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Tales IP, LLC v. Common-Camp, LLC

United States District Court, E.D. Louisiana

November 6, 2019

TALES IP, LLC
v.
COMMON-CAMP, LLC

         SECTION: “J” (4)

          ORDER & REASONS

          CARL J BARBIER UNITED STATES DISTRICT JUDGE

         Before the Court are a Motion for Reconsideration (Rec. Doc. 36) filed by Defendant and Plaintiff-in-Counterclaim Common-Camp, LLC (“Common-Camp”), which seeks reconsideration of the Court's Order & Reasons denying its motion for judgment on the pleadings on its counterclaims (Rec. Doc. 31), and an Alternative Motion to Certify Questions under 28 U.S.C. § 1292(b) (Rec. Doc. 38). Having considered the motion and memoranda, the record, and the applicable law, the Court finds that Common-Camp's motions should be DENIED.

         FACTS AND PROCEDURAL BACKGROUND

         This litigation arises out of a lease dispute between Tales IP, LLC (“Tales”), as lessee, and Common-Camp, as lessor, for the property at 129-133 Camp Street, New Orleans, Louisiana (the “Property”).[1] Effective January 1, 2019, Tales assumed the lease from the prior tenant under an amended lease. The amended lease contained a non-abatement clause, which provides: “The monthly rent shall be paid with no previous demand therefore and without any delay, defense, set-off, abatement or deduction, suspension or counterclaim whatsoever.”[2]

         For purposes of the instant motion, Common-Camp acknowledges that the Court may assume it breached its obligation to deliver the Property in a condition suitable for Tales's intended use and that the Property is in need of repair.[3] Tales paid rent through March 2019, but after Common-Camp refused to work with Tales in good faith to make the necessary repairs, Tales withheld rent for April and May 2019. On May 31, 2019, Common-Camp sent Tales a letter notifying Tales that it was terminating the lease because of Tales's failure to pay rent and that if Tales did not vacate the Property within five business days, Common-Camp would initiate eviction proceedings.

         On June 6, 2019, Tales initiated this action in state court and sought an ex parte order allowing it to deposit the unpaid rent for April, May, and June 2019 as well as future rent into the court's registry, which the state court granted.[4] Common-Camp removed the case to this Court and then filed counterclaims against Tales and its guarantor under the lease, seeking unpaid rent and damages as provided in the lease as well as to evict Tales from the Property. After the Court denied Common-Camp's motion for judgment on the pleadings on its counterclaims and allowed Tales to deposit the rents in this Court's registry, Common-Camp filed the instant motion for reconsideration and an alternative motion to certify the Court's interlocutory order for appeal.

         LEGAL STANDARD

         Where a party seeks reconsideration of an interlocutory order, Federal Rule of Civil Procedure 54(b) controls. Austin v. Kroger Texas, L.P., 864 F.3d 326, 336 (5th Cir. 2017). Rule 54(b) allows the Court “‘to reconsider and reverse its decision for any reason it deems sufficient, even in the absence of new evidence or an intervening change in or clarification of the substantive law.'” Id. (citation omitted). Rule 54(b) is “less stringent” than Rule 59(e) and reflects a more flexible approach to the presentation of new arguments. Id. at 336-37.

         When examining matters of state law, the Court will employ the principles of interpretation used by the state's highest court. Am. Int'l Specialty Lines Ins. Co. v. Rentech Steel LLC, 620 F.3d 558, 564 (5th Cir. 2010). Mindful of Louisiana's distinction between primary and secondary sources of law, the Court will begin its analysis with reliance on the Louisiana Constitution and statutes before looking to “‘jurisprudence, doctrine, conventional usages, and equity, [which] may guide the court in reaching a decision in the absence of legislation and custom.'” Shaw Constructors v. ICF Kaiser Eng'rs, Inc., 395 F.3d 533, 546 (5th Cir. 2004) (quoting La. C.C. art. 1 rev. cmt. b). If the Court must make an “Erie guess” on an issue of Louisiana law, the Court will decide the issue the way that it believes the Supreme Court of Louisiana would decide it. Id. The Court is not strictly bound by the decisions of the state intermediate courts and will disregard them if the Court is “convinced that the Louisiana Supreme Court would decide otherwise.” In re Katrina Canal Breaches Litig., 496 F.3d 191, 206 (5th Cir. 2007).

         DISCUSSION

         In its prior order, the Court held that Common-Camp could not put Tales in default because it failed to deliver the Property in a condition suitable for Tales's intended use, relying on Civil Code article 1993.[5] Common-Camp first contends that article 1993 is inapplicable in the current context because the more specific provisions of Title IX (“Lease”) are controlling.

         Article 2669 provides: “In all matters not provided for in this Title, the contract of lease is governed by the rules of the Titles of ‘Obligations in General' and ‘Conventional Obligations or Contracts.'” La. C.C. art. 2669. Thus, article 1993 may apply only if the articles on leases do not resolve the issue. See Id. rev. cmt b. Because there are particular rules for leases that govern the instant dispute, as explained below, the Court agrees that its prior holding was in error.

         Common-Camp further argues that the non-abatement clause in the lease prevents Tales from withholding rent, even if Common-Camp is in breach of the lease, regardless of the default provisions of the Civil Code. “The Civil Code . . . while defining and governing the relationship of the parties to a lease, still leaves the parties free to contractually agree to alter or deviate from all but the most fundamental provisions of the Code which govern their lease relationship.” Carriere v. Bank of La., 95-3058, p. 13 (La. 12/13/96), 702 So.2d 648, 666. “In other words, the lease contract itself is the law between the parties; it defines their ...


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