Regions Bank and Regions Commercial Equipment Finance, LLC v. Michael Eymard, Raimy Eymard, Louis Eymard, II, and Offshore Marine Contractors, Inc. ( 2022 )

STATE OF LOUISIANA
COURT OF APPEAL
FIRST CIRCUIT
4'&'
NUMBER 2021 CA 0926
REGIONS BANK AND REGIONS COMMERCIAL EQUIPMENT
FINANCE, LLC
VERSUS
MICHAEL EYMARD, RAIMY EYMARD, LOUIS EYMARD, II AND
OFFSHORE MARINE CONTRACTORS, INC.
CONSOLIDATED WITH
NUMBER 2021 CA 0927
AVIS BOURG, JR.
VERSUS
MICHAEL EYMARD, LOUIS J. EYMARD, II AND
RAIMY EYMARD
Judgment Rendered: MAY 2 3 2022
Appealed from the
Seventeenth Judicial District Court
In and for the Parish of Lafourche
State of Louisiana
Docket Number 131, 426 c/ w 131, 524
The Honorable F. Hugh Larose, Judge Presiding
Philip K. Jones, Jr. Counsel for Plaintiff/1St Appellant,
Joseph P. Hebert Bluehenge Capital Secured Debt SBIC,
New Orleans, LA LP, as Successor in Interest to Regions
Bank and Regions Commercial
Equipment Finance, LLC
J. Eric Lockridge Counsel for Plaintiff/Intervenor/Appellee,
Mark D. Mese Regions Bank and Regions Commercial
James R. Chastain, Jr. Equipment Finance, LLC
Ahmed M. Mohamed
Baton Rouge, LA
Martin S. Bohman Counsel for Defendant/2nd Appellant,
Harry E. Morse Offshore Marine Contractors, Inc.
New Orleans, LA
Daniel A. Cavell Counsel for Defendant/Appellee,
Thibodaux, LA Michael M. Eymard, Raimy D. Eymard,
Louis J. Eymard II
Robert J. Burvant Counsel for Defendant/Appellee,
Henry A. King Avis J. Bourg, Jr.
Timothy S. Madden
John A. Cangelosi
New Orleans, LA
Blair E. Boyd Counsel for Defendant/Appellee,
Beverly A. Delaune Pepperman, Emboulas, Schwartz &
New Orleans, LA Todaro, L.L.C.
BEFORE: WHIPPLE, C.J., PENZATO, AND HESTER, JJ.
2
WHIPPLE, C.J.
In this matter, Bluehenge Capital Secured Debt SBIC, LP and Offshore
Marine Contractors, Inc. appeal a judgment of the trial court maintaining a
peremptory exception raising the objection of peremption and dismissing their
claims against Avis J. Bourg, Jr., with prejudice. For the reasons that follow, we
affirm in part, reverse in part, and remand.
FACTS AND PROCEDURAL HISTORY
Avis J. Bourg, Jr. and Michael Eymard, Louis Eymard II, and Raimy Eymard
collectively " the Eymards"), owned Offshore Marine Contractors (" OMC"),
Offshore Marine, Inc. (" OMI"), Tram Aviation, LLC, and Tram Shipyard, Inc.' (" the
companies").' In 2012, Bourg filed a derivative suit against the companies and the
Eymards, in their capacities as officers and directors of the companies, alleging
breaches of the Eymards' fiduciary duties. On November 24, 2014, the parties
agreed to settle their differences and executed redemption and sale agreements
authorized and signed by the Eymards, as directors and/ or managers of each of the
companies, whereby the parties agreed to redeem all shares of OMI stock and/or
membership interests owned by Bourg for consideration in the amount of
10, 000, 000.00, and all shares of OMC stock and/ or membership interests owned
by Bourg for consideration in the amount of $ 1, 750, 000. 00. Pursuant to the
redemption agreements, redemption payments were made to Bourg in the amount of
In some instances, this corporation is also referred to in the record as " Tram Shipyards,
Inc."
2Bourg owned a twenty-five percent interest in the companies and the Eymards collectively
owned seventy- five percent of the shares or membership interests in the companies.
3
3, 000, 000. 00 on December 9, 2014, 3 and in the amount of $ 3, 500, 000. 00 on
December 29, 2014,4 in partial satisfaction of the amounts due.
In connection with the settlement, OMC and OMI also executed a promissory
note on December 11, 2014 payable to Bourg for the remaining funds owed for his
stock in the amount of $6, 000, 000.00, 5 which was secured by personal guaranties by
the Eymards, a corporate guaranty from their wholly owned affiliate, Glencoe, Inc.,
and a second preferred ship mortgage on the lift boat L/B KATHRYN EYMARD.6
On this same date OMI merged with and into OMC, and on April 30, 2015, Glencoe
merged with and into OMC. As the surviving entity from these two mergers, OMC
assumed all of OMI and Glencoe' s liabilities. Although some payments were made
to Bourg on the promissory note, including a February 27, 2017 payment in the
amount of $ 500, 000. 00 in connection with the sale of the LB KATHRYN
EYNL RD, the note ultimately went into default for non-payment.
In November of 2016, Regions Bank and/ or Regions Commercial Equipment
Finance, LLC (" Regions"), as a creditor of OMC, made demand upon Bourg for the
sums paid, contending that the payment of the above funds to Bourg constituted
unlawful distributions" pursuant to LSA-R.S. 12: 93, and, as such, were subject to
a " claw -back" action by Regions in its capacity as a creditor of OMC. Thereafter,
on November 23, 2016, Regions and Bourg entered into a tolling agreement, wherein
they agreed that all prescriptive periods relating to the commencement of litigation
by Regions against Bourg for causes of actions arising from payments made to
3$ 500,000. 00 of this payment was for Bourg' s OMC stock and $2, 500, 000.00 represented
payment of Bourg' s OMI stock.
4$ 250,000.00 of this payment was for Bourg' s OMC stock; $ 2, 500, 000. 00 was for Bourg' s
OMI stock; and $ 750,000. 00 was for reimbursement of Bourg' s legal fees and expenses.
50MC owed Bourg $ 1, 000,000. 00 for Bourg' s OMC stock and OMI owed Bourg
5, 000, 000.00 for Bourg' s OMI stock.
