Appealed from the Fifth Judicial District Court for the
Parish of Richland, Louisiana Trial Court No. 45037 Honorable
Glen Wade Strong (Pro Tempore), Judge
BREITHAUPT, DUBOS, & WOLLESON, LLC By: Robert Alan
Breithaupt, Michael Lee DuBos, James R. Close, Jared S.
Scheinuk Counsel for Appellant
CARROLL & FRAZIER, PLLC By: James E. Mixon James L.
Carroll Rossanna R. McIlwain Counsel for Appellee Caldwell
Bank & Trust Company
OFFICE OF BRIAN E. CRAWFORD By: Brian E. Crawford Counsel for
Appellee Franklin State Bank & Trust Company
PETTIETE, ARMAND, DUNKELMAN WOODLEY, BYRD, & CROMWELL,
By: Joseph S. Woodley Counsel for Appellee Commercial Capital
YANCEY, KING, & GALLOWAY By: Bernard S. Johnson Lisa
Conly Cronin Counsel for Appellee Clark A. McCain
& ASSOCIATES By: Leroy Smith, Jr. Counsel for Appellee
Danny A. Dickerson
HAMMONDS, SILLS, ADKINS, & By: Jon Keith Guice Justin N.
Myers Linda K. Ewbank Counsel for Appellee Brian Wilson
FRILOT, LLC By: David S. Daly Elliot M. Lonker Counsel for
Appellees David S. Stephens, Lawrence W. Pickett, Jr., and
Lawrence W. Pickett, Jr., APAC
T. SINGER Counsel for Appellee Franklin State Bank &
MICHAEL E. KRAMER Counsel for Appellee Franklin State Bank
& Trust Company
PITMAN, GARRETT, STONE, COX, and McCALLUM, JJ. STONE, J.,
dissents in part with written reasons.
case arises from agricultural loans that were not repaid. The
lender, Agrifund, LLC ("Agrifund"), appeals from a
trial court judgment granting exceptions of no cause of
action as to its claims against eight of the numerous
defendants in this case, and the dismissal of those
defendants with prejudice. For the reasons stated below, we
affirm in part and reverse in part. We find that the
plaintiff has alleged a cause of action in conversion against
the three banks named as defendants. We find that the
plaintiff has not alleged any other causes of action against
any of the defendants who filed the exceptions that are
before us. The matter is remanded to the trial court for
AND PROCEDURAL BACKGROUND
matter began on April 14, 2016, with a ten-page petition
filed by an agricultural lender, Agrifund, against Radar
Ridge Planting Company, Inc. ("Radar Ridge"), a
farming entity, and Thomas A. Dickerson
("Dickerson"), as guarantor, to collect money owed
under a delinquent agricultural loan and for recognition of a
security interest on agricultural products secured under the
UCC. The original suit, grounded on promissory notes and
security agreements, consisted of 47 paragraphs.
matter lay dormant until March 1, 2017, when Agrifund filed a
"First Supplemental and/or Amended Petition." This
pleading adopted all of the original allegations and added 22
additional pages of allegations, for a total of 102
paragraphs of allegations. This petition added 21 additional
defendants, whom we will refer to as the (1) Dickerson
entities, (2) banks and bank employees with whom Dickerson
and his entities did business ("bank defendants"),
and (3) accountants who provided services for Dickerson and
his entities ("accounting defendants"). This
petition sought damages against the added parties under
different legal theories designated as counts. Count One
alleged fraud and conspiracy to commit fraud, Count Two
alleged racketeering, Count Three alleged unfair trade
practices under the Louisiana Unfair Trade Practices Act
("LUTPA"), and Count Four alleged conversion. The
petition recited a lengthy history of events in an effort to
establish liability on the part of all of the added parties,
in addition to still seeking relief against the original
defendants on the notes and security interests and damages.
The thrust of the amended petition was that the conduct on
the part of the added parties either facilitated, caused, or
contributed to a massive fraudulent scheme perpetrated by
Dickerson against Agrifund.
of no cause of action filed by the banking and accounting
defendants were sustained by the trial court, which dismissed
the claims, but allowed Agrifund time to amend.
November 29, 2017, Agrifund filed a "Second Supplemental
and Amended Petition," which amended many of the
existing paragraphs and added additional paragraphs, for a
total of 234 numbered paragraphs, in an effort to address the
deficiencies noted by the trial court in its opinion
sustaining the exceptions. In response, the same exceptors
filed more exceptions of no cause of action. The trial court
again sustained the exceptions and dismissed the
plaintiff's claims against the exceptors.
appealed. Voluminous briefs and reply briefs were filed. This
case was initially argued before a three-judge panel.
