Hoover v. Hoover

• Decision Date: 15 May 1975
• Docket Number: No. 6423,6423
• Citation: 313 So.2d 358
• Parties: Mrs. Betty Albert Crow HOOVER v. Rodney E. HOOVER and John C. Dodt, III.
• Court: Court of Appeal of Louisiana — District of US

Page 358

313 So.2d 358

Mrs. Betty Albert Crow HOOVER v. Rodney E. HOOVER and John C. Dodt, III.

No. 6423.

Court of Appeal of Louisiana, Fourth Circuit.

May 15, 1975.

Frank J. D'Amico, New Orleans, for plaintiff-appellant.

Cecil M. Burglass, Jr., New Orleans, for defendant-appellee John C . Dodt, III.

Before SCHOTT, MORIAL and BEER, JJ.

SCHOTT, Judge.

Plaintiff filed suit against her husband defendant Hoover and defendant Dodt on a promissory note dated March 16, 1971, for $33,000 alleging that she was induced to release a collateral mortgage note securing the note sued on by representations from defendants that her claim was secured by properties at 736--738 and 812--814 Frenchman Streets. In a supplemental and amending petition she further alleged that her funds were used to improve the two mentioned properties as well as 730--732 Frenchman Street, that all of the properties were owned by Dodt, and that Dodt had been unjustly enriched thereby.

This suit was dismissed as against Hoover because plaintiff and Hoover were married and not judicially separated at the time the suit was filed. Following a judicial separation a subsequent suit was filed by plaintiff against her husband and the two cases were consolidated for trial.

The trial court rendered judgment in favor of plaintiff against Hoover on the note in the amount of $33,000 plus interest, attorneys' fees and costs, and in favor of plaintiff against Dodt in the amount of $8,800. The judge found that Dodt had been unjustly enriched in that amount with respect to the property at 736--738 Frenchman Street, but he rejected the claim of unjust enrichment as to the other two properties. Plaintiff has appealed from that judgment not with respect to the original $8,800 award pertaining to the property at 736--738 but only as to the dismissal of her claims pertaining to the other two properties.

Plaintiff and Hoover became acquainted in 1970 and were married on May 1, 1971. In the meantime Hoover, a real estate man who was specially interested in renovation and restoration of old buildings, prevailed upon plaintiff to provide him with financial assistance in his ventures. This assistance included not only the $33,000 loan to Hoover on the note but additional sums in the form of checks to Hoover's order between March 15 and September 22, 1971. In connection with the note plaintiff was originally provided with security in the form of a pledge to her of a $50,000 collateral mortgage note which in turn was secured by a mortgage on the properties at 730--732 and 736--738 Frenchman Street. Dodt's liability on the $33,000 note was expressly limited to the collateral security pledged. In order to understand the facts a summary is here provided of the transactions regarding each peice of property.

730--732 Frenchman Street:

This was acquired by Dodt from a Mrs. Foote in December, 1970, for $25,000. On February 8, 1971, Dodt sold a one-half interest in the property to Hoover by means of a typical homestead financed transaction. Dodt sold to Homestead Savings Association for $26,500 cash, and on the same day the property was resold to Dodt and Hoover for $31,500 credit. On April 30, 1971, Dodt sold his remaining half interest along with interests in two other properties (including 736--738 Frenchman discussed below) for $7,000 represented by a promissory note payable on demand. This sale was recorded in the mortgage records of the Parish on May 24, 1971. On October 19, 1971, this property was sold by Dodt and Hoover to one Dr. Holditch in a homestead transaction in which Dodt and Hoover sold to Homestead Savings Association for $50,000 cash and Homestead Savings Association resold to Dr. Holditch for $38,400 credit. Attached to the sales are releases of the $31,500 mortgage given on February 8, 1971, by Dodt and Hoover, and of the $50,000 collateral mortgage of March 16, 1971. In connection with this transaction a second mortgage was given by Dr. Holditch to Hoover for $9,600. The evidence shows that this second mortgage note was then purchased from Hoover by Dodt's company for $5,342.19.

The record shows that Dodt became interested and involved in this property before plaintiff came upon the scene. As record owner of the property he had begun some renovation and had utilized the services of Hoover for that purpose. Plaintiff raises many questions about the ultimate disposition of this property which she claims cast suspicion upon Dodt and demonstrate that he was taking advantage of her in order to enrich himself. She asks why was it necessary for Dodt to join Hoover in the conveyance to the Homestead in October if he had already conveyed his interest to Hoover in April. She questions the authority of Hoover to release the collateral mortgage note, she attempts to cast suspicion on everyone else involved in the Homestead transaction of October 19, and she particularly complains about the fact that Dodt in the end holds a $9,600 second mortgage note on the property which is now owned by Holditch. But upon our review of the record we find that these questions and complaints are satisfactorily answered by Dodt and that they do not support plaintiff's claim of unjust enrichment on his part.

The record is abundantly clear that Hoover's penchant for spending large sums of money on renovation was only exceeded by his optimism that these ventures would somehow become profitable. The record is likewise clear that Dodt was of some financial substance and that he and Hoover were close friends and associates. Whether it was their intention for Hoover to purchase this property from Dodt in February, 1971, when according to the record Hoover acquired only a one-half interest, the fact remains that Dodt sold his remaining interest to Hoover on April 30. Because this was an all credit transaction we can see why the Homestead would require Dodt to join Hoover in the sale in October since Dodt had retained a vendor's privilege on the property. The record further shows that Hoover was somewhat desperate for the Holditch sale to pass. With plaintiff's full understanding, agreement and cooperation Hoover had used the $50,000 collateral mortgage note to secure an additional loan of $12,000. When the Holditch sale was about to take place, Hoover's $12,000 loan was due and it developed that Holditch could not take title without borrowing an additional $9,600 on a second mortgage. Hoover could not carry the mortgage and Dodt purchased it from him for the $5,342.19. With these funds as well as the other cash he realized from this sale Hoover was able to pay off the $12,000 loan, retrieve the $50,000 collateral mortgage note and have it cancelled in connection with the sale of the property.

Plaintiff testified that Dodt repeatedly assured her that he was going to repay her whatever funds she expended on this property. Dodt denied that he owed her anything on this property and maintained that when the property was finally sold to Holditch he came out even and realized no profit whatsoever. Dodt's testimony is supported by the record and in any event the evidence is not sufficient to support plaintiff's position that Dodt profited on this house at her expense or was unjustly enriched by her expenditures. We see nothing sinister about Dodt's purchase of the second mortgage note. Holditch's position was at best shaky and Dodt's purchase of the $9,600 second mortgage note for $5,342.19 was hardly a bargain. Had the sale fallen...