Settles v. Paul

• Decision Date: 13 April 2011
• Docket Number: No. 46,209–CA.,46,209–CA.
• Citation: 61 So.3d 854
• Parties: James SETTLES, Plaintiff–Appellantv.Brenda Michelle PAUL, Defendant–Appellee.
• Court: Court of Appeal of Louisiana — District of US

61 So.3d 854

James SETTLES, Plaintiff–Appellant
v.
Brenda Michelle PAUL, Defendant–Appellee.

No. 46,209–CA.

Court of Appeal of Louisiana, Second Circuit.

April 13, 2011.

[61 So.3d 855]

Corkern, Crews & Guillet, L.L.C. by J. Chris Guillet, Natchitoches, LA, for Appellant.Kelly & Townsend, L.L.C. by T. Taylor Townsend, Natchitoches, LA, Castillo Law Firm, LLC by Rebecca L. Castillo, Shreveport, LA, for Appellee.Before STEWART, PEATROSS & DREW, JJ.PEATROSS, J.

[2 Cir. 1] Plaintiff, James Settle,¹ appeals the judgment of the trial court granting Defendant's, Brenda Michelle Paul's, Motion for Involuntary Dismissal at the close of Mr. Settle's evidence. Mr. Settle also appeals the denial of his motion for summary judgment and the award of expenses and attorney fees in favor of Ms. Paul. For the

[61 So.3d 856]

reasons stated herein, we reverse in part, affirm in part and remand the matter for the completion of the trial on the merits.

FACTS

This case involves a dispute over the existence of a partnership agreement regarding, and ownership of, Landmark Construction Company of Coushatta, L.L.C. (“Landmark”). Mr. Settle and Ms. Paul were in a romantic relationship and lived together for two years in a house owned by Ms. Paul. During this time, the couple decided to create a construction business together. It is undisputed that Mr. Settle, who had experience in construction, suggested to Ms. Paul the idea of the two starting the business. Ms. Paul was reluctant at first, concerned about undertaking such a large project. Ms. Paul eventually agreed to the idea and the couple held themselves out as a business and performed several “smaller” construction jobs during 2002.

The record reflects that several of the couple's first jobs were for David Harvey, owner of Python Construction Co. (“Python”), an industrial concrete contractor. Mr. Settle and Ms. Paul apparently had a close [2 Cir. 2] relationship with Mr. Harvey and Mr. Harvey provided advice and assistance to the couple in the early days of their business venture. Mr. Harvey advised the couple to incorporate the business and complete the necessary “paperwork” to enable the company to secure larger contracts in Texas, as well as Louisiana.

With Mr. Harvey's assistance, Ms. Paul formed the limited liability company, Landmark, in March 2003. Landmark continued to do work for Python after the L.L.C. was formed. It is undisputed that all of the organizational documents list Ms. Paul as the sole member of Landmark. All parties, including Mr. Harvey, agree that the primary reason that Mr. Settle was not included as a member of the L.L.C. was because he was under a child support obligation to his former wife and he and Ms. Paul wanted to protect Landmark from consideration in Mr. Settle's child support proceedings. In addition, Ms. Paul suggests that Mr. Settle had poor credit and several outstanding judgments against him; therefore, it was in the best interest of the company to put it in only her name.

As a practical matter, Mr. Settle was characterized as a superintendent, foreman and/or project manager for Landmark and was responsible for all work done by Landmark. He was paid a nominal salary of $300 per week. Ms. Paul was also classified as an employee on Landmark's payroll records and was paid a nominal salary. All funds paid to the couple were commingled and used to pay their joint living expenses. Ms. Paul was primarily involved in the recordkeeping aspect of the business and Mr. Settle's mother worked in the Landmark office performing [2 Cir. 3] administrative duties. By all accounts, Landmark's business flourished and the company was highly profitable. The record reveals that the company enjoyed a profit each year it was in business and Mr. Settle and Ms. Paul both had unfettered access to the company funds.

In June 2008, however, the relationship between Mr. Settle and Ms. Paul deteriorated and the couple separated. James ceased “working” for Landmark and the company stopped all operations. Ms. Paul then refused to allow Mr. Settle access to Landmark records or funds and took the position that she was the owner of the company and that Mr. Settle was merely an employee. Following the couple's breakup, however, Ms. Paul made two payments to Mr. Settle in the amounts of $25,000 and $250,000. Ms. Paul suggests that these payments were a goodwill type gesture for Mr. Settle, while he argues that she was attempting to settle with him

[61 So.3d 857]

regarding the co-owned property of Landmark. ²

Mr. Settle filed suit on July 10, 2009, alleging that he and Ms. Paul were business partners, each owning one-half of Landmark. He sought recognition as a co-owner of Landmark and requested partition of Landmark's assets. Ms. Paul answered the suit, denying the existence of any partnership and maintaining that she was the sole owner (member and manager) of the L.L.C. as reflected in all of the organizational filings with the state.

[2 Cir. 4] Mr. Settle filed a motion for summary judgment on May 6, 2010, which was denied on the morning of trial, June 3, 2010. Trial commenced and Mr. Settle offered the testimony of five witnesses, including Ms. Paul and himself. At the conclusion of Mr. Settle's case, counsel for Ms. Paul moved for involuntary dismissal, which was granted by the trial judge. The trial judge concluded that it was clear from the evidence that Ms. Paul was the sole owner of Landmark and that Mr. Settle had failed to establish a prima facie case of ownership or an existing partnership between him and Ms. Paul. Ms. Paul then moved for expenses and attorney fees based on Mr. Settle's allegedly untruthful answers to several requests for admissions. Following briefing on that issue, the trial judge ordered Mr. Settle to pay $2,500 in expenses and $5,000 in attorney fees to Ms. Paul in accordance with La. C.C.P. art. 1472. This appeal by Mr. Settle ensued.

DISCUSSION Involuntary Dismissal

La. C.C.P. art. 1672 governs involuntary dismissals and provides, in pertinent part:

B. 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.

In a non-jury trial, a motion for involuntary dismissal requires the judge to evaluate the evidence and render a decision based on a preponderance of the [2 Cir. 5] evidence, without any special inference in favor of the party opposing the motion. Crowell v. City of Alexandria, 558 So.2d 216 (La.1990); Chandler v. Chandler, 45,308 (La.App.2d Cir.5/19/10), 37 So.3d 569; Lowe v. Skyjacker Suspensions, 45,058 (La.App.2d Cir.3/3/10), 32 So.3d 340. Proof by a...