some of whom were practicing with dr carson and cardiology practice some of whom are investors with the cars and other hotel ventures that we submit that what the plaintiffs are asking the court to accept is not only illogical but also that no reasonable jury would conclude that based on the evidence in this case but the issue today on appeal is whether there are any genuine issues of material fact here we're here to ask you to give it carson's their day in court to allow the jury to hear the evidence to look the witnesses in the eyes before reaching a decision on the merits of this matter this is a a long and somewhat convoluted case as was originally filed the plaintiff solution eleven different theories of liability against the carson against dr and mrs carson have been dismissed so the first remaining claim is a direct claim against carson's for violation of the louisiana securities laws the second claim is a derivative claim against the course and asking that they be found liable for the debts of sinus under piercing of the failed theory now the district court ruled that the carson's are liable under both theories of liability by way of summary judgment based on the same finding that the carson's on november twenty second two thousand and six knowingly and falsely misrepresented to the plaintiffs that they would be members of an l l c that would own louisiana hotel and convention center in alexandria now the legal elements in the two different theories are different so it's important to consider them separately but taking the first the louisiana securities law claims the district court held that there was no genuine issue of material fact that the made a material misrepresentation to the players that the plaintiffs were unaware of this alleged misrepresentation but that the carson's knew or should have known that they were making a misrepresentation if these findings were in area o first the statement that the plaintiffs would be members of an l l c that would own the hotel is not an actual misrepresentation unless it can be proven that the carson's when they were making the statement never intended to perform never intended for that result to happen or somehow made the decision made the statement without a reasonable basis knowing that it was impossible but the district court in this case your honor found that the statement was a misrepresentation solely because the hotel was never transferred to st but that finding alone later does not render the statement a misrepresentation when it was made but even if the statement were deemed to be a misrepresentation there's a significant amount of evidence in the record that the carson's did not know that they were making a misrepresentation yes around the plans were told in advance that mean and at the meeting that the carson's had an agreement to buy the hotel and sack the presentation self says the closing date for the hotel is going to be december seventh or eight i think in the actual presentation and so they knew that the car since we're already in line to buy it and they also knew at that presentation that sign it hadn't been formed yet and that they had no investor proceeds the idea of the presentation was if you guys want to invest we're going to form a new to the planning of an attempt to transfer it took two years well not not really your honor i mean that the document that you talk about the letter of intent and they received a letter of receipt after they pay their proceeds both of those documents indicated that additional paperwork yet to be executed and that they even gave the name and number of the attorney who was charged with preparing those documents what did they get when they when they really got that piece of paper that they own anything they want they had from our perspective they confirm that that was undisputed that the carson and the plaintiffs always intended for that to happen persons and confirm that intent in their depositions the lawyers and accountants in their depositions confirm that that was their intent and so well and you know on the last pamela as had you know the figure of cause us the contract between plane is insane but you know i think that in addition to the evidence of their intent to transfer the hotel to carson's actually took action  to transfer the hotel they presented the plaintiffs with paperwork to facilitate the transfer your well it was it was one year after operations of the hotel you're going to meet some of the plaintiffs didn't invest until into two thousand and seven of the hotel being transferred it was always going to be owned by st if i mean that there is no logical explanation i mean the planners fail to understand i mean plate failed to articulate what they suggest the carson's endgame was but we're just going to keep them in the dark forever and if the hotel was this great success when they were going to sell a huge profit and cut out their their friends and colleagues it just doesn't make any sense well you know i agree i think everybody wished that things would have been done sooner than they work but that issues would have been raised earlier that meeting that they had with the investors was it was after the very first full year of operations the hotel opened in july two thousand and seven and in july two thousand and eight they had a presentation they went over the past year performance and went over what was going to happen next year cetera and so and it was at that meeting after you know a somewhat lackluster performance discussion of the former year that one of the plan says he didn't understand the investment didn't want to sign the documents and then other plans not followed suit  carson's and all that was still going to remain the same the plaintiffs were never obligated for anything beyond their initial capital investment but the mortgage encumbered the property yes your honor but that was always that was that was presentation itself back in november of two thousand and six made clear that there was going to be a mortgage and that there was any debt on the property that they had proforma is that they were going to pay a five hundred thousand in interest a year for the first five there were some discussion of that initially ms carson was never paid any management fees but that's a claim she has against cena i think that was a claim that was raised at one time but but that does not implicate the plaintiffs to any personal liability beyond the capital invested