879 states that “[n]ovation is the extinguishment of an existing obligation by the substitution of a new one.” “The intention to extinguish the original obligation must be clear and unequivocal. Novation may not be presumed.” La.Civ.Code art. 1880.

Novation takes place when, by agreement of the parties, a new performance is substituted for that previously owed, or a new cause is substituted for that of the original obligation. If any substantial part of the original performance is still owed, there is no novation.
Novation takes place also when the parties expressly declare their intention to novate an obligation.
Mere modification of an obligation, made without intention to extinguish it, does not effect a novation. The execution of a new writing, Imthe issuance or renewal of a negotiable instrument, or the giving of new securities for the performance of an existing obligation are examples of such a modification.

La.Civ.Code art. 1881.

This court, in Placid Oil Co. v. Taylor, 325 So.2d 313, 316 (La.App. 3 Cir.1975), writ denied, 329 So.2d 455 (La.1976), stated the following:

The determining factor in deciding whether a novation has been effected is the intention of the parties. The intention to novate may be shown by the character of the transaction, and by the facts and circumstances surrounding it, as well as by the terms of the agreement itself. The burden of proof to establish novation is on the person who claims it. Antoine v. Elder Realty Company, 255 So.2d 625 (La.App. 3 Cir.1971); Midlo & Lehmann v. Katz, 195 So.2d 383 (La.App. 4 Cir.1967).

“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.” La. Civ.Code art. 2046.

The trial court found that the post-resignation agreement constituted a novation between Goulas and B & B because it indicated a clear expression by Goulas of his intent to extinguish B & B’s debt to him under his employment contract, to create a new debt between him and B & B, to distinguish between old and new debt, and to novate. We do not agree.

The post-resignation agreement between Goulas and B & B first contains an accounting of what B & B owes to Goulas under the terms of Goulas’ employment contract. Next is the following language:

I, Johnny Goulas, agree to the amount stated above of $60,766.75 as the complete and final amount of commission due from B & B Oilfield Services, Inc. I agree to (6) six monthly installments of $10,127.79 to be paid on the 29th of each month, commencing on July 29, 2009. B & B Oilfield Services, Inc. reserves the right to withhold any commission that has not been paid by any of the customers listed above. In the event of a change in control or ownership, the remaining unpaid commission | nwill immediately become due and will be paid ten (10) days later.

We find that the language of the post-resignation agreement is clear and explicit. In that agreement there is no expression by Goulas of his clear and unequivocal intent to extinguish B & B’s debt to him under his employment contract. Further, the language cited above does not contemplate creation of a new debt between Gou-las and B & B, nor does it contain an expression of Goulas’ intent to novate. The language merely modifies how Goulas is going to be paid the identical debt B & B owes to Goulas under his employment contract. That modification provides that Goulas will be paid via installments, similarly to how Goulas was paid his commissions under his employment contract.

Under the terms of the post-resignation agreement cited above, B & B still owes Goulas a “substantial part of the original performance,” thus, “there is no novation.” La.Civ.Code ait. 1881. The post-resignation agreement was “[t]he execution of a new writing ... for the performance of an existing obligation ...” Id. This constitutes an example of “[m]ere modification of an obligation, made without intention to extinguish it” and “does not effect a novation.” Id.

Accordingly, we reject B & B’s contention that this agreement evidences a good-faith belief that any claims by Goulas under La.R.S. 23:631 and La.R.S. 23:632 were satisfied via novation. B & B, a sophisticated entity, could not have reasonably believed that this agreement was a novation. Nor does this agreement absolve B & B from actually making the payments that it admittedly owes to Gou-las.

Moreover, after briefs were submitted and oral arguments were originally conducted, this court ordered all parties to file a supplemental brief on the applicability of La.Civ.Code art. 2030 and Henderson v. Kentwood Spring Water, 12Inc., 583 So.2d 1227 (La.App. 1 Cir.1991). We did so because neither party initially raised the issue addressed in Henderson, i.e., that an employer and employee cannot contract away an employer’s duties under La.R.S. 23:631 in order to avoid penalties. This court can notice such an issue under La. Civ.Cbde art. 2030, which states:

A contract is absolutely null when it violates a rule of public order, as when the object of a contract is illicit or immoral. A contract that is absolutely null may not be confirmed.
Absolute nullity may be invoked by any person or may be declared by the court on its own initiative.

