Ryan v. Doucet

• Court: Court of Appeal of Louisiana
• Writing for the Court: WICKER, J.
• Citation: Ryan v. Doucet, 327 So.3d 577 (La. App. 2021)
• Decision Date: 25 August 2021
• Docket Number: NO. 21-CA-32,21-CA-32
• Parties: Ashton RYAN, Jr. v. Melinda DOUCET

327 So.3d 577

Ashton RYAN, Jr.

v.Melinda DOUCET

NO. 21-CA-32

Court of Appeal of Louisiana, Fifth Circuit.

August 25, 2021

COUNSEL FOR PLAINTIFF/APPELLEE, ASHTON RYAN, JR., Cesar R. Burgos, Robert J. Daigre, Gabriel O. Mondino, George M. McGregor, New Orleans, Leila M. Bonilla

COUNSEL FOR DEFENDANT/APPELLANT, MELINDA DOUCET, Bailey D. Morse, Covington

Panel composed of Judges Susan M. Chehardy, Fredericka Homberg Wicker, and Jude G. Gravois

WICKER, J.

Plaintiff-tenant, Melinda Doucet, appeals the September 8, 2020 trial court judgment in favor of defendant-landlord, Ashton Ryan, in the amount of $141,320.47 for past due rental payments, property taxes, and insurance premiums due pursuant to a Lease Agreement executed between the parties, which also contained an Option to Purchase the leased property. Because we find that the judgment improperly awarded Mr. Ryan monetary damages for his prescribed reimbursement claims for taxes and insurances paid pursuant to the Lease for the years 2003-2007, we amend the trial court judgment to reduce the award by $11,232.66. In all other respects, we affirm the trial court's judgment.

FACTUAL AND PROCEDURAL BACKGROUND

This litigation arises out of an unusual set of facts surrounding a Lease Agreement executed between the parties. On August 23, 2002, Ms. Doucet and Mr. Ryan executed a document titled "Lease Agreement" for a property owned by Mr. Ryan and located at 116 Imperial Woods in Harahan, Louisiana. The Lease Agreement—with a 30-year term—contained various provisions, including a "Purchase Option" provision. The Lease granted Ms. Doucet the option to purchase the property "for the initial price of $170,000.00" and set forth that "all principal payments shall be forfeited by Tenant should Tenant fail to properly exercise the purchase option."

The Lease Agreement was introduced into evidence and provided that Ms. Doucet would pay an "initial installment of $50,000.00 at lease inception and thereafter in equal monthly installments of $1,131.00...payable without deduction, set off, or demand, a percentage of said amount being applied to principal should Tenant exercise the option to purchase...." The Lease also contained a provision stating that Mr. Ryan would be responsible for initial payment of all insurances and taxes on the property; however, the Lease stipulated that, upon demand, Ms. Doucet would reimburse Mr. Ryan for property taxes and insurances paid.¹ The Lease additionally provided for a five-percent late fee or penalty should the monthly rental payments not be made by the 15^th of each month. On December 10, 2002, the parties executed an "Addendum to Lease Agreement," which acknowledged that "the property is encumbered by a mortgage in favor of Hibernia National Bank in the approximate amount of $80,000.00" and that "Lessor will not further encumber or otherwise alienate, in whole or in part, the subject property without the express written consent of Lessee." The Addendum further stated that "Lessee shall have the right to exercise the purchase option at any time."

Concerning cancellation, the Lease contained a provision titled "Defaults and Remedies" which provided that under certain circumstances, including "if tenant shall fail to keep and perform each and every covenant condition and agreement herein...," then, "at the sole option of the Landlord, Tenant's right of possession shall thereupon cease and terminate, and Landlord shall be entitled to the possession of the Property and to remove all persons and property therefrom and to reenter the same without further demand of rent or demand of possession of said Property...." The Lease further provided for the Landlord's right to reimbursement of attorney fees incurred in attempting to collect rent or secure possession of the property upon Tenant's default.

On December 26, 2018, Mr. Ryan filed a "Petition for Eviction, Declaratory Judgment, Breach of Lease and Damages," seeking damages totaling $205,934.99 in past due rental payments, including a 5% late fee on the past due rental payments, as well as reimbursement for taxes and insurances paid pursuant to the Lease. The petition alleged that Ms. Doucet ceased making full rental payments in October 2008, at which time she made a few partial rental payments through July 2012. The petition further alleged that Ms. Doucet ceased making any rental payments whatsoever from July 2012 through the date of the filing of the petition—December 26, 2018.

