McGee v. Denham Holdings, L.L.C.
| Decision Date | 17 February 2017 |
| Docket Number | 2016 CA 0766 |
| Citation | 214 So.3d 8 |
| Parties | Frank MCGEE, as Trustee of the TRPLT Unsecured Creditors' Trust v. DENHAM HOLDINGS, L.L.C. d/b/a Performance Insurance Services, et al. |
| Court | Court of Appeal of Louisiana — District of US |
William E. Steffes, Barbara B. Parsons, Baton Rouge, Louisiana, and Kenneth H. Hooks, III, H. Price Mounger, III, Baton Rouge, Louisiana, Attorneys for Appellant Plaintiff—Frank McGee, as Trustee of the TRPLT Unsecured Creditors' Trust
Justin P. Lemaire, Maggie A. Broussard, New Orleans, Louisiana, Attorneys for Appellee Defendant—Catlin Specialty Insurance Company
BEFORE: PETTIGREW,
In this suit for damages arising from a dispute regarding Towing and Recovery Professionals of Louisiana Trust's ("TRPLT") engagement of Denham Holdings, L.L.C., d/b/a Performance Insurance Services ("Performance") to provide insurance agency services to the TRPLT, the plaintiff ("UCT" later identified in more detail) appeals a judgment of the trial court sustaining a peremptory exception raising the objection of peremption and dismissing the plaintiff's claims, with prejudice. Based on the following, we reverse and remand.
The TRPLT was formed in 2003 as an alternative to traditional liability insurance, providing a means by which professional towing, automobile liability, in town on-hook towing, physical damage, and other public liability claims or judgment arising therefrom against participating members of the sponsoring association, the TRPLT, could be paid or settled. The TRPLT was funded through premiums paid by its participants and was managed by its Board of Trustees in accordance with the terms and conditions of the TRPLT Trust Agreement. The TRPLT contracted with Performance to serve as the exclusive "servicing agent" for the TRPLT in soliciting, selling, renewing, and negotiating indemnity coverage for the TRPLT. Performance executed its duties as "servicing agent" through May 2010.
The TRPLT voluntarily filed for Chapter 11 bankruptcy on May 17, 2010, in United States Bankruptcy Court for the Middle District of Louisiana. A reorganization plan for liquidating its assets was approved and a confirmation order was signed on February 28, 2011, effective March 15, 2011. The reorganization plan provided for the creation of the TRPLT Unsecured Creditor's Trust, and Frank McGee was appointed as Trustee (collectively, "UCT").
Shortly before the reorganization plan was confirmed, the TRPLT filed a separate adversary proceeding against Performance on February 25, 2011, in the bankruptcy court. See Towing and Recovery Professionals of Louisiana Trust, et al. v. Denham Holdings, LLC, d/b/a Performance Insurance Services, et al. , Case No. 11–740 (M.D. La.). The TRPLT also filed an adversary proceeding against Lucien Burkett, the Executive Director of the TRPLT. That matter was consolidated with the adversary proceeding against Performance; however, the Burkett case is not at issue in this appeal. See Towing and Recovery Professionals of Louisiana Trust, et al. v. Lucien Burkett , Case No. 11–732 (M.D. La.). The adversary actions involved state law claims for breach of fiduciary and contractual duties and claims for excess and unauthorized payments allegedly made to Performance, Burkett, and the insurance broker, British–American Insurance Group Ltd. (hereinafter, "BAIG").2 The parties agreed the reference to the bankruptcy court should be withdrawn in the wake of the United States Supreme Court's opinion in Stern v. Marshall ;3 accordingly, the bankruptcy court ordered the reference withdrawn, and the adversary proceedings moved from the bankruptcy court to the federal district court.
Thereafter, Performance and Burkett sought to have the proceedings dismissed due to lack of subject matter jurisdiction or, alternatively, to have the federal district court invoke an abstention. In a "Ruling and Order" signed on October 16, 2012 (hereinafter "Abstention Order"), the federal district court expressly stated that it had jurisdiction over the claims brought by the TRPLT against Performance and Burkett in the adversary proceedings, despite the fact that some of the claims "arise under bankruptcy law." The court denied Performance and Burkett's motions to dismiss for lack of subject matter jurisdiction.
