Succession of Donna Lynn Simpson Tripp

Judgment rendered May 29, 2024.
Application for rehearing may be filed
within the delay allowed by Art. 2166,
La. C.C.P.

No. 55,496-CA

COURT OF APPEAL
SECOND CIRCUIT
STATE OF LOUISIANA

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SUCCESSION OF DONNA LYNN SIMPSON TRIPP

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Appealed from the
Second Judicial District Court for the
Parish of Claiborne, Louisiana
Trial Court No. 10,616

Honorable Charles Glenn Fallin, Judge

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AYRES, SHELTON, WILLIAMS, BENSON, Counsel for Appellant,
& PAINE, LLC Casey Arehart
By: Jacob C. White

OFFICE OF CHRISTOPHER STAHL
By: Christopher M. Stahl

H. RUSSELL DAVIS, APLC Counsel for Appellee,
By: Hubert Russell Davis Jimmie Tripp

WEINER, WEISS, & MADISON, APC
By: John M. Madison, Jr.
Reid Allen Jones

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Before COX, ROBINSON, and MARCOTTE, JJ.

ROBINSON, J.

Appellant, Casey Arehart (“Casey”), daughter of the decedent, Donna

Tripp (“Donna”), filed a petition for damages against Jimmie Leo Tripp

(“Jimmie”), surviving spouse of Donna, in his capacity as dative

testamentary executor of Donna’s succession, based on the diminution of

value of assets of the estate, specifically the value of shares owned by Donna

in ESPS, Inc. (“ESPS”), a Louisiana corporation co-owned by Jimmie and

Donna as community property. Jimmie filed a peremptory exception of

prescription and peremption, arguing that Casey’s claims were not against

Jimmie in his capacity as dative testamentary executor, but instead were

derivative claims by Casey as shareholder of ESPS against Jimmie as an

officer of ESPS, which would be subject to the two- and three-year

prescriptive periods and the three-year peremptive period provided by La.

R.S. 12:1502. The trial court sustained Jimmie’s peremptory exceptions at a

November 22, 2022, hearing and entered a judgment on January 10, 2023,

sustaining the exceptions and dismissing Casey’s petition. Casey appeals.

Concluding that Casey’s claims against Jimmie for actions or

inactions taken by him as executor are subject to a 10-year prescriptive

period, we REVERSE the judgment in part and AFFIRM in part.

FACTS AND PROCEDURAL HISTORY

Donna passed away on October 15, 2013. She was survived by her

two daughters, Casey and Nikki Arehart (“Nikki”), and her spouse, Jimmie,

who is not the father of Casey and Nikki. A petition for appointment of

independent administrator was filed on April 22, 2014, by Jimmie, Casey,

and Nikki. An order was entered naming Casey and Nikki as independent

co-administrators. On June 26, 2015, Casey filed a petition for probate of

Donna’s last Will and testament dated August 27, 2013. According to

Jimmie’s testimony, he was unaware of the existence of the 2013 Will until

it was filed. An order was entered on the same date admitting the Will to

probate and appointing Casey as independent executrix of the succession. In

the 2013 Will, Donna bequeathed all of her interest in any business owned

by her with Jimmie as community property to Casey, including but not

limited to ESPS, such interest to include both her ownership interest and any

share of profits generated by the businesses. Casey and Nikki were also

named as residual legatees. Shortly after probate of the 2013 Will and

Casey’s appointment as executrix, Jimmie incorporated the company he

formed, Arizona Manufacturing Company (“AMC”). This was done on

June 17, 2015.

On January 6, 2017, Jimmie filed a rule to remove Casey as

independent executrix on the basis that she had failed to take necessary

action to close the succession and requested his own appointment as dative

testamentary executor. Casey filed an opposition to the rule, alleging that

she had believed a challenge to the Will by Jimmie would need to be

resolved and additional documents would be needed before completion of

administration. The trial court rendered judgment in open court on February

13, 2017, removing Casey as independent executrix, and signed a judgment

on February 27, 2017. Casey filed a motion for new trial on March 6, 2017,

on the basis of discrepancies created by the February 13 ruling, including

that Nikki had not ever been removed as independent administratrix. The

trial court rendered judgment in open court on June 20, 2017, dismissing

Casey’s motion, and signed a judgment on July 18, 2017.
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On October 26, 2017, Jimmie filed a petition for appointment of

