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Vince v. Metro Rediscount Co., Inc.

Court of Appeals of Louisiana, Fifth Circuit

November 14, 2018

TRACY VINCE AND JOANN VINCE ON BEHALF OF SOUTHLAND EXPRESS, LLC
v.
METRO REDISCOUNT COMPANY, INC., BRIAN BRENNAN AND FRANK J. ADOLF

          ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 722-504, DIVISION "N" HONORABLE STEPHEN D. ENRIGHT, JR., JUDGE PRESIDING

          COUNSEL FOR PLAINTIFF/APPELLANT, TRACY VINCE, JOANN VINCE AND SOUTHLAND EXPRESS, LLC James E. Cazalot, Jr.

          COUNSEL FOR DEFENDANT/APPELLEE, BRIAN BRENNAN Dominick F. Impastato, III

          Panel composed of Judges Susan M. Chehardy, Marc E. Johnson, and John J. Molaison, Jr.

          JOHN J. MOLAISON, JR. JUDGE.

         The plaintiffs appeal a judgment that granted the defendant's exception of no cause of action. We affirm.

         STATEMENT OF THE CASE

         According to the record before us, on January 30, 2008, plaintiffs/appellants, Tracy Vince and JoAnn Vince, individually and on behalf of Southland Express, L.L.C. ("Southland"), entered into a "Business Manager Agreement" with defendant, Metro Rediscount Company, Inc. ("Metro"), pertaining to the sale of certain receivables arising from the "sales or services to [Southland's customers.]"[1]The contract provided that Metro would "retain a portion of the sums payable" from Metro to Southland "to provide for satisfaction of [Southland's] Repurchase Obligation." Trace Vince and JoAnn Vince acted as personal guarantors for the contract, which was accepted by Frank Adolf ("Adolf"), in his capacity as president of Metro. Also executed on January 30, 2008, were three separate commercial security agreements in favor of Metro by Southland, JoAnn Vince, individually, and Tracy Vince, individually.[2]

         On December 31, 2012, plaintiffs/appellants, Tracy Vince and JoAnn Vince, individually and on behalf of Southland, filed a petition in the Twenty-Fourth Judicial District Court for damages against defendants, Metro, appellee Brian Brennan ("Brennan"), and Adolf, alleging that defendants owed Southland a balance of $527, 101.57 on an open account. On March 18, 2013, defendants filed an answer, as well as exceptions of no cause of action and no right of action. The trial court granted defendants' exceptions on September 17, 2013, and gave leave for appellants to amend and supplement their petition "at any time" prior to when the matter was set for trial.

         Appellants filed their first amended and supplemental petition for damages on September 1, 2016. On October 19, 2016, Brennan filed an answer to Southland's amended and supplemental petition, and also set forth various exceptions, raised affirmative defenses and asserted cross-claims against defendants Adolph, Metro, and Metro Rediscount Company of Kenner II, L.L.C. ("Metro II"), [3] as Metro's successor in interest. On November 3, 2017, Brennan filed a "motion for summary judgment and/or exception of no cause of action", which was heard by the trial court on December 13, 2017.[4] On that same date, the trial court granted Brennan's exception of no cause of action, dismissing all claims against him with prejudice. The trial court further determined that Brennan's motion for summary judgment was moot. Appellants thereafter timely sought the instant devolutive appeal.

         ARGUMENTS AND ANALYSIS

         Appellants' sole assignment of error is that the trial court erred in granting Brennan's exception of no cause of action, when the petition and amended petition alleged sufficient facts to establish causes of action for fraud and the liability of Brennan as a corporate officer.

         The function of an exception of no cause of action is to test the legal sufficiency of a petition by determining whether the law affords a remedy on the facts alleged in the pleadings. City of New Orleans v. Bd. of Dirs. of the La. State Museum, 98-1170 (La. 3/2/99), 739 So.2d 748, 755. No evidence may be introduced at any time to support or controvert the objection that the petition fails to state a cause of action. La. C.C.P. art. 931. Therefore, an exception of no cause of action is triable solely on the face of the petition.

         In reviewing a trial court's ruling sustaining an exception of no cause of action, the appellate court should subject the case to de novo review because the exception raises a question of law and the lower court's decision is based only on the sufficiency of the petition. City of New Orleans v. Bd. of Comm'rs, 93-0690 (La. 7/5/94), 640 So.2d 237, 253. "[A]n exception of no cause of action must be overruled unless the allegations of the petition exclude every reasonable hypothesis other than the premise upon which the defense is based; that is, unless plaintiff has no cause of action under any evidence admissible under the pleadings." Haskins v. Clary, 346 So.2d 193, 195 (La. 1977).

         In appellants' original petition, Brennan was named as a defendant and identified as "Officer/Vice-President/Secretary of Metro Rediscount Company, Inc." Adolph was identified as the "Officer/President" of Metro. The factual allegations in the original petition, in summary, were that Southland contracted with Metro to collect payments from Southland's customers in Jefferson Parish. At a certain point in time, payments to Southland from Metro started to be returned from the bank for non-sufficient funds. Southland contacted Adolph directly and "requested he immediately cease accepting payments from Southland's customers." Southland alleged that Adolf continued to collect Southland's customer payments and submit checks to Southland that were returned by the bank as non-sufficient. Southland claimed that it terminated its relationship with Metro while Metro still allegedly owed it customer funds in the amount of $527, 101.57.

         The only factual allegation pertaining to Brennan in the original petition was that, "Joann Vince has also spoken to Metro's other Officer/Vice-President/Secretary, Brian Brennan, on multiple occasions who continues to indicate Adolf ...


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