Case ID: so2d_377/html/DLIV-01.html
Source: Caselaw Access Project
Author: {"author": "SCHOTT, Judge. STOULIG, Judge, BOUTALL, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

WHITE PROPERTIES, INC., Gilbert T. White and Robert W. Sullivan v. Dr. and Mrs. Santo J. LoCOCO.
    No. 10311.
    Court of Appeal of Louisiana, Fourth Circuit.
    Nov. 8, 1979.
    Rehearings Denied Dec. 17, 1979.
    Writ Refused Feb. 15, 1980.
    
      Richard T. Regan, Francipane, Regan & St. Pee, Metairie, for plaintiffs-appellees.
    W. Glenn Burns, Murray, Murray, Ellis, Braden & Landry, New Orleans, for defendants-appellants.
    Before REDMANN, STOULIG, BOU-TALL, SCHOTT and BEER, JJ.
   SCHOTT, Judge.

Defendants, Dr. and Mrs. Santo J. LoCo-co, have appealed from a judgment in favor of plaintiff realtor White Properties, Inc. for a broker’s commission and in favor of plaintiffs-vendors Gilbert T. White and Robert W. Sullivan for liquidated damages based on plaintiffs’ breach of contract to purchase a home to be built by White and Sullivan.

In a written agreement dated July 8, 1976, the LoCocos agreed to purchase from White and Sullivan “Lot 5, Lake Whitney West, Sq. 3, Jefferson Parish, and 3500-4000 sq. ft. single family dwelling to be constructed as per plans to be attached to contract .... for the sum of $53,-500 for Lot and approximate cost for improvement to be $90,000 to $95,000 range. Total approximate Lot plus house cost $143,500.00 to $148,500.00.” The contract did not describe the house to be constructed or the period within which it was to be completed, but it required that the sale of the lot was to be passed on or before August 19, 1976.

On July 3, 1976, defendants had entered into an agreement to purchase from White and Sullivan a house and lot on Tolmas Street in Metairie for $85,500 and in connection therewith deposited $8550. Because of their dissatisfaction with this house defendants prevailed upon plaintiff Gilbert White to enter into the agreement sued on in place of the July 3 agreement.

After the July 8 agreement was signed White referred defendants to Harold Keller who was White and Sullivan’s building supervisor to work out the plans for the house. Over the next few months numerous meetings took place between Keller and defendants until December when Keller informed White that defendants had decided not to build. In the meantime defendants took title to the lot for $53,500 in accordance with the agreement. The $8,550 deposited on the original agreement was used to pay the 4V2% real estate agent’s commission on the $53,500, and the balance was applied to the purchase price of the lot.

This suit and the resulting judgment is for the real estate commission and a pro rated deposit on the $90,000 for which the house was supposed to be built. The central issue is whether a binding contract was entered into between defendants and White and Sullivan on July 8. The trial judge found that there was a meeting of minds between plaintiffs and defendants but defendants subsequently changed their minds. We have concluded that this finding is manifestly erroneous.

The only participants in the meeting of July 8 when the agreement was signed were White, the LoCocos and their agent A1 Magner, White’s version seems to preclude his recovery. He testified that he was asked by the LoCocos to void the Tolmas Street purchase agreement, substitute a purchase of a lot, and arrange for Mr. Keller to construct a 3500-4000 square foot house. White went on to say:

“In furtherance of that request we entered into a new agreement which was to, in effect, void the initial agreement, and the new agreement called for the purchase of Lot 5 in Lake Whitney and then, subsequently, 3500 to 4000 square feet of home to be constructed on that Lot, which plans were in the process of being worked out between Dr. LoCoco and Harold Keller.” (Emphasis added)

White described this as “a fairly long meeting” at which the LoCocos “expressed certain needs” in the house to be constructed and explained:

“. . . . the purpose of the meeting on July 8th was to ascertain what these needs were and to put them in touch with Mr. Keller to build plans and specs that would satisfy those needs.”

Finally White described the agreement reached at that meeting as requiring him “to take the [Tolmas Street] home and expand it to a larger version, which would take care of the needs they expressed at that time.”

