Norris et al v. Causey et al

Filing 31

ORDER & REASONS: granting in part and denying in part 27 Motion for Summary Judgment as set forth in document. Signed by Judge Carl Barbier on 12/16/15. (sek)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

JOSH NORRIS, ET AL.

CIVIL ACTION

VERSUS

NO: 14-1598

GARRY CAUSEY, ET AL.

SECTION: “J”(4)
ORDER AND REASONS

Before the Court is a Motion for Summary Judgment (Rec. Doc.
27) filed by Defendant, Karry Causey (“Defendant” or “Defendant
Karry”), and an Opposition thereto (Rec. Doc. 29) by Plaintiffs,
Josh and Jill Norris (“Plaintiffs”). Having considered the motion,
the parties’ submissions, the record, and the applicable law, the
Court finds, for the reasons expressed below, that the motion
should be GRANTED IN PART AND DENIED IN PART.
PROCEDURAL HISTORY AND BACKGROUND FACTS
Plaintiffs Josh and Jill Norris are residents of the state of
Michigan. After Hurricane Katrina in 2005, Mr. Norris, a licensed
plumber, traveled to New Orleans to seek work. In April 2007,
Plaintiffs met Defendant, Karry Causey, and his brother, Garry
Causey. The Causeys proposed an investment to Plaintiffs, in which
Plaintiffs

would

supply

funds

to

purchase

hurricane-damaged

properties in New Orleans. The Causeys would then renovate the
properties and sell them for a profit. The parties agreed to share
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the profits of their venture equally. In furtherance of this
proposed

investment,

Garry

Causey

drafted

a

Joint

Venture

Agreement. Plaintiffs signed the agreement and returned it to Garry
Causey. Defendant Karry did not sign the agreement.
The Causeys recommended a property at 5103 Music Street (“the
Music Street property”) for their first renovation. Garry Causey
was the owner of this property. On June 14, 2007, Plaintiffs
delivered a check for $48,000 payable to Garry Causey for the
renovations of the Music Street property. Garry Causey deposited
the check on June 19. Defendant Karry then instructed Plaintiffs
to pay for architectural plans for the property from a specific
company. Plaintiffs allege that they spent $1,000 on the plans.
Next, the Causeys approached Plaintiffs about another property
located at 4767 Marigny Street (“the Marigny Street property”).
Plaintiffs wrote Garry Causey a check for $45,000 for construction
on the Marigny Street property. Garry Causey deposited the check
on August 7, 2007. Plaintiffs made the initial $93,000 in payments
using their equity line of credit.
Despite Plaintiffs providing funds for the projects, the
Causeys failed to move forward on the renovations. According to
Plaintiffs, the Causeys told them that Garry Causey was unable to
acquire additional funding for construction and materials. In the
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meantime, Plaintiffs had to pay monthly finance charges on their
line of credit. The Causeys agreed to make monthly payments to
Plaintiffs, but they stopped making payments after a few months.
In 2009, Garry Causey transferred his fifty percent interest
in the Marigny Street property to Mark Anthony Holdings. Plaintiffs
contend that Garry Causey is “involved” with this entity. Further,
Mark Anthony Holdings owned the other fifty percent interest in
the property, which it sold to Turn Our Lights on X, an entity in
which Defendant Karry was involved. In 2014, the two entities
constructed a residence on the property and sold it for a profit.
The entities did not share the profit with Plaintiffs.
On July 10, 2014, Plaintiffs filed suit against Karry and
Garry Causey for rescission of the Joint Venture Agreement and
asking for a judgment holding Defendants liable for the principal
amount of $93,000, interest, attorney’s fees, costs, and any other
damages

allowed

by

law

or

equity.

Plaintiffs

alleged

unjust

enrichment, fraud, breach of contract, and other claims. After
Garry Causey failed to answer the complaint, Plaintiffs received
a default judgment against him on March 5, 2015. On December 3,
2015, Defendant Karry filed the instant motion. Plaintiffs filed
an opposition on December 8.

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PARTIES’ ARGUMENTS
Defendant argues that he is entitled to summary judgment on
Plaintiffs’
claims.

unjust

First,

as

enrichment,
to

breach

Plaintiffs’

of

unjust

contract,

and

enrichment

fraud

claims,

Defendant argues that he did not receive a benefit, as is required
by law. Defendant points out that his brother deposited Plaintiffs’
checks into his account and that the Plaintiffs have not produced
any evidence showing that Defendant converted the funds to his
benefit.

