Global Oil Tools, Inc. v. Barnhill et al

Filing 172

ORDER & REASONS: granting in part and denying in part 145 Consolidated Defendants' Motion to Dismiss as set forth in document. The Barnhills are GRANTED leave to amend their pleadings in accordance with this Order. The Barnhills must submi t an amended complaint to this Court within twenty-one (21) days of entry of this Order. Failure to amend within the required period will result in certain dismissals re case 12-1507 and case 12-3041 as set forth in document. Signed by Judge Carl Barbier on 6/14/13. (Reference: 12-1507, 12-3041)(sek, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

GLOBAL OIL TOOLS, INC.

CIVIL ACTION

VERSUS

NO: 12:1507 C/W
12-3041
REF: ALL CASES

BARNHILL, ET AL.

SECTION: "J” (4)

ORDER AND REASONS
Before the Court are Consolidated Defendants’1 Motion to
Dismiss

(Rec.

Doc.

145),

Consolidated

Plaintiffs’2

opposition

thereto (Rec. Doc. 159), and Consolidated Defendants’ reply to
same (Rec. Doc. 167). Consolidated Defendants’ motion was set for
hearing on April 10, 2013, on the briefs. The Court, having
considered the motion and memoranda of counsel, the record, and
the applicable law, finds that motion should be GRANTED in part
and DENIED in part for the reasons set forth more fully below.
1

As used herein, “Consolidated Defendants” refers to Global Oil Tools,
Inc., Lyamec Corp., Global Oil Libya, Inc., and Ray Ghariani.
2

As used herein, “Consolidated Plaintiffs” refers to Wilfred, Diane, and
Brian Barnhill, and Down-Hole Surface Manufacturing, LLC. These Consolidated
Plaintiffs may also be referenced as “the Barnhills.”

1

PROCEDURAL HISTORY AND BACKGROUND FACTS
This consolidated action arises out of claims brought under
the Racketeer Influenced and Corrupt Organizations Act (“RICO”),
18 U.S.C. § 1962 et seq., the Lanham Act, 15 U.S.C. § 1125 et
seq., state law claims for breach of fiduciary duties, civil
fraud,

misappropriation

and

conversion,

tortious

interference

with business relations, and claims under the Louisiana Unfair
Trade Practices Act, La. Rev. Stat. § 51:1401 et seq. On July 13,
2012, Global Oil Tools, Inc. (“Global Oil”) filed Civil Action
No.

12-1507,

naming

Wilfred,

Diane,

and

Brian

Barnhill,

and

Downhole-Surface Manufacturing, LLC, Global International Tools,
Denise Leblanc, and Daniel Triche as Defendants.
On November 28, 2012, Wilfred, Diane, and Brian Barnhill
filed a separate suit in the 32nd Judicial District Court for the
Parish of Terrebonne naming Global Oil, Lyamec Corp. (“Lyamec”),
and Global Oil Tools Libya, Inc. (“Global Libya”) as Defendants.
The state court suit alleged that the Defendants were liable for
breach of contract, return of stock, and unpaid wages claims. On
December 27, 2012, the Consolidated Defendants removed the state
action to this Court as Civil Action No. 12-3041. Case No. 123041 was consolidated with the previously filed case, No. 121507, on January 4, 2013. Case No. 12-1507 became the lead case

2

in this matter.
On January 10, 2013, Wilfred, Diane, and Brian Barnhill, and
Downhole-Surface Manufacturing, LLC

filed a

Counterclaim and

Third-Party Demand (“CC/TP DEMAND”) in case No. 12-1507. The
Barnhills’ CC/TP DEMAND incorporated all of the allegations from
the petition in case No. 12-3041 as counterclaims in case No. 121507, thereby adding Lyamec and Global Libya as parties to No.
12-1507. Furthermore, the CC/TP DEMAND specifically added Ray
Ghariani

as

a

Third-Party

Defendant,

and

also

brought

an

additional counterclaim, Count V, which alleged fraud as to all
of

the

Libya),

newly
the

added

counterclaim

third-party

parties

defendant

(Ray

(Lyamec

and

Ghariani),

Global

and

the

opposing party (Global Oil).
For the purposes of this Order, the Court will describe the
facts and claims in this case as taken from the Barnhills’ CC/TP
DEMAND and their petition in case No. 12-3041. Those facts are as
follows.
Global Oil is a company that manufactures wireline tools and
downhole flow control systems for the oil and gas industry. In
2005, Grifco International, Inc. (“Grifco”) purchased Global Oil
pursuant to a Definitive Acquisition and Purchase Agreement. At
the time of the purchase, James Dial was the president of Grifco

3

and

Wilfred

Barnhill

was

the

president

of

Global

Oil.

The

Barnhills report that as part of the agreement, Wilfred Barnhill
was to receive consideration valued at $4,300,000 in cash and
stock. If he did not receive the full consideration, then Global
Oil was to be returned to him in full ownership. The Barnhills
assert

that

Wilfred

consideration.

Barnhill

Wilfred,

was

Diane,

paid

and

$1

Brian

million
Barnhill

of

the

remained

employees of Global Oil after the sale.
At some point after Grifco purchased Global Oil, Lyamec
acquired ownership of Global Oil from Grifco.3 Wilfred and Brian
Barnhill remained in their respective positions following the
acquisition. In 2006, the Barnhills report that Grifco refused to
close the deal to purchase Global Oil and reduced its offer to
$2.2

million

plus

$3.7

million

in

shares

of

Grifco

stock.

Therefore, on May 31, 2006, the parties entered an “Addendum” to
the

Definitive

Addendum,

half

Acquisition
of

the

and

Grifco

Purchase
stock

that

Agreement.
had

been

Under

the

issued

to

Wilfred Barnhill for purchase of Global Oil “became free and
clear to exchange at a guaranteed strike price of a minimum of

3

At the time that Lyamec acquired ownership of Global Oil, Ray Ghariani
was the reported owner of Lyamec as well as Global Libya. The Barnhills allege
that via this purchase, Lyamec became the lawful successor in interest to Grifco.
They also allege that in the alternative, Lyamec, Global Oil, Global Libya, and
Grifco are all alter egos of each other and/or are a single business enterprise.

4

0.35 cents per share and the remaining half became free and clear
to exchange on the same terms on the second anniversary date.”4
The

Barnhills

report

that

“[t]thereafter,

Grifco

and

Lyamec,

through Ghariani, through various misrepresentations, convinced
[Wilfred] Barnhill to exchange his Grifco stock for shares in
Global Libya.”5
On

December

14,

2006,

Wilfred

Barnhill

entered

into

a

Voluntary Stock Assignment Agreement with Global Libya, becoming
the owner of 901,000 shares of Global Libya’s stock. In 2007, due
to James Dial’s resignation, Ray Ghariani became Global Oil’s
Director and President.6
The Barnhills report that they resigned from their positions
at

Global

Oil

in

2012.

