IV.

Paragraph IV. Objection. Vague. The term collectively owned is not a term recognized
under Louisiana law to describe ownership of an immovable, Subject to this objection, denied.
V.
Paragraph V. is denied.
VI.
Paragraph VI. is denied.
VII.
Paragraph VII. is denied.
VIII.
Paragraph VIII. Objection. Vague. Subject to this objection, denied. The Blums, Greenfield,
Blanchard, and Lajeunesse are not the only persons or entities with a legal interest in the subject
property and, further, denied because Mr. Blanchard and Ms. Lajeunesse have never discussed a
partition of the immovable property with the plaintiffs.
IX.
Paragraph IX. It is agreed that the property cannot be partitioned in kind.
X.
Paragraph X. is denied.
XI.
Paragraph XI. is denied.
XII.
Paragraph XII.(1.) Admitted in part, denied in part. It is denied that Robert Blum is a
licensed Certified Public Accountant in the State of Louisiana. However, it is admitted only to the
extent that Robert L. Blum consistently has represented himself to the defendants to be a licensed
Certified Public Accountant in the State of Louisiana, a formally trained accountant, and, also, a
Louisiana licensed and insured, contractor and master plumber.
Paragraph XII.(2.) is denied as written.
Paragraph XII.(3.) is denied as written, no such contract or agreement exists.
Paragraph XII.(4.) Prior to conducting discovery cannot admit or deny.
Paragraph XII.(5.) is denied as written.
Paragraph XII.(6.) is admitted, in part, that to the best of defendants information, knowledge,
and belief that Greenfield is employed by Warner Bros. as its Prop. House Manager. All other
allegations contained therein are denied as written.
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Paragraph XII.(7.) is denied as written.

Paragraph XII.(8) is denied as written.
Paragraph XII.(9.) is admitted, in part, in that the Blums have created an acrimonious
business relationship with all of the other members; Paragraph XII.(9.) is denied, in part, in that
the parties do not desire a partition by licitation or dissolution of 4471 Michoud, LLC; a
partition by licitation or dissolution is not desired by the parties, Walter J. Blanchard and
Cynthia M. Lajeunesse.
Any and all other allegations contained within Paragraph XII are denied in its entirety.
B.
DEFENDANTS AFFIRMATIVE DEFENSES, CCP ART. 1005
Defendants set forth affirmatively, the following affirmative defenses:
1. Failure to state a claim upon which relief may be granted;
2. Vicarious liability of Iberia Bank and Kushner Lagraize, LLC;
3. Joint venture, Robert L. Blum with full disclosure chose to invest merely as a 25% minority
interest holder and cannot now complain that he does not have a controlling interest or
control over the LLC(s);
4. Lack of standing of plaintiff, Elizabeth Blum, non-member;
5. Lack of authority by plaintiff, Elizabeth Blum, non-member;
6. Assumption of risk by agreeing to participate with a 25% minority non-controlling interest;
7. Negligence and fault of plaintiffs;
8. Failure to act in a commercially reasonable manner;
9. Fault of the plaintiffs because they always knew that Blum did not have a controlling interest;
10. Plaintiffs acquiescence to all agreed upon conditions at commencement of business
operations;
11. Plaintiffs bad faith;
12. Plaintiffs breach of the perpetual agreement to operate pursuant to the Articles or
Organization and agreement between the members at the commencement of the business;
13. Breach of fiduciary duty, plaintiffs are attempting to destroy the profitable LLC companies
without cause;
14. Contributory or comparative negligence;
15. Claimants own conduct and/or the conduct of its agents, representatives, and consultants;
16. Extinguishment of the obligation in any manner;
17. Recoupment;
18. Set off;
19. Lack of contract and consent;
20. Unjust enrichment;
21. Injury by fellow servant;
22. Unclean hands;
23. Laches;
24. Payment;
25. Waiver;
26. Attorneys fee award not permissible; and
27. Breach of Confidentiality;
28. Conversion, Misappropriation of Funds, Fraud on the part of the plaintiffs.

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C.

RECONVENTIONAL DEMAND
AND NOW COMES Walter J. Blanchard, Jr. and Cynthia M. Lajeunesse assuming the
position of the Plaintiffs-in-Reconvention:

I. Plaintiffs
The Plaintiffs-in-Recovention, Walter J. Blanchard, Jr. and Cynthia M. Lajeunesse, both of
the full age of majority, domiciled in the State of Louisiana with their primary residence located at
5822 S. Front Street, New Orleans, Louisiana, Parish of Orleans; both plaintiffs-in-reconvention
maintain a secondary residence in the State of California which they use when they work in the
movie industry in the Los Angeles area; they bring this action in their individual capacities and in
their capacities as the majority members of NOLA PROPS, LLC and 4471 MICHOUD, LLC
(domestic limited liability companies domiciled and doing business in the Parish of Orleans, State
of Louisiana) while reserving all rights to amend and supplement this Reconventional Demand to
include additional causes of action and to file incidental demands, after further investigation and
discovery, as deemed necessary and proper, who respectfully represent:

II. Defendants
Made Defendants-in-Reconvention herein:
1.

Defendant, Elizabeth Blum, of the full age of majority, domiciled in the State of Louisiana,

Parish of Orleans, and residing at 2217 Palmer Avenue, New Orleans, LA, 70118, in her individual
capacity and, additionally, in her capacity as an employee, Vice President, and Mortgage
Executive of Iberia Bank acting at all relevant times within the course and scope of her employment
with Iberia Bank.
2.

