Leader Buick, GMC Trucks, Inc. v. WeinmannLeader Buick, GMC Trucks, Inc. v. Weinmann
LEADER BUICK, GMC TRUCKS, INC.
v.
Robert WEINMANN, Michael Seago, Suburban Motors, L.L.C.
Court of Appeal of Louisiana, Fourth Circuit.
*35 John W. Lindner II, Covington, LA, for Plaintiff/Appellant.
Richard C. Stanley, William M. Ross, Stanley, Flanagan & Rеuter, L.L.C., New Orleans, LA, for Defendant/Appellee (Michael Seago).
E. Wade Shows, Ronnie J. Berthelot, Kristen A. Brazzel, Shows, Cali & Berhtelot, L.L.P., Baton Rouge, LA, for Defendant/Appellee (Robert Weinmann).
(Court compоsed of Chief Judge WILLIAM H. BYRNES III, Judge PATRICIA RIVET MURRAY, Judge MICHAEL E. KIRBY).
MICHAEL E. KIRBY, Judge.
STATEMENT OF THE CASE
The plaintiff, Leader Buick GMC, Inc., seeks review of the trial court's judgment maintaining defendants' exceptions of res judicata, no right of action and no cause of action. The presеnt suit is the third lawsuit filed among the parties concerning the proposed sale of an automotive dealership between the plaintiff (the seller) and defendants (the purchasers).
The facts of the case are succinctly set out in Robertson v. Weinmann, XXXX-XXXX, XXXX-XXXX,1-3 (La.App. 4 Cir. 2/21/01),
On August 6, 1998 the Robertsons filed suit against Robert Weinmann, Michael Seago and Suburban Motors, LLC alleging breach of a purchase agreement of May 13, 1997. That purchase agreement was between Suburbаn Motors and Leader Buick, GMC Truck, Inc. On August 24, 1998 Leader Buick, GMC Truck, Inc. was dissolved by affidavit pursuant to LSA-RS 12:142.1. The petition was amended on October 5, 1998 to list "Leader Buick, GMC Truck, Inc. In Dissolution" as a party plaintiff. Thereafter, a pеtition was filed in the Civil District Court on December 21, 1998 seeking to reinstate the corporation pursuant to LSA RS 12:142.1(B) and a judgment was granted reinstating the corporation retroactive to the date of dissolution.
Defendаnts filed various exceptions which were heard on December 18, 1998. The trial court sustained their exception of no right of action and dismissed plaintiffs' original and amended petitions. Thereafter plaintiffs filed а motion for new trial based upon the retroactive reinstatement of the corporation on December 21, 1998. The defendants then moved to transfer and consolidate the reinstatement suit with the suit for breach of the purchase agreement. On May 28, 1999 the court granted the motion to consolidate and the motion for new trial, thereby rescinding its previous ruling granting the defendants' exception of no right of action. Thе defendants then intervened in the reinstatement case and filed a petition to annul the Ex Parte Judgment reinstating the corporation. In response plaintiffs filed an exception of no right of action to the intervention. Defendants also filed a Motion for Summary Judgment on the claims raised in their intervention/nullity action.
*36 Three matters were heard on October 6, 1999: Plaintiffs' exception of no right of action to the intervention; Defendants Motion for Summary Judgment and Defendants' original exception of no right of action which had been the subject of the motion for new trial. On October 13, 1999 the court signed a judgment which invalidated the retroactivity of Leader's reinstatement; reinstated its original judgment on the defendants' exception of no cause of action thereby dismissing the petition; and, it held the defendants' motion for summary judgment and plaintiffs exceрtion of no right of action to the intervention nullity action were moot.
This Court affirmed the trial court's judgment of October 13, 1999, adopting the trial court's reasons for judgment as its own. Id.
On September 26, 2001, Leader Buick GMC, Inc., filed suit against Robert Weinmann, Michael Seago and Suburban Motors, L.L.C., seeking damages arising from the breach of the purchase agreement executed between the parties on May 13, 1997. The defendants filed exceptions of res judicata, no right of action and no cause of action based upon the dismissal of the prior suits. The trial court rendered judgment on June 4, 2002, granting the defendants' exceptions of res judicata, no right оf action and no cause of action and dismissing plaintiff's case with prejudice.
