Petition for Writ of Certiorari — Crisler v. Browne
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Supreme Court, U.S
FILED
02 58077 | 52002
No. OFFICE OF THE CLERK
In the
Supreme Court of the United States
WILLIAM J. CRISLER, JR. and DEGAULLE MANOR, LTD.,
Petitioners,
KATHY BROWNE, et al.,
Respondents.
On PETITION FOR A Writ OF CERTIORARI
TO THE LOUISIANA SUPREME COURT
PETITION FOR WRIT OF CERTIORARI
ROBERT E. KERRIGAN, JR.
Counsel of Record
JOSEPH L. MCREYNOLDS
JOSEPH E. LEE, III
DEUTSCH, KERRIGAN & STILES,
755 Magazine Street
New Orleans, LA 70130
RECEIVED
OCT 1? ongo
(504) 581-5141
(504) 566-1201
Attorney for Petitioners
Curry & Tavior ¢ (202) 393-4141 ¢ HTTPY/USSCINFO.cCOM
1
QUESTIONS PRESENTED
Petitioners William J. Crisler, Jr. and DeGaulle
Manor, Ltd. were cast in judgment for over $2 million
each in a Louisiana state court tort action. Louisiana
law required each petitioner to post a bond in the
amount of his judgment liability plus irterest in order to
stay enforcement of the judgment pending his appeal to
the Louisiana Court of Appeal. Neither Crisler nor
DeGaulle has the financial means to obtain a bond in
that amount, and they have accordingly sought relief
from this requirement.
Following denials of relief by the Louisiana
district court and court of appeal, the Louisiana
Supreme Court refused to Stay enforcement of the
judgment against Crisler and DeGaulle pending their
appeal. The question presented is whether the Equal
Protection and Due Process clauses of the Fourteenth
Amendment preclude a state from arbitrarily denying a
request for stay of a judgment pending appeal when the
appellant is otherwise unable to post a bond equal to no
less than the amount of the judgment plus interest.
BEST AVAILABLE COPY
ii
PARTIES TO THE PROCEEDING
AND RULE 29.6 STATEMENT
The petitioners are William J. Crisler, Jr., a
Mississippi resident, and DeGaulle Manor, Ltd., a
Mississippi limited partnership, both defendants in the
Louisiana state court action. The respondents are Kathy
Browne, Tara Mosley, and Rydell Bienaime, all plaintiffs
in the Louisiana state court action. Zurich American
Insurance Company and KONE, Inc. were both
defendants in the Louisiana proceedings, but neither
Zurich nor KONE is before this Court.
Petitioner DeGaulle Manor, Ltd., has no parent
companies or subsidiaries (except wholly-owned). In
Ane interest of full disclosure, however, DeGaulle Manor,
L.L.C., a Mississippi limited liability company of which
William J. Crisler is a member, is the general partner of
DeGaulle Manor, Ltd.
ll
TABLE OF CONTENTS
SP RIONE FIRE IND sncvececvcvscsinseveneseesonvsepnecssevnssecenssonsosones i
PARTIES TO THE PROCEEDINGS AND RULE 29.6 STATEMENT ii
ITT naccadsasipahaneoepanbonbeiienaeneeneonecudeiaess iii
PE Ot PII ca casccinecsessnsevsesesnenasesenescnesnesovenvssinonens iv
TTI cd dc tlesdisedeidnscnbtnseennnspoietehanasionten 1
Aichi ec ncinhanbliainclabbetecnntbcmnatlens 1
RELEVANT PROVISION(S) INVOLVED.........cccsccscssesssscsssecesceceeee 1
IIIT PI UII AI c.ssannssstnsisninncsescencconesonsovenetenceavense 2
REASONS FOR GRANTING THE WRIT ...........cscsccssssssessessessecesees 8
EF EC a ee ee 18
APPENDIX
SE RNIN MPIC IIIT sxc scvbcsnessccseesibesnctetscecesesoosssesoses la
IPE SIE CIID sceccnvenvcscsasoncecsnsoccevncecsevnsancseses 13a
DISTRICT COURT BENCH RULING ..........cccsccsssssssessesssceeees 15a
APPENDIX
SUPREME COURT OF LOUISIANA DECISION (7/17/02)........ la
SUPREME COURT OF LOUISIANA DECISION (7/16/02)........ 3a
SUPREME COURT OF LOUISIANA DECISION (7/10/02)........ 5a
COURT OF APPEAL, FOURTH CIRCUIT DECISION
TTT Taian iAalsseittebdeenacilaesnallcheilitiisdannabieiaiowiseanansesane 8a
COURT OF APPEAL, FOURTH CIRCUIT DECISION
NN ae chia tlic cnda anion ananaidnseinienbiibiniisdiieiniciataandonse lla
CIVIL DISTRICT COURT DECISION (7/1/02).......c.scssseesesee. 12a
OTHER RELEVANT MATERIAL..............sccccecsscssessssssseceesees l4a
iv
TABLE OF AUTHORITIES
FEDERAL CASES
BURNS V. OHIO, 360 U.S. 252, 257-258
ESIEIUEIY scpiseiisticesethicliilideaiiaiiaicalabiiiaciiadiiichiclaicaeaiatia as dnidiinasetptlinis 12
DOUGLAS V. CALIFORNIA, 372 U.S.
ey I I jccinrcesedihestnilsacsiataaitgtsiashchiniiatanintebinaiiaiiadaiiniad 12
EVITTS V. LUCEY, 469 U.S. 387, 405
GRIFFIN V. ILLINOIS, 351 U.S. 12, 17-
Sa CITE sininissiseeneitinciniuastediapnesabaiiiaicisinsciadastslianebidaainaabvamiacaahiian 12
‘LINDSEY V. NORMET, 405 U.S. 56, 77
«es Ra ERLE Ce en ian ee ROR rae 8, 12
MODJESKI & MASTERS V. CARTER, 485
Sie Bee IIE steninidkcnnataddinilsshatngebieeincioiasialiun 3, 6, 7,9
WILLIAMS V. OKLAHOMA CITY, 395 U.S.
|___Screen eon aes nee ae 12
STATE CASES
BOWEN V. GEICO, 451 So.2D 1196
CA, SR a ak ee seth ia csneensnitensitiilieninediaaibiiaiatiite 5
RACINE V. Moon's TOWING, INC., 01-
2837 (LA. 5/14/02), 817 SO.2D 211 ........ccscscsesscssccessreerees 17
FEDERAL STATUTES
Ut i i a 1
U.S. CONST., AMENDMENT XIV § 1............sssecssssscceeeeessseees 12
STATE STATUTES
DEL.C.ANN.CONST., ART. BA i enicticnmiitiieiigaate tata ae 8
La. CODE CIV. PROCEDURE ART.
SRP siicinacinnntaieihtibaianthapindaiaitascialnasiibeieine acta aoe 4
LA. CODE Clv. PROCEDURE ART.
TP nbiticenictnsiphisislibiitidaiaiaatitdiids acct 2,4
LA. CODE Civ. PROCEDURE ART. FE
i OT ee ETN IID 2, 6, 10, 11, 13
Re TEED aincsenssinssissiniiintppasinie: ie he 16
LOUISIANA CIVIL CODE ARTICLES 3047, -
SOO ssssicertnindinnapblbtipittilapgii nent ate Rees 6 ae ikem 1}
Miss. CODE § 79-29-305( ED stseiiutiivibucsdiininipitncialeaianene maga 16
MISS. CODE § 79-29-305(2) .....ccssscsssessssssssssssseccsssccseseseccccg. 16
NEB. REV. ST. § 25-1916(1)....c..ccssscsssscssssssessssssescsssescssssecccsg. 8
Eve Ce RP ihicientiitiniieadie at oe ae 8
VA. CODE ANN. § 8.01-676.1(A) ...cccscsecssssessssesosseosseeseoseeccss.n. .
STATE RULES
AL R RCP RULE 62(D)...........ccsscsssssssccessscessseeecosesooesooeeeees.... 8
DE Sup. CT. RULES, RULE _) MRE Le 8
BEN BE. BCP BRULE 68.08 .n..acscceosscvvsesecsveccsssossssecsecncesoeeese.. 8
ii | RT RE en eee, Ne 8
1
PETITION FOR A WRIT OF CERTIORARI
William J. Crisler, Jr. and DeGaulle Manor, Ltd.
respectfully petition for a writ of certiorari to review the
decision of the Louisiana Supreme Court in this case
and impose a stay on enforcement of the civil money
judgment pending petitioners’ appeal on the merits in
the Louisiana appellate court.
OPINIONS BELOW
The decision of the Louisiana Supreme Court
(App. 34) denying writs and affirming the district court
is unreported. The decision of the Louisiana Fourth
Circuit Court of Appeal (App. 8a) denying writs and
affirming the district court is unreported. The decision
of the Civil District Court for the Parish of Orleans (App.
12a-13a) denying petitioners’ motion to stay
enforcement of the judgment is unreported.
JURISDICTION
On July 16, 2002, the Louisiana Supreme Court
denied petitioners’ application for supervisory and/or
remedial writs. This Court has jurisdiction under 28
U.S.C. § 1257(a).
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
The Due Process Clause of the Fourteenth
Amendment provides that no state shall “deprive any
person of life, liberty, or property, without due process
of law”.' The Equal Protection Clause of the Fourteenth
Amendment provides that no state shall “deny to any
U.S. Const., Amendment XIV, § 1.
Rg ee a Te ee ee ee eee ye
—<—<—_<—_—_= ——————— ee
2
person within its jurisdiction the equal protection of the
laws.”
The Louisiana statute dealing with the security
required for a suspensive appeal’ provides in pertinent
part as follows:
B. The security to be furnished for a
suspensive appeal is determined in
accordance with the following
rules:
(1) When the judgment is for a
sum of money, the amount of
security shall be equal to the
amount of the judgment, including
the interest allowed by the
judgment to the date the security is
furnished, exclusive of the costs.“
STATEMENT OF THE CASE
Be Introduction
This matter arises out of the death of one boy and
injury to another at the Live Oak Apartments, a high-rise
apartment building in New Orleans, Louisiana. Not
surprisingly, suit in tort followed this tragic occurrence.
The instant petition is based not on the outcome of that
tort suit but rather on the Louisiana courts’ post-
judgment refusal to address a fundamental inequity in
the application of the Louisiana appeal-bond
: U.S. Const., Amendment XIV, § 1.
: A “suspensive appeal” is one that “suspends the effect or
execution of an appealable order or judgment”. La. Code Civ. P. art.
2123(A).
' La. Code Civ. P. art. 2124(B)(1).
requirement. The application of the requirement in this
case has led the Louisiana courts to conclude that
Crisler and DeGaulle must post appeal bonds that are
three times in excess of their available insurance
coverage, and exceed by an even greater factor their
available assets, if they wish to forestall bankruptcy
while pursuing an appeal. In light of this Court’s order
in Modjeski & Masters v. Carter,’ so onerous a security
requirement violates petitioners’ constitutional rights
under the Due Process and Equal Protection clauses of
the Fourteenth Amendment.
2. The Facts And Proceedings At Trial
With the curiosity characteristic of young boys,
Ron Brown, age 13, and Kevin Mosley, age 11, broke into
an elevator shaft at the Live Oak Apartments in October
1999. As one stood on the other’s shoulders, they
opened the hoistway doors by jimmying the safety lock
atop the outer doors and climbed down onto the top of
the elevator cab. Sadly, once inside, they lost their
footing and fell down the elevator shaft.
The owner of the Live Oak Apartments at the
time of the accident was DeGaulle Manor, Ltd., a
Mississippi Limited Partnership. The general partner of
DeGaulle Manor, Ltd. at that time was DeGaulle Manor,
L.L.C., a Mississippi Limited Liability Company of which
William J. Crisler, Jr. is a member. Crisler is a
Mississippi small businessman with no_ substantial
assets and a negative net worth who now faces certain
bankruptcy and financial ruin as a result of alleged acts
or omissions in the course of his role as a member of
DeGaulle Manor, L.L.C.
. 485 U.S. 1031 (1988).
4
Tara Mosley and Kathy Browne, the boys’
mothers, filed suit against DeGaulle, as owner of the
property; Crisler individually; and KONE, Inc., the
company obligated since 1995 to maintain the elevators.
Rydell Bienaime, Mosley’s father, who had never
contributed to his son’s welfare and was in fact
incarcerated at the time of the accident, brought suit
against the same defendants. After trial, the jury
rendered a verdict in favor of respondents and against
Crisler and DeGaulle for $2,275,500.00 and $2,200,000.00,
respectively, plus interest.° Zurich American Insurance
Company, their liability carrier, was cast in judgment
with them for its policy limits of $1-million, plus interest,
leaving Crisler and DeGaulle exposed to excess
judgment liability of over $2 million each, far in excess
of either party’s assets. KONE was found not liable.
Final judgment was entered on May 23, 2002.
3. The Louisiana Supersedeas Bond
Requirement
Crisler and DeGaulle timely sought an appeal of
the judgment against them. Louisiana law provides for
two types of appeals: (1) a “suspensive appeal,” in which
the appellant posts a bond equal to at least the amount
of the judgment plus interest;’ and (2) a “devolutive
appeal,” in which the appellant neither posts a bond nor
obtains a stay of the judgment.® Respondents moved for
a suspensive appeal and moved to limit the security
required under Louisiana Code of Civil Procedure
Article 2124B(1) to $1,227,752.00, the amount of Zurich’s
judgment liability plus interest, on the ground that
neither Crisler nor DeGaulle had sufficient assets to
6
With interest, the amount of the judgment against Crisler
and DeGaulle rose to $3,055,034.00 and $2,981,399.00, respectively.
La. Code Civ. Procedure Art. 2123(A).
La. Code Civ. Procedure Art. 2087(A).
post any additional security.” Alternatively, Crisler and
DeGaulle moved for an order Staying or enjoining
pending their appeal.
On July 1, 2002, the Civil District Court for the
Parish of Orleans granted all three defendants a
July 8, 2002." On July 9, 2002, the court of appeal
denied petitioners application for Supervisory review,
matter.” On July 16, 2002, the Louisiana Supreme Court
recalled that Stay, denied the application for supervisory
and/or remedial writs, and ordered petitioners to post
security in the amount ordered by the trial court within
forty-eight hours. “ Justice Jeanette T. Knoll dissented
from the denial of petitioners’ application, citing
precedent from this Court:
: Under Louisiana Law, Zurich is required to post security
only for the amount of its policy limits. See Bowen v. GEICO, 451
So.2d 1196 (La. App. 5" Cir. 1984).
i App. 12a-13a.
. App. lla.
7 App. 8a-9a.
“3 App. 5a-6a.
App. 3a-4a.
6
Knoll, J., concurs in the result but would
grant the writ and remand to the Court of
Appeal. C.C.P. art. 2124 (C) requires the
Court of Appeal to independently review
the amount of security. Without an
evaluation of factors such as_ the
defendants’ net worth, the Court of Appeal
abused its discretion by not ascertaining
whether the amount of security in this
case precludes the defendants from their
opportunity for a meaningful appeal. See
Modjeski & Masters v. Carter, 485 U.S.
