Wagner v. Alford

• Decision Date: 30 June 1999
• Docket Number: No. 98-1726.,98-1726.
• Citation: 741 So.2d 884
• Parties: W.L. WAGNER, et ux., Plaintiff-Appellee, v. Stephen R. ALFORD, et al., Defendants-Appellants.
• Court: Court of Appeal of Louisiana — District of US

Page 884

741 So.2d 884

W.L. WAGNER, et ux., Plaintiff-Appellee, v. Stephen R. ALFORD, et al., Defendants-Appellants.

No. 98-1726.

Court of Appeal of Louisiana, Third Circuit.

June 30, 1999.

Writ Denied November 5, 1999.

Thomas Overton Wells, Alexandria, for W. L. Wagner, et al.

James Richard Mitchell, Leesville, for Stephen R. Alford, et al.

Before DOUCE T, C.J., COOKS, DECUIR, AMY and PICKETT, Judges.

AMY, Judge.

The plaintiff condominium owners filed a petition for declaratory judgment seeking enforcement of a purported personal servitude establishing rights on the adjacent resort property. The defendant real estate company filed a reconventional demand alleging that the plaintiffs breached an oral agreement wherein the plaintiffs were to be given title to an adjoining condominium unit in exchange for assisting the defendant's purchase of additional condominiums. The defendant maintained that the plaintiffs breached this agreement by failing to satisfy the contract in full. The lower court found for the plaintiffs in both respects. We reverse the lower court's determination as it relates to the purported servitude and affirm that portion relating to the reconventional demand.

Factual and Procedural Background

The plaintiffs in this matter, W.L. and Nina Wagner, purchased a condominium located in the Fairway Villas Condominium Association in 1990. This condominium complex is adjacent to Toro Hills Resort, a hotel and golf facility in Sabine Parish, Louisiana. Stephen Alford, one of the defendants in this matter, testified that, as early as the 1980s, he was part of a partnership that owned three units at the complex. Afterwards, Rael, Inc., a company in which Alford is the sole stockholder, purchased property in the condominium facility. At the time the parties first bought property in the complex, the Toro Hills facility was owned by Toro Investment Corporation.

Mrs. Wagner testified that, after the 1990 purchase of their condominium, services such as garbage collection, sewerage, water, cable television, and telephone services were provided through the hotel. Alford also testified that, as a condominium owner, his services too were provided through the resort for a monthly fee ranging from an estimated amount as low as $50.00 to $75.00 per month. This fee also included maintenance, parking, and privileges at the golf course.

Mrs. Wagner testified that, as negotiations began for the sale of Toro Hills by Toro Investment Corporation, she and her husband, along with Alford, sought to protect the above-listed services. Mrs. Wagner testified that she, along with Alford, confected a "Service Agreement" listing the services they wanted to safeguard.¹ Her testimony indicates that she and her husband presented their copy of the service agreement to George Gouffray, an employee of Toro Investment Corporation who acted as manager of Toro Hills, and that his staff retyped the agreement. The agreement, which was an exhibit at trial, is written on Toro Hills letterhead and provides, the following:

To: Mr. & Mrs. Wagner

From: George Gouffray—Toro Investment Corp.

Subject: Service Agreement

Date: February 22, 1996

Per our conversation today, please see below the details of the service agreement Toro Hills Resort/Toro Investment Corporation will honor with Mr. & Mrs. Wagner, Condo 4A and 4B.

Services —

1) Present level of services not to be diminished

a. Garbage pickup

b. Sewerage & Water

c. Cable TV & Telephone

d. Upkeep & Maintenance of property

e. Four parking spaces maintained

f. Lifetime golf membership & privileges for family members.

g. Use of personally owned golf cars on golf course

h. Use of all facilities on 265 acres more or less included but not limited to tennis courts, pools, recreation rooms at no additional charges

i. One-half price for motel rooms

j. One-half price for guests golf green fees

k. One-half price for guests golf cart fees

Monthly fee for services will be $75.00 not to increase unless agreed by owner 4A and 4B. Services to be binding on all future owners of property.

The agreement contains the signatures of Mr. and Mrs. Wagner and Gouffray, who signed in his capacity as President of Toro Investment Corp. Gouffray testified that he did not recall the portion of the agreement regarding future owners of the property. Instead, Gouffray stated as follows: "As long as we owned the property, that they could have that agreement." The record indicates that the service agreement was filed with the Clerk of Court for Sabine Parish on July 10, 1996.

