Julie C. White, Et Vir. v. Lucas Strange

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

11-523

JULIE C. WHITE, ET VIR.

VERSUS

LUCAS STRANGE, ET UX.

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APPEAL FROM THE
PINEVILLE CITY COURT
PARISH OF RAPIDES, DOCKET NO. 90,143
HONORABLE F. RAE SWENT, JUDGE AD HOC
**********

SYLVIA R. COOKS
JUDGE

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Court composed of Sylvia R. Cooks, James T. Genovese, and Phyllis M. Keaty,
Judges.

AFFIRMED.

Susan Ford Fiser
1630 Metro Drive
P.O. Box 12424
Alexandria, LA 71315-2424
(318) 442-8899
COUNSEL FOR PLAINTIFFS/APPELLEES:
Julie C. and James White

Robert G. Nida
Gold, Weems, Bruser, Sues & Rundell
2001 MacArthur Drive
P.O. Box 6118
Alexandria, LA 71307-6118
(318) 445-6471
COUNSEL FOR DEFENDANTS/APPELLANTS:
Lucas and Sheri Strange

Richard E. Lee
810 Main Street
Pineville, LA 71360
(318) 448-1391
COUNSEL FOR DEFENDANT/APPELLEE:
Cindy English

COOKS, Judge.

This appeal involves a suit on a contract to buy and sell real estate. The

prospective buyers in this case attempted to terminate the contract to buy the

property. Finding the parties entered into a valid and binding agreement to buy

and sell property and the seller did not receive a timely written notice to cancel the

sale from the buyer, the trial court rendered judgment in favor of the sellers. This

appeal followed.

FACTS AND PROCEDURAL HISTORY

The plaintiffs-prospective sellers are Julie and James White and the

defendants-prospective buyers are Lucas and Sheri Strange. The home and

accompanying property located in Pineville, Louisiana, is titled in the name of

Julie Converse Baker, who purchased the property before her marriage to James

White. The Stranges both signed the buy and sell agreement on December 3, 2008.

Julie Converse Baker White signed the buy and sell agreement on December 4,

2008.

The buy and sell agreement contained certain standard provisions for the

buyer’s right of inspection. The buyer had an eight-day inspection period,

beginning on the day after the buy and sell agreement was signed. If the buyer was

not satisfied with the condition of the property, the buyer had the following

options: (1) elect, in writing, to terminate the agreement and declare it null and

void, or (2) indicate in writing the deficiencies and desired remedies from the

seller. The seller then has seventy-two hours in which to respond in writing to

indicate any willingness to remedy the deficiencies. If the seller declines to

remedy some or all of the problems, the buyer then has a seventy-two hour period

to (1) accept the seller’s response; (2) accept the current condition of the property;

or (3) elect to terminate the agreement. The buy and sell agreement also provides

that the buyer’s failure to make an inspection or failure to respond in writing

within the eight-day period shall be deemed an acceptance of the current condition

of the property.

The inspection period for the property in question was December 5, 2008

through December 12, 2008. An inspection of the property was performed by

Daniel Tarver on December 6, 2008. The report contained the following pertinent

comments: “The retaining wall is leaning. I also noted wood rot on several of the

landscape timbers.”

After reading the inspection report, Mr. Strange, who had a mechanical

engineering degree, was concerned over the problems with the retaining wall. He

believed repairs of the wall would be costly, and questioned whether he wanted to

incur such an expense. The Stranges’ real estate agent, Angie Sikes, informed

Cindy English, the White’s real estate agent, of the Stranges’ concerns and the

possibility they might seek to terminate the buy and sell agreement.

Ms. English then requested a second inspection report on the retaining wall.

Mr. Tarver inspected the property a second time and reported that the retaining

wall was intact and there was no erosion. He noted maintenance and eye appeal

could be improved for approximately $5,000.00 to $6,000.00.

Following this report, on December 9, 2008, the Stranges sent to Sikes an e-

mail asserting they wished to terminate the contract and declare the contract null

and void. They stated the “decision was made due to the uncertainty of the

structural soundness of the retainer wall and the potential damage that could be

caused.” Sikes then forwarded this e-mail to Brad Youngblood, a loan officer who

was working with the Stranges, who acknowledged receipt of the e-mail. Ms.

Sikes also asserted she forwarded a copy of the e-mail to English, but English

denied ever receiving the e-mail. There was a previous incident acknowledged by

both Sikes and English, involving an e-mail that was sent by Sikes that English

could not open. A copy of the e-mail was then faxed to English.

