92 1544 La.App. 1 Cir. 3/11/94, Belle Pass Terminal, Inc. v. Jolin, Inc.
| Decision Date | 11 March 1994 |
| Citation | 634 So.2d 466 |
| Parties | 92 1544 La.App. 1 Cir |
| Court | Court of Appeal of Louisiana — District of US |
Michael A. Mayhall, New Orleans, for Belle Pass Terminal, Inc. and Richard P. Guidry.
Peter Feringa, John Olinde and Christoffer Friend, New Orleans, for Jolin, Inc. and Joseph E. Blanchard, Jr.
Alvin J. Bordelon, New Orleans, for Harold Callais.
Frank G. DeSalvo, Venus Masakowski, New Orleans, for Elmo Pitre, Jr.
Stephen E. Caillouet, Thibodaux, for Caillouet Land Co.
Before CARTER, GONZALES and WHIPPLE, JJ.
[92 1544 La.App. 1 Cir. 2] CARTER, Judge.
This appeal arises out of a trial court judgment in a suit for breach of warranty, redhibition, and damages, which was consolidated with a suit on a promissory note.
On or about April 30, 1973, Caillouet Land Corporation (Caillouet) entered into a lease with Joseph E. Blanchard, Jr. (Blanchard) for a 7.5-acre tract of land on Pass Fourchon of Bayou Lafourche in Lafourche Parish. Thereafter, Blanchard assigned the lease to Fourchon Docks, Inc., a corporation in which Blanchard owned a substantial interest. On September 26, 1977, Caillouet entered into another lease agreement with Blanchard for an 8-acre tract of land on Pass Fourchon, which tract was adjacent to the tract covered by the 1973 lease. Thereafter, Blanchard assigned the lease to the Fourchon Docks, Inc. On December 30, 1981, the 1973 and 1977 leases were amended. The amended leases prohibited the sublease, sale, transfer, or assignment of the leases, in whole or in part, without the written consent of Caillouet. Subsequently, Fourchon Docks, Inc. formally changed its name to Jolin, Inc. (Jolin).
On or about April 6, 1989, Belle Pass Terminal, Inc. (Belle Pass) entered into a "Sale and Mortgage" with Jolin. The sale and mortgage provided that Belle Pass purchased the following described property:
Any and all assets and improvements located on properties owned, leased, or rented by Jolin, Inc., Fourchon Docks, Inc. and Joe Blanchard in Fourchon, Louisiana.
The sale and mortgage also contained the following language:
Belle Pass Terminal, Inc. in this Bill of Sale purchases any and all lease rights that Jolin, Inc., Fourchon Docks, Inc. and Joseph E. Blanchard, Jr. may have on the property in Fourchon, Louisiana. Additionally, Belle Pass Terminal, Inc. agrees to abide by, honor, the aforesaid leases.
In consideration for these assets and improvements, Belle Pass executed a promissory note for $2 million with interest at a rate [92 1544 La.App. 1 Cir. 3] of 13%, payable in 120 monthly installments of $29,862.20. The note payments were due on the 15th day of each month, commencing May 15, 1989. The parties further agreed that, in the event Belle Pass prepaid the loan, the balance of the final payment would be $3,583,464.00, less the monthly installments already paid to Jolin on the principal and interest. Belle Pass also agreed to provide insurance coverage on the property in an amount not less than $2 million. The sale and mortgage and note were signed by Richard P. Guidry (Guidry), as president of Belle Pass. The note was personally guaranteed by Guidry and Elmo J. Pitre, Jr. (Pitre).
On that same day, Harold J. Callais (Callais) purchased from Jolin certain movable property for $1 million. Contemporaneously with the execution of the sale of the movable property, sale and mortgage, and note, Jolin, Fourchon Docks, Inc., Blanchard, Belle Pass, Guidry, individually and as president of Belle Pass, and Pitre, individually and as vice-president of Belle Pass, executed a "To Whom It May Concern" letter. In the letter, the parties acknowledged that Milchem Incorporated and/or Milpark (Milchem), to whom a portion of the property had been subleased, was prepaid on its lease through May 1, 1992, 1 and that once the prepayment period had run and rental payments resumed, those payments would be applied to the monthly mortgage payments due by Belle Pass, Guidry, and Pitre. The "To Whom It May Concern" letter also contained the following language:
Once the note is paid in full, all leases presently held by Jolin, Inc., Fourchon Docks, Inc., and Joseph E. Blanchard, Jr., in effect as of this date are to be transferred to Belle Pass Terminal, Inc., Richard P. Guidry, and Elmo P. Pitre, Jr.
