DELERY v. BORGNEMOUTH REALTY COMPANY LIMITED (2026)

Plaintiffs appeal a judgment of the district court dismissing their (1) shareholder derivative claims pursuant to a motion to dismiss under La. R.S. 12:1-744 filed by defendant corporation and (2) direct claims for damages pursuant to exceptions raising the objection of no right of action filed by each of the three defendants. For the reasons that follow, we affirm.

FACTS AND PROCEDURAL HISTORY

James G. Delery and Edward J. Delery, Jr. (“Plaintiffs”) are shareholders in Borgnemouth Realty Company, Ltd., a privately held corporation formed in 1904 with the intent of buying and selling real estate. At its inception, Borgnemouth had 25 shareholders; today, the company has over 130 shareholders, a large majority of whom are descendants of the original shareholders. Borgnemouth is currently managed by a Board of Directors (“the Board”), consisting of five members: Nadia de la Houssaye, John Gilmore Simpson, Jr., Winifred Wendy Delery Hills, Robert Bruce Wallis, and Philip Livaudais. All members of the Board are descendants of the original secretary/treasurer of Borgnemouth, though none of the Board members share common grandparents.

Approximately 750 acres of the land held by Borgnemouth fronts the Mississippi River in St. Bernard Parish (“the Riverfront Property”); the remaining land held by Borgnemouth consists of approximately 8,000 acres of undeveloped wetlands and marshland. In 2021, after many years of negotiations, the then-president and CEO of Borgnemouth, Robert Bruce Wallis,¹ negotiated the sale of the Riverfront Property to the Port of New Orleans, with the Board's consent, for $18,407,925.00 by Act of Sale dated December 30, 2021. Wallis received a 6% “commission” for his efforts in negotiating the sale of the Riverfront Property in his capacity as the Board president.

On January 12, 2023, a Borgnemouth shareholder, Joseph Puglia, filed a “Shareholder's Verified Petition for Recission [sic] and for Return of a Payment for a Thing Not Due” in the 22nd JDC.² Therein, Puglia named the Board of Commissioners of the Port of New Orleans (“the Port”), Borgnemouth, and Wallis, individually and in his capacity as president and CEO of Borgnemouth (collectively “Defendants”), as defendants. Puglia sought (1) rescission of the sale of the Riverfront Property on the basis that the sale was an ultra vires act done without adherence to proper corporate formalities ³ ; (2) rescission of the sale for lesion beyond moiety on the basis that the Riverfront Property was sold to the Port for less than half of its fair market value ⁴ ; and (3) return of a payment not due and/or to set aside the “unlawful real estate commission” paid to Wallis.⁵

On March 27, 2023, Plaintiffs filed a first amending petition in which they sought to be substituted for Puglia as plaintiffs in the lawsuit. Plaintiffs later sought leave to file a second amending petition on May 24, 2024, which the district court granted on May 31, 2024. Therein, Plaintiffs alleged they brought their lawsuit “as both a derivative and direct proceeding since their voting rights as Borgnemouth stockholders are held by them individually[.]” Plaintiffs asserted Defendants are liable to them for all damages, including damages for the denial of their shareholder voting rights and the losses they personally sustained due to the alleged unauthorized, lesionary sale of the Riverfront Property. Plaintiffs prayed for a declaration that (1) all unauthorized actions taken by the Borgnemouth officers and directors with respect to the sale of the Riverfront Property and any commission or compensation paid to Wallis in connection therewith are null and void to the extent that shareholder notice and/or approval of the Riverfront Property's sale was required pursuant to Borgnemouth's Corporate Charter and La. R.S. 12:1-1202 and/or (2) at any relevant time, the purported Borgnemouth officers and directors who sold the Riverfront Property “were not duly elected in accordance with Borgnemouth's Charter.”

