JOSEPH KOLWE, JR.
CIVIL AND STRUCTURAL ENGINEERS, INC.
FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF
LAFAYETTE, NO. C-2016-1792-B HONORABLE JULES D. EDWARDS, III,
G. Durio Travis J. Broussard Durio, McGoffin, Stagg &
Ackermann COUNSEL FOR: Plaintiff/Appellant - Joseph Kolwe,
W. Washington Kyle M. Bacon Jones Walker LLP COUNSEL FOR:
Defendant/Appellee Civil and Structural Engineers, Inc.
D. Plaisance Marcus J. Plaisance Plaisance Law, LLC COUNSEL
FOR: Plaintiff/Appellant - Joseph Kolwe, Jr
composed of Ulysses Gene Thibodeaux, Chief Judge, John D.
Saunders, and D. Kent Savoie, Judges.
ULYSSES GENE THIBODEAUX CHIEF JUDGE
consolidated appeals entreat us to consider res nova
issues of law interpreting the recently revised Louisiana
Business Corporation Act ("LBCA"), La.RS. 12:1-101,
Joseph Kolwe, Jr. is a withdrawing shareholder of
Defendant-Appellee, Civil and Structural Engineers, Inc.
("CASE"). He appeals a final judgment of the trial
court which fixed the fair value of his shares at
contradictory amounts of $871, 817.00 and $587, 187.00. The
judgment was then amended sua sponte by the trial
court to a decisive figure of $871, 817.00. This Amended
Judgment now forms the subject of Mr. Kolwe's
consolidated appeals, whereby he challenges its validity
pursuant to La.Code Civ.P. art. 1951. Mr. Kolwe additionally
contends the trial court erred in its conclusion of his
effective date of withdrawal from CASE and also in its
failure to award interest on the amount of his shares as
answers the appeal challenging the trial court's
determination of the fair value of Mr. Kolwe's shares in
the corporation. Specifically, it asserts that the trial
court erred in declining to tax-effect Mr. Kolwe's
shares, in including proceeds of a settled claim awarded to
CASE in its valuation determination, and in allegedly
refusing to consider evidence of undue burden pursuant to
reasons set forth below, we amend the original judgment to
conform to the statutory framework contemplated by the LBCA
and, as amended, affirm.
(1) whether the Amended Judgment on Rules issued by the trial
court on January 4, 2018, is an absolute nullity pursuant to
La.Code Civ.P. art. 1951 and, if so, whether the Original
Judgment on Rules signed on December 22, 2017, may be revised
to correct any errors of substance or, alternatively, any
errors in calculation or phraseology;
(2) whether the trial court erred in determining the
effective date of Mr. Kolwe's Notice of Withdrawal to be
November 29, 2015;
(3) whether the trial court erred in its determination of the
"fair value" of Mr. Kolwe's interest by failing
to tax-effect the value of his shares and/or including the BP
settlement payment in its valuation;
(4) whether the trial court erred in failing to award Mr.
Kolwe judicial interest and costs from the date of judicial
(5) whether the trial court abused its discretion in refusing
to hear evidence pertaining to La.R.S. 12:1-1436(E) at the
conclusion of the valuation trial.
AND PROCEDURAL HISTORY
a professional engineering firm operating as a closely-held
business corporation. Its three shareholders, Michael Smith,
Matthew Granberry, and Joseph Kolwe, Jr., each owned an equal
one-third share until December 2017. Prior to Mr. Kolwe's
disassociation from the corporation, each shareholder served
as an employee and officer of CASE, and the three together
comprised the board of directors.
employment-related disputes arose concerning Mr. Kolwe's
performance, discussions regarding his departure from CASE
commenced in December of 2014. In early 2015, CASE began
negotiating a buy-out of Mr. Kolwe's ownership interest
and retained a business valuation expert, Jason MacMorran, to
facilitate the transaction; Mr. Kolwe likewise retained his
own expert, Charles Theriot, to protect his interests. By
mid-2015, however, the shareholders were unable to amicably
resolve the terms of Mr. Kolwe's withdrawal.
November of 2015, Mr. Kolwe received notice of a special
meeting of the board of directors to be held for the purpose
of considering a profitability incentive plan for employees
and directors of CASE. After receiving notice of the meeting,
Mr. Kolwe's attorney drafted and mailed a notice of
withdrawal to the corporation pursuant to La.R.S. 12:1-1435,
et seq. At the board meeting, the profitability
incentive plan was adopted despite Mr. Kolwe's objection.
At the end of November, Mr. Kolwe's employment with CASE
was terminated, and, over the course of the next month, he
was removed as both an officer and director of the
December 2, 2015, Mr. Kolwe filed suit against CASE, Mr.
