Bass, Ltd. v. City of New Iberia

NOT DESIGNATED FOR PUBLICATION

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

CA 14-310

BASS, LTD.

VERSUS

CITY OF NEW IBERIA, ET AL.

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APPEAL FROM THE
SIXTEENTH JUDICIAL DISTRICT COURT
PARISH OF IBERIA, NO. 118772
HONORABLE CHARLES LEE PORTER, DISTRICT JUDGE

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BILLY HOWARD EZELL
JUDGE

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Court composed of John D. Saunders, Billy Howard Ezell, and J. David Painter,
Judges.

AFFIRMED IN PART AND REVERSED IN PART.

Alan K. Breaud
Breaud & Meyers
600 Jefferson St., Suite 1101
Lafayette, LA 70502
(337) 266-2200
COUNSEL FOR PLAINTIFF/APPELLEE:
Bass, Ltd.

Allan Leland Durand
235 La Rue France
Lafayette, LA 70508
(337) 237-8501
COUNSEL FOR DEFENDANT/APPELLANT:
Segura Enterprises, Ltd.

Theodore Michael Haik, Jr.
Haik, Minvielle & Grubbs
P. O. Box 11040
New Iberia, LA 70562-1040
(337) 365-5486
COUNSEL FOR DEFENDANT/APPELLEE:
City of New Iberia

Jeremy A. Hebert
Becker & Hebert, L.L.C.
910 Harding Street
Lafayette, LA 70503
(337) 233-1987
COUNSEL FOR DEFENDANT/APPELLANT:
Spanish Towne Investments, LLC

EZELL, Judge.

Segura Enterprises, Ltd. and Spanish Towne Investments, LLC appeal the

decision of the trial court below awarding Bass, LTD. $40,000 in damages for

breach of right of first refusal. For the following reasons, we hereby reverse the

decision of the trial court awarding damages to Bass.

On January 12, 2000, Segura Enterprises and Bass executed a “Lease” to

construct and maintain a billboard in the city limits of New Iberia, Louisiana. The

lease provided a term of fifteen years. Afterwards, Bass constructed a double-sided

billboard on the north side of U. S. Highway 90. The lease describes the property

only as:

114 U. S. Huy [sic] 90 West New Iberia LA
See Attached for Exact Location

Location of property: The leased property is located on the
(N,S,E,W) E side of Highway 90 +,/-150 (distance), (N,E,S,W) N, of
(Highway or Landmark) AVERY ISLAND RD in the city of NEW
IBERIA, in the Parish IBERIA, in the State of LA.

Stephen Sonnier drafted the lease in his capacity as owner/manager of Bass

and submitted the lease to Perry J. Segura, Manager of Segura Enterprises. The

lease contains a provision making the lease a part of any sale of the property:

6. Becomes Part of Sale or Lease of Property: This Lease shall
become a part of any transaction which constitutes the sale and/or
lease of the described property herein and this execute [sic] and
recorded lease shall be transferred to the new owner(s) or lessee(s), in
the event of any change of ownership of the described property,
Lessor agree [sic] to notify the Lessee promptly of such changes and
Lessor also agree [sic] to give the new owner formal written notice of
the existence of the lease.

The lease further contains the following provision regarding right of first

refusal:

7. Right of First Refusal to Purchased Leased Property: Lessee
has the right and first of refusal to purchase from the Lessor the
described leased property in whole or part upon which the advertising
structure(s) is located for the sum no greater than the sales price to the
interested purchaser.

Finally, the lease also contained a clause which read:

13. Cancellation of Lease by Lessor: The Lessor shall have the right
to cancel this lease if the following condition exists:
In the event the advertising display erected on described property
interferes with a construction or renovation project or prevents the
Lessor from selling and/or leasing the property upon which the
advertising structure is located, for any purpose other than outdoor
advertising, as evidenced by a building permit or lease or sale contract
to be presented to Lessee for inspection. If any of the described leased
property is not utilized for such building or renovation or part of the
property is not to be sold or leased, the Lessee has the option to use
the remaining portion on the same terms. If Lessor does cancel this
lease, Lessor agrees to refund to the Lessee any prorated yearly rent
previously paid for the unexpired portion of this lease. Lessee agrees
to remove the advertising structure within ninety (90) days of written
notice to Lessee of the Lessor’s cancellation of lease.

Bass recorded the lease in the public records of Iberia Parish, and New

Iberia issued a permit to Bass to operate the billboard.

