Belle-Jar Management, LLC v. Process Techs, LLC

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

09-1420

BELLE-JAR MANAGEMENT, L.L.C.

VERSUS

PROCESS TECHS, L.L.C., ET AL.

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APPEAL FROM THE
SIXTEENTH JUDICIAL DISTRICT COURT
PARISH OF IBERIA, NO. 109436-G
HONORABLE CHARLES LEE PORTER, DISTRICT JUDGE

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ULYSSES GENE THIBODEAUX
CHIEF JUDGE

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Court composed of Ulysses Gene Thibodeaux, Chief Judge, Sylvia R. Cooks, and
Elizabeth A. Pickett, Judges.

AFFIRMED.

Charles Morris Rush
Rush, Rush & Calogero
202 Magnate Drive
Lafayette, LA 70508
Telephone: (337) 235-2425
COUNSEL FOR:
Defendants/Appellants - Kram Management, L.L.C., Mark J. Kelly,
and Process Techs, L.L.C.

Paul Nicholls DeBaillon
DeBaillon & Miley
P. O. Box 51387
Lafayette, LA 70502
Telephone: (337) 237-0598
COUNSEL FOR:
Defendant/Appellee -Paul Nicholls DeBaillon, Liquidator

Lawrence Lee Lewis, III
Onebane Law Firm
P. O. Drawer 3507
Lafayette, LA 70502
Telephone: (337) 237-2660
COUNSEL FOR:
Plaintiff/Appellee - Belle-Jar Management, L.L.C.

THIBODEAUX, Chief Judge.

Process Techs is a Louisiana limited liability company whose members

are Kram Management, L.L.C. and Belle-Jar Management, L.L.C. The members

agreed to liquidate and dissolve Process Techs, and the parties entered into a

liquidation agreement. The Liquidation Agreement established the orderly winding

down of Process Techs’ ongoing business operations. Disputes arose during the

liquidation regarding several ongoing projects. After reviewing the projects, the

judicial liquidator discretionarily distributed the funds. Kram challenged the

liquidator’s distributions. The trial court approved the distributions recommended

by the liquidator. Kram appealed. For the foregoing reasons, we affirm the judgment

of the trial court.

I.

ISSUES

We must decide whether the trial court erred:

(1) in finding that Kram failed to exhaust its remedies as
provided in the Liquidation Agreement;

(2) in denying Kram’s objection to the proposed
distribution of funds that a setoff is due from Belle-
Jar for its failure to charge published rates on Job
1883; and,

(3) in finding insufficient evidence to show that Belle-
Jar usurped the installation of certain computers as
part of Jobs 1865 and 1866.

II.

FACTS AND PROCEDURAL HISTORY

Kram and Belle-Jar agreed to dissolve Process Techs, a company they

jointly owned. The parties entered into an Agreement and Plan for Liquidation of

Process Techs. The Liquidation Agreement established an orderly process to end

Process Techs’ business operations. All cash and receivables of the company were

divided equally between each member. The Liquidation Agreement provided that

Process Techs’ ongoing projects would be assigned to each member, with Process

Techs retaining the billing and receivables of those projects. The Agreement also

provided that each member would invoice Process Techs at an hourly rate of $45.00

per hour for all labor necessary to complete the project assigned, and Process Techs

would retain no less than a twenty percent profit.

Belle-Jar filed a Petition for Judicial Dissolution and Liquidation of

Process Techs after it became apparent that the members of the company were unable

to implement and complete the voluntary plan of liquidation and dissolution agreed

to in the Liquidation Agreement. At that time, the liquidator possessed funds in the

amount of $457,623.82, and only Belle-Jar and Kram had pending claims to the

funds. Since Kram and Belle-Jar disagreed as to the payment of claims, the liquidator

submitted a motion for proposed distribution of funds with the trial court. The

motion sought to authorize the liquidator to distribute funds to the members in

payment of claims each member had against Process Techs.