In Henderson, the employer and employee signed an agreement wherein the employee consented to a delay of his final paycheck. The employer used this fact as an equitable defense. In deciding Henderson, the Louisiana First Circuit Court of Appeal stated the following:

While it is true that persons may waive personal rights that the law has established, they cannot by their contracts violate prohibitory law or derogate from law enacted for the protection of the public interest. [La.Civ.Code] art. 7. “Any act in derogation of such laws is an absolute nullity.” Id. We believe that [La.]R.S. 23:631 is such a prohibitory law. Where a statute imposes a penalty on the doing of an act without either prohibiting it or expressly declaring it illegal or void, generally an agreement founded on or for doing such penalized act is void. Fix-It-Shop v. Roy, 68 So.2d 332 (La.App.Orleans 1953); Ronaldson v. Moss Watkins, Inc., 13 La.App. 350, 127 So. 467 (La.App. 1st Cir.1930). We further find that the agreement has the direct effect of thwarting the legislative intent behind [La.]R.S. 23:631, which was enacted for the protection of the public interest. See Elliott v. General Gas Corporation, 229 La. 128, 85 So.2d 55 (La.1956). Consequently, the agreement is void as a matter of law and may not support an equitable defense under [La.]R.S. 23:631.

Henderson, 583 So.2d at 1232-33.

B & B argued that Henderson is not applicable to the case before us because the employee in Henderson signed the contract while still employed with Kentwood Spring Water, Inc., whereas Goulas and Wilkins entered into agreements with B & B |1safter their employment ended. We are not persuaded by this argument. The timing of an absolutely null contract is irrelevant. The parties cannot enter into such a contract irrespective of when it was confected.

Finally, B & B argues that Goulas and Wilkins were not in the disadvantageous situation that the employee was in Henderson because neither Goulas’ or Wilkins’ employment depended upon their entering into a novation with B & B. Again, this argument is without merit. These novation “contracts” were against public policy because they had “the direct effect of thwarting the legislative intent behind [La.]R.S. 23:681, which was enacted for the protection of the public interest.” Id. at 1233. Here, the novations that the trial court found occurred have the result of B & B shirking its responsibilities under La. R.S. 23:631.

Moreover, as to whether B & B has any leverage over either Wilkins or Goulas, Ricky James Poche, a former employee of B & B who was president of B & B at the time, testified that Goulas asked him about his commissions “a couple of days after” he resigned. Poche then stated that “after discovering that the CEO and the owner were going to pay [Goulas] his commission in full but they were going to try and pay it out in a six month period,” he told Goulas “just to go in there calm, cool[,] and collected and accept the deal.” This conversation between Poche and Goulas indicates that Goulas was concerned about his commissions and that B & B exerted some leverage over him by asking that he accept his commissions over a six-month period rather than all at once as he was entitled under La.R.S. 23:631.

Given the above, we agree with the analysis of our sister court in Henderson and find it applicable. Here, like Kentwood Spring Water, Inc.’s contract with Henderson, B & B’s contract with Goulas and agreement with Wilkins affords B & B 114the right to violate La.R.S. 23:631. As such, these post-resignation agreements are absolutely null and cannot be the basis for the trial court’s ruling that novation has transpired. Accordingly, we reverse the trial court’s finding that Goulas and Wilkins entered into novation with B & B. Any novation that may have occurred between Goulas and Wilkins and B & B is absolutely null and against public policy.

Thus, not only did the post-resignation agreement, by its clear contents, not amount to novation, it is void, as it violates public policy. As such, it cannot support an assertion of an equitable defense under La.R.S. 23:631. See Henderson, 583 So.2d 1227.

Finally, B & B contends that it has an equitable defense in that it stopped paying Goulas under the post-resignation agreement due to a good-faith reliance on advice of counsel. We find no merit in this contention.

The Louisiana First Circuit Court of Appeal has specifically rejected this assertion as an equitable defense in cases involving La.R.S. 23:632. See Magee v. Engineered Mech. Servs., Inc., 415 So.2d 277 (La.App. 1 Cir.), writ denied, 420 So.2d 455 (La.1982). Moreover, B & B’s contention that it was justified in refusing to pay Goulas the remaining payments under the post-resignation agreement based upon a good-faith reliance on advice of counsel assumes that the agreement is valid. It was not. B & B cannot plead an equitable defense based upon advice of counsel that it received months after it illegally contracted away its statutory duties under La.R.S. 23:631. Henderson, 583 So.2d 1227.

Given no equitable defense shown by B & B, we find that Goulas can recover penalty wages under La.R.S. 23:632. Gou-las earned $10,000.00 per month. Under |1sthe calculations delineated in La.R.S. 23:632, Goulas is entitled to $40,909.09. This amount is clearly less than Goulas’ full wages from demand until B & B eventually would pay him, as more than four months at $10,000.00 per month has elapsed since Goulas has made demand on B & B. Accordingly, we render judgment that B & B owes $40,909.09 to Goulas as penalty wages.

