Bass, Ltd. v. Tim Gerald

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

06-1125

BASS, LTD.

VERSUS

TIM GERALD, ET AL.

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APPEAL FROM THE
TWENTY-SEVENTH JUDICIAL DISTRICT COURT,
PARISH OF ST. LANDRY, NO. 04-2115,
HONORABLE JAMES P. DOHERTY, JR., DISTRICT JUDGE

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MICHAEL G. SULLIVAN
JUDGE

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Court composed of Ulysses Gene Thibodeaux, Chief Judge, Oswald A. Decuir, and
Michael G. Sullivan, Judges.

AFFIRMED.

George J. Tate
Attorney at Law
Post Office Box 817
Abbeville, Louisiana 70511-0817
(337) 893-8335
Counsel for Defendant/Appellant:
Triangle Venture Associates, Inc.

Lamont P. Domingue
Voorhies & Labbe
Post Office Box 3527
Lafayette, Louisiana 70502-3527
(337) 232-9700
Counsel for Plaintiffs/Appellees:
Bass, Ltd.
Charles Bernard

SULLIVAN, Judge.

This is a case of competing billboard leases. Defendant appeals the trial court’s

holding that Plaintiff’s lease is valid and its lease is invalid. For the following

reasons, we affirm the judgment of the trial court.

Facts

In early 2004, Bass, Ltd. (Bass) and Triangle Venture Associates, Inc.

(Triangle) were interested in leasing property along Interstate Highway 49 in

St. Landry Parish for the placement of billboards. Bass instructed its employee,

David Sonnier, to begin working toward this goal. Mr. Sonnier contacted

Mr. Charles Bernard, who, along with his wife, owned property which suited Bass’s

needs. Mr. Sonnier negotiated a lease with Mr. Bernard. On February 11, 2004,

Mr. Bernard signed his name and his wife’s name on the lease. Bass recorded the

lease in the public records of St. Landry Parish on April 5, 2004. It also filed an

application for a billboard permit with the Department of Transportation and

Development (DOTD) that same day.

Tim Gerald is an independent contractor who often provides services to

Triangle. After learning of Triangle’s interest in leasing property on Interstate

Highway 49, Mr. Gerald also contacted Mr. Bernard and negotiated a lease with him.

Mr. and Mrs. Bernard signed the lease on March 25, 2004. On April 1, 2004,

Mr. Gerald applied to DOTD for a permit for the placement of a billboard on the

Bernards’ property. He recorded Triangle’s lease on April 6, 2004. When he

recorded the lease, Mr. Gerald checked the conveyance records for any other

transactions concerning the Bernards’ property and found that Bass had recorded its

lease with the Bernards the day before. DOTD issued Triangle a permit for the

issuance of a billboard on April 8, 2004.

Stephen Sonnier of Bass contacted Mr. Gerald on April 5, after he learned that

Bass’s permit application was not the first permit application filed with DOTD for the

Bernards’ property. He also contacted Stephen Scott, president of Triangle, and

advised him that Triangle’s permit application pertained to property leased by the

Bernards to Bass. Mr. Gerald and Mr. Scott testified that they believed Triangle’s

lease and permit application did not pertain to the same property leased by Bass.

Mr. Bernard testified that Mr. Gerald told him that Bass’s lease was not valid because

Bass could not get a billboard permit.

Triangle began construction of its billboard structure on April 15, 2004. On

April 20, 2004, Bass filed a Petition for Preliminary Injunction, Permanent Injunction,

Tortious Interference with a Contract, Unfair Trade Practices, Declaratory Judgment

and, in the alternative, Interferences with Peaceful Possession of Leased Premises

against Triangle, Mr. Gerald, and the Bernards. Triangle and Mr. Gerald filed

answers in which they denied Bass’s claims and asserted cross-claims against the

Bernards. Sometime later, Triangle filed an exception of no cause of action which

was tried in conjunction with the trial on the merits. Before trial, the Bernards

assigned their rights in and to their lease with Triangle to Bass. In exchange, Bass

agreed to waive all of its claims against them.

After a trial on the merits, judgment was rendered in favor of Bass declaring

Bass’s lease with the Bernards valid and enforceable. The judgment granted a

permanent injunction prohibiting Triangle from performing, enforcing, or acting upon

its rights and obligations under its lease with the Bernards. Bass was awarded

damages against Triangle for interference with its peaceful possession of the leased

location. Bass’s claims for damages for unfair trade practices and for tortious

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interference with its contract were dismissed. Judgment was rendered in favor of

Triangle on its third party demand against the Bernards in the amount of $8,000.00,

the rent paid by Triangle to the Bernards under its lease.

