Bopp Trust et al v. Capital One, N.A.

Filing 37

ORDER granting in part and denying in part 26 Motion for Summary Judgment; denying 27 Motion for Summary Judgment. Signed by Judge Ivan L.R. Lemelle on 4/28/2011. (lag, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

BOPP TRUST, ET AL.

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VERSUS
CAPITAL ONE, N.A.

CIVIL ACTION
NO. 09-6828
SECTION “B”(4)

ORDER AND REASONS
Before the Court is Defendant, Capital One N.A.’s (“Capital
One”)

Motion

for

Summary

Judgment

(Rec.

Doc.

No.

26)

and

Plaintiffs’ Motion for Summary Judgment (Rec. Doc. No. 27) to which
both parties have filed memoranda in opposition at Rec. Doc. Nos.
30

and

32

respectively.

After

review

of

the

pleadings

and

applicable law and for the reasons herein articulated,
IT IS ORDERED that Defendant’s Motion for Summary Judgment
(Rec. Doc. No. 26) be GRANTED IN PART and DENIED IN PART; GRANTED
to the extent that all claims of Plaintiffs for damage to the
constructions on the land are hereby dismissed, and DENIED to the
extent that all claims arising from alleged damage to the real
property itself are hereby allowed to proceed to trial.
IT IS FURTHER ORDERED that Plaintiffs shall submit to the
court on or before, but NO LATER THAN THURSDAY, MAY 12, 2011,
supplemental briefing addressing both the type of damage to the
real property itself caused by the noted Hurricanes as well as the
marketability of the property and any additional damages sought.
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IT IS FURTHER ORDERED that Plaintiffs’ Motion for Summary
Judgment (Rec. Doc. No. 27) be and is hereby DENIED.
I. Cause of Action and Facts of Case
This breach of contract case is before the Court upon removal
from the Thirty Fourth Judicial District Court, Parish of Saint
Bernard.

The instant dispute centers on two lease contracts, the

first executed on May 20, 1958, the second on December 20, 1963.
(Rec. Doc. Nos. 26-4 at 1; 26-5 at 1).

Plaintiffs’ predecessors

were the original lessors, Defendant’s predecessor was the original
lessee.1

The leases at issue, the 1963 lease containing identical

language to the 1958 lease in all pertinent respects, expired in
May, 2008.

Following the execution of the 1958 lease, Defendant’s

predecessor, St. Bernard Bank & Trust Company (“SBBT”) constructed
a bank building on the property; this building was used through
August, 2005 when the building suffered damage due to Hurricanes
Katrina and Rita.

(Rec. Doc. No. 26-2 at 2).

Plaintiffs point out

that the four original lessors were also members of SBBT’s Board of
Directors at the time of execution of the lease.

(Rec. Doc. No.

27-1 at 2).
Pursuant to the terms of the contracts, ownership of all
improvements transferred to Plaintiffs upon termination of the

1

Rec. Doc. No. 22-1 at 1. Original lessee, St. Bernard Bank & Trust
Company was acquired by Hibernia National Bank which assumed both commercial
leases and, in early 2006, Hibernia National Bank became Capital One; Capital
One subsequently assumed the leases at issue. Rec. Doc. No. 27-1 at 3.

2

lease in May of 2008.

(Rec. Doc. No. 26-2 at 2).

Plaintiffs seek

the costs of repairs to the improvements on the leased property,
loss of rental income, court costs and attorney’s fees.

Id.

Paragraph one of the 1958 lease states:
Lessors do by these presents lease unto the lessee, for
the term and for the consideration hereinafter set forth,
and subject to the conditions and stipulations herein,
the following described property, to-wit:
A CERTAIN TRACT OR PORTION OF GROUND, together with all
the
rights,
ways,
privileges,
servitudes
and
appurtenances
thereunto
belonging
or
in
anywise
appertaining, situated in Arabi . . .
Rec. Doc. No. 26-4 at 1.

The fourth paragraph of Section three and

the entirety of section six of both the 1958 and 1963 leases are
the focus of the parties’ contentions.

Paragraph three states, in

pertinent part:
The rental or consideration specified above shall be net
to the Lessors, free of any and all costs and expenses
incurred in complying with the above conditions, and any
and all costs or expenses or liability for damages in
connection with the property shall be paid by Lessee.
Rec. Doc. Nos. 26-4 at 2, 26-5 at 3.

Paragraph six states:

All buildings and improvements erected upon this said
property, and all fixtures, immovable by destination,
attached to said buildings and improvements shall become
the property of the Lessors at the expiration or
termination of this lease.
Rec. Doc. Nos. 26-4 at 4; 26-5 at 4.
is

liable

for

the

cost

of

At issue is whether Defendant

repairs

to

the

constructions

or

improvements made to or constructed upon the leased property
following damage sustained due to Hurricanes Katrina and Rita.
II. Parties’ Contentions
3

A. Contentions of Movant
Movant’s primary contention is simply stated “there is simply
no basis to suggest that there is a duty on the part of Capital One
to restore the building to its pre-damaged condition.”
No. 26-2 at 8).
one,

quoted

(Rec. Doc.

Capital One contends that the language of section

supra

makes

clear

that

the

property

description

“denotes only land, wherein no reference is made to any buildings
and/or improvements to be constructed thereon.” (Rec. Doc. No. 262 at 6). As such, Capital One submits that Plaintiffs’ reliance on
section three is “misplaced” as the word “property” in that section
“refers only [to] the land, not the subsequently constructed
improvements made by the lessee.”

Id. at 5.