The "To Whom It May Concern" letter also provided that Belle Pass, Guidry, and Pitre would be responsible for the lease payments to Caillouet according to the terms of the lease, but that the [92 1544 La.App. 1 Cir. 4] $6,700.00 in monthly rental would be paid to Jolin, which would in turn send a check for the rent to Caillouet.
Thereafter, the parties encountered some difficulties involving the required insurance coverage and the tardiness of the rental payments to Blanchard. 2 On April 5, 1990, Belle Pass and Callais filed a suit for breach of warranty, redhibition, and damages against Blanchard and Jolin arising out of the sale of movable property and the purported sale and mortgage of the leases under docket number 65,847. In response thereto, Jolin and Blanchard filed numerous exceptions pleading the objections of lack of procedural capacity, prematurity, and nonjoinder of indispensable parties. After a hearing, the trial judge denied the exceptions pleading the objections of lack of procedural capacity and prematurity, but sustained the objection of nonjoinder of an indispensable party. Accordingly, the court ordered Belle Pass and Callais to join Guidry and Pitre as additional plaintiffs in the action.
On November 14, 1990, Belle Pass and Callais filed a supplemental petition to name Guidry and Pitre as plaintiffs. Guidry appeared in the petition and assumed the status of co-plaintiff with Belle Pass and Callais. Pitre retained his own counsel, but refused to assume the status of co-plaintiff. Thereafter, on February 1, 1991, Pitre filed a supplemental and amending petition, appearing and assuming the status as co-plaintiff with Belle Pass, Callais, and Guidry.
Jolin and Blanchard answered the petitions, generally denying any liability to Belle Pass, Callais, Guidry, and Pitre. In the [92 1544 La.App. 1 Cir. 5] answer, Jolin and Blanchard alleged that no payments on the $2 million note had been received since March 15, 1990, and requested a credit for the value received by Belle Pass, Callais, Guidry, and Pitre, in the event the court granted the relief requested in the main demand. Jolin and Blanchard also alleged that Guidry, Pitre, and Callais were personally liable for the debts in that these individuals were the alter ego of Belle Pass. Jolin and Blanchard also incorporated a reconventional demand in the answer, naming as defendants-in-reconvention Belle Pass, Guidry, Pitre and Callais. In the reconventional demand, Jolin and Blanchard alleged reformation of the contract, 3 tortious interference with a contract and unfair trade practices, 4 and personal liability on the part of the Belle Pass shareholders. Thereafter, the parties filed numerous exceptions, motions for summary judgment, and other pretrial motions. 5
On January 22, 1991, Jolin filed a suit on a promissory note under docket number 67,730. Named as defendants in this action were Belle Pass, Guidry, Pitre, and Callais. In the petition, Jolin requested recognition of its mortgage and vendor's lien upon the property described in the April 6, 1989, act of sale and mortgage and for the issuance of a writ of sequestration, seizing [92 1544 La.App. 1 Cir. 6] all of the property designated in the sale and mortgage. 6 Thereafter, various exceptions and pre-trial motions were filed by the parties.
Pursuant to a motion and order to consolidate, on June 27, 1991, the suit on the note filed by Jolin, under docket number 67,730, was consolidated with the suit for breach of warranty, redhibition, and damages filed by Belle Pass, Callais, Guidry, and Pitre, under docket number 65,847.
The matter was tried by a jury in late January and early February of 1992. After the close of Callais' case for rescission of the sale of the movables, the trial court granted Jolin's and Blanchard's motion for directed verdict, and Callais' claims against them were dismissed. On February 3, 1992, the jury rendered its verdict on the merits of both the action for breach of warranty, redhibition, and damages and the action on the promissory note. The jury's verdict was as follows:
1. Did Jolin, Inc. and Joseph Blanchard, Jr. sell the leases from Caillouet
Land Corporation to Belle Pass Terminal, Inc., Richard Guidry, and Elmo
Pitre, Jr. on April 6, 1989
YES ___ NO X
[If your answer is "YES", go to Question # 2; If your answer is "NO", go
to Question # 6.]
2. Did the Caillouet Land Corporation leases to Jolin, Inc. and Joseph
Blanchard, Jr., in effect on April 6, 1989, require Caillouet's written
consent to the sale, transfer, or assignment of the leases by Jolin,
Inc. and Joseph Blanchard, Jr.?
YES ___ NO ___
[If your answer is "YES", go to Question # 3; If your answer is "NO", go
to Question # 6.]
3. Did the Caillouet Land Corporation give written consent to the sale,
transfer, or assignment of the leases to Belle Pass Terminal, Inc.,
Richard Guidry, and Elmo Pitre, Jr.?
YES ___ NO ___
[If your answer is "YES", go to Question # 6; If your answer is "NO", go
to Question # 4.]
4. Did the failure of Caillouet Land Corporation to consent to the sale or
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