94-2092 La.App. 4 Cir. 11/16/95, New Orleans Riverwalk Associates v. Robert P. Guastella Equities, Inc.

• Court: Court of Appeal of Louisiana
• Writing for the Court: Before SCHOTT; SCHOTT
• Citation: 94-2092 La.App. 4 Cir. 11/16/95, New Orleans Riverwalk Associates v. Robert P. Guastella Equities, Inc., 664 So.2d 151 (La. App. 1995)
• Decision Date: 16 November 1995
• Parties: 94-2092 La.App. 4 Cir

Page 151

664 So.2d 151

94-2092 La.App. 4 Cir. 11/16/95

NEW ORLEANS RIVERWALK ASSOCIATES v. ROBERT P. GUASTELLA EQUITIES, INC., et al.

ROBERT P. GUASTELLA EQUITIES, INC. v. NEW ORLEANS RIVERWALK ASSOCIATES, et al.

Nos. 94-CA-2092, 94-CA-2093.

Court of Appeal of Louisiana Fourth Circuit.

Nov. 16, 1995.

Reasons for Denying Rehearing by

Judge Lobrano Dec. 19, 1995.

Writ Granted April 8, 1996.

William R. Forrester, Jr., William S. Penick, Thomas M. Benjamin, Lemle & Kelleher, New Orleans, and Marie R. Yeates, Sheryl L. Hopkins, Gwen J. Samora, Vinson & Elkins, Houston, Texas, for New Orleans Riverwalk Associates, New Orleans Riverwalk Limited Partnership, Connecticut General Life Insurance Company, Rouse-New Orleans, Inc. & Rouse Company.

William E. Brown, Covington, Jacques F. Bezou, Robert H. Matthews, Bezou & Matthews, Mandeville, for Robert P. Guastella Equities, Inc., Robert P. Guastella, Charles Kovacs, Donald Guastella, David Guastella, Darren Guastella, and Debra Guastella.

Before SCHOTT, C.J., and BYRNES and LOBRANO, JJ.

[94-2092 La.App. 4 Cir. 1] BYRNES, Judge.

In this consolidated case, New Orleans Riverwalk Associates, New Orleans Riverwalk Limited Partnership, Connecticut General Life Insurance Company, Rouse-New Orleans, Inc. and the Rouse Company (collectively "Riverwalk"), appeals a judgment in favor of Robert P. Guastella Equities, Inc. (collectively "Guastella") for damages arising from a lease agreement. Guastella answered the appeal. We amend and affirm.

On October 10, 1988 Guastella signed a ten-year lease agreement with a five-year renewal term with Riverwalk. Guastella built a Howard Johnson restaurant known as HJ's Great American Cafe ("HJ's Cafe") on Spanish Plaza next to the entrance to Riverwalk mall. Guastella was responsible for constructing the restaurant with Riverwalk's approval of the plans. Riverwalk did not approve Guastella's plans to build a higher level floor or drainage wall to aid in preventing flooding. HJ's Cafe opened in January 1989. After encountering various problems, including many days of flooding, Guastella filed for bankruptcy.

In December 1989 Riverwalk began eviction proceedings in civil district court and filed a petition against Guastella for past due rent, attorney's fees and interest, for termination of the lease and for writ of sequestration. Guastella filed [94-2092 La.App. 4 Cir. 2] Chapter 11 proceedings in federal bankruptcy court, and the eviction proceedings were stayed in civil district court. The bankruptcy court granted Guastella's motion to assume the lease, provided it brought the past rent current and began paying future rent on time. Guastella paid rent for February through May 1990 and a $6,000 partial payment on October 30, 1990, but Guastella did not pay for rent accrued from May 1989 through January 1990.

On November 8, 1990 Guastella, the former tenant, brought an action in civil district court against Riverwalk, lessor, for intentional wrongdoing, bad faith breach of lease, conspiring to commit unfair trade practices and intentional tort. Guastella claimed that Riverwalk attempted to drive Guastella out of business when Riverwalk tried to stop liquor sales, refused to fix drainage problems, interfered with the air conditioning system for two and one-half months, tried to cut off live entertainment as well as the outside bar and brought in competitors. Guastella also claimed that Riverwalk failed to provide for security.

In December 1990 the bankruptcy court terminated the lease and Guastella vacated the premises. Thereafter, the cases in civil district court were consolidated. The trial court granted two peremptory exceptions asserted by Riverwalk. The trial court dismissed Guastella's future lost profits claim on the grounds of res judicata based on the claim that the bankruptcy court had evicted Guastella. The trial court also dismissed all damage claims arising from the temporary restraining order issued by the bankruptcy court, which enjoined Guastella from use of outside entertainment and an outside bar. This court granted Guastella application for writs on the exception concerning future lost profits and ordered that the future loss claim be tried.

