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Khoobehi Properties, L.L.C v. Baronne Development No. 2, L.L.C

Court of Appeals of Louisiana, Fifth Circuit

December 18, 2019

KHOOBEHI PROPERTIES, L.L.C.
v.
BARONNE DEVELOPMENT NO. 2, L.L.C., KAILAS FAMILY LIMITED PARTNERSHIP, AND KAILAS PROPERTIES, L.L.C.

          ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 733-258, DIVISION "P" HONORABLE LEE V. FAULKNER, JR., JUDGE PRESIDING

          COUNSEL FOR PLAINTIFF/APPELLANT, KHOOBEHI PROPERTIES, L.L.C. George D. Fagan Anton L. Hasenkampf

          COUNSEL FOR DEFENDANT/APPELLEE, KAILAS FAMILY LIMITED PARTNERSHIP; KAILAS PROPERTIES, L.L.C.; CHANDRA MOHAN KAILAS, PRAVEEN KAILAS, NAVEEN KAILAS AND DENISE GAINES Philip A. Franco Diana C. Surprenant

          Panel composed of Judges Jude G. Gravois, Stephen J. Windhorst, and Hans J. Liljeberg.

          HANS J. LILJEBERG, J.

         In this commercial dispute, plaintiff appeals the trial court judgments granting summary judgment in favor of three defendants and dismissing them from this lawsuit, denying plaintiff's motion for new trial, and denying plaintiff's request for leave to file a fourth amended and supplemental petition. For the following reasons, we reverse the summary judgments granted in favor of defendants and we remand for further proceedings. We affirm the trial court's ruling denying plaintiff's request to file a fourth amended and supplemental petition.

         FACTS AND PROCEDURAL HISTORY[1]

         In 2004, plaintiff, Khoobehi Properties, L.L.C. ("Khoobehi Properties"), acquired a 13% interest in Baronne Development No. 2, L.L.C. ("Baronne Development"). The primary asset of Baronne Development was a building located at 210 Baronne Street in New Orleans, Louisiana. On June 17, 2013, Khoobehi Properties sold its 13% membership interest in Baronne Development to one of the defendants in this matter, Kailas Family Limited Partnership ("KFLP"). The sale was negotiated and executed by Dr. Kamran Khoobehi, the managing member of Khoobehi Properties, and Mr. Chandra Mohan Kailas, the managing member of Kailas Properties, L.L.C. ("Kailas Properties"), which is the managing general partner of KFLP.

         Following the sale, in August of 2013, Dr. Khoobehi learned of plans to redevelop the upper floors of the building at 210 Baronne Street into luxury condominiums. He claims that these redevelopment plans were being made and negotiated without his knowledge prior to the sale of Khoobehi Properties' membership interest. On November 25, 2013, Khoobehi Properties filed this lawsuit against Baronne Development, KFLP, and Kailas Properties, seeking an order requiring defendants to provide it with a full accounting of Baronne Development's business and operations from the time of its formation through the date Khoobehi Properties sold its interest in Baronne Development, including an accounting of insurance proceeds received by Baronne Development after the building was damaged by Hurricane Katrina. Damages were not sought in plaintiff's original petition.

         On April 28, 2014, Khoobehi Properties filed its first amended, supplemental, and restated petition wherein it restated the allegations against defendants, repeated its request for an accounting from Baronne Development and made new allegations under theories of breach of contract, breach of fiduciary duty, negligent misrepresentation, alter ego/single business enterprise, conspiracy, and fraud. It alleged that defendants, KFLP, Kailas Properties, and Baronne Development, failed to disclose material information about plans to renovate Baronne Development's building in order to wrongfully induce Khoobehi Properties to sell its interest in Baronne Development for a substantially lesser value than it was worth. In this amended petition, Khoobehi Properties requested damages and any other equitable relief, in addition to its request for an accounting.[2]

         On August 14, 2014, Khoobehi Properties filed a second amended, supplemental, and restated petition wherein it named as additional defendants Chandra Mohan Kailas ("Mr. Kailas"), individually, and 210 Baronne, L.L.C. ("210 Baronne"), which was organized in September 2013 and is the current owner of the 210 Baronne Street property. This amended petition included allegations that, on or prior to June 17, 2013, Mr. Kailas, in his personal capacity and as an agent for Baronne Development, KFLP, and Kailas Properties, made misstatements and failed to disclose material facts to Khoobehi Properties about plans and intentions regarding the development, exchange, leasing, marketing, transfer, and use of the 210 Baronne Street property. Khoobehi Properties alleged that Mr. Kailas made these misrepresentations and failed to disclose pertinent information in order to wrongfully induce Khoobehi Properties to sell its interest for substantially less than it would have sold for, and to obtain an unjust advantage over and cause damage and inconvenience to Khoobehi Properties.