6For convenience, we refer to the redemption agreement and promissory note collectively
herein as the " settlement agreements."
M
Bourg in connection with the settlement agreements were tolled and extended
through May 22, 2017. The parties subsequently amended the tolling agreement to
extend the tolling period through November 22, 2017.
On November 28, 2016, Regions filed a petition for damages against the
Eymards and OMC in the 171 Judicial District Court, contending that the companies
and the Eymards, in their capacity as directors, breached a duty to Regions by
authorizing the redemption of corporate shares without ensuring that the payments
would not render the companies insolvent. Region' s suit was assigned docket
number 131426 (" Regions' suit"). Regions averred: that the stock redemption was
in violation of LSA-R.S. 12: 55, as the stock redemption and settlement payments
rendered the companies insolvent; that the Eymards failed to exercise reasonable
care and to act as reasonably prudent directors by approving the stock redemption
and settlement agreement; and that the Eymards were jointly and severally liable to
the creditors of the corporations pursuant to LSA-R.S. 12: 92. Regions thus sought
a judgment against the Eymards for all settlement payments made or promised to
Bourg, plus interest, attorney' s fees, and costs. On December 9, 2016, Bourg
likewise filed suit against the Eymards in the 17th Judicial District Court, seeking
defense, indemnity, and/ or reimbursement and money damages, which was assigned
docket number 131524 (`` Bourg' s suit").
Upon the expiration of the tolling agreement with Bourg in November of
2017, Regions supplemented and amended its petition to add Bourg as a defendant
in its suit and also intervened in Bourg' s suit, asserting simliar claims against Bourg
in both proceedings. Regions essentially restated its claims against the companies
and the Eymards, contending that the companies became insolvent as a result of the
redemption payments and that additional payments, including payments on the
Regions' supplemental and amending petition was filed on November 21, 2017, and its
petition of intervention was filed on November 27, 2017.
5
promissory note and a payment in connection with the sale of the LB KATHRYN
EYMARD, " deepened" their insolvency. Regions averred that the companies
approved the payments in violation of LSA-R.S. 12: 55 and that Bourg, as a
shareholder, received an unlawful distribution of assets and was personally liable to
the creditors of the corporation up to the amounts received by him pursuant to LSA-
R.S. 12: 93. Regions thus sought judgment awarding it the promissory note and all
future payments on the note, or alternatively, that the court declare the promissory
note void and the redemption agreement null, and that judgment be rendered against
the companies, the Eymards, and Bourg, jointly, severally, and in solido, in an
amount equal to all of the redemption payments and additional payments made to
Bourg.
Pursuant to a motion by the Eymards and OMC, on February 8, 2018,
Regions' suit and Bourg' s suit were consolidated in the trial court. Bourg answered
Regions' first supplemental and amending petition and asserted affirmative
defenses. OMC also answered Regions' amended petition and, on July 29, 2019,
asserted a cross- claim against Bourg, averring that at the time OMC entered into the
redemption agreement with Bourg, it had no surplus capital and was " either
insolvent or made insolvent by the redemption and ancillary payments," rendering
the redemption agreement and promissory note " illegal contracts under Louisiana
law" and absolute nullities.
OMC thus sought a declaratory judgment in its favor
declaring that the redemption agreement and promissory note are null and void and
that no future payments under the promissory note are owed.
On March 6, 2018, Regions executed an assignment whereby it transferred,
assigned, and conveyed to Bluehenge Capital Secured Debt SBIC, LP (" Bluehenge")
all of its right, title, and interest in the debt owed by the companies to Regions.
Thereafter, on April 5, 2018, Bluehenge filed a motion to substitute itself as plaintiff
and intervenor in the place of Regions in the litigation, which was granted by the
2
trial court. Bourg answered Bluehenge' s petition for intervention and asserted
affirmative defenses.
Thereafter, Bluehenge filed a motion for summary judgment, averring that the
payments made to Bourg were prohibited " unlawful distributions" and seeking a
judgment against Bourg and the Eymards for the total amount of funds paid to Bourg,
as well as a declaration that the promissory note in favor of Bourg was an absolute
nullity. OMC filed a motion for summary judgment on its cross- claim against co-
defendant Bourg, seeking a judgment declaring the promissory note absolutely null
and unenforceable against OMC.
Bourg filed a peremptory exception raising the objection of peremption,
contending that all claims asserted by Bluehenge and OMC against him were barred
by the peremptive period in LSA-R.S. 12: 93( D), which provides that an action to
recover an unlawful distribution must be brought within two years from the date on
which the unlawful distribution was received and must be dismissed with prejudice.$
Following the filing of oppositions by OMC and Bluehenge, Bourg' s exception was
heard by the trial court on February 5, 2021. On March 25, 2021, the trial court
signed a judgment, maintaining the exception of peremption and finding that the
controlling statutes, LSA-R.S. 12: 92( D), 12: 93( D), and 12: 93( E), intended that a
situation arising in this manner be governed by a two-year peremptive period, and
therefore, Bluehenge' s suit against Bourg, filed on November 21, 2017, was
untimely as beyond the two-year peremptive period. The trial court also rendered
written reasons for judgment. The trial court signed an amended judgment on April
8Bourg also filed a supporting memorandum, wherein he averred that OMC filed a
voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code and
that pursuant to the reorganization plan (" the plan"), Bluehenge became the owner of 100% of the
shares of OMC stock. Bourg contended that pursuant to the plan, his claim on the note against
OMC was subordinated pursuant to Section 510 of the United States Bankruptcy Code and that he
thus received no property under the plan, such that his right to collect the remaining amounts owed
by OMC was effectively terminated. Bourg also contended that Bluehenge, the companies, and
the Eymards entered into a settlement agreement in connection with the plan, thereby releasing the
Eymards from any potential liability to Bluehenge.
7
231, 202 1, which amended the original judgment to include language dismissing, with
prejudice, all claims against Bourg by Bluehenge and OMC. Thereafter, Bluehenge
and OMC each filed devolutive appeals of the March 25, 2021 judgment and the
April 23, 2021 amended judgment. 9
Bluehenge contends on appeal that the trial court erred in:
1) finding that the two-year time period within which to bring an action under
LSA-R. S. 12: 93( D) was peremptive in nature such that the tolling agreement was
deemed ineffective;
2) finding that the filing of an action against the Eymards, who were solidary
obligors with Bourg, did not preserve the cause of action against Bourg;
3) finding that the granting of a preferred lift boat mortgage by an affiliated
corporation did not constitute an " unlawful distribution" under LSA-R. S. 12: 93( D);
and
4) finding that the time period for declaring a promissory note to be an
absolute nullity under LSA-R.S. 12: 55 was subject to the two-year time period
contained in LSA-R.S. 12: 93( D).
