The Cottonport Bank v. Lsj, LLC

STATE OF LOUISIANA

COURT OF APPEAL, THIRD CIRCUIT

16-569

THE COTTONPORT BANK

VERSUS

LSJ, L.L.C., ET AL.

**********
ON APPLICATION FOR SUPERVISORY WRITS FROM THE
TWELFTH JUDICIAL DISTRICT COURT
PARISH OF AVOYELLES, DOCKET NO. 2015-2516
HONORABLE KERRY SPRUILL, PRESIDING
**********

SYLVIA R. COOKS
JUDGE

**********

Court composed of Sylvia R. Cooks, Marc T. Amy and Billy Howard Ezell,
Judges.

WRIT DENIED.

Miche Moreau
Anthony J. Roy, III
Roy & Roy Law Office
117 East Ogden Street
P.O. Box 363
Marksville, LA 71351
(318) 253-0275
ATTORNEY FOR PETITIONER/RESPONDENT
The Cottonport Bank

Dennis A. Pennington
Michael J. Harig
Pennington & Martinez
4707 Bluebonnet Boulevard, Suite A
Baton Rouge, LA 70809
(225) 293-8880
ATTORNEY FOR DEFENDANTS/APPLICANTS
LSJ, L.L.C., Southeastern Crane, L.L.C., Flintstone Development, L.L.C., Cade
Dubois, Ashley Dubois, Clyde Dubois, Jr. and Dawn Dubois

Bradley L. Drell
Gold, Weems, Bruser, Sues & Rundell
2001 MacArthur Drive
Alexandria, LA 71301
(318) 445-6471
ATTORNEY FOR DEFENDANTS/APPLICANTS
LSJ, L.L.C., Southeastern Crane, L.L.C., Flintstone Development, L.L.C., Cade
Dubois, Ashley Dubois, Clyde Dubois, Jr. and Dawn Dubois

2

COOKS, Judge.

In this writ application, the relators-defendants, LSJ, L.L.C., Southeastern

Crane, L.L.C., Flintstone Development, L.L.C., Cade Dubois, Ashley Dubois,

Clyde Dubois, Jr. and Dawn Dubois, seek supervisory writs from the district

court’s judgment overruling their exceptions of improper venue. For the following

reason, we find no error in the district court’s ruling, and deny the writ application.

FACTS AND PROCEDURAL HISTORY

This case arises from the default on Promissory Notes securing loans from

respondent, The Cottonport Bank, to Major Industry Service, Inc. (MIS), a

company in the business of selling and leasing cranes. Clyde Dubois, Jr. (Dubois),

a relator herein and owner of MIS, was the guarantor for the loans, and a security

interest in MIS’s movable equipment and property, namely cranes, was the

collateral for the loans. When MIS and Dubois defaulted on the loans, Cottonport

Bank obtained a judgment on March 11, 2016 against them in the amount of

$2,213,950.07 (which includes attorney fees). In its judgment, the trial court

recognized that Cottonport Bank had a security interest in approximately 186

movables constituting its collateral. This litigation took place in the Twentieth

Judicial District Court.

Cottonport Bank asserts, after the default, it learned that: (1) the collateral

was not owned, controlled or managed by MIS, contrary to Dubois’ claim, (2)

Dubois owned another company, LSJ, L.L.C. (LSJ) and moved assets back and

forth between the two companies, and (3) MIS began to operate under a different

name, Southeastern Crane, L.L.C. (Southeastern Crane). Out of the 186 items

listed as collateral in the default judgment, the bank was able to locate about ten

pieces of equipment in Baton Rouge. Cottonport Bank subsequently filed a

Petition for Conversion, Fraud, Deceit, Piercing the Corporate Veil,

Misrepresentation, and Unfair or Deceptive Practices against companies owned by

3

the relators, including Dubois, and companies owned by Dubois and family

members involved in those companies. The respective companies and family

members were domiciled in four different parishes. That petition was filed in the

Twelfth Judicial District Court, Avoyelles Parish, on January 13, 2016. Cottonport

Bank asserted there was a single elaborate scheme devised by Dubois to conceal

assets constituting the collateral. Therefore, rather than file four separate lawsuits

in four separate parishes regarding the same set of facts, Cottonport Bank filed its

lawsuit in Avoyelles Parish. Cottonport Bank acknowledged it was not aware of

where the wrongful conduct occurred; thus, it filed suit in Avoyelles Parish,

contending that was the site where the damages were sustained. They maintain

this complies with La.Code Civ.P. art. 74, which allows suit to be filed where the

damages were sustained or where the wrongful conduct occurred.

