Truschinger v. Pak

• Court: Court of Appeal of Louisiana
• Writing for the Court: KLEES, WARD and WILLIAMS, JJ
• Citation: Truschinger v. Pak, 503 So.2d 208 (La. App. 1987)
• Decision Date: 29 May 1987
• Docket Number: No. CA-5496.,CA-5496.
• Parties: Hanina TRUSCHINGER v. Helen Pak, Buddy PAK, Mary Tsai, Mark Tsai and Mitchell Serio.

503 So.2d 208

Hanina TRUSCHINGER v. Helen Pak, Buddy PAK, Mary Tsai, Mark Tsai and Mitchell Serio.

No. CA-5496.

Court of Appeal of Louisiana, Fourth Circuit.

February 12, 1987.

Rehearing Denied March 19, 1987.

Writ Granted May 29, 1987.

R. Louis Carruth, New Orleans, for defendant-appellant.

Gary R. West, New Orleans, for plaintiff-appellee.

Before KLEES, WARD and WILLIAMS, JJ.

WILLIAMS, Judge.

This is an appeal by defendant Mitchell Serio from a decision of the trial court finding him liable to plaintiff Barbara Truschinger for $80,000.00 in damages for his refusal to consent to a sublease.

Defendant Serio owns 140 Carondelet Street in New Orleans. He leased the premises to Kenneth Upton individually and as president of Flame-N-Burger, Inc. The lease provided:

Lessee is not permitted to rent or sublet or grant use or possession of the premises to any other party without the written consent of the lessor, and then only in accordance with the terms of this lease. Should lessee decide to sub-let, permission must be obtained in writing through lessor or lessor's agent and such sublease shall be handled by lessor's agent at expense of the herein lessee.

In 1977, Upton and Flame-N-Burger subleased to Art Spiropoulos, and defendant signed the sublease. This sublease stated that: "sublessee Spiropoulous has the right to sublease the premises upon obtaining the consent of the sublessor Flame-N-Burger, which consent shall not be unreasonably withheld." Thereafter, Mrs. Spiropoulos (Barbara Portlock) assumed the obligations of the sublease pursuant to a community property settlement. She later entered into a sublease with plaintiff. The sublease was signed by Kenneth Upton, but not by defendant Serio. Plaintiff operated a restaurant at the location for three years. She then tried to find a new owner for the business because she had to move due to family obligations. She entered into an "Offer to Sublease" with Helen Pak, Buddy Pak, Mary Tsai, and Mark Tsai. The agreement provided that there would be a sublease to the Paks and Tsais, and a sale of plaintiff's business to them for $80,000.00. Defendant, however, refused to consent to the sublease unless he received one-half of the purchase price, i.e. $40,000.00. As a result of this demand, plaintiff claimed that she was unable to sell to the Paks and Tsais. After a trial on the merits, defendant was found to have unreasonably withheld his consent to the sublease, and plaintiff was awarded the $80,000.00 in damages. It is from this ruling that defendant now appeals.

Article 2725 of the Louisiana Civil Code states:

The lessee has a right to underlease, or even to cede his lease to another person, unless this power has been expressly interdicted.

The interdiction may be for the whole, or for a part; and this clause is always construed strictly.

Louisiana law, therefore, clearly allows a lessor to prohibit a lessee from subleasing. If, however, the lease permits subleasing with the lessor's consent, that consent may not be unreasonably withheld. Caplan v. Latter & Blum, Inc., 468 So.2d 1188, 1190 (La.1985); Associates Commercial Corp. v. Bayou Management, 426 So.2d 672 (La. App. 1st Cir.1982). See also Illinois Central R. Co. v. International Harvester, 368 So.2d 1009 (La.1979) at 1013-14 for a full discussion of the abuse-of-rights doctrine.

At trial, plaintiff testified that defendant refused to allow her to sublease unless she paid one-half of the purchase price to him. Defendant set forth a number of reasons why he refused to approve a sublease. Plaintiff contended that these reasons were never communicated to her prior to trial. The trial court obviously made a factual determination that these reasons were insufficient or not credible enough to support defendant's rejection of the proposed sublease. We have reviewed the record and cannot find that it was manifest error for the judge to make such a determination. Canter v. Koehring Co., 283 So.2d 716 (La.1973).

Defendant also contends that the sublease between plaintiff and Mrs. Spiropoulos is invalid because he never gave his consent as required by the agreement between Spiropoulos and Upton. Plaintiff contends that defendant impliedly consented to the sublease. At trial, defendant testified that he was aware for over three years that plaintiff had entered into a sublease and had accepted rental payments from her. At no time did he express disapproval of the sublease.

The issue of whether defendant gave his implied consent to plaintiff's sublease with Mrs. Spiropoulos is a factual one. Illinois Central at 1012 (in Illinois Central the trial court found no consent to have been given based upon the facts of the case). Once again we have reviewed the record in order to determine whether there was sufficient evidence upon which the trial court could have found that defendant had given his implied consent to the subleasing agreement. We cannot conclude that the trial court was in error in deciding that the implied consent was given based upon the facts of the case. Canter.

For the foregoing reasons, the decision of the trial court holding defendant Serio liable to plaintiff for damages and legal interest is affirmed. All costs of this appeal are to be paid by appellant.

AFFIRMED.

WARD, J., dissents with reasons.

WARD, Judge, dissenting.

While the majority has affirmed in deference to the Trial Court's finding of fact, I believe the critical issue in this appeal is one of law. What standard is to be applied to the lessor's refusal to consent to a sublease? I believe the Trial Court and the majority erred in deciding the case on the issue of whether Serio unreasonably withheld his consent to sublease.

I respectfully submit that the issue is whether Serio abused his rights as a lessor. There is a difference, and I believe the lease itself is dispositive of the issue which is before the Court.

In general, when a lease contains no interdiction as to subleasing, then a lessee has the right to sublease freely. La.C.C. Art. 2725. But a lease may wholly interdict and prohibit a sublease; or the lease may partially interdict the right of a lessee to sublease. Art. 2725. When a lessor partially interdicts the right of a lessee to sublease by stipulating that it may not be done without the lessor's written consent, then the lessor has a right to withhold his consent, subject only to the limitation that he may not abuse his rights as a lessor. Illinois Central Gulf R. Co. v. International Harvester Co., 368 So.2d 1009 (La. 1979). When the lease stipulates that the lessee may not sublease without the written consent of the lessor, and additionally stipulates that the lessor shall not unreasonably withhold his consent, then there is a question of fact as to whether the lessor unreasonably withheld his consent. Caplan v. Latter & Blum, Inc., 468 So.2d 1188 (La.1985).

In the instant case, the lease contains a partial interdiction which prohibits the lessee from subleasing without...