JO BLANCHE CORPORATION v. CARLO MARCELLO JR CARLI MARCELLO WORSHAM AND CHRISTY MARCELLO CHAMBERS (2025)

Plaintiff appeals a judgment of the district court that granted a motion for summary judgment filed by Defendants, Christy Marcello Chambers and Carli Marcello Worsham, and declared them the rightful owners of funds deposited in the registry of the court during this concursus proceeding. For the reasons that follow, we reverse the district court's ruling on the motion for summary judgment and vacate its award of the funds deposited in the registry of the court to Christy Marcello Chambers and Carli Marcello Worsham.

FACTS AND PROCEDURAL HISTORY

On December 31, 1986, a large tract of farm property located in Lafourche Parish (“the Property”) was transferred by members of the Marcello family (“the Marcellos”) to a closely held, family-owned corporation (“Jo-Blanche”) in exchange for stock ownership in Jo-Blanche. In 2021, Jo-Blanche sold the Property to Crossing Development, LLC. Following the 2021 sale, the Jo-Blanche Board of Directors (“the Board”) met and unanimously agreed to distribute a percentage of the sale proceeds among the shareholders.

The Board determined that Carlo J. Marcello, Jr. (“CJ”) was entitled to $50,000.00 of the sale proceeds based on his ownership of 11 shares of stock in Jo-Blanche. However, CJ executed two separate acts of donation in 2002 whereby he purported to donate his interest in the Property to his nieces, Christy Marcello Chambers and Carli Marcello Worsham. Jo-Blanche considered these acts of donation either void or voidable. Therefore, Jo-Blanche instituted this concursus proceeding in accordance with La. C.C.P. art. 4651, et seq.¹ in 2022 and named CJ, Christy, and Carli as defendants.

In its petition, Jo-Blanche stated “[t]he proper disposition of the sale proceeds attributable to [CJ's] purported share ownership has resulted in a dispute between plaintiff and defendants[,]” and therefore, it “is seeking judgment to afford it adequate notice pursuant to its corporate formalities regarding exercising its right of first refusal as provided in the articles and by-laws regarding the transfer of stock ownership by [CJ.]” Additionally, Jo-Blanche stated it commenced this concursus proceeding for the district court “to decide which party is entitled to receive the funds being deposited into the registry of the Court” and prayed “[f]or an order requiring all parties to the concursus to appear ․ and assert their claims contradictorily for the amount on deposit on a date and time to be decided by the court[.]” The district court signed an order permitting Jo-Blanche to deposit the $50,000.00 into the registry of the court on January 19, 2022.

On January 17, 2024, Christy and Carli filed a motion for summary judgment, in which they asserted there is no genuine issue of material fact that they are the legal owners of shares in Jo-Blanche, and therefore, the funds held in concursus should be released to them. Christy and Carli argued that, according to the allegations of the petition, the concursus funds belong to the owner of 11 shares of stock in Jo-Blanche. Christy and Carli maintained the evidence established that they are the owners of the 11 shares of stock that previously belonged to CJ, notwithstanding any vices of form in the acts of donation. In support of their motion, Christy and Carli attached the following evidence: the petition for concursus filed by Jo-Blanche with attachments, including the act of sale from the Marcellos to Jo-Blanche, the act of donation to Christy, the act of donation to Carli, a December 22, 2021 letter from Jo-Blanche to CJ regarding proceeds of the sale of the Property, and a January 6, 2022 email from CJ to counsel for Jo-Blanche instructing Jo-Blanche to release the concursus funds to him; CJ's affidavit; Christy's affidavit, with supporting exhibits; and Carli's affidavit, with supporting exhibits.