1031 (1988). If the defendants’ net worth
were to prove less than the amount of the
security ordered by the trial court, their
inability to post security would be
tantamount to an arbitrary denial of their
access to the courts, violating their right to
due process. Therefore, I would
immediately remand to the Court of
Appeal for such determination.
Petitioners immediately requested an additional
ten days to post security or, in the alternative, seek a
stay from this Court. At 4:35p.m. on July 17, 2002, the
Louisiana Supreme Court denied that requested by a 5-2
16
Petitioners subsequently sought an emergency
stay and/or injunction from this Court through an
application to Justice Antonin Scalia under Supreme
Court Rule 22. On July 26, 2002, Justice Scalia denied
petitioners’ application for expedited and/or emergency
App. la-2a.
7
In addition to seeking formal relief through the
courts, petitioners have sought relief from respondents.
First, Crisler presented respondents with an affidavit
and financial statement detailing his Jack of any
significant assets. Second, Crisler offered himself for a
post-trial deposition that allowed respondents to
explore in great detail his and his family’s assets. This
deposition provided further support for the impecunious
condition established in Crisler’s affidavit, and made it
clear to respondents that the judgment in this matter
cannot be fully satisfied in any event. Despite the fact
that Crisler obviously lacks funds sufficient to satisfy
the judgment and will be forced into bankruptcy if
enforcement of the judgment is sought, respondents
have refused to give petitioners any assurance that they
will refrain from enforcing the judgment pending the
appeal. Accordingly, petitioners have no other recourse
than to seek a review by this Court.
As shown below, the Louisiana Supreme Court’s
refusal to stay the posting of petitioners’ appeal bond
raises a significant question of federal constitutional
law: the extent to which the states may deny a request
for stay of a judgment pending appeal based on the
inability of the appellant to post a bond equal to no less
than the amount of the judgment plus interest. At
present, at least 10 states impose such a statutory
requirement. The constitutionality and propriety of
Louisiana's appeal bond requirement was directly
addressed by this Court in Modjeski-& Masters v.
Carter. Following the entry of a preliminary stay by
Justice White, this Court concluded that the Louisiana
appeal bond requirement may not be blindly applied in
cases in which the appellant can provide some security
but is unable to obtain security in the full amount of the
judgment against him.
ee oo ee eee
8
REASONS FOR GRANTING THE WRIT
1. The Application Of The _ Louisiana
Supersedeas Bond Requirement In This Case
Is Neither Rational Nor Related To Any
Government Interest.
The refusal of the Louisiana courts to stay
execution of the judgment based solely on petitioners’
inability to post a bond far in excess of their respective
net worth raises a significant constitutional question: Is
it permissible under the Due Process and Equal
Protection clauses for a state automatically to refuse to
stay execution pending appeal based solely on the
appellant’s inability to post a supersedeas bond in the
full amount of the judgment against him? That this is an
important question is shown by the fact that no fewer
than 10 states have statutes making the posting of a
bond at least equal to the judgment plus interest a
prerequisite to obtaining a stay pending appeal.”
The Louisiana supersedeas bond requirement as
strictly applied in this case asks petitioners to do the
impossible: obtain security for assets they do not
possess. It is undisputed that the judgment liability of
Crisler and DeGaulle -— which collectively exceeds $5
million — far exceeds what assets petitioners possess for
satisfaction of the judgment against them. Petitioners
recognize the legitimate state interest in preserving a
judgment debtor’s property in the event that the appeal
is unsuccessful.’ However, respondents here will never
= AL R RCP Rule 62(d); Ala. R. App. P. 8(a);
Del.C.Ann.Const., Art. 4, § 24; DE Sup. Ct. Rules, Rule 32(c); Mn St.
RCP Rule 62.03; Neb. Rev. St. § 25-1916(1); NY CPLR § 5519(a); OR
R. RCP 72(a); Va. Code Ann. § 8.01-676.1(a) & (c).
Lindsey v. Normet, 405 U.S. 56, 77 (1972) (“a State may
9
be able to fully satisfy their judgment in this case, given
the vast discrepancy between the amount of the
judgment and the judgment debtors’ available assets and
insurance coverage. As this Court has previously
acknowledged, there is no rational interest in requiring a
judgment debtor to obtain security where there are
insufficient funds to satisfy the judgment in any event.
In Modjeski & Masters v. Carter,” this Court
recognized that, as a matter of federal constitutional
law, some measure of discretion inheres in the appeal
bond requirement. The Modjeski & Masters Court
fashioned the only reasonable remedy available when
faced with an appeal bond requirement that, for no
rational reason, forces an appellant into bankruptcy or
extinction during the pendency of his appeal: it allowed
the appellant to post a bond in the amount of its net
worth. This remedy strikes the appropriate balance
between the seemingly irreconcilable interests of the
judgment debtor and judgment creditor by securing the
assets actually available for satisfaction of the judgment.
No amount of security can preserve for enforcement of
a judgment assets that do not exist.
Like the present matter, Modjeski & Masters”
originated in the Civil District Court for the Parish of
Orleans and eventually made its way to this Court.
Modjeski & Masters involved a money judgment
rendered in the Civil District Court against an
engineering firm that provided consulting services in
connection with the Greater New Orleans Bridge over
the Mississippi River. The firm, Modjeski & Masters,
properly take steps to insure that an appellant post adequate
security before an appeal .. . to guard a damage award already
"485 U. S. 1031 (1988).
Id.
10
had a net worth of approximately $700,000.00, but had
been cast in judgment for approximately $14 million,
including interest. Like Crisler and DeGaulle here,
Modjeski & Masters sought but was unable to obtain a
suspensive appeal bond for the full amount of the
judgment against it, based on the discrepancy between
the firm’s net worth and the amount of the judgment.
Modjeski & Masters petitioned the district court
for an order eliminating the suspensive appeal bond
requirement, or, in the alternative, for an injunction,
urging that the enforcement of the bond requirement
would force the firm into bankruptcy and cause
irreparable harm. The district court found that
argument persuasive, but felt constrained to deny relief
from the full bond requirement because of the
mandatory nature of Article 2124. Modjeski & Masters
filed writs to both Louisiana Fourth Circuit and the
Louisiana Supreme Court, but both courts denied relief.
Modjeski & Masters then sought and obtained a
temporary stay from Justice White. This Court then
granted Modjeski & Masters’ request for a permanent
stay, and directed the Louisiana courts to allow
Modjeski & Masters to suspend execution of the
judgment against it by posting a bond for the firm’s full
net worth. The rationale behind the ruling was simple:
A final judgment merely gives the judgment creditor the
right (absent reversal of the judgment on appeal) to
satisfy the judgment out of the judgment debtor’s net
worth — not the right to collect the full judgment
regardless of the assets available to satisfy it. No bond
requirement can preserve assets that a judgment debtor
does not have. And no surety, recognizing that he will
be called upon to satisfy the judgment if affirmed on
appeal, will issue a bond securing the judgment liability
aac
11
of a bankrupt judgment debtor.”
The rationale underlying Modjeski & Masters is
equally applicable to the instant matter. Though they
face judgment liability in excess of $5 million, neither
Crisler nor DeGaulle possess sufficient assets to satisfy
the judgment. Neither Crisler nor DeGaulle is able to
obtain a suspensive appeal bond. Crisler is not willfully
refusing to pay the judgment against him; he simply
cannot obtain security for assets that he does not have.
Requiring Crisler or DeGaulle to either furnish security
in the full amount of the judgment or else appeal
devolutively is no less than a requirement that they
bankrupt themselves while pursuing their constitutional
right to appeal the judgment against them.
20
Article 2124(E) requires that the suspensive appeal bond
provide “in substance, that it is fwmished as security that the
appellant will prosecute his appeal, that any judgment will be paid
or otherwise satisfied from the proceeds of the sale of his property,
or that otherwise the surety is liable for the amount of the
judgment.” All sureties in Louisiana, even commercial sureties on
appeal bonds, have a right of reimbursement and the right to
require security from the principal. See Louisiana Civil Code
Articles 3047, 3049 and 3053.
. .
12
2. The Irrational And Unjustified Impairment
Of Petitioners’ Right To Appeal Violates The
Due Process And Equal Protection Clauses
Because It Is Irrational.
It is established law that the states need not
provide for appeals in the first place.” If they do
provide a right of appeal, however, they cannot
arbitrarily exclude certain parties from exercising that
right;” nor may they capriciously or arbitrarily grant the
right to some litigants and deny it to others without
violating the Equal Protection Clause.” For these
reasons, where a state has erected financial barriers _
effectively denying the defendant “a fair opportunity” to
” appeal and rendering his right to appeal “a meaningless
ritual,” this Court has struck down those barriers as
arbitrary, in violation of the Fourteenth Amendment.”
The strict application of the Louisiana bond requirement
in this case effectively renders petitioners’ appeal a
meaningless ritual.
In Lindsey v. Normet,” this Court recognized that
the burden placed by an appellate bond requirement on
the statutory right to appeal must be somehow
rationally related to the state’s interest in preserving the
property at issue. That is, in the case of a money
judgment such as the one entered below, it is rational
and legitimate for the state “to guard a money award
already made”.” The state’s rational interest in
“i Lindsey v. Normet, 405 U.S. 56, 77 (1972).
wd Evitts v. Lucey, 469 U.S. 387, 405 (1985).
58 Lindsey, 405 U. S. at 77.
1 Evitts, 469 U.S. at 394, 405. See Lindsey, 405 U.S. at 77;
Williams v. Oklahoma City, 395 U.S. 458, 460 (1969); Douglas v.
California, 372 U.S. 353, 356-58 (1963); Burns v. Ohio, 360 U.S. 252,
257-258 (1959); Griffin v. Minois, 351 U.S. 12, 17-18 (1956).
si 405 U.S. 56 (1972).
- Id. at 77.
13
preserving a judgment debtor’s assets is inapplicable
here, for no bond requirement will preserve for
satisfaction of the judgment assets that Crisler and
DeGaulle have never possessed. |
The Louisiana provision, Code of Civil Procedure
Article 2124, actually makes some allowance for judicial
discretion, but does not specifically grant the trial court
discretion in all cases. Article 2124 underwent a major
revision by the Louisiana Legislature in 2001, and now
specifically provides discretion on the part of the trial
judge to lower security requirements when the money
judgment exceeds $150 million. Subparagraph (B)(1)(a)
specifically states that, “where the amount of the
judgment exceeds $150 million, the trial court, upon
motion and after hearing, may, in the exercise of its
broad discretion, fix the security in an amount sufficient
to protect the rights of the judgment creditor while at
the same time preserving the favored status of appeals
in Louisiana.” Paragraph D of the Article also gives a
trial court discretion to increase security “for good
cause,” further statutory authority for judicial
discretion.
Moreover, Paragraph~C specifically allows for
review of an onerous supersedeas bond by the
intermediate appellate court when “the party seeking to
appeal from a judgment for a sum of money is aggrieved
by the amount of the security fixed by the trial court”.”
These provisions in the bond statute evidence express
legislative recognition of judicial discretion to balance
the rights of judgment creditors and judgment debtors
27
La. Code Civ. P. art. 2124(C). As Justice Knoll of the
Louisiana Supreme Court observed in her dissent, there is no
evidence that the Louisiana appellate court conducted any
independent evaluation of the amount of security fixed by the trial
court in this case.
14
by fashioning an appropriate amount of security
according to the needs of a particular case.
Louisiana’s bond provision, as applied to the
petitioners, imposes a clear financial barrier to appeal
on these facts and, as such, cannot be expected to
withstand this Court’s constitutional scrutiny. As
explained above, the only way for petitioners to obtain a
stay of execution pending appeal under Louisiana law is
for them to post a bond equal to the amount of the
judgment plus interest. This they cannot do. For this
reason, petitioners may be forced into a bankruptcy
from which they may not emerge. They may never have
meaningful review of this civil death sentence, a review
available under Louisiana law for those with sufficient
resources to post suspensive appeal bonds.
Nor is there any reason for refusing to stay
judgments against those in petitioners’ position. If
respondents were permitted to enforce their judgment
against petitioners, the most that they could hope to
recover would be the value of the Zurich policy, which
has already been posted as security. Requiring a bond
of over $6 million surely has little to do with protecting
respondents’ position. The most that could rationally be
required would be a bond equal to petitioners’ net
worth, which, in Mr. Crisler’s case, would be a negative
amount.
Denial Of A Stay Of Enforcement Of The
Judgment Would Cause Irreparable Injury to
Petitioners By Exposing Them To
Bankruptcy During The Pendency Of Their
Appeal.
Petitioners will be irreparably injured unless this
Court grants a writ of certiorari to prevent immediate
enforcement of the judgment against them.
Respondents have already begun proceedings designed
to allow execution of the Louisiana judgment in Crisler’s
home state of Mississippi. The outstanding judgment
and interest so far exceed the amount of existing assets
and insurance coverage that immediate enforcement
will certainly mean bankruptcy for Crisler and
extinction for DeGaulle.
Although irreparable, this financial ruin might not
be so troubling were it inevitable. But it is far from
certain that petitioners would be forced into bankruptcy
were the proceedings in the Louisiana appellate courts
allowed to run their full course. Respondents are
essentially seeking to force Crisler to bankrupt himself
while appealing a judgment that will likely not withstand
review on appeal.
William Crisler did not own the Live Oak
Apartments, nor did he “own” DeGaulle Manor, Ltd. At
no time pertinent to this action was Crisler a partner in
DeGaulle Manor, Ltd. Rather, the general partner of
DeGaulle Manor, Ltd. was DeGaulle Manor, L.L.C.
Crisler, in turn, was a member of DeGaulle Manor, L.L.C.
Both DeGaulle entities, the limited partnership and the
limited liability company, were duly-organized and
constituted under the laws of the State of Mississippi.
Crisler’s status, as merely a member of the limited
liability company that was a partner in the limited
16
partnership, was clearly established at trial and
unrefuted.
That Crisler cannot be held liable in his capacity
as a member of the limited liability company is clear
regardiess of whether Louisiana or Mississippi law
applies to the question. Under Louisiana law, “no
member, manager, employee or agent of a limited
liability company is liable in such capacity for a debt,
obligation, or liability of the limited liability company.””
Moreover, except in the case of a dispute between the
limited liability company and one of its members, “a
member, manager, employee, or agent of a limited
liability company is not a proper party to a proceeding
by or against a limited liability company[.]”"”
Mississippi law is equally clear on the question,
explicitly providing that “a member of a limited liability
company is not liable by reason of being a member,
under a judgment, decree or order of a court... fora
debt, obligation, or liability of the limited liability
company ... whether arising in . . . tort or otherwise.””
And, as in Louisiana, “[a] member of a limited liability
company is not a proper party to a proceeding by or
against a limited liability company, by reason of being a
member of the limited liability company[.]””
In addition to the logical and jurisprudential
deficiencies in the judgment rendered below as it
applies to Crisler personally, the judgment is further
incorrect as a matter of law in that it effectively
resurrects strict premises liability, a species of liability
without fault that is all but extinct in Louisiana.
2 La.R.S. 12:1320 (B).
= Id.
e Miss. Code § 79-29-305(1).
~ Miss. Code § 79-29-305(2).
17
Moreover, in applying the attractive nuisance doctrine
to this case involving injury to an 11-year-old and a 13-
year-old, the decision below contravenes recent and
relevant Louisiana Supreme Court precedent indicating
that the doctrine only applies to children under 10-years-
old.
