STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
14-711
ROBERT H. RHYNE, JR. AND BRENT TRAUTH
VERSUS
OMNI ENERGY SERVICES CORP.
********** APPEAL FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF LAFAYETTE, NO. 2013-4316 C/W 2009-3396 HONORABLE GLENNON P. EVERETT, DISTRICT JUDGE
**********
ULYSSES GENE THIBODEAUX CHIEF JUDGE
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Court composed of Ulysses Gene Thibodeaux, Chief Judge, Sylvia R. Cooks, and J. David Painter, Judges.
AFFIRMED.
Randy Paul Angelle Boyer, Hebert, Abels & Angelle, LLC 401 East Mills Avenue Breaux Bridge, LA 70517 Telephone: (337) 336-8285 COUNSEL FOR: Defendants/Appellees - Edward E. Colson, III, Dennis R. Sciotto, and Ronald E. Gerevas
Alan K. Breaud Timothy Wayne Basden Breaud & Meyers, APLC P. O. Box 3448 Lafayette, LA 70503 Telephone: (337) 266-2200 COUNSEL FOR: Plaintiff/Appellee - OMNI Energy Services Corp. David Michael Kaufman Elmore, Griffin P. O. Box 4604 Lafayette, LA 70502-4604 Telephone: (337) 233-2417 COUNSEL FOR: Defendants/Appellants - Robert H. Rhyne, Jr. and Brent Trauth
André F. Toce The Toce Firm, PLC 1112 Bayou Tortue Road Broussard, LA 70518 Telephone: (337) 233-6818 COUNSEL FOR: Defendants/Appellants - Robert H. Rhyne, Jr. and Brent Trauth
Robert Joseph Burns, Jr. 2141 Quail Run Drive Baton Rouge, LA 70808 Telephone: (225) 767-7730 COUNSEL FOR: Defendant/Appellee - XL Specialty Casualty Company
David Michael Thorguson Bourgeois Thorguson, L.L.C. P. O. Box 3006 Morgan City, LA 70381-3006 Telephone: (985) 384-2055 COUNSEL FOR: Defendans/Appellees - Edward E. Colson, III, Dennis R. Sciotto, and Ronald E. Gerevas THIBODEAUX, Chief Judge.
This dispute boasts a lengthy and complex procedural history, in
which Robert H. Rhyne, Jr. and Brent Trauth appeal a Lafayette Parish trial court
judgment that (1) denied appellants’ exception of lack of jurisdiction, (2) granted
appellee’s exception of no cause of action, and (3) granted defendant XL Specialty
Insurance’s motion for summary judgment. Appellants Rhyne and Trauth asserted
claims against OMNI Energy Services (OMNI), seven OMNI Directors, XL
Specialty Insurance Company, Richard Mager, and Cove Properties, LLC in
federal court, Iberia Parish, St. Martin Parish, and Lafayette Parish. The claims
asserted related to a Stock Purchase and Sales Agreement (SPSA) between OMNI
and Preheat Inc., sold by Rhyne and Trauth.
All claims against OMNI and the directors in their capacity as
directors were ultimately dismissed in St. Martin Parish. Three directors then
remained in the litigation for acts or omissions outside of their director capacity.
The suit was transferred to Lafayette Parish and consolidated with a suit previously
filed by OMNI against Rhyne and Trauth. That original Lafayette suit was
appealed and a decision rendered by this Court in Omni Energy Services Corp. v.
Robert H. Rhyne, Jr., et al., 14-251 c/w 14-322, 14-323 (La.App. 3 Cir. 10/15/14),
__ So.3d __. The remaining defendants in the current suit now before this Court
were dismissed by the trial court via a grant of no cause of action and motion for
summary judgment.
Reasoning that (1) the trial court had jurisdiction to hear the
exceptions, (2) appellants have no right of action to maintain the suit after they
confessed no claims against the directors outside their capacity as OMNI directors exist, and (3) XL Specialty Insurance Company is not liable to Rhyne and Trauth,
we affirm the trial court’s April 14, 2014 judgment as amended.
I.
