Ebert v. Howell

• Docket Number: 23-588,23-589
• Decision Date: 07 March 2024
• Citation: 381 So. 3d 990
• Parties: Lowell EBERT and Suzette Reeves Ebert v. Gary HOWELL Gary Howell v. Suzette Reeves and Lowell Ebert
• Court: Court of Appeal of Louisiana

381 So.3d 990

2023-588 (La.App. 3 Cir. 3/7/24)

Lowell EBERT and Suzette Reeves Ebert

v.Gary HOWELL

Gary Howell

v.Suzette Reeves and Lowell Ebert

23-588

23-589

Court of Appeal of Louisiana, Third Circuit.

March 7, 2024

APPEAL FROM THE TENTH JUDICIAL DISTRICT COURT, PARISH OF NATCHITOCHES, NO. 93,852, (consolidated with 93,899), HONORABLE DESIREE D. DYESS, DISTRICT JUDGE

T. Taylor Townsend, Shantel M. Wem pren, T. Taylor Townsend, LLC, Post Of fice Box 784, Natchitoches, Louisiana 71458, (318) 238-3612, Counsel for Plaintiffs/Appellants: Lowell Ebert, Suzette Reeves Ebert

Christopher M. Sylvia, 720 San Antonio Avenue, Many, Louisiana 71449, (318) 431 5009, Counsel for Defendant/Appellee: Gary Howell

Court composed of Van H. Kyzar, Charles G. Fitzgerald, and Gary J. Ortego, Judges.

FITZGERALD, Judge.

₁This appeal stems from the trial court’s judgment denying the plaintiffs’ claims for declaratory relief and specific enforcement of an option to purchase immovable property.

FACTS AND PROCEDURAL HISTORY

On April 15, 2019, the plaintiffs, Lowell Ebert and Suzette Reeves Ebert, and the defendant, Gary Howell, executed in authentic form a lease agreement with an option to purchase immovable property. Howell was the owner/lessor, and the Eberts were the tenant/lessees. Howell and the Eberts were close friends when the agreement was signed.

In relevant part, the lease provided for a two-year initial term, running from April 15, 2019, through March 14, 2021, with monthly rental payments in the amount of $2,726.85. The lease also contained an option for the Eberts to purchase the property "at any time throughout the initial term of the foregoing lease" for $429,000.00.

It is undisputed that the leased property would be used as a bed and breakfast. It is also undisputed that during the lease’s initial term, the parties orally modified the agreement on at least two occasions: first, for the payment of property taxes; and second, for the payment of flood insurance premiums. In addition, it is undisputed that the Eberts continued to reside in the bed and breakfast for approximately twenty-four months after the March 14, 2021 termination date, and that they continued paying monthly rent until December 2022 when Howell refused to deposit those funds. The relationship between the parties soured over time, culminating in a dispute as to their rights and obligations under the option to purchase.

Then, on March 8, 2023, the Eberts filed a Petition for Declaratory Judgment and to Enforce Option to Purchase. A few weeks later, Howell responded by filing ₂a motion to evict the Eberts from the leased premises. All actions were tried together by agreement on May 18, 2023. At the close of evidence, the trial court took the matter under advisement. Thereafter, on July 12, 2023, the trial court issued written reasons and a final judgment. In essence, the trial court denied the Eberts’ actions for declaratory relief and specific performance but granted Howell’s motion for eviction. The judgment was amended on September 29, 2023. This appeal by the Eberts followed.¹

On appeal, the Eberts assert the following assignments of error:

1. The Court erred in finding that the Lease with Option to Purchase expired on March 20, 2021[,] and was reconducted after the initial term by operation of law.

2. The Trial Court erred by not finding that the Lease with Option to Purchase was validly extended by oral agreement of the parties in March 2021 during the initial term.

LAW AND DISCUSSION

[1] A trial court’s factual findings are reviewed on appeal for manifest error. Stobart v. State, through Dep’t of Transp. & Dev., 617 So.2d 880 (La.1993). On the other hand, pure legal questions are reviewed de novo. Evans v. Lungrin, 97-541 (La. 2/6/98), 708 So.2d 731. Because both assignments of error concern the existence of an oral agreement to extend the lease, we address them together in the discussion below.

[2] On appeal, the Eberts frame the issue before us as follows: "The primary issue before the court is whether the Lease with Option to Purchase was extended by oral agreement of the parties." The Eberts argue that the parties verbally agreed to extend the lease during the initial term, and that this verbal agreement had the effect of ₃extending the option to purchase. Howell disagrees, arguing that no such agreement was reached during the lease’s initial term.

On this issue, the trial court made the following finding of fact, as noted in its written reasons:

The parties entered into "oral modifications" that included that the Eberts pay the property taxes and, most importantly, about July of 2021, after the original lease term expired, to continue the leaseto "through COVID-19" as COVID-19 severely impacted the Eberts’ use of the property as a commercial Air B & B establishment.

