Opinion
23-CA-211
05-29-2024
5301 JEFFERSON HWY, LLC v. A. MALONEY MOVING & STORAGE, INC. D/B/A MALONEY MOVING AND STORAGE AND MALONEY PRODUCTIONS, INC. (WITH TRADENAME MALONEY LOGISTICS)
COUNSEL FOR DEFENDANT/APPELLANT, A. MALONEY MOVING & STORAGE, INC. D/B/A MALONEY MOVING AND STORAGE AND MALONEY PRODUCTIONS, INC. J. Scott Loeb Lauren F. Bartlett Jason R. Anders COUNSEL FOR PLAINTIFF/APPELLEE, 5301 JEFFERSON HWY, LLC AND DEFENDANT CRAIG MALONEY Patrick S. McGoey Andrea V. Timpa McClain R. Schonekas
ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 820-284, DIVISION "F" HONORABLE MICHAEL P. MENTZ, JUDGE PRESIDING
COUNSEL FOR DEFENDANT/APPELLANT, A. MALONEY MOVING & STORAGE, INC. D/B/A MALONEY MOVING AND STORAGE AND MALONEY PRODUCTIONS, INC. J. Scott Loeb Lauren F. Bartlett Jason R. Anders
COUNSEL FOR PLAINTIFF/APPELLEE, 5301 JEFFERSON HWY, LLC AND DEFENDANT CRAIG MALONEY Patrick S. McGoey Andrea V. Timpa McClain R. Schonekas
Panel composed of Judges Fredericka Homberg Wicker, Marc E. Johnson, and Timothy S. Marcel
MARC E. JOHNSON JUDGE
Appellants, A. Maloney Moving and Storage, Inc. d/b/a Maloney Moving and Storage and Maloney Productions, Inc. seek review of the 24th Judicial District Court's November 9, 2022 judgment granting Appellee, 5301 Jefferson Hwy, LLC's, Peremptory Exceptions of Res Judicata, No Cause of Action, and Prescription. For the following reasons, we affirm in part, and reverse in part the district court's judgment.
Appellants in the instant action are businesses owned by Robert Maloney, Jr. and Kurt Maloney. Appellee, 5301 Jeff Hwy, LLC is managed by their brother, Craig. The brothers, and/or their corporate alter egos, are parties in extensive litigation surrounding their parents' successions. The Supreme Court has recently granted writs in Succession of Maloney, 23-1447 (La. 1/17/24), 376 So.3d 845, 846 and 231452 (La. 1/17/24), 376 So.3d 840 to review this Court's decision affirming the district court's judgment that Robert Jr. and Kurt were disinherited by their late mother's will according to its terms.
FACTS AND PROCEDURAL HISTORY
Appellants, A. Maloney Moving and Storage, Inc. d/b/a Maloney Moving and Storage and Maloney Productions, Inc. (collectively, "Maloney"), leasedstorage space that served as the primary business address for 5301 Jefferson Hwy, LLC ("5301 Jeff Hwy"). Appellees, Plaintiffs, and Defendants-in-Reconvention, 5301 Jeff Hwy brought an eviction action against Maloney in the 24th Judicial District Court in August 2020. Instead of proceeding with a Rule for Eviction, the parties entered into a Consent Judgment on March 12, 2021 that terminated Maloney's right of occupancy the same day and gave Maloney two months to vacate the premises. On May 12, 2021, Maloney filed a motion requesting an extension of time to vacate the premises. The next month, the district court denied the motion and issued a warrant of possession. 5301 Jeff Hwy filed the instant ordinary proceeding on August 11, 2021 against Maloney seeking damages for breach of contract/lease and, alternatively, unjust enrichment. 5301 Jeff Hwy sought to recover over $660,000 in unpaid rent, common area maintenance costs, and other expenses, plus attorney's fees and costs. On January 21, 2022, Maloney filed a [Dilatory] Exception of Lack of Procedural Capacity. Maloney alleged that Third-Party Defendant Craig Maloney had "no power or authority to act on behalf of 5301 either as a manager, member or otherwise" and also "wrongfully evicted [Maloney] so that his company, Gallagher International, could have sole possession of the property". In its Opposition, 5301 Jeff Hwy contended that, in the eviction action, the district court had already rejected a similar argument, and the "Exception, here, is also without merit and just another tactic to delay having a money judgment entered against them for hundreds of thousands of dollars in unpaid rent." The district court held a trial on the exception on March 31, 2022; Maloney's exception was overruled at the end of the hearing; the court issued a written judgment on September 8, 2022. Defendants did not seek appellate review of the district court's oral or written judgments.
