216 So. 3d 287
La. Ct. App.2017Background
- Khoobehi Properties sold its 13% membership interest in Baronne Development to KFLP in mid‑2013; sale documents were signed by Dr. Kamran Khoobehi and Chandra Mohan Kailas.
- After the sale Khoobehi alleged it had never received distributions while a member and sought an accounting and later added claims for breach of fiduciary duty, fraud, negligent misrepresentation, conspiracy, alter‑ego, and damages.
- Defendants (Baronne Development, KFLP, Kailas Properties, 210 Baronne, and Mohan Kailas individually) filed exceptions: no right/no cause of action, peremption (KFLP), and discussion (Kailas Properties), among others.
- The district court (May 13, 2016) dismissed Baronne Development and 210 Baronne for no right/no cause of action, granted Kailas Properties’ discussion exception, denied Khoobehi’s motion to compel, and left KFLP’s peremption earlier granted on July 25, 2014.
- On appeal the court: affirmed dismissals of Baronne Development and 210 Baronne; dismissed review of KFLP’s peremption as untimely; reversed the grant of Kailas Properties’ discussion exception; and denied writs on discovery rulings, remanding for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Right to an accounting under La. R.S. 12:1319 | Former member Khoobehi may demand an accounting for the period it was a member | Defendants: sale transferred membership interest so Khoobehi no longer has that statutory member right | Court: Khoobehi relinquished membership rights on sale; no right of action for accounting; exception sustained |
| No cause of action — Baronne Development (fiduciary, agency, fraud, conspiracy, single enterprise) | Khoobehi: facts state claims against Baronne Development on multiple theories | Defendants: LLC is a juridical entity; alleged wrongs are by members/managers (KFLP/M. Kailas), not the LLC itself; allegations are conclusory | Court: statutes and pleading defective; claims fail as to Baronne Development; exception sustained; dismissal with prejudice |
| No cause of action — 210 Baronne (successor liability) | Khoobehi: 210 Baronne is successor and liable for misconduct | Defendants: 210 Baronne organized after alleged conduct and could not have acted then | Court: 210 Baronne did not exist during alleged acts; dismissal affirmed |
| Peremption — KFLP (La. R.S. 12:1502) | Khoobehi: statute not peremptive or not applicable to all claims | KFLP: claims before statutory cutoff are perempted | Court: KFLP’s peremption was adjudicated July 25, 2014; Khoobehi failed to timely seek review here, so challenge dismissed as untimely |
| Dilatory exception of discussion — Kailas Properties (partner liability) | Khoobehi: Kailas Properties is independently liable; discussion plea improperly asserted | Kailas Properties: as partner it may invoke discussion to require creditor to exhaust partnership assets first | Court: Article 5155 requires partner pleading discussion to identify partnership property and deposit funds; Kailas Properties didn’t; court erred in sustaining discussion — reversed |
| Discovery — motion to compel and motion to quash (third‑party accountant records; attorney fee documents) | Khoobehi: financials of 210 Baronne since sale are relevant to damages/rescission; moved to compel; sought third‑party production | Defendants/M. Kailas: requests duplicative or not reasonably calculated to lead to admissible evidence; accountant/client privilege; fee discovery premature | Court: trial court did not abuse discretion in denying Khoobehi’s motion to compel or quashing relief; financial records relevant to measure of damages; writs denied |
Key Cases Cited
- Channelside Servs., LLC v. Chrysochoos Grp., Inc., 194 So.3d 751 (La. App. 4 Cir. 2016) (statutory member inspection/accounting rights interpreted)
- Johnson v. Motiva Enters., LLC, 128 So.3d 483 (La. App. 5 Cir. 2013) (de novo review of exception of no right of action)
- Par. of Jefferson v. Bankers Ins. Co., 88 So.3d 1082 (La. App. 5 Cir. 2012) (pleading standards for exceptions of no cause of action)
- Green v. Champion Ins. Co., 577 So.2d 249 (La. App. 1 Cir. 1991) (single business enterprise doctrine)
- Stutts v. Melton, 130 So.3d 808 (La. 2013) (fraud vitiates consent and supports rescission/damages)
- Hardee v. City of Jennings, 65 So.3d 266 (La. App. 3 Cir. 2011) (appellate review of discovery rulings; abuse of discretion standard)