Chase v. Hilton Hotels Corp.

• Decision Date: 10 March 1988
• Docket Number: Civ. A. No. 87-2118.
• Citation: 682 F. Supp. 316
• Parties: Allen CHASE v. HILTON HOTELS CORPORATION.
• Court: U.S. District Court — Eastern District of Louisiana

682 F. Supp. 316

Allen CHASE v. HILTON HOTELS CORPORATION.

Civ. A. No. 87-2118.

United States District Court, E.D. Louisiana.

March 10, 1988.

Clarence F. Favret, III, Favret, Favret, Demarest & Russo, New Orleans, La., for plaintiff.

John P. Manard, Jr., Phelps, Dunbar, Marks, Claverie & Sims, New Orleans, La., for defendant.

ORDER AND REASONS

MENTZ, District Judge

Plaintiff, Allen Chase, alleges that on April 26, 1986, while he was a guest in the New Orleans Hilton Hotel, he was drugged by a female acquaintance, whom he met in the hotel, and/or the bartender in the hotel's Rainforest Lounge. He alleges that as a direct result of Hilton's negligence, he lost consciousness in his room, awoke the following day to find certain money and personal possessions stolen, and suffered prostate gland and kidney damage from the drug, loss of profits to two of his business enterprises, and other damages totalling $575,000.

Defendant, Hilton Hotels Corporation (Hilton), brought a motion for partial summary judgment on the grounds that: (1) Chase is not the real party in interest to bring a claim for loss of income and, even if he were, the claim is so speculative, remote, and unrelated to the suit as to bar recovery; and (2) Article 2971 of the Louisiana Civil Code limits Hilton's liability for the value of Chase's stolen property to $500. The parties agreed to submit the matter on briefs without oral argument.

The Court will first address Chase's claim for loss of income. During Chase's deposition, his counsel made the following stipulation to clarify exactly which of a whole series of companies in which Chase was a shareholder were involved in the loss of income claim:

At this time, on behalf of Mr. Chase, we can make a stipulation that the only claim we are going to make in connection with loss of revenues or loss of income will be any loss that we can prove in connection with Mr. Chase's involvements with Who's Who—Bachelor's, Inc. d/b/a Who's Who International and the negotiation that he was having with the People's Republic of China and the potential for utilization of his Australian ranch and the ventures that were going on in China. Otherwise, the other ventures that were mentioned are waived as claims for loss of revenue at this time.

Hilton argues that Chase is not the real party in interest to claim damages for lost profits because he cannot sue individually for damages incurred by a corporation. Chase testified in his deposition that he owns 90% of the outstanding stock in Bachelor's, Inc. He further testified that due to his kidney condition, he was unable to properly manage the company causing its value to diminish. He claims that because of this depreciation in value, he was unable to declare a dividend to himself and unable to sell the stock for an appreciated value.

While it is true that an individual "plaintiff is not entitled to recover directly for the lost earnings of the company, he may recover for the reduced value of his asset, the corporate stock." Metz v. United Technologies Corp., 754 F.2d 63, 70 (2d Cir.1985) (applying Louisiana law and, in particular, Nobile v. New Orleans Public Service, Inc., 419 So.2d 35 (La.App. 4th Cir.1982)); see also Wall v. First National Bank of Shreveport, 482 So.2d 865, 867 (La.App. 2d Cir.1986) ("A shareholder cannot sue to recover damages done to the corporation ... but may allege some direct damage to them.") "Where plaintiff's business profits depend for the most part on the employment of capital or the labor of others, lost profits are not a proper measure of plaintiff's loss. The business profits must be a product of the personal effort, skill or ability of the plaintiff." Metz, at 69. Of course, Chase must prove his loss with reasonable certainty and that it was the proximate result of his alleged injury. These questions are not ripe for summary judgment. Nevertheless, the Court seriously questions whether Chase will be able to carry his burden to show a causal connection between the alleged drug ingestion, his kidney and prostate damage, and Bachelor, Inc.'s depreciated value, if any. The Court suggests that Hilton may wish to bring a motion addressing these issues after taking the deposition of the doctor(s) who treated Chase's kidney and prostate trouble.

With regard to Chase's negotiations with the People's Republic of China, Chase testified in his deposition that he was attempting to establish a joint venture between that government and a corporate entity in Australia in which he was a shareholder. The proposed joint venture involved growing cashew nuts in Australia, with labor and technical assistance provided by Chinese citizens, and ultimate sale of the nuts in China. Although Chase is the proper party to bring a claim for his personal loss of business opportunity or loss of profits, his claim related to the proposed cashew venture is based purely on conjecture and speculation.

Under Louisiana law, damages are not recoverable where they are based on conjecture or speculation. Damages must be proved with reasonable certainty. If direct evidence is not available, the plaintiff may resort to evidence of customary or foreseeable profit. Ellwest Stereo Theatres, Inc. v. Davilla, 436 So.2d 1285, 1288 (La.App. 4th Cir.1983); Al Smith's Plumbing & Heating Service, Inc. v. River Crest, Inc., 365 So.2d 1122, 1126 (La.App. 4th Cir.1978).

In the...