State v. Zanders

339 So.3d 1194

STATE of Louisiana, Division of Administration, Office of Community Development - Disaster Recovery Unit

v.Ann D. ZANDERS and Willie M. Zanders Sr.

2021 CA 0336

Court of Appeal of Louisiana, First Circuit.

Judgment Rendered: December 22, 2021

Willie M. Zanders, Sr., Ann D. Zanders, Baton Rouge, Louisiana, Defendants/Appellants, Pro Se

Mary Catherine Cali, John C. Walsh, William J. Wilson, John C. Conine, Jr., Baton Rouge, Louisiana, Counsel for Plaintiff/Appellee, State of Louisiana, Division of Administration, Office of Community Development - Disaster Recovery Unit

BEFORE: LANIER, WOLFE, AND BURRIS,¹ JJ.

LANIER, J.

This matter is before us on appeal by defendants, Willie M. Zanders, Sr. and Ann D. Zanders, from a judgment of the district court granting summary judgment in favor of plaintiff, State of Louisiana, Division of Administration, Office of Community Development, Disaster Recovery Unit ("the State"), and rendering judgment in favor of plaintiff and against defendants in the amount of $57,407.79, together with legal interest, from the date of judicial demand, and costs. For the reasons that follow, we affirm.

FACTS AND PROCEDURAL HISTORY

Following Hurricanes Katrina and Rita in 2005, the State was awarded a Community Development Block Grant ("CDBG") from the U.S. Department of Housing and Urban Development to assist homeowners affected by the storms in their efforts to reoccupy damaged homes. The State administered the CDBG funds and created the Road Home Program, through which it awarded grants to eligible homeowners.

After their residence, located at 2309-11 Peniston Street, New Orleans, Louisiana, 70115 ("the Property") was damaged by Hurricane Katrina, defendants received a grant from the Road Home Program on April 28, 2008, in the amount of $42,976.53. In connection with the grant, defendants entered into several agreements with the State: (1) The Road Home Declaration of Covenants Running with the Land Hurricane Katrina/Hurricane Rita ("Declaration of Covenants"); (2) The Road Home Program Grant Agreement ("Grant Agreement"); (3) The Road Home Limited Subrogation/Assignment Agreement ("Subrogation/Assignment Agreement"); (4) The Road Home Grant Recipient Affidavit ("Grant Affidavit"); and (5) The Road Home Direct Disbursement Acknowledgement Form ("Direct Disbursement Form").

In consideration for their receipt of the $42,976.53 grant, defendants agreed to comply with certain obligations of the Road Home Program. As set forth in the Declaration of Covenants, defendants agreed "to commence occupying the Property as his/her primary residence within three (3) years after the Closing Date."² With regard to enforcement of the covenants, the Declaration of Covenants included the following language:

These Covenants shall be enforceable, at law or in equity, by the State of Louisiana ..., and Owner hereby agrees that the State of Louisiana ... may demand repayment of Grant proceeds or compel specific performance by the Owner or claim injunctive relief against the Owner for violation of these Covenants, without posting bond and without the need for demonstrating irreparable harm. (Emphasis added.)

Defendants also executed the Grant Agreement, which contained the following relevant conditions:

Homeowner(s) agree(s) to commence occupying the Property as his/her primary residence within three (3) years after the Closing Date. This provision is a material consideration without which the Homeowner(s) would have received a lesser amount under the Road Home Program. Homeowner(s) will be required to repay the Grant in the event of a violation of this Section 6. (Emphasis added.)

Finally, defendants executed the Grant Affidavit in which they both certified and declared under oath that they had executed and delivered to the State the Declaration of Covenants and the Grant Agreement, which imposed on them an obligation to occupy the Property as their primary residence at some point during the three-year period beginning on the date of the Grant Agreement, or April 28, 2008. They further attested that they would comply with the terms of the Declaration of Covenants and the Grant Agreement and that failure to comply may result in an obligation to repay the grant money.

Thereafter, on May 8, 2010, defendants executed a Final Award Acknowledgement Form, acknowledging that they were receiving their final disbursement under the Road Home Program. On that same day, defendants received an additional $14,431.26 in grant funds, bringing their total award to $57,407.79.