OMC appeals the dismissal of its declaratory judgment action for nullity
pursuant to LSA-R.S. 12: 55, contending that the trial court erred in:
1) finding that the execution of the promissory note funding the stock
redemption triggered the running of prescription and/ or peremption under LSA-R.S.
12: 55 as opposed to the actual payments, which have not yet been made;
9The record reflects that following the filing of these appeals by Bluehenge and OMC, the
trial court heard Bluehenge' s motion for summary judgment against Bourg and the Eymards on
May 5, 2021. Considering that all of Bluehenge' s claims against Bourg were dismissed as
perempted pursuant to the April 23, 2021 amended judgment and that the Eymards filed no
opposition to the motion, the trial court found no genuine issue of material fact remained and that
Bluehenge was entitled to judgment against the Eymards as a matter of law. The trial court thus
signed a judgment on May 19, 2021, granting Bluehenge' s motion for summary judgment and
rendering judgment in favor of Bluehenge and against the Eymards, in solido, in the amount of
6,411, 311. 97, plus legal interest from the date of the filing of the petition for damages and court
costs.
8
2) not considering evidence submitted in support of OMC' s insolvency,
which it contends is necessary for determination of a claim predicated on a violation
of LSA-R.S. 12: 55; and
3) dismissing OMC' s claim for declaratory judgment under LSA-R.S. 12: 55,
given that there was unopposed evidence that LSA-R.S. 12: 55 was violated when
the redemption occurred rendering the redemption and the accessory note absolute
nullities not subject to the running of prescription or peremption.
DISCUSSION
Standard of Review
The objection of peremption is raised by the peremptory exception. LSA-
C. C. P. art. 927( A)(2). Ordinarily, the exceptor bears the burden of proof at the trial
of the peremptory exception. However, if peremption is evident on the face of the
pleadings, the burden shifts to the plaintiff to show the action has not been
perempted. See Lomont v. Bennett, 2014- 2483 ( La. 6/ 30/ 15), 172 So. 3d 620, 626-
627, cert. denied, 577 U.S. 1139, 136 S. Ct. 1167, 194 L.Ed.2d 178 ( 2016).
At a hearing on a peremptory exception raising the objection of peremption
pleaded prior to trial, evidence may be introduced to support or controvert
the exception. LSA- C. C. P. art. 931. If evidence is introduced at the hearing, the
trial court' s findings of fact are reviewed under the manifest error -clearly wrong
standard of review. Satterfield & Pontikes Construction, Inc. v. Breazeale Sachse &
Wilson, LLP, 2015- 1355 ( La. App. 1St Cir. 1/ 10/ 17), 212 So. 3d 554, 558, writ
denied, 2017- 0268 ( La. 3/ 31/ 17), 217 So. 3d 363, citing Lomont v. Bennett, 172 So.
3d at 627. However, in the absence of evidence, an exception of peremption must
be decided upon the facts alleged in the petition with all of the allegations accepted
as true. Beverly Construction, L.L.C. v. Wadsworth Estates, L.L.C., 2019- 0911 ( La.
App. 1St Cir. 2/ 26/ 20), 300 So. 3d 1, 5. In a case involving no dispute regarding
material facts, only the determination of a legal issue, a reviewing court must apply
0J
the de novo standard of review, under which the trial court' s legal conclusions are
not entitled to deference. Shannon v. Vannoy, 2017- 1722 ( La. App. 1St Cir. 6/ 1/ 18),
251 So. 3d 442, 449.
We note at the outset that in the instant case, the parties failed to formally
admit any evidence in favor of or in opposition to Bourg' s exception of peremption.
Although the parties attached exhibits to their memoranda in support of and in
opposition to the peremptory exception, the record reflects that these documents
were not admitted into evidence at the hearing. Evidence not properly and officially
offered and introduced cannot be considered, even if it is physically placed in the
record. Denoux v. Vessel Management Services, Inc., 2007- 2143 ( La. 5/ 21/ 08), 983
So. 2d 84, 88. Moreover, as recognized in the jurisprudence, documents attached to
memoranda do not constitute evidence and cannot be considered as such on
appeal. Denoux v. Vessel Management Services, Inc., 983 So. 2d at 88.
Accordingly, on review of peremptory exceptions, appellate courts cannot consider
exhibits filed into the record as attachments to memoranda in determining the issues
1st
on appeal. 10 Cyprian v. Tangipahoa Parish School System, 2021- 0238 ( La. App.
Cir. 11/ 16/ 21), 332 So. 3d 689, 691, citing Union Planters Bank v. Commercial
Capital Holding Corporation, 2004- 0871 ( La. App. 1St Cir. 3/ 24/ 05), 907 So. 2d 129,
130.
Thus, in this matter, where no evidence was introduced at the hearing on the
exception, we accept as true the facts alleged in the petitions and apply the de novo
1OPursuant to exparte motions, Bluehenge and OMC obtained orders designating the record
for appeal. Bourg subsequently filed an ex parte motion to supplement the designations of the
record on appeal, averring that the exhibits in support of his peremptory exception of peremption
were " inadvertently switched" with exhibits in support of a motion to compel filed by Bourg the
same date. However, the parties' respective designation and supplementation of the record on
appeal does not cure their failure to introduce the evidence at the hearing on the peremptory
exception.
10
standard to our review of the trial court' s legal conclusions." See Damond v.
Marullo, 2019- 0675 ( La. App. 1St Cir. 6/ 22/ 20), 307 So. 3d 234, 240, writ denied sub
nom. Damond v. Marullo, 2020- 01243 ( La. 3/ 23/ 21), 312 So. 3d 1104, and cert.
denied sub nom. Damond v. Marullo, 142 S. Ct. 567, 211 L. Ed. 2d 354 ( 2021).
The petitions of Bluehenge ( formerly Regions) and OMC against Bourg
allege that the redemption agreements were entered into on November 24, 2014.