dative testamentary executor, seeking his own appointment. Attached was a

letter by Casey’s counsel dated September 25, 2017, indicating opposition to

the appointment on the basis that the estate may have claims against Jimmie,

including for diversion of business from ESPS. On November 8, 2017,

Casey filed an opposition to Jimmie’s petition for appointment based on his

alleged attempts to divert and/or deplete estate assets of ESPS. She

requested the appointment of a provisional third-party administrator, or in

the alternative, the appointment of Charles Arehart, Donna’s previous

husband and Casey’s and Nikki’s father, based upon language contained in

the 2013 Will. Hearings on the appointment were upset and refixed multiple

times, then upset and continued without date subject to refixing by the

parties.

On February 1, 2019, Casey filed a motion to compel discovery

responses related to AMC, as she believed clients, business, assets, and

goodwill from ESPS had been shifted to AMC. On April 2, 2019, Jimmie

filed an opposition to the motion to compel, arguing that AMC was his

separate property because it was formed approximately 20 months following

Donna’s death; therefore, its financial information was not subject to

discovery based on Casey’s allegations. On April 29, 2019, the trial court

heard the motion to compel and the competing petitions for appointment,

and rendered a judgment (1) ordering the appointment of a CPA to serve as

the trial court’s expert to determine whether Jimmie had shifted assets from

ESPS to AMC, and (2) appointing Jimmie as dative testamentary executor of

the succession. Jimmie thereafter filed his executed oath and a detailed

descriptive list, and was issued letters testamentary on June 17, 2019.
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Jimmie and Casey filed a joint motion to appoint a CPA on July 15, 2019,

agreeing to appoint Susan Whitelaw, CPA (“Whitelaw”), as the trial court’s

expert. Whitelaw issued her report (the “Whitelaw Report”) on November

8, 2020, concluding that, among other things, Jimmie had shifted customers

and goodwill from ESPS to AMC, and AMC had used ESPS assets without

compensation.

Jimmie, as dative testamentary executor of the succession, filed a

petition to annul the 2013 Will on June 12, 2020, and an amended petition

on March 29, 2021. Casey filed a peremptory exception of no right of action

on April 30, 2021, arguing that Jimmie had no justiciable interest in the

annulment, stating that (1) his rights as a usufructuary under intestacy laws

had terminated when he remarried in 2015, and (2) prescription had run for

the probate of Donna’s earlier Will executed in 2012 in which Jimmie was a

legatee. Jimmie filed an opposition to the peremptory exception on June 7,

2021. Following a hearing on June 17, 2021, the trial court overruled

Casey’s exception. Casey sought and was granted supervisory writs from

this Court, resulting in the sustaining of the peremptory exception of no right

of action and the dismissal of Jimmie’s action to annul the Will.

Jimmie filed a petition to file a final account and a tableau of

distribution on June 3, 2021, proposing to be placed in possession of

Donna’s one-half interest in former community property as reimbursement

for his asserted claims against the estate. Casey filed an opposition to

Jimmie’s petition on June 18, 2021, opposing the proposed tableau as

premature on the basis of the pending Will annulment appeal and the

unresolved determination regarding the shifting of value from ESPS to

AMC. On April 27, 2022, Jimmie filed a motion to amend the final
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accounting and tableau of distribution, an amended account for the period of

June 17, 2019, through March 1, 2022, and a tableau of distribution. On

May 5, 2022, Casey filed an opposition to the amended final account and

tableau of distribution, asserting the same objections as in the response to the

original proposed tableau.

On September 1, 2022, Casey filed a petition for damage, asserting

claims against Jimmie in his capacity as the dative testamentary executor of

the succession for breaches of his fiduciary duties, including shifting value

from ESPS to AMC, causing ESPS to pay a personal loan and then seeking

reimbursement from the estate, and not including the value of certain assets

owned by ESPS in the value of the estate. The petition based part of its

claim for damages on the conclusions in the Whitelaw Report. Jimmie filed

a peremptory exception of prescription and peremption on October 19, 2022,

arguing that the claims were not against Jimmie in his capacity as executor,

but by Casey as a shareholder against Jimmie as a corporate officer of ESPS;

as such, the claims were subject to the two- and three-year prescriptive

periods and the three-year peremptive period provided by La. R.S. 12:1502.

