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Collins v. Hill

Court of Appeals of Louisiana, Second Circuit

February 27, 2019

EULA M. COLLINS Plaintiff-Appellant

          Appealed from the Third Judicial District Court for the Parish of Union, Louisiana Trial Court No. 45, 600 Honorable Robert Kostelka, Pro Tempore, Judge

          SMITH & NWOKORIE By: Brian G. Smith Counsel for Appellant

          G. SCOTT MOORE Counsel for Appellee

          Before MOORE, GARRETT, and STEPHENS, JJ.

          GARRETT, J.

         The plaintiff, Eula M. Collins, appeals a decision by the trial court granting summary judgment in favor of the defendant, Charles D. Hill.[1] The judgment dissolved a sale of immovable property, awarded Hill money deposited into the registry of the court, recognized Hill's entitlement to other funds previously paid by Collins, and terminated all rights of Collins to possession of the property. For the following reasons, we reverse and remand for further proceedings.


         This dispute began in April 2013, and has been in the judicial system for almost six years. It appears that at least five different judges have presided over the matter. Hill's legal position has evolved over time. To understand why the summary judgment was improperly granted, a review of the events leading up to the suit and its progress is necessary.

         In March 2009, Collins entered into a rental agreement with Hill concerning a house in Sterlington, Louisiana. This arrangement changed when Hill sold the property to Collins. In October 2010, Collins and Hill executed a "Deed Subject to Mortgage" conveying title to the immovable property to Collins. The deed acknowledged receipt by Hill of a $5, 000 payment from Collins. The deed further provided that the sale was subject to a mortgage executed by Hill in 2009, in the original amount of $69, 893.97, with a current balance of $68, 749.53. The deed provided that Collins was to make the mortgage payments to Hill. After buying the property, Collins claimed that she made $25, 000 worth of improvements, in addition to other expenditures for repairs, insurance, and taxes.

         For reasons disputed by the parties, on April 2, 2013, Collins deeded the property back to Hill. The recited consideration was the "return" of the property subject to the mortgage. At that time, the balance due on the mortgage executed by Hill was $60, 538.34. Hill claimed the transaction was done to avoid foreclosure, because Collins was behind in making the mortgage payments. Collins claimed that Hill fraudulently told her there was a title problem and she needed to deed the property back to him. He would then deed it back to her when the problem was cured. According to Collins, in April 2013, soon after the allegedly fraudulent deed was executed, Hill served her with an eviction notice obtained from a justice of the peace.

         On April 29, 2013, Collins instituted the present suit for breach of contract, which sought recognition of her ownership rights, damages, and attorney fees. Collins claimed that she could not be evicted from the property because she was the owner. Attached to her petition were copies of two eviction notices obtained by Hill through a justice of the peace, the 2010 deed to her, and numerous other documents.

         In October 2013, Hill filed an answer and reconventional demand claiming that the business relationship with Collins began in March 2009, as a rental agreement. In October 2010, a deed subject to a mortgage was executed. In his answer, Hill maintained that Collins did not make the $5, 000 down payment and failed to make the mortgage payments. Hill claimed that in April 2013, Collins deeded the property back to him and continued to live in the house under an oral month-to-month rental contract. In his reconventional demand, Hill demanded the past-due rent, termination of the month-to-month lease, and an order evicting Collins from the property.

         On January 31, 2014, Collins filed an exception, claiming that Hill had no cause of action for eviction because she had purchased the property and was not renting it. She urged that the trial court should first determine the primary issue of ownership. Collins later filed an exception of no right of action, essentially making the same arguments raised in the first exception. In March 2014, Collins amended her petition to allege that Hill acted fraudulently in inducing her to deed the property back to him. Hill answered, denying the fraud allegations.

         On April 24, 2014, the parties appeared in court and agreed to have the exceptions considered at the trial on the merits. Collins presented a check for $7, 640, representing ten months' payments. The check, as well as future monthly payments of $764 per month, were ordered to be deposited into the registry of the court.

         In December 2016, Hill filed an amended and supplemental reconventional demand arguing that, if Collins had occupied the property under the 2010 deed, then she had failed to pay the purchase price. Hill noted that Collins paid $7, 640 in court in April 2014, but since that time had only paid $19, 864. [2] Hill contended that Collins was delinquent in the amount of $3, 820. Hill also alleged that, if Collins possessed the property as owner, she had failed to fulfill her obligation under the agreement to pay the property taxes and insurance. According to Hill, due to Collins's failure to pay, the sale should be dissolved for nonpayment under La. C.C. art. 2561, which provides in part that, if the buyer fails to pay the price, the seller may sue for dissolution of the sale. Collins answered and denied these allegations.

         In March 2017, Hill filed the instant motion for summary judgment. He first claimed that Collins breached her lease agreement. He alleged "as an alternative action" that there was a sale between the parties and urged that he was entitled to have the sale dissolved for Collins's failure to pay the consideration for the purchase of the property. Hill maintained that Collins failed to make all payments required by the deed, including insurance and property taxes.

         In his affidavit, Hill contended that Collins was a lessee and was delinquent in her rent payments. He again acknowledged that Collins paid $7, 640 in court in April 2014, that he actually received those funds, and that Collins paid $19, 864 into the registry of the court since that time. He claimed that her payments were delinquent in the amount of $6, 112. If she was the owner, he asserted that she also owed for property taxes and insurance for a total delinquency of $11, 083.63, after application of all her payments made into the registry of the court. Hill acknowledged that Collins made the $5, 000 down payment for the sale, even though in his answer and reconventional demand, he previously denied this. Hill alleged that the only dispute between the parties was whether this was a lease or a sale conditioned on payment of the mortgage. He contended that it did not matter whether there was a lease or a sale because, under either scenario, Collins breached her obligation to pay and he was entitled to relief.

         In her affidavit attached to her opposition to the motion, Collins claimed that she paid insurance and taxes on the property and that she never defaulted on the payment of the original mortgage. Collins contended there was a genuine issue of material fact as to whether the agreement between the parties was a lease or a sale, noting that Hill acknowledged this dispute in his motion for summary judgment.

         In his response to Collins's opposition to the motion for summary judgment, Hill contended that the delinquency for monthly payments had increased to $8, 404. He again asserted that, whether the agreement was a lease or a sale, Collins was not entitled to possess the property, due to her failure to pay.

         A hearing on the motion was held on May 11, 2017, before a judge pro tempore. At the hearing, Hill's lawyer abandoned the contention that the agreement between the parties was a lease and acknowledged that the agreement was, in fact, a sale.

         Collins maintained that she paid the $5, 000 down payment and made the payments into the registry of the court as required. However, her attorney stated that he was not sure if she made all the payments required. He argued that, if Collins was behind on the payments under the sale, the appropriate ...

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