ON
APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH
OF JEFFERSON, STATE OF LOUISIANA NO. 733-258, DIVISION
"P" HONORABLE LEE V. FAULKNER, JR., JUDGE PRESIDING
COUNSEL FOR PLAINTIFF/APPELLANT, KHOOBEHI PROPERTIES, LLC
George D. Fagan Anton L. Hasenkampf.
COUNSEL FOR DEFENDANT/APPELLEE, BARONNE DEVELOPMENT NO. 2,
L.L.C. KAILAS FAMILY LIMITED PARTNERSHIP, AND KAILAS
PROPERTIES, L.L.C. Philip A. Franco Jeffrey E. Richardson
David C. Coons.
Panel
composed of Susan M. Chehardy, Fredericka Homberg Wicker, and
Robert A. Chaisson
DISMISSED
IN PART; AFFIRMED IN PART; REVERSED IN PART; WRITS DENIED;
REMANDED
RAC
SMC
FHW
ROBERT
A. CHAISSON JUDGE.
Plaintiff,
Khoobehi Properties, L.L.C. ("Khoobehi
Properties"), appeals a May 13, 2016 judgment of the
district court that sustained various exceptions filed by
co-defendants Baronne Development No. 2, L.L.C.
("Baronne Development"), 210 Baronne, L.L.C.
("210 Baronne"), and Kailas Properties, L.L.C.
("Kailas Properties"). Khoobehi Properties also
attempts to appeal a July 25, 2014 judgment of the district
court that sustained an exception of peremption filed by
defendant Kailas Family Limited Partnership
("KFLP"), and further seeks this Court's
supervisory review of a ruling of the district court that
denied its motion to compel discovery.[1] Additionally,
defendant Chandra Mohan Kailas seeks this Court's
supervisory review of a ruling of the district court that
denied his motion to compel discovery and also denied his
motion to quash Khoobehi Properties' discovery requests
served on a non-party accountant.[2]
For the
following reasons, we dismiss that portion of Khoobehi
Properties' appeal that seeks review of the July 25, 2014
judgment sustaining KFLP's exception of peremption; we
reverse that portion of the district court's May 13, 2016
judgment that sustained Kailas Properties' exception of
discussion, and in all other respects we affirm the judgment
of the district court. Additionally, we deny the writ
applications of both Khoobehi Properties and Mr. Kailas
regarding discovery issues and remand this matter to the
district court for proceedings consistent with this opinion.
FACTS
AND PROCEDURAL HISTORY
This
case comes before us on a second appeal, the first appeal
having been dismissed on the grounds that the judgment at
issue was interlocutory rather than final in nature.
Khoobehi Props., L.L.C. v. Baronne Dev. No. 2,
L.L.C., 15-117 (La.App. 5 Cir. 11/19/15), 178 So.3d 647,
writ denied, 16-0048 (La. 2/26/16), 187 So.3d 1002.
Though Khoobehi Properties has amended its petition, the
alleged facts remain essentially the same as those set forth
in this Court's previous opinion.
This
case arises from a contract for the sale of Khoobehi
Properties' membership interest in Baronne Development, a
limited liability company whose primary asset consisted of a
high rise building located at 210 Baronne Street in downtown
New Orleans. In the contract of sale, Khoobehi Properties
sold its 13% membership interest in Baronne Development to
KFLP. The sale was negotiated and executed by Dr. Kamran
Khoobehi, the managing member of Khoobehi Properties, and Mr.
Kailas, the managing member of Kailas Properties, which is
the managing general partner of KFLP. At the time of the 2013
sale, KFLP owned a greater than 50% controlling interest in
Baronne Development. The sale of Khoobehi Properties'
membership interest was initially memorialized in an
"Agreement for Sale of a Limited Liability
Interest" on May 9, 2013, and was completed on June 17,
2013, with the execution of a "Sale, Assignment, and
Transfer of Membership Interests." Both of these
documents were signed by Dr. Khoobehi and Mr. Kailas.
