St. Bernard Parish Government v. Richard Perniciaro

• Court: Louisiana Court of Appeal
• Decided: March 11, 2020
• Docket: 2019-CA-0604
• Status: Published

Opinion

ST. BERNARD PARISH * NO. 2019-CA-0604 GOVERNMENT * VERSUS COURT OF APPEAL * RICHARD PERNICIARO, ET FOURTH CIRCUIT AL. * STATE OF LOUISIANA *******

APPEAL FROM ST. BERNARD 34TH JUDICIAL DISTRICT COURT NO. 17-0995, DIVISION “AD HOC” Honorable Ashly Bruce Simpson ****** JUDGE SANDRA CABRINA JENKINS ****** (Court composed of Judge Edwin A. Lombard, Judge Sandra Cabrina Jenkins, and Judge Tiffany G. Chase)

CHASE, J., CONCURS IN THE RESULT

James M. Garner Debra J. Fischman Stuart D. Kottle SHER GARNER CAHILL RICHTER KLEIN & HILBERT, L.L.C. 909 Poydras Street, Suite 2800 New Orleans, LA 70112-1033

David C. Jarrell OFFICE OF THE DISTRICT ATTORNEY, ST. BERNARD PARISH 1101 W. St. Bernard Highway Chalmette, LA 70043

COUNSEL FOR PLAINTIFF/APPELLANT

William Joseph Larzelere, III 249 Kingsland Drive Covington, LA 70435

COUNSEL FOR DEFENDANTS/APPELLEES

REVERSED AND REMANDED

MARCH 11, 2020 In this governmental ethics case, Plaintiff/Appellant, the St. Bernard Parish

Government (“St. Bernard”), appeals two March 14, 2019 judgments: (1)

sustaining the peremptory exception of prescription raised by defendants Harold

Rosselli and C.H.E.R. Software, L.L.C. (“C.H.E.R.”) (collectively the “C.H.E.R.

Defendants”); (2) sustaining the declinatory exception of lack of subject matter

jurisdiction raised by Appellee/defendant Richard Perniciaro; and (3) sustaining

the declinatory exception of lis pendens raised by Appellee/defendant ParaTech,

L.L.C. (“ParaTech”) (Perniciaro and ParaTech are collectively, the “ParaTech

Defendants”), thereby dismissing the cause of actions filed by St. Bernard.

For the reasons that follow, we reverse the judgment sustaining the C.H.E.R.

Defendants’ exception of prescription; reverse the judgment sustaining Mr.

Perniciaro’s exception of lack of subject matter jurisdiction; and reverse the

judgment sustaining ParaTech’s exception of lis pendens.

1 FACTUAL AND PROCEDURAL BACKGROUND

On August 2, 2017, St. Bernard filed this suit against the ParaTech

Defendants and the C.H.E.R. Defendants seeking damages, and a declaration that

contracts between St. Bernard and ParaTech were null and void. The petition

alleges that on January 10, 2012, new Parish President David E. Peralta secretly

appointed Mr. Perniciaro and Mr. Rosselli to directorial positions within St.

Bernard. According to the petition, Mr. Perniciaro and Mr. Rosselli used their

appointed positions to direct contractual services to ParaTech and C.H.E.R., even

though Mr. Perniciaro and Mr. Rosselli had direct and substantial economic

interests in ParaTech and C.H.E.R., respectively. On January 26, 2012, Mr.

Rosselli, in his capacity as the acting director of the Office of Information,

recommended the termination of James Murray as the Director of Information

Technology, who was terminated the same day.

The petition asserts that because Mr. Perniciaro and Mr. Rosselli were

employees of St. Bernard, they were able to use their “secret” positions to

authorize individualized services and projects to ParaTech. St. Bernard alleges that

after Mr. Perniciaro and Mr. Rosselli became putative employees of St. Bernard,

ParaTech was formally awarded the contract to perform IT services for St. Bernard

on February 1, 2012 (the “2012 Contract”). The petition alleges that on September

23, 2013, even though ParaTech was not the lowest bidder, it was awarded the new

IT services contract. On January 16, 2014, ParaTech executed a new contract to

perform IT services for St. Bernard (the “2014 Contract”).

2 St. Bernard contends that Mr. Perniciaro and Mr. Rosselli “schemed” to use

their official capacities as parish employees to direct work and money to ParaTech

and C.H.E.R., in violation of the Code of Governmental Ethics (“Ethics Code”),

codified at La. R.S. 42:1101, et seq. As a result of these alleged violations of the

Ethics Code, St. Bernard seeks damages, and a declaration that the 2012 and 2014

Contracts are an absolute nullity and void ab initio.

