Court: Louisiana Court of Appeal; March 30, 2017; Louisiana; State Appellate Court
In a commercial lease dispute between BCNO 4, L.L.C. (lessor) and An Erny Girl, L.L.C. (lessee), the trial court denied Erny Girl's declinatory exception of lis pendens and granted BCNO 4's petition for possession, leading to Erny Girl's appeal. The parties entered a lease on January 23, 2013, for premises at 619 Frenchman Street, New Orleans. The initial lease term was from February 1, 2013, to January 31, 2014, with renewals discussed and agreed upon until June 9, 2016. On January 28, 2016, Erny Girl filed a Declaratory Action seeking a declaration that the lease remained in effect through June 9, 2016, and attempted to exercise a renewal option to extend the lease to June 9, 2017. However, BCNO 4 rejected this renewal on February 15, 2016, asserting the lease had transitioned to a month-to-month arrangement after January 31, 2015, and provided notice of lease termination effective February 12, 2016. BCNO 4 claimed the lease was validly terminated and subsequently filed two eviction actions against Erny Girl; the first citing failure to maintain required insurance, and the second based on Erny Girl's admission that the lease terminated on June 9, 2016. Erny Girl was served with the second action but did not respond. The court affirmed the trial court's judgment.
On July 25, 2016, Erny Girl filed a declinatory exception of lis pendens, followed by an unverified answer to the First Eviction Action on July 29, 2016. The trial court scheduled a hearing for the lis pendens exception on August 15, 2016. In opposition, BCNO 4 proposed transferring the eviction actions from Division 'J' to Division 'C', where the earlier Declaratory Action was pending, citing La. Rules for District Courts, Rule 9.4 (b). The trial court accepted this suggestion and transferred the actions on August 1, 2016. During the August 15 hearing in Division 'C', the court addressed both BCNO 4’s eviction action and Erny Girl’s lis pendens exception. On August 17, 2016, the trial court overruled the lis pendens exception, stating it did not apply, and granted possession to BCNO 4 based on the lease expiration on June 9, 2016, which Erny Girl admitted in their petition. Following this judgment, Erny Girl filed a suspensive appeal.
BCNO 4 subsequently filed a motion to dismiss the appeal, arguing that Erny Girl did not comply with La. C.C.P. art. 4735’s requirements for a suspensive appeal of an eviction judgment, specifically that the answer filed by Erny Girl was neither sworn nor included an affirmative defense for retaining possession. Erny Girl contended that BCNO 4's motion ignored a stipulation between the parties regarding the preservation of its appeal rights. This stipulation arose during a hearing addressing service issues related to the Second Eviction Action, where both parties agreed that Erny Girl's answer would apply to both actions.
Erny Girl argues that the existing record is insufficient to determine whether the stipulation was adequate to preserve its right to a suspensive appeal, requesting a limited remand for clarification from the trial court. The court denies this request, stating that the validity of Erny Girl's suspensive appeal is a legal issue rather than a factual one, emphasizing that the requirement for a verified answer is mandatory and cannot be waived by stipulation. The court references La. C.C.P. Article 4735, which mandates that a tenant must file a verified answer with an affirmative defense to maintain a suspensive appeal in eviction matters. Since Erny Girl did not file a verified answer to either eviction action, it failed to preserve its right to a suspensive appeal.
Erny Girl further contends that the judgment denying the exception of lis pendens is appealable and subject to a suspensive appeal under La. C.C.P. Article 2121. However, the court disagrees, categorizing the judgment as interlocutory and asserting that it cannot independently support a suspensive appeal. The court concludes that since the eviction portion of the judgment did not meet the criteria for a suspensive appeal, the denial of the lis pendens exception also fails to fulfill these requirements. Consequently, Erny Girl's appeal can only proceed as a devolutive appeal. The sole assignment of error on appeal is the trial court’s denial of the declinatory exception of lis pendens, which the court reviews de novo.
The appellate court reviews issues of law to determine if a trial court's interpretive decision is legally correct. A declinatory exception of lis pendens serves to prevent duplicate trials in Louisiana courts, as outlined in La. C.C.P. art. 531. This article permits a defendant to dismiss all but the first suit when multiple suits are pending on the same transaction or occurrence involving the same parties. If the defendant does not file an exception, the plaintiff can continue any suit, but the first final judgment will be conclusive.
The doctrines of res judicata and lis pendens are interrelated, with amendments made to both statutes in 1990 to ensure consistency. The requirements for establishing lis pendens align with those for res judicata, meaning that an exception for lis pendens can be sustained if a final judgment in the first suit would preclude the subsequent suit. Three criteria must be met for lis pendens to apply: (1) two or more suits must be pending; (2) the suits must involve the same transaction or occurrence; and (3) the suits must involve the same parties in the same capacities. In this case, the first and third requirements are satisfied as there are concurrent suits between the same lessor and lessee. The second requirement regarding the same "transaction or occurrence" necessitates further examination, as the 1990 amendment to La. C.C.P. art. 531 broadened its scope from "cause of action" to "transaction or occurrence," indicating a wider interpretation involving connected acts or agreements.
