Judgment rendered August 26, 2026.
Application for rehearing may be filed
within the delay allowed by Art. 2166,
La. C.C.P.
No. 57,060-CA
COURT OF APPEAL
SECOND CIRCUIT
STATE OF LOUISIANA
*****
JASWANT DHILLON AND Plaintiffs-Appellants QUICK TRIP SJ, LLC
versus
WARRIS SHAHEEN, FAISAL ALI Defendants-Appellees & BEST SMOKE & VAPE SHOP,
LLC
*****
Appealed from the
Fourth Judicial District Court for the
Parish of Ouachita, Louisiana
Trial Court No. 2023-1193
Honorable B. Scott Leehy, Judge
*****
SEDRIC E. BANKS Counsel for Appellants
BRADLEY MURCHISON Counsel for Appellees, KELLY & SHEA, LLC Faisal Ali, Best Smoke & By: Brittanie W. Carpenter Vape Shop, LLC, and JA
JMart Fuel, LLC
ADAM J. ROSS
*****
Before PITMAN, STONE, and THOMPSON, JJ.
STONE, J., dissents with written reasons.
THOMPSON, J.
Two business partners operated a convenience store and were equal
members and managers of a limited liability company which owned the real
estate where the store operated and other assets. The operating agreement
provided that any disputes between the partners would be resolved by
binding arbitration. Disputes arose when, while one member was out of the
country, he alleged the other improperly acted on behalf of the limited
liability company and sold the real estate and then inventory of the store
without his knowledge or consent, which actions were in violation of the
provisions of the limited liability company operating agreement. Litigation
ensued between the two partners and ensnared the purchasers of the property
and the separate purchasers of the inventory.
The claims between the two partners were stayed and sent to binding
arbitration, as per the provisions of the operating agreement. The claims
against the various purchasers remained, and it is their disposition that
comes before us now. The defendants filed exceptions of no cause and no
right of action, prescription, and lack of capacity, which were granted by the
trial court, dismissing all claims against them and awarding sanctions. The
plaintiff appeals those actions by the trial court. For reasons more fully
detailed below, we affirm the trial court’s judgment sustaining the
defendants’ exceptions and dismissing the plaintiffs’ claims with prejudice.
FACTS AND PROCEDURAL HISTORY
Jaswant Dhillon (“Dhillon”) and Waris Shaheen (“Shaheen”) were
business partners, including the operation of a convenience store, and were
equal members of the Louisiana limited liability company they formed
named Quick Trip SJ, LLC1 (“LLC”). Internally, they agreed to be bound
by and executed an operating agreement which included provisions for
binding arbitration in the event there was a disagreement between the
members. Dhillon alleges that when he was temporarily out of the country,
Shaheen forged a company certificate granting himself individual authority,
beyond what was established in the operating agreement, to sell the real
property and assets of their convenience store for a price below fair market
value. Upon learning of these transactions when he returned, Dhillon
objected and filed suit against Shaheen and the purchasers.
Dhillon initially filed suit in his personal name and on behalf of the
LLC against his business partner, Shaheen, as well as Faisal Ali (“Ali”) the
purchaser of the real property, and his limited liability company, Best Smoke
& Vape Shop, LLC. Later, Dhillon also named one of Ali’s other limited
liability companies, JA J-Mart Fuel, LLC. Ali and his limited liability
companies are hereinafter, when appropriate, collectively referred to as the
“Ali Defendants”.
Dhillon asserts in effect that by acting in concert with Shaheen, Ali
(and the Ali Defendants) have effectively replaced his ownership interest in
the LLC. In response to these allegations:
• Shaheen filed a motion to stay the proceedings based on the
arbitration clause in the operating agreement, and Dhillon
ultimately agreed2 and stipulated to settle his claims against
Shaheen via arbitration, which is ongoing.
• The Ali Defendants filed peremptory exception of no right of
action, directing the court to the certificate on which they relied,
authorizing Shaheen, as a member of the LLC, to sell its real
property. They also raised the dilatory exception of lack of
1
Formed September 30, 2020
2
June 17, 2024
2
capacity for Dhillon to independently file suit on behalf of the
LLC.
Dhillon asserts there were ultimately two transactions. The first
transaction was when one Ali Defendant (Best Smoke) accepted Shaheen’s
offer to purchase the real property. This sale was limited to the corporeal
immovable property, with no offer to purchase any movables, such as
equipment or inventory. The Ali Defendants contacted a law firm, Hudson,
Potts, and Bernstein, LLP, to verify that Shaheen had the authority to sell the
property, which they advised he did by virtue of a Limited Liability
Company Certificate (“Certificate”) dated November 3, 2021, and filed in
the public records of Ouachita Parish. That sale soon followed.
The second sale was of the store’s inventory, which was sold in a
separate transaction between two parties who are not parties to this original
suit – Cypress Wholesale and Retail, LLC (“Cypress Wholesale”), which
was owned by Shaheen, and JA J-Mart Fuel, LLC, which was owned by Ali.
It was asserted by Shaheen that the LLC did not own the inventory of the
store, but that is owned by Cypress Wholesale. Dhillon added JA J-Mart as
a defendant in an amended and supplemental petition3 two and a half years
after first initiating this lawsuit. In response, the Ali Defendants filed4
multiple exceptions to Dhillon’s petition, including peremptory exceptions
of no cause of action, no right of action, prescription, and the dilatory
exception of lack of capacity. Plaintiffs responded to the exceptions, filing
an opposition to exceptions on behalf of only JA J-Mart. Plaintiffs
acknowledged in their opposition that Shaheen had been dismissed in the
3
June 9, 2025
4
August 6, 2025
3
present lawsuit and that he was pursuing those claims against Shaheen in
arbitration.