Attorney Fees — Goulas:

B & B argues in brief that it is exonerated from paying attorney fees due to Goulas to equitable defenses. We have already determined that B & B has exerted no such equitable defenses. Further, the argument raised by B & B misstates the jurisprudence interpreting La.R.S. 23:632. Unlike penalty wages, courts have consistently interpreted the award of attorney fees as mandatory under La.R.S. 23:632 if a “well-founded suit” for wages is filed regardless of equitable defenses. Co/mere, 364 So.2d at 556. A “well-founded suit” is one wherein an employee recovers unpaid wages. Jeansonne v. Schmolke, 09-1467, 09-1468, 10-437 (La.App. 4 Cir. 5/19/10), 40 So.3d 347.

Here, Goulas filed suit, and we award him unpaid wages. Thus, it is incumbent on us to award reasonable attorney fees under La.R.S. 23:632. Additionally, Goulas has requested attorney fees for work done on this appeal. “Generally, when an award for attorney’s fees is granted at the trial level, additional attorney’s fees are proper for work done on appeal. This is to keep the appellate judgment consistent with the underlying judgment.” Wilczewski v. Brookshire Grocery Store, 08-718, p. 18 (La.App. 3 Cir. 1/28/09), 2 So.3d 1214, 1226, writ denied, 09-456 (La.4/13/09), 51 16So.3d 170.

After a thorough review of the record, we find that the work done on the trial warrants an award of $10,000.00 to Goulas in attorney fees. Further, we find that he is also entitled to $5,000.00 in attorney fees for work done on this appeal. Accordingly, we render judgment awarding these amounts to Goulas.

Discussion of the Merits — Wilkins:

Unlike the situation between Goulas and B & B, the facts surrounding Wilkins’ petition are in dispute. Wilkins contends that the wages and benefits he received following his resignation from January of 2009 to March of 2009 were simply in exchange for his continued employment with B & B. However, B & B contends that the wages and benefits that Wilkins received for the three months following his resignation were payment of his commissions per an oral agreement. The trial court found as fact that Wilkins received the wages and benefits not for his employment but for payment of Wilkins’ commissions that B & B owed to him. Wilkins has appealed this finding of fact.

The applicable standard of reviewing such determinations is the well-settled manifest error or clearly wrong standard. Rosell v. ESCO, 549 So.2d 840 (La.1989). “[Wjhere two permissible views of the evidence exist, the factfinder’s choice between them cannot be manifestly erroneous or clearly wrong.” Stobart v. State, through DOTD, 617 So.2d 880, 883 (La.1993) (citing Canter v. Koehring Co., 283 So.2d 716 (La.1973)).

Here, Poche testified to the following:

Q All right. Now I would like to direct your attention to Mr. Wilkins’ departure from the defendant’s employ, all right. First of all, sir, do you recall when Mr. Wilkins left what was then know[n] as B & B’s employment?
[ 17A It was somewhere around the end of December of 2008.
Q All right. At that time did you have any discussions with him about the commissions that were due him or that had accrued for his working through December of 2008?
A I don’t remember if it was exactly that day or the day after[,] but he came to me with a plan of, in lieu of his commissions owed, for us to keep him on payroll for until the end of March. Which the reasoning behind that was for his health insurance wouldn’t kick in on a new company he was going to work for for ninety .days, so we would pay him while he was transitioning his customers to Johnny Goulas, which he stayed employed with us, and that would be in lieu of his commissions and it would also help him with the benefits as far as hospitalization, dental, for any type of medical needs that he might have during that period of ninety days.
Q Okay. So if I understand your testimony, [Wilkins] was assigned a vehicle, which was a Tahoe, by B & B, correct?
A Correct.
Q Okay. Let me just see. And for December commissions that were— for the commissions that were due him in December, it’s your testimony that he agreed to have the ownership of the Tahoe transferred to him in lieu of the December commissions; is that correct?
A Correct.
Q All right. Now what about the other commissions that were due him? ... Did that December commissions in your mind have anything to do with the extension of him staying on B & B’s payroll through March 31, 2009?
A Actually the way I understood it, the way he explained it to me was, he would take three months salary ... In lieu of his commissions he would just accept the salary while he was employed with the other ... company.

Poche’s testimony is corroborated by the testimony of another former employee 11sof B & B, Mark Comeaux. He was the chief financial officer when Wilkins resigned from B & B. The following exchanges are contained in Comeaux’s testimony:

Q Did you have any conversations with Ricky Poche concerning the terms of Mr. Wilkins’ departure from B & B?
A Yes, I did.
Q Okay. Now as a result of those conversations, did you come to an impression as to what terms B & B had with Mr. Wilkins in connection with Mr. Wilkins’ departure?
A I did.
Q And what was that impression?
A That there were commissions that were payable to him as of 12/31 — or December 31st of 2008. In lieu of those commissions he asked to be— to receive his salary going forward from January 1st of 2009 to March 31st of 2009, along with his medical benefits.
Q Now, as a result of your understanding of the terms of Mr. Wilkins’ departure from B & B’s employment, did you undertake any actions as the head accountant, or the CFO ofB&B?
A Yes, I did.
Q What did you do?
A Well, part of the responsibility is at the end of the year or at the end of any month, I had to accrue any liabilities that were due, for example, commissions payable. And because of this agreement and arrangement going forward there was absolutely no need to accrue any commissions that were due to Mr. Wilkins, so I removed those commissions from the commissions payable.

