Kite Bros. LLC v. Alan Kite

• Court: Louisiana Court of Appeal
• Decided: October 5, 2011
• Docket: CA-0011-0335
• Status: Unknown

Opinion

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

11-334 c/w 11-335

ALAN KITE

VERSUS

KITE BROS., ET AL.

********** APPEAL FROM THE THIRTY-SIXTH JUDICIAL DISTRICT COURT PARISH OF BEAUREGARD, DOCKETS NO. C-2006-0241 c/w C-2007-1110 HONORABLE F. RAE SWENT, PRESIDING **********

SYLVIA R. COOKS JUDGE

**********

Court composed of Sylvia R. Cooks, Oswald A. Decuir, and Jimmie C. Peters, Judges.

AFFIRMED.

Kenneth Michael Wright Kenneth Michael Wright, LLC 203 W. Clarence Street Lake Charles, LA 70601 (337) 439-6930 COUNSEL FOR PLAINTIFF/APPELLANT: Alan Kite

Scott J. Scofield Phillip W. DeVilbiss Scofield, Gerard, Singletary & Pohorelsky 901 Lakeshore Drive, Suite 900 P.O. Drawer 3028 Lake Charles, LA 70601 (337) 433-9436 COUNSEL FOR DEFENDANTS/APPELLEES: Robert J. Kite and Kite Bros., L.L.C. COOKS, Judge.

In 1961, Robert Kite (Mr. Kite) co-founded a recreational vehicle dealership

with his brother. The company was originally formed as a corporation, Kite Bros.,

Inc. On April 30, 1998, Kite Bros., Inc. became inactive when Mr. Kite formed a

limited liability corporation, Kite Bros., L.L.C. Since its formation, Mr. Kite has

been the sole member, manager and owner of Kite Bros., L.L.C.

At different points in the 1980s, Mr. Kite‟s two sons, Alan Kite and Jeff

Kite, began working for the corporation. When Kite Bros., L.L.C. was formed,

both brothers were employed there, although the record indicated Alan never had

employment contracts with either Kite Bros., Inc. or Kite Bros., L.L.C. Over time,

Alan was given the authority to write checks on the company account, including

payroll checks. However, it was testified that neither Alan nor Jeff had authority

to change their salary or commission rate.

Mr. Kite testified he was always very generous to Alan, and paid him

substantially more than other salesmen with the company, receiving a salary of

$1,500.00 per week. Alan also received a commission based on a written schedule

which Mr. Kite created. Alan was provided with a company truck and a company

credit card. Testimony revealed Alan consistently made in excess of $200,000.00

in annual compensation.

In September of 2005, Alan and Jeff, on their own, raised their salaries. The

raises Alan took were significant, at times more than triple his previous weekly

salary. Alan and his brother also agreed they would take another ten percent (10%)

of all revenues of Kite Bros., L.L.C. Alan testified he and his brother would

continue to take the increased salaries and the cut of revenues “until everything

settled down after the storm [Hurricane Rita].”

It was undisputed that neither Alan nor Jeff cleared their raises nor the

decision to take ten percent (10%) of the revenues with Mr. Kite. In January of 2006, Mr. Kite discovered Jeff‟s salary had been raised without his permission.

Mr. Kite told Jeff to return his salary to the authorized level. Mr. Kite then

proceeded to revoke Alan and Jeff‟s authority to write checks and cancelled their

credit cards. Despite this, Alan submitted a pay sheet the following week

documenting a salary due of $5,000.00, rather than the agreed upon $1,500.00 per

week.

On January 19, 2006, both Alan and Jeff left the employ of Kite Bros.,

L.L.C. It was disputed as to whether the brothers left on their own accord or were

fired. Not in dispute is that when Alan left the premises, he took with him business

papers belonging to Kite Bros. L.L.C. without permission. Among the papers

removed were records which documented the deferred commissions due to Alan.

Mr. Kite filed a criminal complaint over the papers removed by Alan. When

the investigating officer contacted Alan, he was assured by Alan that the papers

would be returned the next day. However, Alan did not return the papers and kept

them in his possession until August of 2006, when his attorney returned some of

the papers to Mr. Kite‟s attorney. Alan has continued to remain in possession of

some of the business papers to this date.

