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Holmes v. Paul

FIFTH CIRCUIT COURT OF APPEAL STATE OF LOUISIANA
Oct 2, 2019
279 So. 3d 1068 (La. Ct. App. 2019)

Summary

observing that "[c]ontracts regarding the transfer or encumbrance of immovable property must be in writing" and citing La. C.C. arts. 1839, 2440

Summary of this case from Cmty. Dev. Capital v. Hous. Corp.

Opinion

NO. 19-CA-130

10-02-2019

Lauren HOLMES v. Mintu and Aparna PAUL

COUNSEL FOR PLAINTIFF/APPELLANT, LAUREN HOLMES, Matthew A. Moeller COUNSEL FOR DEFENDANT/APPELLEE, MINTU AND APARNA PAUL, Scott M. Galante, Salvador I. Bivalacqua, Lauren B. Griffin


COUNSEL FOR PLAINTIFF/APPELLANT, LAUREN HOLMES, Matthew A. Moeller

COUNSEL FOR DEFENDANT/APPELLEE, MINTU AND APARNA PAUL, Scott M. Galante, Salvador I. Bivalacqua, Lauren B. Griffin

Panel composed of Judges Jude G. Gravois, Robert A. Chaisson, and Hans J. Liljeberg

GRAVOIS, J.

In this dispute involving enforcement of a real estate purchase agreement, plaintiff, Lauren Holmes, appeals a summary judgment granted in favor of defendants, Mintu and Aparna Paul, which judgment dismissed all claims asserted against the Pauls by Ms. Holmes with prejudice. For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

On March 11, 2016, Lauren Holmes and Mintu and Aparna Paul executed a "Louisiana Residential Agreement to Buy or Sell" wherein Ms. Holmes agreed to sell and the Pauls agreed to purchase property located at 1024 Lynnette Street in Metairie, Louisiana. In the purchase agreement, the parties agreed that the act of sale was to take place on or before April 29, 2016. According to the terms of the purchase agreement, "[a]ny change of the date for execution of the Act of Sale must be mutually agreed upon in writing and signed by the SELLER and the BUYER." On April 29, 2016, both Ms. Holmes and the Pauls signed an amendment to the purchase agreement extending the act of sale date to on or before May 6, 2016. The parties ultimately agreed to a purchase price of $176,000.00; however, on May 3, 2016, the house was appraised for $162,000.00. In response, Ms. Holmes's agent, Kara Breithaupt, and the Pauls' agent, James Adams, discussed and pursued an appraisal review. The act of sale did not take place on May 6, 2016, and no written amendment to the purchase agreement was signed by Ms. Holmes and the Pauls extending the act of sale date. On May 28, 2016, Ms. Holmes agreed to decrease the purchase price to match the appraised value. On that same date, the Pauls signed a cancellation of the purchase agreement.

On June 22, 2016, Ms. Holmes filed a petition for damages, naming the Pauls as defendants and raising claims of breach of contract and detrimental reliance. In her petition, Ms. Holmes alleged that, considering the issues with the appraisal and its resulting delays, the parties' agents verbally agreed, on behalf of their clients, that another amendment to the purchase agreement extending the act of sale date would be executed as soon as they could determine a feasible closing date. Ms. Holmes alleged that Mr. Adams assured Ms. Breithaupt that the Pauls would close as soon as a date could be determined. Ms. Holmes asserted that as a result, she was lulled into inaction concerning the need to execute an amendment to the purchase agreement or a termination of the contract.

On March 7, 2017, the Pauls filed an answer to the petition, as well as a reconventional demand against Ms. Holmes. In their reconventional demand, the Pauls alleged claims of breach of contract and negligence, arguing that Ms. Holmes failed to sign an amendment to the purchase agreement extending the act of sale date prior to the May 6, 2016 deadline and failed to reduce the sale price to the appraised value within three calendar days after the appraisal was received, as required in the purchase agreement. Further, they alleged that Ms. Holmes failed to return the $1,000.00 deposit they had made pursuant to the contract. In that same pleading, the Pauls asserted a third-party demand against both real estate agents for breach of fiduciary duties and negligent misrepresentation regarding the negotiation of the terms of the contract.