Smith, and Mr. Granberry alleging claims of shareholder
oppression. However, this suit was ultimately dismissed after
the trial court sustained the defendants' Exceptions of
No Cause of Action and Prematurity.
April 6, 2016, Mr. Kolwe reasserted his claims of oppression
against CASE, Mr. Smith, and Mr. Granberry. After
disagreements continued regarding the value of Mr.
Kolwe's ownership interest, the parties agreed to bypass
a trial on the merits of the oppression claims and simply
litigate the valuation issue by summary proceeding in
accordance with La.R.S. 12:1-1436. Upon joint request of the
parties, the trial court signed a Consent Judgment and Order
of Trial Date which ordered that a trial be held for the
limited purposes of valuing Mr. Kolwe's shares and
determining the effective date of his notice of
withdrawal. Prior to the valuation trial, CASE filed a
Motion for Partial Summary Judgment regarding the effective
date of Mr. Kolwe's withdrawal. On November 20, 2017, the
trial court granted the motion and held Mr. Kolwe's
notice of withdrawal to corporation was effective as of
November 29, 2015.
valuation trial was held on December 20-21, 2017, and a final
judgment was rendered in the matter on December 22, 2017,
purporting to declare the value of Mr. Kolwe's shares and
affirming its earlier ruling as to the effective date of Mr.
Kolwe's notice of withdrawal. In reaching its valuation
determination, the trial court declined to
"tax-effect" the value of the corporation's
unaccrued net assets as argued for by CASE, and included the
proceeds of a settled BP claim in the valuation as argued
against by CASE.
the final judgment contained an internal inconsistency
regarding the dollar figure amount of Mr. Kolwe's
interest, and the trial court thereafter issued an amended
judgment on January 4, 2018, to correct the inconsistency. On
appeal, however, Mr. Kolwe asserts that the amended judgment
is absolutely null and, thus, seeks to reinstate the original
judgment because of the trial court's failure to afford
the proper hearing with notice to the parties prior to
correcting its error of substance in the original judgment.
Next, Mr. Kolwe argues that the effective date of his notice
of withdrawal was November 24, 2015, despite the trial
court's ruling that his notice of withdrawal was
effective five days later, as of November 29, 2015. Whereas
the effective date of Mr. Kolwe's withdrawal from the
corporation dictates the fair value of his ownership interest
in CASE, the parties raise several arguments on appeal with
respect to both procedural and substantive aspects of the
trial court's valuation determinations.
jurisdiction of a court of appeal extends to law and
facts." La.Const. art. 4, § 10(B). The appellate
court must determine whether the trial court committed an
error of law or made a factual finding that was manifestly
erroneous or clearly wrong. Gibson v. State, 99-1730
(La. 4/11/00), 758 So.2d 782, cert denied, 531 U.S.
1052, 121 S.Ct. 656 (2000). The reviewing court must review
the record in its entirety to make this determination.
Stobart v. State, Through DOTD, 617 So.2d 880
appellate court may not set aside a trial court's
findings of fact in the absence of manifest error or unless
it is clearly wrong. Id.; Rosell v. ESCO,
549 So.2d 840 (La.1989). The trial court's valuation of a
withdrawing shareholder's ownership interest is a factual
one which shall not be disturbed absent manifest error.
Ellington v. Ellington, 39, 943 (La.App. 2 Cir.
3/18/03), 842 So.2d 1160. Accordingly, if the trial
court's findings in a valuation proceeding are reasonably
supported by the record and do not constitute an abuse of
discretion, its determinations should be affirmed.
"Furthermore, the trial court's choice of one
expert's method of valuation over that of another will
not be overturned unless it is manifestly erroneous."
Id. at 1166.
the interpretive aspect of this case presents this court with
a question of law and is, thus, reviewed under a de novo
standard of review. Caldwell v. Janssen Pharmaceutical,
Inc., 12-2447 (La. 1/28/14), 144 So.3d 898. While it is
well settled that a reviewing court will defer to a trial
court's reasonable decision on a question properly within
its discretion, such deference shall not be afforded where
its decision is based on an erroneous interpretation or
application of law rather than a valid exercise of
discretion. Kem Search, Inc. v. Sheffield, 434 So.2d
of Final Judgment
December 22, 2017, the trial court issued its Judgment on
Rules following a two-day valuation trial ("Original
Judgment"). However, the judgment contained an internal
inconsistency with respect to the dollar figure amount of Mr.
Kolwe's ownership interest in the corporation.
an earlier portion of the judgment located under the
subheading JUDGMENT, the trial court stated: "This court
adjudges declares and decrees [sic] the plaintiff's
shares as of November 29, 2015 to be $587, 178.00." In
its conclusion, however, the trial court went on to state:
"Accordingly, this court finds that the plaintiff's
ownership interests in CASE shares as of November 29, 2015 to
be valued to be $871, 817.00."