Following the sale, in August of 2013, Dr. Khoobehi learned
of plans to redevelop the upper floors of the 210 Baronne
building into luxury condominiums. He claims that these
development plans were being made and negotiated without his
knowledge, prior to the sale of Khoobehi Properties'
membership interest.
On
November 25, 2013, Khoobehi Properties filed a petition
against Baronne Development, KFLP, and Kailas Properties
wherein it alleged the facts stated above regarding the sale
of its membership interest to KFLP, and also that it had
never received an asset distribution from Baronne Development
at any time while it was a member from 2005 to 2013. It also
alleged that during that same time period, Dr. Khoobehi made
repeated requests of Mr. Kailas for a full and complete
accounting of Baronne Development's business and
financial records, but that this accounting was never
provided. Though acknowledging that it had sold and
transferred its interest in Baronne Development and was
therefore no longer a member, Khoobehi Properties
nevertheless demanded an accounting from Baronne Development
and the other defendants from that time period for which it
was a member, pursuant to La. R.S. 12:1319. Damages were not
sought as part of this initial petition.
On
January 24, 2014, Baronne Development, KFLP, and Kailas
Properties filed a peremptory exception of no right of action
pursuant to La. C.C.P. art. 927(A)(6), wherein they argued
that under the statutes governing Louisiana limited liability
companies, the sale agreement between the parties, and the
principles of subrogation, Khoobehi Properties no longer has
a right to an accounting of the business of Baronne
Development. After a hearing on the matter, the district
court issued a judgment on February 19, 2014, sustaining the
defendants' exception of no right of action.
Subsequently, on March 7, 2014, Khoobehi Properties filed a
motion for a new trial requesting the right to amend the
petition to state a right of action as allowed for pursuant
to La. C.C.P. art. 934. On April 15, 2014, the district court
granted the motion for new trial for the purpose of allowing
Khoobehi Properties leave to amend its petition to address
the previously urged peremptory exception of no right of
action.
On
April 28, 2014, Khoobehi Properties filed its first amended,
supplemental, and restated petition wherein it restated the
allegations against the three corporate defendants, repeated
its request for an accounting from Baronne Development, and
made new allegations under theories of breach of contract,
breach of fiduciary duty, negligent misrepresentation, alter
ego/single business enterprise, conspiracy, and fraud. In its
prayer for relief in this amended petition, Khoobehi
Properties also requested damages and any other equitable
relief, in addition to its request for an accounting. In
response to this petition, the corporate defendants filed
various exceptions: Baronne Development filed a peremptory
exception of no cause of action, contending that Khoobehi
Properties had failed to allege facts sufficient under any
theory to constitute a cause of action against Baronne
Development; KFLP filed a peremptory exception of peremption
in which it sought to bar all of Khoobehi Properties'
claims that arose prior to November 25, 2010, which was three
years prior to the time of filing of the suit; Kailas
Properties filed a dilatory exception of discussion in which
it argued that Khoobehi Properties should be required to
enforce its rights against KFLP before pursuing Kailas
Properties because, as a partner in KFLP, Kailas Properties
is only secondarily liable for KFLP's debts. On July 25,
2014, after a hearing on these exceptions (as well as some
discovery related motions), the district court issued a
judgment sustaining all of the defendants' exceptions.
On
August 8, 2014, Khoobehi Properties filed a motion for new
trial from the July 25, 2014 judgment with respect to Baronne
Development's exception of no cause of action and Kailas
Properties' exception of discussion, but not with respect
to KFLP's exception of peremption.[3] Khoobehi
Properties also filed a second amended, supplemental, and
restated petition wherein it named as additional defendants
Mr. Kailas, individually, and 210 Baronne, which was
organized in September 2013 and is the current owner of the
210 Baronne Street property. This amended petition also
included additional allegations that, on or prior to June 17,
2013, Mr. Kailas, in his personal capacity and as an agent
for Baronne Development, KFLP, and Kailas Properties, made
misstatements and failed to disclose material facts to Dr.
