The opinion
UNITED STATES BANKRUPTCY COURT
MIDDLE DISTRICT OF LOUISIANA
IN RE:
KOLOGIK, LLC, ET AL.1 CASE NO. 24-10311
DEBTORS CHAPTER 11
(JOINT ADMINISTRATION)
JACKSON SMITH THOMAS
PLAINTIFF
V. ADVERSARY NO. 24-01019
KOLOGIK, LLC
MISSISSIPPI RIVER BANK
MERCHANTS & MARINE BANCORP, INC.
DEFENDANTS
MEMORANDUM OPINION
Hearings on the following matters came before the court on March 26, 2025: 2
1) Motion for Partial Summary Judgment3 filed by Jackson Smith Thomas (“Thomas”),
seeking summary judgment that:
a) Kologik, LLC (“Kologik”) owed Thomas $397,352 as of January 30, 2020,
according to the understanding of both parties, and as partially reflected in a certain
Non-Recourse Promissory Note executed by Kologik in November 2018 (“Note”);
b) The Note was modified by a compromise evidenced by a series of emails on April
12, 2022, to reflect the understanding of the parties that a 15% rate of interest accrued
on Thomas’s principal during the pendency of a directors and officers (“D&O”)
liability litigation that was managed by the bankruptcy trustee for debtor COPsync,
Inc. (“COPSync”);
1 The debtors and debtors-in-possession in these chapter 11 cases, along with the last four digits of their respective
Employer Identification Numbers, are as follows: ResolveKo, LLC (formerly Kologik, LLC) (3729), Case No. 24-
10311; ResolveKo Capital LLC (formerly Kologik Capital, LLC) (3729) Case No. 24-10312; and ResolveKo., Ste.
#1600, Baton Rouge, LA, 70801.
2 The court also took up a Motion for Summary Judgment filed by Mississippi River Bank and Merchants & Marine
Bancorp, Inc. on March 26, 2025 (P-43). That motion was granted and judgment has been rendered dismissing the
complaint as to these two defendants (P-78).
3 P-40.
c) Thomas has recourse on his Note up to $1,239,807;
d) Thomas seized $1.3 million worth of accounts receivable in his pre-petition
attachment proceedings; and
e) Thomas is permitted recourse against the assets of the estate on his Note pursuant to
11 U.S.C. §1111(b)(1)(A).
Objections to Thomas’s motion were filed by Kologik4 and Mississippi River Bank (“MRB”)
and Merchants & Marine Bancorp, Inc. (MMB”) (collectively, “Banks”), 5 and Thomas filed a
reply.6
2) Motion for Partial Summary Judgment7 filed by Kologik, seeking summary judgment
that:
a) the terms of the Note control the parties’ obligations under Thomas’s loan, and the
amount due to him through the petition date is $150,686;
b) the Note is not an “open account” and therefore, no attorneys’ fees and costs are
due on it;
c) the loan Thomas made for payroll is not an open account and therefore, no
attorneys’ fees and costs are due on it either;
d) the Writ of Attachment should be dissolved and avoided; and
e) Kologik is entitled to damages for the wrongful issuance of the Writ of Attachment
measured by the reasonable attorneys’ fees and costs associated with successfully
dissolving and avoiding it.
Thomas filed an objection8 to Kologik’s motion.
4 P-53.
5 P-59.
6 P-73.
7 P-46.
8 P-57.
3) Motion in Limine9 filed by Kologik, seeking to exclude evidence of settlement
negotiations. Thomas filed an objection.10
At the conclusion of the hearings, the court took the matters under advisement.
I. Facts and Procedural History
As part of the confirmed plan in COPSync’s bankruptcy case (“COPSync’s Plan”),11
Koligik loaned the COPSync’s liquidation trust (“Liquidation Trust”) funds to complete the
confirmation process (“Plan Exit Financing”) and was defined as the “Plan Exit Lender.”
According to paragraph 5.13 of COPSync’s Plan, Kologik, as the Plan Exit Lender, was entitled
to 11% of any recovery made from claims against directors and officers (“D&O Claims”), but
only after a 40% contingency fee and expenses were paid to counsel who prosecuted those
claims.
To fund the Plan Exit Financing, Kologik borrowed funds from Thomas and five others
(“Private Lenders”). On November 18, 2018, Kologik borrowed $135,000 from Thomas. The
Note12 provides in pertinent part:
FOR VALUE RECEIVED, [Kologik] promises to pay to the order of [Thomas] …
of this [Note], the principal sum … together with other sums as provided herein.
The principal sum shall … not bear interest, other than as set forth below in event
of default.
