KCrew Invs., LLC v. Clark

362 So.3d 1288

KCREW INVESTMENTS, LLC, Plaintiff-Appellee v. Johnathan Dangelo CLARK, Defendant-Appellant

No. 55,092-CA

Court of Appeal of Louisiana, Second Circuit.

Judgment Rendered May 10, 2023.

NEUPERT & ASSOCIATES, LLC, By: Charles J. Neupert, Jr., Shreveport, Counsel for Appellant

WILLIAM E. BYRAM, LTD., APLC, By: William E. Byram, Shreveport, Counsel for Appellee

Before STONE, HUNTER, and ELLENDER, JJ.

ELLENDER, J.

Johnathan Clark, the seller, appeals a judgment ordering specific performance of a residential real estate buy-sell agreement with KCREW Investments, the buyer, and ordering Clark to pay KCREW's attorney fees of $9,366.00. For the reasons expressed, we affirm.

FACTUAL BACKGROUND

In 2007, Clark, who was unmarried at the time, bought a house and lot on Jessica Drive, in Forbing Woods Subdivision in southwest Shreveport, for $82,000. At some point, he married Shanika and the couple used the house as their marital home; they also placed an FHA second mortgage on it. By January 2020, however, the couple had separated and Clark had relocated to Irving, Texas. He then decided to list the house (along with another property) for sale with Eunice Johnson-Strickland, an agent with Keller Williams Realty.

A prospective buyer, KCREW Investments LLC, acting through its agent, John Lorick of Re/Max Realty, made an offer of $60,000. Clark rejected this, so KCREW counteroffered $65,000, which Clark accepted.

The parties DocuSigned a "Louisiana Residential Agreement to Buy or Sell" ("the Agreement") on January 20, 2020. This listed Ms. Johnson-Strickland as seller's agent, Keller Williams as seller's broker, and Clark and his wife as sellers. It listed Re/Max as the "selling firm," John Lorick as buyer's agent, and KCREW as buyer. It stated a closing date of February 18.

At Clark's request, the parties pushed back the closing date several times; each time, Ms. Johnson-Strickland prepared an addendum. Addendum #1 moved the closing to March 3, 2020; like the Agreement, it listed both Clark and his wife as sellers. Addendum #2 moved the closing to March 27; it listed only Clark (not his wife) as seller, but listed Nathan Lorick (not John Lorick) as buyer. Addendum #3 moved the closing to April 3 and listed Clark as seller and Nathan Lorick as buyer. Addendum #4 moved the closing to April 6; it also listed Clark as the sole seller and Nathan Lorick as buyer.

On April 6, at the appointed time and place (11:00 am CDT, at an attorney's office on Ashley Ridge Blvd.), John Lorick appeared along with a representative from his mortgage lender. However, Clark did not appear. The attorney's secretary, Ms. Strozier, tried calling and emailing him, but he did not respond. The realtor, Ms. Johnson-Strickland, told them he would not come because he had to bring $7,000 to the closing to settle the FHA mortgage, a fact that he was unhappy with. Ms. Johnson-Strickland also told them that, in her view, Clark could not convey clear title because his wife, Shanika, had acquired an interest in the property. Later in April, KCREW sent Clark a demand letter, which went unanswered.

PROCEDURAL HISTORY

KCREW filed this suit, to enforce specific performance of a real estate agreement, on July 13, 2020. Clark never answered, so KCREW took a default judgment, which the district court confirmed on September 10, ordering specific performance and awarding attorney fees of $2,000.

Notice of judgment apparently got Clark's attention; he retained counsel and took an appeal. This court reversed the default judgment on grounds that service had been made on Clark's estranged wife at an address other than the one in the citation, and that no sheriff's return appeared in the record. KCREW Inv. LLC v. Clark , 54,003 (La. App. 2 Cir. 6/30/21), 324 So. 3d 242.

After proper service was made on Clark, he asserted that he was justified in skipping the closing because he thought he could not deliver merchantable title to the property.

The matter came to bench trial in January 2022. Called by KCREW, Ms. Johnson-Strickland testified that she drafted the four addenda. She admitted that, in Addendum #1, the agent's name was not correct and Clark's wife was listed as a seller. She honestly believed that Shanika was part owner, and she had so advised Clark. She also stated that she dealt only with John Lorick , and had never met Nathan Lorick, even though the latter's name appeared in two of the addenda. She also pointed out that the Dotloop verification on Addendum #4 was time-stamped 12:38 pm EDT, some 38 minutes after the closing was supposed to occur (11:00 am CDT). She agreed, however, that despite the different names, she knew the buyer was indeed KCREW; she and Clark both knew the closing was set for 11:00 am on April 6; and Clark was the person who had requested all the delays.

