Robert H. Rhyne, Jr. v. Omni Energy Services Corp.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

14-711

ROBERT H. RHYNE, JR. AND BRENT TRAUTH

VERSUS

OMNI ENERGY SERVICES CORP.

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APPEAL FROM THE
FIFTEENTH JUDICIAL DISTRICT COURT
PARISH OF LAFAYETTE, NO. 2013-4316 C/W 2009-3396
HONORABLE GLENNON P. EVERETT, 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 J.
David Painter, Judges.

AFFIRMED.

Randy Paul Angelle
Boyer, Hebert, Abels & Angelle, LLC
401 East Mills Avenue
Breaux Bridge, LA 70517
Telephone: (337) 336-8285
COUNSEL FOR:
Defendants/Appellees - Edward E. Colson, III, Dennis R. Sciotto, and
Ronald E. Gerevas

Alan K. Breaud
Timothy Wayne Basden
Breaud & Meyers, APLC
P. O. Box 3448
Lafayette, LA 70503
Telephone: (337) 266-2200
COUNSEL FOR:
Plaintiff/Appellee - OMNI Energy Services Corp.

David Michael Kaufman
Elmore, Griffin
P. O. Box 4604
Lafayette, LA 70502-4604
Telephone: (337) 233-2417
COUNSEL FOR:
Defendants/Appellants - Robert H. Rhyne, Jr. and Brent Trauth

André F. Toce
The Toce Firm, PLC
1112 Bayou Tortue Road
Broussard, LA 70518
Telephone: (337) 233-6818
COUNSEL FOR:
Defendants/Appellants - Robert H. Rhyne, Jr. and Brent Trauth

Robert Joseph Burns, Jr.
2141 Quail Run Drive
Baton Rouge, LA 70808
Telephone: (225) 767-7730
COUNSEL FOR:
Defendant/Appellee - XL Specialty Casualty Company

David Michael Thorguson
Bourgeois Thorguson, L.L.C.
P. O. Box 3006
Morgan City, LA 70381-3006
Telephone: (985) 384-2055
COUNSEL FOR:
Defendans/Appellees - Edward E. Colson, III, Dennis R. Sciotto, and
Ronald E. Gerevas

THIBODEAUX, Chief Judge.

This dispute boasts a lengthy and complex procedural history, in

which Robert H. Rhyne, Jr. and Brent Trauth appeal a Lafayette Parish trial court

judgment that (1) denied appellants’ exception of lack of jurisdiction, (2) granted

appellee’s exception of no cause of action, and (3) granted defendant XL Specialty

Insurance’s motion for summary judgment. Appellants Rhyne and Trauth asserted

claims against OMNI Energy Services (OMNI), seven OMNI Directors, XL

Specialty Insurance Company, Richard Mager, and Cove Properties, LLC in

federal court, Iberia Parish, St. Martin Parish, and Lafayette Parish. The claims

asserted related to a Stock Purchase and Sales Agreement (SPSA) between OMNI

and Preheat Inc., sold by Rhyne and Trauth.

All claims against OMNI and the directors in their capacity as

directors were ultimately dismissed in St. Martin Parish. Three directors then

remained in the litigation for acts or omissions outside of their director capacity.

The suit was transferred to Lafayette Parish and consolidated with a suit previously

filed by OMNI against Rhyne and Trauth. That original Lafayette suit was

appealed and a decision rendered by this Court in Omni Energy Services Corp. v.

Robert H. Rhyne, Jr., et al., 14-251 c/w 14-322, 14-323 (La.App. 3 Cir. 10/15/14),

__ So.3d __. The remaining defendants in the current suit now before this Court

were dismissed by the trial court via a grant of no cause of action and motion for

summary judgment.

Reasoning that (1) the trial court had jurisdiction to hear the

exceptions, (2) appellants have no right of action to maintain the suit after they

confessed no claims against the directors outside their capacity as OMNI directors

exist, and (3) XL Specialty Insurance Company is not liable to Rhyne and Trauth,

we affirm the trial court’s April 14, 2014 judgment as amended.

I.