On the other hand, staying enforcement of the
judgment pending appeal will not prejudice
respondents’ position. Respondents have already been
offered the full amount of the Zurich policy in
settlement of this matter. If respondents were permitted
to enforce their judgment tomorrow, the most that they
could possibly hope to obtain would be the amount of
the Zurich policy, plus whatever minor amounts they
might eventually obtain from Crisler’s and DeGaulle’s
bankruptcy proceedings. Indeed, it appears that the
only benefit to respondents’ apparent plan to initiate
immediate enforcement of the judgment against Crisler
and DeGaulle, knowing that it cannot lead to collection
of any significant amount over the amount of the Zurich
policy, would be avoidance of an appellate ruling
eliminating the judgment altogether or reducing it to
less than the amount of the Zurich policy.
" _ Racine v. Moon's Towing, Inc., 01-2837 (La. 5/14/02), 817
So.2d 21.
18
CONCLUSION
Therefore, petitioners William J. Crisler, Jr. and
DeGaulle Manor, Ltd. respectfully pray that this Court
grant their Petition for a Writ of Certiorari to the
Louisiana Supreme Court and stay enforcement of the
Judgment of the Civil District Court for the Parish of
Orleans pending petitioners’ appeal of the judgment on
the merits.
ROBERT E. KERRIGAN, JR.*
JOSEPH L. MCREYNOLDS
JOSEPH E. LEE, I
DEUTSCH, KERRIGAN & STILES, L.L.P.
755 Magazine Street
New Orleans, LA 70130
Telephone: (504) 581-5141
Facsimile: (504) 566-1201
*COUNSEL OF RECORD
Counsel for Petitioners
la
SUPREME COURT
STATE OF LOUISIANA
NEW ORLEANS
PASCAL F. CALOGERO, JR. 301 LOYGLA AVENUE
CHIEF JUSTICE NEW ORLEANS, LA
70112
JOHN TARLTON OLIVIER
CLERK OF COURT
TELEPHONE (504) 568-5707
HOME PAGE
http://www.lasc.org
July 17, 2002
Joseph L. McReynolds, Esq.
755 Magazine St
New Orleans, LA 70130
In Re: Browne, Kathy etal vs. DeGualle Manor Ltd. etal
No: 2002-CC-1883 Dear Counsel:
This is to advise that the Court took the following action
on the Motion For Extension of Time to Post Appeal
Bond and File Application to the U.S. Supreme Court in
the above entitled matter:
“Motion denied.”
Knoll, J.. would grant the motion, I find defendant's
request for a ten day extension of time to post an appeal
bond and/or file a writ with the U.S. Supreme Court
reasonable and, therefore, would grant defendant’s
motion under the circumstances of this case.”
Weimer, J., would grant the motion.
2a
With kindest regards, I remain,
Very truly yours,
John Tarlton Olivier
Clerk of Court
By: Katherine A. Fontana
Deputy Clerk of Court
KAF: vre
ccs: All Counsel
Court of Appeal, Fourth Circuit, Number 2002-C-1306
3a
_ The Supreme Court of the State of Louisiana
NO. 2002-CC-1883
KATHY BROWNE, ET AL.
VS.
DEGUALLE NANOR, LTD., ET AL.
IN RE: DeGualle Manor Ltd. etal; Crisler, William J. Jr.,
Defendant(s); Applying for Supervisory and/or Remedial
Writs, Parish of Orleans, Civil District Court Div. A, Nos.
99-18552, 99-19006, 99-19398; to the Court of Appeal,
Fourth Circuit, No. 2002-C-1306
July 16, 2002
Stay recalled; Writ denied. We find no error in the trial
court’s application of La. Code Civ. P. art 2124. Relators
are granted 48 hours from the issuance of this order to
post the requisite suspensive appeal bonds, should they
choose to seek a suspensive appeal.
JLW
4a
KNOLL, J., dissents with reasons. I would grant the writ
and remand this matter to the court of appea!. LSA-
C.C.P. art. 2124(C) requires the court of appeal to
independently review the amount of security. Without
an evaluation of factors such as the defendants’ net
worth, the court of appeal abused its discretion by not
ascertaining whether the amount of security in this case
precludes the defendants from their opportunity for a
meaningful appeal. See Modjeski & Masters v. Carter,
485 U.S. 1031 (1988). It the defendants’ net worth were
to prove less than the amount of security ordered by the
trial court, their inability to post security would be
tantamount to an arbitrary denial of their access to the
courts, violating their right to due process. Therefore, I
would remand this matter to the court of appeal for
such determination
Supreme Court of Louisiana
July15, 2002
Deputy Clerk of Court
For the Court
5a
SUPREME COURT
STATE OF LOUISIANA
NEW ORLEANS
PASCAL F. CALOGERO, JR. 301 LOYGLA AVENUE
CHIEF JUSTICE NEW ORLEANS, LA
70112
JOHN TARLTON OLIVIER
CLERK OF COURT
TELEPHONE (504) 568-5707
HOME PAGE
http://www. lasc.org
July 10, 2002
Hon. Carolyn W. Gill-Jefferson
Parish of Orleans
Judge, Civil District Court
Division A.
421 Loyola Ave.
New Orleans, LA 70112
In Re: Browne, Kathy etal vs. DeGualle Manor Ltd. etal
No: 2002-CC-1883
Dear Judge Gill-Jefferson:
This is to advise that the Court took the following action
with regards to the above entitled matter:
“All proceedings stayed pending further orders of the
Court.”
Knoll, J., concurs in the result but would grant writ and
remand to Court of Appeal. C.C.P. art. 2124 (C) requires
the Court of Appeal to independently review the amount
6a
of security. Without an evaluation of factors such as the
defendants’ net worth, the Court of Appeal abused its
discretion by not ascertaining whether the amount of
security in this ease precludes the defendants from their
opportunity for a meaningful appeal. See Modjeski &
Masters v. Carter, 485 U.S. 1031 (1988). If the
defendants’ net worth were to prove less than the
amount of security ordered by the trial court, their
inability to post security would be tantamount to an
arbitrary denial of their access to the courts, violating
their right to due process. Therefore, I would
immediately remand to the Court of Appeal for such
determination.
With kindest regards, I remain,
Very truly yours,
John Tarlton Olivier
Clerk of Court
By: Katherine A. Fontana Deputy Clerk of Court
KAF: rtd
ccs: Thomas L. Gaudry Esq.
Gregory Carl Weiss Esq.
Terese M. Bennett Esq.
Tamara Kluger Jacobson Esq.
Joseph Edward Lee III Esq
Robert Emmett Kerrigan Jr. Esq.
Marc D. Winsberg Esq.
Eugene P. Redmann Esq.
Thomas William Darling Esq.
Joseph L. McReynolds Esq.
Court of Appeal. Fourth Circuit, Number 2002-C-1306
Civil District Court Div. “A” Number 99-18552
\
7a
Civil District Court Div. "A" N umber 99-19006
Civil District Court Div. “A” Number 99-19398
8a
NO. 2002-C-1306
COURT OF APPEAL, FOURTH CIRCUIT
STATE OF LOUISIANA
KATHY BROWNE, ET AL.
VERSUS
DEGUALLE MANOR, LTD., ET AL.
IN RE: DEGAULLE MANOR, LTD. AND WILLIAM
J. CRISLER, JR.
APPLYING FOR: SUPERVISORY WRITS
DIRECTED TO: HONORABLE CAROLYN GILL-
JEFFERSON, JUDGE CIVIL DISTRICT COURT,
ORLEANS PARISH DIVISION “A”, 99-18552
SUPERVISORY WRIT DENIED; STAY VACATED.
On the showing made, we decline to exercise our
supervisory jurisdiction. We find no error in the trial
court’s application of La. C.C.P. art, 2124. Modjeski
&Masters v. Carter, 485 U.S. 1031, 108 S. Ct. 1590 (1988)
applies only to its unique facts and is distinguishable
from those in the case at bar. We vacate our stay and
grant relators 24 hours from the date and time of this
order to post the requisite bonds.
New Orleans, Louisiana this 9th day of July, 2002, at
11:00 a.m.
JUDGE MAX N. TOBIAS, JR.
9a
Jones, J. Concurs in the Result (see attached)
JUDGE CHARLES R. JONES
JUDGE MICHAEL E. KIRBY
10a
NO. 2002-C-1306
COURT OF APPEAL
FOURTH CIRCUIT
STATE OF LOUISIANA
KATHY BROWNE, ET AL.
VERSUS
DEGUALLE MANOR, LTD., ET AL.
JONES, J. CONCURS IN THE RESULT
lla
NO. 2002-C-1306
COURT OF APPEAL
FOURTH CIRCUIT
STATE OF LOUISIANA
KATHY BROWNE, ET AL.
VERSUS
DEGUALLE MANOR, LTD., ET AL.
(CDC# 99-18552)
DIVISION "A"
ORDER
IT IS ORDERED that this manner be stayed pending
further orders of this court.
IT IS FURTHER ORDERED that the respondents file a
written response to the relator’s application for
supervisory writ by 2:00 p.m. on Monday, July 8, 2002.
New Orleans, Louisiana this 3rd day of July, 2002.
JUDGE CHARLES R. JONES
JUDGE MICHAEL B. KIRBY
JUDGE MAX N. TOBIAS, JR.
12a
CIVIL DISTRICT COURT FOR
THE PARISH OF ORLEANS
STATE OF LOUISIANA
NO. 99-18552 DIVISION “A”
c/w 99-19006
c/w 99-19398
KATHY BROWN, on behalf of her minor son,
RON BROWN
VERSUS
DEGAULLE MANOR, ET AL
FILED:
DEPUTY CLERK
JUDGMENT
This matter came for hearing on the Defendants' Motion
for Suspensive Appeal to Limit Security on July 1,2002 at
10:00 a.m. Present were:
Tamara Kluger Jacobson
HARVEY, JACOBSON & GLAGO
A Professional Law Corporation
2609 Canal Street, 5th Floor
New Orleans, Louisiana 70119
Counsel for Plaintiffs, Kathy Brown and Ron Brown
Thomas McEachin
SCHONEKAS, WINSBERG,
EVANS & McGOEY, L.L.C.
400 Poydras Street, Suite 2040
New Orleans, Louisiana 70130
Counsel for Plaintiff, Tara Mosely
13a
Greg Weiss
WEISS & EASON
1515 Poydras Street, Suite 1100
New Orleans, Louisiana 70112
Counsel for the defendants
Robert Kerrigan
Joseph L. McReynolds
DEUTSCH, KERRIGAN & STILES, L.L.P.
755 Magazine Street
New Orleans, Louisiana 70 130-3672
Counsel for the Defendants
Thomas W. Darling
WINDHORST, GAUDRY, RANDSON,
HIGGINS & GREMILLION
401 Whitney Avenue, Suite 500
Gretna, Louisiana 70056
Counsel for the Defendant,
Zurich American Insurance Company
Alter considering the pleadings, memoranda, exhibits
and arguments of Counsel, this Court finds the
following:
IT IS HEREBY ORDERED that the defendants’ Motion
for Suspensive Appeal is GRANTED provided that the
parties comply with the requirements of posting a bon2
as set forth in La.C.C.P. 2124.
IT IS FURTHER HEREBY ORDERED that the Motion of
the Defendants. William J. Crisler, Jr. and DeGaulle
Manor, Ltd. to limit the amount of the required bond and
all other relief as prayed for in their motion is DENIED.
New Orleans, Louisiana this 1st day of July 2002.
Judge
l4a
CIVIL DISTRICT COURT FOR THE
PARISH OF ORLEANS
STATE OF LOUISIANA
KATHY BROWN ET AL
VERSUS
DEGAULLE MANOR ET AL.
CASE NUMBER: 99-18552 DIVISION A
c/w 99-19006
c/w 99-19398
Transcript of the HEARING held in the above-captioned
matter on Monday, July 1, 2002, before the Honorable
Carolyn Gill-Jefferson, Judge Presiding.
APPEARANCES:
TAMARA JACOBSON, ESQ.
Representing the Plaintiff, KATHY BROWN ET AL.
THOMAS M. MCEACHIN, ESQ.
Representing ‘the plaintiff, TARA MOSLEY ET AL.
GREGORY C. WEISS, ESQ
JOSEPH L. MCREYNOLDS, ESQ.
ROBERT E. KERRIGAN, ESQ.
Representing the Defendant, DEGAULLE MANOR ET
AL.
THOMAS DARLING, ESQ.
Representing the Defendant, ZURICH AMERICAN
INSURANCE COMPANY
REPORTED BY:
Eve S. Kazik, RMR
Colloquy by the Court
PROCEEDINGS
Monday, July 1, 2002
THE COURT:
This is matter No. 99-18552, consolidated with 99-19006,
consolidated with 99-19398, Kathy Brown versus
DeGaulle -Manor, Ltd. Counsel, please identify
yourselves and your representation for the record.
MR. KERRIGAN:
I'm Bob Kerrigan on behalf of Mr. Crisler and DeGaulle
Manor and Zurich.
MR. MCREYNOLDS:
Joe McReynolds, also for the same parties.
MR. WEISS:
Greg Weiss for the same parties.
MR. MCEACHIN:
Thomas McEachin on behalf of Tara Mosley.
MR. DARLING:
Thomas Darling on behalf of Zurich American Insurance
Company. I have a motion to enroll as counsel of record,
THE COURT:
You are in on it?
l6a
MR. DARLING:
Yes.
MS. JACOBSON:
Tamara Jacobson, on behalf of the plaintiffs, Kathy
Brown and her minor son, Ron Brown.
THE COURT:
Before the Court this morning is a Motion for
Suspensive Appeal to Limit Security or Alternatively,
Stay or Enjoin Judgment and/or for Expedited Hearing
and Order.
Basically, as I understand from the pleadings that have
been filed, the defendants are seeking to have this court
either reduce the security or suspend the security during
the period of suspensive appeal. And the plaintiff's
position is that the Court does not have any authority to
do that pursuant to civil Procedure, Article 2124.
I’ve read the memos. I know what they say. How do you
all figure I'd get out of the “shall” language of 2124?
MR. MCREYNOLDS:
Due process grounds under the state and federal
constitution, If an appellant is inpecunious and is unable
to post a statutory required bond, and he would be
forced into bankruptcy pending his right to have the
judgment against him or in this case, excessive
judgment against him — on review. And that’s irreparable
harm. it violates his due process rights, which Justice
white of the Supreme Court held in the Modjeski &
Masters case, a case that came out of the same court.
That’s the basis for it. It’s a violation of due process and
equal protection.
17a
THE COURT:
The only thing I have here is self-serving affidavits that
tell me you can’t afford it. I don’t have any financial
documents or anything. All It says is “that, We can’t
afford it; we are going bankrupt. And that DeGaulle
Manor is out.
MR. WEISS:
I think he attached a financial statement.
MR. MCREYNOLDS:
I have the original of the affidavit that he signed.
MS. JACOBSON:
I have the copy.
MR. MCREYNOLDS:
It's an attachment to the original. I got it in the mail after
I filed the motion. It lists his assets.
MR. MCEACHIN:
Do you have a copy of that, Joe?
MR. MCREYNOLDS:
I gave it to him.
