Noles-Frye Realty (Nai Latter & Blum) v. Holly Dixon

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

17-965

NOLES-FRYE REALTY (NAI LATTER & BLUM)

VERSUS

HOLLY DIXON, ET AL

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APPEAL FROM THE
NINTH JUDICIAL DISTRICT COURT
PARISH OF RAPIDES, NO. 254,605
HONORABLE THOMAS MARTIN YEAGER, DISTRICT JUDGE

**********

MARC T. AMY
JUDGE

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Court composed of Sylvia R. Cooks, Marc T. Amy, and John E. Conery, Judges.

REVERSED AND RENDERED.

William M. Ford
Post Office Box 12424
Alexandria, LA 71315-2424
(318) 442-8899
COUNSEL FOR DEFENDANTS/APPELLEES:
Holly Dixon
Sandra Damico
Diana Ratner
Jayn Robison

Christie C. Wood
Wilson & Wilson
Post Office Box 1346
Jena, LA 71342
(318) 992-2104
COUNSEL FOR DEFENDANTS/APPELLANTS:
Andrea Talbot
Adrian Talbot

Michael S. Ricci
101 W. Robert E. Lee Boulevard, Suite 400
New Orleans, LA 70124
(504) 304-7115
COUNSEL FOR PLAINTIFF/APPELLEE:
Noles-Frye Realty (NAI LATTER & BLUM)

AMY, Judge.

Following the failure of a purchase agreement, a realty company

commenced this concursus proceeding so that the sellers and the purported buyer

could advance their claims of ownership to the underlying deposit. Following a

hearing, the trial court ruled in favor of the sellers after observing that, although

the buyer was credible in her testimony regarding her inability to secure financing

for the home, she failed to produce corroborating documentary or testimonial

evidence in that regard. The buyer appeals. Following review, we reverse and

render.

Factual and Procedural Background

Noles-Frye Realty filed a Petition for Concursus instituting this matter in

December 2015, noting that it “became aware that a dispute existed as to the

ownership or entitlement of funds, held in escrow as a result of a real estate

transaction.” The parties to the underlying transaction, a September 2015

Louisiana Residential Agreement to Buy or Sell (“the Agreement”), were named as

defendants in the proceeding. The record indicates by the Agreement, Andrea

Soltau-Talbot (“the Buyer”),1 sought to purchase residential property in Alexandria

offered for sale by Holly Dixon, Sandra Damico, Diane Ratner, and Jayn Robison

(hereinafter “the Sellers”).2 Although the closing date was twice extended, the sale

was not completed.

Both the Buyer and the Sellers claimed entitlement to the $30,000.00 deposit

provided by the Buyer pursuant to the Agreement. Each focused on the initial

1
Although not a signatory to the purchase agreement, the concursus proceeding also
listed Dr. Adrian Talbot, Mrs. Soltau-Talbot’s husband, as a defendant. Although Dr. Talbot is
an appellant here, we reference Mrs. Soltau-Talbot as the Buyer.
2
Ms. Dixon testified that the Sellers inherited the property from their parents.

inquiry as to whether the Agreement provided that the sale was to be a financed

one and the effect of the Agreement’s condition that:

This sale is conditioned upon the ability of BUYER to borrow with
this Property as security for the loan the sum of $ TBD or % of
the Sale Price by a mortgage loan or loans at an initial interest rate not
to exceed _____% per annum, interest and principal, amortized over a
period of not less than _____ years, payable in monthly installments
or on any other terms as may be acceptable to the BUYER provided
that those terms do not increase the cost, fees or expenses to the
SELLER.

The Agreement further indicated that the loan was to be secured by “Fixed Rate

Mortgage[.]” Following “Other financing conditions[,]” it provided that:

“Financing to be done w/credit union in New Orleans that buyer is member of.

Buyer has already prequalified.”

In support of their claim to the deposit, the Sellers argued that, while the

Agreement indicated that the sale was to be a financed one, the “TBD” and

otherwise uncompleted aspects of the financing details indicated that the sale was

not, in fact, contingent on financing. As the sale was not completed, the Sellers

sought the deposit by the purchase agreement’s provision that:

DEFAULT OF AGREEMENT BY BUYER: In the event of any
default of this Agreement by the BUYER, the SELLER shall have at
the SELLER’S option the right to declare this Agreement null and
void with no further demand, or to demand and sue for any of the
following: 1) Termination of this Agreement; 2) Specific
performance; 3) Termination of this Agreement and an amount equal
to 10% of the Sale Price as stipulated damages.

Further, the SELLER shall be entitled to retain the Deposit. The
prevailing party to any litigation brought to enforce any provision of
this Agreement shall be awarded their attorney fees and costs. The
BUYER may also be liable for Broker fees.

