APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH
OF JEFFERSON, STATE OF LOUISIANA NO. 767-037, DIVISION
"C" HONORABLE JUNE B. DARENSBURG, JUDGE PRESIDING
COUNSEL FOR PLAINTIFF/APPELLANT, B & P RESTAURANT GROUP,
LLC, ET AL Richard B. Ehret, Ross A. Ledet.
COUNSEL FOR DEFENDANT/APPELLEE, DAVID LAWRENCE Norman A.
Mott, III, Michael S. Blackwell.
composed of Judges Fredericka Homberg Wicker, Jude G.
Gravois, and Stephen J. Windhorst.
STEPHEN J. WINDHORST JUDGE
B & P Restaurant Group, LLC, d/b/a the Rum House of New
Orleans, LLC, Highlights Catering & Gourmet Shop, LLC,
Island Time Management, LLC, The Rum House of Baton Rouge,
LLC, and the Red Dog Diner, LLC ("appellants")
appeal the district court's granting of the motion for
summary judgment filed by David Lawrence, appellee/defendant
("appellee" or "Lawrence") and the
dismissal with prejudice of all appellants' claims
against him. For the following reasons, we reverse the
district court's judgment and remand for further
AND PROCEDURAL HISTORY
Lawrence, is the sole owner and manager of Delta
Administrative Services, LLC ("DAS"), which
provides administrative services, including payroll, tax
administration, workers' compensation administration,
risk management and human resource issues. Appellants each
entered into a contract for services with DAS entitled
"Service Agreement," which Lawrence signed on
behalf of DAS. Pursuant to this agreement, DAS was
responsible for withholding and remittances of pay-roll
related taxes, including those taxes under FICA, FUTA, and
Administrative Fees, each service agreement states the
"CLIENT agrees to pay a fee to DAS for services"
and that "[t]hese fees will be charged on each payroll,
as applicable." The fee schedule attached to the service
agreement reflects that the administrative fee (also referred
to herein as the "service fee") is 1.50% of gross
payroll. The fee schedule also states the following:
This rate is on gross payroll only. These rates include the
additional charges for FICA, FUTA, SUTA, and Workers
Compensation. The only additional charges will be any company
paid benefits you choose to offer your employees. There is no
reduction upon reaching the cutoffs for FUTA and SUTA.
December 1, 2016, appellants filed a petition for damages
against DAS and Lawrence, asserting claims based on breach of
contract, intentional misrepresentation, and violation of the
Professional Employer Organizations (PEO) statute, La. R.S.
23:1761 et seq. The only claim asserted against
Lawrence individually is the intentional misrepresentation
claim. Appellants allege that after maximum SUTA and FUTA tax
thresholds had been met, DAS continued to charge appellants
for SUTA and FUTA taxes as if they were still owed, and did
not pay this collected money to the appropriate taxing
authorities but instead wrongfully retained the overcharged
amounts for itself.
the intentional misrepresentation claim, appellants allege
that DAS and Lawrence misrepresented or suppressed material
facts to obtain an unjust advantage over appellants by
failing to advise them or state in the service agreements
that DAS would continue charging appellants FUTA and SUTA
taxes after the maximum thresholds were met and would keep
those funds as additional, hidden fees. Appellants assert
that if they had known DAS and Lawrence would continue
charging FUTA and SUTA after the maximum thresholds were met
and would retain those amounts as additional, hidden fees,
Plaintiffs would never have agreed to do business with them.
November 7, 2017, appellants filed a first supplemental
petition for damages, asserting a claim against DAS and
Lawrence individually alleging overcharges involving
workers' compensation premiums. The supplemental petition
was filed after the May 31, 2017 motion for summary judgment
at issue here. On May 31, 2017, Lawrence filed a motion for
summary judgment, seeking dismissal of appellants' claims
against him personally based on La. R.S. 12:1320, arguing
that the statute frees him from individual liability for the
debts, obligations or liability of DAS, as the owner and sole
member of DAS. Lawrence asserted that he is not liable for
DAS's alleged breach of the agreement because he is not a
party to the agreement; he is not liable for the alleged
intentional misrepresentation because he is shielded from
liability under La. R.S. 12:1320 and appellants cannot prove
fraud; and he is not liable for alleged breaches under La.
R.S. 23:1763 because this statute creates a duty for the
employer (DAS), not its member. After Lawrence filed his
motion for summary judgment, the parties participated in
written discovery and depositions were taken. Lawrence filed
a second summary judgment motion with DAS on March 20,
2018. In this second summary judgment motion,
DAS and Lawrence sought dismissal of all of appellants'
their opposition to the motion for summary judgment,
appellants attached excerpts of depositions from multiple
individuals who were involved with hiring DAS to provide
payroll services and/or worked with Lawrence relative to the
services DAS provided appellants, DAS invoices, DAS detailed
cost reports, correspondence with Lawrence and the fee
schedule. In the depositions, the appellant representatives
asserted that they had conversations with Lawrence regarding
the DAS rates and he never disclosed that the FUTA and SUTA
taxes continued after thresholds were met, or that these
amounts were converted to administrative fees for DAS. The
appellant representatives also testified that Lawrence did
not disclose to them during negotiations or contract
discussions that any part of the FUTA or SUTA taxes were
actually service fees.
appellant representative of Island Time Management, LLC
stated in her deposition that, in January 2014, Island Time
informed DAS that it needed taxes broken out from
administrative fees on its invoices. Thereafter, Island Time
believed that the invoices separated the two from each other
but later learned that they were not.
opposition, appellants also asserted that each invoice
constituted a misrepresentation because even when the FUTA
and SUTA taxes were converted to administrative fees, on the
invoices, the amount was still represented as FUTA and SUTA
taxes. Specifically, on the invoices, the administrative fee
is separated out from the other payments, such as gross
payroll, hourly employee, salary employee and workers'