Payments. As consideration for the loan … Borrower shall pay to Lender the
“Pro Rata Portion” of all funds received by Borrower attributable to the “D & O
Claims” and the “Chapter 5 Claims” (as such terms are defined below). Borrower
shall make such payments immediately upon receipt of funds. It is understood
that total payments to Lender hereunder may exceed the principal amount of this
Note.
9 P-47.
10 P-55.
11 COPSync’s Plan is Exhibit C to the Affidavit of Amelia Hurt [P-46-3]. It is also P-322 to Case no. 17-12625,
United States Bankruptcy Court, Eastern District of Louisiana.
12 P-40-6.
Pro Rata Portion. This Note is issued to facilitate a loan of up to $865,000 made
by Borrower to COPSync, Inc. and its liquidating trust in Bankruptcy case
number 17-12625, US Bankruptcy Court for the Eastern District of Louisiana (the
“COPSync Loan”). The Pro Rata Portion shall be determined by dividing the
principal amount of this Note with the total principal amount of COPSync Loan.
D & O Claims and Chapter 5 Claims. “D &O Claims” shall mean all causes of
action of COPSync, Inc. or its liquidating trust against current or former officers
and directors and any direct-action claim against any insurer thereof. “Chapter 5
Claims” shall mean all claims of COPSync, Inc or its liquidating trust arising in or
related to Chapter 5 of the Bankruptcy Code.
Non-Recourse Obligations. Notwithstanding anything to the contrary stated
herein, Lender agrees that for payment of this Note it will look solely to the funds
received by Borrower attributable to the D & O Claims and the Chapter 5 Claims,
and no other assets of Borrower shall be subject to levy, execution or other
enforcement procedure for the satisfaction of the remedies of Lender, or for any
payment required to be made under this Note. …
Default Rate of Interest. If Lender declares this Note to be in default, Lender has
the right prospectively to adjust and fix the simple interest rate under this Note
until this Note is paid in full. The fixed default interest rate shall be equal to 18%
per annum.
Attorneys Fees. In the event that any payment of any principal or interest due
hereunder shall not be paid when due, whether by reason of acceleration or
otherwise, and this Note is placed in the hands of an attorney or attorneys for
collection, or the enforcement against other collateral, securing payment hereof,
Borrower promises to pay, in addition to all other amounts otherwise due hereon,
the costs and expenses of such collection, foreclosure and representation,
including without limitation, reasonable attorneys’ fees and expenses (whether or
not litigation shall be commenced in aid thereof). …
In May 2019, Kologik borrowed another $100,000 from Thomas. Although the second
loan was not memorialized in a separate promissory note, Thomas and Kologik agree that the
same terms apply to that loan as in the September 18, 2018, Note. Thomas also made a separate
loan of $41,500 to Kologik for payroll (“Payroll Loan”).13 The Payroll Loan was not reduced to
a writing.
13 At the hearing on March 26, 2025, Kologik’s counsel represented that it did not dispute the $41,500 loan.
Thomas loaned $235,000 of the total $753,000 borrowed by Kologik from the Private
Lenders. Under the terms of the Note, Thomas’s pro rata portion of the amount Kologik received
for D&O and Chapter 5 Claims was 31.21%. These numbers are not in dispute.
In November 2019, COPSync’s liquidation trustee, H. Kenneth Lefoldt, Jr. (“Liquidation
Trustee”), reached a settlement of the D&O Claims in the amount of $3,750,000.14 The
settlement was approved by the bankruptcy court in New Orleans on December 2, 2019.15
On December 16, 2019, Kologik borrowed $800,000 from MRB. That same day, it sent a
wire transfer for $800,020 to the Liquidation Trust, which included a $20 wire transfer fee, as
consideration for the purchase of the stock redemption. According to the Liquidation Trustee’s
Declaration, the Liquidation Trust sent Kologik $827,306.58 on December 17, 2019, as
repayment of the “Kologik - Note Payment.”16
Kologik used the $827,306.58 to repay MRB the $800,000 it owed, plus $422.22 interest.
In Kologik’s Objection to Thomas’s proof of claim, it treated the $27,306.58 received from the
Liquidation Trust on December 17, 2019, as D&O proceeds.17 While Kologik maintains that
these funds were not actually D&O proceeds, it has agreed to include these funds in its
calculation of what Thomas is due under the Note rather than incur the expense of litigating the
issue.18
14 The Liquidation Trustee’s motion to approve the settlement is Exh. D to Thomas’ Motion, P-40.
15 The Order approving the settlement is Exh. E to Thomas’ Motion, P-40.
16 P-53-2, Exh. A.
17 Case no. 24-10311, P-222, ¶ 21.
18 P-46, p. 9.
On January 9, 2020, Kologik received $412,500 from the Liquidation Trust for its
undisputed 11% share of the recovery on the D&O Claims as the Plan Exit Lender. Kologik
made a $25,000 payment to Thomas in January 2020. Kologik also overpaid three of the Private
Lenders from the D&O proceeds and then ran out of funds before paying Thomas in full.
