24/7 Restoration Specialists, LLC v. Young

Filing 17

ORDER AND REASONS denying 15 Motion to Dismiss for Failure to State a Claim. Signed by Judge Lance M Africk on 11/18/2022. (blg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
24/7 RESTORATION SPECIALISTS, LLC

CIVIL ACTION

VERSUS

No. 22-1948

ZACHARY YOUNG

SECTION I
ORDER & REASONS

Before the Court is a motion 1 by defendant Zachary Young (“Young”), pursuant
to Federal Rule of Civil Procedure 12(b)(6), to dismiss plaintiff 24/7 Restoration
Specialists, LLC’s (“24/7”) claim for suit on open account. For the reasons that follow,
the Court denies the motion.
I.

FACTUAL BACKGROUND

The Court has previously recounted the facts giving rise to this case in its
order and reasons granting in part and denying in part Young’s motion to dismiss
24/7’s original complaint, and therefore does so only briefly here.
24/7 claims that Young has failed to pay for water mitigation services that 24/7
performed after Hurricane Ida at a property Young owns. 2 In 24/7’s original
complaint, it stated three causes of action: breach of contract, suit on open account
pursuant to La. Rev. Stat. § 9:2781, and unjust enrichment. 3 Young moved to dismiss
24/7’s open account and unjust enrichment claims. 4 This Court concluded that 24/7

R. Doc. No. 15.
R. Doc. No. 14 (Amended Complaint), ¶¶ 6–7.
3 R. Doc. No. 1, ¶¶ 18–31.
4 R. Doc. No. 5.
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had not adequately alleged its open account claim and granted 24/7 leave to amend
its complaint regarding that claim; it also denied Young’s motion to dismiss the
unjust enrichment claim. 5 24/7 subsequently filed an amended complaint setting
forth further allegations in support of its open account claim, and attaching the
alleged agreement (the “Authorization”) between the parties. Young has now filed a
motion re-urging dismissal of the open account claim.
II.

STANDARDS OF LAW

a. Dismissal for Failure to State a Claim
Rule 12(b)(6) of the Federal Rules of Civil Procedure allows for dismissal of a
complaint for “failure to state a claim upon which relief can be granted.” Fed. R. Civ.
P. 12(b)(6). “To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its
face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation and internal quotations
omitted). A claim is facially plausible “when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Id. “The plausibility standard is not akin to a probability
requirement, but it asks for more than a sheer possibility that a defendant has acted
unlawfully.” Culbertson v. Lykos, 790 F.3d 608, 616 (5th Cir. 2015) (citation omitted)
(internal quotation marks omitted).
A complaint is insufficient if it contains “only labels and conclusions, or a
formulaic recitation of the elements of a cause of action.” Whitley v. Hanna, 726 F.3d

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R. Doc. No. 11.
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631, 638 (5th Cir. 2013) (citation and internal quotations omitted). It “must provide
the defendant with fair notice of what the plaintiff’s claim is and the grounds upon
which it rests.” Dura Pharms., Inc. v. Broudo, 544 U.S. 336, 346 (2005) (internal
quotations omitted).
In considering a motion to dismiss, a court views the complaint “in the light
most favorable to the plaintiff, accepting as true all well-pleaded factual allegations
and drawing all reasonable inferences in the plaintiff’s favor.” Lovick v. Ritemoney
Ltd., 378 F.3d 433, 437 (5th Cir. 2004). A court may also consider “any documents
attached to or incorporated into the plaintiff’s complaint by reference.” PS Bus. Mgmt.
v. Fireman’s Fund Ins. Co., No. 21-1229, 2021 WL 4989870, at *2 (E.D. La. Oct. 27,
2021) (Feldman, J.) (citing Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285,
288 (5th Cir. 2004)); accord Brown v. Alixa-RX, No. 22-40160, 2022 WL 4594188, at
*2 (5th Cir. Sept. 30, 2022) (per curiam) (unreported).
III.

ANALYSIS

a. Open Account
As discussed in the Court’s previous order and reasons, Louisiana law defines
an open account as “any account for which a part or all of the balance is past due,
whether or not the account reflects one or more transactions and whether or not at
the time of contracting the parties expected future transactions.” La. Stat. Ann. §
9:2781(D). The Louisiana open account statute provides for the recovery of attorneys’
fees by a plaintiff who prevails on a claim for failure to pay an open account. Id.
§ 9:2781(A). Since the open account statute imposes attorneys’ fee awards as a

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penalty, it must be strictly construed. Ormet Primary Aluminum Corp. v. Ballast
Techs. Inc., 436 F. App’x 297, 300–01 (2011).
The determination of whether an agreement falls under the open account
statute often depends on “questions of an agreement’s determinacy.” Wood Materials
LLC v. Berkley Ins. Co., No. 17-10955, 2018 WL 560473, at *3 (E.D. La. Jan. 24, 2018)
(Africk, J.). In contrast to a standard contract, an open account “generally leaves
undetermined key aspects of the obligation, such as the time period during which the
services will be rendered or the total cost of the services for which a party may be
liable.” Cong. Square Ltd. P’ship v. Polk, No. 10-317, 2011 WL 837144, at *5 (E.D. La.
Mar. 4, 2011) (Fallon, J.). The Fifth Circuit has noted that an undetermined total cost
is “[a] hallmark of an open account.” Ormet Primary Aluminum Corp., 436 F. App’x
at 301.
In its previous order and reasons, the Court noted that 24/7’s complaint alleged
certain features of an open account, including an open price term. 6 However, the
Court concluded that 24/7 had not adequately alleged its claim pursuant to the open
account statute, noting that the complaint did not state whether the alleged
agreement between the parties defined how the cost of 24/7’s services was to be
calculated, whether it defined the scope of the work to be performed, or whether it set
a timeframe for completion of the work. 7

