Priola Construction Corporation v. Profast Development Group, Inc.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

CA 09-342

PRIOLA CONSTRUCTION CORPORATION

VERSUS

PROFAST DEVELOPMENT GROUP, INC., ET AL.

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APPEAL FROM THE
FOURTEENTH JUDICIAL DISTRICT COURT
PARISH OF CALCASIEU, NO. 2007-2398
HONORABLE R. RICHARD BRYANT, JR., DISTRICT JUDGE

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BILLY HOWARD EZELL
JUDGE

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Court composed of Michael G. Sullivan, Elizabeth A. Pickett, and Billy Howard
Ezell, Judges.

AFFIRMED.

Anna R. Gray
A. J. Gray, III
The Gray Law Firm
P. O. Box 1467
Lake Charles, LA 70602
(337) 494-0694
Counsel for Defendant/Appellee:
Capital One, N.A.

Thomas Patrick LeBlanc
Loftin, Cain, & LeBlanc
113 Dr. Michael DeBakey Drive
Lake Charles, LA 70601
(337) 310-4300
Counsel for Plaintiff/Appellant:
Priola Construction Corporation

EZELL, JUDGE.

This appeal involves application of the Louisiana Credit Agreement Statutes,

La.R.S. 6:1121- 6:1124, and accession principles. At issue is whether Capital One,

N. A., is liable to Priola Construction Corporation for improvements Priola made to

the Capital One building in downtown Lake Charles. The improvements were made

pursuant to a Letter of Agreement with several defendants referred to for simplicity

as the “Johnson Defendants.”1 The trial court granted Capital One’s motions for

summary judgment and dismissed all of Priola’s claims against Capital One. Priola

appealed, and for the following reasons, we affirm the judgment of the trial court.

FACTS

Blake McCaskill, a commercial loan officer with Capital One, knew one of the

Johnson Defendants, Fulton “Flip” Johnson, from their days of playing football

together at McNeese State University. Mr. McCaskill heard that Mr. Johnson was

looking at constructing a modular building facility in addition to some condominiums

in the Lake Charles area, so he contacted Mr. Johnson about Capital One doing

business with him. Discussions soon evolved into discussing the need for office

space, so Mr. McCaskill told him about the Capital One Building.

On October 18, 2006, Capital One entered into a lease agreement with the

Johnson Defendants to lease Suites 2100 and 2200, the twenty-first and twenty-

second floors, in the Capital One Building. The twenty-first floor had been a

restaurant, and the Johnson Defendants wanted to open a restaurant and sports bar.

The twenty-second floor was to be the private offices for Mr. Johnson.

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The Johnson Defendants included Profast Development Group, Inc., Profast
Development Group, L.L.C., FJ80 Enterprizes, L.L.C., 430 Club, L.L.C., Fulton “Flip” Johnson,
and Randall Keith Ballard.

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According to Mr. McCaskill, he had discussed the potential projects with a

client of Priola. Josh Priola wanted to be introduced to Mr. Johnson, so Mr.

McCaskill took him upstairs in the Capital One Building for an introduction. At the

time, the Johnson Defendants had actually started some demolition work. On October

27, 2006, Priola entered into a Letter of Agreement with the Johnson Defendants to

renovate the twenty-first floor of the Capital One Building. The anticipated costs

were between $400,000.00 and $600,000.00. Priola agreed to be paid in a lump sum

upon completion of the work or no later than January 31, 2007.

The Letter of Agreement further stated that Priola was agreeable to such terms

provided:

Pro Fast Development Group, LLC, provides Priola Construction
Corporation, on or before October 30, 2006, proof satisfactory to Priola
Construction Corporation that Pro Fast Development Group, LLC, has
obtained a line of credit from a federally insured lending institution in
an amount not less than $600,000.00, and that its agreement with the
lender with respect to said line of credit provides that monies may be
drawn against the line of credit only if disbursed by draft or electronic
funds transfer payable solely and directly to Priola Construction
Corporation; and (2) Fulton Johnson and any and all other
members/owners of Pro Fast Development Group, LLC, on or before
October 30, 2006, execute within a reasonable time after acceptance of
this proposal all contracts and related documents necessary to effect the
agreements proposed herein on terms mutually agreeable to the parties.

