Southern Acadiana Services, LLC v. Phayarath

139 So. 3d 638, 14 La.App. 3 Cir. 03, 2014 WL 1815253, 2014 La. App. LEXIS 1208
CourtLouisiana Court of Appeal
DecidedMay 7, 2014
DocketNo. 14-03
StatusPublished
Cited by1 cases

This text of 139 So. 3d 638 (Southern Acadiana Services, LLC v. Phayarath) 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.

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Southern Acadiana Services, LLC v. Phayarath, 139 So. 3d 638, 14 La.App. 3 Cir. 03, 2014 WL 1815253, 2014 La. App. LEXIS 1208 (La. Ct. App. 2014).

Opinion

GENOVESE, Judge.

| j Plaintiffs, Southern Acadiana Services, LLC and Khambang Viengvilay, appeal the judgment of the trial court granting summary judgment in favor of Defendants, Phonesaga Phayarath and I & I Contracting Services, LLC, finding that Plaintiffs failed to meet their burden of proof on their claims for breach of fiduciary duty, tortious interference with contracts, unfair trade practices, and defalcation of funds relative to their business arrangement. For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

Southern Acadiana Services, LLC (SAS) was formed on June 28, 2011, by Kham-bang Viengvilay and Phonesaga Phayarath to provide welding services to industrial customers. Viengvilay and Phayarath were the only two members of the limited liability company, each with a fifty percent membership interest.

In April 2012, after disagreements arose between Viengvilay and Phayarath, they began discussions about closing SAS. On May 5, 2012, the parties met, but, were unable to reach an agreement on the terms of a buyout.

On the morning of May 7, 2012, unbeknownst to Phayarath, Viengvilay contacted SAS’s employees and informed them that SAS was permanently closing. Vi-engvilay also contacted SAS’s insurance agent, cancelled SAS’s workers’ compensation and liability insurance, and emailed SAS’s customers, advising them that SAS no longer had insurance and that it was closing its business.

Later that same day, when Phayarath learned of Viengvilay’s actions, he contacted SAS’s insurance agent and reinstated the insurance coverage. Phayarath then went to the office of the Louisiana Secretary of State to form his own company, I & I Contracting Services, LLC (I & I), which he created to provide welding services to industrial customers.

1 zSuit was subsequently filed by Viengvi-lay and SAS against Phayarath and I & I asserting claims for breach of fiduciary duty, tortious interference with contracts, unfair trade practices, and defalcation of funds.1 Viengvilay and SAS contended that Phayarath and I & I were liable for the damages they sustained resulting from Phayarath starting a competing business, acquiring SAS’s customers, and withdrawing SAS’s funds without notice to or approval by Viengvilay.

Phayarath and I & I filed a Motion for Summary Judgment asserting that:

There are no genuine issues of material fact as to any of plaintiffs’ claims since [641]*641plaintiffs by their own admission triggered the chronology of events which specifically caused the damages sustained by Plaintiffs, Southern Acadiana Services, LLC and [VIENGVILAY]. Therefore, defendants, PHONESAGA PHAYARATH and I & I CONTRACTING SERVICES, LLC, are entitled, as a matter of law, to summary judgment herein, dismissing all plaintiffs’ demands at plaintiffs’ costs.

Following a hearing, the trial court granted Phayarath and I & I’s Motion for Summary Judgment, “being of the opinion that the plaintiffs did not meet their burden of proof as to the allegations of a claim for breach of fiduciary duty, tortious interference with contracts, unfair trade practices, and defalcation of funds.” Viengvi-lay and SAS appeal.

ASSIGNMENTS OF ERROR

On appeal, Viengvilay and SAS present the following assignments of error for our review:

1. The [t]rial [c]ourt erred in finding that Khambang [Viengvilay] caused damages to [SAS] and that Plaintiffs cannot sustain their burden of proof with respect to their claim against Defendants for breach of fiduciary duties.
2. The [t]rial [c]ourt erred in finding that [SAS] had no contracts that could be interfered with, and that Plaintiffs cannot meet their burden of proof with respect to their claim against Defendants for tortious interference with contracts.
3. The [t]rial [e]ourt erred in holding that the unfair trade practices are proved to be the result of the action of Plaintiff, and that Plaintiffs cannot meet their burden of proof with respect to their claim for damages against Defendants pursuant to the Louisiana Unfair Trade Practices Act.
4. The [t]rial [c]ourt erred in holding that there is no proof that the Defendants issued checks illegally, and that Plaintiffs cannot meet their burden of proof with respect to their claim against Defendants for defalcation of funds.

LAW AND DISCUSSION

A motion for summary judgment is reviewed on appeal under the de novo standard of review. Hogg v. Chevron USA, Inc., 09-2632 (La.7/6/10), 45 So.3d 991. The reviewing court uses the same criteria as the trial court to determine whether summary judgment is appropriate, ie., whether there is a genuine issue of material fact, and whether the movant is entitled to judgment as a matter of law. See La.Code Civ.P. art. 966; Hogg, 45 So.3d 991. Summary judgment shall be granted “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.” La.Code Civ.P. art. 966(B). “[A] ‘genuine issue’ is a ‘triable issue,’ or one as to which reasonable persons could disagree. A ‘material fact’-is a fact, the existence or non-existence of which may be essential to a cause of action under the applicable theory of recovery.” Hogg, 45 So.3d at 997 (citations omitted), citing Champagne v. Ward, 03-3211 (La.1/19/05), 893 So.2d 773. In proving entitlement to summary judgment:

The burden of proof remains with the movant. However, if the movant will not bear the burden of proof at trial on the matter that is before the court on the motion for summary [642]*642judgment, the movant’s burden on the motion does not require him to negate all essential elements of the adverse party’s claim, action, or defense, but rather to point out to the court that there is an absence of factual support for one or more elements essential to the adverse party’s claim, action, or defense. Thereafter, if the adverse party fails to produce factual support sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial, there is no genuine issue of material fact.

La.Code Civ.P. art. 966(C)(2).

Gruver v. Kroger Co., 10-689, pp. 2-3 (La.App. 3 Cir. 2/2/11), 54 So.3d 1249, 1251, writ denied, 11-471 (La.4/25/11), 62 So.3d 92

In support of their Motion for Summary Judgment, Phayarath and I & I contend that it was Viengvilay’s own unilateral and unjustified actions that caused the losses which he and SAS allegedly sustained. To the contrary, Viengvilay and SAS contend that summary judgment is unwarranted because “genuine issues of material fact exist with respect to the cause of the damages to SAS.”

In considering the Motion for Summary Judgment, the trial court addressed each of the claims asserted individually. The court ultimately concluded, based upon the evidence, that Viengvilay and SAS were unable to meet their burden of proof. Having conducted a de novo review of the record, we agree with the trial court.

On the claim for breach of fiduciary duty, the trial court found that “prior to the actions taken by [Phayarath], [Viengvi-lay] had already shut down the business.

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139 So. 3d 638, 14 La.App. 3 Cir. 03, 2014 WL 1815253, 2014 La. App. LEXIS 1208, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southern-acadiana-services-llc-v-phayarath-lactapp-2014.