The testimony of Poche and Comeaux provide a reasonable basis for the trial court to find that Wilkins’ wages and benefits that he received for three months after his resignation constitute payment of commissions rather than wages for work performed during that timeframe. The standard of review dictates finding no error |inby the trial court in reaching this conclusion. There are “two permissible views of the evidence[,]” and the trial court’s “choice between them cannot be manifestly erroneous or clearly wrong.” Id. at 888 (citing Canter, 283 So.2d 716).

Commissions as Wages — Wilkins:

We upheld the trial court’s finding of fact that the amount B & B payed to Wilkins from January 2009 to March 2009 were payments for his commissions rather than simply wages for work Wilkins was performing at that time. Given the nullity of the oral agreement between B & B and Wilkins, B & B’s contention that these payments fully satisfied what it owed to Wilkins is incorrect. However, B & B is entitled to a set-off equal to what it paid to Wilkins from January of 2009 to March of 2009. Thus, we render judgment awarding Wilkins, as wages, his outstanding commissions minus the amount B & B paid to him from January of 2009 to March of 2009.

Penalty Wages — Wilkins:

As was the case with Goulas, in order to be awarded penalty wages under La.R.S. 28:682, Wilkins must “show that (1) wages were due and owing; (2) demand for payment thereof was made where the employee was customarily paid; and (3) the employer did not pay upon demand.” Hebert, 706 So.2d at 1013.

Wilkins has also met these three criteria. We found that Wilkins is due wages or commissions from B & B equal to his outstanding commissions minus the amount B & B paid to him from January of 2009 to March of 2009. He has made proper demand of those wages or commissions from B & B, and B & B has failed to remitted these wages or commissions. Like with Goulas above, we must look to whether B & B has an equitable defense based on the facts of Wilkins’ case, and if greater justice will |2nbe served by the refusal to award penalty wages. Becker, 204 So.2d 680.

Similar to the Goulas situation, B <& B asserts the equitable defense of novation as evidence of a good-faith belief that any claims by Wilkins under La.R.S. 23:631 and La.R.S. 23:632 were satisfied. We find that the situations differ.

In Goulas’ situation, we found that B <& B’s contention of a reasonable belief that the contract was a novation was untenable. With Wilkins, according to the well-supported factual findings of the trial court, both B & B and Wilkins actually believed that they had entered into a novation for Wilkins’ outstanding commissions.

Heeding this finding of fact, it follows that B & B was, in truth and in fact, acting in good faith and, unlike the situation in Goulas, fully complied with the admittedly invalid agreement. Thus, Wilkins has actually received benefits from that agreement, as he was continued on B & B’s health insurance policy and was paid a salary from January of 2009 to March of 2009. Wilkins will, under the judgment we render in this opinion, receive all of his outstanding commissions as wages and attorney fees for work done on the trial and appellate levels. We are also asked to award penalty wages, and we must concede that, under the general rule, a contract that is against public policy will not support an equitable defense so as to defeat an award of penalty wages. See Henderson, 588 So.2d 1227. However, the singular set of facts in Wilkins’ case convinces this court that an award of penalty wages is unwarranted. The general purpose of penalty wages is to deter conduct. B & B’s erroneous conduct with respect to Wilkins, given the well-supported findings of fact made by the trial court, was merely to mistakenly believe that it could enter into the agreement. Thereafter, B & B held up its end of the bargain. Thus, we find that greater justice will be served by the refusal to award penalty wages. Becker, 2041 ¾1 So.2d 680. Accordingly, we deny Wilkins penalty wages.

Attorney Fees — Wilkins:

B & B argues in brief that it is exonerated from paying Wilkins attorney fees due to its equitable defenses. We have already dispensed with this argument when addressing attorney fees for Goulas. It misstates the jurisprudence interpreting La.R.S. 23:632 where courts have found the award of attorney fees to be mandatory under La.R.S. 23:632 if a “well-founded suit” for wages is filed regardless of equitable defenses. Garriere, 364 So.2d at 556.

Here, Wilkins filed suit, and we award him unpaid wages. Thus, we must award reasonable attorney fees under La.R.S. 23:632. Our review of the record renders a finding that the work done on the trial level warrants an award of $10,000.00 to Wilkins in attorney fees. Further, we find that he is also entitled to $5,000.00 in attorney fees for work done on this appeal. Accordingly, we render judgment awarding these amounts to Wilkins.

