Judson v. Davis

• Court: Louisiana Supreme Court
• Writing for the Court: Gaidry
• Citation: Judson v. Davis, 916 So.2d 1106 (La. 2005)
• Decision Date: 29 June 2005
• Docket Number: No. 2004 CA 1699.,2004 CA 1699.
• Parties: Nancy Davis JUDSON, Secretary/Treasurer Hall's Mortuary, Inc. v. Hall DAVIS, IV, President Hall's Mortuary, Inc.

Page 1106

916 So.2d 1106

Nancy Davis JUDSON, Secretary/Treasurer Hall's Mortuary, Inc. v. Hall DAVIS, IV, President Hall's Mortuary, Inc.

No. 2004 CA 1699.

Court of Appeal of Louisiana, First Circuit.

June 29, 2005.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Alfreda Tillman Bester, Robert Eames, Baton Rouge, Counsel for Plaintiff/Appellant Nancy David Judson.

Henry D.H. Olinde, Jr., Baton Rouge, Edward A. Songy, Jr., Plaquemine, Counsel for Defendant/Appellee Hall Davis, IV.

David B. Allgood, Baton Rouge, Counsel for Temporary Liquidator Edward J. Merrick, Jr.

Before: GUIDRY, GAIDRY, and McCLENDON, JJ.

GAIDRY, J.

This is an appeal of a summary judgment ordering the involuntary dissolution of a close corporation. The two opposing parties are the sole directors, officers, and shareholders, with equal ownership interests. For the following reasons, we affirm the judgment.

FACTS AND PROCEDURAL BACKGROUND

The parties in this appeal are siblings, and, unfortunately, rivals as well. They inherited their parents' stock in a domestic close corporation, Port Allen Mortuary, Inc., as well as the immovable property upon which the corporate business, a funeral home, was situated. They subsequently exchanged the property with the corporation for additional stock, and changed the corporate name to Hall's Mortuary, Inc. The plaintiff-appellant, Nancy Davis Judson, was the secretary-treasurer of Hall's Mortuary, Inc., and also a director and shareholder of fifty percent of the outstanding stock issued. The defendant-appellee, Hall Davis, IV, was the president, a director, and the shareholder of the other fifty percent of the corporation's stock. The primary business of the corporation is the operation of a prominent and successful funeral home in Port Allen, Louisiana.

The tortuous trail of this litigation commenced on September 16, 2002, when Ms. Judson filed a petition for a writ of mandamus in the 18th Judicial District Court for the Parish of West Baton Rouge, seeking to compel Mr. Davis to hold formal corporate meetings, to comply with the corporate bylaws, and to allow her access to all corporate records. Pursuant to La. C.C.P. art. 3865, the trial court issued an alternate writ on September 23, 2002, ordering Mr. Davis to either perform the acts demanded, or to show cause to the contrary on October 18, 2002. On October 8, 2002, Mr. Davis filed his answer to the petition, denying Ms. Judson's allegations of mismanagement and ultra vires acts on his part, and affirmatively alleging that Ms. Judson had conducted unilateral action on behalf of the corporation and failed to properly record certain financial transactions. The scheduled hearing on the alternate writ of mandamus was continued without date at the request of both parties, as they attempted to amicably resolve their differences.

On January 8, 2003, Mr. Davis filed a reconventional demand styled as a "Petition for Involuntary Dissolution of Corporation" in the action instituted by Ms. Judson, and requested service on Ms. Judson only. He alleged that he and Ms. Judson were "deadlocked in the management of the corporate affairs" and that the corporation should be dissolved and liquidated, with a liquidator appointed by the trial court. The foregoing pleading was accompanied by an ex parte motion to appoint a temporary liquidator, in which Mr. Davis nominated a local accountant, Bobby E. Stanley, to serve in that capacity. On the same date, the trial court signed an order permitting the filing of Mr. Davis's "petition" and appointing Mr. Stanley as temporary liquidator.¹

On January 13, 2003, Ms. Judson filed a motion to re-set the hearing on the alternate writ of mandamus, and an order was signed that day, setting the hearing for March 21, 2003.

On January 17, 2003, Ms. Judson filed and served a dilatory exception to Mr. Davis's reconventional demand, asserting the objections of improper cumulation of actions and the reconventional demand's nonconformity with the requirements of La. R.S. 12:143(C). The dilatory exception was originally fixed for hearing on March 21, 2003, but on January 23, 2003, on Ms. Judson's motion, the trial court advanced the hearing on the alternate writ and the hearing on the exception to February 14, 2003. In the same motion, Ms. Judson prayed that the appointment of the temporary liquidator be "stayed" pending the hearing, but the trial court refused to issue an order to that effect.

