Case Name: L.S. HUCKABAY, III, et ux, Plaintiffs-Appellees, v. RED RIVER WATERWAY COMMISSION, Defendant-Appellant
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 1995-10-12
Citations: 663 So. 2d 414
Docket Number: No. 27113-CA
Parties: L.S. HUCKABAY, III, et ux, Plaintiffs-Appellees, v. RED RIVER WATERWAY COMMISSION, Defendant-Appellant.
Judges: Before NORRIS, LINDSAY, BROWN and STEWART, JJ., and EDWARDS, J. Pro Tem.
Reporter: Southern Reporter, Second Series
Volume: 663
Pages: 414–429

Head Matter:
L.S. HUCKABAY, III, et ux, Plaintiffs-Appellees, v. RED RIVER WATERWAY COMMISSION, Defendant-Appellant.
No. 27113-CA.
Court of Appeal of Louisiana, Second Circuit.
Oct. 12, 1995.
Order on Rehearing Nov. 22, 1995.
Donald G. Horton, Coushatta, for Appellant.
James G. Bethard, Bethard & Davis, L.L.P., Coushatta, for Appellees.
Before NORRIS, LINDSAY, BROWN and STEWART, JJ., and EDWARDS, J. Pro Tem.

Opinion:
JiLINDSAY, Judge.
The Red River Waterway Commission appeals a judgment ordering it to pay damages to the plaintiffs-appellees for the value of a lease on land in rural Red River Parish. For the following reasons, we reverse the judgment of the trial court.
FACTS
On November 3, 1981, the plaintiffs-appel-lees, Sheriff L.S. Huckabay, III, and Judy Webb Huckabay (the Huckabays), leased certain property in Red River Parish from Mrs. Clarice L. Detro and her three children (the Detros). The Huckabays planned to use the property for cattle pasturing for their business of raising and selling cattle. The consideration of the lease was $1,000 annually, with the installments being due on the first day of September each year. The lease was recorded in the conveyance records of Red River Parish. It was for a five-year period, beginning on September 28,1981, and ending' on September 27, 1986.
The lease also contained an option clause which gave the Huckabays the right to lease the property for an additional five years. It further provided that the option must be exercised prior to September 1, 1986.
In addition to the annual rent of $1,000, the Huckabays were to perform certain obligations. First, the lease stated that the coastal Bermuda grass growing on the property had been depleted. The Huckabays were to restore and maintain the stand of coastal Bermuda. Second, the Huckabays were to rebuild and restore the fences on the property that were in poor condition. Failure to maintain the lessors' property in good condition was specified as grounds for cancellation of the lease.
In 1982, the Huckabays moved 117 cattle onto the property and began making the improvements as set forth in the lease. They re-fenced the property, added cross fencing, cleared areas overgrown with thorn trees, limed and fertilized the area, and planted grass. The Huckabays also repaired the hay barn, built a new|2corral, and added a water well and a pond to the property. Sheriff Huckabay testified at trial that when the lease began, he intended to use the property for a lengthy period of time.
Beginning in 1983 and continuing in 1984, the Huckabays encountered a problem with Bangs disease, which causes female cows to abort their calves during pregnancy. They sold all cows diagnosed with having the disease or suspected of having the disease. The Bangs disease caused their herd to diminish until the problem was finally eradicated in 1986.
On February 4,1985, the Detros granted a right of entry upon the property to the defendant-appellant, the Red River Waterway Commission (Commission), for a five-year period. The right of entry gave the Commission the authority to perform certain tasks on the property, including surveying, making test borings, and carrying out necessary exploratory work in connection with a proposed lock and dam to be built on the Red River in the vicinity of the property.
Soon after the right of entry was granted, the Huckabays began to have problems with the work of the Commission. The work crews made numerous borings on the property, knocked portions of the fencing down, and rutted the property by using heavy equipment. Sheriff Huckabay testified at trial that the work of the Commission continued to increase and became more destructive to the property.
Despite their problems with the Commission, on September 17, 1986, the Huckabays signed another lease with the Detros for an additional five years pursuant to the option clause in the original lease. However, this lease was not ^recorded in the conveyance records of Red River Parish. It was also for a five-year period, beginning on September 28, 1986, and ending on September 27, 1991. The consideration for the unrecorded lease was again an annual rental payment of $1,000, which was due on first day of September each year. This lease provided that the Huckabays were to maintain the drainage ditches, the pastures, and the fences in a state of good repair. The unrecorded lease also contained an option clause which gave the Huckabays the right to lease the property for an additional five years and provided that the option must be exercised prior to September 1, 1991.
