Morris v. Rental Tools, Inc.

• Decision Date: 28 June 1983
• Docket Number: No. 83-CA-462,83-CA-462
• Citation: 435 So.2d 528
• Parties: J.B.N. MORRIS v. RENTAL TOOLS, INC. and Research-Cottrell, Inc.
• Court: Court of Appeal of Louisiana — District of US

Page 528

435 So.2d 528

J.B.N. MORRIS v. RENTAL TOOLS, INC. and Research-Cottrell, Inc.

No. 83-CA-462.

Court of Appeal of Louisiana Fifth Circuit.

June 28, 1983.

Michael H. Piper, III, Herbert W. Christenberry, Christenberry & Associates, Ltd., Dando B. Cellini, McGlinchey, Stafford, Mintz & Cellini, PLC, New Orleans, for plaintiff-appellee.

James A. Babst, Marc G. Shachat, New Orleans, for defendants-appellants.

Before CHEHARDY, BOWES and CURRAULT, JJ.

CURRAULT, Judge.

This expedited appeal arises from a denial of an exception of no right of action filed by defendants, Rental Tools, Inc. and Research-Cottrell, Inc., in response to an action by plaintiff, J.B.N. Morris, for violations of the sui generis statutes pertaining to the Louisiana Unfair Trade Practice and Consumer Protection Act and the Louisiana Anti-Trust Laws.

PROCEDURAL HISTORY

On November 30, 1982, defendants filed suit in a New Jersey court for injunctive relief, alleging a breach, by plaintiff, of the non-competition portion of a contract between the parties. Jurisdiction was denied and that judgment is presently on appeal in New Jersey.

Subsequently, on December 3, 1982, plaintiff filed suit in the Twenty-Fourth Judicial District Court, seeking the transfer of, and damages for, failure to transfer certain shares of stock allegedly owed to plaintiff and withheld by defendants.

On December 27, 1982, defendants, in response to the Louisiana action, filed a declinatory exception of lis pendens based on the New Jersey suit. Plaintiff consequently amended and supplemented his petition on January 19, 1983 to include claims under LSA-R.S. 51:1401 et seq., the Louisiana Unfair Trade Practice and Consumer Protection Act and LSA-R.S. 51:122 for restraint of trade, and on January 24, 1983, the lis pendens exception was withdrawn.

In February, 1983, plaintiff filed for a writ of mandamus relative to the transfer of the stock and defendants filed various exceptions. On March 14, 1983, the trial court sustained the exception to the writ of mandamus as an unauthorized use of a summary procedure and denied the exceptions of jurisdiction, vagueness and lis pendens. On March 23, 1983, defendants filed a peremptory exception of no right of action under the antitrust statute and the Unfair Trade Practice Statute. The hearing was held on April 5, 1983, and in a judgment signed on April 11, 1983, the exception was denied. Defendants then perfected this appeal of the denial of the exception of no right of action. Subsequently, on the morning of oral argument, defendants presented a motion to strike portions of appellee-plaintiff's brief to this court as including exhibits and references to matters not introduced into evidence and thus not properly before the court on appeal.

ISSUES ON APPEAL

The issues presented on appeal are:

(1) Whether the trial court correctly applied the appropriate standards for determining whether plaintiff has standing to assert a private action under the Louisiana Unfair Trade Practices and Consumer Protection Act or the Louisiana Antitrust Laws;

(2) Whether the trial court improperly relied on the pleadings in ruling on the exception of no right of action.

The appeal is properly before the court under LSA-R.S. 51:134 which provides that unless the party cast appeals the judgment within five days, the ruling shall have the effect of res judicata.

Prior to disposing of the primary issue, i.e., the correctness of the trial court's application of the standings standards under the statutes, we will first address the motion to strike.

Motion to Strike

In its motion, appellant argues that numerous documents appended as exhibits in brief to this court and references to same are either outside the record or improperly before the court in that they were not introduced into evidence in the hearing on the exception. A review of the record reveals that numerous documents found their way into the record by attachment to the pleadings or to the exceptions filed in this case. However, the record is devoid of a transcript of the hearing on the exception of no right of action. Lacking a minute entry note of evidence, we are unable to ascertain what factual evidence, if any, was introduced to either support or controvert the exception, aside from appellant's admission of the introduction of appellee's deposition testimony. The trial court did provide written reasons for judgment which included several specific findings of fact as follows:

"Plaintiff, defendants and Research Cottrell Tools, Inc. entered into an agreement and plan of merger on July 9, 1980. Said agreement called for plaintiff and defendants to perform certain acts. A suit was initially brought in New Jersey. The trial court dismissed said suit as lacking jurisdiction. That matter is presently under appeal.

