Opinion
No. 2009 CA 1254.
March 19, 2010.
ON APPEAL FROM THE TWENTY-SECOND JUDICIAL DISTRICT COURT NUMBER 2008-10826, DIV. J, PARISH OF ST. TAMMANY STATE OF LOUISIANA, HONORABLE WILLIAM J. KNIGHT, JUDGE.
Crystal M. Heine, Gretna, Louisiana, Peyton B. Burkhalter, Metairie, Louisiana, Counsel for Plaintiff-Appellant, A E Engine and Compression, Inc.
F. Charles Marionneaux, F. Barry Marionneaux, Ryan N. Ours, Plaquemine, Louisiana, Counsel for Defendants/Appellees, Remnant Capital, LLC, Ronald, Suttill, Miss-Lou Petroleum LLC and Ruben Shealy.
Leo R. McAloon, III, Brendan P. Doherty, New Orleans, Louisiana, Counsel for Defendant/Appellees, Miss-Lou Petroleum LLC and Ruben Shealy.
BEFORE: PARRO, KUHN, AND McDONALD, JJ.
Plaintiff-appellant, A E Engine and Compression, Inc. (A E) appeals the trial court's judgment, sustaining peremptory exceptions, raising the objections of no cause of action and no right of action, and dismissing its claims against defendants-appellees, Miss-Lou Petroleum, LLC (Miss-Lou), Ruben Shealy, Remnant Capital, LLC (Remnant), and Ronald Suttill. For the reasons that follow, we amend and, as amended, affirm in part, reverse in part and remand.
PROCEDURAL BACKGROUND
A E filed its petition on an open account seeking recovery for the value of the goods and services it provided at the request of Miss-Lou for the Breton Sound 31 Field Project located in Louisiana waters. Specifically, the petition avers that a Saltwater Disposal Pump Package, which included an 817 Waukesha and Gaso Pump, and an Oil Transfer Package, which included a Deutz engine and oil pump, had been supplied by A E at/for the Breton Sound 31 Field Project. When A E was unable to obtain full payment for the goods and services it had provided, it filed its lawsuit naming as defendants: Miss-Lou and its managing member, employee, and agent, Shealy, in his individual capacity; Aviva Petroleum, Inc. (Aviva Petroleum), the alleged operator and majority working interest owner of at least one well located in Breton Sound 31 Field Project at/for which A E performed services and provided the goods; Aviva America, Inc. and/or The Harvest Group, LLC (Harvest), the alleged owners and/or operators of the well(s); Remnant, a company that "became involved to help finance" Aviva Petroleum's "production of the Breton Sound 31 Field Project"; and Suttill, an agent and employee of Aviva Petroleum.
Although the petition appears to allege the existence of only one well, other documentation in the record indicates that more than one oil well was associated with the Breton Sound 31 Field Project.
Aviva Petroleum and Aviva America, Inc. answered the lawsuit, generally denying liability, as did Harvest. Remnant, Suttill, and Shealy filed peremptory exceptions raising the objection of no cause of action. Miss-Lou and Shealy filed peremptory exceptions raising the objection of no right of action.
The petition also names Harvest Oil Gas, LLC as a defendant in this lawsuit as an alleged operator of the pump and avers to have made demands for payment from this defendant. Harvest Oil Gas, LLC joined Harvest in its answer to the lawsuit in which they admitted Harvest Oil Gas, LLC is an affiliated company of Harvest. Harvest and Harvest Oil Gas, LLC also filed a cross claim naming Aviva Petroleum as defendant from whom they aver entitlement to indemnification.
Curiously, although Suttill is an agent of, or an individual with an interest in, Aviva Petroleum, both he and Remnant are represented by the same counsel.
After a hearing, the trial court sustained the peremptory exceptions filed by Remnant, Suttill, Shealy, and Miss-Lou and dismissed A E's claims against these defendants. A new trial motion was denied. A E appeals.