Pursuant to La. Const. Art. 5, Section 8(B), the case was
later reassigned to a five-judge panel. Additional briefs
were filed. The matter was argued again before the five-judge
panel. More briefs were then filed. Hence, a rather unusual
delay in handling the appeal has occurred in this case.
narrow issue before us is whether the trial court erred in
sustaining the exceptions of no cause of action filed by the
banking and the accounting defendants and dismissing the
plaintiff's claims as to these parties.
our de novo review, and guided by the
well-established legal precept that we must assume that all
of the well-pled factual allegations are true, we ultimately
find that the plaintiff has alleged a cause of action for a
claim in conversion against the three banks. This cause of
action was pled only against the banks. In all other
respects, we find that the plaintiff has not alleged any
other causes of action against any of the exceptors under the
other legal theories pled by Agrifund.
evaluate whether the trial court correctly sustained the
exceptions in this matter, a detailed examination of all
three petitions is necessary. This task is complicated
because the petitions are not succinctly stated or artfully
drawn. Further, none of the loan documents, promissory notes,
agricultural security agreements, UCC-1F forms, guaranty
agreements, or checks described below were attached to the
pleadings. The trial court chose to rule on the exceptions of
no cause of action and pretermitted ruling on the numerous
other exceptions which address some of these deficiencies, so
they are not before us.
to the original petition, in 2015, Agricultural Resource
Management ("ARM") extended a crop production loan
for that year to Dickerson and one of his farming entities,
Radar Ridge. ARM filed a UCC-1F form perfecting its security
interest in all future crops and future Farm Services Agency
("FSA") payments for the defendants' cotton,
soybean, corn, and rice crops grown in Morehouse, Franklin,
and Richland Parishes. In January 2016, the parties agreed to
convert the crop production loan to a crop storage loan with
Agrifund, an affiliate of ARM. In February 2016, it was
discovered that the defendants did not have the grain in
storage that they claimed. In April 2016, Agrifund filed its
original petition against Dickerson and Radar Ridge seeking
payment of the delinquent notes, recognition of its security
interests, and damages for nonpayment of the loan.
forth above, Agrifund filed a first supplemental and amended
petition adding numerous defendants, including
Dickerson's father, Danny A. Dickerson, and the
"Dickerson entities" comprised of Dickerson Ag
Inc.; Kelley Ag Service, Inc.; Dickerson Farming Partnership;
Dickerson Agricultural Partnership; B&T Farms, LLC; Tough
Luck Farms, LLC ("Tough Luck"); W&T Farms, LLC;
Yes Farms, LLC ("Yes Farms"); Tibb Co. Farms, LLC;
High Flyers, Inc. ("High Flyers"); and Number Two
Farms, LLC ("Number Two Farms"). Agrifund also
named as defendants the "bank defendants" comprised
of several banks and bank employees, including Clark A.
McCain, an employee of Franklin State Bank and Trust Company;
Franklin State Bank and Trust Company ("FSB");
Commercial Capital Bank ("Commercial Capital");
Brian Wilson, an employee of Caldwell Bank and Trust Company;
and Caldwell Bank and Trust Company ("Caldwell
Bank"). Agrifund also included as defendants the
"accounting defendants" comprised of
Dickerson's accountants and accounting firm, David S.
Stephens; Lawrence W. Pickett, Jr.; and Lawrence W. Pickett,
Jr., a Professional Accounting Corporation. Finally, Agrifund
named as a defendant Crop Production Services, Inc.
("Crop Production Services"), an entity associated
the accounting defendants, Agrifund alleged that they
performed accounting services for Dickerson and his entities
and conspired with Dickerson in preparation for the 2015 crop
year to organize farming entities to engage in improper,
fraudulent, and deceptive acts and practices with respect to
acquisition of crop loans, conduct of operations, sale of
crops, and allocation and disbursement of proceeds from the
sale of crops. Agrifund contended that the accounting
defendants aided in reactivating High Flyers, an inactive
corporation, without the knowledge of the registered agent,
William J. Casiday, and used Casiday's tax identification
number to defraud creditors, kite checks, launder money, and
abscond with the proceeds from crops that were pledged as
security for loans. It alleged that the accounting defendants
added Scott and Theresa Higdon as partners in the Dickerson
Agricultural Partnership without their knowledge, submitted
fraudulent documents to FSA to participate in government crop
and crop insurance programs, forged signatures on loan
documents submitted to FSB, forged signatures to open an
account with Crop Production Services, and forged signatures
for a loan with Commodity Credit Corporation.
