K&F Restaurant Holdings, Ltd. et al v. Rouse et al

Filing 117

RULING: Motion for New Trial / Reconsideration 41 is DENIED. Motion for Oral Argument 42 is DENIED as moot. Signed by Judge Shelly D. Dick on 07/26/2017. (ELW)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

K&F RESTAURANT HOLDINGS, LTD.
d/b/a IZZO’S ILLEGAL BURRITO; K&F
RESTAURANT OPERATIONS, LLC;
G&O PIZZA HOLDINGS, LTD d/b/a
LIT PIZZA; G &O RESTAURANT
OPPERATIONS, LLC; OSVALDO
FERNANDEZ; and A. GARY KOVACS

CIVIL ACTION
16-293-SDD-EWD

VERSUS
DONALD J. ROUSE, JR.; DONALD J.
ROUSE, SR.; THOMAS B. ROUSE;
ALLISON ROUSE ROYSTER; and
ROUSE’S ENTERPRISES, L.L.C.
RULING
This matter is before the Court on the Motion for New Trial/Reconsideration1 filed
by Plaintiffs, K&F Restaurant Holdings, Ltd. et al (“Plaintiffs”). The Defendants, Donald
J. Rouse, Jr., et al. (“Defendants”) have filed an Opposition2 to this motion. For the
following reasons, the Court finds that Plaintiffs’ motion should be DENIED.
I.

FACTUAL BACKGROUND
This case was removed from the 19th Judicial District Court on April 29, 2016.3

On February 2, 2017, the Court issued a ruling wherein Plaintiffs’ Louisiana Unfair Trade
Practice Act (“LUTPA”) claims were dismissed with prejudice due to peremption.4 The
Court also dismissed without prejudice Plaintiffs’ claims for tortious interference with a

1

Rec. Doc. 41.
Rec. Doc. 57.
3
See Rec. Doc. 1.
4
Rec. Doc. 31, p. 14.
2

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business relationship, product defamation and/or disparagement, civil conversion, and
conspiracy.5 The Court denied Defendants’ motion to dismiss Plaintiff’s Louisiana
trademark claims.6 On February 21, 2017, Plaintiffs’ counsel filed a motion for new
trial/reconsideration, pursuant to Federal Rule of Civil Procedure 59, alleging the Court
committed “manifest errors” in its Ruling. 7 The Defendants have opposed this motion.8
II.

LAW AND ANALYSIS
A. Motion for New Trial and/or To Alter or Amend the Judgment
Unlike the broad discretion Congress has given to district courts when considering

a Rule 60 motion for new trial, a Rule 59 motion to alter or amend serves “the narrow
purpose of allowing a party to correct manifest errors of law or fact or to present newly
discovered evidence and is not the proper vehicle for rehashing evidence, legal theories,
or arguments that could have been offered or raised before the entry of the judgment.”9
A Rule 59(e) motion “calls into question the correctness of a judgment.”10 It is an
extraordinary remedy that should be used sparingly.11
There are three grounds for altering or amending a judgment under Rule 59(e):
“(1) an intervening change in controlling law, (2) the availability of new evidence not
previously available, or (3) the need to correct a clear error of law or prevent manifest
injustice.”12

5

Id.
Id.
7
Rec. Doc. 45, p. 6.
8
Rec. Doc. 57.
9
Knight v. Kellogg Brown & Root Inc., 333 Fed. Appx. 1, 8 (5th Cir. 2009).
10
In re Transtexas Gas Corp., 303 F.3d 571, 581 (5th Cir.2002).
11
Templet v. HydroChem Inc., 367 F.3d 473, 478–79 (5th Cir. 2004); Clancy v. Employers Health Ins. Co.,
101 F.Supp.2d 463, 465 (E.D.La.2000) (citing 11 Charles A. Wright, Arthur R. Miller & Mary Kay Kane,
Federal Practice & Procedure § 2810.1, at 124 (2d ed.1995)).
12
Williamson Pounders Architects, P.C., 681 F.Supp.2d 766, 767 (N.D.Miss. 2008).
6

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The Court finds that Plaintiffs have failed to satisfy the standards set forth above.
Plaintiffs’ LUTPA argument is a repackaging of the continuing violation theory which the
Court has determined does not apply to this case. Plaintiffs’ remaining arguments do not
establish any clear errors of law or manifest injustice as a result of the Ruling.
B. Conspiracy
Plaintiffs’ motion alleges the Court’s holding was erroneous because it did not
adequately consider the factual allegations in the petition, and the Defendants’ alleged
acknowledgment that Plaintiffs had established a conspiracy claim. The Court evaluated
and considered all allegations of Plaintiffs’ petition in its Ruling and found that Plaintiffs’
conspiracy claim did not survive Defendants’ 12(b)(6) challenge. Plaintiffs also argue that
the Court’s Ruling was erroneous because “it fails to reconcile the apparent conflict
presented by Defendants’ own motion.”13 Plaintiffs interpret footnote 80 in Defendants’
Motion to Dismiss as an “acknowledgment that Plaintiffs have successfully alleged
‘predicate acts’ for purposes of stating their RICO claim.”14 This is a new legal argument
that was not raised in Plaintiffs’ Opposition and is, thus, not properly before the Court on
a motion for reconsideration.15 Furthermore, in the Court’s view, Defendants did not
acknowledge in footnote 80 that Plaintiffs had successfully pled a predicate act but merely
stated: “Like conspiracy, RICO requires the existence of ‘predicate acts’ and is not, in and
of itself, a tort.”16 Accordingly, Plaintiffs’ motion is DENIED as to conspiracy claims.

