Atocha St. Charles, LLC v. Terpsichore Props., LLC

294 So.3d 1082

ATOCHA ST. CHARLES, LLC

v.TERPSICHORE PROPERTIES, LLC and/or Current Occupants

NO. 2019-CA-0776

Court of Appeal of Louisiana, Fourth Circuit.

APRIL 08, 2020

Marcus L. Giusti, Steven M. Hannan, HANNAN, GIUSTI & HANNAN, L.L.P., 2201 Ridgelake Drive, Suite 200, Metairie, LA 70001, Thomas M. Flanagan, Camille E. Gauthier, FLANAGAN PARTNERS LLP, 201 St. Charles Avenue, Suite 2405, New Orleans, LA 70170, COUNSEL FOR PLAINTIFF/APPELLEE

Albert A. Thibodeaux, DAVILLIER LAW GROUP, LLC, 935 Gravier Street, Suite 1702, New Orleans, LA 70112, COUNSEL FOR DEFENDANT/APPELLANT

(Court composed of Judge Edwin A. Lombard, Judge Daniel L. Dysart, Judge Tiffany G. Chase )

Judge Tiffany G. Chase

Terpsichore Properties, LLC (hereinafter "Terpsichore"), appeals from the trial court's judgment denying its exception of unauthorized use of summary proceeding and granting the petition for eviction filed by plaintiff, Atocha St. Charles, LLC (hereinafter "Atocha"). After consideration of the record before this Court and the applicable law, we affirm the judgment of the trial court.

FACTS AND PROCEDURAL HISTORY

On August 6, 2018, Atocha purchased property located at 1600 St. Charles Avenue in New Orleans (hereinafter "the property") from M.A. Gonzalez Properties, LLC for $1,809,500.00 This sale was executed by authentic act and filed in the conveyance records (hereinafter the "Act of Sale"). On the same day, Atocha and Terpsichore executed a bond for deed contract (hereinafter the "Bond for Deed") wherein Terpsichore was required to make twenty-four payments of $19,095.00 each month commencing on October 1, 2018. The principal balance and remaining interest would be made in a final "balloon payment" that would be due on September 1, 2020. The impetus of these transactions was a July 9, 2018 loan agreement (hereinafter the "Term Sheet") between Mario Gonzalez (hereinafter "Mr. Gonzalez") and Loan Partners, LLC, wherein Mr. Gonzalez, as the principal of both M.A. Gonzalez Properties, LLC and Terpsichore, agreed to secure the loan by entering into the Act of Sale and Bond for Deed. Mr. Gonzalez signed the aforementioned agreements on behalf of his juridical entities. Craig Lehnhardt (hereinafter "Mr. Lehnhardt") signed on behalf of Atocha and Loan Partners, LLC.

The first and second payments on the Bond for Deed, for the months of October and November 2018, were paid late, and only after Atocha sent a notice of default. Terpsichore made no additional payments thereafter. On December 13, 2018, Atocha mailed another default notice by registered mail (hereinafter the "Notice of Default"). More than forty-five days passed from the mailing of the Notice of Default and still Terpsichore did not make the required payments due under the Bond for Deed.

On January 28, 2019, Atocha and Terpsichore executed a mutual cancellation of the Bond for Deed by authentic act (hereinafter the "Mutual Cancellation"). The Mutual Cancellation provided Terpsichore a three-day window in which to cure its default. In the event it failed to vacate, Terpsichore would be required to vacate the property by February 14, 2019 unless the parties agreed to a lease or other possessory agreement. Terpsichore made no payments to cure the default, and the parties did not reach another agreement as to occupancy. Accordingly, Atocha filed the Mutual Cancellation into the conveyance records. Terpsichore did not vacate the property.

Atocha filed a petition for eviction on March 4, 2019. Terpsichore filed an answer, several exceptions, and a reconventional demand asserting, among other things, that it had an interest in title in the property.¹ The trial court heard oral argument on April 26, 2019. After taking the matter under advisement, the trial court issued a written judgment and reasons for judgment on May 31, 2019 wherein it denied Terpsichore's exception of unauthorized use of summary proceeding and granted Atocha's petition for eviction.

Terpsichore filed a motion for a suspensive appeal which was granted by the trial court. The appeal bond was set at $20,000.² In this Court, Atocha filed a motion to dismiss Terpsichore's suspensive appeal for irregularities alleging that, pursuant to La. C.C.P. art. 4735 ; Terpsichore failed to answer Atocha's petition for eviction under oath, Terpsichore failed to apply for its suspensive appeal within twenty-four hours after the rendition of the trial court's judgment; and that the amount of the bond required by the trial court was inadequate to protect Atocha's interests.

MOTION TO DISMISS

Before addressing the merits of the appeal, we first address Atocha's motion to dismiss. Louisiana Code of Civil Procedure article 4735 states:

An appeal does not suspend execution of a judgment of eviction unless the defendant has answered the rule under oath, pleading an affirmative defense entitling him to retain possession of the premises, and the appeal has been applied for and the appeal bond filed within twenty-four hours after the rendition of the judgment of eviction. The amount of the suspensive appeal bond shall be determined by the court in an amount sufficient to protect the appellee against all such damage as he may sustain as a result of the appeal.