CONCLUSION:

John Goulas and Vernon Wilkins raise five assignments of error. We find that the trial court erred as a matter of law in granting B & B’s exception of unauthorized use of a summary proceeding. Further, based on La.Civ.Code art. 2030 and Henderson, 583 So.2d 1227, we find that the trial court erred as a matter of law that novation occurred between either John Goulas or Vernon Wilkins and B & B Oilfield Services, Inc. Such contracts or agreements that allow B & B Oilfield Services, Inc. to thwart “the legislative intent behind [La.]R.S. 23:631, which was enacted for the protection of the public interest” are against public policy. Henderson, 583 So.2d at 1233. Accordingly, we reverse the trial court’s finding that novation occurred | ^between the parties.

We find the record before us on John Goulas and Vernon Wilkins’ petition is complete. We render judgment awarding John Goulas $40,511.16 in unpaid wages from B & B Oilfield Services, Inc. We also render judgment awarding John Goulas $40,909.09 in penalty wages due to B & B Oilfield Services, Inc.’s lack of an equitable defense.

Further, we render judgment that Vernon Wilkins is entitled to his outstanding commissions. However, those commissions are subject to a set-off in the amount that B & B paid to him in wages and benefits from January of 2009 to March of 2009. However, we find that justice dictates that we deny Vernon Wilkins’ request for penalty wages. According to the well-supported findings of fact made by the trial court, both B & B and Wilkins thought they had entered into a legal novation of Wilkins’ outstanding commissions.

Finally, after reviewing the record, we render judgment awarding each John Gou-las and Vernon Wilkins $10,000.00 in attorney fees for work done at the trial level pursuant to La.R.S. 23:632 and each $5,000.00 for work done on this appeal.

AFFIRMED IN PART, REVERSED IN PART, AND RENDERED.

EZELL, J., concurs in the result for the reasons assigned by Judge GENOVESE.

PAINTER, J., concurs in the result for the reasons assigned by Judge GENOVESE.

GENOVESE, J., concurs in the result and assigns written reasons.

GREMILLION, J., concurs in part, dissents in part, and assigns written reasons.

GENOVESE, J., concurs in the result and assigns the following reasons.

Li concur in the result of the majority opinion in this case; however, I disagree with the author of the opinion’s reliance on Henderson v. Kentwood Spring Water, Inc., 583 So.2d 1227 (La.App. 1 Cir.1991). I find the facts in Henderson render it inapplicable to the instant matter.

In Henderson, the employee was forced to sign a written policy which contained a clause waiving his rights under La.R.S. 23:631 in order to begin or retain employment. I agree with Henderson to the extent that an employer and employee cannot contract away an employer’s duties under La.R.S. 23:631 and that such a contract is in derogation of law enacted for the protection of the public interest and thereby contra bones mores. However, in the instant matter, neither Goulas nor Wilkins was forced to sign any contract requiring any waiver of any legal rights protected under La.R.S. 23:631. Consequently, the facts in Henderson are readily distinguishable from the instant matter, thereby rendering Henderson inapplicable.

GREMILLION, J.,

concurs in part, dissents in part, and assigns the following reasons.

hi dissent from the majority’s decision to award statutory penalties to John Gou-las. As the majority opinion properly points out, no penalties should be awarded when there is any non-arbitrary, good-faith defense, or reasonable basis for not paying Goulas. Here there are two non-arbitrary, good-faith reasons. First, having dramatically changed the time frame within which Goulas was to expect payment, B & B had a good-faith argument that its obligation had been novated. Certainly the trial court agreed, having expressly found not only that B & B argued for a novation in good-faith, but indeed that a novation existed.

Second, I disagree with the majority opinion that there was no evidence of any non-arbitrary, good-faith allegations of set-off. Neither Jeff Jeurgens’ testimony nor B & B’s suit against Goulas proves that an offset is actually owed. However, it does, in my view, establish a good-faith argument that Goulas’ claims should be relegated to an ordinary breach of contract proceeding which, in all likelihood, would be consolidated with B & B’s setoff lawsuit.

|aI find the appellee’s arguments regarding novation and setoff to be cogent, reasonable, fair, and offered in good-faith. Accordingly, I disagree with the majority’s decision to impose statutory penalties. In all other respects, I concur with the majority’s opinion for the reasons assigned by Judge Genovese.

      . Louisiana Revised Statutes 23:631(B) states, in pertinent part, "[t]he employee shall have the right to file an action to enforce such a wage claim and proceed pursuant to [Louisiana] Code of Civil Procedure Article 2592.” Louisiana Code Civil Procedure Article 2592(12) authorizes the use of summary proceedings in all matters in which it is permitted.

