Villenurve et al v. New River Shopping Center, LLC

Filing 24

RULING: New River's 12 Motion for Summary Judgment is GRANTED. Judgment shall be entered accordingly. Signed by Chief Judge Shelly D. Dick on 8/13/2018. (KAH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

VIVIAN GONZALES
VILLENURVE, ET AL.
CIVIL ACTION
VERSUS
17-303-SDD-EWD
NEW RIVER SHOPPING
CENTER, LLC
RULING
This matter is before the Court on the Motion for Summary Judgment1 filed by
Defendant, New River Shopping Center, LLC (“New River” or “Defendant”). Plaintiffs,
Vivian G. Villenurve and Margaret C. Kernan (“Plaintiffs”) have filed an Opposition,2 to
which Defendant has filed a Reply3. For the following reasons, the Motion will be
GRANTED.
I.

PROCEDURAL POSTURE AND FACTUAL BACKGROUND
This is the latest round in a suit of an ongoing dispute between the Parties

regarding a 1976 lease of certain real property held by the Lester Gonzales Family Trust.4
The Plaintiffs are the named trustees and the sole income and principal beneficiaries of
the Lester Gonzales Family Trust (“Trust”).5
In 1976, American Bank and Trust Company, a previous trustee of the Trust,
entered into a lease agreement (“Lease”) with Memphis Apartments, Inc. for Memphis

1

Rec. Doc. 12.
Rec. Doc. 17.
3
Rec. Doc. 23.
4
Rec. Doc. 1-1, ¶ 5.
5
Rec. Doc. 1-1, ¶ 1.
2

Apartments to lease property with an annual rent of $8,400.00 paid for in monthly
installments of $700.00 per month.6 The Lease was for a primary term of thirty-seven
(37) years and eight (8) months beginning August 1, 1976 and ending on March 31, 2014,
with an option to extend the lease for five periods of ten (10) years with the same terms
except an increase in the rental amount.7
In 1978, Memphis Apartments, Inc. assigned the Lease to Thomas Green and
Nelson Bowers, who then assigned the lease to James Rifkin.8 In 1984, James Rifkin
assigned the Lease to Consolidated Investments Limited Partnership, who in 2008
transferred all rights, title, and interest in the Lease to New River Shopping Center, LLC
(“New River”).9 New River subleased portions of the Leased property to Office Depot and
Specialty Retailers LP (Stage), who have both entered it a Fee Owner Recognition
Agreement with Hancock Bank of Louisiana, a previous trustee of the Trust.10
The Trust filed a Petition for Declaratory Judgment in state court on June 24, 2015
against New River, and Defendants removed to this Court on August 6, 2015.11 The Trust
filed the Petition in response to New River exercising their first ten year option to extend
the lease. The Trust argued that the Lease ended by its own term on March 31, 2014 and
that the options to extend were null.12 Specifically, the Trust asserted that the rent was
not serious consideration based on the value of the property in question.13 The Trust then

6

See 17cv00281-SDD-RLB, Rec. Doc. 1-1, ¶ 12.
The rent would increase by $450.00 upon each option to extend the Lease. Rec. Doc. 1-1, ¶ 5, See
17cv00281-SDD-RLB, Rec. Doc. 1-1.
8
See 17cv00281-SDD-RLB, Rec. Doc. 1-1, ¶ 11.
9
Rec. Doc. 12-4.
10
Rec. Docs. 12-5 and 12-6.
11
Vivian Gonzales Villenurve and Margaret Gonzales Kernan v. New River Shopping Center, LLC, No. 15517, United States District Court, Middle District of Louisiana (“Declaratory Judgment Action”).
12
Rec. Doc. 1-1 ¶ 9.
13
Rec. Doc. 1-1 ¶ 8-12.
7