ISSUES

We are entreated to consider whether:

1. the trial court had jurisdiction to rule on the exception of no cause of
action and motion for summary judgment when the question of venue
was on appeal in the consolidated case.

2. the portion of the appeal relating to the April 26, 2011 judgment
should be stricken from the appellants’ brief.

3. the trial court erred in granting defendants’ exception of no cause of
action.

4. the trial court erred in granting XL Specialty Insurance’s motion for
summary judgment.

II.

FACTS AND PROCEDURAL HISTORY

The claims originally asserted by plaintiffs/appellants related to a

Stock Purchase and Sales Agreement (SPSA) between OMNI and Preheat Inc.,

whereby OMNI purchased Preheat via stock sold by Rhyne and Trauth. As per the

agreement, Rhyne and Trauth would operate Preheat as OMNI employees. As part

of the purchase price, OMNI issued two promissory notes. Payment on the

promissory notes would not be made to Rhyne and Trauth, however, if either

resigned or was terminated with cause before the maturity date on the notes. Prior

to the maturity dates, Rhyne was terminated with cause, and Trauth allegedly

resigned. Rhyne and Trauth filed suit alleging several alternative theories of

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recovery including nullity of the SPSA, wrongful termination, and tortious

interference with the SPSA.

This suit currently on appeal arises from Docket Number 2013-4316

(Lafayette Parish II), which was originally filed in federal court. The federal issues

were dismissed and the federal court declined to extend pendent jurisdiction over

the remaining issues. The suit was later filed in St. Martin Parish on May 10,

2010, and ultimately transferred to Lafayette Parish. Once in Lafayette, the case

was consolidated with Docket Number 2009-3396 (Lafayette Parish I) originally

filed on June 9, 2009.

In response to the suit filed in St. Martin Parish, defendants OMNI

and the directors filed exceptions of venue and lis pendens. Those directors

included Richard White, Barry Kaufman, Brian Recatto, James Eckert, Dennis

Sciotto, Edward Colson, III, and Ronald Gerevas. The district court granted the

exceptions on April 26, 2011, specifically to OMNI, White, Kaufman, Recatto, and

Eckert. The exceptions were also granted in part to Sciotto, Colson, and Gerevas,

but only for any acts or omissions occurring outside their duties as directors.

Therefore, the remaining defendants after the judgment on the exceptions were

Richard Mager, Cove Partners, Sciotto, Colson, and Gerevas, with the liability of

the later three only arising from claims against them outside their capacity as

directors. The judgment on the exceptions of venue and lis pendens was not

appealed and a supervisory writ was not applied for.

The St. Martin Parish suit was then removed to federal court by

defendants Richard Mager and Cove Partners, LLC, but ultimately remanded to St.

Martin Parish on May 1, 2012. Appellants did not appeal or seek supervisory writs

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for the April 26, 2011 grant of exceptions of venue or lis pendens either before

removal or after remand to St. Martin Parish.

Meanwhile, in Lafayette Parish I, appellants Rhyne and Trauth filed a

reconventional demand that reiterated the allegations made by them in the St.

Martin Parish suit, including those claims against parties that had been dismissed

in St. Martin.

On March 6, 2013, defendant directors Sciotto, Colson, and Gerevas

filed a peremptory exception of no cause of action in the St. Martin Parish suit.

The directors stated that they were dismissed from the suit in their official capacity

as directors of OMNI by the grant of improper venue and lis pendens. They next

alleged that Rhyne and Trauth’s petition did not assert any claim against them

outside of their official capacity, and, therefore, there was no cause of action

remaining against them. Prior to the hearing on the exception, the remaining

parties agreed to transfer the suit to Lafayette and consolidate it with the case

already pending there. The suit was transferred to Lafayette and consolidated with

Docket Number 2009-3396 (Lafayette Parish I) as per agreement of the parties.

The suits continued on two separate tracts. The exception of no cause of action,

originally filed in St. Martin Parish, was now set for hearing in Lafayette.