In October 2006, Segura Enterprises sold the subject property to Spanish

Towne. Segura Enterprises did not notify Bass of the sale. Bass did not discover

the sale of the property until roughly March 22, 2007, when it attempted to pay

Segura Enterprises its yearly lease payment. Bass did not assert any right under the

lease against Segura Enterprises or Spanish Towne, or otherwise challenge the sale

in any way. Instead, Bass forwarded payments due under the lease to Spanish

Towne, cooperating with Spanish Towne to the point of trading advertising space

for yearly rent.

On or about February 16, 2009, Spanish Towne sold and transferred

properties including the leased land to the City of New Iberia. Like Segura

Enterprises before it, Spanish Towne did not inform Bass of the sale. Bass became

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aware of the sale to the City about December 2009. Again, Bass did not challenge

the sale to the City in any way, once more submitting lease payments to the City in

early 2011 in lieu of challenging the sale. The City, however, refused the tender of

lease payments.

On April 6, 2011, the City refused to issue a permit for Bass to operate the

billboard. Bass also received correspondence dated April 20, 2011 and May 17,

2011, from the City canceling the lease and requesting that Bass remove its

billboard from the leased property because the billboard interfered with a

municipal construction project. In turn, Bass sued for mandamus, declaratory

judgment, and damages against the City and Spanish Towne; seeking to require the

City to renew the operating license for the billboard; specific performance of the

right of first refusal contained within the lease; and alternatively, damages for

breach of contractual rights.

Shortly after preliminary proceedings, Bass filed Chapter 11 Bankruptcy in

the U.S. Bankruptcy Court. During the bankruptcy proceedings, the parties

continued to litigate, including an amendment by Bass adding Segura Enterprises

as a defendant.

After a trial on the matter, the trial court issued declaratory judgments

stating that Bass had a valid and enforceable lease, the right to continue operating

the billboard, and the right to relocate the billboard to a portion of the property not

interfering with the municipal construction property. The trial court also issued a

writ of mandamus ordering to the City to renew/reissue the necessary permits to

operate the billboard. The City has not appealed those decisions. The trial court

further held that Segura Enterprises and Spanish Towne breached their contractual

obligations of right of first refusal to Bass and awarded Bass $40,000 in damages

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against them, in solido. From that decision, Segura Enterprises and Spanish

Towne appeal.

On appeal, Segura Enterprises asserts eight assignments of error and Spanish

Towne asserts five assignments of error. However, since we find one assignment

of error common to both Appellants compelling, we need only address their

assignments of error concerning damages.

A trial court’s finding of fact may not be reversed absent manifest error or

unless it is clearly wrong. Stobart v. State, through Dep’t of Transp. and Dev., 617

So.2d 880 (La.1993). “The [trial court’s] determination of the amount, if any, of

an award of damages . . . is a finding of fact.” Ryan v. Zurich Am. Ins. Co., 07-

2312, p. 7 (La. 7/1/08), 988 So.2d 214, 219. The reviewing court must do more

than simply review the record for some evidence which supports or controverts the

trial court’s findings, it must instead “review the record in its entirety to determine

whether the trial court’s finding was clearly wrong or manifestly

erroneous.” Stobart, 617 So.2d at 882. The issue to be resolved on review is

whether the fact finder’s conclusion was a reasonable one, not whether it was right

or wrong. Id. “‘[T]he reviewing court must always keep in mind that ‘if the trial

court or jury’s findings are reasonable in light of the record reviewed in its entirety,

the court of appeal may not reverse, even if convinced that had it been sitting as the

trier of fact, it would have weighed the evidence differently.’”’ Id. at 882-

83 (quoting Housley v. Cerise, 579 So.2d 973, 976 (La.1991) (quoting Sistler v.

Liberty Mut. Ins. Co. 558 So.2d 1106, 1112 (La.1990)).

It is undisputed that all sellers and purchasers of the property failed to

comply with Bass’ right of first refusal to the property. However, there is no

evidence in the record before this court that Bass suffered any actual damages, let

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alone the extent of any damages allegedly suffered. The only evidence at all

concerning costs incurred by Bass was the assertion by Mr. Sonnier that he had

paid roughly $40,000 to move signs in the past. The trial court allowed no

evidence of any kind regarding any specific costs of relocation of this particular

sign, and we cannot find any of the exclusions to be an abuse of the trial court’s

discretion.

