Christopher Conroy v. Suzico, L.L.C., Madeline Ahlgren Melanson and Jared Blackburn

• Court: Louisiana Court of Appeal
• Decided: February 24, 2023
• Docket: 2022CA0974
• Status: Unknown

Opinion

STATE OF LOUISIANA

COURT OF APPEAL

FIRST CIRCUIT

2022 CA 0974

CHRISTOPHER CONROY

VERSUS

SUZICO, L.L.C, MADELINE AHLGREN MELANSON AND JARED BLACKBURN

Judgment Rendered. FEB 2 4 2023

Appealed from the 19th Judicial District Court In and for the Parish of East Baton Rouge State of Louisiana Case No. C702091 Division D, Section 21

The Honorable Ronald R. Johnson, Judge Presiding

Mary Kathryn Gimber Counsel for Defendant/Plaintiff-in- Cross- William L. Caughman, III Claim/Appellant Jourdan Curet Suzico, L.L.C. Randy R. Cangelosi Baton Rouge, Louisiana

Michael O. Adley Counsel for Defendant/ efendant/ Defendant-Defendant- in-in- James H. Gibson Cross- Claim/Claim/ Appellee Appellee Lafayette, Louisiana Madeline Ahlgren Melanson

BEFORE: WELCH, PENZATO, AND LANIER, JJ.

dV R

Tdztj LANIER, J.

The appellant, Suzico, L.L.C. ( Suzico), appeals the summary judgment of

the Nineteenth Judicial District Court in favor of the appellee, Madeline Ahlgren

Melanson. For the following reasons, we reverse and remand for further

proceedings.

FACTS AND PROCEDURAL HISTORY

On November 25, 2020, Christopher Conroy, the plaintiff in the instant case,

filed a petition for specific performance, attorney fees, and damages against Suzico

and Ms. Melanson. Mr. Conroy alleged that Suzico was a Louisiana limited

liability company that owned commercial property in Baton Rouge, which Mr.

Conroy had attempted to purchase. Mr. Conroy and Suzico allegedly entered into

an agreement to purchase and sell the property on August 25, 2020, wherein Mr.

Conroy agreed to purchase the property for $ 1. 44 million. Mr. Conroy alleged that

Ms. Melancon was the legal representative of Suzico, and she digitally signed the

agreement to purchase and sell, although she is not represented on the document as

signing on behalf of Suzico.

On October 21, 2020, Mr. Conroy and Suzico allegedly agreed to an

extension to the date of the closing. This addendum to the agreement was signed

by Jared Blackburn, who was not represented on the document as representing

Suzico; however, Mr. Conroy claimed that a certificate of authority for Suzico,

which was executed on October 23, 2020, granted authority to Mr. Blackburn to

sign acts of sale and other legal documents on behalf of Suzico. The document

grants the same authority to Susan Waters and Thomas Waters, who are the two

members of Suzico, but not to Ms. Melanson. Additionally, minutes of a special

meeting held on October 2, 2020 by the members of Suzico reflect that Mr.

Blackburn was granted the authority to enter into agreements to purchase and sell

property on behalf of Suzico. Mr. Conroy alleged that despite these documents,

2 Ms. Melanson, upon Mr. Conroy' s information and belief, had executed purchase

agreements on behalf of Suzico in the past.

Mr. Conroy further alleged that on November 13, 2020, he received a letter

from an attorney for Suzico, which stated that Ms. Melanson did not have authority

to sell the property on behalf of Suzico and that the property was not for sale. In

response, Mr. Conroy advised Suzico that the closing was scheduled for November

18, 2020. No representative for Suzico appeared for the closing, and ownership of

the property was not transferred to Mr. Conroy.' Thus, Mr. Conroy demanded

specific performance on the contract, as well as attorney fees, which were provided

for in the terms of the agreement. In the alternative, Mr. Conroy demanded if Ms.

