Norris et al v. Causey et al

Filing 44

ORDER AND REASONS: It is ORDERED that Plaintiffs' 33 Motion for Reconsideration is GRANTED IN PART AND DENIED IN PART. It is FURTHER ORDERED that the portion of this Court's Order and Reasons (Rec. Doc. 31 ) that granted summary judgment to Defendant on Plaintiffs' breach of contract claim is VACATED. It is FURTHER ORDERED that Plaintiffs' 38 Motion for Leave to File Reply is DENIED as moot. Signed by Judge Carl Barbier. (gec)

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 Partial Reconsideration (Rec.
Doc. 33) filed by Plaintiffs, Josh and Jill Norris (“Plaintiffs”),
and an Opposition thereto (Rec. Doc. 35) filed by Defendant, Karry
Causey (“Defendant” or “Karry Causey”). 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
the profits of their venture equally. In furtherance of this
1

agreement,

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
owned 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
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.
2

In 2009, Garry Causey transferred his 50% 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 50% interest in the property,
which it transferred 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 filed a Motion for Summary Judgment. Plaintiffs
filed an opposition on December 8.
On December 16, this Court issued an Order and Reasons that
granted Defendant’s motion in part and denied it in part. This
Court held that Plaintiffs could not pursue a breach of contract
claim against Defendant Karry Causey because the law requires a
joint venture agreement pertaining to real property to be in
writing and Karry Causey did not enter into a written contract
3

with Plaintiffs. This Court also ruled that Plaintiffs’ fraud claim
was

subject

to

a

five-year

prescriptive

period,

pursuant

to

Louisiana Civil Code article 2032.
On January 6, 2016, Plaintiffs filed the instant motion,
requesting that this Court review its December 16 order. Defendant
Karry Causey opposed the motion on January 14.
PARTIES’ ARGUMENTS
Plaintiffs argue that this Court erred in three ways. First,
Plaintiffs

claim

that

the

Court

incorrectly

granted

summary

judgment to Defendant on Plaintiffs’ breach of contract claims.
The Court found that Plaintiffs and Defendant Karry Causey did not
enter into a written contractual agreement, as is required by law.
Plaintiffs argue that the law does not require joint venture
agreements to be in writing when the agreement does not involve
the

“direct

transfer

of

immovable

property.”

Plaintiffs

cite

several Louisiana cases, claiming the courts have held that joint
venture agreements to develop and sell investment properties do
not need to be reduced to writing.
Second, Plaintiffs argue that Karry Causey tacitly accepted
the contract signed by Plaintiffs and Garry Causey. Plaintiffs
claim that both Karry and Garry Causey approached them about
developing the Music Street Property, after Garry and Plaintiffs
had signed the agreement. According to Plaintiffs, both Garry and
Karry

requested

that

they

send
4

a

$48,000

check

to

Garry.

Subsequently, Karry Causey asked Josh Norris to obtain plans for
the property from a local company. Plaintiffs also allege that
both Karry and Garry approached them about the Marigny Street
property. Again, Plaintiffs claim that both Causeys requested
payment in the amount of $45,000. For a short period of time, both
Garry and Karry made payments to Plaintiffs for their monthly
finance charges.
Plaintiffs also argue that Karry Causey tacitly accepted the
agreement because bank records show that Garry Causey deposited
money into Karry’s account after receiving Plaintiffs’ checks.
Thus, Plaintiffs argue that Karry Causey accepted the contract
even though he did not sign it. Alternatively, they argue that
genuine issues of material fact exist with respect to Karry’s tacit
acceptance. Plaintiffs admit that Karry Causey contests their
description of his activities in the development of the property.
Third and finally, Plaintiffs argue that all of their claims
are subject to a ten-year prescriptive period. This Court found
that Plaintiffs’ claim for rescission based on fraud is subject to
a five-year prescriptive period that commenced when Plaintiffs
obtained actual or constructive knowledge of the fraud. Plaintiffs
disagree.