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sought to invalidate or reform the Lease renewal option based on alleged inadequate
consideration.14 On March 16, 2016, this Court granted the Defendant’s Motion to Dismiss
without prejudice.15
On May 1, 2017, New River filed an Emergency Verified Complaint for Temporary
Restraining Order, Preliminary Injunction, Permanent Injunction, Request for Order
Exercising Judicial Control, and For Damages. New River Shopping Center, LLC v. Vivian
G. Villenurve and Margaret C. Kernan, individually and as trustees of the Lester Gonzales
Family Trust, No. 17-281, United States District Court, Middle District of Louisiana (the
“Injunction Action”). New River alleged that the Trust breached their lease agreement.16
This Court denied New River’s emergency motion for temporary restraining order on May
5, 201717 and denied New River’s Motion for Preliminary Injunction on May 11, 2017.18
The Trust filed a Motion to Dismiss on May 2, 201719 and the Court denied the motion on
February 1, 2018.20
On May 9, 2017, the Trust filed a Rule to Show Cause Why Possession Should
Not Be Delivered to evict New River from the leased property for failure to remit payment
of past due rent.21 After declining to accept or deposit the received rent checks from New
River beginning in January 2014, the Trust requested that New River issue a new check
for the past due rent by April 26, 2017.22 The Trust maintained that New River failed to

14

Rec. Doc. 1-1 ¶ 14.
Id.
16
17cv00281-SDD-RLB, Rec. Doc. 1.
17
Id. at Rec. Doc. 15.
18
Id. at Rec. Doc. 29.
19
Id. at Rec. Doc. 6.
20
Id. at Rec. Doc. 41.
21
Rec. Doc. 1-1.
22
Rec. Doc 1-1, ¶ 20.
15

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remit the past due rent within the deadline and sought an order requiring New River to
vacate the leased property.23 This action was removed on May 10, 2017 to this Court on
the basis of diversity jurisdiction under 28 U.S.C. § 1332 for the complete diversity of
citizenship between the Parties and the amount in controversy exceeding $75,000.000.24
On May 10, 2017, the Trust filed a Motion to Remand arguing this Court lacked
subject matter jurisdiction under 28 U.S.C. § 1332 because the matter did not satisfy the
amount in controversy requirement.25 The Trust’s Motion to Remand was denied on
November 6, 2017.26 By the procedural and factual history it is clear that the Trust is
mightily dissatisfied with the contractual lease bargain made some many years ago. The
Trust seeks to evict the current Sublessees for alleged breaches by the principal lessee,
New River. New River moves for summary judgment concluding that the Trust failed to
provide requisite notice of default under the Lease – said notice being a condition
precedent to any eviction proceedings.
II.

LAW AND ANALYSIS
A. Summary Judgment Standard
“The court shall grant summary judgment if the movant shows that there is no

genuine dispute as to any material fact and the movant is entitled to judgment as a matter
of law.”27 “When assessing whether a dispute to any material fact exists, we consider all
of the evidence in the record but refrain from making credibility determinations or weighing

23

Id.
Id.
25
Rec. Doc. 3.
26
Rec. Doc. 19.
27
Fed. R. Civ. P. 56(a).
24

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the evidence.”28 A party moving for summary judgment “must ‘demonstrate the absence
of a genuine issue of material fact,’ but need not negate the elements of the nonmovant’s
case.”29 If the moving party satisfies its burden, “the non-moving party must show that
summary judgment is inappropriate by setting ‘forth specific facts showing the existence
of a genuine issue concerning every essential component of its case.’”30 However, the
non-moving party’s burden “is not satisfied with some metaphysical doubt as to the
material facts, by conclusory allegations, by unsubstantiated assertions, or by only a
scintilla of evidence.”31
Notably, “[a] genuine issue of material fact exists, ‘if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.’”32 All reasonable factual
inferences are drawn in favor of the nonmoving party.33 However, “[t]he Court has no
duty to search the record for material fact issues. Rather, the party opposing the summary
judgment is required to identify specific evidence in the record and to articulate precisely
how this evidence supports his claim.”34 “Conclusory allegations unsupported by specific
facts … will not prevent the award of summary judgment; the plaintiff [can]not rest on his
allegations … to get to a jury without any ‘significant probative evidence tending to support

