Carriere v. Frank A. Occhipinti, Inc.

• Decision Date: 11 October 1990
• Docket Number: No. 90-CA-233,90-CA-233
• Citation: 570 So.2d 43
• Parties: Shirley Hartmann, Wife of and Richard P. CARRIERE v. FRANK A. OCCHIPINTI, INC. 570 So.2d 43
• Court: Court of Appeal of Louisiana — District of US

Page 43

570 So.2d 43

Shirley Hartmann, Wife of and Richard P. CARRIERE v. FRANK A. OCCHIPINTI, INC.

No. 90-CA-233.

570 So.2d 43

Court of Appeal of Louisiana Fifth Circuit.

Oct. 11, 1990.

Rehearing Denied Dec. 17, 1990.

Writ Denied Feb. 22, 1991.

Marshall J. Favret, Thomas J. Lutkewitte, New Orleans, for plaintiffs/appellees.

Stewart F. Peck, New Orleans, for defendant/appellant.

Before GAUDIN, GRISBAUM and WICKER, JJ.

WICKER, Judge.

The Bank of Louisiana appeals a judgment rendered in an eviction proceeding in favor of the plaintiffs, Shirley Hartmann Carriere and Richard P. Carriere. That judgment ordered Bank of Louisiana to vacate immovable property, and it terminated a lease of that property. The issue is the competing rights of a lessor and the lessee's mortgagee with regard to possession to the property. We reverse.

The Carrieres are owners of immovable property in Metairie. They leased this property for five years to Frank A. Occhipinti Inc. on April 23, 1982. Occhipinti built a restaurant on the property with financing provided by Gulf Federal Savings and Loan Association. To accommodate and protect Gulf Federal, the Carrieres and Occhipinti amended the lease on January 10, 1983, and March 1, 1983; and the amended lease was recorded.

Occhipinti refinanced the loan with Bank of the South and amended the lease again on June 26, 1987. He also executed a collateral mortgage for $1,200,000.00 in favor of Bank of the South, using his leasehold interest and the improvements as collateral. Bank of Louisiana has since acquired the assets of Bank of the South, including this collateral mortgage.

Occhipinti filed for Chapter 11 protection under the Bankruptcy Code, which he later converted to Chapter 7, on March 28, 1989. The trustee in bankruptcy abandoned the leasehold interest and improvements on May 31, 1989. Shortly after, the Carrieres served Occhipinti with notice of default, and when the default was not cured, with a notice to vacate the premises on July 7, 1989. The Carrieres then filed an eviction proceeding against Occhipinti.

A few days later, on July 25, 1989, Bank of Louisiana filed a petition for executory process and in due course purchased the Occhipinti's interest at a sheriff's sale on September 20, 1989. The Carrieres then amended their eviction petition to name Bank of Louisiana, demanding termination of the lease and vacation of the premises.

The trial judge declared the lease at an end and ordered Bank of Louisiana to vacate, recognizing a "lessor's privilege" on the property. "[T]he defendant mortgagee, Bank of Louisiana in New Orleans, did not obtain a subordination of the ground lease to its mortgage on the property. The result of this oversight is the priming of the mortgage by the chronologically superior ground lease."

Bank of Louisiana complains of several alleged errors: the judge failed to recognize that it could legally own the leasehold and improvements separate from the land and that it should not be evicted from its own property; the judge improperly ruled that the lease predated the mortgage, that a lessor's privilege applies to immovable property, and that an eviction is a proper procedure to enforce a lessor's privilege; the judge failed to recognize that the privilege had been waived, had been extinguished by the termination of the lease, and/or had terminated prior to the hearing; the judge found the issue of subordination relevant and/or failed to find that the Carrieres' rights had been subordinated to those of Bank of Louisiana; the judge failed to find that Bank of Louisiana had no obligations to the Carrieres under the lease; and the judge failed to recognize that the Carrieres were estopped by deed from evicting it.

The competing equities here are difficult to resolve. Bank of Louisiana argues that it should, by virtue of its mortgage, have the unlimited use and possession of the buildings on the Carrieres' property, without payment of any rent, and despite the termination of the lease with its reversionary clause. The Carrieres argue that they should have, by virtue of the lease agreement with Occhipinti, the complete ownership of the buildings free and clear of any mortgage in favor of the Bank of Louisiana and despite the bank's having purchased Occhipinti's interest at the sheriff's sale.

The only issue raised by the Carrieres in their pleadings and in the judgment was their right, as lessors, to terminate the lease and evict Occhipinti and/or its successor, Bank of Louisiana. The ownership of the improvements and the rights of the mortgagee were never at issue and were in fact not adjudicated at trial, and the mortgage itself is not in evidence.

The lease contract is the law between the parties. Bank of Louisiana's rights to possession, if any, must flow from that lease agreement and its amendments.

The Carrieres and Occhipinti signed their first lease agreement on April 23, 1982. It anticipated that Occhipinti would construct at its own cost a building, driveways, and parking area and would provide a bond to indemnify the Carrieres against any liens. Occhipinti agreed to keep the property free of...