Plaintiffs

argue

that

Civil

Code

article

3499

establishes a prescriptive period of ten years for all personal
actions. Louisiana courts have held that claims arising out of a
joint venture agreement are subject to the ten-year personal action
5

prescriptive period. Thus, Plaintiffs argue that all of their
claims, including their fraud claim, are subject to the ten-year
prescriptive period.
In his opposition, Defendant Karry first argues that he is
not bound by the agreement between his brother and Plaintiffs.
Defendant

asserts

that

a

written

contract

is

required

for

agreements pertaining to the transfer of real property. Karry
argues that he did not sign any such written agreement. Defendant
claims that the cases cited by Plaintiffs do not apply because
those cases focused on determining the terms of a joint venture.
In this case, the Court merely needed to determine whether such an
agreement existed, not its terms.
Further, Defendant argues that he did not tacitly accept the
terms of the joint venture agreement because he refused to sign
the agreement. Defendant claims that his role in the joint venture
was to manage construction on the property once the parties secured
financing. Because the parties never managed to obtain financing
for the properties, Defendant argues that he never rendered a
performance

that

would

constitute

tacit

acceptance

of

the

contract. Defendant also claims that the bank records do not prove
that he accepted the contract. Karry claims that he and Garry were
in the market of “flipping” properties, which often required Garry
to transfer funds to Karry.

6

Third, Defendant argues that this Court improperly decided
that Plaintiffs may pursue an unjust enrichment claim. Defendant
argues that a party can only bring an unjust enrichment claim if
he has no other cause of action. Here, Plaintiffs have delictual
and contractual rights of action, even though these actions may
have prescribed. Thus, Defendant argues that Plaintiffs may not
bring an unjust enrichment claim. Finally, Defendant argues that
the ten-year prescriptive period does not apply because he and
Plaintiffs were not parties to a joint venture agreement. Instead,
Defendant claims without elaboration that Plaintiffs’ fraud claim
is subject to a one-year prescriptive period.
LEGAL STANDARD
The Federal Rules of Civil Procedure do not expressly allow
motions for reconsideration of an order. Bass v. U.S. Dep’t of
Agric., 211 F.3d 959, 962 (5th Cir. 2000). The Fifth Circuit treats
a motion for reconsideration challenging a prior judgment as either
a motion “to alter or amend” under Federal Rule of Civil Procedure
59(e) or a motion for “relief from judgment” under Federal Rule of
Civil Procedure 60(b). Lavespere v. Niagara Mach. & Tool Works,
Inc., 910 F.2d 167, 173 (5th Cir. 1990), abrogated on other grounds
by Little v. Liquid Air Corp., 37 F.3d 1069, 1076 (5th Cir. 1994).
The difference in treatment is based on timing. If the motion
is filed within twenty-eight days of the judgment, then it falls
under Rule 59(e). FED. R. CIV. P. 59(e); Lavespere, 910 F.2d at 173.
7

However, if the motion is filed more than twenty-eight days after
the judgment, but not more than one year after the entry of
judgment, it is governed by Rule 60(b). FED. R. CIV. P. 60(c);
Lavespere, 910 F.2d at 173. In the present case, Plaintiffs’ Motion
for Reconsideration (Rec. Doc. 33) was filed on January 6, 2016,
which is within twenty-eight days of the issuance of the order (of
December

16,

2015).

As

a

result,

Plaintiffs’

Motion

for

Reconsideration is treated as a motion to alter or amend under
Rule 59(e).
Altering

or

amending

a

judgment

under

Rule

59(e)

is

an

“extraordinary remedy” used “sparingly” by the courts. Templet v.
Hydrochem, Inc., 367 F.3d 473, 479 (5th Cir. 2004). A motion to
alter or amend calls into question the correctness of a judgment
and is permitted only in narrow situations, “primarily to correct
manifest errors of law or fact or to present newly discovered
evidence.” Id.; see also Schiller v. Physicians Res. Grp. Inc.,
342 F.3d 563, 567 (5th Cir. 2003). Manifest error is defined as
“[e]vident to the senses, especially to the sight, obvious to the
understanding, evident to the mind, not obscure or hidden, and is
synonymous with open, clear, visible, unmistakable, indubitable,
indisputable, evidence, and self-evidence.” In Re Energy Partners,
Ltd., 2009 WL 2970393, at *6 (Bankr. S.D. Tex. Sept. 15, 2009)
(citations omitted); see also Pechon v. La. Dep't of Health &
Hosp., 2009 WL 2046766, at *4 (E.D. La. July 14, 2009) (manifest
8

error is one that “‘is plain and indisputable, and that amounts to
a

complete

disregard

of

the

controlling

law’”)