28

Delta & Pine Land v. Nationwide Agribusiness Ins., 530 F.3d 395, 398-99 (5th Cir. 2008).
Guerin v. Pointe Coupee Parish Nursing Home, 246 F.Supp.2d 488, 494 (M.D. La. 2003)(quoting Little
v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)(en banc)(quoting Celotex Corp. v. Catrett, 477 U.S.
317, 323-25, 106 S.Ct. at 2552 (1986))).
30
Rivera v. Houston Indep. Sch. Dist., 349 F.3d 244, 247 (5th Cir. 2003)(quoting Morris v. Covan World
Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998)).
31
Willis v. Roche Biomedical Labs., 61 F.3d 313, 315 (5th Cir. 1995)(quoting Little v. Liquid Air Corp., 37
F.3d 1069, 1075 (5th Cir. 1994).
32
Pylant v. Hartford Life & Accident, 497 F.3d 536, 538 (5th Cir. 2007)(quoting Anderson v. Liberty Lobby,
477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).
33
Galindo v. Precision American Corp., 754 F.2d 1212, 1216 (5th Cir. 1985).
34
RSR v. Int’l. Ins., 612 F.3d 851, 857 (5th Cir. 2010).
29

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the complaint.’”35
B. Notice of Default
This claim is before the Court under 28 U.S.C. § 1332, diversity jurisdiction,
therefore the Court must apply state law to the matter.36 Under the Louisiana Civil Code,
“the contract of lease is governed under the rules of ‘Obligations in General’ and
‘Conventional Obligations or Contracts.’”37
The sole issue before the Court is whether the Trust followed the proper eviction
procedure under the Lease and sent notice of default to all parties required under
paragraph 16.1. To survive New River’s motion, the Trust must provide evidence that
notice of default was sent to Office Depot and Specialty Retailers (“Sublessees”).38
Paragraph 16.1 of the Lease describes the requirement to terminate the lease:
If at any time, any rental or other charge shall be in arrears and unpaid for
a period of thirty (30) days after it shall become due, or if any of thirty (30)
days after it shall become due, or if any of the agreements to be performed
by Lessee shall not be performed as stipulated within a period of thirty (30)
days after the date performance was due, then Lessor, at Lessor’s option,
upon first giving thirty (30) days written notice to Lessee and to any
mortgagee, sublessee or assignee…shall have the right to enter upon the
leased premise at any time after the expiration of the thirty (30) day written
notice period, take possession of the premises and bring suit for collection
of any rentals or other charges which may have accrued up to the time of
such re-entry, provided that Lessee or any other mortgagee, assignee, or
sublessee, during the thirty (30) day period after written notice shall have
been given, shall have the right to settle and pay in full any rightful claim of
Lessor under this lease which are then delinquent, or take any other action
necessary to cure Lessee’s default, and further provided that such thirty
(30) day period shall be extended, if necessary, in the event that Lessee or
35

Nat’l Ass’n of Gov’t Employs v. City Pub. Serv. Bd. of San Antonio, Tex., 40 F.3d 698, 713 (5th Cir.
1994)(quoting Anderson, 477 U.S. at 249).
36
See Erie R.R. Co. v. Tompkins, 304 US. 64 (1938).
37
La. Civ. Code art. 2669.
38
Initially, the Trust claims the Motion for Summary Judgment is premature because the Court has not
adopted the Magistrate Judge’s recommendation to deny Plaintiff’s Motion to Remand and cannot decide
this matter before establishing jurisdiction. On November 6, 2017, this Court adopted the Magistrate
Judge’s recommendation and denied Plaintiff’s Motion to Remand. See Rec. Doc. 19.

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any mortgagee, assignee or sublessee shall commence within that time to
cure the default and shall thereafter diligently pursue such efforts to
completion.39
A lease is “a synallagmatic contract by which one party, the lessor, binds himself to give
the other party, the lessee, the use and enjoyment of a thing for a term in exchange for a
rent that the lessee binds himself to pay.”40 The interpretation of a contract is based on
the common intent of the parties.41 Louisiana Civil Code Article 2046 states, “[w]hen the
words of a contract are clear and explicit and lead to no absurd consequences, no further
interpretation may be made in search of the parties’ intent.”42 “When the language of a
contract is clear and unambiguous, a court must interpret the contract solely by reference
to the four corners of the document.”43
New River maintains that it is an undisputed fact the Trust failed to comply with the
terms of the lease by failing to notify the Sublessees of New River’s alleged default.44
New River cites to specific provisions in both the Lease and Fee Owner Agreement that
clearly require the lessor to send notice of default to both the leasee and any
sublessees.45 New River also cites to testimony from the preliminary injunction hearing
where Ms. Kernan, a trustee, testifies she was not aware of any notice of default sent to
the Sublessees.46 New River primarily relies on Taylor v. Manuel, where a lessor evicted