January 4, 2018, the trial court issued an Amended Judgment
on Rules ("Amended Judgment") sua sponte.
Without providing a hearing with notice to the parties, the
trial court deleted its language decreeing Mr. Kolwe's
interest to be worth $587, 178.00. Consistent with the
Original Judgment, the Amended Judgment valued Mr.
Kolwe's shares to be $871, 817.00.
Kolwe now argues before this court that the Amended Judgment
rendered on January 4, 2018, ought to be declared an absolute
nullity pursuant to La.Code Civ.P. art. 1951. Louisiana Code
of Civil Procedure Article 1951 provides the following:
On motion of the court or any party, a final judgment may be
amended at any time to alter the phraseology of the judgment,
but not its substance, or to correct errors of calculation.
The judgment may be amended only after a hearing with notice
to all parties, except that a hearing is not required if all
parties consent or if the court or the party submitting the
amended judgment certifies that it was provided to all
parties at least five days before the amendment and that no
opposition has been received.
asserts that while the trial court clearly intended to value
his interest to be worth $871, 817.00, as demonstrated by the
Amended Judgment's deletion of the decretal reference to
the $587, 187.00 figure contained in the Original Judgment,
the deletion constitutes an amendment to the substance of the
final Original Judgment rendered by the trial court, in
violation of La.Code Civ.P. art. 1951. Finding that this
alteration of the final judgment regarding the fair value
amount not only affects the substance of the judgment, but
also directly injects uncertainty into the very objective to
be attained by the valuation trial, we agree.
the usual remedy of this court in such a case is to vacate
the amended judgment and reinstate the original judgment,
this case will not be resolved by such a remedy. See
Tunstall v. Stierwald, 01-1765 (La. 2/26/02), 809 So.2d
916. To reinstate the Original Judgment here would allow a
judgment to stand which contains an internal inconsistency
regarding the value of Mr. Kolwe's shares, which would,
thus, defeat the sole objective of the valuation trial.
Pursuant to La.Code Civ.P. art. 2164, an appellate court may
"render any judgment which is just, legal and proper
upon the record on appeal." Accordingly, based on the
complete record before us, we deem it just, legal and proper
not only to vacate the Amended Judgment and reinstate the
Original Judgment, but also to revise the Original Judgment
to reflect the clear intent of the trial court to value Mr.
Kolwe's ownership interest in the amount of $871, 817.00
as of November 29, 2015. 
Mr. Kolwe's ownership of any interest and any
corresponding rights and obligations as a shareholder in CASE
will be deemed to have terminated as of the date of the
issuance of the Original Judgment, on December 22,
CASE raises a separate error of the trial court in rendering
its final judgment. It asserts that the trial court erred in
its failure to render a portion of the judgment in favor of
CASE and against Mr. Kolwe, as required by La.R.S.
12:1-1436(D). We agree, and likewise revise the Original
Judgment, as amended above, to conform with the statutory
requirements of the LBCA pursuant to the authority conferred
upon this court in La.Code Civ.P. art. 2164.
Revised Statutes 12:1-1436(D) (emphasis added) provides, in
pertinent part, that
[A]t the conclusion of the trial the court shall
render final judgment as described in Paragraphs (1)
and (2) of this Subsection:
(1) In favor of the shareholder and against the corporation
for the fair value of the shareholder's shares.
(2) In favor of the corporation and against the
shareholder that does both of the following:
(a) Terminates the shareholder's ownership of shares in
(b) Orders the shareholder to deliver to the corporation
within thirty days of the date of the judgment any
certificate issued by the corporation for the shares or an
affidavit by the shareholder that the certificate has been
lost, stolen, destroyed, or previously delivered to the
judgments, the trial court concluded its written reasons by
stating the following:
In accordance with the provisions of La.R.S. 12:1-1436(D),
this is a final judgment is [sic] rendered in favor of
plaintiff Joseph Kolwe, Jr. and against defendant Civil and
Structural Engineers, Inc. This judgment terminates the
plaintiff's ownership shares [sic] in Civil and
Structural Engineers, Inc. The plaintiff is ordered to
deliver to CASE, Inc., any certificate issued by CASE for the
shares or an affidavit that the certificate has been lost,
stolen destroyed [sic] or previously delivered to the
corporation, within thirty days of the date of this judgment.
stated above, La.Code Civ.P. art. 1951 provides that a court
may, on its own motion, amend a final judgment at any time to
correct the phraseology of a judgment. Thus, La.Code Civ.P.
art. 1951 allows that a "judgment may be amended by the
court where the amendment takes nothing from or adds nothing
to the original judgment." Villaume v.