Casey filed an opposition to Jimmie’s exceptions on November 14, 2022.

Jimmie filed a reply in support of the exceptions on November 18, 2022. At

a November 22, 2022, hearing, the trial court sustained Jimmie’s peremptory

exceptions of prescription and peremption, noting that Casey “had the right

or the power, or at some point in time could have done more than she did to

file a derivative action suit.” The court entered a judgment on January 10,

2023, sustaining the exceptions and dismissing Casey’s petition for damages

with prejudice. Casey appeals the trial court’s judgment dismissing her

petition for damages.
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DISCUSSION

Standard of Review

The trial court made a legal determination that Casey’s claims against

Jimmie for breach of his fiduciary duties as dative testamentary executor of

Donna’s estate were actually in the nature of derivative claims against him

as an officer of ESPS; therefore, the claims would be subject to the

prescriptive and peremptive periods applicable to shareholder derivative

claims under La. R.S. 12:1502, rather than the general, ten-year prescriptive

period for personal actions provided by La. C.C. art. 3499. The court also

found that Casey had the ability to bring an action and failed to do so during

the applicable prescriptive and peremptive periods.

Legal findings are subject to a de novo standard of review. State v.

Hunt, 09-1589 (La. 12/01/09), 25 So. 3d 746. To the extent that any factual

determinations are made based upon presented evidence, those would be

reviewed under the manifest error standard. “If evidence is introduced at the

hearing on the peremptory exception, the district court’s findings of fact are

reviewed under the manifest error-clearly wrong standard of review.”

Stevenson v. Progressive Security Insurance Company, 19-00637 (La.

04/03/20), 341 So. 3d 1202. However, “[w]hen the pertinent facts are not in

dispute and the decision involves purely legal issues, the matter is reviewed

de novo, and the trial court’s legal conclusions are not entitled to any

deference.” Smith v. Acadian Ambulance Service, Inc., 22-626 (La. App. 3

Cir. 03/22/23), 363 So. 3d 564 (citing Jenkins v. Kauffman, 21-1596 (La.

App. 1 Cir. 07/13/22), 344 So. 3d 689, writ denied 22-01242 (La. 11/8/22),

349 So. 3d 576, and Stevenson, supra).

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This court finds that since the pertinent facts pertaining to the basis of

the claim are not in dispute, the decision involved purely the legal issue of

whether Casey’s claim for damages was in the nature of a shareholder

derivative claim such that the prescriptive/peremptive periods in La. R.S.

12:1502 would apply rather than La. C.C. art. 3499. The trial court did not

elaborate in its ruling when prescription and/or peremption commenced, or

whether prescription was suspended or interrupted for any reason.

Standing

Donna’s Will bequeathed all of her interest in any business owned by

her with Jimmie as community property to Casey, including but not limited

to ESPS, such interest to include both her ownership interest and any share

of profits generated by the businesses. Although ESPS was a sole

proprietorship owned by Jimmie prior to his marriage to Donna in 2009, it is

undisputed that Donna owned 50% of the stock of ESPS from the time it

was incorporated on June 9, 2010, and that the parties considered the

company to be community property. In addition to being a particular legatee

of Donna’s interest in ESPS, Casey was also a residual legatee of the estate

along with Nikki.

La. C.C. art. 935 provides, in part, that, “Immediately at the death of

the decedent, universal successors acquire ownership of the estate and

particular successors acquire ownership of the things bequeathed to them.”

Prior to the probate of Donna’s Will, Casey and Nikki would have been

universal successors as Donna’s heirs under intestacy. Once the Will was

probated, as the particular legatee under the Will, Casey retroactively

acquired ownership of Donna’s shareholder interest in ESPS immediately

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upon Donna’s death. As a universal legatee, Casey also acquired ownership

of any portion of the estate not otherwise disposed of by particular legacy.

