Court Opinion

ID: 6530615
Source: CourtListenerOpinion
Date Created: 2022-07-19 20:17:00.662405+00
Date Added: 2024-06-11T15:55:21.050650
License: Public Domain

Cooks, J.,
dissents.
11 Plaintiffs sued Defendant to enforce two options to purchase immovable property consisting of two duplexes. They also sought damages for fraudulent misrepresentations and violations of the Louisiana Unfair Trade Practices and Consumer Protection Law. The trial judge granted partial summary judgment in favor of Defendant and also evicted Plaintiffs. The trial court found because Plaintiffs admitted they did not give any written notice to exercise the options to purchase as specifically required in the written agreements, and as required by Louisiana law concerning immovable property, they could not prove an ownership interest in the property. Thus, the trial court ordered the eviction but recognized Plaintiffs have unresolved damage claims which can be addressed in future proceedings.
The majority affirms the trial court’s granting partial summary judgment based largely upon Plaintiffs’ acknowledgment in them affidavit that: “The Rivet Trust never received a certified letter or any other notice of intent to exercise the options which expired approximately five years ago.” The majority finds Plaintiffs’ assertions that they continued to make payments after the option period | ¡..expired and paid more to the Trust than the agreed upon price are not dispositive. The majority was not persuaded by Plaintiffs’ assertions of detrimental reliance, unjust enrichment and fraudulent misrepresentation. Plaintiffs’ claim they were induced by Defendant’s continued representations that they indeed owned the property, which they paid for, but he repeatedly claimed he was too busy to sign a deed each time they asked. The majority acknowledges Plaintiffs’ presented evidence of these assertions in the affidavits of Mr. Martinez and the affidavit of the president of a title company at the motion for summary judgment.
The trial court’s and the majority’s reliance on the requirement of Civil Code Article 1839 that “[a] transfer of immovable property must be made by authentic act or by act under private signature,” relies on decisions involving facts occurring before the adoption of La.Civ.Code art. 1967, which became effective January 1, 1985, and misapprehends the nature of this dispute. The Louisiana Supreme Court, in Morris v. Friedman, 94-2808, (La. 11/27/95), 663 So.2d 19, 25, relying on this court’s decision in Ogden v. Ogden, 93-1413, p. 5 (La.App. 3 Cir. 9/21/94), 643 So.2d 245, 248, writ denied, 94-2539 (La. 1/13/95), 648 So.2d 1339, noted in footnote ll(emphasis added), “[t]he addition of La.C.C. art. 1967 in the Civil Code as an additional ground for enforceability of obligations may well alter this analysis. ” This fact was also noted by this court in Morris v. People’s Bank & Trust Co., 580 So.2d 1029, 1033 (La.App. 3 Cir.), writ denied, 588 So.2d 101 (La.1991). Louisiana Civil Code Article 1967 (emphasis added), *458entitled “Cause defined, detrimental reliance” provides:
Cause is the reason why a party obligates himself.
A party may be obligated by a promise when he knew or should have known that the promise would induce the other party to rely on it to his detriment and the other party was reasonable in so relying. |sRecovery may be limited to the expenses incurred or the damages suffered as a result of the promisee’s reliance on the promise. Reliance on a gratuitous promise made without required formalities is not reasonable.
Indeed, in two subsequent cases this court, applying La. Civ.Code art. 1967, found the requirement that an agreement be in writing in cases involving onerous agreements controlled by Article 1967, no longer applied after its effective date. See Dugas v. Guillory, 97-398 (La.App. 3 Cir. 10/7/98), 719 So.2d 719 and Cenac v. Hart, 98-1679 (La.App. 3 Cir. 4/7/99), 741 So.2d 690. Relying on this court’s decisions in these cases, the Louisiana Fifth Circuit Court of Appeals in Rhoads v. Quicksilver Brokers, Ltd. 01-768, p. 9 (La.App. 5 Cir. 1/14/02), 801 So.2d 1284, 1289 (emphasis added) reversed the lower court’s grant of summary judgment noting:
Plaintiff contends the “cause” argument is simply defendant’s attempt to impose a suspensive condition on plaintiffs right to exercise her option, so that defendant seeks to orally modify the terms of the stock option agreement. Plaintiff points out that, at the time the stock option agreement was confected, Louisiana had a Statute of Frauds regarding securities that stated a contract for the sale of securities was not enforceable unless it was in writing. La. R.S. 10:8-319 (Repealed).
In Morris v. Friedman, 94-2808 (La.11/27/95), 663 So.2d 19, 26, the Louisiana Supreme Court held that a claim of equitable estoppel or detrimental reliance will not lie when the law requires the contract to be in writing: “[TJhere can be no recovery on the basis of equity where, as in the instant case, a positive statutory writing requirement, not adhered to, exists.” The Morris court noted, however, that the facts in the case occurred in 198k, prior to the effective date ofLa.C.C. art.1967...
In Dugas v. Guillory, 97-398 (La.App. 3 Cir. 10/7/98), 719 So.2d 719, 726, in which former employees of a company brought action against the principal for breach of an oral promise to transfer 65% of the company’s stock to the employees, the court held that under La. C.C. art.1967 and the given circumstances of the suit, the plaintiffs’ reliance on the defendant’s oral promise, although not executed in written form, was reasonable because the promise was onerous in nature.
[4As explained in Dugas and in Cenac v. Hart, 98-01679 (La.App. 3 Cir. 4/7/99), 741 So.2d 690, 695, the 1985 enactment of La.C.C. art.1967 was controlling over the Statute of Frauds
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The Louisiana Second Circuit Court of Appeals discussed the import of La.Civ. Code art. 1967 in Benton v. Clay, 48,245 (La. App. 2 Cir. 8/7/13), 123 So. 3d 212, 222-23 (emphasis added):
Detrimental reliance is designed to prevent injustice by barring a party from taking a position contrary to his prior acts, admissions, representations, or silence .... This is because detrimental reliance is not based upon the intent to be bound. Rather, the basis of detrimental reliance is the idea that a person should not harm another person by making promises that he will not keep. Thus, the focus ofanaly-*459sis of a detrimental reliance claim is not whether the parties intended to perform, but, instead, whether a representation was made in such a manner that the promisor should have expected the promisee to rely upon it, and whether the promisee so relies to his detriment. Suire v. Lafayette City-Parish Consol. Gov’t, supra; Allbritton v. Lincoln Health Syst., Inc., supra.
FN5. Mr. Clay contends that, because the agreement to buy the property jointly with Ms. Benton was not written, the doctrine of detrimental reliance does not apply, citing Morris v. Friedman, 94-2808 (La.11/27/95), 663 So.2d 19. However, since the enactment of La. C.C. art.1967, Louisiana courts have found detrimental reliance to occur despite the fact that an onerous contract may lack a requisite formality such as written execution in authentic form, provided that the requisites of La. C.C. art.1967 are satisfied. See Dugas v. Guillory, 97-398 (La.App. 3d Cir.10/7/98), 719 So.2d 719.
If Plaintiffs can prove their allegations regarding detrimental reliance on the assurances by Defendants which caused them to forego the formalities provided in the agreements they may still establish an ownership interest in the at issue properties. The “in writing” requirement mentioned by the majority has been relaxed by the current provisions on detrimental reliance. Thus, this case is not ripe for summary judgment and I respectfully dissent.