Pursuant to the terms of the Liquidation Agreement, Process Solutions,

L.L.C., a company owned by Mark Kelly, the owner of Kram, completed the projects

assigned to Kram under the Liquidation Agreement, and Failsafe Controls, L.L.C.,

a company owned by Kirk Robicheaux, the owner of Belle-Jar, completed the

projects assigned to Belle-Jar under the Liquidation Agreement. Failsafe submitted

to Process Techs invoices amounting to $52,517.00 for work performed by it, which

the liquidator proposed to pay. Process Solutions submitted invoices to Process

Techs in the amount of $18,293.77, which the liquidator also proposed to pay. The

liquidator, based upon information submitted by the parties, determined that one

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project assigned to Belle-Jar, Job 1883, failed to meet the twenty percent profit

margin required by the Liquidation Agreement and had a deficit of $3,260.75, which

was to be offset from any distributions payable to Belle-Jar. The liquidator also

determined that four projects assigned to Kram failed to meet the twenty percent

profit margin: Jobs 1989, 2022, 2013, and 2005. These jobs resulted in a deficit of

$1,022.63, which the liquidator proposed to offset from any distributions payable to

Kram. Belle-Jar agreed with the proposed distribution submitted by the liquidator,

subject to a correction regarding the profitability it achieved on Job 1883. After

reviewing updated information, Belle-Jar agreed that the job costs on the project were

$103,231.29 and that the profit on the job was $8,370.24, which resulted in a

deficiency of $12,276.02, rather than the offset of $3,260.75 proposed by the

liquidator.

Kram opposed the distribution proposed by the liquidator, alleging that

additional offsets should be charged against Belle-Jar. The trial court heard Kram’s

objections to the proposed distributions. The court approved the distributions

recommended by the liquidator and rejected Kram’s opposition to the proposed

distributions, with the exception of an increase in the offset to Belle-Jar for Job 1883,

an increase that Belle-Jar acknowledged and agreed to prior to the hearing. Kram

subsequently filed this devolutive appeal from the trial court’s judgment.

III.

LAW AND DISCUSSION

Standard of Review

We review the trial court’s judgment for manifest error.

[A] court of appeal may not set aside a trial court’s
or a jury’s finding of fact in the absence of “manifest error”
or unless it is “clearly wrong,” and where there is a conflict

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in the testimony, reasonable evaluations of credibility and
reasonable inferences of fact should not be disturbed upon
review, even though the appellate court may feel that its
own evaluations and inferences are as reasonable.

Rosell v. ESCO, 549 So.2d 840, 844 (La.1989) (citations omitted).

Alleged Failure to Charge “Published Rates”

Kram argues that the trial court erred in not ruling on Kram’s objection

to the proposed distribution based upon Belle-Jar’s failure to charge “published rates”

on Jobs 1954 and 1955. The trial court held that this objection was untimely and

without merit as Kram failed to exhaust the remedy provided in Section 3.01(d) of the

Liquidation Agreement.1 Specifically, Kram failed to invoke the dispute resolution

process regarding designation of a knowledgeable person to set rates and contest

disputes involving invoices.

Kram asserts that the “law of the case” doctrine precludes the trial court

from revisiting this issue since it previously ruled against Kram on this issue by

denying Kram’s Exception of Prematurity filed in response to the suit for judicial

liquidation. Kram is mistaken. The doctrine of “law of the case” does not apply here.

Law of the case is a discretionary principle which relates to (a) the binding force of

a trial judge’s ruling during the later stages of trial; (b) the conclusive effects of

appellate rulings at trial on remand; and (c) the rule that an appellate court ordinarily

will not reconsider its own rulings of law on a subsequent appeal in the same case.

Louisiana Land and Exploration Company v. Verdin, 95-2629 (La.App. 1 Cir.

9/27/96); 681 So.2d 63, 65, writ denied, 96-2629 (La. 12/13/96); 692 So.2d 1067.