Thomas and Kologik agree that the default interest rate of 18% was triggered when
Kologik failed to pay the full amount owed after Kologik received proceeds from the D&O
Claims in January 2020.19 Specifically, Thomas seeks default interest of 18% from February 1,
2020, until April 23, 2024, the date Kologik filed its bankruptcy petition.20
Kologik paid Thomas $48,000 from April through December 2022 with eight payments
of $6,000 each. In June 2023, Thomas commenced a suit against Kologik in state court.21 On
June 15, 2023, Thomas obtained an order directing that a Writ of Sequestration be issued to
MRB (“Writ”).22 For a more detailed review of the facts and procedural history concerning the
Writ, please refer to this court’s Memorandum Opinion rendered on March 28, 2025.23 For
present purposes, the Minute Entry from the state court hearing on July 13, 2023, is relevant for
the proposition that Kologik was represented by counsel (Jack Whitehead) at the hearing. It
provides:
This matter came before the Court for a hearing. Present in Court was Heather A.
Cross and Thomas M. McEachin on behalf of plaintiff. Present for defendant was
Jack K. Whitehead Jr. The matter was argued by counsels and submitted to the
Court. Whereupon, the Court moots petition for nullity and motion for suspensive
appeal. The Court will consider the motion for consolidation. Plaintiff's counsel is
19 Thomas’ Memo in Support, P-40-1, p. 2; Kologik’s Motion, P-46, p. 6.
20 Thomas’ Memo in Support, P-40-1, p. 3.
21 Case no. 733437, 19th Judicial District Court, Parish of East Baton Rouge.
22 P-40, Exh. J.
23 P-77.
to prepare an order with today's oral ruling and submit to the Court for signature
within 10 days.24
Kologik filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code on
April 23, 2024.25 Thomas filed an unsecured claim for $837,412.26 Thomas also filed this
adversary proceeding against MRB, MMB, and Kologik on June 27, 2024. The court entered an
order on November 18, 2024, consolidating Kologik’s objection to Thomas’s claim with this
adversary proceeding.27 All parties have stipulated that they consent to this court’s entry of a
final judgment on non-core claims.28
On motion of Kologik, the court ordered that evidence attached to its Objection to
Thomas’s Motion for Partial Summary Judgment shall properly be considered as evidence for
Kologik’s Motion as well.29
On March 28, 2025, this court granted the Motion for Summary Judgment of MRB and
MMB, dismissing Thomas’s complaint against them.30
II. Summary Judgment Standard
F.R.B.P. 7056 makes F.R.C.P. 56 applicable in adversary proceedings, so jurisprudence
construing Rule 56 is equally applicable to motions under F.R.B.P. 7056. The Fifth Circuit held
24 P-43, Exh. 1E. In this court’s Memorandum Opinion granting the Motion for Summary Judgment of MRB and
MMB, the court incorrectly assumed and stated that counsel for MRB attended the state court hearing on July 13,
2023. P-77. Instead, Mr. Whitehead represented Kologik at that hearing. The prior ruling did not depend on that
erroneous assumption.
25 Case no. 24-10311.
26 Case no. 24-10311, Proof of Claim 21.
27 Case no. 24-10311, P-281.
28 P-19.
29 P-68.
30 P-78.
in Pena v. Gonzalez,31 that “[s]ummary judgment is proper where ‘competent summary
judgment evidence demonstrates that there is no genuine issue of material fact and the moving
party is entitled to judgment as a matter of law.’”32 This court is therefore tasked with deciding
what, if anything, should be tried.
III. Thomas’s Motion for Partial Summary Judgment
A. Was the Note Modified?
Thomas seeks summary judgment that “[t]he Note was modified by valid written
compromise on April 12, 2022, to reflect the understanding of the parties that a 15% rate of
interest accrued on Thomas’s principal during the pendency of [the D&O] litigation.”33 This
prayer for relief is based on two contentions by Thomas: 1) that the Note provides that Kologik
repay Thomas the $235,000 principal in addition to his 31.21% pro rata portion of Kologik’s
D&O proceeds, and 2) that Thomas and Kologik reached a settlement on April 12, 2022, that
modified the pre-default interest rate provided in the Note. Kologik disputes both contentions.