In June 2005, 5301 Jeff Hwy, LLC entered into a 25-year lease with Maloney Moving, Maloney Productions, and Maloney Logistics. The lease was signed by the late Robert (Sr.) and Bonny Babin Maloney as lessors, and the late Jeannie Maloney, their daughter, as the president of Maloney Moving. All three successions are still open, but Jeannie, who predeceased her parents, died intestate. Therefore her siblings inherited her estate after their parents' deaths, which ended the usufruct over her property. In 2020, surviving siblings, Robert Jr., Kurt, and sister Julie were placed in possession of their % interests in Maloney Moving and Maloney Productions. The following year, brother Craig renounced his interests in Maloney Moving and Maloney Productions, and the other remaining siblings now hold a 1/3 interest each in the companies. .
During the March 31, 2021 hearing, the court pointed out that Judge Schlegel had previously heard the same arguments about Craig's capacity to act as member/manager during a hearing on exceptions of no right of action and no cause of action Maloney had filed in the earlier eviction case, and denied the same. A week later, the court heard 5301 Jeff Hwy's Motion to Cancel Improper [Mahoney's] Notice of Lis Pendens, which was granted at the end of the hearing and rendered on April 22, 2022. During the hearing, counsel for Maloney implicitly acknowledged that the court had found that Craig did have the capacity to act on 5301 Jeff Hwy's behalf ("The ability of [Craig] to manage the LLC and to act on behalf of the LLC was in dispute. So the lis pendens was appropriate at that point. Your Honor's ruling, respectively is not final, that's still an issue, could still be subject to a new trial or a writ."). Maloney also did not seek review of those oral or written judgments.
Almost a month before the Exception of Lack of Procedural Capacity was filed, Maloney filed an Answer, Affirmative Defenses, Jury Demand, Reconventional Demand, and Third-Party Demand. Maloney prayed the district court grant judgment in its favor and dismiss all of the claims and causes of action asserted in 5301 Jeff Hwy's petition. Maloney also claimed that the 50% interest in 5301 Jeff Hwy Craig received from their mother via donation inter vivos was not a voting interest. Maloney/Robert Jr. and Kurt also claimed that the executor of their late sister's estate held the majority voting interest of 5301 Jeff Hwy, so the September 2019 Operating Agreement signed by Craig and their late mother had no effect. Maloney further alleged that Craig also lacked capacity to act as executor for their late parents' estates. Finally, Maloney claimed that Craig, on behalf of 5301 Jeff Hwy, unlawfully removed the "personal property of [Maloney]" without obtaining a warrant executed by the sheriff, constable, or marshal to deliver possession of the premises. Maloney asserted a counterclaim for damages based on: 1) wrongful eviction; 2) tortious interference with contract; 3) negligence; 4) breach of contract (lease); 5) unfair trade practices and self-dealing; and 6) unjust enrichment.
In response, 5301 Jeff Hwy filed Peremptory Exceptions of Res Judicata, Prescription, and No Cause of Action in Response to Reconventional and Third-Party Demands on September 12, 2022. It argued that Maloney's demands should be dismissed with prejudice under the doctrines of res judicata and compromise, for failure to state a cause of action, and/or prescription. 5301 Jeff Hwy contended that Bonny Babin Maloney was the sole voting member of the LLC at the time the Operating Agreement was executed and, thus, she did have authority to appoint Craig as Manager. 5301 Jeff Hwy also argued that "Lessees' theory, however, relied on draft[ed], undated Articles of Organization, for a different entity, 5301 Jefferson Highway, LLC, which were never filed with the Secretary of State, and ignores Louisiana law which is clear that LLC interests acquired through inheritance do not convey voting rights, but merely nonmember assignee status without voting rights." (Emphasis in original). 5301 Jeff Hwy also noted that the late Mrs. Maloney donated her 50% interest in the company to Craig before her death. Further, 5301 Jeff Hwy urged that it was improper to sue Craig in his individual and personal capacity as he was not a party to the lease, and he acted as Manager of the LLC in connection with the Eviction Proceeding. Therefore, none of the reconventional and third-party demands state any cause of action against Craig, personally.
The district court held a hearing on the exceptions on November 7, 2023. A few days later, the court signed a Judgment which granted: 1) the Peremptory Exceptions of Res Judicata and Prescription in favor of 5301 Jeff Hwy as to the claims for wrongful eviction, tortious interference with a contract, negligence, unfair trade practices, and unjust enrichment; 2) the Peremptory Exception of Res Judicata in favor of 5301 Jeff Hwy as to the claim for Breach of Contract; 3) the Peremptory Exceptions of Prescription and 4) the Peremptory Exception of No Cause of Action in favor of third party defendant Craig Maloney in his capacity as sole manager of 5301 Jeff Hwy (as to the third party demand on the claims for wrongful eviction, tortious interference with a contract, negligence, unfair trade practices, and unjust enrichment); and, 5) the Peremptory Exception of No Cause of Action in favor of (5301 Jeff Hwy) Craig Maloney as to the Third-Party Demand on the claims for breach of contract. The November 9, 2023 judgment was certified as a final judgment pursuant to La. C.C.P. art. 1915(B). This timely appeal followed.
