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In re BCL Investments, L.L.C.

Court of Appeals of Louisiana, Second Circuit

January 16, 2019

IN THE MATTER OF BCL INVESTMENTS, L.L.C.

          Appealed from the Twenty-Sixth Judicial District Court for the Parish of Bossier, Louisiana Trial Court No. 153909 Honorable Edward Charles Jacobs, Judge

          HARPER LAW FIRM By: Jerald R. Harper Anne E. Wilkes Counsel for Defendant- Appellant Barry Barton

          KITCHENS LAW FIRM By: Richard Russell Ray Counsel for Third Party Appellee BCL Investments

          PETTIETTE, ARMAND, DUNKLEMAN, WOODLEY, BYRD & CROMWELL By: Robert A. Dunkleman E. Henry Byrd, IV Counsel for Plaintiff- Appellee William Long

          Before WILLIAMS, MOORE, and STEPHENS, JJ.

          STEPHENS, J.

         Barry Barton appeals a judgment by the Twenty-Sixth Judicial District Court, Parish of Bossier, State of Louisiana, granting an exception of no right of action filed by William R. Long. For the following reasons, we affirm the trial court's judgment.

         FACTS AND PROCEDURAL HISTORY

         Barry Barton and William R. Long are the only members of BCL Investments, L.L.C. ("BCL"), a Louisiana limited liability company-each having a 50% ownership interest and equal voting rights. BCL's sole business is the ownership and development of a commercial use "strip" shopping center in Bossier City, Louisiana, known as "Park Place Plaza" (the "property").[1]

         The Petition and Answer

         Long filed a petition seeking the judicial dissolution of BCL on August 30, 2017, wherein he claimed that "[t]he current members have reached an impasse as to the objectives, purposes and future of BCL and it is not reasonably practical to carry on the business of BCL [.]" According to his petition, in May 2016, Barton approached Long with information regarding a potential buyer for the property; Long was interested, but the prospect backed out. Long alleged that afterwards, due to disagreements over the management of the property, he and Barton attempted to sell the property, but that was unsuccessful. Additionally, Long asserted that the parties attempted a resolution where one member would buy the other out of BCL-to no avail. Long made other allegations which he claimed indicated Barton's breach of the fiduciary duty owed to him and the LLC. Thus, Long requested the dissolution of BCL and an appointment of a liquidator.

         Barton answered the petition, denying most of the allegations, but admitting that: disagreements between him and Long over the management of BCL existed; efforts had been made to sell the property; and, BCL should be dissolved and a liquidator should be appointed.

         The parties entered into a consent order on October 25, 2017, naming Richard Ray as liquidator in the matter.

         Barton's Rule to Show Cause

         Shortly after the appointment of Ray as liquidator, Barton filed a rule to show cause regarding payment of compensation prior to the distribution of assets. In Barton's rule to show cause, it was claimed that he and Long were negotiating terms for the buyout of their respective interests in BCL. Barton alleged in his pleading that Long, an attorney, agreed to provide legal services to BCL without charge, and Barton, a CPA, agreed to provide accounting services without charge-all in furtherance of BCL's objectives. Barton alleged that BCL procured the services of a local real estate firm, Lea Hall Properties, to handle the leasing of the property. As claimed by Barton, the agreement with Lea Hall Properties provided for BCL to pay commission "up front" upon execution of any lease-6% of the entire lease revenues for the entire term of the lease. Barton characterized this agreement with the real estate firm as a financial burden to BCL, especially in the early phase of the business.

         Therefore, Barton alleged he and Long made an oral agreement that for any tenant Barton secured for the property, the "up front" commission would be avoided, and any right Barton had to "compensation" for the lease of the property would be deferred until BCL sold the property. Barton claimed to have secured several tenants, and attached to his pleading sample pages from the leases. Apparently, in the initial leases, Long referred to "commissions" payable to Lea Hall Properties, but in subsequent leases, Long referred to "commissions" as to Barton. However, in those leases, Long stated "all such commissions waived as Barry Barton is also one of the Landlords at this time." Barton alleged that he questioned why Long used the word "waived" instead of "deferred," and claimed Long explained that was the legally proper language.

         In the rule to show cause, Barton set forth several tenants he allegedly secured, the dates of their leases, monthly base rent, terms of the leases, and the compensation he claimed was due him. The grand total he claimed to be due as a result of securing tenants for the property on behalf of BCL was $55, 613.47.

         Peremptory Exception of No Right of Action And Opposition to Rule to Show Cause

         In response to Barton's filing, Long filed his peremptory exception of no right of action and opposition to rule to show cause. Therein, he referenced Barton's allegation that he and Long had an oral agreement whereby BCL would in effect pay Barton a real estate commission for any tenants he secured for the property. Generally, Long's exception contended that Barton is statutorily prohibited from recovering a commission for the rentals of the property because he lacks a valid real estate license. Specifically, Long argued that "the recruiting and securing of tenants with the expectation of collecting a fee, commission, or other valuable consideration is 'real estate activity' as defined and governed by" La. R.S. 37:1430, et seq. Citing La. R.S. 37:1436 as authority, Long submitted that a person cannot recover a fee or commission unless he has a license from the Louisiana Real Estate Commission. Considering the statutory law, Long argued that Barton has never possessed a real estate salesperson or broker's license. Furthermore, Long contended that Barton did not allege he was a real estate salesperson or broker, thus he cannot bring suit for the recovery of a real estate commission. Finally, Long maintained that any contract for the alleged recovery of a real estate commission would be a violation of a rule of public order and an absolutely nullity.

         Action ...


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