OMC' s petition further avers that the promissory note was executed on December
115 2014. Bluehenge' s petition against Bourg was filed in November of 2017, and
OMC' s cross- claim for declaratory judgment against Bourg was filed in July of
2019. To the extent that the dates of any of the purported unlawful distributions, as
alleged on the face of their petitions, occurred more than two years prior to the filing
of their respective pleadings, Bluehenge and OMC bear the burden of establishing
that their actions were not perempted. See LSA-R.S. 12: 93( D). Otherwise, Bourg
bears the burden of proof.12
Applicable Law
We note that effective January 1, 2015, Section 5 of Louisiana Acts 2014, No.
328, repealed former Chapter 1, " Business Corporation Law," consisting of LSA-
R.S. 12: 1 to 12: 178, while Section 1 enacted LSA-R.S. 12: 1- 101 to 12: 1- 1704,
comprising Chapter 1, " Business Corporation Act" of Title 12 of the Louisiana
Revised Statutes. For purposes of our discussion herein, we rely upon the version
of these statutes in effect at the time the settlement agreements were entered into in
For purposes of reviewing Bourg' s exception to the claims asserted by OMC, we must
accept as true the facts alleged in OMC' s cross- claim against Bourg. With regard to Bourg' s
exception as to the claims asserted by Bluehenge, we likewise accept as true the facts alleged in
Bluehenge' s petition for intervention against Bourg and Bluehenge' s supplemental petition adding
Bourg as a defendant, which incorporated its original petition in its entirety. The claims alleged
in Bluehenge' s petitions against Bourg are identical.
12Failure to adequately prepare the record by neglecting to offer matters into evidence can
alter the outcome of a case, especially in an exception where the burden of proof may shift between
the parties. See Cichirillo v. Avondale Industries, Inc., 2004-2894 ( La. 11/ 29/ 05), 917 So. 2d 424,
428, n. 7.
11
2014. See LSA-C. C. art. 6; see also Segura v. Frank, 93- 1271 ( La. 1/ 14/ 94), 630
So. 2d 714, 721.
Louisiana Revised Statute 12: 55 prohibited the purchase or redemption of
corporate shares by a corporation when the corporation is insolvent or the purchase
or redemption renders the corporation insolvent, in pertinent part, as follows:
A. A corporation shall not purchase or redeem its shares when it is
insolvent, or when such purchase or redemption would render it
insolvent, or at a price, in the case of shares subject to redemption,
exceeding the redemption price thereof, or when its net assets are less
than, or such purchase or redemption would reduce its net assets below,
the aggregate amount payable on liquidation upon any issued shares,
which have a preferential right to participate in the assets in event of
liquidation, remaining after the purchase or redemption and
cancellation of any shares in connection therewith.
Emphasis added.)
Louisiana Revised Statute 12: 92 provided that officers and directors who
authorize unlawful distributions are liable jointly and severally to the corporation,
or creditors of the corporation, or both, in an amount equal to the unlawful
distribution, in pertinent part, as follows:
A. If a corporation has transacted any business in violation of R.S.
12: 26, the officers who participated therein and the directors shall be
liable jointly and severally with the corporation and each other for the
debts or liabilities of the corporation arising therefrom.[ 13]
B. Any officers or directors who knowingly, or without the exercise of
reasonable care and inquiry, consent to the issuance of shares in
violation of the provisions of this Chapter or of prior statutes, shall be
liable jointly and severally to the corporation and any person who
suffers any loss or damage as a result thereof.
C. If property or services taken in payment for shares are grossly
overvalued contrary to the provisions of this Chapter, the officers or
directors who knowingly, or without the exercise ofreasonable care and
inquiry, consented thereto, or voted in favor thereof, shall be liable
jointly and severally to the corporation for the benefit of creditors or
shareholders, as their respective and relative interests may appear, for
any loss or damage arising therefrom.
13 Louisiana Revised Statue 12: 26 provided that:
A corporation formed under this Chapter shall not incur any debts or begin the
transaction of any business, except business incidental to its organization, or to the
obtaining of subscriptions to, or payment for, its shares, until the amount of paid -
in capital with which it will begin business, if stated in the articles, has been paid
in full.
12
D. If any dividend shall be paid in violation of this Chapter, or if
any other unlawful distribution, payment or return of assets be
made to the shareholders, or if the corporation purchase or redeem
any of its own shares in violation of this Chapter, the directors who
knowingly, or without the exercise of reasonable care and inquiry,
voted in favor thereof shall be liable jointly and severally to the
corporation, or to creditors of the corporation, or to both, in an
amount equal to the amount of the unlawful distribution. An action
to enforce such liability must be brought within two years from the
date on which the distribution was made, and this time limit shall not
be subject to suspension on any ground, nor to interruption except by
timely suit.
E. A director shall, in the performance of his duties, be fully protected
in relying in good faith upon the records of the corporation and upon
such information, opinions, reports, or statements presented to the
corporation, the board of directors, or any committee thereof by any of
the corporation' s officers or employees, or by any committee of the
board of directors, or by any counsel, appraiser, engineer, including a
petroleum reservoir engineer, or independent or certified public
accountant selected with reasonable care by the board of directors or
any committee thereof or any officer having the authority to make such
selection, or by any other person as to matters the director reasonably
believes are within such other person' s professional or expert
competence and which person is selected with reasonable care by the
board of directors or any committee thereof or any officer having the
authority to make such selection.
Footnote and emphasis added.)
Louisiana Revised Statute 12: 93 also set forth the liability of subscribers and
shareholders, and directors, providing that every shareholder who receives an
unlawful distribution shall be liable to the corporation or its creditors in an amount
not exceeding the amount he received pursuant to LSA-R.S. 12: 93( D), and that when
directors are liable for consenting to an unlawful distribution, the director has a cause
of action for indemnity against the shareholder for the amount of the unlawful
distribution received by the shareholder pursuant to LSA-R.S. 12: 93( E), as follows:
D. Every shareholder who receives any unlawful dividend or other
unlawful distribution of assets shall be liable to the corporation, or
to creditors of the corporation, or to both, in an amount not
exceeding the amount so received by him. An action to enforce this
liability must be brought within two yearsfrom the date on which the
unlawful distribution was received, and this time limit shall not be
subject to suspension on any ground, nor to interruption except by
timely suit.
