author: WICKER, J.

text:
    Mia W. RANDLE v. Sylvester J. RANDLE
    NO. 18-CA-168
    Court of Appeal of Louisiana, Fifth Circuit.
    December 4, 2018
    COUNSEL FOR PLAINTIFF/APPELLANT, MIA W. RANDLE, Alan G. Bouterie, Alan G. Bouterie, Jr., Chalmette, Melanie M. Licciardi, Metairie
    COUNSEL FOR DEFENDANT/APPELLEE, SYLVESTER J. RANDLE, Maria M. Chaisson, Destrehan
    Panel composed of Judges Susan M. Chehardy, Fredericka Homberg Wicker, and Hans J. Liljeberg
   WICKER, J.

Appellant, Mia Randle, seeks review of the trial court's December 18, 2017 judgment granting Sylvester Randle interim spousal support in the amount of $1,500.00 per month and child support in the amount of $1,793.31 per month with Ms. Randle owing to Mr. Randle a retroactive amount of $5,750.00 in interim spousal support and $8,966.55 in child support. For the following reasons, we affirm the trial court's judgment.

PROCEDURAL HISTORY

Mr. Randle and Ms. Randle were married on January 20, 2006, in Hinds County, Mississippi. They moved to Louisiana in 2013. From their union, three children were born, all of whom are currently under the age of majority. On July 19, 2017, Ms. Randle filed a Petition for Divorce Pursuant to LSA-C.C. Art. 102, Rule for Custody, Request for Use of Immoveable and Moveable Property and Request for Expedited Hearing in the Twenty-Ninth Judicial District Court. On July 31, 2017, Mr. Randle filed a Motion on Incidental Matters which included a request for child support and interim periodic spousal support. On August 4, 2017, the trial court entered an Interim Consent Judgment addressing the issues of health insurance, occupancy of the family home, use of the family computer, distribution of the children's clothing, vehicle maintenance, child custody, and injunctions. On December 12, 2017, the trial court entered a subsequent Consent Judgment signed by Mr. and Ms. Randle; thus, the only matters addressed by the trial court on December 12, 2017, were Mr. Randle's requests for child support and interim spousal support.

On December 18, 2017, the trial court, in a Judgment Regarding Interim Spousal Support and Child Support , ordered Ms. Randle to pay Mr. Randle $1,150.00 per month in interim spousal support "retroactive to July 27, 2017," the date Ms. Randle filed her petition for divorce. The trial court ordered Ms. Randle to pay the retroactive amount of $6,900.00 at the rate of $1,500.00 per month. Ms. Randle was also ordered to pay Mr. Randle $1,793.31 per month in child support, "retroactive to July 27, 2017," with a retroactive amount of $10,759.86 paid at the rate of $1,500.00 per month.

On March 28, 2018, the trial court issued Written Reasons for Judgment and Amendment to Correct Calculation of Error whereby the court corrected a calculation error in assigning the retroactive amount Ms. Randle was to pay Mr. Randle in both child support and interim spousal support. It is from the December 18, 2017 judgment that Ms. Randle filed her timely appeal.

DISCUSSION

Ms. Randle asserts the following assignments of error regarding the trial court's December 18, 2017 judgment: the trial court abused its discretion and committed manifest legal error in finding that Mr. Randle met his burden to prove that he is entitled to interim spousal support and in determining that Ms. Randle has the ability to pay Mr. Randle interim spousal support; the trial court committed manifest legal error in calculating Ms. Randle's child support obligation on a 57% - 43% time basis, rather than a 50% - 50% time basis; and the trial court failed to give Ms. Randle credit for childcare expenses that were paid solely by her from the time Mr. Randle requested child support until the time the child support obligation was set by Judgment.

Need of Interim Spousal Support

In Ms. Randle's first assignment of error, she avers the trial court abused its discretion and committed manifest legal error in finding that Mr. Randle needs interim spousal support. In a divorce proceeding, a court may award a party interim periodic spousal support based on the needs of that party, the ability of the other party to pay, and the standard of living of the parties during marriage. La. C.C. arts. 111 and 113. Interim periodic spousal support is designed to assist the claimant spouse in sustaining the same style or standard of living that he or she enjoyed while residing with the other spouse, pending the litigation of the divorce. St. Pierre v. St. Pierre , 09-1124 (La. App. 5 Cir. 5/25/10), 42 So.3d 426, 428-429 ; Dufresne v. Dufresne , 08-215 (La. App. 5 Cir. 9/16/08), 992 So.2d 579, 588, writ denied , 08- 2843 (La. 12/17/08), 996 So.2d 1123. It is awarded retroactive to the date of the petition for spousal support. La. R.S. 9:310(A).

The needs of the claimant spouse have been defined as "the total amount sufficient to maintain ... a standard of living comparable to that enjoyed by [the claimant spouse] prior to the separation, limited only by the [other spouse's] ability to pay," and the claimant spouse has the burden of proving his or her need. Hitchens v. Hitchens, 38-339, p.2 (La. App. 2 Cir. 5/12/04), 873 So.2d 882, 884 ; Jones v. Jones , 38-790, p.15 (La. App. 2 Cir. 6/25/04), 877 So.2d 1061, 1072. An award of support also requires that expenses claimed be reasonable. Vassallo v. Vassallo , 540 So.2d 1300 (La. App. 5 Cir. 1989).

The trial court is given much discretion in determining awards of spousal support and its determinations will not be disturbed absent a clear abuse of discretion. Dufresne , supra . The right to claim interim periodic support is based on the statutorily imposed duty of spouses to support each other during marriage and provide for the spouse who does not have sufficient income for his or her maintenance during separation. La. C.C. art. 98 ; Hall v. Hall , 08-706 (La. App. 5 Cir. 2/10/09), 4 So.3d 254, 257, writ denied, 09-0812 (La. 5/29/09), 9 So.3d 166 ; McAlpine v. McAlpine , 94-1594 (La. 9/05/96), 679 So.2d 85, 90. The right of spousal support is further emphasized in the Louisiana Civil Code which imposes a mutual duty on married persons to provide fidelity, support, and assistance to each other. La. C.C. art. 98.

In her brief, Ms. Randle asserts that Mr. Randle failed to demonstrate his need for spousal support in that his listed expenses on the Income and Expense Statement were not exclusively his personal expenses. Specifically, she avers that the expenses alleged by Mr. Randle include those incurred by him and the parties' minor children, which have also been included in the child support calculation. Thus, Ms. Randle contends that Mr. Randle had not been paying the expenses he included on the Income and Expense Statement because Ms. Randle had been paying those expenses as a form of child support, pursuant to the parties' mutual Consent Judgment . Therefore, Ms. Randle suggests that Mr. Randle be credited for only one-half the expenses he pays on rent, electric, water, cable television, phone, internet, and maintenance since she maintains the children "approximately one-half of the time."

In Mr. Randle's brief, he avers that his stated expenses would be incurred regardless of whether the children lived in his household and further argues that he supplemented and/or modified his Income and Expense Statement through his testimony at trial. Specifically, Mr. Randle avers that he withheld the minimum amount of federal taxes to increase his net pay and that if the correct amount of federal taxes were withheld from his paycheck, he would be unable to "make ends meet;" he pays the bare minimum of $100.00 per month on his $1,700.00 credit card debt; he experienced an increase in gasoline expenses due to issues with his transmission which cost $1,800.00 to fix; and the expenses categorized as "Children's Clothing & Shoes" only included the children's uniforms and shoes, not their regular clothing. In testifying to the adjustments in his Income and Expense Statement , Mr. Randle argues that he experiences a monthly deficit beyond what was written on the Income and Expense Statement and is in need of interim spousal support.

In examining the record, we find that the trial court did not abuse its discretion nor did it commit manifest legal error in awarding Mr. Randle interim spousal support. At trial, the parties submitted proof of employment, income and expense affidavits, paystubs, and child support obligation worksheets. In doing so, the court determined that Ms. Randle's monthly gross income was $17,837.62 and Mr. Randle's monthly gross income was $4,398.00. Further, the court found insufficient evidence of underemployment by Mr. Randle. According to testimony provided at trial, Mr. Randle is a State employee who is only contracted to work 1,000 hours.

While Ms. Randle appears to assert that Mr. Randle's expenses are inflated by the inclusion of expenses incurred by the parties' minor children, she failed to assert or elicit which portion of the expenses he alleged, other than food, were covered by the child support obligations she was required to pay. Further, she failed to provide evidence refuting the supplemental expenses alleged by Mr. Randle during trial. In failing to submit substantial evidence refuting Mr. Randle's claim of need, we give deference to the trial court. In light of the record before us, we affirm the trial court's awarding of interim spousal support to Mr. Randle.

Ability to Pay Interim Spousal Support

In her second assignment of error, Ms. Randle asserts that the trial court abused its discretion and committed manifest legal error in determining that she has the ability to pay Mr. Randle interim spousal support. Once a claimant spouse has established need, the court must examine the ability of the payor spouse to provide support. St. Pierre v. St. Pierre , supra . In assessing a spouse's ability to pay, the court must consider his or her means. Id. Means include "any resource from which the wants of life may be supplied," requiring an assessment of the entire financial condition of the payor spouse. Dagley v. Dagley , 96-1796, p. 4 (La. App. 4 Cir. 5/21/97), 695 So.2d 521, 523. The trial court has much discretion in determining awards of spousal support and its determinations will not be disturbed absent a clear abuse of discretion. Id. An abuse of discretion will not be found if the record supports the trial court's conclusions about the means of the payor spouse and his or her ability to pay. Short v. Short , 11-1084 (La. App. 5 Cir. 05/22/12), 96 So.3d 552, 556 (citing Lambert v. Lambert , 06-2399 (La. App. 1 Cir. 03/23/07), 960 So.2d 921, 928 ).

From January 2017 to November 2017, Ms. Randle grossed $241,101.21. Despite a gross income of $17,837.62 dollars per month (as calculated by the court), Ms. Randle stated that after payroll deductions of $10,053.95, her voluntary contributions to her 401K in the amount of $1,484.58, and child support payments to her husband, she will suffer a monthly deficit. She further asserts that such deficit will create an "economic dislocation of the parties [which] does not maintain the economic status quo."