Capital One argues

alternatively and without citing to supporting authority that, were
the Court to find that the provisions of Paragraph three of the
lease applied to those constructions on the land made by the lessee
“the lessee would nevertheless not be responsible for damages
caused by an unforeseen event, such as a hurricane, in the absence
of an express assumption by the lessee of an obligation to make
repairs caused by casualty.”

(Rec. Doc. No. 26-2 at 9).

B. Contentions of Respondents
Respondents, Plaintiffs, repeat throughout their opposition to
Defendant’s motion and in their own summary judgment motion that
their predecessors, the original lessors were also the lessees.
They point out that all four original lessors were also members of
4

the SBBT Board of Directors and “were leasing the subject property
to themselves.”

(Rec. Doc. NO. 27-41 at 4).

They attach to their

opposition, an extract from a SBBT’s Board of Directors meeting on
May 8, 1958 wherein the Board agreed to enter a construction
contract with Union Construction Company “for the erection of a
bank building to be erected on land to be leased by the Bank . . .
.”

(Rec. Doc. No. 30-1 at 5).

Plaintiffs contend that, the fact

of this document’s execution prior to execution of the May 1958
lease proves that the Lessors “intended that references in the two
leases . . . addressed [sic] both the land and the bank building
that was being erected, and . . . that [SBBT], under the 1958
lease, would be responsible for all costs and any damages to the
land and the bank building, regardless of the origin.”

(Rec. Doc.

No. 30 at 3).
Plaintiffs’ Second Supplemental and Amending Petition for
Breach of Contract states, in paragraph eight:
Hurricanes Katrina and Rita caused severe damages to the
leased premises, including flood damage, wind damage, and
wind-driven rain damage to the structures on the leased
premises and to the real property itself. Defendant has
failed and continues to fail to restore and/or renovate
the damages to the premises that Hurricanes Katrina and
Rita caused. Defendant surrendered said premises on May
1, 2008, without having performed any renovation or
repairs to the structure or real property, breaching its
contacts with the plaintiffs.
Rec. Doc. No. 1-2 at 33 (emphasis supplied).

However, in neither

their own summary judgment motion nor their opposition to Capital
One’s motion do Plaintiffs support their contention that Capital
5

One owes a duty to “restore and/or renovate the damages” caused by
the Hurricanes.
In their own summary judgment motion, Plaintiffs cite Board of
Com’rs of the Port of New Orleans v. Lexington Ins., 549 F.Supp.2d
795 in which the court held that a lease provision allowing lessee
to terminate the lease if the facility became unusable was a valid
escape clause and thus, lessee was allowed to terminate the lease.
(Rec. Doc. No. 27-41 at 7).

Plaintiffs argue that, as the leases

at issue here to not contain similar escape clause, “Capital One
remains liable to the Plaintiffs under the plain wording” of the
leases.

Id.

However, Plaintiffs make scarce mention of the

express provision of the lease at issue in Board of Com’rs stating
“[e]xcept as provided herein, Lessee agrees that it shall at its
own cost, risk and expense promptly and with due diligence repair,
replace, or restore any and all of the Leased Premises which may
become the subject of loss, damage or destruction, however caused.”
549 F.Supp.2d at 797, n.5.

Such an express provision creating a

duty to “replace, or restore any and all of the Leased Premises”
does not exist in the instant leases.
Plaintiffs contend that the word “property” in paragraph three
of the leases at issue encompasses the bank building erected on the
property after execution of the lease and thus, Capital One has
breached its duty or duties under the leases to restore or renovate
the damages.
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III. Law and Analysis
A. Summary Judgment Standard
Summary judgment is proper if the pleadings, depositions,
interrogatory

answers,

and

admissions,

together

with

any

affidavits, show that there is no genuine issue as to any material
fact and that the moving party is entitled to judgment as a matter
of law.

Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett,

477 U.S. 317, 327 (1986).
would

allow

nonmovant.
(1986).

a

A genuine issue exists if the evidence

reasonable

jury

to

return

a

verdict

for

the

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248,

Although the Court must consider the evidence with all

reasonable inferences in the light most favorable to the nonmoving
party, the nonmovant must produce specific facts to demonstrate
that a genuine issue exists for trial.

Webb v. Cardiothoracic

Surgery Assocs. of N. Texas, 139 F.3d 532, 536 (5th Cir. 1998).
The nonmovant must go beyond the pleadings and use affidavits,
depositions, interrogatory responses, admissions, or other evidence
to establish a genuine issue.

Id.

Accordingly, conclusory

rebuttals of the pleadings are insufficient to avoid summary
judgment.

Travelers Ins. Co. v. Liljeberg Enter., Inc. 7 F.3d

1203, 1207 (5th Cir. 1993).
In the instant case, there exists no genuine issue of fact as
to whether the leases, as worded, give rise to a duty to repair
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damage to the building erected on the subject property.

As

written, in unambiguous terms, it does not appear that Lessors were
under

any

duty

to

erect

any

construction

or

restore

any

construction to an original state before termination of the lease
and the attendant transfer of ownership of any improvements thereon
erected.
However, there remains a genuine issue of fact as to whether
Capital One is liable to Plaintiffs for the damage to the real
property itself caused by Hurricanes Katrina and Rita.

Plaintiffs

mention such damage in their Second Supplemental and Amending
Complaint as discussed supra at Rec. Doc. No. 1-2 at 33 and at
other places in the record but do not give specifics.2
New Orleans, Louisiana, this 28TH day of April, 2011.

______________________________
UNITED STATES DISTRICT JUDGE

2

See Rec. Doc. No. 30 at 2 “When Hurricane Katrina struck in 2005 . . .
[it] caused extensive damages to both the building and real property covered
by the two commercial leases.” See also Rec. Doc. No. 27-1 at 3 stating same.

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