DISCUSSION
The peremptory exception pleading the objection of no cause of action is a procedural device used to test the legal sufficiency of the petition. In making the determination, all well-pleaded allegations of fact in the petition must be accepted as true, and no reference can be made to extraneous supportive or controverting evidence. The court must then determine whether the law affords any relief to the claimant if those factual allegations are proven at trial. Home Distribution, Inc. v. Dollar Amusement, Inc. , 98-1692, p. 5 (La. App. 1st Cir. 9/24/99), 754 So.2d 1057, 1060. A petition should not be dismissed for failure to state a cause of action unless it appears beyond doubt that the plaintiff can prove no set of facts in support of any claim which would entitle it to relief. The question therefore is whether, in the light most favorable to plaintiff, and with every doubt resolved in its behalf, the petition states any valid cause of action for relief. Id.
The burden of demonstrating that no cause of action has been stated is on the exceptor. In reviewing a trial court's ruling sustaining an exception of no cause of action, the reviewing court should subject the case to a de novo review. Id.
The trial court sustained the exceptions of no cause of action raised by Remnant, Suttill, and Shealy and the no right of action raised by Miss-Lou and Shealy and dismissed A E's claims against each of these defendants. We examine the dismissal of each defendant in turn. Remnant
According to the allegations of A E's petition, Remnant is a non-Louisiana limited liability corporation doing business in the state of Louisiana and domiciled in the state of Washington. Don Broyles, an employee of Remnant, advised A E that upon production of the well on or about June 15, 2007, payment of the invoices for the goods and services A E had provided on October 23, 2006 at/for the Breton Sound 31 Field Project would be made. The petition also avers that Remnant advised A E that "they became involved to help finance (or otherwise purchase the debt of) [Aviva Petroleum's] production of the Breton Sound 31 Field Project." Lastly, the allegations of the petition state that in a conversation between A E and Broyles, as agent for Remnant, A E was advised that after payment to the operator of the pump, Aviva Petroleum would then pay its creditors, including A E.
In sustaining the exception of no cause of action as to Remnant, the trial court concluded there were no allegations establishing privity of contract between A E and Remnant.
A contract is an agreement by two or more parties whereby obligations are created, modified, or extinguished. La.C.C. art. 1906. Consent of the parties is necessary to form a valid contract. See La.C.C. art. 1927. Where there is no meeting of the minds between the parties, a contract is void for lack of consent. Stockstill v. C.F. Indus., Inc. , 94-2072, p. 25 (La. App. 1st Cir. 12/15/95), 665 So.2d 802, 820, writ denied , 96-0149 (La. 3/15/96), 669 So.2d 428. And no action for breach of contract may lie in the absence of privity of contract between the parties. Pearl River Basin Land and Dev. Co., L.L.C. v. State, ex rel. Governor's Office of Homeland Sec. and Emergency Preparedness , 2009-0084, p. 2 (La. App. 1st Cir. 10/27/09), ___ So.3d ___, ___. A party claiming the existence of a contract has the burden of proving that the contract was perfected between himself and his opponent. Casey v. Nat'l Info. Services, Inc. , 2004-0207, p. 12 (La. App. 1st Cir. 6/10/05), 906 So.2d 710, 719, writ denied , 2005-2210 (La. 3/24/06), 925 So.2d 1235.
Although A E asserts they have alleged facts sufficient to support the existence of a contractual relationship between it and Remnant, we disagree. Nothing in the factual allegations specifies that Remnant consented to pay the debts of Aviva Petroleum. While A E states Broyles made representations that payment would be forthcoming, it does not identify the party who Broyles indicated would tender the payment.