the bank defendants, Agrifund alleged that McCain, an
employee of FSB, signed loan documents benefitting Dickerson
with FSB, which included the forged signatures of the
Higdons, and that McCain knew of the forgery. FSB and McCain
cashed forged instruments, negotiated instruments that
Dickerson had no legal right to, converted third party checks
to cashier's checks, and McCain endorsed grain elevator
checks. Agrifund alleged that FSB passed funds through
various accounts with the bank, including Doe Properties, an
entity for which McCain controlled the checkbook. Agrifund
also alleged that McCain hired harvesters and got farmhands
to sign loan agreements, the proceeds of which actually went
to Dickerson. According to Agrifund, in December 2015, McCain
approved a loan to pay rent on farmland, an expense that
should have been included in the crop production loan.
claimed that Wilson, at Caldwell Bank, loaned money to
Dickerson that was not really a crop loan, cashed checks for
Dickerson, and issued cashier's checks. These included
checks 1740 and 1743 from Kennedy Rice Dryers ("Kennedy
Rice"). Check 1740 was payable to Yes Farms, which did
not have a crop loan for 2015 with Caldwell Bank. The check
for $406, 412.51 was split into two cashier's checks
payable to Joseph Blake Lively, the agent for one of the
Dickerson entities, who was not aware that the funds were run
through his account at the bank. Check 1743 was converted to
cashier's checks payable to Dickerson. Agrifund alleges
that these transactions were approved by Wilson.
alleged that Commercial Capital was involved in a check
kiting scheme for Dickerson, ignored his large negative
account balances, and gave him a bailout loan of $1, 849,
646.50, based upon false information regarding delays in
alleged that all defendants were engaged in fraud and
conspiracy to commit fraud; all defendants were engaged in
racketeering; all defendants, except the banks, engaged in
unfair trade practices prohibited by LUTPA, set forth in La.
R.S. 51:1405 et seq.; and that the banks and Crop Production
Services engaged in conversion of the proceeds of the sale of
the crops which belonged to Agrifund by virtue of its
exceptions were filed, including exceptions of no cause of
action. The exceptions of no cause of action were sustained
by the trial court in a judgment signed on November 13, 2017.
In written reasons for judgment, the trial court found no
causal connection between the actions alleged and the
disposition of the proceeds from Dickerson and Radar
Ridge's crops which were subject to Agrifund's lien.
The court stated that there was no showing that the actions
of the defendants caused damage to Agrifund. The trial court
reasoned that the banks did not have a legal duty to monitor
the funds deposited into the accounts in the banks and there
was no fiduciary duty between the banks and Agrifund.
the allegations of fraud and conspiracy to commit fraud, the
trial court found that there was no showing of an agreement
to defraud Agrifund. As to racketeering, the trial court
stated that there was no showing of an alleged enterprise for
the purpose of engaging in illegal activity, no showing that
the defendants participated in the operation or management of
the alleged enterprise, and there was no link between the use
of racketeering income and Agrifund's injury. As to the
LUTPA claims, the trial court found that LUTPA did not apply
to the banks or bank employees. The trial court found that
Agrifund failed to state a cause of action for conversion
because there was no alleged act of dominion over
Agrifund's property by the defendants, and the defendants
were not aware that the funds belonged to Agrifund. The trial
court granted Agrifund time to amend its petition to state a
cause of action.
filed its second supplemental and amended petition on
November 29, 2017, which contained 52 more pages of
allegations, in addition to adopting all of the previous
allegations. Agrifund alleged that ARM gave crop
production loans to Radar Ridge and Dickerson Ag in exchange
for promissory notes of $2, 683, 002 and $2, 200, 137,
respectively, and Dickerson and Radar Ridge granted ARM a
continuing security interest in their crops, farm products,
equipment, and inventory. The agreement specified that Radar
Ridge and Dickerson Ag would not use any of the farm products
or inventory for their own purposes without ARM's
consent. The petition set forth the numerous farms in
Morehouse, Richland, and Franklin Parishes to be covered by
the crop production loan. The petition alleged that ARM filed
the UCC-1F forms identifying its collateral and securing its
interest in the crops of Radar Ridge and Dickerson Ag.
further alleged that, on September 9, 2015, it acquired
ARM's rights to the Radar Ridge and Dickerson Ag loan. In
January 2016, after the loans matured, Dickerson, Radar
Ridge, and Dickerson Ag approached Agrifund about replacing
the crop production loan with a crop storage loan. Agrifund
agreed to the crop storage loan. A new Agricultural Security
Agreement ("ASA") was entered and Agrifund secured
its position through the filing of a UCC-1F on the
defendants' crops. Agrifund alleged that it received by
assignment all of the previous positions perfected in the
crops by ARM's UCC filings. Dickerson personally
guaranteed the loans.
to Agrifund, in February 2016, it became aware that the
amount of grain represented by Dickerson was not in storage.
