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Reed v. 7631 Burthe Street, LLC

Court of Appeals of Louisiana, Fourth Circuit

December 28, 2017

RAEDELL O. REED AND EDWINA BROWN REED
v.
7631 BURTHE STREET, LLC, AND JASON A. RIGGS

         APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2014-10189, DIVISION "L-6" Honorable Kern A. Reese, Judge.

          Salvador I. Bivalacqua Lauren B. Griffin Scott M. Galante GALANTE & BIVALACQUA LLC COUNSEL FOR DEFENDANTS/PLAINTIFFS /APPELLEES

          Brian A. Dragon COUNSEL FOR THIRD-PARTY/ DEFENDANTS/APPELLANTS

          Court composed of Judge Paula A. Brown, Judge Tiffany G. Chase, Judge Marion F. Edwards, Pro Tempore

          Paula A. Brown Judge.

         Appellants/Third-Party Defendants, Jesus Arguelles ("Mr. Arguelles") and Austin Venture Properties, LLC (collectively referred to as "Austin Venture"), seek review of the district court's February 24, 2017 Judgment granting Appellees/Defendants/Plaintiffs-in-Reconvention, Jason A. Riggs ("Mr. Riggs") and 7631 Burthe Street, LLC's (collectively referred to as "Burthe Street, LLC") petition to enforce settlement. The settlement agreement (also referred to as a "compromise agreement") was between Burthe Street, LLC and Edwina Brown Reed ("Edwina") and Raedell O. Reed ("Raedell").[1] The Reeds did not submit a response brief.

         For reasons discussed below, we find Austin Venture lacks standing, and we dismiss the appeal.

         PROCEDURAL HISTORY AND FACTS

         The Reeds were co-owners of the property located at 7631 Burthe Street, New Orleans, Louisiana ("the Property"). Edwina acquired her undivided one-half interest in the Property by Judgment of Possession, and Raedell, Edwina's daughter, acquired her undivided one-half interest by Quitclaim Deed. The Reeds failed to pay the taxes on the Property.

         In December 2009, Mr. Riggs acquired a one percent (1%) interest in the Property through a tax sale deed, which was recorded in February 2010. In February 2014, Mr. Riggs, through 7631 Burthe Street, LLC acquired Edwina's interest in the Property, by cash sale, for a payment of $3, 000.00.

         In August 2014, Austin Venture entered into an agreement with Raedell to purchase one-hundred percent (100%) of the Property, although Raedell owned only fifty percent (50%) interest of the Property.

         In October 2014, the Reeds filed in the district court a Petition to Rescind Sale and for Annulment of Tax Sale ("the Petition"), naming Burthe Street, LLC as Defendants. The Reeds were represented by John Davidson ("Mr. Davidson"), and the litigation was funded by Austin Venture.

         In the Petition, the Reeds asserted the tax sale of the Property was invalid, and the purchase of the Property by Burthe Street, LLC from Edwina was lesionary and subject to recession in accordance with La. C.C. art. 2663. In her supplemental petition, Edwina argued the sale of her interest in the Property to Burthe Street, LLC was vitiated when Mr. Riggs failed to disclose he was a real estate broker.

         On December 22, 2015, the Reeds and Burthe Street, LLC through their attorneys, entered into a settlement agreement. Burthe Street, LLC agreed to pay the Reeds $80, 000.00 to purchase Raedell's fifty percent (50%) interest in the Property and for dismissal of the Reeds' Petition.

         On December 29, 2015, Austin Venture filed the purchase agreement between it and Raedell in the parish conveyance records.[2]

         When a problem arose in September 2016 with the enforcement of the agreement, Burthe Street, LLC filed a reconventional demand against the Reeds and a third-party demand against Austin Venture. Burthe Street, LLC, praying for enforcement of the settlement agreement with the Reeds or, in the alternative, a partition by licitation and that the purchase agreement between Austin Venture and Raedell be declared a nullity.

         On February 9, 2017, a trial was held.[3]

         Mr. Davidson testified he began representing the Reeds when Mr. Arguelles funded the litigation to file the Petition. Mr. Davidson stated Mr. Arguelles had an interest in buying the property, and Mr. Arguelles funded the ligation to clear the title to the Property. Notwithstanding, Mr. Davidson recalled an agreement between the Reeds and Mr. Riggs wherein Mr. Riggs agreed to pay $80, 000.00 to settle the lawsuit filed by the Reeds, which included an agreement to purchase Raedell's fifty (50%) interest in the Property.

         Evidence of the settlement agreement-emails-were admitted into evidence. An email dated December 22, 2015, from Mr. Davidson to Mr. Riggs' attorney stated, "The clients have agreed to accept $80, 000.00 in settlement of their claim and will execute a dismissal of the suit and a sale from Ms. Raedell Reed of her interest. Please prepare the appropriate documentation." Mr. Riggs' attorney responded, "Agreed that we have a settlement with a full release from all of your clients, motion to dismiss and transfer all remaining interest and clear title to property. . . ."

         On December 28, 2015, Mr. Davidson sent another email to Mr. Riggs' attorney setting forth how payment of the settlement should be made and it provided: "Please issue one check to Raedell Reed for $57, 500 with an additional check for $2, 500 payable to Raedell Reed and Austin Venture Properties, LLC. Please issue one check to Edwina Brown Reed for $17, 500 with an additional check of $2, 500 to Edwina Brown Reed and Austin Venture Properties, LLC." Mr. Davidson testified he had authority from the Reeds to accept the offer, and he thought there was a settlement between the parties which was indicated in the December 28, 2015 email.

         Mr. Davidson testified confusion arose about the terms of the settlement when he received an email on December 28, 2015, from Mr. Riggs' attorney. The email inquired about the Reeds paying fifty percent (50%) of the city liens owed on the Property and the closing cost. Mr. Davidson continued Mr. Arguelles was discontent with his portion of the reimbursement from the settlement. Mr. Davidson expressed the settlement with Mr. Arguelles was one of Raedell's "predicates" for making the decision to settle. Mr. Davidson testified only Raedell was negotiating with Austin Venture as to the amount she and Edwina would pay for reimbursement of litigation costs. Mr. Davidson explained he was not representing Austin Venture during the settlement negotiations between the Reeds and Burthe Street, LLC.

         Mr. Davidson testified Austin Venture had an interest in buying the Property, and Austin Venture funded the litigation for the Reeds to clear the title to the Property. According to Mr. Davidson, he was not representing Austin ...


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