Robert Kite v. Felicia Carter and Colonial Ins. Co. of Ca

STATE OF LOUISIANA

COURT OF APPEAL, THIRD CIRCUIT

03-378

ROBERT KITE

VERSUS

FELICIA CARTER AND COLONIAL INS. CO.
OF CALIFORNIA

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APPEAL FROM THE
THIRTY-SIXTH JUDICIAL DISTRICT COURT
PARISH OF BEAUREGARD, NO. C-97-0374 "A"
HONORABLE STUART S. KAY JR., DISTRICT JUDGE
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GLENN B. GREMILLION
JUDGE

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Court composed of John D. Saunders, Marc T. Amy, and Glenn B. Gremillion,
Judges.

JUDGMENT RENDERED.

Randall Scott Iles
P. O. Box 3385
Lafayette, LA 70502
(337) 234-8800
Counsel for Plaintiff/Appellant
Robert Kite

Mesonie Terrence Halley, Jr.
Pitre, Halley & Sikich
702 Kirby Street
Lake Charles, LA 70602-3756
(337) 494-0800
Counsel for Defendant/Appellee
Felicia Carter
Colonial Ins. Co. of CA

Mitchel Mark Evans, II
416 North Pine Street
DeRidder, LA 70634
(337) 462-5225
Counsel for Third Party Defendant/Appellee
Smith’s Car Wash
Howard Smith
Marlin Jantz

GREMILLION, Judge.

The plaintiff, Robert Kite (Kite), appeals the trial court’s directed verdict

in favor of the defendants, Colonial Insurance Company of California and its insured,

Felicia Carter. For the following reasons, we render a judgment of involuntary

dismissal in favor of Colonial and Carter.

FACTS

On August 3, 1996, Carter ran a stop sign at the intersection of Pine Tree

Lane and East First Street in DeRidder, Louisiana, and struck a building operated as

Smith’s Car Wash. The building was located on land originally owned by George

Kite. On March 1, 1967, George leased the property to Howard Smith, the operator

of Smith Car Wash, Inc. The lease of the property was for $140 per month, for a term

of five years, and terminating on February 28, 1972. The lease provided in pertinent

part:

6.

The LESSOR retains the LESSOR’S lien provided by law upon
all property and equipment of the LESSEE upon the premises, and in
addition thereto, it is stipulated that the LESSEE shall not remove from
the premises that equipment this date purchased by LESSEE from
LESSOR, more particularly described in a bill of sale and chattel
mortgage executed of even date herewith to secure a note from LESSEE
to LESSOR until said purchase money note has been paid and satisfied
in full.

7.

The LESSOR grants to the LESSEE the right to take and remove
from the premises at the end of the full five (5) year term of this lease,
the building and improvements situated upon the leased property, except
the foundation slab of said building. It is stipulated that removal of the
improvements so granted in this paragraph shall be without damage to
said foundation or to the premises.

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At the termination of the five-year term, the parties continued the lease

on a month-to-month basis under the terms of the original lease. George died on May

4, 1977. After George’s death, Smith continued paying the rental amount to his wife,

Billy, and then to his son, Kite, in the name of his estate. Sometime after George’s

death, his wife increased the monthly rental from $140 to $200 per month. Smith

continued paying this amount until October 1996, even though the car wash was no

longer operable due to the damage caused by Carter. On September 24, 1996, Smith

notified Kite in writing that he intended to discontinue his car wash operations and

that he intended to remove the building out of which he operated the business. In

response, Kite informed Smith, via a September 25, 1996 letter, that the March 1,

1972 lease had terminated, that he was the owner of the building, and that Smith

owed him several thousand dollars for rent from 1972 through September 25, 1996.

Thereafter, Smith abandoned the building.

On April 21, 1997, Kite filed suit against Carter and Colonial seeking

monetary damages for the property damage sustained by the building located on East

First Street. In its answer, Colonial stated that it had paid $10,000 in response to a

demand by CNA Insurance Company for reimbursement of amounts paid by it to its

insured, Smith Car Wash, and its owners, Smith and his son-in-law, Marlin Jantz.