In February 1997, Toro Hills, both the hotel and golf facilities, was sold to Alford's company, Rael, Inc. Gouffray's deposition testimony indicates that, during negotiations, he attempted to incorporate the service agreement into the sale of the property, but that Alford refused to buy the property if the agreement was part of the sale. Gouffray stated that he informed the Wagners of Alford's refusal to consider the agreement and that the sale was ultimately completed without the inclusion of the agreement.

Alford testified that following Rael's purchase of Toro Hills, the services outlined in the service agreement were provided for approximately one year. At some point, however, he ceased accepting the $75.00 monthly payments from the plaintiffs. Alford stated that he did not feel that the agreement was valid or binding against Rael and that he stopped accepting the $75.00 payments as he had put together two service packages from which condominium owners could choose and that the plaintiffs never made a choice between the options. He admitted that the new packages presented to the Wagners would result in a higher monthly fee than the $75.00 fee discussed in the original service agreement. The record reveals that many of the services listed in the agreement ultimately ceased to be provided.

In June 1997, the plaintiffs filed a petition for declaratory judgment requesting the court to declare the service agreement binding and enforceable against Rael. Subsequently, Rael filed a reconventional demand against the Wagners asserting that they were indebted to Rael for $49,000.00, the purchase price of the Wagners second condominium at Toro Hills. Thus, Rael asked the court to recognize Rael as the true owner of the condominium or, in the alternative, order the plaintiffs to reimburse the purchase price to Rael.

Following a trial, the lower court ruled in favor of the plaintiffs in both actions. With regard to the declaratory judgment, the court found that the recorded service agreement constituted a valid personal servitude, specifically, a right of use. As for the reconventional demand, the trial court concluded that the plaintiffs had completed the work necessary for receipt of the condominium and that the portion of the oral agreement that had not been completed had been agreed to by the plaintiffs under duress.

The defendants appeal both portions of the lower court's judgment assigning the following as error:

1. The Trial Court erred by upholding the service agreement as a valid personal servitude.

2. The Trial Court erred by denying the reconventional demand of defendants and failed to recognize defendant as the correct owner of condominium Unit 4A.

Discussion

Service Agreement

The defendants assert a variety of deficiencies that arguably prevent the service agreement from being considered a personal servitude. First, they maintain that the agreement was not created by either authentic act or act under private signature and, thus, cannot now be considered a properly confected right of use. They also contend that the plaintiffs have failed to prove that the person entering into the alleged servitude, George Gouffray, had authority to enter into this type of agreement. Further, the defendants maintain that the agreement is invalid as a servitude as it is vague as to the nature and extent of the servitude and, additionally, it requires that the servient estate, in this case Toro Hills, perform services for the plaintiffs which is contrary to the nature of a predial servitude. The plaintiffs continue to argue that the service agreement created a personal servitude of right of use in their favor.

The Louisiana Civil Code provides for two types of servitudes, personal and predial. La.Civ.Code art. 533. A personal servitude, the type at issue, "is a charge on a thing for the benefit of a person. There are three sorts of personal servitudes: usufruct, habitation, and rights of use." La.Civ.Code art. 534. It is the right of use with which we are now concerned.

Article 639 of the Louisiana Civil Code explains that: "The personal servitude of right of use confers in favor of a person a specified use of an estate less than full enjoyment." Only those advantages that may be provided by a predial servitude are permissible rights of use. La.Civ.Code art. 640. Further, "[a] right of use is regulated by application of the rules governing usufruct and predial servitudes to the extent that their application is compatible with the rules governing a right of use servitude." La.Civ.Code art. 645. It is when we turn to the rules pertaining to predial servitudes that we encounter problems with the lower court's determination that the "service agreement" acts as a servitude. Although recorded and arguably created by an act under private signature, we do not conclude that the service agreement is consistent with the articles pertaining to predial servitudes.²

La.Civ.Code art. 651 relates to the types of obligations that may be imposed by predial servitude upon the owner of a servient estate, in this case, the Toro Hills property. It provides as follows:

The owner of the servient estate is not required to do anything. His obligation is to abstain from doing something on his estate or to permit something to be done on it. He may be required by convention or by law to keep his estate in suitable condition for the exercise of the servitude...