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Section 3.01(d) of the Liquidation Agreement required that all invoices submitted to Process
Techs be mutually agreed upon by Kram and Belle-Jar and that any disputes regarding the invoice
amount were to be resolved by Bernard Duhon selecting a knowledgeable person in the oilfield
industry to determine the reasonableness of the rate to be paid by the company.

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The law of the case doctrine promotes consistency and efficiency, and the doctrine

avoids re-litigation of the same issues. Id.

Because the two issues considered by the trial court are separate and

distinct, the law of the case doctrine does not apply. First, in response to Belle-Jar’s

petition seeking judicial dissolution and liquidation of Process Techs, Kram filed an

exception of prematurity alleging that Belle-Jar failed to avail itself of Section 3.01(d)

of the Liquidation Agreement. The trial court denied the Exception of Prematurity,

as compliance with Section 3.01(d) of the Liquidation Agreement was not a

prerequisite to a party filing a suit for judicial dissolution and liquidation as Kram

alleged, but instead only applied to disputes involving invoices submitted for

payment to Process Techs.

Second, Kram’s objections with respect to Projects 1954 and 1955 relate

to invoices submitted to Process Techs for payment, and, therefore, quite clearly fall

within the provisions of Section 3.01(d).2 Thus, because the two issues were separate

and distinct, law of the case does not apply. We affirm the trial court’s judgment that

Kram failed to comply with the provisions of the Liquidation Agreement and was

precluded from making the claim.

Alleged Failure to Charge Setoff to Belle-Jar on Job 1883

Kram asserts that the trial court erred in denying Kram’s contention that

a setoff is due from Belle-Jar for its failure to charge published rates on Job 1883.

For the reasons we articulated in assessing Kram’s first assignment of

error, the trial court’s judgment is correct. The parties never agreed to charge

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Kram also asserts that “published rates” should have been charged. The Liquidation
Agreement, however, provides no requirement for a published rate, and we cannot infer a published
rate, as Kram suggests.

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published rates under the terms of the Liquidation Agreement, and Kram failed to

avail itself of the remedy to dispute an invoice provided under Section 3.01(d).

Kram also asserts that $6,340.00 should be offset from any distribution

to Belle-Jar on the basis that Kram was required to complete Job 1883 to satisfy the

customer, at a cost of $6,340.00 to Process Solutions. Process Solutions is not a party

to this action. Process Solutions neither intervened in this action, nor filed its own

claim for its alleged costs incurred in completing Job 1883. Process Solutions’ costs

and claims are not this court’s concern.

We find that the trial court’s judgment regarding Job 1883 was not

manifestly erroneous, and we affirm.

Installation of Computers on Jobs 1865 and 1866

Kram also asserts that the trial court erred in finding that there was

insufficient evidence that Belle-Jar usurped the installation of certain computers as

part of Jobs 1865 and 1866, resulting in loss profits to Process Techs. We disagree.

The trial court’s judgment was not manifestly erroneous.

The parties presented testimony on both sides of the issue. Kram

claimed that the work orders included installation language, but Robicheaux,

testifying on behalf of Belle-Jar, testified that the installation language that was added

to the work orders was not his handwriting. This issue presents a classic “he-

said/she-said” situation, and the trial court was left to weigh the credibility of the

witnesses and the evidence.

After hearing the disputed testimony and considering the disputed work

orders, the trial court denied Kram’s claim on this issue. In doing so, the court found

that no reference to the scope of the projects in the Liquidation Agreement existed,

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nor did the Agreement specify installation as part of the project assigned to Process

Techs at the time of liquidation.

We find that ample evidence existed in the record to support the factual

findings of the trial court, and we refuse to disturb the trial court’s judgment on this

issue.

IV.

CONCLUSION

For the foregoing reasons, we affirm the judgment of the trial court.

Costs of this appeal are assessed against Process Techs, L.L.C., Kram Management,

L.L.C., and Mark J. Kelly.

AFFIRMED.

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