A E urges that the facts give rise to recovery against Remnant under theories of detrimental reliance and unjust enrichment. We agree with the trial court that the allegations of the petition do not set forth facts sufficient to support recovery under those or any other theories, but under La.C.C.P. art. 934, A E must be given the opportunity to amend its petition to allege any additional facts necessary to state a cause of action. Accordingly, the judgment of the trial court, sustaining Remnant's exception of no cause of action, is amended to so permit. Suttill
According to La.C.C.P art. 934, when the grounds of the objection pleaded by peremptory exception may be removed by amendment of the petition, the judgment sustaining the exception shall so order.
Like Remnant, the trial court concluded that the allegations of A E's petition failed to state a cause of action against Suttill because the facts did not demonstrate the existence of a contractual relationship between Suttill and A E for payment of the invoices for the goods and services provided on October 23, 2006 at/for the Breton Sound 31 Field Project.
A E's petition alleges that Suttill is a person of the full age of majority, domiciled in the state of Texas, who is an agent and employee of Aviva Petroleum. Like the allegations concerning Broyles of Remnant, the petition avers that Suttill, as an agent of Aviva Petroleum, advised A E that the operator of the pump would be paid first and subsequently all of Aviva Petroleum's creditors, including A E, would be paid.
Nothing in the factual allegations specifies that Suttill personally consented to pay the debts of Aviva Petroleum. While A E acknowledges Suttill's capacity as an agent for Aviva Petroleum in averring his representation of payment to A E subsequent to payment of the operator of the pump, A E offers no facts establishing the date of disclosure of the agency status so as to support a theory of recovery based on undisclosed agency/mandate. As with Remnant, A E fails to assert facts that Suttill made representations identifying the party who would tender the payment. Thus, the trial court correctly sustained Suttill's exception of no cause of action.
Under La.C.C.P. art. 934, A E must be given the opportunity to amend its petition to allege any additional facts necessary to state a cause of action against Suttill in his individual capacity. Accordingly, we affirm the trial court's judgment sustaining the exception of no cause of action after amending it to permit A E an opportunity to set forth facts that will support its entitlement to relief from Suttill. Shealy
Shealy asserts that the allegations of the petition directed at him are limited to actions he undertook while acting as a managing member, employee, or agent of Miss-Lou. Thus, he urges A E has failed to establish a cause of action against him in his personal capacity.
According to the allegations of A E's petition, Shealy is a person of the full age of majority, domiciled in St. Tammany Parish, who is a managing member, employee, or agent of Miss-Lou. The petition avers that Miss-Lou is a limited liability company registered and doing business in St. Tammany Parish. All actions undertaken by Shealy, according to the petition, were done in a representative capacity on behalf of Miss-Lou.
La.R.S. 12:1320 addresses the liability of employees, member managers, employees, and agents of limited liability companies, stating in relevant part:
B. Except as otherwise specifically set forth in this Chapter, no member, manager, employee, or agent of a limited liability company is liable in such capacity for a debt, obligation, or liability of the limited liability company. . . .
D. Nothing in this Chapter shall be construed as being in derogation of any rights which any person may by law have against a member, manager, employee, or agent of a limited liability company because of any fraud practiced upon him, because of any breach of professional duty or other negligent or wrongful act by such person, or in derogation of any right which the limited liability company may have against any such person because of any fraud practiced upon it by him.
Because the allegations of A E's petition admit the limited liability status of Miss-Lou and Shealy's status as a managing member, employee, or agent of Miss-Lou, under La.R.S. 12:1320B, Shealy cannot be liable in his individual capacity for a debt, obligation, or liability of Miss-Lou. See Hollingsworth v. Choates , 42,424, p. 4 (La. App. 2d Cir. 8/22/07), 963 So.2d 1089, 1092-93. Thus, the trial court correctly sustained Shealy's exception of no cause of action. But because a managing member, employee, or agent may be held liable in his personal capacity because of any fraud, breach of professional duty, or other negligent or wrongful act he committed, we amend the judgment dismissing A E's claims against Shealy to permit it an opportunity, if it can, to state a cause of action against this defendant. See La.C.C.P. art. 934.