Also in the Abstention Order, the federal district court stated that it would "permissively abstain from all of the claims [brought by the TRPLT in the adversary proceedings] except those made in Counts VI and VII (to recover avoidable transfers made to Burkett...)." As to the other claims, the court referenced a class action pending in Louisiana state court—Roadrunners Towing and Recovery, Inc., etc. v. Lucien Burkett, et al. , Suit No. 595,553, filed in 2010 in the Nineteenth Judicial District Court on behalf of the members of the TRPLT against Burkett and trustees of the TRPLT, seeking damages for negligence and breach of fiduciary duties, including refund of premiums and return of any profits. Neither the TRPLT, the UCT, nor Performance were parties to the class action. In the Abstention Order, the federal district court found that "the state court action was brought prior to these proceedings," and that "the claims in both forums involve[d] state law issues which essentially stem from the same operative facts...." The court further stated that "all of the parties are either involved in the state court proceedings or they can be made party to those proceedings," noting "the only forum that can effectively entertain all of these claims is the state court," and that "there is a strong possibility of inconsistent results should the matters proceed in separate forums." Accordingly, the federal district court granted the motions to abstain filed by Performance and Burkett as to "all claims other than Counts VI and VII" in the Burkett proceeding, Case No. 11–732, which the court stayed, pending resolution of the state court proceedings.
Thereafter, the federal district court signed an order on May 15, 2013, administratively terminating the matter, stating "this case has been stayed until the state court proceedings have been resolved" (hereinafter, "Administrative Closure Order"). The Administrative Closure Order expressly stated "[t]his order shall not be considered a dismissal or disposition of this matter, and should further proceedings in it become necessary or desirable, any party may initiate it in the same matter as if this order had not been entered."
On September 25, 2013, the UCT filed a petition for damages in Louisiana state court against Performance, its insurer, Catlin Specialty Insurance Company (hereinafter, "Catlin"), and its sole members/owners, Debra LaLa and Charles Burkett. The suit, filed in the Nineteenth Judicial District Court, asserted nearly identical claims against Performance as were alleged in the adversary action in federal district court by the UCT's predecessor in interest, the TRPLT.
Catlin filed a motion for summary judgment on April 14, 2014, arguing that the UCT's claims were excluded from the errors and omissions coverage provided by Catlin to Performance. Following a hearing, the trial court denied Catlin's motion.
Thereafter, Catlin filed a peremptory exception raising peremption or, alternatively, a motion for summary judgment.4 Catlin argued that the UCT's claims were extinguished through peremption because the UCT failed to commence its state court action within the peremptive period set forth in La. R.S. 9:5606. Following a hearing, the trial court sustained the peremption objection in a judgment signed on November 17, 2015, and dismissed the UCT's claims with prejudice. The UCT then filed a motion for new trial, which the trial court denied in a judgment signed on February 1, 2016.
The UCT moved for a devolutive appeal from the judgment denying the motion for new trial. Catlin filed a motion to dismiss the appeal with this court. In an order signed on September 22, 2016, this court maintained the appeal, but reserved a final determination as to whether the appeal was to be maintained to the panel to which the appeal was assigned.
Appellate courts have a duty to examine subject matter jurisdiction sua sponte , even when the parties do not raise the issue. Texas Gas Exploration Corp. v. Lafourche Realty Co., Inc. , 2011–0520 (La.App. 1 Cir. 11/9/11), 79 So.3d 1054, 1059, writ denied , 2012–0360 (La. 4/9/12), 85 So.3d 698. Our appellate jurisdiction extends to "final judgments." See La. C.C.P. art. 2083. A judgment must be precise, definite, and certain. Laird v. St. Tammany Parish Safe Harbor , 2002–0045 (La.App. 1 Cir. 12/20/02), 836 So.2d 364, 365. Moreover, a final appealable judgment must name the party in favor of whom the ruling is ordered, the party against whom the ruling is ordered, and the relief that is granted or denied. See Carter v. Williamson Eye Center , 2001–2016 (La.App. 1 Cir. 11/27/02), 837 So.2d 43, 44. These determinations should be evident from the language of the judgment without reference to other documents in the record. Laird , 836 So.2d at 366. In relevant part, a final appealable judgment "must contain appropriate decretal language disposing of or dismissing claims in the case." State in Interest of J.C. , 2016-0138 (La.App. 1 Cir. 6/3/16), 196 So.3d 102, 107.
As an appellate court, we are obligated to recognize any lack of jurisdiction if it exists. This court's appellate jurisdiction extends to "final judgments," which are those that determine the merits in whole or in part. La. C.C.P. arts. 1841 and 2083 ; see Van ex rel. White v. Davis , 2000–0206 (La.App. 1 Cir. 2/16/01), 808 So.2d 478, 483. However, a judgment that only partially determines the merits of an action is a partial final judgment and, as such, is immediately appealable only if authorized by La. C.C.P. art. 1915....
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