[94-2092 La.App. 4 Cir. 3] After a jury trial commenced on October 11, 1993, the jury reached its verdict on October 28, 1993. In answering the jury interrogatories, the jury found that Riverwalk committed four breaches of the lease in bad faith; negligently and intentionally interfered with Guastella's business to prevent Guastella from meeting its obligations for the payment of the rent due under the lease; and conspired to commit an unfair trade practice. The jury allocated the following damages for the four problems:

Drainage                            $250,000
                              Air Conditioning                    $148,000
                              Restrictions on entertainment       $150,000
                              Restrictions on outdoor bar         $300,000
                

The jury found that Guastella failed to mitigate the drainage problem in the amount of $35,000. The jury also awarded Guastella $300,000 for the loss of the net leasehold investment. The jury awarded Guastella $14,800,000 for future lost profits, and the jury found that Guastella failed to mitigate future lost profits in the amount of $4,000,000. Guastella's total future lost profits, reduced for failure to mitigate were $11,913,000. The trial court reduced the total jury award to $9,530,400 based on the jury's finding that Riverwalk was 80 percent at fault, and Guastella was 20 percent at fault.

The trial court awarded prejudgment interest and attorney's fees in the amount of $450,000 to Guastella based on the jury's finding of unfair trade practice. The trial court found that The Rouse Company was liable in solido with Riverwalk based on the jury's finding that The Rouse Company conspired with Riverwalk to commit an unfair trade practice and to interfere with Guastella's business.

[94-2092 La.App. 4 Cir. 4] With respect to Riverwalk's claims, the jury awarded Riverwalk $187,406 for unpaid rent, $143,380 in interest, and $72,000 in liquidated damages for Guastella's breach of the lease for a total of $402,786. The trial court awarded Riverwalk $25,000 in attorney's fees.

After the trial court rendered its judgment of January 7, 1994 and its amended judgment on May 6, 1994, including its award of legal fees, Riverwalk appealed, and Guastella answered the appeal.

On appeal Riverwalk contends that Guastella: failed to provide evidence of causation or proof of the four elements of past damages; has no claim for future loss profits; failed to prove leasehold improvements by the best evidence; and has no claim for attorney's fees under the statute. Riverwalk also claims that the jury erred in its conspiracy findings, and the trial court erred in awarding prejudgment interest on future loss profits.

Guastella argues that the trial court erred in: applying 20 percent comparative negligence to damages awarded for bad faith breach of lease and unfair trade practice; finding that Guastella failed to mitigate damages after eviction; and awarding liquidated damages and attorney's fees to Riverwalk. Guastella avers that members of the Guastella family stated causes of action for intentional infliction of emotional distress and other intentional torts.

CAUSATION

Findings as to fault are factual and should be upheld on appeal unless clearly wrong. Garrett v. Celino, 489 So.2d 335 (La.App. 4 Cir.1986). Where there is a conflict in the testimony, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review. Virgil v. American Guarantee and Liability Ins. Co., 507 So.2d 825 (La.1987); Moore v. Gencorp, [94-2092 La.App. 4 Cir. 5] Inc., 92-2049 (La.App. 4 Cir. 6/30/94), 641 So.2d 592, 598. Where there are two permissible view of the evidence, the fact finder's choice between them cannot be manifestly erroneous. Rosell v. ESCO, 549 So.2d 840 (La.1989). To reverse a fact-finder's verdict, the appellate court must find from the record that a reasonable factual basis does not exist for the verdict, and that the record establishes the verdict is manifestly wrong. Stobart v. State through Dept. of Transp. and Development, 617 So.2d 880 (La.1993). Although the reviewing court must accord deference to the fact finder, it must be cognizant of its constitutional duty to review the facts, not merely to decide if it would have interpreted the facts differently, but to determine whether the trial court's verdict was manifestly erroneous, clearly wrong based on the evidence, or clearly without evidentiary support. Ambrose v. New Orleans Police Department Ambulance Service, 93-3099 (La. 7/5/94), 639 So.2d 216, 221.

Guastella provided evidence supporting its claims that Riverwalk breached the lease agreement in bad faith, intentionally interfered with the operation of the restaurant, and caused the tenant's business to fail.

Riverwalk rejected the plans of Guastella's Roland Alpha, the restaurant's architect, to build a four inch slab to prevent water from running into the building and to design the building with a six inch curb or retainer wall to keep water out. Mrs. Deborah Guastella testified that Guastella was not allowed to install a canopy in the front of the cafe like the one in front of LeMoyne's Landing. Instead Guastella used umbrellas over outside tables. A canopy would have provided outside customers with more protection from the rain than the individual table umbrellas.

[94-2092 La.App. 4 Cir. 6] Riverwalk complains that Guastella failed to show that it flooded on days that Guastella claimed; however, Guastella employees testified that small amounts of rain caused flooding in the cafe on days when it did not rain throughout the City. Although Kurt Steiner, Riverwalk's expert certified public accountant testified that there was no water in the City's nearest water gauge on June 30, 1990, Guastella...