39

Rec. Doc. 1-1, p. 6, ¶ 16.1(emphasis added). Paragraph 5 of both Fee Owner Agreements for Office
Depot and Stage, respectively, states the Primary Lessor, in this case the Trust, has the responsibility to
forward a copy of all notices given to the Lessee, New River, under the Primary Lease. See Rec. Doc. 125, p. 2, ¶ 5; Rec. Doc. 12-6, p. 3, ¶ 5.
40
La. Civ. Code art. 2668.
41
La. Civ. Code art. 2045.
42
La. Civ. Code art. 2046.
43
Taylor v. Manuel, 2001-0653 (La. App. 3 Cir. 10/31/01), 799 So. 2d 812, 815.
44
Rec. Doc. 12-1.
45
Rec. Doc. 12-1, p. 7.
46
Rec. Doc. 12-16, p. 6-7.

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his lessee without giving him notice, ignoring the notice provision of fifteen days required
by the lease.47
The Louisiana Code of Civil Procedure states:
When a lessee’s right of occupancy has ceased because of
the termination of the lease by expiration of its term, action by the
lessor, nonpayment of rent, or for any other reason, and the
lessor wishes to obtain possession of the premise, the lessor or
his agent shall cause written notice to vacate the premises to be
delivered to the lessee. The notice shall allow the lessee not less
than five days from the date of its delivery to vacate the leased
premises.48 The definition of a “lessee” in the Code of Civil
Procedure includes sublessees.49
Both Taylor and the eviction article in the Code of Civil Procedure stand for the principle
that proper notice is the first requirement to initiate an eviction proceeding.
When a lease clearly offers a remedy in the form of a notice and opportunity to
cure the default, the parties must follow these requirements.50 Both the Lease and the
Fee Owner Recognition Agreement stipulate that the Trust must notify the Sublessees of
default and forward copies of any notices to the Sublessees.51 The Louisiana Supreme
Court has held that a “contract is the law between the parties…”52 “When the language of
a contract is clear and unambiguous, a court must interpret the contract solely be
reference to the four corners of the document.”53 The words and intentions of the parties
are plainly stated in both the Lease and the Fee Owner Agreements’ specific that notice
be sent to both the lessee and any sublessees in the event of default, regardless of which
47

799 So. 2d at 815.
La. Code Civ. Proc. Art. 4701.
49
La. Code Civ. Proc. Art. 4704.
50
Environmental Safety & Health Consulting Services v. Crest Energy Partners, L.P. No. 13-cv-5747,
2015 WL 245258 *5 (E.D. La. May 21, 2015); Taylor at 815.
51
See Rec. Doc. 1-1, p. 17, ¶ 16.1. See also, Rec. Doc 12-5 and 12-6, ¶ 5.
52
Lobell v. Rosenberg, No. 2015-C-0247, 186 So.3d 83, 88-89 (La. 2015) (internal citations omitted).
53
Id. at 89.
48

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party was at fault.
In response, the Trust contends that New River has not provided sufficient proof
that notice was not received and that there is a genuine issue of material fact of whether
the Sublessees received notice of the default.54 The Trust does not present any evidence
that the default notice was sent to the Sublessees. Summary Judgment is appropriate
when there is no genuine issue of material fact.55 The Trust cannot create a material issue
of fact on the hope that the Sublessees might have received notice short of any evidence
of notice. The Trust cannot extinguish their duty to notify the Sublessees of New River’s
default by transferring the duty to New River or arguing it does not exist without presenting
any evidence the original Lease was modified.
III.

CONCLUSION
For these reasons stated above New River’s Motion for Summary Judgment is

GRANTED.
Judgment shall be entered accordingly.
IT IS SO ORDERED.
Signed in Baton Rouge, Louisiana on August 13, 2018.

S

JUDGE SHELLY D. DICK
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

54
55

Rec. Doc. 17, p. 7.
Fed. R. Civ. 56(c).

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