According to Mr. Kite, when Alan left he wanted to make sure Alan

received everything he was entitled to in terms of compensation. However,

reaching an exact figure owed was difficult due to the lack of documentation

because of Alan‟s removal of certain business records. Mr. Kite testified, to be

safe, he simply wrote Alan a check for $100,000.00, minus employment taxes. He

believed this more than adequately covered any compensation Alan was due. Alan

acknowledged receiving this check in February of 2006.

In March of 2006, Alan and Jeff filed a lawsuit against their father and Kite

Bros., L.L.C. Several claims were alleged, including: (1) retaliatory discharge; (2)

detrimental reliance; (3) defamation; (4) failure to pay final wages; (5) failure to

2 deliver insurance policies; (6) failure to deliver retirement accounts; and (7) a

claim for an injunction ordering the return of a bass boat. Mr. Kite and Kite Bros.,

L.L.C. brought reconventional demands against the brothers for taking

unauthorized salaries and raises.

Mr. Kite, stating he was saddened by the family squabbling, agreed during a

mediation to settle Alan and Jeff‟s claims. The settlement agreement required that

Mr, Kite be treated with respect and he be granted access to his grandchildren.

Asserting that Alan did not uphold the agreement, Mr. Kite filed a lawsuit seeking

to declare the mediated agreement null. That lawsuit was consolidated with the

suit stemming from Alan and Jeff‟s claims. The mediated agreement was

rescinded.

During that time period, Alan and Jeff began a competing RV dealership,

Kite RV, L.L.C. Shortly after its inception, Alan and Jeff began arguing over

control of the company. As a result, Jeff reconciled with his father and dismissed

his claims against him.

On January 21, 2010, Mr. Kite moved for summary judgment dismissing

Alan‟s claims. The motion for summary judgment was supported with numerous

affidavits and depositions supporting the granting of summary judgment.

In his argument to defeat the motion for summary judgment, Alan argued

simply that there were several genuine issues of material fact that precluded

summary judgment. The trial court ordered Alan to “identify in writing the

specific statements” that created the genuine issues of material fact. However,

Alan did not provide the court with any such written documentation.

On July 16, 2010, the trial court issued written reasons granting partial

summary judgment, dismissing several, but not all, of Alan‟s claims. The trial

court granted summary judgment on the defamation claim, finding “the fact that

Alan did do what any reasonable person would see was stealing would be a

3 complete defense to the action for defamation.” The trial court also granted

summary judgment on Alan‟s ownership claim based on the doctrine of

detrimental reliance, finding “Alan has acknowledged elsewhere that [Mr. Kite]

was the sole owner of [Kite Bros.,] LLC and Alan disclaimed any ownership of the

[Kite Bros.,] LLC in his divorce proceedings. The trial court also granted

summary judgment dismissing Alan‟s retaliatory discharge claim. It was

acknowledged by both parties at the hearing that the claim regarding failure to

deliver retirement accounts, as well as the claim for an injunction ordering the

return of a bass boat, were moot. The judgment did not dismiss Alan‟s two other

claims alleging the failure to pay final wages and deliver insurance policies.

At Alan‟s request, the trial court stated that these partial summary judgments

were final pursuant to La.Code Civ.P. art. 1915(B)(1). Alan then filed the present

appeal, asserting the trial courts grants of partial motion for summary judgment

were in error.

ANALYSIS

Designation of Judgment as Final.

As the three of Alan‟s claims that were dismissed was done so in a partial

motion for summary judgment, we first consider whether the judgment is properly

before the court. An appellate court cannot determine the merits of an appeal

unless its jurisdiction is properly invoked by a valid final judgment. La.Code

Civ.P. art. 2083. In this case, at Alan‟s request, the trial court designated its partial

summary judgment as final pursuant to La.Code Civ.P. art. 1915(B)(1). No

reasons for this determination were given, other than the trial court stating in the

judgment that “there is no just reason for delay.”

This court in Fakier v. State of La., Bd. of Sup’rs for University of La.

