Brandner v. Staf-Rath, L.L.C.

64 So. 3d 812, 10 La.App. 5 Cir. 778, 2011 La. App. LEXIS 484, 2011 WL 1565927
CourtLouisiana Court of Appeal
DecidedApril 26, 2011
DocketNo. 10-CA-778
StatusPublished
Cited by4 cases

This text of 64 So. 3d 812 (Brandner v. Staf-Rath, L.L.C.) 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
Brandner v. Staf-Rath, L.L.C., 64 So. 3d 812, 10 La.App. 5 Cir. 778, 2011 La. App. LEXIS 484, 2011 WL 1565927 (La. Ct. App. 2011).

Opinion

FREDERICKA HOMBERG WICKER, Judge.

| ¡.This breach of contract dispute concerns the failed sale of immovable property. At the heart of this controversy is whether there was a valid agreement to purchase the real estate; and, if valid whether there was an oral modification of the agreement. The trial judge concluded there was a valid agreement and that the purchasers, plaintiffs/appellants, Michael Brandner and Cynthia Brandner, defaulted on the agreement by failing to go forward with the act of sale on the date of closing, January 8, 2007. The trial judge awarded the owner, defendant/appellee, Staf-Rath, LLC (Staf-Rath), $56,500, in interest, costs, and attorney’s fees. He [814]*814dismissed the plaintiffs’ case-in-chief. We amend the judgment, and as amended affirm.

Facts

lain 2006, Staf-Rath owned a large warehouse-like structure located at 5504 South Lambert Street in Harahan, Louisiana (the Property). Raymond Rathle was the managing member of the firm. At that time, Mr. Rathle’s company, Carnival Brands, Inc., a food processing company, leased the Property from Staf-Rath on a monthly basis. In October 2006, after Hurricane Katrina, Staf-Rath decided to sell the Property.

After the hurricane, Mr. Rathle repaired the building and obtained a conditional use to operate Carnival Brands once again from the United States Department of Agriculture. The company needed an approved USDA facility. But Mr. Rathle could not get regular workers. Thus, he decided to sell Carnival Brands, its inventory, as well as the building.

Carnival Brands’ assets consisted of two freezers (with separate lines), a walk-in cooler, a free-standing cooler, movable fixtures, stainless steel tables, two kettles, pallet racks that contained dry storage materials, bags, boxes, desks, file cabinets, pots, and pans. Carnival Brands also used food processing equipment that was installed in the building. The processing equipment consisted of a cooker, a freestanding sink and tank, a chill bath with water to chill down food, and an outside boiler with a natural gas coupling. At the time that Mr. Rathle purchased the processing equipment and placed it in the building for Carnival Brands, he required the services of a licensed electrician, a licensed plumber, a certified welder, and a general contractor. Mr. Rathle estimated the removal of the processing equipment, including capping off lines, could take a week to three months. He estimated it would cost $25,000 to remove and transport the equipment and $50,000 to hook it up elsewhere.

Michael Brandner, who owned nearby property, was interested in purchasing the Property as an investment; he was not interested in operating the food ^processing business. Also, he wanted the processing equipment and inventory removed before closing. He and his wife, Cindy Brandner, signed an offer to purchase the Property on October 3, 2006. Robert M. Israel, Staf-Rath’s realtor, and Kathleen Brandner (Ms. K. Brándner), the Brandners’ realtor, assisted the parties in the sale negotiations.

Mr. Israel, as the seller’s agent, signed accepting the October offer on or about October 3 or 4, 2006. On October 3 and 4, 2006, the Brandners tendered the deposit by check and promissory note, respectively. Mr. Rathle signed the offer (as altered and initialed by him in two respects) on October 5 and October 6, 2006.

The offer contained a “removal” provision that required the seller to remove certain items, including the food processing equipment, prior to the act of sale:

Prior to the act of sale, Seller shall remove all movable furniture, fixtures and equipment at the seller’s expense per the Carnival Brands Partial Asset Inventory Report as of 6/1/05 attached hereto, and shall remove the coolers and refrigeration equipment and partitions per the property plan labeled “Exhibit A.” All electrical, gas and/or plumbing lines that fed said equipment and fixtures to be removed and shall be capped in a professional and workmanlike manner per all applicable codes.

The closing for the act of sale was set for January 8, 2007. On January 8, the processing equipment had not been removed.

[815]*815From mid-November 2006 until the weekend before the closing, however, the Brandners were negotiating a lease with Pigeon Catering, Inc. (Pigeon) through its principal J.P. Pigeon.

Mr. Pigeon, Mr. Rathle’s friend, had been in business for 11 years. His equipment supplier told him about Mr. Rathle’s newspaper advertisement to sell food processing equipment. He contacted Mr. Rathle and offered to purchase the equipment. Mr. Pigeon was also interested in purchasing the building and using the equipment located there. The building had a USDA certification, a valuable 15asset. At the time, Mr. Pigeon operated a restaurant-style kitchen that was not USDA certified. The USDA certification piqued his interest in the building. Mr. Rathle, however, informed Mr. Pigeon that the building was already under contract. But he informed Mr. Pigeon that the purchaser might be interested in leasing the property to Mr. Pigeon. Later, on December 22, 2006, Mr. Pigeon purchased Carnival Brands’ assets. Mr. Pigeon testified that he purchased the assets while also negotiating a lease with the Brandners intending for the processing equipment to remain in the building. He stated that “everyone involved understood that this was critical to the [lease] deal [with the Brandners].”

Mr. Rathle testified that if he were to undertake the daunting task of removing the integral processing equipment from the building during the lease negotiations, he would undermine Mr. Pigeon’s plans for operating his business.

Unfortunately, although all parties anticipated a lease agreement before the closing on the sale of the Property, all lease negotiations abruptly ended on the Saturday before the Monday closing when Mr. Pigeon withdrew. The parties, including Mr. Pigeon, proceeded to the act of sale on January 8, 2007. At the closing, Staf-Rath tendered title, and the Brandners, through their attorney, Mr. Raymond Landry, rejected the tender although the purchasers had the funds available to proceed with the transaction. Mr. Brandner relied on the “removal” provision and did not purchase the property because processing equipment remained in the building. According to Ms. K. Brandner, the Brand-ners’ realtor, the term, “equipment,” included the “partitions” as well.

Mr. Israel testified that he returned the Brandners’ cash portion of the deposit. Mr. Rathle stated that he attempted to salvage the sale and that the removal process was completed by January 19. Negotiations between the Brandners and, Mr. Rathle after January 8 failed.

|fiThe agreement to purchase provided for specific performance or alternatively damages, attorney’s fees, and costs in the event of failure to comply with the agreement within the time specified. After the failed sale, the Brandners filed suit against Staf-Rath alleging that Staf-Rath defaulted by failing to remove the processing equipment before closing. Staf-Rath in turn filed a reconventional demand alleging that the Brandners were in default for failing to go forward with the sale.

In addition to finding a valid agreement, the trial judge concluded that there was an oral modification of the “removal” provision of the agreement based on lease negotiations between the Brandners and Mr. Pigeon, which showed the intent for the processing equipment to remain in the building.

Analysis

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Cite This Page — Counsel Stack

Bluebook (online)
64 So. 3d 812, 10 La.App. 5 Cir. 778, 2011 La. App. LEXIS 484, 2011 WL 1565927, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brandner-v-staf-rath-llc-lactapp-2011.