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Succession of Dinesh Shaw M.D v. Alexandria Investment Group, LLC

Court of Appeals of Louisiana, Third Circuit

July 27, 2017

SUCCESSION OF DINESH SHAW, M.D,
v.
ALEXANDRIA INVESTMENT GROUP, LLC

         APPEAL FROM THE NINTH JUDICIAL DISTRICT COURT PARISH OF RAPIDES, NO. 257, 131 HONORABLE WILLIAM GREGORY BEARD, DISTRICT JUDGE

          Michael M. Meunier Matthew K. Brown Imtiaz A. Siddiqui Sullivan, Stolier, Schulze, & Grubb LLC COUNSEL FOR DEFENDANT/APPLICANT: Alexandria Investment Group, LLC.

          W. Alan Pesnell The Pesnell Law Firm COUNSEL FOR PLAINTIFF/RESPONDENT: Succession of Dinesh Shaw, M.D.

          William M. Ford Attorney at Law COUNSEL FOR PLAINTIFF/RESPONDENT: Succession of Dinesh Shaw, M.D.

          Jimmy Roy Faircloth, Jr. Barbara Bell Melton Faircloth, Melton, & Sobel, LLC COUNSEL FOR INTERVENOR/RESPONDENT: Red River Bank.

          Court composed of Ulysses Gene Thibodeaux, Chief Judge, Sylvia R. Cooks, and D. Kent Savoie, Judges.

          D. KENT SAVOIE JUDGE.

         Defendant-Relator, Alexandria Investment Group, LLC (Company), seeks supervisory writ from the judgment of the trial court, granting the motion in limine filed by plaintiff, Succession of Dinesh Shaw, M.D.

         This suit was brought by plaintiff to compel Relator's compliance with its Operating Agreement to buy the ownership interest of its deceased member, Dr. Dinesh Shaw (Dr. Shaw), [1] at the "Death Purchase Price" set forth in provision 10.3.1 (emphasis added), which provides, in part:

If a Member dies, then the Company shall purchase the Ownership Interest of the deceased Member for the Death Purchase Price (defined below). As used in this Section 10.3, the term "Death Purchase Price" shall mean the appraised value of the Company's multiplied by the Ownership Interest percentage of the deceased Member.

         On March 23, 2017, plaintiff filed its motion in limine, requesting the court "exclude any and all references to [] evidence, testimony and argument relating to the valuation of decedent's 'membership interest, ' and to limit the testimony, evidence, and argument to the contractually agreed upon method of valuation defined in the Operating Agreement." Plaintiff argued that the contractually agreed upon valuation method for the "Death Purchase Price" is the "appraised value of the Company's [assets] multiplied by the Ownership Interest of the deceased Member." In its interpretation, i.e., its insertion of the word "assets, " plaintiff looked to "each and every other provision in the Operation Agreement calling for a valuation and purchase of a person's membership interest" in the context of retirement (10.5.1), involuntary termination (10.6.2), and bankruptcy (10.2.3), and in each instance, the formula consisted of "the appraised value of the Company's assets . . . multiplied by the Ownership Interest" of the withdrawing member.[2]

         Relator opposed the motion, arguing: (1) the language of the Operating Agreement specifically calls for the value of the Company, not its assets; (2) testimony regarding the value of the Company and related matters is essential to insure that any payment to Dr. Shaw of a final distribution under the Operating Agreement is in accordance with law; (3) the proposed testimony is relevant under the default provision of our LLC law, which states that payment is based on the fair market value of the Company; and (4) evidence regarding the financial condition of the Company is even relied upon by plaintiff's appraisal expert and, thus, is relevant. Under Relator's reading of the contract, the members intentionally omitted the word "assets" and agreed to calculate the "Death Purchase Price" based on the value of the Company as a whole; therefore, the apostrophe "s" was merely a typographical error.

         On April 24, 2017, the trial court heard the motion and ruled from the bench:

The motion in limine before me deals with the operating agreement signed by all the doctors plus the late Dr. Shaw. The death of a member section . . . ten point three point one deals with the term death purchase price shall be appraised value of the company's multiplied by the ownership interest of the deceased member. That paragraph then continues with the paragraph ten point five with the retirement and ten point six with involuntary termination, more or less has the same words but for the word assets. The court is going to grant the motion in limine. I believe the operating agreement has the words in it that set forth the intent of the parties when they signed the agreement that they were going to abide by what the agreement called for. Even though the word assets is not there, it does provide enough with the other paragraphs that the terms of the operating agreement are clear and they control ...

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