Bedding Plus, LLC v. Commerce P'ship #1155

• Docket Number: 2023 CA 0021
• Decision Date: 20 June 2023
• Parties: BEDDING PLUS, LLC v. COMMERCE PARTNERSHIP #1155
• Court: Court of Appeal of Louisiana — District of US

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BEDDING PLUS, LLC v. COMMERCE PARTNERSHIP #1155

No. 2023 CA 0021

Court of Appeals of Louisiana, First Circuit

June 20, 2023

On Appeal from the 19th Judicial District Court In and for the Parish of East Baton Rouge State of Louisiana Trial Court Docket Number C633068, Sec. 26 Hon. Richard "Chip" Moore, Judge Presiding

Charles A. Schutte, Jr. Baton Rouge, Louisiana Counsel for Defendant/Appellant, Commerce Partnership # 1155

Kay H Michiels Alexandria, Louisiana Counsel for Defendant/Appellee, Mickey Leblanc

BEFORE: WELCH, PENZATO, AND LANIER, JJ.

PENZATO, J.

Commerce Partnership #1155 appeals a trial court judgment granting summary judgment in favor of Mickey Leblanc, dismissing Commerce's claims against Leblanc with prejudice.For the following reasons, we reverse and remand for further proceedings.

PERTINENT FACTS AND PROCEDURAL HISTORY

Commerce Partnership #1155, as landlord, and American Wholesale Mattress, Inc., as tenant, entered into an agreement for the lease of property located at 9450-C Airline Highway, Baton Rouge, Louisiana.Between October 23, 2000, when the original lease was signed, and May 7, 2008, the lease was amended five times to adjust various terms not pertinent here.The lease required American Wholesale to pay Monthly Rental, defined as "the minimum monthly rent payable by Tenant to Landlord during the Term" at the rates provided in the lease.Monthly Rental was "due and payable" on the first day of each month.The lease also required American Wholesale to pay a pro rata share of common area maintenance expenses (CAM), taxes, and insurance.

On June 23, 2011, Commerce, American Wholesale, and Bedding Plus, LLC executed an "Assignment, Assumption of Lease, Estoppel and Sixth Amendment to Lease," wherein American Wholesale assigned, transferred, and set over unto Bedding Plus, and Bedding Plus accepted, all right, title, and interest in the lease.With Commerce's consent, Bedding Plus assumed American Wholesale's obligations under the lease from and after the date of the assignment.Notably, the assignment stated that, unless specifically and expressly set forth, nothing shall be construed to modify, waive, or affect (i) any of the provisions, covenants, or conditions in the lease; (ii) any of American Wholesale's obligations under the lease; (iii) any rights or remedies of Commerce under the lease, or (iv) any default by American Wholesale under the lease.The lease similarly stated that notwithstanding any assignment of the lease, American Wholesale "shall, nevertheless, remain liable" to Commerce for the performance of all obligations under the lease, and any assignment by American Wholesale "shall be subject to the terms, conditions and provisions" of the lease.

On July 1, 2011, American Wholesale sold all of its movable assets to Bedding Plus and also transferred "[w]hatever interest if any, [it] may have to rent or lease or otherwise occupy the premises or store located at 9450 Airline Highway, Baton Rouge" to Bedding Plus.American Wholesale was dissolved on January 25, 2012, and its assets and liabilities were divided among its shareholders, Michael Monk, Sean Bryan, and Mickey Leblanc.

On September 9, 2014, Bedding Plus filed a "Petition to Terminate the Lease and for Refund of Sums Improperly Collected by Landlord" against Commerce.Bedding Plus alleged that Commerce "routinely" overbilled and/or incorrectly billed various charges from 2012 through 2014 and failed to comply with the terms of the lease.Particularly, Bedding Plus alleged that Commerce billed it for charges that predated May 31, 2011, despite Commerce's acknowledgement in the assignment that all Monthly Rental and charges were "current as of May 31, 2011."^[1]As a result, and also due to Commerce's alleged failure to provide accurate accounting information, Bedding Plus sought judicial recognition that the lease was terminated, reimbursement for overpayments, and available attorney fees, expenses, and costs.

