David Brown and Karen Brown v. Douglas Romero

• Court: Louisiana Court of Appeal
• Decided: February 1, 2006
• Docket: CA-0005-1016
• Status: Unknown

Opinion

STATE OF LOUISIANA

COURT OF APPEAL, THIRD CIRCUIT

05-1016

DAVID BROWN AND KAREN BROWN

VERSUS

DOUGLAS ROMERO, KAREN LEBLANC, NICK LEBLANC, ET AL.

************

APPEAL FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF LAFAYETTE, NO. 2003-3315-A HONORABLE JOHN TRAHAN, DISTRICT JUDGE

JAMES T. GENOVESE JUDGE

Court composed of Jimmie C. Peters, J. David Painter, and James T. Genovese, Judges.

AFFIRMED.

Barton W. Bernard, A.P.L.C. 120 Representative Row Lafayette, Louisiana 70508 COUNSEL FOR PLAINTIFFS/APPELLANTS: David Brown and Karen Brown Julius W. Grubbs, Jr. Haik, Minvielle & Grubbs 1017 E. Dale Street Post Office Box 11040 New Iberia, Louisiana 70562-1040 COUNSEL FOR DEFENDANTS/APPELLEES: Karen LeBlanc and Nick LeBlanc GENOVESE, Judge.

Plaintiffs appeal the trial court’s granting of summary judgment in favor of

Defendants thereby dismissing Plaintiffs’ lawsuit. For the following reasons, we

affirm.

FACTS

This lawsuit arises out of a business venture by Ultra D Investments, L.L.C.

(“Ultra D”), through which Douglas Romero (“Romero”) intended to lease and

renovate a building in downtown Lafayette, Louisiana, for the purpose of opening a

bar. When the venture failed, Plaintiffs, David and Karen Brown (“Browns”), filed

suit against Romero, claiming an ownership interest in Ultra D due to monetary

contributions made by them to the company. The Browns also claimed

reimbursement for the amount which they invested in Ultra D.

The Browns twice amended their lawsuit to add additional parties including

Defendants/Appellees Nick and Karen LeBlanc (“LeBlancs”), Janice Wilkins, and

Judith Verret. The Browns alleged that these additional parties conspired with

Romero to deprive them of their interest in Ultra D. The Browns claim that

Defendants’ actions, or scheme, constituted a conspiracy, unfair activities, and unfair

trade practices. A motion for summary judgment was filed by the LeBlancs asserting

that there are no genuine issues of material fact and, as a matter of law, that the

Browns are unable to prove the essential allegations in their petition. Following a

hearing, the trial court granted the LeBlancs’ motion for summary judgment. The

Browns filed the present appeal.

ISSUES

The following issues are presented by the Browns for our review:

1 1. Whether summary judgment should be granted when the established facts create a material issue of fact, and when material issues of fact exist regarding the LeBlancs’ subjective intent, motive, knowledge, and bad faith in providing assistance to Douglas Romero, while knowing that their assistance to Romero would damage David and Karen Brown.

2. Whether summary judgment should be granted when the LeBlancs’ affidavit offered in support of their summary judgment contains self- serving and conclusory factual and legal statements regarding the ultimate issues in this case.

3. Whether summary judgment should be granted when the statements contained in the LeBlancs’ affidavit, used to support their summary judgment, are contradicted by Karen LeBlanc’s own deposition testimony.

LAW AND ARGUMENT

Summary Judgment

“Appellate courts review summary judgments de novo, using the same criteria

that govern the trial court’s consideration of whether summary judgment is

appropriate.” Richard v. Hall, 03-1488, p. 4 (La. 4/23/04), 874 So.2d 131, 137;

Goins v. Wal-Mart Stores, Inc., 01-1136 (La. 11/28/01), 800 So.2d 783. The

appellate court must determine whether “the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that

there is no genuine issue as to material fact, and that mover is entitled to judgment as

a matter of law.” La.Code Civ.P. art. 966(B). Despite the legislative mandate

favoring summary judgments set forth in La.Code Civ.P. art. 966(A)(2), “factual

inferences reasonably drawn from the evidence must be construed in favor of the

party opposing the motion, and all doubt must be resolved in the opponent’s favor.”

Willis v. Medders, 00-2507, p. 2 (La. 12/8/00), 775 So.2d 1049, 1050; Indep. Fire Ins.

Co. v. Sunbeam Corp., 99-2181, 99-2257 (La. 2/29/00), 755 So.2d 226.

Additionally, as we explained in LaRocca v. Bailey, 01-0618, pp. 5-6 (La.App.