      . We get this result by first dividing Goulas' $10,000.00 monthly salary by twenty-two, the average number of work days in a month. This results in Goulas' daily wage rate. We then multiply this daily wage rate by ninety per La.R.S. 23:632.


author: BARNES, J.,

text:
    Michael STEWART, Appellant v. STATE of Mississippi, Appellee.
    No. 2010-KA-00309-COA.
    Court of Appeals of Mississippi.
    March 22, 2011.
    Benjamin Allen Súber, attorney for appellant.
    Office of the Attorney General by Laura Hogan Tedder, attorney for appellee.
    Before IRVING, P.J., BARNES and MAXWELL, JJ.
   BARNES, J.,

for the Court:

¶ 1. Michael Stewart was convicted of attempted escape by force or violence and sentenced to five years in the custody of the Mississippi Department of Corrections (MDOC) as a habitual offender without eligibility for parole or probation. After the circuit court’s denial of his motion for a judgment notwithstanding the verdict (JNOV) or, in the alternative, a new trial, Stewart now appeals the single issue of the denial of his motion for a new trial. Finding that the verdict is not against the overwhelming weight of the evidence, we affirm the circuit court’s judgment.

STATEMENT OF FACTS AND PROCEDURAL HISTORY

¶ 2. On July 12, 2008, Sarah Houston, an employee of the Coahoma County Sheriffs Department, was working a late-night shift in the main control room of the jail. Observing that a silent alarm had been triggered, she contacted the shift sergeant, Terrence Humphrey. Neither Houston nor Sergeant Humphrey could determine the origin of the alarm; so Sergeant Humphrey conducted a visual body count of the prisoners. After conducting the count and finding it satisfactory, Sergeant Humphrey left the area to book another prisoner. A second silent alarm was triggered, and Houston observed, through the jail’s surveillance cameras, two men walking along the roof. She notified Sergeant Humphrey and another deputy, who proceeded to investigate.

¶ 3. Otis Taylor, a local police officer, responded to the jail’s call for assistance regarding the escapees. Arriving at the jail, he noticed two inmates climbing the fence located around the jail. He ordered them to halt and drew his gun. Upon Officer Taylor’s order, one escapee fell over and outside of the fence; the other escapee, Stewart, fell to the ground on the inside of the fence. When Sergeant Humphrey arrived at the scene, he noted that Stewart was lying facedown beside the fence.

¶ 4. Mario Magsby, an investigator with the Coahoma County’s Sheriffs Department, arrived at the jail at approximately 3:00 a.m. to conduct a search of the crime scene. He concluded that Stewart and the other inmate had escaped through a pipe-chase door and the air-conditioner pipes that led to the roof of the building. The pipe-chase doors, which are located in between the prisoners’ cells, house plumbing and mechanical equipment. Investigator Magsby later testified that this method of escape had been used by other inmates in the past. He also discovered that there was damage to the adjacent air-conditioning unit located on the roof of the “B pod” building where Stewart was housed.

¶ 5. On May 25, 2009, a Coahoma County grand jury indicted Stewart of attempting to escape by force or violence under Mississippi Code Annotated section 97-9-49(l)(a) (Rev.2006). Stewart was further charged as a habitual offender as he had three prior drug-offense convictions. After a one-day jury trial on January 28, 2010, Stewart was convicted and given the maximum sentence of five years in the custody of the MDOC as a habitual offender, with the sentence ordered to run consecutively to the sentence he was currently serving. Stewart filed a motion for a JNOV or, in the alternative, a new trial, which the circuit court denied. After reviewing Stewart’s timely appeal, which only addresses the denial of his motion for new trial, we affirm the judgment of the circuit court.

Whether the circuit court erred in denying Stewart’s motion for a new trial as the verdict is against the overwhelming weight of the evidence.

¶ 6. Stewart claims that the overwhelming weight of the evidence did not support the guilty verdict. A guilty verdict will not be disturbed upon appeal “unless we find that the verdict ‘is so contrary to the overwhelming weight of the evidence that to allow it to stand would sanction an unconscionable injustice.’ ” Tate v. State, 20 So.3d 623, 644 (¶57) (Miss.2009) (citing Bush v. State, 895 So.2d 836, 844 (¶ 18) (Miss.2005)). “A reversal is warranted only if the trial court abused its discretion in denying a motion for new trial.” Pruitt v. State, 28 So.3d 585, 588 (¶ 11) (Miss.2010) (quoting Ivy v. State, 949 So.2d 748, 753 (¶ 21) (Miss.2007)).

¶ 7. Mississippi Code Annotated section 97-9^49(l)(a) states that: .

Whoever escapes or attempts by force or violence to escape from any jail in which he is confined ... shall, upon conviction, if the confinement or custody is by virtue of an arrest on a charge of felony, or conviction of a felony, be punished by imprisonment in the penitentiary not exceeding five (5) years to commence at the expiration of his former sentence^]

(Emphasis added). Stewart contends that there was no evidence of “force” presented at trial; therefore, his conviction was not supported by the evidence.

