Rose v. Johnson

• Decision Date: 27 September 2006
• Docket Number: No. 2006-518.,2006-518.
• Citation: 940 So.2d 181
• Parties: Theophilus ROSE v. Bernard E. JOHNSON and Celebrity Professional Services, Inc.
• Court: Court of Appeal of Louisiana — District of US

940 So.2d 181

Theophilus ROSE v. Bernard E. JOHNSON and Celebrity Professional Services, Inc.

No. 2006-518.

Court of Appeal of Louisiana, Third Circuit.

September 27, 2006.

Neil G. Vincent, Allen & Gooch, Lafayette, LA, for Plaintiff/Appellee, Theophilus Rose.

Derriel C. McCorvey, Lafayette, LA, for Defendant/Appellant, Bernard Johnson.

Court composed of OSWALD A. DECUIR, MARC T. AMY, and BILLY HOWARD EZELL, Judges.

AMY, Judge.

The defendant allegedly purchased property on behalf of the plaintiff. When the property faced foreclosure, the defendant asked the plaintiff for assistance. The plaintiff discussed the matter with his brother-in-law who agreed to purchase a portion of the property for a sum that would allow the defendant to pay off the mortgage. Prior to the purchase, the brother-in-law imposed certain conditions, to which the defendant allegedly agreed. In addition to the cash sale, a donation inter vivos was executed, in which the defendant donated the remaining property to the plaintiff. The plaintiff filed suit to enforce the validity of the act of donation. The trial court ruled in the plaintiff's favor. The defendant now appeals, arguing that the trial court erred in finding that he intended to donate the property, in not finding the donation was a product of error or duress, and in not considering whether the donation was a nullity under La.Civ. Code art. 1498. For the following reasons, we affirm.

Factual and Procedural Background

In 1994, Bernard Johnson purchased thirty-one acres of land located on Moss Street in Lafayette, Louisiana. Because he was unable to pay the mortgage in 1996, Johnson contacted his nephew, Theophilus Rose, to assist him in making the payments and preventing foreclosure on the property. Rose, who testified that he wanted to purchase the property himself but lacked the funds to do so, discussed Johnson's predicament with his brother-in-law, Dr. Bryan LeBean, Sr. Rose and LeBean decided that LeBean would procure a loan and purchase 11.5 acres of the property for $213,000.00. This sum would pay off the mortgage, unpaid taxes, and another encumbrance. According to Rose, Johnson would receive the remaining sum of $25,000.00.

At trial, LeBean explained that he imposed two conditions on his purchase. First, he did not want to buy the 11.5 acres from Johnson because he "couldn't get along with Bernard Johnson." LeBean wanted Johnson to sell the property to Rose, who would then sell it back to him. Second, LeBean did not want to own any property adjacent to property that Johnson owned; therefore, he wanted Johnson to transfer the remaining property to Rose. Rose and LeBean both testified that they informed Johnson of the conditions and that he agreed to them.

LeBean subsequently procured a loan to buy 11.5 acres of the property. Johnson, Rose, and Rose's wife went to the office of Alfred Boustany, a notary-attorney, to execute the transfers of the property. Johnson and Rose entered into a cash sale deed for the 11.5 acres, and Johnson executed a donation inter vivos in favor of Rose for the remaining 19.5 acres. Boustany notarized the transactions in the presence of two witnesses. The parties were given copies of the documents when they left Boustany's office.

According to Johnson, he signed the cash sale deed first and then signed the donation believing that it was a copy of the cash sale deed. He maintained that he did not read the donation. Johnson testified that a week had passed before he realized that he had donated the remaining property to Rose. He further testified that he did not intend to donate the property to Rose and that had he known of this condition, he would not have sold a portion of the property to LeBean. According to Johnson, he told Rose that he unknowingly signed the donation document and asked that Rose transfer the property back to his name, to which Rose allegedly agreed. Johnson testified that he later received a letter from Rose stating that he spoke with Boustany and that he had "changed his mind"; he was not going to transfer the property back to Johnson.

Johnson testified that he then used a 1983 power of attorney that he held on Rose's behalf to execute a quitclaim deed and put the property back in his name. Rose testified that Johnson did not tell him his intentions or ask for his authority to do so. Once the quitclaim deed was executed, Johnson sold the property to Celebrity Professional Services, Inc., a family-owned company in which he was president. According to Rose, Johnson sent him a letter offering to sell him the property for $300,000.00. Rose refused and subsequently filed this suit to have the quitclaim deed annulled. Johnson responded by filing a reconventional demand claiming that the donation inter vivos was invalid and that the initial transfer to Rose was a nullity.