Plaintiffs’ opposition to the exceptions was directed only at JA JMart. Plaintiffs assert that the oppositions it filed were meant to respond to
the “mirror exceptions” filed on behalf of both Ali and Best Smoke, and JA
J-Mart, by Ali’s counsel. A hearing on the exceptions followed.
The trial court heard arguments on the exceptions5 and took the matter
under advisement before it rendered final judgment,6 sustained Defendants’
exceptions and dismissed Plaintiffs’ claims against the Ali Defendants with
prejudice. The trial court provided written reasons, adopting the reasons set
forth in Ali’s counsel’s memoranda. This appeal by Shaheen of the
dismissal of claims against the Ali Defendants followed, in which he asserts
nine assignments of error. Plaintiffs’ claims against Shaheen remain viable
in the binding arbitration proceedings and are not before this court. The Ali
Defendants seek additional sanctions against Plaintiffs.
DISCUSSION
Assignment of Error No. 1: The trial court erred by adopting
defendants’ memoranda as its reasons for judgment.
Plaintiffs argue that the exceptions filed by Defendants should be
denied, because they have successfully stated causes of action and rights of
action. Plaintiffs also argue that the trial court failed to conduct an
independent review of the record and merely adopted Defendants’
memoranda as its reasons for judgment granting the exceptions, dismissing
Plaintiffs’ claims, and cancelling lis pendens. We disagree.
5
August 21, 2025
6
November 5, 2025
4
The Ali Defendants’ memorandum in support of its peremptory
exception of no right of action and dilatory exception of lack of capacity
included the applicable facts, law, and jurisprudence. Counsel correctly
identified the controlling law and concisely connected each to the facts. We
find that the trial court committed no legal error in adopting Defendants’
memoranda as its reasons for judgment. Louisiana courts have consistently
held that in whichever manner the trial court decides to determine the facts,
whether through adoption of briefs or otherwise, the findings of fact should
not be disturbed as long as such findings are based on evidence. Shoreline
Gas, Inc. v. Grace Res., Inc., 34,517 (La. App. 2 Cir. 4/4/01), 786 So. 2d
137; Fletcher v Simmons, 37,758 (La. App. 2 Cir. 10/29/03), 859 So. 2d 292.
The record reveals that the trial court’s written reasons were based on its
independent review of the record in its entirety, the pleadings, and the facts.
Judges are not deprived of the ability to direct the parties to properly
written summations of the facts, discussion of the issues, and identification
of the controlling law and jurisprudence simply because it was also
identified by counsel. The judgment specifically notes as reasons for the
judgment: “consideration of the exceptions filed on behalf of the defendants,
5
the supporting and opposing memoranda submitted by the parties, and the
oral arguments presented by the parties” as is evidenced below:
Accordingly, this assignment of error lacks merit.
Assignment of Error No. 2: The trial court erred in finding that
Plaintiffs “had no opposition” to the exceptions.
Plaintiffs argue that the trial court’s finding that they did not file an
opposition to the exceptions was erroneous. Plaintiffs admit that neither the
caption nor the introduction of its opposition properly identifies each
Defendant, specifically JA J-Mart, by name. However, Plaintiffs argue that
the opposition it did file encompasses the “mirror exceptions” Defendants
filed in response to JA J-Mart’s addition to the lawsuit.
6
The record reveals that Plaintiffs failed to timely file any opposition to
the Ali Defendants’ exceptions, despite the trial court granting Plaintiffs an
additional 30 days to do so. The record also shows that the opposition filed
only responded to the exceptions filed as defendant, JA J-Mart, who was not
properly added to this lawsuit, as will be discussed below. Accordingly, this
assignment of error is without merit.
Assignment of Error No. 3: The trial court erred in granting the
peremptory exception of no right of action.
Plaintiffs repeatedly urge that the trial court simply adopted
Defendants’ memoranda “wholesale” but did not clearly articulate a legal
basis for sustaining the exceptions of no right of action and/or no cause of
action. Those assertions have been addressed above. The function of an
exception of no cause of action is to test the legal sufficiency of the petition
by determining whether the law affords a remedy on the facts alleged in the
pleading. Everything on Wheels Subaru, Inc. v. Subaru S., Inc., 616 So. 2d
1234 (La. 1993). No evidence may be introduced at any time to support or
controvert the objection that the petition fails to state a cause of action. La.
C.C.P. art. 931. An exception of no cause of action is triable on the face of
the petition; and, for the purpose of determining the issues raised by the
exception, the well-pleaded facts in the petition must be accepted as true.
Indus. Companies, Inc. v. Durbin, 02-0665 (La. 1/28/03), 837 So. 2d 1207.
It should be granted only when it appears beyond doubt that the plaintiff can
prove no set of facts in support of any claim which would entitle him to
relief. Badeaux v. Sw. Computer Bureau, Inc., 05-0612 (La. 3/17/06), 929
So. 2d 1211. If the petition states a cause of action on any ground or portion
of the demand, the exception should generally be overruled. Id. Every
7
reasonable interpretation must be accorded the language used in the petition
in favor of maintaining its sufficiency and affording the plaintiff the
opportunity of presenting evidence at trial. Indus. Companies, Inc. v.
Durbin, supra.
In reviewing a trial court’s ruling sustaining an exception of no cause
of action, the appellate court should conduct a de novo review because the
exception raises a question of law, and the trial court’s decision is based
only on the sufficiency of the petition. Indus. Companies, Inc. v. Durbin,
supra.; Nat’l Collegiate Student Loan Tr. 2006-1 v. Huggins, 55,786 (La.
App. 2 Cir. 10/2/24), 399 So. 3d 847.