From this testimony and that of the Lo-Cocos it is clear that all parties had only a vague idea of what the LoCoco wanted. It would be Keller’s job to transform these vague ideas into a definite plan. In any event there was no agreement made at that time and despite numerous meetings over several months no agreement was ever reached.

The principal contention made by plaintiffs and the one which apparently convinced the trial judge was that the agreement was definite. The Tolmas Street house, 2750 square feet, would be expanded to 4000 square feet and at $22 per square foot this would cost about $90,000. Had this been the testimony perhaps there would have been a contract. Taking the Tolmas Street and simply enlarging rooms to increase the square footage would have been relatively easy to translate into figures but that is not the sense of White’s or the LoCocos’ testimony. As White put it:

“After the second contract was signed Mr. Keller got with Dr. and Mrs. LoCoco for several meetings in which the ideas and needs they had expressed to me in the meeting on July 8th, were to be in effect, captured in the terms of plans.”

The problem was that the LoCocos’ “ideas and needs” were so vague and nebulous that they never could be captured. Thus, the contract sued on was invalid because it lacked a certain object as required by C.C. Arts. 1779 and 1886. The parties had agreed only that Keller would try to develop these “needs,” into a plan of construction for $90,000. As it turned out the LoCocos’ “needs” could not possibly be satisfied for less than $120,000.

Our conclusion is further supported by the testimony of plaintiff Robert W. Sullivan. He met defendants for the first time in August when they were meeting with Keller. He understood that the purpose was to increase the square footage of the Tolmas Street house. From the outset of the discussion among the LoCocos, Keller and the draftsmen he realized that the house being discussed was “foreign to [him] as it related to” the Tolmas Street house. He realized immediately “that they were going to build an all totally different type house than the 3724 Tolmas house.”

From this testimony it appears that Sullivan was not aware that White’s agreement went beyond a simple expansion but, instead, included his commitment to let Keller try to “capture” the LoCocos’ ideas and needs.

In their arguments plaintiffs make much over Dr. LoCoco’s admission on cross examination that he changed his mind about the expanded version of the Tolmas Street house and wanted a more majestic house after meeting with Keller. But the problem stems from the uncertainty in the minds of White and LoCoco as to the meaning of “expanded version” in the first instance. This concept was so vague that it was not susceptible to a meeting of the minds of the parties.

Accordingly, the judgment appealed from is reversed and set aside and there is judgment in favor of defendants Dr. and Mrs. Santo J. LoCoco and against plaintiffs, White Properties, Inc., Gilbert T. White and Robert W. Sullivan, dismissing their suit at their cost.

REVERSED AND RENDERED.

STOULIG and BOUTALL, JJ., dissent with written reasons.

STOULIG, Judge,

dissenting.

I respectfully dissent.

I conclude there was a meeting of the minds as to the object of the contract. The LoCocos intended to have Harold Keller build an expanded version of the Tolmas Drive house when they signed the agreement of July 8, 1976. The breach came simply because defendants later changed their minds.

If we treat the July 8 agreement as the final document emerging from a series of negotiations, it is readily apparent both buyers and sellers understood what house the LoCocos agreed to have constructed. C.C. art. 1945 requires courts to give legal effect to the intent of the parties in interpreting contracts; and C.C. art. 1949 permits courts to refer to prior or subsequent agreements between the parties to explain doubtful passages in the contract at issue.

To understand the significance of the dealings among the parties prior to July 8, the roles of all the participants must be defined. Vendors Gilbert White and Robert Sullivan owned the residence offered for sale at 3724 Tolmas Drive as well as the Lake Whitney West subdivision. White Properties, Inc. (hereinafter WPI), of which Gilbert White is president, is a real estate broker who was listing agent for Tolmas and the realty here in dispute. Harold Keller (now deceased) was a contractor who built the Tolmas house and who constructed other homes in the Whitney Heights subdivision. Keller had no ownership in either property; had no interest in WPI; but was associated in business with White and Sullivan to the extent that he would pay the vendors one-third of his net profit on a home he constructed as a result of the vendors’ referral.