Borgnemouth's Motion to Dismiss

On March 22, 2024, Borgnemouth filed a motion to dismiss pursuant to La. R.S. 12:1-744, in which it alleged that a quorum of qualified members of the Board met on March 7, 2024, and determined in good faith, after conducting a reasonable inquiry, that maintenance of the derivative proceeding was not in the best interest of the corporation. Borgnemouth attached the meeting minutes from March 7, 2024, which reflect that four of the five members of the Board ⁶ met, “reviewed all the information [they] gathered before Puglia and [the] Delery[s] filed suit against [them] and the Port[,]” and concurred that dismissal of the suit would be in the best interest of Borgnemouth.

Plaintiffs opposed the motion to dismiss. Plaintiffs alleged that Borgnemouth was not entitled to dismissal because it failed to comply with the requirement that there be a majority vote of “qualified directors” in favor of dismissal only after a “good faith and reasonable inquiry.” Plaintiffs stated that because Borgnemouth is a closely held private corporation, there is no presumption that the Board members are “qualified director[s]” under La. R.S. 12:1-744. Plaintiffs further noted that outside counsel was not retained and no report was prepared prior to the vote to dismiss the suit.

Borgnemouth filed a reply memorandum in which it argued Plaintiffs did not allege that any members of the Board have a material interest in the outcome of the proceeding or a material relationship with a person who does such that they should be disqualified from voting for dismissal. In addition, Borgnemouth detailed its actions leading up to the decision to move to dismiss the lawsuit, arguing that it was at all times acting in good faith.

Exceptions Raising the Objection of No Right of Action

On September 20, 2024, Borgnemouth and Wallis filed a joint exception raising the objection of no right of action. Borgnemouth and Wallis argued that Plaintiffs do not have an individual claim against the corporation or Wallis “because the claims are for nothing more than the alleged losses to Borgnemouth that all shareholders would have suffered equally[,]” i.e., they are derivative in nature. In addition, Borgnemouth argued that Plaintiffs also have no right of action to assert derivative claims against it because Borgnemouth moved to dismiss the derivative proceedings as not in the company's best interest. In support of their exception, Borgnemouth and Wallis attached Plaintiffs’ discovery responses, in which Plaintiffs admitted that if the Riverfront Property sold for what it was actually worth, “[they] and every other shareholder should have received ․ more than twice what [they] received in consideration for Borgnemouth's sale of the [Riverfront] Property.” Plaintiffs also responded that they were deprived of their shareholder voting rights to approve the sale and to elect Board directors, which resulted in personal economic losses when the Riverfront Property sold for less than it is worth. According to Borgnemouth and Wallis, this is evidence that Plaintiffs’ claims are no different than those that could be raised by each and every shareholder. The Port filed its own exception raising the objection of no right of action, raising the same reasons for dismissal as those offered by Borgnemouth and Wallis.

Plaintiffs filed one opposition to Defendants’ exceptions raising the objection of no right of action. In short, Plaintiffs argued that Defendants are unable to carry their burden of proof on their exceptions because their loss of the right to vote for members of the Board is a basis for a direct action. Further, Plaintiffs argued that partial exceptions raising the objection of no right of action may not be sustained under Louisiana law.

Defendants filed three separate reply memoranda.⁷ Borgnemouth and Wallis first argued that district courts may render judgments sustaining an exception in part pursuant to the 2003 comments to La. C.C.P. art. 934. Additionally, Defendants pointed out that if the district court grants Borgnemouth's motion to dismiss, Plaintiffs’ direct-action claims will be the only claims remaining. Borgnemouth and Wallis argued dismissal of the direct-action claims is appropriate because Plaintiffs’ alleged losses are not distinct from injury to Borgnemouth and/or all of its shareholders. The Port, on the other hand, highlighted that its involvement in the suit relates only to one of Plaintiffs’ claims: lesion beyond moiety.

Hearing

The district court held a hearing on the motion to dismiss and the exceptions on December 6, 2024. The district court first heard the motion to dismiss. The parties introduced live testimony of Wallis and Hills, the secretary/treasurer for the Board, as well as documentary evidence. The exceptions were submitted on the briefs.

