W.L. Wagner & Nina Wagner v. Stephen R. Alford

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

09-1338

W.L. WAGNER & NINA WAGNER

VERSUS

STEPHEN R. ALFORD, ET AL.

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APPEAL FROM THE
ELEVENTH JUDICIAL DISTRICT COURT
PARISH OF SABINE, NO. 60,582
HONORABLE STEPHEN BRUCE BEASLEY, DISTRICT JUDGE

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ELIZABETH A. PICKETT
JUDGE

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Court composed of Marc T. Amy, Elizabeth A. Pickett, and Shannon J. Gremillion,
Judges.

REVERSED AND REMANDED.

Michael Steven Beverung
620 Esplanade, Suite 103
Lake Charles, LA 70607-6363
(337) 478-8706
Counsel for Plaintiffs-Appellees:
W.L. and Nina Wagner

Jack L. Simms, Jr.
P. O. Box 1554
Leesville, LA 71496
(337) 238-9393
Counsel for Defendant-Appellant:
Greenhills International, LLC

PICKETT, Judge.

The defendant-appellant, Greenhills International, LLC, appeals the

confirmation of a default judgment against it.

STATEMENT OF THE CASE

W. L. And Nina Wagner own two condominium units in the Fairway Villas

Condominiums (Fairway Villas) on the grounds of Emerald Hills Resort in Florien,

Louisiana. At the time this suit was filed, Rael, Inc., was the owner of Emerald Hills

Resort and the remaining eighteen condominium units in Fairway Villas. Steve Alford

is the sole shareholder of Rael, Inc., and the president of the Fairway Villas

Condominium Owners’ Association, Inc. (FVCOA).

In January 2008, the Wagners filed suit against Alford, Rael, Inc., and FVCOA,

alleging that FVCOA had a duty to provide water and sewer utilities and to maintain

the common areas for the benefit of the owners, and that they had failed to provide

water and sewer services to their units and maintained the common areas. The

Wagners sought damages for the decreased value of their condominium units, lost

rental income for on of the units, and general damages. Alford and Rael, Inc., filed an

exception of prescription in the trial court.

This is not the first time the issue of the Wagners’ access to water and sewage

service has been presented to this court. This court has previously held that the resort

property owned by Rael, Inc. and Alford was not burdened with a personal servitude

to provide utilities in favor of the Wagners. Wagner v. Alford, 98-1726 (La.App. 3

Cir. 6/30/99), 741 So.2d 884, writ denied, 99-2265 (La. 11/5/99), 750 So.2d 192. In

a subsequent case, we found there was not a predial servitude in favor of the Wagners’

property for the provision of water and sewage service, that Rael, Inc. and Alford were

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not abusing the right of ownership in failing to provide utilities, and that Rael, Inc. did

not have a contractual obligation to provide utilities to the Wagners. Wagner v.

Fairway Villas Condominium Associates, Inc., 01-734 (La.App. 3 Cir. 3/13/02), writ

denied, 02-1492 (La. 9/20/02).

In April 2008, Rael, Inc. and Alford sold their interest in the eighteen units in

Fairway Villas to Greenhills International (Greenhills). In October 2008, the Wagners

filed a First Amending and Supplemental Petition adding Greenhills as a defendant.

When FVCOA and Greenhills failed to file an answer to the suit, the Wagners filed

a Motion for a Preliminary Default, and a preliminary default was entered by the trial

court on April 1, 2009. At a hearing on the confirmation of default on June 15, 2009,

Mrs. Wagner testified. During her testimony, the condominium regime declaration

filed in the Sabine Parish Clerk of Court’s office, the cash deed transfering ownership

from Rael, Inc., and Alford to Greenhills, and an appraisal of the value of the

Wagners’ units was introduced into evidence. On July 6, 2009, the trial court signed

a judgment confirming the default and awarding the Wagners $92,000.00 for loss of

value of the condominiums, $20,340.00 for loss of income, and $10,000.00 in general

damages. Greenhills now appeals.