MR. MCEACHIN:
I'll get Tamara’s.
MR. MCREYNOLDS:
An affidavit was filed in the Modjeski & Masters case,
and it was found to be sufficient by the Supreme court
as proof of assets.
MR. WEISS:
Additionally, Judge, le me just say for the record that
Mr. Crisler has been deployed by the United States
18a
Army. I'm not exactly sure; I think he’s in Germany. He
has been officially -he has been deployed.
MS. JACOBSON:
When is that as of?
MR. WEISS:
On active duty.
MS. JACOBSON:
Because there were negotiations between the parties
that we were going to take his deposition and that was
going to happen either last week or this week. And now
he has been deployed to Germany as of which day?
THE COURT:
I don’t know anything about it.
MR. WEISS:
I’m just saying it for the record, Judge. That’s the fact of
the matter is, is that he’s been deployed.
MS. JACOBSON:
Your Honor, on behalf of the plaintiffs, the problem with
this affidavit and typed-up financial statement that
hasn’t been notarized or certified by any competent CPA
or anything to that effect is that it is self-serving. And it’s
difficult for the parties in this matter to wholeheartedly
rely upon the assertions of counsel for the reason that
was just stated.
Again, we were in the middle of negotiations to take this
gentleman’s judgment debtor deposition which would
have provided us, if not for this purpose, for at least the
purposes of discussing settlement, more of a basis for
believing what is being said. And suddenly he’s in
Germany.
19a
MR. MCREYNOLDS:
Your Honor, we have posted a bond in the amount of
Zurich’s judgment liability. Now the policy limits plus
accrued interest to date. if, as we believe, this judgment
is reversed, at least as to the liability of Crisler, then it
would certainly be a violation of his due process rights
to force him into bankruptcy while waiting for the
appellate court to review that judgment.
If it turns out that he’s not liable or that the damage
award is excessive, then he will have suffered the harm
of a bankruptcy when, in all likelihood, he inay not have
any judgment liability whatsoever.
THE COURT:
So, why is he filing bankruptcy?
MR. MCREYNOLDS:
If they proceed, as they are indicating that they’re going
to do, with executing on this judgment for the excess
amount over the amount of Zurich’s liability and bond,
he'll have no choice but to have to file for bankruptcy.
He can’t pay a million and a half dollar judgment.
MS. JACOBSON:
Your Honor, with regard to the claim that his due
process rights have been violated, this gentleman was
represented at a trial of this matter. Further, he was at
the trial for a good portion of the beginning of the trial.
And he was fully aware of the situation as it existed. He
participated in the proceedings, and he knew what this
trial was about. It’s not as though we came down here
and did a default judgment against him! and he had no
opportunity to obtain counsel. If he wasn’t informed by
his counsel of the enormity of the damages that he was
facing, it’s certainly not the plaintiff's problem,
20a
MR. WEISS:
Judge, I can assure you that Mr. Crisler, during the
entire course of this litigation, was informed of all of the
ramifications of this case, but he was also informed that
we felt that he didn’t do one single thing in terms of his -
in terms of tiability with respect to this case. I mean, the
reason that I appreciate the reason that the Court let
them in this case, as far as I’m aware, was because of
this 1995 letter, that U.S. Elevator document, the one
from Matthew Binder.
But it was clear and unmistakable in this record that
two or three months later KONE, Montgomery required
that they — that Crisler, Crisler’s partnership perform
$38,000 in repairs to that elevator, and they took over
the contract. so for three years prior to this accident he
was relying on the expertise of KONE Elevator. He was
exonerated. I think when you look at the overall — the
potential and even though I know this court, most
respectfully, Judge, I know you disagree, but I think it’s -
you've got at least to concede that Mr. Crisler does have
a good faith basis for extricating himself from suit on
appeal. He — he — but to require him now while he’s out
serving his country, to force him into bankruptcy so that
he does not get to suspensively appeal this judgment, I
think violates his due process rights.
I think, you know, we are not talking about Zurich and
DeGaulle Manor here. We are talking about William
Crisler. And Crisler didn’t hold this hoistway door for
these kids to jump into it. I meant the evidence shows
that Crisler didn’t even receive the 1995 letter. But
assume — even if he did, is a landowner entitled to rely
on experts in the elevator maintenance industry to tell
him when his elevators are dangerous? And the jury
found that the elevator company was not negligent.
Z2la
So here’s Crisler. He has got a negative net worth. He’s
over serving his country. He wants to appeal this
judgment. And he, at least, at the very, very, bare bones
minimum, Judge, has got at minimum a good faith basis
for going upstairs with this case.
MS. JACOBSON:
Your Honor, everything he just said explains to this
court why we briefed in a memo that there was an
outrageous conflict of interest in this case. There was no
way for him to argue that Crisler can rely upon the
expertise of the elevator company and yet also
represent the elevator company as they did. Since
Zurich chose to do that in this case, they should also
choose to protect their insured who they now say is
fighting for this country. Let them put up the bond. They
are more than capable and more than solvent of getting -
- and able to get a bond for this gentleman.
They decided that it was more important to protect the
$10 million policy that was out there rather than their $1
million policy for Mr. Crisler. And as such at this point
let them get him a bond. There are cases out there that
say that the insurance company is responsible to their
insured for more than the liability limits, not necessarily
te pay them but in order to get them a bond for that
matter.
We have cited the Bowen case which went through the
language of if they have clean hands and such! As your
Honor is aware from listening to the trial in this matter
and from seeing our briefs, it’s our position that Zurich
does not have clean hands. And therefore, they should
put up the bond for their insureds.
MR. MCREYNOLDS:
Your Honor, Zurich has -— is facing a judgment liability of
22a
its policy limits plus interest. NOW, It has an obligation
to pay the premium of a bond, if Mr. Crisler can get one.
But he can’t get one. It has no obligation to increase its
own judgment liability beyond its policy limits by
signing onto a bond that, if the judgment is affirmed, it
will then have to pay under a guarantee agreement.
That’s what the Sowen case stands for. And the practical
truth is that Mr. Crisler is unable to get a bond because
he’s got no assets with which to secure the bond. No
surety company is going to come in for the price of a
premium and buy over two and a half, three million
dollars worth of judgment liability. It doesn’t work that
way. I can’t speak to what happened at trial, but I don’t
see any indication that Zurich acted in bad faith in any
way. It’s putting up its bond for its judgment liability, we
are willing to pay the premium of the bond, but Mr.
Crisler can’t obtain one.
And all we're asking is that the security be limited to the
amount of Zurich’s bond so that Mr. Crisler can pursue
his constitutionally-guaranteed rights of appeal in this
state and have his review without pushing him into
bankruptcy.
THE COURT:
But isn’t that provided for under the code articles with
regard to devolutive appeal? I mean, he gets a right to an
appeal. He may not get a right to a suspensive appeal,
but he gets a right to an appeal.
MR. MCREYNOLDS
But I think that under the authority of Modjeski &
Masters he has a right to get it suspended to prevent the
harm that would happen by pushing him into
bankruptcy. That’s what that case was about.
23a
MR. KERRIGAN:
We're just talking about suspending it, Judge. if we’re
wrong, they can execute a judgment later. He’s talking
about for the appeal process, Judge.
THE COURT:
I understand that, and that’s the whole purpose of the
Suspensive appeal. The statute Says that you are to
secure the value of the judgment plus interest until the
date that it’s posted. That’s what gives you the right —
you're suggesting to me this morning somehow that Mr.
Crisler’s due process rights will be violated by the fact
that if this Court orders a suspensive bond to go ahead
pursuant to the statute. And I don’t see how that
happens.
MR. MCREYNOLDS:
Because if that’s true, your Honor, then the only litigants
who would have a right to have a Suspensive appeal are
those rich enough to secure a bond.
THE COURT:
That’s not true. That’s why you have a devolutive appeal.
That's not true. You mean - -
MR. MCREYNOLDS;
No. A suspensive appeal.
THE COURT:
You said that — you said their right to an appeal.
MR. MCREYNOLDS:
I'm sorry. I meant, the only ones who would have a right
to a suspensive appeal are those who are rich enough in
order to buy a bond. Now that is unequal protection.
Those are the arguments that were made and that were
accepted and agreed to by the United States Supreme
24a
Court
MS. JACOBSON:
It’s also unequal protection if you’re only requiring
solvent or wealthy insureds to have to go get a bond.
But folks who don’t have means aren’t required to get a
bond. There is no case law out there except for this
aberrant Modjeski & Masters case. It’s unfair that
wealthy debtors would have to go get a bond but poor
debtors don't.
MR. MCEACHIN:
Your Honor, I disagree with what Mr. McReynolds says
about the Modjeski case being decisive on that issue.
They issued an interim order. And after that interim
order was issued, the case was reversed on appeal The
Supreme Court never got to the constitutionality of the
statute. The statute has been on the books in one form
or another for 190 years. It says you can’t do this. And
with all due respect, I don’t think you can do it. The only
way you can afford the defendants the relief they're
asking for is to declare 2124 unconstitutional. I don’t
think your Honor can do that after 190 years.
THE COURT
But I can’t do that.
MR. MCREYNOLDS:
Of course you can.
THE COURT:
I cannot do that without a hearing. If we are talking
about our constitutionality of a statute -— Mr.
McReynolds, under the law of this state if you challenge
the constitutionality of a statute, then the Attorney
General of the state of Louisiana has to be notified, and
he has to come in and defend it. I’ve done that.
25a
I can’t sit here today and Say, all right, on the basis of
what I have here is this statute is unconstitutional.
That’s what you’re asking me to do, and I cannot do that.
MR. WEISS:
No.
MR. MCEACHIN:
Your Honor, there are Supreme Court decisions that
uphold the language of the statute.
THE COURT:
But as I understand your argument to me this morning is
that the reason why I have to limit the security being
posted in this to Zurich’s amount of the policy plus
interest until it’s posted is that Mr. Crisler’s due process
rights would be violated. And if I do that, then and
you're asserting that this statute is unconstitutional
because it violates his due process rights. Is that what
you're telling me?
MR. MCREYNOLDS:
Let me restate what I’m saying. I’m saying that under the
- on Modjeski & masters you have the authority and
discretion, just as any court does, to take cognizance of
the particular circumstances involved in a case and to
protect a litigant’s appeal rights, including suspensive
appeal rights, to prevent irreparable harm in the form of
bankruptcy by fashioning some other remedy more
appropriate than the statutorily required security.
THE COURT:
And tell me how it’s irreparable harm because we are
talking about money here. The fact that it’s going to be —
he has a credit problem? Is that the irreparable harm?
where is the irreparable harm?
26a
MR. MCREYNOLDS:
The Supreme Court has held that forcing someone into
bankruptcy and effectively forego their right of review,
an appeal, is irreparable harm.
THE COURT:
To forego their rights of a suspensive appeal.
MR. MCREYNOLDS:
A suspensive appeal. That’s exactly right. They are
effectively without any remedy.
MR. WEISS:
That’s what the case says.
MR. MCEACHIN:
Your Honor, I don’t think that’s what the case says. I
read this case. This is a one-page memorandum opinion
that applies to the facts of that case, that particular
defendant and that particular case, and what their net
worth was. Mr. McReynolds —
THE COURT:
The thing that disturbs me about that case is that I am
sure that since this case has come out, that there have
been other defendants or appellants -- I'll put it that way
— who have been in the same position that Mr. Crisler
has been in. But there has never been any other case
since this. And this case was done —
MR. MCEACHIN:
This case hasn’t been cited to once, your Honor.
MS. JACOBSON:
We were unable to find any case.
2%a
THE COURT;
This case came out in 1988. And that’s why I'm
suggesting to you that it’s probably turned on the facts
of that particular case because otherwise it hasn't been -
- I'm sure there are other defendants who have been in
the same position — appellants, rather, in that same
situation. .
MR. MCREYNOLDS:
Your Honor, we have made our argument. Zurich is
certainly entitled to a Suspensive appeal upon the
posting of the bond.
THE COURT:
Certainly Zurich is both of them are entitled to — by law
are required to post a bend in order to suspend the
execution of that judgment. And that’s what 2124 does.
In those instances — the legislature just amended this
thing last year to afford certain defendants — I mean
appellants — some remedies when the judgments are
over and above a certain amount. And they took that
into consideration. And they did not — because | got to
use it the first time last year, around the same time last
year, when I looked at that statute.
MR. WEISS:
See, Judge, the real harm here is that if this bond is not
suspended for Mr. Crisler, Mr. Crisler is going to be
forced into a bankruptcy situation. It’s not going to get
the money — he’s not going to get the money ever to post
this bond. No surety is going to come in and give Mr.
Crisler a bond. He will not get a bond.
The only thing that’s going to happen is they'll try to
execute on the judgment. Okay. Forces him into
bankruptcy. He'll have to seek the protection of the
28a
bankruptcy court in order to perfect even a devolutive
appeal.
So what happens later if Crisler is exonerated, if the
appellate court decides he should have never been in
this case? He has been forced into bankruptcy; he can’t
get credit for another seven years. It’s, you know for a
situation in which perhaps the appellate court, with all
due respect, Judge, may have disagreed with the lower
court as to whether he should have been in the first
place.
THE COURT
It’s their prerogative every day, Mr. Weiss.
MR. WEISS:
Why should he be hurt as a result of this judgment? Why
should he be irreparably harmed in bankruptcy if
ultimately he’s exonerated? Why does he have to go
through that, Judge? How is that —
MR. KERRIGAN:
Judge, your feelings are abundantly clear. Are you going
to prepare a judgment?
THE COURT:
Well, it’s not my feelings. It’s what the law says. Look,
Let me tell you something. I do this business based on
the facts and the law. It doesn’t have anything to do with
feelings.
MR. KERRIGAN:
Judge. I misspoke. They get absolutely nothing if he
takes bankruptcy. They get nothing. Everything will be
discharged. We understand the track we're going
through. Let’s just go through it. Let’s get a judgment
signed and move on.
29a
MR. DARLING:
I think the Court has discretion if you read 2124-B along
with 2124-D. 2124-B says, “It shall set the bond.” You
know, shall be limited of the judgment plus the interest
through the date of the Setting of the bond.
Then you go to more specific 2124-D, where it says,
“upon good cause shown, the Court may set a bond but
no more than 150 percent.” It doesn’t say what a
minimum should be in 2124-D. So if you read 2124-D and
apply it to these facts, it gives the court discretion, less
than the amount of the total judgment.
MS. JACOBSON:
And along those lines, your Honor, we would have no
problem with your Honor Setting the bond at 150
percent for Zurich and allow them to afford their
insured some additional protection, if that’s the case.
MR. DARLING:
There is no — Zurich’s bond is what their policy limits
are. It shouldn’t be any greater because at the end of the
day if a surety —
THE COURT:
I would agree with you on Zurich. Zurich is in on the
extent of whatever its policy is.
MR. KERRIGAN: 7
That’s exactly what the judgment says.
MR. MCEACHIN:
Your Honor, we would argue that there is due cause in
this case for the same reason they are arguing that their
defendant shouldn’t be posting a bond. There is a
chance that these guys are insolvent. If that’s true, then
our client is left hanging with no place to collect a
30a
judgment.
MR. KERRIGAN: —
Your clients are hung with the people you got a
judgment against, counsel.