¶ 8. In Herrington v. State, 911 So.2d 545 (Miss.Ct.App.2005), this Court examined a case with similar circumstances. Kenneth Herrington was being held in custody at the Lauderdale County Detention Facility, awaiting trial on felony charges, when he attempted to escape using “an existing hole in the chain-link enclosure to gain access to the roof of the detention facility.” Id. at 547 (¶ 1). Herrington, like Stewart, was charged and convicted under section 97-9-49(1) and also claimed that was no evidence of force to support his conviction of attempted escape. This Court rejected Herrington’s argument, finding that the opening in the fence “was not intended as an exit” and “[t]he photographs ' of the hole established that the chain[] link roof was pulled, pried, or twisted from the wire which held it in place.” Id. at 548 (¶ 11). Therefore, the record supported the finding of “force” in Herrington’s attempted escape.

¶ 9. As in Herrington, the pipe-chase door and air-conditioning unit located on the roof were not intended for access or exit. Investigator Magsby testified that someone had tampered with the air-conditioning unit on the roof above where Stewart’s cell was located. The photographs of the unit that were entered into evidence corroborated this testimony, showing that a door was off the unit and that the filter and insulation from the pipes had been ripped and torn. There was also a clean-looking, white pair of boxer shorts lying near the unit. When questioned about the photographs, Investigator Magsby replied as follows:

Q. If you looked inside that opening [of the air-conditioning unit], would this (indicating) be in there someplace?
A. Yes. If you go — if you enter the unit and go down, you can go through the pipe-chase door and go into B pod.
Q. Could a person fit through this opening we just — just saw and go through all this from up here (indicating) all the way down?
A. Yes.
Q. To the pipe-chase door?
A. Yes.

In her testimony, Houston also stated that the roof “was about the only place [prisoners] usually get out.”

¶ 10. Investigator Magsby also testified that, at a later date, Stewart claimed that Sergeant Humphreys had helped Stewart and the other prisoner to escape by unlocking doors to the exercise yard. Stewart told Investigator Magsby that he was not trying to escape but merely trying to prove a point. What “point” Stewart was trying to make, however, was not clear. We find that the evidence and testimony presented at trial sufficiently refutes Stewart’s contention. Investigator Magsby noted at trial that the only way to escape by that method was either to climb over two fences or have a key to open the gate to gain access. Houston also testified that no outside doors had been opened, a fact she could determine from her position in the control room. When testifying at the trial, Sergeant Humphreys denied helping the prisoners and denied giving them permission to leave their cells. As this Court recently observed, “it is the function of the jury to weigh the evidence, evaluate witness credibility, and determine which witnesses are to be believed.” Timmons v. State, 44 So.3d 1021, 1028 (¶ 26) (Miss.Ct.App.2010) (citing Thomas v. State, 14 So.3d 812, 823 (¶37) (Miss.Ct.App.2009)). Moreover, the prisoners were spotted through video surveillance on the roof of “B” pod.

¶ 11. Finding that the overwhelming weight of the evidence supports the jury’s verdict, we affirm the circuit court’s denial of Stewart’s motion for a new trial.

¶ 12. THE JUDGMENT OF THE CIRCUIT COURT OF COAHOMA COUNTY OF CONVICTION OF ATTEMPTED ESCAPE BY FORCE OR VIOLENCE AND SENTENCE OF FIVE YEARS IN THE CUSTODY OF THE MISSISSIPPI DEPARTMENT OF CORRECTIONS AS A HABITUAL OFFENDER WITHOUT ELIGIBILITY FOR PAROLE OR PROBATION IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO COAHOMA COUNTY.

LEE, C.J., IRVING AND GRIFFIS, P.JJ., MYERS, ISHEE, ROBERTS, CARLTON AND MAXWELL, JJ., CONCUR.

      . The other escapee was quickly apprehended and taken back into custody.

      . Stewart was serving a twenty-five-year sentence for the sale of a controlled substance.


author: MAXWELL, J.,

text:
    Jimmie Lee BOND, Appellant v. Donna Shanell BOND, Appellee.
    No. 2010-CA-00637-COA.
    Court of Appeals of Mississippi.
    Aug. 16, 2011.

      William L. Bambach, attorney for appellant.
    Roberta Lynn Haughton, West Point, attorney for appellee.
    Before LEE, C.J., MYERS and MAXWELL, JJ.
   MAXWELL, J.,

for the Court:

¶ 1. Jimmie Lee Bond argues the Oktib-beha County Chancery Court’s equitable division must be reversed because the chancellor did not make sufficient findings regarding Donna Bond’s adulterous affair. Yet the chancellor’s final judgment of divorce clearly reflects that he weighed Donna’s adultery against her in ordering the equitable division, which heavily favored Jimmie. Finding no manifest error in the chancellor’s Ferguson analysis, we affirm.

