FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2017-07702,
DIVISION "F" Honorable Christopher J. Bruno, Judge
A. Meade MEADE YOUNG, LLC COUNSEL FOR PLAINTIFF/APPELLANT
A. Stern Don S. McKinney Timothy M. Brinks ADAMS & REESE
LLP Adam V. Vickers William F. Large Mark J. Graffagnini CARA
STONE, LLP COUNSEL FOR DEFENDANT/APPELLEE
composed of Judge Edwin A. Lombard, Judge Rosemary Ledet,
Judge Tiffany G. Chase
ROSEMARY LEDET JUDGE
a complex commercial litigation suit. In the various
iterations of the petition,  the plaintiff, Thomas Pike
Barkerding, named over fifty defendants and asserted almost a
dozen causes of action. At this juncture, only six defendants
and four causes of action remain. Those six defendants can be
divided into the following two groups:
(i) Stone Pigman Walther Wittmann, LLC ("Stone
Pigman"); Scott Whittaker; and William Bishop
(collectively, the "Stone Pigman Defendants"); and
(ii) Cara Stone, LLP ("Cara Stone"); Graffagnini, A
Law Corporation; and Mark Graffagnini (collectively, the
"Cara Stone Defendants").
first remaining cause of action, which is asserted only
against the Stone Pigman Defendants, is "legal
malpractice and breach of fiduciary duty" (the
"Malpractice Claims"). The other three remaining
causes of action, which are asserted against all six
remaining defendants, are "fraudulent and/or intentional
misrepresentations and/or detrimental reliance" (the
"Fraud Claims"); Louisiana Unfair Trade Practice
Act ("LUTPA") violations (the "LUTPA
Claims"); and conspiracy (the "Conspiracy
response to Mr. Barkerding's claims, the Stone Pigman
Defendants and the Cara Stone Defendants both filed various
peremptory exceptions-including exceptions of prescription,
cause of action, and no right of action. Following several
hearings, the trial court rendered multiple judgments. The
effect of those judgments was to dismiss all the claims
against both the Stone Pigman Defendantsand the Cara Stone
Defendants. From those judgments, Mr. Barkerding
appeals. Both the Stone Pigman Defendants and the Cara Stone
Defendants answered the appeal. For the reasons that follow,
AND PROCEDURAL BACKGROUND
November 2013, Mr. Barkerding formed SmartPak, LLC
("SmartPak") to finance and develop a patented
invention-an integrated "koozie" and carry-case
for packages (four and six) of bottled beverages, such as
beer (the "Invention"). Robert Post, an experienced
cardboard package designer, assisted Mr. Barkerding in
developing the Invention.
an on-line legal form, Mr. Barkerding drafted SmartPak's
first operating agreement, which was dated November 21,
2013. In the agreement, Mr. Barkerding was
designated as SmartPak's manager and its chief executive
officer. The agreement also included a requirement of
unanimous written consent of the existing SmartPak members to
admit new members.
2014, Mr. Barkerding met with the chief marketing officer of
one of the major beer conglomerates, who confirmed the
potential market demand for the Invention. Thereafter, Mr.
Barkerding sought to obtain additional capital for SmartPak.
Two principals of SmartPak members-Jack Carrere (Carrere
Consulting LLC) and Alex Goss (Goss Ventures LLC)-also were
involved with a new local funding group called NO/LA Angel
Network ("NOLAAN"). Mr. Carrere and Mr. Goss urged
Mr. Barkerding to approach NOLAAN for the capital. In August
2014, Mr. Carrere and Mr. Goss introduced Mr. Barkerding to
Dann Schwartz, a prominent NOLAAN member. Mr. Schwartz
forwarded to Mr. Barkerding an email from Mr. Whittaker
regarding the newly launched, Stone Pigman CornerStone
Program, which was designed to provide start-up businesses
with legal services to help them grow and to protect their
September 27, 2014, Mr. Barkerding first communicated with
the Stone Pigman Defendants. On that date, he submitted a
CornerStone Program application "on behalf of SmartPak,
LLC." The application expressly indicated that it would
not create an attorney-client relationship. The following
week Mr. Barkerding met with representatives of Stone Pigman.