Following a bench trial, the trial court found in Rose's favor. It upheld the donation and annulled the quitclaim deed, which thereby nullified the sale to Celebrity Professional Services, Inc. It is from this judgment that Johnson appeals, designating the following as error:

I. The trial court erred in concluding that the factual findings of this case uphold the inter vivos donation from Johnson to Rose.

a. The trial court erred in concluding the facts of this case indicate that Johnson intended to donate his property inter vivos to Rose.

b. The trial court erred in concluding the facts of this case did not indicate that Johnson donated his property inter vivos as a product of fraud or duress. Or that if those facts did exist, in not basing its ruling on that.

II. The trial court erred in failing to consider whether the inter vivos donation at hand is a nullity under LSA-C.C. Art. 1498.

Discussion

Donative Intent

Johnson argues that the donation inter vivos should be held invalid because he never intended to donate the property. Furthermore, he argues that the authentic act itself is insufficient to prove donative intent insofar as he did not know that he signed a donation.

"A donation inter vivos (between living persons) is an act by which the donor divests himself, at present and irrevocably, of the thing given, in favor of the donee who accepts it." La.Civ.Code art. 1468. Every donation inter vivos of immovable property shall be passed before a notary public and two witnesses or it shall be deemed null and void. La.Civ.Code art. 1536. "Although the donation may be valid as to form, the substantive requirements of a divestment and donative intent must be fulfilled in order to effect a valid donation." Fogg v. Fogg, 571 So.2d 838, 841-42 (La.App. 3 Cir.1990), writ denied, 575 So.2d 372 (La.1991). Donative intent is a factual issue and is reviewed on appeal under the manifest error standard of review. Thomson v. Thomson, 34,353 (La. App. 2 Cir. 1/24/01), 778 So.2d 736.

In its oral reasons for judgment, the trial court stated as follows with regard to the alleged donation:

Now, you [Johnson] have filed a reconventional demand through your lawyers which says that: I didn't know what I was signing at the time that I signed a donation. By your own admission, the witnesses and the notary were present at the time you and all parties signed the documents. So it is clearly in proper form.

Insofar as the donation was executed in the presence of a notary and two witnesses, we find no error in the trial court's determination that the donation has met the form requirements of La.Civ.Code art. 1536. Therefore, the pertinent issue is whether the trial court was manifestly erroneous in determining that Rose proved that Johnson intended to donate this property to him.

Rose testified that he, not Johnson, first located the property in 1989. Because of financial difficulties, Rose was not able to purchase the property. Rose testified that because his uncle previously offered him financial assistance, he called Johnson and: "I told him about the property. And I asked him would he help me. And he said, `Yes.'" Johnson purchased the property in 1994 and put it in his name. When asked if he had any objections to putting the property in Johnson's name, Rose answered: "No, I trusted him. We were like father and son. We didn't have any problems."

Rose testified that two years after the property was acquired, Johnson began experiencing financial problems, and the property was facing foreclosure. Rose testified that Johnson called and asked him for help; he agreed. Because Rose was not able to borrow the money himself, he "asked [LeBean] would he do a loan. We went and took out a loan to bring up the arrear." Rose testified that, after making the mortgage current, he and LeBean paid back the loan.

One year later, the property was again facing foreclosure. Rose stated that Johnson asked him what he was going to do. Since the two could not get financing elsewhere, Rose again turned to LeBean. Rose testified as follows:

I pleaded with him to help me save the land because he didn't want to do more business with my uncle. . . . Dr. LeBean was unable to borrow all the money but he put a down payment on the—for the property. So what I done was, he wanted nine acres of land and I lent him two and a half acres of land to get him more collateral so he could have enough to put—to make it where he was able to get it without coming up with the money, without coming up with the down payment.... I told my uncle exactly what I was doing. And my uncle said, "Well, Fish, you gotta do something. You gotta do something." I say, "Unc," I say, "if I get this land," I say, "I don't want no strings attached with you coming and trying to force me to do this, that, or one thing or another."

When asked whether he discussed LeBean's conditions with his uncle, Rose stated:

I told him. I told him and also Dr. LeBean and I went to Neil Vincent's office, which was Dr. LeBean's attorney. And they had a conference call and Dr. LeBean told my uncle that the only way that he would purchase...