PETER J. ABADIE * NO. 2019-CA-0749
VERSUS * COURT OF APPEAL JESUS ARGUELLES, AUSTIN * VENTURE PROPERTIES, FOURTH CIRCUIT L.L.C., DEREK LIGHTELL * AND UNITED BROKERS OF STATE OF LOUISIANA LOUISIANA L.L.C. *******
APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2019-00607, DIVISION “L” Honorable Kern A. Reese, Judge ****** Judge Terri F. Love ****** (Court composed of Judge Terri F. Love, Judge Regina Bartholomew-Woods, Judge Tiffany G. Chase)
Peter J. Abadie, Jr. 4404 Hamilton Street New Orleans, LA 70118
APPELLANT/ ATTORNEY PRO SE
Shandy Arguelles Lindsey S. Olsen DE ST. GERMAIN LAW OFFICE, LLC 118 West Hall Avenue Slidell, LA 70460
COUNSEL FOR DEFENDANT/APPELLEE
REVERSED AND REMANDED FEBRUARY 19, 2020 This dispute arises from a suit for breach of contract that property owner and
appellant Peter Abadie (“Mr. Abadie”) filed after the buyer elected to withdraw
from the sale. Jesus Arguelles (“Mr. Arguelles”) filed a peremptory exception of
no right of action, claiming he is not a proper named defendant pursuant to La.
R.S. 12:1320 et seq. The trial court relied on the purchase agreement to sustain the
exception of no right action, finding Mr. Arguelles signed the contract as a
representative of the limited liability company and not in his individual capacity.
We find that without evidence to establish that Mr. Arguelles was authorized to act
on behalf of the limited liability company, the contract, on its own, is insufficient
to prove Mr. Arguelles was a member of the limited liability company at the time
the contract was entered and, therefore, not a proper party to the instant suit.
Accordingly, we reverse the trial court’s ruling that granted the exception of no
right of action and remand for further proceedings in line with this opinion.
PROCEDURAL HISTORY AND FACTUAL BACKGROUND
In January 2019, Mr. Abadie filed suit against Mr. Arguelles, among other
1 named defendants, seeking damages arising from a contract to purchase property
Mr. Abadie owned in New Orleans. Mr. Arguelles signed the purchase agreement,
entitled “Louisiana Residential Agreement to Buy or Sell,” associated with Mr.
Abadie’s property in November 2018. The purchase agreement identified the
buyer on the last page of the document as Austin Venture Properties, LLC (“Austin
Venture”), a limited liability company authorized to do business in the state of
Louisiana.
After the purchase agreement fell through, Mr. Abadie filed suit for
damages. In February 2019, Mr. Arguelles filed a peremptory exception of no
right of action, alleging Mr. Abadie had no right to sue Mr. Arguelles in his
individual capacity because he was not a party to the contract. Following the April
2019 hearing on the exception, the trial court sustained the exception. The trial
court signed a written judgment on the exception in May 2019, and Mr. Abadie
filed his appeal. This Court remanded the matter, however, with instructions to the
trial court to amend the judgment to include the necessary decretal language in
order to properly invoke this Court’s appellate jurisdiction. The trial judge signed
the amended judgment in September 2019. This appeal timely follows.
STANDARD OF REVIEW
“The standard of review of a trial court’s ruling on an exception of no right
of action is de novo.” N. Clark, L.L.C. v. Chisesi, 16-0599, p. 3 (La. App. 4 Cir.
12/7/16), 206 So.3d 1013, 1015 (citing St. Pierre v. Northrop Grumman
Shipbuilding, Inc., 12-0545, p. 7 (La. App. 4 Cir. 10/24/12), 102 So.3d 1003,
2 1009).
DISCUSSION
Mr. Abadie raises two assignments of error: (1) whether the trial court erred
in granting Mr. Arguelles’ exception of no right of action; and (2) whether the trial
court erred in finding that Mr. Abadie was attempting to pierce the corporate veil.
