Family Business Suit in Beauregard Parish Illustrates Dismissal Principles

Alan Kite had many disagreements with his father as the two separated from their business relationship. Alan said that his father had harmed his reputation, that his father had discharged Alan to retaliate against him, and that Alan had relied on his father’s promises to his detriment. Alan had other disputes, but the 36th Judicial District Court, Beauregard Parish, saw disputed facts that required more consideration than dismissal by a motion for summary judgment. The Louisiana Court of Appeal agreed with the district court’s decision to dismiss some of Alan’s claims in Kite v. Kite Bros., No. 11-334 c/w 11-335 (La. Ct. App. 3 Cir. 10/5/11).

Alan Kite had worked in the Kite Brothers recreational vehicle dealership since the 1980s. He did well, earning more than $200,000 a year, as set by his father, Robert Kite. Alan wanted more. He agreed with his brother, Jeff, to raise their salaries, as much as triple the salary for Alan, and to take 10% of the business revenues. The chaos from Hurricane Rita hid this action temporarily, but the father learned about it a few months later in January 2006. The sons quit, or were fired, from the dealership. Alan took business papers with him. The sons sued their father and the business and set up their own competing RV dealership. The brothers fought over control of their own dealership, and Jeff reconciled with his father. Jeff dismissed his claims against his father.

Robert Kite tried to have dismissed more of the claims against the business. The trial court agreed in part. The trial court’s decision does not affect other claims that Alan still has against his father’s business. Alan claimed that his father had damaged his reputation by calling him a “thief” and a “liar.” The district court dismissed the claim. It concluded that “the fact that Alan did what any reasonable person would see was stealing would be a complete defense to the action for defamation.”

The first of four required elements for defamation is “a false and defamatory statement concerning another.” The court of appeal easily found that element had not been satisfied. “The evidence clearly established Alan, without his father’s permission, raised his salary substantially and also unilaterally gave himself an unauthorized percentage of all revenues.” In addition, “Alan, without permission, removed business documents from the Kite Bros., L.L.C. office,” and didn’t return them even after he told a police officer that he would. The court of appeal agreed that the father’s statements were not false. The defamation claim was properly dismissed.

Alan claimed that Kite Brothers fired him in retaliation for objecting to renting recreational vehicles without a license to do so. The Louisiana Whistleblower Statute prohibits an employer from taking a reprisal “against an employee who in good faith, and after advising the employer of the violation of law . . . [o]bjects to or refuses to participate in an employment act or practice that is in violation of law,” or “[d]iscloses or threatens to disclose a workplace act or practice that is in violation of state law.”

Alan facilitated the two contracts for renting recreational vehicles in September 2005, and he claims that he is owed 10% “of the funds realized from those leases.” Whistleblowers refuse to participate in the employer’s illegal practices or intend to report them. Alan participated, to his profit, and did not intend to report the violation. He stayed with his employer for four months after this alleged objection. By the time he left, Kite Brothers had a license to lease vehicles. For these reasons, the court of appeal found that Alan’s claim had “no merit.” It agreed with the trial court’s dismissal. Finally, Alan sought a 1% ownership in the business because he claimed to rely upon his father’s statement that Alan would obtain ownership. The trial court dismissed this claim because “Alan has acknowledged elsewhere that [Mr. Kite] was the sole owner of [Kite Bros.,] LLC and Alan disclaimed any ownership of the [Kite Bros.,] LLC in his divorce proceedings.”

Detrimental reliance occurs when a promise induces the other party to rely on it, and the other party suffers as a result of reliance that is reasonable. In such circumstances, the promise is enforceable under the Louisiana Civil Code. It’s a powerful tool, and for that reason, courts look “carefully and strictly” at those claims.

The alleged statement by the father that he wanted Alan to have a controlling interest in the business came from a conversation more than 20 years ago. Alan’s testimony does not support that he reasonably believed his dad promised him a share of ownership in the dealership. Since that alleged statement, Alan has admitted at least three times before a court or administrative board that his father was the company’s sole owner. Even if the statement had become a promise that Alan believed in, the court of appeal noted that Alan has not shown that he changed his position because of the alleged promise. As a result, the court of appeal affirmed dismissal of the three claims.

A claim may have a popular definition, but that won’t hold up in court. A lawyer is needed to recognize all the strengths and limitations of a claim. If one isn’t sure that the claim will succeed, time and money may be spent without anything in return. If you believe that you have been wronged, you should seek counsel of an experienced attorney, who may guide you through the claims that are most likely to succeed.

If you have been harmed by the acts of another, call the Berniard Law Firm toll free at 1-866-574-8005 and speak with a lawyer who can help you get the recovery you deserve.