Ms. Strozier, the attorney's secretary, confirmed that Clark was a no-show for the closing. She also testified that she had sent him a proposed HUD-1 settlement showing that he owed $7,000 on the FHA loan.

John Lorick testified that he was a realtor with Re/Max and agent for all of KCREW's local dealings. Further, Nathan Lorick is his son, the 100% owner of KCREW, a Colorado LLC, and Nathan might have DocuSigned a few of the papers in this case, but KCREW was the actual buyer. John Lorick added that it was Clark's agent, Ms. Johnson-Strickland, who inputted all data to the addenda. Finally, he testified that he wanted to enforce the Agreement's provisions for specific performance and attorney fees.

Clark testified that he had lived in the house some 12 or 13 years, and after he and his wife moved out, they retained it as a rental property; they charged $825 a month rent, which barely offset the FHA mortgage of $760 a month plus upkeep. He admitted that he attended the closing on his other property one hour earlier, at 10:00 am April 6, but skipped this one because this realtor told him he would have to pay $7,000 to settle the FHA mortgage (a fact that, in his words, "blew my mind") and because he was unsure whether the house was community property. ¹ He also stated that paying tenants had been in the house until four or five months before trial; after they left, he let his brother stay there rent-free.

The court ruled from the bench that Clark had "credibility issues," and ignorance of the value of his FHA mortgage was not a defense. The court allowed Lorick to inspect the property, after which Lorick advised that he still wanted specific performance.

The court also told Lorick to submit an affidavit of attorney fees, and Clark to traverse it. Lorick's affidavit covered entries from April 2020 through February 2022, a total of 47.33 hours, at $200 an hour. Clark countered that many of these hours related to the default judgment, which was reversed; it would "defy sound judicial norms, logic and common sense" to award fees for a judgment that the attorney lost.

The court rendered judgment ordering Clark to convey the property to KCREW for the price of $65,000 and to pay attorney fees of $9,366.00 (46.83 hours at $200 an hour). ²

Clark appealed devolutively, raising two assignments of error.

DISCUSSION

Existence of a Written Contract

By his first assignment of error, Clark urges the court erred in finding there existed a written contract signed by the seller and the buyer, which obligated Clark to appear at an 11:00 am closing on April 6, 2020. He concedes the standard of review is manifest error, Ryan v. Zurich Amer. Ins. Co. , 07-2312 (La. 7/1/08), 988 So. 2d 214. He contends, however, that the party seeking to enforce a contract must prove its existence, La. C.C. art. 1831 ; when the law requires a writing, the contract cannot be proved by testimony or presumption, La. C.C. art. 1832 ; and any transfer of immovable property must be by authentic act, La. C.C. art. 1839.

He also cites the "act of sale" clause of the Agreement: any change of the date for execution of the sale "must be mutually agreed upon in writing and signed" by both parties. He argues that the four addenda do not meet this clause. First, the Dotloop verification on Addendum #3 was March 30, two days after the expiration provided in Addendum #2, resulting in a two-day gap in which there was no enforceable agreement. Second, the Dotloop verification on Addendum #4 was April 6 at 12:38 pm EDT, 38 minutes after the proposed closing; he contends this gave the buyer an extra 38 minutes to extract concessions out of the seller. He further contends that Nathan Lorick did in fact extract these concessions, but he does not specify what they were.

The interpretation of a contract is a determination of the common intent of the parties. La. C.C. art. 2045 ; Olympia Minerals LLC v. HS Res. Inc. , 13-2637 (La. 10/15/14), 171 So. 3d 878. 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. C.C. art. 2046 ; Olympia Minerals v. HS Res., supra ; Lacas v. Monroe Credit LLC , 54,170 (La. App. 2 Cir. 12/15/21), 332 So. 3d 1264. Further, La. C.C. 1848 provides:

Testimonial or other evidence may not be admitted to negate or vary the contents of an authentic act[.] Nevertheless, in the interest of justice, that evidence may be admitted to prove such circumstances as a vice of consent or to prove that the written act was modified by a subsequent and valid oral agreement. (Emphasis added.)

In other words, the court may consider parol evidence as proof of a subsequent agreement to modify or revoke a written agreement by mutual consent of the parties. Torrey v. Simon-Torrey Inc. , 307 So. 2d 569 (La. 1974) ; Lacas v. Monroe Credit LLC, supra , and citations therein.

On close review of the Agreement and the four addenda, we find nothing that would negate the existence of a valid contract for Clark to sell the property to KCREW for $65,000 at a closing at 11:00 am, April 6, 2020. We concede the minor...