(citations

omitted).
The Fifth Circuit has noted that “such a motion is not the
proper

vehicle

for

rehashing

evidence,

legal

theories,

or

arguments that could have been offered or raised before entry of
judgment.” Templet, 367 F.3d at 478-79. Nor should it be used to
“re-litigate prior matters that ... simply have been resolved to
the movant’s dissatisfaction.” Voisin v. Tetra Techs., Inc., No.
08-1302, 2010 WL 3943522, at *2 (E.D. La. Oct. 6, 2010). Thus, to
prevail on a motion under Rule 59(e), the movant must clearly
establish at least one of three factors: (1) an intervening change
in the controlling law, (2) the availability of new evidence not
previously available, or (3) a manifest error in law or fact. Ross
v. Marshall, 426 F.3d 745, 763 (5th Cir. 2005) (to win a Rule 59(e)
motion, the movant “must clearly establish either a manifest error
of

law

or

fact

or

must

present

newly

discovered

evidence”);

Schiller, 342 F.3d at 567.
DISCUSSION
As

discussed

above,

Plaintiffs

argue

that

the

Court’s

previous decision was manifestly erroneous in three ways. The Court
will address each of their contentions in turn.

9

A. Breach of Contract
First,

Plaintiffs

argue

that

a

joint

venture

agreement

to

develop investment property does not need to be reduced to writing.
Plaintiffs are incorrect. Louisiana courts have unequivocally held
that an agreement pertaining to immovable property must be in
writing, even if it does not involve the direct transfer of
property. See Ogden v. Ogden, 643 So. 2d 245, 246 (La. Ct. App.
1994) (“[M]onetary damages arising out of the inexecution of a
contract concerning an immovable must meet the same requirements
of proof as a claim for specific performance.”). The alleged joint
venture

agreement

involved

the

purchase

and

development

of

immovable property. The agreement clearly “concerned” immovable
property. Thus, the law requires the contract to be confected in
writing.
The cases cited by Plaintiffs involve actions for breach of
fiduciary obligation. 1 In each case, the joint venture agreement
was not reduced to a written contract. Regardless, the courts
allowed the plaintiffs to pursue breach of fiduciary obligation
claims. Plaintiffs extrapolate from these cases that a written
agreement is not required to pursue a breach of contract claim.
However, Plaintiffs fail to recognize that breach of fiduciary

1

Grand Isle Campsites, Inc. v. Cheek, 262 So. 2d 350 (La. 1972); Brignac v.

Barranco, No. 2014-1578, 2015 WL 5306216 (La. Ct. App. Sept. 10, 2015).

10

duty

and

breach

of

contract

are

different

claims

subject

to

different evidentiary rules. A plaintiff may be able to pursue
some claims without a written contract even when the law requires
a contract to be in writing. For example, this Court previously
held that Plaintiffs could pursue their claim for rescission based
on fraud even though the law required a written contract for a
breach of contract claim. Mitchell v. Clark, 448 So. 2d 681, 686
(La. 1984); Le Bleu v. Savoie, 33 So. 729, 730 (La. 1903).
While the cases Plaintiffs cite are unpersuasive, this Court
failed to fully explore the legal impact of the contract signed by
Plaintiffs

and

Garry

Causey

in

its

previous

decision.

It

is

undisputed that Karry Causey did not sign the contract. However,
the agreement referred to Karry as one of the joint venturers and
contained a signature line for Karry. Thus, the parties clearly
contemplated that Karry would be a party to a written agreement.
While an agreement pertaining to immovable property must be in
writing, “[t]here is no requirement that the writing be signed by
both parties.” Miller v. Miller, 335 So. 2d 767, 769 (La. Ct. App.
1976). “[W]ritten acceptance of a contract or an act of sale is
not necessary, but may be established by acts clearly indicating
acceptance.” Saunders v. Bolden, 98 So. 867, 869 (La. 1923).
Because a written agreement exists in this case, the Court finds
that Plaintiffs are entitled to pursue their breach of contract
claims.
11

B. Tacit Acceptance
Because a written contract may be accepted by performance,
Plaintiffs must prove that Karry Causey accepted the contract by
his actions. As described above, Plaintiffs argue that Karry acted
in furtherance of the contract and accepted funds provided by
Plaintiffs to Garry. Karry Causey contests Plaintiffs’ description
of his actions.
“When, because of special circumstances, the offeree's silence
leads the offeror reasonably to believe that a contract has been
formed, the offer is deemed accepted.” La. Civ. Code art. 1942.
Thus, an offeree may accept by “silent deed as well as by word.”
Johnson v. Capital City Ford Co., 85 So. 2d 75, 81 (La. Ct. App.
1955).

