SHELBY P. LASALLE, JR., WILLIAM B. HAENSEL, JR., STEPHEN W. PHILLIPPI AND RONALD J. DANOS
G.E.C., INC. KREBS, LASALLE, LEMIEUX CONSULTANTS, INC.
APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH
OF JEFFERSON, STATE OF LOUISIANA NO. 732-755 C/W 749-232 C/W
780-420, DIVISION "D" HONORABLE SCOTT U.SCHLEGEL,
COUNSEL FOR PLAINTIFF/APPELLANT, KREBS, LASALLE, LEMIEUX
CONSULTANTS, INC. Jeffrey L. Oakes
COUNSEL FOR DEFENDANT/APPELLEE, G.E.C., INC. Matthew A.
Sherman Preston L. Hayes Patrick R. Follette
composed of Judges Fredericka Homberg Wicker, Jude G.
Gravois, and Hans J. Liljeberg
G. GRAVOIS JUDGE
Krebs, Lasalle, Lemieux Consultants, Inc. ("KLL"),
appeals the trial court's May 22, 2018 judgment which
granted defendant G.E.C., Inc.'s ("GEC")
exception of no right of action and dismissed with prejudice
KLL's suit against GEC for enforcement of a promissory
note. The dispute between these parties, going back to 2013,
includes four separate district court cases, three of which
have been consolidated, as well as two previous appeals to
this Court. Previously, in Krebs, Lasalle, Lemieux
Consultants, Inc. v. G.E.C., Inc., 16-24 (La.App. 5 Cir.
7/27/16), 197 So.3d 829, 833 ("Krebs I"),
this Court found that as a corporation which had been
dissolved by affidavit pursuant to La. R.S. 12:142.1 of the
old Business Corporation Law,  KLL had thereby lost the right to
enforce its inchoate claims upon dissolution, and therefore
no longer had the right to sue GEC for enforcement of a
promissory note allegedly defaulted on by GEC in 2013.
issue in this appeal is whether KLL's reinstatement to
active corporate status in 2016 has given KLL back its right
of action against GEC for enforcement of the promissory note.
In this third suit by KLL against GEC on the promissory note,
the trial court ruled against KLL, finding that the law in
effect at the time of both KLL's dissolution in 2012 and
the alleged default on the note in 2013, the old Business
Corporation Law, governed, rather than the Business
Corporation Act which became effective on January 1, 2015.
KLL appeals, arguing that under the new law, its
reinstatement to active status should be retroactive to the
date of dissolution, rendering the dissolution as if it never
had occurred. Alternatively, KLL argues that jurisprudence
interpreting the prior law, upon which this Court previously
relied, is wrong and should be repudiated. Finally, KLL
argues that even under the prior law, its reinstatement
should be retroactive to its dissolution and therefore it has
a right of action against GEC.
following reasons, we find that the applicable law to this
dispute over the 2013 alleged default of the promissory note
is the old Business Corporation Law. Under that law, because
KLL dissolved by affidavit rather than by employing a
liquidator, KLL failed to preserve its inchoate claims, one
of which was the right to sue GEC for default on the
promissory note, as previously determined by this Court in
Krebs I. Further, KLL's reinstatement is
prospective only and does not serve to revive its
extinguished right of action against GEC. Accordingly, the
judgment of the trial court granting GEC's exception of
no right of action and dismissing KLL's suit against GEC
with prejudice is affirmed.
AND CHRONOLOGICAL PROCEDURAL HISTORY
2016 appeal before this Court, Krebs I, we
summarized certain facts and procedural history as follows:
On February 21, 2011, KLL, Inc. entered into an Asset
Purchase Agreement ("the Agreement"), wherein
G.E.C., Inc. bought, accepted, or acquired [a] certain
portion of KLL, Inc.'s trade, business, operations,
assets, good will and liabilities. On February 28, 2011, in
connection with the Agreement, G.E.C., Inc. executed a
promissory note in favor of KLL, Inc. On December 26, 2012,
KLL, Inc.'s shareholders voluntarily dissolved KLL, Inc.
by affidavit pursuant to La. R.S. 12:142.1.