They

assert

that

at

the

time

of

resignation, Global Oil owed all three of them thousands of
dollars of unpaid wages and unused vacation time. They contend
that despite repeated demands, Global Oil has refused to pay them
these wages. Likewise, Wilfred Barnhill asserts that on September
13, 2012, he sent a written request to Global Libya to redeem his

4

Petition, No. 12-3041, Rec. Doc. 1-1, pp. 3-4 ¶ 22.

5

Petition, No. 12-3041, Rec. Doc. 1-1, p. 4 ¶ 23.

6

The Barnhills note that James Dial resigned from his position due to
fraud charges on which he was later convicted. Petition, No. 12-3041, Rec. Doc.
1-1, pp. 4-5 ¶¶ 27 - 31.

5

shares of Global Libya stock pursuant to the Voluntary Stock
Assignment Agreement. He contends that he has never received a
response.

He

further

asserts

that

he

never

received

full

consideration for the sale of his original Global Oil stock to
Grifco.
Count I of the Barnhills’ petition and CC/TP DEMAND seeks
specific

performance

for

a

breach

of

contract

claim

against

Global Libya. Specifically, it seeks specific performance of the
redemption of Wilfred Barnhill’s Global Libya stock. Likewise,
the

Barnhills’

also

assert

that

interest to, alter ego of, and/or

Lyamec

is

the

successor

in

a single business enterprise

with Global Libya and, therefore, is liable

to Wilfred Barnhill

as well.
Count II of the Barnhills’ petition and CC/TP DEMAND asserts
a claim for the return of Global Oil Stock to Wilfred Barnhill
from

Lyamec.

Specifically,

it

asserts

that

the

Definitive

Acquisition Purchase Agreement is a binding contract that was
entered into between Wilfred Barnhill and Grifco as well as
Grifco’s successors and assigns. The Barnhills state that “[o]n
information and belief, Lyamec is the assignee and/or successor
in interest to Grifco and/or Grifco is the alter ego of Lyamec
and/or

Lyamec

and

Grifco

constitute

6

a

single

business

enterprise.”7

Thus,

the

Barnhills

assert

that

under

the

Definitive Acquisition and Purchase Agreement Wilfred Barnhill
has never received full compensation owed to him for the sale of
stock and, as such, Lyamec must return the stock to him.
Count

III

of

the

Barnhills’

petition

and

CC/TP

DEMAND

asserts various claims for unpaid wages and vacation pay. Count
IV asserts a claim for statutory penalties and attorney’s fees
based on those same unpaid wages claims.
On March 5, 2013, the Consolidated Defendants filed the
instant Motion to Dismiss. The Barnhills’ responded on April 1,
2013, with the Consolidated Defendants replying on April 10,
2013.
On June 14, 2013 in an order and reasons issued concurrently
with the instant Order, the Court found that Global Oil had been
improperly joined to the Barnhills’ state court petition. As
such, it severed Counts III and IV, the Barnhills’ claims against
Global Oil for unpaid wages, vacation pay, statutory penalties,
and attorney’s fees,

from case No. 12-3041, leaving only Lyamec

and Global Libya as Defendants in that suit. Accordingly, with
reference to case No. 12-3041, the Court only addresses Counts I
and II. As to case No. 12-1507, the Court will address all claims

7

Petition, No. 12-3041, Rec. Doc. 1-1, p. 7 ¶ 54.

7

(Counts I - V), even those that were severed from case No. 123041, since they were incorporated prior to severance.
THE PARTIES’ ARGUMENTS
The Consolidated Defendants request that the Court dismiss
the

Barnhills’

petition

in

CC/TP

suit

DEMAND

No.

in

suit

12-3041.

The

No.

12-1507

Consolidated

and

their

Defendants

contend that the Barnhills have failed to state a claim upon
which

relief

can

be

granted

in

both

actions.

First,

the

Consolidated Defendants argue that any and all claims related to
the Definitive Acquisition Purchase Agreement were previously
settled

between

the

parties

and,

therefore,

abandoned.

This

argument specifically refers to Count II. In support of this
argument,

the

Consolidated

Defendants

introduce

a

settlement

agreement between Wilfred Barnhill, Grifco, and James Dial. The
Consolidated

Defendants

assert

that

the

Court

may

take

this

agreement into consideration under its Rule 12(b)(6) analysis
because it is central to the Barnhills’ claims.
In addition, the Consolidated Defendants argue that Count II
should be dismissed because (1) Lyamec is not a party to the
Definitive Acquisition and Purchase Agreement; (2) the Barnhills
have

not

alleged

sufficient

facts

to

show

that

Lyamec

is

a

successor in interest, alter ego, or single business entity of

8

any

person/organization

that

was

a

party

to

the

Definitive

Acquisition and Purchase Agreement; (3) the execution of the
Voluntary

Stock

Assignment

Agreement

relieved

Grifco

of

any

obligations under the Definitive Acquisition Purchase Agreement;
and

(4)

the

Voluntary

Stock

Assignment

Agreement

effected

a

novation of the Definitive Acquisition and Purchase Agreement.
First, the Consolidated Defendants contend that under Texas
Law, the Barnhills have not alleged sufficient facts to show that
Lyamec is an alter ego of Grifco or that Grifco and Lyamec are a
single

business

entity

and,

therefore,

they

assert

that

the

corporate veil cannot be pierced. The Consolidated Defendants
argue that Texas law takes a strict approach to disregarding
corporate structure and requires that a party make a showing of
fraud

in

order

to

pierce

the

corporate

veil.

Thus,

the

Consolidated Defendants argue that because the Barnhills have not
pleaded fraud with particularity, their alter ego and single
business enterprise claims under Count II must be dismissed.
Furthermore, with regard to the Barnhills allegation that Lyamec
is

a

single

business

enterprise,

the

Consolidated

Defendants

contend that even if the theory were viable, under Texas law, you
cannot impute the contract of one organization, i.e. Grifco, to
another, i.e. Lyamec. Thus, they contend that these claims also

9

fail.
Second, the Consolidated Defendants argue that the execution
of the Voluntary Stock Assignment Agreement relieved Grifco of
any obligations under the Definitive Acquisition and Purchase
Agreement. Specifically, they contend that if Wilfred Barnhill
traded his Grifco stock for shares in Global Libya, then it is
clear that he cannot redeem the Grifco stock because he has
divested himself of it. Along these same lines, the Consolidated
Defendants also argue that because the Definitive Acquisition
Purchase

Agreement

is

governed

by

Nevada

law,8

the

Voluntary

Stock Assignment Agreement actually effected a novation of the
earlier agreement.9 The Consolidated Defendants assert that under
Nevada

law,

“‘the

substitution

of

a

new

obligation

for

an

existing one effects a novation, which thereby discharges the
parties from all of their obligations under the former agreement
inasmuch

as

such

obligations

are

extinguished

by

the

novation.’”10

8

The Definitive Acquisition Purchase Agreement contains a choice of law
clause which provides that Nevada law shall govern disputes over the contract.
Ex. 1 to Mot., Rec. Doc. 145-2, p. 17 ¶ 10.8.
9

The Consolidated Defendants also note that the Voluntary Stock Assignment
Agreement is governed by Wyoming law, which also recognizes a novation as an
agreement between all parties that discharges a valid existing obligation by
substitution of a new one. Mem. in Supp. to Mot., Rec. Doc. 145-1, p. 12n.8.
10
Mem. in Supp. of Mot., Rec. Doc. 145-1, p. 12 (quoting Nevada Bank of
Commerce v. Esquire Real Estate, Inc., 468 P. 2d 22, 23 (Nev. 1970)).