In response, Commerce filed a reconventional demand against Bedding Pius and asserted third-party demands (incorrectly identified as reconventional demands) against, among others, American Wholesale and Leblanc.^[2]SeeLa. C.C.R arts. 1061, 1111.Commerce alleged that Bedding Plus, as assignee, and American Wholesale, as the original tenant obligated under the lease, breached the lease by abandoning the premises and failing to pay rent and other expenses due under the lease.Commerce sought monetary damages in the amount of accelerated rent and unpaid CAM charges, insurance, payment of tax obligations, and any amounts due under the lease for the remainder of the term.Finally, Commerce sought to hold Leblanc personally liable for debts owed by American Wholesale as a result of its dissolution.^[3]

On March 24, 2022, Leblanc filed the subject motion for summary judgment seeking to dismiss Commerce's claims against him.Leblanc asserted that Commerce and Bedding Plus settled their claims and, as a result, Commerce was not entitled to recover additional damages from Leblanc.Leblanc contended that, through the assignment, Bedding Plus and American Wholesale became solidary obligors as to the lease.Leblanc argued that any violation or default of the lease was, undisputedly, due to the sole fault of Bedding Plus, because it enjoyed exclusive possession and use of the leased premises via the assignment.Therefore, Leblanc asserted that Bedding Plus owed and paid 100% of the solidary obligation in the settlement with Commerce.SeeLa.C.C. art. 1804.Leblanc further reasoned that the compromise between Commerce and Bedding Plus benefitted American Wholesale and/or Leblanc in the amount of Bedding Plus's portion.SeeLa.C.C. art. 1803.Thus, Leblanc maintained that, because Bedding Plus's virile share was 100% and American Wholesale/Leblanc's virile share was 0%, Commerce had no right to recover additional sums from American Wholesale and/or Leblanc.

Leblanc also asserted that he and American Wholesale were not in default of the lease, because Commerce failed to give notice of default and an opportunity to cure, as purportedly required by the lease.Section 13.01 of the lease states, in part,

.. .Default by Tenant.In the event any of the following shall occur:

(a) Tenant fails to pay any installment of Rent within ten (10) days after it is due; or

(b) Tenant is in default of any of its other obligations under this Lease and Tenant fails to commence to cure any such default within fifteen (15) days after notice of the occurrence thereof from Landlord and thereafter fails to complete the cure of such default with due diligence within thirty (30) days after notice of the occurrence thereof from Landlord; or

* * * *

[T]hen and in any such event, Landlord may, in addition to such other rights and remedies which are provided for by law or equity or elsewhere in this Lease: [the lease then sets forth various remedies available to the Landlord].

Leblanc contended that he first became aware that Bedding Plus allegedly breached the lease on February 3, 2015, when he was served with the third-party demand filed by Commerce.Leblanc argued that he was denied the opportunity to cure the alleged violations of the lease within 15 days as provided by the lease.Consequently, Leblanc maintained that Commerce was not entitled to recover damages from American Wholesale and/or Leblanc for default of the lease.

Commerce opposed the motion, asserting that its agreement with Bedding Plus was not a "settlement."Nevertheless, Commerce acknowledged that Bedding Plus signed a consent judgment "admitting that it owed Commerce" a sum of money, plus legal interest and costs.^[4]Commerce and Bedding Plus also purportedly executed a forbearance agreement wherein both parties agreed to dismiss their respective claims upon payment by Bedding Plus.Commerce maintained that the forbearance agreement did not extinguish any obligation owed to Commerce by Leblanc or American Wholesale.Finally, as to Leblanc's notice contention, Commerce asserted that notice of default for failure to pay a monetary obligation owed under the lease, as occurred here, and an opportunity to cure were not required.

The trial court granted Leblanc's motion at the conclusion of the contradictory hearing on August 15, 2022.The trial court referenced a purported "stipulation whereby the matter was settled after Bedding Plus paid its portion" as the basis of its ruling.A written judgment was signed on August 30, 2022, granting Leblanc's motion and dismissing all claims by Commerce against Leblanc with prejudice.

Commerce now appeals.

DISCUSSION

Motion for Summary Judgment: Standard, Evidence, and Standard of Review

The summary judgment procedure is expressly favored in the law and is designed to secure the just, speedy, and inexpensive determination of non-domestic civil actions.La.C.C.P. art 966(A)(2).After an adequate opportunity for discovery summary judgment shall be granted if the motion, memorandum, and supporting documents show there is no genuine issue as to material fact and the mover is entitled to judgment as a matter of law.La.C.C.P. art. 966(A)(3).In determining whether summary judgment is appropriate, appellate courts review evidence de novo under the same criteria that governs the trial court's determination of whether summary judgment is appropriate.Kelley v. Estate of Kelley, 2021-0178(La.App. 1st Cir.10/4/21), 330 So.3d 667, 670.

The burden of proof rests with the mover.If the mover will not bear the burden of proof at trial on the issue that is before the court on the motion for summary judgment, the mover is not required to negate all essential elements of the adverse party's claim, action, or defense....