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Latter & Blum, Inc. v. Ditta

Court of Appeals of Louisiana, Fourth Circuit

June 22, 2017


         APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2013-08821 C\W 2013-08832, DIVISION "I-14" Honorable Piper D. Griffin, Judge

          Jack A. Ricci Michael S. Ricci Jonathan L. Schultis Brian G. LeBon RICCI PARTNERS, LLC COUNSEL FOR PLAINTIFFS/APPELLANTS

          Charles L. Stern, Jr. Ryan M. McCabe Elise M. Henry STEEG LAW FIRM, LLC COUNSEL FOR DEFENDANT/APPELLEE

          Court composed of Chief Judge James F. McKay, III, Judge Terri F. Love, Judge Rosemary Ledet

          Rosemary Ledet Judge

         This is a consolidated concursus and damages action. This action arises out of an alleged breach of an agreement to purchase immovable property and resulting forfeiture of the deposit. Following a bench trial, the trial court rendered judgment in favor of the defendant-purchaser, Frank Scurlock, and against the plaintiff-seller, Teresa ("Terri") Ditta, M.D., and her real estate agent, Latter & Blum, Inc. The trial court also awarded Mr. Scurlock the return of his $100, 000 deposit, which the real estate agent had deposited into the registry of the court. For the reasons that follow, we affirm.


         On May 28, 2013, Dr. Ditta, as seller, and Mr. Scurlock, as buyer, entered into a Louisiana Residential Agreement to Buy or Sell (the "Agreement"). The Agreement was for the purchase of a mansion located at 3711 St. Charles Avenue in New Orleans, Louisiana-an approximately 18, 000 square feet lot (the "Property"). In the Agreement, the Property is described as "including all buildings, structures, components parts, and . . . all fences." The purchase price was $3, 400, 000. The parties agreed to divide the purchase price into the following two parts: (i) the immovable property-specifically including the fences-to be sold for $1, 800, 000; and (ii) certain furnishings-miscellaneous household goods-and a limousine to be sold for $1, 600, 000. The Agreement was an "all cash" sale. In addition to the purchase price, the Agreement required Mr. Scurlock to make a deposit of $100, 000 to be held in escrow by Latter & Blum.

         In exchange for Mr. Scurlock's payment of the deposit and the purchase price, the Agreement obligated Dr. Ditta to deliver a merchantable title at closing; the Agreement provided as follows:

The SELLER shall deliver to BUYER a merchantable title at SELLER's costs. . . . SELLER's inability to deliver merchantable title within the time stipulated herein shall render this Agreement null and void, reserving unto BUYER the right to demand the return of the Deposit and to recover from SELLER actual costs incurred in processing of sale as well legal fees incurred by BUYER.

         On July 25, 2013, the day before the scheduled closing, Mr. Scurlock's previous attorney and the closing attorney-Ewell "Corky" Potts, III-sent an email to Dr. Ditta's attorney-James Mounger. In this email, Mr. Potts acknowledged that judgment and mortgage issues had been addressed properly; however, he raised issues regarding fence encroachments and misalignments. Mr. Potts stated that the new survey, dated July 17, 2013, revealed fence encroachments or misalignments by the Property onto adjoining properties. Mr. Potts also stated that he had reviewed "the lawsuit" and had not found "a resolution to the boundary dispute with the adjoining owner which was purported to be 4 S Investments, LLC" (the "2005 Lawsuit").[1] For these reasons, Mr. Potts, on Mr. Scurlock's behalf, invoked the thirty-day automatic extension provided for in the Agreement. The closing was rescheduled for August 26, 2013.

         Attempting to cure the alleged fence encroachment and misalignment issues, Dr. Ditta, assisted by her two attorneys, Mr. Mounger and Lawrence Genin, executed boundary agreements with the owners of each of the following three adjoining properties: 1628 Amelia Street, 1615-17 Peniston Street, and 3721 St. Charles Avenue. Dr. Ditta spent approximately $6, 000 to secure the three boundary agreements.[2] By the three boundary agreements, the parties agreed to the boundary lines reflected by the existing fence surrounding the Property. As the trial court noted, "Dr. Ditta testified that it was her intent to resolve the alleged-encroachments before the August 26th closing date."

         On August 18, 2014-eight days before the closing date-Mr. Scurlock sent an email to multiple recipients, including Dr. Ditta and Mr. Potts (the "Email"). In the Email, Mr. Scurlock alluded to his contentious divorce proceeding; he stated that his soon-to-be former wife, Patricia Scurlock ("Patty"), and her legal team were "trying to control" him. Expressing his desire to cancel the purchase of the Property, Mr. Scurlock stated:

Corky [Potts], I am not going to show up for the St. Charles closing on August 26th as well so [P]atty will share equally in the default provisions of that as well. This was to be my birthday present that [R]egions was financing[, ] but I will forgo that as well without settlement and documents in place. Amy with [R]egions was close to funding that.

         On August 22, 2013, Dr. Ditta's attorneys recorded the three boundary agreements in the Orleans Parish conveyance records. On that same date, one of Dr. Ditta's attorneys, Mr. Genin, sent a letter to Mr. Potts seeking information on whether Mr. Scurlock was going to purchase the Property. The letter stated that if Mr. Scurlock was going to default, as he stated in the Email, Dr. Ditta would pursue the $100, 000 deposit, which was in escrow. Mr. Genin further stated that his "client is ready, willing, and able to conclude this matter at any time and place so designated" and that "all requirements to deliver merchantable title to the buyer have been met."

