Opinion
2023-CA-0462
01-31-2024
JASMIJN BOL v. BREDA, LLC
Abid Hussain HUSSAIN LAW LLC, COUNSEL FOR PLAINTIFF/APPELLEE Michael G. Bagneris BAGNERIS, PIEKSEN & ASSOCIATES, LLC COUNSEL FOR DEFENDANT/APPELLANT
APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2021-03245, DIVISION "M" Honorable Paulette R. Irons, Judge
Abid Hussain HUSSAIN LAW LLC, COUNSEL FOR PLAINTIFF/APPELLEE
Michael G. Bagneris BAGNERIS, PIEKSEN & ASSOCIATES, LLC COUNSEL FOR DEFENDANT/APPELLANT
Court composed of Judge Joy Cossich Lobrano, Judge Tiffany Gautier Chase, Judge Dale N. Atkins
Judge Tiffany Gautier Chase
TGC
JCL
DNA
Appellant, Michael Schexnayder (hereinafter "Mr. Schexnayder"), seeks review of the trial court's March 23, 2023 judgment which granted the motion for dissolution filed by Appellee, Jasmijn Bol (hereinafter "Ms. Bol"). After consideration of the record before this Court, and the applicable law, we deny the stay, reverse the judgment of the trial court and remand the matter for further proceedings consistent with this opinion.
Facts and Procedural History
Ms. Bol and Mr. Schexnayder were co-owners of Breda, LLC. On April 14, 2021, Ms. Bol filed a petition for damages seeking judicial dissolution of Breda, LLC pursuant to La. R.S. 12:1335. Ms. Bol only named Breda, LLC as a defendant and noted that she and Mr. Schexnayder were the sole members of the company. In her petition for damages, Ms. Bol also asserted claims for breach of contract and unjust enrichment. Specifically, Ms. Bol argued that Breda, LLC, through Mr. Schexnayder, failed to repay loans she made to the company and that the parties could not amicably dissolve the business. Mr. Schexnayder answered the petition for damages on behalf of Breda, LLC.
On July 22, 2022, Ms. Bol filed a motion for partial summary judgment on the issue of her membership status in Breda, LLC and seeking dissolution of the business. By judgment dated September 12, 2022, the trial court granted the motion for summary judgment in part confirming Ms. Bol's status in Breda, LLC. However, the trial court denied the summary judgement as to the dissolution of the business.
On October 13, 2022, Ms. Bol filed a "Motion for Dissolution, Reimbursement and Appointment of Liquidator." She maintained that judicial dissolution, under La. R.S. 12:1334(4), reimbursement and appointment of a liquidator were warranted due to the state of affairs of Breda, LLC. Ms. Bol asserted that continuation of the business was not reasonably practical because Mr. Schexnayder failed to provide a proper accounting of Breda, LLC's earnings and mismanaged the rental properties' utility bills, taxes and fines. Mr. Schexnayder opposed the motion for dissolution arguing that Ms. Bol was not entitled to dissolution because under La. R.S. 12:1335 liquidation of a business is only allowed if it is impractical to carry on the business in conformity with the articles of organization or operating agreement. Mr. Schexnayder pointed out that there was no means by which to determine if the business was in conformity as Breda, LLC did not file articles of organization with the Louisiana Secretary of State, nor did it have an operating agreement. Thus, according to Mr. Schexnayder, Ms. Bol failed to show that she was entitled to judicial dissolution of the business under the applicable statutory provisions.
La. R.S. 12:1334(4) provides:
Except as provided in the articles of organization or a written operating agreement, a limited liability company is dissolved and its affairs shall be wound up upon the first to occur of the following:
(4) Entry of a decree of judicial dissolution under [La.] R.S. 12:1335.
La. R.S. 12:1335 provides:
On application by or for a member, any court of competent jurisdiction may decree dissolution of a limited liability company whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement.
The matter was deemed submitted to the trial court on March 2, 2023. The record does not reflect that a hearing was held, nor was any testimony submitted. By judgment dated March 23, 2023, the trial court granted Ms. Bol's motion for dissolution. The judgment provided for an appointment of a liquidator to dissolve Breda, LLC's assets, pay off all debts and distribute remaining assets to Ms. Bol and Mr. Schexnayder. The judgment also ordered Mr. Schexnayder to provide a full accounting of all income, expenses and assets of Breda, LLC and ordered Ms. Bol to produce all financial records in her possession. This appeal followed.