“The function of the peremptory exception is to have the plaintiff’s action
declared legally nonexistent, or barred by effect of law, and hence this exception
tends to dismiss or defeat the action.” La. C.C.P. art. 923. Specifically, “‘[t]he
function of an exception of no right of action is to determine whether the plaintiff
belongs to the class of persons to whom the law grants the cause of action asserted
in the suit.’” N. Clark, 16-0599, p. 5, 206 So.3d at 1016 (quoting Hood v. Cotter,
08-0215, p. 17 (La. 12/2/08), 5 So.3d 819, 829). The defendant-exceptor has the
burden of proving the exception of no right of action. N. Clark, 16-0599, p. 5, 206
So.3d at 1017 (citing Hospitality Consultants, LLC v. Angeron, 09-1738, p. 6 (La.
App. 4 Cir. 6/9/10), 41 So.3d 1236, 1240); See also Robertson v. Sun Life
Financial, 09-2275, p. 6 (La. App. 1 Cir. 6/11/10), 40 So.3d 507, 512 (“To prevail
on the exception of no right of action, the defendant has the burden of establishing
that the plaintiff does not have an interest in the subject matter of the suit or legal
capacity to proceed with the suit.”). “Evidence may be received under the
exception of no right of action for the purpose of showing that the plaintiff does
not possess the right he claims or that the right does not exist.” Teachers’ Ret. Sys.
of La. v. La. State Emp.’s Ret. Sys., 456 So.2d 594, 597 (La. 1984). Additionally,
3 in determining whether to sustain an exception of no right of action, “a court
should focus on whether the particular plaintiff has a right to bring the suit while
assuming that the petition states a valid cause of action for some person.” N.
Clark, 16-0599, p. 6, 206 So.3d at 1017 (quoting J-W Power Co. v. State ex rel.
Dept. of Revenue & Taxation, 10-1598, p. 7 (La. 3/15/11), 59 So.3d 1234, 1238-
39).
In that an exception presents a question of law, the inquiry on appellate
review is whether the trial court was legally correct in sustaining the exception. N.
Clark, 16-0599, p. 6, 206 So.3d at 1017 (citing Peneguy v. Porteous, 01-1503, p. 6
(La. App. 4 Cir. 5/15/02), 823 So.2d 380, 384). Review of the exception begins
with consideration of the pleadings. N. Clark, 16-0599, p. 6, 206 So.3d at 1017
(quoting Gisclair v. La. Tax Comm’n, 10-0563, p. 2 (La. 9/24/10), 44 So.3d 272,
274). In the absence of evidence to the contrary, the “averments of fact in the
pleading must be taken as true.” N. Clark, 16-0599, p. 5-6, 206 So.3d at 1017
(citing Huntsman Int’l LLC v. Praxair, Inc., 15-0975, p. 4 (La. App. 4 Cir.
9/14/16), 201 So.3d 899, 904).
In this case, the petition for damages alleges that Austin Venture, United
Brokers of Louisiana, L.L.C., Derek Lightell, and Mr. Arguelles are liable for
breach of the purchase agreement. The petition avers that “[o]n November 13,
2018[,] [Mr.] Arguelles signed an Agreement to Purchase Property…owned by
[Mr.] Abadie, located at 4522 Palmyra Street in the City of New Orleans.”
According to Mr. Abadie’s petition “[Mr.] Arguelles was to deposit $1000.00 with
4 the Purchase’s Title Attorney, which he failed to do, thereby violating the terms of
this Agreement from the outset, and making [Mr.] Arguelles and Austin [Venture],
indebted unto [Mr.] Abadie for that amount, plus all further damages as outlined in
this petition.”
Mr. Arguelles filed his exception, challenging Mr. Abadie’s right to bring
suit against him, individually, pursuant to La. R.S. 12:1320 (B) and (C). La. R.S.