As a result of the claims against Shaheen being controlled by binding
arbitration, the trial court considered only the claims asserted against the Ali
Defendants. The Ali Defendants relied on the Certificate in authentic form
and filed in the public records of Ouachita Parish to confirm Shaheen had
the authority to convey the real property owned by the LLC. It sought out
and obtained legal advice on that subject. While Dhillon may pursue any
grievances regarding Shaheen’s actions against Shaheen, any allegations
against the Ali Defendants must be viewed in light of the controlling facts
and law.
La. R.S. 12:1318, Voting Rights of Members, provides in pertinent
part:
A. Unless otherwise provided in the articles of organization or
a written operating agreement, each member of a limited
liability company shall be entitled to cast a single vote on
all matters properly brought before the members, and all
decisions of the members shall be made by majority vote of
the members.
8
B. Unless otherwise provided in the articles of organization or
a written operating agreement, a majority vote of the
members shall be required to approve the following matters,
whether or not management is vested in one or more
managers pursuant to R.S. 12:1312:
(1) The dissolution and winding up of the limited liability
company.
(2) The sale, exchange, lease, mortgage, pledge, or other
transfer of all or substantially all of the assets of the
limited liability company.
(3) The merger or consolidation of the limited liability
company.
(4) The incurrence of indebtedness by the limited liability
company other than in the ordinary course of its
business.
(5) The alienation, lease, or encumbrance of any
immovables of the limited liability company.
(6) An amendment to the articles of organization or an
operating agreement.
After conducting a de novo review of the record, we find the trial
court did not err in granting the peremptory exceptions of no right of action
as to the Ali Defendants. Dhillon had no right to file the present lawsuit
against the Ali Defendants on behalf of the LLC and had no individual right
of action against them. He was not an individual party to the property sale,
and he cannot independently assert actions on behalf of the LLC without
consent of the majority of the members.
Finally, Plaintiffs failed to assert a right of action against JA J-Mart,
because neither Dhillon nor the LLC was a party to the sale of the store’s
inventory to JA J-Mart, which involved separate entities in a separate
transaction. Accordingly, this assignment of error is without merit.
9
Assignment of Error No. 4: The trial court erred in granting the
peremptory exception of no cause of action.
Plaintiffs argue that their petition successfully states claims against
the Ali Defendants for actionable misconduct, statutory and codal violations,
intentional tort, false representations, silence and inaction, unlawful business
practices and conspired wrongdoing resulting in economic harm. A cause of
action, when used in the context of the peremptory exception, is defined as
the operative facts that give rise to the plaintiff’s right to judicially assert the
action against the defendant. Wederstrandt v. Kol, 22-01570 (La. 6/27/23),
366 So. 3d 47, reh’g denied, 22-01570 (La. 9/8/23), 370 So. 3d 457. An
exception of no cause of action is utilized to determine the legal sufficiency
of the petition by determining whether the law affords a remedy on the facts
alleged in the pleading. Everything on Wheels Subaru, Inc. v. Subaru, Inc.,
supra. No evidence may be introduced to support or controvert the
objection that the petition fails to state a cause of action. La. C.C.P. art. 931.
Thus, the court reviews the petition and accepts well-pleaded allegations of
fact as true; and the issue at the trial of the exception is whether, on the face
of the petition, the plaintiff is legally entitled to the relief sought. Everything
on Wheels Subaru, supra.
The adjective “well-pleaded” refers to properly pleaded allegations
conforming to the system of fact pleading embodied in the Louisiana Code
of Civil Procedure. Wederstrandt, supra. It does not include allegations
deficient in material detail, conclusory factual allegations or allegations of
law. Id. The burden of demonstrating that the petition states no cause of
action is upon the mover. Id. A petition should not be dismissed for failure
to state a cause of action unless it appears beyond doubt that plaintiff can
10
prove no set of facts in support of any claim which would entitle him to
relief. Succession of Miller, 56,139 (La. App. 2 Cir. 4/9/25), 409 So. 3d 486,
490-91, reh’g denied (May 15, 2025), writ denied, 25-00747 (La. 10/1/25),
417 So. 3d 569; Walker v. Dollar Tree Stores, Inc., 53,898 (La. App. 2 Cir.
4/14/21), 316 So. 3d 585. In reviewing a trial court’s ruling on an exception
of no cause of action, an appellate court applies a de novo standard of
review. Id.
Plaintiffs’ allegations in any of their pleadings fail to assert or allege
any facts that establish any cause of action against JA J-Mart. Plaintiffs
failed to provide any facts that support a connection between claims
originally pleaded against Best Smoke and Ali against JA J-Mart, who was
not a party to the property sale. Further, Plaintiffs appear to try to rescind
the sale of the inventory to JA J-Mart but cannot state a cause of action
against Defendants in this lawsuit because that sale constituted an entirely
separate transaction (the inventory, not the property) that also involves
distinct parties. We find that the trial court did not err in sustaining the
exception of no cause of action. Plaintiffs cannot prove any set of facts in
this litigation in support of any claim which would entitle them to the relief
they seek against Defendants. Accordingly, this assignment of error is
without merit.
Assignment of Error No. 5: The trial court erred in granting the
peremptory exception of prescription.
Ordinarily, the party pleading prescription bears the burden of proving
that the claim has prescribed; however, when prescription is evident on the
face of the pleadings, the burden shifts to the plaintiff to show that the action
has not prescribed. Higgins v. Russell, 55,624 (La. App. 2 Cir. 5/22/24), 386
11
So. 3d 1236. When no evidence is submitted at the hearing on the
exception, the exception of prescription must be decided upon the facts
alleged in the petition with all of the allegations accepted as true. In that
case, the reviewing court simply assesses whether the trial court was legally
correct in its finding. Mitchell v. Baton Rouge Orthopedic Clinic, L.L.C.,
21-00061 (La. 10/10/21), 333 So. 3d 368; Gilcrease v. Maximus Operating,
LTD., 56,300 (La. App. 2 Cir. 10/1/25), 423 So. 3d 246, writ denied, 25-01394 (La. 1/21/26), 425 So. 3d 105.