10

Next, the Consolidated Defendants assert that Count I of the
petition should also be dismissed. The Consolidated Defendants
argue that this count, which seeks the redemption of Global Libya
stock, does not state a claim against Lyamec or Global Libya. As
to Lyamec, the Consolidated Defendants assert that it is not a
party to the Voluntary Stock Assignment Agreement and, therefore,
not liable under it. Likewise, the Consolidated Defendants raise
the same arguments that they asserted in Count II with respect to
Lyamec’s status as a successor in interest, alter ego, or single
business entity. Furthermore, the Consolidated Defendants argue
that under the Voluntary Stock Assignment Agreement, resale was
only provided for in connection with any distribution or initial
public offering and it was clearly not guaranteed under the
contract.
entitled

Thus,
to

they

specific

contend

that

performance

Wilfred

under

the

Barnhill
Voluntary

is

not

Stock

Assignment Agreement.11
As to Count IV, the Consolidated Defendants assert that the
Barnhills’ claims for penalties for unpaid wages under Louisiana

11
The Consolidated Defendants also report that Counts I and II do not
mention Brian or Diane Barnhill (Count IV does), but the general prayer for
relief seeks damages on behalf of all of the Barnhills. Thus, the Consolidated
Defendants argue that, to the extent that Count I and Count II attempt to state
claims for damages on behalf of Brian and Diane Barnhill, these claims should be
dismissed. In response, the Barnhills specifically note that they never sought
or intended to seek relief for either Brian or Diane Barnhill under Counts I and
II.

11

Revised

Statute

§

23:632

must

be

dismissed

because

the

Consolidated Defendants, namely Global Oil, did not act in bad
faith

in

withholding

the

disputed

wages.

The

Consolidated

Defendants assert that because the penalties can only be awarded
where someone has acted in bad faith, Count IV fails to state a
claim because, in this case, a bona fide dispute exists as to
whether wages were owed. In support, the Consolidated Defendants
point to their own allegations against the Barnhills in case No.
12-1507

as

evidence

that

they

were

justified

in

withholding

wages.
With respect to Count V, the Barnhills’ fraud claim, the
Consolidated Defendants argue that it must be dismissed because
the settlement agreement that was executed after the Definitive
Acquisition Purchase Agreement, Addendum, and Voluntary Stock
Assignment Agreement settled all matters between the parties,
thereby precluding the current allegations of fraud with respect
to

these

contracts.

Furthermore,

the

Consolidated

Defendants

contend that the Barnhills have not alleged fraud with sufficient
particularity. Moreover, they assert that there are no specifics
with regard to any alleged misrepresentations in connection with
the

various

stock

purchases.

Likewise,

they

contend

that

in

addition to the general fraud claims contained in Count V, it

12

also contains a fraudulent mismanagement claim that is lodged
against

Ray

Ghariani

as

the

President

of

Global

Oil.

The

Consolidated Defendants assert that the Barnhills lack standing
to bring a claim for fraudulent mismanagement because they were
not shareholders of Global Oil during the time period that the
alleged mismanagement took place.
Furthermore, the Consolidated Defendants allege that all of
the claims in Count V are time barred. They assert that Count V
alleges
other

that

and

the

Jim

Consolidated

Dial

to

Defendants

acquire

Global

conspired

Oil.

The

with

each

Consolidated

Defendants assert that this fraud allegedly arose out of the
various transactions that led to Global Oil’s sale, specifically,
the three agreements mentioned
August

5,

2005,

May

31,

herein, which were executed on
2006,

and

December

13,

2006,

respectively. Thus, they assert that because fraud is governed by
a prescriptive period of one year in Louisiana, the claims are
time barred.
Next, the Consolidated Defendants assert that the entire
CC/TP DEMAND in case No. 12-1507 must be dismissed. Specifically,
the Consolidated Defendants argue that it was impermissible for
the Barnhills to incorporate the complaint from case No. 12-3041
into the CC/TP DEMAND because, although consolidated, the case

13

remained

a

separate

case.

Furthermore,

the

Consolidated

Defendants assert that under Federal Rule of Civil Procedure
13(h), a party may be added via counterclaim when the conditions
for permissive joinder under Rule 20 are satisfied. However,
Consolidated Defendants argue that a counterclaim may not be
asserted solely against a person who is not already a party to
the original action. Rather, the counterclaim must involve at
least one existing party. Thus, they assert that joining Lyamec
and Global Libya as parties via the incorporation of Counts I and
II was improper. Furthermore, the Consolidated Defendants note
that Count V of the CC/TP DEMAND, which is the only count in the
CC/TP DEMAND that was alleged against all of the parties, does
not provide an avenue for joinder because it fails to comply with
the

rules

for

permissive

joinder.

Specifically,

Consolidated

Defendants assert that the claims against all of these parties do
not arise out of the same transaction, occurrence, or series of
transactions and do not contain common questions of law or fact.
Likewise, the reiterate that Count V fails to state a claim.
Furthermore,

the

Consolidated

Defendants

argue

that

even

if

incorporation of the petition in case No. 12-3041 was proper, it
was only proper as to Counts III and IV, which meet the joinder
criteria.

14

Lastly, the Consolidated Defendants argue that the ThirdParty Demand against Ray Ghariani should be dismissed because it
is not proper pursuant to Rule 14. Specifically, they argue that
the Barnhills cannot show a basis for the Third-Party Defendant’s
liability as he owes no indemnity to the Barnhills, and his
liability is not contingent upon the main claims in the original
suit, No. 12-1507.
In response to Global Oil’s assertion that the Court may
look at the settlement agreement,
settlement

agreement

is

the Barnhills contend that the

outside

of

their

pleadings

and,

therefore, cannot be reviewed under a Rule 12(b)(6) analysis. The
Barnhills note that (1) they did not mention the settlement
agreement in their petition; (2) this action does not seek to
enforce it; and (3) they have not asserted that it has been
breached. Therefore, they contend that it is not central to their
claims and can only be introduced if the Court converts this
motion to a motion for summary judgment.
With regard to the arguments lodged against Count I, the
Barnhills assert that they have sufficiently alleged that Lyamec
is a successor in interest, alter ego and/or single business

15

enterprise

under

Texas

law.12

They

point

to

the

following

allegations as evidence thereof: (1) Lyamec exploited its control
over

Grifco;

(2)

Lyamec

acquired

control

over

Grifco

and

renegotiated the Definitive Acquisition Purchase Agreement; (3)
Lyamec made misrepresentations to Wilfred Barnhill which caused
him to exchange Grifco stock for Global Libya stock; and (4)
Lyamec “committed or conspired to commit fraud against” Wilfred
Barnhill.13 Furthermore, the Barnhills contend that Nevada law,
rather than Texas law, may actually be the appropriate law to
follow.

