Jose Raful Martinez v. George Robert Rivet, Trustee of Rivet Family Trust

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

16-100

JOSE RAFUL MARTINEZ, ET AL.

VERSUS

GEORGE ROBERT RIVET, TRUSTEE OF RIVET FAMILY TRUST

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APPEAL FROM THE
FOURTEENTH JUDICIAL DISTRICT COURT
PARISH OF CALCASIEU, NO. 2015-1849
HONORABLE CLAYTON DAVIS, DISTRICT JUDGE

**********

MARC T. AMY
JUDGE

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Court composed of Sylvia R. Cooks, John D. Saunders, Marc T. Amy, Billy H.
Ezell and Phyllis M. Keaty, Judges.

AFFIRMED.

Cooks, J., Dissents and assigns written reasons.
Saunders, J., dissents.

Skipper M. Drost
One Lakeshore Drive, Suite 100
Lake Charles, LA 70629
(337) 436-4546
COUNSEL FOR PLAINTIFFS/APPELLANTS:
Jose Raful Martinez
Maria Victoria Martinez
Victor Ray Labra

Merrick J. (Rick) Norman, Jr.
Norman Business Law Center
145 East Street
Lake Charles, LA 70601
(337) 436-7787
COUNSEL FOR DEFENDANT/APPELLEE:
George Robert Rivet, Trustee of Rivet Family Trust

AMY, Judge.

The plaintiffs filed suit against the defendant, seeking enforcement of

options to purchase within the leases of their respective duplex properties. The

plaintiffs further sought damages for alleged misrepresentations by the defendant.

The defendant refuted the plaintiffs‟ assertions, and, by reconventional demand,

sought the plaintiffs‟ eviction from the properties. The trial court ultimately

entered a partial summary judgment in favor of the defendant and ordered the

evictions. It did so based upon a determination that the plaintiffs could not

establish an ownership interest in the property. The trial court recognized that the

plaintiffs‟ remaining damages claims remained for future proceedings. The

plaintiffs appeal. For the following reasons, we affirm.

Factual and Procedural Background

This appeal involves review of the granting of a partial summary judgment

relating to the ownership of two duplex units, one unit leased by Jose Raful

Martinez and Maria Victoria Martinez, and one unit leased by Victor Ray Labra.

Each was the subject of a “Lease with Option to Purchase” executed, respectively,

between The Rivet Family Trust and Mr. and Mrs. Martinez and The Rivet Family

Trust and Mr. Labra. In May 2014, the plaintiffs, Mr. and Mrs. Martinez and Mr.

Labra, alleged that they exercised the options to purchase by paying all sums due

over the course of time and that the defendant, George Robert Rivet, as Trustee of

The Rivet Family Trust, refused to transfer the titles to the units to them. The

plaintiffs sought specific performance of the options to purchase, associated

damages, as well as attorney fees and costs. By amended petition, the plaintiffs

alleged that the defendant violated the Unfair Trade Practices and Consumer

Protection Law. See La.R.S. 51:1401, et seq. They again sought damages,

attorney fees and costs available thereunder and re-urged their original request for

specific performance of the options to purchase.

The defendant‟s answer included his denial that the plaintiffs exercised the

options to purchase. The defendant asserted instead that the plaintiffs “simply

continued to pay the monthly rent after the lease and option expired and the lease

(without the option) reconducted on a month to month basis.” By reconventional

demand, the defendant alleged that the plaintiffs “repeatedly defaulted on the lease

by failing to pay the required rent, utilities, sewer electricity [sic], taxes, and

insurance, and currently are in arrears” for both units. Therefore, the defendant

alleged, the plaintiffs breached the lease and refused to vacate the units upon notice

of eviction. The defendant sought an order of eviction, as well as a judgment for

unpaid rent, various damages, and for attorney fees. The plaintiffs responded to

the reconventional demand with an exception of prematurity and argued that the

“[e]viction should not be heard until the true ownership of said property is

determined by a Trial on the Merits and therefore Defendant‟s Rule for Eviction is

premature.”

The defendant thereafter filed a motion for partial summary judgment, in his

capacity as a plaintiff-in-reconvention, seeking a declaration that the subject

options to purchase were unenforceable. Chiefly, the defendant asserted that the

plaintiffs failed to exercise the options to purchase in writing by their designated

expiration date and that any payments made thereafter must be viewed simply as

rental payments after the lease reconducted on a monthly basis. The defendant

attached various exhibits, including the leases at issue, his affidavit, and the

previously-served notices to vacate. The plaintiffs opposed the motion and

submitted Mr. Martinez‟s affidavit, the affidavit of the president of a title

2

company,1 and spreadsheets purportedly representing payments made from 2008-

2011.