The Johnson Defendants wanted the work completed in order to host a New

Year’s Eve grand opening on December 31, 2006. Priola never received the proof

that the Johnson Defendants had secured a line of credit. Due to the time constraints,

Josh Priola claims he approached Mr. McCaskill a few days after the agreement was

signed to inquire if Capital One had agreed to finance the improvements. Priola

claims that Mr. McCaskill advised “they were collecting information, had one more

piece of information to get. They got it, and it looked great and it was more than what

they hoped for and the commitment process would begin when he got back in the

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office.” At that point, Priola began and completed the improvements at a cost in

excess of $1.1 million.

Prior to completion, Priola entered into an amended contract with the Johnson

Defendants on November 15, 2006, which increased the budget to between

$850,00.00 and $950,000.00. On December 22, 2006, a separate contract was entered

into between the Johnson Defendants and Priola for renovations to a separate space

known as The V.I.P. Room for a proposed budget of $70,000.00.

A loan application to Capital One by the Johnson Defendants was not

submitted until November 14, 2006. On December 4, 2006, the loan was denied for

failure to submit proper financial documentation and supporting schedules. Priola

found out that the loan had been denied on December 21, 2006.

On May 9, 2007, Priola filed suit against the Johnson Defendants claiming that

they had paid nothing for the work performed by Priola and that it was owed

$1,133,116.49. On June 1, 2007, the petition was amended to add Capital One as a

defendant on the basis of negligent misrepresentation, detrimental reliance, and

breach of contract. A preliminary default was entered against the Johnson Defendants

on August 27, 2007. Capital One filed a motion for summary judgment.

A hearing on Capital One’s motion for summary judgment was held on August

19, 2008. The trial court granted Capital One’s motion and dismissed Priola’s claims

against it. Priola then filed a supplemental and amending petition elaborating on its

claim for damages under the principles of accession. Again, Capital One moved for

summary judgment. A hearing on the matter was held on December 17, 2008, with

the trial court again ruling in favor of Capital One. Judgment was signed that same

day which also included the ruling on the previous motion for summary judgment,

thereby dismissing all of Priola’s claims against Capital One in this matter. Priola

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then appealed the judgment.

SUMMARY JUDGMENT

Appellate review of the granting of a motion for summary
judgment is de novo, using the identical criteria that govern the trial
court’s consideration of whether summary judgment is appropriate.
Bonin v. Westport Ins. Corp., 05-0886, p. 4 (La.5/17/06), 930 So.2d 906,
910; Schroeder v. Bd. of Sup’rs of La. State Univ., 591 So.2d 342, 345
(La.1991). A motion for summary judgment is a procedural device used
when there is no genuine issue of material fact. The summary judgment
procedure is designed to secure the just, speedy, and inexpensive
determination of every action and shall be construed to favorably
accomplish these ends. La. C.C.P. art. 966(A)(2). A motion for
summary judgment is properly granted only if the pleadings,
depositions, answers to interrogatories, and admissions on file, together
with the affidavits, if any, show there is no genuine issue of material
fact, and the mover is entitled to judgment as a matter of law. La. C.C.P.
art. 966; Duncan v. USAA Ins. Co., 06-0363, p. 4 (La.11/29/06), 950
So.2d 544, 546-547. A fact is material if it potentially insures or
precludes recovery, affects a litigant’s ultimate success, or determines
the outcome of the legal dispute. Hines v. Garrett, 04-0806, p. 1
(La.6/25/04), 876 So.2d 764, 765 (citing Smith v. Our Lady of the Lake
Hosp., Inc., 93-2512, p. 27 (La.7/5/94), 639 So.2d 730, 751). A genuine
issue of material fact is one as to which reasonable persons could
disagree; if reasonable persons could reach only one conclusion, there
is no need for trial on that issue and summary judgment is appropriate.
Hines, 876 So.2d at 765-766.