ASSIGNMENTS OF ERROR

Greenhills asserts six assignments of error:

1. No notice of the entry of a default was sent to counsel for defendants,
James R. Mitchell, or to any of the parties, as provided by law;

2. There was no proper substitution or joinder of parties ordered by the trial
court, after the filing of the supplemental and amended petition, and
plaintiffs did not proceed, thereafter, as required by La.Code Civ.P art.
807;
3. The exception filed by defendants, Stephen R. Alford and Rael, Inc.,
which directly affected the merits of these proceedings, was still pending
when the default judgment was confirmed;

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4. The trial court allowed the plaintiffs to prove their claim by hearsay
evidence and non-authenticated exhibits;

5. The trial court did not require plaintiffs to prove the essential elements
of its claim by admissible evidence;

6. The law and evidence presented by plaintiffs did not present a prima
facie case in support of the judgment.

DISCUSSION

The supreme court recently explained the procedure for obtaining and

confirming a default judgment:

A defendant’s failure to comply with Louisiana Code of Civil
Procedure articles 1001 and 1002 exposes the party to a judgment of
default. The law and procedure relative to default judgments is set forth
in Louisiana Code of Civil Procedure article 1701, et seq. Specifically,
in an ordinary proceeding, such as the instant one, a defendant is
generally required to file an answer within fifteen (15) days after service
of citation upon him. La. C.C.P. art. 1001. A delay is afforded when an
exception is filed prior to answer or the trial court grants additional time
for answering upon motion. La. C.C.P. art. 1001. Notwithstanding the
specified delay periods for answering, a defendant may file his answer at
any time prior to confirmation of a default judgment against him. La.
C.C.P. art. 1002. However, when the defendant in the principal or
incidental demand fails to answer within the time prescribed by law,
judgment by default may be entered against him. La. C.C.P. art.
1701(A). 1 Frank L. Maraist, Louisiana Civil Law Treatise: Civil
Procedure § 12.3, at 451 (2d ed.2008).

The process for obtaining a default judgment when the defendant
has failed to answer a petition timely is uncomplicated. It may be
obtained by oral motion in open court or by written motion, entered in the
minutes of the court, and the judgment consists merely of a minute entry.
La. C.C.P. art. 1701(A); Power Marketing Direct, Inc. v. Foster,
05-2023, p. 10 (La.9/6/06), 938 So.2d 662, 669. A judgment of default
is sometimes referred to as a “preliminary default.” Power Marketing
Direct, 05-2023 at 10, 938 So.2d at 669.

Thereafter, the judgment of default may be confirmed after two
days, exclusive of holidays, from the entry of the judgment of default,
that is, on the third “judicial day” after the lapse of two days, which are
not judicial holidays, from the entry of the preliminary default La. C.C.P.
art. 1702(A).

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Confirmation of a default judgment is similar to a trial and
requires, with admissible evidence, “proof of the demand sufficient to
establish a prima facie case.” La. C.C.P. art. 1702(A); Power Marketing
Direct, 05-2023 at 10, 938 So.2d at 670; Maraist, supra, at 452-453.
The elements of a prima facie case are established with competent
evidence, as fully as though each of the allegations in the petition were
denied by the defendant. Sessions & Fishman v. Liquid Air Corp., 616
So.2d 1254, 1258 (La.1993); Thibodeaux v. Burton, 538 So.2d 1001,
1004 (La.1989). In other words, the plaintiff must present competent
evidence that convinces the court that it is probable that he would prevail
at trial on the merits. Thibodeaux, 538 So.2d at 1004. A plaintiff
seeking to confirm a default must prove both the existence and the
validity of his claim. A default judgment cannot be different in kind
from what is demanded in the petition and the amount of damages must
be proven to be properly due. La. C.C.P. art. 1703.

....

There is a presumption that a default judgment is supported by
sufficient evidence, but this presumption may be rebutted by the record
upon which the judgment is rendered. Ascension Builders, Inc. v.
Jumonville, 262 La. 519, 527, 263 So.2d 875, 878 (1972). Finally, a
defendant against whom a default judgment is confirmed may not assert
an affirmative defense on appeal. Galland v. Nat'l Union Fire Ins. Co.
of Pittsburg, Pa., 452 So.2d 397, 398-99 (La.App. 3d Cir.1984); Romero
v. Sunseri, 359 So.2d 305, 308 (La.App. 4th Cir.1978).

Arias v. Stolthaven New Orleans, L.L.C., 08-1111, pp. 5-8 (La. 5/5/09), 9 So.3d 815,

818-820 (footnotes omitted).

On appeal, we restrict our review of default judgments to a determination of the

sufficiency of the evidence offered in support of the judgment. Bordelon v. Sayer, 01-

717 (La.App. 3 Cir. 3/13/02), 811 So.2d 1232, writ denied, 02-1009 (La. 6/21/02), 819

So.2d 340. As this is a question of fact, we review it under the manifest error standard

of review. Id.