In response, the relators filed respective exceptions of improper venue.1 A

hearing was held on April 4, 2016, and the matter was taken under advisement. On

June 6, 2016, the trial court denied the exceptions in a written judgment and issued

written reasons for ruling. The trial court specifically noted there were “limited

facts presented in this case.” The trial court concluded the record was devoid of

any evidence of any wrongful conduct occurring or damages sustained “in any

other parish than Avoyelles Parish.”

On June 16, 2016, the relators filed a motion for new trial for the purpose of

allowing the trial court to reconsider its ruling in light of this court’s ruling in

D&D Drilling & Exploration, Inc. v. XTO Energy, Inc., 15-626, 15-631 (La.App. 3

Cir. 5/4/16), 191 So.3d 1166, writ denied, 16-1540 (La. 11/18/16), ___ So.3d ___.

The relators also filed a motion to stay the proceeding. In lieu of a formal hearing,

a telephone conference on the motions was held on July 7, 2016, and both motions

1
The relators also filed dilatory exceptions of prematurity, lack of procedural capacity, and
improper cumulation of actions, which were passed by the parties as moot.
4

were denied. The relators then filed a writ application seeking review of the trial

court’s denial of the exceptions of improper venue. The writ was called up on the

court’s regular docket and argued before a panel of this court.

ANALYSIS

Initially, we note Cottonport Bank filed a “Motion to Supplement Appellate

Record, or in the Alternative, to Lift the Stay, and Allow the Trial Court to

Supplement the Record.” Specifically, due to error, two affidavits executed by the

private process server to be filed with the service return were not made part of the

record by the trial court. Cottonport Bank seeks to supplement the record with the

affidavits. This motion was referred to the panel, and we hereby grant the motion

to supplement the record to include the affidavits.

Cottonport Bank contended venue in Avoyelles Parish was appropriate

under La.Code Civ.P. art. 74, which provides, in pertinent part:

An action for the recovery of damages for an offense or quasi
offense may be brought in the parish where the wrongful conduct
occurred, or in the parish where the damages were sustained. An
action to enjoin the commission of an offense or quasi offense may be
brought in the parish where the wrongful conduct occurred or may
occur.

In its written reasons for judgment, the trial court attempted to determine

where the wrongful conduct occurred. The trial court specifically noted only

Cottonport Bank presented oral testimony and that the relators relied on Cottonport

Bank’s filings and memoranda. The trial court found the relators’ argument, that

the Nineteenth Judicial District Court was the most convenient forum for all

witnesses and was the parish where the alleged transactions occurred, was not

supported by the evidence and law.

The trial court discussed the testimony of Lynn Bordelon, a bank officer for

Cottonport Bank. Mr. Bordelon testified Clyde Dubois sent documentation to

Cottonport Bank that MIS owned equipment that was either co-owned, managed or

5

leased by other companies also owned by Mr. Dubois. Mr. Bordelon maintained

Cottonport Bank relied upon misrepresentations provided by Mr. Dubois when it

made accounting decisions in reference to the loan in question, decisions which

caused Cottonport Bank economic loss.

The trial court added that the trial testimony of bank officer Joshua Johns,

combined with that of Mr. Bordelon, supported the finding that venue was proper

in Avoyelles Parish. Mr. Johns testified that Mr. Dubois listed four separate

parishes as domiciles, and that the former address for MIS is a defunct business

site with a “for sale” sign posted. Mr. Johns also testified Southeastern Crane,

organized in 2015, designated the defunct business site of MIS as its registered

business location.

