Fie, LLC v. New Jax Condo Ass'n, Inc.

• Decision Date: 21 February 2018
• Docket Number: NO. 2016–CA–0843, NO. 2017–CA–0423,2016–CA–0843
• Citation: 241 So.3d 372
• Parties: FIE, LLC v. NEW JAX CONDO ASSOCIATION, INC. and Earl Weber FIE, LLC v. New Jax Condo Association, Inc. and Earl Weber
• Court: Court of Appeal of Louisiana — District of US

241 So.3d 372

FIE, LLC
v.
NEW JAX CONDO ASSOCIATION, INC. and Earl Weber

FIE, LLC
v.
New Jax Condo Association, Inc. and Earl Weber

NO. 2016–CA–0843
NO. 2017–CA–0423

Court of Appeal of Louisiana, Fourth Circuit.

FEBRUARY 21, 2018

Lawrence G. Pugh, III, William W. Sentell, III, PUGH, ACCARDO, HAAS, RADECKER & CAREY L.L.C., 1100 Poydras Street, Suite 3200, New Orleans, LA 70163, and Stanley J. Cohn, LUGENBUHL, WHEATON, PECK, RANKIN & HUBBARD, 601 Poydras Street, Suite 2775, New Orleans, LA 70130, COUNSEL FOR PLAINTIFFS/APPELLEES

Raymond A. Pelleteri, Jr., Alexander R. Saunders, PELLETERI & WIEDORN, L.L.C., 636 Carondelet Street, New Orleans, LA 70130, and Charles L. Stern, Jr., Ryan M. McCabe, Elise M. Henry, THE STEEG LAW FIRM, L.L.C., 201 St. Charles Avenue, Suite 3201, New Orleans, LA 70170, COUNSEL FOR DEFENDANT/APPELLANT (NEW JAX CONDO ASSOCIATION, INC.)

Howard B. Kaplan, Jeffrey G. Lagarde, BERNARD CASSISA ELLIOTT & DAVIS, A PLC, 3838 N. Causeway Blvd., Suite 3050, Metairie, LA 70002–8357, COUNSEL FOR DEFENDANT/APPELLANT (LAFAYETTE INSURANCE COMPANY)

(Court composed of Judge Rosemary Ledet, Judge Sandra Cabrina Jenkins, and Judge Regina Bartholomew–Woods)

JUDGE SANDRA CABRINA JENKINS

241 So.3d 380

Following a jury trial, the trial court rendered judgment in favor of FIE, LLC ("FIE") and Iberia Tigers, LLC (collectively, "plaintiffs"), and against New Jax Condominium Association, Inc. ("New Jax") and Lafayette Insurance Company (collectively, "defendants"), in solido , in the amount of $1,185,700.00 for the loss of use of plaintiffs' condominium unit. In the first of these consolidated appeals, defendants seek reversal of the trial court's judgment and the dismissal of plaintiffs' claims for loss of use damages. In an answer to defendants' first appeal, plaintiffs seek reversal and remand on the trial court's pre-trial judgment precluding plaintiffs from introducing evidence at trial to support a claim for bad faith damages against Lafayette.

During the pendency of the first appeal, plaintiffs filed a motion to tax costs of the trial against defendants, which the trial court granted in part, assessing court costs and expert fees in the amount of $49,862.92 against defendants. Defendants then filed an appeal of the trial court's judgment assessing costs of the trial. This Court ordered that the two appeals be consolidated.

Based on our review of the record and the applicable law, we affirm the trial court's March 24, 2016 judgment finding defendants jointly liable to plaintiffs for the loss of use damages awarded by the jury. We also affirm the trial court's March 2, 2016 pre-trial judgment challenged by plaintiffs in their answer to the first appeal. Finally, we affirm the trial court's January 6, 2017 judgment assessing costs and expert fees.

FACTUAL BACKGROUND

Robert Chris Jordan is the sole member and manager of FIE and Iberia Tigers, LLC ("Iberia Tigers"), through which Mr. Jordan acquires mostly commercial properties for investment purposes. In May 2007, FIE purchased Unit 5–C in the New Jax Brewery building, located at 640 Decatur Street, which is managed and operated by New Jax. FIE later transferred ownership of Unit 5–C ("the condo") to Iberia Tigers. According to Mr. Jordan, the condo was purchased as an investment property and for his personal use to entertain family, friends, or clients during visits to New Orleans.

Within the first year of acquiring the condo, Mr. Jordan observed water intrusion in areas of the condo directly below the roof of the building. Mr. Jordan reported the water intrusion to Earl Weber, Jr., the President of the Board of New Jax, and requested that repairs be made to the roof to stop the water intrusion.

