Opinion
CIVIL ACTION NO. 01-2893, (REF: 02-2038), SECTION "L" (5)
January 15, 2003
ORDER REASONS
Before the Court is the Motion of defendants Procorp Associates, Inc. ("Procorp") and Dan Spence ("Spence") to Dismiss the Complaint filed by plaintiff JRL Enterprises, Inc. ("JRL") in Civil Action Number 02-2038, the consolidated case in the above-captioned proceeding. For the following reasons, the Court finds that the claims against defendants sounding in tort have prescribed; the court further finds that the complaint fails to set forth a cause of action against Spence. individually, for breach of a fiduciary duty. Accordingly, the Court GRANTS the defendants' motion and DISMISSES the claims of JRL in Civil Action Number 02-2038.
I. BACKGROUND
Plaintiff, JRL, is a computer software company that designs educational software. During the fall of 2000, JRL began exploring the possibility of an initial public offering of its stock. To assist in this endeavor, it contracted with defendant Procorp, a human resources consulting firm. Defendant Spence was the president of Procorp at that time, and entered into the agreement with JRL in January, 2001.
By August, 2001, the relationship between the parties had soured, and JRL filed suit against Procorp in Civil District Court for Orleans Parish asserting claims for breach of contract, negligence, and breach of fiduciary duties owed by Procorp to JRL. JRL further sought a declaratory judgment that it did not owe Procorp $378,641 in fees under the services contract. Procorp removed the lawsuit to this Court, asserting diversity jurisdiction. According to the petition, Procorp had convinced JRL to turn over human resource functions to Procorp for efficient management. However, JRL alleged, the defendant shut down JRL's operations and prevented "performance of any useful work by company employees." When JRL appointed a new CEO, he terminated the contract, and the lawsuit followed.
This action was assigned Civil Action Number 01-2893, and is the lead case in this consolidated proceeding.
Procorp answered and counterclaimed against JRL for the unpaid amounts of the contract. It also added JRL's CEO, John Lee, as a third party defendant based on JRL's lack of solvency. Lee then attempted to sue Spence individually for defamation, but this action was dismissed by this Court by Order and Reasons dated January 11, 2002. JRL thereafter sought leave to amend its petition to add Spence personally as a defendant, alleging that he was part of a conspiracy to take over JRL. Procorp opposed the proposed amendment, and this Court denied leave to amend on June 14, 2002. JRL then filed a new complaint in this Court on July 2, 2002 naming Procorp and Spence as defendants and asserting substantially the same claims as it had in its proposed amended pleadings. This second suit was docketed as Civil Action Number 02-2038 and was consolidated with the first-filed suit for trial before this Court.
The second complaint asserts causes of action against Spence and Procorp, as Spence's employer under the theory of respondeat superior, for tortious interference with contractual relations, tortious interference with prospective business opportunities of JRL, breach of Spence's fiduciary duties to JRL, negligence, and conspiracy. According to the allegations of the complaint, Spence, JRL's CFO Louis Raspino, and JRL's primary lender engaged in a conspiracy to attempt an improper hostile takeover of JRL by the lender. JRL alleged that Spence divulged confidential information about JRL to the bank, and prevented JRL from earning any productive revenue.
Spence and Procorp now move to dismiss the second complaint (02-2038) pursuant to Federal Rule of Civil Procedure 12(b)(6). The defendants argue that the causes of action pled sound in tort and have prescribed because suit was filed more than one year after the actions allegedly occurred. Alternatively, defendants argue that the plaintiffs have failed to assert any claims upon which relief can be granted. JRL opposes the motion and argues that its filing of the first suit interrupted prescription as to both Spence and Procorp because the two are solidarily liable. JRL further asserts that its pleadings sufficiently indicate the existence of various alleged causes of action.
II. ANALYSIS
A. Rule 12(b)(6) Standard
The Federal Rules of Civil Procedure permit a defendant to seek dismissal of a complaint based on the "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). When considering a motion to dismiss under Rule 12(b)(6), a district court should construe the complaint liberally in favor of the plaintiff, assuming all factual allegations to be true. See Leleux v. United States, 178 F.3d 750, 754 (5th Cir. 1999). A complaint may not be dismissed "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (quoting Lowrey v. Texas A M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997)).
B. Prescription
This Court, sitting in diversity, is bound to apply the laws of Louisiana to the claims raised in these pleadings. Actions sounding in tort prescribe within one year of "the day injury or damage is sustained." LA. CIV. CODE. ANN. art. 3492. In this case, JRL asserts, in its second complaint, causes of action sounding in tort (tortious interference with contractual relationships and business interests, negligence, and conspiracy) for actions that occurred between January, 2001 and April, 2001. The second complaint was not filed until July 2, 2002. Clearly, the tort claims have prescribed on their face; however, that does not end this Court's inquiry, as JRL may still argue that prescription has not run for some reason. "When it is clear on the face of a plaintiff's petition that prescription has run, the plaintiff bears the burden of showing why the claim has not prescribed." Williams v. Sewerage Water Board of New Orleans, 611 So.2d 1383, 1386 (La. 1993).
JRL asserts that prescription against Spence and Procorp was interrupted on August 15, 2001 when it filed its petition in Civil District Court. To maintain this argument, JRL relies on Louisiana Civil Code articles 3462 and 1799, and the assertion that Spence and Procorp are solidarily liable. The defendants maintain that Spence and Procorp are not solidarily liable because the Civil Code requires a showing of a conspiracy to commit an intentional and willful act. See LA. CIV. CODE ANN. art. 2324.
