Creely v. Leisure Living, Inc.

423 So. 2d 1224, 1982 La. App. LEXIS 8533
CourtLouisiana Court of Appeal
DecidedNovember 10, 1982
DocketNo. 5-189
StatusPublished
Cited by4 cases

This text of 423 So. 2d 1224 (Creely v. Leisure Living, Inc.) 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
Creely v. Leisure Living, Inc., 423 So. 2d 1224, 1982 La. App. LEXIS 8533 (La. Ct. App. 1982).

Opinion

DUFRESNE, Judge.

This matter came before the district court in a concursus proceeding to determine the rightful claimant to $2,205, or 3% of the sale price of a house. These funds were in the possession of plaintiff in con-cursus, Robert Creely, the attorney who passed the sale. The two claimants made defendants, were Leisure Living, Inc., seller of the house, and Jessie Martin Realty Mart, Inc., a real estate broker. After trial on the merits, the court held that no contract existed between the claimants at the time this dispute arose. He further found, however, that Realty Mart, appellee here, was entitled to $1,500 in quantum meruit for services rendered. It is from this judgment that Leisure Living, Inc., appellant, takes this appeal.

Because we find no rule of equity that permits Realty Mart to recover in quantum meruit, and no contractual obligation on the part of Leisure to pay them a realtor’s commission, we reverse in part and affirm in part.

On October 24,1979, Realty Mart entered into a sale-purchase agreement for a home in Nottingham Subdivision with Leisure, owner of the house, and Alfred Gaudet, purchaser. By the terms of that agreement, Leisure agreed to pay Realty Mart a 3% commission on the proposed sale price. The contract specified, however, that if a loan commitment were not secured within 75 days after October 24, i.e., January 8, 1980, that the contract would be null and void.

This contract being concluded by the parties, Realty Mart advised Gaudet on how to go about getting a loan. Following this advice, Gaudet duly made application with Carruth Mortgage Corporation on the basis of the contract. Sometime in late January, Carruth sent the application papers to Creely for finalization. On inspecting these papers, Creely noticed that the October 24th sale-purchase contract had apparently expired, and decided that it would have to be rectified or replaced by another agreement before the loan could be finalized.

As a result of discussions, with all of the parties, a second sale-purchase agreement between only Leisure and Gaudet was entered into on February 1, 1980. On February 11, 1980, Gaudet received from Carruth a commitment for the requested loan. This was the only loan commitment made to Gaudet in regard to the contracts at issue here. It was stipulated at trial, however, that the loan commitment was made on the basis of the October 24, contract and accompanying loan application.

The final sale of the home was concluded on March 18, 1980. At that time, Creely anticipated that Realty Mart would make a claim for broker’s fees. He therefore withheld the amount of these fees, i.e., $2,205, from Leisure, and instituted this concursus.

After trial on the merits, the trial judge concluded that at least as of January 30, 1980, two days before the second sale-purchase agreement was signed, no viable agreement or contract existed between Leisure, Realty Mart and Gaudet. However, based on services rendered by Realty Mart, he awarded them $1,500 in quantum meruit.

The first issue to be resolved here is whether a party to a contract which is null and void for failure of a suspensive condition is entitled to recover in quantum meru-it for services rendered under that contract before the suspensive condition failed. We conclude that a party so situated is not entitled to recover, and therefore we reverse the judgment of the district court as to the award in quantum meruit.

The contract at issue here was prepared by Realty Mart, and contains an unambiguous suspensive condition:

“Should purchaser, seller or agent be unable to obtain the loan [of $48,500] within 75 days from acceptance hereof, this contract shall be null and void .... Commitment by lender to make loan, subject to [1227]*1227approval of title shall constitute - obtaining of loan.”

The contract further provides that:

“If this offer is accepted, seller agrees to pay the agent’s commission of 3% which commission is earned by agent when this agreement is signed by both parties and when the mortgage loan, if any, has been secured.”

The contract was signed on October 24, 1979. The loan commitment thus had to be obtained by January 8,1980, or the contract would be null and void of its own force. As the loan commitment was not forthcoming until February 11, 1980, the contract was null and void as of January 8th, and no realtor’s commission could be owing under the terms of this void agreement. With this conclusion, the trial judge was in agreement.

He further found, however, that there was a “relationship” between Realty Mart and Leisure, and held that this relationship entitled Realty Mart to compensation in quantum meruit. This holding is erroneous.

Quantum Meruit is an equitable doctrine, based on the concept that no one should be unjustly enriched at the expense of another. Swiftships, Inc. v. Burdin, 338 So.2d 1193 (La.App.3rd Cir.1976). In the instant case, there are only two legal theories based in equity that can be advanced, and both bar recovery by Realty Mart in quantum meru-it.

The first is that under La.C.C. art. 1963, equity can be resorted to when the intent of the parties is not evident or is unlawful. Realty Mart has not alleged that the October 24th contract was ambiguous or that the intent of the parties was not evident, and we find no ambiguity or lack of clear intent in that agreement. Neither can there be any argument that the suspen-sive condition was unlawful because La.C.C. arts. 2020-2047 permit such agreements. As Realty Mart has failed to demonstrate that either of these requisites existed, La. C.C. art. 1963 prohibits resort to quantum meruit, or equity, in this case.

The second theory for recovery here is in fact a more general application of the first. This theory is based on quasi-contract, or more properly in this case, on principles of unjust enrichment. While the Civil Code recognizes only two types of quasi-contract, i.e., transaction of another’s business and payment of a thing not due (La.C.C. Art. 2294), the jurisprudence has established that other forms of quasi-contracts can arise under the more basic principle of unjust enrichment. Moreover, because the Code makes no specific provisions for cases in quasi-contract other than as contained in Art. 2294, such cases must be decided according to equity as provided in La.C.C. Art. 21. Minyard v. Curtis Products, Inc., 251 La. 624, 205 So.2d 422 (1967). However, to obtain relief in the action for unjust enrichment, or actio de in rem verso, five criteria must be met:

(1) there must be an enrichment,
(2) there must be an impoverishment,
(3) there must be a connection between the enrichment and resulting impoverishment,
(4) there must be an absence of justification or cause for the enrichment and impoverishment, and
(5) there must be no other remedy at law available to plaintiff.
Minyard v. Curtis Products, Inc., supra.

While four of these criteria have apparently been met in the present case, there remains the question of whether there was any justification or cause for the enrichment. Put another way, the issue here is whether the enrichment resulted from a rule of the contract entered into by the parties. Edmonston v. A-Second Mortgage Co.,

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Related

Butler v. Crescent Land & Development Co.
499 So. 2d 1163 (Louisiana Court of Appeal, 1986)
Creely v. Leisure Living, Inc.
437 So. 2d 816 (Supreme Court of Louisiana, 1983)

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Bluebook (online)
423 So. 2d 1224, 1982 La. App. LEXIS 8533, Counsel Stack Legal Research, https://law.counselstack.com/opinion/creely-v-leisure-living-inc-lactapp-1982.