The trial court determined the wrongful act—the presentation of misleading

documentation regarding collateral—and Cottonport Bank’s subsequent reliance

on same occurred in Avoyelles Parish and resulted in the alleged damages to the

bank in Avoyelles Parish. The trial court also specifically noted the record was

void of any evidence that wrongful conduct occurred, or that damages were

sustained, in any parish other than Avoyelles Parish. Therefore, the trial court

concluded venue was proper in Avoyelles Parish.

The relators argue the rule of law established in Colvin v. Louisiana

Patient’s Compensation Fund Oversight Board, 06-1104 (La. 1/17/07), 947 So.2d

15, applies in this case. In Colvin, the Louisiana Supreme Court held that the situs

of where the damages were sustained was where the underlying acts occurred. The

trial court addressed the Colvin decision, noting this court in Juneau v. State, 06-

1653 (La.App. 3 Cir. 5/2/01), 956 So.2d 728, 732, writ denied, 07-1177 (La.

9/14/07), discussed Colvin as follows:

Our Louisiana Supreme Court granted writs and found that Bossier
Parish was an improper venue and that the only venue proper for these
suits was East Baton Rouge Parish as provided by La.R.S.

6

13:5104(A)[.] The Colvin court expressly abrogated the established
jurisprudence above that allowed for application of the general venue
statutes, La.Code Civ.P. arts[.] 42 and 71 through 85, to the State or
one of its agencies.

As such, the trial court concluded the Colvin decision was limited to cases against

the state where venue is proper in East Baton Rouge Parish.

Relators contend the rule of law established in Colvin was reiterated by this

court in D&D Drilling, 191 So.3d 1166, which did not involve the state. That

opinion provided:

We see no sound policy reason to ignore the legion of cases that hold
that the parish where the wrongful conduct occurred is the parish
where damages were sustained under Article 74. See, e.g., Town of
Eunice v. M&L Constr. Co., 123 So.2d 579 (La.App. 3 Cir. 1960). In
Fogleman Truck Line, Inc. v. Southern Bulk Carriers, Inc., 532 So.2d
226 (La.App. 3 Cir. 1988), we quoted with approval our colleagues on
the first circuit in Belser v. St. Paul Fire & Marine Ins., 509 So.2d 12
(La.App. 1 Cir. 1987). The Belser court undertook an exhaustive
analysis of the jurisprudence interpreting Article 74, and concluded:

The common thread that runs through the Coursey-
Foster-King-Williams-Lapeyrouse line of cases is that, if
any damage is caused to the plaintiff in the parish where
the wrongful conduct occurred, that parish, and no other,
is “the parish where the damages were sustained” for
purposes of Article 74. This holding is consistent with
the jurisprudence that Article 74 must be strictly
construed. This holding evidences public policy
determinations by the Coursey-Foster-King-Williams-
Lapeyrouse courts that forum shopping should be
minimized in actions for the recovery of damages for
offenses and quasi offenses.

Id. at 18-19. The loss of Rig 1 is the basis for D&D’s suit. That loss
occurred in LaSalle Parish. LaSalle Parish is the only proper venue
under Article 74.

Id. at 1170.

We find D&D Drilling distinguishable from this matter because there were

sufficient facts available to determine where the wrongful conduct occurred. In

D&D Drilling, the wrongful conduct that occurred was the loss of the drilling rig,

which occurred in LaSalle Parish. In the present case, we find there are numerous

questions, and precious few, if any, answers as to the ownership and location of the

7

cranes. The relators did not introduce any evidence at the hearing shedding light

on where the wrongful conduct occurred.

We agree with Cottonport Bank that the trial court correctly relied upon

Simmons v. Templeton, 96-592 (La.App. 4 Cir. 11/27/96), 684 So.2d 529, writ

denied, 96-3089 (La. 2/7/97), 688 So.2d 508, in which the sellers of stock filed suit

in Orleans Parish alleging damages from the buyer’s fraud in a sale. The court

found that because the sellers received a misleading financial report and entered

into the transaction in Orleans Parish, venue was proper in that parish, and not in

the parish where the documents were prepared. The court specifically found the

individuals had not sustained damage in the parish where the wrongful conduct,

preparation of the report, had occurred. The Simmons court concluded that venue

was proper in the parish where the plaintiffs relied on the report. The court

commented that its finding would not encourage forum shopping because the

single venue applied.

