Guillory v. Broussard

• Decision Date: 04 May 2016
• Docket Number: No. 15–953.,15–953.
• Citation: 190 So.3d 486
• Parties: Simone B. GUILLORY, et al. v. Samuel S. BROUSSARD, Jr., et al.
• Court: Court of Appeal of Louisiana — District of US

190 So.3d 486

Simone B. GUILLORY, et al.

v.Samuel S. BROUSSARD, Jr., et al.

No. 15–953.

Court of Appeal of Louisiana, Third Circuit.

May 4, 2016.

Philip A. Franco, Lauren Lopresto Tafaro, Diana Cole Surprenant, Adams and Reese LLP, New Orleans, LA for Plaintiff/Appellant, Simone B. Guillory.

Donald W. Washington, Jones Walker LLP, Lafayette, LA, Justin J. Marocco, Jones Walker LLP, Baton Rouge, LA, for Defendants/Appellees, Samuel S. Broussard, Jr., Michelle B. Cart, Kurt Van Brocklin, as Trustee of the SSB 2012 Family Trust No. 1, Sam Broussard Trucking Co., Inc.

Court composed of ULYSSES GENE THIBODEAUX, Chief Judge, and JIMMIE C. PETERS, and JOHN E. CONERY, Judges.

PETERS

, J.

Simone B. Guillory and Lamar B. Lopresto brought a shareholders' derivative action on behalf of Sam Broussard Trucking Company, Inc. against Samuel S. Broussard, Jr., the corporation's president and majority shareholder. Simone Guillory now appeals the trial court's grant of motions for involuntary dismissal which had the effect of dismissing all of the claims raised on behalf of the corporation. For the following reasons, we affirm the trial court's judgment in all respects.

DISCUSSION OF THE RECORD

Samuel Broussard Trucking Company, Inc. (“SBT”) is a family owned and operated business in New Iberia, Louisiana. Samuel Broussard, Jr. and his three sisters, Simone B. Guillory, Lamar B. Lopresto, and Michelle B. Cart are all shareholders in SBT. Ms. Guillory, Ms. Lopresto, and Ms. Cart each own ten percent of the corporate stock; and the remaining seventy percent is owned by Mr. Broussard and the SSB 2012 Family Trust No. 1 (Family Trust), a trust formed by Mr. Broussard. Mr. Broussard is the president of SBT, and both he and Ms. Cart serve on the corporation's board of directors.¹

This particular litigation began on June 27, 2012, with Ms. Guillory and Ms. Lopresto filing a shareholders' derivative action on behalf of the corporation. Mr. Broussard, Ms. Cart, and the corporation were initially named as defendants.² Kurt Van Brocklin, as trustee of the Family Trust, was joined as a defendant by a subsequent pleading. In their initial petition, Ms. Guillory and Ms. Lopresto asserted claims of breach of fiduciary duty, self-dealing, and abuse of control by Mr. Broussard. Subsequent pleadings resulted in additional factual allegations supporting the claim of breach of fiduciary duty by Mr. Broussard.³

The issues went to trial beginning on October 20, 2014, with the issues before the trial court being narrowed down to three claims: one concerning excessive compensation paid to Mr. Broussard, one concerning his refusal to distribute profits, and one of unfair trade practices. After Ms. Guillory presented all of her evidence and rested her case, the defendants moved for involuntary dismissal of all of Ms. Guillory's claims. The trial court granted the defendants' motions and dismissed all claims asserted by Ms. Guillory. After the trial court executed a December 3, 2014 judgment corresponding to its trial court judgment, and after the trial court rejected her motion for new trial on March 30, 2015, Ms. Guillory perfected the appeal now before us.

In her appeal, Ms. Guillory asserts two assignments of error:

1. The trial court committed a reversible error of law in granting involuntary dismissal by shifting the burden of proof to the plaintiff shareholder in a derivative action when it is the defendant's [sic] burden to prove the compensation he intentionally set himself was in good faith, inherently fair to the corporation, and was essentially an arm's length transaction.

2. The trial court committed a reversible error of law in granting involuntary dismissal of Ms. Guillory's claim that the intentional refusal of Mr. Broussard, Jr. to distribute profits of a corporation to its shareholders to coerce dismissal of shareholder lawsuits against him constitutes an unfair and deceptive trade practice under the Louisiana Unfair Trade Practices Act ( [“]LUTPA”).

