Billups v. B.C. Enter. Grp., Inc.

• Decision Date: 07 November 2012
• Docket Number: No. 2012–CA–0281.,2012–CA–0281.
• Citation: 104 So.3d 577
• Parties: Geraldine BILLUPS v. B.C. ENTERPRISE GROUP, INC., Louisiana Real Estate Inspection Incorporated, and Wells Fargo Bank, N.A.
• Court: Court of Appeal of Louisiana — District of US

104 So.3d 577

Geraldine BILLUPS

v.B.C. ENTERPRISE GROUP, INC., Louisiana Real Estate Inspection Incorporated, and Wells Fargo Bank, N.A.

No. 2012–CA–0281.

Court of Appeal of Louisiana, Fourth Circuit.

Nov. 7, 2012.

J. Alex Watkins, Capitelli & Wicker, New Orleans, LA, for Plaintiff/Appellant.

Kent A. Lambert, Brian M. Ballay, Baker Donelson Bearman Caldwell & Berkowitz, PC, New Orleans, LA, for Defendant/Appellee.

(Court composed of Chief Judge CHARLES R. JONES, Judge MAX N. TOBIAS, JR., and Judge DANIEL L. DYSART).

CHARLES R. JONES, Chief Judge.

[4 Cir. 1]The Appellant, Ms. Geraldine Billups, appeals an adverse judgment granting the motion for summary judgment of the Appellee, Wells Fargo Bank, N.A. After a review of the law in this matter, we affirm the judgment of the district court.

On August 29, 2008, Ms. Billups purchased a home at the municipal address of 1476–78 N. Miro St. in New Orleans (hereinafter “the property”) with funds loaned by Appellee/defendant Wells Fargo Bank, N.A. (hereinafter “Wells Fargo”) under a HUD-administered 203(k) rehabilitation loan pursuant to Section 203(k) of the National Housing Act, 12 U.S.C. § 1709(k), and the regulations promulgated thereunder. The Section 203(k) program was designed to allow the borrower to get just one mortgage loan, at a long-term fixed rate, to finance both the acquisition and the rehabilitation of the property. As to the instant matter, a list of HUD ¹ approved 203(k) consultants was to be provided to Ms. Billups for her selection by Wells Fargo.

On or before the closing of the loan with the bank, Wells Fargo informed Ms. Billups that Andrew Polmer, owner/employee of Louisiana Real Estate [4 Cir. 2]Inspection Incorporated (“LREI, Inc.”), would be her 203(k) consultant. Mr. Polmer was responsible for making “draw inspections” ² for Ms. Billups throughout the rehabilitation and renovation of the property.

Furthermore, as part of the loan application, Ms. Billups entered into a contract for the renovation of the property on June 26, 2008, with Espy L. Cornin, who is both the president and representative of the defendant B.C. Enterprise Group, Inc. (hereinafter “B.C. Enterprise”) The subject contract provided for a completion of the renovations within 120 days of commencement. B.C. Enterprise started work on the property on or about January 2009.

In June 2009, Andrew Polmer wrote an inspection report for the sixth (6th) draw based upon an inspection dated June 17, 2009, which suggested that an escrow disbursement of $14,512.50 be made to Ms. Billups. The report indicated that only 54% of the total job had been completed. Furthermore, between June and October 2009, B.C. Enterprise failed to complete any additional work on the property. During this time, Ms. Billups claimed that she was disabled by a medical condition, despite her repeated requests that the work proceed. Subsequently, on or about November 2009, Ms. Billups' son inspected the property and discovered that the rehabilitation and renovation work still had not been completed by B.C. Enterprise. Therefore, in November [4 Cir. 3]2009, B.C. Enterprise was formally discharged ³ for non-performance of its obligations.

On December 14, 2009, Harvey Williams with Louisiana Statewide Renovator, L.L.C., completed an inspection report that found numerous deficiencies in the work performed by B.C. Enterprise. The deficiencies included improperly installed electrical wiring, plumbing, gas lines, drywall, heating system and roof. The estimated value of the work actually completed by B.C. Enterprise was $15,000, rather than the $85,752.63 actually paid.⁴

After Ms. Billups filed her Petition for Damages on June 17, 2010, Wells Fargo answered and filed a motion for summary judgment, praying for dismissal of all claims asserted by Ms. Billups. At the hearing on the motion in December 2011, counsel for Ms. Billups argued that Wells Fargo was liable for gross negligence because it validated the contractor (Mr. Cornin) who failed to complete the work and the consultant (Mr. Polmer) who ultimately confirmed the work. The district court disagreed with Ms. Billups and granted Wells Fargo's motion for summary judgment. This timely appeal followed.

In her sole assignment of error, Ms. Billups argues that the district court erred in granting Wells Fargo's motion for summary judgment as genuine issues of material fact are present in this case.