On November 8, 2013, the former shareholders of KLL, Inc.
filed a petition to enforce the promissory note, under
Shelby P. LaSalle, William B. Haensel, Jr., Stephen W.
Phillippi, and Ronald J. Danos v. G.E.C., Inc., Division
"D," case number 732-755, contending that G.E.C.,
Inc. failed to pay the monthly installment on the promissory
note for June 2013, and it remained in default thereafter by
failing to pay the successive monthly installments and other
amounts due on the promissory note. The shareholders asserted
that as the former shareholders of KLL, Inc., they were
entitled to enforce the promissory note because they were the
holders in due course. G.E.C., Inc. filed an answer and
reconventional demand denying the allegations in
plaintiffs' petition and contending that KLL, Inc.
violated and/or breached the Agreement. G.E.C., Inc. brought
the reconventional demand against the former shareholders
individually as required by law, since KLL, Inc. was
voluntarily dissolved in 2012. G.E.C., Inc. also filed an
exception of no right of action and no cause of action
requesting the dismissal of the former shareholders'
On April 15, 2015, the trial court sustained G.E.C.,
Inc.'s exception of no right of action finding that the
former shareholders individually did not have a right of
action, but allowed the former shareholders fifteen days to
file an amended petition to name KLL, Inc. as party
plaintiff. The judgment further held that if an amended
petition was not filed within fifteen days, the petition
would be dismissed with prejudice.
On April 29, 2015, instead of filing an amended petition,
KLL, Inc., through its former shareholders, filed a new
petition to enforce the promissory note, under Krebs,
Lasalle, Lemieux Consultants, Inc. v. G.E.C., Inc.,
Division "P," case number 749-232. In this
petition, KLL, Inc. asserted the same claims as previously
asserted in the prior lawsuit, i.e., that G.E.C.,
Inc. was in default on the promissory note. In response to
this petition, G.E.C., Inc. filed exceptions of res judicata,
lack of procedural capacity, no right of action, and no cause
of action. On July 13, 2015, the trial court dismissed the
claims filed by the former shareholders individually against
G.E.C., Inc. On August 7, 2015, the parties consented to a
transfer and consolidation of the two cases. On August 26,
2015, the trial court overruled G.E.C., Inc.'s exceptions
of res judicata and no cause of action, held that
the exception of lack of procedural capacity was moot,
sustained the exception of no right of action and dismissed
KLL, Inc.'s claims with prejudice. …
Krebs I, 197 So.3d at 830-31.
shareholders appealed the dismissal of their suit against GEC
to this Court. In Krebs I, appellants argued that
La. R.S. 12:1-1405 of the recently enacted Business
Corporation Act should apply to the dispute. Unlike specific
statutory provisions that were in effect both at the time of
KLL's dissolution by affidavit in 2012 under La. R.S.
12:142.1 and when it commenced suit against GEC in 2013,
"new" La. R.S. 12:1-1405 purports to allow a
corporation, though dissolved, to commence a proceeding in
its corporate name to collect its assets, i.e., sue
on the promissory note. However, in Krebs I, this
Court held that La. R.S. 12:1-1405 did not apply under the
facts of this case. This Court determined that newly enacted
La. R.S. 12:1-1405 was substantive in nature, because it
changed the fundamental rights of the parties concerning
dissolution of corporations, and therefore should be applied
prospectively only. Krebs I, 197 So.3d at 832.
Applying jurisprudence interpreting the statutory law
regarding corporate dissolution in existence at the time of
KLL's dissolution in 2012, this Court determined that
because KLL dissolved by affidavit under La. R.S. 12:142.1,
rather than by formally dissolving with a liquidator as per
La. R.S. 12:142, KLL waived and failed to preserve its
inchoate claims against GEC. Krebs I, 197 So.3d at
832-33. Thus, this Court affirmed the trial court's
judgment granting GEC's exception of no right of action.
on May 12, 2016, KLL through its designated representatives
filed a suit, In Re Krebs, Lasalle, Lemieux Consultants,
Inc., case number 760-781 of the Twenty-fourth Judicial
District Court, Parish of Jefferson, seeking reinstatement of
its corporate status so that it could "collect certain
assets due and owing to it." The trial court denied
KLL's petition for reinstatement, citing La. R.S.