Defendant, Robert L. Blum, of the full age of majority, domiciled in the State of

Louisiana, Parish of Orleans, and residing at 2217 Palmer Avenue, New Orleans, LA, 70118 in his
individual capacity; in his capacity as a minority member of NOLA PROPS, LLC and 4471
MICHOUD, LLC, and, additionally, in his capacity as an accountant and/or an alleged Certified
Public Accountant licensed by the State of Louisiana, operating at all relevant times in the Parish of
Orleans.

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3.

Defendant, Iberia Bank Corporation, a domestic corporation and Louisiana State Bank(doing

business as Iberia Bank and Iberia Mortgage), hereinafter, referred to as Iberia Bank,
at all relevant times was and is still doing business in the Parish of Orleans, State of Louisiana and
the employer of Vice President and Mortgage Executive Elizabeth Blum, defendant, who was acting
within the course and scope of her employment at all relevant times herein.
4.

Defendant, William Hamilton, CPA, of the full age of majority, domiciled in the State

of Louisiana, and residing in the Parish of Jefferson, both in his individual capacity, and, also, in
his capacity as a licensed Certified Public Accountant, who at all relevant times was employed and
working with Kushner Lagraize, LLC and acting within the course and scope of his employment with
Kushner Lagraize, L.L.C.
5.

Defendant, Kushner Lagraize, L.L.C., is a Louisiana limited liability company, doing

business in the Parish of Orleans, State of Louisiana, located at 3330 W. Esplanade Avenue, Suite
100, Metairie, Louisiana 70002, in its capacity as the employer of defendant, William Hamilton,
CPA, who was acting within the course and scope of his employment at all relevant times herein.

III. Venue
Venue is proper, pursuant to La. CCP Art. 89, as the subject matter of this
Reconventional Demand involves issues in the Parish of Orleans, State of Louisiana.

IV. Facts
1.

Due to the successful emergence of the movie industry in the New Orleans area, Walter J.

Blanchard, Jr. and Cynthia M. Lajeunesse made the investment decision to open a prop house in
New Orleans; Blanchard and Lajeunesse both have extensive experience in the movie industry.
2.

Walter J. Blanchard and Cynthia M. Lajeunesse located a warehouse at 4471 Michoud Blvd.,

in the Michoud Industrial District area; they knew that it would be and ideal location for a movie
prop house.
3.

Walter J. Blanchard and Cynthia M. Lajeunesse were looking for investors. Because it was

going to be a small closely held company, Blanchard and Lajeunesse wanted investors who they
knew well and were friends with; Blanchard and Robert L. Blum had been lifelong friends who
grew up together, here in New Orleans; because of this longtime friendship, Blanchard and
Lajeunesse invited Robert L. Blum to enter into their joint venture; additionally, another close friend,
Robert D. Greenfield, the prop director for Warner Bros. Studios was invited to invest.
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4.

Thus, the only member without any movie industry experience was Robert D. Blum.

However, he represented that he was a Certified Public Account licensed in the State of
Louisiana and that he could contribute that expertise.
5.

In 2012, the parties, Walter J. Blanchard, Cynthia M. Lajeunesse, Robert D. Greenfield, and

Robert L. Blum formed two separate LLCs:

a) NOLA PROPS, LLC, the business entity that owns the prop house located at 4471
Michoud Blvd; and,
b) 4471 MICHOUD, LLC, the company that owns the building wherein the members
intended that the prop house be permanently located.
6.

Relevant to this lawsuit, Blanchard and Lajeunesse are now the 75% majority interests

holders and the defendant, Robert L. Blum, is, and has always been since the inception of the
companies, a 25% minority interest holder in both companies.
7.

Robert Blum invested in these 2 LLC(s) with full knowledge that he was only acquiring a

25% minority ownership interest in a closely held company, not a controlling interest.
Elizabeth Blum is not a member of either LLC.
8.

Since all thought that their friendship was close enough to survive this business venture,

they mistakenly proceeded without the benefit of an operating agreement.

9.

In the beginning, everyone contributed and it appeared like everything was going smoothly.

10.

The majority wanted to hire an independent bookkeeper; however, Robert L. Blum insisted

that because he was a licensed Certified Public Account it was in everyones best interest that
he set-up and maintain the books and records. Early on, Robert L. Blum, despite the protest of the
members, insisted that he hire his friend, William Hamilton. (See Exhibit CPA Emails in Globo)
11.

Under protest of the others members, Robert Blum, increasingly, involved his wife, Elizabeth

Blum, in the bookkeeping and other daily operations of both NOLA PROPS LLC and 4471
MICHOUD, LLC: This is when the conflict began.
12.

Even though Elizabeth Blum was not a member or even an employee, she acted though she

personally owned the companies. She seized control of everything that she could get her hands on.
She intimated, threatened, and harassed the employees; she, even, caused one employee to quit
because he was tired of being ordered to report to Elizabeth Blum at her job at Iberia Bank.
13.

Elizabeth Blum continues to act as though she is the owner of these companies. In fact, as

of this date, she and her husband, Robert Blum, refuse to give the majority members the
administrative codes for the companies Quick Books account.
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14.