ASSIGNMENTS OF ERROR
Maloney argues that the Consent Judgment only pertains to 5301 Jeff Hwy's rule for eviction and does not contain any language it intended to waive the claims asserted in its reconventional demand. It also argues that the Consent Judgment does not affect rights acquired after the agreement was executed as those rights were not expressly included in the agreement. Thus, the claims for res judicata and compromise should have been overruled. Maloney also argues that an improper cumulation of actions occurred as an eviction is a summary proceeding, and the suit for damages is an ordinary action. In addition, regarding prescription, they argue that the wrongful eviction and breach of contract claims are subject to a liberative prescription period of ten years, and the remaining claims are also timely because of contra non valentem - 5301 Jeff Hwy argued prescription started when the warrant of possession was issued, but Maloney argues its damages began to accrue when it learned that Maloney started disposing of or destroying its property. Maloney further argues that the tort is ongoing in nature and, because they do not have access to the building, discovery must be conducted so it can fully account for all of its damages. Maloney also urges that whether it lacks another remedy at law besides unjust enrichment cannot be determined absent discovery; if there is another remedy available to Maloney, then 5301 Jeff Hwy can move for summary judgment at that time. Last, Maloney contends that issues of fact remain regarding whether Craig is shielded from personal liability as member/manager of 5301 Jeff Hwy, or to what extent, under La. R.S. 12:1320.
La. R.S. 12:1320, entitled, "Liability to third parties of members and managers" states:
A. The liability of members, managers, employees, or agents, as such, of a limited liability company organized and existing under this Chapter shall at all times be determined solely and exclusively by the provisions of this Chapter.
B. Except as otherwise specifically set forth in this Chapter, no member, manager, employee, or agent of a limited liability company is liable in such capacity for a debt, obligation, or liability of the limited liability company.
C. A member, manager, employee, or agent of a limited liability company is not a proper party to a proceeding by or against a limited liability company, except when the object is to enforce such a person's rights against or liability to the limited liability company.
D. Nothing in this Chapter shall be construed as being in derogation of any rights which any person may by law have against a member, manager, employee, or agent of a limited liability company because of any fraud practiced upon him, because of any breach of professional duty or other negligent or wrongful act by such person, or in derogation of any right which the limited liability company may have against any such person because of any fraud practiced upon it by him.
5301 Jeff Hwy counters that Maloney consented to the eviction and did not seek review of the district court's judgment overruling its Exception of Lack of Procedural Capacity through which it challenged his authority to act as manager to evict Maloney from the premises. 5301 Jeff Hwy notes that Maloney filed its Answer, Affirmative Defenses, Jury Demand, Reconventional Demand, and Third-
Party Demand over a year after the Consent Judgment and Eviction. Further, Maloney "made the exact same allegations and arguments in the Reconventional and Third-Party Demands" as it urged in its exception. In its brief, 5301 Jeff Hwy avers that "[B]ecause Lessees consented to the eviction and agreed to the removal of their property from the premises by May 11, 2022, both orally under oath and in the Consent Judgment, all of their claims are barred by the doctrine of res judicata and/or compromise." (Emphasis in original).
5301 Jeff Hwy also maintains that the district court correctly granted its exception of no cause of action, particularly regarding Craig, personally, as he was not a party to the lease or the eviction proceeding. 5301 Jeff Hwy also argues any claims Maloney could have filed against Craig in his capacity as member/manager have prescribed under La. R.S. 12:1502. Further, Maloney's wrongful eviction, tortious interference with contract, negligence, and unfair trade practice claims are subject to a liberative prescription period of one year and have prescribed under La. C.C. art. 3492 and La. R.S. 51:1409(E). Walters v. MedSouth Record Mgmt., LLC, 100352 (La. 6/4/10), 38 So.3d 241, 242 citing Jim Walter Homes v. Jessen, 98-168 (La.App. 3 Cir. 3/31/99), 732 So.2d 699, 706. 5301 Jeff Hwy asserts, "[t]he mere fact that a plaintiff does not successfully pursue another available remedy does not give the plaintiff the right to recover under the theory of unjust enrichment." Last, it avers the district court did not err when it did not grant leave "to amend the pleadings to conform to the evidence presented in the trial court" under La. C.C.P. art. 1154, where Maloney had not filed any answer, never filed an Amended Reconventional and Third Party Demand, and could not cure the objections raised by the Exceptions by amendment.