12:1320(B) states, “[e]xcept as otherwise specifically set forth in this Chapter, no
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PETER J. ABADIE * NO. 2019-CA-0749
VERSUS * COURT OF APPEAL JESUS ARGUELLES, AUSTIN * VENTURE PROPERTIES, FOURTH CIRCUIT L.L.C., DEREK LIGHTELL * AND UNITED BROKERS OF STATE OF LOUISIANA LOUISIANA L.L.C. *******
APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2019-00607, DIVISION “L” Honorable Kern A. Reese, Judge ****** Judge Terri F. Love ****** (Court composed of Judge Terri F. Love, Judge Regina Bartholomew-Woods, Judge Tiffany G. Chase)
Peter J. Abadie, Jr. 4404 Hamilton Street New Orleans, LA 70118
APPELLANT/ ATTORNEY PRO SE
Shandy Arguelles Lindsey S. Olsen DE ST. GERMAIN LAW OFFICE, LLC 118 West Hall Avenue Slidell, LA 70460
COUNSEL FOR DEFENDANT/APPELLEE
REVERSED AND REMANDED FEBRUARY 19, 2020 This dispute arises from a suit for breach of contract that property owner and
appellant Peter Abadie (“Mr. Abadie”) filed after the buyer elected to withdraw
from the sale. Jesus Arguelles (“Mr. Arguelles”) filed a peremptory exception of
no right of action, claiming he is not a proper named defendant pursuant to La.
R.S. 12:1320 et seq. The trial court relied on the purchase agreement to sustain the
exception of no right action, finding Mr. Arguelles signed the contract as a
representative of the limited liability company and not in his individual capacity.
We find that without evidence to establish that Mr. Arguelles was authorized to act
on behalf of the limited liability company, the contract, on its own, is insufficient
to prove Mr. Arguelles was a member of the limited liability company at the time
the contract was entered and, therefore, not a proper party to the instant suit.
Accordingly, we reverse the trial court’s ruling that granted the exception of no
right of action and remand for further proceedings in line with this opinion.
PROCEDURAL HISTORY AND FACTUAL BACKGROUND
In January 2019, Mr. Abadie filed suit against Mr. Arguelles, among other
1 named defendants, seeking damages arising from a contract to purchase property
Mr. Abadie owned in New Orleans. Mr. Arguelles signed the purchase agreement,
entitled “Louisiana Residential Agreement to Buy or Sell,” associated with Mr.
Abadie’s property in November 2018. The purchase agreement identified the
buyer on the last page of the document as Austin Venture Properties, LLC (“Austin
Venture”), a limited liability company authorized to do business in the state of
Louisiana.
After the purchase agreement fell through, Mr. Abadie filed suit for
damages. In February 2019, Mr. Arguelles filed a peremptory exception of no
right of action, alleging Mr. Abadie had no right to sue Mr. Arguelles in his
individual capacity because he was not a party to the contract. Following the April
2019 hearing on the exception, the trial court sustained the exception. The trial
court signed a written judgment on the exception in May 2019, and Mr. Abadie
filed his appeal. This Court remanded the matter, however, with instructions to the
trial court to amend the judgment to include the necessary decretal language in
order to properly invoke this Court’s appellate jurisdiction. The trial judge signed
the amended judgment in September 2019. This appeal timely follows.
STANDARD OF REVIEW
“The standard of review of a trial court’s ruling on an exception of no right
of action is de novo.” N. Clark, L.L.C. v. Chisesi, 16-0599, p. 3 (La. App. 4 Cir.
12/7/16), 206 So.3d 1013, 1015 (citing St. Pierre v. Northrop Grumman
Shipbuilding, Inc., 12-0545, p. 7 (La. App. 4 Cir. 10/24/12), 102 So.3d 1003,
2 1009).
DISCUSSION
Mr. Abadie raises two assignments of error: (1) whether the trial court erred
in granting Mr. Arguelles’ exception of no right of action; and (2) whether the trial
court erred in finding that Mr. Abadie was attempting to pierce the corporate veil.
“The function of the peremptory exception is to have the plaintiff’s action
declared legally nonexistent, or barred by effect of law, and hence this exception
tends to dismiss or defeat the action.” La. C.C.P. art. 923. Specifically, “‘[t]he
function of an exception of no right of action is to determine whether the plaintiff
belongs to the class of persons to whom the law grants the cause of action asserted
in the suit.’” N. Clark, 16-0599, p. 5, 206 So.3d at 1016 (quoting Hood v. Cotter,
08-0215, p. 17 (La. 12/2/08), 5 So.3d 819, 829). The defendant-exceptor has the
burden of proving the exception of no right of action. N. Clark, 16-0599, p. 5, 206
So.3d at 1017 (citing Hospitality Consultants, LLC v. Angeron, 09-1738, p. 6 (La.