Timeliness of Appeal
As a threshold matter, this case warrants consideration of two issues relative to the timeliness of the appeal: (1) notice of appeal and (2) payment of appeal costs. Mr. Schexnayder noticed his intent to "appeal" the trial court's March 23, 2023 judgment on April 22, 2023 and the trial court provided him a return date "as provided by law." Thereafter, Mr. Schexnayder filed a motion requesting an extension of the return date which the trial court granted, extending the return date to June 5, 2023. However, instead of filing an "appeal" of the March 23, 2023 judgment, Mr. Schexnayder filed an application for supervisory review with this Court on June 5, 2023.
Mr. Schexnayder was not allowed to seek an extension of the return date to file his appeal. Extension of a return date relates only to the preparation and timely lodging of the record on appeal. Davidge v. Magliola, 346 So.2d 177, 180 (La. 1977). Extension of a return date is to be requested by the clerk of court and only relates to the lodging of the record on appeal, not to extend the time for taking an appeal. Id.
This Court denied the application for supervisory review "on the showing made." Jasmijn Bol v. Breda, LLC, 2023-C-0369 (La.App. 4 Cir. 6/6/23).
La. C.C.P. art. 2087(A)(1) provides
Except as otherwise provided in this Article or by other law, an appeal which does not suspend the effect or the execution of an appealable order or judgment may be taken within sixty days of any of the following:
(1) The expiration of the delay for applying for a new trial or judgment notwithstanding the verdict, as provided by [La. C.C.P. art. 1974] and [La. C.C.P. art. 1811], if no application has been filed timely.
The notice of signing of judgment is dated March 23, 2023. Mr. Schexnayder thus had until March 30, 2023 to file a motion for new trial. Since Mr. Schexnayer did not file a motion for new trial, he had until May 30, 2023 to appeal the trial court's judgment. The "Notice of Intent to Appeal" was filed April 22, 2023; therefore, Mr. Schexnayder timely noticed his intent to appeal the March 23, 2023 judgment.
La. C.C.P. art. 2126 provides that an appellant shall pay the appeal costs within twenty days of the mailing of notice of appeal. La. C.C.P. art. 2126(B). The notice of appeal was mailed on May 3, 2023; therefore, Mr. Schexnayder had until June 6, 2023 to pay the appeal costs. Although Mr. Schexnayder did not pay the appeal costs until June 8, 2023, this Court has previously found that untimely payment of appeal costs are not fatal to an appeal. Succession of Brown, 20200518, p. 7 (La.App. 4 Cir. 4/21/21), 318 So.3d 348, 353 ("La. C.C.P. art. 2126[(F)] further provides that if the appellant pays the costs then the appeal may not be dismissed even if the time to pay has tolled"); See Maradiaga v. Doe, 2015-0450, p. 3 (La.App. 4 Cir. 11/25/15), 179 So.3d 954, 956. Likewise, "[a]ppeals are favored under our law and jurisprudence." Argence, L.L.C. v. Box Opportunities, Inc., 2007-0765, p. 6 (La.App. 4 Cir. 3/13/08), 980 So.2d 786, 790. Although the appeal costs were untimely paid, Mr. Schexnayder ultimately paid the appeal costs. Once Mr. Schexnayder complied and paid the appeal costs, the only remaining issue was the lodging of the record with this Court.
La. C.C.P. art. 2125 provides that the return date for an appeal, when there is testimony to be transcribed, is forty-five days from the date appeal costs are paid. Thus, the clerk of court had until July 23, 2023, to lodge the record with this Court. The record in this matter was lodged on July 20, 2023. Accordingly, we find the appeal timely.
The notice of appeal issued by Civil District Court, Parish of Orleans, indicates that there were transcripts from September 1, 2022 and November 17, 2022.
Jurisdiction
This Court has a duty to determine whether subject matter jurisdiction exists. Urquhart v. Spencer, 2015-1354, p. 3 (La.App. 4 Cir. 12/1/16), 204 So.3d 1074, 1077. In the case sub judice, Ms. Bol asserts that the March 23, 2023 judgment is interlocutory as her petition for damages asserts three causes of action: (1) breach of contract; (2) unjust enrichment; and (3) dissolution of Breda, LLC. She contends that the trial court's judgment only disposed of the dissolution of Breda, LLC and does not resolve the breach of contract or unjust enrichment claims. Ms. Bol further argues that Mr. Schexnayder's appeal cannot be converted to an application for supervisory writ because he previously sought supervisory review of the March 23, 2023 judgment by this Court, which was denied "on the showing made."