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Sikes and English testified they had a conversation on December 9, 2008. In

that conversation, Sikes maintained she had gotten confirmation from English that

she had received the e-mail. Sikes believed she had made a written notation of that

fact, but her notes did not bear that out. English stated she was with Tarver at the

second inspection when she was called by Sikes. According to English, she was

told by Sikes that the Stranges were considering terminating the contract, and

English would get something from her as soon as possible.

The record confirms on December 14, 2008, Sikes e-mailed a request to

English to forward her a copy of the December 9, 2008 inspection report on the

retaining wall. That report was faxed by English to Sikes that day. On December

15, 2008, the Stranges sent to English a “Buyers Response to Inspection” (which

was a standard form), indicating there was a deficiency in the retaining wall. Julie

White immediately responded that they would repair or remedy the complaint.

Despite this offer to remedy the complaint, the Stranges did not proceed with the

closing.

On December 29, 2008, the Stranges sent an “Agreement to

Terminate and/or Release of Deposit” to the Whites. The Whites refused to return

the deposit. The $4,000.00 deposit remained with Perego Realty.

The Whites filed suit against the Stranges for damages suffered, alleging

they defaulted on an agreement to purchase the property. The Stranges filed a third

party demand against Perego Realty and Cindy English as the authorized agents for

the Whites.

The matter went to trial. The Stranges argued their December 9, 2008 e-

mail to Sikes constituted a “writing” sufficient to legally terminate the buy and sell

agreement. At the close of trial, the trial judge took the matter under advisement.

Shortly thereafter and before rendering a decision, the trial judge passed away, and

the matter was transferred to another judge. After reviewing the record, that judge

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then rendered written reasons finding the parties entered into a valid and binding

agreement to buy and sell the property, and there was no timely writing to cancel

the sale. Further, the trial judge noted there was no refusal by the sellers to repair

the deficiencies listed in the inspection report. Judgment was rendered in favor of

the Whites, and awarding damages in the amount of $22,320.00, a forfeit of the

$4,000.00 deposit and $7,500.00 in attorney fees.

The Stranges contend on appeal that the termination of the buy and sell

agreement was valid and that the court erred in ruling in favor of the Whites. In

the alternative, the Stranges argue even if it were found they did not validly

terminate the buy and sell agreement, the trial court’s erred in awarding damages

to the Whites.

ANALYSIS
I. Was the Buy and Sell Agreement Validly Terminated?
As they did below, the Stranges argue the Louisiana Uniform Electronic

Transactions Act, La.R.S. 9:2601-2620, is applicable and allows for the use of an

e-mail to validly terminate the buy and sell agreement in this case. Under the facts

of this case, we do not agree.

Louisiana Revised Statutes 9:2605B(1) provides the Act applies “only to

transactions between parties, each of which has agreed to conduct transactions by

electronic means.” Under La.R.S. 9:2605B(2), no formal agreement is needed, but

“the context and surrounding circumstances, including the conduct of the parties,

shall determine whether the parties have agreed to conduct a transaction by

electronic means.” In finding there was no formal agreement nor any conduct of

the parties indicating an agreement to use electronic transmissions, the trial court

reasoned:

This court has no difficulty in finding that the parties have
agreed in this case to the use of a facsimile machine. Under the Buy-
Sell Agreement, the parties are permitted to send documents by fax,

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but original signatures “shall” be submitted to the listing agent. Then,
the parties may use other electronic means for any supplement
addendum or modification to the Acceptance. No reference to the
Uniform Act is required for anything having to do with the
Acceptance. There was no supplement, addendum or modification,
although the testimony showed that the buyers made multiple verbal
requests, such as beginning a wall and early occupancy.

Even if this clause was sufficient to invoke the “Act,” these
parties had no regular use of any electronic transmission, other than
fax. While Sikes and her client may have used email, there is only
one reference in the testimony to Sikes and English using email before
the 9th and that was not a successful use. The court believes that Sikes
believed that English told her she got the email; however, Sikes,
knowing the email was sent, believed there was more to her
conversation with English than was actually said. It is not uncommon
for two parties to have a conversation about an event and not
understand one had more information than the other. The notes that
Sikes made only referenced whether or not the Whites “knew”
something and did not contain any reference to the email.