2 3 Cir. 11/7/01), 799 So.2d 1263, 1267:

Because this is a summary judgment case to which La.Code Civ.P. art. 966 et seq. is applicable, it is necessary to first determine who will bear the burden of proof at trial. Subpart (C)(2) of La.Code Civ.P. art. 966 explains that The burden of proof remains with the movant. However, if the movant will not bear the burden of proof at trial on the matter that is before the court on the motion for summary judgment, the movant’s burden on the motion does not require him to negate all essential elements of the adverse party’s claim, action, or defense, but rather to point out to the court that there is an absence of factual support for one or more elements essential to the adverse party’s claim, action, or defense. Thereafter, if the adverse party fails to produce factual support sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial, there is no genuine issue of material fact.

In the instant case, the Browns bear the burden of proof at trial. Thus, as set

forth above, summary judgment is proper, as a matter of law, if there exists no

genuine issue of material fact. Since the LeBlancs do not bear the burden of proof

at trial, the LeBlancs are not required, in a summary judgment proceeding, to negate

all essential elements of the Browns’ claims. Rather, they must show an absence of

factual support for one or more elements essential to the claim. If they are successful,

the burden of proof shifts to the Browns to produce factual support sufficient to

establish that they will be able to satisfy their evidentiary burden of proof at trial.

LaRocca, 799 So.2d 1263.

In support of their motion for summary judgment, the LeBlancs argue that the

Browns are unable to prove an element of their claim, namely, that the LeBlancs were

involved in a scheme or conspiracy with Romero to assist him in defrauding the

Browns, thereby causing them damage. We agree.

Romero formed Ultra D for the purpose of renovating and leasing property in

Lafayette, Louisiana, with the goal of operating a bar. The nature of the ownership

3 interest in this venture is what prompted this litigation. Romero and the Browns do

not agree on what was contemplated by the parties and what monetary amounts, if

any, are owed amongst the parties. Relevant to the present motion, however, are the

Browns’ allegations that the LeBlancs contributed money to Romero and assisted him

in defrauding them of their ownership interest in Ultra D. The Browns assert that the

LeBlancs conspired with Romero to own the assets of the company thereby taking

advantage, for their own benefit, of the contributions which the Browns had made in

the venture. The Browns conclude that the LeBlancs made these monetary

contributions knowing of their ownership interest and that these contributions

damaged them. Finally, the Browns claim that the LeBlancs prohibited them from

entering the leased premises. The Browns contend that the actions of the LeBlancs

constituted a conspiracy, unfair activities, and/or unfair trade practices.

For purposes of their motion for summary judgment, the LeBlancs conceded

that the Browns contributed money toward Romero’s efforts to open a bar known as

the Skylight Lounge. The LeBlancs further conceded that an entity known as Ultra

D was formed for the purpose of opening the bar and that a dispute concerning the

rights and ownership status of the company arose between the Browns and Romero.

The LeBlancs admitted that they knew the Browns gave Romero money for the

purpose of opening the bar. They further admitted that they lent Romero money and

that they did so knowing that Romero was going to use it to continue his efforts to

open the Skylight Lounge. However, the LeBlancs claim that their actions of lending

money to Romero were done out of the love and affection Karen LeBlanc had for

Romero, her cousin,1 and that loaning money to a relative to help him open a business

1 The record contains an error regarding the exact nature of the familial relationship. In their brief, the LeBlancs refer to Douglas Romero as Karen LeBlanc’s nephew, which is consistent with the affidavit of Nick and Karen LeBlanc wherein she is referred to as his aunt. However, Karen LeBlanc’s deposition states that they are first cousins.

4 did not rise to the level of a conspiracy, unfair activities, or unfair trade practices.

It is evident that Romero and the Browns considered an arrangement through

which they hoped to open the Skylight Lounge. Ultra D Investments, L.L.C. was

formed as a limited liability company with Douglas Romero as the initial member and

manager of the entity. A lease was executed and renovations were begun. Thereafter,

a dispute arose between Romero and the Browns. In hopes of helping Romero

accomplish his goal, the LeBlancs began lending him money to get the bar opened.

Ultimately, the Skylight Lounge was never opened due to the fact that the

Commissioner of the Louisiana Office of Alcohol and Tobacco Control denied a state

liquor license to Romero on behalf of Ultra D. The business venture therefore ended

without the Skylight Lounge being opened, with a dispute between Romero and the

Browns over ownership interests in Ultra D and money owed, and without the

LeBlancs being repaid the amounts which they lent Romero.