We recognize that while Ms. Randle provided testimony regarding several expenses mentioned on her submitted Income and Expense Affidavit , she failed to provide the trial court with proof that she actually incurred said expenses. For example, when Ms. Randle was asked about the $12,000.00 expense she categorized as "home maintenance," she introduced no invoices or other form of evidence regarding these repairs. Although Ms. Randle provided testimony regarding several areas of the home in need of repair, she failed to submit evidence supporting her claim. Absent evidence substantiating Ms. Randle's claim of her inability to pay periodic interim spousal support, we find that the trial court did not err in finding that Ms. Randle had the means to pay Mr. Randle interim spousal support. Despite Ms. Randle's assertions to the contrary, the record supports the trial court's conclusions that Mr. Randle was in need of support and Ms. Randle had the means and the ability to pay spousal support in the amounts awarded by the trial court.

57% v. 43% Child Support Obligation

In her third assignment of error, Ms. Randle asserts the trial court erred in its calculation of custody 57% in favor of Mr. Randle and 43% in favor of Ms. Randle. In the Interim Consent Judgment rendered August 4, 2017, the parties agreed that Mr. Randle would receive physical custody of the children every Sunday at 10:00 A.M. until Thursday, and Ms. Randle would receive physical custody of the children from Thursday until Sunday at 10:00 A.M. However, on December 12, 2017, via a subsequent Consent Judgment , Mr. Randle received physical custody of the minor children every Sunday at 12:00 P.M. through the end of school/summer camp on Thursday, and one weekend per month Friday at 6:00 P.M. to Sunday at 12:00 P.M. Ms. Randle received physical custody of the children every Thursday from the end of school/summer camp through Sunday at 12:00 P.M. and two week nights per month to be agreed upon by the parties. Mr. and Ms. Randle were further ordered to follow the holiday custody schedule, ensure they pick up the children for custody exchanges, and comply with co-parenting guidelines.

In her brief, Ms. Randle relies on Westcott v. Westcott , 04-2298 (La. App. 1 Cir. 11/4/05), 927 So.2d 377, in which a trial court's decision to deviate from the statutory child support guidelines was upheld by the First Circuit when the trial court provided oral reasons for its deviation. In its reasoning, the trial court considered the number of meals provided by each parent, the time spent helping with homework, and testimony of a court-appointed hearing officer with a financial background and a social worker, both of whom spent many hours with the parties. Id. at 378.

Westcott differs from the present case in that no hearing officer or social worker evaluated the quality of time spent with the minor children by Mr. and Ms. Randle. Instead, the trial court was presented with the Consent Judgment , which afforded Mr. Randle four nights of physical custody of the children, two nights a month in which the parties switched custody, and the ability to bring the children to their sporting events, as well as testimony regarding the times the parties worked outside of the agreement to the benefit of the other. Given the testimony and evidence submitted regarding the time allotted each parent with the minor children and the physical time they spent with each child, we find that the trial court did not err in its calculation of child support based upon a custody arrangement 57% in favor of Mr. Randle and 43% in favor of Ms. Randle.

Credit for Childcare Expenses

In her final assignment of error, Ms. Randle argues that the trial court committed manifest error in failing to give Ms. Randle credit for childcare expenses that were paid solely by her, from the time Mr. Randle requested child support until the time the child support obligation was set by Judgment. Specifically, Ms. Randle avers she is entitled to a 20% credit for the child care expenses she paid during Thanksgiving of 2017 totaling $300.00 dollars and for the before and after care she paid for the minor children from August 2017 to November 2017 totaling $525 dollars. Once again, Ms. Randle failed to introduce evidence of her payments of child care expenses for the aforementioned periods.

An appellate court must render its judgment based upon the record on appeal. La. C.C.P. art. 2164. A court of appeal is a court of record, which must limit its review to evidence in the record before it. See Black v. Anderson , 06-891 (La. App. 5 Cir. 3/13/07), 956 So.2d 20 ; Martin v. Martin , 14-749 (La. App. 5 Cir. 2/25/15), 168 So.3d 829 ; Lowentritt v. Lowentritt , 11-703 (La. App. 5 Cir. 3/13/12), 90 So.3d 1081.

Based only on the evidence that is in the record, we cannot determine if Ms. Randle actually made childcare payments. Thus, we do not have a sufficient basis to find that the trial court committed manifest error in not crediting Ms. Randle for childcare expenses.

CONCLUSION

For the aforementioned reasons, we affirm the trial court's judgment awarding Mr. Randle interim spousal support and child support retroactive to the date of filing the Petition for Divorce.

AFFIRMED

      The subsequent Consent Judgment awarded the parties joint and shared custody, with Mr. Randle being the primary domiciliary parent. Mr. Randle was granted physical custody of the children every Sunday at 12:00 p.m. through the end of school/summer camp on Thursday, and one weekend per month from Friday at 6:00 p.m. to Sunday at 12:00 p.m. Ms. Randle was given physical custody of the children every Thursday from the end of school/summer camp through Sunday at 12:00 p.m. The judgment also addressed the custody of the children during holidays and required that the parties comply with co-parenting guidelines. The Consent Judgment required the parent receiving custody to pick up the children for the custody exchange and further afforded Mr. Randle the ability to take the children to their extracurricular activities regardless of the custody schedule. Finally, the Consent Judgment required Ms. Randle to maintain the children's health and dental insurance, awarded Ms. Randle exclusive use of the 2015 Infinity QX80 (pending partition), and awarded Ms. Randle exclusive use of the family home located in Destrehan, Louisiana.

      The trial court initially determined the retroactive amount owed by Ms. Randle using a six-month calculation; however, since Ms. Randle was to make payments retroactive to July 2017, and the court order was dated December 2017, only five months had passed; thus, at the time of judgment, Ms. Randle only owed for five, not six months.

      We take judicial notice that the lower court references a December 18, 2018 judgment in its Written Reasons for Judgment and Amendment to Correct Calculation Error ; however, at the time of issuing its reasons, this date had not yet occurred. We recognize this as a typographical error in that the trial court references the proper year (December 18, 2017) within the same document hosting its reasons for judgment and the parties, throughout their briefs, demonstrated their understanding of the trial court's intent to reference the December 18, 2017 judgment.

      Mr. Randle testified that he began working as a contract employee for the State of Louisiana in April 2017, and ended his part-time employment at the cigar shop in September 2017. According to his testimony, he works an average of 28 hours per week. Mr. Randle also testified that one of his reasons for no longer working at the cigar shop was its interference with the parties' minor children's ability to participate in extracurricular activities. This appears to be a steady theme, in that during various times in the marriage, Mr. Randle became unemployed or changed jobs because his work hours interfered with his ability to care for the minor children while Ms. Randle worked.

      Mr. Randle takes the children to their sporting events during periods in which Ms. Randle has been assigned custody of the minor children. We recognize that during this period of time, Ms. Randle does not have custody of at least one of the children, depending on the sport being played and the season in which it is being played.

      In his brief, Mr. Randle states that he is willing to pay Ms. Randle the $525.00 if she shows evidence of payment.


source: Caselaw Access Project

author: JOHNSON, J.

license: Public Domain

text:
    Helen LOPEZ LANGUIRAND and L. Lopez's Sons, Inc. v. John Magruder LOPEZ, Shawn L. Lopez and John Michael Lopez
    NO. 18-CA-245
    Court of Appeal of Louisiana, Fifth Circuit.
    December 12, 2018
    COUNSEL FOR PLAINTIFF/APPELLANT, HELEN LOPEZ LANGUIRAND, James F. Willeford, Reagan L. Toledano, New Orleans
    COUNSEL FOR DEFENDANT/APPELLEE, JOHN MAGRUDER LOPEZ, SHAWN L. LOPEZ AND JOHN MICHAEL LOPEZ, Timothy Thriffiley, Belle Chasse
    Panel composed of Judges Susan M. Chehardy, Marc E. Johnson, and Robert A. Chaisson
   JOHNSON, J.

Plaintiffs appeal the trial court's judgment sustaining Defendants' exceptions of no right of action, no cause of action, prematurity and improper cumulation of parties and dismissing their suit without prejudice. For the following reasons, we affirm in part, reverse in part, and amend in part.

FACTS & PROCEDURAL HISTORY

Plaintiffs, Helen Lopez Languirand and L. Lopez's Sons, Inc. (the "corporation"), filed a petition on December 15, 2017 against Defendants, John Magruder Lopez ("John"), Shawn Lopez ("Shawn"), and John Michael Lopez ("John Michael"), seeking to have the January 2017 election of the directors and officers for the corporation declared null and void and to have the April 2017 sale and transfer of treasury shares declared null and void.

In her petition, Ms. Languirand alleged that she is a shareholder of the corporation. She asserted that Defendants held an annual meeting of shareholders without issuing proper notice, resulting in a meeting attended only by the three defendants. Ms. Languirand stated that neither she nor shareholder Carroll Campbell attended the meeting. She alleged that at this meeting, which lacked a quorum, Defendants proceeded without authority to elect themselves as the new directors and officers of the corporation. Thereafter, in April 2017, John, as newly elected president, and Shawn, as newly elected treasurer and secretary, passed a resolution selling a total of 200 treasury shares to Shawn and John Michael. Ms. Languirand averred Defendants failed to offer those treasury shares to her or the other shareholders in violation of law - namely their preemptive rights under La. R.S. 12:1-630.

Ms. Languirand contended Defendants' acts of electing directors and officers and selling treasury shares constituted ultra vires acts. She asserted that Defendants, as officers and/or shareholders of the corporation, breached their fiduciary duties to the corporation and its shareholders. Accordingly, she sought to have the January 2017 election of directors and officers and the April 2017 sale of treasury shares declared null and void.

