Capital v. Mamal Inc.

• Decision Date: 13 January 2011
• Docket Number: No. 2010–CA–0798.,2010–CA–0798.
• Citation: 55 So.3d 963
• Parties: FORTERRA CAPITAL, L.L.C.v.MAMAL, INC., Innovative Marine Services, L.L.C., Michael J. Thibodaux, Sr., Michael Thibodaux, Jr., Jason Lyons, Jay Capouch and Allison Randolph.
• Court: Court of Appeal of Louisiana — District of US

55 So.3d 963

FORTERRA CAPITAL, L.L.C.
v.
MAMAL, INC., Innovative Marine Services, L.L.C., Michael J. Thibodaux, Sr., Michael Thibodaux, Jr., Jason Lyons, Jay Capouch and Allison Randolph.

No. 2010–CA–0798.

Court of Appeal of Louisiana, Fourth Circuit.

Jan. 13, 2011.

[55 So.3d 964]

Gladstone N. Jones III, Lynn E. Swanson, Catherine E. Lasky, Jones Swanson Huddell & Garrison, L.L.C., New Orleans, LA, for Plaintiff/Appellant, Forterra Capital, L.L.C.Robert H. Matthews, Pauline M. Warriner, New Orleans, LA, for Defendant/Appellee, Innovative Marine Services, L.L.C., Michael Thibodaux, Jr., Jason Lyons, Jay Capouch and Allison Randolph.(Court composed of Chief Judge JOAN BERNARD ARMSTRONG, Judge PATRICIA RIVET MURRAY and Judge MAX N. TOBIAS, JR.).JOAN BERNARD ARMSTRONG, Chief Judge.

[4 Cir. 1] The plaintiff-appellant, Forterra Capital, L.L.C. (“Forterra”), appeals the March 11, 2010 summary judgment dismissal of it's claims against the defendants-appellees, Innovative Marine Services, L.L.C. (“IMS”), Michael Thibodaux, Jr. (“Mr. Thibodaux, Jr.”), Jason Lyons (“Mr. Lyons”), Jay Capouch (“Mr. Capouch”) and Allison Randolph (“Mr. Randolph”). The same judgment denied Forterra's own motion for summary judgment, but Forterra does not raise that as an issue in this appeal. For the reasons that follow, we affirm the judgment of the trial court.

On or about January 12, 2007, Information Technology Systems, L.L.C. (“ITS”), with Mr. Michael J. Thibodaux, Sr. (Mr. Thibodaux, Sr.) as guarantor, executed a promissory note and allonge thereto (collectively, the “Loan Documents”) in the amount of $966,195.00 in favor of Forterra in connection with a certain Commercial Loan Agreement and Commercial Security Agreement.

ITS and Mr. Thibodaux, Sr. failed to make the required payments to Forterra. Consequently, Forterra entered into a Settlement Agreement with ITS and Mr. Thibodaux, Sr. on June 22, 2007, which provided that ITS and Mr. Thibodaux, Sr. would continue to make payments to Forterra pursuant to the original loan documents, and that Forterra would be granted an interest in certain [4 Cir. 2] contracts to be obtained by ITS, Mr. Thibodaux, Sr. and their affiliates, which included defendant Mamal, Inc. (“Mamal”). However, ITS, Mr. Thibodaux, Sr. and their affiliates failed to fulfill the terms of the Settlement Agreement.

On August 23, 2007, Forterra filed a breach of contract suit against ITS and Thibodaux, Sr. in the Civil District Court for the Parish of Orleans, seeking damages for breach of the Settlement Agreement. On November 15, 2007, Forterra and Mr. Thibodaux, Sr., in his individual capacity and as President/Manager of ITS, executed a Consent Judgment to end that litigation.

The Consent Judgment provided that ITS and Mr. Thibodaux, Sr. would continue to make payments as required under the loan documents; that the total indebtedness to Forterra as of November 2007 was $1,141,341.32; and that ITS and certain of its affiliates, including specifically Mamal, which is wholly owned by Mr. Thibodaux, Sr., would also make payments to Forterra on an ongoing basis based upon work obtained by Mamal and other affiliates. According to Forterra, pursuant to the Loan Documents, Settlement Agreement and Consent Judgment, Mamal, along with ITS and Mr. Thibodaux, Sr. became indebted to and obligors to Forterra. Again, ITS, Mr. Thibodaux, Sr. and Mamal failed to make the payments as required.

On July 29, 2008, Forterra filed a “Petition to Annul Transfers and for Damages,” naming as defendants Innovative Marine

[55 So.3d 965]

Services, L.L.C. (“IMS”), Mamal, Inc., Michael J. Thibodaux, Sr., Michael Thibodaux, Jr., Jay Capouch, Jason Lyons and Allison Randolph, alleging that:

1. Mamal and IMS share the same address as Information Technology Systems, L.L.C. (“ITS”). However, we note that ITS is not named as a defendant.