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Id. at 6.
Id.
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In its amended complaint, 24/7 has alleged that, at the outset, the parties did
not know the scope of labor and supplies that would be necessary to complete the
work, and that the timeframe and total cost were therefore left open. 8 It further
alleges that the cost of the work was to be determined based on local market rates
using Xactimate software, and that the costs “of each unit and item of mitigation
services and supplies it provided . . . were calculated as the work progressed.” 9 It
further alleges that “the work to be done was left open for modification over the course
of 24/7’s work.” 10
As mentioned above, 24/7 also attached the Authorization to its complaint.
That document provides few details about the arrangement between the parties. It
does provide that “the total cost of cleaning and/or repairs shall be payable upon
completion of the work.” 11
Young asserts that the Authorization that 24/7 attached to its amended
complaint is “nothing more than a permission slip” and “no agreement at all.” 12 Young
further faults 24/7 for alleging facts in its complaint regarding the alleged agreement
that are not reflected in the Authorization. 13 However, as 24/7 points out, the Court

R. Doc. No. 14, ¶¶ 25–28.
Id. ¶ 31.
10 Id. ¶ 33.
11 R. Doc. No. 14-1.
12 R. Doc. No. 15-1, at 2. Young appears to suggest that there is not a valid contract
between the parties. Id. (setting forth Louisiana law’s requirements for contract
formation). However, Young has not moved to dismiss 24/7’s breach of contract
claims.
13 Id. at 6 (arguing that the Authorization does not support 24/7’s allegation that costs
were to be calculated using Xactimate and that the scope of the work was left open).
8
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may, on a motion dismiss, consider attached materials in addition to the facts alleged
in the complaint. See, e.g., Brown, 2022 WL 4594188, at *2 (“For a Rule 12(b)(6)
dismissal, we look to the allegations in the complaint and attached documents to
determine whether the complaint [is sufficient].” (emphasis added)). The
Authorization does not state, and 24/7 does not allege, that the Authorization
contained all the terms of parties’ agreement. Therefore, the fact that not all of 24/7’s
allegations are reflected in the Authorization is not determinative.
Turning to 24/7’s allegations, the Court determines that 24/7 has pleaded
sufficient factual matter, which the Court takes as true at this stage, to avoid
dismissal of its open account claim. 24/7 specifically alleges that, at the time of the
Authorization, the scope of required labor and supplies, 14 the time necessary to
complete the work, 15 and the total cost of the services 16 were unknown. 24/7 further
alleges that the cost of services was to be calculated as the work progressed, 17 and
that the scope of the work to be done was left open to modification, and that it was in
fact modified as the work progressed. 18 The Authorization further sets out an interest
rate of 18% for late payments, which the Fifth Circuit has found relevant to and
supportive of a determination of an open account. Ormet Primary Aluminum Corp.,
436 F. App’x at 301 (“The account in question here was left open or undetermined

R. Doc. No. 14, ¶ 25
Id. ¶ 26
16 Id. ¶ 29.
17 Id. ¶ 30.
18 Id. ¶ 33.
14
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because the total amount depended on how long Ballast should delay payment to
Ormet and how much interest would accrue.”).
In sum, 24/7 has alleged that the time period, the scope, and the total cost of
the services to be rendered was left open. Cong. Square Ltd. P’ship, 2011 WL 837144,
at *5; Ormet Primary Aluminum Corp., 436 F. App’x at 301. 24/7 has further alleged
that it engaged labor and purchased supplies to complete that work, and that Young
was to pay for those on completion of the project. See Hayes v. Taylor, 812 So.2d 874,
878 (La. Ct. App. 2002) (“A contractor relationship in which the contractor
‘purchase[s] all of the materials and perform[s] the labor necessary’ and sends a bill
upon completion can fall under the open account statute.”); accord SBL Constr., LLC
v. Eymar, 289 So.3d 1079, 1082 (La. Ct. App. 2019) (citing R.L. Drywall, Inc. v. B&C
Elec., Inc., 2013-1592, 2014 WL 3559390, at *1 (La. Ct. App. May 2, 2014)). These
facts, taken as true, are sufficient to state a claim that Young is liable to 24/7
pursuant to the Louisiana open account statute.
Accordingly,
IT IS ORDERED that Young’s motion to dismiss 24/7’s open account
claim is DENIED.
New Orleans, Louisiana, November 18, 2022.

_______________________________________
LANCE M. AFRICK
UNITED STATES DISTRICT JUDGE

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