The trial court heard the plaintiffs‟ exception of prematurity as well as the

defendant‟s motion for partial summary judgment and eviction in September 2015.

The trial court first denied the plaintiffs‟ motion for continuance, finding that the

verbal motion was not in proper form and that the written motion was not timely.

Reaching the merits of the motion for partial summary judgment, the trial court

determined that the plaintiffs had not exercised the now-expired options to

purchase. Accordingly, the trial court granted the motion for partial summary

judgment and entered the judgment for eviction against the plaintiffs. The trial

judge determined that the ruling rendered the exception of prematurity moot. The

trial court specifically recognized that the parties‟ claims for damages would be

reserved for further proceedings.

The plaintiffs appeal,2 asserting that the trial court erred in: 1) denying the

motion to continue; 2) granting the defendant‟s motion for partial summary

judgment; 3) granting the motion for eviction; 4) dismissing the exception of

prematurity; and in 5) refusing the introduction of parol evidence pertaining to the

eviction and application of the Unfair Trade Practices and Consumer Protection

Law.

1
The affiant stated that Mr. Martinez approached him in October 2012 regarding
“formalizing the purchase of two duplexes by Martinez and Victor Ray Labra from The Rivet
Family Trust.” He stated that he prepared cash deeds to transfer title to both properties, but was
later informed by Mr. Martinez that “Mr. Rivet refused to sign.” The affiant further stated that
he “contacted Mr. Rivet on behalf of Martinez to come in and sign the documents and he
refused.”
2
By prior opinion, a panel of this court addressed the defendant/appellee‟s motion to
dismiss the appeal filed with this court. See Jose Raful Martinez, et al. v. George Robert Rivet,
Trustee of the Rivet Family Trust, 16-100 (La.App. 3 Cir. 4/13/16), 190 So.3d 461.

3

Discussion

Motion to Continue

The plaintiffs first briefly question the trial court‟s denial of their request for

a continuance at the time of the September 2015 hearing. They note that Louisiana

Code of Civil Procedure Article 1601 provides discretionary grounds for a

continuance “in any case if there is good ground therefor.” They explain, as they

did at the hearing, that they had not received discovery requested of the defendant.

Thus, they contend that the trial court erred in proceeding with the hearing rather

than granting the continuance.

Notably, “[t]he denial of a motion for continuance will not be disturbed

absent a showing of an abuse of discretion by the trial court.” Newsome v. Homer

Mem. Med. Ctr., 10-0564, p. 2 (La. 4/9/10), 32 So.3d 800, 802. On review, we

find no such abuse of discretion. Although the plaintiffs cited discovery requests

that had been pending for several months, the trial court noted that the plaintiffs

had not pursued those requests by a motion to compel. See, e.g., La.Code Civ.P.

art. 1469. After being informed that the discovery request “was filed or sent on

June 25th of 2015[,]” and that the motion for partial summary judgment was filed

on July 31st, the trial court observed that a motion to compel “could have been filed

in late July or at any time in August in anticipation of this, which would have then,

if they had not complied, given you a much better argument to seek a continuance

of this date, but you haven‟t filed anything.” The trial court additionally noted that

the continuance was merely requested verbally at the hearing, rather than by

writing and in advance of the hearing. While the trial court did not formally

reference the local rules of court, we find no abuse of discretion in a determination

4

that the contemporaneous nature of the request for continuance mitigated from a

finding of the “good ground” of La.Code Civ.P. art. 1601.3

Merits

The plaintiffs next combine argument as to various issues to contest the trial

court‟s determination by partial summary judgment that they could not establish an

ownership interest in the properties. We consider each in turn.

Partial Summary Judgment

As explained by La.Code Civ.P. art. 966(A)(2),4 “[t]he summary judgment

procedure is designed to secure the just, speedy, and inexpensive determination of

every action, except those disallowed by Article 969. The procedure is favored

and shall be construed to accomplish those ends.” Summary judgment “shall be

rendered forthwith if the pleadings, depositions, answers to interrogatories, and

admissions, together with the affidavits, if any, admitted for purposes of the motion

for summary judgment, show that there is no genuine issue as to material fact, and

that mover is entitled to judgment as a matter of law.” La.Code Civ.P. art.

