State of Louisiana, Div of Admin, Office of Community Development-Disaster Recovery Unit v. Mark Leger and Donna Leger

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

21-455

STATE OF LOUISIANA,
DIVISION OF ADMINISTRATION,
OFFICE OF COMMUNITY DEVELOPMENT–
DISASTER RECOVERY UNIT

VERSUS

MARK LEGER AND DONNA LEGER

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APPEAL FROM THE
FOURTEENTH JUDICIAL DISTRICT COURT
PARISH OF CALCASIEU, NO. 2020-0218
HONORABLE KENDRICK J. GUIDRY, DISTRICT JUDGE

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CHARLES G. FITZGERALD
JUDGE

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Court composed of D. Kent Savoie, Candyce G. Perret, and Charles G. Fitzgerald,
Judges.

AFFIRMED.

Mary Catherine Cali
John C. Walsh
Caroline M. Tomeny
William J. Wilson
John C. Conine, Jr.
Shows, Cali & Walsh, LLP
Post Office Box 4425
Baton Rouge, Louisiana 70821
(225) 346-1461
Counsel for Plaintiff/Appellant:
State of Louisiana,
Division of Administration,
Office of Community Development–
Disaster Recovery Unit

Jennifer A. Jones
Jones Law Firm
Post Office Box 1550
Cameron, Louisiana 70631
(337) 249-1056
(337) 775-8374
Counsel for Defendants/Appellees:
Mark Leger
Donna Leger

FITZGERALD, Judge.

The State of Louisiana, Division of Administration, Office of Community

Development–Disaster Recovery Unit (the State) filed suit against homeowners

Mark and Donna Leger for breach of an Elevation Incentive Agreement. The Legers

responded with an exception of prescription, which the trial court sustained. The

issue before us is whether the State’s lawsuit was timely filed.

FACTS AND PROCEDURAL HISTORY

In 2004, the Legers decided to move an existing house onto some land they

owned in Cameron Parish. In doing so, the Legers poured a concrete slab and then

used cinderblock piers to elevate the house to just over nine feet. The Legers

completed the elevation process and moved into their home in 2005. A few months

later, Hurricane Rita ripped through Southwest Louisiana. The Legers’ house was

badly damaged, but not destroyed.

In the wake of Hurricane Rita, The Road Home Program was created. This

was a federally funded program administered by the State to provide financial

assistance to affected homeowners. In essence, the program offered two types of

grants: compensation grants and elevation grants. The Legers, for instance, received

a compensation grant of approximately $50,000 in February 2008. Then, in October

2008, they received an elevation grant of $30,000. Only the elevation grant is at

issue in this appeal.

In general, the elevation grant was offered as an incentive for homeowners in

flood-prone areas to elevate their homes to a level that met or exceeded the Advisory

Base Flood Elevations established by the Federal Emergency Management Agency

(FEMA). The terms of the elevation grant were set forth in a generic Elevation

Incentive Agreement. The Legers signed this agreement on October 29, 2008.

Eleven years later, on January 17, 2020, the State filed suit against the Legers

for breach of contract. The essence of the suit is that the Elevation Incentive

Agreement required the Legers to elevate their home within three years of signing,

and that the Legers breached the agreement by failing to comply with this provision.

In response, the Legers filed the peremptory exception of prescription. The

Legers concede that they breached the Elevation Incentive Agreement. However,

they argue that the breach occurred when the agreement was signed on October 29,

2008.

The hearing on prescription was held on March 22, 2021. After listening to

the witness testimony and reviewing the documents in evidence, the trial court

sustained the exception from the bench. A written Judgment was signed on March

25, 2021. It is from this Judgment that the State has appealed.

On appeal, the State asserts the following assignments of error:

1. The trial court erred in finding that the Petition was prescribed
on its face and shifting the burden of proof to [the State].

2. The trial court erred in finding that prescription commenced
when the Legers signed the Elevation Incentive Agreement on
October 29, 2008.

3. The trial court erred in finding that the doctrine of contra non
valentem did not apply to suspend prescription until October 29,
2011.

LAW AND ANALYSIS

The prescriptive period for a breach of contract claim is ten years under

La.Civ.Code art. 3499. Prescription begins to accrue when the contract is breached.

Deshotels v. Fruge, 364 So.2d 258 (La.App. 3 Cir. 1978), writ denied, 367 So.2d

388 (La.1979).