They

assert

that

Grifco’s

place

of

incorporation

is

Nevada, and that, under Nevada law, there is no requirement that
fraud be alleged in order to plead alter ego. Thus, the Barnhills
assert that their alter ego claim survives under either Nevada or
Texas law.
With

respect

allegations,

the

to

their

Barnhills

single

contend

that

business
Texas

enterprise
will

impose

liability on one corporation for the obligations of another in
several circumstances. Specifically, (1) where a fiction is used

12
The Barnhills make arguments under Texas law without conceding that
Texas law applies to this case. The Court notes that neither the Barnhills nor
the Consolidated Defendants make any choice of law arguments or specifically
advocate for the law they have chosen with respect to alter ego, single business
enterprise, and veil-piercing theories. Rather, both parties merely assert that
the law they rely on applies.
13

Barnhill Opp., Rec. Doc. 159, p. 8.

16

to perpetrate a fraud, (2) where a corporation is a tool or
conduit of another corporation, (3) where a corporate fiction is
used to evade an existing legal obligation, (4) where a corporate
fiction is used to perpetuate a monopoly, (5) where a corporate
fiction

is

used

to

circumvent

a

statute,

and

(6)

where

a

corporate fiction is used to protect from a crime. They claim
that one or more of those circumstances are evidenced in their
complaint and, therefore, Count II survives under Texas law.
In response to the Grifco stock redemption and novation
arguments, the Barnhills note that the Consolidated Defendants
have not cited any authority for their argument that Wilfred
Barnhill cannot redeem the Grifco stock. Furthermore, they note
that the argument is irrelevant because Wilfred Barnhill is not
seeking to recover the Grifco stock, but rather, is seeking to
recover

the

Global

Oil

stock

that

was

sold

to

Grifco

and

transferred to Lyamec. Therefore, they contend that this argument
is of no moment. Moreover, the Barnhills argue that nothing in
the Voluntary Stock Assignment Agreement modified, amended, or
superseded the Definitive Acquisition and Purchase Agreement.
They note that the Voluntary Stock Assignment Agreement does not
mention

the

Definitive

Acquisition

and

Purchase

Agreement

or

contain any language indicating that the parties entered into it

17

with

the

intent

to

release

Grifco

of

any

obligations.

The

Barnhills assert that under Louisiana law, while express or tacit
remission of a debt does extinguish an obligation, such remission
is never presumed and the burden of proving it lies with the
Consolidated

Defendants.

The

Barnhills

argue

that

the

Consolidated Defendants have not proven remission in the instant
filings and, therefore, Count II cannot be dismissed on those
grounds.
As

to

novation,

the

Barnhills

assert

that

under

either

Nevada law or Wyoming law, no novation occurred. The Barnhills
contend that in both states, the intent of the parties to cause a
novation must be clear. They argue that nothing in the pleadings,
taken in the light most favorable to them, indicates that the
parties intended for the Voluntary Stock Assignment Agreement to
act as a novation of the Definitive Acquisition and Purchase
Agreement. Thus, they assert that this argument is without merit
and that Count II cannot be dismissed on this basis.
With respect to Count I, the Barnhills argue that (1) the
Consolidated

Defendants’

positions

are

not

supported

by

the

language of the Voluntary Stock Assignment Agreement, and that
(2) the claims cannot be resolved on a 12(b)(6) motion. The
Barnhills assert that nothing in the Voluntary Stock Assignment

18

Agreement indicates that the right to redemption was premised
upon

an

initial

public

offering

or

conditional

in

any

way.

Furthermore, the Barnhills assert that these arguments look well
beyond the face of the pleadings and are not appropriate for a
motion to dismiss.
In regard to Count IV, the Barnhills contend that they have
pleaded

all

Statute

§

of

the

23:632

essential
and

elements

that

the

of

Louisiana

arguments

raised

Revised
by

the

Consolidated Defendants are merely defenses to the Barnhills’
well pleaded claims. As such, the Barnhills contend that these
arguments go to the merits and are not appropriate for a 12(b)(6)
motion.
As to Count V, the Barnhills argue that they have pleaded
fraud with particularity and that their claims should not be
dismissed.

To

the

extent

that

the

Court

may

find

that

the

Barnhills have failed to plead fraud with particularity, the
Barnhills request that the Court grant them leave to amend.
Likewise, the Barnhills also assert that they have not alleged a
derivative claim, but rather, are making a claim for their own
damages. The Barnhills contend that because Global Oil’s Amended
Complaint alleges that the Barnhills caused the financial decline
of Global Oil through fraud and mismanagement, it is only proper

19

that the Barnhills be allowed to add Ray Ghariani in order to
allege that it was in fact his mismanagement that led to Global
Oil’s

downfall.

Thus,

the

Barnhills

maintain

that

their

allegations and their addition of Ray Ghariani are proper under
Rule 14. Furthermore, the Barnhills assert that Count V is not
prescribed because they have alleged that this was a continuing
tort and/or the doctrine of contra non valentem applies.
Lastly, the Barnhills assert that their CC/TP DEMAND cannot
be dismissed for alleged technical defects in pleading. First,
citing

Rule

21,

the

Barnhills

assert

that

where

there

is

a

misjoinder, the court’s only remedies are to drop the misjoined
parties and/or sever misjoined claims, allowing them to proceed
on

their

own.

Consolidated

Thus,

the

Defendants’

Barnhills
arguments

assert
with

that

regard

even
to

if

the

improper

joinder have merit, the Court could not dismiss on that basis.
Likewise, the Barnhills also note that Rule 10(c) specifically
allows for incorporation by reference, thereby indicating that
the Court should accept their incorporation of the counts from
case No. 12-3041. Furthermore, the Barnhills assert that even if
the incorporation was improper, they should be allowed to amend
their

CC/TP

DEMAND

because

“[m]ere

20

technical

defects

in

a

pleading do not provide a basis for dismissal.”14 Additionally,
the

Barnhills

question

of

assert

law

or

that
fact,

Rule
and

20
it

only
does

requires
not

one

require

common

that

all

questions of law and fact be common. Thus, the Barnhills assert
that there is overlap among their claims and the newly added
parties

and,

therefore,

all

of

these

parties

have

been

permissively joined. Lastly, the Barnhills assert that they have
properly pleaded their Third-Party Demand against Ray Ghariani
under Rule 14.
DISCUSSION
A. Legal Standard
Under the Federal Rules of Civil Procedure, a complaint must
contain “a short and plain statement of the claim showing that
the pleader is entitled to relief.”