It claimed that Dickerson conspired with the defendants to
launder the proceeds from the sale of the crops, knowing that
they were secured by perfected security interests of other
lenders, including Agrifund.
alleged that the defendants acted in concert with Dickerson
to divert money away from other creditors to pay debts owed
to the defendant banks, and the banks sought to continue
their business relationships with Dickerson and the Dickerson
entities in order to mitigate their losses.
the accountants, Agrifund made the same allegations contained
in the first amended petition.
made extensive allegations regarding FSB and McCain. Agrifund
claimed that FSB granted a crop loan for 2015 on the
Dickerson Agricultural Partnership crops based upon the
forged signatures of the Higdons. The company asserted that
FSB knew that the Higdons' signatures were forged.
alleged that Dickerson and the Dickerson entities conspired
with McCain, FSB, Wilson, and Caldwell Bank to divert funds
from the sale of Dickerson entity crops, which was the
collateral of Agrifund, and laundered the funds to benefit
Dickerson and the banks. According to Agrifund, the banks
cashed forged instruments, negotiated instruments to which
Dickerson and the Dickerson entities had no rights, and
converted third party checks to cashier's checks to
launder funds and disguise their source, depriving Agrifund
of its security interest in the crops and the proceeds from
claimed that McCain was Dickerson's accomplice at FSB.
The company asserted that many grain elevator checks were
endorsed by McCain and internal bank tickets directing the
application of funds were in McCain's handwriting.
Agrifund alleged that, from September through December, 2015,
numerous accounts at FSB were used as
"pass-through" accounts to kite checks. The company
maintained that three accounts were opened in conjunction
with new loans made to Dickerson in early 2015. McCain
controlled the checkbook for Doe Properties, another
Dickerson entity. Agrifund asserted that it was highly
irregular for a loan officer to have control of a
customer's checking account. McCain exercised power of
attorney on behalf of Crop Production Services, a business
that operated in conjunction with FSB and used his power of
attorney to negotiate grain checks where Crop Production
Services was the payee.
urged that McCain received checks payable to FSB and Crop
Production Services but, instead of applying the funds to the
loans at the bank, McCain paid the proceeds directly to
Dickerson. Agrifund claimed that McCain hired harvesters for
Dickerson and had farm hands sign loan documents, the
proceeds of which were paid to Dickerson.
asserted that, in January 2016, Kennedy Rice issued Check
1777 for grain from Farm Serial Number ("FSN")
6492, and Agrifund held the security interest in the crops
from that farm. The grain was booked under W&T Farms,
FSB, and Crop Production Services, and the check was made
payable to those entities, even though they did not have a
security interest in the crops. This check was endorsed by
McCain, clearing the proceeds for Dickerson's use.
in January 2016, Kennedy Rice issued Check 1778, for grain
from the same farm, FSN 6492, which was subject to
Agrifund's security interest. The check was presented at
FSB, payable to W&T Farms, which did not have an
outstanding loan with FSB. The check was endorsed by McCain
and given to Crop Production Services.
alleged that Wilson and Caldwell Bank diverted funds from a
crop loan made to Danny Dickerson in 2014. Agrifund claimed
the funds were given to Dickerson and the Dickerson entities.
Agrifund also claimed that Kennedy Rice issued Check 1740 to
Yes Farms and Caldwell Bank, which was given for grain
originally booked under Dickerson Ag and to which Agrifund
had a security interest. Yes Farms did not have an account at
Caldwell Bank. These funds were converted to two
cashier's checks, one payable to Joseph Blake Lively, who
did not appear to be aware of the transaction. A second
cashier's check was also issued from the funds
represented by Check 1740. These checks were used to purchase
other cashier's checks in order to launder the funds. The
checks were initialed by Wilson, who should have questioned
the source of the money because nothing was due Caldwell
alleged that, in December 2015, Kennedy Rice issued Check
1743 to Yes Farms and Caldwell Bank. Agrifund contended that
the grain came from one of the farms for which it held a
security interest. The check was presented to Caldwell Bank
and Wilson approved converting the proceeds to a
cashier's check which was deposited to Dickerson's
personal account at Winnsboro State Bank.