Thereafter, Colonial and Carter filed a third-party demand against CNA, Smith, and

Jantz. Smith and Jantz answered the third-party demand alleging that George had

conveyed the building and car wash equipment to Smith on the same date he entered

into the lease of the named property, as evidenced by the lease which mentions the

bill of sale and chattel mortgage. They further introduced a Notice of Filing of the

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chattel mortgage in the Beauregard Parish public records on March 14, 1967, and the

cancellation of the chattel mortgage by prescription on November 24, 1997.

Kite filed a motion for summary judgment on the issue of liability,

damages, right of subrogation, bad faith, and excess damages. Following a hearing

on the motion, the trial court granted summary judgment in favor of Kite on the issue

of liability, but referred the remaining issues to the trial on the merits. During the

trial on the merits, Smith, Jantz, Carter, and Colonial moved for a directed verdict

following the close of Kite’s evidence. The trial court granted the directed verdict

and dismissed Kite’s claims against Colonial and Carter. All other claims were

rendered moot as a result. A judgment in this matter was rendered on November 11,

2002. This appeal by Kite followed.

ISSUES

On appeal, Kite raises one assignment of error arguing that the trial court

erred in finding that the March 1, 1967 lease between Smith and George had

reconducted even though it exceeded its terms, the original lessor had died, and the

rental amount had changed. Although we agree that the original lease terminated at

the time the lease amount changed, we still find that Smith was the owner of the

building located on the leased property at issue.

RECONDUCTED LEASE

In Misse v. Dronet, 493 So.2d 271, 273-74 (La.App. 3 Cir. 1986)

(citations omitted), we stated:

To have a tacit reconduction in Louisiana it is necessary that the
lease has expired, that the lessee remain in possession for more than a
week, that the lessor consent to his remaining in possession of the
premises or not have given him notice to vacate. The reconducted lease

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is actually a continuation of the original lease in all respects except that
the fixed terms or period of duration under the old lease is voided and
the reconducted lease is considered to be by the month.

We further stated that when, by agreement, the rental amount is changed, a new rental

amount and a new consent is created. Id. Thus, the old lease terminated and a new

one was created in its stead.

In the instant case, the trial court held that the 1967 lease was

reconducted at the end of the original five year term on a month-to-month basis, with

an adjustment of the rent amount from $140 to $200 per month. Thus, it held that all

of the terms and conditions of the original lease continued in the reconducted lease,

even after the parties agreed to the increase in the rent. This finding is clearly wrong.

Once Billy and Smith agreed to increase the monthly rental from $140 to $200, a new

lease was created and all of the terms of the original lease ceased. However, after

conducting a de novo review of the record, we still find that Smith is the owner of the

building located upon the leased premises and render judgment dismissing Kite’s

claim with prejudice.

INVOLUNTARY DISMISSAL

Although Smith moved for and was granted a directed verdict, the proper

procedural motion was for an involuntary dismissal. The procedure for an

involuntary dismissal is provided for in La.Code Civ.P. art. 1672. If the matter is

tried as a bench trial, the defendant may move for a dismissal of the plaintiff’s action

at the close of the plaintiff’s case, based on the “ground that upon the facts and law,

the plaintiff has shown no right to relief.” La.Code Civ.P. 1672(B). At that point, the

trial court may either render judgment or decline to render judgment until the close

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of all evidence. Id.

The trial court is accorded much discretion in the granting of an

involuntary dismissal. Guillory v. Int’l Harvester Co., 99-593 (La.App. 3 Cir.

10/13/99), 745 So.2d 733, writ denied, 99-3237 (La. 1/14/00), 753 So.2d 220. It is

required to weigh and evaluate all of the evidence presented by the plaintiff and grant

the dismissal if the evidence is sufficient to establish that the plaintiff has not proven

his claim by a preponderance of the evidence. Id. The grant of an involuntary

dismissal is subject to the manifest error standard of review. Id.

Louisiana Civil Code article 464 provides that a building is a separate

immovable when it belongs to someone other than the owner of the ground upon

which it stands. Louisiana Civil Code article 491 provides that a building is

presumed to belong to the owner of the ground, unless an instrument evidencing

separate ownership is filed for registry in the conveyance records of the parish in

which the immovable is located. Moreover, the law requires that immovable property

be transferred by authentic act or by act under private signature. La.Civ.Code art.

1839. An oral transfer is valid if actual delivery has occurred and the transferor

recognizes the transfer when questioned under oath. Id. However, if a written

contract is required by law, “the contract may not be proved by testimony or by

presumption, unless the written instrument has been destroyed, lost, or stolen.”