(off the record discussion. )
THE COURT:
Counsel made a statement about 2124-D.
MR. DARLING:
2124-D gives you discretion to limit the bond.
MR. MCEACHIN:
Asking the Court to raise the amount of the bond under
2124-D. We believe there is good cause here to have a
bond in excess of 100 percent required, minimum
required, and up to the 150 percent that’s allowed by
2124-D.
MR. MCREYNOLDS:
Are you representing to the Court that you would accept
a bond in the amount of 150 percent of the judgment?
MR. MCEACHIN:
We would accept a bond in the amount of 1.8 million for
Zurich's suspensive appeal.
MR. DARLING:
That’s greater than their policy limits.
MR. MCEACHIN: "
They’re asking you to do something that’s not allowed
by the statute. I’m asking you to do something that is
allowed by the statute. It’s in your discretion to do that.
But it's not in your discretion to do what the defendants
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3la
have asked you to do.
MR. MCREYNOLDS:
Well, are you representing to the Court that you would
accept security in the amount of 150 percent of the
judgment as to all three defendants?
MS. JACOBSON:
That is in the Court’s discretion. We are asking, and we
set forth in our memo a little bit more extensive about
the duty of Zurich and the reason that we believe good
cause is being shown that there should be a bond of 150
percent in this matter.
MR. MCREYNOLDS:
As to all three defendants or simply —
MR. MCEACHIN:
As to Zurich only.
MR. MCREYNOLDS:
I think that would be completely unreasonable and
unfair.
MR. DARLING:
The bond I have today is for the million dollar plus the
interest, and that’s the Statutory required amount. We
have it — a Motion and Order for Appeal is-prepared.
MR. MCEACHIN:
Your Honor, that’s the memo. As you know, 2124-D does
allow you to go above 100 percent. And what — Tamara
and I are arguing that that’s the case here. There was
good cause. If there is ever a case for good cause shown
~ ened
——
32a
THE COURT:
. You want them to go above their policy limits because
they have got an insured who says he can’t meet the
bond.
MS. JACOBSON:
No, your Honor. That’s not the reason. NO, that’s not
what I’m saying, and that’s not what I briefed. Our
position is that the statute provides that if good cause is
shown that a party can be required to post up to 150
percent bond. That’s under 2124-D.
Our position is that Zurich, their behavior in this case, as
we have set forth in our memo, the inherent conflict in
representing two parties and our lack of knowledge as
to what was told to Mr. Crisler and his participation
which would then be a departure from the ruling in the
Bowen case. For those reasons we believe that Zurich
should be required to put up the 150 percent bond.
As an example, and what we put forth in our brief, is
that if it’s found that Zurich was arbitrary and capricious
in not settling this case with us, then it’s possible they'll
have to eat the entire $7 million of judgment in this case.
And for those reasons we are asking that the court post
the bond at 150 percent.
MR. DARLING
That’s not the plaintiff's argument.
MS. JACOBSON:
That’s exactly — I made the argument, and I wrote it.
MR. DARLING:
That's not the right party to make the argument. They
don’t have standing to claim bad faith. under 22 — 1220
only the insured.
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33a
MR. MCEACHIN:
We're saying there is a potential claim in the future, and
that’s —
THE COURT:
But the 1220 claim is left to the insured.
MR. MCEACHIN
Your Honor, that is not as outrageous as the defendants
make it seem. That was the rule for 150 years.
THE COURT:
I know, until they changed it last year in June. I told you,
I got the first crack at one, a discretion case. |
understand.
MR. MCEACHIN:
The defendants have been posting 150 percent bond as
long as the law has been around.
MR. DARLING:
What would happen, though, in this case, assuming the
case is affirmed as it stands now, we won't be able to get
a bond for 150 percent because who is going to write a
bond saying. wait, Zurich, you're only liable right now
for 1.2 million, and we are going to write a bond for 18
million. And then that $600,000 window is going to be
collected upon because there is no one else to pay it
because Zurich is only liable for their policy limits. So
you're going to be going to a surety and saying, we want
you to insure a $600,000 payment that if this judgment is
affirmed, you're guaranteed to have to pay it. They won’t
do it.
MR. MCREYNOLDS:
They won’t do that unless Zurich Says -unless Zurich
agrees to indemnify the surety company. And to order
34a
that, then you're increasing Zurich’s judgment liability,
and that’s not good cause. That’s unfair.
MS. JACOBSON:
But the statute provides that you're entitled to — require
them to post up to 150 percent bond. obviously, this is
not a fluke. This happens, where the Court allows —
rather, requires the parties to post up to 150 percent. In
fact, it was the law until not that long ago.
MR. DARLING:
And there are cases where the judgment is well within
policy limits. That’s where the discretion comes in. But
when you have a case that’s in excess of policy limits,
the discretion is that you can’t post the bond. It’s
economically impossible to go get a surety when you're
guaranteeing that surety will have to pay because our
policy, limits are one million dollars.
MS. JACOBSON:
But you said you think this whole thing is going to get
overturned on appeal.
MR. DARLING:
I didn’t say that.
MS. JACOBSON:
Weli, that’s the position of lead counsel.
THE COURT:
Let me tell you what my position is on this and what my
understanding is of the law — and I know what the facts
are in this case because I tried the case, and I have held
numerous motions and stuff on it. So I’m clear as to
what the facts are. The jury has entered a verdict in this
case against the parties that they chose to do that
against.
OPN GE NEG ER PIR
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35a
Now what I’m required here to do is in the instance of a
motion for a request for a Suspensive appeal is to make
a determination about the bond. My reading of 2124 says
that there shall be a posting of the bond in an amount of
the judgment plus interest from the date of the posting.
As it relates to the defendant Crisler, I’m not going to
order that he post — limit his security in this amount. It
is my position and my understanding of the law that he
has to follow 2124.
As to Zurich Insurance Company, I’m going to order that
they follow 2124, and that they post a bond in the
amount of the judgment plus interest from the date of
the posting.
Prepare a judgment to that effect.
MR. MCEACHIN:
Your Honor, what about DeGaulle? You didn’t address
DeGaulle.
THE COURT:
DeGaulle has to post — it applies to DeGaulle and
Crisler. Everybody has to follow 2124.
MS. JACOBSON:
'll prepare a written judgment to that effect, your
Honor.
MR. MCREYNOLDS;
Can we indicate for our — it will be on the minutes, the
motion for suspensive appeal is granted conditioned
upon the posting of the security as you just outlined?
THE COURT:
Yes.
MS. JACOBSON:
I'll prepare a judgment.
THE COURT:
And circulate it to all counsel.
MS. JACOBSON:
I will.
MR. KERRIGAN:
Judge, we need that signed today.
THE COURT:
I'll be here all day. Is yours ready now?
MR. DARLING:
Well, I'm going to wait. I want to see the judgment. |
don’t want to file an appeal until I see the judgment on
the suspensive, what we just —
MS. JACOBSON:
I’m going to prepare it.
THE COURT:
I will be here all day; I'll be here tomorrow all day. So
whenever you all get it in, I'll sign it.
MS. JACOBSON:
I will fax it to everybody.
THE COURT:
Wait. Before you all leave, wait. Wait. There is this other
motion you all have got here, A Motion to Continue
Hearing on Plaintiffs Motion for Sanctions. The
37a
defendants have asked for a continuance on that until
my next rule date. You all object to it? Everybody gets
one.
MS. JACOBSON:
Your Honor, but the next rule date is September. That’s
the problem.
THE COURT:
I know. What's the problem? Sanctions — | mean, what is
the — whether or not I impose sanctions is that going to
bother somebody between now and then?
MS. JACOBSON
If your Honor wants to —
THE COURT:
I give everybody one. You all get one continuance.
That’s my policy. I give them one and whatever the first
rule date — because I’m on vacation in August. That’s
probably why you can’t get another one. It was left here
last week, and that’s why I’m addressing it now.
MS. JACOBSON:
Right. Move it to September?
THE COURT;
Yes. Because I’m on Vacation. It’s set for September 6th.
You all want new notices?
MS. JACOBSON:
No.
THE COURT:
I'm going to do it right now. I’m doing it right now. And
Mr. Carter can give you all -that’s the only reason it’s put
off is because I wen’t be here.
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38a
CIVIL DISTRICT COURT FOR THE
PARISH OF ORLEANS
STATE OF LOUISIANA
REPORTER'S CERTIFICATE
I, Eve S. Kazik, RPR, do hereby certify that:
I am an official court Reporter of the Civil District Court
of the State of Louisiana, in and for the parish of
Orleans, Louisiana, and that as such I reported in
stenotype the proceedings had in the within-entitled
matter at the time and place therein set forth, and that
the same is a full, true, and correct transcription of said
stenotype notes as taken by me in said matter to the
best of my ability.
Eve S. Kazik, RPR
Official Court Reporter
License No. 87028
July 1, 2002
LA C.C.P. Art. 2124
LSA-C.C.P. Art. 2124
WEST’S LOUISIANA STATUTES ANNOTATED
LOUISIANA CODE OF CIVIL PROCEDURE ACTS 1960.
NO.15 BOOK II. PROCEEDINGS IN APPELLATE
COURTS TITLE I. APPELLATE PROCEDURE
CHAPTER 2. PROCEDURE FOR APPEALING _
Current through all 2001 Regular and
Extraordinary Session Acts
39a
Art. 2124. Security robe furnished for an appeal
A. No security is required for a devolutive appeal.
B. The security to be furnished for a suspensive
appeal is determined in accordance with the rollowing
rules:
(1) When the judgment is for a sun’ of money, the
amount of the security shall be equal to the amount of
the judgment, including the interest allowed by the
judgment to the date the security is furnished, exclusive
of the costs.
(a) However, in all cases, except litigation related to
the Tobacco Master Settlement Agreement, or any
litigation where the state is a judgment creditor? where
the amount of the judgment exceeds one hundred fifty
million dollars, the trial court, upon motion and after a
hearing, may, in the exercise of its broad discretion, fix
the security in an amount sufficient to protect the rights
of the judgment creditor while at the same rime
preserving the favored stems of appeals in Louisiana.
(b) The time for taking the suspensive appeal under
Article 2123 shall be interrupted for judgments pursuant
to Article 21 24(B)(1 )(a) until the trial court fixes the
amount of the security and commences anew on the
date the security is fixed.
(2) When the judgment distributes a fund in custodia
legis, only security sufficient to secure the payment of
costs is required.
(3) In all other cases, the security shall be fixed by
the trial court at an amount sufficient to assure the
Satisfaction of the judgment, together with damages for
the delay resulting from the suspension of the
execution.
C. Where the party seeking to appeal from a
judgment for a sum of money is aggrieved by the
amount of the security fixed by the trial court, the party
so aggrieved may seek supervisory writs to review the
appropriateness of the determination of the trial court in
fixing the security. The application for supervisory writ
shall be heard by the court of appeal on a priority basis.
The time for taking a suspensive appeal under Article
2123 shall be interrupted until the appellate court acts
on the supervisory writs to review the determination of
the trial court in fixing the security and commences
anew on the date the action is taken.
D. For good cause shown, the trial judge in the case
of the appeal of a money judgment to be secured by a
surety bond may fix the amount of the security at an
amount not to exceed one hundred fifty percent of the
amount of the judgment, including the interest allowed
by the judgment to the date the security is furnished,
exclusive of the costs.
E. A suspensive appeal bond shall provide, in
substance, that it is furnished as security that the
appellant will prosecute his appeal, that any judgment
against him will be paid or satisfied from the proceeds
of the sale of his property, or that otherwise the surety
is liable for the amount of the judgment.
CREDIT(S)
2002 Main Volume
Amended by Acts 1977, No. 176, 1, eff. Jan. 1, 1978; Acts
1988, No. 444, § 1, cf. Jan. 1, 1989; Acts 1989, No. 307, §
2; Acts 2001. No. 450, § 1, eff. June 19, 2001.
OFFICIAL REVISION COMMENTS- 1960
2002 Main Volume
(a) This article establishes the formulae for determining
the proper amount of bond required to suspend
execution. Subparagraphs (I) and (2) of the second
paragraph are taken directly from Art. 575 of the 1870
Code of Practice.
(b) Those portions of Art. 575 dealing with the
technicalities of the bond filed, e.g., how it shall be
payable, how tested, are not included in this Book. See
nook IX, Title I, Chapter 3.
(c) Subparagraph (3) of the second Paragraph is taken in
principle from Fed. Rule 73(d). It is flexible in that it
gives the court a wide discretion in fixing the bond in
Cases not involving a money judgment.
(d) Both Arts. 575 and 579 of the 1870 Code require that
appeal bonds have sureties and that the sureties beheld
under the terms of the bonds. See Book IX, Title I,
Chapter 3.
(e) This article applies to bonds in injunction cases,
where appeals from such are available. See Art. 3612,
infra.
Fashion, 10 La.Ann. 345 (1855); State ex rel. Blocky.
Rightor, 44 La.Ann. 564.10 So. 866 (1892): Metropolitan
Bank v. Blaise, 109 La. 92, 33_So. 95(1902); Succession
42a
of Jones. 189 La. 693. 180 So. 48.9 (1938); State ex rel.
Messina v. Cage. 152 So. 399 (La.App. 1934). And, in
such cases when the appellant has sued in forma
pauperis where no cost bond is required, the suspensive
appeal may be taken without furnishing any bond.
Succession of Jones, supra; State ex rd. Messina v. Cage,
supra. These tales of the jurisprudence are not changed
by this Code.
(g) See, also, Comments under Arts. 2126, 2252, infra.
HISTORICAL AND STATUTORY NOTES
2002 Main Volume-
Source:
C.P. Arts. 575-578; Fed. Rule 73(d); cf. Comments
preceding.
The 1977 amendment substituted “No security is
required for a devolutive appeal.” for the first paragraph
and deleted a final paragraph. Prior to the 1977
amendment, the paragraphs had read:
“The security to be furnished for a devolutive appeal
shall be fixed by the trial court at an amount sufficient
to secure the payment of costs.”
“Both devolutive and suspensive appeal bonds shall
afford security for the payment of all appellate costs
paid by the appellee, and all costs due by the appellant,
including those due the clerk of the trial court for the
preparation of the record on appeal.”
43a
Acts 1977, No. 176, § 4 provides as follows:
“Section 4. The effective date of this Act is January 1,
1978; the provisions hereof shall apply to all appeals in
which the order of appeal is granted on or after the
effective date hereof.”
The 1988 amendment, in subpar. (B)(1) inserted “and a
surety bond is furnished as security”, substituted “be
equal to” for “exceed by one-half’, inserted “the”
preceding “costs” and added " otherwise, the amount of
the security shall exceed by one-half the amount of the
judgment and interest as described in this Paragraph”; in
Subpar. (B)(2), substituted a period for ", and"; and
inserted art unnumbered paragraph, following subpar.
(B)(8), relating to good cause.
In this article as amended in 1988, paragraph
designations A to D were made pursuant to the statutory
revision authority of the Louisiana State Law Institute.
Section 2 of Acts 1988, No. 444 (§ I of which amends this
article) provides:
“Section 2. This Act shall become effective January 1,
1989 and shall apply to cases in which an order of
appeal is entered on or after that date.”
