Case Name: Thomas K. SWOBODA and Karen L. Swoboda, Plaintiff-Appellee, v. SMT PROPERTIES, L.L.C., Defendant-Appellant
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 2008-01-30
Citations: 975 So. 2d 691
Docket Number: No. 42,746-CA
Parties: Thomas K. SWOBODA and Karen L. Swoboda, Plaintiff-Appellee, v. SMT PROPERTIES, L.L.C., Defendant-Appellant.
Judges: Before WILLIAMS, GASKINS and CARAWAY, JJ.
Reporter: Southern Reporter, Second Series
Volume: 975
Pages: 691–698

Head Matter:
Thomas K. SWOBODA and Karen L. Swoboda, Plaintiff-Appellee, v. SMT PROPERTIES, L.L.C., Defendant-Appellant.
No. 42,746-CA.
Court of Appeal of Louisiana, Second Circuit.
Jan. 30, 2008.
Rehearing Denied March 13, 2008.
Thomas N. Thompson, Lafayette, for Appellant.
Franklin H. Spruiell, Jr., for Appellee.
Before WILLIAMS, GASKINS and CARAWAY, JJ.

Opinion:
WILLIAMS, J.
hThe defendant, SMT Properties, L.L.C., appeals a judgment in favor of the plaintiffs, Thomas and Karen Swoboda. The trial court awarded plaintiffs $30,308.28 in damages. For the following reasons, we amend and affirm as amended.
FACTS
In 2002, SMT Properties, L.L.C. ("SMT") began construction of a house on Lot 11 in a new subdivision in Caddo Parish. Kevin Schmidt was the sole member and manager of SMT. The subdivision, known as "Lakeside on Long Lake," was owned and developed by AOK, L.L.C. ("AOK"). Robert Aiello was the manager of AOK. The subdivision was subject to a declaration of covenants and building restrictions, which among other things required a setback of at least ten feet from the interior, or side, property lines of each lot. One of the members of AOK, Ronald Turner, individually provided SMT with financing to build the house. During construction, Schmidt allowed 40% of the house foundation to be improperly placed across the property line onto the adjacent Lot 12. This error was discovered by Aiello while driving through the subdivision.
Instead of demolishing the foundation, Aiello suggested that SMT purchase Lot 12 and the two lots were "re-subdivided" into Lots 122 and 123 of Lakeside on Long Lake, Unit 2. After filing the re-subdivision plat, Aiello purported to grant verbal variances reducing the side setback from ten feet, as required by the declaration of covenants, to five feet for both Lots 122 and 123. These variances were never reduced to writing, were not reflected on the re-subdivision plat, and were not a matter of public record. |2After the house was completed, SMT then allowed a portion of the bricked flower bed, two sprinkler heads and some sod to be improperly placed across the revised property line. This error was not discovered at the time.
In July 2003, Turner, who was not the legal owner of Lot 122, hired a realtor, Lynn Roos, to sell the property. Turner completed and signed a "Seller's Disclosure Statement," which noted the presence of an oil pipeline next door and stated that "Lot 11 has been subdivided thus making it much larger." However, the document did not disclose the variance that reduced the side setback to five feet for both lots. That month, Karen Swoboda was looking for a house in Shreveport and hired Kandy McEachern, a realtor in the same office as Roos. Swoboda looked at the SMT-built house on Lot 122 and was given copies of the declaration of covenants and restrictions and the re-subdivision plat.
After reviewing these documents and the disclosure form, Swoboda instructed the realtor to have the boundaries of the lot marked and signed a contract to buy the house. On August 11, 2003, AOK instructed Charles Coyle, a surveyor, to mark the property corners of Lot 122. AOK paid the invoice for this work.
Later in August 2003, Dr. Thomas Swoboda and Karen Swoboda met their realtor at the house and observed survey stakes, which indicated a property line running at an angle away from the house that appeared to conform with the placement of the flowerbed and sod. At the closing on August 27, 2003, the Swobodas first met Schmidt, who signed the seller's disclosure form without mentioning either the five-foot variance of the side ^setback or the encroachment of the landscaping and sprinklers onto the adjacent lot. The Swobodas paid $395,000 for the house.
The problem with the west property line surfaced in April 2004, when a prospective purchaser, attorney James Davis, ordered a survey of Lot 123 after he was informed by Aiello of the original foundation problem and the setback variance. This survey reflected that the boundary line was only five feet from the Swobodas' house running through the bricked flower bed, and that two sprinkler heads were located on Lot 123. At that time, the Swobodas first learned of the verbal variances granted by Aiello that subjected their lot to a side setback of only five feet. The Swobodas attempted to buy a strip of land as a buffer along the property line, but the adjacent landowner was unwilling to sell. As a result, the Swobodas bought the entire adjacent lot for $49,950.
In March 2005, the plaintiffs, Thomas and Karen Swoboda, filed a petition for damages against the defendant, SMT, alleging fraudulent misrepresentation. The plaintiffs sought damages including the purchase price of the adjacent lot, interest and attorney fees, but did not seek rescission of the sale or reduction of the purchase price. Following a trial, the district court issued a written ruling finding that although the plaintiffs had failed to prove fraud, the defendant had breached its duty to plaintiffs under LSA-C.C. art. 2529, because the property sold was not of the kind represented by defendant.
Considering the circumstances of the case, the trial court concluded that plaintiffs were entitled to recover one-half of the purchase price of the ^adjacent lot in the amount of $24,975, closing expenses of $2,500, property taxes of $1,573.28 and homeowner assessments of $1,260. The court declined to award attorney fees. Accordingly, the court rendered judgment awarding the plaintiffs damages in the total amount of $30,308.28. The defendant appeals the judgment.