Vested ownership of estate property does not necessarily equate to

possessory rights or determined that a party has the authority to represent the

rights and obligations of a decedent. La. C.C.P. art. 3211 states, “A

succession representative shall be deemed to have possession of all property

of the succession and shall enforce all obligations in its favor.” In addition,

La. C.C.P. art. 685 provides:

Except as otherwise provided by law, the succession
representative appointed by a court of this state is the proper
plaintiff to sue to enforce a right of the deceased or of his
succession, while the latter is under administration. The heirs or
legatees of the deceased, whether present or represented in the
state or note, need not be joined as parties, whether the action is
personal, real, or mixed.

However, La. C.C. art. 938 provides:

A. Prior to the qualification of a succession representative, a
successor may exercise rights of ownership with respect to his
interests in a thing of the estate as well as his interest in the estate
as a whole.

B. If a successor exercises his rights of ownership after the
qualification of a succession representative, the effect of that
exercise is subordinate to the administration of the estate.

Casey and Nikki were appointed as co-independent administrators of

Donna’s estate on April 22, 2014. Casey was appointed as independent

executrix on June 5, 2015. Shortly thereafter, on June 17, 2015, Jimmie

incorporated AMC, of which he is the sole officer and shareholder.

Therefore, Jimmie’s alleged misdeeds that are the basis of Casey’s petition

for damages did not occur until just after she was appointed as the executrix.

Casey was removed as executrix on February 27, 2017, approximately 21

months after her appointment and the incorporation of AMC. No other

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succession representative was appointed for an additional 27 months until

Jimmie was named as dative independent executor on May 29, 2019, with

letters testamentary issued on June 17, 2019.

In her capacity as a universal successor, Casey had the authority to

represent the decedent with respect to any rights and obligations of the

decedent from the time of Donna’s death on October 15, 2013, to the time a

succession representative was appointed on April 22, 2014. However, Casey

also had the authority to represent the interests of the decedent in her

capacity as a succession representative from April 22, 2014, through

February 27, 2017. Casey had the ability to represent her own ownership

interests (particularly as to ESPS) as of the date of Donna’s death – first as

an heir, then as a residual legatee – although those interests would be

subordinate to the estate administration during the time a succession

representative was appointed. After Casey’s removal as executrix, she

maintained her authority to represent the decedent’s interests as a universal

successor, as well as priority for her ownership rights as a particular legatee,

until Jimmie was appointed on May 29, 2019. Therefore, for the overall

time period of October 15, 2013, to May 29, 2019, Casey had the authority –

on behalf of the estate as the executor, or on her own behalf as a legatee – to

obtain information necessary to pursue a claim, and to bring an action,

including the enforcement of her rights as a shareholder of ESPS.

Nature of Action

ESPS, whose acronym stands for “Environmental Safety Product

Solutions,” built certain environmental products for the oilfield, in

particular, environmental tanks that collect and dispose of waste generated

by compressor skids, generators, etc. The company also sells other products
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such as retaining walls, containment systems, plastic chemical tanks, and

containment pans. AMC builds environmental tanks similar to those ESPS

was selling, but they differ in design and size. The new AMC tanks were

designed with different parts, including a different level controller and

different pumps that are imported from overseas, which make the tanks less

expensive. Both ESPS and AMC tanks were designed by Jimmie.

Jimmie is the sole officer of ESPS, which was a sole proprietorship

prior to his marriage to Donna. ESPS was incorporated approximately one

year into the marriage, and Donna was named a 50% shareholder. Jimmie is

also the officer and shareholder of AMC, which was initially funded solely

by his separate funds. Jimmie testified that he created AMC due to the

significant decline in the oilfield business during that time and the need to

design a separate product at a much lower cost so that he could maintain a

profit. He also testified that he created AMC essentially to separate his

business interests from Casey, since she would be inheriting Donna’s

ownership in the company.