The 1989 amendment rewrote subpar. (B)(1), which had
read:
“(1) When the judgment is for a sum of money and a
surety bond’s furnished as security, the amount of the
security shall be equal to the amount of the judgment,
including the interest allowed by the judgment to the
dare the security is furnished, exclusive of the costs;
44a
otherwise, the amount of the security shall exceed by
one-half the amount of the judgment and interest as
described in this Paragraph.”
Acts 2001, No. 450, § 1, added items (B)( 1)(a) and (B)( 1
)(b) and par. C; and redesignated former pars. C and D
as D and B respectively.
Prior Laws:
Acts 1876, No. 24.
Acts 1890 No. 46.
Acts 1926, No. 289.
Acts 1946, No. 74, § 2.
LSA-C.C.P. Art. 2124
LA C.C.P. Art. 2124
45a
CIVIL DISTRICT COURT FOR THE
PARISH OF ORLEANS
STATE OF LOUISIANA
NO: 99-18552,99-19006, 99-19398 DIVISION: A
KATHY EROWNZ ET AL.
versus
DEGAULLE MANOR, LTD., ET AL.
DEPUTY CLERK:
AFFIDAVIT OF NET WORTH
Before me, the undersigned Notary Public. personally
came and appeared William J. Crisler, Jr., a person of
the full age of majority, who after being duly sworn, did
depose and state that,,
i My name is William L Crisler, Jr. I reside at 101
Cedar Cove in Clinton Mississippi. I make this Affidavit
of my personal knowledge, and belief.
2. I have been personally cast in judgment in this
case for $2,275,500.00, plus legal interest.
3. The following facts show I have insufficient
assets to satisfy this judgment and insufficient assets to
secure a bond necessary to Suspend execution of the
judgment pending an appeal.
4, I have two mortgages on my home, in the
respective amounts of $ 154,347.16 and $63,262.00. My
home has an estimated value of $245,000, with equity of
$127,390. 84.
endian ie
ne oape pres
46a
5. I have two credit cards, American Express and
Master Card with balances totaling $8,823.33. I have two
checking accounts, Trustmark account number
1003057714 with a balance of $1,943.62 and
BancorpSouth account number 53093902 with a balance
of $ 166.78.
6. I have a personal debt on a business loan in the
amount of $ 46,590.78 with BancorpSouth. This debt is
for S M Business Forms, Ltd, a printing distributor, of
which I am 420% limited partner, but I am the maker of
this note. The assets of the company that would be
accountable to my 20% limited partnership interest
amount to approximately $10,000.
z I own shares of stock currently valued on the
market at $_44, 178.35. The purchase of this stock was
financed with a loan in the amount of $100, 000 and there
is $(55,821.65) in equity.
8. My most recent Federal Tax Returns show that I
earned approximately $95,000 in 2000 and $116,000 in
2001,
9. I am insured under a general liability policy
issued by Zurich American Insurance Company, Number
ACO 8522074-3. This is the only liability policy that
covers the liability of myself and DeGaulle Manor, Ltd.
DeGaulle was also cast in judgment in this case, in the
amount of $2,220,000.
10. I have a homeowners policy issued by State
Farm, for approximately $249,920 in coverage, but that
policy does not provide coverage for my judgment
liability in this case. I have no umbrella coverage.
47a
ll. ‘I own three automobiles that have a Kelly Blue
book value of $31,885 with car loans totaling 18,435.12.
There is a total equity in my automobiles of $13,449.88,
ll. I have no other personal or business assets with
which to Satisfy the judgment and no assets to post as
security for an appeal bond to Satisfy any bonding
company’s indemnity requirements for furnishing an
appeal bond. My personal net worth is $(25,934.86),
Signed this 25 day of June, 2002, in Clinton, Mississippi.
William J. Crisler, Jr.
Sworn to and Subscribed before me this 25th day of
June, 2002
Notary Public in and for the County of Hinds
Mississippi.
NOTARY PUBLIC
48a
Financial Statement of William J. Crisler, Jr.
ASSETS I
Cash
Home
Home Furnishings
Stocks Owned
(@ current
value) Value
Lucent $4,840.00
Applied Micro
Circuit $4,520.00
Redback
Networks $1,580.00
Rambus $3,221.50
Star Media $20.00
Cypress |
Semiconductor $15,510.00
Coming $3,900.00
Globspan
Virata $3,680.00
Ariba $3,735.00
Yahoo $2,262.00
AGR.a $18.90
AGR.b $488.40
Avaya $402.55
3 Automobiles
@ Kelly Blue
Book Value
97 Ford
Explorer $6,855.00
98 Olds 88 $9,545.00
99 Suburban $15,485.00
$2,110.40
$245,000.00 ;
$35,000.00 (this is a guess)
Current
# of shares Price
2000 $2.42
1000 $4.52
1000 $1.58
850 $3.79
2000 $0.01
1000 $15.51
1000 $3.90
1000 $3.68
1500 $2.49
150 $15.08
10 $1.89
264 $1.85
83 $4.85
20 % Limited
Partner of SM
Business
Forms
Total Assets
LIABILITIES
Home
Mortgages
Car Loans
Credit Cards
Am Ex
MasterCard
Stock Pledge
Loans
S M Business
Forms Bank
Debt
Dentist Braces
Debt
Total
NET WORTH
$10,000.00
$368, 173.75
$217,609.16
$18,435.12
$7,873.17
$950.16
$100,000.00
$48,000.00
$1,250.00
$394,117.61
-$25,943.86
DEE en en ae
ERNE METER ERE EES ser ES ce EEE NERS wane
50a
CIVIL DISTRICT COURT
STATE OF LOUISIANA
NO. 99-18552, 99-19006, DIVISION “A”
99-1 9398
KATHY BROWNE, ET AL
VERSUS -
DEGAULLE MANOR, LTD., ET AL
Telephonic deposition of WILLIAM J. CRISLER, JR.,
taken on Tuesday, July 2, 2002, at the Law Office of
Deutsch, Kerrigan & Stiles, L.L.P., 755 Magazine Street,
New Orleans, Louisiana, commencing at 3:45 p.m.
and concluding at 4:55 p.m., C.S.T.
APPEARANCES
DEUTSCH, KERRIGAN & STILES, L.L.P.
BY: ROBERT E. KERRIGAN, JR., ESQ. JOSEPH E.
LEE, ESQ.
755 Magazine Street
New Orleans, Louisiana 70130
ATTORNEYS FOR DEGAULLE MANOR, LTD.,
WILLIAM J. CRISLER, JR., AND ZURICH AMERICAN
INSURANCE COMPANY
HARVEY, JACOBSON & GLAGO
BY: ROBERT G. HARVEY, ESQ. TAMARA KLUGER
JACOBSON, ESQ.
2609 Canal Street
New Orleans, Louisiana 70119
ATTORNEYS FOR KATHY BROWNE
EE
ELL LLL LE LE LLL LTT TS LT TL eT aaa aaa
5la
ON BEHALF or RON BROWNE
APPEARANCES CONTINUED:
TAGGART, MORTON » OGDEN, STAUB, ROUGELOT,
BROCATO & O'BRIEN , L.L.C.
BY: JAMES R. MORTON , ESQ.
(Via telephone)
1100 Poydras Street
Suite 2100
New Orleans, Louisiana 70163 ATTORNEYS FOR MR.
WILLIAM J. CRISLER, JR.
WEISS & EASON
BY: TERESE M. BENN ETT, ESQ.
(Via telephone)
1515 Poydras Street
Suite 1100
New Orleans, Louisiana 70112 ATTORNEYS FOR
DEGAULLE MANOR,
MR. WILLIAM J. CRISLER, JR.,
AND ZURICH AMERICAN INSURANCE COMPANY
Reported by: JoLyn A. Halley
Certified Court Reporter
INDEX
DESCRIPTION PAGE
Examination:
1: I crenata TS, 4
Objections:
By: Mr. Kerrigan.................... 6, 9, 28, 34, 39, 48, 48, 49
Fh I i iscscerasiniicrtieaniiidiinadiieied backs 10, 41
CREE PDB erinnereesrsiniviniinisernimaisisecdaicen 54
EXHIBITS
(None offered at this proceeding. )
52a
STIPULATION
It is stipulated and agreed to by and between counsel for
the parties hereto that the deposition of WILLIAM J.
CRISLER, JR. is hereby being taken for all purposes,
pursuant to the Louisiana Code of Civil Procedure and
in accordance with law, pursuant to notice, on Tuesday,
July 2, 2002, in the Law Office of Deutsch, Kerrigan &
Stiles, 755 Magazine Street, New Orleans, Louisiana;
That the formalities of sealing, certification and filing
are waived; that the formality of signing is not waived.
That all objections, save those as to the form of the
question and responsiveness of the answers, are hereby
reserved until the time as this deposition, or any part
thereof may be used or sought to be used in evidence.
JOLYN A. MALLEY, Certified Court Reporter in and for
the Parish of Orleans, State of Louisiana, officiated in
administrating the oath to the above-named witness.
WILLIAM J. CRISLER, JR..,
101 Cedar Cove, Clinton? Mississippi, 39056, after
having been duly sworn to tell the truth, the whole truth,
and nothing but the truth, was hereby examined and
testified as follows:
DIRECT EXAMINATION
BY MR. HARVEY:
Q. Mr. Crisler, how are you? This is Bob Harvey.
A. Hi, Mr. Harvey.
Q. How are you doing?
53a
A. Fine. Before we begin, I wanted to tell you again
how much I appreciated the courtesies that you
extended me at our trial by allowing me to testify out of
sync.
Q. I understand.
A. I wanted to tell you that again how much |
appreciated that.
Q. No problem. No problem. Mr. Crisler, I'm putting
on the Record that Mr. Winsberg is out of town, and he
faxed a letter over and the gist is he couldn't be
available today. And as I indicated before we got on the
Record, numbers of people are out of town. So, what
we'll do is we'll try to cover as much as we can, let him
read the transcript, and hopefully you won't have to do
this again. Okay?
A. Yes, sir.
Q. So, so it appears in the body of the deposition,
why don't you repeat your full name and address.
A. My name is William J. Crisler, Jr., and I reside at
101 Cedar Cove, Clinton, Mississippi, 39056.
Q. And at that address, who lives with you?
A. My wife and four children.
Q. Before we go any further, Mr. Kerrigan has
indicated that you're going to read and sign the
deposition?
MR. KERRIGAN:
That is correct.
ne eR NEE Ta em Oe ae
THE WITNESS:
Yes, sir.
BY MR. HARVEY CONTINUED:
Q. Now, you said your wife and four children?
Yes, sir.
Whai is her name?
Eva, E-V-A.
What was the last name?
Crisler.
No. No. Was that a maiden name you gave me?
No, sir. That’s her first name, Eva.
What was her maiden name?
Krone, K-R-O-N-E.
Oo -— © F&F O&O FF O&O Ff O Y
The home at 101 Cedar Cove, is that the only
property that you own?
A. Yes, sir. And I own that, obviously, in joint
tendency with my wife.
Q. I understand. And I've got your Affidavit, and I'll
try not to repeat things in the Affidavit, just to clear
them up. Okay. And, of course, that question was in
your name. Now, do you own anything else, any other
properties in anyone else’s name?
SOS Nae ae? a ee a
_—
55a
MR. KERRIGAN:
Object to the form of the question. I don’t understand
the question.
BY MR. HARVEY CONTINUED:
Q. Well, I've noticed -— | believe I remember
correctly at trial you had a cousin that was in DeGaulle
Manor with you?
A. Yes, sir. I heard — I don’t know who was talking
after you, but couldn't barely hear him so I just want to
get clarified on that question. Do I own anything in
anybody else’s name?
MR. KERRIGAN:
Yes, that’s the question I objected to.
BY MR. HARVEY CONTINUED:
Q. He objected to it, so let me clear it up.
A. Okay.
Q. Do you have an interest in any property that is
not in your name by virtue of any agreements, counter
letters, or any other legal documents, documents that
you have in your safe; do you understand my question?
A. Mr. Harvey, I think I do, and I'll clear this up right
now. I do not own any real property other than my
house. To my knowledge, I am not involved in any
transaction where I was an owner or am planning to be
an owner. The only piece of property I currently own is
my house. I don’t have any documents in my safe
suggesting that I'm an owner of anything else, no, sir.
Q. All right. Now, do you own any Corporations —
eee st I,
56a
A. — no, sir.
Q. — that own any property?
A. I mean, I guess the stock that I listed is, I guess,
part ownership of that corporation. But, no, sir, not
besides what I have listed on the financial statement I
sent with the Affidavit.
MR. KERRIGAN:
Let me — this is not an objection, but the question by
counsel was do you Own any corporations, and let me
clear that up. The question should be, do you own stock
in any corporation?
MR. HARVEY:
Yes.
THE WITNESS:
My answer is going to stay the same, other than what I
showed to you, and I presume, Mr. Harvey, you’ve got a
copy of that.
BY MR. HARVEY CONTINUED:
Q. Yes.
A. That — you know, stock is partial ownership of a
corporation but that is all, no, sir.
Q. And I got that. No, really what I was referring to
is any small corporations, private corporations where
you would be either the sole owner or partial owner of
stock?
A. No, sir.
Q. Can you tell me I understand your personal
i ae
)
57a
attorney is on the phone, Mr. James Morton?
A. Yes, sir.
Q. When did you — when did Mr. Morton first begin
representing you in this matter?
MR. KERRIGAN:
I object to the form of the question. Go ahead and
answer it.
THE WITNESS:
Okay. I called Mr. Morton probably sometime in the
middle of June specifically to look at the LLC issue that
arose during the trial. Mr. Morton has done commercial
work for us when we owned DeGaulle, that’s my
relationship with him.
BY MR. HARVEY CONTINUED:
Q. Did you have a personal attorney that you were
consulting with from the time this lawsuit was filed up
until the time you hired Mr. Morton?
MR. KERRISAN:
You mean other than counsel of record?
THE WITNESS:
The attorneys that I consulted with were primarily
Weiss & Eason, and they were provided by Zurich.
BY MR. HARVEY CONTINUED:
Q. Did at any time Weiss & Eason, Mr. Weiss or
anyone with their firm, recommend that you seek the
representation of a personal attorney?
MS. BENNETT:
I'm going to object to the form of the question, and I’m
58a
going to object also on the basis of any comments that
may have been given to Mr. Crisler based upon his
previous answer would be_ protected under
attorney/client privilege.
MR. KERRIGAN;
Terese, let me handle this. Number one, don’t answer
the question; number two, the question has nothing to
do with your ability to respond to an adverse judgment;
number three, any questions regarding legal
representation or matters regarding your personal
liability are covered by a privilege. Next question.
MR. HARVEY:
Let me just say for the Record that the issue that I am
covering is covered by his ability to pay a judgment. In
other words well, you know where I’m going, so it is
something that I need for your appeal. So, if you’re going
to instruct him not to answer the question, I think we’re
going to need to get the Judge on the phone to get a
clarification that I’m not limited just to assets.
MR. KERRIGAN:
My instruction to my client is he doesn’t answer the
question.
MR. HARVEY:
All right, then I think we — it's not going to benefit us —
MR. KERRIGAN:
— just hold it. Let’s go through everything else you need
and we'll take it at the end.
MR. HARVEY:
All right.
