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367 So. 2d 1302

Giarrusso v. Giarrusso Security Services, Inc.

Louisiana Court of Appeal

Decided February 6, 1979

Louisiana Court of Appeal · decided 1979-02-06

Cited by 2 later decisions — most recently October 1989

1 state decisions

Key passage — most relied on by later courts

“Any person to whom any of the property mentioned in R.S. 9:2961 shall be so transferred, who shall pay any part of the consideration therefor to such trans-feror, or who shall execute or deliver to the transferor or to his order, or to any person for his use, any promissory note or other evidence of indebtedness for the transfer or any part thereof without first having demanded and received from the transferor or from his agent the statement provided for in R.S. 9:2962 B. verified as therein provided, and without paying or seeing to it that the purchase money or other consideration of the transfer is applied to the payment of the bona fide claims of the creditors of the transferor pro rata according to the dignity of their several claims as shown upon the verified statement, and without first having sent the notices of said transfer and such statement of creditors as provided for in R.S. 9:2962 C., shall at the suit of any creditor, be held liable to all the creditors of the trans-feror as receiver for the fair value of all the property so transferred to him. If the transferor and his creditors do not agree in writing to a schedule of distribution of the proceeds of the sale, or the transferee or his agent has reason to believe that the transferor has failed either to furnish a list of all the creditors or to furnish a statement of the full amount of the debts due each creditor, or for any other reason the transferee or his agent is unable to make proper distribution as herei”

quoted by 1 later decision, including McDowell v. Chambers

“As used in this Part, “creditor” and “creditors” mean only the creditor or creditors of the transferor with respect to a debt or debts owed by the transferor at the time of transfer, but not with respect to any debt or debts subsequently arising.”

quoted by 1 later decision, including McDowell v. Chambers

Relies on 266 So. 2d 732 - Viera v. Kwik Home Services, Inc. · 294 So. 2d 580 - Servi-Clean Industries, Inc. v. Tonti Manage. Corp. · Uarco, Inc. v. Peoples Bank & Trust Co. of St. Bernard

Good law ✅— No negative treatment on recordhow we know

Decided 1979-02-06

View the full empirical analysis of this case →

STOULIG, Judge.

¶1Plaintiff, Joseph I. Giarrusso, Sr., has appealed a judgment dismissing his suit against Giarrusso Security Service, Inc. (GSS), Guardsmark, Inc. (Guardsmark), and Honeywell, Inc., doing business as Honeywell Protective Services (Honeywell). Alleging he is a creditor of GSS, plaintiff has petitioned to (1) have a transfer of assets by GSS in separate sales to Guards-mark and Honeywell declared invalid for noncompliance with the Bulk Sales Law (R.S. 9:2961 et seq.) and (2) obtain as a creditor of GSS a $150,000 judgment against the defendants.

¶2Defendants initially filed two peremptory exceptions, namely, no cause of action because the sale complained of was not regulated by Bulk Sales Law requirements, and no right of action because Giarrusso is not a creditor of GSS and has no standing'to sue even if the sales by GSS to the other defendants were subject to the R.S. 9:2961 et seq. regulations. The trial court overruled these exceptions and permitted defendants 15 days within which to file responsive pleadings. At this point a motion was filed in the record enrolling new counsel for defendants to replace those withdrawing.

¶3The next pleading filed for defendants was one urging peremptory exceptions of no right or no cause of action, and alternatively, a motion for summary judgment. From a judgment maintaining these peremptory exceptions and also granting summary judgment,1 plaintiff has appealed.

¶4The basis of plaintiff’s claim as a creditor of GSS is a pending claim for damages based on libel that plaintiff has urged in a reconventional demand in the suit Giarrusso Security Services, Inc. v. Joseph I. Giarrus-so, Sr., No. 604-421 of the Civil District Court of the Parish of Orleans. Not only is the sum uncertain, but his right to recovery has yet to be adjudicated.

¶5The instant case rests on two premises, namely, that plaintiff was a creditor of GSS at the time its assets were sold to Guardsmark and to Honeywell and that the Bulk Sales Law is applicable to these transactions. Even were we to assume that GSS was subject to these regulations2 which admittedly it did not follow, plaintiff has no basis in law for recovery. R.S. 9:2961 provides:

“The transfer in bulk and otherwise than in the ordinary course of trade and in the regular and usual prosecution of the business of the transferor, of any portion or the whole of a stock of merchandise, or merchandise and fixtures, or of all or substantially all of the fixtures or equipment used or to be used in the display, manufacture, care, or delivery of any goods, wares, or merchandise including movable store and office fixtures, horses, wagons, automobile trucks and other vehicles or other goods or chattels of the business of the transferor shall be void as against the creditors of the trans-feror, unless made in conformity with the provisions of this Part. As used in this Part, ‘creditor’ and ‘creditors’ mean only *1304the creditor or creditors of the transferor with respect to a debt or debts owed by the transferor at the time of transfer, but not with respect to any debt or debts subsequently arising.”

¶6Plaintiff under the admitted facts is not a creditor to whom the protection of this act is afforded. He simply has an unliquidated claim that had not been reduced to judgment. A claimant does not acquire the status of a creditor within the meaning of the Bulk Sales Law until the validity of his claim is established and liquidated. Only liquidated claims are contemplated by the requirement of R.S. 9:2963 “ … that the purchase money or other consideration of the transfer is applied to the payment of the bona fide claims of the creditors of the transferor pro rata … Because plaintiff’s claim has not been reduced to judgment he has no standing to sue.

¶7In reaching this result we do not pass on the issue of whether a demand for damages in libel is premature when urged in the same suit in which the statements in the petition form the basis of the libel complaint.3 Our conclusion that an unliquidat-ed claim does not ripen into a debt until a judgment is rendered obviates the need to discuss the appropriate time to file a libel claim.

¶8For the reasons assigned, the judgment appealed from is affirmed.

¶9AFFIRMED.

¶10. Plaintiff did not file any countervailing affidavits or adduce any evidence in opposition to the motion for summary judgment.

¶11. It is questionable whether the Bulk Sales Law is applicable to a business such as GSS that renders a service rather than engages in the sale of merchandise; however, the decision in Servi-Clean Industries, Inc. v. Tonti Manage. Corp., 294 So.2d 580 (La.App. 4th Cir. 1974), suggests it includes businesses not strictly engaged in retail merchandising. See discussion on this point in Uarco v. Peoples Bank & Trust Co. of St. Bernard, 414 F.Supp. 1219 (E.D.La. 1976).

¶12. Viera v. Kwik Home Services, Inc., 266 So.2d 732 (La.App. 4th Cir. 1972), holds that a defendant alleging he was libelled by the petition in the suit to which he is responding may urge his complaint by reconventional demand. The logic of this case is compelling.

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