Wilson v. Cost Plus of Vivian, Inc.

• Decision Date: 12 June 1979
• Docket Number: No. 13873,13873
• Citation: 375 So.2d 683
• Parties: James H. WILSON, Plaintiff-Appellant, v. COST PLUS OF VIVIAN, INC., UDS, Inc. and B. J. Tanenbaum, Jr., Defendants-Appellees.
• Court: Court of Appeal of Louisiana — District of US

Page 683

375 So.2d 683

James H. WILSON, Plaintiff-Appellant, v. COST PLUS OF VIVIAN, INC., UDS, Inc. and B. J. Tanenbaum Jr., Defendants-Appellees.

No. 13873.

Court of Appeal of Louisiana, Second Circuit.

June 12, 1979.

Booth, Lockard, Jack, Pleasant & LeSage by John R. D'Anna, Shreveport, for plaintiff-appellant.

Cook, Clark, Egan, Yancey & King by John D. Collinsworth and Dewey W. Corley, Shreveport, for defendants-appellees.

Before HALL, MARVIN and JONES, JJ.

HALL, Judge.

Plaintiff-lessor appeals from a judgment sustaining defendants-lessees' exception of no cause of action addressed to plaintiff's petition requesting lease cancellation for lessees' violation of an alleged obligation of the lease to conduct continuous commercial operations on the premises. We affirm the judgment of the district court dismissing plaintiff's suit.

The issue on appeal is whether the provisions of the lease or of the law expressly or impliedly require continuous commercial operations on the premises, giving rise to a cause of action for lease cancellation where the lessee has allowed the premises to be vacant for a period of time.

Plaintiff, James H. Wilson, filed suit against defendants, Costk Plus of Vivian, Inc., UDS, Inc. and B. J. Tanenbaum, Jr., in February 1978. The petition alleged that plaintiff entered into a lease of property with Costk Plus on February 18, 1974. The written lease was attached to and made a part of the petition. It affects an approximately one acre tract of land on Spruce Street in Vivian, Louisiana. The lease is for a primary term of ten years beginning February 1, 1974 and ending January 31, 1984. The rental during the primary term is $325 per month. Lessee is also required to pay all occupational licenses, insurance, and other permits and fees necessary in the operation of the business to be carried on in the leased premises; all utility services; and all sales, use, income or other taxes due as a result of the business conducted on the premises. Lessee agreed to erect on the leased premises a first-class modern retail building and to maintain it in good repair. Lessee agreed and warranted that the leased premises and building to be erected thereon will be used solely to conduct a retail store business or for such other commercial purposes as lessee may desire, provided that lessee shall not use the premises for any unlawful business or purpose. Upon termination of the lease, if the lessee is not in default, the building is to become the property of the lessor upon payment of $1. Upon termination as a result of default by lessee, no payment is required. The lease may not be transferred or assigned by lessee without lessor's written consent. Lessee is granted the option to renew the lease for an additional term of five years at a monthly rental of $1,650, plus an additional rental contingent on gross sales. Lessee is granted an additional option to renew the lease for an additional five-year term at the same rental. Upon default by lessee, lessor is given the right to declare all unmatured rent due or to cancel the lease.

Plaintiff's original petition alleged breach of the lease provisions by (1) assignment of the lease from Costk Plus to UDS, Inc.; (2) the filing of a Chapter XI bankruptcy proceeding by UDS in November 1976; and (3) nonpayment of rent for the month of February 1978. The petition prayed for (1) cancellation of the lease; (2) $325 for one month's past due rent; and (3) that plaintiff be declared the owner of the building constructed on the leased premises.

In August 1978, after exceptions were filed by defendants relating to the bankruptcy proceedings, plaintiff filed two amended petitions, alleging that a final decree was rendered in the bankruptcy proceeding on April 7, 1978, and withdrawing the allegations of the original petition asserting insolvency and transfer without consent as grounds for cancellation. Plaintiff alleged as additional grounds for cancellation failure of the lessor to comply with Article VIII of the lease, "specifically, that defendants have permitted and caused the premises to be vacant since November 1977 and have not operated a retail or commercial establishment therein."

Defendants filed various exceptions, including a peremptory exception of no cause of action asserting that the allegations of the petition did not show a breach of the lease provisions.

After hearing on the exceptions, Costk Plus, which had merged into UDS, was dismissed from the suit. The remaining defendants' exception of no cause of action was sustained by judgment signed in December 1978 and this appeal followed. Plaintiff apparently abandoned in the trial court his claim for cancellation on the grounds of failure to timely make rental payments and does not urge that claim on appeal. The sole issue on appeal is whether plaintiff's allegations that defendants have permitted the premises to be vacant and have not operated a retail or commercial establishment thereon since November 1977, states a cause of action for cancellation of the lease under the lease provisions or applicable law of lease.

In Louisiana, liberal rules of pleadings prevail, and the court should maintain a petition so as to afford the litigant an opportunity to present his evidence when it can reasonably do so. Haskins v. Clary, 346 So.2d 193 (La.1977); Pence v. Ketchum, 326 So.2d 831 (La.1976). The peremptory exception of no cause of action tests the legal sufficiency of the petition and is triable on the face of the papers, which in this case include the written lease between the parties attached to and made a part of plaintiff's petition. Haskins, supra. It is well settled that for purposes of determining the merit of the no cause exception all allegations of fact are taken as true. Haskins, supra; Pence, supra; Hero Lands Company v. Texaco, Inc., 310 So.2d 93 (La.1975). However, plaintiff's conclusionary allegations are not taken as true. See Lott v. Haley, 370 So.2d 521 (La.1979).

The only pertinent facts alleged in plaintiff's petition are the lease and its provisions and the vacancy and failure to conduct retail or commercial operations since November 1977. Plaintiff contends his allegation that Article VIII of the lease requires continuous operations making the vacancy a breach of the lease is an allegation of fact which must be taken as true. Plaintiff also terms defendants' contention that the lease does not require continuous operations an "interpretation". This statement reflects the true nature of both parties' contentions in this respect. They are both interpretations of the lease and as such they are conclusions of law which are not considered as true in ruling on the no cause of action exception. It is the function of the court, in ruling on an exception of no cause of action, to interpret the law in light of the facts alleged. When a contract is subject to interpretation from the four corners of the instrument, without necessity of extrinsic evidence, interpretation of the contract is a matter of law. Thus, the issue is whether plaintiff, by alleging that defendants have allowed or caused the leased premises to remain vacant, has stated a cause of action to cancel the lease under the applicable law.

The applicable law is (1) the lease provisions which are law between the parties, LSA-C.C. Art. 1901; and (2) any obligations provided by the law of lease which are not consistent with the lease provisions.

Plaintiff contends that Article VIII of the lease, particularly when read with other provisions of the lease referring to business activities to be carried on in the leased premises, requires the lessee to conduct continuous business operations on the premises. Plaintiff...