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Duffy v. Richard M. Millet Travel 5, LLC

Court of Appeals of Louisiana, Fifth Circuit

October 25, 2018

DANYA D. DUFFY
v.
RICHARD M. MILLET TRAVEL 5, LLC IN RE TRAVEL 5, LLC

          APPLYING FOR SUPERVISORY WRIT FROM THE TWENTY-NINTH JUDICIAL DISTRICT COURT, PARISH OF ST CHARLES, STATE OF LOUISIANA, DIRECTED TO THE HONORABLE M. LAUREN LEMMON, DIVISION ''D'', NUMBER 63, 652

          Panel composed of Judges Jude G. Gravois, Marc E. Johnson, and John J. Molaison, Jr.

         WRIT GRANTED; JUDGMENT REVERSED, IN PART; PRELIMINARY INJUNCTION VACATED

         In this writ application, relator, Travel 5, LLC, challenges the issuance of a preliminary injunction against it in favor of petitioner, Danya Duffy, in a community property partition proceeding against her former spouse to which relator is not a party. For the following reasons, we grant relief and vacate the trial court's issuance of the preliminary injunction directed to Travel 5, LLC.

         Factual Background and Procedural History

         Danya Duffy and Richard Millet were divorced in April 2006. The community of acquets and gains formerly existing between them, however, has not been partitioned; partition proceedings are currently pending.

         Richard is a 13.5% minority member of Travel 5, LLC, a multiple-member, limited liability company that was formed during the existence of the former community, and is a legal entity separate and distinct from Richard.[1] Since 2000, in accordance with La. C.C. art. 2352, Richard has managed the community's membership interest in Travel 5, LLC.[2]

         Travel 5, LLC is a 16% minority member of Metro-Investments, LLC, which is also a multi-member limited liability company that was formed during the existence of the former community. In May 2018, Metro-Investments sold a piece of real estate and chose to make a cash distribution to its members, resulting in a $684, 244.94 distribution to Travel 5, LLC.

         In anticipation of the distribution, Danya instituted community property partition proceedings against Richard wherein she identified Richard's 13.5% undivided ownership interest in Travel 5, LLC as an asset of the former community. In her petition, seeking to preserve the former community's interest in the anticipated cash distribution Travel 5, LLC was to receive from Metro-Investments, LLC, Danya requested that the trial court issue an ex parte temporary restraining order pursuant to La. R.S. 9:371 and La. C.C. art. 3944, without bond, directed to Richard and to Travel 5, LLC, a non-party, prohibiting Richard and Travel 5, LLC from using in any manner any of the monies Travel 5, LLC received from Metro-Investments, LLC. This temporary restraining order was issued ex parte against Travel 5, LLC (and Richard), on April 23, 2018. Travel 5, LLC did not receive the cash distribution from Metro-Investments, LLC until May 2018.

         Subsequent to an evidentiary hearing held on July 18, 2018, the trial court issued judgment on August 22, 2018 in favor of Danya and ordered that a preliminary injunction be issued against Travel 5, LLC pursuant to La. R.S. 9:371, restraining, enjoining, and prohibiting Travel 5, LLC from alienating, encumbering, or disposing of 13.5% of the company's cash (representing the interest in Travel 5, LLC that was held in Richard's name) pending the partition of the community property. Travel 5, LLC was further ordered not to make any cash distribution to Richard unless an equal distribution was contemporaneously made to Danya.[3]

         The August 22, 2018 judgment also ordered that a preliminary injunction be issued against Richard enjoining him "from alienating, encumbering, disposing of any and all of the community property or co-owned property pending the partition of the community property."

         DISCUSSION

         In this writ application, relator argues that the trial court erred by issuing a preliminary injunction against Travel 5, LLC pursuant to La. R.S. 9:371, which, in effect, enjoins Travel 5, LLC from exercising its business discretion to alienate, encumber, and/or use 13.5% of its cash assets. For the following reasons, we agree and grant relief.

         Standard ...


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