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Robert v. Robert Mgmt. Co., LLC

Court of Appeal of Louisiana, Fourth Circuit

February 11, 2015

ANDRE' J. ROBERT, RANDALL G. MOUROT, AND J. STOREY CHARBONNET
v.
ROBERT MANAGEMENT COMPANY, LLC, ET AL

Page 923

Editorial Note:

This Decision is not final until expiration of the fourteen day rehearing period.

APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH. NO. 2010-04150, DIVISION " L-6" . Honorable Kern A. Reese, Judge.

Robert Patrick Vance, Andrew R. Lee, Avery B. Pardee, Brett S. Venn, JONES WALKER WAECHTER POITEVENT CARRERE & DENEGRE, L.L.P., New Orleans, LA, COUNSEL FOR PLAINTIFF/APPELLANT.

Kyle D. Schonekas, Patrick Shaw McGoey, Andrea V. Timpa, SCHONEKAS EVANS McGOEY & McEACHIN, L.L.C., New Orleans, LA, COUNSEL FOR DEFENDANT/APPELLEE.

(Court composed of Chief Judge James F. McKay, III, Judge Dennis R. Bagneris, Sr., Judge Max N. Tobias, Jr.). MCKAY, C.J., CONCURS.

OPINION

Max N. Tobias, Jr., J.

Page 924

[2014-0822 La.App. 4 Cir. 1] The plaintiffs, André J. Robert, J. Storey Charbonnet, Randall G. Mourot, and MarketFare, L.L.C. (referred to collectively as " the Plaintiffs" ), appeal from a partial final judgment rendered on 21 April 2014,[1] dismissing Counts I and III[2] of their

Page 925

fourth and fifth supplemental and amending petitions in the limited liability company member-derivative action, which they filed against the defendants, Marc Robert, Darlene Robert, Claiborne Fresh Market, LLC, and Robert Management Company, LLC (" RMC" ) (referred to collectively as " the Defendants" ), on the ground that these claims had prescribed under La. R.S. 12:1502. The Plaintiffs' suit, in part, alleges that the Defendants intentionally breached fiduciary duties owed to the Plaintiffs by utilizing a new limited liability company to lease and open a grocery store, inter alia, the Claiborne Avenue Store, without their involvement. The Defendants filed an exception of prescription, averring that the [2014-0822 La.App. 4 Cir. 2] Plaintiffs' petition was filed after any claim for the alleged intentional breach of fiduciary duty had already prescribed. The trial judge determined that as of 25 August 2007, the Plaintiffs knew, or should have known, of the alleged intentional breach of fiduciary duties committed by the Defendants regarding the Claiborne Avenue Store. Accordingly, the trial court determined that as of the filing of the Plaintiffs' petition on 23 April 2010, this cause of action had prescribed.[3] For the following reasons, we affirm.

In 1999, MarketFare, L.L.C. (" MarketFare" ), was formed by Marc Robert (" Marc" ) as a manager-managed Louisiana limited liability company for purposes of acquiring, through a bankruptcy action, leases on former Schwegmann Grocery Stores in New Orleans. To raise the necessary capital, Marc recruited investors, [2014-0822 La.App. 4 Cir. 3] including the Plaintiffs: his brother André J. Robert (" André " ), J. Storey Charbonnet (" Storey" ), and Randall G. Mourot

Page 926

(" Randy" ).[4] The Plaintiffs collectively own 32.2% of the membership interest in MarketFare, whereas Marc and his wife, Darlene Robert (" Darlene" ), own 65% of the membership interest of the company in community.[5]

MarketFare initially submitted bids on five Schwegmann Grocery Store leases, but was the high bidder on only four of them. MarketFare created four wholly owned subsidiaries to separately own and operate each of the four stores; namely: MarketFare N. Broad, LLC; MarketFare Canal, LLC; MarketFare St. Claude, LLC; and, MarketFare Annunciation, LLC (collectively, " Subsidiary LLCs" ).[6] RMC was designated as the manager for the newly-formed MarketFare as well as for the Subsidary LLCs. Marc and Darlene are the sole members of RMC.

Prior to successfully acquiring the four leases, Marc sought the advice of Schwegmann Grocery Stores' former chief financial officer, David Erath, in return [2014-0822 La.App. 4 Cir. 4] for his earning a 5% ownership interest in MarketFare.[7] According to Mr. Erath, he understood that the formation of MarketFare was solely for the purpose of acquiring the leases of the former Schwegmann Grocery Stores and " nothing more."

The evidence contained in the record on appeal suggests, and the trial judge concluded, that from 1995 to 2005, the MarketFare stores lost over a million dollars per year. In May 2004, due to a continuous loss in revenue, the Broad Street Store was closed. Following severe property damage sustained during Hurricane Katrina in August 2005, MarketFare's operations at the remaining three grocery stores ceased and the Subsidiary LLCs were over $6 million in debt.[8] As a result of the severe damages sustained to the various properties during the hurricane and the denial of payment for its insurance claims by MarketFare's insurers, MarketFare filed lawsuits for the collection of insurance proceeds. Despite the cessation of operations and the closure of its grocery stores, coupled with the growing sentiment among the Plaintiffs that MarketFare was a " bad investment," the company did not fold as its assets included a rather sizeable insurance claim.

In February 2006, Marc held an investors' meeting. Present were the investors

Page 927

of MRE, MarketFare, and another entity formed by Marc, M.L. Robert, [2014-0822 La.App. 4 Cir. 5] II, LLC (" MLR" ).[9] The trial testimony and documentary evidence contained in the record on appeal establish that during that meeting, Marc presented to the investors the fiscal condition of each company and store and the status of the insurance claims involving each. A discussion was also held regarding which company debts would be paid off, if and when the insurance proceeds were received. Additionally on the agenda for the meeting was " future developments," wherein the trial testimony reveals that Marc presented various grocery store opportunities that he was considering in Louisiana, including potential stores in Baton Rouge, New Orleans, and on the North Shore in St. Tammany Parish. One such opportunity that Marc presented was the potential for opening a grocery store at the corner of South Carrollton and South Claiborne Avenues (the " Claiborne Avenue Store" ).[10] According to Marc, and as understood by other persons in attendance at the meeting, he was not presenting these opportunities solely to the MarketFare investors, but to all of his investors.[11]

[2014-0822 La.App. 4 Cir. 6] Another investors' meeting was held on 30 August 2006, which the record on appeal establishes included the investors of MLR, MRE, and MarketFare.[12] While André and Storey were in attendance, Randy was not. At this meeting, Marc presented the status of the pending insurance claims for each entity and store, and what debts had been paid to whom with insurance proceeds received to date. Additionally, Marc again discussed new grocery store opportunities, including the Claiborne Avenue Store, which opportunity the Plaintiffs contend was presented and discussed solely as a potential MarketFare store.

Two weeks later, on 13 September 2006, without notice to the Plaintiffs or other

Page 928

investors, the Defendants formed Claiborne Fresh Market, LLC (" Claiborne LLC" ), establishing RMC as its managing member, for purposes of pursuing the Claiborne Avenue Store opportunity. After Claiborne LLC was formed in September 2006, nothing was done by or with the entity for approximately one year. Though Marc testified that he continued to apprise and discuss the Claiborne Avenue Store with each of his investors, both individually and at times collectively, the Plaintiffs testified they were unaware of the lease or its recordation. ...


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