The business contact here was initiated by Dr. LoCoco through his own realtor, Magner Realty, Inc., when A1 Magner submitted to vendors an offer to buy what LoCoco describes as the “French house” at 3724 Tolmas for $85,500. When the written offer dated July 3, 1976 was accepted July 5, 1976, a cash deposit of $8,550 was given by LoCoco to be escrowed by WPI.

The validity of this contract, which required buyers to forfeit the deposit and pay a real estate commission in the event of a breach, is not disputed; however, it was never put into effect because the LoCocos changed their minds. The house, according to Mrs. LoCoco, was too small. Within the days preceding July 8, Magner and WPI negotiated a second agreement for their clients, which provided it would have the effect of voiding the first written contract, once it was executed.

In the written agreement dated July 8, 1976, the LoCocos stipulated they “* * * agree to purchase Lot 5, Lake Whitney West, Sq. 3, Jefferson Parish and 3500-4000 sq. ft. single family dwelling to be constructed * * * ” from White and Sullivan. They stated value of the ground was $53,500 while the house was to be constructed for between $90,000 and $95,000. The parties to the contract did not describe the house to be constructed or the period within which it was to be completed; however, the discussions and transaction between the parties prior to July 8 evidence the fact all litigants had a meeting of the mind as to what type of home was to be built.

Even though the builder Keller was not at the July 8 meeting, the LoCocos defined with clarity the house they expected him to build on the lakefront lot. I find it significant that it was Dr. LoCoco who insisted Keller must be the builder, not WPI or the vendors. Important also is Keller’s status as an independent contractor. The following testimony of Dr. LoCoco explains his intent when he induced the vendors to cancel the July 3 contract and substitute the one at issue in its place:

“Q Subsequently, did you execute, on July 8,1976, another purchase agreement?
A Yes, we did.
Q And what was that for?
A It was to rescind the first contract and for me to build a house for 3500 to 4000 square feet for just under a hundred thousand dollars, which was my ceiling price on the construction of the home, so I mortgaged my home and bought the lot out for cash, my present home I’m living in, and with good faith, to build this house for that figure.
It was supposed to be a luxury house comparable to the other house.
Q Did you enter into some discussions with Mr. Keller?
A Yes, many times.
Q Who introduced you?
A We met Mr. Keller through White Properties. He was the builder of other houses, and he told me he built country club homes. He built a lot of homes. I wasn’t familiar with the area, but I liked the workmanship in the French house and I wanted Mr. Keller to build my house. I thought the workmanship was real good in the house. I had worked as a carpenter when I was young and I knew good workmanship, and I thought Mr. Keller did real good work.
Q At any time, Dr. LoCoco, did you consider just making additions to the prior house that you had looked at?
A Yes. We were. The original plan was — I just loved the French house workmanship and all, and we wanted to sit the French house on the lake lot, but we were told it probably wouldn’t look good on the lake because it was such a small house, that a more majestic house, a taller house would look better. The French house is something like a Cape Cod, and it probably would look small on that particular lot.”

We need only look to the testimony of Dr. LoCoco to demonstrate he had a definite object in mind when he signed the July 8 contract and later changed his mind. On cross-examination the doctor candidly conceded this fact. I quote:

“Q All right, sir. And Doctor, is it correct, that the testimony that you gave on direct when you said you met with Mr. Keller and had the discussions about a more majestic house on that site, that was after you had signed the second contract of July 8th?
A Yes.
Q Is it a fair statement that you and your wife at that time changed your minds about building the expanded version of the first house and you wanted a more majestic house?
A Yes.
Q You changed your minds.
A Yes. A taller house. Not more luxurious. We wanted a taller house. We wanted the extra bathroom and — ”

After taking title to the realty on August 19,1976, as the agreement required, defendants conferred on several occasions with Harold Keller, however, in translating what they conceived originally to be a slightly larger home of comparable quality into definite plans and specifications, the proposed construction became aggrandized to a point that the extras the LoCocos required added $25,000 to the cost of construction. The additions defendants required were: (1) an extra full bath; (2) additional porches and balconies to take advantage of the view of the lake visible from a higher level over the levee that abutted their lot; (3) eight 2V2 story brick columns; (4) an extra fireplace; (5) stub-outs for a pool to be constructed; (6) a third floor to be prepared for a future bedroom; and (7) several additional appliances and appurtenances.