Ms. Doucet thereafter filed an Answer with various exceptions, including an exception of prescription as to the alleged past-due rental payments, contending that any payments allegedly owed beyond a three-year period from the date of demand were prescribed as a matter of law. In her answer, Ms. Doucet claimed that she learned Mr. Ryan placed an additional mortgage on the property in 2007, which she alleged was in violation of the Lease Addendum and could have affected her ability to obtain clear title to the property. Ms. Doucet further alleged that Mr. Ryan failed to request rental payments or reimbursement of any taxes or insurances paid, and that the parties’ actions during the length of the lease resulted in a modification of the terms of the Lease such that Mr. Ryan, by his silence or inaction, waived his right to assert claims for unpaid rent or other obligations under the Lease.

With her answer, Ms. Doucet further asserted a reconventional demand against Mr. Ryan² seeking reimbursement for nearly $200,000.00 she alleged she expended in improvements to the property, which she described as being in "deplorable" condition at the time of the execution of the Lease. Ms. Doucet further sought specific performance of the Purchase Option under the Lease, seeking title to the property at issue.

Mr. Ryan subsequently filed a "Motion for Summary Judgment on Issue of Lease versus Lease Purchase Agreement and Ms. Doucet's Default," requesting the trial court make a determination that the contract between the parties is a lease agreement with an option to purchase provision, rather than a lease-purchase contract. On May 14, 2019, the trial court rendered a judgment holding that the Lease agreement at issue is a "lease agreement with the option to purchase."³

On March 11, 2020, the trial court issued a judgment, sustaining Ms. Doucet's exception of prescription in part, finding that "the rental arrearages and late payments asserted before November 2, 2015 are prescribed" and further that "ten year liberative prescription applies [to] all remaining balances, such as the insurances and taxes."⁴

The matter proceeded to a bench trial on June 15 and June 24, 2020. At trial, Mr. Ryan testified that he purchased the property at issue from his parents in 1983, and that he had not been to the home since his mother and siblings lived there in 1999. When questioned how he became acquainted with Ms. Doucet, he stated that he believed Ms. Doucet knew Mr. John Lapworth, a contractor who built a home for Mr. Ryan in or around 2000, and that Mr. Lapworth approached him about Ms. Doucet purchasing the home. He testified that his initial intent was not to sell the home but Ms. Doucet asked for an option to be able to buy the house "if at some point in time her economic and credit fortunes got better." Mr. Ryan agreed to that.

Mr. Ryan testified that he, Ms. Doucet, and his then-attorney Greg St. Angelo met to execute the Lease agreement. He testified that all parties carefully reviewed the agreement drafted by Mr. St. Angelo, as evidenced by the fact that certain portions of the Lease Agreement had been scratched out and initialed as amended.

Concerning Ms. Doucet's rental payment history, Mr. Ryan testified that Ms. Doucet paid the initial $50,000.00 installment, which he testified was pre-paid rent that enticed him to agree to lease the property and was a beneficial requirement to allow Ms. Doucet a lower monthly rental payment; she thereafter made timely and full payments for approximately 18 months. He testified that, thereafter, Ms. Doucet would make intermittent payments and, at times, would skip a few months and then write a larger check to catch up. On two occasions, he asked his attorney, Mr. St. Angelo, to contact Ms. Doucet to inquire about the status of her rent payments. Mr. Ryan testified that, during that time frame, Ms. Doucet had three young children and he was not interested in evicting her but wanted to inquire as to her plans to catch up on rental payments. He testified that Ms. Doucet would make promises as to either her father's intents to help get her caught up on rent, or that she was awaiting inheritance or additional money from other sources. He testified that the last payment he received was in July 2012, and that Ms. Doucet resided in the house but had not made one rental payment in approximately eight years.⁵

Mr. Ryan testified that, at the time the Lease was executed, the house was encumbered with an $80,000.00 mortgage with Hibernia National Bank. In 2007, after the "mini perm" loan matured, Hibernia would not renew the loan and he had to renew the loan at Omni Bank, who would approve him. He testified that the Omni (now Iberia) Bank loan was for a total amount of $65,000.00, less than the prior $80,000.00 Hibernia mortgage loan. Mr. Ryan testified to his opinion that the $65,000 mortgage was not in breach of the Lease Addendum because it did not further encumber the property and, in fact, was a lower amount of debt encumbering the property than at the time the lease was executed. Further, he testified that Ms. Doucet never confronted him about the mortgage or indicated that the $65,000.00 mortgage on the property was her reason for non-payment of rent.

Mr. Ryan testified that he paid the Parish and City of Harahan taxes for the property, with the exception of one year when he did not receive a notice of taxes and later found out that Ms. Doucet had paid the taxes that year. Mr. Ryan also testified that he paid all...