202 So. 3d 177
La. Ct. App.2016Background
- S&D Roofing, LLC (members Shane Dufrene and David Cain) was formed in 2005; both were registered agents.
- Jefferson contracted with S&D in 2006 and sued for breach of contract in 2009; Cain was served with the petition in Jan. 2010; Dufrene was not.
- Jefferson obtained a default judgment against S&D on April 16, 2010; notice of that judgment was not perfected on the LLC prior to dissolution.
- Cain and Dufrene filed an affidavit dissolving S&D on November 30, 2010 under La. R.S. 12:1335.1, which made them personally liable for LLC claims.
- Cain and Dufrene later learned of the default judgment in 2011; they sought reinstatement of the LLC and requested retroactive reinstatement to perfect service and enable representation.
- The district court ordered reinstatement prospectively only (effective on the date of the court’s order); S&D appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether reinstatement of an LLC under La. R.S. 12:1335.1 may be given retroactive effect | Retroactive reinstatement is necessary to perfect service of the April 2010 default judgment and to facilitate proper legal representation of the LLC | The statute is silent on retroactivity and public policy disfavors retroactive reinstatement that would prejudice third parties or shield members from personal liability | Reinstatement under La. R.S. 12:1335.1 is prospective only; court affirmed district court’s prospective-only reinstatement |
Key Cases Cited
- Robertson v. Weinmann, 782 So.2d 38 (La. App. 4 Cir. 2001) (reinstatement under statute silent on retroactivity should be prospective; public policy favors reliance on dissolution)
- In re Reinstatement of Venture Assocs., 906 So.2d 498 (La. App. 1 Cir. 2005) (retroactive reinstatement allowed to preserve a pending suit brought by the corporation)
- In re Islander Shipholding, 715 So.2d 7 (La. App. 5 Cir. 1998) (retroactive reinstatement approved to facilitate arbitration where liquidation/dissolution procedures caused the issue)
- Airline Skate Ctr., Inc. v. Lockett, 759 So.2d 813 (La. App. 5 Cir. 1999) (reinstatement does not shield shareholders from personal liability when they dissolved the corporation knowing debts existed)
- Butcher v. Keith Hebert Carpentry/Vinyl Siding, Inc., 945 So.2d 914 (La. App. 3 Cir. 2006) (reinstatement to resolve pending litigation is proper but does not absolve personal liability)