After several months Harold Keller left a note with one of plaintiffs stating the house would not be built. Before this matter came to trial, Mr. Keller died, thus the specifics of the negotiations are not available to us, at least from his viewpoint. But Dr. and Mrs. LoCoco’s testimony confirms the requirement that the extras enumerated be included in the house. Defendants stated their construction cost ceiling was $95,000 and, understandably, the contractor would not agree to build a $120,000 home for that price.

The trial court concluded defendants breached the contract when they:

“* * * decided, subsequent to the purchase of the lot, that the home they contemplated (within the above stated price range), would not be suitable for the size, shape, location and/or value of their lot. It was obvious from their testimony that they wanted a more prestigious home than the one contemplated under the agreement.”

In written reasons for judgment, after stating the quoted conclusion, the court said it relied heavily on the testimony of John L. Crosby, conceded by all to be an expert builder, who opined the house stipulated in the verbal and written negotiations could have been built within the $90,000 to $95,-000 price range prior to December, 1976 when negotiations with the LoCocos for constructing the house finally terminated unsuccessfully.

I do not agree that the failure to reduce the house conceived by the parties on July 8 into plans and specifications supports the result the “certain object” requisite of C.C. art. 1779 was not met. If the object of a contract is so poorly defined that it cannot be the subject of an order of specific performance, then the object is too indefinite. In Wright v. Mark C. Smith & Sons, 283 So.2d 85 (La.1973), a contract for the construction of a “sanitary sewer” was declared void because the object was too vague. In the instant case, however, the price, the size, the style and the square footage were agreed to by the parties. What remained was to refine the concept into plans and specifications.

Therefore I would affirm the judgment awarding liquidated damages and the brokerage commission. That the vendors and WPI permitted the original $8,550 deposited in escrow with the July 3 agreement to be applied by defendants to the August 1976 purchase of the lot does not void the liquidated damages provision in the contract. As written, even though the contract specifies deposit of earnest money, the intent clearly is to make an amount equivalent to the deposit the damages for breach. That the identical money deposited is not available to satisfy the damage claim and cannot become the sellers of simple forfeiture does not destroy the liquidated damage provision.

BOUTALL, Judge,

dissenting.

I dissent from the majority opinion holding that the contract sued upon was invalid. The trial judge found that there was in fact a valid contract between the parties, and that the defendants had changed their minds. The record contains ample evidence to support this finding. Accordingly I join with the dissent of Judge Stoulig for the reasons therein expressed, and would affirm the judgment, with the exception of the award of forfeiture of the deposit.

By whatever name it may be called, the contract entered into between the parties was a valid contract and became the law governing the obligations of each. The contract contained the following pertinent clauses.

“Purchaser agrees to deposit with sellers’ agent in cash_% of purchase price amounting to ($8,550.00) within 24 hours of the acceptance of this offer to buy.”
***** *
“In the event the purchaser fails to comply with this agreement within the time specified, the seller shall have the right to declare the deposit ipso facto, forfeited, without formality beyond tender of title to purchaser; * * * ”
“In the event the seller does not comply with this agreement within the time specified, the purchaser shall have the right either to demand the return of his deposit in full, plus an equal amount to be paid as penalty by the seller; * * ”

The required deposit of $8,550.00 was made, but when the partial execution of the contract took place by the sale of the lot to the purchasers, the appropriate part of the agent’s commission was paid out of the deposit and the balance of the deposit was applied to the purchase price of the lot. It is apparent to me that the parties, by their actions, obviously changed the condition of requirement of a deposit, and there has been no deposit or requirement for deposit thereafter.

The ability of the seller to declare the deposit forfeited has thus been removed from the contract, and he has no right to declare it forfeited and keep it, any more than the purchaser would have to demand from him the return of his deposit in full plus an equal amount to be paid as penalty by the seller. If the seller has suffered damages as a result of the failure to perform by the purchaser, he must seek a different measure of damages. To that extent I would concur in result with the majority opinion. 
      
      . Keller died before the trial and before his testimony could be taken.