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An Erny Girl, L.L.C. v. BCNO 4 L.L.C.

Court of Appeals of Louisiana, Fourth Circuit

March 30, 2017

AN ERNY GIRL, L.L.C.
v.
BCNO 4 L.L.C. AND JOHN GREGORY FOX BCNO 4, L.L.C.
v.
AN ERNY GIRL, L.L.C.

         APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2016-00966 C/W 2016-04130, DIVISION "C" Honorable Sidney H. Cates, Judge

          David P. Vicknair Brad P. Scott SCOTT, SEVIN & VICKNAIR Ike Spears SPEARS & SPEARS COUNSEL FOR PLAINTIFF/APPELLANT.

          Christy L. McMannen Fred Sherman Boughton, Jr. CHRISTOVICH & KEARNEY, LLP COUNSEL FOR DEFENDANT/APPELLEE.

          Court composed of Judge Joy Cossich Lobrano, Judge Rosemary Ledet, Judge Sandra Cabrina Jenkins

          ROSEMARY LEDET JUDGE.

         This is a commercial lease dispute. The parties are BCNO 4, L.L.C. ("BCNO 4"), the lessor, and An Erny Girl, L.L.C. ("Erny Girl"), the lessee. From the trial court's judgment denying Erny Girl's declinatory exception of lis pendens and granting the BCNO 4's petition for possession (eviction action), [1] Erny Girl appeals.[2] For the reasons that follow, we affirm.

         FACTUAL AND PROCEDURAL BACKGROUND

         On January 23, 2013, the parties entered into a commercial lease agreement (the "Lease"). The leased premises were located at 619 Frenchman Street in New Orleans, Louisiana; Erny Girl leased the premises to operate the Frenchmen Art Market there.

         On January 28, 2016, Erny Girl filed a Petition for Damages, Declaratory Judgment and Permanent Injunction (the "Declaratory Action"), captioned "An Erny Girl, L.L.C. v. BCNO 4 L.L.C. and John Gregory Fox, " which was allotted to Division "C" of the Orleans Parish Civil District Court ("CDC"). In its Declaratory Action, Erny Girl requested, among other things, a declaration that "the Lease is effective and continuing through June 9, 2016, and that the defendant, BCNO [4], is obligated and ordered to cease any and all attempts to improperly terminate the lease and undermine Lessee's peaceful possession."

         In the Declaratory Action, Erny Girl alleged the following regarding the term of the Lease:

• The Lease had an initial term of February 1, 2013 through January 31, 2014 (Section 2 of the Lease);
• Sometime after January 31, 2014, Erny Girl began discussing a renewal option with BCNO 4; and around June 1, 2014, BCNO 4 and Erny Girl renewed the Lease for an additional year, through June 1, 2015.
• Around February 25, 2015, BCNO 4 began to discuss and negotiate with Erny Girl an additional renewal of the Lease for a third term.
• On June 9, 2015, BCNO 4 and Erny Girl agreed to a renewal option on the Lease, extending the Lease through June 9, 2016.

         On the same day it filed the Declaratory Action (January 28, 2016), Erny Girl, by letter, attempted to exercise the renewal option under the Lease and thereby extend the term of the Lease to June 9, 2017. The letter stated that Erny Girl was "electing to exercise its renewal option within Section 4 of the Lease, extending the term of the Lease through June 9, 2017." The renewal clause (Section 4 of the Lease), however, provided that "Tenant shall have the option to renew this lease thirty (30) days before the end of the initial term." (Emphasis supplied).

         By letter dated February 15, 2016, BCNO 4 rejected Erny Girl's attempted renewal of the Lease, stating:

[Erny Girl's] attempt to exercise the option to renew is without effect. The lease had an initial term of one year, expiring January 31, 2014 (See Section 2), with an option to renew for an additional one year term expiring January 31, 2015 (See Section 4). Upon expiration of the renewal term on January 31, 2015, the lease converted to month to month term. On January 11, 2016, my client [BCNO 4] sent the lessee written notice of lease termination, effective February 12, 2016.

