218 So. 3d 665
La. Ct. App.2017Background
- In April 1986 Coleman and Querbes Company No. 1 executed four related contracts: Articles of Partnership (forming Querbes‑Coleman, 25% Coleman/75% Querbes), a Development Agreement, a Management Agreement (ULCP to manage One Bellemead Centre), and a separate Agreement contemplating future arrangements to develop an adjacent 14.9‑acre tract.
- One Bellemead Centre (6.7 acres) was developed and operated under the partnership/LLC structure; the parties later converted Querbes‑Coleman to an LLC with an Operating Agreement in 1998.
- Coleman alleges defendants engaged in a scheme (transferring the adjacent tract to Querbes #2, refinancing maneuvers, sales, and a capital call) to oust him and deprive him of rights to develop the adjacent tract, and asserts 11 counts (fiduciary breach, fraud, breach of various agreements, interference, unfair trade practices, veil piercing, etc.).
- Defendants filed peremptory exceptions of no cause of action, no right of action, and prescription; parties stipulated various cutoff dates for prescription issues and that many Coleman claims were derivative of Querbes‑Coleman.
- After a multi‑day hearing with testimony and exhibits, the district court sustained most exceptions and dismissed nearly all claims; plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of a joint venture (Count 3) | Coleman: the 1986 documents contemplated formation of a further joint venture to develop the adjacent tract; a joint venture could be oral. | Querbes: the Agreement only contemplated future agreements; no joint venture was ever formed (no written or oral proof). | No joint venture; evidence and documents show only a future contingency; exception of no cause of action sustained. |
| Fiduciary duty claims against defendants/individuals (Count 1 and related counts) | Coleman: defendants owed fiduciary duties to him personally (including under articles and alleged ongoing joint venture). | Querbes: any fiduciary duties ran to the LLC (Querbes‑Coleman) under R.S. 12:1314; no separate personal fiduciary duty exists from the nonexistent joint venture or Operating Agreement. | Duties applied to the LLC, not to Coleman individually; no cause/right of action for individual fiduciary claims. |
| Fraudulent interference / conspiracy / torts (Counts 8–9) | Plaintiffs: defendants conspired to fraudulently breach agreements and interfered with Management Agreement; tort causes of action are available. | Defendants: torts like intentional interference are narrow (traditionally against corporate officers); plaintiffs have not pleaded facts bringing managers/partners within that scope. | Court declined to extend narrow torts beyond established scope (e.g., Spurney); exceptions sustained. |
| Prescription and no right of action (Counts 1–7,10) | Plaintiffs: many acts were continuing/series of wrongs so later acts are timely; Coleman claims direct individual loss so has standing. | Defendants: earlier acts placed plaintiffs on notice; statutory prescriptive periods apply; many claims are derivative and belong to the LLC. | Court sustained prescription as stipulated and as applied; Coleman has no individual right to assert LLC claims; many counts prescribed or lacked right/causal basis. |
Key Cases Cited
- Scheffler v. Adams & Reese LLP, 950 So.2d 641 (La. 2007) (defines joint venture and distinguishing from partnership)
- 9 to 5 Fashions Inc. v. Spurney, 538 So.2d 228 (La. 1989) (narrow tort for intentional interference by corporate officer)
- Maw Enters. LLC v. City of Marksville, 149 So.3d 210 (La. 2014) (court may consider evidence admitted without objection to enlarge pleadings)
- Starns v. Emmons, 538 So.2d 275 (La. 1989) (prescription: character of action controls prescriptive period; cannot recast statutory categories to avoid applicable prescriptive term)
- Baudeau v. Southwest Computer Bureau, Inc., 929 So.2d 1211 (La. 2006) (standard for reviewing exceptions of no cause of action)