On October 20, 2017, the C.H.E.R. Defendants filed a peremptory exception

of prescription. On October 27, 2017, the ParaTech Defendants filed a declinatory

exception of lis pendens, and Mr. Perniciaro filed an exception lack of subject

matter jurisdiction. On December 4, 2018, St. Bernard filed an omnibus

opposition to the exceptions filed by Mr. Perniciaro, the ParaTech Defendants, and

the C.H.E.R. Defendants.

On February 20, 2019, the trial court heard the exceptions raised by the

defendants. At the hearing, the C.H.E.R. Defendants offered no witnesses or

evidence in support of their exception of prescription.

On March 14, 2019, the trial court signed written judgments sustaining Mr.

Perniciaro’s exception of lack of subject matter jurisdiction, sustaining ParaTech’s

exception of lis pendens, and sustaining the C.H.E.R. Defendants’ exception of

prescription, thereby dismissing the cause of actions filed by St. Bernard.

DISCUSSION

St. Bernard lists three assignments of error.

3 Exception of Lack of Subject Matter Jurisdiction

First, St. Bernard contends that the trial court erred in sustaining Mr.

Perniciaro’s exception of lack of subject matter jurisdiction. The exception of lack

of subject matter jurisdiction is a question of law and is reviewed de novo. Ryan

Gootee Gen. Contractors, LLC v. Plaquemines Parish Sch. Bd. & One Constr.,

Inc., 15-0325, p. 9 (La. App. 5 Cir. 11/19/15), 180 So.3d 588, 595

“Jurisdiction is the legal power and authority of a court to hear and

determine an action or proceeding involving the legal relations of the parties, and

to grant the relief to which they are entitled.” La. C.C.P. art. 1. “Jurisdiction over

the subject matter is the legal power and authority of a court to hear and determine

a particular class of actions or proceedings, based upon the object of the demand,

the amount in dispute, or the value of the right asserted.” La. C.C.P. art. 2. The

jurisdiction of a court over the subject matter of an action or proceeding cannot be

conferred by consent of the parties or waived; a judgment rendered by a court

which has no jurisdiction over the subject matter of the action or proceeding is

void. La. Code Civ. P. art. 3.

St. Bernard relies upon this Court’s recent opinion in Plaquemines Parish

Govt. v. Williams, 18-0675 (La. App. 4 Cir. 2/19/18), 262 So.3d 1080, to support

its argument that the trial court has subject matter jurisdiction to hear St. Bernard’s

cause of actions for damages and declaratory relief against Mr. Perniciaro.

In Williams, the Plaquemines Parish Government (“PPG”) filed suit seeking

damages, losses, and return of public funds. PPG alleged that Williams, in his

4 position as public works director, violated the Ethics Code by directing Parish

work to companies affiliated with the Williams family. The defendants filed a

motion for summary judgment asserting that Williams did not violate the Ethics

Code. The trial court granted the motion for summary judgment, and PPG

appealed to this Court. On appeal, this Court stated that “the central issue before

this Court [was] whether Byron Williams, Jr. violated the Code of Ethics of

Government Employees.” Id., p. 7, 262 So.3d at 1086. The Williams Court upheld

the summary judgment, finding that the parish employee did not violate La. R.S.

42:1112 of the Ethics Code.

“[I]t is the duty of a court to examine subject matter jurisdiction sua sponte,

even when the issue is not raised by the litigants.” Boudreaux v. State, Dep’t of

Transp. & Dev., 01-1329, p. 8 (La. 2/26/02), 815 So.2d 7, 13. In Williams, the

Court concluded that PPG’s claims were “primarily rooted in the nepotism

statutes” over which the Court found it had subject matter jurisdiction. Williams,

18-0675, p. 7, 262 So.3d at 1086.

Here, as in Williams, we find that the trial court had subject matter

jurisdiction to hear St. Bernard’s cause of actions for damages and declaratory

relief based on Mr. Perniciaro’s alleged violations of the Ethics Code. The trial

court committed legal error to the extent it found that it did not have subject matter

jurisdiction as to Mr. Perniciaro. Accordingly, we reverse the trial court’s

judgment sustaining Mr. Perniciaro’s exception of lack of subject matter

jurisdiction.

5 Exception of Lis Pendens

St. Bernard contends that the trial court erred in sustaining the ParaTech

defendants’ exception of lis pendens based on two cases that were consolidated in

this matter (Case no. 17-0995 and Case No. 14-1331).

A trial court’s ruling on an exception of lis pendens is a question of law, and

the standard of review of the appellate court in reviewing a question of law is

whether the court’s interpretative decision is legally correct. Krecek v. Dick, 13-

0804, p. 3 (La. App. 4 Cir. 2/19/14), 136 So.3d 261, 264.