Defendants responded to the petition by filing four exceptions: no right of action, no cause of action, improper joinder of parties, and prematurity. They first argued that Ms. Languirand had no right of action to bring an individual claim on behalf of the corporation for breach of fiduciary duties because she did not allege any individual damage as a result of the alleged actions of Defendants. As such, they maintained that any action belongs to the corporation and must be brought as a derivative proceeding. Second, Defendants asserted that the petition failed to state a cause of action because it failed to comply with the requirements for a derivative action set forth in La. R.S. 12:1-742.1. Third, Defendants asserted the petition improperly joined the corporation as a plaintiff because the corporation must be named as a defendant in any derivative proceeding. Finally, Defendants argued the petition was premature because it failed to comply with the statutory requirements that a written demand must be made upon the corporation to take suitable action and that 90 days must pass from the date of demand prior to the commencement of a derivative proceeding.

A hearing on the exceptions was held on March 14, 2018. During the hearing, no evidence was presented but rather the entire hearing consisted only of the argument of counsel. At the conclusion of the hearing, the trial court sustained all four exceptions. A written judgment to that effect was signed on March 22, 2018, and the trial court issued reasons for judgment on April 17, 2018, at the request of Ms. Languirand.

In its reasons for judgment, the trial court concluded that Ms. Languirand's lawsuit was for a breach of fiduciary duty that resulted in deflation of the value of corporate shares. The trial court reasoned that a shareholder does not have a right to personally sue for a breach of fiduciary duty that does not result in a direct loss to the shareholder. Citing Lawly Brooke Burns Trust v. RKR, Inc. , 96-1231 (La. App. 1 Cir. 3/27/97), 691 So.2d 1349, the court explained that the decline in the value of stock, which is suffered by all shareholders, has been determined to be an indirect loss from which no individual direct action is permitted. Thus, the trial court concluded that Ms. Languirand may only sue to recover said loss through a derivative suit. Based on this conclusion, the trial court further granted the exception of no cause of action and prematurity, finding Ms. Languirand had not complied with the statutory requirements to sustain a derivative action. Additionally, the trial court granted the exception of improper joinder of parties on the basis that the corporation must be a defendant in any derivative action.

ISSUE

In her appeal, Ms. Languirand argues that the trial court erred in finding that she had no right of action to file an individual direct action suit against the corporation's directors and other shareholders to enforce her preemptive rights and to void the sale of shares that were made in violation of her preemptive rights. She contends the trial court erred in concluding that her claims must be brought by a derivative action.

DISCUSSION

An action can only be brought by a person having a real and actual interest in which she asserts. La. C.C.P. art. 681. The exception of no right of action tests whether the plaintiff has a real and actual interest in the action. See La. C.C.P. art. 927(A)(6). The purpose of an exception of no right of action is to determine whether the plaintiff belongs to the class of persons to whom the law grants a cause of action asserted in the petition. Badeaux v. Southwest Computer Bureau, Inc. , 05-612 (La. 3/17/06), 929 So.2d 1211, 1217. The exception of no right of action assumes that the petition states a valid cause of action for some person and questions whether the plaintiff in the particular case is a member of the class that has a legal interest in the subject matter of the litigation. Howard v. Administrators of the Tulane Educ. Fund , 07-2224 (La. 7/1/08), 986 So.2d 47, 60.

The party raising a peremptory exception bears the burden of proof. On the trial of a peremptory exception of no right of action, evidence is admissible to support or controvert the objection pleaded when the grounds do not appear from the petition. La. C.C.P. art. 931. In this case, neither party presented any evidence at the hearing on the exception; thus, this Court must decide, based on the allegations alone, whether Ms. Languirand belongs to the class of persons to whom the law grants the cause of action asserted.

"The determination of whether a plaintiff has a legal right to bring an action raises a question of law, which requires a de novo review." Rebel Distributors Corp., Inc. v. LUBA Workers' Compensation , 13-749 (La. 10/15/13), 144 So.3d 825, 833. Any doubt regarding the appropriateness of an exception of no right of action is to be resolved in favor of the plaintiff. Id.

The petition alleges that Defendants, who are directors, officers, and/or shareholders in the corporation, breached their fiduciary duties to the corporation and other shareholders, including Ms. Languirand, in two ways: (1) by improperly electing themselves as directors/officers; and (2) by issuing treasury shares in violation of her and other shareholders' preemptive rights.

Officers and directors of a corporation stand in a fiduciary relationship to both the corporation itself and the corporation's shareholders. It is well-established that a shareholder of a corporation does not have a right to sue personally for alleged losses sustained by the corporation due to mismanagement and/or a breach of fiduciary duty. Rather, a shareholder may only sue to recover losses to a corporation resulting from mismanagement and/or a breach of a fiduciary duty secondarily through a shareholder's derivative suit. Eckert v. Roux , 09-1016 (La. App. 5 Cir. 3/23/10), 39 So.3d 636, 640. However, if the breach of fiduciary duty causes a direct loss to the shareholder, with no loss to the corporation, the shareholder may have the right to pursue an individual claim in a direct action to recover his loss. Palowsky v. Premier Bancorp, Inc. , 597 So.2d 543, 545 (La. App. 2d Cir. 1992). Where the alleged loss to the individual shareholder is the same loss that would be suffered by all other shareholders (such as a decline in the value of stock), the loss is considered to be indirect and the individual shareholder does not have the right to sue individually. Lawly , 691 So.2d at 1353 ; Palowsky , supra .

A review of the jurisprudence shows that distinguishing between derivative and direct claims can be difficult. While such classification can be challenging, "the basic contours of the classification scheme are fairly well established" -

Suits brought by shareholders to recover for damage or loss to corporation-owned property or interests or to recover for losses caused to the corporation as a result of the self-dealing or negligence of a corporate officer or director are considered to be derivative in nature. But suits brought to vindicate some right held by a shareholder personally, such as a right to vote or to protect against dilution of voting or financial rights, to inspect books or records, to receive a dividend, or to recover for fraud in connection with the purchase or sale of his stock, are considered direct suits. [Internal citations omitted.]

Glenn G. Morris & Wendell H. Holmes, Business Organizations, § 34.03, at 162, in 8 Louisiana Civil Law Treatise (1999).

Some examples of actions that have been classified by Louisiana courts as derivative include the following. In Beyer v. F&R Oilfield Contractors, Inc. , 407 So.2d 15 (La. App. 3d 1981), writ denied , 411 So.2d 451 (La. 1982), minority shareholders of a corporation sought individual damages from the directors and officers for fraudulent and ultra vires acts, including excessive payment of salaries and bonuses; denial of access to the corporate books; improper obtainment of corporate loans; and the illegal removal of directors. The court determined that the alleged acts of mismanagement or fraud belonged to the corporation and not to the individual shareholders.

Additionally, in Landry v. Thibaut , 523 So.2d 1370, 1376-77 (La. App. 5th Cir. 1988), writs denied , 526 So.2d 809 (La. 1988), some shareholders filed suit against the officers and directors for losses incurred from their ownership of stock - specifically, they alleged that they purchased their stock in 1974 at a higher price than other shareholders who purchased shares in 1976 at a lower price than the plaintiffs. The officers and directors argued that the plaintiffs' allegations were simply related to the diminution in value of their stock due to imprudent loans.

This Court concluded that the damage was done to the corporation and only indirectly to the shareholders; thus, it should have been brought as a derivative suit. This Court explained that the mismanagement did not personally or directly affect the plaintiffs - those shareholders who purchased their stock in 1974 - but rather all shareholders, except those who purchased in 1976, who experienced a drop in value of their holdings. This Court specifically noted that the plaintiffs were not singled out for unfair treatment in stock transfers or redemptions. Id. at 1377.

In Eckert v. Roux , supra , the corporation had two shareholders, one who owned 49 shares of stock and the other who owned 51 shares. The minority shareholder filed an individual action against the majority shareholder for mismanagement of the corporate assets, alleging that he had diverted fees collected for the corporation to other personal and third party accounts and, thus, had breached his fiduciary duty to the corporation through self-dealings. The minority shareholder further alleged he suffered direct loss as a result of the defendant's mismanagement and self-dealings. This Court concluded that the plaintiff had no individual claim for mismanagement and breach of fiduciary duty based on the alleged acts, but rather the proper procedure was a derivative action. Id. at 640-41.

Conversely, the following actions have been classified by Louisiana courts as direct. In Wilson v. H.J. Wilson Co., Inc. , 430 So.2d 1227 (La. App. 1st Cir. 1983), writ denied , 437 So.2d 1166 (La. 1983), a shareholder's claim for a breach of fiduciary duty based on an allegedly fraudulent transfer of some of his shares to the corporation's principal stockholder was found to be a loss personal to him and not suffered by the corporation. Thus, the shareholder had a right of action to sue individually for the recovery of his shares or their value.

Also, in Succession of Davis , 463 So.2d 723 (La. App. 4th Cir. 1985), the shareholder's suit was found to be direct where he sued the succession of a corporate president, alleging fraud and misrepresentation in connection with a stock redemption agreement. And, in Noe v. Roussel , 310 So.2d 806 (La. 1975), the Louisiana Supreme Court recognized the right of a shareholder to sue individually for breach of fiduciary duty in connection with the liquidation of the corporation - namely an action to rescind a sale of immovable property by an officer and director of the corporation who was the sole liquidator. The shareholder alleged that his stock was fraudulently manipulated by the officer/director and that he was deprived of his rightful share of the corporation's liquidated assets.

In the present case, Ms. Languirand argues that she has an individual direct action to enforce her preemptive rights because such rights are personal and do not belong to the corporation. She maintains that she is not alleging injury or loss to the corporation but rather individual harm - namely, the dilution of her ownership interest and voting rights in the corporation because of the improper sale of additional shares in violation of her preemptive rights. As such, she claims an action to enforce a shareholder's preemptive rights is personal and direct - not derivative.

A preemptive right is defined in Black's Law Dictionary, Sixth Edition, as "[t]he privilege of a stockholder to maintain a proportionate share of ownership by purchasing a proportionate share of any new stock issue." Under La. R.S. 12:1-630(A), the shareholders of a corporation do not have a preemptive right except as provided by the articles of incorporation. However, if the corporation was incorporated prior to January 1, 1969, the articles of incorporation are deemed to contain a provision electing to have preemptive rights unless the articles of incorporation contain a specific provision to the contrary. The violation of a shareholder's preemptive right - when shares are issued to persons other than the existing shareholders in proportion to their present percentage ownership - results in the dilution of that shareholder's voting power and ownership interest in the corporation. Glenn G. Morris & Wendell H. Holmes, Business Organizations, § 28.03, at 672, in 8 Louisiana Civil Law Treatise (1999).