Also,

ownership

Defendant

interest

in

argues

the

that

Music

he

Street

did
or

not

acquire

Marigny

an

Street

properties.
Second, on Plaintiffs’ contract claim, Defendant argues that
Louisiana law requires a contract concerning immovable property to
be confected in writing. Further, Defendant claims that Plaintiffs
cannot use parol evidence to prove the terms of an agreement that
the law requires to be in writing. Because Plaintiffs and Defendant
were not parties to a written agreement, Defendant argues that
they are unable to prove a breach of contract. Finally, Defendant
argues that Plaintiffs’ fraud claim is subject to a one-year
liberative prescription and that it has prescribed.
In their opposition, Plaintiffs argues that Defendant is not
entitled to summary judgment. First, they contend that the parol
4

evidence rule does not apply to the contract in question. The
agreement was to form a joint venture, not to purchase real
property. Thus, Plaintiffs argue that the agreement need not be in
writing and that they can introduce parol evidence to prove its
terms. Second, Plaintiffs argue that summary judgment on their
unjust enrichment claims is not timely because they are awaiting
subpoena responses from the Causeys’ banks that will show whether
Garry

Causey

transferred

funds

to

Defendant

Karry.

Also,

Plaintiffs point out that Defendant was a member of Turn Our Lights
on X, one of the entities that owned the Marigny Street property
and sold it for a profit. Finally, Plaintiffs argue that fraud
claims in the contract context are subject to a longer prescriptive
period. Also, the “date of injury” in both tort and contract claims
is the date the injured party had actual or constructive knowledge
of the injury. Because this date is still uncertain, Plaintiffs
argue that genuine issues of material fact exist.
LEGAL STANDARD
Summary judgment is appropriate when “the pleadings, the
discovery and disclosure materials on file, and any affidavits
show that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing Fed. R.
5

Civ. P. 56(c)); Little v. Liquid Air Corp., 37 F.3d 1069, 1075
(5th Cir. 1994). When assessing whether a dispute as to any
material fact exists, the Court considers “all of the evidence in
the record but refrains from making credibility determinations or
weighing

the

evidence.”

Delta

&

Pine

Land

Co.

v.

Nationwide

Agribusiness Ins. Co., 530 F.3d 395, 398 (5th Cir. 2008). All
reasonable inferences are drawn in favor of the nonmoving party,
but

a

party

cannot

defeat

summary

judgment

with

conclusory

allegations or unsubstantiated assertions. Little, 37 F.3d at
1075. A court ultimately must be satisfied that “a reasonable jury
could not return a verdict for the nonmoving party.” Delta, 530
F.3d at 399.
If the dispositive issue is one on which the moving party
will bear the burden of proof at trial, the moving party “must
come forward with evidence which would ‘entitle it to a directed
verdict if the evidence went uncontroverted at trial.’” Int’l
Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1263-64 (5th Cir.
1991) (citation omitted). The nonmoving party can then defeat the
motion by either countering with sufficient evidence of its own,
or “showing that the moving party’s evidence is so sheer that it
may not persuade the reasonable fact-finder to return a verdict in
favor of the moving party.” Id. at 1265.
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If the dispositive issue is one on which the nonmoving party
will bear the burden of proof at trial, the moving party may
satisfy its burden by merely pointing out that the evidence in the
record is insufficient with respect to an essential element of the
nonmoving party’s claim. See Celotex, 477 U.S. at 325. The burden
then shifts to the nonmoving party, who must, by submitting or
referring to evidence, set out specific facts showing that a
genuine issue exists. See id. at 324.

The nonmovant may not rest

upon the pleadings, but must identify specific facts that establish
a genuine issue for trial.

See, e.g., id. at 325; Little, 37 F.3d

at 1075.
DISCUSSION
1. Breach of Contract Claim
Defendant correctly asserts that Plaintiffs will not be able to
prove

their

breach

of

contract

claim

because

Defendant

and

Plaintiffs never confected a written joint venture agreement. The
Louisiana Civil Code provides that a transfer of immovable property
must be made in writing. La. Civ. Code art. 1839. As a corollary
to this principle, “[w]hen the law requires a contract to be in
written form, the contract may not be proved by testimony or by
presumption, unless the written instrument has been destroyed,
lost, or stolen.” La. Civ. Code art. 1832. This “parol evidence”
7

rule applies to contracts that directly affect title to real
property, as well as to contracts where the parties “merely sought
to derive benefits growing out of verbal agreements relating to
the sales of immovable property.” Hayes v. Muller, 158 So. 2d 191,
198 (La. 1963); see John W. Stone Oil Distrib., L.L.C. v. River
Oaks Contractors & Developers, Inc., 986 So. 2d 103, 107 (La. Ct.
App. 2008).
Plaintiffs argue that the parol evidence rule does not apply to
the contract at issue because it was primarily a joint venture
agreement, not a contract to purchase real property. Plaintiffs
are incorrect. The Louisiana Supreme Court and appellate courts
have held that joint venture agreements pertaining to real property
must also be in writing. See, e.g. Hayes, 158 So. 2d at 198 (La.
1963); John W. Stone Oil Distrib., L.L.C., 986 So. 2d at 107. The
purported

