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Moulton v. Stewart Enterprises, Inc.

Court of Appeals of Louisiana, Fourth Circuit

August 3, 2017

KAREN MOULTON, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED
v.
STEWART ENTERPRISES, INC., JOHN B. ELSTROTT, JR., THOMAS M. KITCHEN, ALDEN J. MCDONALD, JR., RONALD H. PATRON, ASHTON J. RYAN, JR., JOHN K. SAER, JR., FRANK B. STEWART, JR., AND SERVICE CORP. INTERNATIONAL, RIO ACQUISITION CORP. PHILIP JOSEPH ROSEN, INDIVIDUALLY AND ON BEHALF OF OF ALL OTHERS SIMILARLY SITUATED
v.
STEWART ENTERPRISES, INC., FRANK B. STEWART, JR., JOHN B. ELSTROTT, ALDEN J. MCDONALD, JR., THOMAS M. KITCHEN, ASHTON J. RYAN, JR., RONALD H. PATRON, JOHN K. SAER, JR., SERVICE CORPORATION INTERNATIONAL, AND RIO ACQUISITION CORP.

         APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2013-05636 C\W 2013-05887, DIVISION "A" Honorable Tiffany G. Chase, Judge

          Andrew A. Lemmon LEMMON LAW FIRM, LLC, David T. Wissbroecker ROBBINS, GELLER RUDMAN & DOWD LLP COUNSEL FOR PLAINTIFF/APPELLANT

          Robert B. Bieck, Jr. Mark A. Cunningham Alexander N. Breckinridge, V JONES WALKER LLP, Steven W. Usdin Joshua O. Cox BARRASSO USDIN KUPPERMAN FREEMAN & SARVER, LLC

          Pamela S. Palmer, Pro Hac Vice PEPPER HAMILTON LLP COUNSEL FOR DEFENDANTS/APPELLEES

          Court composed of Judge Rosemary Ledet, Judge Sandra Cabrina Jenkins, Judge Regina Bartholomew Woods

          Rosemary Ledet, Judge

         This is a direct stockholder class action. From the trial court's October 31, 2016 judgment granting certain defendants' motions for summary judgment, the plaintiffs appeal. Because the trial court's judgment lacks the required decretal language for a final judgment, we dismiss the plaintiffs' appeal without prejudice and remand.

         FACTUAL AND PROCEDURAL BACKGROUND

         This suit arises out of a $1.4 billion merger transaction involving two of the country's largest publicly traded death care companies-Service Corporation International ("SCI") and Stewart Enterprises, Inc. ("STEI"). Simply stated, the merger transaction involves SCI and its wholly owned subsidiary, Rio Acquisition Corp. ("Rio"), acquiring all STEI's outstanding shares at a price of $13.25 per share. (Rio was formed for the merger transaction.) The merger transaction spurred several suits by STEI's stockholders.

         On June 13, 2013, Karen Moulton filed a class action suit on behalf of herself and the public stockholders of STEI (the "Moulton Suit"). Named as defendants in the Moulton Suit were STEI; the seven members of STEI's board of directors [(i) Frank Stewart, Jr.; (ii) John Elstrott, Jr.; (iii) Alden McDonald, Jr.; (iv) Thomas Kitchen; (v) Ashton Ryan, Jr.; (vi) Ronald Patron; and (vii) John Saer, Jr.]; SCI; and Rio. Ms. Moulton alleged that the sale price was inadequate and that the sale process was unfair. She further alleged that STEI and its board of directors breached their fiduciary duty in handling the sale process, that STEI should have obtained a higher stock purchase price, and that all the defendants conspired to breach those fiduciary duties to obtain personal benefits. She still further alleged that Mr. Stewart pushed for the merger in order to secure a side deal for himself. She sought both injunctive relief and monetary damages for the alleged breach of fiduciary duties.

         On June 20, 2013, Philip Joseph Rosen filed a similar class action suit on behalf of himself and the public stockholders of STEI against the same defendants making similar allegations as in the Moulton Suit (the "Rosen Suit"). Also in June 2013, three alleged STEI stockholders-Alex Rodgers, Gairi Williamson, and Debbie Williamson-filed a petition for intervention in both the Moulton Suit and the Rosen Suit (the "Interventions"). On July 30, 2013, an Order of Consolidation was entered, by stipulation of the parties, consolidating the Moulton Suit, the Rosen Suit, and the Interventions.

         In August 2013, the trial court denied the plaintiffs' motions for a temporary restraining order and preliminary injunction. In October 2013, the trial court granted SCI's and Rio's exception of no cause of action as to the aiding and abetting allegation, but allowed the plaintiffs to amend their petition to include a civil conspiracy claim. After the plaintiffs amended their petition, all of the defendants filed exceptions of no cause of action. In June 2014, the trial court granted the exceptions of SCI and Rio, but denied the exceptions of STEI, Mr. Stewart, and the other defendant-directors. Thereafter, the remaining defendants filed two motions for summary judgment. One motion was filed by Mr. Stewart; the other motion was filed by the remaining six director-defendants and STEI. As noted at the outset, on October 31, 2016, the trial court granted certain defendants' motions for summary judgment. This appeal followed.

         JURISDICTIONAL ISSUE

         A threshold requirement in any appeal is subject matter jurisdiction. An appellate court cannot determine the merits of an appeal unless its subject matter jurisdiction is properly invoked by a valid final judgment. Freeman v. Phillips 66 Co., 16-0247, p. 2 (La.App. 4 Cir. 12/21/16), 208 So.3d 437, 440 (citing Tsegaye v. City of New Orleans, 15-0676, p. 3 (La.App. 4 Cir. 12/18/15), 183 So.3d 705, 710, writ denied, 16-0119 (La. 3/4/16), 188 So.3d 1064); see La. C.C.P. art. 2083(A). Before reaching the merits of an appeal, an appellate court has a duty to determine, on its ...


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