Jo-Blanche opposed Christy and Carli's motion, arguing that they are not entitled to summary judgment because the donations executed by CJ were invalid, void, and did not transfer ownership of any Jo-Blanche shares because (1) the documents CJ signed were not authentic acts; (2) CJ did not own the Property and therefore could not transfer ownership of it; and (3) CJ violated corporate requirements set forth in the Jo-Blanche articles of incorporation and/or by-laws governing the transfer of shares. Additionally, Jo-Blanche asserted that there is a genuine issue of material fact as to whether CJ is asserting a claim for the concursus funds. Jo-Blanche presented the affidavit of David A. Marcello, president of Jo-Blanche, to support its opposition, and the articles of incorporation and by-laws of Jo-Blanche were attached to David's affidavit. There was no objection by either party to the evidence presented in support of or in opposition to Christy and Carli's motion.

The district court held a hearing on Christy and Carli's motion on April 4, 2024, and after denying several outstanding exceptions, the district court granted Christy and Carli's motion for summary judgment and gave oral reasons. The court found there was no genuine issue of material fact because CJ's affidavit definitively stated that he is not the owner of the funds deposited into the registry of the court.

The district court signed a judgment to that effect on April 19, 2024. Therein, the court granted Christy and Carli's motion for summary judgment and declared that the concursus funds should be awarded and distributed to them as follows: 50% to Christy and 50% to Carli. This appeal followed.²

SUMMARY JUDGMENT

After an opportunity for adequate discovery, a motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show there is no genuine issue of material fact and the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(A)(3). The initial burden of proof is on the party filing the motion for summary judgment. See La. C.C.P. art. 966(D)(1). The mover's supporting documentary evidence must prove the essential facts necessary to carry its burden. See La. C.C.P. art. 966(A)(3). Thereafter, summary judgment shall be granted unless the adverse party produces factual support sufficient to establish the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law. See La. C.C.P. art. 966(D)(1).

When ruling on a summary judgment motion, the judge's role is not to evaluate the weight of the evidence or to determine the truth of the matter but instead to determine whether there is a genuine issue of triable fact. Maggio v. Parker, 2017-1112 (La. 6/27/18), 250 So.3d 874, 878. All doubt should be resolved in favor of the non-moving party. Maggio, 250 So.3d at 878.

The grant of a motion for summary judgment is reviewed on appeal de novo, with the appellate court using the same criteria that govern the district court's determination of whether summary judgment is appropriate, i.e., whether there is any genuine issue of material fact, and whether the movant is entitled to judgment as a matter of law. Maggio, 250 So.3d at 878.

DISCUSSION

In this case, the initial burden on summary judgment rests with Christy and Carli to demonstrate they are the rightful owners of the concursus funds. To do so, it was incumbent upon Christy and Carli to demonstrate an ownership interest in Jo-Blanche, the seller of the Property from which the concursus funds originated. See Bernard v. Louisiana Testing & Inspection, Inc., 2019-575 (La. App. 3 Cir. 2/5/20), 290 So.3d 239, 244, writ denied, 2020-00393 (La. 6/3/20), 296 So.3d 1069.

In support of their motion for summary judgment, Christy and Carli submitted the acts of donation executed by CJ in 2002. In each act of donation, CJ stated that it is his intention to “give grant, alien[ate], confirm[,] and donate, inter vivos unto [Christy and Carli], the following described property, to-wit: ․ AN UNDIVIDED ONE-HALF (1/2) INTEREST IN AND TO ALL OF HIS RIGHT, TITLE[,] AND INTEREST IN AND TO THE ․ PROPERTY[.] ”3

Christy and Carli also attached their own affidavits, as well as CJ's affidavit, to their motion for summary judgment. In CJ's affidavit, he averred that he “made an inter vivos donation with the intent to transfer all of [his] ownership in stock of the Jo-Blanche Corporation, Inc. to, and for the benefit of, [his] nieces[.]” CJ further stated that he has not been treated as a shareholder in Jo-Blanche since March 18, 2002, the date on which he executed the acts of donation to Christy and Carli, and that he does not contest Christy and Carli are the rightful owners of the concursus funds.

