Cargill Incorporated vs Hebert Farms Partnership

Filing 49

RULING AND ORDER: IT IS ORDERED that the Motion to Quash, or Alternatively, for Protective Order 41 and 42 filed by Eric Hebert, Shane P. Hebert, Susan Lacombe Hebert, and Tina Latiolais Hebert, is hereby GRANTED and that the Judgment Debtor Examinations of such individuals scheduled for 3/1/2012 at 10:00 a.m. is hereby QUASHED/CANCELLED.. Signed by Magistrate Judge Christine Noland on 2/15/2012. (CMM) Modified on 2/15/2012 to edit text. (CMM)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

CARGILL INCORPORATED

CIVIL ACTION

VERSUS
HEBERT FARMS PARTNERSHIP

NO. 08-457-FJP-CN

RULING & ORDER
This matter is before the Court on the Emergency Motion to Quash or, Alternatively,
for Protective Order (R. Docs. 41 and 42) filed by the respondents to the Ex Parte Motion
to Examine Partners of Judgment Debtor, Eric Hebert, Shane P. Hebert, Susan Lacombe
Hebert, and Tina Latiolais Hebert (collectively “respondents”). Plaintiff, Cargill Incorporated
(“Cargill”), has filed an opposition (R. Doc. 44) to respondents’ motion.
FACTS & PROCEDURAL BACKGROUND
On November 23, 2010, this Court signed an order confirming an arbitration award
entered in National Grain and Feed Association Arbitration Case No. 2365 against
defendant, Hebert Farms Partnership (“Hebert Farms”), and in favor of Cargill in the
amount of $131,524.99, plus interest at a rate of 4.5% from June 2, 2010, and continuing
until paid in full. When two (2) months had elapsed without Hebert Farms paying or
otherwise satisfying that judgment, Cargill filed its first Motion for Writ of Execution on
January 25, 2011, which was granted. Writs and garnishment interrogatories were served
upon a number of entities who, upon Cargill’s information and belief, were in possession
or control of funds, assets, property, and/or credits belonging to Hebert Funds. However,
no funds or proceeds were ever received by Cargill as a result of the writs served. Cargill
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subsequently applied for another Writ of Execution on June 23, 2011, which was granted
and served upon another entity believed to be in possession or control of funds, assets,
property, and/or credits belonging to Hebert Farms. However, as with the first set of writs
and garnishment interrogatories, no funds or proceeds were received as a result of the
subsequent writ either.
Pursuant to a motion filed by Cargill, on July 15, 2011, a judgment debtor
examination of Hebert Farms occurred. The examination did not reveal any assets or
property of the partnership sufficient to satisfy the judgment, but a copy of the Partnership
Agreement of Hebert Farms was produced at the examination hearing. Such Partnership
Agreement provided that the “name of the partnership shall be HEBERT FARMS, and the
partners shall share in the assets, liabilities, and profits in the following manner: Shane P.
Hebert (25%); Susan L. Hebert (25%); Eric Hebert (25%); and Tina L. Hebert (25%).” See,
Exhibit A to Cargill’s Ex Parte Motion to Examine Partners of Judgment Debtor, R. Doc. 37.
The Partnership Agreement further stated that the partners of Hebert Farms “shall bear the
losses and expenses of the partnership in proportion to their percentage of ownership.” Id.
As a result of Hebert Farms’ continued failure to pay the judgment at issue, Cargill
filed an ex parte motion to conduct judgment debtor examinations of the four (4) individual
partners listed in the Hebert Farms’ Partnership Agreement concerning their individual
estates and property. Such examinations are scheduled to occur on March 1, 2012. On
February 6, 2012, respondents (i.e., the four individual partners) filed the present motions,
seeking to quash their judgment debtor examinations, or alternatively, to have the Court
issue a protective order limiting the scope of the examinations to inquiries regarding only
the partnership assets.
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LAW & ANALYSIS
Pursuant to La. C.C. art. 2817, a partnership is primarily liable for its debts. See,
La. C.C. art. 2817. A partner is bound for his virile share of the debts of the partnership but
may plead discussion of the assets of the partnership. Id. A partner may not be sued on
a partnership debt unless the partnership is joined as a defendant. La.C.C.P. art. 737.
Louisiana courts have interpreted the above articles to require that a partnership creditor,
such as Cargill, first exhaust its rights against the partnership before he proceeds against
the individual partners, who are secondarily liable for the partnership’s debts to the extent
of their virile or proportionate shares. Travelers Ins. Co. v. St. Jude Hosp. of Kenner, La.,
Inc., 1993 WL 177208 (E.D.La. 1993), citing Koppers Co. v. Mackie Roofing & Sheet Metal
Works, 544 So.2d 25, 26 (La. App. 4th Cir. 1989).
Despite the fact that partners are secondarily liable for partnership debts, however,
no judgment on an obligation owed by a partnership may be entered against an individual
partner unless that partner has been personally served with citation and had a judgment
entered against him personally. See, 1 La. Prac. Civ. Proc. Article 737 (2011 ed.), citing
Cortiza v. Rosenblat, 291 So.2d 425 (La. App. 4th Cir. 1974). The fact that a partner may
have appeared before the court to testify in the suit against the partnership has been held
insufficient to allow the court to cast judgment against a non-named partner individually.
Id.
In the present case, Cargill elected to name and serve only Hebert Farms
Partnership as a defendant, and the order confirming the arbitration award casts judgment
only against Hebert Farms Partnership. Thus, although the four (4) individual partners of
Hebert Farms Partnership may be held secondarily liable for the amount of the judgment
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against the partnership, they cannot be held responsible in the context of this suit in which
they were not personally cited and served as defendants.1 See, Travelers Ins. Co. v. St.
Jude Hosp. of Kenner, Louisiana, Inc., 37 F.3d 193 (5th Cir. 1994)(When efforts to collect
judgment from partnership failed, judgment creditor filed action against general partner to
collect judgment, and the Fifth Circuit held that, under principles of res judicata, the prior
action, in which liability was imposed on the partnership, did not bar the subsequent action
against the general partner); Koppers Co., Inc. v. Mackie Roofing and Sheet Metal Works,
544 So.2d 25 (La. App. 4 Cir. 1989)(Statutory requirement that partnership creditor first
exhaust rights against partnership before proceeding against individual partners was
satisfied by creditor who had already obtained judgment against partnership before bringing
suit against individual partners for their virile share of partnership debt).2
Thus, because Cargill did not name the individual partners as defendants and
properly cite and serve them in this suit, it cannot hold them secondarily liable for the