sets forth in its petition that conversion occurred on
several occasions. The company maintained that, on August 27,
2015, Caldwell Bank converted four third-party checks to two
cashier's checks, payable to Danny Dickerson or Thomas
Dickerson, neither of whom had an account at the bank. Wilson
initialed each check. Agrifund claimed this was to disguise
the source of the grain proceeds checks in derogation of the
rights of Agrifund.
asserted that, on October 2, 2015, two third-party checks
were presented, payable to Yes Farms and Number Two Farms,
neither of which had an account at Caldwell Bank. The checks
were initialed by Wilson and one cashier's check was
issued, which was deposited at Commercial Capital in the name
of Tough Luck Farms. Agrifund alleged that this transaction
was made to divert funds owed to it by Dickerson and the
asserted that, on October 19, 2015, two third-party checks
payable to Number Two Farms, which had no account at Caldwell
Bank, were presented at Caldwell Bank, initialed by Wilson,
and reissued as one cashier's check payable to Dickerson.
claimed that, on August 31, 2015, Caldwell Bank converted
third-party checks to two cashier's checks payable to
Dickerson entities and these transactions were approved by
October 23, 2015, Agrifund claimed that Dickerson presented a
check payable to Joseph Blake Lively, which was not deposited
to his account. Rather, a cashier's check was issued
payable to DPF Harvest.
November 2, 2015, a check payable to B&T Farms, which had
no account with Caldwell Bank, was presented and a
cashier's check was issued payable to Dickerson Farming
Partnership. The check was initialed by Wilson.
November 5, 2015, two checks drawn on Commercial Capital and
payable to Number Two Farms, which did not have an account at
Caldwell Bank, were presented at Caldwell Bank and two
cashier's checks were issued to Tough Luck Farms. These
checks were then deposited at Commercial Capital to cover an
claimed that, in early December 2015, a check for grain
subject to its security interest, payable to Yes Farms and
Caldwell Bank, was presented to Caldwell Bank. Yes Farms did
not have an account at Caldwell Bank and did not have any
outstanding loans there. A cashier's check payable to
Dickerson was issued and was approved by Wilson.
Commercial Capital, Agrifund alleged that the bank assisted
Dickerson in his check kiting scheme, and, instead of
shutting down Dickerson and the Dickerson entities, the bank
gave Dickerson a bailout loan of $1, 849, 646.50. Agrifund
contended that a bank memo associated with this loan falsely
stated that the loan was made because Dickerson had weather
delays in harvesting his crops.
asserted that all the defendants engaged in fraud and
conspiracy to commit fraud by misrepresenting or suppressing
the truth in order to gain an unjust advantage for Dickerson
and for themselves. Agrifund claimed the conspiracy involved
more than 283 checks which were issued for no legitimate
business purpose. The company maintained that the banks were
required by banking regulations to monitor Dickerson's
transactions and to file reports for transactions they knew
or suspected to be suspicious. Agrifund contended that all the
defendants engaged in a pattern of racketeering activity
under La. R.S. 15:1352. Agrifund asserted that all
defendants, other than the banks, engaged in unfair trade
practices in violation of LUTPA. Agrifund claimed that only
the banks, Caldwell Bank, FSB, and Commercial Capital,
committed conversion by improperly diverting the proceeds
from the sale of crops, which belonged to Agrifund by virtue
of its security interests, to other entities that had no
interest in the proceeds.
of no cause of action were again filed by the bank defendants
and the accounting defendants. After a hearing, the trial
court issued written reasons, again sustaining the exceptions
as to all the movants. The trial court found: (1) Agrifund
failed to allege facts showing causation between the
appellees' actions and Agrifund's damages; (2)
Agrifund failed to show that the appellees owed a duty to
Agrifund; and (3) McCain and Wilson, as employees of
FDIC-insured banks, were exempt from Agrifund's LUTPA
claims under La. R.S. 51:1406. With regard to the conversion
claim, the trial court reasoned that the crop storage loan
replaced the crop production loan and that any conduct prior
to January 2016 was not the cause of any damage. No analysis,
discussion, or consideration of the plaintiff's rights
under its security interests was included in the reasons for
judgment. The trial court rendered a final judgment
dismissing Agrifund's claims against the appellees with
prejudice. Agrifund appealed.
OF NO CAUSE OF ACTION
peremptory exception of no cause of action is set forth in
La. C.C.P. art. 927(A)(5). It tests the legal sufficiency of
the petition by determining whether the law affords a remedy
on the facts alleged in the petition. Vince v. Metro
Rediscount Co., Inc., 18-2056 (La. 2/25/19), 264 So.3d
440; Jackson v. City of New Orleans, 12-2742 (La.