1. Is Thomas Entitled to Principal and a Pro-Rata Portion of D&O Proceeds?
Thomas alleges the Note entitles him to recover $235,000 as well as a pro rata portion of
the D&O proceeds. The Note provides that it “shall be governed and construed in accordance
with the laws of the State of Louisiana.”34 In Lehman v. Benasco,35 the court held that “[a]
31 Pena v. Gonzalez, No. 24-20163, 2025 WL 789548, at *1 (5th Cir. Mar. 12, 2025).
32 Id. at *1 (citing QBE Ins. Corp. v. Brown & Mitchell, Inc., 591 F.3d 439, 442-43 (5th Cir. 2009)).
33 P-40, p. 2
34 P-40, Exh. B.
35 Lehman v. Benasco, 2023-0694 (La. App. 1 Cir. 2/8/24), 384 So. 3d 366.
promissory note is a contract between the parties and is to be enforced according to its terms.”36
La. C.C. art. 2046 provides that “[w]hen the words of a contract are clear and explicit and lead to
no absurd consequences, no further interpretation may be made in search of the parties' intent.”
Thomas points to the first sentence of the Note, which provides:
FOR VALUE RECEIVED, [Kologik] promises to pay to the order of [Thomas] …
of this [Note], the principal sum … together with other sums as provided herein…
The court cannot interpret this sentence in isolation. La. C.C. art. 2050 provides that “[e]ach
provision in a contract must be interpreted in light of the other provisions so that each is given
the meaning suggested by the contract as a whole.” A provision in the Note entitled “Payments”
unambiguously explains precisely how Thomas is to be repaid:
Payments. As consideration for the loan … Borrower shall pay to Lender the
“Pro Rata Portion” of all funds received by Borrower attributable to the “D & O
Claims” and the “Chapter 5 Claims” (as such terms are defined below). Borrower
shall make such payments immediately upon receipt of funds. It is understood
that total payments to Lender hereunder may exceed the principal amount of this
Note.
Kologik argues that a plain reading of the Note limits Thomas’s recovery to proceeds
obtained from D&O and Chapter 5 Claims. This court agrees. Specifically, he is entitled to his
pro rata portion of the recovery attributable to Kologik’s percentage of those claims. Thomas’s
motion for partial summary judgment is denied on this issue.
2. Interest
The Note is clear that it bears no interest until default.37 Thomas alleges that the Note
was modified to provide for a 15% interest rate before default based on a settlement evidenced
36 Id. at 370 (citing Spillman v. Spillman, 509 So.2d 442, 443 (La. App. 1 Cir.), writ denied, 513 So.2d 1207 (La.
1987)).
37 P-40-6.
by emails back and forth on April 12, 2022, and a series of $6,000 payments made to him
thereafter. The email chain dated April 12, 2022, was between Terri Jones, the controller of
Kologik, and Thomas. Thomas contends this email chain is definitive evidence of offer and
acceptance sufficient to confect a binding settlement.38 The court disagrees. As pointed out by
Kologik, Ms. Jones’ email to Thomas provides that the debt schedule attached “will serve as the
source of truth, pending any audit adjustments/reconciliations.”39 In this court’s view, Ms. Jones’
qualifying language shows that the debt schedule was not finalized, and Thomas submitted no
evidence that it was ever finalized or what the terms of repayment would be. No evidence was
submitted by Thomas indicating Kologik agreed to a 15% pre-default interest rate. Further, the
court rejects the notion that the monthly $6,000 payments evidence a meeting of the minds.
Indeed, no one disputes that Kologik owed Thomas money, so the payments, without more, are
more reflective of that reality than evidence of a settlement. The court is not persuaded the
parties ever reached a settlement and therefore will enter judgment denying summary judgment
with respect to whether a settlement was reached.
B. Amount Due
Thomas seeks summary judgment that Kologik owed him $397,352 as of January 30,
2020. That amount depends entirely on a favorable ruling that the parties reached a settlement in
2022. As evidence, Thomas attached an email dated April 12, 2022, from himself to employees
of Kologik with an attached spreadsheet, purportedly created by Kologik.40 Kologik contends
that this email was part of the same settlement negotiations on April 12, 2022, in which no
38 P-40, Exh. H.
39 Id. at p. 1.
40 P-40, Exh. G.
agreement was reached. An examination of the emails shows that they are, at best, part of the
same settlement negotiations. Again, the court has already denied summary judgment in favor of
Thomas on the issue of whether a settlement was reached. Accordingly, Thomas’s Motion for
Partial Summary Judgment is denied as to this issue as well.