In its written reasons for ruling, the trial court discussed the ruling in

Simmons in relation to the present case:

The same can be said by analogy when comparing the Simmons case
to these pending proceedings. The Court further noted in Simmons,
that the real purpose for the venue rules is to relate venue to the place
where the damages occurred. Again, the same observation is
appropriate in the case at bar. Finally, the Court in Simmons found
that the facts of that case did not involve “subjectively nebulous”
damages allegedly suffered in [Coursey v. White, 184 So.2d 625
(La.App. 4 Cir. 1966)], which may have occurred anywhere. Instead,
the Simmons case involved damages sustained at a specific
foreseeable time and place for the defendants’ business product was
brought to the parish of the plaintiffs’ residence by an executive of the
company for which the product was prepared in furtherance of a
proposed business transaction. As mentioned above, under the
circumstances presented before the Court in the Simmons case,
Orleans Parish was held an appropriate venue. A careful analyzation
of the facts presented at bar merits a similar legal conclusion, i.e.,
Avoyelles Parish is an appropriate venue for the present proceedings.

As noted above, the relators did not introduce any evidence establishing

where the wrongful conduct occurred. We agree with Cottonport Bank that it was

8

within the relators’ power and control to disclose where any wrongful conduct

occurred. Having chosen not to do so, we find the trial court was within its

discretion under La.Code Civ.P. art. 74 to find venue was appropriate in the parish

where the damages were sustained.

As Cottonport Bank notes, the case of Belser v. St. Paul Fire & Marine Ins.

Co., 509 So.2d 12 (La.App. 1 Cir.1987), is supportive of the trial court’s

conclusion in the present case. In that case, the appellate court attempted to

determine where the wrongful conduct occurred. The Belser court observed a

common thread in the jurisprudence -- “where no damage is caused to the plaintiff

in the parish where the wrongful conduct occurred, a parish where the damages

were sustained is a proper venue.” Id. at 20. In the present case, the trial court

concluded it was impossible to determine where the wrongful conduct occurred,

due largely in part to the relators’ failure to offer evidence of same. The testimony

of Lynn Bordelon supports that conclusion, wherein he acknowledged, “I don’t

know who owns the collateral. Who has it or where it is.”

It is clear from the evidence in the record that the misleading collateral

documentation was studied by Cottonport Bank in Avoyelles Parish, and that its

collateral department acted upon this documentation by determining Dubois owned

sufficient collateral and recommending the loan. The lawsuit in question alleges a

scheme in which Dubois and his family members acted together to move pieces of

equipment from one company to another and to change deposit accounts and the

beneficiary of lease payments. A plaintiff invoking the provisions of La.Code

Civ.P. art. 74 “must allege sufficient facts to prove that the chosen venue is

proper.” Sorrento Companies, Inc. v. Honeywell Intern., Inc., 04-1884 (La.App. 1

Cir. 9/23/05), 916 So.2d 1156, 1162. For the purposes of determining a proper

venue, the plaintiff’s allegations must be accepted as true. Cacamo v. Liberty

Mut. Fire Ins. Co., 99-3479 (La. 6/30/00), 764 So.2d 41. “If the grounds for an

9

objection of improper venue do not appear on the face of a plaintiff’s petition, the

burden is on a defendant to offer evidence in support of his position.” Jewell v.

Dudley L. Moore Ins. Co., 95-2453 (La.App. 1 Cir. 6/28/96), 676 So.2d 223, 225,

writ denied, 96-2015 (La. 11/8/96), 683 So.2d 273.

As discussed above, the relators failed to submit any evidence of where the

wrongful conduct occurred, and thus, the trial court determined venue was proper

under La.Code Civ.P. art. 74 in the parish where the damages were sustained,

Avoyelles Parish. We find no error in the trial court’s judgment, and the relators’

writ is denied.

We also, effective this date, lift the stay of proceedings issued by this court

on October 6, 2016.

WRIT DENIED.

10