October 2014, Mr. Schwartz became a SmartPak member. At this
time, Mr. Schwartz was serving on NOLAAN's board. In
November 2014, Mr. Schwartz advised Mr. Barkerding that, in
order for NOLAAN to invest in SmartPak, the company needed to
obtain corporate counsel. Mr. Barkerding's first choice
for corporate counsel was Carver Darden-a law firm that Mr.
Barkerding had previously engaged before he formed SmartPak
to assist with the intellectual property ("IP")
rights, especially in obtaining the patents for the
Invention. In response to Mr. Barkerding's inquiry as to
whether Carver Darden could expand their representation to
include the company, Carver Darden sent an outline of complex
legal steps that were required before they could switch from
representing Mr. Barkerding, individually, to representing
the company itself. Those legal steps included a unanimous
consent resolution, signed by all of SmartPak's members,
authorizing SmartPak to sign a summary engagement memorandum;
an arbitration disclosure and consent document; and an
appropriate conflicts waiver.
to Mr. Barkerding, before he had time to read and to
interpret the information that Carver Darden sent to him, Mr.
Schwartz instructed him to tell Carver Darden to stop any
further work and to transfer all patent concerns to another
firm, AdamsIP. Mr. Barkerding complied. Mr. Schwartz then
arranged with Mr. Whittaker for Stone Pigman to become
SmartPak's corporate counsel.
November 2014, Stone Pigman began representing SmartPak in
connection with obtaining Series A investment through NOLAAN
(the "Series A Financing"). In connection with the
Series A Financing, NOLAAN was represented by Mr.
Graffagnini, who also was a NOLAAN board
December 1, 2014, Mr. Barkerding made his pitch to a
preliminary panel of NOLAAN's members, requesting $150,
000 in funding. At the end of his pitch, the head of NOLAAN,
Mike Eckert, announced NOLAAN's interest in
oversubscribing to the funding round (providing $350, 000 in
December 5, 2014, Mr. Whittaker emailed a copy of Stone
Pigman's letter of engagement to Mr. Barkerding. This
letter indicated that Stone Pigman would represent SmartPak,
that Mr. Whittaker would be primarily responsible for this
representation, and that Mr. Bishop and other Stone Pigman
lawyers would be involved as appropriate. This letter stated
that the initial projects that Stone Pigman would be handling
included revising SmartPak's operating agreement and
closing the contemplated seed money investment round. This
letter did not disclose any conflicts of interest or mention
Mr. Whittaker's membership on NOLAAN's board.
According to Mr. Barkerding, Mr. Whittaker told him not to
sign the first letter. The first letter was never executed.
In response to Mr. Schwartz's request, on December 8,
2014, Mr. Whittaker sent a revised engagement letter with
SmartPak, which likewise did not disclose Mr. Whittaker's
membership on NOLAAN's board. The second letter, like the
first one, was never executed.
days later, on December 11, 2014, Mr. Barkerding made his
formal pitch to NOLAAN's full membership. Mr. Whittaker
testified that he was present at the meeting when Mr.
Barkerding made his formal pitch. According to Mr. Whittaker,
he spoke to Mr. Barkerding at the meeting and told Mr.
Barkerding that he had been a founding member of NOLAAN and
that he presently was serving on NOLAAN's board. Mr.
Barkerding did not recall having that conversation and denied
being provided that information at the meeting.
December 19, 2014, Mr. Bishop, Mr. Whittaker's associate
at Stone Pigman, sent a "Revised Term Sheet" to Mr.
Graffagnini, NOLAAN's counsel, stating:
Attached are clean and marked drafts of the term sheet based
on our meeting today. Per our discussion, the issue of
dilution protection, in particular with respect to future
equity raises with low valuations, remains unresolved. I am
also circulating the attached to my client
simultaneously and, as such, it remains subject to
his further review and comment.