At the conclusion of the hearing, the district court took the matter under advisement and invited the parties to submit post-trial briefs. On January 27, 2025, the district court issued reasons for judgment wherein it (1) granted Borgnemouth's motion to dismiss; (2) sustained Borgnemouth and Wallis's exception raising the objection of no right of action; and (3) sustained the Port's exception raising the objection of no right of action. As to the motion to dismiss, the district court noted that, when the Board voted to approve the sale of the Riverfront Property in 2021, the terms of the directors serving on the Board had expired. Nevertheless, the court determined that, based on the articles of incorporation, the Board that voted to approve the sale had the authority to do so. The court also noted that even if the Board did not have the authority, the vote was implicitly ratified at the March 7, 2024 Board meeting to consider whether the sale was in Borgnemouth's best interest.

The district court also found the Board directors were “qualified,” i.e., they did not have a material interest in the outcome of the proceeding or a material relationship with a person who had such an interest. Although the district court acknowledged Wallis was not a qualified director, it noted Wallis was not present for the vote for dismissal and that the remaining directors constituted a quorum. The court further concluded the directors conducted a good faith reasonable inquiry into whether dismissal was in Borgnemouth's best interest, citing testimony establishing the Board gathered and responded to all requests for information; diligently reviewed all gathered information; discussed the allegations of the lawsuit and the effects thereof; and kept the shareholders apprised throughout the entire process. In light of all its findings, the district court ordered dismissal of Plaintiffs’ derivative proceeding with prejudice.

The district court then addressed the exceptions raising the objection of no right of action. The court concluded Plaintiffs “do not, and cannot, allege a loss of their shares or a dilution of the value of their shares” because, even if taken as true, “every shareholder would have been entitled to their share of additional funds.” Additionally, all shareholders were affected by Borgnemouth's failure to hold elections in 2020 and 2021. Therefore, the court found the “alleged damage occurred to [Borgnemouth] and all shareholders, not just the plaintiffs, and is therefore not a direct loss but rather an indirect loss which cannot be asserted individually.” The court determined these claims are all derivative; however, it concluded Plaintiffs have no right to bring a derivative action based on its ruling on the motion to dismiss. Therefore, the district court sustained the exceptions filed by Defendants.

The district court signed a judgment on March 19, 2025, dismissing Plaintiffs’ lawsuit with prejudice, and Plaintiffs appealed.⁸ On appeal, Plaintiffs assert three assignments of error:

1. The Trial Court committed legal error in sustaining the Defendants’ Exceptions of No Right of Action, failing to recognize that La. R.S. 12:1-304(B)(1) provides shareholders with a direct, independent right of action to challenge and set aside ultra vires corporate acts.

2. The Trial Court committed legal error in sustaining the Exceptions of No Right of Action regarding the illegal real estate commission paid to [Robert] Bruce Wallis, thereby ignoring the plain language of La. C.C. art. 2030, which allows “any person” to invoke the absolute nullity of a contract that violates public order.

3. The Trial Court committed legal error in granting Borgnemouth's Motion to Dismiss under La. R.S. 12:1-744, as the corporation failed to prove that the dismissal was authorized by a majority of “qualified directors” who conducted a “reasonable inquiry” in good faith.

LAW AND ANALYSIS

Motion to Dismiss Under La. R.S. 12:1-744

Shareholders may sue to recover losses to a corporation through a shareholder's derivative suit. See LeBlanc v. Alfred, 2015-0397 (La. App. 1 Cir. 12/17/15), 185 So.3d 768, 774; see also La. C.C.P. art. 611(A) & La. R.S. 12:1-741(B). Nevertheless, a derivative proceeding shall be dismissed by the court on motion of the corporation if a majority vote of qualified directors (constituting a quorum) present at the meeting of the board of directors has determined in good faith, after conducting a reasonable inquiry upon which its conclusions are based, that the maintenance of the derivative proceeding is not in the best interests of the corporation. See La. R.S. 12:1-744(A) & (B)(1).