FED. R. CIV. P. 8(a)(2).

The

complaint must “give the defendant fair notice of what the claim
is and the grounds upon which it rests.”
Broudo, 544 U.S. 336, 346 (2005).
simple, concise, and direct.”

Dura Pharm., Inc. v.

The allegations “must be

FED. R. CIV. P. 8(d)(1).

To survive a Rule 12(b)(6) motion to dismiss, the plaintiff
must plead enough facts to “state a claim to relief that is

14

Barnhill Opp., Rec. Doc. 159, p. 21 (quoting Jones v. State of La.
through Bd. of Tr. for State Coll. & Univs., 764 F.2d 1183, 1185 (5th Cir.
1985)).

21

plausible on its face.”

Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547
(2007)).

A claim is facially plausible when the plaintiff pleads

facts that allow the court to “draw the reasonable inference that
the defendant is liable for the misconduct alleged.”

Id.

A

court must accept all well-pleaded facts as true and must draw
all reasonable inferences in favor of the plaintiff.

Lormand v.

U.S. Unwired, Inc., 565 F.3d 228, 232-33 (5th Cir. 2009); Baker
v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996).

The court is not,

however, bound to accept as true legal conclusions couched as
factual allegations.

Iqbal, 556 U.S. at 678. “The purpose of a

motion to dismiss, pursuant to Rule 12(b)(6) of the Federal Rules
of Civil Procedure is to test the sufficiency of the complaint,
not to judge the merits of the case.” First National Bank of
Louisville v. Lustig, 809 F. Supp. 444, 446 (E.D. La.1992).
“Dismissal is appropriate only if the district court could not
afford relief to the plaintiff under any set of facts consistent
with the allegations in the complaint.” Shaffet v. Marquette
Transp. Co., LLC, No. 10-54, 2010 WL 3943647, at *2 (E.D. La.
Oct. 1, 2010) (citing Westfall v. Miller, 77 F.3d 868, 870 (5th
Cir. 1996)).

22

B. Analysis
Before

proceeding

with

its

substantive

analysis

of

the

Barnhills’ claims, the Court addresses a few threshold issues in
this matter. First, for the purposes of the instant 12(b)(6)
motion,

the

Court

will

not

take

the

settlement

agreement

introduced by the Consolidated Defendants into consideration. The
settlement

agreement

was

neither

mentioned

in

the

Barnhills’

complaint, nor is it central to, the Barnhills’ claims.15 As
such, it is extrinsic evidence that is not appropriate under a
12(b)(6) analysis. See Fed. R. Civ. Proc. 12(d) (noting that
under Rule 12(b)(6), matters outside of the pleadings must be
excluded by the court or the motion must be treated as one for
summary

judgment).

Definitive

However,

Acquisition

and

the

Purchase

Court

will

Agreement,

consider

the

Addendum,

and

Voluntary Stock Assignment Agreement, as all of these documents
are directly referenced in the petition/CC/TP DEMAND and form the
basis of the Barnhills’ claims. Collins v. Morgan Stanley Dean

15

In particular, the Court notes that Global Oil cites Borders v. Chase
Home Financial LLC, No. 09-3020, 2009 WL 1870916, at *1 (E.D. La. June 29, 2009),
in support of its argument. In Borders, the action actually concerned the breach
of the settlement agreement. Therefore, as the entire case rested on the
settlement agreement itself, it was central to the plaintiff’s claims. Unlike
Borders, the instant action involves claims for breach of contract and return
of Global Oil stock, not a breach of the settlement agreement. Thus, while the
settlement agreement may be probative evidence of whether such stock needs to be
returned, it is not essential to a determination before the Court, and is
extrinsic to the pleadings.

23

Witter, 224 F.3d 496, 498 (5th Cir. 2000) (noting that documents
attached to a motion to dismiss may be considered to be part of
the

pleadings

when

they

are

referenced

in

the

plaintiff’s

complaint and are central to the plaintiff’s claim).
Second, the Court addresses the Consolidated Defendants’
arguments regarding incorporation by reference. Federal Rule of
Civil Procedure 10(c) provides that, “[a] statement in a pleading
may be adopted by reference elsewhere in the same pleading or in
any other pleading or motion.” Fed. R. Civ. Proc. 10(c). Rule
10(c) is not expressly limited to pleadings in the same action;
however, as the Consolidated Defendants noted in their reply, on
at least one occasion, the Fifth Circuit has held that a party
could not adopt a cross claim that was posed in a separate
action. See Texas Water Supply Corp. v. RFC, 204 F.2d 190, 197
(5th Cir. 1953). In Texas Water Supply Corp., the court found
that a party’s reference to claims brought in

a separate action

proceeding before a different court was not sufficient to raise a
claim in the suit before it. Id.
This Court finds that the instant case is distinguishable
from Texas Water Supply Corp. In particular, the Court notes
that, although the pleading in case No. 12-3041 was a pleading in
a separate case from case No. 12-1507, No. 12-3041 had been

24

consolidated with case No. 12-1507 for pretrial purposes. As
such, the cases share the same docket sheet and file under the
same

case

separate

number.

for

Thus,

judgment

while

purposes,

the
their

cases

themselves

pretrial

remain

pleadings

and

filings are all concentrated in one location. Accordingly, in
this instance, the Court does not find that incorporating the
allegations of case No. 12-3041 by reference was fatal to the
Barnhills’ CC/TP DEMAND. Likewise, even though the Court has
severed Counts III and IV from case No. 12-3041, at the time that
they were incorporated into the CC/TP DEMAND they were before
this

Court

and,

as

has

been

explained,

located

in

one

consolidated docket. Thus, the Court will consider them as well.
While the Court, in its discretion, has chosen to allow this form
of pleading in the instant matter, it cautions the Barnhills that
this kind of “shotgun pleading” is not favored, and will likely
be ignored in the future.
1. CC/TP DEMAND
Accordingly, the Court moves on to its substantive analysis
of the Consolidated Defendants’ arguments, beginning with Count V
of the CC/TP DEMAND.

The Consolidated Defendants argue that the

Barnhills’ fraud claim fails because they have failed to plead it
with particularity. This Court agrees.

25

When a party pleads claims of fraud, such claims must be
plead with particularity. FED. R. CIV. P. 9(b). The claimant must
assert

more

than

mere

conclusory

allegations

or

technical

elements. Id. The claim must contain “particularized allegations
of time, place, and contents of the false representations, as
well as the identity of the person making the misrepresentation.”
Castillo v. First City Bancorporation of Texas, Inc., 43 F.3d
953, 961 (5th Cir. 1994) (citing Tel-Phonic Servs., Inc. v. TBS
Int’l, Inc., 975 F.2d 1134, 1139 (5th Cir. 1992)).
Count

V

of

the

Barnhills’

CC/TP

DEMAND

alleges

that

“Counterclaim/Third-Party Defendants committed or conspired to
commit fraud against the [Barnhills].”16 Notably, other than this
statement, the Barnhills do not explain who committed the fraud,
i.e.

what

individual,

when

the

fraud

was

committed,

what

misrepresentations were made, and where they were made.17 Such
allegations

are

wholly

insufficient

under

Rule

9(b).

