Ardent Services, LLC Versus G & v. Investments, LLC

CourtLouisiana Court of Appeal
DecidedFebruary 28, 2024
Docket23-CA-253
StatusUnknown

This text of Ardent Services, LLC Versus G & v. Investments, LLC (Ardent Services, LLC Versus G & v. Investments, LLC) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ardent Services, LLC Versus G & v. Investments, LLC, (La. Ct. App. 2024).

Opinion

ARDENT SERVICES, LLC NO. 23-CA-253

VERSUS FIFTH CIRCUIT

G & V INVESTMENTS, LLC COURT OF APPEAL

STATE OF LOUISIANA

ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 799-516, DIVISION "I" HONORABLE NANCY A. MILLER, JUDGE PRESIDING

February 28, 2024

STEPHEN J. WINDHORST JUDGE

Panel composed of Judges Susan M. Chehardy, Stephen J. Windhorst, and John J. Molaison, Jr.

REVERSED IN PART; AFFIRMED IN PART; REMANDED SJW SMC JJM COUNSEL FOR PLAINTIFF/APPELLANT, ARDENT SERVICES, LLC Lawrence R. DeMarcay, III

COUNSEL FOR DEFENDANT/APPELLEE-2ND APPELLANT, G & V INVESTMENTS, LLC Raymond B. Landry Thomas M. Flanagan Anders F. Holmgren Alixe L. Duplechain WINDHORST, J.

In this appeal, plaintiff-appellant, Ardent Services, LLC, seeks review of the

trial court’s January 30, 2023 judgment, granting the motion for involuntary

dismissal filed by defendant-appellee, G&V Investments, LLC and dismissing

Ardent’s claim against G&V. In addition, G&V filed a cross-appeal, seeking review

of the trial court’s February 9, 2023 judgment, denying its request for attorney’s fees.

For the following reasons, we reverse the trial court’s judgment granting G&V’s

motion for involuntary dismissal and dismissing Ardent’s claim against G&V, and

remand for further proceedings. We affirm the trial court’s judgment denying

G&V’s reqeust for attorney’s fees.

PROCEDURAL HISTORY and EVIDENCE

On September 17, 2019, Ardent (Lessee) filed a petition for breach of lease

agreement, to enforce lease agreement, and to mandate specific performance of the

terms of the lease agreement against G&V.1 According to the petition, on September

18, 2009, the parties entered into a “Commercial Build To Suit Lease” (the “Lease”)

relative to property located in Kenner, Louisiana. At all relevant times, the property

was subject to a promissory note and mortgage in favor of Whitney National Bank,

for which G&V was the mortgagor and borrower.

Pursuant to the lease, G&V (Lessor) was to complete certain improvements

and/or a buildout on the property for Ardent. The parties agreed that the initial five-

year lease term would commence upon completion of the improvements and

buildout, and that Ardent had the option to renew for two additional five-year terms,

as well as an option to purchase the property. The “option to purchase” gave Ardent

the option to purchase during the term of the lease and any subsequent option term

1 Ardent’s claim for specific performance of the option to purchase appears to have been resolved prior to trial, and is not an issue in this appeal.

23-CA-253 1 and provided that the “purchase price at any given time shall be that amount

necessary to payoff [sic] in full the mortgage indebtedness.”

With regard to monthly rent, Section 6(E) of the Lease provides: . . . The rental payment is fixed for the initial term of this lease at $7,706.13 per month [(“monthly rent”)]. The monthly rental payment is agreed to be the equivalent of the monthly debt service payment due by Lessor [to Whitney], i.e., the cash amount required monthly for the repayment of principal and fixed rate interest (currently six and one- half (6.500 %) per cent) constituting the mortgage indebtedness bearing against the property which is the subject of this lease, plus a Lessor’s [G & V’s] fee of eight (8.00%) per cent [sic] of that amount.... At the commencement of any option term, the monthly rental shall be adjusted for increase or decrease consistent with the current “market rate”, i.e., the fixed rate of interest a company such as Lessor must pay to borrow funds, plus the Lessor’s fee. [Boldface in original.]

In the petition, Ardent stated that it had paid the $7,706.13 monthly rent for the first

term of the Lease and had continued to pay the monthly rent into the second term of

the Lease as of the date of filing of the petition.

Pursuant to Section 6(E), the Lease provided for re-calculation of the monthly

rental payments upon the commencement of each option term, in this case, March

21, 2015 and March 21, 2020. The pertinent language is as follows:

. . . At the commencement of any option term, the monthly rental shall be adjusted for increase or decrease consistent with the current “market rate”, i.e., the fixed rate of interest a company such as Lessor must pay to borrow funds, plus the Lessor’s fee.

Section 6(G) of the Lease provided that Ardent “has the option of making the

debt service portion of the monthly rental payment directly to the financial institution

(Whitney National Bank) to which the indebtedness is owed.” If Ardent paid the

monthly rent to G&V, G&V was responsible for paying the full monthly rent (less

G&V’s eight percent fee) to Whitney to reduce the mortgage indebtedness against

the property.

Under the Lease, Ardent also agreed to (1) pay all insurance, utilities and

taxes; (2) “all costs connected with or arising out of the leased premises, and all other

23-CA-253 2 expenses of every nature whatsoever, including but not limited to all repairs,

excluding the building structure and roof. Ardent further agreed to maintain the

premises in good and safe condition, including, “plate glass, electrical wiring,

elevator, plumbing (even when damaged by freeze), heating, ventilation and air

conditioning systems and any other system or equipment on the premises, with the

exception of the building structure and roof which will be maintained by Lessor.”

By letter dated May 1, 2019, Ardent notified G&V of its intent to exercise the

option to purchase the property and provided a purchase and sale contract setting

forth the terms by which it proposed to purchase the property. In response, G&V

attempted to renegotiate the option to purchase. In May 2019, Ardent obtained

information from Whitney dated May 21, 2019, identifying the principal balance on

the indebtedness (“Indebtedness Balance”) for the property as $660,854.82. Ardent

determined that this amount was significantly higher than expected based on

Ardent’s records. Based on its records, Ardent determined that as of May 21, 2019,

the Indebtedness Balance and the purchase price under the Lease should have been

$552,974.21.

In its petition, Ardent alleged that G&V breached the Lease by failing to pay

Whitney all monthly rent payments (less G&V’s eight percent fee) that Ardent paid

G&V. Specifically, Ardent claimed that G&V failed to pay Whitney $56,514.48,

and that Ardent is entitled to a credit against the Indebtedness Balance. Ardent also

alleged that G&V breached the Lease by failing to pass on to Ardent the decrease

market rate resulting from G&V re-financing the Whitney mortgage for the property,

which totaled is $51,366.13. Ardent claimed that it is also entitled to a credit against

the Indebtedness Balance on this basis.

At a bench trial on January 17, 2023, Ardent called the following witnesses to

testify: (1) Albert Vallotton III, an executive vice president at Ardent; (2) Jody Grass,

the owner/manager for G&V; (3) James Heurtin, Jr., Ardent’s chief financial officer.

23-CA-253 3 Mr. Vallotton testified that the Lease was executed by Mr. Grass on behalf of

G&V as the lessor and Dale Brem on behalf of Ardent as the lessee relative to a

commercial/industrial office at 17 Veterans Boulevard, Kenner, Louisiana. Mr.

Brem was a vice president and one of the co-founders of Ardent. Mr. Vallotton

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