On January 23, 2003, Mr. Davis submitted an ex parte motion for separate trials of the mandamus action and his reconventional demand, on the grounds that such action would resolve the objection of improper cumulation raised by Ms. Judson. The trial court granted that motion the same day, and ordered separate trials, and dismissed the dilatory exception of improper cumulation as moot.

On January 27, 2003, Ms. Judson moved for an order of appeal of the trial court's interlocutory orders of January 23, 2003, denying her request to "stay" the temporary liquidator's appointment and granting Mr. Davis's motion ordering separate trials of the mandamus and corporate dissolution actions. On the same date, Ms. Judson filed a motion to recuse the trial judge on the grounds of bias in favor of Mr. Davis and his counsel. The latter motion was set for hearing at the request of Mr. Davis on February 20, 2003. Following that hearing, another trial judge ruled that the motion would be denied. A judgment to that effect was signed on March 11, 2003.

Following the hearing on the motion to recuse and the oral ruling denying it, the original trial judge signed an order on February 21, 2003, granting Ms. Judson an appeal of the interlocutory orders of January 23, 2003.

On March 17, 2003, Ms. Judson filed a "request" in this court, seeking "injunctive relief" and an express order divesting the trial court of jurisdiction by reason of the pending appeal of the interlocutory judgments. This court treated the "request" as a writ application, and refused to consider that writ application because of numerous violations of the appellate court rules governing the form and content of such applications. Judson v. Davis, 2003 CW 0467 (La.App. 1st Cir.3/18/03) [unpublished opinion]. On March 20, 2003, Ms. Judson submitted her writ application on the issue of the trial court's jurisdiction in proper form. On the same date, this court denied that writ application, stating that the trial court was not divested of jurisdiction. Judson v. Davis, 2003 CA 0505 (La.App. 1st Cir.3/20/03) [unpublished opinion].

After the appeal record for the appeal of the January 23, 2003 orders was lodged, this court issued an order on June 2, 2003, for the parties to show cause why the appeal should not be dismissed for lack of jurisdiction, as an appeal of interlocutory orders rather than final judgments. On July 15, 2003, this court dismissed the appeal of the judgment dismissing the dilatory exception as an interlocutory non-appealable judgment, but granted Ms. Judson thirty days within which to apply for supervisory writs. Judson v. Davis, 2003 CW 0970 (La.App. 1st Cir.7/15/03) [unpublished opinion]. Ms. Judson thereupon sought supervisory writs, which were denied with reasons. Judson v. Davis, 2003 CA 1811 (La.App. 1st Cir.9/18/03) [unpublished opinion].² Her writ applications to the Louisiana Supreme Court, seeking review of this court's above ruling on the issue, were likewise denied. Judson v. Davis, 03-2771 (La.10/15/03), 858 So.2d 407; Judson v. Davis, 03-2896 (La.12/9/03), 860 So.2d 1142.

In the course of a status conference held on May 1, 2003, the trial court directed Mr. Davis to serve the corporation with the reconventional demand seeking dissolution, in order to comply with La. R.S. 12:143(C). In addition to serving the corporation, Mr. Davis again served Ms. Judson with the original reconventional demand. On September 11, 2003, Ms. Judson filed two separate dilatory exceptions of unauthorized use of summary proceeding and a peremptory exception of no right of action.

On September 19, 2003, the trial court conducted a hearing on Ms. Judson's new exceptions and motions of the temporary liquidator seeking court approval for certain actions. The exceptions were overruled and the temporary liquidator's motions were granted.

On September 26, 2003, Ms. Judson filed her answer to the reconventional demand, incorporating a motion for trial by jury.

On November 3, 2003, Ms. Judson served Mr. Davis, through his counsel, with discovery interrogatories. On November 17, 2003, Mr. Davis filed a motion for summary judgment in his reconventional demand seeking dissolution. On November 18, 2003, Ms. Judson served a request for production of documents on Mr. Davis, through his counsel. On January 7, 2004, Ms. Judson filed a motion to compel discovery responses.

The motion for summary judgment and the motion to compel were both assigned for hearing on April 23, 2004. Following the hearing, the motion for summary judgment was granted, and the judgment was signed the same day, ordering the involuntary dissolution of the corporation and appointing the temporary liquidator as judicial liquidator. The motion to compel was denied, on the grounds that it failed to comply with the mandatory provisions of Rule 10.1 of the Rules for Louisiana District Courts. This appeal followed.

ASSIGNMENTS OF ERROR

We summarize Ms. Judson's stated assignments of error as follows, in the order presented in her brief:

1. The trial court erred in rendering summary judgment, as there existed genuine issues of material fact unresolved by the judgment;

2. The trial court erred in rendering summary judgment, as adequate discovery had not been accomplished, there being outstanding discovery requests to the defendant;

3. The trial court erred in rendering summary judgment on the reconventional demand for dissolution in an ordinary proceeding, without first determining the issues in the mandamus action, a summary...