Richard Hargett v. Estate of Daniel N. Hargett, Sr.

CourtLouisiana Court of Appeal
DecidedFebruary 6, 2008
DocketCA-0007-0723
StatusUnknown

This text of Richard Hargett v. Estate of Daniel N. Hargett, Sr. (Richard Hargett v. Estate of Daniel N. Hargett, Sr.) 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
Richard Hargett v. Estate of Daniel N. Hargett, Sr., (La. Ct. App. 2008).

Opinion

DO NOT PUBLISH

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

07-723

RICHARD HARGETT

VERSUS

ESTATE OF DANIEL N. HARGETT, SR., YVETTE HARGETT, DANIEL N. HARGETT, JR., LLOYD HARGETT, HEIDI HARGETT, AND ELIZABETH HARGETT

********** APPEAL FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF LAFAYETTE, NO. 20025288 HONORABLE DURWOOD CONQUE, DISTRICT JUDGE

**********

J. DAVID PAINTER

********** Court composed of Glenn B. Gremillion, Elizabeth A. Pickett, and J. David Painter, Judges.

AFFIRMED.

Joseph C. Peiffer James R. Swanson, E.C. McCardle 201 St. Charles Ave., 46th Fl. New Orleans, LA 70170-4600 Counsel for Plaintiff-Appellant: Richard Hargett

Joseph F. Gaar, Jr. Jason M. Welborn P.O. Box 2053 Lafayette, LA 70502 Counsel for Plaintiff-Appellant: Richard Hargett Eric J. Simonson Richard A. Aguilar Edward L. Fenasci 643 Magazine St. New Orleans, LA 70130-3447 Counsel for Defendants-Appellees: Yvette Hargett, Elizabeth Hargett Patridge, Heidi Hargett Perry, Lloyd Hargett and Daniel Hargett, Jr.

Jack M. Alltmont 201 St. Charles Ave., 35th Fl. New Orleans, LA 70170 Counsel for Defendant-Appellee: Lloyd Hargett PAINTER, Judge.

Plaintiff, Richard Hargett, appeals the judgment of the trial court dismissing

his claims against the estate of his brother and his brother’s heirs pursuant to

exceptions of no cause of action and prescription. For the following reasons, we

affirm.

FACTS

Daniel Hargett, Sr. and Richard Hargett were brothers. Daniel was majority

shareholder in Hargett Mooring & Marine, Inc. (HMM) and owned a 67% share in

the company. Richard was a minority shareholder with a 33% share. Daniel was sole

owner of CSI Hydrostatic Testers (CSI), which was a major customer of HMM. In

1997, Daniel began negotiations for the sale of both businesses. Richard was not

involved in the negotiations. Daniel and Richard executed a letter of intent to sell the

businesses. In July 1997, Daniel and Richard executed an Exchange Agreement

whereby Richard exchanged his shares in HMM for shares in CSI. In November

1997, Transcoastal Marine Services purchased CSI for $44,000,000.00 in cash and

$11,000,000.00 in Transcoastal stock options. Richard received $2,800,000.00.

Daniel Hargett received $36,000,000.00 and 433,000 shares of Transcoastal stock.

Daniel died on May 29, 1998. In August 2002, Richard received documents

produced in a lawsuit filed against Daniel Hargett which allegedly led him to believe

that the value assigned to the HMM stock in the Exchange Agreement was too low

and that the value assigned to the CSI stock was too high.

PROCEDURAL HISTORY

On October 11, 2002, Richard filed this suit for damages alleging, in the

original and several amending petitions, breach of fiduciary duty, breach of contract

1 to properly value HMM’s stock, violation of federal and state securities laws, unjust

enrichment, and detrimental reliance and asking to have the Exchange Agreement

rescinded because his consent was obtained by fraud. In his petition he alleges that

he and his brother were business partners but that Daniel “was much more involved

and exercised much more control over corporate structure, global corporate strategy

and financial and financing affairs,” and that he, Richard, was more involved in the

operations of the business. He further alleges that the two corporations, HMM and

CSI, were dependent on each other and could not function separately. Richard asserts

that Daniel exercised substantial control over HMM and often used this control to

coerce Richard into acquiescing in his decisions. Richard asserts that he did not have

access to the financial records and projections of CSI and that, during negotiations

for the sale of the businesses, Daniel had superior knowledge about the structure,

value, and timing of the transaction. He alleges that Daniel intentionally supplied

him with false, misleading, and incomplete information about the value of HMM’s

assets and valued CSI too high and HMM too low in order to benefit himself in the

sale of the business.

All of Richard’s claims were dismissed pursuant to exceptions of no cause of

action or prescription. He appeals the dismissal pursuant to exceptions of no cause

of action of his claims for detrimental reliance and rescission based on contractual

fraud and duress, the trial courts determination that La.R.S. 12:1502 perempted all of

Richard’s breach of fiduciary claims, and the dismissal of his claim for breach of

contract.

2 DISCUSSION

Breach of Contract

We first consider Richard’s argument that the trial court erred in dismissing his

claims for breach of contract pursuant to an exception of no cause of action.1 Richard

asserts that Daniel breached an oral contract to fairly value both companies, that

Richard accepted the offer, and that Daniel breached his oral contract. The trial court

found that his petition did not state a cause of action for breach of contract.

The criteria for deciding an exception of no cause of action are as follows:

A cause of action, when used in the context of the peremptory exception, is defined as the operative facts that give rise to the plaintiff’s right to judicially assert the action against the defendant. Everything on Wheels Subaru, Inc. v. Subaru South, Inc., 616 So.2d 1234, 1238 (La.1993). The function of the peremptory exception of no cause of action is to test the legal sufficiency of the petition, which is done by determining whether the law affords a remedy on the facts alleged in the pleading. Id. at 1235. No evidence may be introduced to support or controvert an exception of no cause of action. La. C.C.P. art. 931. Consequently, the court reviews the petition and accepts well-pleaded allegations of fact as true. Jackson v. State ex rel. Dept. of Corrections, 00-2882, p. 3 (La.5/15/01), 785 So.2d 803, 806; Everything on Wheels Subaru, 616 So.2d at 1235. The issue at the trial of the exception is whether, on the face of the petition, the plaintiff is legally entitled to the relief sought. Montalvo v. Sondes, 93-2813, p. 6 (La.5/23/94), 637 So.2d 127, 131.

Louisiana has chosen a system of fact pleading. La. C.C.P. art. 854 cmt. (a); Montalvo at p. 6, 637 So.2d at 131. Therefore, it is not necessary for a plaintiff to plead the theory of his case in the petition. Kizer v. Lilly, 471 So.2d 716, 719 (La.1985). However, the mere conclusions of the plaintiff unsupported by

1 We note that Richard did not support his arguments by referring to those places in the record containing the erroneous rulings, either in the form of judgment or in the transcript of the various proceedings. His only record references are his own pleadings. Uniform Rules–Courts of Appeal Rule 2-12.4 requires that:

The argument on a specification of error in a brief shall include a suitable reference by volume and page to the place in the record which contains the basis for the alleged error. The court may disregard the argument on that error in the event suitable reference to the record is not made.

3 facts does not set forth a cause of action. Montalvo at p. 6, 637 So.2d at 131.

The burden of demonstrating that the petition states no cause of action is upon the mover. City of New Orleans v. Board of Com’rs of Orleans Levee Dist., 93-0690, p. 28 (La.7/5/94), 640 So.2d 237, 253.

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