[4 Cir. 4]The Supreme Court, in Oubre v. Louisiana Citizens Fair Plan, 11–0097, pp. 20–21 (La.12/16/11), 79 So.3d 987, 1002–03,reh'g denied (1/20/12), cert. denied, 11–1252, summarized the summary judgement procedure as follows:

... a motion for summary judgment is a procedural device used when there is no genuine issue of material fact for all or part of the relief prayed for by a litigant. Schultz v. Guoth, 10–0343, p. 5 (La.1/19/11), 57 So.3d 1002, 1005;Samaha v. Rau, 07–1726, pp. 3–4 (La.2/26/08), 977 So.2d 880, 882–83;Duncan v. U.S.A.A. Ins. Co., 06–363, p. 3 (La.11/29/06), 950 So.2d 544, 546,seeLa.Code Civ. Proc. art. 966. An issue is genuine “if reasonable persons could disagree.” Smith v. Our Lady of the Lake Hosp., Inc., 93–2512, p. 27 (La.7/5/94), 639 So.2d 730, 751 (quoting W. Schwarzer, Summary Judgment Under the Federal Rules: Defining Genuine Issues of Material Fact, 99 F.R.D. 465, 481 (1983)). A fact is “material” when its existence or nonexistence may be essential to plaintiff's cause of action under the applicable theory of recovery. Id.;Penalber v. Blount, 550 So.2d 577, 583 (La.1989). Any doubt as to a dispute regarding a genuine issue of material fact must be resolved against granting the motion and in favor of a trial on the merits. Sassone v. Elder, 626 So.2d 345, 352 (La.1993).

Nevertheless, summary judgments are favored under the law as they are designed to secure the just, speedy, and inexpensive determination of every action. La.Code Civ. Proc. art. 966(A)(2). Accordingly, rules are liberally construed to accomplish these ends, and a motion for summary judgment will be granted “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact, and that mover is entitled to judgment as a matter of law.” La.Code Civ. Proc. art. 966(B).

Initially, the burden of producing evidence at the hearing on the motion for summary judgment is placed on the mover who can ordinarily meet that burden by submitting affidavits or by pointing out the lack of factual support for an essential element in the opponent's case. La.Code Civ. Proc. art. 966(C)(2); Schultz, 10–0343 at p. 6, 57 So.3d at 1006;[4 Cir. 5]Samaha, 07–1726 at p. 4, 977 So.2d at 883. “At that point, the party who bears the burden of persuasion at trial (usually the plaintiff) must come forth with evidence (affidavits or discovery responses) which demonstrates he or she will be able to meet the burden at trial.” Samaha, 07–1726 at p. 4, 977 So.2d at 883 (quoting Wright v. Louisiana Power & Light, 06–1181, p. 16 (La.3/9/07), 951 So.2d 1058, 1069–70). Thus, “[o]nce the motion for summary judgment has been properly supported by the moving party, the failure of the nonmoving party to produce evidence of a material factual dispute mandates the granting of the motion.” Id.

Although Ms. Billups raises one assignment of error on appeal, the argument she presents is two pronged. First, she argues that summary judgment was inappropriate because genuine issues of material fact exist as to whether Wells Fargo is liable under a gross negligence theory for the negligent inspection of her home; and, second, she argues that genuine issues of material fact exist as to whether Wells Fargo is liable under the theory of apparent authority.

I.

As to her first argument, Ms. Billups argues that there was gross negligence associated with Wells Fargo's contractor validation because the contractor's license of Mr. Cornin was facially invalid. Ms. Billups argues that although she signed a waiver relieving Wells Fargo of liability associated with the contractor approval process, the waiver is invalid if Wells Fargo's conduct amounts to gross fault.

Ms. Billups argues that the document containing the waiver included those documents Wells Fargo required, including the “copy of current contractor/ builder license.” The contract being validated was for $90,000, while the license specified that the contractor could only perform contracts less than $75,000. Thus, Ms. [4 Cir. 6]Billups maintains that said contract is invalid on its face. She further notes that Wells Fargo admitted to what Ms. Billups characterized as “intentional ignorance” of the invalid contract during the deposition of Rochelle Pietsch of Wells Fargo:

Q: So the contract value could go up, and it wouldn't get back to your department?

A. Not necessarily.

Q: Are you aware that the HOCA ⁵ did go up in this case?

A: I am based on the documents provided, yes.

Based on the above colloquy, Ms. Billups concludes that the district court erred in granting the Wells Fargo's motion for summary judgment because the question of whether the evidence presented amounts to gross negligence is a question for the trier of fact, precluding summary judgment.

Wells Fargo submits that Ms. Billups' arguments are not on point for the issues presented in the instant matter. Wells Fargo argues that in order to defeat the motion for summary judgment, it was only required to point out to the district court that there was an absence of factual support for one or more elements essential to Ms. Billups' case. At that time, Ms. Billups only had to come forward with affirmative evidence sufficient to satisfy her evidentiary burden of proof at trial.⁶Thus, Ms. Billups, per Wells Fargo, did not satisfy her evidentiary burden to defeat the motion for summary judgment as to her claims for gross negligence. Further, Wells Fargo argues that Ms. Billups at all times was well aware of the...