The record shows that Plaintiffs’ petition (which is their third in this
litigation but is actually entitled “First Amending and Supplemental
Restating Petition”) was filed over two years after initially filing suit. These
claims are subject to a one-year prescriptive period, which would have
begun on the date of the transaction.
Based on our de novo review of the record, we find the trial court did
not err in sustaining the exception of prescription as to JA J-Mart. The oneyear prescriptive period for any potential claim against JA J-Mart had
prescribed, and the addition of JA J-Mart as a party did not relate back to the
initiation of the lawsuit. See La. C. C. P. art. 1153. Accordingly, this
assignment of error is without merit.
Assignment of Error No. 6: The trial court erred in granting the
dilatory exception of lack of procedural capacity.
Plaintiffs argue they are a natural person and a Louisiana LLC, who
are both capable of bringing suit, and Defendants present no evidence to the
contrary. Defendants assert that the trial court did not err in granting the
exception because Dhillon had no capacity to bring this suit on behalf of the
LLC.
12
Lack of procedural capacity is a dilatory exception which tests a
party’s legal capacity to bring an action or have an action brought against it.
Stonecipher v. Caddo Parish, 51,148 (La. App. 2 Cir. 4/7/17), 219 So. 3d
1187, writ denied, 17-0972 (La. 10/9/17), 227 So. 3d 830. The
determination of whether a party has the procedural capacity to sue or be
sued involves a question of law, which is reviewed under the de novo
standard of review to determine whether the ruling of the trial court was
legally correct. Woodard v. Upp, 13-0999 (La. App. 1 Cir. 2/18/14), 142 So.
3d 14.
We find the trial court did not err in sustaining the exception of lack
of procedural capacity. The record shows that Dhillon did not have the
capacity to bring this lawsuit on behalf of the LLC. La. R.S. 12:1318. As
discussed herein, the LLC is comprised of only two members, Dhillon and
Shaheen. Dhillon clearly did not have a majority vote of both members to
bring this action on behalf of the LLC.7 Neither the LLC’s Articles of
Organization nor the operating agreement provide any exception to the
general rule that decisions made on behalf of the LLC must be made by a
majority vote of the members. As Dhillon pursues in arbitration his claims
that Shaheen, without a majority vote, could not act alone on behalf of the
LLC to sell its assets, Dhillon is likewise confronted with that same
mathematical challenge here of not owning a majority of the LLC to bring
this action. Accordingly, this assignment of error is without merit.
Assignment of Error No. 7: The trial court abused its discretion by
dismissing Plaintiffs’ claims with prejudice without allowing
amendment.
7
Plaintiffs have made no allegation that this suit arises as a derivative action. See La. C.C.P. art. 611 and art. 615.
13
Plaintiffs argue that dismissal with prejudice is only appropriate when
amendment would be futile and that the trial court did not identify any
incurable defect in their pleadings.
Defendants argue that the Plaintiffs’ claims are blatantly frivolous and
not supported by the record and were, therefore, appropriately dismissed.
Further, Defendants note that Plaintiffs had a total of 48 days to respond to
the exceptions and failed to timely do so. We find that the trial court did not
abuse its discretion by dismissing Plaintiffs’ claims for the reasons
addressed by the other assignments of error. Further, the record shows that
Plaintiffs did not request the right to amend and did not oppose the proposed
Judgment prepared by Ali’s counsel. Accordingly, this assignment of error
is without merit.
Assignment of Error No. 8: The trial court erred in dismissing Plaintiff, Quick Trip SJ, LLC’s claim against Defendant, Best Smoke & Vape
Shop, LLC for lesion beyond moiety.
Plaintiffs argue that the trial court failed to conduct an analysis into its
allegations regarding the fair market value of the LLC to support its claims
against JA J-Mart of lesion beyond moiety.
Louisiana Civil Code articles 2589 through 2600 govern rescission of
a sale for lesion beyond moiety, i.e., when the price paid is less than one half
of the fair market value of the immovable. See La. C.C. art. 2589.
Plaintiffs’ claims related to lesion beyond moiety were only directed
to JA J-Mart. Defendants argue that the trial court did not abuse its
discretion by dismissing Plaintiffs’ claim against JA J-Mart for lesion
beyond moiety because JA J-Mart was not a party to the property sale. We
agree. The remedy sought by Plaintiffs is strictly limited to the seller of the
14
immovable property, and JA J-Mart was not a party to that sale. The trial
court correctly held Plaintiffs have no cause of action against JA J-Mart to
rescind the property sale on the grounds of lesion beyond moiety.
Accordingly, this assignment of error is without merit.
Assignment of Error No. 9: The trial court erred in ordering lis pendens cancelled.
Based on our review of the record, the trial court did not err in
ordering that the notice of lis pendens filed by Dhillon be cancelled, because
the trial court had properly dismissed Plaintiffs’ claims with prejudice. The
action, alleging fraud, conversion and Louisiana Unfair Trade Practices Act
claims, does not affect the title to the immovable property. The notice of lis
pendens was properly removed. La. C.C.P. art. 3751. Accordingly, this
assignment of error is without merit.
Request for Additional Sanctions for Frivolous Appeal
The Ali Defendants argue that this appeal is frivolous, and they should
be granted sanctions, including attorney fees spent in opposition. Sanctions
have already been brought and awarded against Plaintiffs’ counsel in this
suit by the trial court. We find that this appeal is not frivolous, as Plaintiffs
did identify genuine legal questions for multiple parties in complex
transactions in their multiple assignments of error. Accordingly, the Ali
Defendants’ request for added sanctions is denied.