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“The burden of proof on the prescription issue lies with the party asserting it

unless the plaintiff’s claim is barred on its face, in which case the burden shifts to

the plaintiff” to prove a suspension or interruption of prescription. Bailey v. Khoury,

04-620, 04-647, 04-684, p. 9 (La. 1/20/05), 891 So.2d 1268, 1275; Smith v. Ieyoub,

01-1517 (La.App. 3 Cir. 3/6/02), 809 So.2d 1256.

At the hearing on the exception of prescription, evidence may be introduced

to support or to controvert the exception. La.Code Civ.P. art. 931. If evidence is

introduced, the trial court’s factual findings are reviewed under the manifest error

standard. Succession of Savoie v. Carmouche, 18-601 (La.App. 3 Cir. 3/7/19), 269

So.3d 931, writ denied, 19-548 (La. 6/17/19), 274 So.3d 1257.

“However, where one or more trial court legal errors interdict the fact-finding

process, the manifest error standard is no longer applicable, and, if the record is

otherwise complete, the appellate court should make its own independent de novo

review of the record and determine a preponderance of the evidence.” Evans v.

Lungrin, 97-541, 97-577, pp. 6-7 (La. 2/6/98), 708 So.2d 731, 735. Of course, pure

questions of law are also reviewed de novo.

First Assignment of Error.

The State initially asserts that the trial court erred in finding that the petition

was prescribed on its face and then shifting the burden of proof to the State. Because

this is a question of law, we review this assignment de novo.

The record shows that the trial court made the following findings before any

evidence was adduced:

All right. As a matter of law, I find that the Petition—excuse me—yes,
the Petition or the contract in 2008 prescribed on its face. I find that as
a matter of law, the State has the burden now in this Exception of
Prescription hearing, and you may proceed.

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The 2008 contract is the Elevation Incentive Agreement dated October 29,

2008. This agreement is one of many documents that were attached to the petition.

However, there is nothing in the petition (including the attached documents) to

suggest that the State’s breach-of-contract action is prescribed.

On the contrary, the petition alleges that the Legers’ home was damaged by

Hurricane Rita in September 2005; that the Legers signed the Elevation Incentive

Agreement on October 29, 2008; that under the agreement, the Legers had three

years to elevate their home to meet or exceed the existing Advisory Base Flood

Elevations established by FEMA (9.0 feet); that the three-year term for performance

ended on October 29, 2011; that the Legers failed to elevate their home within this

three-year period; and that this failure amounted to a breach of contract. If anything,

the petition and documents attached thereto reflect that the Legers’ breach occurred

on October 29, 2011, which is when the agreement’s three-year term ended.

In sum, the trial court erred as a matter of law in concluding that the State’s

petition was prescribed on its face. The trial court also erred as a matter of law in

shifting the burden of proof to the State.

“Placing the burden of proof on the wrong party is legal error that will interdict

the fact-finding process by placing a more onerous standard than the law requires on

one of the parties.” Kinnett v. Kinnett, 17-625, p. 20 (La.App. 5 Cir. 8/6/20), 302

So.3d 157, 174. Therefore, the trial court’s factual finding—that the Legers’ breach

occurred on October 29, 2008—is no longer entitled to the manifest error standard

of review. See Evans, 708 So.2d 731.

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Second Assignment of Error.

The State asserts that the trial court erred in finding that prescription

commenced when the Legers signed the Elevation Incentive Agreement on October

29, 2008. For the reasons given above, we review this assignment de novo.

At the outset, all parties agree that the State’s claim is for breach of contract

subject to a liberative prescription period of ten years under La.Civ.Code art. 3499.

They also agree that prescription commenced when the Elevation Incentive

Agreement was breached. So when did the Legers breach the agreement? In essence,

this is the factual dispute.