         In its answer to the Declaratory Judgment Action, BCNO 4 asserted that the Lease was validly terminated as of February 12, 2016. BCNO 4 also filed a reconventional demand requesting, among other thing, "a declaratory judgment be issued, stating that the Lease expired on February 12, 2016." Additionally, BCNO 4 gave Erny Girl notice to vacate.

         Thereafter, BCNO 4 filed two petitions for possession (eviction actions). Both actions were entitled "BCNO 4, L.L.C. v. An Erny Girl;" both actions were filed in the same case number and allotted to CDC Division "J." The first action, which was filed on April 25, 2016, sought to evict Erny Girl based on its failure to maintain all-risk property insurance as required by the Lease (the "First Eviction Action.").[3] The second action, which was filed on June 24, 2016, sought to evict Erny Girl based upon its judicial admission in its Declaratory Action that the Lease terminated on June 9, 2016 (the "Second Eviction Action"). Although Erny Girl was served with the Second Eviction Action on July 28, 2016, it failed to file an answer to that action.

         On July 25, 2016, Erny Girl filed a declinatory exception of lis pendens. On July 29, 2016, Erny Girl filed an unverified answer to the First Eviction Action. The trial court, in Division "J, " set a hearing on the lis pendens exception for August 15, 2016.

         In opposing Erny Girl's lis pendens exception, BCNO 4 suggested that the trial court in Division "J"-the division in which the eviction actions (the later filed actions) were pending-transfer the eviction actions to Division "C"-the division in which the Declaratory Action was pending (the earlier filed action). See La. Rules for District Courts, Rule 9.4 (b) (providing that "all subsequent actions asserting the same claim by the same parties . . . shall be transferred to the division to which the first case filed was allotted, whether or not the first case is still pending."). Adopting the suggestion, the trial court in Division "J" transferred the eviction actions to Division "C" on August 1, 2016.

         On August 15, 2016, a hearing was held, in Division "C, " on both BCNO 4's pending eviction action[4] and Erny Girl's lis pendens exception.[5] On August 17, 2016, the trial court rendered judgment overruling Erny Girls' lis pendens exception and granting BCNO 4's Second Eviction Action. In its written reasons for judgment, the trial court stated as follows:

After hearing argument, this Court overruled An Erny Girl, L.L.C.'s Exceptions of Lis Pendens filed in response and opposition to BCNO 4, L.L.C.'s two Petitions for Possession of Premises, finding that lis pendens, La. C.C.P. Art. 531, is inapplicable in this matter. An Erny Girl's "Petition for Damages, Declaratory Judgment, And Permanent Injunction" seeks a declaration from the Court that the lease is effective through June 9, 2016. BCNO 4, L.L.C.'s second "Petition for Possession of Premises", filed June 24, 2016, seeks possession of the premises based on the expiration of the lease on June 9, 2016, which An Erny Girl, L.L.C. judicially admitted in their Petition. The Declaratory Judgment action does not assert any right to possession past June 9, 2016.[6]
From this judgment, Erny Girl filed a suspensive appeal.

         MOTION TO DISMISS

         Before addressing the merits of the appeal, we must first address BCNO 4's motion to dismiss. In its motion to dismiss, BCNO 4 does not argue that Erny Girl filed either its petition for appeal or its appeal bond untimely.[7] Instead, BCNO 4 argues that Erny Girl's appeal should be dismissed because it failed to comply with the requirements set forth in La. C.C.P. art. 4735 for a suspensive appeal of a judgment of eviction.[8] BCNO 4 argues that Erny Girl's answer, which was filed on July 29, 2016, was neither made under oath, nor pleaded an affirmative defense entitling Erny Girl to retain possession of the leased premises. Erny Girl counters that BCNO 4's motion to dismiss fails to acknowledge a stipulation between the parties that was intended to preserve its suspensive appeal rights.

         To place Erny Girl's argument regarding the stipulation in context, we provide a brief review of the procedural history of this case. As noted earlier in this opinion, this case originated as two separately filed actions, which were allotted to two different divisions of CDC. After the eviction actions were transferred to the same division as the Declaratory Action, the trial court in that division held a hearing on BCNO 4's pending eviction actions and Erny Girl's lis pendens exception. At that hearing, Erny Girl's counsel raised an issue regarding service ...


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