January 8, 2015, Mr. Whittaker sent Mr. Barkerding a third,
revised engagement letter. In the transmittal email, Mr.
Whittaker stated that he had previously spoken to Mr.
Barkerding, in person, about a waiver of any conflicts
regarding NOLAAN. The third letter included the following new
paragraph regarding conflict of interest matters:
Conflict of Interest Matters. SmartPak acknowledges
that Stone Pigman represents NO/LA Angel Network from time to
time in connection with certain investment transactions, and
I serve on the Board of Directors of NO/LA Angel Network.
Furthermore, Stone Pigman may represent certain members of
NO/LA Angel Network who may participate in the contemplated
Series A Financing. To the extent that these circumstances
present a conflict of interest under the Louisiana Rules of
Professional Conduct, SmartPak hereby grants its informed
consent and waiver with respect to such conflict(s) of
interest, it being understood, however, that Stone Pigman
would not represent NO/LA Angel Network or any of its members
in connection with Series A Financing or any other matter
adverse to SmartPak.
third letter, as in the prior two letters, the client is
identified as SmartPak. The third letter stated that the
initial services Stone Pigman would perform included revising
the SmartPak operating agreement and documenting and closing
the contemplated NOLAAN Series A Financing. On January 9,
2015, Mr. Barkerding, as SmartPak's CEO, signed the third
letter and emailed it back to Mr. Whittaker.
January 21, 2015, the NOLAAN Series A Financing
closed. In connection with the closing, multiple
contracts were signed, including the Employment Agreement and
the Assignment/Non-Disparagement Agreement between SmartPak
and Mr. Barkerding. The Amended and Restated Operating
Agreement also was executed on that date.
after the NOLAAN Series A Financing closing on January 21,
2015, Mr. Barkerding began having conflicts with
SmartPak's other board members. On September 25, 2015,
Mr. Whittaker, in his capacity as SmartPak's attorney,
sent a letter to Mr. Barkerding addressing Mr.
Bakerding's conflicts with the other board members, which
were allegedly harming the company. Mr. Whittaker informed
Mr. Barkerding that he should bring his own attorney to a
meeting with the other board members. On October 25, 2015,
Mr. Barkerding sent an email to all the SmartPak board
members addressing his concerns and stating that he did not
have "legal guidance" and that he believed it would
further complicate matters to bring in additional counsel.
Also, in October 2015, Mr. Barkerding was removed as CEO; he
remained, however, as Chief Product Officer until his
employment contract expired.
SmartPak January 19, 2016 board meeting, Mr. Barkerding
advised the other board members that he felt they were trying
to remove him from the company; and he abruptly left the
meeting. During 2016, Mr. Barkerding retained three
successive attorneys to represent him in his dispute with the
other SmartPak board members.
February 7, 2016, Bob Ellis, the first attorney Mr.
Barkerding retained, emailed Mr. Whittaker to request a
meeting about Mr. Barkerding's concerns. At the next
board meeting, Mr. Barkerding expressed his displeasure
regarding the Class AA Financing round.
February 26, 2016, the second attorney Mr. Barkerding
retained, Scott Galante, emailed Mr. Whittaker requesting
certain documents; Mr. Galante stated that Mr. Whittaker
"ha[d] the ability and the responsibility to clear up
these issues for me and my client as attorney for the
entity." Mr. Galante further stated that Mr. Whittaker
was "employed to work for the organization as a
professional which includes my client's interest."
Later that day, Mr. Galante sent another email to Mr.
Whittaker in which he stated that he believed his
"client ha[d], at his disposal, several different causes
of action to protect his interest." On March 1, 2016,
Mr. Galante sent another email to Mr. Whittaker stating that
he would be advising his client "to formally move to
have [Mr. Whittaker] and [his] firm removed as counsel for
SmartPak . . . [e]specially in light of the fact that [Mr.