Sheriff Huckabay testified at trial that because of the problems with the work of the Commission, the Huckabays sold their cows to a neighbor, R.L. Walters, and orally subleased the property to him in 1987. Walters also had problems with the Commission. Finally, Walters removed all of his cattle from the property in 1989.
On April 19, 1989, the Detros sold the property to the Commission. The deed of sale provided that payments for the improvements made to the property were included in the costs of the sale. Prior to the sale, the Commission had a title opinion of the property performed. The title opinion, dated April 20,1988, acknowledged that the property was "apparently" leased to the Huckabays because of the extension of the 1981 lease. The title opinion also advised the Commission to "satisfy [itself] as to whether or not this lease [had] been extended as [was] set forth therein and if so appropriate action should be dealt with the Lessee therein." Further, an appraisal of the property, dated May 13, 1988, noted that the Huckabays had exercised the five-year lease option provided for in the 1981 lease and had also obtained an additional five-year option for the period of September of 1991 to September of 1996. At the time of the sale, Ben Littlepage, the executive director Uof the Commission, stat ed in a letter to the Commission's attorney that the Commission was aware of the lease of property by the Huckabays.
The Huckabays failed to pay timely the rent to the Commission on September 1, 1989. Later in the month, the Huckabays tendered a check for the rental payment to the Commission. During the period of the lease with the Detros, the Huckabays had on several occasions paid the rent after September 1, although they always paid it during the month of September. However, the Commission rejected the check and never cashed it. The Huckabays did not attempt to pay the rent again after that time. Dam construction began on the property in 1990.
On October 17,1990, the Huckabays filed a petition for damages against the Commission. The Huckabays claimed that the Commission had evicted them without compensation or offer of compensation. They further alleged that the Commission had caused them to suffer damages for loss of profits of their cattle business and for loss of use of the improvements they had placed on the property-
The Commission subsequently named the Detros as third party defendants by virtue of having paid the Detros at the time of the sale of the property for the improvements made upon the property by the Huckabays. The Detros were successful in having the third party demand dismissed. The case then proceeded to a bench trial on the merits, where the trial judge rendered a judgment in favor of the Huckabays.
The trial judge awarded the Huckabays $85,595, plus legal interest from October 17, 1990, for their losses. The damages award included projections of profits from the Huckabays' cattle business through 1996, as Sheriff Huckabay testified he would have exercised the second lease option. The trial court also awarded the Huckabays attorney fees in the amount of one-third of the $85,-595, Isplus interest from October 17, 1990; and two expert witness fees in the amount of $5,000 and $500, respectively, plus legal interest on both fees from October 17, 1990. The judgment also ordered the Commission to pay all costs of the proceedings.
The trial judge did not award compensation for the improvements the Huckabays made to the property. The Commission appeals, raising numerous assignments of error as to the Huckabays entitlement to damages and the amount of damages awarded. The Huckabays have not appealed the trial court's judgment.
DISCUSSION
Exercise of the Five-Year Option
The Commission contends that the trial court erred in deciding that the original lease had not lapsed due to the Huckabays' failure to exercise timely the first five-year option. It argues that the terms of the original lease provided that the Huckabays had to "exercise" the five-year option prior to September 1, 1986. The unrecorded, but written, lease option was not signed by all parties until September 17, 1986.
Mr. Huckabay testified that he notified Mrs. Detro in August of 1986 that the Huck-abays would be exercising the option to renew the lease. The Commission offered no testimony to the contrary. That portion of the lease of November 8, 1981, concerning the five-year option merely stated that the option must be "exercised" prior to September 1, 1986. The lease did not provide for any specific method for "exercising" the option. It is apparent that the Huckabays' decision to "exercise" the option was acceptable to the Detros, as they entered into an additional five-year agreement with the Huckabays in the written, but unrecorded, lease option of September 17, 1986. This lease was to commence on September 28, 161986, one day after the original lease expired.
It is a fundamental principle that the lease contract is the law between the parties and defines their respective legal rights and obligations. Frey v. Amoco Prod. Co., 603 So.2d 166 (La.1992); LSA-C.C. Art. 1983. As the parties appear to have agreed to an additional five-year term for the lease of the property with consideration of $1,000 in annual rent and upkeep of the property, and in the absence of a specific method for "exercising" such an option, we find that the Hucka- bays "exercised" the option timely upon their notification of the same to the Detros in August of 1986.
Unrecorded Lease Option
The Commission also contends that the trial court erred in its reliance on the unrecorded lease option of September 17, 1986, as a basis for compensation to the Huckabays. The Commission relies on the Public Records Doctrine (LSA-R.S. 9:2721) as support of this argument. The Commission states that the lease option could have no effect on the Commission, a third party, because it was not recorded in the conveyance records of Red River Parish.