King v. Ill. Nat.’l Ins. Co., 08-1491, p. 6 (La. 4/3/09), 9 So.3d 780, 784.

Therefore, we will conduct a de novo review to determine if there are any

genuine issues of material fact which would prevent the granting of summary

judgment in favor of Capital One. We will also determine whether Capital One is

entitled to summary judgment as a matter of law. La.Civ.Code art. 966(B).

LOUISIANA REVISED STATUTES 6:1124

Priola argues that the trial court erred in concluding that the Louisiana Credit

Agreement Statutes, specifically La.R.S. 6:1124, bars all actions for damages between

a bank and a non-customer third party, regardless of the legal theory of recovery, if

there is no written agreement between the bank and the non-customer third party.

Priola contends that while La.R.S. 6:1124 does preclude the creation of a fiduciary

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duty between a bank and either its customers or third parties in the absence of a

written agreement specially creating a fiduciary relationship, the statute does not

immunize a bank from all of its actions with respect to non-customer third parties.

Louisiana Revised Statutes 6:1124 provides (emphasis ours):

No financial institution or officer or employee thereof shall be
deemed or implied to be acting as a fiduciary, or have a fiduciary
obligation or responsibility to its customers or to third parties other
than shareholders of the institution, unless there is a written agency or
trust agreement under which the financial institution specifically
agrees to act and perform in the capacity of a fiduciary. The
fiduciary responsibility and liability of a financial institution or any
officer or employee thereof shall be limited solely to performance under
such a contract and shall not extend beyond the scope thereof. Any
claim for breach of a fiduciary responsibility of a financial institution or
any officer or employee thereof may only be asserted within one year of
the first occurrence thereof. This Section is not limited to credit
agreements and shall apply to all types of relationships to which a
financial institution may be a party.

Priola claims that it does not allege a fiduciary relationship with Capital One

or the existence of fiduciary duties of loyalty and prudent administration as between

them. Instead Priola alleges that Capital One voluntarily assumed a duty to disclose

information to Priola pertaining to the loan request of the Johnson Defendants and is

liable for disclosing inaccurate and misleading information upon which Priola relied

to its detriment. Priola argues that its claims for negligent misrepresentation,

detrimental reliance, and breach of contract are not foreclosed by La.R.S. 6:1124.

After reviewing the record, we observe that there is no evidence whatsoever

that there was a contract between Priola and Capital One. Therefore, summary

judgment as to Priola’s breach of contract claim was certainly appropriate. In support

of its argument regarding negligent misrepresentation and detrimental reliance, Priola

cites BizCapital Business & Industrial Development Corp. v. Union Planters Corp.,

03-2208 (La.App. 4 Cir. 9/8/04), 884 So.2d 623, writs denied, 04-2473, 04-2505 (La.

1/14/05), 889 So.2d 267.

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BizCapital involved lenders suing third-party banks for negligent

misrepresentation and detrimental reliance regarding the financial status of the

borrower. BizCapital alleged that Union Planters and Business Bank misrepresented

to BizCapital the reason they sought a pay-off on a loan to Media Direct and further

omitted to tell BizCapital about a $4 million overdraft and the suspiciously high

volume of monetary transactions occurring in Media Direct’s account. Other

deliberate misrepresentations were also alleged. The trial court granted an exception

of no cause of action filed by Union Planters and Business Bank relying on La.R.S.

6:1124.