966(B)(2).

The moving party bears the burden of proof on the motion for summary

judgment. La.Code Civ.P. art. 966(C)(2). However, if the moving party will not

bear the burden of proof at trial on the issue presented, the moving party is not

3
See also La.Code Civ.P. art. 1602, which relates to a moving party‟s efforts to obtain
evidence, provides, in part, that: “A continuance shall be granted if at the time a case is to be
tried, the party applying for the continuance shows that he has been unable, with the exercise of
due diligence, to obtain evidence material to his case[.]”
4
Louisiana Code of Civil Procedure Article 966 was amended by 2015 La. Acts No. 422,
§ 1. However, its provisions became effective on January 1, 2016, after the motion for partial
summary judgment was heard. Thus, we consider this matter under the version of the Article in
effect at that time. See 2015 La. Acts No. 422, § 2 (“The provisions of this Act shall not apply to
any motion for summary judgment pending adjudication or appeal on the effective date of this
Act.”).

5

required “to negate all essential elements of the adverse party‟s claim, action, or

defense, but rather to point out to the court that there is an absence of factual

support for one or more elements essential to the adverse party‟s claim, action, or

defense.” Id. On appeal, the reviewing court considers the matter de novo, using

the same criteria that governed the trial court‟s determination as to whether

summary judgment is appropriate. Dunn v. City of Kenner, 15-1175 (La. 1/27/16),

187 So.3d 404.

By their petition, the plaintiffs sought enforcement of the options to

purchase contained within their respective leases. The defendant, however,

rejected the enforceability of those options and asserted that the options had merely

expired. The defendant introduced the subject leases in support of the motion for

partial summary judgment in that regard. The Martinez lease designated its thirty-

six month term from November 15, 2006 to October 15, 2009,5 required a monthly

payment of $2,165.36, and contained insurance and tax payment provisions. It

further included an “Option to Purchase” section which provided, in pertinent part:

Landlord further appears and declares that for and in consideration of
the payment of the above all of the above [sic] monthly rental
payments, Landlord then grants unto Tenant the exclusive right,
privilege or option to purchase the property leased hereinabove and
heretofore described subject to the conditions hereinafter set forth and
for the price and terms of payment set forth to-wit:

1. In the event that Tenant exercises his option herein
granted, the purchase price of the property is to be $130,000.00
subject to a credit of $16,000.00 paid in cash leaving an unpaid
balance of $114,000.00 and subject to a credit for all previous
monthly rentals paid to date . . . .

5
Notwithstanding the November 2006 commencement date, the lease reflects a creation
date of December 2008. In further filings in this matter, Mr. and Mrs. Martinez alleged that they
first executed an Act of Vendor‟s Lien with the defendant in October 2006, but that the Act was
cancelled by an August 2007 dation en payment.

6

2. In order to exercise his option to purchase Tenant
shall notify Landlord on or before October 15, 2009 by Certified
Mail Return Receipt Requested that Tenant wishes to exercises
his option to purchase. Said notice shall be sent to Landlord at
the address listed below.

....

8. Should Tenant/buyer violate any of the conditions of the
lease, or fail to exercise the option the lease is automatically
terminated and this option shall be automatically extinguished without
any action being taken by Landlord/seller and the option shall be
considered as never have been written. Should Tenant/buyer not
exercise his option within the above stated time limit his option shall
be automatically extinguished without any action being taken by
Landlord/seller and the option shall be considered as never have been
written.

Also confected on December 17, 2008, the Labra lease designated its thirty-

six month term from October 1, 2007 to September 30, 2010, and required a

monthly rate of $2,165.27. Like the Martinez lease, the Labra lease included

insurance and tax payment provisions. Its respective “Option to Purchase” section

provided, in part, as follows:

Landlord further appears and declares that for and in consideration of the
payment of the above all of the above monthly rental payments, Landlord
then grants unto Tenant the exclusive right, privilege or option to purchase
the property leased hereinabove and heretofore described subject to the
conditions hereinafter set forth and for the price and terms of payment set
forth to-wit:

1. In the event that Tenant exercises his option herein granted, the
purchase price of the property is to be $130,000.00 subject to a credit of
$4,000.00 paid in cash leaving an unpaid balance of $126,000.00 and subject
to a credit for all previous monthly rentals paid to date . . . .