Nevertheless, the Court notes that “although a court may dismiss

16

No. 12-1507, Rec. Doc. 124, p. 26 ¶ 52.

17
To the extent that the Barnhills have argued that the pertinent
misrepresentation was that Grifco promised it would pay the full contracted
amount and failed to do so, the Court does not find that this is sufficient to
state a claim for fraud. If such broad allegations satisfied the Rule 9(b)
particularity standard , then all breach of contract claims would necessarily
include an overarching claim for fraud. In this context, the Barnhills allegation
of misrepresentation is merely reiterates their claim that the Consolidated
Defendants breached their contract(s).

26

[a] claim [for failure to plead with particularity], is should
not do so without granting leave to amend, unless the defect is
simply

incurable

or

the

plaintiff

has

failed

to

plead

with

particularity after being afforded repeated opportunities to do
so.” Hart v. Bayer Corp., 199 F.3d 239, 248n.6 (5th Cir. 2000).
As such, because it is possible that the Barnhills could properly
plead

their

fraud

claim,

the

Court

finds

that

rather

than

dismissing Count V, the proper course of action is to allow the
Barnhills’ leave to amend Count V in order to attempt to cure the
defects in the claim.
Having found that Count V is insufficient, the Court is
faced with an interesting dilemma. Count V is the only claim
which includes an existing party, Global Oil, as well as the new
parties that the Barnhills joined via the CC/TP DEMAND, namely,
Lyamec and Global Libya. Accordingly, without Count V, there is
no basis for either Lyamec or Global Libya to remain joined to
this

suit.

As

the

Court

discussed

in

its

related

Order

and

Reasons regarding subject matter jurisdiction, Counts I and II
are wholly separate from any claims against Global Oil and pose
no

joint

or

several

liability.

While

they

may

be

an

early

precursor to the R.I.C.O. and Lanham Act claims alleged in case
No. 12-1507, they do not arise out of those claims; they do not

27

relate to them; and they do not meet the rules for permissive
joinder under Rule 20.18 Therefore, Lyamec and Global Libya are
not proper counter claimants or cross claimants in case No. 121507.19
Under Rule 21, where a party has been misjoined, the court
“may at any time, on just terms, add or drop a party.” Fed. R.
Civ. Proc. 21. Because these claims could not have been brought
absent Count V, and because the Court has found that Count V is
insufficient, the Court finds that it is appropriate to drop both
Lyamec and Global Libya from the instant action. Furthermore,
although the Barnhills have argued that the proper action is not
dismissal,

but

rather,

severance

with

the

opportunity

to

be

afforded a separate suit, the Court notes that the Barnhills will
not be prejudiced if the Court drops their claims against Lyamec
and

Global

Libya

from

suit

No.

12-1507.

The

Barnhills

have

asserted these exact claims against Lyamec and Global Libya in
case No. 12-3041; thus, the Barnills may pursue their claims in
that suit. Furthermore, dismissing these parties, even without
18
For a more complete discussion of permissive joinder, See June 14 2013
Order and Reasons on Subject Matter Jurisdiction; see also Fed. R. Civ. Proc. 13
(explaining that a party may bring a counterclaim against an opposing party and
that a crossclaim may be brought against a coparty only if it “arises out of the
transaction or occurrence that is the subject matter of the original action or
of a counterclaim”).
19
They are also not proper Third-Parties because the Barnhills cannot
recover from them in the event that they lose their case against Global Oil.

28

the existence of case No. 12-3041, does not violate Rule 21
because it is not a complete dismissal of the action, i.e. the
entirety of case No. 12-1507.20 Thus, the Court will dismiss
Lyamec and Global Libya from case No. 12-1507. The Court notes,
however, that this dismissal will be without prejudice as it is
possible that the Barnhills may effectively replead Count V.
The Court also finds that the Barnhills’ claims against Ray
Ghariani must be dismissed.21 Under Rule 14(1), a third-party
demand may be brought against “a nonparty who is or may be liable
to [a defendant] for all or part of the claim against it.” Fed.
R. Civ. Proc. 14(1). Even assuming that the allegations in the
Barnhills’ CC/TP DEMAND are true, the Barnhills’ allegations do
not set out a claim upon which they can obtain relief. As the
Consolidated Defendants have noted, the Barnhills’ allege that
Ray Ghariani is liable

to them for fraudulently mismanaging

Global Oil. Allegations of mismanagement are derivative claims

20

Rule 21 provides that,

Misjoinder of parties is not a ground for dismissing an action. On
motion or on its own, the court may at anytime, on just terms, add
or drop a party. The court may also sever any claim against a party.
21

The Court is cognizant that the only count lodged against him is Count
V, which, as the Court has noted, is insufficient; however, the Court finds it
pertinent to address Ray Ghariani specifically because the CC/TP DEMAND asserts
factual allegations which indicate that he “fraudulently mismanaged” Global Oil.
These facts are alleged outside of the scope of Count V and, therefore, the Court
addresses them specifically.

29

that are only available to shareholders of a corporation. Crochet
v. Cisco Sys., Inc., No. 2002-1357 (La. App. 3 Cir. 5/28/03); 847
So. 2d 253, 256 (“‘The general rule is that the right to an
action against officers and directors for mismanagement or fraud
that

causes

loss

to

the

corporation

is

an

asset

of

the

corporation and may be asserted secondarily by a shareholder
through

a

shareholder’s

derivative

suit.’”(quoting

Landry

v.

Thibaut, 523 So. 2d 1370, 1376 (La. App. 5 Cir. 1988)).22 None of
the Barnhills were shareholders at the time that the alleged
mismanagement occurred. As such, they cannot recover, even if Ray
Ghariani did mismanage Global Oil. Rather, as the Consolidated
Defendants have explained, the Barnhills have asserted a defense
to the claims that Global Oil has lodged against them. While the
Barnhills are certainly allowed to assert defenses, they are not
permitted to join Third-Party Defendants against whom they cannot
recover in order to assert those defenses. Thus, the Court finds
that Ray Ghariani and the claims against him should be dismissed
for failure to state a claim.
Lastly, with regard to Count IV of the CC/TP DEMAND, the
Court finds that the Barnhills have effectively stated a claim

22

The Court notes that the Consolidated Defendants cited to Louisiana law
when discussing the claims against Ray Ghariani. The Barnhills did not propose
any particular state’s law. As such, the Court looks to Louisiana law.