Triangle filed a motion for new trial which was denied after a hearing. It then

perfected this appeal in which it assigns five errors. Our findings on the following

assignments negate the need to address all of them:

1) The trial court erred in granting a declaratory judgment in
favor of Bass which declares Bass’s lease “valid and
enforceable” and Triangle’s lease “void and
unenforceable.”

2) The trial court erred in failing to sustain its affirmative
defenses.

3) The trial court erred in all of its findings regarding Bass’s
ability to obtain a billboard permit from DOTD.

Standard of Review

Recently, in Cosby v. Holcomb Trucking, Inc., 05-470 (La. 9/6/06), 942 So.2d

471, the supreme court reiterated that reversal of a trial court’s findings of fact is

warranted only after the appellate court has performed a complete review and

determined that the trial court’s finding of fact is manifestly erroneous or clearly

wrong. The appellate court cannot reweigh the evidence or substitute its own

findings, and where there are two permissible views of the evidence, the fact finder’s

choice cannot be manifestly erroneous or clearly wrong. Id.

Discussion

Bass’s Lease

Triangle’s first assignment of error is that the trial court erred in finding Bass’s

lease “valid and enforceable” and its lease “void and unenforceable.” The trial court

specifically addressed three arguments urged by Defendants regarding the validity of

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Bass’s lease: 1) Mr. Bernard signed Mrs. Bernard’s signature on the lease; 2)

Mr. Bernard testified that he did not believe he was signing a binding lease with Bass;

and 3) Bass’s lease required annexation of the leased property which was an

impossible condition.

The trial court made two findings with regard to Mr. Bernard having signed

Mrs. Bernard’s name to Bass’s lease: 1) while Mrs. Bernard’s concurrence in the

lease was required by La.Civ.Code art. 2347, she ratified Mr. Bernard’s signing her

name thereto as provided in La.Civ.Code art. 2353 and 2) even if she did not ratify

Mr. Bernard’s signing her name, she was the only person who could claim the lease

was null without her signature, and neither she nor her successors have done so.

Article 2031 of the Louisiana Civil Code provides:

A contract is relatively null when it violates a rule intended for the
protection of private parties, as when a party lacked capacity or did not
give free consent at the time the contract was made. A contract that is
only relatively null may be confirmed.

Relative nullity may be invoked only by those persons for whose
interest the ground for nullity was established, and may not be declared
by the court on its own initiative.

The trial court correctly determined that only Mrs. Bernard or her representative

could urge the invalidity of Bass’s lease because she did not sign it. See also, Rowan

v. Town of Arnaudville, 02-882 (La.App. 3 Cir. 12/11/02), 832 So.2d 1185, where this

court held that the plaintiff, who was not a party to the lease contract, could not attack

the validity of the lease.

Triangle next urges that Mr. Bernard did not know what he was signing when

he signed Bass’s lease and, therefore, he did not consent to Bass’s lease. As

previously discussed, only Mr. Bernard could invoke nullity of the lease; he did not.

Additionally, the trial court correctly concluded that by signing the lease Mr. Bernard

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was presumed to know what he was signing and that his signature on a letter to

DOTD which stated in part: “I have [entered] into a new lease with Bass LTD. of

New Iberia, La. and they will assume the same [l]ocation and build a new [d]isplay,”

three weeks after he signed the lease evidenced that he knew he signed a lease with

Bass.

Triangle also argues that Bass’s lease is invalid for a number of other reasons:

1) the lease is subject to a suspensive condition—installation of a billboard

structure—which has not been satisfied; 2) the lease cannot be performed without a

DOTD permit, which it cannot obtain; and 3) the lease requires annexation of the

lease property by the City of Opelousas, which cannot be accomplished.

The trial court did not address items 1) and 2) in its Reasons for Judgment.

However, Triangle is neither a party to Bass’s lease nor a third-party beneficiary of

the lease. Therefore, it does not have the right to attack the validity of the lease.

Doland v. ACM Gaming Co., 05-427 (La.App. 3 Cir. 12/30/05), 921 So.2d 196, writ

not considered, 06-797 (La. 6/2/06), 929 So.2d 1239. Furthermore, Triangle’s claims

are without merit.