(Emphasis added.)

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Conversely, the Buyer contended that she was unable to secure financing

and that, by operation of the financing contingency, she was entitled to the return

of the deposit pursuant to the following:

RETURN OF DEPOSIT: The Deposit shall be returned to the
BUYER and this Agreement declared null and void without demand
in consequence of the following events:

....

2) If this Agreement is subject to the BUYER’S ability to obtain a
loan and the loan cannot be obtained, except as stated in lines 70
through 77 of this Agreement, but only if the BUYER has made timely
application for the loan and made good faith efforts to obtain the
loan[.]

(Emphasis added.)

Following a hearing, the trial court determined that the Buyer failed to prove

that she made a good faith effort to obtain financing. Thus, the trial court ruled in

favor of the Sellers and ordered that the Rapides Parish Clerk of Court tender the

subject deposit to them.

The Buyer appeals, asserting that:

1. The trial court erred as a matter of law by shifting the burden to
Appellant;

2. The trial court erred as a matter of law, by holding that
Appellant did not make a reasonable effort to fulfill her
obligations;

3. The trial court erred as a matter of law when it found Ms.
Talbot forfeited her $30,000.00 deposit to the Sellers.

Discussion

Burden of Proof

In her first assignment of error, the Buyer references the trial court

determination that she failed to sustain her burden of proving her good faith efforts

to obtain financing. She contends, however, that the trial court erred in

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determining that she was required to sustain the burden of proof, “rather than

requiring Seller to prove the contract had been breached in bad faith.”

However, the Buyer’s argument accounts for neither the fact that this matter

is a concursus proceeding nor the specific wording of the contractual provision

under which she advanced her claim. Louisiana Code of Civil Procedure Article

4651 explains that such a proceeding is “one in which two or more persons having

competing or conflicting claims to money, property, or mortgages or privileges on

property are impleaded and required to assert their respective claims

contradictorily against all other parties to the proceeding.” (Emphasis added.) See

also La.Code Civ.P. art. 4654 (providing that a petition instituting a concursus

proceeding “shall allege the nature of the competing or conflicting claims, and

shall include a prayer that all of the persons having such claims be required to

assert their respective claims contradictorily against all other parties to the

proceeding.”) (emphasis added). Significantly, “[e]ach defendant in a concursus

proceeding is considered as being both a plaintiff and a defendant with respect to

all other parties.” La.Code Civ.P. art. 4656.

Given that posture, it bears repeating that each party claimed the deposit by

virtue of adverse provisions within the Agreement. The Sellers contended that the

Agreement contained no financing contingency, that the Buyer failed to complete

the sale, and, therefore, that they were able to “retain the Deposit” by enforcing the

“DEFAULT OF AGREEMENT BY BUYER” provision.3

3
The Sellers repeat that claim in their appellees’ brief to this court. They argue that,
notwithstanding the Buyer’s argument regarding financing, “a more simple determination and
conclusion was that the contract did not require as a condition that the buyer obtain financing.”
However, the trial court clearly rejected that argument and addressed its findings based upon
such a condition. Although the Sellers focus on those aspects of the financing details left either
unmarked or marked by “TBD,” it is important to note that the financing contingency portion of
the Agreement affirmatively indicated that the loan was to be secured by a “Fixed Rate
Mortgage” and that, furthermore, a handwritten inscription referenced the Buyer’s intention of

4

The Buyer contrarily referenced the Agreement’s “RETURN OF

DEPOSIT” provision, asserting that the Agreement was “subject to [her] ability to

obtain a loan and the loan c[ould not] be obtained[.]” Thus, the Buyer noted that

the provision indicates that “[t]he Deposit shall be returned to [her.]” However,

that provision further indicates that the deposit was to be returned “only if the

BUYER has made timely application for the loan and made good faith efforts to

obtain the loan[.]” (Emphasis added.)

In ruling, the trial court referenced the burden of proving the Buyer’s good

faith effort in attempting to obtain financing, stating:

The issue before the Court is whether the buyer, after signing
the buy-sell agreement on February 11, 2015, was in good faith in
attempting to obtain financing for the house prior to the extended
closing date of April 15, 2015.

A contract of sale is an agreement by which one gives a thing
for a price in current money, and the other gives the price in order to
obtain ownership of the thing. Three circumstances must exist for
perfection of the contract: the thing sold, the price and consent. La.
C.C. Art. 2439. A conditional obligation is one dependent on an
uncertain event. If the obligation may not be enforced until the
uncertain event occurs, the condition is suspensive. La. C.C. Art.
1767. The obligation subject to a condition in this case is the sale of
the house. The approval of financing was the uncertain event which
suspended enforcement of the sale. The suspensive condition imposes
on the buyer the duty to make a good faith effort to obtain the loan.
Whether she has acted in good faith depends on the facts and
circumstances in each case. If the buyer, through no fault of her own,
is unable to obtain the loan, she is released from her obligation to
purchase and is entitled to the return of her deposit. Woods v. Austin,
347 So.2d 897 (3rd Cir., 1997); La. C.C. Art. 1771.