E.
When the directors are held liable solely because of having
negligently consented to or participated in any unlawful dividend,
13
distribution, payment or return of assets, the directors shall have,
to the extent of the payments made by them, a cause and right of
action for indemnity against each of the shareholders for the
proportionate amount of the unlawful distribution received by such
shareholder. This action must be brought within two years from the
date ofpayment by the directors on account of the liability imposed
by R.S. 12: 92(D), and this time limit shall not be subject to suspension
on any ground, nor to interruption except by timely suit.
Emphasis added.)
Two -Year Time Limitation in LSA-R.S. 12: 93( D)
Bluehenge' s Assignment of Error No. 1)
In Bluehenge' s first assignment of error, it contends that the trial court erred
in finding that the two-year time period to bring an action to enforce liability
against a shareholder set forth in LSA-R.S. 12: 93( D) was peremptive and not
subject to suspension by a tolling agreement. We find no merit to this contention.
Peremption is a period oftime fixed by law for the existence of a right. Unless
timely exercised, the right is extinguished upon the expiration of the peremptive
period. LSA-C. C. art. 3458. Peremption may not be renounced, interrupted, or
suspended. LSA-C. C. art. 3461.
As the Louisiana Supreme Court has explained, when a statute creates a right
of action and stipulates the delay within which that right is to be executed, the delay
thus fixed is not one of prescription, but is one of peremption. Naghi v. Brener,
2008- 2527 (La. 6/ 26/ 09), 17 So. 3d 919, 923. Statutes of prescription simply bar the
remedy. Statutes of peremption destroy the cause of action itself. Stated differently,
after the limit of time expires, the cause of action no longer exists; it is lost. Na i
v. Brener, 17 So. 3d at 923, citing Guillory v. Avoyelles Ry. Co., 104 La. 11, 28 So.
899, 901 ( 1900); Borel v. Young, 2007- 0419 ( La. 11/ 27/ 07), 989 So. 2d 42, 48
P] eremption is a period of time, fixed by law, within which a right must be
exercised or be forever lost."); see also LSA-C. C. art. 3458, Revision Comments —
1982 ( b). Public policy requires that rights to which peremptive periods attach are
14
to be extinguished after passage of a specified period. Accordingly, nothing may
interfere with the running of a peremptive period. It may not be interrupted or
suspended; nor is there provision for its renunciation. However, as an inchoate right,
prescription, on the other hand, may be renounced, interrupted, or suspended. Naghi
v. Brener, 17 So. 3d at 923.
Louisiana Revised Statute 12: 93( D) specifically fixes a period of time to bring
an action to enforce the shareholder' s liability to the corporation or creditors of the
corporation and provides that the time period may not be suspended. Thus, such an
action " must be brought within two years from the date on which the unlawful
distribution was received, and this time limit shall not be subject to suspension on
any ground, nor to interruption except by timely suit." Likewise, LSA-R.S. 12: 93( E)
provides that when a director is held liable, a director' s cause of action for indemnity
against the shareholder " must be brought within two years from the date of
payment by the directors on account of the liability imposed by [ LSA-] R.S.
12: 92( D), and this time limit shall not be subject to suspension on any ground,
nor to interruption except by timely suit."
The provisions of LSA-R. S. 12: 93( D) and ( E) clearly and explicitly fix a
period of time and further expressly provide that the stated time limit shall not be
subject to suspension on any ground. Because the statute sets forth a fixed period of
time that is not subject to suspension, we find no error in the trial court' s
determination that the legislature clearly intended to set forth a peremptive period.
Moreover, this court has previously held in McGregor v. United Film Corp.,
351 So. 2d 1224, 1229 ( La. App. 1St Cir. 1977), writ denied, 353 So. 2d 1335 ( La.
1978), and writ denied, 353 So. 2d 1335 ( La. 1978), and writ denied, 353 So. 2d
1341 ( La. 1978), that the provisions of LSA-R. S. 12: 93( D) are peremptive (" This
liability is further limited by the peremption provisions of the statute, under which
the action to enforce the liability must be brought within two years from [ the date
15
on] which the unlawful distribution was received."). The peremptive nature of LSA-
R.S. 12: 93 as well as LSA-R.S. 12: 55 have also been recognized by the Fourth
Circuit Court of Appeal. See Security Center Protection Services, Inc. v. All -Pro
Securiy, Inc., 94- 1317 ( La. App. 411 Cir. 2/ 23/ 95), 650 So. 2d 1206, 1208 (" Under
the provisions of [LSA-] R.S. 12: 93( D), quoted above, SCPS' s suit to recover the
assets it alleges were unlawfully distributed to Clement under the provisions
of [LSA-] R.S. 12: 55( A) is barred by peremption unless it was filed ``within two years
of the date on which the unlawful distribution was received."').
Finally, because a peremptive period cannot be renounced, interrupted or
suspended, a peremptive period may not be altered by contract or agreement of the
parties. Taranto v. Louisiana Citizens Property Insurance Corporation, 2010- 0105
La. 3/ 15/ 11), 62 So. 3d 721, 735. Accordingly, we find that the tolling agreement
entered into by the parties herein cannot serve to extend the peremptive period.
For the reasons stated above, and where this court has specifically recognized
that the two-year time limitation period set forth in LSA-R.S. 12: 93 is peremptive,
we find no error in the trial court' s legal conclusion that the statute is peremptive.
See Lafourche Parish Water District No. 1 v. Dip co
- Utility Construction, L.P., 2018-
1112 ( La. App. 1St Cir. 3/ 13/ 19), 275 So. 3d 20, 25- 26, writ denied, 2019- 0577 ( La.
6/ 17/ 19), 274 So. 3d 1257. Accordingly, we find no merit to this assignment of
error.
Liability In Solido
Bluehenge' s Assignment of Error No. 2)
In its second assignment of error, Bluehenge contends that the trial court erred
in finding that its cause of action against the Eymards did not preserve its cause of
action against Bourg as a solidary obligor. Bluehenge concedes, however, that the
Civil Code articles and jurisprudence do not address this assertion as an alleged
16
exception to peremption and that it has not found any jurisprudence specifically
addressing this issue.