C. What is Thomas’s Recourse under the Note?
Thomas also contends he has recourse on the Note up to $1,239,807. With respect to
recourse, the Note provides:
Non-Recourse Obligations. Notwithstanding anything to the contrary stated
herein, Lender agrees that for payment of this Note it will look solely to the funds
received by Borrower attributable to the D & O Claims and the Chapter 5 Claims,
and no other assets of Borrower shall be subject to levy, execution or other
enforcement procedure for the satisfaction of the remedies of Lender, or for any
payment required to be made under this Note. …41
This provision leaves no doubt that Thomas only has recourse against “the funds received by
[Kologik] attributable to the D&O Claims and the Chapter 5 Claims.” It is undisputed that no
funds were received by Koligik for Chapter 5 Claims. That leaves this court to determine what
amount received by Kologik from the Liquidating Trust was “attributable to the D&O Claims.”
The parties agree that the $412,500 Kologik received on January 9, 2020, was attributable to the
D&O Claims.42 But Thomas also contends that the $827,306.58 Kologik received on December
17, 2019, is attributable to the D&O Claims as well. This is based on his belief (or hope rather)
that the $827,306.58 was paid from funds received by the Liquidation Trust from the D&O
settlement. Thomas submitted no evidence demonstrating that any portion of the settlement
proceeds were used to make this payment to Kologik.
41 P-40, Exh. B (emphasis added).
42 The $412,500 is 11% of the $3,750,000 D&O settlement that Kologik was entitled to under COPSync’s Plan.
Conversely, Kologik submitted the declaration43 of Ken Lefoldt, Liquidation Trustee,
showing that the Liquidation Trust received the following payments on the dates indicated in
settlement of the D&O Claims:
Entity Date Amount
HCC Service Co. D&O 12/18/2019 $100,000
XL-Specialty 12/31/2019 $1,800,000
Chubb 1/2/2020 $1,825,000
Fishman Haygood 1/3/2020 $25,000
The Liquidation Trustee attached to his declaration “a true and correct copy of [his] records,”
showing that on December 17, 2019, or the day before the first payment of settlement proceeds
was received, he wrote check no. 1016 to Kologik in the amount of $827,306.58. On that date,
the Liquidation Trust’s account, as reflected in the attachment to the Declaration, had sufficient
funds to pay that amount.44 Based on the Liquidation Trustee’s declaration and the exhibit
thereto, together with Thomas’s failure to submit any evidence to the contrary, Thomas’s motion
for partial summary judgment on this issue is denied as well.
D. Seizure
Thomas also seeks a judgment that he seized $1,300,000 of accounts receivable in the
state court attachment proceedings. For the reasons set forth in this court’s Memorandum
Opinion45 granting MRB’s Motion for Summary Judgment, a seizure of Kologik’s accounts
receivable was undeniably subject to the priming security interest of MRB. Even if the seizure
were valid, it would not have resulted in any recovery for Thomas. Kologik’s accounts at MRB
43 P-53-2.
44 P-53-2, Exh. A.
45 P-77.
are now closed, and the court has already dismissed Thomas’s complaint against it and MMB.
The court views this request for declaratory relief as potentially confusing and misleading, even
if technically accurate (i.e., there may have been a seizure of receivables, just not one that proved
fruitful). Therefore, summary judgment is denied on this ground.
Thomas also alleges in his memorandum in support of its motion for partial summary
judgment that MRB and Kologik conspired to avoid the Writ. Importantly for present purposes,
no such allegations were made in the complaint. In U.S. ex rel. DeKort v. Integrated Coast
Guard Systems,46 the Fifth Circuit ruled:
[T]he district court did not err in denying DeKort's motion for partial summary
judgment because he attempted to raise a new claim, not asserted in his fifth
amended complaint. See Fisher v. Metro. Life Ins. Co., 895 F.2d 1073, 1078 (5th
Cir.1990); see also Corey Airport Servs., Inc. v. Decosta, 587 F.3d 1280, 1282 n.
2 (11th Cir.2009) (“[Plaintiff] cannot amend its complaint by adding a new claim
beyond its summary judgment papers....”); Gilmour v. Gates, McDonald and Co.,
382 F.3d 1312, 1314–15 (11th Cir.2004) (“[T]he Supreme Court has mandated a
liberal pleading standard for civil complaints.... This standard however does not
afford plaintiffs with an opportunity to raise new claims at the summary judgment
stage.... At the summary judgment stage, the proper procedure for plaintiffs to
assert a new claim is to amend the complaint in accordance with Fed.R.Civ.P.
15(a).”).