"A judgment that does not determine the merits but only preliminary matters in the course of the action is an interlocutory judgment." La. C.C.P. art. 1841. "A judgment that determines the merits in whole or in part is a final judgment." Id. The March 23, 2023 judgment grants Ms. Bol's motion for dissolution to the extent that it orders dissolution of Breda, LLC and distribution of its assets. Although the March 23, 2023 judgment does not address Ms. Bol's breach of contract or unjust enrichment claims, the judgment is determinative of the merits of the dissolution issue. Accordingly, we find the March 23, 2023 judgment is a final appealable judgment.
Assignments of Error
Mr. Schexnayder asserts three assignments of error challenging the trial court's ruling on the motion for dissolution. Specifically, he argues that Ms. Bol does not have the legal right to seek dissolution of Breda, LLC; that the company remains a profitable business; and the trial court's grant of dissolution was premature.
Standard of Review
"A trial court's finding that it is not reasonably practical for the parties to carry on business is a question of fact reviewable under the manifest error/clearly wrong standard of review." S. Louisiana Ethanol L.L.C., v. CHS-SLE Land, 20140127, p. 20 (La.App. 4 Cir. 2/4/15), 161 So.3d 83, 95.
However, in reviewing this appeal, the Court determined a procedural error committed by the trial court which prevents review of the merits of the trial court's ruling. Namely, we find the trial court procedurally erred in failing to conduct a contradictory hearing prior to ordering dissolution of Breda, LLC.
Motion for Dissolution
The matter was deemed submitted on March 2, 2023. Ms. Bol attached her affidavit and documentation regarding outstanding payments owed by Breda, LLC for various bills to the motion for dissolution. Mr. Schexnayder opposed the motion for dissolution and filed an affidavit contradicting her claims. La. C.C.P. art. 963 provides, in pertinent part:
A. If the order applied for by written motion is one to which the mover is clearly entitled without supporting proof, the court may grant the order ex parte and without hearing the adverse party.
B. If the order applied for by written motion is one to which the mover is not clearly entitled, or which requires supporting proof, the motion shall be served on and tried contradictorily with the adverse party.
C. The rule to show cause is a contradictory motion.
We acknowledge that "[o]ral argument is a privilege, not a right, and is within the court's discretion." Viering v. Liberty Mut. Ins. Co., 2017-0204, p. 9 (La.App. 1 Cir. 9/27/17), 232 So.3d 598, 604 (quoting La. Dist. Court Rule 9.18). Nonetheless, La. C.C.P. art. 963 mandates a contradictory hearing on a motion when the relief to the mover is not clear. La. C.C.P. art. 963(B). "The word 'shall' is mandatory.. ." La. C.C.P. art. 5053; See generally Mahe v. LCMC Health Holdings, LLC, 2023-00025, pp. 1-2 (La. 3/14/23), 357 So.3d 322-23 (finding that use of the word "shall" indicates that limits within the code articles are mandatory). Whether Ms. Bol is entitled to judicial dissolution of Breda, LLC is not "clear." The parties dispute whether it remains reasonably practical to carry on the business. Further, the documentation submitted by both parties does not clearly establish that dissolution is warranted. Both Ms. Bol and Mr. Schexnayder attached opposing affidavits regarding the current state of Breda, LLC. A review of jurisprudence reveals that judicial dissolution under La. R. S. 12:1335 occurs after a full contradictory hearing after the submission of evidence on the record. See S. Louisiana Ethanol L.L.C., 2014-0127, p. 7, 161 So.3d at 88 (granting plaintiff's petition for dissolution after a trial on the merits of defendant's motion for summary judgment); In re Cat Island Club, L.L.C., 2011-1557, p. 3 (La.App. 3 Cir. 5/2/12), 94 So.3d 75, 77 (filing of a petition to dissolve which was granted based on a subsequently filed motion for summary judgment seeking dissolution, which was heard and granted); In re Tufts Oil &Gas-III, 2003-1296, p. 5 (La.App. 5 Cir. 3/30/04), 871 So.2d 476, 478 (hearing conducted on exceptions of no right of action, or alternatively, lack of procedural capacity and prematurity, filed in response to request for judicial dissolution sought through reconventional demand).
We find the trial court erred in not conducting a full contradictory hearing on the merits and granting dissolution of Breda, LLC. Accordingly, the matter is remanded for the trial court to conduct a full contradictory hearing, with testimony and introduction of evidence into the record, on the issue of dissolution. Additionally, Ms. Bol's requests for a stay and cost of appeal are denied.
Ms. Bol asks this Court for costs of this appeal without providing any supporting jurisprudence that she is entitled to such costs. As such, we will not consider her request for costs of this appeal.
Decree
For the foregoing reasons, we deny the stay, reverse the March 23, 2023 trial court judgment and remand the matter for further proceedings consistent with this opinion.
STAY DENIED; JUDGMENT REVERSED; REMANDED