The $20,000 appeal bond covered only one monthly payment due by Terpsichore under the terms of the Bond for Deed, thus we find the appeal bond was insufficient to protect Atocha against all such damages it may sustain as a result of the appeal.³ See Lakewind East Apartments v. Poree’ , 629 So.2d 422, 423-24 (La.App. 4 Cir. 1993) (requiring an appellant to post monthly rental amounts as they become due is a reasonable solution that protects the interests of both parties). We therefore grant the motion to dismiss the suspensive appeal. However, pursuant to La. C.C.P. art. 2087, the appeal is maintained as devolutive.⁴ See 1205 St. Charles Condominium Assoc. Inc. v. Abel , 2018-0566, p. 15 (La.App. 4 Cir. 12/19/18), 262 So.3d 919, 928 (citing Freemin v. Coglaiti , 411 So.2d 471, 472 (La.App. 1 Cir. 1981) ).

STANDARD OF REVIEW

The exception of unauthorized use of summary proceeding is only designed to test whether an action should proceed in a summary manner rather than by ordinary proceeding. Hatcher v. Rouse , 2016-0666, p. 4 (La.App. 4 Cir. 2/1/17), 211 So.3d 431, 433. In an eviction proceeding, an appellate court reviews the factual findings of the trial court under the manifest error standard of review; however, the proper interpretation of a contract is a question of law subject to de novo review. Keyes v. Brown , 2014-0821, p. 6 (La.App. 4 Cir. 1/28/15), 158 So.3d 927, 931. A trial court's judgment of eviction should not be disturbed unless it is clearly wrong or manifestly erroneous. Nola East, LLC v. Sims , 2018-0623, p. 4 (La.App. 4 Cir. 2/13/19), 265 So.3d 1147, 1150.

DISCUSSION

Terpsichore avers that the trial court erred in denying its exception of unauthorized use of summary proceeding and granting Atocha's petition for eviction. As the petitioner in this summary eviction proceeding, Atocha is required to make a prima facie showing of title to the property; prove that Terpsichore is an occupant as defined in La. C.C.P. art. 4704 ;⁵ and show that the purpose of the occupancy has ceased. See Durden v. Durden , 2014-1154, p. 23 (La.App. 4 Cir. 4/29/15), 165 So.3d 1131, 1147 (citation omitted). We examine these requirements in the context of a bond for deed contract.

A bond for deed is "a contract to sell real property, in which the purchase price is to be paid by the buyer to the seller in installments and in which the seller after payment of a stipulated sum agrees to deliver title to the buyer."⁶ La. R.S. 9:2941. The Bond for Deed clearly states it is not a sale "but only a written contract to sell immovable property." It further provides that "[Atocha], after receiving payment of a stipulated sum, agrees to deliver title to [Terpsichore] provided all terms, conditions, payments and obligations set forth herein are fully, completely, and timely satisfied by [Terpsichore]." Under the foregoing contractual and statutory language, title to the property does not transfer until all installment payments are satisfied. See Bennett v. Hughes , 2003-1727, p. 6 (La.App. 4 Cir. 5/26/04), 876 So.2d 862, 866. When Terpsichore defaulted due to its failure to make timely payments, Atocha had the contractual and statutory right to have the Bond for Deed cancelled given proper statutory notice.⁷ See Regua v. Saucier , 2013-0832, pp. 3-4 (La.App. 4 Cir. 11/20/13), 129 So.3d 798, 800 (citing La. R.S. 9:2945). An eviction proceeding is the appropriate procedural vehicle whereby the seller regains possession in the event of the purchaser's default on a bond for deed contract. Branch v. Young , 2013-0686, pp. 12-13 (La.App. 5 Cir. 2/26/14), 136 So.3d 343, 352 ; see also Keyes , 2014-0821, p. 13, 158 So.3d at 935 ("[r]egardless of how the transaction is characterized, [the owner] had a right to regain possession of the property upon the buyer's default") (quoting Montz v. Theard , 2001-0768, p. 14 (La.App. 1 Cir. 2/27/02), 818 So.2d 181, 191 ).

At the April 26, 2019 hearing, Atocha established that it was entitled to summary eviction by submitting into evidence the Term Sheet, Act of Sale, Bond for Deed, Notice of Default, and the Mutual Cancellation.⁸ Mr. Lehnhardt, who was involved in the negotiation of these transactions, gave testimony corroborating the documentary evidence. He also testified that Terpsichore was represented by counsel during the negotiation. This evidence and testimony was sufficient to establish that Atocha had title to the property, that Terpsichore was an occupant, and that the purpose of the occupancy had ceased. See Bennett , 2003-1727, p. 13, 876 So.2d at 870.

Terpsichore failed to present evidence that it had title to the property. See Dowl v. Arias , 2006-0874, p. 3 (La.App. 4 Cir. 2/14/07), 953 So.2d 81, 83 ("eviction is proper where the defendant fails to present any...