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The fact that one of the partners, Eric Hebert, appeared at the July 15, 2011 judgment debtor
examination on behalf of Hebert Farms Partnership and testified that Hebert Farms Partnership has no
money or assets to pay the judgment in this case is insufficient to allow the Court to cast judgment against
Hebert individually for his portion of the partnership debt in the context of this suit since he was not named
and properly served as a defendant in this suit.
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See, Partnership Law & Practice §14:2 (2011)(citations to various cases omitted)(“After
judgment has been obtained against the partnership or one or more partners, execution of the judgment
may be against partnership property since the partnership itself has been adjudged liable. When a
judgment has been obtained, the plaintiff may also recover the full amount of the judgment from any
partner named in the suit, but not against unnamed partners. When a judgment is obtained against the
partnership and none of the partners are named, the plaintiff cannot attach the individual partners’
property. In such case, if the plaintiff is unable to satisfy the judgment from partnership assets, the plaintiff
may bring suit against some or all partners to hold them personally liable for the partnership obligation”);
J.T. Turnr Const. Co., Inc. v. Summerour, 301 Ga.App. 323, 687 S.Ed.2d 612 (2009)(A judgment rendered
in a suit against a general partnership binds the partnership assets and the individual assets of any
general partners who were properly served in the suit. A general partner’s individual assets may not be
bound unless the partner was personally served with process and had his day in court, or unless he has,
by some express or implied waiver, dispensed with the necessity of service. General partners who are not
personally served in the original suit and who do not appear at trial are subject to suit individually and
cannot attack the merits of the judgment against the partnership).

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judgment against the partnership in the context of this suit. As such, the judgment debtor
examinations set for March 1, 2012, seeking production of information concerning the
individual partners’ estates and property for purposes of satisfying the judgment in the
context of this suit is improper and should not occur.
Accordingly;
IT IS ORDERED that the Motion to Quash, or Alternatively, for Protective Order (R.
Docs. 41 and 42) filed by Eric Hebert, Shane P. Hebert, Susan Lacombe Hebert, and Tina
Latiolais Hebert, is hereby GRANTED and that the Judgment Debtor Examinations of such
individuals scheduled for March 1, 2012 at 10:00 a.m. is hereby QUASHED/CANCELLED.
Signed in chambers in Baton Rouge, Louisiana, February 15, 2012.

MAGISTRATE JUDGE CHRISTINE NOLAND

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