Debaillon v. Alfred (In re Anderson)

539 B.R. 277
CourtUnited States Bankruptcy Court, W.D. Louisiana
DecidedOctober 2, 2015
DocketCase No. 10-51074; Adversary No. 13-5017
StatusPublished
Cited by1 cases

This text of 539 B.R. 277 (Debaillon v. Alfred (In re Anderson)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, W.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Debaillon v. Alfred (In re Anderson), 539 B.R. 277 (La. 2015).

Opinion

REASONS FOR DECISION

ROBERT SUMMERHAYS, UNITED STATES BANKRUPTCY JUDGE

This is an adversary proceeding between the debtor, Patricia Anderson, and multiple defendants involving a dispute over the ownership of a home healthcare business. Paul DeBaillon, the duly-appointed trustee in the above-captioned case, and Anderson (together, “plaintiffs”) commenced this adversary proceeding seeking a declaratory judgment that Anderson and defendant Ruby Alfred formed a partnership for purposes of operating a home healthcare business, AB Family, Inc., and that Anderson is entitled to her share of the partnership. The complaint also asserts various damage claims for breach of fiduciary duty, mismanagement, unfair trade practices, single business enterprise and piercing the corporate veil. Defendants Alfred and Valerie Baranco then moved for summary judgment on all of the claims asserted in the complaint. The court took the matter under advisement following oral argument. After considering the summary judgment record, the relevant authorities, and the parties’ arguments, the court rules as follows.

JURISDICTION

This case has been referred to this court by the Standing Order of Reference entered in this district which is set forth as Rule 83.4.1 of the Local Rules of the United States District Court for the Western District of Louisiana. No party in interest has requested a withdrawal of the reference nor have the parties objected to the court entering a final order with respect to this motion.

BACKGROUND

Anderson and Alfred began discussing the creation of a home healthcare business around 2002. Both Anderson and Alfred worked for another healthcare company, Louisiana Health. In 2004, Anderson'and Alfred approached Dennis and Cordelia Broussard and discussed the Broussards’ experience in opening up their own home healthcare business in New Iberia. Although Anderson contends that she and Alfred formed their partnership prior to their discussions with the Broussards, the summary judgment record includes no evidence of any written partnership agreement. Rather, Anderson relies on an alleged oral agreement to form a partnership with Alfred. In February 2005, Anderson and Alfred met with an attorney, Thomas Brum-baugh, about forming a Louisiana corporation to run their business. Alfred and Anderson could not serve as incorporators or own any shares in this business because they were still employed by Louisiana Health and could not afford to leave to run a new business. Moreover, because they were still employed by a company with a Medicaid provider number, they were precluded by law from having an ownership interest in another healthcare provider with a different Medicaid provider number. (Deposition of Patricia Anderson (“Anderson Depo.”) at 31; Deposition of Ruby Alfred (“Alfred Depo.”) at 12, 21; Affidavit of Thomas Brum-baugh (“Brumbaugh Aff.”) at 1). [281]*281Anderson was also worried about a potential personal injury claim against her and did not want her name on any property that could be seized in the event of a money judgment. (Anderson Depo. at 34, 48). As a result, Alfred’s daughter, Valerie Baranco, served as the sole incorpo-rator of the business, AB Family, Inc., and Baranco executed the relevant incorporation documents. As the sole incorpo-rator, Baranco paid Brumbaugh’s attorney fees for drafting the documents. (Brum-baugh Aff. at 2). The initial capital for AB Family, Inc. was contributed by Alfred’s son, Chad Duhon. (Anderson Depo. at 78; Alfred Depo. at 21). Neither Anderson nor Alfred contributed any of the initial capital to the company. (Anderson Depo. at 95). Nothing in the incorporation documents indicated that Anderson was an owner of AB Family, Inc. or that she was to receive any stock in the corporation. Instead, Anderson served as a W-2 employee and received régular compensation from AB Family, Inc. for her services. (Anderson Depo. at 14, 101). During the same period that Anderson was paid for her services to AB Family, Inc., the company’s tax returns show that, except for 2007, the company experienced losses. (See Exhibit I to Plaintiffs’ Opposition to Defendants’ Motion for Summary Judgment). The summary judgment record also shows that part of Anderson’s responsibilities at AB Family, Inc., was filing personal care attendant license applications yearly with the Louisiana Department of Health and Hospitals (“LDHH”) on behalf of the company. The summary judgment record includes the applications filed by Anderson from 2006 through 2010, and those applications certify that Baranco was the company’s sole owner. (Anderson Depo. at 49-50 and Exhibits 2-4 to deposition). Anderson’s responsibilities also required her to execute Disclosure of Ownership and Control Interest Statements from 2006 to 2012 and file those statements with the LDHH under penalty of perjury. Again, these documents certify that Baranco was the sole owner of AB Family, Inc. (Anderson Depo. at 50-51 and Exhibits 1-4 to deposition). According to Anderson, the purpose of these forms is to identify all of the ownership interests in the corporation so that regulatory authorities can ensure that the owners of a regulated healthcare company are eligible to hold those interests. (Anderson Depo. at 54-55).

Anderson filed for relief under Chapter 7 of the Bankruptcy Code on July 12, 2010 and Paul DeBaillon was duly appointed as the Chapter 7 Trustee for the case. John Clifton Conine was subsequently appointed trustee in 2014 when Mr. DeBaillon passed away. In the Statement of Financial Affairs filed by Anderson, she represented that she was a director of AB Family, Inc., but nowhere in this statement or any of the other schedules she was required to file did she disclose that she had an ownership interest in AB Family, Inc. or any partnership with Alfred. (Anderson Depo. at 138, 149-51 and Exhibit 6 to deposition). In 2012, almost two years after the filing of her Chapter 7 ease, the relationship between Anderson and Alfred soured. According to Anderson, Baranco, who was then executive director and president of AB Family, Inc., fired her and barred her from the company’s offices. (Complaint at 16-17, 23). On May 15, 2013, the Trustee and Anderson commenced this adversary proceeding seeking (1) a declaratory judgment recognizing Anderson’s ownership interest in AB Family, Inc., and/or the partnership allegedly formed by Anderson and Alfred, (2) damages for alleged breaches of fiduciary duty and mismanagement by the defendants in operating AB Family, Inc., (3) damages for misappropriation of com[282]*282pany property as well as Anderson’s termination under the Louisiana Unfair Trade Practice Act, La. R.S. 51:1401, and (4) a claim to pierce the corporate veil and/or declare that AB Family, Inc. and the partnership between Anderson and Alfred operated as a “single business enterprise.” Chad Duhon was subsequently dismissed as a defendant. The remaining defendants then filed the instant motion for summary judgment seeking dismissal of all of the plaintiffs’ claims.

DISCUSSION

A. Summary Judgment Standard

Summary judgment is proper if the pleadings,' discovery products on file, and affidavits show that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P 56(a). The purpose of summary judgment is to pierce the pleadings, to assess the proof, and to determine whether there is a genuine need for trial. See Matsushita Electric Industries v. Zenith Radio Corp. 475 U.S. 574

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Bluebook (online)
539 B.R. 277, Counsel Stack Legal Research, https://law.counselstack.com/opinion/debaillon-v-alfred-in-re-anderson-lawb-2015.