Any claim for conspiracy damages now represents an improper expansion of the
pleadings, as the complaint does not state a cause of action for conspiracy. Further, the court
notes that the discovery cutoff in this case was February 28, 2025, and trial is scheduled to begin
on April 15, 2025.47 Thomas had ample opportunity to amend the complaint to allege conspiracy
and failed to do so. It is far too late now. Accordingly, summary judgment is denied on any
claim of conspiracy.
46 In U.S. ex rel. DeKort v. Integrated Coast Guard Systems, 475 F. App'x 521 (5th Cir. 2012).
47 Order dated November 26, 2024 (P-24).
E. Section 1111(b) of the Bankruptcy Code
Similarly, Thomas seeks summary judgment that 11 U.S.C. § 1111(b)(1)(A) permits him
to claim recourse status against the assets of Kologik’s estate. The court is at a loss as to what
Thomas is trying to achieve with this argument. Any attempt after the filing of bankruptcy to go
back in time armed with newfound in personam rights and, with it, presumably, justification for a
seizure of assets beyond the limits of the remedies set forth in the Note, is rejected. Regardless,
Thomas did not plead this in the complaint. As such, seeking it now on summary judgment is an
improper expansion of the complaint according the Fifth Circuit’s ruling in U.S. ex rel. DeKort v.
Integrated Coast Guard Systems.48 And for the same reasons detailed in the conspiracy count, it
is too late for Thomas to amend his complaint. Accordingly, the court will deny summary
judgment on this issue.
F. Conclusion
Thomas’s Motion for Partial Summary Judgment is denied in its entirety. Pursuant to the
Note, Thomas is only entitled to receive his pro rata share of Kologik’s recovery attributable to
the D&O Claims. Thomas has not proved that he is entitled to a percentage recovery on the
$800,000 paid by the Liquidation Trustee on December 17, 2019. Thomas has not proved that a
settlement was reached sufficient to support modifying the Note to include pre-default interest of
15%. And finally, Thomas may not expand the pleadings in an attempt to recover funds for
conspiracy or to make out some kind of claim pursuant to 11 U.S.C. § 1111(b)(1)(A), nor can he
48 In U.S. ex rel. DeKort v. Integrated Coast Guard Systems, 475 F. App'x 521 (5th Cir. 2012).
amend his complaint at this late stage of the litigation. The court will enter a separate judgment
in accordance with this ruling.
IV. Kologik’s Motion for Partial Summary Judgment
A. The Note Controls
Kologik seeks summary judgment that the terms of the Note control the parties’
obligations for the repayment of the $235,000 loan. It contends that through the date of the
bankruptcy petition that total is $150,686.00. That contention necessarily includes the
underlying theory that the $827,306.58 received was not attributable to the D&O Claims. To that
end, Koligik offered the Declaration and attachment thereto executed by the Liquidation Trustee.
The summary judgment evidence establishes that the Liquidation Trust did not receive any
proceeds attributable to the settlement of the D&O Claims until after the $827,306.58 had been
paid to Kologik. Thomas did not present any evidence to the contrary. The court will grant
summary judgment in favor of Kologik, finding that the following amounts are attributable to the
D&O Claims:
$412,500.00 Received January 9, 2020
$27,306.5849 Received December 17, 2019
$439,806.58 TOTAL
However, for reasons set forth below, the court will not grant summary judgment limiting
Thomas’s claim to $150,686.00.
49 In Kologik’s Objection to Thomas proof of claim, Kologik treated as D&O proceeds the $27,306.58 it received
from the Liquidation Trust on December 17, 2019. Case No. 24-10311, P-222, ¶ 21. At the hearing, counsel for
Kologik clarified that they still contend this amount was not attributable to D&O proceeds but continuing the fight
over that amount was not worth the trouble.
B. Open Account and Attorneys’ Fees
Kologik also seeks summary judgment declaring the amount due on the Note is not an
“open account” under Louisiana law and thus Thomas may not seek reasonable attorneys’ fees at
trial. In Simmons v. Cornerstone Investments, LLC,50 the Louisiana Supreme Court held that
“[i]t is ... well recognized in the jurisprudence of this state that as a general rule attorney fees are
not allowed except when authorized by statute or contract.”51 Count One of Thomas’s complaint
alleges that Kologik’s debt to Thomas represents an open account. La. R.S. 9:2781 does not
define what an open account is but case law certainly suggests that it applies to debts arising
from services rendered or goods supplied.52 And in Lehman v. Benasco,53 the court held that
“[t]o construe ‘open account’ as used in La. R.S. 9:2781 to include the failure to pay a
promissory note would violate the principle that statutes providing for attorney fees are penal in
nature and must be strictly construed.”54 It should be noted that the prescriptive period on a
promissory note is five years (La. C.C. art. 3498) and a suit on an open account is three years
(La. C.C. art. 3494), further evidence in this court’s view that the two types of claims are
inherently different.