12:1-1444, "Reinstatement of terminated
corporation." KLL appealed to this Court. This Court,
In Re Krebs, Lasalle, Lemieux Consultants, Inc.,
16-586 (La.App. 5 Cir. 3/15/2017), 215 So.3d 939
("Krebs II"), vacated the ruling. Noting
our decision in Krebs I, this Court held that the
repealed Business Corporation Law, rather than La. R.S.
12:1-1444 (which is part of the newly enacted Business
Corporation Act), governed KLL's request for corporate
reinstatement. Krebs II, 215 So.3d at 941. This
Court cited La. R.S. 12:1-1701-1703, transition statutes
found in the Business Corporation Act, holding that La. R.S.
12:1-1701 evidenced the Legislature's intent that the new
law would apply only to corporations in existence on January
1, 2015. Krebs II, 215 So.3d at 942-43. As KLL was
not in existence on that date, this Court determined that as
per La. R.S. 12:1-1703, the reinstatement time limitations of
La. R.S. 12:1-1444 did not apply to KLL, who had dissolved
under the repealed La. R.S. 12:142.1 which contained no time
limits in which to seek reinstatement. Id. This
Court remanded for KLL to have a reasonable opportunity to
seek an evidentiary hearing on the question of whether KLL
had a lawful and valid purpose for seeking reinstatement.
Krebs II, 215 So.3d at 943. On remand, the trial
court granted KLL's petition for reinstatement on
September 14, 2017, retroactive to May 12, 2016, the date
KLL's petition for reinstatement was filed.
February 5, 2018, reinstated KLL filed a third suit against
GEC to enforce the promissory note, case number 780-420 of
the Twenty-fourth Judicial District Court, Parish of
Jefferson. On April 6, 2018, GEC filed exceptions of no right
of action, no cause of action, and res judicata,
which KLL opposed. On April 10, 2018, the 2018 suit was
consolidated with the 2013 (732-755) and 2015 (749-232)
suits. Following a hearing on May 22, 2018, the trial court
granted GEC's exception of no right of action and
dismissed KLL's suit with prejudice. The trial court
ruled that in accordance with this Court's previous two
appellate opinions (Krebs I and Krebs II),
the applicable law was the Business Corporation Law and not
the Business Corporation Act, specifically La. R.S. 12:142.1,
and that that statute, as interpreted by jurisprudence, did
not provide for a corporation dissolved by affidavit to
regain the right, upon reinstatement, to enforce claims that
were inchoate at the time of the corporation's
dissolution; in other words, KLL's reinstatement in 2016,
under the provisions of the pre-2015 law, was not retroactive
to the date of its dissolution and did not operate to revive
KLL's right to enforce its inchoate claims against GEC,
which right was lost when KLL dissolved by affidavit in 2012.
KLL's timely appeal followed.
appeal, in its only assignment of error, KLL asserts that the
trial court erred in its ruling that KLL has no right of
action to enforce the note against GEC. In its assignment of
error, KLL first argues that once its corporate status was
reinstated, La. R.S. 12:1-1444(H) of the new Business
Corporation Act should apply, rather than the prior law, to
provide that its reinstatement is retroactive to the date of
its dissolution, and thus it has the right to sue GEC to
enforce the promissory note. KLL argues alternatively that in
the event the prior law (La. R.S. 12:142.1) does apply, the
Fourth Circuit jurisprudence interpreting this statute is
wrong and should be repudiated by this Court. Finally, KLL
argues, also alternatively, that under the prior statutory
scheme, specifically La. R.S. 12:163(E), the reinstatement of
KLL's corporate articles is retroactive "as though
the revocation never occurred," and thus KLL did not
lose its right of action against GEC when it elected to
dissolve by affidavit in 2012.