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Morel v. Nola Title Co., LLC

Court of Appeals of Louisiana, Fifth Circuit

July 16, 2019

STEPHEN D. MOREL
v.
NOLA TITLE COMPANY, LLC, MOREL YORSCH, LLC, MOREL YORSCH PROPERTIES, LLC, MOREL YORSCH HOLDINGS, LLC, MOREL YORSCH REALTY, LLC, MY TAX SALE RESOURCES, LLC, MY INSURANCE AGENCY, LLC AND THE LIEN AUTHORITY, LLC IN RE FREDERICK YORSCH

          SUPERVISORY WRIT FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT, PARISH OF JEFFERSON, STATE OF LOUISIANA, DIRECTED TO THE HONORABLE STEPHEN C. GREFER, DIVISION "J", NUMBER 759-985

          Panel composed of Judges Jude G. Gravois, Marc E. Johnson, and Stephen J. Windhorst

         WRIT GRANTED

         Relator, Frederick Yorsch, seeks review of the trial court's March 20, 2019 Order that overruled his exception of lack of personal jurisdiction and ordered him to pay a portion of the remaining balance of Bruce Miller's, the liquidator in the matter, retainer and a portion of the remaining balance needed to reimburse the escrow account for NOLA Title Company, LLC.

         Relator is a member of limited liability companies/entities ("Morel Yorsch Entities") that are in the process of being liquidated. Bruce A. Miller has been appointed by the trial court as the liquidator of the Morel Yorsch Entities. Mr. Miller filed a motion for a rule to show cause to compel delivery of records and to approve actions proposed by him, wherein he asserted that Relator and Stephen Morel obstructed, and continue to obstruct, the liquidation process while making allegations and engaging in litigation relative to the entities and each other. Mr. Miller further asserted that there are no longer any liquid assets belonging to any of the Morel Yorsch Entities with which to pay any outstanding creditors, including costs of the liquidation. Mr. Miller then requested that Relator and Mr. Morel, among other things, be ordered to replenish his retainer and reimburse the escrow account of NOLA Title Company, LLC. In response, Relator filed declinatory exceptions of insufficiency of citation and lack of personal jurisdiction. Relator argued that he was not properly provided with citation in the matter, and thus, the trial court lacked the personal jurisdiction over him.

         A hearing was held on the exceptions and various other matters on March 14, 2019. On March 20, 2019, the trial court rendered the Order at issue. For the following reasons, we grant the application and reverse portions of the March 20thOrder.

         Exception of Lack of Personal Jurisdiction

         Relator alleges the trial court lacks personal jurisdiction over him in this matter because he was not properly served with citation, even though he had knowledge of the matter as a former member of the dissolved limited liability companies at issue. As a result, Relator contends the trial court erred in overruling his exception of lack of personal jurisdiction.

         La. C.C.P. art. 6 states that jurisdiction over the person is the legal power and authority of a court to render a personal judgment against a party to an action or proceeding. The Article further states, in pertinent part, that the exercise of this jurisdiction requires the service of process on the defendant, or on his agent for the service of process, or the express waiver of citation and service under Article 1201. "Without service of process, the trial court may not exercise personal jurisdiction over a defendant." State v. White, 14-1269 (La.App. 3 Cir. 4/1/15); 162 So.3d 718. (See also, Bittner v. Scott, 07-718 (La.App. 5 Cir. 2/6/08); 980 So.2d 5, 11, where this Court found that, since service of process was never made on the mover, he was never a defendant to the suit, and the trial court was without jurisdiction to render a judgment against him.)

Proper citation is the foundation of all actions. A fundamental principle of law is that no valid judgment can be rendered in any case where the defendant has not been informed of the suit against him by citation in strict compliance with the law. Actual knowledge of the existence of an action cannot supply the want of citation.

White, supra, quoting Kimball v. Kimball, 93-1364 (La.App. 3 Cir. 5/20/94); 637 So.2d 779, 781.

         In the instant matter, the trial court sustained Relator's declinatory exception of insufficiency of citation, indicating the court found that Relator was not provided proper citation of the action. [1] However, the trial court also overruled Relator's exception of lack of personal jurisdiction. Because proper citation is the foundation of all actions and the trial court cannot render a valid judgment against a party that has not been properly cited, we find that Relator has met his burden of proving the trial court cannot exercise personal jurisdiction over him in this matter without proper citation and service of process.

         Accordingly, we vacate the portion of the trial court's March 20, 2019 Order that overruled Relator's exception of lack of personal jurisdiction, render judgment in favor of Relator, and sustain Relator's exception of lack of personal jurisdiction.

         Personal Liability ...


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