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DOMINO ESTATE LLC v. BRAND SCAFFOLD SERVICES LLC (2021)

Court of Appeal of Louisiana, First Circuit.2021-03-29No. 2020 CA 0191

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Opinion

In this suit arising from a lease of immovable property, the lessor sought damages after the termination of the lease due to the lessees removal of a structure it had placed on the leased premises. The trial court granted summary judgment to the lessee and dismissed the lessors suit. We affirm.

FACTS AND PROCEDURAL HISTORY

Domino Estate, LLC (“Domino”), leased immovable property in Morgan City, Louisiana, to Brand Scaffold Services, LLC (“Brand”), as set forth in a written lease agreement that was executed by the parties in 2007. The initial lease term was from February 1, 2007 through January 31, 2012, and the parties amended the lease to extend the term.

1

Brand leased the property to be used for its scaffolding, blasting, painting, coating, and insulating business. When Brand leased the property, an office building was located on the property. At the end of 2013 or early 2014, Brand contracted with Bosco Brothers to have it install a metal structure (“the structure”) for approximately $50,000 on the leased property. The structure had an open front, three complete sides, and a roof, and was secured by bolts to cement slabs that were poured on the property. Before the lease was terminated, Brand removed the structure from the property.

Domino filed suit against Brand, alleging that Brands removal of the structure, which Domino alleged was a “metal building secured to a cement slab,” violated the lease. Domino further alleged that the lease provided that “such ․ improvements” to the leased property “shall become” Dominos property as the lessor when the lease was terminated. Domino requested that, under the terms of the lease, Brand return and re-erect the original structure, erect a new structure on the property, or pay Domino the fair market value of the structure. Domino amended its petition to allege that before Brand removed the structure, Domino had negotiated another lease with a prospective lessee who declined to lease the property after the structure was removed. Domino sought damages, and it also added a claim for attorneys fees pursuant to the lease.

Brand answered the petition and denied Dominos allegation that the structure was a building, asserting that it was a temporary structure. Brand filed a motion for summary judgment seeking the dismissal of the suit based on the lease. Domino then filed a motion for partial summary judgment on the issue of liability. The trial court held a hearing on the cross-motions for summary judgment on November 5, 2019.

The trial court issued oral reasons at the hearing, determining that the structure was not an improvement, but that the cement pads to which it was anchored should be considered an improvement. The trial court signed a judgment on November 21, 2019, granting Brands motion for summary judgment, denying Dominos motion for partial summary judgment, and dismissing Dominos petition for damages with prejudice. From this judgment, Domino filed an appeal as to that part of the judgment dismissing its suit and an application for supervisory writs as to the denial of its motion for partial summary judgment. The application for supervisory writs was referred to the panel handling the appeal on February 18, 2020. See Domino Estate, LLC v. Brand Scaffold Services, L.L.C., 2020-0015 (La. App. 1 Cir. 2/18/20) (unpublished writ action).

DISCUSSION

On appeal and in its writ, Domino contends that the trial court committed legal error in determining the ownership of the alleged improvement made to the leased premises by misinterpreting La. C.C. art. 2695. Louisiana Civil Code article 2695 states, in pertinent part:

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

(Footnote added.)

The issue of whether the structure is an improvement was raised in cross-motions for summary judgment. After an opportunity for adequate discovery, a motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show there is no genuine issue as to material fact and the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(A)(3). The summary judgment procedure is favored and shall be construed to secure the just, speedy, and inexpensive determination of every action. La. C.C.P. art. 966(A)(2). In determining whether summary judgment is appropriate, appellate courts review evidence de novo under the same criteria governing the trial courts determination of whether summary judgment is appropriate. Thompson v. Center for Pediatric and Adolescent Medicine, L.L.C., 2017-1088 (La. App. 1 Cir. 3/15/18), 244 So.3d 441, 444, writ denied, 2018-0583 (La. 6/1/18), 243 So.3d 1062.

The Code of Civil Procedure places the burden of proof on the party filing a motion for summary judgment. La. C.C.P. art. 966(D)(1). The mover can meet this burden by filing supporting documentary evidence consisting of pleadings, affidavits, depositions, answers to interrogatories, certified medical records, stipulations, and admissions with the motion for summary judgment. La. C.C.P. art. 966(A)(4). The movers supporting documentary evidence must prove the essential facts necessary to carry the movers burden. Thus, in deciding a motion for summary judgment, it must first be determined whether the supporting documents presented by the mover are sufficient to resolve all material fact issues. Crockerham v. Louisiana Medical Mutual Insurance Co., 2017-1590 (La. App. 1 Cir. 6/21/18), 255 So.3d 604, 608.

Appellate courts review evidence de novo using the same criteria that govern the trial courts determination of whether summary judgment is appropriate. Thus, appellate courts ask the same questions: whether there is any genuine issue of material fact and whether the mover is entitled to judgment as a matter of law. Georgia-Pacific Consumer Operations, LLC v. City of Baton Rouge, 2017-1553 (La. App. 1 Cir. 7/18/18), 255 So.3d 16, 22, writ denied, 2018-1397 (La. 12/3/18), 257 So.3d 194.