13

Rec. Doc. 45, p. 8.
Rec. Doc. 45, p. 8.
15
“A motion to alter or amend judgment must clearly establish either a manifest error of law or fact or must
present newly discovered evidence. These motions cannot be used to raise arguments which could, and
should, have been made before the judgment issued. Moreover, they cannot be used to argue a case under
a new legal theory.” Pender v. Barron Builders & Management Co., 298 Fed. Appx. 298, 299, (5th Cir. 2008).
16
Rec. Doc. 5, p. 20, n. 80.
14

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C. LUTPA
Plaintiffs allege the Court’s ruling on its LUTPA claims was clearly erroneous
because: (1) there was a mischaracterization of the juridical acts (“acts”); (2) the Court
did not apply the plain language of La. R.S. 51:1409(a)(“1409(a)”) in conjunction with La.
R.S. 51:1409(e)(“1409(e)”); and (3) the Court failed to acknowledge that the continuing
violation theory applied.
Plaintiffs argue the three juridical acts in question were improperly characterized
as leases because one of the acts was entitled “restrictive covenant.” Even so, Plaintiffs
appear to concede that all three acts were properly classified and analyzed as leases:
“Taking into full consideration the effects of appropriately classifying the juridical acts
as lease agreements, one must conclude that Defendants are uniquely bound,
synallagmatically, to a certain course of conduct as long as the agreements remain in
force.”17 Plaintiffs’ statutory support for the alleged misclassification supports the Court’s
classification. The Court analyzed all three juridical acts as leases and determined that
the continuing violation doctrine did not apply.18 Given that Plaintiffs contend the acts
should be considered leases, and the Court considered the acts as leases, there appears
to be no discrepancy between what Plaintiffs argue and the Court’s holding on this matter.
Plaintiffs next advance a new legal argument in this motion– the relevant “acts” are
the acts of the developers, not the leases. This argument is an attempt to re-argue the
application of the continuing violation doctrine. Such an argument is improper in a motion

17

Rec. Doc. 45, p. 10 (emphasis added).
Rec. Doc. 31, p. 7 (“In support of their continuing violation theory, Plaintiffs point to the continued
existence of these discriminatory provisions. However, for the reasons stated above, this proposition has
not been recognized as an act meriting the application of the continuing violation doctrine to a LUTPA claim
under applicable jurisprudence.”)(internal quotations omitted).
18

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for reconsideration.19 As discussed below, the relevant acts are the leases, not the
actions flowing from the leases.
As their second basis for arguing that the Court’s ruling was erroneous, Plaintiffs
argue that the Court misapplied the text of 1409(a) as it applies to 1409(e). Plaintiffs’
argument centers on the fact that the Court allegedly failed to properly apply ‘act’ as it
appears in 1409(a). 1409(a) states:
Any person who suffers any ascertainable loss of money or
movable property, corporeal or incorporeal, as a result of the
use or employment by another person of an unfair or
deceptive method, act, or practice declared unlawful by R.S.
51:1405, may bring an action individually but not in a
representative capacity to recover actual damages.20
According to Plaintiffs, “under the plain language [of the statute], the peremptive period
commences to run from the date when a plaintiff suffers any ascertainable loss, or in other
words, when a plaintiff sustains damages.”21 Plaintiffs argue “Defendants’ blocking of
Plaintiffs’ companies merely one month before Plaintiffs’ Petition was filed”22 resulted in
Plaintiffs suffering an alleged monetary loss, making Plaintiffs’ LUTPA claims not subject
to the one year peremptive period. Notably, Plaintiffs concede that they “were explicitly
advised by a commercial real estate developer in Livingston Parish that by virtue of the
June 18, 2013 lease agreement, the Defendants had effectively excluded [Plaintiffs.]”23
Lastly, Plaintiffs suggest the Court’s ruling was manifestly erroneous because it
failed to acknowledge the continuing violation theory. Plaintiffs failed to establish their

19

See supra note 13.
La. R.S. 51:1409 (A).
21
Rec. Doc. 45, p. 12 (emphasis original).
22
Id.
23
Rec. Doc. 10, p. 8 (emphasis added).
20