We are unaware of any Louisiana case addressing the classification of the enforcement of a shareholder's preemptive rights as direct or derivative. Thus, we turn to jurisprudence in other jurisdictions, which overwhelmingly finds such actions to be direct.

In discussing the enforcement of shareholders' preemptive rights, the court in Saigh v. Busch , 403 S.W.2d 559, 565 (Mo. 1996), noted the prevailing rule:

Where the pre-emptive [sic] rights of shareholders have been violated, the wrong is to the shareholders and not to the corporation. Accordingly, an action brought for the violation of such right must be in the right of the shareholder and may not be maintained on behalf of the corporation. Moreover, if the shareholders who have been deprived of their rights do not complain, it does not lie within the power of the corporation to rescind the sale of shares sold in violation of pre-emptive [sic] rights, especially where the sale has been for value.

Citing numerous cases from various jurisdictions, the court held that the plaintiffs'

claim to preemptive rights is a direct action and not a derivative action. It further noted that while a shareholder has a direct action against the corporation to recover the value of his preemptive right, if such a remedy at law would be inadequate to protect the shareholder's interest in the corporation, the shareholder may have equitable relief to protect those interests. Id. , citing Barsan v. Pioneer Savings & Loan Co. , 163 Ohio St. 424, 127 N.E.2d 614, 621 (1955). The Saigh court reiterated that the corporation is not damaged by the violation of a shareholder's preemptive rights and has no legal right with respect to their enforcement.

Also, in Zuker v. Rodriguez , 12-1408 (PAD), 2017 WL 2345683 at *8, n.10 (D.P.R. 5/30/17), the court specifically stated that an action "to protect preemptive rights, [or] to prevent the improper dilution of voting rights" is recognized as a direct action. And, in explaining the right of a shareholder "to enjoin or cancel the issuance of shares in violation of his preemptive rights or to recover damages therefore" as a direct and personal action of the shareholder, the court in Wolf v. Young Supply Co., 19 Pa. D. & C.2d 404, 407 (C.P. 1959), explained such a claim as a breach of the shareholder's contract with the corporation.

Further, in Efessiou v. Efessiou , 41 Va. Cir. 142, 149 (Va. Cir. Ct. 1996), the court held that a claim "to set aside the actions of an illegally structured Board of Directors meeting and for the award of monetary damages resulting from the illegal election of Directors, the illegal action by Directors, and the illegal issuance of stock" was derivative. At the same time, the court held that a personal and direct action arose from the violation of a particular shareholder's preemptive rights.

We find the instant case presents a similar situation to Efessiou - Ms. Languirand alleges the election of directors and officers was illegal, which is a derivative action belonging to the corporation, and also alleges her preemptive rights were violated, which is a direct action.

Based on the above discussion, we find Ms. Languirand has no legally recognized right to personally enforce the rights of the corporation related to the alleged breach of fiduciary duty of Defendants relating to the election of new officers and directors. This right belongs to the corporation and must be asserted through a derivative suit. See Beyer , supra at 17 ; Bordelon v. Cochrane , 533 So.2d 82, 86 (La. App. 3d Cir. 1988), writ denied , 536 So.2d 1255 (La. 1989). Therefore, we find the trial court properly sustained Defendants' exception of no right of action for this claim.

However, we find Ms. Languirand has a right of action to personally and directly enforce her preemptive rights. Such a claim does not belong to the corporation and cannot be asserted through a derivative suit on behalf of the corporation. Accordingly, we find the trial court erred in sustaining Defendants' exception of no right of action as to Ms. Languirand's claim for the violation of her preemptive rights.

Defendants argue that Ms. Languirand has not asserted a cause of action for the violation of her preemptive rights because she does not seek to enforce those rights - specifically, she has not made a request to purchase her proportionate share but rather has only alleged that the sale of the treasury shares caused a decline in stock value, which Defendants again contend can only be asserted through a derivative suit.

Contrary to Defendants' claim, the petition does not allege that the sale of treasury shares caused a decline in stock value. Rather, the petition states that the treasury shares were not offered to Ms. Languirand or any other shareholder in violation of law, or their preemptive rights. As noted above, the violation of preemptive rights results in the dilution of that shareholder's voting power and ownership interest in the corporation and a direct action by the shareholder against the offending officers and/or directors exists for the resulting damage. To the extent Ms. Languirand failed to allege a direct loss as a result of the alleged violation of her preemptive rights, she fails to state a cause of action.

A petition should not be dismissed for failure to state a cause of action unless it appears beyond doubt that the plaintiff can prove no set of facts in support of any claim that would entitle him relief. Kelley v. Dyson , 08-1202 (La. App. 5 Cir. 3/24/09), 10 So.3d 283, 286. To the extent that Ms. Languirand might amend her petition to remove the grounds for the objection, she should be given an opportunity to amend her petition. See La. C.C.P. art. 934 ; Clulee v. St. Pierre , 13-881 (La. App. 5 Cir. 5/14/14), 142 So.3d 83, 87.

DECREE

Based on the foregoing, we affirm that portion of the trial court's judgment sustaining Defendants' exception of no right of action regarding Ms. Languirand's claim for a breach of fiduciary duty regarding the January 2017 election of directors and officers on the basis that such a right belongs to the corporation and must be brought through a derivative or secondary action. However, to the extent the trial court's judgment sustains a no right of action relating to Ms. Languirand's claim for the violation of her preemptive rights, that portion of the judgment is reversed.

Additionally, we affirm that portion of the trial court's judgment sustaining Defendants' exceptions of no cause of action and prematurity as it relates to Ms. Languirand's claim for breach of fiduciary duty regarding the election of directors and officers. However, insofar as the trial court's judgment sustaining the exception of prematurity relates to Ms. Languirand's direct action claim for violation of her preemptive rights, that portion is reversed.

We further affirm the trial court's judgment sustaining the exception of no cause of action as it relates to Ms. Languirand's claim for violation of her preemptive rights. However, we reverse that portion of the judgment dismissing the claim and amend the judgment to allow Ms. Languirand 30 days from the date of this opinion to amend her petition to state a cause of action, e.g. to allege a direct loss, for violation of her preemptive rights as discussed above, if she can.

And, we affirm the trial court's judgment sustaining the exception of improper joinder of parties. As discussed above, the corporation must be a named defendant in a derivative suit and the right to enforce a preemptive right does not belong to the corporation - thus, the corporation cannot be a plaintiff in either of Ms. Languirand's claims. Costs of this appeal are assessed equally between the parties.

AFFIRMED IN PART; REVERSED IN PART; AND AMENDED IN PART

      Ms. Languirand further alleged that she owned 250 of the 1,000 shares in the corporation and that Ms. Campbell owned 312.5 of the 1,000 shares. Ms. Campbell is not a named plaintiff in this suit, but rather is simply named in the petition as a "stockholder."

      Although Defendants stated in their exceptions that they excepted to Plaintiffs' petition on the grounds of "improper joinder of parties and/or cumulation of action," they only advanced an argument relating to the improper joinder of parties.

      Effective January 1, 2015, the Business Corporation Law, consisting of La. R.S. 12:1 to 12:178, was repealed and the Business Corporation Act, consisting of La. R.S. 12:1-101 to 12:1-1704 was enacted.
      Prior to its repeal, La. R.S. 12:91(A) provided in part:
      Officers and directors shall be deemed to stand in a fiduciary relation to the corporation and its shareholders, and shall discharge the duties of their respective positions in good faith, and with that diligence, care, judgment, and skill which ordinary prudent men would exercise under similar circumstances in like positions....
      By Acts 2014, No. 328, La. R.S. 12:91 was replaced in part by La. R.S. 12:1-830, which provides in pertinent part: "Each member of the board of directors, when discharging the duties of a director, shall act in good faith and in a manner the director reasonably believes to be in the best interests of the corporation." Additionally, La. R.S. 12:1-842(A) sets forth the standard of conduct required of officers of a corporation and states that an officer has the duty to act "(1) In good faith. (2) With the care that a person in a like position would reasonably exercise under similar circumstances. (3) In a manner the officer reasonably believes to be in the best interest of the corporation."
      While the Business Corporation Act does not expressly state that officers and directors stand in a fiduciary relation to the corporation and its shareholders, it did not change the law regarding the general premise that officers and directors owe a fiduciary duty to both the corporation and its shareholders. This is made clear in the liability provisions of the Business Corporation Act that discuss the liability of officers and directors to both the corporation and its shareholders. See La. R.S. 12:1-831(A), 1-832(A), 1-842(D). See also , Richard P. Wolfe, Article: The Fiduciary Duty of Directors and Officers Under the Louisiana Business Corporation Act of 2014 , 60 Loy.L.Rev. 523 (2014).

      A derivative action is "a suit asserted by a shareholder on the corporation's behalf against a third party (usually a corporate officer) because of the corporation's failure to take some action against the third party." Darr v. Marine Electronics Solutions, Inc. , 11-908 (La. App. 5 Cir. 5/22/12), 96 So.3d 527, 536, writ denied , 12-1442 (La. 10/8/12), 98 So.3d 860, quoting Black's Law Dictionary (9th ed. 2009). In a derivative action, the individual shareholder must bring suit on behalf of the corporation to enforce the corporation's rights against the individual defendants. As such, the shareholder bringing the suit is only a nominal plaintiff, and the real party plaintiff is the corporation because the shareholder claims to be suing on behalf of the corporation. Robinson v. Snell's Limbs & Braces of New Orleans, Inc. , 538 So.2d 1045, 1048 (La. App. 4th Cir. 1989). Further, La. C.C.P. art. 615 and La. R.S. 12:1-742.1 require that the derivative shareholder name both the corporation and the directors/members - allegedly involved in the breach of fiduciary duty - as defendants. Therefore, the corporation is both a passive plaintiff and a named defendant in a derivative action. Robinson , supra .

