Opinion
No. 2002-CA-0355.
January 15, 2003. Writ Denied April 25, 2003.
APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2000-14075, DIVISION "C" HONORABLE ROLAND L. BELSOME, JUDGE.
JAMES M. GARNER, NEAL J. KLING, TIMOTHY B. FRANCIS, EMMA E. DASCHBACH, SHER GARNER CAHILL RICHTER KLEIN McALISTER HILBERT, L.L.C., New Orleans, Louisiana, Attorneys for Plaintiff/Appellee.
JOHN C. REYNOLDS, VIRGINIA W. GUNDLACH, JONES, WALKER, WAECHTER, POITEVENT, CARRERE DENEGRE, L.L.P., New Orleans, Louisiana, Attorneys for Defendant/Appellant.
(Court composed of Judge Miriam G. Waltzer, Judge James F. McKay III, Judge Dennis R. Bagneris, Sr., Judge Michael E. Kirby, Judge Max N. Tobias, Jr.)
The appellant, Gus Reynoir (Reynoir), as Succession Representative of Fred M. Reynoir, seeks a review of the trial court's granting of a partial summary judgment in favor of appellee, Canal 66 Partnership (Canal 66), and denying his cross motion for summary judgment.
The pertinent issue for this Court to address concerns the interpretation of a ground and building lease agreement on an immovable property, entered into by the parties. On cross motions for summary judgment, the trial court was presented with the issue of the meaning of the rent recalculation provision of the lease agreement, which provides: "[t]he rental for the new period shall be the base rental of $24,000 per year plus the six (6) percent real estate commission, multiplied by a fraction," In appellee's motion for summary judgment, it urged the court to delete the entire phrase "plus the six (6) percent real estate commission" from the recalculation formula maintaining that "the Lease recalculation provision can be easily misunderstood, " and that "to actually include the 6% real estate commission is the base rental recalculation [was] folly." In its cross motion for summary judgment appellant argued that Canal 66 was requesting that the trial court basically rewrite the contract by deleting the phrase from the recalculation provision. On June 6, 2001, the trial court entered a Judgment, granting Canal 66's motion for partial summary judgment and denying the appellant's cross motion. The trial court determined that the base for the rent recalculation was $24,000; we find no error in this particular portion of the judgment. Nevertheless, we do question the judgment of the trial court's interpretation of the lease in the area of recalculation, in particular the 6% real estate commission payments.
The original parties to the contract are not parties to this lawsuit. Fred M. Reynoir is deceased and Florentine Development Corporation assigned to International Hotel Company its interest in the lease in June of 1986. Reynoir is a party to this lawsuit as the Succession Representative of the Succession of Fred M. Reynoir, and Canal 66, the appellee, is a party by virtue of a transfer of interest from the original assignee.
These payments were to be paid to Clement J. Dufau; now the succession of Clement J. Dufau.
In its reasons for judgment the trial court found that "the language in § 3(B) of the lease implies that the 6% real estate commission should be added to the base annual rent before the annual rent is plugged into the formula," and that " the language in § 3(B) in its literal terms identifies the 6% real estate commission as part of the formula to recalculate the rent." The trial court further concluded that: "it is the opinion of this Court that the 6% increase used in the recalculation and described as a real estate commission but never paid to the real estate agent unjustly enriches the lessor." The trial court held that Canal 66 was due compensation in the amount of $407.79 a month for all the months paid to the lessor since January 1992, and that Reynoir owes Canal 66, $43,215.00.
On June 14, 1971, Reynoir, Lessor, entered into a lease agreement on an immovable with Florentine Development Corporation, with a stated term of the lease as sixty years, commencing on January 1, 1972. Under the terms of the lease, § 3(A), the base annual rental for the first five years was $24,000.00, "and in addition thereto shall pay an additional sum equal to six per cent thereof, which shall be the amount of the real estate commission payable to Clement J. Dufau , (emphasis added) real estate agent.". Under the terms of the lease, after the first five years, the annual rental is to be recalculated based on a formula set forth in § 3(B) of the lease:
The leased premise at 213 Tchoupitoulas Street is presently used as a parking facility for the Doubletree Hotel.
Thereafter, the annual rental shall be recalculated periodically using the changes in the U.S. Consumer Price Index, "All Items," column in Table I, using the 1967 = 100 standard reference base, as published from time to time by the U.S. Department of Labor, Bureau of Labor Statistics, as the basis for recalculation. As a further identification of the index to be used, the "All Items" index for February 1971, as released in March 1971, is 119.4. The rental for the new period shall be the base rental of $24,000.00 per year, plus the six (6%) percent real estate commission, multiplied by a fraction, (emphasis added), the denominator of which shall always be the "All Items" figure contained in Table I of the Consumer Price Index for the month immediately prior to the effective date of this lease. The numerator shall be the same "All Items" figure of Table I of the Consumer Price Index for the month immediately prior to the commencement of the term for which the rent must be recalculated. The rental shall be recalculated for each of the following periods and the adjusted rental shall be paid throughout each such period for which it was recalculated:
1. For the five (5) year period commencing at the beginning of the sixth (6th) year and ending at the close of the tenth (10th) year of the lease.