Prior to the no cause of action hearing, appellants Rhyne and Trauth

filed a pleading titled “Peremptory Exception of Lack of Jurisdiction” alleging that

the court had no jurisdiction to hear the exception. Rhyne and Trauth based their

argument on the fact that Lafayette Parish I was on appeal. The appeal asked

whether the trial court erred in partially denying a motion for new trial in Lafayette

Parish I, which dismissed all claims against the directors, defendants-in-

reconvention, in their official capacity on the grounds of prescription. Appellants

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contend that the decision on appeal would inherently decide whether or not venue

had been proper in federal court and in St. Martin Parish for the claims against the

directors. Furthermore, that the decision on appeal is intertwined with the no cause

of action exception at issue in the Lafayette Parish II suit. The trial court in

Lafayette Parish II ultimately denied Rhyne and Trauth’s exception of no

jurisdiction in a judgment dated April 14, 2014. The trial court further granted

defendant directors’ exception of no cause of action as well as XL Specialty

Insurance Co.’s motion for summary judgment. Rhyne and Trauth now appeal that

April 14, 2014 judgment in Lafayette Parish II.

III.

LAW AND DISCUSSION

Denial of Exception of Lack of Jurisdiction

An exception of lack of subject matter jurisdiction raises a question of

law, which is reviewed de novo. Gandy v. Key Realty, L.L.C., 13-712 (La.App. 3

Cir. 12/11/13), 128 So.3d 678.

Appellants argue that the trial court in Lafayette Parish II was

divested of jurisdiction to take any action while the partial denial of a motion for

new trial in Lafayette Parish I was being appealed. The motion for new trial was

related to a prior November judgment in Lafayette Parish I. In that judgment, the

trial court granted plaintiffs-in-reconvention a new trial only for alleged tortious

interference claims against three defendants-in-reconvention, namely Sciotto,

Colson, and Gerevas. This judgment therefore denied the new trial, but carved out

and maintained those claims pending in Lafayette II.

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According to Louisiana Code of Civil Procedure Article 2088,

jurisdiction of the trial court is divested over all matters in the case reviewable

under the appeal when one has been timely filed and granted. Matters not

reviewable under the appeal, however, remain within the jurisdiction of the trial

court. La.Code Civ.P. art. 2088.

When two cases are consolidated, they each retain their own status as

separate procedural entities. Dendy v. City Nat. Bank, 06-2436 (La.App. 1 Cir.

10/17/07), 977 So.2d 8. “Procedural rights peculiar to one case are not rendered

applicable to a companion case by the mere fact of consolidation” and “filing a

pleading or motion in one of several consolidated cases does not procedurally

affect the others.” Id. at 12. The Louisiana Supreme Court has stated that

consolidation is “a procedural device which allows a trial court to deal with similar

issues of law or fact in one trial; it does not merge the parties, affect the running of

delays, or authorize consolidation of judgments or appeals.” Davis v. Am. Home

Prods. Corp., 95-1035, p. 1 (La. 5/19/95), 654 So.2d 681, 681. Furthermore, an

appeal in a proceeding that has previously been consolidated with another “does

not serve as such to the benefit of another party in the joined action.” Darouse v.

Mamon, 201 So.2d 362, 364 (La.App. 1 Cir. 6/30/67).

The issues remaining in the Lafayette Parish II suit, from which this

appeal originates, are those involving the alleged intentional acts of defendant-

directors Sciotto, Colson, and Gerevas in their capacity outside that of directors for

OMNI. Those issues pertaining to XL Specialty Insurance Company also remain.

These are the sole remaining issues that were transferred to Lafayette Parish from

St. Martin Parish. The St. Martin Parish trial court dismissed claims against OMNI

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as well as all directors in their official capacity for improper venue and lis pendens,

thereby leaving only the claims against directors outside their director capacity.

The issues in front of the trial court in the Lafayette Parish II suit were

specifically left out of the judgment rendered in Lafayette Parish I from which an

appeal was taken. The judgment in Lafayette Parish carved out the issues of the

directors outside their capacity as directors for future consideration. Therefore, the

trial court did not lose jurisdiction over Lafayette Parish II because the issues in

this suit were not reviewable on appeal in the consolidated case.