ISSUES
We are entreated to consider whether:
1. the trial court had jurisdiction to rule on the exception of no cause of action and motion for summary judgment when the question of venue was on appeal in the consolidated case.
2. the portion of the appeal relating to the April 26, 2011 judgment should be stricken from the appellants’ brief.
3. the trial court erred in granting defendants’ exception of no cause of action.
4. the trial court erred in granting XL Specialty Insurance’s motion for summary judgment.
II.
FACTS AND PROCEDURAL HISTORY
The claims originally asserted by plaintiffs/appellants related to a
Stock Purchase and Sales Agreement (SPSA) between OMNI and Preheat Inc.,
whereby OMNI purchased Preheat via stock sold by Rhyne and Trauth. As per the
agreement, Rhyne and Trauth would operate Preheat as OMNI employees. As part
of the purchase price, OMNI issued two promissory notes. Payment on the
promissory notes would not be made to Rhyne and Trauth, however, if either
resigned or was terminated with cause before the maturity date on the notes. Prior
to the maturity dates, Rhyne was terminated with cause, and Trauth allegedly
resigned. Rhyne and Trauth filed suit alleging several alternative theories of
2 recovery including nullity of the SPSA, wrongful termination, and tortious
interference with the SPSA.
This suit currently on appeal arises from Docket Number 2013-4316
(Lafayette Parish II), which was originally filed in federal court. The federal issues
were dismissed and the federal court declined to extend pendent jurisdiction over
the remaining issues. The suit was later filed in St. Martin Parish on May 10,
2010, and ultimately transferred to Lafayette Parish. Once in Lafayette, the case
was consolidated with Docket Number 2009-3396 (Lafayette Parish I) originally
filed on June 9, 2009.
In response to the suit filed in St. Martin Parish, defendants OMNI
and the directors filed exceptions of venue and lis pendens. Those directors
included Richard White, Barry Kaufman, Brian Recatto, James Eckert, Dennis
Sciotto, Edward Colson, III, and Ronald Gerevas. The district court granted the
exceptions on April 26, 2011, specifically to OMNI, White, Kaufman, Recatto, and
Eckert. The exceptions were also granted in part to Sciotto, Colson, and Gerevas,
but only for any acts or omissions occurring outside their duties as directors.
Therefore, the remaining defendants after the judgment on the exceptions were
Richard Mager, Cove Partners, Sciotto, Colson, and Gerevas, with the liability of
the later three only arising from claims against them outside their capacity as
directors. The judgment on the exceptions of venue and lis pendens was not
appealed and a supervisory writ was not applied for.
The St. Martin Parish suit was then removed to federal court by
defendants Richard Mager and Cove Partners, LLC, but ultimately remanded to St.
Martin Parish on May 1, 2012. Appellants did not appeal or seek supervisory writs
3 for the April 26, 2011 grant of exceptions of venue or lis pendens either before
removal or after remand to St. Martin Parish.
Meanwhile, in Lafayette Parish I, appellants Rhyne and Trauth filed a
reconventional demand that reiterated the allegations made by them in the St.
Martin Parish suit, including those claims against parties that had been dismissed
in St. Martin.
On March 6, 2013, defendant directors Sciotto, Colson, and Gerevas
filed a peremptory exception of no cause of action in the St. Martin Parish suit.
The directors stated that they were dismissed from the suit in their official capacity
as directors of OMNI by the grant of improper venue and lis pendens. They next
alleged that Rhyne and Trauth’s petition did not assert any claim against them
outside of their official capacity, and, therefore, there was no cause of action
remaining against them. Prior to the hearing on the exception, the remaining
parties agreed to transfer the suit to Lafayette and consolidate it with the case
already pending there. The suit was transferred to Lafayette and consolidated with
Docket Number 2009-3396 (Lafayette Parish I) as per agreement of the parties.
The suits continued on two separate tracts. The exception of no cause of action,
originally filed in St. Martin Parish, was now set for hearing in Lafayette.