Villaume, 363 So.2d 448, 450 (La.1978).
judgments explicitly rule in favor of Mr. Kolwe as
shareholder and against the CASE, per Subsection (D)(1), but
likewise fail to include language explicitly ruling in favor
of the corporation and against the shareholder, as required
by Subsection (D)(2). While we recognize that the trial
court's holding comports with the statute's
requirement in effect through featuring language that
terminates Mr. Kolwe's ownership of shares and orders him
to deliver any certificate or affidavit to the corporation,
we further amend the phraseology of Original Judgment to
explicitly reflect the statutory directive for the judicial
determination of fair value as contemplated by La.R.S.
12:1-1436(D), specifically Subsection (D)(2), where to do so
would neither add nor take something away from the substance
of the judgment.
Date of Notice of Withdrawal
appeal, Mr. Kolwe asks this court to determine whether the
trial court erred in declaring that the effective date of his
notice of withdrawal to the corporation was November 29,
2015, rather than November 24, 2015, as he maintains. For the
following reasons, we decline the arguments advanced by Mr.
Kolwe and affirm the trial court's determination that Mr.
Kolwe's notice of withdrawal to the corporation became
effective as of November 29, 2015.
November 21, 2015, a notice of special meeting of the board
of directors of CASE was timely mailed to Mr. Kolwe per the
corporate by-laws, informing him of a special meeting to be
held on the morning of November 25, 2015. The board meeting
notice was delivered to Mr. Kolwe's mailbox on November
23, 2015, at 1:23 p.m., as indicated by the return receipt.
On the afternoon of November 24, 2015, following his receipt
of the board meeting notice, Mr. Kolwe's attorney, Travis
Broussard, prepared a letter asserting that Mr. Kolwe was
withdrawing as a shareholder of CASE pursuant to La.R.S.
12:1-1435, et seq. The letter was addressed to
Michael Smith as president of CASE, and sent by U.S. mail to
be delivered to the address of the corporation's
principal office as indicated in the corporate records.
However, the letter was never actually received by the
around the same time, Mr. Broussard's secretary drafted
and sent an email to Kyle M. Bacon, an attorney representing
Mr. Smith and Mr. Granberry as majority shareholders and
directors of CASE. The email stated: "Attached please
find a letter from Mr. Broussard directed to Civil and
Structural Engineers, Inc., regarding the above-referenced
matter, which was sent via U.S. Mail
pertinent times, Mr. Kolwe has argued that the email sent to
Mr. Bacon constituted notice by electronic transmission
pursuant La.R.S. 12:1-141, and further that notice to Mr.
Bacon constituted sufficient, legal notice to the
corporation. Mr. Kolwe alternatively argued that because the
notice of withdrawal was mailed to a shareholder of CASE
pursuant to La.R.S.12:1-141(I)(2), the notice was effective
upon deposit in the U.S. Mail. On November 20, 2017, the
trial court granted CASE's Partial Motion for Summary
Judgment and found that "there is no genuine issue of
material fact that notice of withdrawal was mailed on
November 24, 2015, to the address of the business. Notice is
effective five (5) days thereafter, which was November 29,
2015." On appeal, we find Mr. Kolwe's arguments to
be neither compelling nor applicable to the instant situation
as reasserted before this court.
Revised Statutes 12:1-1435 governs the procedure affording an
oppressed shareholder the right to withdraw from a
corporation. At the outset, the statute dictates that
"the value of a withdrawing shareholder's shares is
to be determined as of the effective date of the notice of
withdrawal." La.R.S. 12:1-1435(C)(1). The statute
further indicates that "[a] shareholder may assert a
right to withdraw under this Section by giving written notice
to the corporation that the shareholder is
withdrawing from the corporation on grounds of
oppression." La.R.S. 12:1-1435(D) (emphasis added).
Therefore, in addition to the requirements that notice be
written and specify that the shareholder withdraws on grounds
of oppression, the statute explicitly mandates that a
shareholder direct his or her notice of withdrawal to the
La.R.S. 12:1-1435 does not contain any formal requirements
for effectuating notice particular to oppressed shareholders,
the "effective date of notice" is defined in
La.R.S. 12:1-141. La.R.S. 12:1-140(7). That statute provides
that "[n]otice or other communication to a
domestic…corporation…may be delivered to its
registered agent or to the secretary of the corporation at
its principal office." La.R.S. 12:1-141(C).
Alternatively, the statute also permits that such notice
"may be delivered by electronic transmission if
consented to by the recipient or if authorized by Subsection
J of this Section." Subsection (J) goes on to provide the
J. A notice or other communication may be in the form of an
electronic transmission that cannot be directly reproduced in
paper form by the recipient through an automated process used
in conventional commercial practice ...