App. 4 Cir. 6/9/10), 41 So.3d 1236, 1240); See also Robertson v. Sun Life
Financial, 09-2275, p. 6 (La. App. 1 Cir. 6/11/10), 40 So.3d 507, 512 (“To prevail
on the exception of no right of action, the defendant has the burden of establishing
that the plaintiff does not have an interest in the subject matter of the suit or legal
capacity to proceed with the suit.”). “Evidence may be received under the
exception of no right of action for the purpose of showing that the plaintiff does
not possess the right he claims or that the right does not exist.” Teachers’ Ret. Sys.
of La. v. La. State Emp.’s Ret. Sys., 456 So.2d 594, 597 (La. 1984). Additionally,
3 in determining whether to sustain an exception of no right of action, “a court
should focus on whether the particular plaintiff has a right to bring the suit while
assuming that the petition states a valid cause of action for some person.” N.
Clark, 16-0599, p. 6, 206 So.3d at 1017 (quoting J-W Power Co. v. State ex rel.
Dept. of Revenue & Taxation, 10-1598, p. 7 (La. 3/15/11), 59 So.3d 1234, 1238-
39).
In that an exception presents a question of law, the inquiry on appellate
review is whether the trial court was legally correct in sustaining the exception. N.
Clark, 16-0599, p. 6, 206 So.3d at 1017 (citing Peneguy v. Porteous, 01-1503, p. 6
(La. App. 4 Cir. 5/15/02), 823 So.2d 380, 384). Review of the exception begins
with consideration of the pleadings. N. Clark, 16-0599, p. 6, 206 So.3d at 1017
(quoting Gisclair v. La. Tax Comm’n, 10-0563, p. 2 (La. 9/24/10), 44 So.3d 272,
274). In the absence of evidence to the contrary, the “averments of fact in the
pleading must be taken as true.” N. Clark, 16-0599, p. 5-6, 206 So.3d at 1017
(citing Huntsman Int’l LLC v. Praxair, Inc., 15-0975, p. 4 (La. App. 4 Cir.
9/14/16), 201 So.3d 899, 904).
In this case, the petition for damages alleges that Austin Venture, United
Brokers of Louisiana, L.L.C., Derek Lightell, and Mr. Arguelles are liable for
breach of the purchase agreement. The petition avers that “[o]n November 13,
2018[,] [Mr.] Arguelles signed an Agreement to Purchase Property…owned by
[Mr.] Abadie, located at 4522 Palmyra Street in the City of New Orleans.”
According to Mr. Abadie’s petition “[Mr.] Arguelles was to deposit $1000.00 with
4 the Purchase’s Title Attorney, which he failed to do, thereby violating the terms of
this Agreement from the outset, and making [Mr.] Arguelles and Austin [Venture],
indebted unto [Mr.] Abadie for that amount, plus all further damages as outlined in
this petition.”
Mr. Arguelles filed his exception, challenging Mr. Abadie’s right to bring
suit against him, individually, pursuant to La. R.S. 12:1320 (B) and (C). La. R.S.
12:1320(B) states, “[e]xcept as otherwise specifically set forth in this Chapter, no
member, manager, employee, or agent of a limited liability company is liable in
such capacity for a debt, obligation, or liability of the limited liability company.”
Additionally, “[a] member, manager, employee, or agent of a limited liability
company is not a proper party to a proceeding by or against a limited liability
company, except when the object is to enforce such a person’s rights against or
liability to the limited liability company.” La. R.S. 12:1320(C).
In support of his exception, Mr. Arguelles relies exclusively on the purchase
agreement. Mr. Arguelles argues that Mr. Abadie and Austin Venture were the
only parties to enter into the purchase agreement. He contends that he signed the
purchase agreement in his capacity as a member of Austin Venture, which is the
printed name that appears under the buyer’s signature line on the last page of the
agreement. Mr. Arguelles asserts that he did not sign or enter into the purchase
agreement in his individual capacity.