Also, the Blums placed the NOLA PROPS, LLC business telephone account in their own

name, personally, without authority from the LLC. Thus, gaining control over the LLCs phone
number (an important asset of the company) The LLC cannot even change their phone carrier or
exercise control over its own phone line without the Blums permission.
15.

The main objective of the majority members was to remove Elizabeth Blum from having

anything at all to do with the businesses and to stop her constant interference, thus the majority
members demanded that an independent Certified Public Account was hired to handle the books
and records, rather than Elizabeth Blum; however, the Blums adamantly insisted that the LLC(s)
hire William Hamilton, who happens to be a friend of the Blums.
16.

However, this did not solve the problem because he companies CPA, William Hamilton,

who the Blums are friends with, refuses to provide the other members with itemized statements for
the work that he did for the LLC(s), or to share with the LLC(s) and the majority members the books
and records for either business. He will only disclose information and take instruction from the
Blums. THE CPA AND THE FIRM HE WORKS FOR REFUSES TO ALLOW WALTER J.
BLANCHARD, THE MANAGING MEMBER, THE BOOKS OF EITHER LLC.
17.

In fact, the CPA, William Hamilton, has been fired in writing by the managing member,

Walter J. Blanchard, Jr., YET THE CPA AND THE FIRM HE WORKS FOR REFUSES TO STOP
WORKING ON BEHALF OF THE LLC(S). The CPA keeps working on behalf of the Blums
interest. The LLC(s) are incurring a bills, for which the Blums, without authorization, pay with the
NOLA PROPS, LLCs funds. The CPAs bill, most recently paid for, by the Blums, was paid from
the NOLA PROPS, LLC account. The bill was for personal services rendered to the Blums,
regarding these lawsuits, as the name of Barry Cooper, the Blums attorney, herein, appears on the
bill.
18.

The CPA for the LLC(s), also, is billing the LLC because the Blums wanted the CPA to

consult with Attorney Barry Cooper regarding the lawsuits against the LLC(s) and the majority
members.
19.

The fierce loyalty of the CPA and his firm to the Blums is frightening to the other members

because Blanchard had been trying to learn just how the CPA and Blum had reconciled the checks,
written by Blum, totaling $36,610.00 . The checks were written
Blum.

to Cash and to Robert

These checks were endorsed on the back of the check by Robert Blum. (See Exhibit

Blum Checks, in Globo)

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20.

Robert Blum has refused to account for these checks, although requested to do so. Blum is

always evasive.
21.

The majority members, under strenuous protest by the Blums, hired an independent

bookkeeper. It is the perception of the majority members that the Blums and their CPA wanted
COMPLETE AND EXCLUSIVE control of all the books and records concerning NOLA
PROPS, LLC and 4471 MICHOUD, LLC. They resisted any interference from an independent
bookkeeper or accountant. See (Exhibit Bookkeeper in Globo)
22.

Also, of momentous concern to the majority members: The majority members have to be

circumspect with their dealings with Elizabeth Blum because she purports to exercise absolute
control over their 4471 MICHOUD, LLC mortgage and NOLA, PROPS, LLC loan with Iberia Bank.
23.

Blanchard, and Lajeunesse were very pleased with the mortgage that they had initially

secured for the 4471 MICHOUD, LLC property in 2012. However, Elizabeth Blum, in early 2013,
as the Vice-President of Iberia Bank and the Mortgage Executive for Iberia Bank, Blum solicited the
members to move their loan. She represented to the majority members that she could get them a
much better deal, if they would refinance with Iberia Bank.
24.

It was a good sell. The members did as Blum suggested, because, at the time, they did not

suspect an ulterior motive. They believe now, in hindsight, that it was just another means for
Elizabeth Blum to garner further control over both LLC(s) and the members personal financial
records and one step closer to acquiring the 4471 MICHOUD, LLC property. (Elizabeth Blum has
never disclosed whether she earned a fee or commission on this transaction with Iberia in which her
husband had a personal interest.)
25.

Elizabeth Blum uses her position, at the Iberia Bank, as a threat that the majority members

could lose there financing-this would destroy both LLC(s) which are viable and profitable.
26.

The Blums are very unreasonable people, they have relayed to the majority members that

they want to bankrupt the other members with attorney fees and court costs. The Blums, specifically,
stated that suing the majority members is a hobby for them, and that they do not care if they lose
their entire investment in both LLC(s): They just want to destroy the majority members.
27. It is believed that this is one of the reasons why their attorney Barry Cooper filed an almost
identical lawsuit, involving the exact same parties and issues as the instant suit, three (3) days
after the instant suit was filed- so that the other members must incur double the court costs and
attorney fees to defend 2 almost identical suits filed by the Blums against them, simultaneously.
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28.

Further and finally, the Blums, are attempting to destroy NOLA PROPS, LLC and,

and 4471 MICHOUD, LLC, which are both viable and profitable companies that are making
money and operating very successfully, despite Elizabeth and Robert Blums usurpation of the
books and records and destructive interference.

V. Plaintiffs-in-Reconvention
CAUSES OF ACTION
AGAINST ELIZABETH BLUM AND IBERIA BANK LA CCP Art. 2320
Breach of Fiduciary Duty, Trust, Loyalty, Confidentiality and Privacy, Maliciousness,
Negligence, Misrepresentation, Abuse of Power, Harassment and Unfair Deceptive Practices
1.