Khoobehi about the plans and intentions regarding the
development, exchange, leasing, marketing, transfer, and use
of the 210 Baronne Street property. Khoobehi Properties
alleged that Mr. Kailas took these actions in order to
wrongfully induce Khoobehi Properties to sell its interest
for substantially less than it would have sold for had the
misrepresentations not been made and the material information
disclosed, and to obtain an unjust advantage over, and to
cause damage and inconvenience to, Khoobehi
Properties.[4]
On
October 8, 2014, KFLP and Mr. Kailas filed an answer to
Khoobehi Properties' second amended and supplemental
petition in which they denied that material information was
withheld from, or misrepresentations were made to, Dr.
Khoobehi. In their answer, KFLP and Mr. Kailas also stated as
affirmative defenses that, inter alia, Khoobehi
Properties failed to state a claim against the defendants
upon which relief can be granted, that pursuant to La. R.S.
12:1502, Khoobehi Properties' claims pre-dating November
25, 2010, are perempted, and that Khoobehi Properties has no
cause of action for any acts allegedly occurring after June
17, 2013, the date of the sale. Additionally, 210 Baronne
filed a peremptory exception of no cause of action, and
Kailas Properties filed another dilatory exception of
discussion.
The
district court rendered judgment on November 10, 2014,
denying Khoobehi Properties' motion for new trial on the
issues of Baronne Development's peremptory exception of
no right of action and Kailas Properties' dilatory
exception of discussion.[5] Khoobehi Properties appealed the
November 10 judgment; however, this Court dismissed the
appeal on the grounds that the judgment, which did not
address Khoobehi Properties' claim for an accounting by
Baronne Development, was an interlocutory judgment rather
than a final appealable judgment. Khoobehi Props.,
L.L.C., supra.
In
response to this Court's dismissal of its appeal,
Khoobehi Properties filed an ex parte motion in the
district court seeking a ruling as to all of its causes of
action against Baronne Development, and entry of a final
judgment dismissing all of its causes of action against
Baronne Development, with prejudice, reserving unto Khoobehi
Properties the right to appeal that judgment. Additionally,
various parties filed discovery related motions: Khoobehi
Properties filed a motion to compel complete responses to
interrogatories, requests for production and admissions, and
a motion for award of reasonable expenses, directed to all
defendants; in response, Mr. Kailas filed a motion to quash
Khoobehi Properties' notice of deposition for production
of records held by a third party accountant and a motion to
compel discovery responses from Khoobehi Properties for
questions relating to the fee agreement between Khoobehi
Properties and its counsel.
At a
hearing on April 12, 2016, the district court considered the
outstanding exceptions filed in the defendants' answer,
the motion for an entry of a final judgment, and the various
discovery motions, and on May 13, 2016, entered a ruling
wherein it: granted Kailas Properties' dilatory exception
of discussion; granted 210 Baronne's peremptory exception
of no cause of action and dismissed 210 Baronne from the case
with prejudice at Khoobehi Properties' cost; granted
Khoobehi Properties' ex parte motion for entry
of a final judgment, thereby dismissing Baronne Development
from the case with prejudice for failure to state any cause
of action or right of action against Baronne Development;
denied Khoobehi Properties' motion to compel responses to
interrogatories, requests for production and admission, and
for an award of reasonable expenses; denied Mr. Kailas's
motion to compel discovery responses; and denied Mr.
Kailas's motion to quash.
Khoobehi
Properties timely filed an appeal of the May 13, 2016
judgment. The parties also timely sought supervisory review
of the district court's interlocutory rulings on the
discovery motions, and these writs have been consolidated
with Khoobehi Properties' appeal. In its appeal, Khoobehi
Properties raises the following assignments of error:
1. The district court erred by determining that Khoobehi
Properties lacks standing to request an accounting from
Baronne Development under La. R.S. 12:1319;
2. The district court erred in sustaining Baronne
Development's exception of no cause of action and
dismissing Baronne Development;
3. The district court erred in sustaining 210 Baronne's
exception of no cause of action to the second amended
petition and dismissing 210 Baronne;
4. The district court erred in sustaining KFLP's
exception of peremption;
5. The district court erred in sustaining Kailas
Properties' exception of discussion; and
6. The district court abused its discretion or clearly erred
by denying ...