Ghergich v. Toye

• Decision Date: 29 October 2014
• Docket Number: No. 14–CA–300.,14–CA–300.
• Citation: 164 So.3d 238
• Court: Court of Appeal of Louisiana — District of US
• Parties: Matthew S. GHERGICH, IV v. Paul TOYE, III, Paul Toye, IV, Sal Michel, and Advanced Pain Management Clinic, LLC.

164 So.3d 238

Matthew S. GHERGICH, IV
v.
Paul TOYE, III, Paul Toye, IV, Sal Michel, and Advanced Pain Management Clinic, LLC.

No. 14–CA–300.

Court of Appeal of Louisiana, Fifth Circuit.

Oct. 29, 2014.

164 So.3d 239

John A. Venezia, Attorney at Law, New Orleans, Louisiana, for plaintiff/appellant.

W. Clifton Stoutz, Attorney at Law, New Orleans, Louisiana, for defendant/appellee.

Panel composed of Judges SUSAN M. CHEHARDY, JUDE G. GRAVOIS, and HANS J. LILJEBERG.

Opinion

HANS J. LILJEBERG, Judge.

Plaintiff appeals a summary judgment granted in favor of defendants, dismissing plaintiff's lawsuit against them. For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

On January 11, 2011, plaintiff, Matthew Ghergich, IV, filed a “Petition for Declaratory Judgment and to Inspect Records Pursuant to LSA–R.S. 22:1319,” against defendants, Paul Toye, III, Paul Toye, IV, Sal Michel, and Advanced Pain Management Clinic, L.L.C. (“Advanced”).¹ According to Mr. Ghergich, he and John DeFraites formed Health Tech Wellness Center, L.L.C. (“Health Tech”), a pain management clinic, on October 14, 2004. Mr. Ghergich states that Paul Toye, III, and Sal Michel formed Advanced, a pain management clinic, on February 28, 2005, with Paul Toye, IV, listed as a member of Advanced.

In his petition, Mr. Ghergich contends that Health Tech merged with Advanced in October of 2005, and that Mr. Ghergich, Mr. DeFraites, Mr. Toye, III, and Mr. Michel were to have equal 25% membership interests in Advanced after

December 31, 2005. According to Mr. Ghergich, the parties hired an attorney to prepare a written operating agreement, but not all of the members signed it.² Nevertheless, he asserts that the parties acted in conformity with the agreement and paid profit distributions to Mr. Ghergich for several years.

Mr. Ghergich asserts that at some point, his profit distributions were steadily reduced, so he demanded that he be allowed to review Advanced's records. He claims that this request was denied by Mr. Toye, III. As a result, Mr. Ghergich filed this lawsuit seeking a declaration that he is a member of Advanced, as well as an order from the court allowing him to inspect Advanced's records, pursuant to La. R.S. 12:1319(B).³

164 So.3d 240

On May 7, 2013, defendants filed a motion for summary judgment, asserting that Mr. Ghergich is not a member of Advanced and that he has never been able to produce any documentation or other evidence to prove he has an ownership interest in Advanced. Defendants further argued that even if Mr. Ghergich could prove that there was a merger between Health Tech and Advanced, which is denied, Mr. Ghergich is not legally able to hold an ownership interest in Advanced, because he pled guilty to the charge of possession of marijuana in 1986 and thus,

pursuant to La. R.S. 40:2198.12 and La. Admin. Code, Title 48, Part I, § 7803, he cannot legally own or operate a pain management clinic.⁴

In opposition to defendants' motion for summary judgment, Mr. Ghergich argued that he does not have a conviction for any “disqualifying crime,” because his conviction was set aside and his arrest record was expunged during the pendency of the present case, by order dated June 21, 2013. Mr. Ghergich further argued that the Louisiana Department of Health and Hospitals waived any issues pertaining to his criminal history, because it took no action against Mr. Ghergich's business since he began operating Health Tech in 2004.

After considering the arguments of counsel and the exhibits presented, the trial judge granted defendants' motion for summary judgment and dismissed plaintiff's case against them. In his reasons for judgment, the trial judge stated that even if there was an agreement in October of 2005 to merge Health Tech and Advanced, the agreement would be an absolute nullity due to Mr. Ghergich's prior conviction for possession of marijuana.

LAW AND DISCUSSION

Appellate courts review the granting of a summary judgment de novo using the same criteria governing the trial court's consideration of whether summary judgment is appropriate. Prince v. K–Mart Corp., 01–1151, p. 7 (La.App. 5 Cir. 3/26/02), 815 So.2d 245, 248 ; Duncan v. U.S.A.A. Ins. Co., 06–363, p. 3 (La.11/29/06), 950 So.2d 544, 547. A motion for summary judgment should be granted “if the pleadings, depositions, answers to interrogatories, and admissions, together with the affidavits, if any, admitted for purposes of the motion for summary judgment, show that there is no genuine issue as to material fact, and that mover is entitled to judgment as a matter of law.” La. C.C.P. art. 966(B)(2). The

summary judgment procedure is favored, and shall be construed to secure the just, speedy, and inexpensive determination of most actions. La. C.C.P. art. 966(A)(2) ; Nuccio v. Robert, 99–1327, p. 6 (La.App. 5 Cir. 4/25/00), 761 So.2d 84, 87, writ denied, 00–1453 (La.6/30/00), 766 So.2d 544.

On appeal, Mr. Ghergich argues that the trial court erred by granting defendants' motion for summary judgment and dismissing his lawsuit. He claims that although an individual with a prior conviction for a disqualifying crime may not own a pain management clinic in his own name, neither La. R.S. 40:2198.12 nor La. Admin. Code, Title 48, Part I, § 7803 governs who can own a limited liability company (“L.L.C.”) that owns or operates a pain

164 So.3d 241

management clinic, as long as the clinic was in operation before June 15, 2005.

In response, defendants argue that an L.L.C. cannot be used to circumvent statutory and regulatory requirements concerning ownership of pain management clinics. They claim that a fair interpretation of the...