CONCLUSION
For the foregoing reasons, the trial court’s judgment sustaining the
Defendants’ exceptions of no right of action, no cause of action,
prescription, and lack of capacity, and dismissing Plaintiffs’ claims with
prejudice, is affirmed.
15
Costs of this appeal are assessed to Plaintiffs.
AFFIRMED.
16
STONE, J., dissenting.
I respectfully dissent from the majority opinion for several reasons.
First, when the proceedings were stayed as to Shaheen, the entire action
became subject to the mandatory stay of La. R.S. 9:4202. Second, even if
the action were not required to be stayed, the trial court and majority err in
granting any of the exceptions. Third, I point out what appears to be
improper factual premises on which the majority relies in reaching its
conclusion.
Mandatory stay
Section 21 of the QT operating agreement8 sets forth the arbitration
agreement; in relevant part, it states:
Any dispute, controversy or claim arising out of or in
connection with this Agreement or any breach or alleged
breach hereof shall, upon the request of any party
involved, be submitted to, and settled by, arbitration in the
city in which the principal place of business of the
Company is then located, pursuant to the commercial
arbitration rules then in effect of the American Arbitration
Association (or at any other time or place or under any
other form of arbitration mutually acceptable to the parties
involved). Any award rendered shall be final and
conclusive upon the parties and a judgment thereon may
be entered in a court of competent jurisdiction.
The scope of the arbitration clause (italicized above) includes whether the
subject transactions were authorized or apparently authorized and whether
Shaheen committed fraud and conspired with Ali to convey assets without
authority. That issue is referable to arbitration. The arbitrator’s decision of
that issue, if in favor of Dhillon, may or may not have res judicata effects
binding as to Ali and his companies (i.e., through the doctrine of virtual
8
R. 26-27.
1
representation), but it certainly cannot be preclusive against Dhillon. An
arbitration decision in favor of Shaheen may preclude Dhillon’s judicial
action against Ali and his companies.
On September 5, 2023, the parties agreed to Shaheen’s motion to stay
and that the plaintiffs’ claims against him be referred to arbitration, but
plaintiffs stipulated that they would be allowed to continue their claims
against Ali in court. The parties and court contemplated that an order would
be signed effectuating the stay, but no such order appears in the record. R.
1. Likewise, there is no dismissal of Shaheen, nor any order staying
proceedings.
La. R.S. 9:4202 mandates stay of judicial proceedings involving any
issue referable to arbitration:
If any suit or proceedings be brought upon any issue
referable to arbitration under an agreement in writing for
arbitration, the court in which suit is pending, upon being
satisfied that the issue involved in the suit or proceedings
is referable to arbitration under such an agreement, shall
on application of one of the parties stay the trial of the
action until an arbitration has been had in accordance
with the terms of the agreement, providing the applicant
for the stay is not in default in proceeding with the
arbitration.
By its very terms, this provision does not allow the adjudication of “any
issue referable to arbitration” to be bifurcated between the court and the
arbitrator, i.e., having the court proceed with the suit (involving the
arbitrable issues) as to parties not subject to arbitration but referring an issue
common to all the parties to the arbitrator as to other parties that are subject
to arbitration. Rather, upon application of a party, the statute mandates that
2
the court “stay the trial of the action until an arbitration has been had.” 9 The
statutory mandate is to stay trial of the entire action, not merely stay trial as
to less than all parties on an issue arbitrable between less than all parties.
There is no room within the language of La. R.S. 9:4202 for a stay as to one
party but not to all. The stipulation to continue the action against Ali and his
companies while sending the issue of the validity of the transactions to
arbitration violates La. R.S. 9:4202.
A contrary reading of La. R.S. 9:4202 (i.e., allowing piecemeal
adjudication) becomes even more untenable in light of related law. La.
C.C.P. art. 927(A)(4) provides that nonjoinder of a necessary party (under
arts. 641 & 642) is grounds for the grant of a peremptory exception. La.
C.C.P. art. 641 mandates joinder as follows:
A person shall be joined as a party in the action when
either:
(1) In his absence complete relief cannot be accorded
among those already parties.
(2) He claims an interest relating to the subject matter of
the action and is so situated that the adjudication of the
action in his absence may either:
(a) As a practical matter, impair or impede his ability to
protect that interest.
(b) Leave any of the persons already parties subject to a
substantial risk of incurring multiple or inconsistent
obligations.
Plaintiff cannot obtain complete relief without Shaheen, as the latter is: (1)
the allegedly self-dealing, unauthorized agent who conspired with Ali and
caused QT to sell its assets below market value and remains a 50% owner in
QT; and (2) allegedly has an interest in or is employed favorably by the
entities through which Ali purchased the QT assets. Furthermore, having
9
“A civil action is a demand for the enforcement of a legal right.” La. C.C.P. art. 421.
3
these issues arbitrated as to Shaheen but tried in court as to the Ali
defendants could result in inconsistent and contradictory adjudications.
La. C.C.P. art. 642 provides the consequences when a necessary party
cannot be joined:
If a person described in Article 641 cannot be made a
party, the court shall determine whether the action should
proceed among the parties before it, or should be
dismissed. The factors to be considered by the court
include:
(1) To what extent a judgment rendered in the person’s
absence might be prejudicial to him or those already
present.
(2) The extent to which the prejudice can be lessened or
avoided by protective provisions in the judgment, by the
shaping of relief, or by other measures [i.e., such as a stay
pursuant to La. R.S. 9:4202].
(3) Whether a judgment rendered in the person’s absence
will be adequate.