Motion to Strike the April 26, 2011 Judgment from Appellants’ Brief

Appellants Rhyne and Trauth essentially seek to appeal the April 26,

2011 judgment (2011 Judgment) rendered in St. Martin Parish, which dismissed

several parties from the litigation based on improper venue and lis pendens. The

parties dismissed were OMNI, Richard White, Barry Kaufman, Brian Recatto, and

James Eckert. The judgment also dismissed claims against Dennis Sciotto, Edward

Colson, III, and Ronald Gerevas in their official capacity as directors of OMNI, but

maintained those claims against them in any capacity outside that of directors.

Appellees argue that the 2011 Judgment was an immediately appealable, final

judgment, and that the time delay for appeal has run. Appellees, therefore, request

that all argument related to the 2011 Judgment be stricken from appellants’ brief.

Louisiana Code of Civil Procedure Article 1915(A) states in
pertinent part:

A final judgment may be rendered and signed by
the court, even though it may not grant the successful
party or parties all of the relief prayed for, or may not
adjudicate all of the issues in the case, when the court:

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(1) Dismisses the suit as to less than all of the
parties, defendants, third party plaintiffs, third party
defendants, or interveners.

Therefore, when “one party is completely dismissed from a suit, the judgment is

final under Article 1915(A)(1), and there is no requirement to have it designated as

final.” Jeansonne v. New York Life Ins. Co., 08-932, p. 9 (La.App. 3 Cir. 5/20/09),

11 So.3d 1160, 1168. The judgment dismissing OMNI, White, Kaufman, Recatto,

and Eckert was final under 1915(A) because these parties were completely

dismissed from the suit, and was even designated as final by the district court judge

in the 2011 Judgment. The judgment as to the remaining defendants, Sciotto,

Colson, and Gerevas, was an interlocutory judgment and not immediately

appealable.

Under Louisiana Code of Civil Procedure Article 1915(B)(1), “a

partial judgment as to one or more but less than all of the claims, demands, issues,

or theories against a party . . . shall not constitute a final judgment unless

designated as a final judgment. . . .” There was no such designation by the judge in

this case. The 2011 Judgment dismissed only those claims against Sciotto, Colson,

and Gerevas in their capacity as directors, but left any claims against them outside

that capacity to be litigated. The judgment as to these remaining parties was

interlocutory and not final. “An interlocutory judgment is appealable only when

expressly provided by law.” La.Code Civ.P. art. 2083.

However, the 2011 Judgment cannot be considered now on appeal

even though it was an interlocutory judgment as to the parties then. The 2011

Judgment dismissed claims against the remaining defendants, now appellees, in

their capacity as directors because of improper venue and lis pendens. In order to

challenge a venue decision, if the judgment is not otherwise appealable, a timely

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supervisory writ must be sought with the court of appeal. Land v. Vidrine, 10-1342

(La. 3/15/11), 62 So.3d 36. “[L]itigants are required to seek review via

supervisory writs. Failure to timely file a writ application on a venue ruling

amounts to a waiver of any objection thereto.” Id at 40. Plaintiffs did not seek a

supervisory writ for the venue issue at any time in this litigation and, therefore, the

2011 Judgment dismissing those claims against appellees in their director capacity

because of improper venue is final.

Based upon the foregoing, the only judgment properly before this

Court is that of April 14, 2014 in the Lafayette Parish II suit, in which Sciotto,

Colson, and Gerevas remain in a non-director capacity, as well as claims against

XL Specialty Insurance Company. Appellants’ assignments of error and

arguments addressing the 2011 judgment are hereby ordered stricken from

appellants’ brief.

Grant of Peremptory Exception of No Cause of Action

At issue on this appeal is whether there existed a cause of action in the

Lafayette Parish II suit. When the suit was transferred from St. Martin Parish to

Lafayette, the remaining claims were against Dennis Sciotto, Edward Colson, III,

and Ronald Gerevas for actions taken outside of their official capacity as directors

of OMNI. A cause of action must exist on the face of the complaint. La.Code

Civ.P. art. 891. “No evidence may be introduced at any time to support or

controvert the objection that the petition fails to state a cause of action.” La.Code.