In April 2008, finding that New Jax had not yet made successful attempts to repair the roof and stop the water leaks, Mr.

241 So.3d 381

Jordan began withholding the monthly condo assessment fees owed by FIE to New Jax.

In July 2009, New Jax made attempts to discover the source of the water leaks by cutting holes in the ceiling and walls of the condo; during this process, New Jax tarped off the perimeter of the condo with Visqueen plastic sheeting. At that point, Mr. Jordan found the condo uninhabitable and unusable for its intended purpose. Between July 2009 and October 2011, Mr. Jordan corresponded with New Jax by email about ongoing water leaks, damage to furniture, and the presence of black mold growth in the condo;¹ along with each complaint, he constantly sought updates from New Jax on the status of the roof repairs. During that same two year period, New Jax reported several times to Mr. Jordan that attempts were being made to find the source of the water leaks, that roofers were making repairs to the roof, and that the condo was being monitored for further water leaks. However, by 2012, the roof had not been repaired successfully; and, on March 28, 2012, plaintiffs² instituted this suit for damages against New Jax.

In July 2012, plaintiffs hired Greg Fisher, a roofing contractor and consultant, to perform a visual inspection of the roof above the condo and prepare a report of his findings. During his initial inspection, Mr. Fisher observed that limited remedial repair work was being undertaken on the roof, and he recommended that water tests be performed to assess the effectiveness of that work. In October 2012, Mr. Fisher returned for a second visual inspection and he observed that a significant component of the roof—the standing seam metal roofing—had been completely removed and no temporary waterproofing material had been installed to protect the building from the weather. He returned a week later and observed that Visqueen had been installed to cover the portion of the roof that had been removed; however, he did not observe progress in the completion of the repairs. Mr. Fisher discussed his observations with Mike Storms, New Jax's maintenance manager overseeing the roof repairs, and he recommended that New Jax hire a "competent roofer" to perform all necessary roof repairs due to the complex nature of the building's roofing system. Subsequently, by letter dated November 21, 2012, plaintiffs formally requested that New Jax hire a competent roofer to repair the roof.

In December 2012, New Jax hired Paul Couget to install a new roof over the condo. In January 2013, Mr. Couget submitted an invoice to New Jax for the completed installation of a "standing seam snap lock roof system complete with all necessary trim, flashing, and closures." Despite these repairs, Mr. Jordan continued to find water leaks in the condo, and he reported to New Jax that the condo had sustained further water damage and mold growth during the months that the roof was removed. In April 2013, plaintiffs and New Jax came to an agreement that New Jax would gut the affected areas of the condo but no interior repairs would take place until the recurring leaks were repaired successfully.

241 So.3d 382

In April 2014, New Jax held an annual Board meeting at which all new Board members were elected. In July 2014, the newly elected Board of New Jax hired a new property management company and a roofing consulting firm, BE–CI, to assess the roof. On August 4, 2014, BE–CI issued a detailed report of its findings and recommendations for necessary repairs. In September 2014, New Jax hired Acadian Waterproofing to complete the repairs outlined in BE–CI's report.

In May 2015, a hard rain tested the roof repairs and provided confirmation that the roof and water leaks had been repaired successfully. Soon thereafter, repair work began on the interior of the condo. All repairs were complete by September 15, 2015—seventy-five months after Mr. Jordan had first reported that the condo was unusable.

PROCEDURAL BACKGROUND

Plaintiffs filed this suit for damages against New Jax on March 28, 2012. In the original petition, plaintiffs alleged that, since 2009, water leaking from the roof of the New Jax property had caused extensive damage to their condo, making it uninhabitable, as a direct result of New Jax's negligence in failing to maintain and repair the roof.³ Plaintiffs sought damages for the loss of use of the condo, subsequent rental value, the cost of reconstruction, and the loss of personal enjoyment.

On March 11, 2013, plaintiffs filed their first supplemental and amended petition alleging further damages as a result of New Jax's "ineffective, negligent effort to repair the exterior roof,"⁴ and naming New Jax's liability insurer, Lafayette Insurance Company ("Lafayette"), as a jointly liable defendant. Subsequently, in a third supplemental and amended petition, filed on March 27, 2014, plaintiffs asserted an additional claim against Lafayette for bad faith pursuant to La. R.S. 22:1892, and, after being granted leave to file a fourth supplemental and amended petition on July 7, 2015, plaintiffs added a claim for the recovery of attorney's fees pursuant to La. R.S. 9:1121.104.

After answering the petition, New Jax filed a reconventional demand against plaintiffs for failure to pay monthly condo assessment fees as required by New Jax's Declaration and By–Laws. New Jax asserted that plaintiffs had failed to pay their monthly condo assessment...