(4) Whether the plaintiff will have an adequate remedy if
the action is dismissed for nonjoinder.
Thus, the same conclusion can be reached independently of La. R.S. 9:4202
via La. C.C.P. arts. 641 and 642. As explained above, the inconsistencies
that parallel adjudications of the transactional authority, fraud, and
conspiracy issues could produce are unacceptable.
The trial court should have stayed the entire proceeding upon
Shaheen’s application. Instead, the trial court proceeded to adjudicate the
Ali defendants’ exceptions, and dismissed plaintiff’s claims against the Ali
defendants with prejudice. Thus, if the plaintiff prevails in arbitration on his
theory of lack of authority and further on his theories of forgery, fraud, and
conspiracy between Ali and Shaheen, the plaintiff will nonetheless be
precluded by res judicata from recovery against Ali and his companies ―
that is, unless this court vacates the dismissal, enters a stay pursuant to La.
R.S. 9:4202, and pretermits the assignments of error raised.
4
Setting aside the fact that the majority errs in not following La. R.S.
9:4202 and La. C.C.P. arts. 641 and 642, I also dissent from the majority’s
decision regarding assignments of error nos. 3, 4, 5, 6, and 9.
No right of action and lack of procedural capacity
The Ali defendants assert: (1) plaintiff has no authority to bring this
action on behalf of QT because Shaheen, the other 50% owner, did not vote
for it to do so; and (2) plaintiff lacks procedural capacity to file suit on
behalf of QT.10 As the exceptors, the Ali defendants have the burden of
proving that Dhillon has no right to enforce QT’s cause of action. Louisiana
Shrimp Ass’n v. Wayne Estay & Wayne Estay Shrimp Co., 05-29 (La. App. 5
Cir. 5/31/05), 905 So. 2d 431, 434.
In granting these exceptions, the majority does not mention or address
the plaintiff’s strongest argument in opposition to these exceptions i.e., that
this is a derivative action whereby a member of an LLC can file suit in his
own name to enforce the LLC’s rights when the LLC itself refuses to do so.
La. C.C.P. art 611(A); see also, Parker v. Paladin Contractors, LLC, 20-0492 (La. App. 4 Cir. 3/3/21), 314 So. 3d 1128. This position is well argued
in the plaintiff’s appellate brief. Furthermore, the majority conflates the
exception of no cause of action with that of no right of action. This
conflation is evidenced by the fact that, in addressing the assignment of
error concerning the exceptions of no right of action, the majority opinion
extensively recites the law concerning exceptions of no cause of action but
10
“The objection of lack of procedural capacity challenges the authority of the plaintiff to institute the suit, despite the fact that he or she is the owner of the right which is asserted.” The dilatory exception, 1 La. Civ. L. Treatise, Civil Procedure § 6:6 (2d ed.)
5
is completely silent as to the law concerning the exception of no right of
action.
Regardless, the majority’s conclusion regarding the exception of no
right of action is incompatible with the applicable law. La. C.C.P. art.
611(A) establishes the derivative action: “When a corporation or
unincorporated association refuses to enforce a right of the corporation or
unincorporated association, a shareholder, partner, or member thereof may
bring a derivative action to enforce the right on behalf of the corporation or
unincorporated association.”11 (For purposes of a derivative action, “[a]
limited liability company shall be treated as an unincorporated association
under [La. C.C.P. arts. 611– 617] of the Louisiana Code of Civil
Procedure”).12
However, La. C.C.P. arts. 611– 617 do not contain a list of what a
plaintiff in a derivative action that is not also a class action must plead. The
pleading requirements for bringing a derivative class action are set forth in
La. C.C.P. art. 615. Strictly speaking, these requirements do not apply to
Dhillon’s claims because this is not a class action. Nonetheless, La. C.C.P.
art. 615 is the closest authority on point and is analogically correct for this
case and should be analogically applied. The petition must: (1) allege that
plaintiff was a member at the time of the transaction of which he complains;
11
“When it is not impracticable for all of …members of a…unincorporated
association to join or to be joined as parties to a derivative action to enforce a right of the …unincorporated association which it refuses to enforce…all of the…members who refuse or fail to join as plaintiffs in such an action shall be joined as defendants.” La. C.C.P. art. 616.
12
That series of articles is located in a chapter entitled “Class and Derivative
Actions.”
6
(2) allege efforts made to have the LLC enforce its own rights, or the reason
for not making such efforts; (3) join as defendants the LLC and the obligor
against whom the obligation is sought to be enforced; (4) pray for judgment
in favor of the LLC; and (5) be verified by affidavit of plaintiff or his
counsel. Concerning element (2), there are exceptions applicable here.
Hirsch v. Cahn Elec. Co., 29,327 (La. App. 2 Cir. 5/9/97), 694 So. 2d 636,
641, writ denied, 97-1561 (La. 10/3/97), 701 So. 2d 200, held:
Often in a derivative action were [sic] the corporation is
closely held, the second requirement, demand upon the
corporation, will be dismissed if the futility of the
corporate actors compliance is obvious. “[C]ourts have
unanimously held that in such a case the demand is
futile since it is unreasonable to think that a man will
vote to bring suit against himself.” See, Smith v.
Wembley Industries, Inc., 490 So.2d 1107 (La.App. 4
Cir.1986) citing Note, 73 Harv.L.Rev. 729, 753 (1960).
(Emphasis in original.)
Id. Further yet, this requirement is legally inapplicable where the other
member is allegedly “involved in the self-dealing and mismanagement that
is the subject of the suit.” Smith v. Wembley Indus., Inc., supra.
The pleading requirements for a derivative action are substantially
satisfied. Regarding element (1), the petition alleges that Dhillon was a
member of QT at the time of the sales of the real estate and inventory.