While the court grants summary judgment in favor of Kologik that the Note is not an
open account (and therefore attorneys’ fees are unavailable under that statute), this ruling does
not foreclose the possibility of Thomas maintaining a claim for reasonable attorneys’ fees at trial
50 Simmons v. Cornerstone Invs., LLC, 2018-0735 (La. 5/8/19), 282 So. 3d 199.
51 Id. at 203 (quoting Killebrew v. Abbott Laboratories, 359 So.2d 1275, 1278 (La. 1978)).
52 Bridges v. Citifinancial Auto Corporation, 18-0734 (La. App. 1 Cir. 11/5/18), 266 So.3d 939, 942.
53 Lehman v. Benasco, 2023-0694 (La. App. 1 Cir. 2/8/24), 384 So. 3d 366.
54 Id. at 370.
under the Note. Indeed, the court has already ruled, at Kologik’s urging, that the Note controls
the obligations between Thomas and Kologik. It would be intellectually inconsistent to parse out
beneficial portions of the Note from those less so. The Note clearly provides that “Borrower
promises to pay, …, the costs and expenses of such collection, foreclosure and representation,
including without limitation, reasonable attorneys’ fees and expenses.”55 This court is not going
to penalize Thomas for pleading a claim for attorneys’ fees under an inapplicable statute when
the contract unequivocally provides for that claim. Similarly, the court expressly finds that
seeking contractual attorneys’ fees is not an expansion of the pleadings in the complaint.
Thomas asked for attorneys’ fees and the Note provides for that. The amount of that claim must
be determined after a trial on the merits. To the extent Kologik seeks summary judgment
denying all attempts to establish a contractual claim for attorneys’ fees, the motion is denied.
C. The Payroll Loan
Kologik also seeks summary judgment that the $41,500 Payroll Loan made by Thomas to
Kologik is not an open account, preventing any attempt to claim attorneys’ fees for this distinct
claim. The key distinction here, of course, is that the Payroll Loan was not reduced to a
promissory note. As such, the only way Thomas can successfully maintain a separate award of
attorneys’ fees under the Payroll Loan is to shoehorn the claim under the open account statute
contained in La. R.S.§ 9:2781. Perhaps recognizing the futility of that claim,56 Thomas waived
55 P-40, Exh. B.
56 La. C.C. art. 3494 lists a series of actions subject to a liberative prescriptive period of three years. Subsection (3)
is “[a]n action on money lent;” and subsection (4) is “[a]n action on an open account.” An action on an
undocumented loan almost assuredly would be characterized by courts as a suit on “money lent” rather than a suit on
open account. Had the legislature intended for actions on money lent and open account to be synonymous, it could
have certainly dispensed with the delineation made in La. C.C. art. 3494. Further, even assuming the Payroll Loan
is an open account, Thomas was required, under the open account provisions, to send a written demand for payment
within 30 days of the debt becoming due correctly setting forth the amount owed to be entitled to reasonable
attorney fees. The record contains no such evidence.
his right to attorneys’ fees on the Payroll Loan in his Opposition to Kologik’s Motion for Partial
Summary Judgment.57 Thus, Kologik will be granted summary judgment on this issue.
Before moving on to Kologik’s counterclaim, to determine the amount of Thomas’s
allowed claim, which is also set for trial on April 15, 2025, the parties must take into account all
credits due for payments made and the rulings herein that clarify (1) no settlement was reached
that would allow for a 15% pre-default interest rate on the Note, (2) the $800,000 paid to
Kologik on December 17, 2019, was not attributable to the D&O recovery, (3) Kologik has
voluntarily waived any right to judgment that the additional $27, 306.58 of the funds received
from the Liquidation Trust were also not attributable to the D&O recovery, and (4) Thomas will
be permitted to make a claim for contractual attorneys’ fees at trial but not with respect to
collection on the Payroll Loan.
