Brothers' dispute over Idaho business is sent back to Louisiana state court

By Scott Holland | May 15, 2019

NEW ORLEANS — A federal judge has weighed in on a dispute between two Louisiana brothers who own an Idaho real estate business.

David Paddison and Richard Paddison Jr. own Paddison Scenic Properties (PSP). On Oct. 3, 2018, Richard, saying he was a Louisiana resident, filed a complaint against David and the business in Idaho, seeking to dissolve the business. On Nov. 20, 2018, David filed a complaint in the Parish of St. Tammany against Richard and the business, seeking injunctive relief.

On March 6, Richard — now representing himself as an Idaho resident — removed the Louisiana complaint to federal court and said PSP was dissolved Dec. 31, 2018. On March 12, David moved to have his complaint remanded to state court, and the next day Judge Susie Morgan ordered Richard to address if PSP is an existing limited liability corporation. Richard filed his opposition March 26, asserting he moved from Louisiana to Idaho in 2018.

In analyzing Richard’s home state for her opinion issued April 16, Morgan noted that David did not object to Richard’s statement that he moved his personal items to Idaho, where he has a driver’s license and is registered to vote. Richard also said that he gave up the homestead exemption on his prior residence in Louisiana, which is renting to third parties.

To determine the status of Paddison Scenic Properties, Morgan noted the Idaho Secretary of State’s office's website listed it as an active LLC as of April 5, and although she told Richard to address the question, his response “merely restates that PSP has been dissolved,” she wrote, noting Richard “has failed to meet his burden of proof.”

However, Morgan also considered whether PSP had to be included as a party to the lawsuit to adequately address the underlying claims. While the petition in Louisiana state court alleges Richard breached fiduciary duty to the business, Morgan said the petition seeks no relief from PSP and that the partnership “was joined solely for the purpose of performing ministerial duties and that it is not a real party in interest to the controversy,” she wrote. As such, its legal citizenship is irrelevant to the larger analysis.

Another aspect of Richard’s effort to remove the case is whether the disputed amount exceeds $75,000. Morgan noted that David is not seeking financial damages, only injunctive relief. And while Richard did say the value of the property in Lowell, Idaho, substantially exceeds $75,000, Morgan said that assertion is based on his assumption of the result of a scheduled appraisal.

Further, David signed off on a stipulation that he would neither seek nor accept an award of $75,000 or more, including punitive damages, legal fees and the fair value of injunctive relief. The undated stipulation was filed March 12, after the case was removed March 6.

However, Morgan said that Richard Paddison signed that stipulation as the attorney, not the plaintiff, and that attorney affidavits do not automatically bind plaintiffs. As such, she granted him leave to file a sworn affidavit as the plaintiff by April 22. Upon that filing, the case will be remanded to the 22nd Judicial Court for St. Tammany Parish.

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