1/28/14), 144 So.3d 876; Port City Glass & Paint Inc.
v. Brooks, 52, 534 (La.App. 2 Cir. 2/27/19), 266 So.3d
516; Pesnell v. Sessions, 51, 871 (La.App. 2 Cir.
2/28/18), 246 So.3d 686; Gipson v. Fortune, 45, 021
(La.App. 2 Cir. 1/27/10), 30 So.3d 1076, writ
denied, 10-0432 (La. 4/30/10), 34 So.3d 298. The
exception is triable on the face of the petition; and, for
the purpose of determining the issues raised by the
exception, the well-pleaded facts in the petition must be
accepted as true. Fink v. Bryant, 01-0987 (La.
11/28/01), 801 So.2d 346; Pesnell v. Sessions,
supra. No evidence may be introduced at any time to
support or controvert the objection that the petition fails
to state a cause of action. La. C.C.P. art. 931. An exception
of no cause of action should be granted only when it appears
beyond doubt that the plaintiff can prove no set of facts in
support of any claim which would entitle him to relief. If
the petition states a cause of action on any ground or
portion of the demand, the exception should generally be
overruled. Every reasonable interpretation must be accorded
the language used in the petition in favor of maintaining its
sufficiency and affording the plaintiff the opportunity of
presenting evidence at trial. Badeaux v. Southwest
Computer Bureau, Inc., 05-0612 (La. 3/17/06), 929 So.2d
1211; Stonecipher v. Caddo Par., 51, 148 (La.App. 2
Cir. 4/7/17), 219 So.3d 1187, writ denied, 17-0972
(La. 10/9/17), 227 So.3d 830.
burden of showing that the plaintiff has stated no cause of
action is upon the exceptor. The public policy behind the
burden is to afford the party his day in court to present his
evidence. City of New Orleans v. Board of Directors of
La. State Museum, 98-1170 (La. 3/2/99), 739 So.2d 748;
Port City Glass & Paint Inc. v. Brooks,
supra; Villareal v. 6494 Homes, LLC, 48,
302 (La.App. 2 Cir. 8/7/13), 121 So.3d 1246.
appellate court reviews a trial court's ruling on an
exception of no cause of action de novo because the
exception raises a question of law and the lower court's
decision is based only on the sufficiency of the petition.
Port City Glass & Paint Inc. v. Brooks,
supra; Mack v. Evans, 35, 364 (La.App. 2
Cir. 12/5/01), 804 So.2d 730, writ denied, 02-0422
(La. 4/19/02), 813 So.2d 1088. See also Kinchen v.
Livingston Parish Council, 07-0478 (La. 10/16/07), 967
So.2d 1137; Hebert v. Shelton, 2008-1275 (La.App. 3
Cir. 6/3/09), 11 So.3d 1197; Ordoyne v. Ordoyne,
2007-0235 (La.App. 4 Cir. 4/2/08), 982 So.2d 899.
address each of the four counts in the order alleged by
AND CONSPIRACY TO COMMIT FRAUD
argues that the trial court erred in concluding that the
company failed to allege a cause of action against the
exceptors for fraud and conspiracy to commit fraud. This
argument is without merit.
definition of fraud is found in the portion of the Louisiana
Civil Code dealing with vices of consent to contracts.
However, not all fraud actions are contract claims.
Thomas v. North 40 Land Dev., Inc., 2004-0610
(La.App. 4 Cir. 1/26/05), 894 So.2d 1160; Boudreaux v.
Jeff, 2003-1932 (La.App. 1 Cir. 9/17/04), 884 So.2d 665.
Fraud actions may also constitute a tort, sometimes called
deceit. Frank L. Maraist and Thomas C. Galligan,
Louisiana Tort Law §2.06(10) (2016). When fraud
is alleged, all persons who participated in the alleged fraud
and those who are beneficiaries are proper parties to the
suit. Thomas v. North 40 Land Dev., Inc.,
is a misrepresentation or suppression of the truth made with
the intention either to obtain an unjust advantage for one
party or to cause a loss or inconvenience to the other. Fraud
may also result from silence or inaction. La. C.C. art. 1953.
See also Benton v. Clay, 48, 245 (La.App. 2 Cir.
8/7/13), 123 So.3d 212; Quality Envtl. Processes, Inc. v.
IP Petroleum Co., Inc., 2016-0230 (La.App. 1 Cir.
4/12/17), 219 So.3d 349, writ denied, 17-00915 (La.