La.Civ.Code art. 1832.

In this instance, Smith alleged that he purchased the building located on

the leased property, and the equipment located therein, pursuant to a written bill of

sale and chattel mortgage executed the same date as the lease. However, in his

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answer to the third-party demand, he stated that the original bill of sale and chattel

mortgage had either been lost or stolen. In support of his allegation, he introduced

a copy of the original lease, a Notice of Filing from the Beauregard Parish

Conveyance Records evidencing that a chattel mortgage from Smith to George was

filed on March 14, 1967, bearing file number 186418, and a cancellation by

prescription of the same chattel mortgage in the amount of $65,000, on November 24,

1997.

Smith testified that he purchased the car wash business and its equipment

from George on the same date that the lease was executed in 1967. However, he

could not recall whether this was reduced to writing or where the documents were

located. He stated that he made payments for the purchase over a period of five years

to the First National Bank in DeRidder. At the end of that time, he stated that he

believed that he was the owner of the building and the equipment. However, he could

not recall receiving a canceled chattel mortgage. Smith testified that George never

participated in the profits and losses of the business, he never made any

improvements to the structure or the property, nor did he require Smith to insure the

property. He stated that all of the equipment originally purchased in 1967 had been

replaced due to general wear and tear. He further testified that the business was

damaged by a tornado after George’s death, but that no claim was made by Kite to the

insurance proceeds used to repair the structure. Smith stated that the first notice he

received from Kite concerning the ownership of car wash equipment and the building

was in the September 26, 1997 letter.

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Jantz testified that he started working at the car wash in 1994, and that

he took over the operations sometime after Smith incorporated his business in 1997.

He testified that they were in the process of remodeling the car wash prior to the

August 1996 accident, and had purchased $20,000 worth of new equipment through

financing from Beauregard Federal Savings Bank. He stated that the equipment they

were replacing was not the original equipment purchased in 1967. Jantz testified that

the equipment damaged as a result of the August 1996 accident was repaired with the

insurance money received from its insurer. He stated that Kite never offered to pay

for the remodeling, refurbishing, or repairs to the equipment or property.

Jantz testified that he talked to Kite several times about entering into a

long-term lease or selling the property. He stated that their discussions never

concerned the purchase of the equipment, since Smith informed him that he already

owned the equipment. He further stated that no one representing George’s estate ever

contacted them about insuring the equipment pursuant to the lease. Moreover, the

insurance settlement proceeds were not issued in Kite’s name. After they decided to

relocate the car wash, Jantz stated that they notified Kite of their intent not to renew

the lease. In the September 26, 1997 letter, Kite informed them that he owned the

building and that they owed him rent for the building. Jantz testified that they viewed

the building as belonging to them, and that they never acknowledged that Kite owned

either the building or the equipment located therein.

After reviewing the evidence, we find that Kite has failed to prove that

he is the owner of the building located on the leased property. While a building is

considered an immovable and is presumed to belong to the owner of the ground upon

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which it is located, we find that the evidence proves that this building is the separate

property of Smith. Although the bill of sale and chattel mortgage were either lost or

destroyed, we find that they were sufficiently proven by parole evidence through the

testimony of Smith and Jantz and through the original lease agreement, which

mentions that a bill of sale and the chattel mortgage were executed on the same day

as the lease. Further evidence affirming the existence of the sale is presented by the

notice of filing of the chattel mortgage and the cancellation of the chattel mortgage

from the Beauregard Parish Clerk of Court’s records. Since Kite has failed to

contradict this evidence, we find that he has failed to establish his claim by a

preponderance of the evidence. Accordingly, we grant the motion for involuntary

dismissal and render judgment in favor of Carter and Colonial. The third party

demand by Carter and Colonial against Smith and Jantz, and their insurer, CNA, is

rendered moot.

CONCLUSION

For the foregoing reasons, we order, adjudge, and decree that a judgment

of involuntary dismissal be granted in favor of the defendants-appellees, Colonial

Insurance Company of California and Felicia Carter. The third-party demand against

the third-party defendants, Howard Smith, Marlin Jantz, and CNA Insurance

Company, is rendered moot. The cost of this appeal is assessed against the plaintiff-

appellant, Robert Kite.

JUDGMENT RENDERED.

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