LAW AND DISCUSSION
Assignment No. 1: The Trial Court committed reversible error when it granted the Exception of Res Judicata.
The doctrine of res judicata is found in La. R.S. 13:4231, and bars a subsequent action when the following elements are satisfied: (1) the judgment is valid; (2) the judgment is final; (3) the parties are the same; (4) the cause(s) of action asserted in the second suit existed at the time of the final judgment in the first litigation; and (5) the cause(s) of action asserted in the second suit arose out of the transaction or occurrence that was the subject matter of the first litigation. Burguieres v. Pollingue, 02-1385 (La. 2/25/03), 843 So.2d 1049, 1053. The party who urges an exception of res judicata bears the burden of proving its essential elements by a preponderance of the evidence.Rudolph v. D.R.D. Towing Co., LLC, 10-629 (La.App. 5 Cir. 1/11/11), 59 So.3d 1274, 1277. (Emphasis in original).
The doctrine of res judicata is stricti juris, and any doubt concerning the application of res judicata must be resolved against its application. Bovie v. St. John the Baptist Par., Dep't of Streets &Roads, 13-162 (La.App. 5 Cir. 9/4/13), 125 So.3d 1158, 1161. The res judicata effect of a prior judgment is a question of law that is reviewed de novo. Bovie v. St. John the Baptist Par., Dep't of Streets &Roads, 13-162 (La.App. 5 Cir. 9/4/13), 125 So.3d 1158, 1161.
In this instance, no exhibits were introduced at the hearing on the exceptions. Evidence not properly and officially offered and introduced cannot be considered, even if it is physically placed in the record. Documents attached to memoranda do not constitute evidence and cannot be considered as such on appeal." Wells Fargo Fin. Louisiana, Inc. v. Bordelon, 21-80 (La.App. 5 Cir. 12/22/21), 334 So.3d 996, 1003, citing Denoux v. Vessel Mgmt. Servs., Inc., 072143 (La. 5/21/08), 983 So.2d 84, 88-89. Without any documentary evidence, the defendants-in-reconvention cannot meet their burden of proving the objection of res judicata. See Cyprian v. Tangipahoa Parish School System, 21-238 (La.App. 1 Cir. 11/16/21),__So.3d__,__, 2021 WL 5316999, *2.
The consent judgment from case no 809-484, the eviction proceeding, was not admitted into the record at the trial on the exceptions. The record also does not show a party requested that the trial court take judicial notice of the eviction proceeding and judgment, or the court on its own took judicial notice (upon reasonable notice to all other parties) of those proceedings under La. C.E. art. 202; See In re L. D. B., 17-373 (La.App. 5 Cir. 10/4/17), 228 So.3d 296, 300 (finding documentation of other courts' proceedings must be offered into evidence in the usual manner).
Even if the Consent Judgment had been entered into the record, or if we were to assume that the district court took judicial notice of its prior judgment, res judicata does not necessarily perempt all of Maloney's claims. A compromise settles only those differences the parties clearly intended to settle, including the necessary consequences of what they express. La. C.C. art. 3076; Singleton v. UnitedServs. Auto. Ass'n, 18-15 (La.App. 5 Cir. 10/17/18), 258 So.3d 1074, 1076, writ denied, 18-1814 (La. 1/14/19), 261 So.3d 787. Maloney agreed that its right of occupancy would end on March 12, 2021 and it would remove all its items and personal property by May 11, 2021. The consent judgment also references another consent judgment in another case, no. 809-921, which is not a part of this record. The consent judgment in the eviction case also ordered the individuals controlling the legal entities to subscribe to a certain code of conduct in its actions towards one another, and provided instructions on how property insurance coverages should be maintained, pending the completion of the eviction process. Based on the record before us, we cannot determine which ancillary claims, if any, the parties intended to settle. Thus, we cannot find that all the elements of res judicata are met in this instance.
Further, Maloney failed to remove all of movables it owned or possessed from the premises by May 11, 2021, and it alleges that the warrant of possession was not properly executed and 5301 Jeff Hwy removed or disposed of the things in its possession. The consent judgment does not contemplate what happens in the event that either party failed to perform per its terms.
However, we find that the trial court's previous judgment overruling Maloney's Exception of Lack of Procedural Capacity in this case could be considered by the trial court although it was not properly taken into evidence at the trial on the exception, and the court did not explicitly take judicial notice of its judgment. We find that the elements needed to apply res judicata on the issue of Craig's right to act as member/manager of 5301 Jeff Hwy exist; the judgment implicitly found he could institute the suit for damages on behalf of that corporation, but the prior judgment on the exception of lack of procedural capacity does not preclude Maloney from alleging other facts that may be sufficient to support piercing the corporate veil and finding Craig personally liable for his actions. The trial on the exception only addressed whether Craig could act as member/manager based on the corporation's articles of incorporation and operating agreement. Further, Maloney did not seek supervisory review of that judgment.
