Articles Posted in Litigation

The old saying goes:  nothing is certain but death and taxes. In the case of property taxes on real, or immovable, property, failure of payment can permit the sheriff of the parish in which the property is located to hold a “tax sale.” In a tax sale, the delinquent property taxes are paid out of the proceeds of the property’s sale. Removing a homeowner from his residence in order to pay overdue taxes is a very serious and potentially damaging action — both financially and emotionally — for the homeowner. For this reason, under Louisiana law, property owners who lose their homes due to a tax sale have options for reclaiming their property after a tax sale if they can obtain sufficient funds to make good on what they owe. This process is known as redemption of the property. If redemption is not feasible, a homeowner can still seek an annulment of the tax sale if certain conditions are met. A case that came before Louisiana’s Fifth Circuit Court of Appeal illustrates how these procedures operate.

Mark Manganello owned a condominium on Avant Garde Circle in Kenner, Louisiana. He failed to pay property taxes for the condo in 2009. In April 2010, the Jefferson Parish Sheriff’s Office notified Manganello of his property tax delinquency by certified mail. Two months later, the Sheriff’s Office advertised a tax sale of the property, and the property was purchased by Virtocon Financial Services. A Tax Sale Certificate in favor of Virtocon was recorded in the immovable property records of Jefferson Parish. Virtocon subsequently assigned its rights to the Tax Sale Certificate to Philnola, LLC.

Four years later, Philnola filed a lawsuit against Manganello to confirm the tax title of the property. Philnola asserted that Manganello was properly notified of the tax sale, but that he neither paid the taxes due nor redeemed the property within the three year period provided by Louisiana law. Phinola’s motion for summary judgment was denied by the trial court, however, because the court found genuine issues of material fact existed in relation to whether Mangenello sought redemption of the property. Then Phinola filed a second motion for summary judgment, arguing that Manganello failed to begin a proceeding to annul the tax sale within the six-month service notice of sale as required by Article 7 of the State Constitution. Philnola argued that because Manganello failed to seek an annulment of the tax sale, the property should belong to Phinola. Manganello argued that because the 2009 taxes had either been paid or because he had begun the redemption process within the statutory redemption period, there was no reason to seek an annulment of the tax sale. The trial court granted the second motion for summary judgment and confirmed Philnola’s tax title to the property. Manganello appealed to the Fifth Circuit.

It really does go without saying, but lawsuits tend to progress slowly.  Delays abound and the realities of finite court resources mean that lawsuits can take years to complete.  As an alternative to using this system, some parties will agree to arbitrate disputes. Arbitration takes place outside the court system before a contractually agreed upon third party who hears evidence and renders a final decision (much like a judge). Although it is sometimes successful, arbitration can often result in court litigation anyway. After a dispute arose over the quality of some condo construction in Biloxi, Mississippi, the New Orleans Glass Company attempted to litigate rather than arbitrate.  

The New Orleans Glass Company (“NOG”) was a subcontractor for the Roy Anderson Corporation (“RAC”) on a project building condos in Mississippi.  The parties executed a subcontract which required any subcontractors to participate in arbitration proceedings between RAC and a third-party when the subcontractor had claims against RAC arising out of the same general subject matter as the already-pending proceeding. NOG interpreted the contractual provisions to mean that arbitration was only required in regards to that third-party and not for disputes between NOG and RAC.      

Predictably, a dispute did arise between RAC, the condo developer, and the condo owner’s association over the quality of the construction. Developer and owners initiated arbitration proceedings.  RAC determined that many of the claims for damages involved work performed by subcontractors and subsequently filed a demand requiring NOG to participate in the arbitration proceedings. NOG filed a complaint before the United States District Court for the Southern District of Mississippi requesting the District Court to issue a judgment stating that NOG and RAC did not agree to arbitrate but to litigate.  

The worst thing that could happen if you are in a bad situation is for that situation to get worse. A New Orleans, Louisiana, resident found himself in that exact scenario when he was in legal trouble and subsequently found himself in even deeper legal trouble.

MT, the defendant, owned with his partners, a construction contracting company, Garner Services. When MT was the Chief Operating Officer, he and his brother-in-law, DF, created fictitious invoices for work never performed, amounting to $925,000 to a company that MT himself controlled.

After his fraud was discovered, MT was criminally charged with conspiracy to commit mail fraud, which he pled guilty to in exchange for no additional charges filed. The Government also informed MT that he would be indicted for concealing financial information to block the forfeiture of certain assets. Before the plea deal was signed, MT hired a private investigator, Tim Wilson, who spoke with two of the Assistant United States Attorney’s (“AUSAs”) for the Eastern District of Louisiana on MT’s behalf. Wilson stated the AUSAs promised not to execute on the forfeiture indictment. This “secret deal” was later contested by the AUSAs, who denied having made such a promise.

A contract creates a level of trust between two businesses or individuals, but what happens when one individual fails to uphold their end of the bargain? Or worse yet, what happens when an individual purposefully misrepresents their ability to uphold their end of the bargain? These are issues the Louisiana Third Circuit Court of Appeal recently addressed in a lawsuit between Meyer & Associates, Inc. (“Meyer & Associates”) and the Coushatta Tribe of Louisiana.

The Coushatta Tribe of Louisiana is a federally recognized Indian tribe composed of an elected four-member Tribal Council and a separately elected Tribal Council spokesperson. The Tribe conducts all of its governmental and business matters from the offices in Allen Parish, Louisiana. In July 2001, the Tribe decided to enter into an agreement in order to better manage the Tribe’s casino facility in Kinder, Louisiana. The Coushatta Tribe agreed to enter into a consulting services contract with Meyer & Associates, a Louisiana corporation that provides professional engineering services to its clients.

In early 2002, the members of the Tribal Council and the vice president of Meyer & Associates, Richard Meyer, began discussions concerning the possibility to design and construct a facility for the casino’s general electricity, the individuals of the Coushatta Tribe, and potentially outside customers. Because Meyer’s & Associates did not have specific experience in this area, Mr. Meyer began assembling a team of experts to assist him. For the next several months, the project team began exploring the possibilities of developing the electric program. During the Tribal Council meeting on December 17, 2002, Mr. Meyer presented the most up-to-date study on the feasibility of the electrical project – this presentation gave the Tribal Council enough confidence to accept the project on the January 14, 2003 meeting. With this acceptance, a second agreement was written. This second agreement gave the Chairman of the Tribal Council the ability to negotiate and execute any new agreements with Meyer & Associates, and also stated that that the Tribe’s financial obligation to the project was $10,000,000 in addition to the $3,375,000 that was necessary for all the preliminary work.