Bourg contends that the alleged liability of Bourg and the Eymards arise from
separate statutory grounds of liability that do not give rise to a solidary obligation,
as Bluehenge' s claims against the Eymards as officers and directors are predicated
on LSA-R.S. 12: 92( D) and Bluehenge' s claims against Bourg are predicated on
liability as a shareholder pursuant to LSA-R.S. 12: 93( D). Nonetheless, Bourg avers
that even if he were deemed solidarily liable with the Eymards for any alleged
unlawful distribution, the law is clear that peremption cannot be interrupted,
suspended, or renounced. We agree.
As stated above, peremption may not be renounced, interrupted, or suspended.
LSA- C. C. art. 3461. Moreover, in Naphi v. Brener, the Supreme Court recognized
that the relating back of an amended petition adding a plaintiff is not allowed to
avoid the running of a peremptive period, as follows:
While Article 1153[ 14] does not specifically refer to its effect on
statutory time limitations for filing suit, there can be no question but
that "relation back" of an untimely filed amended petition directly
interferes with the application of prescription or peremption by
allowing a claim that would have otherwise prescribed or been
perempted to proceed. Thus, we cannot consider Article 1153 in a
vacuum without considering whether it has a prohibitive effect on the
operation of peremption.
Because it is well established that " nothing may interfere with the
running of a peremptive period," and avoiding the peremptive period
certainly interferes with the running of that period, relation back of an
amended or supplemental pleading adding a plaintiff is not allowed to
avoid the running of a peremptive period such as that found in La. R.S.
9: 5605. Further, the relation back theory assumes that there is a legally
viable claim to which the pleading can relate back.
14Louisiana Code of Civil Procedure article 1153 provides that:
w]hen the action or defense asserted in the amended petition or answer arises out
of the conduct, transaction, or occurrence set forth or attempted to be set forth in
the original pleading, the amendment relates back to the date of filing the original
pleading.
17
Naghi v. Brener, 17 So. 3d at 924- 925 ( citation omitted).
Because the avoidance of the time period interferes with the running of that
time period, relation back of a petition adding a new defendant is not permitted
where the time period involved is peremptive. Stewart v. Continental Casualty
Company, Inc., 2011- 0505 ( La. App. 1" Cir. 11/ 9/ 11), 79 So. 3d 1047, 1053, writ
denied, 2011- 2721 ( La. 2/ 17/ 12), 82 So. 3d 285. Because the expiration of
a peremptive time period destroys the cause of action, there is nothing for an
amended or supplemental petition to relate back to under LSA-C. C.P. art. 1153.
Stewart v. Continental Casualty Company, Inc., 79 So. 3d at 1053.
For these reasons, on review, we find no basis for concluding that a timely
suit against the Eymards and OMC would interrupt the peremptive period against
Bourg. Because Bluehenge did not file suit against Bourg before the peremptive
period of LSA-R.S. 12: 93( D) expired, Bluehenge' s amending petition attempting to
do so cannot relate back to its original petition under LSA- C. C.P. art. 1153.
Thus, this assignment of error also lacks merit.
Preferred Lift Boat Mortgage
Bluehenge' s Assignment of Error No. 3)
Bluehenge contends that the trial court erred in concluding that ownership of
the payment realized on the sale of the L/B KATHRYN EY IARD was received by
Bourg when the mortgage of the vessel was granted to him. Specifically, Bluehenge
contends that the $ 500,000. 00 payment made to Bourg by OMC on February 27,
2017, from the proceeds of the sale of the LB KATHRYN EYMARD, constitutes
an " unlawful distribution" made within two years of the filing of its November 21,
2017 supplemental petition adding Bourg as a defendant. Bluehenge contends that
this purported unlawful distribution was only received when Bourg received the
payment of $
500,000.00 from the sale proceeds, not when Bourg was granted an
ownership interest through the preferred ship mortgage.
18
Bourg counters that pursuant to LSA-R.S. 12: 93( D), any claims for
shareholder liability must be asserted within two years of the date on which the
unlawful distribution was received and that the ownership interest he acquired
through the preferred mortgage asset was received by him at the time his interest in
the LB KATHRYN EYMARD arose, i.e., when confected on November 24, 2014.
Bourg contends that he " received" the asset in November of 2014, and that the
mortgaged asset was merely converted to cash through the sale of the vessel on
February 27, 2017. Bourg further contends that since OMC had no right or interest
in the sale proceeds, OMC did not make a " distribution" to Bourg when the vessel
was sold. Instead, Bourg avers, the sales proceeds were momentarily placed into
OMC' s account for immediate transfer to the mortgagees ( Bourg and MidSouth
On review, and considering allegations which must be taken as true, we note
that in its petitions against Bourg, Bluehenge averred that to secure repayment of the
promissory note, Glencoe, Inc., " a related company in which Bourg did not own
stock,"
executed a corporate guaranty and granted Bourg a second preferred ship
mortgage on the lift boat LB KATHRYN EYMARD. Bluehenge further alleged in
its petitions that additional payments to Bourg included a $ 51, 959. 94 payment on
January 14, 2014 and a $ 500, 000.00 payment on or about February 27, 2017, in
connection with the sale of the LB KATHRYN EYMARD. Bluehenge also alleged
that on or about April 30, 2015, Glencoe, Inc. merged with and into OMC. As noted
above, on review of the exception, all of these allegations must be accepted as true.
See Beverly Construction, L.L.C. v. Wadsworth Estates, L.L.C., 300 So. 3d at 5.
In doing so, we note that although Bourg contends that the mortgage was
conveyed to him on November 24, 2014, which he avers is the " operative date" of
the alleged unlawful distribution, the date the mortgage interest was conveyed to
Bourg is not disclosed in Bluehenge' s petitions against Bourg. Because the date of
19
the alleged unlawful distribution was not set forth in the petitions, the burden of
proof remained with Bourg, as the party who pled the exception of peremption, to
establish that the distribution occurred over two years prior to the filing of the
petitions. See Cichirillo v. Avondale Industries, Inc., 917 So. 2d at 428. However,
Bluehenge' s petitions do set forth that the mortgage to Bourg was granted by
Glencoe, Inc. prior to its merger with and into OMC on April 30, 2015.