in saying th carson's did commit fraud and then secondly that its initial analysis under the traditional corporate veil piercing factors was still valid and these are findings your honour's were also error first of all to find that the car since committed fraud that again would have would have required a finding that the statement was a misrepresentation at the time that it was made in november twenty second two thousand and six but more importantly that requires a finding of their intent of their mental state which is pretty well established that findings of mental state or intent but way of summary judgment are julie inappropriate and so there's just a lot of fact issues around the questions of whether they intended to commit fraud you know aside from their dealings with the plaintiffs and aside from the evidence of their intent they they did things suggesting that they intended for saying it on the hotel that scene is entered into a franchise agreement with payment hotels to to run the hotel  that the defendant had violated the statute that they have so the security through misrepresentation and so he found a violation of of seven fourteen imposes liability almost seller with a valley section seven where and and there's no question that the representation in the statements that were made everything was done in connection with the sale this was made by the courts it personally and previous decision the panel of this court held you know this is from seven eighty four seven fifty six f thirty eight eighty four of rather the court held that sainath was obligated to return the money it had received because there had been a failure of consideration am that k p was liable for the return of the funds because it had been unjustly enriched so both l l c entities are liable under the court it but the bottom line is there are a lot of facts that support summary judgment and despite the continuous reference to all of these facts that go against summary judgment there aren't any in the record interpretation that the jury could find they made a material representation that they would own it at the time of the presentation but what's what's tell me again why a jury had to find that if there were certain little bits and pieces here and there that they tended to transfer all right and now we're talking about the security slug like ok which gets back to my answer to you of why we went with two clips because i think the piercing the veil is indisputable and securities claim all of the evidence taken as a whole and judge draw specifically address this because there's one way to go on this which is you just look at that one statement at that point and at that point these individuals are making a misstatement or they're not or you look at the overall by your fruits you know will know you or whatever that that that thought that he looked at all of the evidence in this way said his decision and based on his review of that evidence there's no reasonable way for him to conclude that they really intended to do this carson's personal phones were quote interchangeable for all purposes close quote she said yes the financial statements in the tax returns that were prepared by the carson's yes they were prepared to reflect that sa the hotel and yes there were some inquiries made about st being able to do things but it never happened and the effect of those statements in those inquiries and those tax returns was actually to continue the deception because the investors were getting these papers that said so and it had this and that it really didn't so actually those statements were to prove their intended those statements were to keep the investors from finding out for over a year and  the hotel the same because you just chose not to transfer it and once again mrs carson in her deposition forthrightly said the reason this is one of the other elements in the record so docket number one sixty eight was sealed so it's not number as part of the record but sixty seven sixty eight over deposition she said that they didn't want to transfer the hotel that had been promised because it just wasn't in the carson's best interest and those are her words to do so so the point is there are two ways to look at this case one is you look at the overall conduct and you conclude you know actions speak louder than words and what they always meant was what they did and that's what judge bill concluded on the securities issue the other way  under the factors in o j is completely appropriate under the circumstances judge bell went through all of those factors but when you have one of the members and managers of that company saying yes k p c funds are interchangeable for all purposes with our personal funds or saying oh we just didn't make the transfer case because it wasn't our best interest to do so you have a clear picture of a situation where even though piercing may have been normal it's not the typical it unlawful for any person offered to sell a security by means of an oral written untrue statement of material fact  when you look at the evidence in the facts and what actually occurred there's really no genuine disputed material fact that the course is intended to gain an unjust advantage for themselves like the one other statement for my well there's there's another aspect of that there's not only the original statement but there's the ongoing continuing misrepresentation and it becomes clearer and clearer as we look back at the hotel was never going to be transferred and the carson's continue be the owner though you say they're they're doing it to cover up the fact that it's not already the owner of the will and you basically have those you have the you have the statement the presentation and then you have the letter and and then i was the fact that it took well two years from the time of the presentation to the actually transfer t statement we didn't know what was going to happen in the future and we met for this to happen well that works fine let's say the hotel hadn't been transferred was a little different facts and the hotel was out there and it was available and then something else or ok if that wasn't the carson's fault or for whatever reason thought that's the kind of thing where you look at the forward looking statement you say well something went wrong things go wrong you said this was going to happen but obviously you know you weren't wind anybody because it was your fault well none of what happened in this