(Paragraph 1 of original petition.)
Regarding element (2), the fact that plaintiff sued Shaheen over this
sale is sufficient (to satisfy La. C.C.P. art. 615(2)), especially given that this
is not a class action, and QT is a two-member LLC, not a publicly held
corporation. Moreover, pursuant to Hirsch, supra, and Smith, supra, the Ali
defendants’ argument that Dhillon lacks authority to cause QT to sue
likewise disproves or waives their contention that plaintiff failed to satisfy
7
that requirement to “[a]llege with particularity the efforts of the plaintiff to
secure from…[the other member], the enforcement of the right and the
reasons for his failure to secure such enforcement, or the reason for not
making such an effort to secure enforcement of the right.”
Regarding element (3), Dhillon named QT as a co-plaintiff, not a
defendant (preamble to original petition). That is the only “deficiency” in
his allegations, and at least on these facts it is a mere technicality that does
not militate against plaintiff’s derivative right of action and, regardless,
certainly could be cured by amendment.
Regarding elements (4) and (5), Dhillon prays for judgment in favor
of QT and his petition is verified. These pleading requirements are
straightforwardly met in toto. Thus, even though Shaheen opposes the suit
in his capacity as 50% owner of QT, the exceptions of no right of action and
lack of procedural capacity cannot defeat or retard Dhillon’s derivative
action, whereby a member of an LLC can file suit in his own name to
enforce the LLC’s rights when the LLC itself refuses to do so.
Nonetheless, in explaining why it grants the exception of no right of
action, the majority, after citing operating agreement provisions and the law
of no cause of action, merely offers:
After conducting a de novo review of the record, we find
the trial court did not err in granting the peremptory
exceptions of no right of action as to the Ali Defendants.
Dhillon had no right to file the present lawsuit against the
Ali Defendants on behalf of the LLC and had no
individual right of action against them. He was not an
individual party to the property sale, and he cannot
independently assert actions on behalf of the LLC without
consent of the majority of the members.
Finally, Plaintiffs failed to assert a right of action against
JA J-Mart, because neither Dhillon nor the LLC was a
party to the sale of the store’s inventory to JA J-Mart,
8
which involved separate entities in a separate transaction.
Accordingly, this assignment of error is without merit.
Essentially, the Ali defendants contended at oral argument that
Dhillon has no right of action because he did not use the magic label
“derivative action” in his pleadings. This contention is frivolous because:
(1) Louisiana retains a system of fact pleading,13 and the plaintiff has pled all
the facts necessary for a derivative action, La. C.C.P. art 615; (2) “[n]o
technical forms of pleading are required,” La. C.C.P. art. 854; and (3)
“[e]very pleading shall be so construed as to do substantial justice,” La.
C.C.P. art. 865.
The Ali defendants’ assertion that Dhillon lacks procedural capacity
rests entirely on the false presupposition that Dhillon has no right to bring a
derivative action. Clearly, as a natural non-interdicted adult person and
member of QT (at all relevant times), Dhillon does have capacity to bring a
derivative action.
Assuming arguendo that the trial court needed not stay the proceeding
pending arbitration, it nonetheless erred in granting these exceptions as to
the Ali defendants, as does the majority.
No cause of action
JA JMart argues that Dhillon fails to state a cause of action regarding
the inventory because he does not explicitly allege that QT owned/owns the
Fuller store inventory. The majority opinion refers to this movable property
as the Fuller “store’s inventory.” Dhillon’s petition refers to the inventory
as “the Fuller store inventory” ― which, grammatically, asserts that the
13
A party need not plead law or evidence, but only the material facts on which the cause of action is based.
9
Fuller store and thus QT were in a rightful possession relation to the
inventory. This is sufficient to constitute an allegation that QT owned the
movables sold or at least had a contractual right to possess and sell them in
its operation. There is a cause of action against a transferee who receives via
an unauthorized transfer of the transferor company’s assets, whatever it is
labeled and whatever theories of liability are asserted.
Furthermore, Shaheen and Ali’s interposition of Cypress Wholesale,
LLC, which Shaheen solely owned and controlled, between QT and JA
JMart does not and cannot shield JA JMart from suit in its capacity as
unlawful transferee of the Fuller store’s inventory. This is explained more
fully below in the discussion of the exception of prescription.
Prescription
JA JMart, which (like Best Smoke) is solely owned and controlled by
Faisal Ali, pretends that plaintiff needs relation back to avoid prescription as
to JA JMart. However, there is clearly a contractual note in the plaintiff’s
cacophony of theories ― i.e., rescission on the ground that QT did not
authorize the inventory sale, and therefore, the sale was invalid. This
amounts to a vice or lack of consent ― and valid consent is an element
essential to all contracts. Contractual actions are subject to a 10-year
prescriptive period. La. C.C.P. art. 3499; Moore v. City of Monroe, 49,207
(La. App. 2 Cir. 8/13/14), 147 So. 3d 288, writ denied, 14-1935 (La.
11/21/14), 160 So. 3d 973. Quasi-contractual actions, such as unjust
enrichment, are also subject to a 10-year prescriptive period. Fluid Disposal
Specialties, Inc. v. UniFirst Corp., 53,014 (La. App. 2 Cir. 9/25/19), 316 So.
3d 1222, aff’d on reh’g, 53,014 (La. App. 2 Cir. 6/3/20), 316 So. 3d 1252. It
has not been 10 years since the inventory sale.
10
Furthermore, although fraud is a tort action as to defendants not privy
to the contract in question, prescription still has not run as to JA JMart
because it is allegedly a coconspirator in the overall scheme, including the
real property transaction. Conspirators are liable in solido, and interruption
of prescription against one solidary obligor is interruption of prescription as
to all solidary obligors. La. C.C. arts. 2324(A), 3503.