Defendants alleged in their New Jersey suit that plaintiff has competed with them individually or through a corporation. In a memorandum filed herein for a prior hearing, defendants alleged that plaintiff has competed with them by substantially enlarging his commercial activities elsewhere. Now, in the present hearing, counsel for defendants allege and argue that plaintiff has no right of action to proceed because plaintiff is not a business competitor.

Plaintiff claims that the withholding of 150,000 shares of Research-Cottrell, Inc. stock by defendant is an unfair method of competition because defendant conditioned said transfer of shares on an agreement not to compete. Over the last several months, plaintiff made active inquiries concerning tubing prices, checked delivery dates and negotiated for acquisition of a lease on a shop. Plaintiff alleges he has the capacity and ability to compete in business with defendants."

"Except as otherwise provided by law, an action can be brought only by a person having a real and actual interest which he asserts. LSA-C.C.P. art. 681. The exception of no right of action raises the question of whether the plaintiff has any interest in enforcing judicially the right asserted." Lambert v. Donald G. Lambert Construction Co., 370 So.2d 1254, 1255 (La.1979); Jefferson National Bank & Trust Company v. National Gold Mining Co., Inc. and Virgil Lloyd, 420 So.2d 997 (La.App. 5th Cir.1982).

Unlike the no cause of action exception, evidence is admissible to support or controvert the objection of no right of action when the grounds thereof do not appear from the petition. LSA-C.C.P. art. 931. Thus, the no right of action cannot be utilized to determine whether defendant can stand in judgment, or to urge that plaintiff has no right simply because there is a valid defense. Morton v. Washington National Insurance Company, 420 So.2d 1019 (La.App. 5th Cir.1982); Selber Bros. v. Bryant, 406 So.2d 251 (La.App. 3d Cir.1981). Such defense goes solely to the merits.

In order to determine the question of a party's right to institute an action in Louisiana, the legal test is whether plaintiff belongs to that particular class of persons to whom the law grants a remedy for the particular harm alleged. Morton, supra.

The burden of proof on an exception of no right of action is on the exceptor. Clark v. Clark, 377 So.2d 544 (La.App. 3d Cir.1979); Town of Grand Isle v. Dynamic Constructors, Inc., 374 So.2d 703 (La.App. 1st Cir.1979). The well-pleaded facts of the petition and the contents of attached incorporated documents and exhibits are controlling in determining both a no cause and no right of action. Waterworks District No. 3 of Rapides Parish v. City of Alexandria, 236 La. 804, 109 So.2d 426 (La.1959). Absent evidence to the contrary, the allegations of fact set forth in the pleadings are taken as true. Clark, supra; Burns v. Genovese, 254 La. 237, 223 So.2d 160, 254 La. 237 (La.1969). Documents made exhibits to pleadings are a part thereof for all purposes. LSA-C.C.P. art. 853; Great Sweet Grass Oils Co. v. Kroy-American Oils, Inc., 129 So.2d 591 (La.App. 2d Cir.1961). A statement in a pleading may be adopted by reference in a different part of the same pleading or in another pleading in the same court. LSA-C.C.P. art. 853.

In addition, where the record on review is lacking a transcript or a note of evidence, the factual findings of the trial court are presumed to have been based on proper and competent evidence and will be adopted by the reviewing court. Pate v. Republic Bank, 414 So.2d 1367 (La.App. 2d Cir.1982); Gardemal v. MCM Industries, Inc., 398 So.2d 144 (La.App. 3d Cir.1981), writ denied, 401 So.2d 994 (La.1981); Succession of Walker, 276 So.2d 372 (La.App. 2d Cir.1973).

Pursuant to the above cited legal principles, we find that our consideration of the issue is limited to the plaintiff-appellee's petition and amending and supplemental petition, and those documents incorporated as part of those pleadings (The Employment and Non-Competition Agreement); the deposition of appellee Morris admittedly introduced into evidence at the hearing; and the factual findings in the trial court's reasons for judgment.

The question thus remaining is whether the trial court appropriately applied the standards to be met for a private right of action under the statutes at issue. We find the trial court's conclusion to be correct based on the evidence.

The Exception of No Right of Action

The Louisiana Unfair Trade Practice and Consumer Protection Act, LSA-R.S. 51:1405(A) provides, "Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or business are hereby declared unlawful." The law confers on a private individual the right of action for damages on "any person who suffers any ascertainable loss of money or movable property, corporeal or incorporeal, as a result of the use or employment by another person of an unfair or deceptive method, act or practice declared unlawful by R.S. § 51:1405." .... LSA-R.S. 1409. (Emphasis added). La.R.S. § 1402(8) defines "person" as a "natural person, corporation, trust,...