Melanson was found to lack the authority to sign the agreement to purchase and

sell on behalf of Suzico, and if Mr. Blackburn was found not to have ratified her

action by signing the addendum, then Ms. Melanson should be held personally

liable for his damages. In response, Ms. Melanson claimed that Mr. Blackburn' s

signing of the addendum resulted in Suzico ratifying her action, and she could not 2 be personally liable to Mr. Conroy.

On June 15, 2021, Suzico filed a counterclaim against Mr. Conroy, in which

it claimed that Mr. Conroy knew or should have known that the property was

offered for sale by realtor Lee Lambert of Latter & Blum, Inc. (Latter & Blum) at a

price that was substantially below market value. Further, Suzico claimed that Mr.

Conroy and Mr. Lambert colluded to sell the property well below market value

before the property was actually listed for sale. Suzico specifically alleged that the

agreement to purchase and sell the property was vitiated through fraud. Suzico

Mr. Conroy stated in his petition that he had intended to assign the purchaser rights to Capital City Investments, LLC, of which he was a member,

2 Ms. Melanson made this claim in a motion for summary judgment, which she filed on January 6, 2021, in the original suit filed by Mr. Conroy, On November 17, 2021, the district court granted Ms. Melanson' s motion for summary judgment and dismissed all of Mr. Conroy' s claims against her with prejudice. That judgment is currently not before this Court.

3 also claimed that Mr. Blackburn signed the addendum either through coercion or

error as to the property' s value, induced by Mr. Conroy.

In the same pleading, Suzico filed a third -party claim against Mr. Lambert

and Latter & Blum, claiming that on or about August 20, 2020, Ms. Melanson

signed a marketing agreement with Mr. Lambert, who was an agent of Latter &

Blum, to list property owned by Suzico for sale, but the agreement remained blank

so as not to list any particular piece property to be marketed by Mr. Lambert.

Suzico further claimed that Mr. Lambert wrote into the marketing agreement the

name of the property at issue, and made several copies of the blank marketing

agreement so that he could list other properties of Suzico in separate sales.

Suzico alleged that Mr. Lambert listed the property for sale on August 25,

2020, the same day Mr. Conroy signed the agreement to purchase and sell the

property. Suzico alleged that on the following day, Ms. Melanson signed the

agreement to purchase and sell as the seller without Suzico' s authority. Suzico

claimed it relied on Mr. Lambert' s advice as their fiduciary that the agreed upon

price was the best possible price for the property. Suzico further claimed that Mr.

Lambert knew or should have known that the price was substantially below the

property' s true market value. Suzico also claimed that Mr. Lambert had entered

into a scheme with Mr. Conroy to purchase the property for a price substantially

below market value. Suzico further alleged that Mr. Lambert' s and Latter &

Blum' s actions were fraudulent, and that they were liable to Suzico for the

difference between the sale price and the true market value, other damages, and

attorney fees.

Additionally, Suzico filed a cross- claim against Ms. Melanson, claiming that

at no time did she have written or verbal authority to sell property owned by

Suzico. Suzico demanded that in the event specific performance was granted

against it, Ms. Melanson should be held liable for the difference between the $ 1. 44

4 million sale price and the actual value of the property. On August 26, 2021, Ms.

Melanson filed the instant motion for summary judgment on the cross- claim, again

claiming that her actions were ratified by Mr. Blackburn when he signed the addendum, since he was granted in writing the authority to sign on Suzico' s behalf.

The district court heard the motion for summary judgment on the cross-

claim against Ms. Melanson on January 6, 2022. After the hearing, the district

court signed a judgment on March 2, 2022, granting Ms. Melanson' s motion for

summary judgment and dismissing Suzico' s cross- claim against her with prejudice.

Suzico has appealed this judgment.

ASSIGNMENT OF ERROR

Suzico' s sole assignment of error is that the district court erred when it

improperly granted Ms. Melanson' s motion for summary judgment and improperly

dismissed the cross- claim against her with prejudice by misapplying the

evidentiary standard required to determine whether a genuine issue of material fact

exists, and by failing to consider Suzico' s uncontroverted evidence that the

addendum at issue was void for lack of consent due to fraud or error.