An unrecorded lease is a compensa-ble property interest under LSA-Const. Art. 1, § 4, when the State takes or damages the property that is the subject of the lease through its power of expropriation. State Dep't of Transp. and Dev. v. Jacob, 483 So.2d 592 (La.1986). Further, LSA-Const. Art. 1, § 4 also protects the rights of a lessee under a written, but unrecorded, lease whose property is "taken" by the State by amicable purchase from the landowner in lieu of expropriation. Soma Enterprises, Inc. v. State Dep't of Transp. and Dev., 521 So.2d 829 (La.App.2d Cir.), writ denied, 522 So.2d 572 (La.1988).
The Commission negotiated the purchase of the subject property from thepDetros. It is apparent from the record that the Commission would have expropriated the property had such an agreement not been reached. A letter on February 28, 1985, by the chairman of the commission included the Detro property as a site for a request for right of entry in order that the Corps of Engineers could perform surveys and make soil borings in connection with a proposed lock and dam in Red River Parish. In a letter to the Commission on May 4, 1988, the Louisiana Appraisal Co., Ltd. stated that an appraisal was performed on the property "to estimate the Fair Market Value of the Subject Property which is to be taken...." (Emphasis added.)
Further, testimony at trial from the director of the Commission, Ben Littlepage, revealed that property was being purchased along the Red River, including tracts of land with agricultural leases. If the Commission could not agree with the lessee as to a price, it filed expropriation proceedings. As to the subject property, the Commission acquired a right of entry from the Detros on behalf of the Corps of Engineers in February of 1985, to begin exploratory work with the proposed lock and dam in the area. Finally, Little-page testified that the lock and dam were being constructed on a portion of the property-
Thus, we conclude that the Huckabays' failure to record the lease option does not prevent them from asserting that they had a property interest which was "taken" by the State via purchase from the Detros in lieu of expropriation.
Untimely Rent Payment
In the alternative, the Commission contends that the trial court erred in deciding that the unrecorded lease option did not lapse due to the Huckabays' failure to pay timely the rent due on September 1, 1989. The Commission argues that the unrecorded lease option terminated, and therefore, the Huckabays had no |8compensable property interest after this time.
Testimony at trial indicated that the Huck-abays had on several occasions paid the rent after the first day of September to the Det-ros without objection. However, when the Huckabays tendered a check to the Commission for the 1989 rent during the month of September 1989, but after September 1, the Commission refused to cash the cheek. Neither the original lease, nor the unrecorded lease option, provided for cancellation of the lease upon the Huckabays' failure to pay the rent or late payment of the rent.
Louisiana law affords two remedies to a lessor if a lessee fails to pay rent as it comes due. The lessor may hold the lessee hable for the rent due for the expired term of the lease and sue to dissolve the lease and evict the lessee. In the alternative, the lessor may hold the lessee hable for the rent for both the expired and unexpired terms of the lease. Shreveport Plaza Assoc. v. L.R. Re sources II, .557 So.2d 1067 (La.App.2d Cir.1990). Our review of the record reveals that the Commission did not exercise either of these two remedies.
Further, the cancellation of leases is not favored in Louisiana law. Ergon, Inc. v. Allen, 598 So.2d 438 (La.App.2d Cir.1992). A lessor's right to dissolve a lease upon the lessee's failure to pay rent timely is subject te judicial control according to the circumstances. Ergon, Inc., supra. As a result, a lessee's failure to pay rent timely does not automatically require the termination of the lease. Plunkett v. D & L Family Pharmacy, Inc., 562 So.2d 1048 (La.App. 3d Cir.1990) (quoting Port Arthur Towing Co. v. Owens-Illinois, Inc., 352 F.Supp. 392 (D.C.La.1972)).
Because of the Commission's inaction after the rent was past due and the Huckabays' attempt to pay the rent shortly after the date due, we cannot say that the lease terminated automatically as the Commission contends. This court is not |9presented with a factual scenario where the Commission held the Huckabays liable for the rent due for 1989, and brought suit to dissolve the lease and to evict. Instead, the Commission refused to accept the Huckabays late rent payment, yet did not pursue any of the legal remedies available to it. Further, the Commission did not produce any evidence at trial of notification to the Huckabays as to the method of payment or its unwillingness to accept late rent payments as the Detros had, other than Littlepage's testimony that he thought "ample arrangements were made to inform the lessor [sic] that the lease would be due by September 1, and we didn't get any payment."