Likewise, Christy's and Carli's affidavits state that CJ made an inter vivos donation with the intent to transfer half of his stock in Jo-Blanche to each Christy and Carli. Christy and Carli also state they have been treated as shareholders in Jo-Blanche for several years. Christy stated that she received Schedule K-1s ⁴ from Jo-Blanche “since at least 2005, up until 2021[,]” and she attached Schedule K-1s from 2004 and 2008, both of which reflect Christy owns approximately 2% of the shares of stock in Jo-Blanche. Christy also attached correspondence addressed to her from Jo-Blanche, which referred to her as a shareholder and instructed her regarding the Schedule K-1s. Carli also attested that she received Schedule K-1s from Jo-Blanche “since at least 2009, up until 2021.”⁵

A donation inter vivos is a contract. La. C.C. art. 1468. Interpretation of a contract is the determination of the common intent of the parties. La. C.C. art. 2045. When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties’ intent, La. C.C. art. 2046, and the agreement must be enforced as written, see Paddison Builders, Inc. v. Turncliff, 95-1753 (La. App. 1 Cir. 4/4/96), 672 So.2d 1133, 1136, writ denied, 96-1675 (La. 10/4/96), 679 So.2d 1386. The clear and explicit words of the acts of donation executed by CJ demonstrate that CJ intended to donate his right, title, and interest in the Property to Christy and Carli, not his interest in Jo-Blanche. As such, the acts of donation alone are insufficient to carry Defendants’ initial burden on summary judgment.

Next, we note that CJ's, Christy's, and Carli's affidavits may not be used to establish CJ's intent when executing the acts of donation. It is only when the terms of the agreement are unclear, ambiguous, or will lead to absurd consequences that the court may go beyond the original agreement to determine the true intent of the parties. See SRG Baton Rouge II, L.L.C. v. Patten/Jenkins BR Popeye's, L.L.C., 2023-1204 (La. App. 1 Cir. 5/31/24), 391 So.3d 73, 80. As stated previously, the language of the acts of donation is clear and unambiguous. This court lacks the authority to alter the terms of a contract under the guise of interpretation and should not create an ambiguity where none exists. See Bonilla v. Verges Rome Architects, 2023-00928 (La. 3/22/24), 382 So.3d 62, 66. Further, CJ's donative intent is a factual question, see Matherne v. Polite, 2022-0194 (La. App. 1 Cir. 11/4/22), 355 So.3d 664, 668, and summary judgment is rarely appropriate for a determination based on subjective facts such as intent, SRG Baton Rouge II, 391 So.3d at 78.

However, we find Christy's and Carli's affidavits established sufficient factual support for their contention that they are the owners of the 11 shares in Jo-Blanche. Possession of a stock certificate is not determinative of corporate ownership; it is to be distinguished from actual ownership, which may be determined from all the facts and circumstances of a case. See Fireplace Shop, Inc. v. Fireplace Shop of Lafayette, Inc., 400 So.2d 702, 703 (La. App. 1 Cir. 1981). Christy's and Carli's affidavits and exhibits thereto demonstrate that Jo-Blanche considered Christy and Carli shareholders in Jo-Blanche for many years. This is further corroborated by CJ, who attested that he has not been treated as a shareholder in Jo-Blanche since the acts of donation. Accordingly, we find this evidence sufficient to prove the essential facts necessary for Christy and Carli to carry their burden on summary judgment. Therefore, the burden shifted to Jo-Blanche to produce factual support sufficient to establish the existence of a genuine issue of material fact or that Christy and Carli are not entitled to judgment as a matter of law. See La. C.C.P. art. 966(D)(1).