Prior to the no cause of action hearing, appellants Rhyne and Trauth
filed a pleading titled “Peremptory Exception of Lack of Jurisdiction” alleging that
the court had no jurisdiction to hear the exception. Rhyne and Trauth based their
argument on the fact that Lafayette Parish I was on appeal. The appeal asked
whether the trial court erred in partially denying a motion for new trial in Lafayette
Parish I, which dismissed all claims against the directors, defendants-in-
reconvention, in their official capacity on the grounds of prescription. Appellants
4 contend that the decision on appeal would inherently decide whether or not venue
had been proper in federal court and in St. Martin Parish for the claims against the
directors. Furthermore, that the decision on appeal is intertwined with the no cause
of action exception at issue in the Lafayette Parish II suit. The trial court in
Lafayette Parish II ultimately denied Rhyne and Trauth’s exception of no
jurisdiction in a judgment dated April 14, 2014. The trial court further granted
defendant directors’ exception of no cause of action as well as XL Specialty
Insurance Co.’s motion for summary judgment. Rhyne and Trauth now appeal that
April 14, 2014 judgment in Lafayette Parish II.
III.
LAW AND DISCUSSION
Denial of Exception of Lack of Jurisdiction
An exception of lack of subject matter jurisdiction raises a question of
law, which is reviewed de novo. Gandy v. Key Realty, L.L.C., 13-712 (La.App. 3
Cir. 12/11/13), 128 So.3d 678.
Appellants argue that the trial court in Lafayette Parish II was
divested of jurisdiction to take any action while the partial denial of a motion for
new trial in Lafayette Parish I was being appealed. The motion for new trial was
related to a prior November judgment in Lafayette Parish I. In that judgment, the
trial court granted plaintiffs-in-reconvention a new trial only for alleged tortious
interference claims against three defendants-in-reconvention, namely Sciotto,
Colson, and Gerevas. This judgment therefore denied the new trial, but carved out
and maintained those claims pending in Lafayette II.
5 According to Louisiana Code of Civil Procedure Article 2088,
jurisdiction of the trial court is divested over all matters in the case reviewable
under the appeal when one has been timely filed and granted. Matters not
reviewable under the appeal, however, remain within the jurisdiction of the trial
court. La.Code Civ.P. art. 2088.
When two cases are consolidated, they each retain their own status as
separate procedural entities. Dendy v. City Nat. Bank, 06-2436 (La.App. 1 Cir.
10/17/07), 977 So.2d 8. “Procedural rights peculiar to one case are not rendered
applicable to a companion case by the mere fact of consolidation” and “filing a
pleading or motion in one of several consolidated cases does not procedurally
affect the others.” Id. at 12. The Louisiana Supreme Court has stated that
consolidation is “a procedural device which allows a trial court to deal with similar
issues of law or fact in one trial; it does not merge the parties, affect the running of
delays, or authorize consolidation of judgments or appeals.” Davis v. Am. Home
Prods. Corp., 95-1035, p. 1 (La. 5/19/95), 654 So.2d 681, 681. Furthermore, an
appeal in a proceeding that has previously been consolidated with another “does
not serve as such to the benefit of another party in the joined action.” Darouse v.
Mamon, 201 So.2d 362, 364 (La.App. 1 Cir. 6/30/67).
The issues remaining in the Lafayette Parish II suit, from which this
appeal originates, are those involving the alleged intentional acts of defendant-
directors Sciotto, Colson, and Gerevas in their capacity outside that of directors for
OMNI. Those issues pertaining to XL Specialty Insurance Company also remain.
These are the sole remaining issues that were transferred to Lafayette Parish from
St. Martin Parish. The St. Martin Parish trial court dismissed claims against OMNI
6 as well as all directors in their official capacity for improper venue and lis pendens,
thereby leaving only the claims against directors outside their director capacity.
The issues in front of the trial court in the Lafayette Parish II suit were
specifically left out of the judgment rendered in Lafayette Parish I from which an
appeal was taken. The judgment in Lafayette Parish carved out the issues of the
directors outside their capacity as directors for future consideration. Therefore, the
trial court did not lose jurisdiction over Lafayette Parish II because the issues in
this suit were not reviewable on appeal in the consolidated case.