The Browns contend that the LeBlancs were engaged in a scheme or conspiracy

to defraud them. However, the evidence does not support this allegation. The

LeBlancs did not attempt to obtain any ownership interest in Ultra D or the Skylight

Lounge fraudulently, or otherwise. They did nothing to prevent Ultra D from

obtaining a liquor license or to prevent the bar from being opened. The LeBlancs

involvement was limited to lending money to Romero to help him open the Skylight

Lounge. There was no showing that the LeBlancs ever attempted to obtain assets of

the company or to deprive the Browns of any ownership interest in the venture.

Therefore, the Browns failed to meet their burden of proving that the LeBlancs were

engaged in any scheme or conspiracy to take advantage of the Browns for their own

benefit.

The Browns allege that the LeBlancs committed unfair trade practices. The

5 Louisiana Unfair Trade Practices and Consumer Protection Law provides that

“[u]nfair methods of competition and unfair or deceptive acts or practices in the

conduct of any trade or commerce are hereby declared unlawful.” La.R.S.

51:1405(A). As this court has previously stated, “[c]onduct that violates the Unfair

Trade Practices Act must involve fraud, misrepresentation, deception, or unethical

conduct.” Glod v. Baker, 04-1483, p. 11 (La.App. 3 Cir. 3/23/05), 899 So.2d 642,

649. “A trade practice is considered unfair when it offends established public policy

and when it is immoral, unethical, oppressive, unscrupulous, or substantially injurious

to consumers.” Laurents v. La. Mobile Homes, Inc., 96-976, p. 10 (La.App. 3 Cir.

2/5/97), 689 So.2d 536, 542 (citing Thomas v. Busby, 95-1147 (La.App. 3 Cir.

3/6/96), 670 So.2d 603, writ granted and judgment vacated, 96-0891 (La. 5/17/96),

673 So.2d 601, aff’d on remand, 95-1147 (La.App. 3 Cir. 11/13/96), 682 So.2d 1025,

writ denied, 96-2990 (La. 2/21/97), 688 So.2d 517).

The Browns also assert that the LeBlancs engaged in “unfair activities.” To the

extent that these allegations constitute a claim for tortious interference with business

relations, this court notes that this cause of action has been viewed by Louisiana

courts with disfavor. JCD Mktg. Co. v. Bass Hotels & Resorts, Inc., 01-1096

(La.App. 4 Cir. 3/6/02), 812 So.2d 834. “Louisiana courts have limited this cause

of action by imposing a malice element, which requires that the plaintiff show the

defendant acted with actual malice.” Id. at 841. Similarly, to the extent that the

allegations against the LeBlancs constitute intentional interference with contract, this

cause of action has likewise been very limited in its application and requires a

showing that the actions complained of were intentional, as opposed to merely

negligent. See Spears v. Am. Legion Hosp., 00-865 (La.App. 3 Cir. 1/31/01), 780

So.2d 493. Additionally, as we recognized in Spears, “in 9 to 5 Fashions Inc. v.

6 Spurney, 538 So.2d 228 (La.1989), the Louisiana Supreme Court recognized a

narrowly defined cause of action for the breach of duty by a corporate officer to

refrain from intentionally and unjustifiably interfering with a contractual relationship

between the officer’s corporate employer and the particular plaintiff,” which cause

of action has been limited by this court to its facts. Id. at 496 (quoting Healthcare

Mgmt. Servs., Inc. v. Vantage Healthplan, Inc., 32,523, p. 3 (La.App. 2 Cir. 12/8/99),

748 So.2d 580, 582). Notably, however, the supreme court has expressly declined to

recognize a cause of action for negligent interference with contract. Great Southwest

Fire Ins. Co. v. CNA Ins. Cos., 557 So.2d 966 (La.1990).

The Browns also argue on appeal that summary judgment should not have been

granted due to inconsistencies and contradictions in the affidavit of Nick and Karen

LeBlanc and Karen LeBlanc’s deposition. This court has reviewed both the

deposition and affidavit in question. Though there may have been some

inconsistency, we do not find any contradictions pertinent and material to the issues

in this case. Thus, any remaining factual issues are not material so as to preclude the

granting of summary judgment.

The actions of the LeBlancs in lending money to Romero, even with

knowledge of the involvement of the Browns with Romero in the business venture,

do not satisfy the requirements of actual malice or intentional interference with

contract. Given that such a showing is required for the claims asserted by the

Browns, we find that they are unable to establish essential elements of their claims

against the LeBlancs. Therefore, under the dictates of La.Code Civ.P. art. 966, the

trial court was correct in granting the LeBlancs’ motion for summary judgment.

Costs for this appeal are assessed against Plaintiffs/Appellants, David and

Karen Brown.