Whittaker] ha[d] disclosed that the individual investors are
April 1, 2016, Mr. Galante wrote a letter to Mr. Whittaker
informing him that Mr. Barkerding had an issue with the
issuance of additional stock, which would expose him to
dilution. In bold, Mr. Galante stated in the letter:
Please be advised at this time my client is NOT threatening
to sue SmartPak as an entity in regards to the upcoming
issuance as has been alleged. However, my client has
significant questions arising from and issues with the
individual investors of SmartPak who comprise the majority of
its Management Board.
April 5, 2016, Mr. Whittaker responded, advising that the
other SmartPak investors were "seriously considering
filing suit against Mr. Barkerding for monetary and
injunctive relief to recover the damages he has caused and to
prevent future damage." Mr. Whittaker further summarized
Mr. Barkerding's belief-that SmartPak's other board
members and its attorneys were engaging in a "nefarious
In a nutshell, the situation from the company's
perspective is that Mr. Barkerding has for some reason formed
a belief that the other Board members and the company
attorneys are conspiring to achieve the goal of diluting Mr.
Barkerding's ownership interest, rather than exercising
their business judgment and rendering legal advice to achieve
the goal of maximizing company value for the benefit of all
April 15, 2016 board meeting, the issue of the "legal
cloud" created by Mr. Barkerding's threat to file
suit was raised. The minutes stated that "Mr. Eckert
[the head of NOLAAN] reminded the Board that the legal cloud
and threat of litigation from Mr. Barkerding depressed the
valuation [of SmartPak]." Mr. Barkerding responded that
"he engaged Mr. Galante solely to protect his own
interests and that of the members that helped co-found the
April 28, 2016, Mr. Barkerding posted online a video that he
prepared and emailed a copy of a link to the video to various
parties. In the video, Mr. Barkerding stated that the Stone
Pigman Defendants had a "clear conflict of
interest." In the video, he explained the conflict as
Soon after the successful pitch to [NOLAAN], Mr. Schwartz
introduced the CEO to Scott Whittaker as SmartPak's
tentative corporate counsel. It was later learned that Mr.
Whittaker is a long-time neighbor of Mr. Schwartz and serves
on the board of directors for [NOLAAN]. Mr. Whittaker's
involvement with NOLAAN was a clear conflict of interest.
Before formal engagement, Mr. Whittaker prompted the CEO to
waive this conflict, and by that time, the CEO had grown to
trust the arrangement, and with the combined influence of
good faith, the eagerness to move forward and total ignorance
of the impact this could have, he signed the waiver.
Mr. Barkerding offered to sell all or a portion of his shares
in SmartPak (the "Buy Out"). In connection with the
Buy Out, Mr. Barkerding recorded two phone calls that he had
with Mr. Whittaker-one on October 28, 2016; the other on
November 23, 2016. In the November 23, 2016 phone call, Mr.
Whittaker recounted the events leading up to the Series A
Financing and stated that "so that was your
attorney negotiating for you." (Emphasis
February 22, 2017, SmartPak, represented by Stone Pigman,
filed suit against Mr. Barkerding in Civil District Court for
the Parish of Orleans, captioned SmartPak v.
Barkerding, No. 17-1715 (the "SmartPak
Case"). In that suit, SmartPak sought injunctive relief,
including a temporary restraining order, to enforce the
non-disparagement and confidentiality provisions of the
Employment Agreement and Assignment/Non-Disparagement
Agreement. It also sought to recover damages for the breaches
of Mr. Barkerding's breach of fiduciary duties to
SmartPak. In response, Mr. Barkerding filed a motion to
disqualify Stone Pigman from continuing to serve as
SmartPak's counsel in the SmartPak Case. In
support, Mr. Barkerding cited the fact that Stone Pigman had
multiple conflicts of interest.