As pertinent hereto, LSA-R.S. 12: 93( D) provides that a shareholder who
receives an unlawful distribution of assets is liable to the corporation or creditors of
the corporation and that an action to enforce this liability must be brought within
two years from the date on which the unlawful distribution was received. See also
1St
Eajle Pacific Insurance Co. v. Production Systems, Inc., 2003- 0457 ( La. App.
Cir. 7/ 14/ 04), 887 So. 2d 18, 24, writ denied, 2004- 2100 ( La. 11/ 24/ 04), 888 So. 2d
230, citing AMP Service Corporation v. Richard, 419 So. 2d 911, 915 ( La. 1982) ( In
order for a creditor to obtain recovery under LSA-R.S. 12: 93, there must be an
unlawful distribution of a corporate asset to a shareholder.). However, according to
Bluehenge' s petitions, Bourg did not own stock in Glencoe, Inc. Where the petitions
before us set forth that Glencoe, Inc., executed a corporate guaranty and granted a
second preferred ship mortgage on the L/B KATHRYN EYMARD to Bourg, who
is not a shareholder of Glencoe, Inc., Bourg has failed to establish that LSA-R.S.
12: 93( D), governing shareholder liability, and its two-year peremptive period,
applied to this distribution.
Accordingly, where the facts in Bluehenge' s petitions do not establish that
Bourg was a shareholder of Glencoe, Inc., we find no support in the record to
conclude that Bluehenge' s claims to recover the purported unlawful distribution of
the sale proceeds pursuant to the mortgage on the L/B KATHRYN EYMARD were
barred by the two-year peremptive period set forth in LSA-R.S. 12: 93( D). Thus, the
portion of the trial court' s judgment sustaining Bourg' s exception of peremption as
20
to Bluehenge' s claims against Bourg for the purported unlawful distribution of the
proceeds on the L/ B KATHRYN EYMARD is reversed.
Nullity Pursuant to LSA-R.S. 12: 55
Bluehenge' s Assignment of Error No. 4)
In its final assignment of error, Bluehenge contends that the trial court erred
in finding that its action to declare the promissory note an absolute nullity under
LSA-R.S. 12: 55 was precluded by the two-year time period contained in LSA-R.S.
12: 93( D).
Although Bluehenge' s petitions aver that OMC executed a promissory note
for its remaining $ 6, 000, 000. 00 obligation to Bourg, the petitions do not set forth
the date the promissory note was executed. As such, we are unable to ascertain the
date the note was executed. Since Bluehenge' s claims are not perempted on the face
of its petition, Bourg had the burden of proving the facts to support his peremptory
exception. Without offering evidence to establish the pertinent date, Bourg failed to
carry his burden of proof. See Bank v. Rayford, 2017- 1244 ( La. App. 1St Cir.
3/ 29/ 18), 247 So. 3d 733, 737.
On the record before us, we find the trial court erred in its conclusion that
Bluehenge' s claims to have the note declared null were perempted, as Bourg failed
to establish the date the note was confected. Accordingly, we also reverse the
portion of the trial court' s judgment finding that Bluehenge' s claims to declare the
promissory note a nullity were perempted.
Nullity Pursuant to LSA-R.S. 12: 55
OMC' s Assignment of Error No. 3)
OMC contends that the trial court erred as a matter of law in finding that its
action to declare the promissory note an absolute nullity pursuant to LSA-R.S. 12: 55
was precluded because it was not filed within the two-year peremptive period of
21
LSA-R.S. 12: 93( D), as peremption does not run against an absolute nullity. OMC
essentially argues that since LSA-R.S. 12: 55 fails to set forth a time period within
which to bring an action, there simply is no prescriptive period, much less a
peremptive period, that bars an action to prevent a corporation from performing an
act prohibited by LSA-R.S. 12: 55. OMC alleges in its petition for cross- claim
against Bourg, filed on July 29, 2019, that the promissory note was executed on
December 11, 2014. Where its claims are perempted on the face of its petition, the
burden shifts to OMC to show the action is not perempted. See Bank v. Rayford,
247 So. 3d at 736.
Bourg contends that while LSA-R.S. 12: 55 prohibits a corporation from
redeeming shares that would render it insolvent and LSA-R.S. 12: 93( D) provides
the sole remedy for unlawful distributions to a shareholder, because the claims
against him were not brought within two years of the purported unlawful
distribution, those claims for a finding of liability against the shareholder pursuant
to LSA-R.S. 12: 93( D) are now lost. Bourg contends that if a redemption renders the
corporation insolvent, as prohibited by LSA-R.S. 12: 55, and that prohibited
redemption is to a shareholder, an action of liability against the shareholder is
governed by LSA-R.S. 12: 93 and must be asserted against the shareholder within
two years of the redemption pursuant to LSA-R.S. 12: 93( D). 15
The relationship between these statutes was explained by this court in Eagle
Pacific Insurance Co. v. Production Systems, Inc., 2003- 0457 ( La. App. 11 Cir.
7/ 14/ 04), 887 So. 2d 18, 24, writ denied, 2004- 2100 ( La. 11/ 24/ 04), 888 So. 2d 230,
15
Bourg also contends that OMC has no right to seek a declaratory judgment that the note
is a nullity as to payments that have not been made, where this claim has been rendered moot by
the bankruptcy proceeding. We note, however, that although Bourg attached OMC' s
reorganization plan from its Chapter 11 bankruptcy proceedings in the United States Bankruptcy
Court as an exhibit in support of his exception of peremption, he did not properly offer and
introduce evidence of the bankruptcy proceeding at the hearing. Thus, as previously discussed,
we cannot consider it on appeal. See Denoux v. Vessel Management Services Inc., 983 So. 2d at
88.
22
citing AMP Service Corporation v. Richard, 419 So. 2d at 914, 16 as follows: With
regard to improper redemption, LSA-R.S. 12: 55( A) prohibits a corporation from
purchasing or redeeming its own shares when it is insolvent, or when the purchase
or redemption would render it insolvent. With regard to shareholder liability, LSA-
R.S. 12: 93( D) specifically provides that "[ e] very shareholder who receives any
unlawful dividend or other unlawful distribution of assets shall be liable to the
corporation, or to creditors of the corporation, or to both, in an amount not exceeding
the amount so received by him." However, in order to prevail in finding liability
against a shareholder under LSA-R.S. 12: 93( D), a plaintiff must establish that there
was an unlawful distribution of assets and that the unlawful distribution was made
to shareholders.