agreement

between

Plaintiffs

and

Defendant

Karry

involved the purchase and sale of real property. Such agreements
must be in writing, and parol evidence cannot be used to prove the
contents of the contract. Thus, Defendant is entitled to summary
judgment on Plaintiffs’ breach of contract claim.
2. Unjust Enrichment Claim
Defendant argues that he is entitled to summary judgment on
Plaintiffs’ unjust enrichment claim because Plaintiffs have not
8

produced evidence of an enrichment. An unjust enrichment claim has
five elements: “(1) an enrichment, (2) an impoverishment, (3) a
connection between the enrichment and the impoverishment, (4) an
absence

of

justification

or

cause

for

the

enrichment

or

impoverishment, and (5) no other remedy at law.” Edmonston v. ASecond Mortg. Co. of Slidell, Inc., 289 So. 2d 116, 120 (La. 1974).
Plaintiffs may introduce parol evidence to establish their unjust
enrichment claims, despite the need for a written contract in this
context. See Rogers v. Brooks, 122 Fed. Appx. 729, 734 (5th Cir.
2004).
Defendant argues that summary judgment is appropriate because
Plaintiffs do not have any evidence showing that Defendant received
a benefit from Plaintiffs’ contract with Garry Causey. As Defendant
points

out,

Plaintiffs

wrote

checks

made

out

to

Garry,

who

deposited them. However, Plaintiffs argue that they are awaiting
subpoena responses from the banks of Defendant Karry and his
brother. These responses will purportedly show that Garry Causey
transferred

money

to

Defendant

after

depositing

Plaintiffs’

checks. Thus, genuine issues of material fact exist as to whether
Defendant received a benefit, and Defendant is not entitled to
summary judgment on Plaintiffs’ unjust enrichment claim.

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3. Fraud Claim
Defendant argues that he is entitled to summary judgment on
Plaintiffs’ fraud claim because the claim has prescribed. However,
as Plaintiffs point out, the record does not support Defendant’s
prescription argument. A fraud claim can arise under tort law or
contract law. La. Civ. Code art. 1953; Johnson v. First Nat. Bank
of Shreveport, 792 So. 2d 33, 47 (La. Ct. App. 2001). A tort action
is

“subject

to

a

liberative

prescription

of

one

year.

This

prescription commences to run from the day injury or damage is
sustained.” La. Civ. Code art. 3492. Courts have found that the
plaintiff’s injury or damage is sustained when the plaintiff has
actual or constructive knowledge of the alleged tort. Mistich v.
Cordis Mfg. Co., 607 So. 2d 955, 956 (La. Ct. App. 1992). The
plaintiff

has

information

to

constructive
excite

knowledge

attention

when

he

sufficient

to

“has

sufficient

prompt

further

inquiry.” Bell v. Demax Mgmt. Inc., 824 So. 2d 490, 493 (La. Ct.
App. 2002). In a contract action, fraud renders the contract
relatively null. See La. Civ. Code art. 2031. An action to annul
a relatively null contract must be brought within five years from
the time the nullity was discovered. La. Civ. Code art. 2032.
Here, the evidence is insufficient to support Defendant’s claim
of

prescription.

In

the

tort

context,
10

the

parties

have

not

definitively shown when Plaintiffs acquired actual or constructive
knowledge

of

Defendant’s

fraud.

Prescription

in

the

contract

context also depends on when Plaintiffs discovered the fraud.
Because

the

time

of

the

events

triggering

prescription

are

uncertain, genuine issues of material fact exist as to whether
Plaintiffs’ claims for fraud have prescribed.
Further, Plaintiffs may introduce parol evidence to prove their
allegations of fraud. As restricted to the proof of fraud, parol
evidence is admissible even when the law requires the underlying
contract to be in writing. Mitchell v. Clark, 448 So. 2d 681, 686
(La. 1984); Le Bleu v. Savoie, 33 So. 729, 730 (La. 1903). Thus,
the lack of a written agreement is not a ground for granting
summary judgment to Defendant on Plaintiffs’ fraud claims.
CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Defendant’s Motion for Summary
Judgment (Rec. Doc. 27) is GRANTED IN PART AND DENIED IN PART.
New Orleans, Louisiana this 16th day of December, 2015.

CARL J. BARBIER
UNITED STATES DISTRICT COURT
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