In this case, it appears that the parties are in agreement that there are no contested issues of fact. Rather, in the motion and the cross-motion for summary judgment, the parties request that this court interpret the lease agreement by applying the applicable Civil Code provisions. Therefore, this court in its decision must determine if either party sufficiently proved through documentary evidence that it was entitled to a judgment as a matter of law.

In interpreting La. C.C. art. 2695, the trial court properly considered the terms of the lease agreement between the parties. A lease is a synallagmatic contract by which one party, the lessor, binds himself to give to the other party, the lessee, the use and enjoyment of a thing for a term in exchange for a rent that the lessee binds himself to pay. La. C.C. art. 2668. In all matters not provided for in the Title covering leases, the contract of lease is governed by the rules of the Titles of “Obligations in General” and “Conventional Obligations or Contracts.” La. C.C. art. 2669. Interpretation of a contract is the determination of the common intent of the parties. La. C.C. art. 2045. 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. La. C.C. art. 2046. However, if a court determines as a matter of law that a contract is ambiguous, then extrinsic evidence may be used to determine the true intent of the parties. Carter v. BRMAP, 591 So.2d 1184, 1188 (La. App. 1 Cir. 1991). The intention of the parties is to be determined in accordance with the plain, ordinary, and popular sense of the language used in the agreement and by giving consideration on a practical basis to the instrument in its entirety. Dunn v. Potomac Insurance Co. of Illinois, 1994-2202 (La. App. 1 Cir. 6/23/95), 657 So.2d 660, 663. Each provision in a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole. La. C.C. art. 2050.

Louisiana Civil Code article 2053 provides that “[a] doubtful provision must be interpreted in light of the nature of the contract, equity, usages, the conduct of the parties before and after the formation of the contract, and of other contracts of a like nature between the same parties.” Where a doubtful provision cannot be otherwise resolved, that provision must be interpreted against the party who furnished its text. See La. C.C. art. 2056. A contract executed in the standard form of one party must be interpreted, in case of doubt, in favor of the other party. Id. In case of doubt that cannot be otherwise resolved, a contract must be interpreted against the obligee and in favor of the obligor of a particular obligation. See La. C.C. art. 2057.

At the hearing on the motions for summary judgment, the trial court stated that it was only considering how improvement was defined in the lease agreement. The main descriptions of the structure were provided by the deposition of Bernard Maise, the Brand employee in charge of the site who commissioned the structure to be built; attached to his deposition were photographs of the structure and the leased property with the structure on it and after the structure was removed. According to Mr. Maise, the structure, which he described as a shed, was fastened together entirely by nuts and bolts, and was not welded. The twenty-four feet wide and fifty or sixty feet long structure only had one door for entry at its rear and no windows or plumbing.

3

The structure had no flooring but was bolted to six small cement pads on the ground due to safety concerns about the local weather, particularly high winds. Brand used the structure to protect the lumber used in its scaffolding operations from the weather. Mr. Maise obtained verbal consent from Domino to install the structure. Brand wanted the structure designed to be portable because it planned to move its business one day. The structures assembly and then later its removal took one or two days at most. The structure was entirely dismantled with a couple of wrenches and loaded onto a flatbed truck with a forklift.

The provisions in the lease concerning improvements state, in pertinent part:

6. CONDITION OF THE PREMISES AND SPECIFIC INDEMNITY: ․ [U]pon the termination of this lease, ․ Lessee shall return to Lessor, without notice being required, actual possession of the Leased Premises and all improvements thereto in good order․

8. IMPROVEMENTS: Lessee must obtain the prior written approval of Lessor ․ to make any addition, change, alteration or modification to any of the existing structures located on the Leased Premises or to the Lease itself. Any such improvements, changes, alterations, or modifications to the leased premises shall be made at the sole risk, cost and expense of Lessee and shall be represented by a written construction contract with the contractor thereon to be fully bonded as to all liens and performance ․ with copies of the construction contract, bond, plans and specifications to be furnished to Lessor prior to commencement of any such improvements, modification, change or alteration. ․ All such changes, modifications, improvements or alterations shall conform to all building, zoning and other laws and ordinances of the city, parish, and state wherein the Leased Premises are located, now or in the future. All such changes, modifications, improvements and alterations shall become the property of Lessor at the termination or cancellation of this Lease Agreement without payment whatsoever to Lessee for the same.

(Emphasis added.)