If a majority of the board of directors consisted of qualified directors at the time the determination was made, the plaintiff shall have the burden of proving that the requirements of La. R.S. 12:1-744(A)—that the qualified directors made a good faith, reasonable inquiry into whether maintenance of the suit is in the best interest of the corporation—have not been met; if not, the burden of proof shifts to the corporation. See La. R.S. 12:1-744(D).

With regard to the many issues that involve questions of fact, the appropriate standard of review is the manifest error-clearly wrong standard, pursuant to which an appellate court cannot set aside a district court's finding of fact unless the finding is “clearly wrong” in light of the record reviewed in its entirety. State v. OptumRx, Inc., 2025-00911 (La. 11/12/25), 422 So.3d 754, 756-57 (per curiam). To reverse a district court's factual finding, a court of appeal must find that there is no reasonable factual basis in the record to support the finding, such that it is “clearly wrong.” OptumRx, 422 So.3d at 757. This requires more than reviewing the record for some evidence supporting or controverting the district court's finding. The manifest error-clearly wrong standard is therefore not easily met, as it is rare that no reasonable basis exists to support a finding of a district court. OptumRx, 422 So.3d at 757. On the other hand, legal questions are reviewed by the appellate court de novo, affording no deference to the district court's finding. Breen v. Landry, 2022-1132 (La. App. 1 Cir. 4/14/23), 366 So.3d 577, 581, writ denied, 2023-00873 (La. 10/10/23), 371 So.3d 455.

Qualified Directors

We must first determine whether the Board, at the time of the vote to dismiss the derivative suit, consisted of a quorum of “qualified directors.”⁹ For purposes of a motion to dismiss pursuant to La. R.S. 12:1-744, a “qualified director” is a director who does not have a material interest in the outcome of the proceeding or a material relationship with a person who has such an interest. La. R.S. 12:1-143(A)(1). “Material interest” means “an actual or potential benefit or detriment, other than one that would devolve on the corporation or the shareholders generally, that would reasonably be expected to impair the objectivity of the director's judgment when participating in the action to be taken.” La. R.S. 12:1-143(B)(1). “Material relationship” means a “familial, financial, professional, employment[,] or other relationship that would reasonably be expected to impair the objectivity of the director's judgment when participating in the action to be taken.” La. R.S. 12:1-143(B)(2).

At the hearing on Borgnemouth's motion to dismiss, Hills testified that the Board noticed a Zoom meeting for March 7, 2024, to determine whether to dismiss Plaintiffs’ suit. Hills testified, and the meeting minutes confirm, that Wallis was noticed for the meeting but was asked not to be present during this discussion because he was a named defendant in the suit.¹⁰ The remaining four board members—de la Houssaye, Simpson, Livaudais, and Hills—were present. At the conclusion of the discussion, the then-president of the Board, de la Houssaye, moved for dismissal of the suit, and it was unanimously approved.

Plaintiffs argue de la Houssaye and Hills are not qualified directors. Plaintiffs assert de la Houssaye is not qualified due to her role as a partner at the law firm of Jones Walker. The evidence at the hearing established that an attorney at Jones Walker performed the title work involved in the sale of the Riverfront Property. Jones Walker also represents the Port in separate litigation. Plaintiffs argue that de la Houssaye had insider knowledge on the Port's position, which played a part in her decision to vote for dismissal. According to Plaintiffs, the Port's status as a client of Jones Walker constitutes a professional relationship that disqualifies de la Houssaye under La. R.S. 12:1-744. As to Hills, Plaintiffs argue she was not a qualified director because she was biased against one of Plaintiffs, James G. Delery.