Civ.P. art. 931. Therefore, in reviewing the trial court’s grant of no cause of

action, the question presented is whether the original petition filed in St. Martin

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Parish stated a cause of action against these remaining defendants in a non-director

capacity.

However, due to a judicial confession made by Mr. Toce, appellants’

counsel, this Court will exercise its authority to take notice of an exception of no

right of action in this case, as opposed to a no cause of action. According to

Louisiana Code of Civil Procedure Article 927(B), the failure of a party to state a

right of action may be judicially noticed on the court’s own motion at both the trial

and appellate level. “Generally speaking, an exception of no right of action serves

to question the right of a plaintiff to maintain [the] suit.” Roy O. Martin Lumber

Co. v. Saint Denis Securities Co., 72 So.2d 257, 258 (La.1954). In determining

whether the plaintiff has a legal interest in the litigation, the court is not limited to

the petition as it is with determining whether a cause of action exists. Arcadian

Corp. v. Olin Corp., 97-174 (La.App. 3 Cir. 6/18/97), 698 So.2d 9. Instead,

evidence is admissible to show whether the plaintiff has the right he claims. Id.

Mr. Toce made an in-court statement that Rhyne and Trauth do not

have any claims against Sciotto, Colson, and Gerevas as individuals outside of

their capacity as OMNI directors. “A judicial confession is a declaration made by

a party in a judicial proceeding. The confession constitutes full proof against the

party who made it.” La.Civ.Code art. 1853. “Responses by counsel to questions

posed by the court may constitute judicial confessions, thereby relieving the

opposition of the necessity of introducing evidence.” Compensation Specialties,

L.L.C. v. New England Mut. Life Ins. Co., 08-1549, p. 9 (La.App. 1 Cir. 2/13/09), 6

So.3d 275, 281, writ denied, 09-575 (La. 4/24/09), 7 So.3d 1200.

On December 9, 2013, during the hearing for consolidation of the two

Lafayette cases, Mr. Toce stated on the record that plaintiffs, Rhyne and Trauth,

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“really don’t have any claims [against the remaining three defendants] outside their

capacity as Directors. The tortious interference claim is because they were

Directors and Officers . . . Unless they are Officers and Directors, there is no

tortious interference claim.” Therefore, because the only remaining claim in this

suit is against Sciotto, Colson, and Gerevas outside of their capacity as Directors

for OMNI, and Mr. Toce has admitted that the plaintiffs do not have any claims

against them in this capacity, no right of action exists. This Court recognizes, on

its own motion, and grants an exception of no right of action, dismissing

defendants Sciotto, Colson, and Gerevas.

Grant of Summary Judgment in Favor of XL Specialty Insurance Co.

The grant or denial of a motion for summary judgment is reviewed de

novo, “using the same criteria that govern the trial court’s determination of

whether summary judgment is appropriate; i.e. whether there is any genuine issue

of material fact, and whether the movant is entitled to judgment as a matter of

law.” Samaha v. Rau, 07-1726, pp. 3-4 (La. 2/26/08), 977 So.2d 880, 882-83

(citations omitted); La.Code Civ.P. art. 966.

XL Specialty Insurance Company insured OMNI and OMNI directors

by the definition of “Insured Person” in its policy with OMNI. All director

defendants in their official capacity were previously dismissed in St. Martin Parish.

Now, all claims against director defendants, in all capacities, in this litigation are

dismissed. There is no potential coverage under the policy for which XL Specialty

may be liable. The grant of XL Specialty Insurance Company’s motion for

summary judgment was proper.

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V.

CONCLUSION
Based upon the foregoing, the April 14, 2014 judgment denying

Rhyne and Trauth’s exception of lack of jurisdiction, and granting XL Specialty

Insurance’s motion for summary judgment is affirmed. Further, the Court grants

an exception of no right of action dismissing the remaining defendants. All costs

of this appeal are assessed to Appellants, Robert H. Rhyne and Brent Trauth.

AFFIRMED.

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