At the hearing on the summary judgment motions, the trial court determined that La. C.C. art. 2695, which, in the absence of a contrary agreement, gives the lessee the right to remove any improvements it makes, did not apply because the lease contained provisions concerning improvements. The lease provided that “such ․ improvements” “shall become” Dominos property as the lessor when the lease was terminated. The trial court concluded that the structure was not an improvement because it was not permanently attached to the ground and could be removed. In contrast, the trial court found that the cement slabs beneath the structure constituted an improvement because they were permanently fixed to the ground and could not be removed from the leased property without damaging the property. In its reasons, the trial court commented that it considered La. C.C. art 493, which, in its discussion of the ownership of improvements, states, in pertinent part, “Buildings, other constructions permanently attached to the ground, and plantings made on the land of another with his consent belong to him who made them. They belong to the owner of the ground when they are made without his consent.” Pursuant to the lease, once the trial court concluded that the structure was not an improvement, it found that Brand had the right to remove it when the lease terminated.

On appeal, Domino contends that the trial court erred in its interpretation of La. C.C. art. 2695 because the trial court referred to La. C.C. art. 493 and considered the permanence of the structure.

4

Domino acknowledges in brief that the lease provides that any improvements to the leased premises shall become owned by the lessor at the termination of the lease, which would be a “contrary agreement” pursuant to La. C.C. art. 2695, thus making article 2695 inapplicable, as recognized by the trial court and as argued by Brand.

After a de novo review of the record and the undisputed facts of this case, we find that the trial court properly concluded that Brand had the right to remove the structure when the lease terminated. However, we disagree with the trial courts finding that La. C.C. art. 2695 did not apply. Louisiana Civil Code article 2695 clearly states that the rules as to improvements provided for in the article only apply “in the absence of contrary agreement” in the lease document. The lease in this case specifically defined the improvements that became the property of the lessor at the termination of the lease. The lease requires that the lessee obtain prior written approval “to make any addition, change, alteration or modification to any of the existing structures located on the Leased Premises or to the Lease itself.” (Emphasis added.) The remainder of the improvements section refers to “such improvements.” The only existing structure located on the leased premises was the office building.

5

Brands structure was in no way an addition, change, alteration, or modification to the office building. The other provision of the sentence requiring the lessee to obtain written approval as to a modification to the “Lease itself” would appear to refer to the contractual lease agreement, not to the immovable property or the existing structures on it. The language of the lease is clear that “[a]ll such changes” “shall become the property of Lessor” at the termination of the lease. The phrase “such changes” refers only to an addition, change, alteration or modification to any of the existing structures or to the lease itself. The structure in question is not a change to the existing structure or to the lease itself, nor can it be properly considered or interpreted as “such improvement” in accordance with the lease. Therefore, in the absence of a contrary agreement in the lease, La. C.C. art. 2695 applies to any improvement made by the lessee that was not to the office building located on the property. Since the structure at issue was not an addition to, or modification of the office building, La. C.C. art. 2695 would apply. In accordance with the clear language of La. C.C. art. 2695, Brand could remove the structure it placed on the leased property at the termination of the lease as long as it restored the leased property to its former condition, less ordinary wear and tear.

6

For the foregoing reasons, Dominos assignment of error has no merit.

Our ruling in this appeal disposes of the issue raised in Dominos application for supervisory writs as to the denial of its motion for partial summary judgment, and therefore, the writ application (2020 CW 0015) is denied as moot.

CONCLUSION

For the above reasons, the November 21, 2019 judgment of the trial court in favor of Brand Scaffold Services, LLC, dismissing Domino Estate, LLCs suit against it is affirmed. Costs of this appeal are to be paid by Domino Estate, LLC.

AFFIRMED; WRIT DENIED.

FOOTNOTES

1

.   The lease term was extended in three-year periods from February 1, 2012, through January 31, 2015, then from February 1, 2015, through January 31, 2018, and finally from February 1, 2018, until either January 31, 2021, or January 31, 2024, at Brands option. The parties terminated the lease in May of 2018.

2

.   The remainder of La. C.C. art. 2695 states:(2) If the lessee does not remove the improvements, the lessor may:(a) Appropriate ownership of the improvements by reimbursing the 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.

3

.   When asked if the structure had electricity, Mr. Maise replied affirmatively, but it is unclear if the source of the electricity was within the structure. The photographs show lights on the outside of the structure.

4

.   Domino contends that the trial court erred in considering La. C.C. art. 493 because subsection (c) of Revisions Comments—2004 to La. C.C. art. 2695, provides that article 2695 established a self-contained rule specific to leases without reference to the law of accession to immovables, of which La. C.C. art. 493 is a part.

5

.   The lease defines the leased premises as the entire property. The lease states, “PREMISES: Lessor leases to Lessee and Lessee leases from Lessor the following property called the ‘Leased Premises’: That certain tract or parcel of land ․ more particularly known ․ as Tract ‘DE-9’ as shown on [attached] survey.․” The lease sometimes refers to the building on the leased property as the “Leased Premises,” such as where it says that “Lessee may use one upstairs room of the Leased Premises which may be equipped with eight (8) beds and used as a layover to house Lessees employees for one night.” At other times, the “Leased Premises” appears to refer to the land, such as where the lease says that the lessee shall not use the leased premises in connection with a junk yard.

6

.   According to Mr. Maise, Brand offered to remove the concrete pads but Domino wanted them left on the leased property.

HOLDRIDGE, J.

McDonald, J. concurs.