....

using a New Orleans credit union. Although the Buyer testified that the mortgage lender was in
North Carolina rather than New Orleans, that testimony does not otherwise reveal a lack of
agreement that the purchase was conditioned on financing. Upon questioning, the agent who
completed the Agreement responded “Most definitely” when asked whether it was his
understanding that the sale was to be a financed one. He explained that certain details of the
financing provision were not completed as he did not know the terms of the prospective loan, but
only that it was required to be a fixed rate mortgage.

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Good faith requires she make a reasonable effort to obtain the
agreed upon loan. The only evidence of her “reasonable effort” to
obtain a loan is her testimony on the determinative issue which was
not corroborated by other evidence.

Therefore, the Court finds that Andrea Saltau-Talbot did not
meet her burden of proof that she was in good faith in obtaining a loan
to comply with the suspensive condition in the February 11, 2015,
Buy/Sell Agreement . . . .

To the extent she appeared as a plaintiff in her own claim, the Buyer asserted

that the contract contained a financing contingency and, as she was unable to

obtain financing, her obligations under the Agreement could not be enforced by the

Seller. See La.Civ.Code art. 1767 (providing, in part, that: “A conditional

obligation is one dependent on an uncertain event. If the obligation may not be

enforced until the uncertain event occurs, the condition is suspensive.”). The

Buyer thus initiated her claim under the contractual provision requiring her good

faith effort in obtaining the loan as a further condition for the return of the deposit.

Recognizing that claim, the trial court did not err in articulating that it was the

Buyer’s burden of proving that condition. See, e.g., Int’l Carriers, Inc. v. Pearl

River Navigation, Inc., 14-1189, p. 9 (La.App. 4 Cir. 4/15/15), 166 So.3d 1114,

1119 (noting that “interpleaded claimants must establish their respective claims to

the fund.”).

This assignment lacks merit.

Merits

By her final two assignments, the Buyer contends that the trial court was

manifestly erroneous in determining that the evidence did not support a finding

that she made a good faith effort to obtain financing for the home. She references

the details of her testimony regarding efforts to obtain a mortgage from various

financial institutions. In recounting her testimony, the trial court explained that:

6

After the buy-sell contract was signed by the parties, the buyer
started her search for a conventional loan at a regular rate. Because
she and her husband own mortgage property in North Carolina, she
contacted the bank there to request financing the Alexandria house
and learned they only provided loans on North Carolina real estate.
She then applied with Capital One Bank in Alexandria only to
discover her credit report showed a 2005 “charge off.” She testified
after she and her first husband divorced, he defaulted on a loan that
she subsequently paid. Once it was paid, she was under the
impression it would not appear on her credit report and was surprised
when Capital One informed her it was on her report. Because of the
2005 charge off, Capital [O]ne would not loan her money for the
purchase of the house.
She then began to search for funding on the computer and
found Gateway Funding. Who required her to make repairs and
[s]ubsequently gave her a pre-approval for funding.
Gateway contacted and hired an Alexandria attorney, George
Fine to check the title and handle the closing. He performed some
curative work and then notified Gateway on March 13, 2015, that he
had an unencumbered, marketable title and was ready to proceed with
the closing. While this process was going on, Andrea made
arrangements with Liberty Mutual to provide homeowner’s insurance
at the time of the closing.
Because of Andrea’s search for funding, the closing on the
house was extended from March 15 to March 31, 2015, and later to
April 15, 2015.
She then sought financing with NOLA Lending and was also
rejected by them.
Because she was unable to obtain financing, she didn’t ask to
extend the closing date after April 15, 2015, so she moved out of the
house and requested a refund of her deposit.
The transcript supports the trial court’s observations. The Buyer testified as

to each lending institution she contacted in order to obtain financing. Those

included a mortgage lender in North Carolina, Capital One, Gateway Funding, and,

finally, the NOLA Lending Group. According to her testimony, she was unable to

pursue funding with the North Carolina institution as it did not offer mortgage

services for property in Louisiana. She also explained that, although she applied

with the latter three organizations, she was never successful in obtaining financing.

The Buyer testified that she even completed certain repairs to the home to facilitate

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approval from Gateway Funding. However, she explained that, despite her efforts,

she was ultimately unable to obtain approval from any of the institutions. In

particular, the Buyer testified she encountered difficulty in obtaining financing due

to a poor credit history related to an earlier divorce.