59a
BY MR. HARVEY CONTINUED:
Q. Mr. Crisler, who was your accountant for the last
five years?
Parker and Associates.
And where are they located?
In Jackson, Mississippi.
Have you given anyone, any institution a financial
Statement in the last two years?
A. Yes, sir. I think the last one I gave is two years
old.
Q. You didn’t send one of those with the documents
that —- excuse me a minute. You didn’t furnish one of
those with -other than — the financial statement that I
see attached to your Affidavit, can you tell me who
prepared that financial statement?
A. I did.
Q. You didn't go to Parker and Associates and have
them prepare it?
A. No, sir.
Q. Would you willingly submit to us a copy of the
last financial statement that was prepared by Parker and
Associates?
MR. KERRIGAN:
Chris, I told counsel based on our conversation earlier
that you would provide them with tax returns for the
last five years, and those are the only documents that
60a
you were going to furnish. Is that still your wish and
inclination?
THE WITNESS;
That’s really what I want to do, yeah.
BY MR. HARVEY CONTINUED:
Q. So, you won't voluntarily give us the last financial
statement prepared by Parker and Associates?
A. Mr. Harvey, Parker and Associates has never
prepared a financial statement for me.
Q. Two years ago — now, maybe I misunderstood
you. I indicated when was the Last time you submitted a
financial statement, and I don’t know if I said prepared
by Parker and Associates.
A. You did not.
Q. Okay. Has Parker and Associates ever prepared a
financial statement for you?
A. No, sir.
Q. The financial statement that you prepared two
years ago, who was that submitted to?
A. Generally, it’s going to be submitted to the bank
in relationship to the loan that we had with S.M.
Business Forms.
Q. Has Parker and Associates ever assisted — so, he
just assisted you in the preparation ofa financial
statement?
A. No, sir. I’ve never asked him to.
6la
Q. Now, just so I'm clear, the financial Statement
we're talking about, the one you prepared two years ago,
you will not voluntarily submit that to us with those tax
returns?
MR. KERRIGAN:
I've not had a chance to look at it, so I would like Jim
Morton to look at that and I would look at it before he
Says he’s going to submit it.
MR. MORTON:
Right.
BY MR, HARVEY CONTINUED:
Q. Okay. Subject to a review by counsel if they’re
Satisfied?
MR. HARVEY:
Is that all right?
THE WITNESS:
I'm sorry?
MR. HARVEY:
I’m asking Bob that. I just want to find out if we can get
it through counsel.
MR. KERRIGAN:
I'll have to look at it, and if J think it’s appropriate we'll
send it over.
BY MR. HARVEY CONTINUED:
Q. Did you see the list of documents to be produced
that was submitted to you -
A. — yes, sir.
62a
Q. By Mark Winsberg?
A. Yes, sir.
Q. Have you attempted to accumulate any of these
documents?
A. Some of the documents I do have readily
available, some are not. Some I don’t have at all. But if
you would like to go down that list, we can certainly talk
about it.
Q. I’m going to cover some of that list.
A. Okay, sir.
Q. I'd like to know, do you maintain personal bank
accounts and bank accounts through your law office?
A. No, sir.
Q. Do you have a law practice?
A. Mr. Harvey?
Q. Yes, sir.
A. When you say “through my law office" — I have
two bank accounts, and I do not have a legal bank
account.
Q. They’re both personal?
A. That’s correct.
Q. How about S.M. Business Forms, Limited?
Fr © - 2 - Oo >
They have a bank account.
Are you the signatory on that account?
I am.
I’m sorry?
Yes.
In what capacity?
I am a limited partner.
And I’m not sure if | understood, your Affidavit
Says that you are a 20 percent limited partner?
Yes, sir. That’s correct.
Who are the other partners?
There is one other, Walter Moore.
Has your interest in that particular company
changed in the last year; do you understand my
question?
A.
I do. No, sir.
Was it ever greater than 20 percent?
No, sir.
‘ So, waiter Moore is an 80 percent owner and you
are a 20 percent?
Correct.
64a
Q. On the note — “but I am the maker of this note,”
what note are you referring to?
A. That is the loan that S.M. Business Forms has
with the bank to do business. The note is filed “William
J. Crisler, Jr. doing business as S.M. Business Forms.”
Q. Is Mr. Moore a signatory on the note?
He is not.
Is the note for $46,590?
> oO P-
Yes, sir.
Q. What is the — the last financial statement for S.M.
Business Forms, Limited, what does it show the net
worth of the company?
A. I don’t have it in front of me, but probably
somewhere in the area of $15,000 to $16, 000.
Q. Does it do a volume of business per month; do
you understand my question?
A. Exactly. And if you don’t mind, I'll just explain to
you how that works. For probably the last five or six
years we have a group of set businesses that we call on,
banks and a number of other people we do print jobs
for. We had one large contract we've had for the last five
years, and that contract was basically extremely large,
like $200,000; and of that probably $60,000, $70,000 was
profit. So, that basically put our income at about
$100,000 to $110,000 a year, so that is how — we are — we
do not have basically any assets other than receivables,
because we're a distributor. And I’m not sure whether
you know what that is or not in the printing business,
65a
but we go out and get business and we send it off to
other plants to produce and they ship direct to our
customer.
Q. And am I correct, you said you had $100,000 in
accounts receivables?
A. No, sir. No, sir. What that basically did — what I’m
telling you is that one large contract is basically how
we've been able to do the loan. We did not get the
contract this year.
Q. Now, I remember from your testimony at trial
you talked about tax sales, buying and selling?
A. Yes, sir.
Q. Tell me about — what do you do when you're
involved in a tax sale? Who’s buying at the tax sale?
The individual person or the company?
Well, is there a company?
Yes, sir.
What’s the name of the company?
College Investment Company.
You don’t own any of that, do you?
I do not.
; That’s the company I believe you testified you
worked for?
ssaseitemaerciomieadiianiie ceeiiattc i cee es e re
66a
A. I do. Yes, sir.
Q. And is that where the basic — the basis of your
salary is derived from, the salary you listed on your net
worth?
A. That and the print business. Well, they make up
some of it, and obviously the Mississippi Air National
Guard makes up some of it.
Q. Now, why don’t you just kind of break your
income down. You had $116,000 last year?
A. The investment company is about $50,000.
Q. I’m sorry. Someone coughed and the speaker is
not that good. What was it?
A. The investment company would be about
$50,000. The Mississippi Air National Guard or the Air
Force, depending on whether I’m on active duty or not,
it just fluctuates depending on, you know, how much
active duty I do, itll run anywhere from probably
$17,000 to $28,000. S.M. Business Forms, when we were
getting the large contract I'd normally net probably
$15,000. And, I mean, that’s the preponderance of my
sources of income. In years past I have done pretty well
in the stock market, and, you know, that was generally
equivalent to $10,000 or $15,000, $20,000. But that’s
basically where I get my income from.
Q. Does the investment — the College Investment
income, does that vary from year to year, or is that -
A. — you know, it just probably goes up with cost of
living.
67a
Q. You don’t receive any type of commission or
bonus on any sales that you —
A. - you know, there are occasion where we've
gotten an extra paycheck, I mean if you want to call that
a bonus. But I don’t — I’m not on commission at all.
Q. What was your cousin’s name, Lee Crisler?
Lee.
Does he own any part of College Investment?
I believe he does. Yes, sir.
— Mr. Harvey?
A
Q
A.
Q. How much —
A
Q Yes, sir.
A
; I do not know whether he has given that stock
away. I mean, I know that his father owns some and at
one time I would presume that he did, but he has a lot of
children as well and he very well may have given the
stock to his children. I can’t really answer that question.
I don’t know.
Q. Is College Investment incorporated?
Yes, sir.
Does your wife own any stock in it?
No, sir.
o P- © >
Any of your children?
Yes, sir.
How much stock do your children own?
I think they have about a little over 500 shares.
A
Q
A.
Q. Out of how many?
A Five thousand.
Q
Were any of those shares transferred in the last
A. No, sir.
Q. How long has College Investment, Incorporated
been in existence?
A. I think since about 1947.
Q. Is that kind of a family-owned thing? I’m trying to
recollect some of your testimony.
A. It was. It was started by my grandfather.
Q. How many brothers and sisters do you have, Mr.
Crisler?
A. I have one brother and one sister.
Q And your brother’s name is?
A. Tommy.
Q. All right. Does Tommy Own any part
of College Investment?
69a
A. I do not know whether he does or not.
Q.
Do you maintain some type of an office in the
corporation?
You mean is my office
~ no. Are you an officer? I’m SOITYy.
Iam the Treasurer, yes, sir, Secretary/Treasurer.
Who is the President?
Julius.
Crisler?
How are you related to Julius?
He is my father.
Okay. And who is the Vice President?
There are two: Jim Crisler -
Is that an uncle or cousin?
A.
Q
A.
Q
A.
Q
A. Yes.
Q
A.
Q
A.
Q
A.
That's an uncle. — and Tomy Crisler, who is my
brother.
Q. Do any of them work in the company as you do,
buying and selling?
A. All of them.
Q. All of them.
70a
A. Well, Mr. Harvey, everybody does something
different, but they all work here, yes, sir.
Q. Is that a Subchapter S-type corporation?
A. No, sir.
Q. What was the total income of that corporation
last year?
A. It lost $90,000.
Q. Nine?
A. Ninety.
Q. Did they own any property?
A. Oh, yes.
MR. KERRIGAN:
Who's “they”?
MR. HARVEY:
That’s the corporation. He understood.
BY MR. HARVEY CONTINUED:
Q. You understood me, didn’t you?
MR. KERRIGAN:
I need to understand.
MR. HARVEY:
All right.
BY MR. HARVEY CONTINUED;
Q. College Investment, they own property?
7la
Yes, sir.
A.
Q. Do they own any leases?
A. Mr. Harvey, I’m not aware of any leases.
Can you just ballpark how much property College
vestment, Incorporated owns?
Q.
In
A. I have no idea.
Q Is it more than ten?
A. Ten pieces?
Q Yes.
A. Yes, sir. \
Q Is it more than 100?
A. Yes, sir.
Q. It lost $90,000 last year. Was that due to
depreciation; do you understand my question?
A. Well, obviously depreciation was part of it, yes,
sir.
Q. All right. Do you have a total value for the
property that’s owned by College Investment?
A. I do not.
Q. Do they have annual board meetings?
A. Oh, they do. Yes, sir.
72a
Q. Is the stock, the 500 shares, in all — excuse me,
the names of your four children?
A. Yes, sir. Well, let me — in Mississippi a minor
cannot hold it. It's in trust, and my wife is the trustee.
And that was done three, four, or five years ago. I think
the age is 25 when the disbursement will come for each
of the children.
Q. Other than the $50,000 that you receive, do you
receive any bonuses?
A. Mr. Harvey, I think I answered that question. On
occasion we will get one extra paycheck, but not
generally, no, sir.
Q. All right. Do your children receive any dividends
from this?
° No, sir. There's never been a dividend paid off the
stock, to my knowledge.
Q. Can you tell me who are the two mortgages with
on your home?
MR. KERRIGAN:
I'm going to object to the form of the question for the
simple reason that he doesn't own an interest in the
corporation. -
MR. HARVEY:
I'm asking on his home.
MR. KERRIGAN:
I apologize.
73a
BY MR. HARVEY CONTINUED:
Q. My question was: Can you tell me who holds the
mortgages on your home?
A. Absolutely. Chase Manhattan has one and my
company, College Investment Company, has another.
Q. The one that College Investment has, is that the
second mortgage or the first?
A. It is the second.
Q. I notice you have two credit cards: American
Express and Master Card. Those two have a balance,
and did I understand you right that the balance of those
two cards is $8,823?
A. Yes, sir.
Q. Is that just for the month, or is that a balance that
you pay out monthly?
A. That was the balance at the time that did that
Affidavit. And, no, sir, I would not be paying that cut at
the end of the month.
Q. Then you still have a balance similar to that
amount?
A. At this time it’s higher.
Q. Higher, okay. Do you have credit cards through
your company?
A. No, sir.
Q. Are any of your cars furnished through your
74a
company?
A. No, sir.
Q. Are the car loans through banks or through the
manufacturers?
A. Through neither. College Investment Company
has the car loan.
Q. All three of them?
A. Yes, sir. Actually, Mr. Harvey, there is a car loan
on one car. The others I've paid off. The total value of
the car loan is $18,000 and some change, $18,435.12. The
other car loans I had, one was with — well, two were
with the bank.
Q. Am I correct — well, maybe I'm not. Let me just
ask the question: Other than the two credit cards and
what's listed on your Affidavit of net worth, do you
money to anyone else?
A. Yes, sir.
Q. And who would that be?
A. I did — per the Affidavit, I did a stock pledge
agreement to buy the stack that I’m holding.
Q. When did you do that?
A. I don’t have the exact date. I would say it was
probably about 2 years ago, 2 1/2 years ago.
Q. I think you have that on here. You have that on
here. I'm talking about anyone else — .
75a
A. — oh, I’m sorry.
Q. — that you owe money to that’s not on the
Affidavit of Net Worth.
A. I misunderstood you. I apologize. Mr. Harvey, not
to my knowledge. If I do, they’re not getting paid.
Q. Is there any — are any of the loans that you have,
the amounts that you owe, are any of them insured, do
you understand, against life insurance?
A. No, sir.
Q. you indicated in your Affidavit of Net Worth that
you are insured under a general liability policy issued by
Zurich, and you gave the number. Have you ever seen
the policy?
A. I think I have once. Yes, sir.
Q. Who was your agent who sold you that policy?
A. Phillip Rutlidge, and he is with Arthur Gallagher,
Arthur J. Gallagher.
Q. And are they in New Orleans?
A. I understand they have an office in New Orleans.
His office is here in Jackson.
Q. Jackson?
A. Or Ridgeland.
Q. Did you know the amount of coverage you had on
that policy when you purchased it?
Yes, sir.
And you had no excess?
No, sir No excess or umbrella.
© > © >
Did you purchase that yourself, or did someone
else purchase it?
A. Maybe I don't understand. I, myself did not, buy
that. policy. I am included on that policy. DeGaulle
Manor, Limited purchased the policy.
Q. I understand. But did you negotiate the — in other
words, did you go in for DeGaulle Manor to Arthur
Gallagher and say, I want to purchase insurance for my
company?
A. I probably, yes, sir, was involved in it. I would
imagine there was some other people as well. But we
had been with Arthur J. Gallagher for a number of years,
so if you're referring to this specific policy certainly I
had a part in it, yes, sir.
Q. Just so I know, who signs your paycheck wih
College Investment?
A. I do.
Q. Do you have any savings accounts?
A. Ido __ not.
Q. Now, I believe we talked about a trust account, a
trust, one that your wife has for the kids. How many
trusts do you have? |
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A. Just that one.
Q. Is there anybody at — Phillip Rutlidge, is that —
Arthur J. Gallagher, is there anyone else that you deal
with there?
A. Depending on what the issue was. But as far as —
I mean, Mr. Harvey, I'll be glad to tell you anything I
know, but he’s the primary agent. There’s some other
ladies when they would have a question would call me,
but I don’t even know whether they’re still there or not. I
know Phillip is still there.
Q. Are any of the properties- owned by College
Investment insured through Arthur Gallagher?