In her petition for damages, Casey alleges that Jimmie has shifted

value from ESPS to AMC by moving customers, failing to pay rent for

certain depreciable assets owned by ESPS, and shifting goodwill. She refers

to the Whitelaw Report, dated November 8, 2020, which concluded that:

AMC realized approximately $263,893.52 in income from customers shifted

from ESPS from 2015 through 2019; AMC owed ESPS estimated rents of

$19,120 for 2015, $18,860 for 2016, and $16,821 for 2017; and the value of

goodwill of approximately $43,135.44 was shifted from ESPS to AMC

during the years 2020 and 2021. She also alleges that Jimmie caused ESPS

to make loan payments toward a certain personal loan incurred by Jimmie
10

while also seeking reimbursements from ESPS for payments he made

personally on that loan. She further claims that Jimmie has taken other steps

to reduce the value of ESPS, including the failure to account for ESPS’s

ownership of an airplane and certain property in the Bahamas.

Casey claims that Jimmie breached his duty as executor to preserve

the shares of ESPS, including by failure to assert shareholder rights. She

references Jimmie’s fiduciary obligations enumerated in La. C.C.P. art.

3191, in part, as follows:

A succession representative is a fiduciary with respect to the
succession, and shall have the duty of collecting, preserving, and
managing the property of the succession in accordance with law.
He shall act at all times as a prudent administrator, and shall be
personally responsible for all damages resulting from his failure
so to act.

She also refers to the requirement of La. C.C.P. art. 3211 that a succession

representative must enforce all obligations in favor of the succession. Casey

urges that Jimmie has a fiduciary obligation to Casey as a legatee of the

estate who would ultimately have a shareholder interest in ESPS, and has

failed to protect her interests as such shareholder. She claims that Jimmie’s

actions in diminishing the value of the estate’s shares of ESPS are included

in his duties as executor because an executor’s duty encompasses breaches

that occurred prior to his appointment; therefore, his actions are subject to

the longer applicable prescriptive period.

Casey refers to several cases in which succession representatives held

the dual positions of executor/administrator and a corporate officer, wherein

courts found that the succession representative breached his or her fiduciary

duty by their acts as a corporate officer. In Succession of Dunham, 408 So.

2d 888 (La. 1981), the executrix was also an officer and director of a closely

11

held corporation who had obtained court authorization to sell stock owned

by the estate back to the corporation. The Louisiana Supreme Court

ultimately held that, pursuant to La. C.C.P. art. 3191, the decedent’s children

could reserve the right to seek damages against the executrix, and upheld the

determination that the executrix breached her fiduciary duty in permitting

the stock sale at the authorized price because the corporation received

significant assets after the sale. It noted that, because the executor was

active in the governance of the corporation, she should have known the

corporation would receive additional assets shortly after the sale and that the

sales price should have been higher.

In Scurria v. Hodge, 31,207 (La. App. 2 Cir. 10/30/98), 720 So. 2d

460, writ denied, 99-0011 (La. 3/19/99), 739 So. 2d 782, this Court held that

the co-administrator of a succession who was also an officer and director of

a closely held corporation breached his fiduciary duty in acquiring stock

from the succession at a price far below fair market value. The Court

analyzed the duties of both a succession representative and a corporate

officer, and determined that a breach occurred in both capacities.

Casey also claims that caselaw supports a finding of a breach of a

succession representative’s duty even when the alleged acts occurred prior to

appointment. She refers to Succession of McNeal, 50,498 (La. App. 2 Cir.

02/24/16), 188 So. 3d 1089, writ denied, 16-0836 (La. 6/17/16), 192 So. 3d

766, in which suit was brought against an executor for misappropriation that

occurred while he was trustee of a revocable trust that was subsequently

terminated. This Court found that a determination of whether there was a

breach included an examination of the circumstances surrounding the

management of the trust since the executor’s duty encompassed any
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previous misappropriation or breach of fiduciary duty that occurred before

he became executor because of his duty to recover the succession property.

The Fifth Circuit’s holding in Succession of Theobold, 20-68 (La.

App. 5 Cir. 12/23/20), 309 So. 3d 878, was consistent with this Court in a

factually similar case considering prescription claims against the executor.

It held that it was of no consequence that the alleged misappropriation may

have occurred prior to appointment as executor because the fiduciary duty

encompassed any previous misappropriation undertaken even if it was not

concealed based on his duty to recover succession property.