30

against Global Oil. In order to state a claim under Louisiana
Revised Statute § 23:632, a plaintiff must allege that “(1) wages
were due and owing; (2) demand for payment was made where the
employee was customarily paid; and (3) the employer did not pay
upon demand.” Culotta v. Sodexo Remote Sites P'ship, 864 F. Supp.
2d 466, 477 (E.D. La. 2012) (internal quotations omitted). As the
Barnhills aptly pointed out, the Consolidated Defendants concede
that

the

Barnhills

have

alleged

these

requisite

elements.23

Accordingly, the Barnhills’ allegations are sufficient to survive
a

Rule

12(b)(6)

motion.

arguments

that

Count IV

are actually arguments that go to the merits of the

the

Moreover,

Consolidated

the

Court

Defendants

notes

did

that

raise

the

against

claims. These arguments that are not appropriate for a rule
12(b)(6) motion and will not be considered.
2. Petition Case No. 12-3041
i.

Count II

Next, the Court looks at the sufficiency of Count II of case
No. 12-3041. The Consolidated Defendants argue that Count II
fails because the Barnhills have failed to sufficiently plead
that Lyamec is a successor in interest to, alter ego of, or

23

See Mem. in Supp. of Mot., Rec. Doc. 145-1, p.15 (“Barnhills allege that
in March 2012 and November 2012, they demanded payment for wages and unused
vacation, respectively, and that Global Oil Tools refused to pay.”).

31

single business entity with Grifco under Texas law. In response,
the

Barnhills

assert

that

they

have

successfully

pleaded

successor in interest, alter ego, and single business entity
theories

under

Texas

law,

applicable law to this suit.

and/or

that

Nevada

law

is

the

“When faced with a conflict of law

issue, a federal court, sitting in diversity, is bound to apply
the conflict of laws rules prevailing in the state in which the
federal court sits.” Klaxon Co. v. Stentor Elec. Mfg. Co., 313
U.S. 487, 496 (1941). Therefore, this Court must look at the
Louisiana conflicts of law rules to determine which state’s law
is applied. Truxillo v. Johnson & Johnson, No. 07-2883, 2007 WL
1853363, at *2-4 (E.D. La. June 27, 2007). Louisiana choice of
law rules have been codified in Louisiana’s Civil Code. They
state that,

Except as otherwise provided in this Book, an issue in
a case having contacts with other states is governed by
the law of the state whose policies would be most
seriously impaired if its law were not applied to that issue.

That state is determined by evaluating the strength and
pertinence of the relevant policies of all involved

32

states in the light of: (1) the relationship of each
state to the parties and the dispute; and (2) the
policies and needs of the interstate and international
systems,

including

the

policies

of

upholding

the

justified expectations of parties and of minimizing the
adverse consequences that might follow from subjecting
a party to the law of more than one state.

La. Civ. Code Ann. art. 3515.
Because

the

Louisiana

Civil

Code

does

not

provide

any

specific rules for determining which state’s law applies to the
claims at issue in this suit, the default rule applies.
In the instant case, neither party has expressly briefed the
relevant policies underlying Texas or Nevada law with respect to
alter ego. However, it does appear that the two states differ in
their treatment of these areas of law. In particular, Texas’s law
is more restrictive, requiring an actual showing of fraud in
connection with an alter ego claim, as well as a single business
enterprise

claim.

Texas

also

requires

that

a

successor

in

interest expressly assume the liabilities of its predecessor. In
contrast, Nevada only requires that there be a sufficient showing
of shared control and overlap between companies for an alter ego

33

and single business enterprise claim.
While the Court does not have extensive briefing on the
policies behind each states’ laws, the parties do discuss the
relationship of each state to the parties in the dispute. Of
importance, Lyamec, the party facing liability under Count I, is
incorporated

in

Texas.

Lyamec

has

no

known

ties

to

Nevada.

Grifco, the alleged predecessor to Lyamec and the actual party to
the Definitive Acquisition and Purchase Agreement is incorporated
in Nevada. However, the Court notes that Grifco is not a party to
this suit and faces no potential liability under the allegations
in the petition. As such, the Court finds that the only relevant
relationship is the relationship between Lyamec and Texas, and it
is clear that Texas, like any state, has an interest in the
treatment

of

its

corporations.

Nevada,

however,

has

little

interest in the treatment of an entity that was not formed under
its laws. Thus, the Court finds that Texas has a greater interest
in determining whether Lyamec is an alter ego of Grifco and that,
as to the claims lodged against Lyamec, Texas law should apply.
The United States District Court for the Southern District
of Texas explained Texas law regarding corporate successors in
interest as follows,

34

Texas

law

liability

does
for

assets.There

not

generally

subsequent

is

no

recognize

purchases

successor

in

of

successor
corporate

interest

when

the

acquiring corporation did not expressly agree to assume
the liabilities of the party to the agreement because
successor

has

a

specialized

meaning

beyond

simple

acquisition. . . .

Furthermore

the

Texas

legislature

has

refused

to

recognize the theory that a successor corporation is a
mere continuation of its predecessor as an exception to
the traditional rule that a successor corporation does
not assume the liabilities of a predecessor. Section
10.254 provides,

(a) A disposition of all or part of the property of a
domestic entity, regardless of whether the disposition
requires

the

approval

of

the

entity's

owners

or

members, is not a merger or conversion for any purpose.

(b) Except as otherwise expressly provided by another
statute, a person acquiring property described by this

35

section may not be held responsible or liable for a
liability or obligation of the transferring entity that
is not expressly assumed by the person.

Allied Home Mortgage Corp. v. Donovan, 830 F. Supp. 2d 223, 233
(S.D. Tex. 2011).
Thus, in order for an entity to face liability as a successor
in interest in Texas, a plaintiff must allege that the entity
expressly assumed the predecessor’s liabilities and obligations.
In the instant matter, the Barnhills have not alleged that Lyamec
expressly

assumed

Grifco’s

obligations

when

it

allegedly

purchased Grifco and/or Global Oil’s stock. Therefore, on the
face of the petition, the Barnhill’s successor in interest claim
is insufficient. However, to the extent that the Barnhills could
successfully

plead

their

claim,

the

Court

finds

that

it

is

appropriate to grant them leave to amend, rather than to dismiss.
With respect to alter ego, Texas law provides that, in order
to show that an entity is liable as an alter ego, a plaintiff
must demonstrate, in pertinent part, that,

the holder, beneficial owner, subscriber, or affiliate
caused the corporation to be used for the purpose of

36

perpetrating and did perpetrate an actual fraud on the
obligee primarily for the direct personal benefit of
the holder, beneficial owner, subscriber, or affiliate.

Tex. Bus. Org. § 21.223( b)(emphasis added). As the Court has
already

noted,

the

misrepresentation

do

Barnhills
not

meet

allegations
the

standard

of
of

fraud

and

particularity

required by Rule 9(b) and, therefore, are also not sufficient for
the purposes of meeting all of the elements of alter ego required
by the Texas statute. As such, their allegations of alter ego
fail to state a claim under Texas law. However, as the Court
noted

in

its

earlier

discussion

of

the

Barnhills’

pleading,

because it is possible that the Barnhills could properly plead
the fraud elements of their alter ego claim, the Court will grant
them leave to amend.
Furthermore,

the Texas Supreme Court has made it clear that

entities will not be held jointly liable merely because there is
a

significant

overlap

in

their

operations.