August 8, 2017, Mr. Barkerding filed this action against
multiple defendants. Thereafter, he amended the petition
three times. The only remaining defendants, as noted
elsewhere in this opinion, are the Stone Pigman Defendants
and the Cara Stone Defendants. The gist of Mr.
Barkerding's allegations is that the defendants conspired
to wrest control of his company, SmartPak, away from him, or
knew of such a plan and benefitted from it. He alleges that
the Stone Pigman Defendants conspired with other board
members from NOLAAN and its attorneys, the Cara Stone
Defendants, to dilute his shares by misleading him into
signing contracts to his detriment. He further alleges that
this was accomplished by Mr. Whittaker holding himself out to
be Mr. Barkerding's personal attorney, instead of
informing Mr. Barkerding that he was counsel for SmartPak, as
a whole. Mr. Barkerding still further alleges that he would
not have signed various foundational documents for SmartPak
had he known that Mr. Whittaker was not advocating and
protecting his personal interests.
the Stone Pigman Defendants and the Cara Stone Defendants
filed various peremptory exceptions to the iterations of the
petition. Following an evidentiary hearing on the Stone
Pigman Defendants' exceptions of no right of action and
prescription at which three witnesses, including Mr.
Barkerding and Mr. Whittaker, testified and evidence was
introduced, the trial court sustained most of the Stone
Pigman Defendants exceptions and dismissed Stone Pigman as
a defendant. Following another hearing, the trial court
sustained most of the Cara Stone Defendants
exceptions and dismissed Cara Stone as a defendant.
Both groups of defendants were dismissed based on the trial
court's findings that all the claims against them with
the exception of the Conspiracy Claims were prescribed. The
Conspiracy Claims against them were dismissed based on the
trial court's ruling sustaining their exceptions of no
cause of action.
Mr. Barkerding asserts multiple assignments of error on
appeal, we frame the narrow issue before us as whether the
trial court erred in its rulings on the various peremptory
exceptions of prescription, no cause of action, and no right
addressing the trial court's judgment sustaining the
exceptions of no right of action and no cause of action, we
apply a de novo standard of review because these
exceptions raise a question of law. N. Clark, L.L.C. v.
Chisesi, 16-0599, p. 3 (La.App. 4 Cir. 12/7/16), 206
So.3d 1013, 1015 (exception of no right of action);
Herman v. Tracage Dev., L.L.C., 16-0082, 16-0083, p.
4 (La.App. 4 Cir. 9/21/16), 201 So.3d 935, 939 (exception of
no cause of action).
addressing the trial court's judgment sustaining the
exceptions of prescription, the standard of review varies
based on whether evidence was introduced in the trial court
at the hearing on the exception. State v. Thompson,
16-0409, p. 18 (La.App. 4 Cir. 11/23/16), 204 So.3d 1019,
1031 (citing Miralda v. Gonzalez, 14-0888, pp. 17-18
(La.App. 4 Cir. 2/4/15), 160 So.3d 998, 1009). "When
prescription is raised by peremptory exception, with evidence
being introduced at the hearing on the exception, the trial
court's findings of fact on the issue of prescription are
subject to the manifest error-clearly wrong standard of
review." In re Med. Review Panel of Hurst,
16-0934, p. 4 (La.App. 4 Cir. 5/3/17), 220 So.3d 121, 125-26.
When no evidence is introduced, the de novo standard
applies. Denoux v. Vessel Mgmt. Servs., Inc.,
07-2143, p. 6 (La. 5/21/08), 983 So.2d 84, 88 (observing that
"[i]n the absence of evidence, the exception of
prescription must be decided on the facts alleged in the
petition, which are accepted as true").
the exceptor bears the burden of proof at the trial of the
peremptory exception of prescription. Rando v. Anco
Insulations, Inc., 08-1163, 08-1169, p. 20 (La.
5/22/99), 16 So.3d 1065, 1082 (citing Carter v.
Haygood, 04-0646 (La. 1/19/05), 892 So.2d 1261, 1267).
If prescription is evident on the face of the ...