DISCUSSION
The defendant contends the trial court erred in awarding damages to the plaintiffs. Defendant argues that Article 2529 is not applicable because the property received by plaintiffs did not differ in kind or quality from that described in the sale contract or deed and defendant did not make any verbal representation to plaintiffs about the quality of the lot they purchased.
When the thing delivered by the seller, though in itself free from redhibi-tory defects, is not of the kind or quality specified in the contract or represented by the seller, the buyer's rights are governed by other rules of sale and conventional obligations. LSA-C.C. art. 2529. A trial court's factual findings will not be reversed unless clearly wrong. A reviewing court does not decide whether the factfinder was correct, but whether its findings were reasonable based upon the record. Stobart v. State DOTD, 617 So.2d 880 (La.1993).
In the present case, the subdivision property was subject to a declaration of covenants, servitudes and building restrictions. The declaration provided that all of the lots would be owned, occupied, improved, sold and conveyed subject to the listed covenants and restrictions. Article five, section four of the declaration provided that no |fibuilding could be built on any lot "nearer than ten feet (10') from interior property lines." The architectural control committee or AOK could "waive in writing" any setback requirement.
Aiello testified that after the lots were re-subdivided, AOK granted a variance to Lot 122 reducing the side setback to five feet instead of the ten feet required by the declaration of covenants. However, Aiello acknowledged that this purported variance was never reduced to writing.
The declaration of covenants expressly stated that any waiver, or variance, of the setback requirement must be "in writing." Thus, the verbal variance granted to defendant allowing the house on Lot 122 to be built five feet from the property line was not a valid waiver of the requirement for a setback of ten feet. In addition, the defendant never disclosed to plaintiffs the existence of any such variance. Consequently, at the time of sale the defendant represented that the house complied with the setback of ten feet required in the declaration of covenants. Based upon this record, we cannot say the trial court erred in concluding that pursuant to Article 2529, the defendant breached its duty to plaintiffs by delivering a house that was actually only five feet from the property line. The court found that such a deviation was material to plaintiffs decision to buy their home and this finding was not clearly wrong. The assignment of error lacks merit.
Damages
The defendant contends the plaintiffs failed to satisfy their burden of proving they were damaged. Defendant argues that plaintiffs failed to present evidence to show that they suffered an ac tual loss or to establish the | (¡value of any such loss.
Damages are measured by the loss sustained by the obligee and any profit of which he was deprived. LSA-C.C. art. 1995; Cook v. Stowe, 40,372 (La.App.2d Cir.10/26/05), 914 So.2d 1135. An obligee must make reasonable efforts to mitigate the damages caused by the obligor's failure to perform and if the obligee fails to make these efforts the amount of damages will be reduced. LSA-C.C. art.2002. Much discretion shall be left to the court for the reasonable assessment of damages which are insusceptible of precise measurement. LSA-C.C. art.1999.
In the present case, the plaintiffs presented evidence that defendant's conduct created the need to re-subdivide the original Lots 11 and 12 and resulted in the construction of plaintiffs' house five feet from the revised property line. Plaintiffs testified that they suffered financial loss because they were forced to buy the adjacent lot for $49,950 to prevent construction of a building only ten feet from their home, a circumstance which they believed would reduce the value of their substantial investment. The record supports the trial court's finding that the defendant's failure to disclose the material information regarding the setback variance was a significant factor in causing the plaintiffs to incur that additional expense.
In its appellate brief, the defendant contends that even if plaintiffs are entitled to recover damages, any award must be reduced to reflect their own negligence in failing to obtain a survey of their lot and in failing to read the warnings to do so in the documents they signed in completing the purchase of their house. Contrary to defendant's contention, the plaintiffs made a |7request through their real estate agent that the property owner mark the boundary lines of their lot. The trial court found that the plaintiffs' request that the property lines be marked was the equivalent of a survey in this case, rejecting defendant's assertion that plaintiffs were precluded from recovery. On this record, the trial court's finding was not clearly wrong.
Additionally, the defendant contends the plaintiffs failed to attempt to mitigate the damages suffered as a result of buying the lot with a smaller side setback than required by the declaration of covenants. Defendant argues that under Article 2002 the damage award should be reversed because plaintiffs took no steps to sell or further subdivide the adjacent lot they purchased after learning of the variance.
We note that in its written ruling, the trial court expressly considered the plaintiffs' conduct in assessing damages. The court found that plaintiffs derived some benefit from their purchase of the adjacent lot in that they gained a larger yard and retained the option to further subdivide the property and sell the remaining lot. The trial court noted that plaintiffs had not taken any steps to mitigate their damages by attempting to sell the adjacent lot. The record demonstrates that the trial court considered and weighed the plaintiffs' comparative negligence and lack of mitigation in the award of damages by limiting their recovery to one-half of the price they paid to purchase the adjacent lot.
However, considering the benefit to plaintiffs in- maintaining ownership and possession of the adjacent lot, we conclude that plaintiffs are not entitled to reimbursement for the amounts paid in 2005 and 2006 for ^property taxes and homeowner assessments related to Lot 123. Consequently, we shall amend the award by deleting the amounts of $1,573.28 for property taxes and $840 for homeowner assessments for 2005-2006, reducing the plaintiffs' total damage award to $27,895. In all other respects, the judgment will be affirmed.
CONCLUSION
For the foregoing reasons, the trial court judgment is hereby amended to delete the amount of $2,413.28, and plaintiffs are awarded the sum of $27,895 in damages. The judgment is otherwise affirmed. Costs of this appeal are assessed to the appellant, SMT Properties, L.L.C.
AMENDED AND AFFIRMED AS AMENDED.
GASKINS, J., concurs with reasons.
CARAWAY, J., dissents with written reasons.