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Lili Collections, LLC v. Terrebonne Parish Consolidated Government

Court of Appeals of Louisiana, First Circuit

June 18, 2015

LILI COLLECTIONS, LLC
v.
TERREBONNE PARISH CONSOLIDATED GOVERNMENT

Appealed from the 32nd Judicial District Court In and for the Parish of Terrebonne State of Louisiana Case No. 170023 The Honorable Randall L. Bethancourt, Judge Presiding

David C. Voss Baton Rouge, Louisiana Counsel for Plaintiff/Appellant Lili Collections, LLC

Courtney E. Alcock Houma, Louisiana Counsel for Defendant/Appellee Terrebonne Parish Consolidated Government

BEFORE: GUIDRY, THERIOT, AND DRAKE, JJ.

THERIOT, J.

In this case involving a petition to recover damages for breach of contract, the plaintiff/appellant, Lili Collections, L.L.C, has appealed from the judgment of the Thirty-second Judicial District Court sustaining an exception raising the objection of no right of action and dismissing the plaintiffs petition with prejudice. For the reasons set forth herein, we affirm.

FACTS AND PROCEDURAL HISTORY

On or about July 15, 2003, Aegis Innovative Solutions, L.L.C. (Aegis) entered into an agreement with Terrebonne Parish Consolidated Government (TPCG) for professional services regarding management and performance of the Hurricane Lili Hazard Mitigation Grant Program (the Program) for TPCG.

According to Article II of the agreement, TPCG would pay Aegis a lump sum for its professional services. Article II was later amended to increase the lump sum and to state that TPCG would not be liable for payment for work performed by Aegis that was not funded by the Federal Emergency Management Agency (FEMA) and/or the State of Louisiana Office of Homeland Security and Emergency Preparedness (the State). The amendment became effective November 5, 2004.

Aegis allegedly went unpaid for some of its services to TPCG. TPCG claimed that since it did not receive the necessary funds from FEMA and the State, it could not pay Aegis pursuant to Article II of the agreement as amended. Due to the nonpayment by TPCG, Aegis assigned its rights and causes of action under the agreement to Lili Collections, L.L.C. (Lili). Lili and Aegis made amicable demand upon TPCG and a request for a good faith effort by TPCG to secure payment from FEMA and/or the State but a payment was never received. As a result, Lili filed a petition for breach of contract against TPCG on July 22, 2013, claiming TPCG was liable to Lili for the debt it first owed to Aegis and that had been assigned to Lili.

TPCG filed a peremptory exception raising the objection of no right of action on September 3, 2013, claiming that the assignment of Aegis's rights to Lili was in violation of Article XIII of the agreement between TPCG and Aegis; that TPCG never consented to the assignment; and that Lili had no privity of contract with TPCG. In response to the exception, Lili claimed that the agreement between TPCG and Aegis amounted to a secured transaction, triggering Chapter 9 of the Uniform Commercial Code regarding secured transactions, thereby rendering the non-assignment clause ineffective.[1] Lili claimed that Article XIII of the agreement, which states that Aegis could not assign its rights to a third party without the consent of TPCG, is contrary to the provisions of the U.C.C. and is therefore unenforceable.

The exception was heard before the district court on January 31, 2014. The district court adopted the legal argument of TPCG and signed a judgment on February 4, 2014, granting the exception and dismissing Lili's petition with prejudice. Lili filed a timely appeal.

ASSIGNMENT OF ERROR

Lili alleges that the district court erred in finding that it did not have a right of action for ...


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