The Huckabays were willing to continue with their portion of the lease obligation by tendering the rent payment, albeit late. We do not believe that the Commission, after remaining silent, should now be permitted to contend successfully that the lease terminated automatically upon the failure of the Huckabays to pay timely the rent. We find no error in this aspect of the trial court's decision.
DAMAGES
Having determined that the Huckabays timely "exercised" the five-year option and had a compensable property interest as a result of this written, but unrecorded, lease option, we now turn to the issue of damages.
An award for business losses must be based on adequate proof. State, Department of Highways v. Constant, 359 So.2d 666 (La.App. 1st Cir.1978), amended in part, 369 So.2d 699 (La.1979); State, Department of Transportation & Development v. Tynes, 433 So.2d 809 (La.App. 1st Cir.1983), writ denied, 437 So.2d 1153 (La.1983); State, Department of Highways v. Enserch Corporation, 559 So.2d 787 (La.App. 1st Cir.1990), writ denied, 567 So.2d 85 (La.1990). The | ipburden of proving damages rests on the party seeking them, who must prove such damages with legal certainty by a preponderance of the evidence. See Tynes, supra. Speculation, conjecture, mere possibility or unsupported probability are not sufficient to support such an award. State, Department of Transportation and Development v. Messenger, 556 So.2d 906 (La.App. 3d Cir.1990).
In City of Lafayette v. Cason, 393 So.2d 424 (La.App. 3d Cir.1980), the court concluded that no business losses had been established because necessary elements of such an award had not been established, i.e., the subject property was not unique in nature or location or indispensable to operation of the business being conducted on the site.
In the instant case, the Huckabays failed to show that there was no other available land in the area upon which they could have continued their cattle business. When asked on cross-examination if it wasn't true that there was abundant pasture available for lease in Red River Parish, Sheriff Huekabay did not directly answer the question, responding instead "I already had that place leased." When further questioned as to whether he had looked for another pasture to rent after the Red River Waterway began drilling on the property in 1986, he replied, "Not really." Or put another way, the plaintiffs failed to show any reason why they could not have easily moved their cattle to another pasture and continued their business operation, as opposed to simply ceasing to do business.
Nor did the Huekabays demonstrate any unique quality about the property taken by the Red River Waterway in the instant case. While there was evidence that the Hucka-bays made some improvements on the land as part of the consideration under their lease with the landowners (such as repairing the barns and rebuilding the fence), these features are not sufficient to render the property |n"unique."
Proof of unavailability of other suitable property or uniqueness was a necessary element of the Huekabays' claim for their business losses. Their failure to present such evidence precludes recovery.
In Packard's Western Store, Inc. v. State, Department of Transportation and Development, 618 So.2d 1166 (La.App.2d Cir.1993), writ denied, 629 So.2d 345 (La.1993), and Holland v. State, Department of Transportation, 554 So.2d 727 (La.App.2d Cir.1989), writ denied, 559 So.2d 125 (La.1990), the plaintiffs recovered for their business losses after presenting evidence of their unsuccessful efforts to find comparable replacement locations. In Packard, supra, the inability to secure a suitable relocation site, combined with the state's repeated admonition not to move before it acquired the plaintiffs' property, resulted in the plaintiffs store closing permanently. In the Holland case, the plaintiff testified that, after an extensive search, he was unable to find a comparable location for his service station, which had been in a "unique and strategic business location." In the present ease, we have no such evidence of efforts to secure a comparable location.
Based on the foregoing, we find that the portion of the trial court judgment awarding the Huekabays damages for their business losses must be reversed.
Expert Witness Fees and Attorney Fees
The Commission was cast in judgment for the expert witness fee of Dr. Stevens, as well as attorney fees of one-third of the damages awarded in favor of the plaintiffs. Since we are reversing the judgment which cast the Commission in judgment, we reverse the portion of the judgment assessing an expert witness fee of 112$5,000.00 against the Commission. LSA-R.S. 13:3666.
The award of attorney fees against the Commission must also be reversed. Attorney fees are not to be granted under LSA-R.S. 13:5111 unless the plaintiff is compensated for the taking of property by the defendant.
CONCLUSION
The judgment of the trial court is reversed. All costs are assessed to appellees.
REVERSED.
BROWN, J., dissents to reversal of damage award.
EDWARDS, J., dissents for reasons assigned by BROWN, J.
. The Red River Waterway Commission is a political subdivision of the State of Louisiana and the governing body of the Red River Waterway District. See LSA-R.S. 34:2301-2317.
. However, these improvements might have been appropriate factors to consider in determining the amount of the relocation award to place the plaintiffs in as good a position on a comparable piece of pasture land — if they had carried their initial burden of entitlement. In any cause, there was no evidence on this issue.