2. For the ten (10) year period commencing at the beginning of the twentieth (20th) year of the lease.
3. For each of the successive ten (10) year periods thereafter through the end of the term of this lease.
Appellant presents three issues for review by this Court. First, appellant argues that the trial court committed reversible error by ignoring the literal terms of the lease agreement. Second, appellant agues that the trial court failed to consider appellee's conduct of paying the recalculated rent owed spanning over eight plus years or one hundred (100) months without objection. Finally, appellant argues that the trial court erred in relying on an unjust enrichment theory to rule in favor of Canal 66, as it is an equitable remedy that cannot be invoked when the enrichment is based on a contract.
STANDARD OF REVIEW
In determining whether summary judgment is appropriate, appellate courts review the evidence de novo. Reynolds v. Select Properties, Ltd., 93-1480 (La. 4/11/94), 634 So.2d 1180. Appellate courts review summary judgments de novo, using the same criteria applied by trial courts to determine whether summary judgment is appropriate. Id. at 1182. The summary judgment procedure is designed to secure the just, speedy and inexpensive determination of actions. Two Feathers Enterprises v. First National Bank, 98-0465 (La.App. 4. Cir. 10/14/98), 720 So.2d 398, 400. This procedure is now favored and shall be construed to accomplish these ends. La.C.C.P. art. 966(A)(2). This standard of review requires the appellate court to look to the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, to show that there is no genuine issue as to a material fact, and that the mover is entitled to a judgment as a matter of law. La.C.C.P. art. 966(B). To affirm summary judgment, we must find reasonable minds would inevitably conclude that the mover is entitled to judgment as a matter of the applicable law on the facts before the court. Monts v. Board of Supervisors of the Louisiana State University, 2001-1497, (La.App. 4 Cir. 2/27/02), 812 So.2d 787; Washington v. State, Dept of Transp. Development, 95-14 (La.App. 3 Cir. 7/5/95), 663 So.2d 47. Taking into accounts these standards, we find that summary judgment is improper in the case sub judice.
While we acquiesce that summary judgments are favored, summary judgment requires that there be no genuine issue of material fact and the mover is entitled to a judgment as a matter of law; this threshold must be surmounted prior to granting summary judgment. Mr. Bryan's affidavit merely states that Canal 66's records indicate that they paid the succession of Dufau the 6% commission. Furthermore, appellee's representations that appellant's interpretation of the lease is both absurd and folly cannot be considered as support for the assertion that the succession of Dufau was in fact paid the commission. The record is fraught with accusations and innuendo not supported by the record before this Court. For example, who paid or who was required to pay the pre-1992 real estate commission and to whom was it paid? Who paid the commissions after-1992 and to whom? In what manner was the Dufau succession to be compensated for the 6% real estate commission or even proven that they had been paid? There is insufficient information in the record to determine the answers to these and other questions. Therefore, it was not reasonable for the trial court to grant summary judgment in this case. It is paramount that these issues are resolved before any recalculation can be accomplished.
The Louisiana Supreme Court instructs that: "Courts lack the authority to alter the terms of contracts under the guise of contractual interpretation when the [contract] provisions are couched in clear and unambiguous terms." Peterson v Schimek, 98-1712 (La. 3/2/99), 729 So.2d 1024, 1029; Louisiana Ins. Guar. Ass'n v. Interstate Fire Cas. Co., 93-0911 (La. 1/4/94), 630 So.2d 759, 764.
Under Louisiana law the court is required to either enforce the contract as written, which clearly means that an amount equal to 6% real estate commission is included in the rent recalculation formula, or, if the trial court found the language of the lease ambiguous or susceptible to multiple interpretations, require them to hold an evidentiary hearing to determine the intent of the parties. We find merit to the appellant's argument and agree that summary judgment is inappropriate in this instance. Accordingly, we find that the trial court erred in granting Canal 66's motion for summary judgment.
Therefore, we reverse the trial court's granting of the summary judgment in favor of appellees and remand the matter for further proceedings.
REVERSED AND REMANDED
WALTZER, J., DISSENTS WITH REASONS. TOBIAS, J., CONCURS IN PART AND DISSENTS IN PART.
Because the majority opinion ignores the burden of proof provisions of Louisiana's law of summary judgment, I must respectfully dissent.
A summary judgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact, and that the mover is entitled to judgment as a matter of law. La.C.C.P. art. 996 B. The burden of proof remains with the movant. However, if the movant will not bear the burden of proof at trial on the matter that is before the court on the motion for summary judgment, the movant's burden on the motion does not require him to negate all essential elements of the adverse party's claim, action, or defense, but rather to point out to the court that there is an absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. Thereafter, if the adverse party fails to produce factual support sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial, there is no genuine issue of material fact. La.C.C.P. art. 966 C(2).