Under the provisions of La. C.C.P. art. 531, “[w]hen two or more suits are

pending in a Louisiana court or courts on the same transaction or occurrence,

between the same parties in the same capacities, the defendant may have all but the

first suit dismissed by excepting thereto.” The first requirement for granting an

exception of lis pendens is that there are two or more suits pending. Krecek, 13-

0804, p. 4, 136 So.3d at 264. The second requirement for granting an exception of

lis pendens is that the suits involve the same transaction or occurrence. Id. The

third requirement for granting lis pendens is that the suits involve the same parties

in the same capacities. Krecek, 13-0804, p. 6, 136 So.3d at 265.

In the present case, we cannot determine whether the two lawsuits in

question arise out of the same transaction or occurrence. The record on appeal

does not contain the petition filed in Case No. 14-1331. Therefore, we cannot

compare the allegations in Case No. 14-1331 and those in the instant case, No. 17-

0995. Proper analysis of the exception of lis pendens requires comparison of the

6 demands asserted in each suit against the defendant urging the exception. Pumpkin

Mobile Home Park, LLC v. Harrison, 13-1086, p. 4 (La. App. 1 Cir. 2/18/14), 2014

WL 647398 (unpublished); Capital One, N.A. v. Serv. Door & Millwork, LLC, 11-

0691, p. 3 (La. App. 1 Cir. 11/9/11), 2011 WL 5420374 (unpublished).

“The party filing an exception of lis pendens has the burden of proving the

facts necessary for his exception to be sustained.” Robinson v. Robinson, 474

So.2d 46, 48 (La. App. 3d Cir. 1985). Based on the incomplete record before us,

we find the ParaTech Defendants did not satisfy this burden. Accordingly, we

reverse the trial court’s judgment sustaining the ParaTech Defendants’ exception

of lis pendens.

Exception of Prescription

Finally, St. Bernard contends that the trial court erred in sustaining the

exception of prescription filed by the C.H.E.R. Defendants.1 The standard of

review of a trial court’s ruling sustaining a peremptory exception of prescription is

de novo because it raises a legal question. M.R. Pittman Group, LLC v.

Plaquemines Parish Govt., 15-0513, p 8 (La. App. 4 Cir. 12/2/15), 182 So.3d 303,

309. “Generally, prescription statutes are strictly construed against prescription

and in favor of the claim sought to be extinguished by it; thus, of two possible

constructions, that which favors maintaining, as opposed to barring an action,

should be adopted.” Wells v. Zadeck, 11-1232, pp. 6-7 (La. 3/30/12), 89 So.3d

1145, 1149.

1 The C.H.E.R. Defendants did not file an appellee brief.

7 The trial court ruled that St. Bernard’s delictual cause of action against the

C.H.E.R. Defendants was prescribed on January 16, 2015, one year after the

ParaTech contract was executed on January 16, 2014. According to St. Bernard,

the trial court erred by failing to apply the doctrine of contra non valentum, which

is an exception to the general rules of prescription by suspending the running of

prescription when the circumstances of the case fall into one of four categories.

Wells, 11-1232, p. 8, 89 So.3d at 1150. St. Bernard relies on the fourth category,

commonly known as the discovery rule, which provides that prescription

commences on the date the injured party discovers or should have discovered, the

facts upon which his cause of action is based. Id., p. 9, 89 So. 3d at1150.

David Jarrell, an attorney representing St. Bernard who drafted the 2017

petition, testified that he “reviewed virtually every document ever compiled by St.

Bernard Parish Government regarding these contracts,” and that he did not learn

until June 5, 2017 that Mr. Peralta had been designated as the de facto director of

the IT department on January 10, 2012. Mr. Jarrell also testified that, on that date,

he found a letter authored by Mr. Rosselli personally recommending the

termination of the prior IT director, Mr. Murray.

We find that St. Bernard’s prescriptive period did not begin to run until

2017, when Mr. Jarrell discovered the C.H.E.R. Defendants’ actions and the

damages St. Bernard suffered as a result of these actions. Pursuant to the doctrine

of contra non valentum, St. Bernard’s petition, filed on August 2, 2017, was not

8 prescribed under the one-year period for delictual actions. The trial court erred in

sustaining the C.H.E.R. Defendants’ exception of prescription.

CONCLUSION

For the foregoing reasons, we reverse the trial court’s March 14, 2019

judgment sustaining Mr. Perniciaro’s exception of lack of subject matter

jurisdiction, and the ParaTech Defendants’ exception of lis pendens. We also

reverse the trial court’s March 14, 2019 judgment sustaining the C.H.E.R.

Defendants’ exception of prescription. We remand to the trial court for further

proceedings.