A. Not to my knowledge.
Q. And the only property that you had on this
particular policy was the DeGaulle Manor property?
A. Right.
Q. Can you tell me which entity on that policy you
fall under; do you understand my question? I never did
find DeGaulle Manor in the policy.
MR. KERRIGAN:
Let me object to the form of the question. Unless you
have sufficient expertise to answer an insurance
coverage question, I specifically do not want you to
guess. We have tried in several different forms, by letter,
Affidavit, and like, to Satisfy the answer to that question,
and I do not believe that you are the right person who
can answer that.
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By MR. HARVEY CONTINUED:
Q. Can you tell me who set up the trust for your
children?
A. I did.
Q. Who is the beneficiary?
A. My children. Mr. Harvey, let me make sure I
understood what you were saying. I thought I had
already explained that, but the beneficiary are my four
children.
Right. And your wife, she’s the trustee?
She is.
Anyone else?
No, sir.
Q
A
Q
A.
Q. Do you vote the trust in any way?
A. Do i vote it?
Q Yes.
A.
What do you mean? I don’t understand the
question.
Q. You have any say-so in the trust?
A. I don't Arid I'll even tell you this, Mr. Harvey, one
thing I did was should my wife die there is a successor
trustee named, who is my sister; and should she die, as
part of the trust instrument a court of competent
jurisdiction must appoint the next trustee.
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Q. Do you have any life insurance?
A. Yes, sir. :
Q. Does it have any equity in it?
A.
The preponderance of what I have, Mr. Harvey,
are terra policies. I have one whole life policy. I'm not
aware that it does, because anything — the cost of the
insurance each year varies. I pay a set premium. And
what I set up a couple of years ago was that if the cost
two to three years ago the cost of life insurance
basically went down, so it was probably spinning off
cash value. And I asked the agent to basically turn the
cash value into term policies each year, so it shouldn't. I
don’t know that it does. If it does, it’s very little. But I
will find that out for you and I will fax it to Mr. Kerrigan
and get him to fax it to you.
Q. Is it all with the same company?
A. Oh, no, sir.
Q. How many policies?
A. There are two with American General. And this
term policy they buy, I’m really not sure who that’s with
but they spin that off. Then the rest of the policies are
primarily through the Air National Guard, I mean,
they’re SGLI, and there’s now SGLI Plus, and there is the
National Guard Association.
Q. Do you have any line of credits with any banks?
A. Yes, sir. That would be the S.M. Business Forms
loan.
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Q. You don’t have any personal lines?
A. No, sir.
Q. Who is your primary bank? What is your primary
bank, or who is your primary
bank?
A. Ban Corp South.
Q. Say that — it's Ban Corp?
A. Yes, sir. It's B-A-N, C-O-R-P, S-O-U-T-H.
Q. Is that — wait, that's B-A-N?
MS. BENNETT:
“V” as in Victor.
THE WITNESS:
No, sir, “B” as in Bravo.
MS. BENNETT:
Bravo, I'm sorry.
BY MR. HARVEY CONTINUED:
Q. Do you own any art?
A. No, sir, I don’t.
Q. Who’s your stockbroker?
A. One is E-Trade, so there's basically no broker
involved there, The other is Round Hill Security, and
that -the guy’s name there is Mike Morgan.
Q. Are you on a margin account there?
8la
A. No, sir.
Q. Have you attempted to obtain a bond for this
judgment?
A. Yes, sir.
Q. Where did you attempt to get a bond?
A. I attempted it through my attorney. let's see, did
you attempt through Mr. Kerrigan, through Mr. Weiss,
through Mr. Morton?
MR. KERRIGAN:
Mr. McReynolds.
THE WITNESS:
Primarily at that point in time I guess we're talking
about the Weiss & Eason firm, and basically Mr.
Kerrigan.
BY MR. HARVEY CONTINUED:
Q. He’s already answered it for me.
A. Are you talking to me, Mr. Harvey?
Q. Yes. Mr. Kerrigan just said Mr. McReynolds tried.
A. Okay.
Q. Did you personally try?
A.
No, sir. I will tell you this: My brother also has an
insurance license and we at one time had an insurance
agency, and we discussed this at length and he said
there was absolutely no possibility for me to get a bond.
82a
Q. Did you try to get some type of bond through
College Investment?
A. No, sir. I don’t have any assets to put up for the
bond. I'm just not aware of how I can get a bond, Mr.
Harvey.
Q. Have you taken any steps to declare bankruptcy?
A. Would you describe more of what you mean?
MR. KERRIGAN:
I object to the form of the question. That issue is
definitely premature at this point.
MR. HARVEY:
I realize that.
MR. KERRIGAN:
And there is no judgment that is seeking to be enforced
against him at this time.
BY MR. RARVEY CONTINUED;
Q. Have you ever consulted with anyone to protect
your assets?
MR. KERRIGAN:
Other than talking to Mr. Morton about the L.L.C.
involved in the ownership of DeGaulle?
BY MR. HARVEY CONTINUED:
Q. Let's do it this way: Prior to the — just after the
lawsuit was filed, when you were served the lawsuit, did
you ever consult with anyone to protect your assets,
about asset protection?
A. No, sir, not that I'm aware of.
83a
Q. And I understand what’s going on now, so I don't
need to know that. What's the status of DeGaulle Manor
at this time?
A. DeGaulle Manor, are you referring to the
partnership or the apartment complex?
Q. It's limited liability.
MR. KERRIGAN:
The limited liability corporation?
BY MR. HARVEY CONTINUED:
Q. It owned the complex, didn’t it?
A. No, sir.
Q. Oh, I remember now that it was a very
complicated testimony.
MR. KERRIGAN:
Ask him to explain it.
BY MR. HARVEY CONTINUED:
Q. Why don’t you go ahead and just explain it. I
remember the L.L.C. owned the limited liability
corporation, right?
MS. BENNETT:
I'm going to object to the form of the question. At this
point I don’t know which question he’s being asked to
answer.
MR. KERRIGAN:
That’s fair. Why don’t we, why don’t we just get the
question clearly on the table so that I can understand it.
84a
BY MR. HARVEY CONTINUED;
Q. We have two companies. We have DeGaulle
Manor, Limited, right?
A. Yes, sir.
Q. And we have DeGaulle Manor, L.L.C.?
A. Yes, sir.
Q. Now, as I understand it, correct me, DeGaulle
Manor Limited, which owns the complex, is owned by
the L.L.C. — I mean, right?
MR. KERRIGAN:
What?
BY MR. HARVEY CONTINUED:
Q. Isn't that right?
MR. KERRIGAN:
I don’t understand that. Ask it again.
MR.. HARVEY:
I’m just going back to the testimony.
BY MR. HARVEY CONTINUED:
Q. Why don’t you go ahead and explain it, Mr.
Crisler, and then —
THE WITNESS:
—Mr. Kerrigan, if there’s something objectionable that I
say, just stop me, but let me just explain to you the
ownership. DeGaulle Manor Limited is a Mississippi
limited partnership. It owns DeGaulle Manor Apartment,
DeGaulle Manor/Live Oaks Apartments. The general
85a
partner of DeGaulle Manor Limited is DeGaulle Manor,
L.L.C. That’s the structure.
BY MR. HARVEY CONTINUED:
Q. I thought that was what I said. Anyway, what is
the present status of the L.L.C. at this time?
It’s still there.
Does it have any assets?
No, sir.
Was it ever — it has not been liquidated?
No, sir.
Did it have any assets in 1999?
A. The assets of DeGaulle Manor, L.L.C. were the
basically the assets of the two members of DeGaulle
Manor, L.L.C., and that was their partnership — their
ownership interest in the apartments.
Q. Okay. The apartments were sold,
weren't they?
Yes, sir.
When were they sold?
December 13th, I believe, 2000.
Q. Now, just so — for this Record, the only asset
was the apartment complex; is that right?
A. That is absolutely correct. And, Mr. Harvey, let
86a
me — you know, that is a very broad term when you say
the “apartment complex.” That represented everything
when we sold it and all the personal property that was at
the complex, all the tools, trade name. Everything
associated with that apartment complex was what the
assets of DeGaulle Manor, Limited were, and we sold
every asset of the apartment complex.
Q. And I believe you testified at that trial it was
something like $995,000?
A. Yes, sir. That’s my recollection.
Q. Was there any money due — was there a mortgage
on the property, the apartment complex?
Yes, sir.
And what was the amount of the mortgage?
The first mortgage was about, I think $1,340,000.
And what was the second mortgage?
There were — probably in the area of $2 Million.
oOo -— O&O F&F O PY
Was the $995,000 the excess to the mortgage? It
was assume the mortgage and put up $995,000?
A. Mr. Harvey, I’m sorry. I didn’t understand your
question. Would you repeat it?
Q. According to what you just testified, there were —
there was approximately $3.3 Million in mortgages on
the property?
A. Right.
87a
Q. Was that assumed by the purchaser and the cash
put up was $995,000?
A. No, sir, not really. The — at the time of the sale
basically what transpired, and I’m — this has been a
while ago, but at the time of the sale there was a wrap
mortgage put on for the purchaser that was short-term.
The purchaser did not assume any of the debt, but he
did not pay $995,000 in cash. So, basically what
happened is at the time the mortgage ended, which I
think was about five, six months after the
consummation of the sale, the total amount we received
was $995,000.
_ And where did that money go?
To pay off the first mortgage.
Who passed that Act of Sale?
Q
A.
Q
A. DeGaulle Manor, L.L.C.
Q No, what notary?
A. Jim Morton’s law firm.
Q
: Do you have any judgments against
you now other than this one?
A. No, sir.
Q. Do you have any lawsuits against you now that
have not gone to judgment?
A. No, sir, not that I’m aware of.
Q. Do you have a safety deposit box?
I do.
In what bank is that located?
Pressmark (phonetic) National Bank.
You listed stocks. Do you own any bonds?
I do not. No, sir.
Do you have any purchase agreements that would
that the benefit of which would annue to you?
A. I do not. No, sir. And, Mr. Harvey, let me back up
on that. When you say a "purchase agreement,” would
you -
Q. — I’m talking about on property.
A. You're talking about where I am involved in a
purchase agreement?
Q. Where you would benefit from the purchase.
A. No, sir. I don’t have any.
Q. Okay. The only questions I have left deal with
what I don’t think your attorneys are going to want to
get into.
MR. HARVEY:
Bob, do you want to talk to -get a judge on the phone
and see?
MR. KERRIGAN:
Your question, again, is what?
89a
MR. HARVEY:
Well, my questions are now going to go to indemnity
agreements with Zurich.
MR. KERRIGAN:
Ask him about an indemnity agreement with Zurich.
BY MR. HARVEY CONTINUED:
Q. Mr. Crisler?
A. Yes, sir.
Q. At any time, did you ever request or was there
ever an indemnity agreement signed with Zurich in
which they would indemnify you against any judgment?
A. Mr. Harvey, I’m not aware of signing anything
with Zurich other than what’s relevant to that Zurich
American Insurance policy I put on my Affidavit of
Net Worth. No, sir, I’m not aware of that.
Q. Well, let me put it this way just to be sure: At any
time during the pendency of these proceedings, did
someone from Zurich get you to sign a document, not
the policy or not related to the policy but an agreement,
to say, we’re going to indemnify you individually against
any judgment?
MR. KERRIGAN;
Within the terms of the policy, or any judgment?
MR. HARVEY:
Any judgment.
MR. KERRIGAN:
Object to the form of the question. Don’t answer that,
notwithstanding the fact that he’s already said he’s
signed nothing.
MR. HARVEY:
Weli, he started referencing the policy, and I just wanted
MR. KERRIGAN: }
— his testimony is, A, he has not signed anything, and my
objection had to go to other than whatever were the
terms or conditions of the policy that he purchased from
Zurich.
BY MR. HARVEY CONTINUED:
Q. Did you sign a formal conflict of — waiver of
conflict?
MR. KERRIGAN:
Objection. Don’t answer that question.
MR. HARVEY:
The rest of them — do you want to put them all down
and then call?
MR. KERRIGAN:
Well, it seems to me, Bob, that now what you're going
into is the manner of counsel’s representation or any
independent correspondence that he had with Zurich
during the pendency of your case, all of which are his
rights. And you may tend to believe that that somehow
can be turned into an asset for the benefit of your
clients; I personally fail to see how that could be. So,
why don’t we get on another phone, keep this line open,
and who would you like to talk to?
MR. HARVEY:
I would like to talk to a Judge, I guess.
PE LIOR IME RT Noi ‘i
9la
MR. KERRIGAN;
Which Judge?
THE WITNESS;
Mr. Kerrigan and Mr. Harvey, do you mind if we go off
the Record for a minute?
(Off the Record.)
(Whereupon Judge Jefferson was called.)
JUDGE JEFFERSON:
I don’t think that — there should not be any questions
with regard to Mr. Crisler’s conversations with his
lawyers with regard to any subject matter. What he
discusses with lawyers I believe is privileged
information. I will permit any questions he asks with
regard to whether or not there is an indemnity
agreement between Mr. Crisler or any of the other
defendants with regards to Jean Casler’s judgment as
regards to this trial. I will let the indemnity question be
asked. If it’s already been asked and answered, then
that’s the end of the discussion.
(Off the Record.)
MR. KERRIGAN:
For the Record, the Judge said that nothing that
transpired between counsel during the counsel’s
representation of you during this trial is coming out in
any way, shape, or fashion.
MS. JACOBSON:
At this time.
MR. KERRIGAN:
At this time, as Ms. Jacobson chimed in.
92a
MR. HARVEY:
And I understand, for the Record, I will furnish those
questions in a letter, you will review them, you'll tell me
which ones you will answer or won't answer, if not all of
them, one way or the other, and then we can take it
back up with the Judge.
MR. KERRIGAN;
That sounds good.
MR. HARVEY:
Mr. Crisler, thank you.
MR. KERRIGAN:
We reserve our right to read and sign the deposition.
(Whereupon the deposition concluded. )
WITNESS CERTIFICATE
I, William J. Crisler, Jr., pursuant to the Rule 30(e) of the
Federal Rules of Civil Procedure and/or Article 1445 of
the Louisiana Code of Civil Procedure, have read or
have had the foregoing testimony read to me and do
hereby certify that the testimony is true and correct to
the best of my ability and understanding.
I do hereby certify that I have not marked on, written on
or in any way altered the foregoing transcript pages.
I do hereby tender to the Certified Court Reporter, the
lawful officer before whom my sworn testimony was
reported, transcribed, and thereafter certified, the
foregoing transcript:
( )Without corrections
93a
( )With corrections as reflected on the errata sheet(s)
prepared by me and made a part hereof.
Dated
Signed:
William J. Crisler, Jr.
CERTIFICATE
This certificate is valid only for a_ transcript
accompanied by my blue stamp on this page.
I, JoLyn A. Malley, Certified Court Reporter in and for
the State of Louisiana, as the officer before whom this
testimony was taken, do hereby certify that the
foregoing 52 pages of court proceedings and/or
testimony was reported by me in Stenomask and
transcribed under my personal direction and
supervision, and is a true and correct transcript to the
best of my ability and understanding; that I am not of
counsel, not related to counsel, nor to the parties
hereto, and I am in no way interested in the outcome of
this event.
JoLyn A. Malley
Certified Court Reporter
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.