Authentic Title, Ltd. v. Dix

Citations: 820 So. 2d 1163; 2002 La.App. 5 Cir. 0008; 2002 La. App. LEXIS 1746; 2002 WL 1067432Docket: Nos. 02-CA-0008, 02-CA-0009

Court: Louisiana Court of Appeal; May 29, 2002; Louisiana; State Appellate Court

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Eugene Dix, the defendant, is seeking relief from a trial court judgment favoring plaintiffs Andrea and Jay Joseph, totaling $18,488.90 plus interest and court costs, while also ordering the release of $6,000 held in escrow to the Josephs. The case involves Dix's sale of two 4-plex apartment buildings in Metairie, Louisiana, to the Josephs and N.O. Apartments, L.L.C., under a purchase agreement dated March 24, 1999. Two Property Disclosure Addendums indicated no defects for one building and one defect (a dip in the plumbing line) for the other. An inspection by A-Pro Home Inspection Service Corporation on April 6, 1999, identified multiple repair needs, categorized by urgency. The Josephs requested Dix to address all critical issues, while both parties, facilitated by real estate agent Lori Mancuso, highlighted various items on the inspection list. Dix signed an April 16, 1999 punch list agreeing to address some defects, and on April 20, 1999, he submitted his own punch list. 

During the Act of Sale on May 6, 1999, A-Pro reported to Authentic Title that some repairs were incomplete, specifically loose toilets and the unaddressed dip in the sewer line. Despite this, the sale proceeded, with an agreement to place $6,000 in escrow until repairs were completed within 30 days. The repairs were not finished in that timeframe, prompting the Josephs to issue a deadline for further repairs. A subsequent inspection by Greater New Orleans Home Services on June 7, 1999, revealed ongoing repair needs for warranty coverage, which A-Pro confirmed on June 8, 1999. Dix had plumbing work done by Charles Moulile of Pipe Masters, Inc., who unstopped a sewer line but performed no pipe replacement. Eventually, further plumbing repairs were completed by A Perfect Plumbing. The court affirmed and amended the trial court’s judgment, maintaining the financial obligations of Dix to the Josephs.

John Damonte, the owner of A Perfect Plumbing, conducted plumbing work for the Josephs, including installing sinks, a toilet, and repairing a sewer line. He determined that the entire sewer line needed replacement to pass inspection, leading to total repair costs of $17,500. The Josephs incurred additional repairs from other contractors amounting to $988.90. Dix attempted to withdraw $6,000 from an escrow account, but after the Josephs expressed dissatisfaction with the repairs, the escrow agent initiated a concursus proceeding, placing the funds in court. The Josephs filed a redhibition lawsuit against Dix and A-Pro, seeking damages for reliance on Dix's misrepresentations about defect-free property and the adequacy of the escrow funds. The trial consolidated the concursus proceeding with the redhibition action, resulting in a judgment on September 25, 2001, favoring the Josephs. The court ordered Dix to pay $18,488.90, with interest and court costs, minus the $6,000 held in escrow, and ordered A-Pro to pay $447.95, also with interest and costs. Additionally, Dix was directed to cover part of the Josephs' reasonable attorney fees, to be determined later. Dix appealed, citing three errors: misclassification of the plumbing and electrical work as redhibitory defects, the obligation to pay attorney fees, and the denial of his own attorney fees. The court affirmed the classification of plumbing issues as redhibitory defects under Louisiana Civil Code art. 2520, which protects buyers from significant defects that affect the property’s usefulness or value. The court supported the decision that the plumbing issues warranted damages, aligning with the Josephs' claims regarding undisclosed defects prior to the sale and the escrow agreement.

Dix was obligated under an agreement to resolve plumbing issues within 30 days and subsequently hired Moulile from Pipe Masters, Inc. to address the problem. Moulile believed his work resolved the plumbing issues but did not notice the improper slope of the sewer line. Afterward, the Josephs contracted Damonte from A Perfect Plumbing, who discovered that the sewer line was incorrectly sloped, necessitating a complete replacement costing $17,500. The Josephs were unaware of these significant plumbing issues at the time of sale, and Mrs. Joseph testified that she would not have purchased the property had she known the extent of the problems. Consequently, the plumbing issues were deemed redhibitory defects, entitling the Josephs to a reduction in the sale price equal to the repair costs. 

However, the court found the electrical defects, which the Josephs claimed reimbursement for, were not redhibitory. These defects were easily discoverable by the Josephs or their inspector, A-Pro, during a walkthrough of the property. As a result, the Josephs were not entitled to reimbursement for electrical repairs. The court determined that the Josephs were entitled to the $6,000 held in the court's registry, as Dix failed to complete the required plumbing repairs within the specified timeframe. Ultimately, the court affirmed and amended the trial court's judgment, awarding the Josephs $18,323.90 for plumbing repairs, plus interest, court costs, and reasonable attorney fees, and confirmed the release of the $6,000 to the Josephs.