In relevant part, the Elevation Incentive Agreement states as follows:

4. ELEVATION INCENTIVE AGREEMENT CONDITIONS:
By accepting this grant provided through this Elevation Incentive
Agreement, I agree that:

a. Flood Elevation Compliance: Within three years of
the date of this Elevation Incentive Agreement, the
elevation (height) of the home on the above Property
will be at or above the Advisory Base Flood Elevation
(ABFE) published by FEMA. Where no ABFE has
been published for the Property, the property must be
elevated to meet the Base Flood Elevation (BFE)
shown on the community’s legally adopted Flood
Insurance Rate Map (FIRM) floodplain regulatory map,
plus any freeboard required by local ordinance. ABFE
and BFE are those elevations in effect on the date this
Agreement was signed. By accepting the Elevation
Incentive, I assert that when the home was damaged by
Hurricane Katrina or Rita, its elevation was lower than
the elevation required under this Agreement. I
understand that to comply with this paragraph, I must
elevate my home to be at or above the elevation
required by this Agreement even if the authority having
jurisdiction of building code enforcement is not
requiring elevation of the home. Adoption of a new
FIRM by the community subsequent to signing of this
Agreement, which new FIRM may have BFEs higher
or lower than the ABFE or BFE in effect on the date of
signing, will not change the elevation required by this
Agreement.

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....

c. Obligation to Return Elevation Incentive for
Failure to Comply: If the home on the Property does
not meet or exceed the applicable ABFE’s or BFE’s by
three years from the date of this Elevation Incentive
Agreement, the entire amount of my Elevation
Incentive must be repaid to the State of Louisiana.
[Italicized emphasis added.]

The elevation required under the Elevation Incentive Agreement was 9.0 feet.

The Legers point to the above emphasized language and argue that they breached

this provision on the day the agreement was signed because when their home was

damaged by Hurricane Rita, its elevation was 9.3 feet, which is higher than the

elevation required under the agreement.

The State disagrees, arguing that the Legers failed to prove that their home’s

elevation was 9.0 feet or higher when Hurricane Rita ripped through Cameron Parish.

This, along with the Legers’ admission that they did not elevate their home during

the agreement’s three-year term, means that the Legers’ breach did not occur until

October 29, 2011. This is the State’s argument.

At the hearing on prescription, Mr. Leger testified that he and his wife moved

their home to its present location in 2005. He explained that prior to doing so, they

obtained a building permit from Calcasieu Parish that required them to comply with

the Advisory Base Flood Elevation published by FEMA, which provided for an

elevation of 8.0 feet above sea level at that time. To this end, the Legers poured a

concrete slab and set the house upon cinderblocks. According to Mr. Leger, this

process elevated the home to 9.3 feet, as reflected in a 2005 elevation certificate

prepared by Leo Reddoch.

However, in September 2005, Hurricane Rita blew through Cameron Parish.

Then, in 2007, Mr. Leger and his wife began exploring the possibility of a

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compensation grant from The Louisiana Road Home Program. To this end, Mr.

Leger spoke with a female Road Home representative who requested an elevation

certificate as a prerequisite to receiving any funds. Mr. Leger, in turn, provided

Road Home with a copy of the 2005 elevation certificate, along with all other

information required for the application. Shortly thereafter, in February 2008, the

Legers received a compensation grant of approximately $50,000.

However, according to Mr. Leger, during the application process for the above

compensation grant, the same female Road Home representative told him about the

possibility of receiving additional funds—separate and apart from the $50,000

compensation grant—in the form of an elevation incentive. As Mr. Leger explained,

the representative stated that the elevation funds would not have to be used by the

Legers to elevate their home. The money, for example, could be used to haul dirt

onto their property to increase the land’s elevation, to elevate their air-conditioner

units, to elevate their utility meter, or to finish repairs.

In April 2008, merely two months after receiving the compensation grant, the

Legers received a letter from the State informing them that elevation incentives were

available to eligible Road Home applicants (1) who selected Option 1 in their initial

application for the compensation grant, and (2) whose homes were located in areas

where FEMA had issued Advisory Base Flood Elevation maps. These were the only

two eligibility requirements.

Attached to this letter was a form titled “Benefit Selection Form.” The form

was sent to the Legers with their names and address already filled in, along with a

typewritten “X” next to the line that read: “You are eligible for Elevation

Compensation.” Because the Legers met both eligibility requirements, they signed

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and returned the form to the Road Home Program. All of these documents are in

evidence.

As to the Elevation Incentive Agreement, Mr. Leger testified that he and his

wife signed this agreement on October 29, 2008. He testified that prior to signing,

he never told anyone at Road Home that his house was already above the required

elevation level. As he put it, he never meant to deceive anyone or misrepresent

anything when he signed the agreement. He believed that Road Home knew his

house exceeded the agreement’s required elevation based on his 2005 elevation

certificate. And he did nothing to prevent Road Home from independently

determining his home’s elevation.