Previously, on July 26, 2016, the Pauls filed an exception of no cause of action and an exception of vagueness which were both denied by the trial court on September 13, 2016.

On November 6, 2017, the Pauls filed a motion for summary judgment, arguing that Ms. Holmes's petition for damages has no merit because it is based on an invalid and unenforceable contract to purchase immovable property. The Pauls argued that there was no valid contract since there was no written and signed amendment to the purchase agreement extending the act of sale date and the Pauls' agent did not have authority to agree to a verbal extension of the act of sale date on behalf of the Pauls. The Pauls alleged that according to Ms. Holmes's deposition, she never spoke with or communicated directly with them regarding an extension, she was aware that the purchase agreement had expired, and she was aware it did not provide for verbal extensions of the act of sale. Therefore, they argued that there is no genuine issue of material fact that the purchase agreement expired. Additionally, they claimed that Ms. Holmes did not detrimentally rely upon the sale to the Pauls since the Pauls never personally provided any representation to Ms. Holmes that they were agreeing to the extension of the act of sale. Finally, the Pauls argued that the suspensive conditions of the purchase agreement, specifically their obtaining of a loan to procure the property and the property appraising for the sale price, were not fulfilled by May 6, 2016, the expiration date on the purchase agreement, or even afterwards, and thus the purchase agreement was null and void and unenforceable.

Both third-party defendants, Mr. Adams and Ms. Breithaupt, also filed motions for summary judgment. They argued that because no further amendment of the purchase agreement extending the date for the act of sale was executed by the parties, the sale was unenforceable, and thus, all claims against them should be dismissed.

In opposition to the motions for summary judgment, Ms. Holmes argued that there is a genuine issue of material fact concerning waiver of the written deadline provision based on the Pauls' conduct. She argued that jurisprudence supports the assertion that, where the actions or words of a party constitute a waiver sufficient to lull the opposing party into believing that modification of the contract in writing was not necessary, contracts with verbal amendments regarding immovable property are valid and enforceable. Ms. Holmes contended that the file materials of Ms. Breithaupt and the correspondence and text messages of Mr. Adams establish issues of material fact concerning whether the conduct of the Pauls lulled her into inaction. Ms. Holmes claimed that neither Ms. Breithaupt's file materials, nor any text messages between Mr. Adams and the Pauls, show that the Pauls did not intend to purchase the property until May 28, 2016, when they requested the cancelation of the purchase agreement. Following a hearing on December 13, 2017, the trial court granted the Pauls' motion for summary judgment and Mr. Adams and Ms. Breithaupt's motions for summary judgment, and dismissed all claims against these parties with prejudice. In oral reasons for judgment, the trial court stated that it was of the opinion that the delay deadline for execution of the act of sale that was set in the purchase agreement had expired and was not extended in writing, as required by the contract.

The Pauls have not appealed the trial court's grant of Mr. Adams and Ms. Breithaupt's motions for summary judgment.

Ms. Holmes subsequently filed a motion and order for a devolutive appeal, seeking review of "the final judgment rendered in favor of defendants, Mintu and Aparna Pauls [sic]." On August 29, 2018, this Court dismissed Ms. Holmes's appeal after finding that the judgment at issue was not a final, appealable judgment since the judgment did not make any determination as to the Pauls' reconventional demand. See Holmes v. Paul , 18-140 (La. App. 5 Cir. 8/29/18), 254 So.3d 825, 828. Thereafter, on remand, on October 29, 2018, the trial court certified that the December 13, 2017 summary judgment dismissing Ms. Holmes's suit was a final, appealable judgment. On January 7, 2019, the trial court granted Ms. Holmes's motion for an appeal of the December 13, 2017 judgment made final on October 29, 2018. This appeal followed.