In evaluating her testimony, the trial court explained that it was “impressed

with Ms. Andrea Soltau-Talbot and believes her testimony was credible. She

testified she attempted to obtain financing with her old bank in North Carolina,

Capital One in Alexandria, Gateway and NOLA, both in New Orleans.” We are

mindful that such credibility determinations are within the province of the fact

finder and will not be disturbed on appeal absent an abuse of discretion. Lomont v.

Bennett, 14-2483 (La. 6/30/15), 172 So.3d 620.

Certainly, there is no evidentiary basis to disturb that determination

following review of the record. While the Sellers suggest that the Buyer’s claim of

inability to obtain financing was undermined by her subsequent purchase of a more

expensive property, we find no merit in that contention. Rather, the Buyer testified

that she was able to obtain a multiple-indebtedness mortgage on the later-acquired

property with the assistance of a new mortgage broker. That subsequent event

with a different property, different lender, and different financing product is not

contrary to the trial court’s finding as to the Buyer’s credibility in her testimony

regarding the present property.

Having maintained the trial court’s credibility determination, however, we

find that its subsequent, anomalous determination that the Buyer ultimately failed

to meet her burden of proof is manifestly erroneous. Despite its determination that

her “testimony was credible” and that “[s]he testified she attempted to obtain

financing” from various institutions, the trial court stated:

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However, she did not produce any documents to prove she
applied for a loan and didn’t subpoena one loan officer to testify why
her financing was denied. All that would have been required was the
loan officer from Capital One in Alexandria to appear in Court with
the application for financing and testify that she did apply and the
reason her request was denied.

Good faith requires she make a reasonable effort to obtain the
agreed upon loan. The only evidence of her “reasonable effort” to
obtain a loan is her testimony on the determinative issue which was
not corroborated by other evidence.

Therefore, the Court finds that Andrea Saltau-Talbot did not
meet her burden of proof that she was in good faith in obtaining a loan
to comply with the suspensive condition in the February 11, 2015,
Buy/Sell Agreement . . . .

While it is apparent that the Buyer did not supplement her testimony with

corroborating documentation,4 we find that the trial court erroneously concluded

that her failure to do so was fatal to her claim. Rather, the plaintiff spoke

extensively regarding her efforts to obtain financing and the financial institutions

rejection of her applications. The trial court found merit in that testimony,

detailing her efforts in its reasons for ruling.

However, the trial court specifically noted that the Buyer “did not produce

any documents to prove she applied for a loan and didn’t subpoena one loan officer

to testify why her financing was denied.” It suggested that: “All that would have

been required was the loan officer from Capital One in Alexandria to appear in

Court with the application for financing and testify that she did apply and the

reason her request was denied.” This requirement, however, strays from the

confines of the Agreement.

Rather, the Agreement provided, in pertinent part, that if the loan could not

be obtained, the deposit was returnable to the Buyer “but only if [she] made timely
4
The Buyer attempted to introduce certain financial institution materials, as well as
correspondence with the realty company. However, the trial court excluded the evidence given
its third-party nature and lack of associated witnesses. The Buyer proffered the exhibits for the
record.

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application for the loan and made good faith efforts to obtain the loan[.]” It does

not qualify that return based upon a “reason” the loan could not be obtained. Thus,

we find that the trial court was manifestly erroneous in concluding that the Buyer

failed to meet her burden of proof by such corroboration. Instead, the Buyer

testified regarding her efforts in obtaining the loan and her inability to do so. The

trial court found that evidence credible. Following review, we find that the record

does not otherwise question that testimony. Accordingly, we conclude that the

record dictates a finding that the Buyer satisfied her burden of proving her

entitlement to the return of the deposit pursuant to the Agreement. Below we enter

a ruling in this regard.

DECREE

For the foregoing reasons, the judgment of the trial court is reversed.

Judgment is recast and rendered as follows:

IT IS ORDERED, ADJUDGED AND DECREED that there be
Judgment in favor of ANDREA TALBOT and ADRIAN TALBOT,
M.D. and against HOLLY DIXON, SANDRA DAMICO, DIANE
RATNER, and JAYN ROBINSON, and further the Rapides Parish
Clerk of Court is ordered to pay unto ANDREA TALBOT and
ADRIAN TALBOT the sum of $30,000.00 on deposit in the Registry
of the Ninth Judicial District Court, Parish of Rapides, along with all
of the accumulated interest.

All costs of this proceeding are assessed to the appellees, Holly Dixon, Sandra

Damico, Diane Ratner, and Jayn Robinson.

REVERSED AND RENDERED.

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