In Security Center Protection Services, Inc. v. All -Pro Security, Inc., 703 So.
2d at 809, the Fourth Circuit Court of Appeal noted that the triggering mechanism
of LSA-R.S. 12: 55 is corporate insolvency caused by the purchase or redemption of
its own stock and that where a corporation is rendered insolvent by paying to the
former shareholder the balance owed for the redemption of his stock, LSA-R.S.
12: 93( D) applies. Thus, we find merit to Bourg' s contention that any alleged
prohibited redemption to him, a shareholder, is governed by LSA-R.S. 12: 93( D).
As a fundamental rule of statutory construction, the more specific statute
controls over a broader, more general statute. Burge v. State, 2010- 2229 ( La.
2/ 11/ 11), 54 So. 3d 1110, 1113; Jones v. Anderson, 2016- 1361 ( La. App. 1St Cir.
6/ 29/ 17), 224 So. 3d 413, 418. When two statutes deal with the same subject matter,
if there is a conflict, the statute specifically directed to the matter at issue must
prevail as an exception to the statute more general in character. Louisiana Board of
16In AMP Service, the Supreme Court explained that "[ LSA-] R.S. 12: 92( D) and [ LSA-]
R.S. 12: 93( D) impose liability upon participating directors and recipient shareholders in favor of
corporate creditors for the unlawful distribution of corporate assets to shareholders." AMP Service
Corporation v. Richard, 419 So. 2d at 912.
23
Ethics v. Purpera, 2020- 0801 ( La. App. 1St Cir. 2/ 19/ 21), 321 So. 3d 401, 405, writ
denied sub nom. Louisiana Board of Ethics v. Pupera, 2021- 00404 ( La. 5/ 11/ 21),
315 So. 3d 868.
Louisiana Revised Statute 12: 55( A) prohibits a corporation from purchasing
or redeeming its corporate shares when the purchase or redemption renders the
corporation insolvent. However, LSA-R.S. 12: 93( D) specifically provides for the
liability of shareholders of a corporation who receive any unlawful dividend or other
unlawful distribution of corporate assets and mandates that actions to enforce this
liability must be brought within two years from the date on which the unlawful
distribution was received. Thus, we conclude that claims asserted for violating LSA-
R.S. 12: 55 against shareholders, for nullity or otherwise, are governed by the more
specific statute pertaining to shareholder liability, namely, LSA-R.S. 12: 93( D).
Considering the statutory scheme in its entirety and the applicable
jurisprudence interpreting same, we find that the trial court correctly determined that
the remedy for OMC' s claims for alleged unlawful distributions received by a
shareholder in violation of LSA-R.S. 12: 55, are set forth in LSA-R.S. 12: 93( D).
Thus, where OMC' s claims were not timely asserted against Bourg herein, they are
perempted.
Accordingly, we find no merit to this assignment of error.
Commencement of Peremptive Period
OMC' s Assignment of Error No. 1)
In this assignment of error, OMC contends that the trial court erred in
determining that the execution of the promissory note triggered the running of
peremption as opposed to considering the date of the actual payments themselves,
including those not yet made, but owed under the note, which thus have not yet been
received" by Bourg. We disagree.
OMC' s action of executing the promissory note legally bound it to pay Bourg
the full amount of the note, and in turn, as alleged by OMC, the creation of this debt
caused or contributed to the company' s insolvency. OMC' s action of executing the
promissory note created a legal and financial responsibility by which it was obligated
to repay the full amount of the note to Bourg pursuant to its terms. Thus, the
prohibited distribution that triggered OMC' s indebtedness to Bourg and gave rise to
OMC' s claims or cause of action to cancel the note as an unlawful distribution
occurred upon execution of the note in favor of Bourg. Stated differently, individual
payments made pursuant to the note did not create OMC' s indebtedness to Bourg.
Upon OMC' s execution of the note, Bourg " received" the alleged unlawful
distribution and thus commenced the running of the peremptive period of LSA-R.S.
12: 93( D).
We likewise find no merit to this assignment of error.
Evidence of Solvency Pursuant to LSA-R.S. 12: 55
OMC' s Assignment of Error No. 2)
In its final assignment of error, OMC contends that the trial court erred in not
considering evidence of OMC' s insolvency at the time the redemption agreement
and promissory note were entered into. Bourg counters that a judicial determination
of solvency is an exercise in futility herein because such analysis was unnecessary
and irrelevant to the trial court' s judgment maintaining the exception of peremption,
where the exception of peremption, by its nature, assumed that OMC was insolvent
at the time of the distributions.
We note, however, even if we were to conclude that the trial court erred in
failing to consider evidence of OMC' s insolvency, OMC failed to introduce any
evidence of its purported insolvency at the hearing. Instead, OMC references in
brief "the record on appeal herein" and attachments in the record to a " Motion for
Summary Judgment filed by Bluehenge" and " incorporated by reference" by OMC
25
in support of its motion for summary judgment. As discussed above, these are not
proper evidence in considering a peremptory exception. See Denoux v. Vessel
Management Services, Inc., 983 So. 2d at 88; Cyprian v. Tangipahoa Parish School
System, 332 So. 3d at 691; and Bank v. Rayford, 247 So. 3d at 736.
Thus, we also find no merit to this assignment of error.
CONCLUSION
For the above and foregoing reasons, the April 23, 2021 amended judgment
of the trial court is reversed to the extent that it sustained the peremptory exception
of peremption as to the claims of Bluehenge Capital Secured Debt SBIC, LP against
Avis J. Bourg, Jr., for the alleged unlawful distribution of the proceeds pursuant to
the mortgage of the L/B KATHRYN EYMARD and to declare the promissory note
a nullity.
The April 23, 2021 amended judgment of the trial court is further reversed to
the extent that it dismissed with prejudice the claims of Bluehenge Capital Secured
Debt SBIC, LP against Avis J. Bourg, Jr., for the alleged unlawful distribution of the
proceeds pursuant to the mortgage of the L/B KATHRYN EYMARD and to declare
the promissory note a nullity. In all other respects, the judgment is affirmed.
Costs of this appeal are assessed one- third each to appellants, Bluehenge
Capital Secured Debt SBIC, LP, and Offshore Marine Contractors, Inc., and
appellee, Avis J. Bourg, Jr.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
26