2. In order to exercise his option to purchase Tenant shall
notify Landlord on or before September 30, 2010 by Certified Mail
Return Receipt Requested that Tenant wishes to exercise his option to
purchase. Said notice shall be sent to Landlord at the address listed
below.

....

7

8. Should Tenant/buyer violate any of the conditions of the lease,
or fail to exercise the option the lease is automatically terminated and this
option shall be automatically extinguished without any action being taken by
Landlord/seller and the option shall be considered as never have been
written. Should Tenant/buyer not exercise his option within the above stated
time limit his option shall be automatically extinguished without any action
being taken by Landlord/seller and the option shall be considered as never
have been written.

Thus, the leases themselves clearly reflect that, in order to exercise the options to

purchase, the plaintiffs/tenants were required to contact the defendant/landlord by

the respective designated dates and to do so by certified mail. See La.Civ.Code art.

2046 (“When the words of a contract are clear and explicit and lead to no absurd

consequences, no further interpretation may be made in search of the parties‟

intent.”). See also Prejean v. Guillory, 10-0740 (La. 7/2/10), 38 So.3d 274.

In support of the motion for partial summary judgment, the defendant also

submitted his affidavit, wherein he stated that “The Rivet Trust never received a

certified letter or any other notice of an intent to exercise the options which expired

approximately five years ago.” The defendant also broadly stated within the

affidavit that the “defendants-in-reconvention failed to exercise either of the

options to purchase.”

In opposition, the plaintiffs argued that they had been in the process of

purchasing the properties for a number of years, that they continued to make

payments after the expiration of the option period contained in the lease term, and

that the payments exceeded the sums due under the option to purchase. The

plaintiffs included Mr. Martinez‟s affidavit in their opposition, wherein he

explained the plaintiffs‟ payment history for the two properties and alleged as

follows:

I have approached Mr. Rivet on numerous occasions inquiring
about the transfer of title and was assured by him that I (me and my

8

wife (891)6 and Victor Ray Labra (893) were the legal owners of the
duplexes and not to worry that the property was paid for in full.

I had heard rumors that Mr. Rivet was going to file for
bankruptcy. I went to see him about the duplexes. He told me that
“he had enough other problems and do not worry him about the
duplexes, they were paid in full and would not be a part of a
bankruptcy because the duplexes are yours, you don’t need a piece of
paper to prove it”.

(Emphasis in the original.) The plaintiffs suggest that differences as to accounts of

the amounts paid and the allegations the defendant‟s representations as to their

ownership of the property indicates that the written contract was modified by

verbal agreement and that the options to purchase may be viewed as having been

exercised.

Despite the differing accounts cited by the plaintiffs, however, La.Code

Civ.P. art. 966(B)(2) provides that summary judgment shall be rendered upon a

showing that there is no genuine issue of “material” fact. “A fact is „material‟

when its existence or nonexistence may be essential to plaintiff‟s cause of action

under the applicable theory of recovery.” Cheramie Services, Inc. v. Shell

Deepwater Prod., Inc., 09-1633, p. 10 (La. 4/23/10), 35 So.3d 1053, 1059. The

plaintiffs attempt, in part, to establish ownership of the properties via the options to

purchase. However, the plaintiffs did not exercise those options as specified by the

leases as it is undisputed that they did not notify the defendant of such by the

appropriate dates and by certified mail. As seen above, that method of selection is

required by Paragraph 2 of the option to purchase section of the respective leases.

Furthermore, Paragraph 8 provided that both the lease terminated and the option to

purchase “automatically extinguished” upon failure to exercise the option. Thus,

6
The Leases with Option to Purchase listed municipal addresses as 891 Sistrunk Road
and 893 Sistrunk Road, respectively.

9

as of the end of the specified lease terms of October 15, 2009, for the Martinez

property, and September 30, 2010, for the Labra property, the options to purchase

were extinguished. Payments made after the options were extinguished would,

thus, be irrelevant for purposes of purchase thereunder.

Neither is there merit in the plaintiffs‟ argument that genuine issues of

material fact remain with regard to whether the parties verbally modified the leases

so as to permit verbal acceptance of the options to purchase. Certainly there is

dispute as to whether such verbal communication occurred. However, resolution

of that issue is not relevant to the pertinent cause of action, i.e., enforceability of

the options to purchase. In addition to the lease‟s requirement that the defendant

be notified that the plaintiffs chose to exercise the options by certified mail, the

Louisiana Civil Code indicates that a writing was required in this instance.