In opposition to Christy and Carli's motion for summary judgment, Plaintiff attached the affidavit of David A. Marcello, who has served as the president of Jo-Blanche since 1995. David stated that the articles have not been amended since they were adopted in 1986. David attached copies of the articles of incorporation for Jo-Blanche to his affidavit, as well as the by-laws of Jo-Blanche. The by-laws state, in pertinent part, “Any member of ․ Jo-Blanche ․ who desires to liquidate his interest in the Corporation must first give written notice of his intent to the membership of the Corporation.” After receiving such notice, the shareholders have 90 days to “take action.” However, if a member of Jo-Blanche or Jo-Blanche as a whole does not purchase said interest, the by-laws provide that the member who intends to liquidate his interest in Jo-Blanche may dispose of his interest as he sees fit. David stated that CJ never notified him, as president of Jo-Blanche, that CJ intended to transfer his shares to Christy and Carli. As such, Jo-Blanche contends that the purported transfer of shares to Christy and Carli was without legal effect for failure to follow the corporate formalities. David also attested that he determined, based upon inspection of Jo-Blanche's records, that CJ is the owner of 11 shares in Jo-Blanche.

This evidence submitted by Jo-Blanche in opposition to Christy and Carli's motion for summary judgment is sufficient to establish the existence of a genuine issue of material fact as to whether Christy and Carli are shareholders in Jo-Blanche. Accordingly, on our de novo review, we conclude that Christy and Carli were not entitled to summary judgment.

DECREE

For the foregoing reasons, we find there are genuine issues of material fact precluding summary judgment in favor of Christy and Carli. Accordingly, the portion of the district court's April 19, 2024 judgment rendering summary judgment in favor of Defendants, Christy Marcello Chambers and Carli Marcello Worsham, is reversed, and we vacate the portion of the district court's April 19, 2024 judgment that awarded the proceeds held in the registry of the court to Christy Marcello Chambers and Carli Marcello Worsham. All costs of this appeal are assessed to Christy Marcello Chambers and Carli Marcello Worsham.

JUDGMENT REVERSED AND VACATED.

I find that a genuine issue of material fact exists as to whether Carli and Christy became shareholders in Jo-Blanche by virtue of Carlo's act of donation, in light of the evidence before the court on the motion for summary judgment that Jo-Blanche's articles of incorporation and by-laws require certain formalities before a shareholder desiring to liquidate his interest in the corporation may dispose of his interest as he sees fit, as well as the evidence showing that the corporation has treated Carli and Christy as shareholders for a number of years. Because I agree with the result in this matter, I respectfully concur.

FOOTNOTES

1.   A concursus proceeding is one in which two or more persons having competing or conflicting claims to money, property, or mortgages or privileges on property are impleaded and required to assert their respective claims contradictorily against all other parties to the proceeding. La. C.C.P. art. 4651. More simply put, a concursus proceeding is a proceeding whereby one who admits owing money to others may deposit that money into the registry of the court, thereby relieving himself of the liability for the money so deposited. Setliff v. Cucchiara, 2021-0792 (La. App. 1 Cir. 3/7/22), 341 So.3d 646, 652 (citing La. C.C.P. art. 4658).

2.   Notice of signing of judgment was mailed on April 26, 2024. On May 3, 2024, Jo-Blanche filed a motion for suspensive appeal, which the district court granted on May 14, 2024.

3.   At the time of the donations, Christy and Carli were minors, so the property was “delivered into the possession of Steven Marcello and Rosalie Marcello ․ the parents of [Christy and Carli],” who accepted the donations on their behalf. A donation made to an unemancipated minor may be accepted by a parent or other ascendant of the minor or by his tutor. La. C.C. art. 1548.

4.   According to the IRS, a Schedule K-l is used by corporations to report shareholders’ share of income, deductions, credits, and other items. See 2024 Shareholder's Instructions for Schedule K-l (Form 1120-S), https://www.irs.gov/pub/irs-pdf/i1120ssk.pdf, at p. 1 (last accessed 4/29/25).

5.   Carli attached K-1s and correspondence to her affidavit as well. However, these documents are addressed to Christy and appear to be duplicates of the exhibits attached to Christy's affidavit.

EDWARDS, J.

Theriot, J. concurs with reasons.