LAW AND ANALYSIS

A motion for summary judgment is a procedural device used to avoid a full-scale trial when there is no genuine issue of material fact. Bell v. Parry , 10-369 (La. App. 5 Cir. 11/23/10), 61 So.3d 1, 2. The summary judgment procedure is favored and is designed to secure the just, speedy, and inexpensive determination of every action. La. C.C.P. art. 966(A)(2). Under La. C.C.P. art. 966(D)(1), the initial burden is on the mover to show that no genuine issue of material fact exists. If the moving party will not bear the burden of proof at trial, the moving party must only point out that there is an absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. The nonmoving party must then produce factual support to establish that he will be able to satisfy his evidentiary burden of proof at trial. If the nonmoving party fails to do so, there is no genuine issue of material fact, and summary judgment should be granted. Babino v. Jefferson Transit , 12-468 (La. App. 5 Cir. 2/21/13), 110 So.3d 1123, 1125.

Appellate courts review a judgment granting or denying a motion for summary judgment de novo . Thus, appellate courts ask the same questions the trial court does in determining whether summary judgment is appropriate: whether there is any genuine issue of material fact, and whether the mover is entitled to judgment as a matter of law. Breaux v. Fresh Start Properties, L.L.C. , 11-262 (La. App. 5 Cir. 11/29/11), 78 So.3d 849, 852.

On appeal, Ms. Holmes argues that the trial court erred in concluding, as a matter of law, that the oral agreement to extend the written contract of sale was unenforceable. She asserts that there are exceptions to the writing requirement for purchases of immovable property. She cites to jurisprudence which holds that an oral agreement to extend a contract of sale is enforceable where one party has lulled the other party into inaction in reliance on the oral agreement, where the parties have acted in a fashion which evidences an intention to waive the time requirement, and/or where there has been detrimental reliance by the party seeking to enforce the oral agreement. According to Ms. Holmes, after the appraisal came back below the sale price, the Pauls did not send Ms. Holmes written notification of the appraisal and a written request for reduction of price as required by the purchase agreement. Instead, the Pauls' agent proposed that the parties defer the sale and attempt to obtain a reappraisal. She contends that the Pauls' agent never requested a written extension of the contract. She argues that he agreed to an indefinite oral extension and represented that the Pauls would be willing to sign a written extension fixing a new date for the act of sale on receipt of the reappraisal. Ms. Holmes contends that this oral agreement to extend the contract of sale was enforceable since she relied on the Pauls' representations to her detriment.

See Cottingim v. Vliet , 08-1263 (La. App. 4 Cir. 8/12/09), 19 So.3d 26 ; Huger v. Morrison , 01-1864 (La. App. 4 Cir. 2/6/02), 809 So.2d 1140, writ denied , 02-0501 (La. 2/20/02), 813 So.2d 398 ; Davis v. Oaklawn , Inc. , 212 La. 392, 31 So.2d 837 (1947) ; Bandel v. Sabine Lumber Co. , 194 La. 31, 193 So. 359 (1939) ; Pittman v. Pomeroy , 552 So.2d 983 (La. App. 2d Cir. 1989) ; Brandner v. Staf-Rath, L.L.C. , 10-778 (La. App. 5 Cir. 4/26/11), 64 So.3d 812, writ denied , 11-1085 (La. 9/2/11), 68 So.3d 523 ; Deleon v. WSIS, Inc. , 31,602 (La. App. 2 Cir. 2/26/99), 728 So.2d 1046.

The purchase agreement stated the following regarding the appraisal, to wit:

... If the appraised value is less than the Sale Price, the BUYER shall provide the SELLER with a copy of the appraisal within Three (3) calendar days of receipt of same, along with the BUYER'S written request for the SELLER to reduce the Sale Price. Within Three (3) calendar days after the SELLER'S receipt of such written documentation of the appraised value, the BUYER shall have the option to pay the Sale Price agreed upon prior to the appraisal or to void this Agreement unless the SELLER agrees in writing to reduce the Sale Price to the appraised value or all parties agree to a new Sale Price.

