Wirthman-Tag Construction Co. L.L.C. v. Hotard

• Decision Date: 19 December 2001
• Docket Number: No. 2000-CA-2298.,No. 2000-CA-2299.,2000-CA-2298.,2000-CA-2299.
• Citation: 804 So.2d 856
• Parties: WIRTHMAN-TAG CONSTRUCTION COMPANY, L.L.C. v. James and Jane HOTARD. Wirthman-Tag Construction Company, L.L.C., v. Robert B. Anderson, Consulting Engineers, Inc., Robert B. Anderson, and James Hotard, Sr.
• Court: Court of Appeal of Louisiana — District of US

804 So.2d 856

WIRTHMAN-TAG CONSTRUCTION COMPANY, L.L.C. v. James and Jane HOTARD.

Wirthman-Tag Construction Company, L.L.C., v. Robert B. Anderson, Consulting Engineers, Inc., Robert B. Anderson, and James Hotard, Sr.

No. 2000-CA-2298.

No. 2000-CA-2299.

Court of Appeal of Louisiana, Fourth Circuit.

December 19, 2001.

COPYRIGHT MATERIAL OMITTED

Thomas A. Gennusa, II, Gina Gennusa Piacun, Kelly E. Barbier, The Law Offices of Thomas A. Gennusa, II, Metairie, LA, Counsel for Plaintiff/Appellee.

Vallerie Oxner, Metairie, LA, Counsel for Defendant/Appellant.

Court composed of Chief Judge WILLIAM H. BYRNES, III, Judges JOAN BERNARD ARMSTRONG, and TERRI F. LOVE.

WILLIAM H. BYRNES, III, Chief Judge.

Defendants/third-party plaintiffs, James and Jane Hotard, appeal the July 11, 2000 judgment granting the exception of no right of action of plaintiff-appellee, Wirthman-TAG Construction Company, L.L.C. ("Wirthman-TAG") with respect to a third-party-demand filed by the third-party plaintiffs, the Hotards against the third-party defendants, Thomas A. Gennusa, III and Ronald Wirth, Jr. We reverse.

On June 26, 1998, the Hotards entered into a construction agreement with "Wirthman-TAG Construction" for construction of a residence at 6800 General Haig Street, New Orleans, Louisiana. That agreement was signed "Wirthman-TAG Const. By: Thomas A. Gennusa, III and Ronald Wirth, Jr."

Shortly after construction began, a problem arose which resulted in a settlement agreement between the Hotards and "Wirthman/TAG Construction, L.L.C." Construction resumed, but stopped again with Wirthman-TAG claiming that the Hotards made numerous changes to the original plans and failed to timely pay amounts due under the construction agreement.

On September 9, 1999, Wirthman-TAG filed a petition for declaratory judgment against the Hotards seeking, inter alia, to have the construction contract dissolved or modified to ensure timely payment to petitioners. The Hotards answered that petition and filed a reconventional demand against Wirthman-TAG. The Hotards also filed a third-party demand against Gennusa and Wirth, individually.

Wirthman-TAG, rather than Gennusa and Wirth, filed an exception of no cause of action/no right of action to the Hotards' reconventional demand and third-party complaint based on its assertion that Gennusa and Wirth had at all times acted on behalf of Wirthman-TAG Construction Company and not in their individual capacities. On July 11, 2000, the trial court granted the exception of no right of action as to Gennusa and Wirth, finding that "[t]here is no right of action as to the individual members of Wirthman-Tag Construction Company, L.L.C. Defendants knew or should have known that only the corporation should be sued in this matter." The Hotards appealed.

At issue on appeal is whether the trial court erred in granting Wirthman-TAG's peremptory exception of no cause and no right of action.

A no cause of action and no right of action are two separate and distinct peremptory exceptions. La. C.C.P. art. 927; Honeywell, Inc. v. Sierra, 543 So.2d 594 (La.App. 4 Cir.1989).

No Right of Action

The essential function of an exception of no right of action is to test whether the plaintiff has a real and actual interest in the action. La. C.C.P. art. 927(A)(5). Its purpose is to determine whether the plaintiff belongs to the class of persons to whom the law grants the cause of action asserted in the suit. It assumes that the petition states a valid cause of action and questions whether the plaintiff in the particular case has a legal interest in the subject matter of the litigation. Louisiana Paddlewheels v. Louisiana Riverboat Gaming Com'n, 94-2015 (La.11/30/94), 646 So.2d 885, 888. The exception of no right of action relates solely to the person of the plaintiff. It cannot be used to determine whether a defendant can stand in judgment, nor can it be used to urge that the plaintiff has no right of action because there is a valid defense. Honeywell supra, 543 So.2d at 596.

In the present case, the trial judge granted the exception of no right of action as to Gennusa and Wirth, stating that there was no right of action as to the individual members of Wirthman-TAG Construction Company, L.L.C. The defendants (third-party plaintiffs in the third-party demand, the Hotards) knew or should have known that only the corporation should be sued in this matter.