Defendant, Elizabeth Blum, has no right of action and no standing to sue the majority

members to partition either LLC; she is not a member of either LLC. The instant lawsuit against
the majority members is frivolous and is being brought for an improper purpose: to financially
destroy two profitable businesses and the personal finances of the majority members, Walter J.
Blanchard and Cynthia Lajeunesse. Moreover, the filing of the Partition to Partition Property
By Licitation has no basis in Louisiana law. Hence, the plaintiffs-in-reconvention contend that they
are being maliciously prosecuted by Ms. Blum which is causing them provable financial damages.
2.

As Ms. Blum is not a member of either LLC, Ms. Blums only legitimate interest in the

LLC(s) is relative to her capacity as a Vice-President and Mortgage Executive of Iberia Bank
which holds an approximately $500,000.00 collateral mortgage on the immovable property
which is the sole asset of the LLC which is the subject of this suit. The defendants contend that
she was acting within the course and scope of her employment when soliciting the majority
members to refinance with Iberia Bank.
3.

By Elizabeth Blum bringing the instant suit to destroy the LLC that owns the 4471

Michoud Blvd. and, also, bringing the nearly identical suit (pending in Judge Irons court) to
destroy the other related LLC which owns NOLA Props., Elizabeth Blum, who purports to have
power and control over the mortgages in her position as a Vice President and Mortgage
Executive with Iberia Bank, seeks to directly cause the destruction and bankruptcy of the LLCs
and its majority members with these lawsuits, and, thus, an eminent foreclosure by Iberia Bank
of the sole asset of the 4471 Michoud LLC. The plaintiffs-in-reconvention contend that this is a
conflict of interest; and, generally, an abuse of power on the part of both Elizabeth Blum and her
employer, Iberia Bank.
4.

Elizabeth and Robert Blum have expressed that they want to acquire, for their real estate

portfolio, the 4471 Michoud Blvd. property. The sole asset of the LLC is the large building on
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the property which houses NOLA Props and other tenants. By destroying NOLA Props, as the
Blums seek to do in the related lawsuit, pending in Judge Irons court, they would deprive the
LLC, which is the subject of this suit, of its primary, permanent paying tenant. Without NOLA
Props LLC, the Blums know that 4471 Michoud LLC shall default on its mortgage with Iberia
Bank.
5.

On the other hand, without the 4471 Michoud LLC, NOLA Props will be in a financial

tail spin because NOLA Props houses huge and awkward props such as sections of airplanes
and so many other props that it would take over a year to move and re-organize the prop housethe majority members would be overwhelmed to find another location as perfect as 4471
Michoud Blvd. and move everything. They would be lose customers and be bankrupt before they
could spend a year to regroup. The Blums know this to be the case.
6.

The majority members and NOLA Props LLC, who have been sued by Elizabeth Blum,

are all her Iberia Bank customers. The plaintiffs-in- reconvention contend that this is a conflict
of interest on the part of Elizabeth Blum and her employer, Iberia Bank.
7.

This conflict of interest places Walter J. Blanchard and Cynthia Lajeunesse at a

competitive disadvantage when dealing with the Elizabeth Blum: Through her employer, Iberia
Bank, Elizabeth Blum enjoys access to the majority members personal financial information; she
knows exactly how much money it would take to bankrupt them in a forced buy-out and/or
through the two lawsuits filed by Elizabeth Blum against the majority members.
8.

If Iberia Bank would foreclose and/or the court auctions the 4471 Michoud property,

Elizabeth Blum has intimated that Shell be right there to pick it up.
9.

Further, as an example of another unfair competitive advantage cause by Iberia Banks

conflict of interest, their employer, Elizabeth Blum, lets it be known that she can CONTROL the
approximately $500,000.00 mortgage on the 4471 Michoud property.

She sends emails

regarding how she can manipulate the mortgage, with Iberia Bank, refinance, and/or get anyone
released from the mortgage at any time. She, further, uses her position as a bargaining point in
negotiations to force a buy-out with the members.. See Exhibit Iberia Bank in Globo
On November 11, 2013 at 11:36 AM PST.... liz.blum@iberiabankmortgage.com, in her
official capacity of Vice President of Iberia Bank, wrote: ( to the LLC members)
......In connection with our offer, Liz and I would cause each of you to be released
from the personal guarantee on the 4471 Michoud, LLC Iberia Bank warehouse
loan as well as the personal guarantee on the NOLA, PROPS Iberia Bank line of
credit (LOC).....including procuring the guarantee release or the refinance of the
Iberia 4471 Michoud Mortgage and the Iberia Bank NOLA PROPS, LLC .....
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10.

If Iberia Bank would foreclose and/or the court auctions the 4471 Michoud property,

Elizabeth Blum has intimated that Shell be right there to pick it up.
11.

Moreover, based upon her assertions, the majority members infer that she can set-up an

LLC in a persons name who is not an Iberia employee, and, in her position as a Mortgage
Executive obtain financing for the new LLC and pick-up the 4471 Michoud Blvd. property- at
a price that the majority members cannot afford based upon her review of the majority members
personal financial information that she is privity to in her position and capacity as an employee of
Iberia Bank. The plaintiffs-in-reconvention contend that the actions of Elizabeth Blum and Iberia
Bank are an unfair trade practice. They do not enjoy the same advantage to quickly obtain new
financing from Iberia Bank and pick-up the property at auction or in a forced buy-out.
12.