10/9/17), 227 So.3d 833; Johnson v. First Nat. Bank of
Shreveport, 2000-870 (La.App. 3 Cir. 6/20/01), 792 So.2d
33, writ denied, 01-2770 (La. 1/4/02), 805 So.2d
212, writ denied, 01-2783 (La. 1/4/02), 805 So.2d
of fraud based on silence or suppression of the truth
requires there to be a duty to speak or disclose information.
Greene v. Gulf Coast Bank, 593 So.2d 630
(La. 1992); Joyner v. Liprie, 43, 233 (La.App. 2
Cir. 5/7/08), 983 So.2d 257, writ denied, 08-1236
(La. 8/29/08), 989 So.2d 108. While fraud may result from a
party's silence or inaction, mere silence or inaction
without fraudulent intent does not constitute fraud. Intent
to defraud and loss or damage are two essential elements to
constitute legal fraud. Benton v. Clay,
succeed in a claim for intentional/fraudulent
misrepresentations, the petition must contain allegations of:
(1) a misrepresentation of material fact, (2) made with the
intent to deceive, (3) causing justifiable reliance with
resulting injury. Benton v. Clay, supra;
Systems Eng'g & Sec., Inc. v. Science &
Eng'g Associations, Inc., 2006-0974 (La.App. 4 Cir.
6/20/07), 962 So.2d 1089.
pleading fraud or mistake, the circumstances constituting
fraud or mistake shall be alleged with particularity. Malice,
intent, knowledge, and other condition of mind of a person
may be alleged generally. La. C.C.P. art. 856.
independent cause of action for civil conspiracy does not
exist in Louisiana; rather, the actionable element is the
intentional tort that the conspirators agreed to commit or
committed, in whole or part, causing the plaintiff's
injury. Coleman v. Querbes Co. No. 1, 51, 159
(La.App. 2 Cir. 2/15/17), 218 So.3d 665; Haygood v.
Dies, 48, 485 (La.App. 2 Cir. 11/20/13), 127 So.3d 1008,
writ denied, 13-2955 (La. 2/28/14), 134 So.3d 1177;
Hardy v. Easterling, 47, 950 (La.App. 2 Cir.
4/10/13), 113 So.3d 1178. See also Ross v. Conoco,
Inc., 02-0299 (La. 10/15/02), 828 So.2d 546; Jeff
Mercer, LLC v. State through Dept. of Transp. &
Dev., 51, 371 (La.App. 2 Cir. 6/7/17), 222 So.3d 1017,
writ denied, 2017-1442 (La. 12/5/17), 231 So.3d 625,
cert. denied, ___ U.S. ___, 138 S.Ct. 1566, 200
L.Ed.2d 746, (2018); Thames v. Thames, 50, 639
(La.App. 2 Cir. 5/18/16), 196 So.3d 653.
conspires with another person to commit an intentional or
willful act is answerable, in solido, with that
person, for the damage caused by such act. La. C.C. art.
2324(A). The actionable element in a claim under La. C.C.
art. 2324 is not the conspiracy itself, but rather the tort
which the conspirators agreed to perpetrate and which they
actually commit in whole or in part. The purpose of solidary
liability is to compel any tortfeasor to pay an entire
judgment. See Ross v. Conoco, Inc., supra.
establish a conspiracy, a plaintiff is required to provide
evidence of the requisite agreement between the parties,
i.e., the plaintiff must establish a meeting of the minds or
collusion between the parties for the purposes of committing
wrongdoing. See Jeff Mercer, LLC v. State through Dept.
of Transp. and Dev., supra; Crutcher-Tufts
Resources, Inc. v. Tufts, 09-1572 (La.App. 4 Cir.
4/28/10), 38 So.3d 987.
establish conspiracy, a plaintiff must prove that: (1) an
agreement existed to commit an illegal or tortious act; (2)
the act was actually committed; (3) the act caused the
plaintiff's injury; and (4) there was an agreement as to
the intended outcome or result. Jeff Mercer, LLC v. State
through Dept. of Transp. and Dev., supra;
Thames v. Thames, supra; Crutcher-Tufts
Res., Inc. v. Tufts, supra.
upon our de novo review of the record, we find that
Agrifund failed to state a cause of action against either the
accounting defendants or the banking defendants for fraud and
conspiracy to commit fraud.
argues that it sufficiently stated in its petition that the
bank defendants and the accounting defendants acted in
furtherance of Dickerson's scheme to divert funds from
the sale of crops, which were the collateral of Agrifund, to
further Dickerson's failing farm enterprise and to
benefit Dickerson and the banks. Agrifund claims that the
banks profited from the scheme by receiving interest and bank
fees on the transactions engaged in with Dickerson. Agrifund
maintains that the banks participated in Dickerson's
scheme by aiding in check kiting and money laundering.
the accounting defendants, Agrifund asserted the same
allegations in the first and second amended petitions.
