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Cole v. Sabine Bancshares, Inc.

Court of Appeals of Louisiana, Third Circuit

December 6, 2017

CYNTHIA ANNE COLE
v.
SABINE BANCSHARES, INC.

         APPEAL FROM THE ELEVENTH JUDICIAL DISTRICT COURT PARISH OF SABINE, NO. 67, 189 HONORABLE STEPHEN B. BEASLEY, DISTRICT JUDGE.

          Jacques F. Bezou, Sr. Stacy R. Palowsky Matthew L. Devereaux Counsel for Plaintiff/Appellant: Cynthia Anne Cole

          David S. Rubin, Julie M. McCall, George P. Holmes, Kantrow, Spaht, Counsel for Defendant/Appellee: Sabine Bancshares, Inc.

          John L. Whitehead Attorney Counsel for Defendant/Appellee: Sabine Bancshares, Inc.

          Court composed of John D. Saunders, Billy Howard Ezell, and Phyllis M. Keaty, Judges.

          PHYLLIS M. KEATY, JUDGE.

         Plaintiff/Appellant, Cynthia Anne Cole, appeals the trial court's judgment granting a Peremptory Exception of No Cause of Action in favor of Defendant/Appellee, Sabine Bancshares, Inc. (SBI). For the following reasons, the trial court's judgment is affirmed.

         FACTS AND PROCEDURAL HISTORY

         This matter arises out of Cynthia's disagreement with her brother, James Robert Cole, Jr. (Jim), over shares of bank stock they inherited from their deceased father, James Robert Cole, Sr. (James). James was the owner, CEO, and majority stockholder of SBI. SBI is a holding company which holds 100% of the stock of Sabine State Bank and Trust Company (SSBTC). Prior to James's death, Cynthia owned 1, 406 shares of SBI stock. Upon James's death, Cynthia inherited 3, 020.5 shares of his stock, making her an owner of approximately 44% of SBI stock. Litigation subsequently ensued between Cynthia and Jim regarding their father's succession and division of the stock. See Succession of Cole, 12-802 (La.App. 3 Cir. 12/26/12), 108 So.3d 240, writ denied, 13-257 (La. 3/15/13), 109 So.3d 384.

         On January 7, 2016, Cynthia filed a Petition for Purchase of Shares against SBI, alleging that she was an oppressed shareholder under La.R.S. 12:1-1435 ("oppressed shareholder statute"). Cynthia sought to have SBI purchase her shares of stock at fair value as defined in the statute. On February 26, 2016, SBI filed a Peremptory Exception of No Cause of Action, arguing that the actions alleged in Cynthia's petition fail to constitute acts of oppression as defined in La.R.S. 12:1-1435. SBI argued that La.R.S. 12:1-1435 does not operate retroactively such that any alleged acts of oppression occurring before January 1, 2015, the date the oppressed shareholder statute became effective, cannot provide a cause of action under the statute. Cynthia filed an opposition memorandum. A hearing on the exception occurred on May 2, 2016, after which the trial court allowed the parties to file post-trial memoranda. On June 30, 2016, the trial court issued an Order with reasons granting SBI's exception, finding that the oppressed shareholder statute constitutes substantive law which can only be applied prospectively. The trial court further ordered Cynthia to file an amended petition, "alleging only those acts of shareholder oppression that have occurred on or after January 1, 2015[.]"

         Cynthia filed a Motion to Certify Judgment as Final and Memorandum in Support, which was granted by the trial court on August 3, 2016. She, thereafter, filed a devolutive appeal, which the trial court granted on August 17, 2016. That record was lodged in this court under Docket Number 16-976. The trial court, however, issued a subsequent Order on October 4, 2016, instructing Cynthia to show cause why the appeal "should not be dismissed as having been taken from a non-appealable, interlocutory judgment and/or a judgment lacking proper decretal language." In response, Cynthia filed a brief with this court on October 18, 2016. On November 16, 2016, this court, on its own motion, dismissed her appeal and held that the trial court's interlocutory ruling was "incapable of being designated as final pursuant to La.Code Civ.P. art. 1915(B)." Cole v. Sabine Bancshares, Inc., 16-796, p. 2 (La.App. 3 Cir. 11/16/16), 205 So.3d 995, 996.

         On December 14, 2016, Cynthia filed with the trial court a Motion for Clarification of Judgment, Alternatively, Motion to Amend Judgment with a supporting memorandum. On January 17, 2017, the trial court issued an Amended Judgment granting the peremptory exception in part, dismissing Cynthia's claims for actions prior to January 1, 2015, pursuant to the oppressed shareholder statute, ordering her to amend her petition to allege acts occurring on or after January 1, 2015, and certifying it as a final and appealable judgment. Cynthia appeals that judgment.

         On appeal, Cynthia asserts the following assignments of error:

[1.] The trial court erred by finding that La.R.S. 12:1-1435, the oppressed shareholder statute, cannot apply to pre-2015 acts, thereby sustaining SBI's exception of no cause of action with respect to alleged acts of oppression which took place prior to 2015 and dismissing Ms. Cole's claims arising from same with prejudice.
[2.] The trial court erred by ordering Ms. Cole to amend her petition to include only those alleged acts of oppression which took place after January 1, 2015, even though said acts should be admissible under Code of Evidence article 404(B) even if the oppressed shareholder statute does not specifically apply to them.

         STANDARD OF REVIEW

         An appellate court's "standard or review for sustaining or denying a peremptory exception of no cause of action is de novo because it raises a question of law." Hebert v. Shelton, 08-1275, p. 3 (La.App. 3 Cir. 6/3/09), 11 So.3d 1197, 1201.

The function of the peremptory exception of no cause of action is to question whether the law extends a remedy to anyone under the factual allegations of the petition. The peremptory exception of no cause of action is designed to test the legal sufficiency of the petition by determining whether [the] plaintiff is afforded a remedy in law based on the facts alleged in the pleading. No evidence may be introduced to support or controvert the objection that the petition fails to state a cause of action. The exception is triable on the face of the ...

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