A contract to sell must set forth the thing and the price, and meet the formal requirements of the sale it contemplates. La. C.C. art. 2623. Contracts regarding the transfer or encumbrance of immovable property must be in writing. La. C.C. arts. 1839, 2440. The very purpose of the writing requirement for contracts regarding immovable property is to prevent misunderstanding over verbal terms. Rebman v. Reed , 335 So.2d 37, 42 (La. App. 4th Cir. 1976), writ denied , 338 So.2d 699 (La. 1976).

Additionally, an extension of the time stipulated for passage of title to property in a written contract to purchase and sell real estate must also be in writing. Harrell v. Stumberg , 220 La. 811, 57 So.2d 692, 694 (1952), citing to Lamar v. Young , 211 La. 837, 30 So.2d 853 (1947) ; Di Cristina v. Weiser , 215 La. 1115, 42 So.2d 868 (1949) ; and Hoth v. Schmidt , 220 La. 249, 56 So.2d 412 (1951).

The purchase agreement in the present case clearly requires that any extension to the closing date be in writing. As noted above, the purchase agreement specifically provides that "[a]ny change of the date for execution of the Act of Sale must be mutually agreed upon in writing and signed by the SELLER and the BUYER." The original act of sale date was April 29, 2016. By written amendment, signed by both Ms. Holmes and the Pauls, the act of sale date was extended to May 6, 2016. It is uncontested that no additional amendment to the purchase agreement was signed by the parties extending the act of sale date. In Ms. Holmes's deposition, she testified that no amendment was signed after May 6, 2016, that she knew an extension had to be in writing, and that her agent informed her of this requirement.

Upon review, we find no merit to Ms. Holmes's argument that the parties agreed to an enforceable oral extension and thus there was a waiver of the writing requirement. Ms. Holmes has presented no evidence that the Pauls personally agreed to orally extend the contract or to waive or dispense with the writing requirement. There is no evidence that the Pauls' agent had their authority to dispense with the writing requirement. Further, there is no history of oral agreements between the parties, and in fact, the previous extension was done in writing in accordance with the requirements of the purchase agreement. We therefore find no support in the record that the parties agreed that an oral extension would suffice in spite of the writing requirement contained in the purchase agreement.

Ms. Holmes testified that she had no discussions directly with the Pauls regarding the matter.

Ms. Holmes additionally argues that even if the oral modification is deemed to be unenforceable, then the result is that the original contract remains in effect without modification and is enforceable. Accordingly, she argues that the Pauls would not be entitled to summary judgment.

In support of her argument, Ms. Holmes cited to Mooers v. Sosa , 01-286 (La. App. 5 Cir. 9/25/01), 798 So.2d 200. Mooers involved a dispute over a bond for deed contract, where the agreement provided for the sale of immovable property and the purchase price was to be paid in installments. An oral modification to the agreement was subsequently made by the parties regarding a remaining down payment. When issues arose over the sale after the remaining down payment was never paid, the purchasers filed suit for specific performance of the original agreement and purchase price. Id. at 203. The court found that whether the modification of the agreement was breached by the plaintiffs/purchasers did not affect their claim for specific performance under the original bond for deed contract since the purchaser under a bond for deed contract is entitled to 45 days' notice of default before a bond for deed contract can be canceled. Such was not given in this case. Id. at 206. Upon review, we find that Ms. Holmes's reliance on Mooers is misplaced. The present case does not involve a bond for deed contract, and there was no oral modification of the agreement as previously discussed. Most importantly, neither party signed an amendment extending the agreement after May 6, 2016, as required by the contract, and unlike the bond for deed contract in Mooers which remained enforceable, the contract here expired by its terms and is therefore unenforceable.

Finally, Ms. Holmes argues that the trial court erred in failing to recognize that she has a tort claim against the Pauls for detrimental reliance independent of her claim for breach of contract. She argues that the trial court's oral reasons for judgment do not address the separate detrimental reliance claim. She alleges that the court failed to recognize that this is a separate cause of action, thus constituting reversible error. She contends that the evidence supports the conclusion that she detrimentally relied on the Pauls' representations by holding her house off the market, taking no steps to enforce the original contract as written, and incurring the cost of a reappraisal. First, we note that oral or written reasons for judgment form no part of the judgment, and appellate courts review judgments, not reasons for judgment. Wooley v. Lucksinger , 09-571, 09-584, 09-585, 09-586 (La. 4/1/11), 61 So.3d 507, 572. Because the reasons for judgment form no part of the judgment on appeal, we find no merit to Ms. Holmes's argument that the trial court's failure to mention the claim of detrimental reliance constitutes reversible error.