On September 14, 2017, defendants were notified by the State that they had failed to comply with the obligations as outlined in the Grant Agreement. Defendants were advised of what was necessary to establish compliance and told that if they could not establish compliance, they could opt to either repay the Grant funds in one lump sum or through a payment plan. Defendants apparently attempted to show proof of compliance by sending the State a copy of Mr. Zanders' driver's license and a copy of an insurance policy (with a policy period of 12/02/2017 to 12/02/2018) on the Property that had been secured by their lender. No other proof of occupancy as requested by the State was provided, and defendants never repaid the grant funds or established a method by which the funds would be repaid.

On April 21, 2019, the State filed suit against defendants for breach of contract, seeking judgment in the amount of $57,407.79, together with legal interest from the date of judicial demand and all costs. Defendants answered the suit, generally denying the allegations of the petition. Thereafter, the State filed a motion for summary judgment asserting that there was no genuine issue as to any material fact in dispute and that the State was entitled to summary judgment as a matter of law. The State argued that defendants failed to offer proof of compliance with terms of the Road Home Program. Thus, the State maintained, the Road Home Program agreements should be enforced as written and agreed to by the parties. Defendants did not file a timely opposition to the motion for summary judgment.³

The hearing on the motion was originally set for February 24, 2020. On February 14, 2020, defendants filed a motion for continuance, which was granted. The hearing was reset for May 26, 2020. On May 26, the matter was continued again and reset for August 10, 2020. Thereafter, on August 7, 2020, just three days before the hearing date, defendants filed an exception raising the objection of prescription and peremption and a memorandum in support of same.

Following a hearing on the motion for summary judgment, the district court signed a judgment on August 31, 2020, granting summary judgment in favor of the State and rendering judgment in favor of the State and against defendants in the amount of $57,407.79, together with legal interest, from the date of judicial demand, and costs. This appeal by defendants followed, wherein the following specifications of error were assigned for our review:

1. The [district court] erred in failing to rule on [defendants'] timely filed motion for new trial.⁴

2. The [district court] erred in failing to consider [defendants'] timely filed peremptory exceptions of prescription and peremption before ruling on the State's motion for summary judgment.

3. The [district court] erred in granting the State's motion for summary judgment based on the law and evidence in the trial record.

PRESCRIPTION/PEREMPTION

The Zanders argue on appeal that the district court erred in ruling on the motion for summary judgment before considering their exception raising the objection of prescription and peremption. Although they acknowledge that the district court "heard a few brief comments regarding the exception," the Zanders assert that because there was no formal ruling, the district court should be ordered to hear the exception and rule on the matter before the case is reviewed by this court.

As previously indicated, the Zanders filed the exception just three days prior to the hearing on the motion for summary judgment. During argument on the motion for summary judgment the following colloquy occurred:

MR. ZANDERS: [T]he [S]tate sent us a lot of documents, and at first I was led to believe that it had been -- it had not been ten years. But actually that transaction had been ten years, and we submit that as of May 2008 when the grant was made to May 2018 was the ten years, and that the action prescribed. So that is why I filed the exception. And I don't know how Your Honor is going to rule, but we believe that the exception is in order and that there should be a hearing on the exception.

....

[COUNSEL FOR THE STATE]: Now, Your Honor, in regards to Mr. and Mrs. Zanders' prescription argument, he is correct ... that it is a ten-year prescriptive period, but what he is incorrect about [is] that it is not from the date that the contract is executed. Prescription begins to run on the contract at the time of the breach. So in this case the contract was executed April 28, 2008. The Zanders had three years to reoccupy the property; bringing that to April 28, 2011. When they had not reoccupied the property on April 28, 2011, that's [when prescription] begins to run, not the 2008 date. So with all due respect to Mr. Zanders, it's not prescribed.

....

THE COURT: Thank you. All right. I've looked at the motion and everything filed with it, and I do agree that ... if that matter was before me today, the ten years would start from the breach, not the execution of the contract. So I think the exception of prescription is of no mind. (Emphasis added.)

After the district court ruled on the pending motion for summary judgment, the discussion of prescription continued:

MR. ZANDERS: Judge, also would the court be kind enough to also address the issue of the affidavit with regards to the exception and our motion for the exception since the whole case --

THE COURT: Well, I think I did address it. I said it's

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