Considering the foregoing, the trial court judgment sustaining the 5301 Jeff Hwy's exceptions of res judicata regarding Craig in his personal capacity and the corporation must be reversed. We note that the peremptory exception raising the objection of res judicata may be re-urged in the trial court in accordance with La. C.C.P. art. 928(B). See Jefferson v. Bd. of Supervisors of S. Univ. &Agric. &Mech. Coll., 21-716 (La.App. 1 Cir. 3/3/22), 341 So.3d 603, 608.
Assignment No. 2: The Trial Court erred by granting the Exception of No Cause of Action as to Craig Maloney.
The exception of no cause of action tests the legal sufficiency of the petition by determining whether the law affords a remedy on the facts alleged in the pleading. Hurricane Fence Co. v. Jensen Metal Prods., 12-956 (La.App. 5 Cir. 5/23/13), 119 So.3d 683. The appellate court reviews a trial court's ruling sustaining an exception of no cause of action de novo because the exception raises a question of law and the court's decision is based solely on the sufficiency of the petition. Johnson v. Motiva Enters., LLC, 128 So.3d at 488. The peremptory exception of no cause of action is triable on the face of the pleadings, and, for purposes of resolving issues raised by the exception, the well-pleaded facts in the petition must be accepted as true. Par. of Jefferson v. Bankers Ins. Co., 11-590 (La.App. 5 Cir.
2/28/12), 88 So.3d 1082, 1088. No evidence may be introduced at any time to support or controvert an exception of no cause of action. Id. Because Louisiana uses a system of fact pleading, a plaintiff is not required to plead the theory of recovery in his petition; however, mere conclusions of the plaintiff unsupported by facts will not set forth a cause of action. Id.Khoobehi Properties, LLC v. Baronne Dev. No. 2, L.L.C., 16-506 (La.App. 5 Cir. 3/29/17), 216 So.3d 287, 297, writ denied, 17-893 (La. 9/29/17), 227 So.3d 288. "In deciding an exception of no cause of action a court can consider only the petition, any amendments to the petition, and any documents attached to the petition." Welch v. United Med. Healthwest-New Orleans, L.L.C., 21-684 (La.App. 5 Cir. 8/24/22), 348 So.3d 216, 221, citing White v. New Orleans Ctr. for Creative Arts, 19-213 (La.App. 4 Cir. 9/25/19), 281 So.3d 813, 819, writ denied, 19-1725 (La. 12/20/19), 286 So.3d 428. "A court cannot consider assertions of fact referred to by the various counsel in their briefs that are not pled in the petition." Id. "In ruling on an exception of no cause of action, the court considers whether the plaintiff belongs to a particular class for which the law grants a remedy for a particular grievance. It is not appropriate to consider the plaintiff's ability to prevail on the merits or whether the defendant has a valid defense." Id., citing Madisonville State Bank v. Glick, 05-1372 (La.App. 3 Cir. 5/3/06), 930 So.2d 263, 265 (citations omitted).
5301 Jeff Hwy maintains that, on the face of the petition, Maloney has failed to state a cause of action against Craig personally. The "narrowly defined circumstances" in which a member of a limited liability company may be held personally liable are set forth in Louisiana Revised Statute 12:1320(D), which provides:
Nothing in this Chapter shall be construed as being in derogation of any rights which any person may by law have against a member, manager, employee, or agent of a limited liability company because of any fraud practiced upon him, because of any breach of professional duty or other negligent or wrongful act by such person, or in
derogation of any right which the limited liability company may have against any such person because of any fraud practiced upon it by him.
Under this provision, the limitation of liability normally afforded a member of a limited liability company does not apply if the member (1) engages in fraud, (2) commits a negligent or wrongful act, or (3) breaches a professional duty. Wilson v. Two SD, LLC, 15-959 (La.App. 1 Cir. 12/23/15), 186 So.3d 103, 114-15.
When determining whether a member may be held personally liable for his negligent or wrongful act, the following four factors should be considered: (1) whether the member's conduct could be fairly characterized as a traditionally recognized tort; (2) whether the member's conduct could be fairly characterized as a crime, for which a natural person, not a juridical person, could be held culpable; (3) whether the conduct at issue was required by, or was in furtherance of, a contract between the claimant and the limited liability company; and (4) whether the conduct at issue was done outside the member's capacity as a member. Id.