“[A]n option to buy, or an option to sell, is a contract whereby a party gives

to another the right to accept an offer to sell, or to buy, a thing within a stipulated

time.” La.Civ.Code art. 2620. The “option must set forth the thing and the price,

and meet the formal requirements of the sale it contemplates.”7 Id. The options, in

this instance, contemplate the sale of an immovable. Of course, “[a] sale or

promise of sale of an immovable must be made by authentic act or by act under

private signature, except as provided in Article 1839.” La.Civ.Code art. 2440. In

this regard, La.Civ.Code art. 1839 indicates that “[a] transfer of immovable

property must be made by authentic act or by act under private signature.

Nevertheless, an oral transfer is valid between the parties when the property has

7
Further, La.Civ.Code art. 2621 provides that: “The acceptance or rejection of an offer
contained in an option is effective when received by the grantor. Upon such an acceptance the
parties are bound by a contract to sell. Rejection of the offer contained in an option terminates
the option but a counteroffer does not.”

10

been actually delivered and the transferor recognizes the transfer when interrogated

on oath.” Clearly, the latter circumstances are not present. Additionally,

jurisprudence has construed this requirement of a writing to extend to all contracts

regarding transfers of immovable property. See Chauvin v. Bohn, 411 So.2d 442,

n. 4 (La.1982). See also East Tangipahoa Dev. Co., LLC v. Bedico Junction, LLC,

08-1262 (La.App. 1 Cir. 12/23/08), 5 So.3d 238, writ denied, 09-0166 (La.

3/27/09), 5 So.3d 146. As observed by the trial court, and as addressed below, the

plaintiffs‟ concerns regarding any alleged verbal assurances may pertain to their

remaining claim for damages. They do not, however, determine the enforceability

of the options to purchase.

Thus, in consideration of the parties‟ submissions, we find that the trial court

did not err in granting the motion for partial summary judgment.

Eviction

While the plaintiffs challenge the judgment for eviction, they do not

specifically question whether the defendant met the burden of proving entitlement

to eviction per La.Code Civ.P. art. 4701, et seq. Rather, the plaintiffs challenge the

judgment for evictions within the larger context of the ownership issue determined

by the partial summary judgment, a ruling we find not to be in error. Neither do

we find error in the trial court‟s related order of eviction. Instead, the respective

lease terms of 2009 and 2010 had ended and, absent the above-claim of ownership,

the lease may be viewed as having reconducted by operation of law on a month to

month basis. 8 It is further unquestioned that the defendant provided notices to

8
See La.Civ.Code art. 2721 (providing that “A lease with a fixed term is reconducted if,
after the expiration of the term, and without notice to vacate or terminate or other opposition by
the lessor or the lessee, the lessee remains in possession . . . (2) For one week in the case of other
leases with a fixed term that is longer than a week[.]”). See also La.Civ.Code art. 2723

11

vacate for both properties in May 2015, citing “Expiration of lease” on each notice.

See La.Code Civ.P. art. 4701. Yet, the plaintiffs remained in the properties at the

time of the hearing in light of their ownership claim, now found to be without

merit.

Accordingly, the plaintiffs‟ arguments regarding eviction are without merit.

Prematurity and Parol Evidence

Finally, the plaintiffs argue that the trial court erred in denying their

exception of prematurity and that a trial on the merits was required as to

ownership. Such a trial, the plaintiffs suggest, would allow the introduction of

parol evidence due to their allegations of misrepresentations as to the options to

purchase. They further contend that the parol evidence should have been admitted

insofar as it may relate to their claim for unfair trade practices.

As recognized by the trial court, however, the parol evidence sought to be

introduced by the plaintiffs cannot be viewed as relating to the enforcement of the

options to purchase. Louisiana Civil Code art. 1848 provides that:

Testimonial or other evidence may not be admitted to negate or
vary the contents of an authentic act or an act under private signature.
Nevertheless, in the interest of justice, that evidence may be admitted
to prove such circumstances as a vice of consent or to prove that the
written act was modified by a subsequent and valid oral agreement.

While the plaintiffs contend that the interests of justice require the introduction of

the evidence as to ownership, we note that they do not seek to prove a vice of

consent in the confection of the lease. They instead seek to enforce the contract.

