TeleRecovery of Louisiana, Inc. v. Gaulon

738 So.2d 662 (1999), 814 So.2d 688 (2002)

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TeleRecovery of Louisiana, Inc. v. Gaulon

United States Court of Appeals for the Fifth Circuit
738 So.2d 662 (1999), 814 So.2d 688 (2002)

DH

Facts

Lance D. Gaulon (defendant) executed two casino markers for $10,000 total that were payable to Belle of Baton Rouge Casino (the casino). Each casino marker stated on the last line that Gaulon agreed to payment according to the terms of the Credit Payment Agreement previously executed by Gaulon. When the casino tried to draw the funds from Gaulon’s bank, the bank refused because Gaulon did not have sufficient funds. The casino assigned Gaulon’s account to TeleRecovery of Louisiana, Inc. (TeleRecovery) (plaintiff). TeleRecovery sued Gaulon pursuant to Louisiana’s Nonsufficient Funds Checks statute (the Bad Check Law), which permits, among other things, recovery of twice the amount of the checks. The district court granted TeleRecovery a default judgment against Gaulon for $20,000. Gaulon moved to set aside the default judgment or, alternatively, for a new trial on the grounds that the legislature did not intend for the Bad Check Law to cover casino markers and that casino markers are not checks within the meaning of the statute. The district court ultimately ruled in TeleRecovery’s favor, found that the casino markers constitute checks under negotiable-instruments law, and reaffirmed TeleRecovery’s recovery of the $20,000 under the Bad Check Law. On appeal, Gaulon maintained that the Bad Check Law did not apply to casino markers because casino markers are not negotiable instruments. Specifically, Gaulon argued that the casino markers’ reference to another writing, the Credit Payment Agreement, make the instrument conditional and, therefore, the casino markers fail to satisfy the negotiable-instrument requirement of an unconditional promise to pay.

Rule of Law

Issue

Holding and Reasoning (Chehardy, J.)

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