Opposing the exception, Mr. Abadie avers that Austin Venture was never the
intended purchaser of the property and that the trial court should allow him to
5 proceed with his claim against Mr. Arguelles. Mr. Abadie concedes that the
purchase agreement identifies Austin Venture as the buyer. Nevertheless, he
asserts that the identification is “totally out of place,” noting reference to Austin
Venture does not appear anywhere else in the subsequent documents associated
with the sale. Mr. Abadie also claims that because Mr. Arguelles signed and
initialed the purchase agreement and subsequent documents incidental to the sale,
“the written signature of [Mr.] Arguelles should take precedence over a typed
Austin Venture name underneath the valid signature.”
The trial court relied on the purchase agreement to sustain the exception of
no right of action. On the last page, the purchase agreement identifies Austin
Venture as the “Buyer.” The trial court reasoned that although Mr. Arguelles
signed and initialed the agreement, Mr. Arguelles did so “as a representative of the
corporation.” The trial court concluded that pursuant to La. R.S. 12:1320 et seq.,
Mr. Abadie had no right of action against Mr. Arguelles, individually, and
sustained the exception.
On appellate review, Mr. Abadie maintains that the trial court erred when it
granted Mr. Arguelles’ exception. He points out that Mr. Arguelles relies solely on
the portion of the purchase agreement identifying Austin Venture as the buyer.
However, Mr. Arguelles submitted nothing to establish that he is a member,
manager, employee, or agent of Austin Venture. Similarly, Mr. Arguelles offered
no proof that he is authorized to act on behalf of Austin Venture. The only
evidence suggesting any connection between Mr. Arguelles and Austin Venture is
6 that Mr. Arguelles’ signature and Austin Venture’s printed name appear in the
same document.
Mr. Arguelles carries the burden of proving that Mr. Abadie does not have a
right to seek a claim for damages against him, individually. N. Clark, 16-0599, p.
5, 206 So.3d at 1017 (citing Hospitality Consultants, 09-1738, p. 6, 41 So.3d at
1240). As previously mentioned, “[e]vidence may be received under the exception
of no right of action for the purpose of showing that the plaintiff does not possess
the right he claims or that the right does not exist.” Teachers’ Ret. Sys. of La., 456
So.2d at 597. Mr. Arguelles asserts that he is the acting agent of Austin Venture,
and he signed the purchase agreement, in November 2018, in his representative
capacity. However, unless the assertions contained in a party’s briefs and
pleadings are supported by evidence found in the record, they remain
unsubstantiated assertions, not evidence. Daisy v. Plaquemines Parish Gov’t, 17-
0076, p. 13 (La. App. 4 Cir. 8/30/17), 226 So.3d 560, 568. There are no affidavits,
documents, or other competent evidence to support Mr. Arguelles’ contention that
he is a member of Austin Venture for purposes of dismissing the claims against
him pursuant to La. R.S. 12:1320 et seq. Therefore, we find Mr. Arguelles failed
to carry his burden on the exception of no right action.
CONCLUSION
We find the purchase agreement, by itself, is insufficient to prove Mr.
Arguelles was a member of Austin Venture when he signed the agreement. For
this reason, we find Mr. Arguelles did not carry his burden of proving that he is not
7 a proper party to the proceeding and therefore entitled to dismissal of the claims
against him pursuant to La. R.S. 12:1320. Therefore, this Court finds reversal of
the trial court’s ruling and remand of the matter appropriate. 1
DECREE
Based on the foregoing reasons, we reverse the trial court’s judgment
sustaining the exception of no right of action and dismissing with prejudice the
claims against Mr. Arguelles, individually. Furthermore, we remand the matter to
the trial court for further proceedings in line with this opinion.
REVERSED AND REMANDED
1 La. C.C.P. art. 928 poses no restrictions on Mr. Arguelles’ ability to file an amending/supplemental exception of no right of action, should evidence exist that sufficiently proves he was authorized to act on behalf of Austin Venture.