Thus, according to the trial court, "[w]hen the Eberts continued to occupy the house a week after the term expired, i.e., March 20, 2021, it became a month-to-month lease by operation of law." Id. (citing La.Civ.Code arts. 2721 and 2723).

As the trial court put it:

[U]pon reconduction of the subject lease ‘ on March 20, 2021, the Eberts’ tenancy converted to a month to month basis without a definite term, therefore, the Eberts’ unexercised option to purchase terminated.

The Eberts argue that the parties "modified" the original lease when they agreed to continue it "through COVID-19," thus reviving the option to purchase. This court demurs. The initial lease agreement terminated and a month-to-month reconductive lease began in mid-March of 2021. The discussion between Ms. Ebert and Mr. Howell to "modify" the contract "through COVID-19" came too little too late. The initial term of the original lease agreement had already expired, and any oral modification of the reconductive lease could neither revive the option to purchase past the initial term as described above nor confect a new option to purchase finding that there was no meeting of the minds as to price as commanded by La.Civ.Code art. 2620 as Mr. Howell demanded the new appraisal price of $455,000.00 to be the purchase price which the Eberts now object. Lastly, it is uncontested that the oral modification claimed by the Eberts was not subsequently reduced to writing pursuant to La.Civ.Code arts. 2440 and 1839 thus failing to "meet the formal requirements of the sale it contemplates" pursuant to Article 2620.

Id. (footnote omitted).

In short, the above finding of fact—that the parties extended the lease by oral agreement in July 2021, which was after the initial term of the lease had expired—is not manifestly erroneous: that finding is reasonably supported by the record. But ₄that finding has no bearing on the enforceability of the option to purchase. Why? Well, for starters, a lease and an option to buy or sell are separate and distinct contracts.

In relevant part, La.Civ.Code art. 2668 defines a lease as "a synallagmatic contract by which one party, the lessor, binds himself to give to the other party, the lessee, the use and enjoyment of a thing for a term in exchange for a rent that the lessee binds himself to pay." Louisiana Civil Code Article 2681 then addresses the form requirements for a lease, stating in part that "[a] lease may be made orally or in writing."

On the other hand, La.Civ.Code art. 2620 defines an option to buy or sell as "a contract whereby a party gives to another the right to accept an offer to sell, or to buy, a thing within a stipulated time. An option must set forth the thing and the price, and meet the formal requirements of the sale it contemplates." Hence, an option to buy or sell immovable property must be in writing and executed by authentic act or act under private signature. La.Civ.Code art. 2440.

[3–5] In addition, "a contract that is not required by law to be in writing may be modified by a subsequent oral agreement[.]" Schindler Elevator Corp. v. Long Prop. Holdings, L.L.C., 50,199, p. 12 (La. App. 2 Cir. 11/18/15), 182 So.3d 233, 241. By way of example, a lease of immovable property that is reduced to writing can be modified by a subsequent oral agreement. By contrast, an option to buy or sell immovable property—for which the law requires written form—can only be modified by subsequent written agreement. Hoth v. Schmidt, 220 La. 249, 56 So.2d 412 (La. 1951).

In Hoth, the Louisiana Supreme Court reiterated this statement of law, explaining that an "option to sell real estate is not valid unless given in writing. ₅Consequently, an extension of the time stipulated in a written promise or option to buy or sell real estate must be in writing" Id. at 412 (emphasis added).

Here, the Eberts failed to secure an extension of the option in writing. This failure is fatal to their appeal. Whether there was an oral agreement to extend the lease is immaterial. The Eberts’ assignments of error are therefore without merit.²

DISPOSITION

The trial court judgment of July 12, 2023, as amended on September 29, 2023, is affirmed. The costs of this appeal are assessed to Lowell Ebert and Suzette Reeves Ebert.

AFFIRMED.

Kyzar, Judge, concurs and assigns reasons.

KYZAR, J., concurring with additional reasons.

₁While I concur in the result reached by the majority, and the reasons set forth, I write separately to address a line of cases relied upon by the trial court in reaching the decision being affirmed by the majority opinion. In its combined judgment and reasons for judgment, the trial court stated as follows:

Generally, unexercised option rights, including the right to purchase, terminate with the original lease and are not carried over when a lease is a reconducted. Davis v Elmer, App. 1 Cir.2015, 166 So.3d 1082, 2014-1298 (La.App. 1 Cir. 3/12/15).

Here, the subject lease was offered into evidence as proof of the agreement between the parties, and as such, it is valid and enforceable. It provides for a term of two years, from April 15, 2019 until March 14, 2021. When the Eberts continued to occupy the house a week

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