STANDARD OF REVIEW

The burden of proof on a motion for summary judgment rests with the

mover: here, Ms. Melanson. It must first be determined whether the supporting

documents presented by the mover are sufficient to resolve all material fact issues.

Bass v. DISA Global Solutions, Inc., 2020- 0071 ( La. App. 1 Cir. 12130120), 318

So. 3d 909, 916, writ denied, 2021- 00147 ( La. 3123121), 313 So. 3d 273. Once the

motion for summary judgment has been properly supported by the moving party

i.e., the mover has established the material facts through its supporting

documentary evidence), and the mover has made a prima facie showing that the

motion for summary judgment should be granted, the mover does not have to

5 negate all of the essential elements of the adverse party' s claim, action, or defense.

La. C. C. P. art. 966( D)( 1).

Thereafter, the burden shifts to the non-moving party, Suzico, to produce

factual support sufficient to establish the existence of a genuine issue of material

fact, or that Ms. Melanson is not entitled to judgment as a matter of law. Suzico

may not rest on the mere allegations of denials in its pleadings, but its responses

must set forth specific facts showing that there is a genuine issue for trial. See

Acadian Properties Northsore, L.L. C. v. Fitzmorris, 2019- 1549, 2019- 1550 ( La.

App. 1 Cir. 11/ 12/ 20), 316 So. 3d 45, 50. In determining whether summary

judgment is appropriate, appellate courts review evidence de novo under the same

criteria that govern the trial court' s determination of whether summary judgment is

appropriate. Id.

DISCUSSION

Ms. Melanson submitted her motion for summary judgment at the hearing,

with the following attached exhibits: Mr. Conroy' s petition and its attached

exhibits; Suzico' s supplemental and amended answer to that petition; an excerpt

from Suzico' s responses to Mr. Conroy' s discovery requests; and Suzico' s

responses to Ms. Melanson' s discovery requests. The attached exhibits to Mr.

Conroy' s petition were: the agreement to purchase and sell; the addendum to the

agreement; the certificate of authority for Suzico; and the November 13, 2020

letter to Mr. Conroy from Suzico' s attorney. In response, Suzico submitted its

memorandum in opposition to the motion for summary judgment, with affidavits

of Ms. Waters and Mr. Blackburn attached.

Ratification is the adoption by one person of an act done on his behalf by

another without authority. Ratification amounts to a substitute for prior authority.

Bamber Contractors, Inc. v. Morrison Engineering & Contracting Co., Inc., 385

C So. 2d 327, 331 ( La. App. 1 Cir. 1980). The burden of proving ratification is on the

party asserting it, and to find ratification of an unauthorized act, the facts must

indicate an absolute intent to ratify the act, and no intent will be inferred when the

alleged ratification can be explained otherwise. Id. Ratification will occur when

the principal, knowing of the contract, does not repudiate it but accepts its benefits.

Id.

Our review of the documents submitted at the hearing indicate that Ms.

Melanson executed the agreement to purchase and sell prior to execution of the

certificate of authority that expressly authorized Mr. Blackburn to sign on behalf of

Suzico. While it is unclear as to whether Ms. Melanson actually had authority to

sign the agreement on behalf of Suzico, Mr. Blackburn clearly had the authority to

sign the addendum. The exhibits submitted by Ms. Melanson satisfied her burden

to prove that Mr. Blackburn had ratified her signature on the agreement to

purchase and sell. At that point, the burden shifted to Suzico to prove that a

genuine issue of material fact existed as to whether Mr. Blackburn actually ratified

Ms. Melanson' s signature. See La. C. C.P. art. 966( D), To that end, Suzico

submitted the affidavits of Ms. Waters and Mr. Blackburn.'

In his affidavit., Mr. Blackburn stated that he signed the addendum under the

belief that Suzico would suffer " substantial financial penalties" if he did not sign it,

and that the price of $1. 44 million was the best price available for the property.