System, 08-111 (La.App. 3 Cir. 5/28/08), 983 So.2d 1024, 1027, set forth the

4 procedure to be followed in reviewing an Article 1915(B) judgment designated

without reasons:

The proper standard of review for an order designating a judgment as final and immediately appealable, when the order is accompanied by explicit reasons for the certification, is whether the trial court abused its discretion. However, if the trial court fails to give explicit reasons for the certification, the appellate court should conduct a de novo determination of whether the certification was proper. R.J. Messinger, Inc. v. Rosenblum, 04-1664 (La.3/2/05), 894 So.2d 1113. Accordingly, we will conduct a de novo review. Likewise, because the peremptory exception of no cause of action raises a question of law and the district court‟s decision is based solely on the sufficiency of the petition, review of the district court's ruling on a peremptory exception of no cause of action is de novo. Scheffler v. Adams and Reese, LLP, 06-1774 (La.2/22/07), 950 So.2d 641.

The Fakier court, citing the supreme court‟s opinion in R.J. Messinger, Inc.

v. Rosenblum, 04-1664 (La.3/2/05), 894 So.2d 1113, listed several non-exclusive

factors for use by trial courts when determining certification of a judgment and for

use by appellate courts when conducting de novo reviews when no reasons are

given by the trial court for designation. The factors for examining certification are:

1) The relationship between the adjudicated and unadjudicated claims;

2) The possibility that the need for review might or might not be mooted by future developments in the trial court;

3) The possibility that the reviewing court might be obliged to consider the same issue a second time; and

4) Miscellaneous factors such as delay, economic and solvency considerations, shortening the time of trial, frivolity of competing claims, expense, and the like.

Fakier, 983 So.2d at 1029 (quoting Messinger, 894 So.2d at 1122).

Our analysis of the case at bar under the Fakier factors favors designation of

the judgment as final. There is little relation between the unadjudicated and

adjudicated claims, and there is little possibility the issues considered in this appeal

would be revisited in future proceedings.

Therefore, we find no error in the trial court‟s decision to designate the

judgment as final.

5 Standard of Review.

Louisiana Code of Civil Procedure Article 966(B) states that summary

judgment shall be rendered “if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to material fact, and that mover is entitled to

judgment as a matter of law.” In Boykin v. PPG Industries, Inc., 08-117, p. 4

(La.App. 3 Cir. 6/18/08), 987 So.2d 838, 842, writs denied, 08-1634 and 08-1649

(La.10/31/08) 994 So.2d 537, this court explained the standard of review

applicable to motions for summary judgment, stating:

Appellate courts review a trial court‟s grant or denial of a motion for summary judgment using the de novo standard of review, under the same criteria that govern the trial court‟s consideration of whether a summary judgment is appropriate in any given case. Indep. Fire Ins. Co. v. Sunbeam Corp., 99-2181, 99-2257 (La.2/29/00), 755 So.2d 226.

Defamation Claim.

Alan based his defamation claim on the basis that Mr. Kite referred to Alan

as a “thief” and a “liar.” Four elements are necessary to establish a defamation

cause of action: (1) a false and defamatory statement concerning another; (2) an

unprivileged publication to a third party; (3) fault (negligence or greater) on the

part of the publisher; and (4) resulting injury. Costello v. Hardy, 03-1146, pp. 12-

14 (La.1/21/04), 864 So.2d 129. The trial court granted summary judgment in

favor of Mr. Kite essentially on the basis that truth is an absolute defense against a

In Kennedy v. Sheriff of E. Baton Rouge, 05-1418, p. 25 (La.7/10/06), 935

So.2d 669, 686, our supreme court stated:

[B]ecause of the chilling effect on the exercise of free speech, defamation actions have been found particularly susceptible to summary judgment. Summary adjudication, we have recognized, is a useful procedural tool and an effective screening device for avoiding the unnecessary harassment of defendants by unmeritorious actions which threaten the free exercise of rights of speech and press.

6 The evidence clearly established Alan, without his father‟s permission,

raised his salary substantially and also unilaterally gave himself an unauthorized

percentage of all revenues of Kite Bros., L.L.C. Further, it was undisputed that

Alan, without permission, removed business documents from the Kite Bros.,

L.L.C. office. He also refused to return the records, despite his statement to the

police that he would do so.

The trial court did not err in granting summary judgment dismissing Alan‟s

claim for defamation.

Retaliatory Discharge.