Wirthman-TAG is not the proper party to file the exception of no right of action because Wirthman-TAG has no interest in asserting the individuals' claim. Only the individuals, Thomas Gennusa, III and Ronald Wirth, Jr., are the proper parties to challenge the action by filing the exceptions on their own behalf. However, a trial or appellate court may notice a peremptory exception of no right of action on its own motion. Teacher's Retirement System v. Louisiana State Employees' Retirement System, 456 So.2d 594 (La.1984). Therefore, this court notices ex proprio motu that Wirthman-Tag has of no right of action to assert an exception of no right of action on behalf of the individuals Thomas Gennusa, III and Ronald Wirth, Jr.

Although evidence could be considered in determining an exception of no right of action, whether the defendant may be able to defeat the plaintiffs cause of action is immaterial to the determination of an exception of no right of action. Alside Supply Co. v. Ramsey, 306 So.2d 762 (La.App. 4 Cir.1975). Any evidence admitted which does not relate to the plaintiffs right of action must therefore be referred to the merits of the case. Northwest Ins. Co. v. Carpenters Dist. Council of New Orleans and Vicinity, 470 So.2d 218 (La. App. 4 Cir.1985). This rule includes affirmative defenses, which may not be raised through the peremptory exception of no right of action. See Comet Drilling Co. v. Tri-State Oil Tool Industries, Inc., 337 So.2d 567 (La.App. 2 Cir.1976).

In the present case, Gennusa and Wirth are not the third-party plaintiffs of the third-party-demand. Whether the third-party defendants, Gennusa and Wirth, may be able to defeat the plaintiff's cause of action is immaterial to the determination of an exception of no right of action. The assertion that Gennusa and Wirth were improperly named as third-party defendants in the plaintiffs-Hotards' third-party demand is a defense, consideration of which must be deferred to the merits.

Wirthman-TAG's exception of no right of action should be denied. The exception of no right of action on behalf of Gennusa and Wirth also should be denied.

No Cause of Action

The trial court did not rule on Wirthman-TAG's exception of no cause of action, considering that it granted the exception of no right of action. Because Wirthman-TAG has no interest in asserting the individuals' claim, only the individuals, Thomas Gennusa, III and Ronald Wirth, Jr., are the proper parties to challenge the action by filing the exception on their own behalf. However, a trial or appellate court may notice a peremptory exception of no cause of action on its own motion. Noble v. Armstrong, 93-841 (La. App. 5 Cir. 3/16/94), 635 So.2d 1199. Therefore, this court notices ex proprio mote a peremptory exception of no cause of action with respect to the individuals, Thomas Gennusa, III and Ronald Wirth, Jr.

The purpose of the exception of no cause of action is to determine the legal sufficiency of the plaintiffs petition. Generally, the exception is tried on the face of the petition and no evidence may be introduced to support or controvert the objection that the petition fails to state a cause of action. La. C.C.P. arts. 927(A)(4), 931; Reis v. Fenasci & Smith, 93-1785 (La. App. 4 Cir. 4/14/94), 635 So.2d 1319, 1321. However, the exception allows the court to consider evidence that is admitted without objection to enlarge the pleadings. Stephenson v. Nations Credit Financial Services Corp., 98-1688, 98-1689 (La.App. 1 Cir. 9/24/99), 754 So.2d 1011; Sivils v. Mitchell, 96-2528 (La.App. 1 Cir. 11/7/97), 704 So.2d 25.

The burden of proof is on the exceptor. Haspel & Davis Mill. & Planting Co. Ltd. v.Board of Levee Com'rs of Orleans Levee Dist., 95-0233 (La.App. 4 Cir. 9/4/96), 680 So.2d 159, writ denied 96-2430 (La.12/6/96), 684 So.2d 932. In reviewing trial court's ruling on exception of no cause of action, appellate court should conduct de novo review. All well-pleaded allegations of the petition must be accepted as true, and any doubt should be resolved in favor of main aining the sufficiency of the petition and affording the plaintiff the opportunity to present his evidence. Id. If the court sustains the peremptory exception of no cause of action, it must allow the plaintiff the opportunity to amend the petition within a reasonable period of time. If the plaintiff fails to timely amend and cure the defect, or if it is apparent that the defect cannot be corrected, the case should be dismissed. La. C.C.P. art. 934.

In the present case, the parties did not object to the evidence of the contract and the settlement agreement although the Hotards' third-party demand only referred to the contract as being annexed to the demand.

The Hotards claim that the trial court erred in granting the exception of no cause of action in favor of Gennusa and Wirth because they signed the construction contract in their individual capacities. They claim that nowhere in the contract is Wirthman-TAG Construction referred to as a limited liability company, nor does the contract indicate that Gennusa and Wirth were signing as agents for another entity.

In their third-party demand, the Hotards made the following allegations: that t...