Since the companies began operation, Elizabeth Blum, from her office at Iberia Bank,

during normal working hours, during the normal course of her daily duties at Iberia Bank, has
constantly interfered and exercised control over the daily business operations of her customers,
NOLA PROPS, LLC and 4471 MICHOUD, LLC- despite the fact that she is not a member of either
LLC; she is not and has never been an employee of either LLC; and despite the fact that she and her
husband absolutely have no experience in the movie industries, unlike Walter J. Blanchard, Cynthia
M. Lajeunesse, and Robert Greenfield. For example:
a)

An employee, Grahme Perez had to meet at the conference room of Iberia Bank on Prytania
Street for a job interview with Elizabeth Blum in order to get a job at NOLA Props, LLC.

b)

An Iberia Bank employee, as per instructions by Elizabeth Blum, was ordered to open the
bank doors early, to allow entrance of a NOLA Prop, LLC employee, Mr. Perez, to give
NOLA PROPS DEPOSITS to Elizabeth Blum.

c)

Elizabeth Blum writes out NOLA Prop bills from her office at Iberia Bank.
On February 1, 2014 at 12 AM:02 PST.... liz.blum@iberiabankmortgage.com, in her
official capacity of Vice President of Iberia Bank, wrote: (to Blanchard)
.......This has still not been paid. I did not have a nola props check at the office
yesterday when I discovered this problem...... See Exhibit Iberia Bank in Globo

d)

She sends countless emails to the NOLA Prop LLC and its majority members from her office
and computer at Iberia Bank: it is as if she considers herself as an employee who works
simultaneously for Iberia Bank, NOLA Props, LLC, and 4471 Michoud LLC from her office
at the Prytania Street Branch. The majority members are fed up with her bullying and
controlling even if she does control their mortgage note and financial future. It is ridiculous.

13.

Elizabeth Blum, during normal work hours, during the normal course and scope of her daily

activities with her employer, Iberia Bank, has not been honest in her actions and relationships with
her clients, Walter J. Blanchard, Jr., Cynthia M. Lajeunesse, and NOLA Props; specifically, there
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is an account (thought to be checking) in the name of NOLA PROPS, LLC, that the majority
members do not know how was opened; they do not remember signing any documents to open it.
It is believed that Elizabeth Blum opened this account without authority from the LLC or its majority
members. There is also a line of credit account in the name of NOLA, PROPS, LLC. Further, it is
believed that she has unrestricted access to that account through her position as an employee, Vice
President, and Mortgage Executive with Iberia Bank which she uses for improper and unauthorized
purposes.
14.

Elizabeth Blum, during normal work hours, during the normal course and scope of her daily

activities with her employer, Iberia Bank, has acted unscrupulously and breached the confidentiality
of information pertaining to Iberia Bank customers, NOLA Prop, LLC, 4471 Michoud LLC, Walter
J. Blanchard, Jr. and Cynthia M. Lajeunesse, as just one example: Elizabeth Blum, has discussed
their business, with others, by email, specifically, on April 3, 2014 at 3:15:53 PM CDT, during the
normal course of her duties at work, Elizabeth Blum communicated to a bookkeeper working for
NOLA Props LLC:
Iberia Bank is the mortgage holder and I am a guarantor on this debt. I am also an
officer of Iberia Bank so I need to make sure this is NEVER late...not that you would let
that happen but Iberia has a policy where I can be terminated if I am ever overdrawn or late
on a debt. That has never happened but I just need to keep a tight watch on this bill and the
Iberia HELOC so I (Elizabeth Blum) will continue to pay these two debts. (See Exhibit 1"
attached hereto)
15.

This referenced email, sent by Elizabeth Blum, during normal work hours, during the

normal course and scope of her daily activities with her employer Iberia Bank, is a debt collection
communication from Iberia Bank, in her capacity as the Vice President and Mortgage Executive of
Iberia Bank, Elizabeth Blum has no other authority or right to interfere with the day to day affairs
of the LLC(s); give orders to the employees of the LLC, breach confidentiality, and discuss the
personal financial business of her clients with third parties.
16.

According to Iberia Banks policies and employee handbook located on the internet, this

communication by Elizabeth Blum constitutes several violations of the Iberia Bank policies and its
customers rights to privacy and confidentiality.
17.

With respect to other inappropriate communications sent by Vice President and Mortgage

Executive Elizabeth Blum from her office at Iberia Bank, during the workday, and in the normal
course and scope of her employment, on Tuesday, January 14, 2014, she threatened a person with
legal action if she came to work for NOLA Props, LLC. (NOTE: The Blums are fiercely against
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anyone independent, with no ties to any of the members or its employees, reviewing the books
and records of the two companies. Elizabeth Blum has even called a person that the LLC wanted
hire as an independent bookkeeper and threatened her with legal action if she accepted
employment with the LLC.
18.

As an employee, Vice-President, and Mortgage Executive of Iberia Bank, Elizabeth Blum

has participated in transactions that give the appearance of circumventing established Iberia Bank
policies. Blum is not properly supervised, by her employer, Iberia Bank. This causes Iberia Bank
customers, Walter J. Blanchard and Cynthia M. Lajeunesse to realize that anything could happen
to their $500,000.00 loan with Iberia Bank, the life-line of the LLC(s) and personal finances, if
they defy Elizabeth Blum who purports to be in complete control; in other words, the normal rules
and procedures and their rights as customers, such as their right to privacy and freedom from
interference by their bank officer at Iberia Bank appears not to count for anything.
19.