Despite de la Houssaye's obvious connection to Jones Walker, the evidence established she did not perform the title work for the sale. Additionally, the fact that de la Houssaye is a partner at the firm that completed the title work does not compel the district court to find such a relationship would impair her objectivity in deciding whether the lawsuit filed by Plaintiffs is in Borgnemouth's best interest. In fact, the evidence established that de la Houssaye was one of several shareholders who requested additional information regarding the allegations in Plaintiffs’ lawsuit before she was named to the Board.

Similarly, Hills’ personal opinion of James G. Delery does not necessarily indicate she is incapable of making an objective decision regarding the maintenance of his lawsuit. The minutes from the March 7, 2024 Board meeting do not reflect that Hills’ opinions were considered by the Board when deciding whether maintaining the suit was in the best interest of the corporation. Although all of the Board's members have familial relationships, the evidence at the hearing established that they do not often socialize outside of Borgnemouth meetings other than during occasional family events such as weddings and funerals. Hills characterized the relationship as “more of a working relationship.”

In order for this court to reverse the district court's factual finding that the directors were qualified under La. R.S. 12:1-744, there must be no reasonable factual basis in the record to support the finding. See OptumRx, 422 So.3d at 757. We find that there is reasonable support for the district court's finding that the directors were “qualified,” and therefore, we may not reverse.

Good Faith, Reasonable Inquiry

Since we find no error in the district court's factual finding that the majority of the Board consisted of qualified directors at the time the determination for dismissal was made, the burden of proof is on Plaintiffs to establish the Board did not act in good faith after conducting a reasonable inquiry. See La. R.S. 12:1-744(D). At the hearing, Hills detailed the Board's actions beginning with notifying the shareholders of the sale of the Riverfront Property until the vote for dismissal. Hills testified that Wallis drafted a letter dated February 28, 2022, to inform the shareholders of the sale. The letter discussed the sale to the Port and the dividend checks paid to the shareholders. Borgnemouth then held an annual shareholder meeting on March 28, 2022.¹¹ The minutes from the 2022 shareholder meeting reflect that Wallis gave a president's report and detailed the sale to the Port, and significant discussion followed. Hills testified the March 2022 shareholder meeting was “a very well-attended meeting.”

Following the March 2022 shareholder meeting, a shareholder named Steven Haller wrote a letter dated May 6, 2022, to formally demand documents and information related to the sale of the Riverfront Property and related compensation received by Wallis. Therein, Haller stated that he represented the interests of himself and others (including de la Houssaye, Simpson, and James G. Delery), and together they represented 18% of Borgnemouth's ownership. The information Haller requested included correspondence between Borgnemouth and the Port; copies of signed agreements related to the sale; minutes from meetings of the Board related to the sale; information regarding the compensation received by Wallis; and financial statements. Hills testified that the Board provided the information requested in October of 2022 by way of a Dropbox link “so that [Haller] could share it with everyone.”

In addition, Hills testified that the Board sent a letter dated March 7, 2023, to its shareholders to provide them with a second update on the sale and to advise the lawsuit was filed. The 2023 annual shareholder meeting was held on March 22, 2023. At that meeting, de la Houssaye, who was president of the Board at that time, discussed the request received by Haller and instructed anyone who desired more information to request a link to the Dropbox. In addition, de la Houssaye notified the shareholders that Plaintiffs were substituted for Puglia as the plaintiffs in the lawsuit, and Ms. Hills testified that nobody else wanted to join the lawsuit.

The Board held the meeting to discuss dismissal of the suit on March 7, 2024. The meeting minutes reflect that the Board reviewed all information gathered since inception of the suit, including a complete timeline of work undertaken by Wallis related to the sale of the Riverfront Property,¹² tax returns, meeting minutes, financial statements and valuations, and all other information shared with Haller and other shareholders through the Dropbox link, de la Houssaye also noted the concern expressed by non-plaintiff shareholders. Thereafter, de la Houssaye moved to seek dismissal of the case, and it was unanimously approved.