"Prescription is interrupted . . . when the obligee commences action against the obligor in a court of competent jurisdiction and venue." LA. CIV. CODE ANN. art. 3462.
"The interruption of prescription against one solidary obligor is effective against all solidary obligors and their heirs." LA. CIV. CODE ANN. art. 1799.
Civil Code article 2320 imposes liability on employers for torts committed by their employees while in the course and scope of their employment. LA. CIV. CODE ANN. art. 2320. Such liability has been classified as "solidary," but the liability differs from the traditional notion of solidary liability because an employer's liability is "vicarious" or "derivative." See Sampay v. Morton Salt Co., 395 So.2d 326, 328 (La. 1981). Thus, the employer is liable for the acts of the employee, but the employee is not liable for the acts of the employer.
This distinction is critical because JRL's petition in the first case asserted causes of action only against Procorp for actions arising out of the contract to perform services. The second complaint considers facts arising out of the alleged takeover of JRL by Spence and others. While Procorp may be liable for these acts if Spence was acting in the course and scope of his employment, it cannot be said that Spence is liable to JRL for Procorp's actions in the performance of the contract. Thus, these are separate claims and must be treated as such; therefore, no interruption has occurred. Accordingly, the Court finds that JRL has failed to carry its burden that prescription was interrupted on the claims asserted in JRL's second complaint. The claims have prescribed and should be dismissed.
Furthermore, the Court finds the case of Autrey v. Energy Corp. of America, Inc., 594 So.2d 1354 (La.App. 3d Cir. 1992), instructive on these issues. In Autrey, the plaintiff filed suit for worker's compensation benefits against his employer for claims arising out of heart problems the plaintiff had experienced while working. He was thereafter cleared for work, but the defendant did not re-assign the plaintiff to resume working. As a result, plaintiff amended his complaint to include charges of retaliatory discharge. These claims were made more than two years after he had been cleared to work. The trial court denied the employer's exception of prescription, but the Third Circuit Court of Appeal reversed. The court found that the worker's compensation claim and the retaliatory discharge claim lacked a "factual connexity" to the first suit that would interrupt prescription as to the second suit. The court found that the filing of the worker's compensation suit did not put the employer on notice of a potential retaliatory discharge claim such that prescription was not interrupted.
The Third Circuit in Autrey distinguished the facts before it from the Louisiana Supreme Court's decision in Parker v. Southern American Ins. Co., 590 So.2d 55 (La. 1991). In Parker, the plaintiff sued her husband's employer for wrongful death after a previous court held that her first suit for worker's compensation benefits failed to state a cause of action, because the worker's compensation act was inapplicable. The court held that the filing of the first suit interrupted prescription on the second suit. Id. at 56. The Third Circuit in Autrey found that the factual connexity was greater in that case because the two claims in Parker were based on the same set of facts. See Autrey, 594 So.2d at 1359.
Similarly, the two complaints in this case allege a different set of facts as the bases for their causes of action. Further, it cannot be said that the first suit put Spence on notice of a potential cause of action against him for actions arising out of an alleged hostile takeover. The plaintiff is asserting liability against Spence only for his role in the alleged hostile takeover of JRL. Accordingly, this Court must treat the two complaints as separate and distinct, and finds that the first complaint does not interrupt prescription as to the second complaint. Accordingly, JRL's tort claims against Spence and Procorp in action 02-2038 are untimely, and should be dismissed.
The only remaining non-tort claim against Spence is for breach of fiduciary duty. Such claims are personal actions and are subject to a liberative prescription often years. See LA. CIV. CODE ANN. art. 3498; Copeland v. Wasserstein, Perella Co., Inc., 278 F.3d 472, 478 (5th Cir. 2002). The Copeland Court has recognized that to sustain a cause of action a plaintiff must "allege self-dealing, breach of the duty of loyalty, fraud, or breach of trust on the party of his fiduciary." Id. at 478. Failure to do so will result in the claims being treated as sounding in tort. See id. Procorp urges the Court to find that these claims sound in tort and have thus prescribed like the other claims. However, because the Court finds that the plaintiffs have failed to establish a legal right to maintain this action, it need not consider the prescription issue in this case.
B. Fiduciary duty of a corporate employee
It is a well-recognized principle of Louisiana law that an action for breach of fiduciary duty does not lie against corporate officers absent allegations of fraud on the part of the officers. See Young v. Adolph, 821 So.2d 101, 106 (La.App. 5th Cir. 2002); Dutton Vaughan, Inc. v. Spurney, 600 So.2d 693, 697 (La.App. 4th Cir. 1992); Unimobil 84, Inc. v. Spurney, 797 F.2d 214, 215 (5th Cir. 1986). Allegations of fraud must be pled "with particularity." FED. R. CIV. P. 9(b). JRL's pleadings do not allege any instances of fraud. Accordingly, the pleading has failed to state a cause of action upon which relief can be granted. The fiduciary duty claims, therefore, must also be dismissed.
III. CONCLUSION
In conclusion, the Court finds that the claims of JRL in the second complaint, Number 02-2038, were filed more than one year since the date of their occurrence; the Court further finds that JRL has failed to carry its burden of showing that prescription was interrupted. Thus, these claims have prescribed. As to the claim for breach of fiduciary duty against Spence, the Court finds that, absent allegations of fraud, no legal basis exists upon which relief may be granted. These claims also fail. Accordingly, IT IS ORDERED that the Motion to Dismiss the allegations raised in JRL's July 2, 2002 complaint is GRANTED, and the claims are hereby DISMISSED.