To the extent they seek a modification of the options to purchase, a writing was

required for a modification as explained above. Thus, evidence could not be

(providing that “The term of a reconducted nonagricultural lease is: (1) From month to month in
the case of a lease whose term is a month or longer[.]”).

12

admitted to prove that the written options to purchase were “modified by a

subsequent and valid oral agreement.” Accordingly, we find no error in the trial

court‟s rulings denying the exception of prematurity.

Finally, we find no merit in the plaintiffs‟ argument regarding the necessity

of the trial court‟s consideration of parol evidence as it may relate to their

remaining claim for unfair trade practices. Rather, the trial court considered the

partial summary judgment on the issue of the options to purchase, the rule of

eviction, and the plaintiffs‟ exception of prematurity. The trial court did not

consider the plaintiffs claim of remaining damages associated with the course of

conduct between the parties. The trial court instead remarked that it was

“comfortable granting the motion for partial summary judgment, because I think

that justice can be served and the rights of the lessees/buyers can be protected in

further proceedings that relate to their understandings and their remedies[.]”

This assignment lacks merit.

DECREE

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

of this appeal are assessed to the plaintiffs/defendants-in-reconvention/appellants,

Jose Raful and Maria Victoria Martinez and Victor Ray Labra.

AFFIRMED.

13

COURT OF APPEAL

THIRD CIRCUIT

STATE OF LOUISIANA

16-100

JOSE RAFUL MARTINEZ, ET AL.

VERSUS

GEORGE ROBERT RIVET, TRUSTEE OF RIVET FAMILY TRUST

Cooks, J., dissents.

Plaintiffs sued Defendant to enforce two options to purchase immovable

property consisting of two duplexes. They also sought damages for fraudulent

misrepresentations and violations of the Louisiana Unfair Trade Practices and

Consumer Protection Law. The trial judge granted partial summary judgment in

favor of Defendant and also evicted Plaintiffs. The trial court found because

Plaintiffs admitted they did not give any written notice to exercise the options to

purchase as specifically required in the written agreements, and as required by

Louisiana law concerning immovable property, they could not prove an ownership

interest in the property. Thus, the trial court ordered the eviction but recognized

Plaintiffs have unresolved damage claims which can be addressed in future

proceedings.

The majority affirms the trial court’s granting partial summary judgment

based largely upon Plaintiffs’ acknowledgment in their affidavit that: “The Rivet

Trust never received a certified letter or any other notice of intent to exercise the

options which expired approximately five years ago.” The majority finds

Plaintiffs’ assertions that they continued to make payments after the option period

1

expired and paid more to the Trust than the agreed upon price are not dispositive.

The majority was not persuaded by Plaintiffs’ assertions of detrimental reliance,

unjust enrichment and fraudulent misrepresentation. Plaintiffs’ claim they were

induced by Defendant’s continued representations that they indeed owned the

property, which they paid for, but he repeatedly claimed he was too busy to sign a

deed each time they asked. The majority acknowledges Plaintiffs’ presented

evidence of these assertions in the affidavits of Mr. Martinez and the affidavit of

the president of a title company at the motion for summary judgment.

The trial court’s and the majority’s reliance on the requirement of Civil

Code Article 1839 that “[a] transfer of immovable property must be made by

authentic act or by act under private signature,” relies on decisions involving facts

occurring before the adoption of La.Civ.Code art. 1967, which became effective

January 1, 1985, and misapprehends the nature of this dispute. The Louisiana

Supreme Court, in Morris v. Friedman, 94-2808, (La. 11/27/95), 663 So.2d 19, 25,

relying on this court’s decision in Ogden v. Ogden, 93-1413, p. 5 (La.App. 3 Cir.

9/21/94), 643 So. 2d 245, 248, writ denied, 94-2539 (La. 1/13/95), 648 So.2d 1339,

noted in footnote 11(emphasis added), “[t]he addition of La.C.C. art. 1967 in the

Civil Code as an additional ground for enforceability of obligations may well

alter this analysis.” This fact was also noted by this court in Morris v. People’s

Bank & Trust Co., 580 So.2d 1029, 1033 (La.App. 3 Cir.), writ denied, 588 So.2d

101 (La.1991). Louisiana Civil Code Article 1967 (emphasis added), entitled

“Cause defined, detrimental reliance” provides:

Cause is the reason why a party obligates himself.