The 2024 annual shareholder meeting was held on March 25, 2024. At that meeting, de la Houssaye encouraged anyone who wanted to review the documentation provided at Haller's request to do so and urged shareholders to voice any comments or concerns, explaining that the Board “want[s] to do what is right for [Borgnemouth] ․ and protect [the shareholders’] interests.” de la Houssaye discussed the status of the lawsuit, answered a plethora of questions related thereto, and ultimately advised the shareholders that the Board voted to move for dismissal of Plaintiffs’ suit. de la Houssaye noted that a number of attorneys looked at the case and felt that it did not have merit, and she stated, “Had the Board not looked at these documents and the ramifications that this lawsuit is having on ․ Borgnemouth, [the Board] would not have taken this action of filing to dismiss.” de la Houssaye also reasoned that “having this dispute in a public forum is really not serving ․ anyone” because the lawsuit “diminishes any interest others would have in working with Borgnemouth because they don't want to get into family drama and litigation[.]” Further, she explained there are a lot of risks associated with the ownership and maintenance of wetlands and that in her opinion, she thought Borgnemouth got a great deal. The minutes do not reflect any objection to dismissal of the suit.

After a thorough review of the entire record on appeal, we find no manifest error in the district court's factual finding that the qualified directors made a good faith and reasonable inquiry into whether maintenance of the suit is in Borgnemouth's best interest. The Board gathered and responded to all requests for information; diligently reviewed all information gathered; discussed the allegations of the lawsuit and the effects thereof; and kept the shareholders apprised throughout the entirety of the process. Although Plaintiffs allege the Board should have hired outside counsel to investigate Plaintiffs’ claims and determine whether dismissal is appropriate, we note there is no requirement under Louisiana law that the inquiry required by La. R.S. 12:1-744 be conducted by independent counsel. To the contrary, the 2014 revision comment to La. R.S. 12:1-744 states that the issues may be simple enough, and the knowledge of those conducting the inquiry so extensive, that little additional effort will be required to satisfy the statutory standard that the inquiry be conducted in good faith. Under the facts of this case, we find no independent legal opinion was necessary based on the inquiry performed and the independent knowledge of the Board. Hills testified that both she and de la Houssaye are attorneys. Hills also stated that she read the lawsuit when it was filed, understood the claims being asserted, and conducted independent research related to the lawsuit. Therefore, she did not feel it necessary to obtain independent counsel. Hills testified that she felt the suit was frivolous and lacking in merit, a conclusion to which she came “based on [her] legal knowledge, [de la Houssaye's] legal knowledge, and the facts as [they] knew them.”

For all of the above and foregoing reasons, we find no manifest error in the district court's factual determinations. Accordingly, we conclude the district court did not err in dismissing the shareholder derivative claims asserted by Plaintiffs by granting Borgnemouth's motion to dismiss pursuant to La. R.S. 12:1-744.

Exceptions Raising the Objection of No Right of Action

The exception raising the objection of no right of action is designed to test whether the plaintiff has a real and actual interest in the action. McKinley v. McKinley, 2024-0850 (La. App. 1 Cir. 3/21/25), 410 So.3d 375, 379 (citing La. C.C.P. art. 927(6)). The function of the exception raising the objection of no right of action is to determine whether the plaintiff belongs to the class of persons to whom the law grants the cause of action asserted in the suit; it does so by assuming the petition states a valid cause of action and tests whether the plaintiff has an interest in judicially enforcing it. See McKinley, 410 So.3d at 379. If a plaintiff has a right of action as to any one of the theories or demands for relief set out in his petition, the objection of no right of action should be overruled. Dunbar v. Howard, 2021-1171 (La. App. 1 Cir. 8/16/22), 348 So.3d 738, 744.