Because the City did not appeal challenging the validity of the lease, it

remains in effect against the City. The lease unequivocally allows the billboard to

be moved if it interferes with any construction projects, which it undisputedly did.

However, the lease, which was drafted by Bass, was silent as to who would bear

the cost of any required relocation of the sign. The trial court was well reasoned in

its analysis of this issue, stating in its reason for judgment:

Although the Lease states that the sign may be relocated on the
described property, it is silent about who shall bear the costs and/or
expenses. When the parties do not provide for a particular situation,
we must assume that they intended to bind themselves not only to the
express provisions of the contract, but also to whatever the law, equity,
or usage regards as implied in a contract of that kind or necessary for
the contract to achieve its purpose. LSA-C. C. art. 2054.

La. Civil Code Article 2695 provides as follows:

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.

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

(a) Appropriate ownership of the
improvements by reimbursing the

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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.

Under section 9 of the Land Lease Agreement, if the Lessee
cancels the lease, the Lessee has the right to remove, at his expense
and discretion, aboveground structures and abandon below ground or
substructures. Under section 13, if the Lessor cancels the Land Lease
Agreement, the Lessee receives a pro rata refund on the remainder of
any unexpired term of the lease and the Lessee retains the right to
remove, at his expense, the structure within ninety (90) days.

Therefore the Land Lease Agreement is not a substantial
departure from Civil Code article 2695 which places the burden on the
Lessee to remove his property at his expense or suffer loss of
ownership if not removed within a reasonable period of time. The
Land Lease Agreement does not shift the burden of removal of the
structure when the Lessor requests removal or relocation of the
structure for purposes of renovation or new construction. Therefore,
the City must bear its cost of new construction or renovations and
Bass must bear the cost of relocation of its outdoor advertising
structure.

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Additionally, as the drafter of the lease, any ambiguity in the contract is

interpreted against Bass. La.Civ.Code art. 2056. We, therefore, agree with the

trial court that Bass is responsible for the costs of relocating its sign under section

thirteen of the lease. Accordingly, the cost of that relocation is not a damage

suffered from the breach of the right of first refusal but an obligation Bass incurred

by the very terms of the lease it drafted.

Moreover, a plaintiff has the burden of proving the damage he suffered as

the result of the breach of contract. Campbell v. Lelong Trust, 327 So.2d 533

(La.App. 2 Cir.), writs denied, 331 So.2d 494, 496 (La.1976). “The law is clear

that a plaintiff is unable to recover damages in a breach of contract action absent

definite proof of damages.” Koncinsky v. Smith, 390 So.2d 1377, 1382 (La. App. 3

Cir. 1980).

Beyond the alleged relocation cost, there is no evidence or testimony

whatsoever of any damages suffered by Bass as a result of the breaches of its right

of first refusal. The trial court correctly noted in its reasons for judgment that Bass

put on no evidence of any real estate values at all. There was no testimony

concerning the size of any parcel that could or would have been sought, where that

parcel would have been located, the cost of what that land may have been, or the

value of the hypothetical parcel versus the cost of moving the sign. In fact, the

only evidence in the record of the value of the property in dispute is evidence put

on by the Defendants that the land sold for $1.2 Million to Spanish Towne and

$1.34 million to the City, far exceeding the alleged cost of moving the billboard.

It is clear from reading the record before this court that Bass put on no

evidence of any actual damages suffered. Accordingly, Bass is not entitled to

recover damages for breach of right of first refusal because it was unable to carry

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the burden of proving the damages sustained as a result of the breach. The trial

court’s finding concerning damages was, therefore, unreasonable in light of the

record before this court and is clearly wrong. Accordingly, we reverse the trial

court’s award of $40,000 to Bass.

Finally, Spanish Towne also had a persuasive argument concerning third-

party notification of the lease under the public record doctrine, and both Spanish

Towne and Segura Enterprises had compelling arguments concerning Bass’

behavior constituting waiver of the right of first refusal. However, as we find that

there was no proof of damages and reverse on those grounds, we find these

assignments of error to be moot and need not address these, nor the multitude of

other assignments of error asserted by the Appellants.

For the above reasons, we hereby reverse the decision of the trial court

awarding Bass $40,000 for breach of right of first refusal. The decision is affirmed

in all other aspects. Costs of this appeal are hereby assessed against Bass, LTD.

AFFIRMED IN PART AND REVERSED IN PART.

This opinion is NOT DESIGNATED FOR PUBLICATION. Uniform
Rules—Courts of Appeal. Rule 2–16.3.

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