D. The Writ
Kologik also seeks summary judgment on its counterclaim (1) to dissolve and nullify the
Writ maintained after a hearing in state court, and (2) for money damages in dissolving the Writ
as a wrongful seizure. In turn, Kologik requests dismissal of Counts Two and Three of Thomas’s
complaint. While it may be tempting to weigh in on the language in the Note expressly
forbidding Thomas from attaching assets, a ruling on this issue has already been made in the
state court proceeding. Kologik was represented by counsel at the hearing. As such, Kologik’s
requests to dissolve the Writ and award damages to it for wrongful seizure are beyond this
court’s jurisdiction. In Weaver v. Texas Cap. Bank N.A.,58 the Fifth Circuit held:
Under the Rooker–Feldman doctrine, “federal district courts lack jurisdiction to
entertain collateral attacks on state court judgments.” Liedtke v. State Bar of Tex.,
57 P-57, footnote 1.
58 Weaver v. Texas Cap. Bank N.A., 660 F.3d 900 (5th Cir. 2011).
18 F.3d 315, 317 (5th Cir.1994). A state court judgment is attacked for purposes
of Rooker–Feldman “when the [federal] claims are ‘inextricably intertwined’ with
a challenged state court judgment,” Richard v. Hoechst Celanese Chem. Grp.,
Inc., 355 F.3d 345, 350 (5th Cir.2003), or where the losing party in a state court
action seeks “what in substance would be appellate review of the state judgment.”
Johnson v. De Grandy, 512 U.S. 997, 1005–06, 114 S.Ct. 2647, 129 L.Ed.2d 775
(1994).59
The doctrine of Rooker-Feldman prevents this court from serving as an appellate court in
deciding whether the state court Writ should be dissolved as a wrongful seizure. Stated another
way, this court lacks jurisdiction to act upon Kologik’s requests, as to do so would be an
impermissible collateral attack on the state court ruling. For the same reasons, the court will
deny summary judgment on Kologik’s claim for damages for wrongful seizure. And finally,
based on a lack of jurisdiction, the court will also dismiss Counts One, Two, and Three of
Kologik’s counterclaim, without prejudice to its rights to seek that relief in the state court
proceeding.
E. Conclusion
Kologik’s Motion for Partial Summary Judgment is granted in part and denied in part.
Kologik proved that no genuine issue of material fact is in dispute regarding whether a
settlement was reached by the parties sufficient to modify the Note. Kologik, through the
Declaration of the Liquidation Trustee, also established that Thomas is limited to his percentage
recovery of the $412,500 received in January of 2020, together with the $27,306.58 received
earlier that Kologik voluntarily waived rights to. While the Note is not an open account, the
Note itself does provide for attorneys’ fees if the matter is turned over for collection. This aspect
of the motion for partial summary judgment is denied. A trial will be held to determine the
59 Id. at 904.
amount of that claim. And with respect to Kologik’s request that attorneys’ fees related to the
Payroll Loan be denied, especially considering the waiver to that claim by Thomas, summary
judgment is granted. Finally, the Rooker-Feldman doctrine precludes this court from exercising
jurisdiction as to whether the Writ should be dissolved, as well as any claim for money damages
for wrongful seizure. Summary judgment is denied on those issues and Counts One, Two, and
Three of Kologik’s counterclaim are dismissed, without prejudice to Kologik’s rights to seek
relief from a court of competent jurisdiction. The court will enter a separate judgment in
accordance with this ruling.
V. Kologik’s Motion in Limine
Kologik seeks to exclude from trial all evidence of settlement negotiations pursuant to
F.R.E. 408. F.R.E. 408 provides:
(a) Prohibited Uses. Evidence of the following is not admissible--on behalf of any
party--either to prove or disprove the validity or amount of a disputed claim or to
impeach by a prior inconsistent statement or a contradiction:
(1) furnishing, promising, or offering--or accepting, promising to accept, or
offering to accept--a valuable consideration in compromising or attempting to
compromise the claim; and
(2) conduct or a statement made during compromise negotiations about the
claim--except when offered in a criminal case and when the negotiations
related to a claim by a public office in the exercise of its regulatory,
investigative, or enforcement authority.
(b) Exceptions. The court may admit this evidence for another purpose, such as
proving a witness's bias or prejudice, negating a contention of undue delay, or
proving an effort to obstruct a criminal investigation or prosecution.
The court has already denied Thomas’s attempt to increase his claim through an alleged
settlement. The only issue left to be tried is Thomas’s contractual right to reasonable attorneys’
fees as part of his overall unsecured claim in this bankruptcy. At trial, the court will enforce
F.R.E. 408 and prohibit evidence of settlement negotiations “to prove or disprove the validity or
amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction.”
This limitation may apply, for example, if Thomas were to attempt to introduce evidence or
testimony at trial concerning settlement discussions related specifically to the amount of a
reasonable attorney fee award under the Note. To the extent not mooted by the rulings herein,
the Motion in Limine is granted. The court will enter a separate order in accordance with this
ruling.
Baton Rouge, Louisiana, April 3, 2025.
/s/ Michael A. Crawford
MICHAEL A. CRAWFORD
UNITED STATES BANKRUPTCY JUDGE