Maloney, in an attempt to assign personal liability to Craig by piercing the 5301 Jeff Hwy corporate veil, claims that Craig committed fraud, and acted outside of his capacity as a member/manager. In order to establish a claim for fraud, the plaintiff must prove: 1) a misrepresentation, suppression, or omission of true information; 2) the intent to obtain an unjust advantage or to cause damage or inconvenience to the other party; and 3) the resulting error must relate to a circumstance substantially influencing the other party's contractual consent. Robinson-Carter o/b/o Robinson-Carter v. St. John the Baptist Par. Sch. Bd., 23397 (La.App. 5 Cir. 4/3/24), reconsideration denied sub nom. Robinson-Carter v. St. John the Baptist Par. Sch. Bd., 23-397 (La.App. 5 Cir. 4/19/24). In its reconventional and third-party demands, Maloney has alleged that Craig has committed fraud in his capacity as executor of his mother and father's succession representative, in addition to its claims that his acts as member/manager in the eviction action were unauthorized. But, Maloney is not a party to the successions and Craig, personally, was not a party to the eviction. On its face, the petition does not allege facts sufficient to establish the elements of a fraud claim against Craig personally under La. R.S. 12:1320. Last, considering that we found that the district court previously found that Craig did have authority to act as member/manager on behalf of the corporation, we also find that Maloney has failed to state a valid cause of action against Craig.
However, in reviewing an exception of no cause of action, this Court must consider Maloney's well-pleaded facts as true. Maloney has alleged that 5301 Jeff Hwy has violated the terms of lease and did not lawfully, or reasonably act to give effect to the judgment of eviction, and it suffered damages as a result of 5301 Jeff Hwy's violation of La. C.C. art. 4733.
We are charged to construe pleadings so as to achieve substantial justice and in order to reach the truth, to avoid the application of harsh, technical rules of pleading. See Solis, 63 So.3d at 238. To that end, we could also consider 5301 Jeff Hwy's pleading as a peremptory exception of no right of action, based on 5301's action to evict Maloney via consent judgment in the eviction case, a summary proceeding, and the prior judgment in this ordinary proceeding that found Craig did have the authority to act as member/manager on behalf of 5301 Jeff Hwy.
The exception of no right of action is directed to showing that a plaintiff has no legal right or interest in enforcing the matter asserted, based upon the facts and evidence submitted. La. C.C.P. art. 927. This Court reviews an exception of no right of action de novo. 3218 Magazine, L.L.C. v. Lloyds of London, 08-727 (La.App. 5 Cir. 2/25/09), 10 So.3d 242, 243. Evidence is admissible in support of, or against, the exception of no right of action. Id.
An appellate court may, sua sponte, raise and consider the peremptory exceptions of no right of action and no cause of action. La. C.C.P. art. 927(B); Jefferson Par. Sch. Bd. v. TimBrian LLC, 18-349 (La.App. 5 Cir. 5/9/19), 273 So.3d 528, 534, writ denied, 19-957 (La. 9/24/19), 278 So.3d 979, and writ denied, 19-954 (La. 9/24/19), 279 So.3d 388, and writ denied, 19-1010 (La. 9/24/19), 279 So.3d 933.
Here, no evidence was offered and admitted into the record at the hearing on the exceptions to either support or oppose the exceptions filed. Therefore, the only document we can consider besides the petition itself is the lease that was attached to 5301 Jeff Hwy's petition and incorporated by Paragraph 5 of that document, and Maloney references in Paragraphs 40, 43, and 49 of its Answer, Affirmative Defenses, Jury Demand, Reconventional Demand, and Third-Party Demand. But, neither party properly offered, filed, introduced and admitted the consent judgment into the record. Therefore, we cannot find that Maloney had no right of action against 5301 Jeff Hwy.
Accordingly, we find the trial court erred when it sustained 5301 Jeff Hwy's exception of no cause of action with regard to the corporation, but correctly sustained the exception with regards to Craig in his personal capacity.
Assignment No. 3: The Trial Court erred by determining that the claims had prescribed.
When an exception of prescription is heard before trial, evidence may be introduced to support or controvert the exception. La. C.C.P. art. 931. When evidence is introduced at a hearing on an exception of prescription, the trial court's findings of fact are reviewed under the manifest error standard. Williams v. Louisiana Citizens Property Insurance Company, 12-603 (La.App. 5 Cir. 4/10/13), 115 So.2d 27, 29. However, in the absence of evidence, such as is the case here, an objection of prescription must be decided upon the facts alleged in the petition with all allegations accepted as true. Id., citing Cichirillo v. Avondale Industries, Inc., 04-2894 (La. 11/29/05), 917 So.2d 424, 428.