The party raising the peremptory exception bears the burden of proof. Pearce v. Lagarde, 2020-1224 (La. App. 1 Cir. 10/7/21), 330 So.3d 1160, 1167, writ denied, 2022-00010 (La. 2/22/22), 333 So.3d 446. Evidence supporting or controverting an exception raising the objection of no right of action is admissible; however, in the absence of evidence to the contrary, the averments of fact in the pleadings will be taken as true. McKinley, 410 So.3d at 379 (citing La. C.C.P. art. 931). In this case, the parties submitted the matter on the briefs; thus, this court must decide, based on the allegations of the petition alone, whether Plaintiffs belong to the class of persons to whom the law grants the causes of action asserted. See McKinley, 410 So.3d at 379. The exception raising the objection of no right of action presents a question of law, which is reviewed de novo, and any doubt regarding the appropriateness of an objection of no right of action is to be resolved in favor of the plaintiff. See Pearce, 330 So.3d at 1167.

In light of our ruling affirming the district court's grant of Borgnemouth's motion to dismiss, the only remaining claims are those that Plaintiffs characterize as “individual” claims stemming from the deprivation of their voting rights to (1) approve or disapprove the sale of the Riverfront Property; (2) pay Wallis's “commission”; and (3) elect the Board. In their petition, Plaintiffs allege Borgnemouth did not hold regular shareholder meetings in 2020 or 2021 due to the COVID-19 pandemic; did not call a special meeting to discuss the negotiation and sale of the Riverfront Property or payment to Wallis; did not notify shareholders of the completion of the sale or payment to Wallis; and allowed Wallis to act on its behalf without authority to do so. As a result, Plaintiffs sought rescission of the sale and the “commission” paid to Wallis and damages for Wallis's breach of his fiduciary duty to Borgnemouth.

Under Louisiana law, shareholders of a corporation do not have a personal right to sue to recover for losses sustained by a corporation due to mismanagement and/or a breach of fiduciary duty. See LeBlanc, 185 So.3d at 774; Freeman v. Medical Systems, Inc., 2008-2372 (La. App. 1 Cir. 8/4/09), 2009 WL 2382149, *3 (unpublished) (citing Silliman Private School Corp. v. Shareholder Group, 2001-0964 (La. App. 1 Cir. 5/10/02), 819 So.2d 1088, 1096, writ denied, 2002-1501 (La. 9/20/02), 825 So.2d 1176.). Rather, shareholders may sue to recover losses to a corporation only secondarily through a shareholder's derivative suit. LeBlanc, 185 So.3d at 774. Nevertheless, a shareholder may have a personal right of action if the shareholder shows he or she suffered an injury that is “unique” or “special” to that shareholder but not a loss to the corporation. LeBlanc, 185 So.3d at 774. Where a shareholder's alleged loss is the same as that which would be suffered by all shareholders, such loss is indirect, and the shareholder has no right to sue individually. On the other hand, where a shareholder, but not the corporation, suffers a loss, such loss is direct, and the shareholder may have a right to sue individually. LeBlanc, 185 So.3d at 774. Such direct losses include the loss of the right to vote, to inspect the books or records, or to receive a dividend. See Lopez Languirand v. Lopez, 2018-245 (La. App. 5 Cir. 12/12/18), 261 So.3d 1054, 1060 (quoting Glenn G. Morris, et al., Business Organizations § 34.03, in 8 La. Civ. L. Treatise 162 (1999)).

Plaintiffs do not allege any direct loss in their petitions. To the contrary, all allegations of the petitions detail damages that, if proven, would be borne equally by all shareholders of Borgnemouth and/or Borgnemouth itself. For example, if Borgnemouth should have received more than it did for the sale of the Riverfront Property, every shareholder would be entitled to their share of additional funds. The same is true of Borgnemouth's failure to hold annual shareholder meetings or elections for directors and officers and the payment made to Wallis—the injury sustained was sustained by every shareholder. Therefore, each of the assertions against Borgnemouth and Wallis represent indirect losses, damages for which may only be recovered through a derivative suit. See LeBlanc, 185 So.3d at 774. As we have previously determined the district court did not err in dismissing Plaintiffs’ derivative suit pursuant to Borgnemouth's motion to dismiss, we find no error in the district court's ruling sustaining the exception raising the objection of no right of action filed by Borgnemouth and Wallis.