      The function of the 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 petition. Industrial Companies, Inc. v. Durbin, 02-665 (La. 1/28/03), 837 So.2d 1207, 1213. No evidence may be introduced to support or controvert the exception of no cause of action, and for the purpose of considering an exception of no cause of action, all facts pled in the petition must be accepted as true. Id . ; La. C.C.P. art. 931.


author: MOLAISON, J.

text:
    AMMAR INVESTMENTS, LLC d/b/a Zegar, Inc. and d/b/a Fouad & Faris, Inc. v. CERTAIN UNDERWRITERS OF LLOYD'S, LONDON
    NO. 18-CA-347
    Court of Appeal of Louisiana, Fifth Circuit.
    December 12, 2018
    COUNSEL FOR PLAINTIFF/APPELLANT, AMMAR INVESTMENTS, LLC D/B/A ZEGAR, INC. AND D/B/A FOUAD & FARIS, INC., Joseph B. Landry, Jr., Joseph B. Landry
    COUNSEL FOR DEFENDANT/APPELLEE-2ND APPELLANT, CERTAIN UNDERWRITERS OF LLOYD'S, LONDON, Robert L. Blankenship, Gregory E. Bodin, BATON ROUGE
    Panel composed of Judges Susan M. Chehardy, Hans J. Liljeberg, and John J. Molaison, Jr.
   MOLAISON, J.

Plaintiff/Appellant, Ammar Investments, LLC d/b/a Zegar, Inc. and d/b/a Fouad & Faris, Inc. ("AI"), appeals the trial court's judgment awarding it $26,654.10 in damages for loss of personal property as a result of Hurricane Isaac, but denying its claim for damages sustained to the roof of its building. AI also appeals the trial court's denial of its motion for new trial and/or rehearing of a prior judgment granting summary judgment in favor of defendant, Certain Underwriters of Lloyd's, London ("Underwriters"), and dismissing AI's claim for bad faith damages due to Underwriters' alleged misrepresentation of its policy provisions pertaining to the hurricane deductible. Underwriters filed a cross appeal seeking reversal of the trial court's award to AI for loss of its business inventory. For the following reasons, we affirm the trial court's judgment in part and reverse in part.

FACTS AND PROCEDURAL HISTORY

Ammar Zughayer is the owner of AI, which owns and operates Mike's Food Mart, a convenience store and gas station located on River Road East in Garyville, Louisiana. Mike's Food Mart was insured against building and personal property (inventory) loss under a policy of insurance issued to AI by Underwriters ("the Policy"). The Policy, which required a three percent (3%) wind and hail deductible, was effective from June 8, 2012 to June 8, 2013; its coverage included a $300,000.00 limit for damages occasioned to the building, and a $200,000.00 limit for loss of personal property located on the premises.

On August 28-29, 2012, Hurricane Isaac made landfall in St. John the Baptist Parish causing widespread power outages throughout the parish. These power outages caused the coolers and freezers at Mike's Food Mart to shut down. Following the storm, Mr. Zughayer filed a claim under the Policy on behalf of AI averring that Mike's Food Mart sustained both building and personal property damage as a result of the hurricane's "wind, tornadoes, rain, and/or wind driven rain."

Underwriters retained SyNerGy Adjusting Corporation to investigate Mr. Zughayer's claims. On September 8, 2012, SyNerGy's senior claims' adjuster, Mike Dossett, inspected the property and assessed the damages. Specifically, Mr. Dossett inspected the outside of the building, which he noted was newly constructed, and observed the canopies, awnings, gas pumps and signs. In doing so, he discovered only minimal damage to the metal fascia of the canopy situated over the diesel pumps. Mr. Dossett then inspected the inside of the building, which he found to be in good condition and well-stocked. Mr. Zughayer identified for him two areas of the store where he claimed water was leaking through the roof: (1) in between a walk-in cooler and a back wall, and (2) around a hood vent positioned over cooking equipment in the kitchen. Mr. Zughayer then showed Mr. Dossett the store's inventory that was damaged, which included food and drinks that were spoiled as a result of the power outage.

Mr. Dossett found the building to be in "excellent condition" and determined that the covered damages to the premises were minor. Mr. Dossett provided Mr. Zughayer with a Contents Loss Claims Sheet with instructions to itemize any inventory and contents losses. By letter dated September 28, 2012, Mr. Dossett informed Mr. Zughayer that his "initial inspection" of AI's loss to the building indicated that the damages did not exceed the Policy's 3% hurricane "deductible of $15,000.00." Mr. Dossett also advised Mr. Zughayer that if he disagreed with the assessment, he was encouraged to forward any "competitive, detailed estimates for ... review and further consideration." No estimates for building damages, nor a completed itemized list of damaged contents, were ever provided by Mr. Zughayer to Mr. Dossett during the adjustment period. Several months later, having heard nothing further from Mr. Zughayer, Mr. Dossett closed the file on AI's claim.

On September 27, 2013, AI filed suit against Underwriters seeking recovery for damages to the building and personal property (i.e. , business inventory) caused by Hurricane Isaac. AI sought additional damages claiming that Underwriters acted in bad faith and was "arbitrary and capricious" in adjusting its claim and refusing to pay for its property damage. The matter proceeded to a two-day trial held on September 18 and 19, 2017. At its conclusion, the trial court took the matter under advisement and later issued judgment on February 9, 2018, with written reasons. The trial court denied AI's claim for damages to the building on the basis that AI failed to adduce sufficient evidence to satisfy its burden of proving that damages were sustained to the building's roof, canopies or signs. Despite its rejection of AI's claim for damages to the building's roof caused by the hurricane, the trial court awarded $26,654.10 to AI for the cost of replacing its water-damaged tobacco inventory (less the 3% hurricane deductible), which was stored in the attic directly underneath the roof.

The instant appeal and cross appeal ensued.

ASSIGNMENTS OF ERROR

On appeal, AI contends the trial court erred in failing to grant its motion for new trial and/or rehearing of the prior judgment rendered in favor of Underwriters granting Underwriters' motion for summary judgment and dismissing AI's claim for bad faith damages. AI further contends the trial court erred in failing to award damages for the loss occasioned to the building's roof.

Underwriters filed a cross appeal wherein it contends the trial court erred in finding that AI presented sufficient evidence to prove its claim for damages to its inventory.

LAW AND DISCUSSION

Standard of Review

In all civil cases, the appropriate standard for appellate review of factual determinations is the manifest error - clearly wrong standard, which precludes the setting aside of a trial court's finding of act unless that finding is clearly wrong in light of the record reviewed in its entirety. Cenac v. Public Access Water Rights Ass'n , 02-2660 (La. 6/27/03), 851 So.2d 1006, 1023. Thus, a reviewing court may not merely decide if it would have found the facts of the case differently. Hall v. Folger Coffee Co. , 03-1734 (La. 4/14/04), 874 So.2d 90, 98. Rather, in reversing a trial court's factual findings, the appellate court must satisfy a two-step process based on the record as a whole: there must be no reasonable factual basis for the trial court's conclusion, and the finding must be clearly wrong. Stobart v. State through Dept. of Transp. and Development , 617 So.2d 880, 882 (La. 1993).

This test requires the reviewing court to do more than simply review the record for some evidence that supports or controverts the trial court's findings. The court must review the entire record to determine whether the trial court's findings were clearly wrong or manifestly erroneous. Parish Nat. Bank v. Ott , 02-1562 (La. 2/25/03), 841 So.2d 749, 753-54. The issue to be resolved on review is not whether the judge or jury was right or wrong, but whether the judge's or jury's fact-finding conclusion was a reasonable one. Rosell v. ESCO , 549 So.2d 880, 884 (La. 1989) ; Canter v. Koehring Co. , 283 So.2d 716, 724 (La. 1973).

Where there is conflict in the testimony, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review, even though the appellate court may feel its own evaluations and inferences are as reasonable. Varmall v. Bankers Specialty Ins. Co. , 15-223 (La. App. 5 Cir. 10/28/15), 178 So.3d 181, 183-84citing Waguespack v. Sentry Select Ins. Co. , 12-280 (La. App. 5 Cir. 11/13/12), 105 So.3d 880, 884-85, writ denied , 12-2700 (La. 2/8/13), 108 So.3d 90. Moreover, where there are two permissible views of the evidence, the fact finder's choice between them cannot be manifestly erroneous. Id. , 178 So.3d at 184. It is only where the objective evidence so contradicts a witness' testimony, or the testimony itself if so internally inconsistent or implausible on its face that a reasonable fact finder would not credit it, that the court of appeal may find manifest error even in a finding purportedly based upon a credibility determination. Id.

When an appellate court finds that a reversible error of law or manifest error of material fact was made in the trial court, it is required, whenever possible, to re-determine the facts de novo from the entire record and render a judgment on the merits. Ferrell v. Fireman's Fund Ins. Co. , 94-1252 (La. 2/20/95), 650 So.2d 742, 745. While great deference should be accorded to the fact finder, appellate courts have a constitutional duty to review facts, and to perform its constitutional duty properly. Thus, appellate courts must determine whether the lower court's conclusions were clearly wrong based on the evidence or are clearly without evidentiary support.

Stewart v. State ex rel Dep't of Transp. & Dev. , 08-0772 (La. App. 1 Cir. 3/20/09), 9 So.3d 957, 963, writ denied , 09-1228 (La. 9/18/09), 17 So.3d 968.

With these legal precepts in mind, we turn to the issues presented herein for our review.

Misrepresentation of the Policy Provisions

Prior to trial, the trial court granted Underwriters' motion for summary judgment dismissing AI's claim for bad faith damages. Thereafter, AI filed a motion for new trial and/or rehearing, which motion the trial court considered and denied in open court on the morning of trial. On appeal, AI contends the trial court manifestly erred in granting Underwriters' summary judgment motion, and in denying its motion for new trial, despite clear evidence that Underwriters misrepresented the Policy's deductible. We disagree.