case fits that description these are the kinds of statements where the carson's had complete control over what happened there's no reason that the hotel could have been transferred interesting well i think the only reasonable inference that you can draw from the facts and this is what judge drove conclude is that that's just buck because it never happened there was no reason for it not to happen and so when they said it then really made it and it never happened and that's what proves their intent that going back to the belt or the suspenders whichever way it was arrangement wasn't documented they didn't have regular meetings they didn't do any of the things they were supposed to do and at the carson's felt like he was their own personal piggy bank and k p certainly is liable for the full amount of this judgment so on both of those grounds we believe judge will rule correctly i think actually the securities law issues are more complex and the stra upholding judge girls decision is to recognize that based on all of the evidence and there's no dispute the only dispute is over maybe we were going to transfer the hotel there's no dispute that should be pierced based on the record there's no dispute that the corson's used this to gain benefit for themselves so there's no dispute that the investors ended up with nothing at the end of the day are you you're trying your judgment absolutely and i believe that in the end whatever issues there may be on this point or that point he made the right decision and the facts really speak for themselves of the actions of the  company those are the kinds of things that show that absolutely the veil was properly pierced by judge joe and all of these facts that are constantly being referred to that support the opposite conclusion what are they there's only one issue here which is well we made some more paperwork that talked about how maybe same as we get the hotel well it's pretty clear that a lot of that paperwork wasn't even true at the time it was generated the tax i gree with you and i think my point and the answer that these are the colleagues of dr carson that he brings in his fellow doctors into this meeting and they trust so i agree maybe more due diligence were better appropriate but under these circumstances there's no reasonable in this context basis for them to know that these statements were false they trusted it they believed him the carson's went out of their way to continue for some time to generate paperwork that made it look like saying it was going to own the hotel and it didn't so you're right they could have been more careful but on the other hand i don't think that they were unreasonable in trusting their colleagues especially when they were misrepresentation on nov twenty second two thousand and six the securities laws are such that you have to consider whether it was a misrepresentation at that time whether they should have done something later after they purchased the securities it's at conduct that takes place after the i was i knew what i knew which faltered but if you use a circumstantial evidence as to what was happening at the time but they're talking about different conduct that took place later that amounts to fraud and in suggesting that  know constitutes a violations louisiana securities law so while it is correct that there is no scienter element of louisiana securities law they still have to prove that the carson's knew or should have known that they were making a material misrepresentation at the time and there are a lot of fat of that offering if you guys invested before me this new policy we're going to transfer it over and they knew that there was going to be dead on the hotel as well now i'm sure that if miss carr you know miss carson was here and even dr carson was testifying they could explain a lot about the who what when where why and who knew what and what was what was the what was the what total of mix of information available at the time and why they did certain things and why this took this long and why this took long and why did you do this i mean these are all fat questions and own way of somebody judgment why don't we just freeze frame it at the moment of their presentation they own cap right they they have the purchase agreement for us and they have complete control of that and there is no document existing at that time that shows any plan or mechanism to transfer it yet they say you will own it that's correct there was no document in place yet but it was and the fact remains if the hotel going in their  mind right in and they told that to the plaintiff that but i mean it's hard to miss this but if if if the hotel were to record reflects they told the plaintiffs we only entity that has a purchase agreement we have no existing plan planets would have been exactly the same and through that time there they were sharing in the front you know the last of the hotels with the time in order to transfer over they would have just been a mere you know paperwork it was just paperwork to transfer the hotel over the financial situation was the same they weren't depriving the plaintiffs of any benefits of the ownership of the hotel or the running of the hotel through that time and if i could just address that piercing claim for a second it's important to understand that the piercing claim they're asking well let me let me say one thing first  scene is not as to cap and so i don't think that that district court made any findings that that the cars and they're liable for the debts of cap or that that has been properly brought before people but as to sane if what there's the district court found that the misconduct was was fraud that occurred on november twenty second two thousand and six before the elysee with l l c was formed and as they point out you know a member of an l l c can't claim the protections of an l l c for conduct taken before the and i agree with that but by the same token the plaintiffs can't use the exceptions in an l l c statute to try to hold the corson's liable for the debts of sane if for conduct taken before the l l c was formed the plaintiffs had a number of claims against the carson's directly fraud intentional negligent measurement station and conversion they voluntarily dismissed as claims to avoid a trial that have been set by the court in april of two thousand and fifteen and those claims were dismissed with prejudice in march of two thousand and fifteen and so it's it would be proper