OPINION

Motion for New Trial

Ms. Guillory's April 21, 2015 motion and order of appeal asserts that she appeals not only the trial court's judgment granting the motions for involuntary dismissal, but also the trial court's denial of her motion for new trial. With regard to the issue of motion for new trial, this court held in Dietz v. Superior Oil Co., 13–657, pp. 3–4 (La.App. 3 Cir. 12/11/13), 129 So.3d 836, 839–40

, that:

A trial court's decision to deny a motion for new trial is an interlocutory judgment subject to appeal for abuse of discretion only upon a showing of irreparable harm. Dural v. City of Morgan City, 449 So.2d 1047 (La.App. 1 Cir.1984)

. However, “where a motion for appeal refers by date to the judgment denying a motion for new trial, but the circumstances indicate that the appellant actually intended to appeal from the final judgment on the merits, the appeal should be maintained as being taken from the judgment on the merits” Id. at 1048 (citing Smith v. Hartford Accident and Indemnity Company, 254 La. 341, 223 So.2d 826 (1969) ; Fruehauf Trailer Company v. Baillio, 252 La. 181, 210 So.2d 312 (1968) ; Kirkeby–Natus Corporation v. Campbell, 250 La. 868, 199 So.2d 904 (1967) ).

Although Ms. Guillory asserted in her motion for appeal that she was appealing the trial court's denial of her motion for new trial, she only briefed the issues pertaining to the trial court's grant of the involuntary dismissal. Because the circumstances before us clearly establish that Ms. Guillory intended to appeal only the final judgment on the merits, we need not address the motion for new trial issue.

Motions for Involuntary Dismissal

The question of whether a proceeding may be the subject of a motion for involuntary dismissal is governed by the provisions of La.Code Civ.P. art. 1672(B)

, which states:

In an action tried by the court without a jury, after the plaintiff has completed the presentation of his evidence, any party, without waiving his right to offer evidence in the event the motion is not granted, may move for a dismissal of the action as to him on the ground that upon the facts and law, the plaintiff has shown no right to relief. The court may then determine the facts and render judgment against the plaintiff and in favor of the moving party or may decline to render any judgment until the close of all the evidence.

This court set out the standard of review applicable to the grant of a motion for involuntary dismissal in Touchet v. Hampton, 06–1120, pp. 3–4 (La.App. 3 Cir. 2/7/07), 950 So.2d 895, 898

, where we stated that:

“The trial court is granted much discretion in determining whether to grant an involuntary dismissal.” Boone v. Reese, 04–979, p. 5 (La.App. 3 Cir. 12/8/04), 889 So.2d 435, 438

(citing Kite v. Carter, 03–378 (La.App. 3 Cir. 10/1/03), 856 So.2d 1271 ). “The trial court's grant of an involuntary dismissal is proper if, after weighing and evaluating all of the evidence that has been presented by the plaintiff, the trial court determines that the plaintiff has failed to prove his claim by a preponderance of the evidence.” Id. at 439. The granting of an involuntary dismissal is reviewed under the manifest error standard of review. Id.

With these legal considerations in mind, we turn to review each of the trial court rulings on the motions for involuntary dismissal.

Excessive Compensation

One of Ms. Guillory's primary complaints concerning Mr. Broussard's abuse of his position of control within the corporation involved the amount of compensation he received for the services he rendered to the corporation in his executive capacity. In most years, his total compensation exceeded $1,000,000.00 per year,⁴ and Ms. Guillory asserted that the normal compensation for Mr. Broussard's position would be in the range of $250,000.00.

In her first assignment of error, Ms. Guillory asserts that Mr. Broussard set his own compensation, and that he had the burden at trial to establish that his compensation was set in good faith, was inherently fair to the corporation, and was set in an arm's length transaction. She asserts that the trial court improperly reversed that burden of proof by requiring her to show that it was excessive. In support of her position, she refers this court to the provisions of La.R.S. 12:84

(repealed 2015) as that statute read at the time issue was joined in this litigation:⁵

A. No contract or transaction between a corporation and one or more of its directors or officers, or between a corporation and any other business, nonprofit or foreign corporation, partnership, or other organization in which one or more of its directors or officers are directors or officers or have a financial interest, shall be void or voidable solely for this reason, or solely because the common or interested director or officer was present at or participated in the meeting of the board or committee thereof which authorized the contract or transaction, or solely because his or their votes were counted for such purpose, if:

(1) The material facts as to his interest and as to the contract or transaction were disclosed or known to the board of directors or the committee, and the board or committee in good faith authorized the contract or transaction by a vote sufficient for such purpose without counting the vote of the interested director or directors; or

(2) The material facts as to his interest and as to the contract or transaction were disclosed or known to the shareholders entitled to vote thereon, and the contract or transaction was approved in good faith by vote of the shareholders; or

(3) The contract or transaction was fair as to the corporation as of the time it was authorized, approved or ratified by the board of directors, committee, or shareholders.

B. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee which authorized the contract or transaction.

Ms. Guillory asserts that Mr. Broussard was an “interested...