Jimmie argues that Casey’s claims that he diverted corporate

opportunities from ESPS to AMC are in the nature of a derivative action

because the alleged losses would be borne by all shareholders of ESPS, not a

particular shareholder(s); therefore, the action would be governed by La.

R.S. 12:1502 and the specific two- and three-year prescriptive/preemptive

periods would apply. He urges that the caselaw she refers to is inapplicable

in this situation because the succession administrators in those cases were

alleged to have committed wrongs to or with stock owned by the estate, in

their capacities as administrators. He claims that the damage alleged was to

ESPS, not to the succession, and that any damage to the value of the stock is

an indirect result of his acts as a corporate officer.

Jimmie further urges that Casey attempts to wrongfully reclassify the

claims for corporate mismanagement as a personal action so that it Will be

subject the ten-year prescription. He refers to this Court’s holding in

Coleman v. Querbes Co. No. 1, 51,159 (La. App. 2 Cir. 2/15/17), 218 So. 3d

665, writ denied, 17-0694 (La. 6/29/17), 222 So. 3d 31, in which it refused

to “recast” claims for corporate mismanagement as personal actions subject
13

to La. C.C. art. 3499, reasoning that applying the ten-year prescriptive

period over the specific periods for derivative suits would effectively negate

La. R.S. 12:1502.

Jimmie also refers to Succession of Poteet, 17-710 (La. App. 3 Cir.

1/31/18), 238 So. 3d 1020, wherein the Third Circuit held that La. R.S.

12:1502 clearly applied to allegations that a corporate officer

misappropriated property belonging to the corporation, as well as to

inappropriate expenditures and disbursals over a period of time. The Court

specifically held that the introductory clause of La. C.C. art. 3499 has been

held to be a “catch-all provision” that covers personal actions not

specifically covered by any other prescriptive period such as La. R.S.

12:1502 which provides a clear prescriptive period applicable to the matter,

making La. C.C. art. 3499 inapplicable.

Casey’s claim for damages is clearly based on Jimmie’s actions as an

officer of ESPS. Her allegations regarding ESPS’s corporate value concern

an injury to the corporation itself and an indirect injury to a shareholder.

Her petition includes specific allegations all concerning the reduction of the

value of ESPS, including but not limited to, unrealized income from shifting

customers and misallocated loan reimbursements. She claims that the

reduction in ESPS’s value reduces the value of the estate, thereby resulting

in her claim falling under the purview of the Jimmie’s fiduciary duty as

executor to manage and preserve property and recover any misappropriated

estate funds.

The 50% of ESPS shares were properly included as assets of the

estate, possession of which would be transferred to Casey at the close of

estate administration. Casey is entitled to receive those shares in their
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entirety, but claims that their value was reduced since the date of Donna’s

death. There was no misappropriation of estate assets by Jimmie, either by

virtue of his role as corporate officer or as the executor, because the alleged

misappropriation was of the ESPS assets, a classic situation warranting a

shareholder derivative suit.

The caselaw cited by Casey is distinguishable. In those cases, the

claims for fraud and misappropriation were against an executor who had

formerly acted as either a trustee or in some mandatary capacity of the

decedent. The assets clearly belonged to the decedent, then to the estate

upon death. Further, the court found that the actions fell directly within the

statute with a longer prescriptive period. In this case, the assets involved are

that of ESPS, and La. R.S. 12:1502 directly applies, whereas La. C.C. art.

3499 is merely a catch-all provision.

La. R.S. 12:1502, Prescription vs. Peremption; Commencement

The applicable prescriptive or peremptive period for Casey’s

shareholder derivative action is stated in the applicable portions of La. R.S.

12:1502, as follows:

C. No action for damages against any person described in
Subsection A of this Section for an unlawful distribution, return
of an unlawful distribution, or for breach of fiduciary duty,
including without limitation an action for gross negligence, but
excluding any action covered by the provisions of Subsection D
of this Section, shall be brought unless it is filed in a court of
competent jurisdiction and proper venue within one year from
the date of the alleged act, omission, or neglect, or within one
year from the date that the alleged act, omission, or neglect is
discovered or should have been discovered, but in no event
shall an action covered by the provisions of this Subsection be
brought more than three years from the date of the alleged
act, omission, or neglect.