[4 Cir. 3] 2. Mr. Thibodaux, Sr. is the President/Manager of ITS and the sole shareholder and director of Mamal.

3. Mr. Thibodaux, Jr. is the son of Mr. Thibodaux, Sr. and is a member, manager, and/or control person of IMS.

4. Capouch served as a consultant for ITS, Mr. Thibodaux, Sr. and Mamal and is a member and manager of IMS.

5. Mr. Randolph was an employee of ITS and a member, manager, and/or control person of IMS.

Forterra contends that Mr. Thibodaux, Sr. and ITS transferred valuable assets known as Mudd X machines (used to clean tanks on offshore supply vessels) from their wholly owned affiliate, Mamal, at a time when Mamal was insolvent to another entity controlled by them, IMS, in order to frustrate Forterra's attempts to collect the debt owed to it. Forterra relies primarily on La. C.C. art. 2036, the revocatory action, and La. C.C. art. 3182 and 3183. La. C.C. art. 3182 provides that:

Whoever has bound himself personally, is obliged to fulfill his engagements out of all his property, movable and immovable, present and future.

La. C.C. art. 3183 provides that:

The property of the debtor is the common pledge of his creditors, and the proceeds of its sale must be distributed among them ratably, unless there exist among the creditors some lawful causes of preference.

However, this is almost entirely a fact based case. Forterra cites the following cases in support of the merits of its claim: Gulf Refining Co. of Louisiana v. Glassell, 186 La. 190, 171 So. 846 (1936), and In re Goldberg, 277 B.R. 251, 283 (Bkrtcy.M.D.La.5/1/02). Glassell stands for the proposition that [4 Cir. 4] La. C.C. arts. 3182 and 3183 do not afford a creditor “specific relief such as the maintenance of a petitory action by a lessee against a third person in possession of the property.” As was explained in Glassell:

It logically follows that articles 3182 and 3183 of the Louisiana Civil Code, being literal translations of articles 2092 and 2093 of the Code Napoleon, as the above-quoted law writers pointed out, are designed to secure to creditors the payment of their ‘money debts.’ It is only money creditors, even under the liberal provisions of the French article 1166, who have a common pledge on the property of the debtors, who can exercise the rights and actions of the debtors.

Articles 1990, 3182, and 3183, R.C.C., therefore, do not authorize the granting of specific relief such as the maintenance of a petitory action by a lessee against a third person in possession of the property.

Id., 186 La. at 209–210, 171 So. at 852–853.

Moreover, the facts in Glassell bear no direct relation to those of the instant case. Therefore, Glassell provides no guidance to this Court.

In re Goldberg, supra, is more relevant. It stands for the proposition that the revocatory action under La. C.C. art. 2036 allows a creditor to set aside a transaction of the debtor when it increases the insolvency of the debtor on a dollar for dollar basis without the necessity of having to

[55 So.3d 966]

show receipt of less than reasonably equivalent value by the debtor as a threshold condition. La. C.C. art. 2036 provides that:

An obligee has a right to annul an act of the obligor, or the result of a failure to act of the obligor, made or effected after the right of the obligee arose, that causes or increases the obligor's insolvency.

We agree with the interpretation of La. C.C. art. 2036 as set forth in Parish Nat. Bank v. Wilks, 04–1439 (La.App. 1 Cir. 8/3/05), 923 So.2d 8:

[4 Cir. 5] In accordance with the clear language of La. C.C. art. 2036, in order for an obligee to annul an act of the obligor, he must show (1) an act (or failure to act) of the obligor that causes or increases the obligor's insolvency; and (2) the act must occur after the obligee's rights arose. See Lewis v. Hood, 97–2118 (La.App. 1st Cir.11/6/98), 721 So.2d 1078, 1080.

Id., 04–1439, p. 10, 923 So.2d at 15.

More specifically, Forterra complains that Mr. Thibodaux, Sr., on behalf of Mamal, transferred certain Mudd X machines (used to clean tanks on offshore supply vessels) and all present and future rights thereto to IMS for three hundred thousand dollars ($300,000.00). Forterra contends that this increased Mamal's insolvency. In Forterra's Memorandum in Support of its Motion for Summary Judgment and in its original brief to this Court, Forterra notes that:

As of November 5, 2007, the date of the transfer, the liabilities of Mamal were $3,917,836.31 while its assets were merely $3,241,386.34.

This results in an insolvency of $676,449.97. The record also contains an affidavit of Wilbur J. “Bill” Babin, Jr., as the Chapter 7 Bankruptcy trustee of Michael J. Thibodaux, Sr. and Andrea Thibodaux. Mr. Babin avers without contradiction that:

According to the bankruptcy schedules of the Debtors, the Debtors were the 100% owners of Mamal, Inc. as of the date the Debtors filed Bankruptcy.

Mr. Babin's affidavit goes on to explain that his “office ran a Balance Sheet of Mamal, Inc. as of November 4, 2007....” The...