Nevertheless, upon de novo review, we find that there is no evidence to support Ms. Holmes's claim for detrimental reliance. The doctrine of detrimental reliance is designed to prevent injustice by barring a party from taking a position contrary to his prior acts, admissions, representations, or silence. To prevail on a detrimental reliance claim, Louisiana law does not require proof of a formal, valid, and enforceable contract. Rather, in determining whether a claim for detrimental reliance has been established, the focus is on whether the party proved three elements by a preponderance of the evidence: (1) a representation by conduct or word; (2) justifiable reliance; and (3) a change in position to one's detriment because of the reliance. Suire v. Lafayette City–Parish Consolidated Government , 04-1459 (La. 4/12/05), 907 So.2d 37, 59.

In the present case, we find that Ms. Holmes was not justified in relying on an alleged oral agreement to extend the act of sale date. Again, as she admitted in her deposition, she knew that an extension in writing was required. Further, as previously discussed, we find there has been no evidence that the Pauls personally agreed to orally extend the contract or to waive or dispense with the writing requirement.

See John W. Stone Oil Distributor, L.L.C. v. River Oaks Contractors & Developers, Inc. , 07-1001 (La. App. 5th Cir. 5/27/08), 986 So.2d 103, 107-108, writ denied , 08-1397 (La. 9/26/08), 992 So.2d 992, where suit was filed to enforce an oral agreement to sell immovable property. This Court rejected a claim of detrimental reliance and noted that "Equity will not lie where a positive legal requirement, not adhered to, exists." Id. at 108, citing Morris v. Friedman , 94-2808 (La. 11/27/95), 663 So.2d 19 ; See also E. Tangipahoa Dev. Co., LLC v. Bedico Junction, LLC , 08-1262 (La. App. 1 Cir. 12/23/08), 5 So.3d 238, 247, writ denied , 09-0166 (La. 3/27/09), 5 So.3d 146.

Finally, in their brief, the Pauls' request that this Court award damages for a frivolous appeal pursuant to La. C.C.P. art. 2164 ; however, the Pauls failed to cross-appeal or answer the appeal. As such, we are precluded from considering their request for damages for a frivolous appeal. Eckert v. Roux , 09-1016 (La. App. 5 Cir. 3/23/10), 39 So.3d 636, 643.

Nevertheless, we emphasize that frivolous appeal damages are allowed only when it is obvious that the appellant took the appeal solely for the purpose of delay or that counsel is not sincere in the view of the law he advocates. Seminary v. DuPont , 09-1082 (La. App. 5 Cir. 5/11/10), 41 So.3d 1182, 1188, writ denied , 10-1336 (La. 9/24/10), 45 So.3d 1077.
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CONCLUSION

For the foregoing reasons, we affirm the trial court's judgment granting the Pauls' motion for summary judgment. Costs of the appeal are assessed to appellant.

AFFIRMED


Summaries of

Holmes v. Paul

FIFTH CIRCUIT COURT OF APPEAL STATE OF LOUISIANA
Oct 2, 2019
279 So. 3d 1068 (La. Ct. App. 2019)

observing that "[c]ontracts regarding the transfer or encumbrance of immovable property must be in writing" and citing La. C.C. arts. 1839, 2440

Summary of this case from Cmty. Dev. Capital v. Hous. Corp.
Case details for

Holmes v. Paul

Case Details

Full title:LAUREN HOLMES v. MINTU AND APARNA PAUL

Court:FIFTH CIRCUIT COURT OF APPEAL STATE OF LOUISIANA

Date published: Oct 2, 2019

Citations

279 So. 3d 1068 (La. Ct. App. 2019)

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