In this claim, Alan contended Kite Bros., L.L.C. violated state law by

renting recreational vehicles. Alan stated he objected to this practice in September

of 2005, and as such, when he left Kite Bros., L.L.C. four months later his

departure gave rise to a retaliatory discharge claim under the Louisiana

Whistleblower‟s statute, La.R.S. 23:967. We find no merit in Alan‟s position, and

the trial court did not err in granting summary judgment on this issue.

Trial testimony revealed that the two contracts for renting recreational

vehicles entered into by Kite Bros., L.L.C., were facilitated by Alan himself. Not

only did Alan actively participate, if not orchestrate, the rental of the recreational

vehicles, he has listed as one of his claims in the suit below the entitlement to ten

percent of the funds realized from the lease of these vehicles. The trial court noted

the folly of this argument, as “the Whistleblower Statute only offers protection to a

specific class of employees: those employees who face „reprisals‟ from their

employers based solely upon an employee‟s knowledge of an illegal workplace

practice and his refusal to participate in the practice or intention to report it.”

Hale v. Touro Infirmary, 04-03, p. 6 (La.App. 4 Cir.11/3/04), 886 So.2d 1210,

1215, writ denied, 05-0103 (La.3/24/05), 896 So.2d 1036 (emphasis added). Thus,

7 Alan cannot be found to be a “good faith” whistleblower, which is a requisite

condition on bringing a whistleblower claim. Accardo v. Louisiana Health

Services & Indemnity Co., 05-2377 (La.App. 1 Cir. 6/21/06), 943 So.2d 381.

Moreover, not only did Alan not cite his alleged complaint as a reason for

his departure from Kite Bros., L.L.C., the record established Alan remained with

the company for over four months after his supposed objection (September of

2005) to the leasing of the RVs. When he finally left in January of 2006, Kite

Bros., L.L.C. had obtained a license to lease vehicles. Lastly, it was specifically

testified to by Alan, that he “never threatened my father to turn him in.” The trial

court did not err in granting summary judgment dismissing Alan‟s claims for

Detrimental Reliance.

Alan sought a one percent ownership interest in Kite Bros., L.L.C. based on

the doctrine of detrimental reliance. Louisiana Civil Code Article 1967 provides

for the doctrine of detrimental reliance as follows:

A party may be obligated by a promise when he knew or should have known that the promise would induce the other party to rely on it to his detriment and the other party was reasonable in so relying. Recovery may be limited to the expenses incurred or the damages suffered as a result of the promisee‟s reliance on the promise. Reliance on a gratuitous promise made without required formalities is not reasonable.

The doctrine of detrimental reliance is not favored in the law and all claims

must be examined carefully and strictly. Moroux v. Toce, 06-831, 06-832 (La.App.

3 Cir. 11/2/06), 943 So.2d 1263, writ denied, 07-117 (La.3/16/07), 952 So.2d 698.

Alan‟s own testimony does not establish that he was ever promised a one

percent ownership interest in Kite Bros., L.L.C. Although Alan claimed his father

“made the statement [to Alan] that he wanted [Alan] to have a controlling interest

over the business to keep it going,” it was acknowledged this was a statement

rather than any promise. Further, despite this claim of his reliance on a statement

8 made over twenty years ago of a potential ownership interest in the business, there

have been several judicial admissions by Alan during the years that Mr. Kite was

the sole owner of the company. In 1992, Alan filed to partition community

property during a divorce, and represented to the court that he had no ownership

interest in Kite Bros., Inc. In 1996, in another divorce proceeding, Alan again

represented he owned no interest in Kite Bros., Inc. In a May 2003 application to

the Louisiana State Policy Board, Alan certified that Mr. Kite owned “100%” of

Kite Bros., L.L.C.

Moreover, there is no evidence that Alan ever changed his position as a

result of the alleged promise. Both before and after the alleged promise Alan was

an at-will employee. Alan even admitted this when asked how his position

changed as a result of the alleged promise, he said he could not answer without

speculating.

The trial court did not err in granting summary judgment on Alan‟s

detrimental reliance claim.

DECREE

For the foregoing reasons, the judgment of the trial court is affirmed. All

costs of this appeal are assessed to Plaintiff-Appellant, Alan Kite.