As an officer of Iberia Bank, Elizabeth Blum has taken unfair advantage of Iberia Bank

customers, Walter J. Blanchard, Jr. and Cynthia M. Lajeunesse, 4471 MICHOUD, LLC and NOLA
PROPS, LLC, through manipulation, concealment, abuse of privileged information, harassment,
misrepresentation and other unfair dealings. The defendant, Elizabeth Blum is breaching her
fiduciary duty, and other duties owed to the Iberia Bank customers, Walter J. Blanchard, Jr. and
Cynthia M. Lajeunesse, 4471 MICHOUD, LLC and NOLA PROPS, LLC, and she proceeding
herein, contrary to the best interests of said customers.
20.

Elizabeth Blum is appearing in this original action as a plaintiff, attempting to have the

property at 4471 Michoud Blvd, New Orleans, LA, sold at a sheriffs sale. This is the same
property which Iberia Banks has a mortgage. Elizabeth Blum solicited the members of 4471
MICHOUD, LLC to refinance their mortgage with Iberia Bank; and, now she is trying to have
that same property sold at a sheriffs sale. She has no other standing in this matter, except that
she is an Officer and Vice-President of the Iberia Bank. It is illegal for Iberia Bank, through their
Vice President and Mortgage Executive, to effect the auction and sale of immovable property that
Iberia Bank has a security interest in through this lawsuit; thus, circumventing Louisiana laws
involving foreclosure. In other words, Iberias Mortgage Executive is asking the court to auction the
property that Iberia has a secured interest in and which is not in default. Iberias Mortgage
Executives actions to auction this property, frivolously and without legal cause, is illegal and directly
attributable to her employer.
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21.

Additionally, Elizabeth Blum, as a fiduciary and Officer of Iberia Bank, was obliged to act

in the best interest of the institution, free of self-dealing or conflicts of interest. Financial institution
directors and officers must not use corporate property or assets for their personal pursuits or
advantage. Using confidential material belonging to the financial institution for personal
purposes breaches directors and officers fiduciary duties.
22.

Defendant, Iberia Bank has exhibited a policy, practice, and/or custom of callousness and

reckless disregard for their customers, by its failure to adequately screen, hire, train, supervise,
and/or discipline Elizabeth Blum, and as a result, has caused damage to plaintiffs. Iberia Bank has
also exhibited a policy, practice, and/or custom of mitigation or concealment of information and
accountings that should be available to the plaintiffs herein. By their words and actions, in this
regard, defendants have ratified and/or condoned a pattern and practice of these violations, and as
such, is vicariously liable for the tortious actions of its employee, Elizabeth Blum.
23.

Under the legal principle of respondeat superior and the Louisiana Civil Code, Art. 2320,

Iberia bank is vicariously liable for all tortious acts of its employee, Elizabeth Blum, as outlined
above. Also see Exhibit Iberia Bank in Globo.

CAUSES OF ACTION
AGAINST ROBERT L. BLUM
Breach of Fiduciary Duty and Trust, Negligence, Fraudulent Misrepresentation,
Unjust Enrichment, Detrimental Reliance, and Misappropriation
Unfair Trade and Deceptive Practices, Violations of LA R.S. 51:1405 et seq., LUPTA
24.

Robert L. Blum has written $36,610.00 in checks to both Cash and to himself from NOLA

Props, LLC, Chase Business Account. Robert L. Blum, who represents himself to be a Louisiana
licensed Certified Public Account, along with the company CPA, William Hamilton (who Blum is
friends with) both refuse to provide an accounting of those checks to the other members, although
requested to do so. When Robert Blum directly is questioned about the missing money-he is evasive.
Specifically, the following funds are unaccounted for:
To

Check Number

Amount

For

Cash
Cash
Cash
Cash
Cash
Cash
Cash
Cash
Cash
Withdrawal
Cash

1013
1014
1005
1007
1010
1012
1029
1043
1002
Robert Blum
1018

$ 3,530.00
300.00
3,460.00
2,040.00
2,160.00
760.00
3,040.00
1,855.00
3,490.00
1,110.00
1,225.00
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Blank
Locks
Usual Labor
Blank
Blank
Blank
Blank
Blank
Repairs & Maintenance
Unknown
Blank

Cash
Withdrawal
Cash
Cash
Withdrawal
Cash
Cash
Withdrawal
Cash
Cash
Cash
Cash
Cash
Withdrawal

1022
Robert Blum
1043
1002
Robert Blum
1018
1022
Robert Blum
1006
1011
1016
1038
1048
Robert Blum

3,540.00
500.00
1,855.00
3,490.00
1,110.00
1,225.00
3,540.00
500.00
1,000.00
1,000.00
3,140.00
2,805.00
1,555.00
100.00

Blank
Unknown
Blank
Repairs & Maintenance
Unknown
Blank
Blank
Unknown
Blank
Petty Cash
Blank
Blank
Blank
Unknown

TOTAL FUNDS THAT ROBERT BLUM REFUSES TO ACCOUNT FOR: $36,610.00

(See $36,610.00 in checks Exhibit Blum Checks, in Globo
25.

The defendant, Robert L. Blum, has breached his fiduciary duty and his duty of trust; he has

been negligent in his duties; he has possibly converted for his own use the above listed funds
belonging to the companies, NOLA PROPS, LLC and 4471 MICHOUD, LLC; and financially
harmed its members, Walter J. Blanchard, Jr. and Cynthia M. Lajeunesse, who together hold a 75%
majority interest in said companies.
26.

