A case arising out of the State of Louisiana First Circuit Court of Appeal considers whether defendants should have been permitted to raise certain peremptory contractual exceptions in the trial court: namely, objections of prescription, peremption, no cause of action, no right of action, and a dilatory exception of vagueness. See LA. C.C.P. Art. 927. Unfortunately for the Plaintiffs, the trial court sustained all of defendant’s exceptions, and dismissed their case.
The case involved two plaintiffs Ryan and Vicki Williams—who entered a contractual agreement with Genuine Parts Company to reopen and operate a previously closed NAPA Auto Parts store in Ponchatoula, Louisiana. The Plaintiffs invested approximately $60,000 to start up the store, and obtained a six-year loan guaranteed by the Genuine Parts Company for the remainder of the costs. Plaintiffs were later offered the chance to operate another NAPA Auto Parts store in Hammond, Louisiana, but when plaintiffs declined that opportunity, Genuine Parts Company contracted with Jeffrey Boone to operate that Hammond store instead. After that, plaintiffs were told their financing would not be renewed, because of their NAPA store’s declining performance. When plaintiff’s loan matured, Genuine Parts Company acquired it, and liquidated plaintiff’s store inventory. Plaintiffs then filed a lawsuit for damages, because of the alleged unfair and deceptive practices by Genuine Parts company and Jeffrey Boone. In its response, Genuine Parts Company filed the peremptory exceptions mentioned above. Mr. Boone also adopted the same exceptions in his response. The trial court granted all exceptions and dismissed plaintiff’s case, so plaintiffs appealed.
Defining the Exceptions
The dilatory exception of vagueness is meant to place the defendant on notice of the nature of the facts the plaintiff is trying to assert, to allow defendant to identify the impending cause of action. See Vanderbrook v. Jean, 2006-1975 (La. App. 1st Cir. 2/14/07), 959 So.2d 965 If the plaintiff’s petition fairly informs defendant of the nature of his cause of action, and includes sufficient particular statements to allow defendant to prepare a defense, the exception will be denied. The peremptory exception of prescription allows evidence to be introduced to support or controvert the possible defense of prescription. The peremptory exception of peremption allows a party to raise an objection of peremption. The peremptory exception of no right of action is meant to test whether the plaintiff who seeks relief is the correct person for whom the law should provide a remedy; the exception will be denied if plaintiff does indeed have an interest in judicially enforcing the right asserted. Finally, the peremptory exception of no cause of action intends to question whether or not the law provides any remedy to the plaintiff under the allegations found in the petition.
Appellate Court Holdings
In response to the dilatory exception of vagueness, the appellate court upheld the trial court’s grant of the exception. This was because the appellate court found that the plaintiff’s petition was vague, by failing to define or explain what was meant by the phrase “trade area.”
In response to the peremptory exceptions of prescription, peremption, and no right of action, the appellate court found the exceptions to have been improperly upheld by the trial court. Because the claims of the plaintiffs were not prescribed or perempted on the face of the petition, the burden fell on Genuine Parts Company and Mr. Boone to prove the facts to support the exceptions they were seeking. The appellate court found that, based on the face of the record before them, Genuine Parts Company and Mr. Boone failed to prove their burden, and the exceptions therefore cannot be upheld. Further, GPC and Mr. Boone had the burden of proving that plaintiffs did not belong to the class of persons to whom the law grants the asserted cause of action, and because the record before the court showed no evidence to support this exception of no right of action, the appellate court again found that the exception could not be upheld.
In response to the peremptory exception of no cause of action, the appellate court partially upheld the trial court’s decision to grant the exception, but remanded for further determination. The cause of action at issue for purposes of the exception is the Louisiana Unfair Trade Practices Act (LUPTA), because plaintiffs claim Mr. Boone’s business practices of selling his merchandise at a lower price than plaintiffs’ was unfair and deceptive. The exception for no cause of action was found to apply here because the appellate court agreed with Mr. Boone that choosing to sell auto parts at his store for a lower price than the store in Ponchatoula was mere free enterprise, and LUPTA did not apply. However, because Louisiana Code of Civil Procedure article 934 provides that when grounds of objection for no cause of action can be removed by the plaintiff amending their petition, the court must first allow plaintiff to amend their petition before sustaining the exception. Because this appellate court found that it could be conceivable for plaintiffs to amend their petition to state a proper cause of action against Mr. Boone, the case must actually be remanded to trial court with instructions to permit plaintiffs the opportunity to amend and state a cause of action if they possibly can.
In summary, the court affirmed the dilatory exception of vagueness, reversed the peremptory exceptions of prescription, peremption, and no right of action, and partially upheld and partially reversed the peremptory exception of no cause of action. This decision is highly relevant for any potential plaintiffs with a contractual cause of action, and understanding and preparing for the exceptions that may apply in court can certainly be useful when filing a claim.
Written By Berniard Law Firm Blog Writer: Anne Badasci
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