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.

2

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.

Indeed, in two subsequent cases this court, applying La. Civ.Code art. 1967,

found the requirement that an agreement be in writing in cases involving onerous

agreements controlled by Article 1967, no longer applied after its effective date.

See Dugas v. Guillory, 97-398 (La.App. 3 Cir. 10/7/98), 719 So.2d 719 and Cenac

v. Hart, 98-1679 (La.App. 3 Cir. 4/7/99), 741 So.2d 690. Relying on this court’s

decisions in these cases, the Louisiana Fifth Circuit Court of Appeals in Rhoads v.

Quicksilver Brokers, Ltd. 01-768, p. 9 (La.App. 5 Cir. 1/14/01), 801 So.2d 1284,

1289 (emphasis added) reversed the lower court’s grant of summary judgment

noting:

Plaintiff contends the “cause” argument is simply defendant's
attempt to impose a suspensive condition on plaintiff's right to
exercise her option, so that defendant seeks to orally modify the terms
of the stock option agreement. Plaintiff points out that, at the time the
stock option agreement was confected, Louisiana had a Statute of
Frauds regarding securities that stated a contract for the sale of
securities was not enforceable unless it was in writing. La.R.S. 10:8-
319 (Repealed).

In Morris v. Friedman, 94-2808 (La.11/27/95), 663 So.2d 19,
26, the Louisiana Supreme Court held that a claim of equitable
estoppel or detrimental reliance will not lie when the law requires the
contract to be in writing: “[T]here can be no recovery on the basis of
equity where, as in the instant case, a positive statutory writing
requirement, not adhered to, exists.” The Morris court noted, however,
that the facts in the case occurred in 1984, prior to the effective date
of La.C.C. art.1967. . .

In Dugas v. Guillory, 97-398 (La.App. 3 Cir. 10/7/98), 719
So.2d 719, 726, in which former employees of a company brought
action against the principal for breach of an oral promise to transfer
65% of the company's stock to the employees, the court held that
under La.C.C. art.1967 and the given circumstances of the suit, the
plaintiffs' reliance on the defendant's oral promise, although not
executed in written form, was reasonable because the promise was
onerous in nature.

3

As explained in Dugas and in Cenac v. Hart, 98-01679
(La.App. 3 Cir. 4/7/99), 741 So.2d 690, 695, the 1985 enactment of
La.C.C. art.1967 was controlling over the Statute of Frauds. . . .

The Louisiana Second Circuit Court of Appeals discussed the import of

La.Civ. Code art. 1967 in Benton v. Clay, 48,245 (La. App. 2 Cir. 8/7/13), 123 So.

3d 212, 222-23 (emphasis added):

Detrimental reliance is designed to prevent injustice by barring
a party from taking a position contrary to his prior acts, admissions,
representations, or silence . . . . This is because detrimental reliance
is not based upon the intent to be bound. Rather, the basis of
detrimental reliance is the idea that a person should not harm
another person by making promises that he will not keep. Thus, the
focus of analysis of a detrimental reliance claim is not whether the
parties intended to perform, but, instead, whether a representation
was made in such a manner that the promisor should have expected
the promisee to rely upon it, and whether the promisee so relies to
his detriment. Suire v. Lafayette City–Parish Consol. Gov't, supra;
Allbritton v. Lincoln Health Syst., Inc., supra.

FN5. Mr. Clay contends that, because the agreement to buy the
property jointly with Ms. Benton was not written, the doctrine of
detrimental reliance does not apply, citing Morris v. Friedman, 94–
2808 (La.11/27/95), 663 So.2d 19. However, since the enactment of
La. C.C. art.1967, Louisiana courts have found detrimental reliance
to occur despite the fact that an onerous contract may lack a
requisite formality such as written execution in authentic form,
provided that the requisites of La. C.C. art.1967 are satisfied. See
Dugas v. Guillory, 97–398 (La.App. 3d Cir.10/7/98), 719 So.2d 719.

If Plaintiffs can prove their allegations regarding detrimental reliance on the

assurances by Defendants which caused them to forego the formalities provided in

the agreements they may still establish an ownership interest in the at issue

properties. The “in writing” requirement mentioned by the majority has been

relaxed by the current provisions on detrimental reliance. Thus, this case is not

ripe for summary judgment and I respectfully dissent.

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