Court: Louisiana Court of Appeal; September 17, 1992; Louisiana; State Appellate Court
Guaranty Corporation's appeal against the decision sustaining Harry Gamble, Jr.'s exception of no cause of action and dismissing its lawsuit is affirmed. The case arises from a Stock Sale Restriction Agreement established on March 29, 1988, between Gamble and TBK, a Guaranty stockholder, which prohibited selling shares without offering the same terms to the other party. After Guaranty offered to buy TBK’s shares for $16,000 each and TBK refused, Guaranty later paid Gamble the same amount per share on January 24, 1989, under an Act of Redemption Agreement. TBK subsequently sued Guaranty, claiming a violation of the restriction agreement. Although Guaranty incurred $6,347.77 in attorney's fees defending the dismissed federal suit, it seeks to recover these fees from Gamble, arguing that the Act of Redemption entitles it to indemnification for attorney’s fees due to a breach of warranty by Gamble regarding the sale.
Gamble filed an exception of no cause of action, which the trial court upheld. Guaranty contends that Sections 3, 8, and 17 of the Act support its claim for indemnity and attorney's fees. Section 3 requires sellers to warrant they own the shares free of encumbrances, and Section 8 includes a hold harmless clause, while Section 17 allows for recovery of attorney’s fees for the prevailing party in litigation.
The court found Guaranty's claims unsubstantiated. It established that Section 17 pertains only to litigation directly between the parties, and Section 8 does not provide for attorney's fees or apply since TBK's suit was dismissed without a judgment against Guaranty. Furthermore, Gamble did not breach his obligations as Guaranty offered TBK the same price it paid Gamble, making Guaranty's claims ineffectual. Guaranty’s request for a remand to amend its claims was denied, as it was deemed futile since no judgment existed that could trigger the hold harmless provisions. The decision to dismiss Guaranty’s lawsuit is thus affirmed.
