Articles Posted in Litigation

A non-compete clause is a common feature in many employment agreements in Louisiana. The clause is a way for an employer to restrict an employee from going to work for a competitor and thus potentially harming the original employer. Most non-compete clauses, in order to be enforceable, must contain some limitation as to time and geographical location.

Katie Urban-Kingston was hired by Billedeaux Hearing Center (“Billedeaux”) in Lafayette in May of 2014. Urban-Kingston and Billedeaux entered into an employment agreement containing a non-compete clause that applied to certain areas of Louisiana, Arkansas, Texas, and Mississippi, and allowed for the collection of any costs incurred by Billedeaux for legal enforcement of the clause. Less than a year later, Urban-Kingston left Billedeaux and became employed by Williamson Hearing Center (“Williamson”), just outside of Baton Rouge. Billedeaux sought and was granted a temporary restraining order in February 2015 to enjoin Urban-Kingston from working for Williamson, and a show-cause hearing for a preliminary injunction was set for early March.

At the hearing, the parties stipulated that Urban-Kingston was trained by Billedeaux, that she left Billedeaux’s employ and worked for Williamson at the time of the trial, and that Williamson is in direct competition with Billedeaux. Urban-Kingston claimed as a defense against the issuance of a preliminary injunction, however, that the non-compete clause in her employment agreement with Billedeaux was too broad. The trial court determined that the only issue to decide based on Urban-Kingston’s defense was whether the two hearing centers were actually in competition. But since the parties had already stipulated that point, the court rejected the defense, issued the preliminary injunction in Billedeaux’s favor, and ordered Urban-Kingston to pay Billedeaux’s attorney fees of approximately $6,000.

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.

Have you ever heard the maxim “be careful what you wish for?” This phrase applies almost savagely to Robert Alvarez, a New Orleans financial advisor who sought relief on appeal from an order to pay attorney’s fees and costs in a dispute with his former employer.

Robert Alvarez was associated with Ameriprise Financial Services. After a dispute with the company, Alvarez left Ameriprise and sold his book of business to another Ameriprise advisor, Rufus Cressend. In August 2014, Alvarez filed a petition for a temporary restraining order (“TRO”) and an injunction against Cressend and Ameriprise, seeking to enjoin them from soliciting his former clients and other actions that allegedly damaged his professional reputation. The trial court granted Alvarez’s motion for a TRO on the condition that Alvarez pays a $25,000 security deposit.

Approximately a month later, Cressend and Ameriprise filed a motion to dissolve the temporary restraining order, as well as for the award of attorney’s fees. They asserted that Alvarez failed to prove irreparable harm and failed to provide justification for lack of notice required by La. C.C.P. art. 3603. The trial court denied Alvarez’s motion for a preliminary injunction, found that the TRO had been improperly issued, and granted Cressend’s and Ameriprise’s motion to dissolve the TRO. On the issue of attorney’s fees, Cressend submitted an invoice of fees and costs of about $9,000, and was awarded about $2,500; Ameriprise submitted invoices in the amount of roughly $56,000 and was awarded approximately $20,000. Alvarez appealed the award of attorney’s fees. He settled with Ameriprise, leaving the only issue for the appellate court to consider the $2,500 fee award to Cressend.

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.