Appellate courts review summary judgments de novo using the same criteria that govern the trial court's determination of whether summary judgment is appropriate. Jones v. ABC Ins. Co. , 17-368 (La. App. 5 Cir. 5/30/18), 249 So.3d 310, 315. The decision as to the propriety of a grant of a motion for summary judgment must be made with reference to the substantive law applicable to the case. Ricalde v. Evonik Stockhausen, LLC , 16-178 (La. App. 5 Cir. 9/22/16), 202 So.3d 548, 551-52, writ denied , 16-1923 (La. 12/16/16), 212 So.3d 1170. To prevail on a claim for bad faith claims adjusting under La. R.S. 22:1892 and La. R.S. 1973, a plaintiff bears the burden of proving: (1) the insured provided a proof of loss; (2) the proof of loss was satisfactory; that is, sufficient information to allow the adjuster to pay the undisputed amount within 30 days; and (4) the insurer's failure to timely make payment of the undisputed amount was the result of conduct that was arbitrary, capricious and/or without probable cause. La. R.S. 1892(B)(1). An insurer's actions are "arbitrary and capricious" when its willful refusal of a claim is not based on a good faith defense, or is unreasonable or without probable cause. Calogero v. Safeway Ins. Co. of Louisiana , 99-1625 (La. 1/19/00), 753 So.2d 170, 173.

In the case sub judice , although AI posits that "[Underwriters] ... acted arbitrarily and capricious and without probable cause in failing to pay [its] claim," AI does not set forth any facts upon which it relies to support this contention, nor does it direct this Court to any testimony or exhibits in the record to substantiate its bald allegation. Our de novo review of the record convinces us that the trial court properly dismissed AI's claim that Underwriters acted in bad faith or was "arbitrary and capricious" in its handling of AI's insurance claim.

AI also contends that Underwriters' breached its duty of good faith and fair dealing when its adjuster, Mr. Dossett, misrepresented the Policy's deductible. In particular, AI contends that "[m]isrepresenting the deductible is a breach of the insurer's duty set forth in La. R.S. 22:1973(A) [,]" which provides:

An insurer, including but limited to a foreign line and surplus line insurer, owes to his insured a duty of good faith and fair dealing. The insurer has an affirmative duty to adjust claims fairly and promptly and to make a reasonable effort to settle claims with the insured or the claimant, or both. Any insurer who breaches these duties shall be liable for any damages sustained as a result of the breach.

The Policy Underwriters issued to AI provided for building coverage with limits of $300,000.00, coverage for personal property with limits of $200,000, and contained a 3% wind and hail deductible. Applying the 3% deductible in accordance with the Policy's terms, the deductible for building coverage was $9,000.00, and the deductible for personal property coverage was $6,000.00; thus, the Policy's deductible totaled $15,000.00. In correspondence from Underwriters' adjuster, Mr. Dossett, to Mr. Zughayer dated September 28, 2012, Mr. Dossett stated that the Policy carried "a 3% Wind and Hail deductible of $15,000.00" and that he could not "see where the loss would exceed the deductible." According to AI, Mr. Dossett's reference to a total deductible of $15,000.00-rather than separately identifying a $9,000.00 deductible for losses to the building, and a $6,000.00 deductible for damage to personal property-constituted a material representation of the Policy's provisions and a breach of Underwriters' duty of good faith and fair dealing such that Underwriters is responsible to it in damages.

The record, however, belies AI's contention. Specifically, Mr. Zughayer confirmed in his testimony at trial that there was no misunderstanding regarding the Policy's deductible in this case. Further, even if there was some misunderstanding regarding the deductible-of which we have found no evidence in our de novo review of the record-AI has presented no evidence or testimony establishing that it was damaged in any way as a result of this alleged misrepresentation. Accordingly, based upon our de novo review of the record, we find no merit to AI's contention that the trial court erred by dismissing its claim for bad faith damages or by denying its motion for new trial and/or rehearing on this issue.

Building Damages

In its next assignment of error, AI contends the trial court's failure to award roof damages was manifestly erroneous because: (1) the uncontroverted documentary evidence showed hurricane-related damage to the roof; (2) the testimony of Mr. Zughayer and Billy Burr established that AI paid $22,000.00 to repair the roof; and (3) the trial court found coverage under the Policy for AI's loss of its water-damaged tobacco inventory, which was stored in the attic directly beneath the alleged leaking roof. The trial court found the evidence presented by AI to be "contradictory, inconsistent, ... unsupported" and insufficient to prove his building damage claim. We agree.

AI argues that the uncontroverted testimony at trial established that at the time of Hurricane Isaac, the building and its roof were just over a year old and that there had been no prior issues with leaks. According to Mr. Zughayer, the roof first began leaking immediately after the hurricane, which is what prompted him to file the claim with Underwriters. In particular, Mr. Zughayer testified that he observed water coming from the hood vent in the kitchen. He stated the water was streaming down the walls and dampening the ceiling tiles. AI introduced numerous photographs into evidence at trial that were taken of the inside of the convenience store by Mr. Zughayer depicting what he alleged to be water damage caused by the leaking roof. Notably, of the 82 photographs offered into evidence, not one photograph was taken of the purported damage to the roof.

In order to address the roof damage, Mr. Zughayer testified that he contacted A-1 Steel Erectors ("A-1"), the company that installed the roof at the time of the building's original construction, to obtain an estimate for repairs to the roof. He stated that A-1 submitted an estimate in the amount of $32,842.00 to repair the damage to the roof "due to storm damage." Though A-1's estimate was submitted to Mr. Zughayer on September 28, 2012-only twenty days after Mr. Dossett had inspected the building on behalf of Underwriters-this estimate was never provided to Underwriters (nor was any other estimate of purported damage to the building or its contents).

Rather than have A-1 actually perform the roof repairs, Mr. Zughayer testified that he retained the services of one of A-1's subcontractors, Bobby Burr, to perform the job for $28,200.00. He stated that he presented Mr. Burr with a check for that amount-a check that was never cashed and was made payable to "LA 1 Roofing" not "Bobby Burr"-but explained that Mr. Burr returned the check to him after they agreed to a cash price of $22,000.00, which he claimed he paid to Mr. Burr after the repairs were completed. Mr. Zughayer had no receipts, invoices or other documentary evidence to show that the repairs to the roof were actually made, or to prove that he ever paid cash to Mr. Burr for having performed the work.

Mr. Burr testified that he provided Mr. Zughayer with an estimated cost to complete the roof repairs of $27,000.00, but that they later negotiated a cash price of $22,000.00 for the job. Mr. Burr also gave a detailed account of the specific repairs he recalled making to the roof that was "leaking [b]adly in several places," to the extent that a total replacement of the one-year old roof was required. He testified that it took him, and a crew of "four-to-five guys," ten to twelve days to complete the work. While Mr. Burr stated that Mr. Zughayer paid him $22,000.00 in cash, and that he paid his crew in cash for their work, he claimed that he had not one record to substantiate either the cash he received or the cash he paid. He also had no records to corroborate his testimony that he actually replaced the entire roof, such as the estimate, a permit, or invoices for the materials he purchased. Further, when presented at trial with a check made payable to "LA 1 Roofing" in the amount of $28,200.00-a check Mr. Zughayer claimed to have given Mr. Burr to perform the roof repairs, and Mr. Burr had previously attested to having received from Mr. Zughayer but never cashed -Mr.

Burr denied that Mr. Zughayer had ever presented him with this check or any other check for the roofing job. Incredibly, Mr. Burr testified at one point that he had completely forgotten about ever having performed the repairs, but then later testified that he not only remembered exactly what items he used to do the repairs, he also knew the exact costs of those items. And still later, Mr. Burr testified that he often had difficulty with his memory.

According to AI, despite the absence of demonstrative evidence, the corroborating testimony of Mr. Zughayer and Mr. Burr is sufficient to prove that the roofing repairs were completed and the amount that was paid, as both witnesses testified that Mr. Burr received $22,000.00 in cash after he finished the job. AI also argues that Underwriters' adjuster, Mr. Dossett, did not dispute that the roof was damaged, but he wrongfully concluded that the damages were not hurricane related. In this regard, AI avers that Mr. Dossett performed an inadequate inspection of the premises. In particular, AI claims that when Mr. Dossett arrived to conduct the inspection, he did so without a ladder, which prevented him from climbing onto the roof to properly and fairly assess any damages. Additionally, contrary to Mr. Dossett's testimony that he gained access and viewed inside of the building's attic using the flash on his camera, Mr. Zughayer denied Mr. Dossett ever entered or observed the inside of the attic as it was impossible to do so without the use of a ladder, which Mr. Dossett admitted he did not have.

Mr. Dossett testified that after arriving at Mike's Food Mart and inspecting the outside of the building for hurricane-related damages, he proceeded inside the building and met with Mr. Zughayer. He claimed that his initial impression was that the building was in good condition, operational, and well stocked. Because he detected no obvious physical damage, he had Mr. Zughayer take him to the two areas of the store where Mr. Zughayer claimed the roof had been damaged and was leaking. The first area was near a walk-in cooler, where Mr. Dossett testified that he observed an opening that looked to him to be a "crawl space" in-between the cooler and the back wall. He stated that he climbed atop the cooler looking for water and saw none. He did observe a pre-existing roof penetration where the Freon line entered the ceiling from the remote cooling unit on top of the roof and where rain water could have entered the building. According to Mr. Dossett, he could see outside through an opening around the Freon line where it penetrated the ceiling from the roof. This open space indicated to him that the area was not properly caulked or sealed and possibly allowed water to enter the building. Mr. Dossett testified that he took a couple of photographs of the area near the walk-in cooler, but other than a bit of moisture around the cooling line that was laying on the floor behind it, he did not see any damage for him to record.

Next, Mr. Dossett inspected the ceiling around the hood vent located in the kitchen area where Mr. Zughayer claimed water had been leaking due to damage from the roof. While Mr. Dossett observed some missing ceiling tiles and tiles that were discolored and possibly damp, he testified that he did not see any damage in or around the hood itself and did not see any evidence of water leaking through the roof. Based upon his knowledge of kitchen hood ventilation systems, Mr. Dossett attributed the damp tiles to the poor quality of installation of the hood system coupled with the building's flat roof. Specifically, he explained that if excessive rain water were to accumulate on the flat roof, it would eventually seep into the ceiling tiles through any gaps or holes existing around the hood system where its vents penetrated the roof that were not properly caulked or sealed. Considering what he observed, Mr. Dosssett testified that there was no physical damage that he could see that would lead him to believe that the water damage near the walk-in cooler or around the hood vent was caused by wind or water from Hurricane Isaac.