“[C]onsent

may

be

implied

from

actions

under

the

circumstances, as well as by expressed words; but such acceptance
of, founded on such consent to, an offer nevertheless creates a
valid

contract,

and

the

offerer

is

bound

by

the

obligation

previously offered by him in exchange for the act which the obligee
has performed in response to the offer . . . .” Id. These acts
must unequivocally imply or indicate consent. Ill. Cent. Gulf R.
Co. v. Int'l Harvester Co., 368 So. 2d 1009, 1012 (La. 1979). In
some cases, the law expressly creates a legal presumption that
certain acts amount to consent. When the law does not provide a
presumption, the judge has the discretion to decide whether a
party’s actions constitute acceptance. Id.
12

Here, the parties introduced conflicting evidence of Karry’s
actions following the execution of the contract by Garry and
Plaintiffs. Thus, genuine issues of material fact exist as to
Karry’s acceptance. These issues will be resolved at the trial of
this matter.
C. Prescription
Finally, Plaintiffs argue that all of their claims are subject
to a ten-year prescriptive period because their claims are based
on the joint venture agreement. Plaintiffs correctly assert that
the default prescriptive period for personal actions is ten years.
“Unless otherwise provided by legislation, a personal action is
subject to a liberative prescription of ten years.” La. Civ. Code
art. 3499. Plaintiffs also correctly assert that claims arising
out of a joint venture agreement, such as breach of fiduciary duty,
are subject to the default ten-year period. See Henley v. Haynes,
376 So. 2d 1030, 1031 (La. Ct. App. 1979). Louisiana courts have
acknowledged that breach of contract claims are also subject to a
ten-year statute of limitations. Johnson v. Kennedy, 103 So. 2d
93, 98 (La. 1958).
However, Plaintiffs’ fraud claim is subject to a five-year
prescriptive

period.

Traditional

canons

of

statutory

interpretation provide that a specific law trumps a general law.
Catahoula Par. Sch. Bd. v. La. Mach. Rentals, LLC, 124 So. 3d 1065,
1079 (La. 2013). Article 3499 is general. It states that personal
13

actions are subject to a ten-year prescriptive period, unless other
legislation provides otherwise. La. Civ. Code art. 3499. Here,
another article is directly on point. Article 2032 specifically
provides that a claim for rescission of a contract for fraud is
subject to a five-year prescriptive period. La. Civ. Code art.
2032. Plaintiffs’ argument ignores the fact that different claims
asserted

in

the

same

complaint

may

be

subject

to

different

prescriptive periods. Thus, Plaintiffs’ fraud claim is subject to
a five-year statute of limitations. Plaintiffs’ arguments to the
contrary lack merit.
This Court’s Order and Reasons was manifestly erroneous in
deciding that Plaintiffs could not pursue a breach of contract
claim against Karry Causey. In all other respects, it was legally
sound. In his opposition, Defendant argued that this Court should
have granted him summary judgment on Plaintiffs’ unjust enrichment
claims.

However,

Defendant

did

not

file

a

Motion

for

Reconsideration on this subject, and the Court declines to consider
an argument made only in opposition. The Court will decide any
issues arising out of the unjust enrichment claim at trial.
CONCLUSION
Accordingly,
IT

IS

HEREBY

ORDERED

that

Plaintiffs’

Motion

for

Reconsideration (Rec. Doc. 33) is GRANTED IN PART AND DENIED IN
PART.
14

IT IS FURTHER ORDERED that the portion of this Court’s Order
and

Reasons

(Rec.

Doc.

31)

that

granted

summary

judgment

to

Defendant on Plaintiffs’ breach of contract claim is VACATED.
IT IS FURTHER ORDERED that Plaintiffs’ Motion for Leave to
File Reply (Rec. Doc. 38) is DENIED as moot.
New Orleans, Louisiana this 26th day of January, 2016.

CARL J. BARBIER
UNITED STATES DISTRICT COURT

15