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Schwab v. City of Kenner
Citations: 709 So. 2d 320; 1998 WL 102941Docket: No. 97-CA-287
Court: Louisiana Court of Appeal; March 10, 1998; Louisiana; State Appellate Court
The appeal concerns a judgment on the pleadings favoring Ms. Iris Schwab regarding a contract with the City of Kenner for the display of her deceased husband's toy train collection, valued at approximately one million dollars. Following Mr. Schwab's death, the City Council authorized a ten-year lease agreement with a $1,000 monthly payment, without prior consent from the State Bond Commission, which is required for municipalities to incur debt. In 1996, the City notified Ms. Schwab that it could no longer fund the lease payments and sought to terminate the agreement. Ms. Schwab filed a lawsuit to enforce the contract, leading to a motion for judgment on the pleadings, which the trial court granted, concluding that the contract was valid and had been breached. Upon review, the appellate court recognized that while the trial court was correct to grant the judgment, it incorrectly concluded that the contract was valid. According to Louisiana law, without prior approval from the State Bond Commission, the contract was void from the start (void ab initio) as municipalities cannot incur debt without such consent. Consequently, the appellate court set aside the trial court's judgment, ruling that the obligation under the contract was unenforceable. The costs of the appeal were assessed against Ms. Schwab. Judge Gaudin concurred with the decision, while Judge Cannella dissented.