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Bucks v. Directech Southwest

Court of Appeals of Louisiana, Second Circuit

February 27, 2019

BILYEU BUCKS, ET AL. Plaintiff-Appellants
v.
DIRECTECH SOUTHWEST, ET AL. Defendant-Appellees

          Appealed from the Eighth Judicial District Court for the Parish of Winn, Louisiana Trial Court No. 41, 292, Honorable Glenn B. Gremillion (Ad Hoc), Judge.

          STAMEY & MILLER, LLC By: J. Mark Miller Counsel for Appellants.

          BAKER DONELSON BEARMAN CALDWELL & BERKOWITZ, PC By: Phyllis G. Cancienne Christopher G. Morris Christopher M. Vitenas Counsel for Appellees Directech Southwest, Inc., F/K/A Com-Craft Directech, Inc., and Multiband Field Services, Inc.

          Before MOORE, GARRETT, and STEPHENS, JJ.

          MOORE, J.

         The plaintiffs, Woody Bilyeu, Mary Bilyeu and Patrick Shelton, appeal a judgment that sustained an exception of res judicata filed by the three remaining defendants, DirecTECH Southwest, DirecTECH Inc. and Multiband Corp., thus ending the lawsuit, and a judgment that denied the plaintiffs' later motion for leave of court to file a fifth supplemental and amending petition. For the reasons expressed, we affirm.

         FACTUAL BACKGROUND

         The Bilyeus were the owners of Comm-Craft Inc. and DirecTECH Inc. ("DT"), companies that, in the early 1980s, installed satellite dishes (and later became part of DirecTV). Together with Shelton, they were also the trustees of these companies' Employee Stock Ownership Plans ("ESOPs"). In July 2004, they sold their interest in Comm-Craft (which changed its name to DirecTECH Southwest, "DTSW") and DT (later known as DirecTECH Delaware, but still called "DT" in this matter). Before they divested, the plaintiffs sold their shares in these companies' ESOPs back to the ESOPs. The purchasers paid by executing promissory notes to the plaintiffs.

         Later, DirecTECH Holding Co. ("DTHC") was formed to act as a holding company of DT and DTSW. In June 2005, DTHC acquired 100% of the stock of DT and DTSW; thus, DTSW and DT were wholly-owned subsidiaries of DTHC.

         In 2007, in an effort to refinance, DTHC asked the plaintiffs to take refinance notes, and they agreed. DTHC executed two notes, the "Dec 2007 Refi Note," in favor of Bilyeu for $11, 622, 386, and the "Dec 2007 Bilyeu Bucks Note," in favor of Bilyeu Bucks (the Bilyeus' LLC) for $818, 897. As part of the transaction, DTHC's subsidiaries, DTSW and DT, agreed to indemnify (by nine separate documents, the "Indemnity Agreements") the Bilyeus for any time, travel, legal or other expenses they might incur in connection with the ESOP transactions.

         Later in 2007, the U.S. Department of Labor ("DOL") opened an ERISA investigation into whether the plaintiffs had a conflict of interest by acting as directors of the companies selling their stock and as trustees of the ESOPs buying it. DOL suspected, among other things, that the sales were at grossly overinflated prices, resulting in sizable losses to the employees invested in the ESOPs and in financial gain to the sellers.

         PROCEDURAL HISTORY

         In September 2008, Bilyeu Bucks and the Bilyeus individually filed this suit alleging that the Dec 2007 Refi Note and Dec 2007 Bilyeu Bucks Note were in default. They demanded the balances, a total of $12, 123, 478, plus interest and attorney fees as stated in the notes, from DTHC, DTSW, DT and some other subsidiaries. They also demanded enforcement of the Indemnity Agreements against DTSW and DT.

         The defendants filed an exception of prematurity; after some litigation, the matter was referred to arbitration in Winn Parish.[1]

         Meanwhile, several things happened. In late 2008, DTHC sold 100% of its shares of DT and DTSW to Multiband. In early 2009, in connection with the stock purchase, DTSW, DT and DTHC executed an assignment and assumption agreement ("Master Agreement") whereby Multiband, DTSW and DT would assume certain obligations of DTHC. The Master Agreement specifically listed the Indemnity Agreements as subject to the assignment and assumption and stated that Multiband and DTHC's operating entities "expressly assume all covenants * * * of DTHC * * * as if they were the original party thereto[.]"

         In June 2011, the Bilyeus and Shelton settled their ERISA claim with DOL. They agreed to pay $5, 181, 818 to the DTHC ESOP and $518, 181 directly to DOL.[2] They executed a consent judgment and order which contained a "Bar Order": the plaintiffs were permanently and forever barred from filing any claims against any nonsettling defendant, "whether for indemnification, contribution, reimbursement, or other monetary relief," where the claim was based on the facts in the DOL complaint.

         In June 2012, the arbitrator denied the Bilyeus' claims against DTHC on the Dec 2007 Refi Note and Dec 2007 Bilyeu Bucks Note, but awarded Bilyeu Bucks $74, 770 on the Indemnity Agreements. In October 2012, Bilyeu Bucks acknowledged receipt and satisfaction of this amount.

         The Bilyeus filed four supplemental and amending petitions, adding Shelton as a plaintiff and joining several additional defendants, including Multiband. In 2013, the plaintiffs settled with most of these defendants.

         In March 2016, the three remaining defendants, DTSW, DT and Multiband, filed the instant peremptory exception of res judicata. They alleged that the Bar Order prohibited the plaintiffs from suing any nonsettling defendant for indemnification arising out of the facts in the DOL complaint. They also alleged that under the Master Agreement, Multiband stepped into the shoes of DTSW and DT, and thus was entitled to the protection of the Bar Order.

         The plaintiffs conceded that the Bar Order existed, but argued it was not a "blanket bar," and urged that the Master Agreement was not valid.

         ACTION OF ...


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