To their detriment, the majority members relied on Robert L. Blums misrepresentation that

he was a Louisiana licensed Certified Public Account. The majority members were trying to remove
control of the companies books from Robert Blum; however, the Blums adamantly insisted that
Robert Blum was the best person to control the books, because he was a Certified Public Accountant.
The other members of the LLC(s) trusted that as a Certified Public Accountant he was
knowledgeable and, also, called to a higher standard of duty and ethics due to his status. Apparently,
nothing could be farther from the truth. (See Exhibit CPA Emails in Globo)
27.

Recently, the majority members investigated Robert L. Blums claim that he is a Certified

Public Accountant, and they learned that Blums license expired with the State of Louisiana, in 2006.
Thus, he is not a licensed Certified Public Accountant as he represented to the majority members,
the LLC(s) and in his PETITION TO PARTITION PROPERTY BY LICITATION.
28.

Pursuant to R.S. 121314, defendant, Robert L. Blum, was deemed to stand in a fiduciary

relationship to the limited liability company and its members and had a duty to discharge his
duties in good faith, with the diligence, care, judgment, and skill which an ordinary prudent
person in a like position would exercise under similar circumstances, and he breached that duty.
Nevertheless, Defendant, Blum, allowed his wife, Elizabeth Blum, to interfere with the everyday
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business operations of both NOLA PROPS, LLC and 4471 MICHOUD, LLC to the detriment and
financial harm of both companies and its majority members.
29.

Defendant, Robert L. Blum has engaged in conduct which demonstrates a greater disregard

of the duty of care than gross negligence, including but not limited to intentional tortious conduct
and intentional breach of his duty of loyalty. Moreover, if the missing funds cannot be found or
sufficiently accounted for, then Robert L. Blum has converted company assets for his own personal
benefit and in breach of his fiduciary duty to the LLC(s).
30.

Defendant, Robert L. Blum, has a conflict of interest with respect to the subject of the

business judgment. This is one of the reasons of why they are trying to bring this property to
sheriffs sale. His duty of loyalty is not to the LLC(s) ; he wants to destroy the LLC(s) and grab
the Michoud Blvd. property for his own real estate portfolio. His wife, Elizabeth Blum, sent the
following to email to Walter J. Blanchard which, in pertinent part.,states that:
Today we discussed us buying the 4471 Michoud and yall buying us out of the NOLA
PROPS which would make sense since you want to run the prop house and Robby is the
one who knows every inch of the warehouse.... ( See Exhibit 2 attached hereto)
31.

Finally, the majority members contend that Robert L. Blum is in breach of contract: He

bought into both LLC(s) which are small closed companies, as a minority member; according to both
the Articles of Organization setting up the companies in 2012, and the general agreement of the
members: Neither business was to be temporary; rather, they were to exist into perpetuity. Robert
L. Blum knew that the term of the business would be for more than just two years. He knew that he
could not pull his capital out of the venture and destroy the businesses unless he had a valid
statutorily- sound cause pursuant to Louisiana law, especially if it meant destroying two businesses
which are profitable and financially sound.
32.

Also, from the very beginning Robert L. Blum had full knowledge and disclosure that he was

only a minority holder and, thus, he could not allow his wife to seize control and run the businesses,
under the protest of the other members. His breach has been devastating and the majority members
are owed pecuniary damages.
33.

In hindsight, it is believed by the majority members that Robert L. Blum: the only member

without any interest, experience, or training in the movie prop house business wanted to invest (a
mere two years ago) just to get his hands on the 4471 Michoud Blvd. property. Otherwise, why
would he want to destroy the two LLC(s) because both businesses are PROFITABLE. Robert Blum
received from his investment what he bargained for.
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CAUSES OF ACTION, LA CCP. ART. 2320

AGAINST William Hamilton, CPA and Kushner Lagraize, L.L.C., Defendants
Malpractice, Breach of Fiduciary Duty, Care, Trust and Loyalty, Negligence
Unfair Trade and Deceptive Practices, Violations of LA R.S. 51:1405 et seq., LUPTA
34.

Defendants, William Hamilton and Kushner Lagraize, L.L.C., are the former and discharged

CPAs for NOLA PROPS, LLC and 4471 MICHOUD, LLC. Walter J. Blanchard, Jr., plaintiff and
managing member herein, sent a formal letter of discharge to defendants, on June 21, 2014, attached
hereto as Exhibit 3.
35.

Defendant, Hamilton acknowledged receipt of Blanchards letter discharging him , by

his email to Blanchard, dated June 26, 2014, wherein Hamilton stated that he would provide
Blanchard with the company bills and records, as requested, see Exhibit 4". However, as of
this date and time defendant, Hamilton, has not provided anything to Blanchard, except for
another bill.
36.

Defendant, Hamilton has never been cooperative with respect to providing information

necessary to the operation of the companies to the majority members of the companies independent
bookkeeper, when requested to do so. On numerous occasions, both Blanchard and the company
bookkeeper, have requested that Hamilton provide the social security number of Robert L. Blum,
because it was required for some State Forms. Neither Blum, nor Hamilton would provide the social
security number of Mr. Blum to the bookkeeper, see Exhibits 5", 6" and 7", attached hereto.
37.