         On August 26, 2013, Mr. Scurlock, as he stated in the Email, failed to appear at the closing; however, his attorney, Mr. Potts, attended. In lieu of closing, Mr. Potts performed a procès verbal in which he explained that significant title deficiencies regarding the fence encroachments still remained, rendering the property unmerchantable. Mr. Potts also advised that Mr. Scurlock was not accepting title to the Property because the title was unmerchantable.

         Shortly thereafter, Latter & Blum notified Mr. Scurlock that he was in default. On September 11, 2013, Mr. Scurlock made a second offer to purchase the Property for $1, 800, 000; this offer was rejected. On September 18, 2013, Dr. Ditta sold the property to a third party, Bob G. Dean, Jr., for $2, 100, 000. The movables were auctioned.

         This litigation began when both Mr. Scurlock and Dr. Ditta requested that Latter & Blum release the $100, 000 deposit to them. On September 17, 2013, Latter & Blum filed the instant concursus action pursuant to La. R.S. 37:1435(H) to resolve the dispute over the deposit; it deposited the $100, 000 into the registry of the court. In the concursus action, Latter & Blum named as defendants Dr. Ditta and Mr. Scurlock. Both Dr. Ditta and Mr. Scurlock answered the concursus action and named a defendant-in-reconvention. Dr. Ditta named Mr. Scurlock; Mr. Scurlock named his former wife, Ms. Scurlock.

         On September 18, 2013, Dr. Ditta and Latter & Blum jointly filed a damages action against Mr. Scurlock (the "Damages Action"). In the Damages Action, Dr. Ditta requested damages for breach of the Agreement; Latter & Blum requested the commission that it would have earned had the sale occurred. On November 24, 2015, the trial court granted the parties' joint motion to transfer the later-filed Damages Action to the same division as the earlier-filed concursus action and to consolidate the two actions for trial.

         On October 31, 2014, Dr. Ditta filed a motion for partial summary judgment in the concursus action, which had not yet been consolidated with the Damages Action. She contended that there was no genuine issue of material fact in dispute as to whether Mr. Scurlock breached the Agreement. According to Dr. Ditta, Mr. Scurlock, by the Email, anticipatorily breached the Agreement; defaulted under the Agreement; and thus was liable to her. She also contended that the Property was merchantable and that any alleged defect was cured when she executed the boundary agreements, for consideration, with the adjoining property owners.

         The trial court denied Dr. Ditta's motion for partial summary judgment. This court denied Dr. Ditta's writ application. Latter & Blum, Inc. v. Ditta, 15-160 (La.App. 4 Cir. 3/25/15) (unpub.). In so doing, this court stated that "[considering that genuine issues of fact exist in relation to the merchantability of 3711 St. Charles Avenue, the trial court properly denied relator's motion for partial summary judgment on January 13, 2015." Id.

         In July 2016, a three-day bench trial was held. Following the trial, the trial court took the matter under advisement. On October 10, 2016, the trial court rendered judgment in Mr. Scurlock's favor, finding:

• [Mr.] Scurlock has established by a preponderance of the evidence that the title to Dr. Ditta's property was not merchantable on the scheduled closing date. Therefore, he was not required to buy the [Property and is entitled to the $100, 000 deposit presently held in the Court's registry.
• [Mr.] Scurlock's 18 August 2013 email did not anticipatorily breach the purchase agreement. Accordingly, [Dr.] Ditta's claims for damages, along with Latter & Blum's $156, 367.62 claim for sales commissions, are dismissed.

         This appeal by Dr. Ditta and Latter & Blum (the "Appellants") followed.


         Factual findings are reviewed under "the manifest error-clearly wrong standard, which precludes the setting aside of a district court's finding of fact unless that finding is clearly wrong in light of the record reviewed in its entirety." Hall v. Folger Coffee Co., 03-1734, p. 9 (La. 4/14/04), 874 So.2d 90, 98 (citing Cenac v. Public Access Water Rights Ass'n, 02-2660, p. 9, (La. 6/27/03), 851 So.2d 1006, 1023). Under the manifest error standard, "the issue to be resolved by a reviewing court is not whether the trier of fact was right or wrong, but whether the factfinder's conclusion was a reasonable one." Stobart v. State through Dep't of Transp. & Dev., 617 So.2d 880, 882 (La. 1993). The manifest error standard of review also applies to mixed question of law and fact. Brasseaux v. Town of Mamou, 99-1584, pp. 7-8 (La. 1/19/00), 752 So.2d 815, 820-21. Questions of law are reviewed using the de novo standard. 2400 Canal, LLC v. Bd. of Sup'rs of Louisiana State Univ. Agr. & Mech. College, 12-0220-22, p. 5 (La.App. 4 Cir. 11/7/12), 105 So.3d 819, 824.


         Although Dr. Ditta and Latter & Blum assert about a dozen assignments of error, [3] we find that this appeal presents only two issues: (i) anticipatory breach of contract; and (ii) merchantability of title. We separately address each issue.

         Anticipatory Breach

         Louisiana courts have recognized the doctrine of anticipatory breach of contract.[4] The doctrine of anticipatory breach of contract "'applies when an obligor announces he will not perform an obligation which is due sometime in the future.'" Fertel v. Brooks, 02-0846, p. 13 (La.App. 4 Cir. 9/25/02), 832 So.2d 297, 305 (quoting Gulf Coast Bank & Trust Co. v. Rick Granger Enterprises, 2001-0656, p. 3 (La.App. 3 Cir. 10/31/01), 800 So.2d 402, 404 (quoting B & G Crane Service, Inc. v. Aetna Cas. and Sur. Co., 586 So.2d 710, 712 (La.App. 3rd Cir. 1991)). Under those circumstances, "[t]he obligee need not wait until the obligor fails to perform for the contract to be considered in breach." Id. The jurisprudence, however, ...

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