DENNIS, Circuit Judge:
This interlocutory appeal from a partial summary judgment in a shareholder derivative action is another chapter in the twenty-year family dispute
I. BACKGROUND FACTS
Coury, plaintiff and minority owner of CMI stock, brought this shareholder derivative action alleging "self-dealing" against his sister, Sharon Coury Moss (CMI president, stockholder, and board of directors member); Julie Landry (CMI head accountant, bookkeeper, and board member); William C. Moss (CMI general manager and son of Sharon Moss); CMI itself; and Moss Management Corporation, a Louisiana corporation (collectively, "Defendants").
On July 3, 1979, William J. Moss ("Bill Moss"), Sharon Moss's now deceased husband, and Coury executed CMI's Articles of Incorporation. By means of Article X, they agreed that "no shareholder may sell any [CMI] stock ... without first offering it to [CMI] on the basis of book value."
On March 19, 1986, Coury filed a voluntary petition for bankruptcy. The assets of the bankruptcy estate included, by reference only, Coury's shares of CMI stock and his interest in pending litigation involving CMI. Since their issuance, the certificates representing Coury's shares have never left Coury's possession and their registration in Coury's name on the CMI records has never been changed. Recognizing that the bankruptcy trustee could cause the bankruptcy estate to sell these assets to a third person, Coury, on December 23, 1988, entered a written "Ratification and Agreement of Exchange" with Coury, Ltd., an Oklahoma limited partnership of which Coury is general partner, to exchange assets of Coury, Ltd., including land in Colorado, for the bankruptcy estate's "release of property in A. Sam Coury's name for A. Sam Coury...." In return, Coury, as an individual, assigned to Coury, Ltd. the profits of his dental practice during his lifetime up to $100,000. The agreement further provided that Coury, Ltd. "was not to own or ever take possession of any of the exchanged property .... nor was it to acquire any ownership rights, ownership, or any of the incidents of ownership in any of the exchanged property." On February 1, 1989, the bankruptcy trustee, on behalf of the bankruptcy estate, and Coury, Ltd. executed a "Contract of Exchange" whereby the bankruptcy estate traded its interest
On February 6, 1989, the bankruptcy trustee filed a notice of intent with the bankruptcy court to inform all creditors and interested parties of the transfers contemplated in the foregoing described "Contract of Exchange" and to give them an opportunity to file an objection. After being so notified, CMI, on March 14, 1989, filed an objection and offered a lesser bid limited only to Coury's CMI shares and interest in pending CMI-related litigation. The bankruptcy trustee informed CMI of his refusal to sell the CMI stock and litigious rights separately from the other assets involved and his intention to proceed to an in globo sale. On May 17, 1989, the bankruptcy court held a hearing, at which attorneys for CMI, Coury, and Coury, Ltd. appeared. After the hearing, the court authorized the bankruptcy trustee to complete the proposed transaction or to accept any other bid in excess of $17,100 (the cash equivalent of the assets offered in exchange by Coury, Ltd.). CMI's attorney requested an opportunity to confer with her client, and the bankruptcy trustee agreed to hold the transaction open until 5:00 p.m., stating that he would then accept the highest bid for all of the property offered, including the CMI shares. CMI did not file any additional bid within the allotted time or anytime thereafter.
CMI did not contend during the bankruptcy proceedings in 1989 that the exchange of assets between the bankruptcy estate and Coury, Ltd. (for the benefit of Coury individually) amounted to a default by Coury upon his obligation not to sell his stock to a third person without offering it to CMI for first refusal. Subsequently, in the extensive CMI-related state court litigation, however, Bill Moss, and later Sharon Moss, repeatedly sought unsuccessfully to use defensively the argument that Coury had forfeited his right of actions against CMI based on his defaulting on his obligation under Article X of the Articles of Incorporation. Despite the consistent rejection of this argument in slightly different forms and contexts by the state courts, after Coury filed this shareholder
II. STANDARD OF REVIEW
This court reviews a district court's grant of summary judgment de novo, applying the same standards as the district court: A party is entitled to summary judgment only if "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). On a motion for summary judgment, the court must view the facts in the light most favorable to the non-moving party and draw all reasonable inferences in its favor. See Hockman v. Westward Commc'ns, LLC, 407 F.3d 317, 325 (5th Cir.2004). In reviewing the evidence, the court must therefore "refrain from making credibility determinations or weighing the evidence." Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir.2007).
It is undisputed that Louisiana's substantive law governs our decision because Louisiana is the forum state in this diversity-based shareholder derivative action, see Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), and Louisiana's own law is the proper choice of law under the facts and its conflicts of law rules.
Under the Civil Code, contract interpretation "is the determination of the common intent of the parties." La. Civ.Code Ann. 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. Civ.Code Ann. art. 2046. "The words of a contract must be given their generally prevailing meaning." La. Civ.Code Ann. art. 2047. In the present case, the words of Article X are clear and explicit insofar as they apply to the issue within the context of the undisputed facts. But this does not prohibit us from interpreting the contract in reference to laws on the same subject matter or taking notice of the purpose of the contract as a precaution against reaching absurd consequences.
Under the Civil Code, "[a] contract is an agreement by two or more parties whereby obligations are created, modified, or extinguished." See La. Civ.Code Ann. art. 1906.