STATEMENT OF THE LAW
The plaintiff contends, on appeal, that the trial court erred in granting the defendants' exception of no right of actiоn. The defendants argued, and the trial court agreed, that Leader Buick did not have a right of action against the defendants as all claims against the defendants did not survive the dissolution and reinstatement of Leadеr Buick.
La. R.S. 12:142.1 provides for corporate dissolution by affidavit, without formal liquidation:
A In addition to all other methods of dissolution, if the corporation is not doing business and owes no debts, it may be dissolved by filing an affidavit with the secretary of state executed by the shareholders, ..., attesting to such facts and requesting that the corporation be dissolved. Thereafter, the shareholders,..., shall be personally liable for any debts or clаims, if any, against the corporation in proportion to their ownership in the shares of the corporation.
This Court adopted the trial court's analysis of La. R.S. 12:142.1 in Robertson v. Weinmann, 6-7,
La. R.S. 12:142.1(B) is silent as to whether reinstatement of a corporation under the statute is to be given retroactive effect, and no jurisprudence exists which addresses the issue of the retroactivity.
In contrast, La. R.S. 12:163(E)(2), governing revocation and reinstatement of сorporations in instances when corporations have failed to file annual reports, expressly states that reinstatement of a corporation under that particular article "shall be retrоactive." In this Court's view, the Legislature could have included the same language concerning retroactivity in 12:142.1(B), but did not do so. In absence of such language, reinstatement under 12:142.1(B) should be given prospective effеct only. Furthermore, reinstatement of a corporation dissolved by affidavit should not be given retroactive effect so as to revive the inchoate claims of the corporation. Public poliсy compels this result in that third parties should be able to rely on a corporate dissolution pursuant to La. R.S. 12:142.1. The Plaintiff shareholders elected to dissolve the corporation by *37 affidavit, rather than by formal liquidation, and as such waived any rights to outstanding claims. Allowing retroactive reinstatement of a corporation formerly dissolved by affidavit would be in direct conflict with the objective of 12:142.1, as articulated in Gendusa v. City of New Orleans,
In Gendusa v. City of New Orleans, 93-1527, 7-8 (La.App. 4 Cir. 2/25/94),
Where a corporation has such outstanding claims or obligations, the appropriate method of dissolution is through a voluntary liquidation, with appointment of a liquidator and the orderly collection of claims, payment of debts аnd transfer of assets. Under a § 142 voluntary liquidation, a liquidator would have been vested with the authority to demand, collect, sue for and recover in the name of the corporation, the debts and property of the corporation, and to compromise, compound and settle claims of the corporation on such terms and conditions as the liquidator deems best. La. R.S. 12:145. This result is consistent with the Louisiana Code оf Civil Procedure. The liquidator appointed by a Louisiana court is the proper plaintiff to sue to enforce a right of the corporation. La.C.Civ.P. art. 692; Gendusa.
This Court stated in Gendusa that "[b]usiness corporations are created by statute, and their existence and operations are regulated by the business corporation law and any special professional corporation statute that may be applicable. As а statutory creation, the business or professional corporation has no rights outside the four corners of the enabling statute. Absent language in LSA R.S. 12:142.1 allowing for survival of inchoate corporate claims, we find no authority compelling such a result." Gendusa, 93-1527, 8,
In In re Reinstatement of North Louisiana Well Servicing Co., Inc.,
*38 In the case at bar, the shareholders knew of the claims the corporation had against the defendants when they chose to dissolve the corporation by affidаvit. They could have dissolved the corporation through liquidation and preserved their claims but did not do so. As stated by this Court in Gendusa and Robertson, there is no public policy and no statutory provision to protect a shareholder, in possession of all relevant information concerning his corporation's inchoate claim, from the loss of that right through his own voluntary dissolution of the corporation by affidavit. Likewise, while La. R.S. 12:142.1(B) allows for reinstаtement of the corporation after dissolution by affidavit, there is no public policy or statutory provision which permits the reinstatement to be retroactive and grants the revival of the corporаtion's inchoate claims. As such, Leader Buick does not have a right of action against the defendants for the breach of the purchase agreement. Leader Buick's claims against the defendants werе extinguished when the corporation was dissolved by affidavit. The reinstatement of the corporation did not revive its claims against the defendant. Thus, the trial court correctly maintained the defendants' exception of no right of action.
Accordingly, the judgment of the trial court granting the defendants' exception of no right of action is affirmed.
AFFIRMED.