         On May 24, 2016, Khoobehi Properties filed a third amended and supplemental petition adding Praveen Kailas ("Praveen"), Naveen Kailas ("Naveen"), and Denise Gaines ("Ms. Gaines") as defendants. Praveen and Naveen are Mr. Kailas' sons and they were members of Baronne Development prior to and after Khoobehi Properties' sale of its 13% interest to KFLP. Ms. Gaines has worked for Mr. Kailas and/or his companies for many years, and she assisted with the efforts to obtain financing for redevelopment of the building. Ms. Gaines was also a member of Baronne Development prior to and after Khoobehi Properties sold its interest in the building to KFLP. In this third amended petition, Khoobehi Properties asserted claims against these defendants for misrepresentation and failure to disclose in order to defraud; failure to disclose in order to defraud based on serving as a manager or agent of Baronne Development, KFLP, and Kailas Properties; and conspiracy.

         On September 19, 2018, each of the newly added defendants, Praveen, Naveen, and Ms. Gaines, filed a motion for summary judgment, contending that Khoobehi Properties cannot meet its burden of proof at trial and seeking judgment as a matter of law dismissing all claims against them. Specifically, they asserted that Khoobehi Properties' claims for misrepresentation and failure to disclose in order to defraud must fail because Dr. Khoobehi, as the managing member of Khoobehi Properties, admits that none of these defendants made any misrepresentations to him about the building at 210 Baronne Street and they did not have a duty to disclose any information to plaintiff. They also contended that Khoobehi Properties' claim for failure to disclose in order to defraud based on serving as a manager or agent of Baronne Development, KFLP, and Kailas Properties is without merit, because these defendants were neither managers of Baronne Development or Kailas Properties, nor partners of KFLP. Finally, Praveen, Naveen, and Ms. Gaines asserted that the claims against them for conspiracy must fail because Khoobehi Properties lacks any evidence of an agreement between any of these defendants and another to withhold information from Khoobehi Properties. In support of their motions for summary judgment, Praveen, Naveen, and Ms. Gaines submitted several exhibits, including depositions and other documents.

         Khoobehi Properties filed memoranda in opposition to the motions for summary judgment arguing that there are genuine issues of material fact regarding the duties and actions of these defendants that preclude summary judgment. In support of its position, Khoobehi Properties also submitted several exhibits, including various depositions, emails, and other documents.

         The motions for summary judgment came before the trial court for hearing on November 7, 2018. After hearing the parties' arguments, the trial court took the motions under advisement. Thereafter, on December 6, 2018, the trial court rendered judgments granting the motions for summary judgment filed by Praveen, Naveen, and Ms. Gaines, and dismissing plaintiff's claims against them.

         On December 18, 2018, Khoobehi Properties filed a "Motion for New Trial and Other Relief from the Court's December 6, 2018 Judgments Dismissing Defendants Praveen Kailas, Naveen Kailas and Denise Gaines." In this pleading, Khoobehi Properties also requested leave to file a fourth amended and supplemental petition. After a hearing on February 19, 2019, the trial court took the matter under advisement. Thereafter, on March 20, 2019, the trial court rendered a judgment denying Khoobehi Properties' motion for new trial and other relief, including its request for leave to file a fourth amended and supplemental petition. Khoobehi Properties appeals the trial court judgments granting defendants' motions for summary judgment and the judgment denying its motion for new trial and its request for leave to file a fourth amended and supplemental petition.

         LAW AND DISCUSSION

         Appellate courts review summary judgments de novo using the same criteria that govern the district court's consideration of whether summary judgment is appropriate. Greemon v. City of Bossier City, 10-2828 (La. 7/1/11), 65 So.3d 1263, 1267; Schroeder v. Bd. of Supervisors of Louisiana State University, 591 So.2d 342, 345 (La. 1991). A court shall grant a motion for summary judgment if "the motion, memorandum, and supporting documents show that there is no genuine issue as to material fact and that the mover is entitled to judgment as a matter of law." La. C.C.P. art. 966(A)(3).

         On a motion for summary judgment, the initial burden of proof remains with the mover. La. C.C.P. art. 966(D)(1); Parish of Jefferson v. Daughters of St. Paul, Inc., 12-494 (La.App. 5 Cir 3/27/13), 113 So.3d 371, 374, writ denied, 13-953 (La. 6/14/13), 118 So.3d 1088. However, if the moving party will not bear the burden of proof at trial and points out that there is an absence of factual support for one or more elements essential to the adverse party's claim, action, or defense, then the non-moving party must produce factual support sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial. La. C.C.P. art. 966(D)(1); Reynolds v. Bordelon, 14-2371 (La. 6/30/15), 172 So.3d 607, 610-611. ...


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