On appeal, the fourth circuit found that La.R.S. 6:1124 does not afford banks

blanket immunity in all settings and that a bank should not be rewarded for

misleading a customer or third party. In finding that a bank is not immune from the

claims of negligent misrepresentation and detrimental reliance, the fourth circuit

reviewed the legislative history of La.R.S. 6:1124:

... [T]he bill concretely states that there is no fiduciary relationship
between a bank and its customer just because the customer has an
account at the bank or another relationship with the bank. An agreement
would be required in order to establish a fiduciary relationship between
a financial institution and a customer. This would not eliminate the
obligation of good faith and fair dealing under the Civil Code ...

... [T]his bill simply clarifies that a bank has no implied fiduciary duty
to its customers absent a specific trust or written agreement. This bill
would say that there is no trust relationship or a fiduciary relationship
with your customer unless there is a trust agreement to that respect.

Minutes, House Commerce Committee, 1991 Reg. Sess., May 15,
1991, at 12-13; Minutes, June 6, 1991, at 3.

BizCapital, 884 So.2d at 626-27(alterations in original).

The fourth circuit reasoned that “the letter of the law should not lead to the

absurd result that a bank should be rewarded for misleading a customer or third

party.” Id. at 627.

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Louisiana Revised Statutes 6:1124 clearly provides that there is no fiduciary

relationship between a bank and a third party unless agreed to in writing that a

relationship of agency or trust exists between the parties. Singleton v. Am. Sec. Bank

of Ville Platte, Inc., 02-1109 (La.App. 3 Cir. 4/30/03), 849 So.2d 72. It does not

foreclose the possibility of lawsuits for other causes of action which do not involve

a fiduciary obligation. Therefore, we will examine the remaining causes of action

raised by Priola to determine whether summary judgment was appropriate.

Negligent Misrepresentation

In Barrie v. V.P. Exterminators, Inc., 625 So.2d 1007 (La.1993), the supreme

court reviewed the history of the tort of negligent misrepresentation and recognized

that “there must be legal duty on the party of the defendant to supply correct

information, there must be a breach of that duty, and the breach must have caused

plaintiff damage.” Id. at 1015. “Whether a duty is owed is a question of law.” Id.

The supreme court went on to discuss when a duty to supply correct information

arises. It discussed cases in which the duty owed to the tort victim involved both

non-disclosure and misinformation when there is privity of contract or a fiduciary

relationship. The supreme court then discussed the situation in which there is a

communication of misinformation by the tort feasor directly to the user or the user’s

agent, in which case the tort feasor assumed the duty. In that situation, the tort feasor

becomes a fiduciary and, therefore, liable for any negligent misrepresentation.

Citing Barrie among other cases, the supreme court recognized that “our

jurisprudence has also limited negligent misrepresentation tort theory to cases

wherein [a] contract or fiduciary relationship exists.” Daye v. Gen. Motors Corp., 97-

1653, p. 6 (La. 9/9/98), 720 So.2d 654, 659. The court then went on to hold that

Louisiana negligent misrepresentation cases are evaluated using the duty-risk

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analysis. Later, this court recognized that before a bank can be found liable utilizing

the duty-risk analysis under La.Civ. Code art. 2315, “it must first be determined that

the bank owed a fiduciary duty to the plaintiff.” D & J Tire, Inc. v. Bank One, La.,

Nat’l Ass’n, 02-935, p.2 (La.App. 3 Cir. 2/5/03), 838 So.2d 112, 114, writ denied, 03-

667 (La. 5/2/03), 842 So.2d 1107 (quoting Succession of McKnight, 33,802, p.5 (La.

App. 2 Cir. 10/4/00), 768 So.2d 794, 799, writ denied, 00-3072 (La. 2/9/01), 785

So.2d 822). Also see Guidry v. Bank of LaPlace, 94-1758 (La.App. 4 Cir. 9/15/95),

661 So.2d 1052.

This conclusion is supported by the supreme court’s definition of “fiduciary”

as found in Scheffler v. Adams and Reese, LLP, 06-1774, pp. 6-7 (La. 2/22/07), 950

So.2d 641, 647-48:

A fiduciary relationship has been described as “one that exists
‘when confidence is reposed on one side and there is resulting
superiority and influence on the other.’” Plaquemines Parish
Commission Council v. Delta Development Company, Inc., 502 So.2d
1034, 1040 (La.1987), quoting Toombs v. Daniels, 361 N.W.2d 801, 809
(Minn.1985).