Additionally, on these alleged facts, because the “Ali defendants” (as
the majority has appropriately labeled them) JA JMart and Best Smoke are
both solely owned by Ali, the distinction between the three collapses for
purposes of their alleged fraudulent dealings and intentions.14 Louisiana law
does not allow Ali to play such “Wizard of Oz” type games, but treats him
and his LLCs as one unit:
The “single business enterprise” doctrine is a theory for
imposing liability where two or more business entities act
as one. Generally, under the doctrine, when corporations
integrate their resources in operations to achieve a
common business purpose, each business may be held
liable for wrongful acts done in pursuit of that purpose.
Brown v. ANA Ins. Grp., 07–2116 (La. 10/14/08), 994 So.
2d 1265, citing, Green v. Champion Ins. Co., 577 So. 2d
249 (La. App. 1st Cir.1991), writ denied, 580 So. 2d 668
(La. 1991)…Coleman v. Burgundy Oaks, L.L.C., 46,314
(La. App. 2 Cir. 6/8/11), 71 So. 3d 352.
“Where two or more corporations operate a single business, the courts have
been unwilling to allow affiliated corporations that are not directly involved
to escape liability simply because of the business fragmentation.” Green,
supra; Town of Haynesville, Inc. v. Entergy Corp., 42,019 (La. App. 2 Cir.
5/2/07), 956 So.2d 192, writ denied, 07–1172 (La. 9/21/07), 964 So. 2d 334;
14 This principle is recognized by the U.S. Tax Code, which classifies a singlemember LLC as a “disregarded entity.” 26 U.S.C. § 7701(a); 26 CFR § 301.7701-2(c)(2)(i).
11
Volentine v. Raeford Farms of Louisiana, LLC, 50,698 (La. App. 2 Cir.
8/15/16), 201 So. 3d 325, 355, writ denied, 16-1924 (La. 12/16/16), 212 So.
3d 1171, and writ denied, 16-1925 (La. 12/16/16), 212 So. 3d 1171. The
supplemental and amending petition alleges that the sales (of the movable
and immovable assets) took place on the same day, and that the movables
were not physically moved ― but functionally became the inventory for the
new operator of the Fuller store, i.e., Best Smoke and JA JMart. As to the
Fuller store, the “Ali defendants” must be treated as a single business
enterprise for purposes of these exceptions because, economically, they are a
single unit.
The same principles require us to disregard Cypress Wholesale, LLC,
which is solely owned by Shaheen and was apparently used as a device in an
attempt to circumvent contractual privity between QT and JA JMart.
Improper factfinding
The majority opinion seemingly makes findings of fact rejecting
Dhillon’s allegations and crediting Ali’s allegations; it states:
As a result of the claims against Shaheen being controlled
by binding arbitration, the trial court considered only the
claims asserted against the Ali Defendants. The Ali
Defendants relied on the Certificate in authentic form and
filed in the public records of Ouachita parish to confirm
Shaheen had the authority to convey the real property
owned by the LLC. It sought out and obtained legal
advice on that subject. While Dhillon may pursue any
grievances regarding Shaheen’s actions against Shaheen,
any allegations against the Ali Defendants must be viewed
in light of the controlling facts and law. (Emphasis
added.)
It must be noted that Dhillon explicitly alleges that the Certificate of
Authority (R. 29) on which the transactions rely was forged (original
petition paragraph 8), and he alleged with particularity circumstances that
12
would indicate Ali knew Dhillon was 50% owner of QT and refused to sell
the property (original petition, paragraph 10). Together with the rest of the
allegations, these allegations establish a cause of action for fraud and
conspiracy against Ali. The majority does not mention the allegations of
paragraph 10 in its rendition of the facts.
The majority also states that the certificate relied upon was in
“authentic form” ― by which it apparently means in the form of an
authentic act under La. C.C. art. 1833, which states: “An authentic act is a
writing executed before a notary public or other officer authorized to
perform that function, in the presence of two witnesses, and signed by each
party who executed it, by each witness, and by each notary public before
whom it was executed.” There are no witnesses undersigned to the
certificate of authority (R. 29), and therefore, the certificate is not an
authentic act. Thus, as a mere act under private signature, the burden of
proving the authenticity of the certificate of authority is on the defendants.
La. C.C. art. 1838. The trial court did not hold a jury trial (which Dhillon
requested) or otherwise adjudicate the issue of forgery and certainly made no
finding that Dhillon’s purported signature on the certificate was in fact
authentic. Yet it seems that the majority, in labeling the certificate as in
“authentic form” perhaps takes the authenticity of the signature as a
“controlling fact.”
Finally, the majority opinion’s language above appears to indicate that
it, in granting the exceptions, placed weight on the alleged fact that the
certificate of authority was filed in the public records and that Ali alleged the
fact that Ali relied on advice of counsel regarding Shaheen’s authority to
13
unilaterally divest QT of the Fuller store and its assets. These are not
“controlling facts” at this point in the proceedings as no such factfinding
could validly have occurred yet. Recordation of an act in the public records
does not and cannot validate it. That is because the public records doctrine,
where applicable, only operates to deny effectiveness to rights, as against
third parties, created by unrecorded acts. La. C.C. art. 3338. Moreover,
whether Ali reasonably relied on these things is irrelevant to the exceptions
of no right of action, no cause of action, lack of procedural capacity, and
prescription and is not before this court. Those alleged facts are relevant to
the factual question of Ali’s state of mind and knowledge at the time of the
transaction; this is clearly not a matter to be adjudicated at this stage of
proceedings.
CONCLUSION
For these reasons the judgment of the trial court should be reversed
and vacated and the proceedings should be stayed pending arbitration.
14