Dupuis v. Becnel Co.

527 So. 2d 18, 1988 La. App. LEXIS 493, 1988 WL 30798
CourtLouisiana Court of Appeal
DecidedApril 6, 1988
DocketNo. 87-744
StatusPublished
Cited by2 cases

This text of 527 So. 2d 18 (Dupuis v. Becnel Co.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dupuis v. Becnel Co., 527 So. 2d 18, 1988 La. App. LEXIS 493, 1988 WL 30798 (La. Ct. App. 1988).

Opinion

DOMENGEAUX, Judge.

The plaintiffs in this suit, six limited partners in a Louisiana partnership in com-mendam, sued the partnership, the general partner and the other remaining limited partners for damages caused by alleged fraud, mismanagement, breach of fiduciary duty, etc., on the part of the defendants. The Trial Judge granted the defendants’ motion to strike certain paragraphs in the plaintiffs’ petition which left only those paragraphs requesting the dissolution of the partnership. The plaintiffs applied for writs of certiorari claiming error in the Trial Court’s ruling. This Court denied the plaintiffs’ request, finding no error in the Trial Court’s judgment. The Louisiana Supreme Court, 513 So.2d 1198, subsequently granted writs of review and remanded the case to this Court for consideration of the correctness of the Trial Court’s ruling striking certain paragraphs from the plaintiffs’ petition.

FACTS

The six plaintiffs in this suit include three individuals: Steven J. Dupuis, Sr., James H. Dupuis, Sr., and John W. Dupuis, III, and the irrevocable inter-vivos trusts of three minors: Steven J. Dupuis, Jr., James H. Dupuis, Jr., and John W. Dupuis, IV. All of the plaintiffs are limited partners in SBS-Rue Bienville 1981 Venture (hereinafter referred to as SBS), a Louisiana partnership in commendam. The plaintiffs sued SBS, the general partner of SBS (The Becnel Company), and the remaining limited partners in SBS (Thomas R. Becnel, John D. Price, Brit Busch, and Manning F. Billeaud). The plaintiffs’ petition contained numerous allegations charging the defendants with breach of fiduciary obligations, mismanagement, fraudulent misrepresentation, detrimental reliance, failure to contribute to the capital of SBS, unfair trade practices and breach of contract. The petition asks for damages, or in the alternative, dissolution of the partnership.

In response, the defendants filed numerous exceptions and motions which were all denied by the Trial Judge. The defendants reurged the exception of no cause of action and a motion to strike certain paragraphs from the plaintiffs’ petition. The Trial Court denied the defendants’ exception of no cause of action but granted the defendants’ motion to strike and thereby deleted those paragraphs in the plaintiffs’ petition that stated a cause of action for damages. The Court retained only those paragraphs that stated a cause of action to dissolve and liquidate the partnership. The Trial Judge granted the motion to strike these paragraphs based on the long standing jurisprudential rule that an action is not maintainable between partners with respect to partnership transactions unless there has been an accounting or settlement of the partnership. Dromgoole v. Gardner’s Widow & Heirs, 10 Mart (O.S.) 433 (La.1821); Jeaudron v. Boudreaux, 1 Rob. 383 (La.1842); Stanton v. Buckner, 24 La.Ann. 391 (La.1872); Martin v. Seabaugh, 128 La. 442, 54 So. 935 (1911); Jeffries v. Moore, 219 La. 692, 53 So.2d 898 (1951).

The plaintiffs filed a motion for a new trial asking the Trial Judge to reconsider his ruling on the motion to strike. The Trial Judge ruled that this motion for a new trial was untimely filed and never considered the merits of the motion. The plaintiffs have sought supervisory relief on the two rulings by the Trial Judge, arguing [20]*20that the motion for a new trial was timely filed and that the defendants’ motion to strike was improperly granted.

The plaintiffs’ motioned for a new trial in order to have the Trial Judge reconsider the merits of the previously granted motion to strike. Since the basis for the plaintiffs’ motion for a new trial was the correctness of the previously granted motion to strike, we need not address whether or not the motion for a new trial was timely filed as our determination of the correctness of the Trial Judge’s ruling on the motion to strike will render moot the merits of the motion for a new trial.

The plaintiffs maintain that the Trial Court erred in granting the defendants’ motion to strike because the 1981 revision to the Civil Code Articles on partnership changed the law and now allow lawsuits between partners based on a partnership transaction without first requiring the dissolution and settlement of the partnership. As authority for this, the plaintiffs cite La.C.C. arts. 2802 through 2813, as amended in 1981, entitled “Obligations and Rights of Partners Toward Each Other and Toward the Partnership”. In particular, the plaintiffs argue that articles 2808, 2809, and 2810, when read in pari materia, allow a partner to maintain an action for damages against a co-partner without first dissolving the partnership and settling the partnership debts. These articles state:

ARTICLE 2808
Each partner owes the partnership all that he has agreed to contribute to it.
ARTICLE 2809
A partner owes a fiduciary duty to the partnership and to his partners. He may not conduct any activity, for himself or on behalf of a third person, that is contrary to his fiduciary duty and is prejudicial to the partnership. If he does not, he must account to the partnership and to his partners for the resulting profits.
ARTICLE 2810
The provisions of Article 2808 and 2809 do not prejudice other rights guaranteed by law to recover damages or to obtain injunctive relief in appropriate cases.

Clearly, the above articles provide a cause of action for a partner to sue another partner for breach of fiduciary duties to the partners and/or partnership, or for breach of agreements between the partners. However, contrary to the plaintiffs’ contention, the inclusion of these duties in the revised articles does not necessarily mean that these causes of action are enforceable prior to the dissolution of the partnership. Courts have long recognized that a partner owes a fiduciary duty to the partnership and to the partners and these articles simply codify that prior jurisprudence. See Henley v. Haynes, 376 So.2d 1030 (La.App. 1st Cir.); writ denied, 377 So.2d 843 (La.1979); W.A. McMichael Const. Co. v. D & W Prop., 356 So.2d 1115 (La.App. 2nd Cir.), writ denied, 359 So.2d 198 (La.1978).

The plaintiffs cite two cases that they contend illustrate the abrogation of the jurisprudential rule in question and allow a partner to sue another partner for damages arising out of a partnership transaction without first dissolving and settling the partnership. Neither case advances or advocates the plaintiffs’ position. In Kaufman & Enzer Joint V. v. Bethlan Prod. Corp., 459 So.2d 60 (La.App. 2nd Cir.1984), the Court found that the plaintiff, even though a partner, was also a creditor of the partnership. As a creditor, the plaintiff was entitled to have the partnership placed in receivership. Next, the plaintiff, as a creditor and as a partner, was entitled to enforce a settlement agreement entered into by the plaintiff and defendant which required the defendant to buy out the plaintiff's share of the partnership at a set price. It is an established exception to the prohibition of suits between partners that one partner may sue another partner upon an obligation arising from a private settlement agreement. Douglas v. Thomas, 489 So.2d 449 (La.App. 4th Cir.1986); Kohlmeyer & Co. v. Braud, 342 So.2d 1253 [21]*21(La.App. 4th Cir.), writ denied, 345 So.2d 56, 57 (La.1977). Hence, the Court in Kaufman,

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Related

Dupuis v. Becnel Co.
528 So. 2d 152 (Supreme Court of Louisiana, 1988)

Cite This Page — Counsel Stack

Bluebook (online)
527 So. 2d 18, 1988 La. App. LEXIS 493, 1988 WL 30798, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dupuis-v-becnel-co-lactapp-1988.