Jeansonne v. Attorney's Liability Assurance Society

891 So. 2d 721, 2003 La.App. 4 Cir. 1985, 2004 La. App. LEXIS 3230
CourtLouisiana Court of Appeal
DecidedDecember 15, 2004
DocketNo. 2003-CA-1985
StatusPublished
Cited by5 cases

This text of 891 So. 2d 721 (Jeansonne v. Attorney's Liability Assurance Society) 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
Jeansonne v. Attorney's Liability Assurance Society, 891 So. 2d 721, 2003 La.App. 4 Cir. 1985, 2004 La. App. LEXIS 3230 (La. Ct. App. 2004).

Opinions

11 TERRI F. LOVE, Judge.

This appeal arises from the trial court’s judgment dismissing substituted plaintiff, Ted Hoyt, as executor of the Succession of David Jeansonne, action asserting legal malpractice. David L. Jeansonne filed suit asserting attorney W. Philip Clinton and his employer, Jones,- Walker, Waechter, Poitevent, Carrere and Denegre, L.L.P., the defendants, committed legal malpractice by: (1) failing to discuss the consequences of a stock purchase agreement and promissory note and (2) failing to advise the plaintiff of a conflict of interest. After a hearing on the merits, the trial court dismissed the plaintiffs claims on the merits and on the grounds of peremption. For the reasons assigned below, we affirm the judgment of the trial court.

FACTS AND PROCEDURAL HISTORY

We find the trial court’s recitation of the facts to be accurate and we repeat:

Philip Clinton, defendant herein, began representing Omni Geophysical, L.L.C., the predecessor to Omni Energy Services Corp. (“Omni”) in August, 1997 and had his first contact with David Jeansonne at that time. Clinton worked on the initial public | ^offering (“IPO”) of Omni stock, which was completed in December, 1997 resulting in a $34.275 million cash infusion into Omni. Jeansonne was the founder and visionary of Omni and served as its Chairman of the Board and Chief Executive Officer before and after it went public. Jeansonne personally owned or controlled through his 90% interest in American Aviation, Inc. (“AAI”) roughly 1.4 million Omni shares having a value of between $14 and $28 million during the Spring and Summer of 1998.
Jeansonne was a sophisticated businessman, an accomplished business builder and a decisive deal maker. While serving as Chairman of the Board and CEO of Omni, Jeansonne also operated several successful businesses in addition to Omni and AAI, including Magnolia Farms (horses and real estate), Southern Leisure, Inc. (boat and Pecan Island property), and Vintage Wings and Things (aircraft).
Ted W. Hoyt is the substitute plaintiff in this case as Jeansonne’s executor. Hoyt first met Jeansonne in 1983 or 1984 and together they formed Omni Drilling Company, later Omni Geophysical Corp., at which time the “Hoyt Group” owned 90% and Jeansonne owned 10%. By 1996, Omni Geophysical was owned 50% by Jeansonne and 50% by the Hoyt Group. They sold the business to the predecessor of Omni in 1996 for approximately $13.3 million. Jean-sonne remained Board Chairman and Chief Executive Officer.
In July, 1997, Jeansonne caused AAI to sell its aircraft assets to the predecessor of Omni in return for consideration ultimately having a value in excess of $19 million consisting of cash,- assumption of $6.7 million of -AAI debt, and 1,080,017 shares of Omni stock. Jean-sonne himself renegotiated the deal with the Omni Board.
From August, 1997, Clinton worked closely with Jeansonne on numerous matters including the IPO, several mergers, and acquisitions of other companies, and other corporate affairs. Jeansonne himself negotiated many of these deals. He called on Clinton to prepare the documents for Jeansonne’s signature. Clinton considered Jeansonne to be a sophisticated businessman, decisive and someone who understood the art of the deal, [724]*724pursued deal terms aggressively and gave clear instructions to counsel both as to (i) terms to be drafted, and (ii) the extent to which Jeansonne was willing to participate in review or discussion of the agreements once drafted. Jeansonne always exercised his prerogative to dictate the overall objectives, character and extent of Clinton’s representation.
Patrick Morris and Jeansonne formed AAI together in 1995. Jeansonne has testified that Morris was a “very vital player in what I was doing.” Although, technically, Morris owned 10% of AAI, Jeansonne considered Morris in reality to own 20%. In the fall of |a1997 and into 1998, Morris was in need of cash and Jeansonne wanted to get money into Morris’ hands.
Jeansonne began discussing the tax consequences of a transaction with Charles Giraud and others at Arthur Anderson, L.L.P. Jeansonne later asked Clinton to participate for purposes of securities law advice and to prepare the documents, once a structure had been decided upon.
Jeansonne intended to get a total of 2.5 million into Morris’ hands. Many alternatives for -doing this were proposed and discussed with the Arthur Anderson group because of tax implications. Then, Jeansonne unilaterally decided he had had enough of discussing “tax-advantaged” alternatives and he, individually, was just going to buy out Morris’ interest in AAI for $2.5 million payable $1 million in cash and $1.5 million represented by a promissory note payable in one year.
On July 6 and 8, 1998, Jeansonne and Clinton discussed the terms of the transaction and Clinton was directed to prepare the stock purchase agreement and promissory note. Clinton drafted the two, two-page documents containing precisely the terms discussed with Jean-sonne.
Among those terms were two unusual, non-standard business terms discussed with Jeansonne. They merit special mention because they evidence the particularity with which Jeansonne approached his deal with Morris. First, paragraph 4 of the Stock Purchase Agreement obligated Morris to use $500,000 of case [sic] received by him under the agreement to acquire stock in Omni. If he failed to do so, $500,000 could be set off against the $1.5 million payment due under the promissory note. Jeansonne told Clinton he wanted this provision to ensure Morris’ continued interest as an employee of Omni. Clinton included this provision as directed.
Second, the promissory note has a special mandatory 'prepayment provision requiring the note to be paid earlier than one year if a secondary public offering of Omni stock successfully occurred before one year and Jeansonne was able to realize $1.5 million from this event. Clinton also included this provision as directed....
The Clinton drafts were transported to Jeansonne via Morris as a courier on July 14, 1998. Shortly after, Jeansonne called Clinton and they discussed the documents again.
Both the Stock Purchase Agreement and the Promissory Note were signed on an unknown date. They have a handwritten date of July 17, 1998. However, Morris told Clinton that the deal was not completed until November, 1998, and wrote a letter dated December 31, 1998 ... stating that the stock sale “finally closed on November 18, [1998]
[W]hen the payment of the note became a reality, and after the Estate of [725]*725Morris sued Jeansonne in federal court on November 26, |41999 for recovery on the note, Jeansonne filed this action against Clinton on March 26, 2000.
[Emphasis in original]

The trial court dismissed the case on both the merits and on the grounds of peremption.

Standard of Review

We have recognized, “Great deference is accorded to the trial court’s factual findings, both express and implicit, and reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed on appellate review of the trial court’s judgment.” Vignette Publications, Inc. v. Harborview Enterprises, Inc., 2000-1711, p.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Valencia v. A & J Auto Wreckers, Inc.
119 So. 3d 936 (Louisiana Court of Appeal, 2013)
DePodesta v. Breaux
116 So. 3d 1017 (Louisiana Court of Appeal, 2013)
Dwyer v. Binegar
95 So. 3d 565 (Louisiana Court of Appeal, 2012)

Cite This Page — Counsel Stack

Bluebook (online)
891 So. 2d 721, 2003 La.App. 4 Cir. 1985, 2004 La. App. LEXIS 3230, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jeansonne-v-attorneys-liability-assurance-society-lactapp-2004.