Belle Pass Terminal, Inc. v. Jolin, Inc.

800 So. 2d 762, 2001 WL 1223762
Supreme Court of Louisiana·Decided December 7, 2001·No. 2001-C-0149·Published·Cited by 64 cases

Opinion

800 So.2d 762 (2001)

BELLE PASS TERMINAL, INC. and Harold J. Callais
v.
JOLIN, INC. and Joseph E. Blanchard, Jr.
Jolin, Inc.
v.
Belle Pass Terminal, Inc., Richard P. Guidry, Individually, Elmo J. Pitre, Jr., Individually and Harold J. Callais, Individually.

No. 2001-C-0149.

Supreme Court of Louisiana.

October 16, 2001.
Opinion on Grant of Rehearing December 7, 2001.

*764 Alvin Bordelon, Jr., L.G. LaPlante, Jr., Regina C.S. Wedig, Bordelon, Hamlin & Theriot, New Orleans, Counsel for Applicant.

Jerald P. Block, Matthew F. Block, Kimberly A. Theriot, New Orleans, Counsel for Respondent.

TRAYLOR, J.[*]

We granted certiorari in this case to consider whether the court of appeal erred in affirming the trial court's ruling dismissing plaintiff's motion to annul a judgment rendered in 1992. For the reasons assigned, we reverse the judgment of the Court of Appeal, First Circuit, and remand the matter to the trial court for further proceedings.

FACTS AND PROCEDURAL HISTORY

Plaintiff, Richard Guidry, maintains the judgment rendered against him was the result of fraud or ill practices by defendant, Joseph Blanchard. Since the basis of Guidry's nullity action concerns actions taken by a co-defendant in the initial suit, it is beneficial to have a complete overview of the underlying litigation.

The original Belle Pass litigation arose from the sale of a marine terminal and docking facility at Pass Fourchon in La-Fourche, Louisiana. In 1988, Joe Blanchard (Blanchard), attempted to negotiate a sale of his marine dock and terminal business, known as Fourchon Docks on Pass Fourchon, with Milpark Drilling Fluids, Inc. The land on which the dock was located was leased to Jolin, Inc. (Jolin), a closely held corporation owned by Blanchard, by Caillouet Land Company (CLC) pursuant to a long-term lease. Blanchard's company, Jolin, owned the facility and leased the land used for the facility from CLC. By the express terms of the lease, Blanchard/Jolin could not sell, assign, or transfer the lease without CLC's consent. After the deal with Milpark Drilling fell through, Blanchard approached Elmo Pitre, Jr. (Pitre), a local business man, regarding purchasing the facility. As Pitre was unable to secure financing on his own, he attempted to put together a group of investors comprised of himself and two other investors, Harold Callais (Callais) and Richard Guidry (Guidry). The company created for the purpose of purchasing the docks was named Belle Pass Terminal, Inc. (Belle Pass).

On April 6, 1989, two separate transactions occurred with the gentlemen of Belle Pass and Blanchard. The first transaction was a cash sale of all equipment, cranes, and forklifts and other stock used in the business to Callais for the sum of $1,000,000.00 cash. The second transaction was the sale and mortgage agreement in which Blanchard and his company, Jolin, sold the docking facility to Belle Pass for the sum of $2,000,000.00 represented by a note, to be paid over a ten year period. Guidry, as president of Belle Pass, signed the note and Guidry and Pitre personally guaranteed the note; however, Callais did not guarantee the $2 million note.

After the sale, the Belle Pass business struggled and the relationships between the parties became strained. Pitre, who was working as the manager of the dock, was terminated by Guidry and Callais following Pitre's indictment on felony counts in federal court, and Pitre filed a lawsuit against Guidry and Callais over his termination. Blanchard also became upset *765 with Guidry and Callais over Pitre's dismissal from Belle Pass. Following Pitre's termination, the parties encountered difficulties involving the required insurance coverage and timeliness of the scheduled payments to Blanchard. Thereafter, Blanchard and Jolin filed a lawsuit on the promissory note against Belle Pass, Guidry, Pitre, and Callais.

The Belle Pass matter was tried before a jury in early 1992. The critical issue presented to the jury concerned whether John's lease of the CLC land had been sold to Belle Pass. The jury determined that Jolin and Blanchard had not sold the lease issued by CLC to Belle Pass, Guidry, and Pitre. As a result of this determination, judgment was rendered in the action on the promissory note in favor of Jolin and Blanchard and against Belle Pass, Guidry, and Pitre for $2 million plus interest.

As a result of the verdict and judgment, Belle Pass declared bankruptcy. In the bankruptcy proceeding, Blanchard foreclosed on his mortgage and succeeded in reclaiming the terminal facility. Blanchard then began executing his judgment against Guidry, but made no effort to execute against Pitre until May 7, 1995. However, Blanchard was unable to execute the judgment against Pitre because Pitre had also declared bankruptcy.

The proliferation of litigation spawned by the 1989 Belle Pass transaction continued on September 18, 1995, when Rodney J. Martin filed a suit for breach of contract against Blanchard, Blanchard's wife, Linda, and Elmo Pitre, III, d/b/a R & J Trucking Company. Martin alleged the defendants were jointly and solidarily liable to him for the principal sum of $34,096.88, and also sought to recover lost profits and damages allegedly resulting from the defendant's alleged breach of contract.

The testimony in Martin's case revealed that in early 1991, Pitre approached Rodney Martin with a scheme he claimed would be very profitable for himself and Martin. Pitre explained that Blanchard was engaged in litigation arising from the sale of the terminal facility at Port Fourchon to Belle Pass and that Blanchard needed help in paying his legal fees. According to Martin, Blanchard and Pitre were seeking to obtain a judgment against Callais and Guidry for the $2 million note. Martin claimed his role was to provide funds to Blanchard on his legal expenses, and, in exchange, he would be considered an equal partner when Blanchard and Pitre returned to business in Fourchon at the old John facility. Martin subsequently took out loans on his home in order to provide money to Blanchard for his legal fees. According to Martin, his arrangements with Blanchard and Pitre were to be kept secret from Callais and Guidry. Martin was never repaid for his loans made to Blanchard for his legal expenses.

When Guidry became aware of the alliance between Blanchard and Pitre, he filed a suit on November 15, 1995, pursuant to La.Code Civ. P. art. 2004. Guidry sought to annul the 1992 judgment in the Belle Pass litigation which was originally rendered on March 2, 1992. Guidry contended that he knew nothing of the pact between Blanchard and Pitre until Martin's suit was filed in September, 1995.

After a trial on Guidry's motion to annul, the trial court denied Guidry's petition seeking annulment of the 1992 judgment. The trial court found that although Pitre was not completely forthcoming in his testimony, sufficient evidence presented at the original trial should have led the jury to believe that Pitre was not completely aligned with Guidry and Callais. The court of appeal affirmed the trial court, finding Guidry was not deprived of his *766 legal rights, and pretermitted the issue of whether the enforcement of the judgment would be inequitable and unconscionable.

We granted writs to consider the correctness of these rulings. Belle Pass Terminal, Inc. v. Jolin, 01-0149 (La.4/20/01), 790 So.2d 7.

DISCUSSION

According to La.Code Civ. P. art. 2004, any final judgment obtained by fraud or ill practices may be annulled.

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