Initially, Bass could not accomplish the first two conditions because of an

existing billboard on the Bernards’ property which had to be removed before DOTD

would grant another permit for the construction of a permit on the property. Before

the existing billboard was removed, Mr. Bernard signed a new lease with Triangle,

which allowed Triangle to obtain a permit and begin construction of a billboard

structure before Bass. When a condition is not fulfilled due to the fault of a party not

obligated to satisfy the condition, the condition is deemed fulfilled. La.Civ.Code art.

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1772. Mr. Bernard prevented Bass from fulfilling these two conditions by entering

into a lease with Triangle; therefore, they are deemed fulfilled.

The trial court determined that annexation was not an issue because the need

for annexation was obviated when the Bernards sold the property to their niece and

her husband and Mr. Bernard testified that he would have done the same for Bass.

This conclusion is not clearly wrong based on the evidence.

For these reasons, we find no error with the trial court’s determination that

Bass’s lease is valid and enforceable.

Triangle’s Lease

Triangle assigns as error the trial court’s finding that its lease is invalid and

unenforceable. It contends that its lease with the Bernards and its DOTD permit are

valid because it “obtained a valid lease and permit before Bass ever publicly recorded

its lease or filed its application for a permit with DOTD.” The trial court found

mutual error vitiated the parties’ consent to Triangle’s lease and held the lease

invalid.

Louisiana Civil Code Article 1949 provides: “Error vitiates consent only when

it concerns a cause without which the obligation would not have been incurred and

that cause was known or should have been known to the other party.” Error which

bears on a thing that is “the contractual object” of a contract bears on a cause of the

obligation. La.Civ.Code art. 1950.

Triangle wanted to lease the property to construct billboards and generate

revenue. Mr. Gerald and Mr. Scott believed that Triangle’s lease covered property

different from that leased to Bass. Mr. Bernard testified that he wanted to lease the

property to provide income for his niece and her husband who later purchased the

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property. He also testified that he signed Triangle’s lease because Mr. Gerald told

him Bass’s lease was not for the same location it was leasing and Bass could not get

a permit for the billboard.

Based on this testimony, there is no error with the trial court’s finding that

“both parties thought that the Bernard property was available for lease and was not

encumbered by the Bass lease” nor its conclusion that mutual error vitiated the

Bernards’ and Triangle’s consent to the lease.

Recordation

The trial court determined that, even if Triangle’s lease was valid, Bass’s lease

primed it because Bass’s lease was recorded first in the public records of St. Landry

Parish. Triangle argues that the public records doctrine has no bearing in this matter

because the Bass lease is unenforceable under DOTD regulations, and Bass failed to

perform under the lease. We have already determined that Triangle has no right to

complain about Bass’s performance under the terms of the lease and need not address

this issue again.

With regard to Triangle’s claims concerning DOTD regulations, Bass sought

an explanation from DOTD as to why its application for a permit was denied. DOTD

responded that the permit was denied only because Triangle had already obtained a

permit for that location. Wanda Boudreaux, an employee of DOTD’s District Four,

testified that, if a court determines a permit was issued to a party not legally entitled

to it, DOTD cancels that permit and issues a permit to the applicant whose lease is

determined to meet DOTD’s administrative requirements and all legal requirements.

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Triangle’s lease has been found to be invalid. Bass’s lease has been found to

be valid, and prior to this litigation, DOTD determined that Bass’s lease satisfied its

requirements. This argument is without merit.

Triangle also argues that Bass’s purchase of the Bernards’ rights and interests

in their lease with Triangle resulted in Bass losing its rights under the public records

doctrine. It cites Canco, Inc. v. Outdoor Systems Advertising, 96-559 (La.App. 4 Cir.

9/18/96), 681 So.2d 33, in support of this argument. In Canco, the plaintiff purchased

real estate which was the subject of an unrecorded outdoor advertising lease. In the

act of sale, the plaintiff acknowledged the lease and assumed the obligations of the

vendor/lessor. Thereafter, the plaintiff argued that it was a third-party purchaser

entitled to rely on the public records doctrine because the lease did not put third

parties on notice that the lessee owned the billboard structure, not the lessor. The

court held that the plaintiff was not a third party to the lease because it assumed the

unrecorded lease when it purchased the real property.

The plaintiff in Canco sought to apply the public records doctrine because it

wanted to avoid application of the terms of an unrecorded lease. That is not the case

here, and the Bernards’ assignment did not affect the ranking of the two leases.

Disposition

The judgment of the trial court is affirmed. All costs of this appeal are assessed

to Triangle Venture Associates, Inc.

AFFIRMED.

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