Judson v. Davis

81 So. 3d 712, 2011 La.App. 1 Cir. 0623, 2011 La. App. LEXIS 1357, 2011 WL 5402481
CourtLouisiana Court of Appeal
DecidedNovember 9, 2011
DocketNo. 2011 CA 0623
StatusPublished
Cited by5 cases

This text of 81 So. 3d 712 (Judson v. Davis) 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
Judson v. Davis, 81 So. 3d 712, 2011 La.App. 1 Cir. 0623, 2011 La. App. LEXIS 1357, 2011 WL 5402481 (La. Ct. App. 2011).

Opinion

GAIDRY, J.

| aOnce again, this court must traverse the tangled procedural maze of this civil action relating to the dissolution of a close corporation. We conclude that most of the prior orders and judgments sought to be appealed by the appellant have long acquired the status of res judicata, that the present appeal of those orders and judgments is untimely, that the final decretal elements of the judgment appealed are unappealable by the appellant, and that the remaining interlocutory judgments appealed in connection with the final judgment demonstrate no abuse of the trial court’s discretion. We accordingly sustain the appellee’s exception of res judicata in part, overrule the exception in part, dismiss the appeal in part, amend the judgment, and affirm the judgment, as amended, in all other respects.

FACTS AND PROCEDURAL HISTORY

In an earlier reported decision in this matter, we described the “tortuous trail” of this litigation from its commencement in September 2002 though the summary judgment ordering the involuntary dissolution of the corporation in April 2004. Judson v. Davis, 04-1699, pp. 2-6 (La.App. 1st Cir.6/29/05), 916 So.2d 1106, 1109-12, writ denied, 05-1998 (La.2/10/06), 924 So.2d 167. Since the rendition of our reported decision, the trail has only become more circuitous and the procedural maneuvers more contentious, and numerous attempted appeals and applications for supervisory writs have been filed by Ms. Judson, the original plaintiff.1 Our ^decision affirmed [715]*715the summary judgment ordering the involuntary dissolution, granted on motion of Mr. Davis. We briefly summarize the relevant procedural history since our prior decision.

On March 10, 2004, an interpleader action was filed against Ms. Judson, Mr. Davis, and Hall’s Mortuary, Inc., the corporation at issue, by Conseco Life Insurance Company (Conseco) in the U.S. District Court for the Middle District of Louisiana. The subject of the action was the distribution of the proceeds of a life insurance policy on a key corporate employee, due to a dispute over whether Mr. Davis or the corporation was the policy beneficiary.

Ms. Judson answered the federal court complaint and also served a cross-claim against Mr. Davis and third-party claims against the liquidator, Edward J. Merrick, Jr., and his attorney, among others, alleging a conspiracy by the opposing parties to deprive her of property without due process of law. She also requested injunctive relief to stay the state court dissolution proceedings, alleging that the trial court’s “inordinate bias” rendered it “a foregone conclusion that it will dissolve her corporation without due process of law” if the requested injunctive relief were not issued. The federal district court declined to issue such relief. After nearly two years of contentious litigation in that court, the federal court ultimately rendered judgment on March 31, 2006, declaring the corporation, rather than Mr. Davis, the beneficiary of the life insurance policy. Conseco Life Ins. Co. v. Judson, 04-CV-155 (M.D.La.2006), reversed in part on other grounds, 214 Fed.Appx. 446 (C.A.5th (La.) 2007).

During the pendency of the federal court interpleader action, Ms. Judson attempted to interject unrelated issues relating to the dissolution proceeding in the federal interpleader action. It was necessary for the state)¿trial court, in defense of the exercise of its jurisdiction, to enjoin her from attempting to litigate any matters unrelated to the interpleader action in the federal district court. It accordingly issued an order to that effect on May 12, 2004.

In accordance with a detailed plan of liquidation, approved by the trial court, Mr. Merrick attempted to sell the business of the corporation, a funeral home, as a going concern. His efforts in that regard were unsuccessful, and he therefore followed the liquidation plan’s alternative course of selling the corporation’s tangible assets, including its immovable property. On motion of Mr. Merrick, following extensive evidentiary hearings on June 23, 2006, and July 31, 2006, the trial court approved the sale of the immovable property and payment of the real estate broker’s commission by judgment signed on August 23, 2006. That judgment also addressed a motion by Mr. Davis to require court approval of payment of liquidation fees and expenses and motions by Ms. Judson to distribute the Conseco insurance policy proceeds to the two stockholders (Mr. Davis and Ms. Judson) and to vacate the injunction of May 12, 2004. The trial court granted Mr. Davis’s motion, requiring the liquidator’s submission of ex parte motions for approval of payment of fees and expenses. The trial court denied Ms. Judson’s motions.

[716]*716Ms. Judson attempted to appeal the judgment of August 23, 2006. Her motion for appeal expressly limited her appeal to “that part” of the judgment approving the sale of immovable property and “that part” of the judgment denying her motion seeking distribution of the proceeds of the Con-seco policy. We granted Mr. Merrick’s motion to dismiss the appeal on the grounds that the judgment was an interlocutory judgment for which an |sappeal was not expressly provided by law. Judson v. Davis, 2007 CA 1105 (La.App. 1st Cir.9/4/07) (unpublished opinion).2

In the course of administering the liquidation proceeding, Mr. Merrick discovered certain suspicious financial transactions by Mr. Davis, suggestive of serious impropriety and breaches of fiduciary duty to the corporation on his part. Mr. Merrick filed a civil action for recovery of the corporate funds allegedly misused by Mr. Davis. After Mr. Merrick reported the suspected improprieties to the trial court, the erstwhile adversaries, Ms. Judson and Mr. Davis, joined to file a motion to remove Mr. Merrick as liquidator and to remove his counsel, who had been appointed by the trial court. The trial court granted that motion on February 11, 2008.

On February 22, 2008, Mr. Merrick filed a contradictory motion seeking court approval of his actions as liquidator and ho-mologation of his final accounting as liquidator. The motion was fixed for hearing on May 15, 2008, with notice issued to Ms. Judson and Mr. Davis. The hearing was converted to a status conference in chambers. In addition to excepting to and opposing the liquidator’s motion for homolo-gation, Ms. Judson filed a “Motion for Distribution,” seeking immediate distribution of her share of the net assets of the corporation and alleging that all corporate property had been sold and all debts and liabilities had been paid.

On April 9, 2008, Mr. Merrick deposited the corporation’s funds into the registry of the trial court.

|fiOn May 28, 2008, Mr. Merrick filed another motion seeking court approval and homologation of his amended and supplemented final accounting. The final hearing on that motion for homologation was eventually set for August 14, 2008.

On August 14, 2008, the final hearing was held on Mr. Merrick’s motion for ho-mologation of his final accounting. His motion was granted, the court expressly finding that “all of the [liquidator’s actions reflected therein have been valid, have been in the best interests of the [corporation and its shareholders and creditors, and have been consistent with the orders of this [cjourt, his fiduciary duty, and applicable law.” The trial court signed its judgment that day, homologating the final accounting as supplemented and amended. No timely appeal of that judgment was taken.3

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81 So. 3d 712, 2011 La.App. 1 Cir. 0623, 2011 La. App. LEXIS 1357, 2011 WL 5402481, Counsel Stack Legal Research, https://law.counselstack.com/opinion/judson-v-davis-lactapp-2011.