SSP

Partners

v.

Gladstrong Investments (USA) Corp., 275 S.W. 3d 444, 456 (Tex.
2009) (“We hold that the single business enterprise liability
theory . . . will not support the imposition of one corporation’s
obligations on another.”). Thus, the Court finds that the single

37

business enterprise theory is insufficient to impose Grifco’s
liability on Lyamec and, accordingly, must be dismissed.
Lastly, to the extent that the Consolidated Defendants have
asserted that the Voluntary Stock Assignment Agreement displaces
and/or

preempts

the

Definitive

Purchase

Agreement,

the

Court

finds that these two contracts are two separate agreements. In
particular, nothing in the Voluntary Stock Assignment Agreement
references the Definitive Acquisition Purchase Agreement or the
Addendum such that it would signal the parties’ intent to have
the Voluntary Stock Assignment Agreement supercede the previous
agreement.

As

such,

the

Court

finds

that

the

Consolidated

Defendants’ arguments fail on this point.
ii.

Count I

Consolidated Defendants also argue that Count I fails to
properly assert a claim for Breach of Contract and/or Specific
Performance. First, the Consolidated Defendants argue, as they
did in Count II, that the Barnhills have failed to sufficiently
allege that Lyamec is a successor in interest, alter ego, or
single business enterprise of Global Libya. This Court agrees for
the reasons previously stated in its discussion of Count II.
Therefore, the Court finds that Count I fails to state a claim
against Lyamec. However, as noted, the Barnhills will be granted

38

leave to amend this claim with respect to Lyamec’s status as a
successor in interest to Global Libya and/or as an alter ego of
Global Libya.
While the Court finds that the Barnhills have failed to
sufficiently plead their claim against Lyamec, it does, however,
find that the Barnhills have successfully stated a claim against
Global
Wilfred

Libya.

In

Barnhill

Assignment

particular,
contracted

Agreement.

Global

the
for
Libya

Barnhills
under
was

the
the

seek

stock

Voluntary
signatory

that
Stock

to

the

contract, and the contract provides for a redemption of stock.
The Barnhills have alleged that they have requested to have the
stock redeemed and that Global Libya has not complied. Thus, the
Court finds that the Barnhills have sufficiently stated a breach
of contract claim against Global Libya.24

For the foregoing reasons,

24
The Court finds that Consolidated Defendants’ arguments that Wilfred
Barnhill is precluded from receiving specific performance under the Voluntary
Stock Assignment Agreement are without merit. In particular, under the Court’s
plain reading of the contract, it did not note any requirement that there be an
initial public offering before stock could be redeemed and/or that Wilfred
Barnhill was required to exercise his right to “piggy back” before redeeming his
stock. To the contrary, the only restriction that the Court found in the contract
stated that, “holders then may, at anytime after August 5th 2007, submit their
shares for “GOTL” to retire as treasury it [sic] shares for the face value of
$1.50 Per share.” Ex. 3 to Mot., Rec. Doc. 145-4, p. 5 ¶ 8. Wilfred Barnhill
alleges that he attempted to redeem his stock in 2012. As such, he can seek
specific performance from Global Libya.

39

IT

IS

ORDERED

that

Consolidated

Defendants’

motion

is

GRANTED in part and DENIED in part.
With respect to Count IV of the Barnhills’ CC/TP DEMAND in
case No. 12-1507, the Consolidated Defendants’ motion is DENIED.
The Court finds that the Barnhills have sufficiently stated a
claim.
With respect to the Barnhills’ Third-Party Demand against
Ray Ghariani in case No. 12-1507, the Consolidated Defendants’
motion is GRANTED. The Court finds that the Barnhills have failed
to state a claim against Ray Ghariani and, accordingly, the
Barnhills claims against him are

DISMISSED with prejudice.

With respect to Count V of the Barnhills’ CC/TP DEMAND in
case No. 12-1507, the Consolidated Defendants’ motion is GRANTED
as follows. The Court finds that the Barnhills have failed to
state a claim, therefore, Count V is DISMISSED without prejudice.
However, because it appears to the Court that the defects in this
claim may be cured by amendment, the Barnhills are GRANTED leave
to amend their pleading as to Count V in accordance with this
Order. The Barnhills must submit an amended complaint to this
Court within twenty-one (21) days of entry of this Order. Failure
to amend within the required period will result in the dismissal
with prejudice of Count V.

40

With respect to the Barnhills’ counterclaims against Lyamec
and

Global

Libya

in

case

No.

12-1507,

the

Consolidated

Defendants’ motion is GRANTED as follows. The Court finds that
the Barnhills have failed to state a claim against Lyamec and
Global Libya and, accordingly, the Barnhills claims against them
are DISMISSED without prejudice. However, because it appears to
the Court that the defects in these claims may be cured by
amendment to Count V, the Barnhills are GRANTED leave to amend
these claims with their amendment of Count V. The Barnhills must
submit an amended complaint to this Court within twenty-one (21)
days of entry of this Order. Failure to amend within the required
period will result in the dismissal with prejudice of Lyamec and
Global Libya from case No. 12-1507. The Court notes that should
the Barnhills choose to amend their CC/TP DEMAND to join Lyamec
and Global Libya, the amended counts must also be in conformity
with the rest of this Order.
With

respect

to

the

Barnhills’

pleading

of

the

single

business entity theory against Lyamec in Counts I and II of case
No. 12-3041, the Consolidated Defendants’ motion is GRANTED. The
Court finds that the Barnhills have failed to state a claim and,
therefore, their claims against Lyamec under the single business
enterprise theory are DISMISSED with prejudice.

41

With respect to the Barnhills’ pleading of the successor in
interest and alter ego theories against Lyamec in Counts I and II
of

case

GRANTED

No.

12-3041,

the

Consolidated

Defendants’

motion

is

as follows. The Court finds that the Barnhills have

failed to state a claim and, therefore, their claims against
Lyamec under the successor in interest and alter ego theories are
DISMISSED without prejudice. However, because it appears to the
Court that the defects in these claim may be cured by amendment,
the Barnhills are GRANTED leave to amend their pleading as to
these theories in accordance with this Order. The Barnhills must
submit an amended complaint to this Court within twenty-one (21)
days of entry of this Order. Failure to amend within the required
period will result in the dismissal with prejudice of these
theories in Count I and Count II and, consequently, the complete
dismissal of Lyamec from case No. 12-3041.
With respect to the Barnhills’ claim for return of stock
from

Global

Libya

in

Count

I

of

case

No.

12-3041,

the

Consolidated Defendants’ motion is DENIED. The Court finds that
the Barnhills have sufficiently stated a claim.

New Orleans, Louisiana this 14th day of June, 2013.

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____________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE

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