In Louisiana, a plaintiff bears the burden of proving with legal certainty every item of damages, and the plaintiff's own uncorroborated testimony is insufficient to satisfy that burden. Blake v. City of Port Allen , 14-0528 (La. App. 1 Cir. 11/20/14), 167 So.3d 781, 792. If the damaged property has been restored to its former condition by repair, the proper basis for assessing damages is the repair bill itself. Magee v. Ranger Ins. Co. , 276 So.2d 879, 881 (La. App. 1st Cir. 1973). In concluding that AI failed to meet its burden of proving damages to the building, including the roof, the trial judge provided the following written reasons:

[Mr. Zughayer] agreed that he considered himself to be a sophisticated businessman. One would be inclined to agree, considering he owns several businesses. Consequently, his alleged 'record keeping' methods make absolutely no sense. It would have been much simpler to just get a receipt. He had had prior dealings with all of the contractors and had apparently paid them in cash before.... There is no reason [Mr. Zughayer] could not have asked for a receipt just as he has done in the past. Considering the contradictory, inconsistent, and unsupported evidence presented by [AI], this Court finds that [it] has failed to introduce evidence sufficient to prove his building damage claim.

As the trial judge determined, and our review of the record confirms, AI failed to produce a single receipt for the repairs to the roof. Moreover, we find the conflicting, inconsistent, and unsupported testimony of Mr. Zughayer and Mr. Burr was inadequate to corroborate the costs of the repairs. The only documentary evidence AI presented associated with roof repairs was the estimate prepared by A-1 Steel Erectors, who did not perform the work. And though Mr. Burr claimed that he provided Mr. Zughayer with an estimate of $27,000.00 to complete the work, neither Mr. Zughayer nor Mr. Burr retained a copy of that estimate. Further, the check Mr. Zughayer claims to have given to Mr. Burr as evidence that roof repairs were made-which check Mr. Burr remembered having received prior to trial but then, at trial, denied ever having even seen it-was made payable to someone other than Mr. Burr and was made out for $28,200.00, not the estimated $27,000.00. The only consistency in the testimony of Mr. Zughayer and Mr. Burr was that Mr. Burr was paid $22,000.00 in cash for the job, yet neither could produce a single receipt, bank statement or deposit slip as proof that the cash payment was either made or received.

Additionally, while AI presented over 80 photographs of purported damage to the building, not one depicts damage to the roof or repairs being made to the roof. In short, the record is devoid of any demonstrative evidence to corroborate the conflicting, and largely incredible, testimony of Mr. Zughayer and Mr. Burr, and contains no evidence to substantiate AI's claim that the roof was either damaged or repaired as a result of Hurricane Isaac.

Though AI has abandoned on appeal several of the other claims it made in the lower court for damages to the building, we mention those claims here solely in order to illustrate that our review of the record in its entirety leads us to conclude that the testimony and evidence presented by AI during the course of this litigation was repeatedly unreliable, internally inconsistent, and incredible. For example, prior to trial, in its opposition to a motion for summary judgment filed by Underwriters, AI presented several checks to the trial court claiming that they proved what AI had paid to make the necessary repairs to the storm-damaged property. The checks (similar to the one AI claimed to have been given to Mr. Burr) were made payable to entities that AI had not previously identified in discovery responses, and were for amounts that differed from those that Mr. Zughayer later testified were actually paid to the contractors to complete the purported repairs. When Underwriters subsequently sought to subpoena AI's (or Mr. Zughayer's) bank records, those checks that AI claimed to have been paid did not appear. Nor did the bank's records reveal cash withdrawals matching the amounts indicated on the checks. Moreover, in response to subpoenas issued by Underwriters to the different contractors named on the checks, not one had any documentation showing that they had performed any repair work for AI or that they had ever received or deposited a check from AI or Mr. Zughayer. When confronted with these inconsistencies at trial, Mr. Zughayer explained that the checks to these contractors were written solely for his record-keeping purposes and were never intended to be negotiated; cash payments were substituted for the checks and hand-delivered to the contractors. Unbelievably, neither Mr. Zughayer nor any of the contractors had documentation evidencing that the repairs were actually performed or that the cash payments were ever made. In fact, the documentation submitted by the contractors in response to Underwriters' subpoenas indicated to the contrary-that the work was not performed and that the cash was never paid.

Specifically, Carla Bushnell, a representative of IRC Services, Inc., who was purportedly paid $8,150.00 to repair storm-related damages, testified that on September 4, 2012, IRC prepared a "quote" for $23,881.50 to complete work on the gas pumps at Mike's Food Mart. IRC's business records, however, which showed every deposit made during the applicable time period, indicated that no check from AI or Mr. Zughayer had been deposited. Additionally, the records reflected that no cash payment had been deposited by IRC. Further, Ms. Bushnell testified that she was unable to locate an invoice or receipt for Mike's Food Mart, which would have suggested that the proposed work had been done and payment received. According to Ms. Bushnell, this indicated to her that not only had the work outlined in the September 4, 2012 "quote" never been performed, no payment had ever been received.

Tuyen Huynh was called to testify regarding work performed on the air conditioning/refrigeration at Mike's Food Mart following the hurricane. Mr. Huynh testified that he went to Mike's Food Mart to inspect the duct work that Mr. Zughayer claimed had been damaged in the storm. After doing so, he advised Mr. Zughayer that everything looked "fine" with the duct work. He stated that Mr. Zughayer then asked him to go onto the roof to check the air conditioning unit, which he did and found it to be working fine. Interestingly, according to Mr. Huynh, Mr. Zughayer went up onto the roof with him as he inspected the air conditioning unit. Mr. Huynh claimed that Mr. Zughayer then asked him to prepare a damage estimate to repair all of the duct work so that it could be presented to the insurance company for reimbursement. He stated that Mr. Zughayer told him exactly what to write on the estimate, including that "[d]ue to Hurricane Isaac, the roof was damaged and caused water to leak ... into the supply and air return ducts[,]" even though he observed no damage to the roof or water in the ducts. According to Mr. Huynh, at the direction and in the words of Mr. Zughayer, he prepared a proposal "for replacement of a duct that had water leaked into it" in the amount of $1,547.00 Mr. Huynh testified that Mr. Zughayer contacted him on more than one occasion asking him to prepare a fraudulent receipt to show that the duct work had been done and that he could "name [his] price." However, according to Mr. Huynh, no work was ever performed because no work needed to be performed. Additionally, when presented at trial with Mr. Zughayer's check made payable to "Van's AC" for $9,200.00, Mr. Huynh testified that he had never seen the check nor had he made any cash deposit for monies he (or his father, who also performed air conditioning work at Mike's Food Mart and originally installed its air conditioning unit) received from Mr. Zughayer.

Given AI's presentation of its case in the trial court-which the lower court found to be "contradictory [and] inconsistent"-coupled with the total absence of documentary evidence to substantiate the damages AI alleged were sustained to the building's canopies, gas pumps, and air conditioning units, it is understandable why the trial court rejected all of AI's claims to the building (including the roof), and why AI has now abandoned those claims on appeal. Accordingly, we find no error in the trial court's determination that AI failed to present sufficient credible evidence to prove his claim for damages to the building's roof. This assignment of error is without merit.

Loss of Inventory

Underwriters filed a cross appeal in this matter averring the trial court manifestly erred in awarding $26,654.10 in damages to AI for the loss of its tobacco inventory, not only because AI presented insufficient evidence to prove this loss, but because this finding is inconsistent with the trial court's ruling denying AI's building damage claim. Specifically, the trial court determined that AI satisfied its burden of proving at trial that its tobacco inventory was damaged and that the damage was "caused by water intrusion from the rain and winds of Isaac." Interestingly, however, both Underwriters and AI agree that this factual finding-that the alleged damage to AI's tobacco was hurricane related-is inconsistent and irreconcilable with the trial court's finding that the roof, under which the inventory of tobacco was purportedly stored, was not damaged as a result of the hurricane. We, too, agree that these factual findings are irreconcilable. Thus, having already affirmed the trial court's ruling rejecting AI's claim for damages to the building's roof due to a lack of sufficient credible evidence, and finding on the record that AI's evidence regarding its tobacco inventory loss was riddled with conflicting, inconsistent and unsupported evidence that was insufficient to prove that the alleged damage was in any way related to Hurricane Isaac, we resolve the inconsistency in favor of Underwriters. Consequently, we reverse that portion of the trial court's judgment awarding $26,654.10 to AI for loss of its tobacco inventory.

According to Underwriters, prior to trial, AI failed to identify the hurricane-damaged inventory and to quantify what was purportedly paid to replace it. Mr. Zughayer admitted at trial that during the five years this claim had been pending, he had never once provided Underwriters with an itemization of his alleged damaged inventory and had never once mentioned that tobacco was damaged: not in AI's petition; not in response to discovery; not in his deposition; not in two separate affidavits he had previously executed in this case; and not in the 82 photographs he took in the days following the hurricane.

At trial, for the first time since making the claim , Mr. Zughayer identified the particular items he claimed sustained hurricane damage, including tobacco that was placed on top of the cashier's counter and tobacco that he stored in the attic. Mr. Zughayer also identified several items kept in the storage room that he claimed were damaged, including "kitchen items, like the bulks or rice, sugar, flours (sic), mashed potatoes ... cleaning powder[.]" However, other than its tobacco damage claim, the trial court denied AI's claims for the remaining damaged items finding AI failed to produce any documentary evidence to substantiate those alleged losses. On appeal, just as AI completely abandoned its claims for damage to the building's signs, fuel pumps, and canopies due to the lack of credible testimony and documentary evidence to support them, AI likewise abandoned its inventory loss claims, except for its tobacco loss.