No definitive test exists for determining what qualifies as the same "transaction or occurrence," requiring case-by-case analysis. Erny Girl asserts that both its Declaratory Action, concerning the validity of a lease's renewal option, and BCNO 4’s eviction action, which disputes the effectiveness of that renewal, meet this element. Erny Girl argues that success in its Declaratory Action would prevent BCNO 4 from evicting it due to res judicata, as both actions relate to the renewal provision of the Lease. However, BCNO 4 counters that the Second Eviction Action is based on Erny Girl’s judicial admission that the Lease terminated on June 9, 2016, making the issues distinct. The Declaratory Action seeks possession until that date, while the eviction action questions possession after it. This difference in the timeframes means the actions do not overlap. Erny Girl also claims the trial court incorrectly applied outdated lis pendens jurisprudence by treating the Declaratory Action as an ordinary proceeding and the eviction as a summary proceeding. While Erny Girl cites the Spallino case, BCNO 4 argues that the similarity is superficial, as the cases involve fundamentally different issues regarding lease breach.
In Spallino, both parties were contesting their obligations under the same lease for the same property and sign, leading the court to establish that a final judgment in one suit would have res judicata effects on the other. Consequently, the exception of lis pendens was upheld. However, in the current case, the exception was overruled not due to the different forms of action, but because the transactions at issue were distinct. The Declaratory Action seeks possession of the leased premises until June 9, 2016, while the Second Eviction Action seeks possession after that date, indicating separate issues stemming from Erny Girl’s judicial admission.
The court referenced Sauer v. Johnson, where it found similar distinctions based on a stipulation regarding a month-to-month lease. In that case, the tenant's discrimination claim did not prevent the landlord from evicting her under the lease terms. Thus, the court determined that a judgment in the Declaratory Action would not be res judicata in the Second Eviction Action, as they do not arise from the same transaction or occurrence. The claims involve possession rights for different time periods.
The second requirement for granting lis pendens was not satisfied, as the actions concern separate occurrences. Therefore, the trial court's decision to overrule the lis pendens exception was affirmed.
Regarding frivolous appeal damages, BCNO 4 requested such damages in its motion to dismiss and appellee brief. However, these requests do not comply with the proper procedure, which requires an appellee to file an answer to the appeal or a cross-appeal. Damages for a frivolous appeal cannot be claimed solely in a motion to dismiss or in the appellee’s brief, as these do not constitute valid requests under Louisiana law.
Neither a motion to dismiss nor an appellee brief is an appropriate means for raising a frivolous appeal damage claim, leading to a decision not to consider such a claim by BCNO 4. Consequently, BCNO 4's request for frivolous appeal damages is denied. The court grants the motion to dismiss the suspensive appeal while maintaining the appeal as devolutive, affirming the trial court's judgment.
The lessor filed two eviction actions, but the trial court focused on the second action for its ruling. The first eviction hearing was postponed and ultimately combined with the declaratory action. During the proceedings, BCNO 4 clarified that its eviction case did not concern insurance coverage but was based on judicial admissions in the underlying suit. Issues regarding service raised by Erny Girl were resolved by stipulation.
Erny Girl claimed it was not served with the second eviction action and consented to waive service under the impression that the hearing would only address the first eviction action's insurance issue. The trial court received testimony and evidence, concluding that the lease, initially set to expire on January 31, 2014, had converted to a month-to-month lease after January 31, 2015, due to An Erny Girl's failure to timely exercise any renewal options. Therefore, An Erny Girl's attempts to extend the lease to June 9, 2017, were deemed ineffective, as there was insufficient evidence to support the lease's extension beyond January 31, 2015. An Erny Girl had also filed a petition indicating the lease terminated on June 9, 2016.
BCNO 4, without admitting the lease termination date of June 9, 2016, accepted a judicial admission from An Erny Girl, issued a notice to vacate, and is now pursuing possession of the premises at 618 Frenchmen Street, New Orleans. The court has ruled in favor of BCNO 4, granting them possession and ordering an eviction judgment. Following this, Erny Girl filed a suspensive appeal against the trial court's judgment on August 18, 2016, which the court granted, requiring a $10,000 bond to protect against potential damages from the appeal. Louisiana law specifies that an appeal does not suspend an eviction judgment unless the defendant files a sworn answer asserting an affirmative defense within 24 hours of the judgment.
Erny Girl argues that the trial court erred in denying their Declinatory Exception of Lis Pendens, claiming it relates to a previous Petition for Damages, Declaratory Judgment, and Permanent Injunction in a separate case involving the same parties and transaction. The court references amendments to Louisiana law that removed the requirement for "same cause of action" and "same object," indicating that suits can still be subject to lis pendens if they arise from the same transaction or occurrence, even if they seek different types of relief. The appellate court has previously held that the identity of objects is not necessary for lis pendens to apply, as demonstrated in related cases.