The State called as its only witness Jeff Haley, who is the Chief Operating

Officer for the Office of Community Development–Disaster Recovery Unit. Mr.

Haley admitted having no interaction with the Legers. In fact, Mr. Haley did not

become an employee of the State until 2009. Mr. Haley explained that before his

employment with the State, he worked for the contracting firm that was tasked with

verifying the eligibility of Road Home applicants and otherwise administering the

program. He was employed by this company from 2006 to 2009, which includes the

period when the Legers received both of their grants.

Nevertheless, Mr. Haley testified that in April 2008, the State sent

approximately 40,000 letters to homeowners who were predetermined as being

eligible for an elevation grant. According to Mr. Haley, for “the 40,000 people who

got [the letter], the program was saying you were eligible. There wasn’t something

that they had to do or show us at that point in time in 2008 to prove eligibility.”

Mr. Haley then discussed the pressure of disbursing the grant money as

quickly as possible, explaining:

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It was 2008, the pressure was to be able to get the money out as soon
as possible. We had already had the Legers, and others, come in for an
appointment. We had already deemed them eligible for the program.
They’d already received the [compensation] grant, so basically, the
people who could get elevation just had to say they wanted it[.]

The State did not require any verification from the Legers as to whether their

property was below the elevation required by the Advisory Base Flood Elevation

maps. Nor did the State make any attempt to verify this information from any other

source, such as parish government. The reason for this failure was, according to Mr.

Haley, “We didn’t have time.” Instead, once the homeowner indicated they were

interested, the file was sent directly to the title company for closing.

Mr. Haley also testified that Road Home maintained a file on all applicants,

including the Legers. For example, on page five of the Legers’ file, which is in the

record, there is the following question: “Is home required to be elevated?” The

corresponding answer is “N” for no. The next question asks: “Is homeowner eligible

to receive elevation assistance and not required to elevate?” In response, there is a

“Y” for yes. The above questions and answers were populated by FEMA and made

part of the Legers’ file pursuant to an information-sharing agreement between

FEMA and the State.

On appeal, the State claims that they never received the Legers’ 2005

elevation certification. This certificate is also not in the record on review. However,

in 2014, the State requested, and Mr. Leger provided, an additional elevation

certificate. The 2014 certificate is in evidence; it reflects an elevation of 9.3 feet for

the Legers’ home.

In the end, we find by a preponderance of the evidence that the Legers’ breach

occurred on October 29, 2008. The Legers’ home was elevated to 9.3 feet in 2005,

and the home’s elevation remained unchanged at all relevant times thereafter. Thus,

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the Legers were noncompliant from the moment the agreement was signed, meaning

that prescription commenced on October 29, 2008. The State’s suit was filed on

January 17, 2020, more than ten years after the Legers’ breach. This assignment is

therefore without merit.

Third Assignment of Error.

In its third assignment of error, the State contends that the trial court erred in

finding that the doctrine of contra non valentem did not apply to suspend

prescription until October 29, 2011.

Unlike the second assignment of error, our review here is under the manifest

error-clearly erroneous standard. The reason is because the legal errors committed

by the trial court—finding that the State’s petition was prescribed on its face and

shifting the burden of proof to the State—did not affect its factual findings regarding

contra non valentem. The State, after all, had the burden of proving that prescription

was suspended.

Now to the jurisprudential doctrine of contra non valentem. In Mantiply v.

Hoffman, 18-292, p. 6 (La.App. 3 Cir. 1/16/19), 263 So.3d 1193, 1199, writ denied,

19-588 (La. 6/3/19), 272 So.3d 544, this court explained:

The doctrine itself is based upon the theory that when a plaintiff is not
aware of the facts giving rise to his or her cause of action against a
particular defendant, the running of prescription is suspended until
the . . . [plaintiff] discovers or should have discovered the facts upon
which his or her cause of action is based.

Moreover, contra non valentem only applies in exceptional circumstances.