FACTS

¶ 2. Jimmie and Donna were married in June 2005. They have no children together. Almost four years after marrying, the parties separated. Shortly after, Jimmie filed for a divorce. The chancellor granted the divorce based on Donna’s adultery. In dividing the property, the chancellor awarded approximately ninety percent of the marital assets to Jimmie. Dissatisfied that Donna received even a ten-percent share in light of her adulterous affair, Jimmie filed a motion to reconsider, which the chancellor denied. He now appeals arguing that the chancellor, in his Ferguson analysis, failed to make sufficient findings regarding Donna’s adultery.

STANDARD OF REVIEW

¶ 3. “Chancellors are afforded wide latitude in fashioning equitable remedies in domestic relations matters, and their decisions will not be reversed if the findings of fact are supported by substantial credible evidence in the record.” Henderson v. Henderson, 757 So.2d 285, 289 (1119) (Miss.2000). We will not disturb a chancellor’s factual findings unless the chancellor’s decision was manifestly wrong or clearly erroneous, or the chancellor applied an improper legal standard. Wallace v. Wallace, 12 So.3d 572, 575 (¶ 12) (Miss.Ct.App.2009). We do not substitute our “judgment for that of the chancellor, even if [we disagree] with the findings of fact and would arrive at a different conclusion.” Coggin v. Coggin, 837 So.2d 772, 774 (¶ 3) (Miss.Ct.App.2003). But when reviewing a chancellor’s interpretation and application of the law, our standard of review is de novo. Tucker v. Prisock, 791 So.2d 190, 192 (¶ 10) (Miss.2001).

DISCUSSION

¶ 4. The sole issue Jimmie asserts is whether the chancellor abused his discretion by failing to expressly consider Donna’s adulterous acts when dividing the marital estate. Donna counters that the chancellor obviously considered her adulterous affair and weighed it against her.

¶ 5. In ordering an equitable distribution of property, chancellors must apply the Ferguson factors, which include:

(1) contribution to the accumulation of property, (2) dissipation of assets, (3) the market or emotional value of assets subject to distribution, (4) the value of assets not subject to distribution, (5) the tax and economic consequences of the distribution, (6) the extent to which property division may eliminate the need for alimony, (7) the financial security needs of the parties, and (8) any other factor that in equity should be considered.

Hults v. Hults, 11 So.Sd 1273, 1281 (¶36) (Miss.Ct.App.2009) (citing Ferguson v. Ferguson, 639 So.2d 921, 928-29 (Miss.1994)). Chancellors should also consider each party’s marital fault. Singley v. Singley, 846 So.2d 1004, 1013-14 (¶ 26) (Miss.2002). There is a presumption that “the contributions and efforts of the marital partners, whether economic, domestic or otherwise are of equal value.” Hemsley v. Hemsley, 639 So.2d 909, 915 (Miss.1994). In reviewing a chancellor’s findings, we do not conduct a Ferguson analysis anew. Goellner v. Goellner, 11 So.3d 1251, 1264 (¶ 45) (Miss.Ct.App.2009). Rather, we examine the chancellor’s judgment and the record to ensure the chancellor applied the correct legal standard and did not commit an abuse of discretion. Id. at 1266 (¶ 52).

¶ 6. In Carrow v. Carrow, 642 So.2d 901, 905 (Miss.1994), the Mississippi Supreme Court held that a chancellor erred in finding a wife’s “adulterous conduct precluded her from being entitled to any form of equitable distribution of the property upon divorce.” The Carrow court instructed that chancellors should not view equitable distribution as a means to punish the offending spouse for marital misconduct. See id. at 904 (citing Chamblee v. Chamblee, 637 So.2d 850, 863 (Miss.1994)). Rather, “marital misconduct is a viable factor entitled to be given weight by the chancellor when the misconduct places a burden on the stability and harmony of the marital and family relationship.” Id. at 904-05 (citing Ferguson, 639 So.2d at 927).

¶ 7. Here, the chancellor followed Car-row’s instructions. In assessing the factor for the parties’ contribution to the stability and harmony of the marriage, the chancellor found:

Neither Jimmie nor Donna did all they could to provide stability and harmony to the family. Donna became infatuated with another man[,] and her romantic relationship with this third party caused the dissolution of the marriage.

Thus, Jimmie’s contention that the chancellor did not make explicit findings on Donna’s marital fault is simply incorrect. The order shows he explicitly considered Donna’s adultery in his Ferguson analysis, as well as its causal effect on the deterioration of the marriage. And it is implicit in the order that the chancellor weighed this factor heavily against Donna.

¶ 8. We affirm the chancellor’s judgment.

¶ 9. THE JUDGMENT OF THE OK-TIBBEHA COUNTY CHANCERY COURT IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLANT.

LEE, C.J., IRVING AND GRIFFIS, P.JJ., MYERS, BARNES, ISHEE, ROBERTS, CARLTON AND RUSSELL, JJ„ CONCUR.