The character of an action as disclosed in the pleadings determines the applicable prescriptive period. 55 v. State ex rel. Dept. of Social Services, 02-0831 (La. 12/4/02), 831 So.2d 926, 931; Starns v. Emmons, 538 So.2d 275, 277 (La. 1989).
La. C.C. art. 3499 provides that "[u]nless otherwise provided by legislation, a personal action is subject to a liberative prescription of ten years." Breach of contract claims are personal actions subject to a prescriptive period of ten years. Hotard's Plumbing, Elec. Heating &Air, Inc. v. Monarch Homes, LLC, 15-180 (La.App. 5 Cir. 3/16/16), 188 So.3d 391, 394.
The ten-year prescriptive period also applies to Maloney's claim for unjust enrichment. See Tr. for Melba Margaret Schwegmann v. Schwegmann Family Tr., 09-968 (La.App. 5 Cir. 9/14/10), 51 So.3d 737, 743.
The prescriptive period for delictual actions, such as negligence tortious interference with contract, and unjust enrichment is one year, which commences to run from the day injury or damage is sustained. La. C.C. art. 3492. Wrongful eviction claims accrue upon the judgment of eviction and are subject to a one year prescriptive period. See 2802 Magazine St., L.L.C. v. Eggspressions of N. Am., L.L.C., 19-85 (La.App. 4 Cir. 5/22/19), 274 So.3d 1279, 1283-84. Unfair trade practice claims under LUTPA, La. R.S. 51:1401, et seq., are also subject to a liberative prescription period of one year. La. R.S. 51:1409(E).
Maloney's allegations that 5301 Jeff Hwy is unlawfully restricting its access to movables that were in its possession support a claim of the tort of conversion. Conversion under La. C.C. art. 2315, is defined as a delictual act in derogation of possessory rights, and as any wrongful exercise or assumption of authority over another's goods, depriving him of the possession permanently or for an indefinite time. Everhome Mortgage Co. v. Lewis, 16-323 (La.App. 5 Cir. 12/7/16), 207 So.3d 646, 650-51. Conversion is also subject to the one year liberative period under La. C.C. art. 3492.
Based on Maloney's reconventional and third party demands, filed on August 5, 2022, its claims for negligence, fraud, tortious interference with contract, wrongful eviction, and unfair trade practices, as well as the possible claim for conversion have all prescribed on the face of the petition. Maloney's right to occupy 5301 Jeff Hwy ended on March 12, 2021 and they had until May 11, 2021 to remove their things from the property. The warrant for possession was issued by the trial court in the eviction proceeding on June 22, 2021. However, Maloney alleges that the torts committed by 5301 Jeff Hwy are continuing torts, and therefore its claims have not prescribed.
The jurisprudentially recognized doctrine of continuing tort is one of the exceptions to the one-year rule found in La. C.C. art. 3492. 2802 Magazine St., L.L.C., supra, 274 So.3d at 1283, citingRisin v. D. N.C. Investments, L.L.C., 05415 (La.App. 4 Cir. 12/7/05), 921 So.2d 133, 136. A continuing tort is "[w]here the cause of injury is a continuous one giving rise to successive damages." Id. "[Prescription does not begin to run until the conduct causing the damage is abated." Id. Likewise, "[t]he scope of application of continuing tort is limited" as "[b]oth conduct and damage must be continuous." Id.
However, the majority of damages Maloney alleges it incurred stem from its wrongful eviction; eviction is not an ongoing event. Further, the Supreme Court has found "[Louisiana] laws lead to the conclusion that the discovery rule cannot suspend prescription on a conversion claim." Specialized Loan Servicing, LLC v. January, 12-2668 (La. 6/28/13), 119 So.3d 582, 590. First, the discovery rule applies only in "exceptional circumstances." Id. There is nothing exceptional about conversion cases that would necessitate the application of the discovery rule, because, absent fraud on the part of the defendant, the victim, using some diligence, should be able to quickly discover that he has been the victim of conversion. Id.
If the petition is prescribed on its face, the burden shifts to the party opposing prescription to show the action is not prescribed. Williams v. Louisiana Citizens Property Insurance Company, 12-603 (La.App. 5 Cir. 4/10/13), 115 So.2d 27, 30. Again, Maloney did not introduce competent evidence on the record to show that the claims subject to the one-year liberative prescription rule were still viable at the time it filed its reconventional and third-party demands. Conversely, because 5301 Jeff Hwy also did not introduce evidence at the trial on the exception, we find that the trial court erred when it found that Maloney's breach of contract claim had prescribed.
Considering the foregoing, we find that the district court properly sustained the exception of prescription of Maloney's wrongful eviction, tortious interference with contract, negligence and unfair trade practices claims, but erred when it granted 5301 Jeff Hwy's exception of prescription with regards to Maloney's breach of contract claim and unjust enrichment claim.