The word “fiduciary,” as a noun, means one who
holds a thing in trust for another, a trustee; a person
holding the character of a trustee, or a character analogous
to that of a trustee, with respect to the trust and confidence
involved in it and the scrupulous good faith and candor
which it requires; a person having the duty, created by his
undertaking, to act primarily for another’s benefit in
matters connected with such undertaking.

State v. Hagerty, 251 La. 477, 492, 205 So.2d 369, 374 (1967), quoting
36A C.J.S. Fiduciary, p. 381. One is said to act in a fiduciary capacity
“when the business which he transacts, or the money or property which
he handles, is not his own or for his own benefit, but for the benefit of
another person, as to whom he stands in a relation implying and
necessitating great confidence and trust on the one part and a high
degree of good faith on the other.” Hagerty, 251 La. at 493, 205 So.2d
at 374-375, quoting BLACK’S LAW DICTIONARY (4th ed.1951).

The term “fiduciary” is defined in the Uniform Fiduciaries Law,
LSA-R.S. 9:3801(2), as follows:

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“Fiduciary” includes a trustee under any trust, expressed,
implied, resulting or constructive, executor, administrator,
guardian, conservator, curator, receiver, trustee in bankruptcy,
assignee for the benefit of creditors, partner, agent, officer of a
corporation, public or private, public officer, or any other persons
acting in a fiduciary capacity for any person, trust or estate.

A required element of negligent misrepresentation is a fiduciary relationship

or contract. Therefore, we find that La.R.S. 6:1124 would foreclose the possibility

of a lawsuit against a bank for negligent misrepresentation unless there was a contract

or a written agreement that the financial institution had a fiduciary obligation to the

person claiming negligent misrepresentation. The trial court was correct in granting

summary judgment in favor of Capital One regarding Priola’s claim that Capital One

was guilty of negligent misrepresentation.

Detrimental Reliance

Louisiana Civil Code Article 1967 provides for the doctrine of detrimental

reliance as follows:

A party may be obligated by a promise when he knew or should
have known that the promise would induce the other party to rely on it
to his detriment and the other party was reasonable in so relying.
Recovery may be limited to the expenses incurred or the damages
suffered as a result of the promisee’s reliance on the promise. Reliance
on a gratuitous promise made without required formalities is not
reasonable.

The supreme court in Suire v. Lafayette City-Parish Consolidated Government,

04-1459, 04-1460, 04-1466, p. 31 (La. 4/12/05), 907 So.2d 37, 59, discussed the

application of detrimental reliance as follows:

The doctrine of detrimental reliance is “‘designed to prevent injustice by
barring a party from taking a position contrary to his prior acts,
admissions, representations, or silence.’” Babkow v. Morris Bart,
P.L.C., 1998-0256 (La.App. 4 Cir. 12/16/98), 726 So.2d 423, 427
(quoting Orr v. Bancroft Bag, Inc., 29,046 (La.App. 2 Cir. (1/22/97),
687 So.2d 1068, 1070)). To establish detrimental reliance, a party must
prove three elements by a preponderance of the evidence: (1) a
representation by conduct or word; (2) justifiable reliance; and (3) a
change in position to one’s detriment because of the reliance. Lakeland

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Anesthesia, Inc. v. United Healthcare of La., Inc., 2003-1662 (La.App.
4 Cir. 3/17/04), 871 So.2d 380, 393, writ denied, 2004-0969
(La.6/25/04), 876 So.2d 834; Babkow, 726 So.2d at 427. Significantly,
to prevail on a detrimental reliance claim, Louisiana law does not
require proof of a formal, valid, and enforceable contract. Babkow, 726
So.2d at 429 (citing Morris v. People’s Bank & Trust Co., 580 So.2d
1029 (La.App. 3 Cir.), writ denied, 588 So.2d 102 (La.1991)).

