Eubanks v. Hoffman

685 So. 2d 597, 1996 WL 715139
CourtLouisiana Court of Appeal
DecidedDecember 11, 1996
Docket96-CA-0629
StatusPublished
Cited by18 cases

This text of 685 So. 2d 597 (Eubanks v. Hoffman) 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
Eubanks v. Hoffman, 685 So. 2d 597, 1996 WL 715139 (La. Ct. App. 1996).

Opinion

685 So.2d 597 (1996)

Billy Ray EUBANKS
v.
Bruce F. HOFFMAN and Resource Development, Inc.

No. 96-CA-0629.

Court of Appeal of Louisiana, Fourth Circuit.

December 11, 1996.

Douglas S. Draper, Omer F. Kuebel, III, New Orleans, for Plaintiff/Appellant.

Thomas F. Weymann, New Orleans, for Defendant/Appellee.

Before ARMSTRONG, JONES and MURRAY, JJ.

*598 ARMSTRONG, Judge.

This case involves a business dispute. The plaintiff, Billy Ray Eubanks, is a physician who went into the oil and gas business. Defendant Bruce R. Hoffman is a geologist and he is closely associated with defendant Resource Development, Inc. The plaintiff and the defendants worked together in the acquisition of oil and gas properties. A corporation with which Mr. Eubanks was closely associated, Diamond Oil International, Inc., also became involved in some way with some of the oil and gas transactions but was never made a party to this action. Mr. Eubanks filed suit against Mr. Hoffman and Resource Development for amounts allegedly due him. Defendants Mr. Hoffman and Resource Development filed a reconventional demand against Mr. Eubanks for amounts allegedly due them.

The trial court dismissed Mr. Eubanks' claim for no right of action and dismissed Mr. Hoffman's and Resource Development's claim for res judicata. Mr. Eubanks appealed. Mr. Hoffman and Resource Development did not appeal and did not file an answer to Mr. Eubanks' appeal. Mr. Eubanks argues on appeal that he was not given an opportunity below to present evidence to show his right of action. While we can see why the trial court, based upon the existing record, might well conclude that Mr. Eubanks has no right of action, we are concerned that Mr. Eubanks did not have a procedural opportunity to present evidence to prove his right of action, and so we vacate the judgment as to Mr. Eubanks' claim and remand for an evidentiary hearing as to his right of action. Mr. Hoffman and Resource Development argue on appeal that the trial court erred in dismissing their reconventional demand for res judicata. However, because Mr. Hoffman and Resource Development did not appeal or file an answer to Mr. Eubanks' appeal, we cannot consider the merits of their arguments as to the trial court's judgment dismissing their reconventional demand.

The working arrangement between Mr. Eubanks and Mr. Hoffman began and continued for some time on an informal, oral agreement basis. Mr. Hoffman would locate oil and gas properties and bring them to Mr. Eubanks' attention for possible purchase. Mr. Hoffman was paid lump-sum finder's fees and given percentage royalty interests on some of these properties. On other properties, Mr. Hoffman was given the opportunity to acquire 10% working interests which would obligate him to pay 10% of the purchase price, bear 10% of the operating costs, and receive 10% of the profits.

Pursuant to these various arrangements, certain payments were made to Mr. Hoffman. All or almost all of these payments were made by checks of Diamond rather than Mr. Eubanks personally. Mr. Eubanks alleges that most of these payments were advances against future income attributable to Mr. Hoffman which were to be paid back out of future income of Mr. Hoffman. Because some confusion, or at least concern, arose as to exactly how much was owed by and to each of the parties, they drew up, and on February 27, 1986, executed, a "Master Agreement" to reduce to writing their business agreements for their future and, apparently, past oil and gas transactions together. Contemporaneously with the execution of the Master Agreement, Diamond executed a $151,000 promissory note payable to Mr. Hoffman and guaranteed by Mr. Eubanks.

Later, Mr. Eubanks and Diamond both filed for Chapter 11 bankruptcy reorganization. Mr. Hoffman and Resource Development filed proofs of claim against Mr. Eubanks and Diamond in the bankruptcy proceeding. Mr. Eubanks filed objections to those claims in the bankruptcy proceeding. The bankruptcy court sustained Mr. Eubanks' objections to the claims of Mr. Hoffman and Resource Development but granted them two weeks in which to file amended proofs of claim. However, apparently, Mr. Hoffman and Resource Development never filed amended proofs of claim.

Later, Mr. Eubanks brought the present action against Mr. Hoffman and Resource Development. The primary thrust of Mr. Eubanks' claim is that most of the payments made to Mr. Hoffman were advances against future income attributable to Mr. Hoffman, that there never was such future income to *599 pay off the advances, and that the advances have never been repaid by Mr. Hoffman and are still owed by Mr. Hoffman. In defense, Mr. Hoffman asserts that the payments in question were not advances at all but were, instead, payments made for consulting services.

The judgment of the trial court states that Mr. Eubanks' claims "are dismissed pursuant to Louisiana Code of Civil Procedure Article 927 for the failure of plaintiff to demonstrate a right of action". Judgment, November 7, 1995. The trial court's Reasons For Judgment elaborate by stating that:

Eubanks has asserted his claim in his individual capacity. No claim is made by Diamond. The evidence preponderates to all amounts that might be due as those of Diamond, not Eubanks. The Court has insufficient evidence to satisfy it that Eubanks has a right to assert any claim against Hoffman or Resource. C.C.P. art. 927. Accordingly, Eubanks cannot prevail.

The trial court makes a good point. The checks payable to Mr. Hoffman which, Mr. Eubanks alleges, were for advances to be repaid, were checks drawn on Diamond's account and not Mr. Eubanks' account. The fact that the checks were Diamond checks, and not checks from Mr. Eubanks personally, suggests that, if any repayment is owed, it is owed to Diamond rather than to Mr. Eubanks.

The trial court also was entirely correct to identify the peremptory exception of no right of action, La.Code Civ. Proc. art. 927(5), as the applicable legal rule. The peremptory exception of no right of action addresses whether this plaintiff has an interest in judicially enforcing the right alleged against the defendant. That is, it raises the issue of whether this plaintiff belongs to the particular class for which the law grants a remedy for a particular grievance. This exception of no right of action (as distinct from the exception of no cause of action) does not raise the questions of whether the proper plaintiff can prevail on the merits or whether the defendant has a valid defense. Touzet v. V.S.M. Seafood Services, Inc., No. 96-C-0225 (La.App. 4th Cir. 3/27/96), 672 So.2d 1011, 1012-13. Accord Sattar v. Aetna Life Ins. Co., No. 95-CA-1108 (La.App. 4th Cir. 3/20/96), 671 So.2d 550, 553; Lambert v. Donald G. Lambert Construction Co., 370 So.2d 1254, 1255 (La.1979).

Thus, we might affirm the trial court's dismissal of Mr. Eubanks' claim, under an exception of no right of action, but we are concerned that Mr. Eubanks did not have the required procedural opportunity to present evidence to prove that he, as opposed to Diamond, has a right of action for recovery of the alleged advances. Mr. Eubanks' brief states that at no time did Mr. Hoffman or Resource Development file an exception of no right of action and, based upon our review of the record, Mr. Eubanks appears to be correct in that regard. Thus, it appears that the trial court raised the exception of no right of action upon its own motion which, of course, the trial court had authority to do. La.Code Civ. Proc. art. 927; Teachers Retirement System v. Louisiana State Employees Retirement System,

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Cite This Page — Counsel Stack

Bluebook (online)
685 So. 2d 597, 1996 WL 715139, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eubanks-v-hoffman-lactapp-1996.