D. No action for damages against any person listed in
Subsection A of this Section for intentional tortious
misconduct, or for an intentional breach of a duty of loyalty, or
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for an intentional unlawful distribution, or for acts or omissions
in bad faith, or involving fraud, or a knowing and intentional
violation of law, shall be brought unless it is filed in a court of
competent jurisdiction and proper venue within two years from
the date of the alleged act or omission, or within two years from
the date the alleged act or omission is discovered or should
have been discovered, but in no event shall an action covered
by the provisions of this Subsection be brought more than
three years from the date of the alleged act or omission.

E. The time limitations provided in this Section shall not be
subject to suspension on any grounds or interruption except
by timely suit filed in a court of competent jurisdiction and
proper venue. [Emphasis added.]

The applicable prescriptive period for Casey’s derivative action would be, at

most, two years from the time she knew or should have known of Jimmie’s

alleged misdeeds. However, the statute also clearly provides a peremptive

period of three years from the date the misdeeds occurred.

The alleged act in Casey’s petition for damages refers to Jimmie’s

general shifting of value from ESPS to AMC by way of moving customers,

failing to pay rent for ESPS assets, shifting goodwill, misallocations of loan

payments, and neglecting to include certain ESPS assets. According to the

Whitelaw Report, this overall shifting of value commenced in 2015 when

AMC began to discover income from customers moved from ESPS.

Casey had the ability to obtain information regarding her claims at the

onset of Jimmie’s alleged actions in 2015 because she was either acting as

the executrix of the estate (until February 27, 2017) or had ownership rights

and priority while there was no acting succession representative (until May

29, 2019). The first indication of her knowledge of Jimmie’s alleged

breaches was in her letter dated September 20, 2017, which was attached to

her opposition of Jimmie’s petition for appointment as dative executor, in

which she stated that she suspected that ESPS’s business had been diverted

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and specifically enumerated her allegations. Casey had also taken Jimmie’s

deposition in June 2018 and asked questions about ESPS and AMC. She

sought production of AMC records from Jimmie on February 9, 2019.

The 2017 letter provides in detail Casey’s allegations against Jimmie.

She states:

[Casey has] reviewed ESPS’s tax returns with a CPA, and the tax
returns are improper. The Estate should have been listed as a
50% owner in ESPS for the years 2013-2016. We are also
concerned that no profits have been set aside for the estate.
Instead, Mr. Tripp has continuously paid himself. [Portion
omitted.] It appears on paper that the company suddenly divested
itself of business in 2015 and/or 2016. After grossing 1 million
dollars in 2012, $1.4 million in 2013, $1.7 in 2014, and
$870,000.00 in 2015, the company grossed a meager
$116,000.00 in 2016. I strongly suspect that the business has
been diverted from ESPS.

It is clear that Casey had sufficient knowledge to support her claim as

evidenced by her September 2017 letter. However, we find that Jimmie’s

actions should have been discovered by Casey while she was acting as

independent executor, pursuant to her fiduciary obligations imposed by La.

C.C.P. art. 3191. The alleged shifting of value began in 2015 shortly after

the creation of AMC and Casey was not removed until February 27, 2017.

In fact, the trial court based its order removing her as executrix on the fact

that she had failed to timely perform her duties as executor.

Casey had two years to bring a claim under La. R.S. 12:1502 before it

prescribed, which would be February 27, 2019. She did not file her petition

for damages until September 1, 2022. Therefore, a shareholder derivative

action had clearly prescribed, barring the claim.

In addition to the prescriptive provisions, La. R.S. 12:1502 also

perempts an action brought more than three years from the date of the

alleged act or omission. The alleged act referred to in Casey’s petition is the
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shifting of value from ESPS to AMC, which began in 2015, as indicated in

the Whitelaw Report. As such, the peremptive period in which to bring a

shareholder derivative action would be at some point in 2018, clearly barring

Casey’s action for damages.

La. C.C. art. 3499, Prescription of Personal Action

La. C.C. art. 3499 provides simply that “Unless otherwise provided by

legislation, a personal action is subject to a liberative prescription of ten

years.” The clear peremptive language of the 12:1502 dictates that a

shareholder derivative suit shall not “be brought more than three years from

the date of the alleged act or omission” and that the “time limitations

provided in this Section shall not be subject to suspension on any grounds or

interruption.”