In the present case, the share transfer restriction contained in Article X is a contract that creates obligations whereby each shareholder is bound to render a performance to the corporation and the other shareholders. That performance consists either of (1) not selling any share of stock to a third person, or (2) first offering to sell it to the corporation at book value before selling it to a third person.
Because no one may avail himself of ignorance of the law, see La. Civ.Code Ann. art. 5, Coury and Bill Moss, and their heirs and assigns, must be presumed to have agreed to be bound by Article X according to the meaning of its terms as provided for by law. Therefore, in order to determine whether Coury defaulted on his obligation not to sell his shares without first offering them to CMI, we must refer to the Civil Code Articles pertaining to the contract of sale, ownership, and transfer.
The term "sale" under Louisiana law is defined as "a contract whereby a person transfers ownership of a thing to another for a price in money." La. Civ.Code Ann. art. 2439 (emphasis added). "The thing, the price, and the consent of the parties are requirements for the perfection of a sale." Id. Article 2443 explicitly confirms that which is implicit in Article 2439 by making it plain that "[a] person cannot purchase a thing he already owns." See also Otwell v. Vaughan, 186 La. 911, 173 So. 527, 534-35 (1937); Scott v. Leonard, 106 La. 317, 30 So. 841, 841 (1901). However, Article 2443 adds: "Nevertheless, the owner of a thing may purchase the rights of a person who has, or may have, an adverse claim to the thing."
Applying the foregoing Civil Code Articles to the present case, we conclude that Coury did not default on his obligation under Article X. The only performance Coury was bound to render under Article X was not to sell his shares, i.e., transfer ownership of his CMI shares to a third person, without first offering them to CMI at book value. He fully performed his obligation by not selling or transferring ownership of his shares to anyone. Thus, he never became bound to render the alternate performance of offering them to CMI at book value. Consequently, based on the record in this case, CMI does not have the right to enforce performance of any kind by Coury or to deprive him of his right as the owner of his shares to bring a shareholder derivative suit.
Defendants' arguments to the contrary are without merit.
First, Defendants baldly assert that Coury is estopped to bring this action because his shares were twice transferred in violation of Article X; and that he holds them only because he continues to breach his obligation to transfer those shares to CMI as required by Article X. However, in this argument, Defendants do not point to any specific evidence in the record showing that Coury sold or transferred his CMI shares to anyone. In the absence of such proof, defendants fail to demonstrate that Coury defaulted on his Article X obligation
As legal support for their estoppel argument, Defendants cite only the following Louisiana cases: Morris v. Friedman, 663 So.2d 19, 25 (La.1995); Coker v. Supreme Indus. Life Ins. Co., Inc., 43 So.2d 556, 558 (La.App.1950); Eves v. Morgan City Fund, 252 So.2d 770, 775 (La.App. 1st Cir.1971); Humble Oil & Refining Co. v. Boudoin, 154 So.2d 239, 249-50 (La.App. 3d Cir.1963); Phillips v. Mid-Continent Life Ins. Co., 130 So.2d 791, 798 (La.App.2d Cir.1961). These cases are inapposite to the present case. Defendants present no argument to explain how these cases constitute authority for their bare assertion that Coury is estopped to bring this litigation. Consequently, we conclude that Defendants have abandoned their estoppel position because of inadequate briefing and lack of argument. See Nichols v. Enterasys Networks, Inc., 495 F.3d 185, 190 (5th Cir.2007) ("Where analysis is so deficient, this court has considered the issue waived for inadequate briefing.").
Defendants also devote a major part of their brief to an argument that the exchange of assets between the bankruptcy estate, Coury, Ltd., and Coury was a sale, not an exchange.
Finally, Defendants assert that the transaction between Coury, Ltd. and Coury was a sale that triggered CMI's Article X right to compel Coury to sell his shares for book value. However, Defendants make no cogent argument in support of their assertion. Instead, they mischaracterize the district court's decision as being based solely on Coury's physical possession of the certificates representing his shares of CMI stock; then they proceed to demonstrate that possession of stock certificates is not necessarily legally determinative of stock ownership. But, that was not the rationale of the district court's decision. The district court found, as we do in our de novo review, that Coury did not default on his obligation and is not bound to render any performance under Article X to CMI because Coury never sold or transferred his ownership of his CMI shares to anyone.
The transaction between Coury, Ltd. and Coury could not possibly have constituted a default by Coury on his obligation to CMI under Article X not to sell his CMI shares to a third person without first offering it to CMI for first refusal. Coury did not sell or transfer his stock at all in that transaction; instead, he merely received, as third-party beneficiary,
Because the undisputed facts of record in this case, consisting principally of documentary evidence, demonstrate that Coury has not sold or transferred his CMI stock to anyone and therefore has not defaulted on his obligation under the Article X first refusal clause, Defendants do not have the right to require Coury to sell his stock to CMI at book value or to prevent him from exercising his right of ownership as a stockholder to bring this shareholder derivative action.
For these reasons, we affirm the partial summary judgment of the district court.
See La.Rev.Stat. Ann. § 13:4231 (1990). The parties represent and concede that the above cited state court cases involved solely the issue of whether Coury owned certain litigious rights to the Coury-Moss litigation, not whether Coury owned his 250 shares of CMI stock. Therefore, as the parties agree, because "the object of the judgment" and "[t]he thing demanded" are not the same in the present litigation, the issue is not precluded here.