Motion to Strike the April 26, 2011 Judgment from Appellants’ Brief
Appellants Rhyne and Trauth essentially seek to appeal the April 26,
2011 judgment (2011 Judgment) rendered in St. Martin Parish, which dismissed
several parties from the litigation based on improper venue and lis pendens. The
parties dismissed were OMNI, Richard White, Barry Kaufman, Brian Recatto, and
James Eckert. The judgment also dismissed claims against Dennis Sciotto, Edward
Colson, III, and Ronald Gerevas in their official capacity as directors of OMNI, but
maintained those claims against them in any capacity outside that of directors.
Appellees argue that the 2011 Judgment was an immediately appealable, final
judgment, and that the time delay for appeal has run. Appellees, therefore, request
that all argument related to the 2011 Judgment be stricken from appellants’ brief.
Louisiana Code of Civil Procedure Article 1915(A) states in pertinent part:
A final judgment may be rendered and signed by the court, even though it may not grant the successful party or parties all of the relief prayed for, or may not adjudicate all of the issues in the case, when the court:
7 (1) Dismisses the suit as to less than all of the parties, defendants, third party plaintiffs, third party defendants, or interveners.
Therefore, when “one party is completely dismissed from a suit, the judgment is
final under Article 1915(A)(1), and there is no requirement to have it designated as
final.” Jeansonne v. New York Life Ins. Co., 08-932, p. 9 (La.App. 3 Cir. 5/20/09),
11 So.3d 1160, 1168. The judgment dismissing OMNI, White, Kaufman, Recatto,
and Eckert was final under 1915(A) because these parties were completely
dismissed from the suit, and was even designated as final by the district court judge
in the 2011 Judgment. The judgment as to the remaining defendants, Sciotto,
Colson, and Gerevas, was an interlocutory judgment and not immediately
appealable.
Under Louisiana Code of Civil Procedure Article 1915(B)(1), “a
partial judgment as to one or more but less than all of the claims, demands, issues,
or theories against a party . . . shall not constitute a final judgment unless
designated as a final judgment. . . .” There was no such designation by the judge in
this case. The 2011 Judgment dismissed only those claims against Sciotto, Colson,
and Gerevas in their capacity as directors, but left any claims against them outside
that capacity to be litigated. The judgment as to these remaining parties was
interlocutory and not final. “An interlocutory judgment is appealable only when
expressly provided by law.” La.Code Civ.P. art. 2083.
However, the 2011 Judgment cannot be considered now on appeal
even though it was an interlocutory judgment as to the parties then. The 2011
Judgment dismissed claims against the remaining defendants, now appellees, in
their capacity as directors because of improper venue and lis pendens. In order to
challenge a venue decision, if the judgment is not otherwise appealable, a timely
8 supervisory writ must be sought with the court of appeal. Land v. Vidrine, 10-1342
(La. 3/15/11), 62 So.3d 36. “[L]itigants are required to seek review via
supervisory writs. Failure to timely file a writ application on a venue ruling
amounts to a waiver of any objection thereto.” Id at 40. Plaintiffs did not seek a
supervisory writ for the venue issue at any time in this litigation and, therefore, the
2011 Judgment dismissing those claims against appellees in their director capacity
because of improper venue is final.
Based upon the foregoing, the only judgment properly before this
Court is that of April 14, 2014 in the Lafayette Parish II suit, in which Sciotto,
Colson, and Gerevas remain in a non-director capacity, as well as claims against
XL Specialty Insurance Company. Appellants’ assignments of error and
arguments addressing the 2011 judgment are hereby ordered stricken from
appellants’ brief.
Grant of Peremptory Exception of No Cause of Action
At issue on this appeal is whether there existed a cause of action in the
Lafayette Parish II suit. When the suit was transferred from St. Martin Parish to
Lafayette, the remaining claims were against Dennis Sciotto, Edward Colson, III,
and Ronald Gerevas for actions taken outside of their official capacity as directors
of OMNI. A cause of action must exist on the face of the complaint. La.Code
Civ.P. art. 891. “No evidence may be introduced at any time to support or
controvert the objection that the petition fails to state a cause of action.” La.Code.