Marin v. Exxon Mobil Corp., 09-2368, 09-2371 (La. 10/19/10), 48 So.3d 234. To

this end, the Louisiana Supreme Court has limited the application of the doctrine to

these four categories:

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(1) where there was some legal cause which prevented the courts or
their officers from taking cognizance of or acting on the plaintiff's
actions; (2) where there was some condition coupled with a contract or
connected with the proceedings which prevented the creditor from
suing or acting; (3) where the debtor himself has done some act
effectively to prevent the creditor from availing himself of his cause of
action; or (4) where some cause of action is not known or reasonably
knowable by the plaintiff, even though his ignorance is not induced by
the defendant.

Specialized Loan Serv., LLC v. January, 12-2668, pp. 5-6 (La. 6/28/13), 119 So.3d

582, 585.

In the case before us, the State contends that the third and fourth categories

are applicable. We will therefore discuss these categories in that order.

The third category is specifically invoked when “(1) the defendant engages in

conduct which rises to the level of concealment, misrepresentation, fraud or ill

practice, (2) the defendant’s actions effectually prevented the plaintiff from pursuing

a cause of action, and (3) the plaintiff must have been reasonable in his or her

inaction.” Marin, 48 So.3d at 252 (citations omitted).

On review, the evidence fails to support a finding of fraud, misrepresentation,

concealment, or any other action on behalf of the Legers which would have

prevented the State from timely pursuing its claim.

For starters, the State’s eligibility letter of April 2008 is deceiving because it

informs the Legers that they were eligible to receive the elevation funds when clearly

they were not. The letter does not state that the Legers might be eligible; it states

that the Legers were eligible. The Legers were not the only homeowners who were

confused. According to Mr. Haley, approximately 32,000 homeowners received an

elevation grant. Yet 6,000 of these homeowners ended up being noncompliant (in

breach of the agreement) for failing to elevate their homes. This is a staggering

statistic.

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Next, Mr. Leger testified that he never meant to deceive anyone or

misrepresent anything when he signed the Elevation Incentive Agreement. He

believed that Road Home knew of his home’s elevation at the time of signing. He

also testified that he did nothing to prevent Road Home from independently

determining his home’s elevation. Mr. Leger’s testimony was not contradicted at

trial.

And finally, the evidence shows that the State’s inaction—rather than the

Legers’ actions—prevented it from timely filing suit. As already explained, Road

Home could have looked in its own file and seen that the Legers’ home was not

required to be elevated. Multiple Road Home representatives failed to do so prior

to the signing of the elevation agreement. This is evident based on telephone calls

between case workers and the Legers, which were documented in the Legers’ file.

And according to other documents in the Legers’ file, a representative named

Charles Langley noted: “No open issues – all issues resolved. I have researched this

case and verified that all issues are clear and ready for [closing].” Mr. Langley was

not called as a witness by the State.

In sum, the trial court found that the State failed to prove that prescription was

suspended under the third category of contra non valentem. This finding is

reasonably supported by the record.

Now to the fourth category of contra non valentem. This category operates to

suspend prescription “where the cause of action is neither known nor reasonably

knowable by the plaintiff even though plaintiff’s ignorance is not induced by the

defendant.” Marin, 48 So.3d at 245. For this category to apply, the plaintiff’s

ignorance of his cause of action cannot be attributable to his own willfulness or

neglect, as a plaintiff is deemed to know what he could have learned by reasonable

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diligence. Renfroe v. State ex rel. Dep’t of Transp. and Dev., 01-1646 (La. 2/26/02),

809 So.2d 947.

As addressed previously, the State could have determined the Legers’

ineligibility before October 29, 2008. Mr. Haley acknowledged that if the Legers’

home was already above the agreement’s required elevation, they would not have

been eligible for the elevation grant. But even after the elevation agreement was

signed on October 29, 2008, the State could have discovered the Legers’ ineligibility

(or noncompliance) by using reasonable diligence, such as simply reviewing the

Road Home file for the Legers or contacting parish government to verify the home’s

elevation.

In the end, the trial court found that the fourth category of contra non valentem

did not suspend the running of prescription. And based on our review, we cannot

say that this finding is manifestly erroneous or clearly wrong.

For the above reasons, this assignment of error is without merit.

DECREE

We affirm the Judgment of the trial court sustaining the peremptory exception

of prescription filed by the defendants, Mark Leger and Donna Leger. In accordance

with La.R.S. 13:5112, the costs of this appeal are assessed against the State of

Louisiana, Division of Administration, Office of Community Development–Disaster

Recovery Unit in the amount of $2,552.59.

AFFIRMED.

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