APPEAL FROM THE TWELFTH JUDICIAL DISTRICT COURT, PARISH OF AVOYELLES, NO. 2014-0611-B. HONORABLE WILLIAM J. BENNETT, DISTRICT JUDGE.
Rodney Marchive Rabalais, Marksville, LA, COUNSEL FOR DEFENDANT/APPELLEE: M & C Insurance, Inc.
Koby D. Boyett, Alexandria, LA, COUNSEL FOR PLAINTIFF/APPELLANT: Jeanne Hess.
Court composed of Sylvia R. Cooks, Billy Howard Ezell, and Phyllis M. Keaty, Judges. Cooks, J., dissents.
[14-962 La.App. 3 Cir. 1]
A shareholder filed a petition for writ of mandamus seeking to enforce her right to inspect corporate records pursuant to La.R.S. 12:103(D). She also sought costs, expenses, and attorney fees pursuant to La.R.S. 12:172(D). This appeal results from the trial court's denial of the writ of mandamus.
Jeanne Hess was an employee of M & C Insurance, Inc. On January 7, 2006, the Board of Directors of M & C voted to sell
10% of its shares to Ms. Hess. Following her separation of employment with M & C, Ms. Hess sent a letter dated May 28, 2014, to M & C on June 4, 2104, seeking to inspect the corporate records pursuant to La.R.S. 12:103(D). Ms. Hess is the owner of at least 5% of the outstanding shares of stock. She specifically demanded examination of the records and accounts to be performed on June 13, 2104, at 1:30 p.m. at M & C's registered office. Ms. Hess wanted to examine the records and accounts to determine the value of her stock and the current expenses of the corporation.
Following receipt of the letter, counsel for M & C contacted counsel for Ms. Hess on June 5, 2014, informing him of his representation of M & C. An offer to purchase Ms. Hess's shares of stock was made at that time. On June 10, 2014, counsel for M & C sent another letter to counsel for Ms. Hess requesting the signing of a nondisclosure form before Ms. Hess reviewed the records and accounts. M & C also requested that the examination take place at a different office claiming that Ms. Hess had disrupted its business in the past. The letter also requested that Ms. Hess reschedule the date because June 13 was not convenient. Additionally, M & C informed Ms. Hess that her request was overly broad and ambiguous. M & C further offered to send tax returns from the last three years and a Federal Asset Report as soon as Ms. Hess signed the nondisclosure. On June 13, [14-962 La.App. 3 Cir. 2] 2014, counsel for M & C sent yet another letter to counsel for Ms. Hess via fax and advised that no inspection would be allowed that day and that M & C wanted to cooperate but was having difficulty since no one on behalf of Ms. Hess would respond to its letters or phone calls.
On June 13, 2014, Ms. Hess filed a petition for writ of mandamus, seeking to enforce her shareholder's right to examine M & C's records and accounts. She also sought costs and expenses, including attorney fees pursuant to La.R.S. 12:172(D) for M & C's refusal to allow her to inspect its corporate records. At the same time, Ms. Hess also filed a shareholder's derivative suit and petition for damages against Michael DeSoto, a shareholder, director, and president ...