Civ.P. art. 931. Therefore, in reviewing the trial court’s grant of no cause of
action, the question presented is whether the original petition filed in St. Martin
9 Parish stated a cause of action against these remaining defendants in a non-director
capacity.
However, due to a judicial confession made by Mr. Toce, appellants’
counsel, this Court will exercise its authority to take notice of an exception of no
right of action in this case, as opposed to a no cause of action. According to
Louisiana Code of Civil Procedure Article 927(B), the failure of a party to state a
right of action may be judicially noticed on the court’s own motion at both the trial
and appellate level. “Generally speaking, an exception of no right of action serves
to question the right of a plaintiff to maintain [the] suit.” Roy O. Martin Lumber
Co. v. Saint Denis Securities Co., 72 So.2d 257, 258 (La.1954). In determining
whether the plaintiff has a legal interest in the litigation, the court is not limited to
the petition as it is with determining whether a cause of action exists. Arcadian
Corp. v. Olin Corp., 97-174 (La.App. 3 Cir. 6/18/97), 698 So.2d 9. Instead,
evidence is admissible to show whether the plaintiff has the right he claims. Id.
Mr. Toce made an in-court statement that Rhyne and Trauth do not
have any claims against Sciotto, Colson, and Gerevas as individuals outside of
their capacity as OMNI directors. “A judicial confession is a declaration made by
a party in a judicial proceeding. The confession constitutes full proof against the
party who made it.” La.Civ.Code art. 1853. “Responses by counsel to questions
posed by the court may constitute judicial confessions, thereby relieving the
opposition of the necessity of introducing evidence.” Compensation Specialties,
L.L.C. v. New England Mut. Life Ins. Co., 08-1549, p. 9 (La.App. 1 Cir. 2/13/09), 6
So.3d 275, 281, writ denied, 09-575 (La. 4/24/09), 7 So.3d 1200.
On December 9, 2013, during the hearing for consolidation of the two
Lafayette cases, Mr. Toce stated on the record that plaintiffs, Rhyne and Trauth,
10 “really don’t have any claims [against the remaining three defendants] outside their
capacity as Directors. The tortious interference claim is because they were
Directors and Officers . . . Unless they are Officers and Directors, there is no
tortious interference claim.” Therefore, because the only remaining claim in this
suit is against Sciotto, Colson, and Gerevas outside of their capacity as Directors
for OMNI, and Mr. Toce has admitted that the plaintiffs do not have any claims
against them in this capacity, no right of action exists. This Court recognizes, on
its own motion, and grants an exception of no right of action, dismissing
defendants Sciotto, Colson, and Gerevas.
Grant of Summary Judgment in Favor of XL Specialty Insurance Co.
The grant or denial of a motion for summary judgment is reviewed de
novo, “using the same criteria that govern the trial court’s determination of
whether summary judgment is appropriate; i.e. whether there is any genuine issue
of material fact, and whether the movant is entitled to judgment as a matter of
law.” Samaha v. Rau, 07-1726, pp. 3-4 (La. 2/26/08), 977 So.2d 880, 882-83
(citations omitted); La.Code Civ.P. art. 966.
XL Specialty Insurance Company insured OMNI and OMNI directors
by the definition of “Insured Person” in its policy with OMNI. All director
defendants in their official capacity were previously dismissed in St. Martin Parish.
Now, all claims against director defendants, in all capacities, in this litigation are
dismissed. There is no potential coverage under the policy for which XL Specialty
may be liable. The grant of XL Specialty Insurance Company’s motion for
summary judgment was proper.
11 V.
CONCLUSION Based upon the foregoing, the April 14, 2014 judgment denying
Rhyne and Trauth’s exception of lack of jurisdiction, and granting XL Specialty
Insurance’s motion for summary judgment is affirmed. Further, the Court grants
an exception of no right of action dismissing the remaining defendants. All costs
of this appeal are assessed to Appellants, Robert H. Rhyne and Brent Trauth.
AFFIRMED.