Mr. Blackburn stated he was told this by Mr. Lambert. Mr. Blackburn relied on

Mr. Lambert' s advice and representations when he signed the addendum. After the

addendum was signed, other " trusted advisors" of Suzico raised concerns that the

sale price was far below the actual value of the property. Mr. Blackburn then

3 The testimony contained in the affidavits of Ms. Waters and Mr. Blackburn are substantially similar.

7 stated that it was later determined that the actual value of the property was more

than double the sale price of $1. 44 million.

Consent may be vitiated by error, fraud, or duress. La. C.C. art. 1948.

However, error vitiates consent only when it concerns a cause without which the

obligation would not have been incurred and that cause was known or should have

been known to the other party. La. C. C. art. 1949. Mr. Blackburn stated in his

affidavit that Suzico relied on Mr. Lambert' s advice to determine the best sale

price for the property, and that the sale price was a " principal cause for Suzico to

go forward with the sale." Mr. Blackburn claimed that he discovered after he had

signed the addendum that the agreed upon sale price of $1. 44 million was less than

half of the property' s actual value. If Suzico was mistaken as to the actual value of

the property when Mr. Blackburn signed the addendum as a result of Mr.

Lambert' s misrepresentation, then that mistake may vitiate Suzico' s consent if Mr.

Lambert knew or should have known. See Peironnet v. Matador Resources Co.,

2012- 2292, 2012- 2377 ( La. 6128113), 144 So. 3d 791, 807.

Suzico specifically pled error and fraud as counterclaims to Mr. Conroy' s

suit, and alleged the same against Mr. Lambert. See Sonnier v. Boudreaux, 95-

2127 ( La. App. 1 Cir. 5110196), 673 So. 2d 713, 717. The issue before this Court,

as set forth by Ms. Melanson' s motion for summary judgment on Suzico' s cross-

claim, is whether Mr. Blackburn' s signature on the addendum ratified Ms.

Melanson' s signature on the agreement to purchase and sell. The issue of this

ratification is so factually intertwined with the issue of fraud or error, that if it were

found that fraud or error existed when Mr. Blackburn signed the addendum, then

his consent to do so would be vitiated. If the consent is vitiated, then Ms.

Melanson' s authority to sign on behalf of Suzico becomes a genuine material issue

of fact.

8 One of the possible remedies for fraud or error is rescission. See Peironnet,

144 So. 3d at 808. Rescission would put the parties in the position in which they

were prior to the attempted agreement; which, in the instant case, would return the

parties to their position prior to the signing of the addendum. See La. C.C. art.

1952, Revision Comments - 1984, comment ( b); See Insurance Storage Pool, Inc.

v. Parish Nat. Bank, 97- 2757 ( La. App. 1 Cir. 5114199), 732 So. 2d 815, 821. Only

after it is decided whether the addendum should be rescinded can it be decided

whether Ms. Melanson acted without the authority of Suzico, or whether Suzico

ratified her action.

Based on our review, we find that the district court erred in granting Ms.

Melanson' s motion for summary judgment. Ms. Melanson initially met her burden

by presenting sufficient evidence showing her signature on the agreement to

purchase and sell was potentially ratified by Mr. Blackburn' s signature.

Thereafter, the burden shifted to Suzico, and Suzico presented sufficient evidence

to show that a genuine issue of material fact existed as to whether error or fraud

vitiated Mr. Blackburn' s consent. Mr. Blackburn' s lack of consent based on error

or fraud would vitiate the addendum, which would then no longer operate to ratify

Ms. Melanson' s signature.

DECREE

The summary judgment of the Nineteenth Judicial District Court in favor of

the appellee, Madeline Ahlgren Melanson, dismissing the cross- claim of the

appellant, Suzico, L.L. C., against Ms. Melanson, is reversed, and this matter is

remanded for further proceedings. All costs of this appeal are assessed to the

appellee, Madeline Ahlgren Melanson.

REVERSED; REMANDED.