After discharging defendant, Hamilton, on September 16, 2014, Blanchard received the

attached email (Exhibit 8") from defendant, Elizabeth Blum, in her capacity as the Vice
President of Iberia Bank, presenting Blanchard with a bill for NOLA PROPS, LLC, from
defendant, Hamilton, for CPA services rendered after discharge.
38.

Defendant,

Hamilton, although being discharged as CPA for the companies, he

continued do some work for the Blums, in regard to their personal lawsuit with the other
members of the LLCs.

More importantly, Hamilton, has deceptively billed NOLA PROPS,

LLC, for services rendered personally to the Blums and at the request of the Blums, see (Exhibit
9"). A definite conflict of interest exists between the parties.
39.

Blanchard recently learned, by checking the NOLA PROPS, LLC checking account on line,

that the Blums, although unauthorized to pay, accessed the business account on line and paid
Kushner Lagraize, L.L.C. , for defendant, Hamiltons unauthorized and alleged services rendered to
NOLA PROPS, LLC. Mr. Hamilton billed the company for personal services actually rendered to
the Blums, in regard to their litigation against the LLC and its members. See Exhibit 9".
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40.

Defendant, Hamilton, has never provided any members of the companies with a bill or

had given them access to the work that he alleged to have done for the companies, except
for their K-1, although he had been requested to do so. Defendant, Hamilton, flagrantly and defiantly,
only reported directly to the Blums, and Hamilton intentionally and fraudulently concealed his work
and bills from the other members.
41.

Defendant, Hamilton, has breached his fiduciary duties to both of his clients, NOLA

PROPS, LLC and 4471 MICHOUD, LLC, in favor of his long time friends and other clients, Robert
L. Blum and Elizabeth Blum. His practices have been unfair and deceptive and a violation of LA
R.S. 51:1405 et seq., LUPTA.
42.

Defendant, Kushner Lagraize, L.L.C. have exhibited a policy, practice, and/or custom of

callousness and reckless disregard for their customers. Defendant, by its failure to adequately screen,
hire, train, supervise, and/or discipline William Hamilton, has caused damage to plaintiffs.
Defendants have also exhibited a policy, practice, and/or custom of mitigation or concealment of
information and accountings that should be available to the plaintiffs herein. By their words and
actions, in this regard, defendants have ratified and/or condoned a pattern and practice of these
violations. This pattern and practice is one of the direct causes of the plaintiffs injuries.
Defendant, Kushner Lagraize, L.L.C. is liable for the malpractice and unfair and deceptive acts of its
employee, William Hamilton, CPA and is vicariously liable for his actions.
VI. DAMAGES
Plaintiffs, Walter J. Blanchard, Jr. and Cynthia M. Lajeunesse, have suffered monetary
damages as a result of the foregoing acts of omission and/or commission of the defendants, Elizabeth
Blum, Robert Blum, Iberia Bank Corporation William Hamilton, CPA, and Kushner Lagraize,
L.L.C.; and, as a result of their negligence and breach of their ethical duties; the plaintiffs, Walter
J. Blanchard, Jr. and Cynthia M. Lajeunesse pray that they be awarded compensatory damages,
general and special damages for defendants: (1) severe and intentional infliction of emotional
distress; (2) humiliation; (3) embarrassment; (4) breach of confidentiality of credit and
financial information; (5) negligence; (5) failure to properly supervise its employees; (6) vicarious
liability;

(7) inconvenience; (8) negligence hiring; (9) misappropriation; (10) fraudulent

misrepresentation; (11) breach of fiduciary duty , trust and loyalty ; (12) maliciousness (13) unfair
and deceptive practices and violations of LA R.S. 51:1405 et seq., LUTPA; (14) malpractice; (15)
unjust enrichment; (16) detrimental reliance; and, all other penalties and attorney fees, as
allowed under Louisiana Law or Statue.
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CIVIL DISTRICT COURT FOR THE PARISH OF ORLEANS

STATE OF LOUISIANA
NO. 2014-5630

DIVISION " J "

DOCKET 5

ROBERT L. BLUM and his wife, ELIZABETH BLUM

-VERSUSROBERT D. GREENFIELD, ET AL
FILED:___________________

_____________________________
DEPUTY CLERK

SHERIFF SERVICE INSTRUCTIONS:

ANSWER AND RECONVENTIONAL DEMAND
Robert Blum et al, Plaintiffs
Through their Attorney of Record
Barry Cooper, Esq.
Cooper Law Firm L.L.C.
One Canal Place
356 Canal Street, Suite 2850
New Orleans, LA 70130
Tel: (504) 593-9600
ELIZABETH BLUM, DEFENDANT-IN-RECONVENTION (PERSONAL SERVICE ONLY)
Personally and as an Employee, Vice President and Mortgage Officer of IberiaBank Corporation
Iberia Bank, Prytania Street Branch
4909 Prytania Street
New Orleans, LA 70115
ROBERT L. BLUM, DEFENDANT-IN-RECONVENTION
Personally, in his capacity of Member/Manager NOLA PROPS, LLC, 4471 MICHOUD, LLC
and ALLEGED CERTIFIED PUBLIC ACCOUNTANT
2217 Palmer Avenue
New Orleans, LA, 70118
Service was Mailed, Pursuant to LA R.S. 51:1409
TO:

Office of the Attorney General

State of Louisiana
James D. Buddy Caldwell
P.O. Box 94005
Baton Rouge, LA 70804

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