Assignment No. 4: The Trial Court erred by sustaining the exceptions related to the claim for unjust enrichment.
Under Louisiana law, the requisite elements of a claim for unjust enrichment are: (1) an enrichment; (2) an impoverishment; (3) a connection between the enrichment and the impoverishment; (4) an absence of justification or cause for the enrichment and impoverishment; and (5) no other available remedy at law. Pinegrove Elec. Supply Co., Inc. v. Cat Key Const., Inc., 11-660 (La.App. 5 Cir. 2/28/12), 88 So.3d 1097, 1100-01. Pursuant to La. C.C. art. 2298, the remedy of unjust enrichment is subsidiary in nature, and "shall not be available if the law provides another remedy." Id., citing Walters v. MedSouth Record Management, LLC, 10-353 (La. 6/4/10), 38 So.3d 243. The unjust enrichment remedy is "only applicable to fill a gap in the law where no express remedy is provided." Id.
Maloney contends that 5301 Jeff Hwy's argument that, through Maloney's asserted actions, other remedies at law are available is "premature at best". However, we found that Maloney's petition states an action on its face for breach of contract, supra. See Gereighty v. Domingue, 17-339 (La.App. 5 Cir. 5/30/18); 249 So.3d 1016, 1034 (agreeing with the trial court's ruling that the defendant's Second Amended Reconventional Demand sufficiently stated a cause of action for breach of contract and a claim on unjust enrichment was not warranted). Thus, under La. C.C. art. 2298, the remedy of unjust enrichment is subsidiary in nature, and "shall not be available if the law provides another remedy." See Pinegrove Elec., 88 So.3d at 1101, citing Carriere v. Bank of Louisiana, 95-3058 (La. 12/13/96), 702 So.2d 648, 671 (on rehearing). (Emphasis added). Additional discovery is not needed; Maloney pled unjust enrichment in the alternative, it alleged other claims, but those claims have prescribed. "The mere fact that a plaintiff does not successfully pursue another available remedy does not give the plaintiff the right to recover under the theory of unjust enrichment." Pinegrove, 88 So.3d at 1101. Accordingly, this assignment of error has no merit and we find that Maloney does not have a cause of action for unjust enrichment.
Assignment No. 5: The Trial Court erred by not addressing the Motion to Amend Pleadings to Conform to the Evidence.
An exception of no cause of action questions whether the law extends a remedy against the defendant to anyone under the factual allegations of the petition. Kendrick v. Estate of Barre, 21-993 (La. 3/25/22), 339 So.3d 615, 617. The exception is triable on the face of the petition and each well-pleaded fact in the petition must be accepted as true. Id. Appellate review is de novo. Id. Because the exception raises a question of law based solely on the sufficiency of the petition, an exception of no cause of action should be granted only when it appears beyond doubt that the plaintiff cannot prove any set of facts which would entitle him to relief. Id.
Louisiana C.C.P. art. 934 provides:
When the grounds of the objection pleaded by the peremptory exception may be removed by amendment of the petition, the judgment sustaining the exception shall order such amendment within the delay allowed by the court. If the grounds of the objection raised through the exception cannot be so removed, or if the plaintiff fails to comply with the order to amend, the action, claim, demand, issue, or theory shall be dismissed.
Further,
even if a petition fails to state a cause of action, or if under the allegations, the party asserting the action lacks the procedural capacity to assert it, if the grounds of the objection can be removed by amendment, the plaintiff should be allowed to amend his demand. Where amendment would be a vain and useless act, however, amendment of the petition is not required prior to dismissal of the action. The decision to allow amendment is within the sound discretion of the trial court.Kent v. Epherson, 03-755 (La.App. 5 Cir. 12/9/03), 864 So.2d 708, 713. (Footnotes omitted). To the extent that the exception was properly granted, we find that the trial court did not abuse its discretion in not granting Maloney leave to amend its petition. With the exception of the breach of contract claim against 5301 Jeff Hwy, the claims that could be amended to state a cause of action have prescribed.
DECREE
Considering the foregoing, the district court's November 9, 2022 judgment is affirmed in part and reversed in part. The exception of res judicata is OVERRULED; the exception of no cause of action with regards to 5301 Jeff Hwy is OVERRULED. The exceptions of prescription with regards to the breach of contract claim against 5301 Jeff Hwy is OVERRULED. The judgment is otherwise affirmed in all other respects and the matter is remanded for further proceedings consistent with this opinion.
REVERSED IN PART; AFFIRMED AS AMENDED; REMANDED
MEJ
FHW
TSM