To prove its claim for loss of its tobacco inventory, AI relied on the following: the testimony of Mr. Zughayer; a receipt for the payment of two invoices for tobacco orders placed by Mr. Zughayer on September 3, 2012 and September 8, 2012; and, the testimony of Ms. Lakeisha Jones, an employee of Mike's Food Mart. Though Mr. Zughayer had five years to identify, itemize, and quantify the tobacco inventory in the store's attic that he claimed was hurricane damaged, his testimony at trial was Underwriters' first notice of this particular loss:

Q. I want the record to be clear that on August 29, 2017, you provided to us copies of vendor receipts from June 2012 through December 2012, correct?
A. Correct.
Q. And today we got the first itemization of any inventory that was damaged, correct?
A. Correct.
Q. And that was this tobacco that you outlined, correct?
A. Not only tobacco. I mentioned other things besides tobacco.
Q. But you never itemized, you never told us that that amount was, correct?
A. The question that you had asked me today, that I had told you guys about items was damaged, correct? You just asked me that question. What, I told you for first time, I told you what been (sic) damaged, correct?
Q. Yes.
* * * *
Q. So you itemized the tobacco for us today.
A. When - -
Q. And then you just explained these other items for us today.
A. Correct.
Q. And but before this, we had never received this kind of explanation from you in the discovery responses or in your deposition. Today was the first day we got this kind of explanation.
A. Correct.

Mr. Zughayer testified that on September 3, 2012, he placed an order with IWC, International Wholesale Club, for 847 cigarette cartons, 12 smokeless tobacco, and three convenience items (batteries). According to Mr. Zughayer, this order was made to replace the tobacco that was damaged in the hurricane. He explained that a second order with IWC was made on September 8, 2012 for the replacement of damaged tobacco. To corroborate his testimony, Mr. Zughayer produced a receipt from IWC, International Wholesale Club dated September 2012 reflecting payment for the purchase of $32,654.10 in cigarettes. Mr. Zughayer testified that this was the cost he incurred to replace the hurricane-damaged tobacco that was stored in the attic located directly below the damaged roof he claimed was leaking. AI averred the invoices and receipt established that the tobacco in the attic was damaged and what Mr. Zughayer paid to replace it.

To the contrary, we find these invoices and receipt actually contradict Mr. Zughayer's contention that the orders for tobacco placed on September 3, 2012 and September 8, 2012, were made to replace tobacco damaged as a result of Hurricane Isaac. It is undisputed that Underwriters' adjuster, Mr. Dossett, conducted his inspection of AI's premises on September 8, 2012-only five days after the first order for tobacco was placed and the same day the second order was made-an ordered that totaled $32,110.10. Mr. Dossett testified that he specifically asked Mr. Zughayer on September 8, 2012 to identify and show him the personal property or contents in the store that sustained hurricane damage. Not only did Mr. Zughayer fail to show Mr. Dossett damaged tobacco that day, Mr. Zughayer failed to even mention water damage to his tobacco inventory. It belies all logic and is, in fact, incredible, that having placed a substantial order that same day to replace inventory he was claiming to be damaged, and at a significant cost for which he was requesting repayment, that when asked to specify the damaged items, he would fail to even mention the loss of that expensive item. Then, when provided with the Contents Loss Claim Sheet with instructions to complete it, despite having access to the documentation that would verify his claim, Mr. Zughayer again failed to produce the information concerning this alleged substantial loss. Further, when specifically asked on more than one occasion in discovery to provide a description and to quantify any damaged inventory and the cost to replace it, Mr. Zughayer's failure to produce this information and documentation makes no sense. Even more troubling is that when asked in his deposition to again provide this information, Mr. Zughayer, a seasoned businessman, failed to produce the evidence he obviously had in his possession that would substantiate the loss of his most expensive inventory. The only logical conclusion reasonable minds could reach is that the receipt for payment of those two invoices was not payment to replace damaged tobacco, but rather, was a payment to restock the store's inventory of tobacco (and the other items contained on the invoice) as part of a regular or routine order.

Further, Ms. Jones' testimony does not corroborate (or refute) Mr. Zughayer's testimony that there was hurricane-damaged tobacco in the attic. While Ms. Jones testified she had assisted others in moving items delivered to the store to the attic for storage, she did not testify that she had observed anyone place tobacco into the attic following the hurricane. In fact, though Ms. Jones stated that she had assisted Mr. Zughayer in cleaning up the store following the hurricane by removing all of the damaged goods and helping to restock the shelves, nowhere in her testimony did she even mention cleaning out wet tobacco. Ms. Jones did not mention tobacco at all.

In the days immediately following the hurricane, Mr. Zughayer took over 80 photographs of the premises, including photographs of the areas around the store and building that he claimed were damaged in the storm. Also included were photographs of spoiled produce, food and drinks. There is not one photograph showing damaged or wet tobacco. At trial, Mr. Zughayer testified that the tobacco inventory was stored in two places: on top of the cashier's counter and in the attic. While there are photographs of undisturbed and undamaged shelves containing cartons and packs of cigarettes near the cashier's counter, there are no photographs of damaged tobacco. Not a single missing or stained ceiling tile near the shelved tobacco is seen in the photographs. There are also no photographs of the attic or damaged tobacco in the attic.

AI did not call one witness to corroborate Mr. Zughayer's claim of damage to the tobacco inventory. Other than his own self-serving, conflicting and implausible testimony, the only evidence presented to the trial court to prove his claim for damaged tobacco, was the lone receipt with absolutely no context. Even when reviewing the record in a light most favorable to AI, we find the evidence and testimony of Mr. Zughayer implausible on its face and that a reasonable fact finder would not credit it. Moreover, based upon our review of the entirety of the evidence and testimony in the record, we are unable to reconcile the trial court's factual finding on the one hand-that the building's roof was not damaged because AI's evidence was "contradictory, inconsistent, and unsupported"-with the trial court's factual finding on the other-that AI's evidence was sufficient to satisfy its burden of proving that it replaced tobacco that was damaged "by water intrusion from the rain and winds of Isaac." Thus, we hold the trial court's factual finding that AI's "evidence of damages to [its] inventory to be sufficient to satisfy [its] evidentiary burden of preponderance of the evidence" was manifestly erroneous and clearly wrong and requires reversal of the $26,654.10 in damages awarded to AI for its loss of inventory claim.

CONCLUSION

For the foregoing reasons, we affirm the trial court's judgment granting Underwriters' motion for summary judgment dismissing AI's claim for bad faith damages. Further, we affirm the trial court's denial of AI's motion for new trial and/or rehearing on that issue. We also affirm that portion of the trial court's judgment denying AI's claim for building damages, and reverse that portion of the trial court's judgment awarding AI damages for loss of personal property.

AFFIRMED IN PART; REVERSED IN PART.

      The construction of Mike's Food Mart was completed in 2011, approximately one year prior to Hurricane Isaac, and consists of a convenience store with gas pumps and a covered awning. Located inside the convenience store is a kitchen with a commercial hood ventilation system.

      The Policy also contained a $1,000.00 deductible for all other perils. The Policy specifically excluded coverage for losses occasioned as a result of a flood, and excluded any damages resulting from any "hidden defect or quality in property that causes it damage." Moreover, any damage due to a power outage was excluded under the Policy.

      At trial, Mr. Dossett testified that during his inspection of the premises, he did not observe any damage to the contents, and other than spoiled food items and drinks, Mr. Zughayer did not point out any damaged contents to him.

      The deductible for building loss was $9,000.00 (3% of the $300,000.00 limit), and the deductible for personal property loss was $6,000.00 (3% of the $200,000.00), for a total hurricane deductible of $15,000.00.

      On the morning of trial, prior to its commencement, the court orally denied AI's motion for new trial and/or rehearing of the court's previous grant of summary judgment in favor of Underwriters dismissing AI's claim that Underwriters acted in bad faith or was arbitrary and/or capricious when it misrepresented the Policy's hurricane deductible.

      The denial of AI's motion for new trial and/or rehearing was never reduced to a written judgment.

      La. R.S. 22:1892 requires an insurer to "pay the amount of any claim due any insured within thirty days after receipt of satisfactory proofs of loss from the insured or any party in interest." See La. R.S. 22:1892. But even when an insurer fails to make a timely payment within the terms of Section 22:1892, "such failure [must be] found to be arbitrary, capricious, or without probable cause" before an insurer will be subjected to a penalty. Id. La. R.S. 22:1973 places duties on property insurers "to adjust claims fairly and promptly and to make a reasonable effort to settle claims with the insured or the claimant, or both" within "sixty days after satisfactory proofs of loss." See La. R.S. 22:1973.

      At trial, Mr. Zughayer presented evidence regarding damages to the building that he claimed were sustained in Hurricane Isaac, which included purported damage to exterior signs, fuel pumps, the air conditioning/refrigeration unit, and to the roof. The trial court ruled that the evidence was insufficient to prove any of these alleged damages to the building. On appeal, AI has abandoned all building damage claims except for damages to the building's roof.

      Mr. Burr explained that he does not keep any business records for more than three years.

      In an affidavit dated July 12, 2017, which was attached to AI's opposition to Underwriters' motion for summary judgment, Mr. Burr attested to the following, in pertinent part: "[A]ffiant was given Zegar, Inc. check # 3002, drawn on Chase Bank payable to 'LA 1 Roofing' in the amount of $28,200.00 ... [which] represents payment for repairs to the roof at or upon Mike's Food Mart ... necessitated by Hurricane Isaac."

      No explanation was ever given as to why the check was made payable to LA 1 Roofing, a party that never appeared at trial, when A-1 Steel Erectors, a completely different company, had prepared the estimate, and Bobby Burr claimed to have completed the repairs. Also, there was no explanation provided as to why the check was made out for $28,200.00, when A-1's estimate was for $32,842.00 and Mr. Burr claimed to have provided Mr. Zughayer with an estimate totaling $27,000.00.

      Mr. Zughayer conceded that the batteries and the 12 smokeless tobacco items listed on the invoice were not damaged, and he clarified that these items were not part of his claim, and that he was not seeking the cost for replacing these items.

      A copy of the invoices and receipt, though properly admitted into evidence at trial, are not contained in the record on appeal.