As to the acts alleged to have been committed by Jimmie as corporate

officer of ESPS prior to his appointment as executor, this Court agrees with

Jimmie’s argument that the specific time limits for derivative suits in La.

R.S. 12:1502 trump the general period for personal actions in La. C.C. art.

3499 since a more specific statute controls over a general statute. Burge v.

State, 10-2229 (La. 2/11/11), 54 So. 3d 1110. When two statutes are in

conflict, the statute which is more specifically directed to the matter at issue

must prevail as an exception to the more general statute. Smith v. Cajun

Insulation, Inc., 392 So. 2d 398 (La. 1980); Esteve v. Allstate Ins. Co., 351

So. 2d 117 (La. 1977). The general ten-year prescription of La. C.C. art.

3499, as that article indicates, applies only in the absence of any other

statutory mandate. We find Coleman, supra, to be persuasive that La. R.S.

12:1502 would effectively be negated were the ten-year prescriptive period

of La. C.C. art. 3499 to apply instead.
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In general, an executor has a duty to enforce obligations of the estate,

such as pursuing a shareholder derivative action based on the breach of an

officer’s duty that affects the value of corporate shares owned by the estate.

The executor would need to file that particular type of claim within the

applicable prescriptive period provided in La. R.S. 12:1502. If that action

had prescribed prior to an executor’s appointment, there would obviously be

no such duty as an executor to enforce the prescribed claim.

If a corporate officer of a company whose shares are owned by an

estate breached his fiduciary duty while also serving as a succession

representative of that estate, the executor could not sue himself; rather, his

breach as an officer would be imputed to him in his capacity as executor.

An administrator cannot in his own right sue himself individually. Boone v.

Boone, 152 La. 208, 92 So. 861 (1922). However, the actions of an executor

can be imputed to him as a corporate officer. In Fuller v. Baggette, 36,952

(La. App. 2 Cir. 5/6/03), 847 So. 2d 26, writ denied, 03-2076 (La. 11/7/03),

857 So. 2d 498, an executor’s request to sell succession property for well

below fair market value that would ultimately be purchased by a company

for which he was an officer, was held to be a breach of his duty as

succession representative and the ten-year prescription period applied. This

Court held that the officer’s sale of property was tantamount to a sale by the

fiduciary himself. Notably, the original breach occurred in his capacity as

executor.

If the executor had not been appointed until after he committed the

breaches as the corporate officer, the officer’s duty may still be imputed to

his capacity as executor due to the fact that the executor is the proper person

to bring the action against the officer, i.e., no other individual is authorized
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to bring the action. However, relevant prescriptive/peremptive periods still

apply – in this case, those in La. R.S. 12:1502 concerning shareholder

derivative suits. The action was perempted three years after Jimmie’s

alleged breaches as corporate officer, prior to his appointment as executor.

There would be no claim for fiduciary breach as succession representative

without the underlying claim of a corporate officer breach, and it cannot then

be “revived” solely because an executor is the same individual as the

corporate officer. Once Jimmie was appointed executor by the court, he

owed a fiduciary duty to the estate and any action or inaction by him

resulting in damage to the estate would be subject to the 10-year prescriptive

period as set forth in La. C.C. art. 3499.

For the foregoing reasons, we conclude that claims against Jimmie for

actions taken by him prior to his appointment as executor are perempted

because those claims are shareholder derivative claims. Any claims related

to actions taken, or not taken, by Jimmie after his appointment as executor

are subject to the 10-year prescriptive period under La. C.C. art. 3499 and

survive the exceptions of prescriptions and peremption.

CONCLUSION

We AFFIRM the judgment insofar as it applies to the prescription of

the derivative actions. We REVERSE the portion of the judgment that

dismisses Casey’s claims as to Jimmie’s duties as executor, fiduciary in

nature, relating to his actions or inactions as executor. All costs are shared

equally by the parties. This matter is remanded to the trial court for further

proceedings.

AFFIRMED IN PART, REVERSED IN PART AND

REMANDED.
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