The deposition testimony in the present case reveals the following. Priola’s

whole case is based on a statement made by Blake McCaskill to Josh Priola. Due to

the New Year’s Eve deadline set by the Johnson Defendants, Mr. Priola contacted Mr.

McCaskill by phone and inquired about the status of the loan to the Johnson

Defendants. Mr. Priola stated that Mr. McCaskill told him “they were collecting

information, had one more piece of information to get. They got it, and it looked

great and it was more than what they hoped for and the commitment process would

begin when he got back in the office.” Mr. McCaskill agreed that he told Mr. Priola

that it looked good for the Johnson Defendants based on what he received. Based on

this verbal communication, Priola began remodeling the restaurant. Priola never

received the letter of commitment as required by its own contract with the Johnson

Defendants. The loan application was finally submitted on November 14, 2006, and

on December 4, the loan was denied. Priola continued to negotiate contracts with the

Johnson Defendants, even negotiating a final contract after Priola had notice that the

Johnson Defendants had not been approved for the loan. Priola admitted that it never

did any independent evaluation of the Johnson Defendants’ ability to pay.

No deliberate attempt to mislead Mr. Priola on the part of Mr. McCaskill can

be gleaned from these statements. Mr. Priola called Mr. McCaskill and asked about

the status of the Johnson Defendants’ loan. Mr. McCaskill told Mr. Priola that on

paper things looked good. He further told Mr. Priola that he was going to begin the

commitment process when he got back to the office. Priola proceeded at its own risk

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without waiting for the letter of commitment that it required in the contract from the

Johnson Defendants. Priola proceeded knowing that although the loan process had

begun, the loan had not been approved. Furthermore, Priola negotiated a final

contract with the Johnson Defendants knowing that the loan had not been approved,

indicating that it would continue operating under the contracts as negotiated

regardless of the loan status.

We find no genuine issues of material fact and that Capital One was entitled

to judgment as a matter of law. Summary judgment was appropriate as to Priola’s

claims for breach of contract, negligent misrepresentation, and detrimental reliance.

ACCESSION

Priola sought to recover from Capital One the cost of its improvements to the

Capital One Building under the Louisiana Civil Code provisions on accession in

relation to immovable property. Specifically, Priola relied on La.Civ.Code art. 495

which provides:

One who incorporates in, or attaches to, the immovable of
another, with his consent, things that become component parts of the
immovable under Articles 465 and 466, may, in the absence of other
provisions of law or juridical acts, remove them subject to his obligation
of restoring the property to its former condition.

If he does not remove them after demand, the owner of the
immovable may have them removed at the expense of the person who
made them or elect to keep them and pay, at his option, the current value
of the materials and of the workmanship or the enhanced value of the
immovable.

The trial court found that no contract existed between Capital One and Priola

for the renovations and that the commercial lease between the Johnson Defendants

and Capital One disposed of the accession rights reimbursement issue. Capital One

claimed that the lease denied the Johnson Defendants any build-out expense since the

place had previously operated as a restaurant/dining room and it considered the

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improvements as cosmetic and unnecessary. Priola argues that the lease provisions

do not apply because the provisions of the lease set the commencement date of the

lease after Priola had completed substantially all of the improvements to the Capital

One Tower.

Section 1.1 of the lease specifically provided that (emphasis in original):

“Space shall be taken in ‘as-is’ condition.” Section 5.3 provided, in pertinent part:

All other property at the Leased Premises and any alteration or addition
to the Leased Premises (including wall-to-wall carpeting, paneling or
other wall covering) and any other articles attached or affixed to the
floor, wall or ceiling of the Leases Premises shall become the property
of Lessor and shall remain upon and be surrendered with the leased
Premises as part thereof at the termination of this Lease, Lessee hereby
waiving all rights to any payment or compensation therefor. If,
however, Lessor so requests in writing, Lessee will, at its expense,
promptly remove any and all fixtures, equipment and property placed or
installed by it in the Leased Premises and repair any damage caused by
such removal.