As to the Port, the only claim Plaintiffs assert against it is for rescission for lesion beyond moiety. Rescission of a sale of an immovable on the grounds of lesion beyond moiety is a remedy afforded for an injury suffered by a seller who does not receive a full equivalent for the value of the immovable sold. Webb v. State Through Dept, of Transp. & Development, 470 So.2d 994, 996 (La. App. 1 Cir.) (citing La. C.C. art. 2589), writ denied, 476 So.2d 357 (La. 1985). The seller of the Riverfront Property was Borgnemouth. Therefore, just as previously noted regarding Plaintiffs’ causes of action against Borgnemouth and Wallis, any injury suffered as a result of a lesionary sale would be suffered by Borgnemouth and all of its shareholders, and any action to seek recovery for such an injury must be brought derivatively. See LeBlanc, 185 So.3d at 774. Accordingly, we also find no error in the district court's ruling sustaining the exception raising the objection of no right of action filed by the Port.

DECREE

For the above and foregoing reasons, the district court's March 19, 2025 judgment dismissing the petition filed by Plaintiffs, James G. Delery and Edward J. Delery, Jr., is affirmed. All costs of these proceedings are assessed to Plaintiffs.

AFFIRMED.

FOOTNOTES

1.   Wallis is not a Borgnemouth shareholder; however, he frequently attended Borgnemouth shareholder meetings in his capacity as representative of other shareholders prior to becoming a member of the Board.

2.   Puglia also filed an identical petition in the 34th JDC, which was later dismissed pursuant to an exception raising the objection of lis pendens filed by the Board of Commissioners of the Port of New Orleans.

3.   Louisiana Revised Statutes 12:1-1202(A) provides, in pertinent part, that a sale of assets requires approval of the corporation's shareholders “if the disposition would leave the corporation without a significant continuing business activity.”

4.   Louisiana Civil Code articles 2589 through 2600 govern rescission of a sale for lesion beyond moiety, i.e., when the price paid is less than one half of the fair market value of the immovable. See La. C.C. art. 2589.

5.   Pursuant to La. R.S. 37:1436(B), it is unlawful for any unlicensed person to engage in any real estate activity relating to any portion of a real estate transaction performed for another in exchange for a fee, commission, or other valuable consideration.

6.   Wallis was not present during these discussions.

7.   On September 24, 2024, Plaintiffs moved to disqualify the law firm of Deutsch Kerrigan, LLP for having an “inherent and non-waivable conflict of interest in connection with its dual representation of both ․ Borgnemouth ․ and Wallis[.]” Borgnemouth eventually filed a motion to withdraw and substitute counsel of record, which the district court granted. As such, Borgnemouth and Wallis filed separate reply memoranda regarding their exception raising the objection of no right of action.

8.   Notice of signing of judgment was mailed on March 31, 2025. Plaintiffs filed a motion for devolutive appeal on May 27, 2025. The district court granted the motion for appeal on June 2, 2025, and notice of appeal was issued on June 17, 2025.

9.   We note Plaintiffs do not dispute there was a quorum when the Board voted to dismiss the suit; rather, Plaintiffs focus their arguments on whether the Board members were “qualified” under La. R.S. 12:1-744.

10.   Status as a named defendant does not automatically prevent a director from being a qualified director under La. R.S. 12:1-744. See La. R.S. 12:1-143(C)(3). Nevertheless, we need not determine whether Wallis was “qualified” since he was not a participant in the vote to dismiss the derivative suit.

11.   This was the first shareholder meeting Borgnemouth held after the two-year gap alleged in Plaintiffs’ petition and after the sale was completed.

12.   This timeline was prepared by Wallis.

EDWARDS, J.