Miss-Lou
A E contends the trial court erred in sustaining the peremptory exception raising the objection of no right of action levied against it by Miss-Lou. Miss-Lou claims that because it was acting pursuant to a mandate, A E is without a right to demand payment from it but must instead look to its principal, Aviva Petroleum, for payment.
A mandate is a contract by which a person, the principal, confers authority on another person, the mandatary, to transact one or more affairs for the principal. La.C.C. art. 2989. A principal may confer on the mandatary general authority to do whatever is appropriate under the circumstances. La.C.C. art. 2994. The mandatary may perform all acts that are incidental to or necessary for the performance of the mandate. The authority granted to a mandatary to perform an act that is an ordinary part of his profession or calling, or an act that follows from the nature of his profession or calling, need not be specified. La.C.C. art. 2995.
A mandatary who contracts in the name of the principal within the limits of his authority does not bind himself personally for the performance of the contract. La.C.C. art. 3016. But a mandatary who contracts in his own name without disclosing his status as a mandatary binds himself personally for the performance of the contract. La.C.C. art. 3017.
We begin by observing that Miss-Lou's assertion that it was acting pursuant to a mandate and, therefore, is not bound to make payment to A E is not appropriately raised by the peremptory exception raising the objection of no right of action. The exception of no right of action is intended to question the plaintiffs right to bring the suit by challenging its legal interest in the subject matter. Gorman v. Swaggart , 524 So.2d 915, 919 (La. App. 4th Cir.), writs denied , 530 So.2d 571-75 (La. 1988). It raises the question of whether a remedy afforded by law can be invoked by a particular plaintiff. An exception of no right of action does not raise the issue of whether the remedy exists, only who may assert it. A challenge to the existence of a particular remedy is more properly raised by the peremptory exception raising the objection of no cause of action. That exception questions whether the law grants a remedy to anyone for the particular harm alleged in the petition, just as the exception of no right of action questions whether a particular plaintiff is a member of the class to whom the remedy is extended. Gorman , 524 So.2d at 919.
In this case, A E unquestionably has a right to sue those to whom it supplied a Saltwater Disposal Pump Package who did not pay for the goods and services A E provided. See La.C.C. arts. 2439 and 2549; see also La.C.C. art. 1983. It was error for the trial court to sustain the exception of no right of action in favor of Miss-Lou.
A E also challenges the trial court's action of sustaining the peremptory exception raising the objection of no right of action against Shealy. Although we have already concluded the trial court correctly sustained the exception of no cause of action against Shealy in his individual capacity, we also find the trial court erred in sustaining the exception of no right of action against Shealy in his individual capacity.
The real issue between these parties is whether A E may demand payment from Miss-Lou. Based on the allegations of the petition, A E provided goods and services in October 2006 but was not apprised of the mandatary relationship existing between Miss-Lou and Aviva Petroleum until March 2007. And that at the time A E's goods and services were requested, Miss-Lou contracted in its own name without disclosing its status as a mandatary, potentially binding itself individually for the performance of the contract. See La.C.C. art. 3017. Thus, A E has stated a cause of action against Miss-Lou, and the trial court erred in dismissing A E's claims against Miss-Lou.
DECREE
For these reasons, that portion of the trial court's judgment, sustaining the peremptory exceptions of no cause of action of Remnant Capital, LLC, Ronald Suttill, and Shealy, is affirmed but amended, and the matter is remanded to the trial court to allow A E an opportunity to amend its petition to state, if it can, a cause of action against these defendants within twenty-one days from the date this opinion becomes final, in default of which their claims shall be dismissed. That portion of the trial court's judgment, sustaining the peremptory exception of no right of action against Miss-Lou and Ruben Shealy and dismissing A E's claims against Miss-Lou is reversed. The matter is remanded to the trial court for further proceedings consistent with this opinion. Appeal costs are assessed one-half to A E Engine and Compression, Inc. and one-half to Miss-Lou Petroleum, LLC.