Greenhills argues that as the successor-in-interest to Rael, Inc., the Wagners

should have been required to substitute Greenhills for Rael, Inc., or that the suit

against Rael, Inc., should have been consolidated with the suit against Greenhills,

pursuant to La.Code Civ.P. art. 807. Article 807 states:

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When a party to an action transfers an interest in the subject matter
thereof, the action shall be continued by or against such party, unless the
court directs that the transferee be substituted for or joined with the
transferor.

This argument is based on a misrepresentation of the procedural facts of this case. The

supplemental petition added Greenhills as an additional defendant in this suit. While

some of the allegations in the supplemental petition against Greenhills were

substantially similar to those lodged against the other defendants, the petition was

based on Greenhills’ failure to provide water or sewage facilities after it purchased

Emerald Hills Resort and the other units in Fairway Villas. Thus, Greenhills was an

additional defendant. The pending exception of prescription filed by Rael, Inc., and

Alford did not prevent the Wagners from seeking a default judgment against

Greenhills. See Dismuke v. Quaynor, 25,482 (La.App. 2 Cir. 4/5/94), 637 So.2d 555,

writ denied, 94-1183 (La. 7/1/94), 639 So.2d 1164. This assignment of error lacks

merit.

Greenhills also argues that the Wagners were required to give notice to the

attorney for Rael, Inc., and Alford pursuant to La.Code Civ.P. art. 1702(A). This

provision of law requires notice of the preliminary default if the party against whom

the default judgment is taken has made an appearance in the record. Again, this is a

misstatement of the procedural posture of this case based on the supposition that

Greenhills was a substitute party for Rael, Inc., and Alford. As discussed earlier,

Greenhills was named as an additional defendant. As Greenhills never made an

appearance of record, the notice requirement of La.Code Civ.P. art. 1702(A) does not

apply. This assignment of error lacks merit.

Greenhills argues that the evidence admitted by the trial court to support the

Wagners’ prima facie case were not admissible. Specifically, they object that the

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appraisal of their property provided by Raymond Willett was inadmissible hearsay

evidence. As this is an action for tort damages, La.Code Civ.P. art. 1702(B)(2)

explains the evidence required:

When a demand is based upon a delictual obligation, the testimony
of the plaintiff with corroborating evidence, which may be by affidavits
and exhibits annexed thereto which contain facts sufficient to establish
a prima facie case, shall be admissible, self-authenticating, and sufficient
proof of such demand. The court may, under the circumstances of the
case, require additional evidence in the form of oral testimony before
entering judgment.

In Arias, 9 So.3d 815, 820, the supreme court explained that the rules of evidence are

applicable to confirmations of default judgments:

At the hearing, the rules of evidence generally apply. La. C.E. art.
1101(A); Maraist, supra, at 452-453. The plaintiff must follow the rules
of evidence even though there is no opponent. “Because at a default
confirmation there is no objecting party, to prevent reversal on appeal,
both plaintiff and the trial judge should be vigilant to assure that the
judgment rests on admissible evidence” that establishes a prima facie
case. George W. Pugh, Robert Force, Gerald A. Rault, Jr., & Kerry
Triche, Handbook on Louisiana Evidence Law 677 (2007). Thus,
inadmissible evidence, except as specifically provided by law, may not
support a default judgment even though it was not objected to because
the defendant was not present. 19 Frank L. Maraist, Civil Law Treatise:
Evidence and Proof § 1.1, at 5 (2d ed.2007).

“Hearsay evidence does not sustain this burden of proving a prima facie case.”

Ducharme v. Guidry, 392 So.2d 755, 757 (La.App. 3 Cir. 1980).

The Willett appraisal, which the Wagners used to prove their damages, is

hearsay evidence. While evidence corroborating the testimony of Mrs. Wagner may

be used to prove a prima facie case, the evidence must be admissible. The appraisal

is not admissible because it is hearsay evidence. Without the appraisal, the Wagners

cannot prove an element of their claim, damages. Therefore, they failed to prove a

prima facie case, and the default judgment was improperly confirmed.

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CONCLUSION

The judgment of the trial court finding Greenhills liable for damages in the

amount of $122,340.00 is reversed. The case is remanded for further proceedings.

Costs of this appeal are assessed to the Wagners.

REVERSED AND REMANDED.

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