Stuart Services, L.L.C. v. Nash Heating & Air Conditioning, Inc.

Louisiana Supreme Court reaffirms jurisprudence that party who is in breach of a contract, may not later attempt to enforce provisions of that contract.

Authors: Christopher K. LeMieux and Robyn A. Brown

In Stuart Services, L.L.C. vs. Nash Heating & Air Conditioning, Inc., the Supreme Court of Louisiana recently reaffirmed longstanding Louisiana jurisprudence holding that when one party substantially breaches a contract, the other party to the contract has a defense and excuse for nonperformance.

In this matter, a lawsuit arose out of breach of an employment contract entered into between Defendant, Ronnie Camet (“Camet”), and Plaintiff, Stuart Services, L.L.C. (“Stuart”). After Camet sold his business to Stuart, Stuart hired Camet to serve as a liaison between his former clients and Stuart. As a part of the employment, Camet signed an agreement which contained a non-compete and non-solicitation clause. Shortly after Camet ended his employment with Stuart, Camet began working for Nash Heating & Air Conditioning, a direct competitor of Stuart.

Stuart filed suit against Camet for breach of his employment agreement. The lower courts found Camet was in breach of his employment agreement; however, the lower courts also granted Camet’s request for attorneys’ fees and costs based on contractual provisions.

Stuart appealed the Court’s finding that Camet was entitled to attorneys’ fees and costs. In their decision, the Louisiana Supreme Court noted Louisiana jurisprudence has consistently found when one party breaches a contract, the other party has a defense and excuse for nonperformance under La. C.C. art 2013. Accordingly, the Supreme Court reversed the lower courts’ award of attorneys fees, reasoning that because Camet was in breach of “an essential component of his employment agreement”, Stuart was permitted to raise non-performance as an affirmative defense.

This serves as a reminder that a party who breaches a contract may not be entitled to later attempt to enforce provisions of that contract, including attorney fees provisions.