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entitlement to the application of the continuing violation doctrine in their opposition, and
the Court found that the LUTPA claims were perempted under 1409(e). The Fifth Circuit’s
holding in Tubos de Acero de Mexico S.A. v. American International Investment
Corporation, Inc.,24 precludes the application of the continuing violation theory to this
case: “A continuing violation is occasioned by unlawful acts, not the continuation of the ill
effects of the original wrongful act.”25 Plaintiffs allege LUTPA violations would not have
occurred but for the juridical acts executed by Defendants, and these acts were executed
more than one year before Plaintiffs’ complaint was filed. “The fact that Plaintiffs continue
to be impacted by the ill effects of the juridical acts does not merit application of the
continued violation doctrine.”26 Furthermore, the court in Tubos de Acero de Mexico
clearly held that “the doctrine of contra non valentum, which suspends the running of
prescription where the cause of action is not known or reasonably knowable by the
plaintiff, is inapplicable to a peremptive period.”27 The Court acknowledges that it
erroneously stated that Plaintiffs’ LUTPA claims were dismissed with prejudice as
“prescribed”, rather than perempted; however, this semantic error does not change the
result. The Court applied a peremption analysis to the Plaintiff’s LUTPA claims.28 Plaintiff
fails to demonstrate that the Court’s analysis and findings were clearly erroneous.
Accordingly Plaintiffs’ motion is DENIED on this claim.

24

292 F.3d 471, 482-83 (5th Cir. 2002).
Naquin v. Berryland Campers, LLC., No. 14-2133, 2014 WL 6981944, at * 3 (E.D. La. Dec. 9,
2014)(quoting Crump v. Sabine River Auth., 98-2326 (La. 9/17/99); 737 So.2d 720, 728; Tubos de Acero
de Mexico, S.A., 292 F.3d at 483.
26
Rec. Doc. 31, p. 7 (internal quotations omitted).
27
292 F.3d 471, 490, n.4 (emphasis added).
28
Rec. Doc. 31, p. 14.
25

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D. TORTIOUS INTERFERENCE WITH A CONTRACT
Plaintiffs argue that the Court’s Ruling is erroneous because it only considers
Paragraph 37 of their petition and is contrary to Federal Rule of Civil Procedure Rule 9.
To the Plaintiffs’ first contention, the Court clearly footnoted Paragraph 8 of Plaintiff’s
petition in its Ruling.29 Plaintiffs must comply with the procedural requirements under the
Federal Rules of Civil Procedure and satisfy the substantive requirements under
Louisiana law to state a claim for tortious interference with a business relationship.30 The
Court evaluated and determined that Plaintiffs did not allege the substantive requirements
for a tortious interference with a business relationship claim under Louisiana law in its
Ruling. Accordingly, the Court’s Ruling was not clearly erroneous, and Plaintiffs’ motion
is DENIED on this claim.
E. PRODUCT DEFAMATION
Plaintiffs argue that the petition and its attachments, together with the First
Amended Complaint, clearly established their product defamation claim.

The Court

cannot consider Plaintiffs’ Amended Complaint as it was not the subject of the Court’s
Ruling and was filed after the Ruling was issued. The Court considered Plaintiffs’ factual
allegations as well as the substantive requirements under Louisiana law for a defamation
and product disparagement claim and found that Plaintiffs had not properly alleged these
requirements. Accordingly, the Court’s Ruling was not clearly erroneous, and Plaintiffs’
motion is DENIED on this claim.

29

Rec. Doc. 31, p. 8: “Once again, Plaintiffs support their pleading with the conclusory statement that
Defendants “have harbored significant and substantial malice towards Izzo’s as a result of the incident from
February of 2012.””(quoting Rec. Doc. 1-1).
30
See Restivo v. Hanger Prosthetics & Orthotics, Inc., 483 F.Supp.2d 521, 537 (E.D. La. Apr. 11, 2007).

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F. CONVERSION
Plaintiffs argue that the Court’s Ruling on their conversion claims “appears to be
clearly erroneous because it fails to acknowledge that Rouse’s has continuously and
illegally used Izzo’s recipes in the Rouse’s burrito bars in its stores across the state and
country.”31 In its Ruling, the Court granted Defendants’ Motion to Dismiss Plaintiffs’
conversion claims pursuant to Local Rule 7(f) because Plaintiffs did not respond to
Defendants’ motion on this claim.32 The Court also found that Defendants’ motion had
merit.33 Plaintiffs provide no jurisprudential support for why they should now be able to
argue their opposition to Defendants’ motion when they failed to present an opposition at
the appropriate time. Accordingly, the Court’s Ruling was not clearly erroneous, and
Plaintiffs’ motion is DENIED.
III.

CONCLUSION
For the above reasons, Plaintiffs’ Motion for New Trial/Reconsideration34 is

DENIED. Furthermore, Plaintiffs’ Motion for Oral Argument35 is DENIED as moot.
IT IS SO ORDERED.
Signed in Baton Rouge, Louisiana the 26th day of July, 2017.

S

JUDGE SHELLY D. DICK
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

31

Rec. Doc. 45, p. 15.July 26, 2017
See Rec. Doc. 31, pp. 10-11.
33
See Id. at p. 11.
34
Rec. Doc. 41.
35
Rec. Doc. 42.
32

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