## Facts

- Lance D. Gaulon signed two casino markers totaling $10,000 payable to the Belle of Baton Rouge Casino.
- Each marker was drawn on Gaulon’s bank account and functioned as a demand instrument used to obtain gambling credit at the casino.
- On the last line of each marker, Gaulon stated that he agreed to payment according to the terms of a previously executed Credit Payment Agreement.
- When the casino presented the markers for payment, the drawee bank refused payment due to insufficient funds.
- The casino assigned Gaulon’s account to TeleRecovery of Louisiana, Inc., a collection entity.
- TeleRecovery sued Gaulon under Louisiana’s nonsufficient-funds check statute, La. R.S. 9:2782, seeking statutory recovery of twice the amount of the markers and related charges and fees.
- The district court confirmed a default judgment for TeleRecovery for $20,000 (twice the $10,000 face amount), along with additional amounts allowed by statute.
- Gaulon sought to set aside the default judgment or obtain a new trial, arguing (1) casino markers are not “checks” covered by La. R.S. 9:2782 and (2) the markers were not negotiable instruments because the reference to the Credit Payment Agreement made payment conditional.
- After further proceedings and an evidentiary hearing, the district court ruled that the markers were negotiable instruments (checks) and reaffirmed TeleRecovery’s right to recover the statutory double amount; Gaulon appealed.

## Issues

1. Whether casino markers that reference a separate Credit Payment Agreement are negotiable instruments (checks), or whether the reference makes the promise to pay conditional and destroys negotiability.
2. Whether La. R.S. 9:2782 applies to dishonored casino markers so that the holder (including an assignee) may recover twice the face amount after statutory demand requirements are met.
3. Whether TeleRecovery presented sufficient evidence to support enforcement of the markers and the statutory remedy, including proof tied to dishonor, demand, and assignment.

## Decision

- The court of appeal affirmed the judgment in TeleRecovery’s favor.
- The court held that the casino markers qualified as negotiable instruments and “checks” despite referencing a separate Credit Payment Agreement.
- The court concluded that the markers’ reference to the Credit Payment Agreement did not make payment “subject to” that agreement and therefore did not render the instruments conditional.
- Because the instruments were checks and were dishonored for insufficient funds, and because the statutory prerequisites were satisfied, La. R.S. 9:2782’s double-amount remedy applied.
- The court upheld TeleRecovery’s ability, as assignee of the casino’s rights, to recover the doubled amount and the related statutory items awarded by the trial court.

## Legal Principles

- A “check” is a form of negotiable instrument: a draft drawn on a bank and payable on demand.
- An instrument’s reference to another agreement does not destroy negotiability unless the instrument states that the order or promise to pay is conditioned on, or subject to, the other agreement.
- Casino markers drawn on a patron’s bank account may be treated as checks when they satisfy negotiable-instrument requirements, even if used in connection with casino credit.
- La. R.S. 9:2782 authorizes enhanced civil recovery for NSF checks when statutory conditions are met, including written demand and nonpayment within the statutory time period; the remedy may include twice the amount of the check and attorney’s fees.
- An assignee of the payee’s claim may sue to enforce the instrument and seek statutory remedies available to the payee when the assignment and other required facts are proven.

## Conclusion

TeleRecovery of Louisiana, Inc. v. Gaulon affirmed that casino markers drawn on a patron’s bank account can constitute negotiable checks even when they mention a separate credit payment agreement, and that a holder such as the casino’s assignee may recover the statutory double amount and related relief under La. R.S. 9:2782 after NSF dishonor and compliance with the statute’s demand requirements.


TeleRecovery of Louisiana, Inc. v. Gaulon, 738 So.2d 662 (1999), 814 So.2d 688 (2002)