Agrifund claimed that the accounting defendants conspired to
organize farm entities for Dickerson to engage in improper,
fraudulent, and deceptive acts and practices with respect to
the acquisition of crops loans, sale of crops, and the
allocation of the proceeds from those sales. Agrifund alleged
that the accounting defendants aided Dickerson in
reactivating High Flyers without the knowledge of its agent,
Casiday, and added the Higdons as partners in the Dickerson
Agricultural Partnership without their knowledge. Agrifund
contended that the accounting defendants aided Dickerson in
filing fraudulent documents in order to participate in
government crop loans and crop insurance programs. Agrifund
also alleged that the accounting defendants aided Dickerson
in forging signatures to open accounts with Crop Production
Services and obtain loans from FSB and Commodity Credit
allegations do not assert that the accounting defendants
misrepresented or suppressed the truth with the intent to
obtain an unjust advantage over or cause a loss or
inconvenience to Agrifund. There are no allegations that the
accounting defendants remained silent when they had a duty to
Agrifund to disclose information. There are no allegations
that the plaintiff ever relied upon any work performed by the
accounting defendants. Agrifund failed to allege that the
accounting defendants were even aware of the existence of
Agrifund or had any communications or contact with the
company. Further, the claims in Agrifund's petitions do
not allege that the accounting defendants agreed with and had
a meeting of the minds with Dickerson, the Dickerson
entities, or any other defendants to engage in fraudulent
conduct with the intent to cause injury to Agrifund.
Therefore, Agrifund failed to allege fraud or conspiracy to
commit fraud against it by the accounting defendants.
also failed to state a cause of action for fraud and
conspiracy to commit fraud against the banks or bank
employees. Agrifund alleged that loan documents were filed
with FSB containing the forged signatures of the Higdons and
that McCain knew of the forgery. Agrifund claimed that the
bank defendants cashed forged instruments and improperly
converted third party checks to cashier's checks.
Agrifund urged that Kennedy Rice checks were endorsed by
McCain. The proceeds from one were deposited at Commercial
Capital and the proceeds of another were given to Crop
Production Services. According to Agrifund, the bank
defendants improperly passed funds through various accounts
at the banks. The company alleged that McCain induced farm
hands to sign loan applications, but the proceeds were
actually paid to Dickerson, and the bank approved a loan to
Dickerson to pay rent on farmland when funding for rent
should have already come from crop production loans.
alleged that Wilson and Caldwell Bank loaned money to
Dickerson that was not really a crop loan. Agrifund also
maintained that Caldwell Bank improperly cashed checks for
Dickerson and issued cashier's checks for the money.
Agrifund urged that Commercial Capital aided in check kiting
and gave Dickerson a bailout loan.
claimed that the bank defendants diverted funds from Agrifund
for the benefit of Dickerson and the banks. The company urged
that the conspiracy involved a large number of checks which
were not issued for legitimate business
upon the three petitions filed by Agrifund, the company has
failed to allege that the bank defendants misrepresented or
suppressed the truth to gain an unfair advantage or to cause
a loss or inconvenience to Agrifund. Many of the allegations,
such as improperly obtaining crop loans based upon forged
signatures, and inducing farm hands to sign loan applications
where Dickerson actually received the proceeds, fail to
establish a connection with Agrifund or how the activities
harmed Agrifund. The allegations regarding cashing checks not
payable to Dickerson and issuing cashier's checks for the
proceeds, if proven to be true, fail to establish that the
actions were done to cause injury or harm to Agrifund. There
are no allegations that any of the bank defendants ever had
any contact, communications, or dealings with Agrifund.
Simply stated, there are no allegations which establish an
agreement or meeting of the minds among the bank defendants
with Dickerson to commit fraud upon Agrifund.
summary, fraud occurs when one party intentionally
misrepresents or withholds information from another party who
relies on the inaccurate information or lack of information
and sustains damage as a result. While Agrifund may have
sufficiently pled a cause of action against Dickerson for
fraud, it failed to sufficiently plead that the accounting
defendants or the banking defendants knew that Dickerson was
defrauding Agrifund and agreed with Dickerson to act in
furtherance of his scheme. Therefore, Agrifund has failed to
state a cause of action against the accounting defendants or
the banking defendants for fraud and conspiracy to commit