Comment (b) to Article 495 provides, in pertinent part: “When improvements

are made by a lessee in accordance with the terms of the lease, the rights of the parties

are determined by the contract or under the law of lease. Article 495 applies only in

the absence of other provisions of law or juridical act.”

In Smith v. State, Department of Transporation & Development, 04-1317 (La.

3/11/05), 899 So.2d 516, the supreme court discussed the application of Article 495,

noting that it is a supplementary remedy that applies in the absence of other laws or

juridical acts.

Louisiana Civil Code Article 2695 provides:

In the absence of contrary agreement, upon termination of the
lease, the rights and obligations of the parties with regard to
attachments, additions, or other improvements made to the leased thing
by the lessee are as follows:

(1) The lessee may remove all improvements that he made to the
leased thing, provided that he restore the thing to its former condition.

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(2) If the lessee does not remove the improvements, the lessor
may:

(a) Appropriate ownership of the improvements by reimbursing
the lessee for their costs or for the enhanced value of the leased thing
whichever is less; or

(b) Demand that the lessee remove the improvements within a
reasonable time and restore the leased thing to its former condition. If
the lessee fails to do so, the lessor may remove the improvements and
restore the leased thing to its former condition at the expense of the
lessee or appropriate ownership of the improvements without any
obligation of reimbursement to the lessee. Appropriation of the
improvement by the lessor may only be accomplished by providing
additional notice by certified mail to the lessee after expiration of the
time given the lessee to remove the improvements.

(c) Until such time as the lessor appropriates the improvement, the
improvements shall remain the property of the lessee and the lessee shall
be solely responsible for any harm caused by the improvements.

Comment (b) to Article 2695 provides, in pertinent part, that:

Article 2695 (Rev. 2004) provides a suppletive rule of law that applies
only in the absence of a contrary agreement regarding the fate of the
improvements at the end of the lease. The agreement may be made at
any time, such as at the making of the lease contract, or at any time
before or after the making of the improvements.

Obviously, the law does not require that the lease have commenced when the

agreement concerning improvements is made or even that the agreement regarding

the fate of the improvements be confected before the improvements are made. In the

present case, the agreement was made at the time of the making of the lease contract.

Therefore, Article 495 does not apply in this case, since the lease determined that

lessees would not be reimbursed for any improvements.2

Furthermore as stated in Smith, 899 So.2d at 533(citations omitted):

Article 495 provides a mechanism for a person to retain those items of
value he incorporates or attaches to the property of another. Further, the

2

We observe that pursuant to La.R.S. 9:4801-9:4855, The Private Works Act, Priola’s claim
for a privilege is limited to an owner who has contracted with it in writing to the price and work of
the contract. In this case, that is the Johnson Defendants. This privilege is also inferior to the rights
owed to the lessor.

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article provides a mechanism for the landowner to have those
improvements removed from his property, if he so desires, by
demanding their removal. If upon demand the improver fails to remove,
the owner may remove the items or elect to keep them and then pay the
value of the items to the improver. However, Article 495 does not
appear to contemplate a situation where the improver abandons his
improvements, then makes a demands to be compensated for their value.
Thus, Article 495 does not require a lessor to pay for improvements to
a lessee if the lessee abandons the improvements upon the termination
of the lease.

Even if Article 495 did apply, there is no testimony whatsoever that Capital

One has demanded that Priola remove the improvements and restore the property to

its former condition, a condition which must be met before Priola can demand

compensation.

For these reasons, we find that summary judgment was also appropriate as to

Priola’s claim for reimbursement due to accession principles.

The judgment of the trial court granting Capital One’s motions for summary

judgment is affirmed. Costs of this appeal are assessed to Priola Construction

Corporation.

AFFIRMED.

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