The conduct of the parties did not give any indication that the
Whites or English did or would agree to the use of a forwarded email
as the means of canceling the Agreement to Buy and Sell. The Court
also believes that English did not get the email. Her testimony is
somewhat corroborated by the exchange between Youngblood and
Daniels on the 12th, to the effect that English did not know until 12 th
that the closing was not going to take place on the 15 th. Even when
she learned the closing would not take place, she still did not know the
sale would never take place, especially since she received a request
for the Tarver report on the 14th and the Buyer’s Response on the 15th.
According to her testimony, English did not receive any termination
notice in writing and, so, she simply believed that Sikes told her the
Stranges wanted to terminate as a negotiation tactic. The court does
not find this conclusion to be unreasonable.

The court also questions whether cancelling a buy-sell
agreement is a situation where it would be appropriate to apply the
“Act.” This is a real estate transaction and there was testimony from
all concerned that realtors are required to use certain contract forms,
including the Property Inspection Response forms. In fact, Sikes
testified that her Broker instructed her to complete and send the
inspection report on the 15th. Thus, while electronic transmissions
other than a fax may be convenient for those negotiating the details of
everyday business, it would appear that the Louisiana Real Estate
Commission believes that certain significant actions should be in a
certain form. In fact, on 12/29, Sikes used a pre-printed form to
attempt termination and return of the deposit. This document appear
to be the type of form that could be used for termination, but, in this

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case, the document came too late. There was no “writing” sufficient
to cancel the contract on or by the 12th of December.
We find no error in the trial judge’s reasoning in support of her finding that the

Stranges failed to timely terminate the buy and sell agreement.

We also note in the Listing Agreement, completed by English and signed by

Julie White, the box that states “Seller authorized the authentication of his

signature or of the Purchaser’s by facsimile (fax) or e-mail” was left unchecked.

This contradicts the Stranges’ contention that e-mail was authorized by the parties

in this case.

Further, the record indicates, as late as December 14, 2008, Sikes was still

requesting inspection reports and appraisals from English, which gave English no

reason to believe the Stranges were not still negotiating details of the purchase of

the house. Sikes herself testified that on December 15, 2008, the Stranges were

still asking for reports and for things to be repaired and changed at the house.

English testified on December14, 2008, she called Sikes to inform her that Kevin

Bell, the foundation repair person, was meeting her at the house, and she would

forward his report to Sikes as soon as she received it. According to English, Sikes

responded “okay,” further leading English to believe the agreement to buy and sell

had not been terminated. The record clearly establishes the conduct of the

Stranges and Sikes does not reflect that of parties who believed the buy and sell

agreement had been terminated.

II. Damages.

Finding the parties entered into a valid and binding buy and sell agreement,

and under Option 1 of the agreement there was no timely writing to cancel the sale

and, under Option 2, the sellers did not refuse to repair the deficiencies listed on

the Buyers Response to Property Inspection Report, the trial judge found the sellers

were entitled to damages. The trial judge noted the Agreement provided for

stipulated damages in the amount of ten percent (10%) of the purchase price
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($22,320.00), forfeiture of the deposit ($4,000.00), and attorney fees ($7,500.00).

Thus, the only amount which was subject to any discretion was the trial judge’s

award of attorney fees. The trial judge did not accept the Whites’ arguments below

that the Stranges were in bad faith and they should be liable for actual damages.

The Stranges’ assignment of error, asserting the trial judge should have

ordered Perego Realty to refund the $4,000.00 deposit to them, was premised on its

belief that the buy and sell agreement was properly terminated. Finding no error in

the trial court’s ruling that the agreement was not properly terminated, this

assignment of error has no merit.

As to the award of damages in the amount of $22,320.00, we find the trial

court correctly applied the stipulated amount of damages listed in the buy and sell

agreement. The law is established that parties to a contract may stipulate damages

to be recovered in case of non-performance. See La.Civ.Code art. 2005. A

stipulated damage clause fixes the amount of damages that may be recovered for

breach of contract. Nesbitt v. Dunn, 28,240 (La.App. 2 Cir. 4/3/96), 672 So.2d

226.

We also find no abuse of discretion in the trial court’s award of

$7,500.00 in attorney fees. The buy and sell agreement provided for attorney fees

in the case of non-performance, and the trial court provided facts and figures for

setting the amount it did.

DECREE

For the foregoing reasons, the judgment of the trial court is affirmed. Costs

of this appeal are assessed against appellants, Lucas and Sheri Strange.

AFFIRMED.

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