An adverse party to a supported motion for summary judgment may not rest on the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided by law, must set forth specific facts showing that there is a genuine issue of material fact for trial. La.C.C.P. art. 967; Townley v. City of Iowa, 97-493 (La.App. 3 Cir. 10/29/97), 702 So.2d 323, 326.
Once mover has properly supported the motion for summary judgment, the failure of the non-moving party to produce evidence of a material factual dispute mandates the granting of the motion. The amendments to La.C.C.P. art. 966 bring Louisiana's standard for summary judgment closely in line with the federal standard under Fed. Rule Civ.Proc. 56(c). Hayes v. Autin, 96-287 (La.App. 3 Cir. 12/26/96); 685 So.2d 691, 694, writ denied, 97-0281 (La. 3/14/97), 690 So.2d 41. The summary judgment law was amended by La. Acts No. 483 of 1997 to incorporate the Hayes analysis.
Under Fed. Rule Civ.Proc. 56, when the nonmoving party bears the burden of proof at trial, there is no genuine issue of material fact if the nonmoving party cannot come forward at the summary judgment stage with evidence of sufficient quantity and quality for a reasonable juror to find that the party can satisfy his substantive evidentiary burden. In construing the federal summary judgment rule, the United States Supreme Court held that summary judgment shall be granted where the evidence is such that it would require a directed verdict for the moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). If a defendant in an ordinary civil case moves for summary judgment or a directed verdict based on the lack of proof of a material fact, the judge must ask himself not whether he thinks the evidence unmistakably favors one side or the other, but whether a fair-minded jury could return a verdict for the non-moving party on the evidence presented. Id. The Anderson court further held that the mere existence of a scintilla of evidence on the non-moving party's position would be insufficient; there must be evidence on which the jury could reasonably find for that party. In Lujan v. National Wildlife, 497 U.S. 871, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990), the court held that Fed. Rule Civ.Proc. 56 mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to the party's case and on which that party will bear the burden of proof. Berzas v. OXY USA, Inc., 29,835 (La.App. 2 Cir. 9/24/97), 699 So.2d 1149, 1152-53; Martello v. State Farm Fire and Cas. Co., 96 2375 (La.App. 1 Cir. 11/7/97), 702 So.2d 1179, 1183-84.
The majority finds disputed material fact in a series of rhetorical questions, asking who paid or was required to pay the real estate commission at issue herein. A fact is material if it is essential to a plaintiff's cause of action under the applicable theory of recovery and without which plaintiff could not prevail. Generally, material facts are those that potentially insure or preclude recovery, affect the litigant's ultimate success, or determine the outcome of a legal dispute. Prado v. Sloman Neptune Schiffahrts, A.G., 611 So.2d 691, 699 (La.App. 4th Cir. 1992), writ not considered 613 So.2d 986 (La. 1993).
The uncontroverted affidavit of Canal 66's Controller, Donald E. Bryan, states upon personal knowledge that Canal 66 paid the contractual real estate commission on a timely monthly basis to Clement J. Dufau during his life (from January 1987 to December 1991) and to Mr. Dufau's succession after his death (from January 1992 to January 2001).
When a motion for summary judgment is made and supported with affidavits, depositions and/or answers to interrogatories, the adverse party may not rest merely on the allegations or denials contained in the pleadings. Poydras Square Assoc. v. Suzette's Artique, 614 So.2d 131, 132 (La.App. 4th Cir.1993).
The Bryan affidavit establishes that the real estate commissions were paid. In the absence of sworn evidence to the contrary, the opposing party has failed to carry its burden of providing contrary evidence, showing a genuine issue of material fact as to which it will have the burden of proof at trial. Therefore, I would affirm the judgment of the trial court.
I respectfully concur in part and dissent in part.
As I read the lease as a whole, (a) § 3 thereof fixes the initial rent at $24,000 plus a 6% real estate agent's commission, and (b) § 20 thereof requires that the lessee pay the real estate agent's commission of 6% directly to the agent. I find no ambiguity. That is, the parties specified initially that the lessor was to receive a net rent of $24,000. As the lease matured in age, the rent increased in accordance with a formula tied to the Consumer Price Index ("CPI"). It therefore follows that whether one applies the CPI simultaneously to the aggregate of rent plus commission, or independently to the rent and then the 6% commission, the resulting rent and agent's commission parts results in the identical dollar amounts for rent and commission.
"Lessee shall pay rental at the base annual rate of $24,000.00, and in addition thereto shall pay an additional sum equal to six (6%) per cent thereof, which shall be the amount of the real estate commission payable to Clement J. Dufau, real estate agent, as hereinafter provided."
"Lessee agrees to pay Clement J. Dufau, real estate agent, his successors and assigns, a commission of six (6%) per cent of the rentals paid by Lessee to Lessor as previously provided herein; Lessor shall have no responsibility to the real estate agent for the payment of this commission."
In that regard, it is my view that the case should be remanded to the trial court for purposes of checking the calculation of the sums that are or are not due between the parties, for the record lacks sufficient information as to whether the correct CPI formula has been used.