Holland v. State, Dept. of Transp.

554 So. 2d 727, 1989 La. App. LEXIS 2464, 1989 WL 150173
CourtLouisiana Court of Appeal
DecidedDecember 6, 1989
Docket20984-CA
StatusPublished
Cited by10 cases

This text of 554 So. 2d 727 (Holland v. State, Dept. of Transp.) 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
Holland v. State, Dept. of Transp., 554 So. 2d 727, 1989 La. App. LEXIS 2464, 1989 WL 150173 (La. Ct. App. 1989).

Opinion

554 So.2d 727 (1989)

Jim HOLLAND, Plaintiff-Appellee,
v.
STATE of Louisiana, DEPARTMENT OF TRANSPORTATION, Defendant-Appellant.

No. 20984-CA.

Court of Appeal of Louisiana, Second Circuit.

December 6, 1989.
Writ Denied February 16, 1990.

*728 Bertrand & Soileau by Ronald J. Bertrand, Rayne, for defendant-appellant.

Patricia N. Miramon, Shreveport, for plaintiff-appellee.

Before MARVIN, SEXTON and HIGHTOWER, JJ.

MARVIN, Judge.

In this action that arose when the State purchased from the owner-lessor, in lieu of threatened expropriation for I-49, the property that plaintiff leased for a service station, the State appeals a judgment awarding plaintiff-lessee $102,791 for loss of business profits and about $34,000 in attorney fees.

The State primarily contends that the lessee has no right of action against the State for constitutional compensation because his written lease provides that it automatically terminates if the property is expropriated or is voluntarily transferred in lieu of expropriation during its term.

If the lessee has a right of action, the State alternatively contends that the lessee's evidence of business loss is too speculative to satisfy his burden of proof, that any recovery by the lessee should be reduced *729 for his failure to mitigate damages, and that the attorney fee award should be reduced from 1/3 to ¼ of any award for business loss.

We affirm.

LESSEE'S RIGHT OF ACTION

In 1978, Jim Holland began operating a Texaco full-service gas station on property leased from Texaco, Inc., at the corner of Kings Highway and Southern Avenue in Shreveport. Holland's father, who retired in late 1977, operated the business before Holland.

The first of Holland's four leases with Texaco was for one year (1978). Each succeeding lease was for three years (1979-1981, 1982-1984, 1985-1987). The lease in effect when the State bought the property from Texaco in April 1985 was executed in August 1984, for a three-year term beginning January 1, 1985. The lease was not recorded in the public records.

The State concedes that Holland's claim for constitutional compensation is not defeated by the fact that the lease was not recorded, nor by the fact that the State bought the property in lieu of expropriation. State Dept. of Transp. & Development v. Jacob, 483 So.2d 592 (La.1986); Soma Enterprises v. State, D.O.T. & Dev., 521 So.2d 829 (La.App. 2d Cir.1988), writ denied.

The State's argument that Holland has no right of action is founded on paragraph 17 of the lease:

In the event of an appropriation of all of the leased premises, this lease shall immediately terminate by limitation and be of no further force or effect as of the date the premises are actually physically occupied by the condemnor.

The lease defines "appropriation" to include a voluntary transfer "made in lieu or avoidance of an exercise of the power of eminent domain." It also provides that in the event of an "appropriation,"

lessor shall be entitled to the entire award including, but not limited to, compensation, damages, and interest, if any, made with respect to the appropriation, and lessee hereby assigns to lessor all of lessee's interest, if any, in and to all and any part of such award unless ... this lease is terminated as the result of an appropriation and an award is made specifically for loss of business opportunity or goodwill, in which event lessor shall fairly apportion such award between lessor and lessee. (Our emphasis.)

The State does not contend that its payment to Texaco for property included any amount for "loss of business opportunity." The State concedes that, as a general rule, lessees of property taken by the State may claim compensation for business loss under Art. 1, § 4 of the 1974 Louisiana Constitution. State, Dept. of Transp. & Dev. v. Exxon Corp., 430 So.2d 1191 (La.App. 1st Cir.1983), writs denied.

The State argues, however, that Holland has no right of action to claim compensation for business loss through the end of the lease term because he agreed to the resolutory condition in the lease that the lease would terminate "immediately ... in the event of an appropriation," citing State D.O.T. & Development v. Orleans Oil, 520 So.2d 1163 (La.App. 3d Cir.1987), writ denied.

In Orleans Oil, the lessees intervened in the expropriation proceeding against the landowner to claim "compensation for the loss of their leasehold interest." The appellate court affirmed a judgment sustaining an exception of no right of action, filed jointly by the landowner and the State. The court noted that the 1979 lease had an initial six-month term, after which it was to continue "until terminated by either party upon notice in writing given at least ten days prior to effective date of termination."

In 1984, the lessor, Orleans Oil Company, gave the lessees notice that "it is now virtually certain that the State will go forward with the expropriation ... [and that] effective upon the date of any such taking,... all ... leases ... Orleans has with you shall terminate."

The State's petition for expropriation was filed two weeks after Orleans Oil *730 mailed the termination notice to the lessees. The court found that the lease terminated at that time as the State went "forward with the expropriation."

The resolutory condition occurred and the lease obligation came to an end. That the taking was not complete until [the State deposited its estimate of compensation in the registry of the court a few days later] is of no moment.... [I]ntervenors are protected by no lease whatsoever for ... the lease terminated upon DOTD initiating the expropriation proceeding. 520 So.2d at 1164-1165.

In a footnote following this text, the court noted that elsewhere in the lease, the parties agreed that the lease "shall automatically terminate ... if Lessor's estate in said property shall for any reason terminate (whether due to the acts of Lessor or otherwise) during the term of this lease[.]" The court found this provision to be consistent with CC Art. 2697, which provides in part that the lease "is at an end" if the property is taken for a public purpose during the lease term. The footnote ends with these remarks:

Therefore, even if Orleans had not notified Intervenors of the termination of the lease upon the State going "forward with the expropriation" (June 28, 1984), the lease would have terminated under the afore quoted "self-destruct" clause on July 3, 1984, at the moment the State deposited the estimate in the registry of the court. See LSA-R.S. 48:445. Without a lease, Intervenors lack a legal interest in the suit. Fn. 2, 520 So.2d at 1165.

The reasoning in the Orleans Oil footnote follows, without citing, State Department of Highways v. Sumrall, 167 So.2d 503 (La.App. 1st Cir.1964), writs denied. There, the court reversed an award to the lessee of the expropriated property with this brief discussion:

The lessees in [this] case ... are not entitled to recover any amount for the reason that their written and recorded lease contains the following language:
"In the event said premises are either taken for public purposes or the zoning is changed so as to prohibit the premises being used for a service station, then and in those events, this lease is automatically cancelled; provided, the above events are actually accomplished." 167 So.2d at 509.

Sumrall,

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Parish of Jefferson v. Powerline, LLC
131 So. 3d 250 (Louisiana Court of Appeal, 2013)
Avenal v. State
757 So. 2d 1 (Louisiana Court of Appeal, 2000)
Franklin Southland Printing v. Noab
739 So. 2d 977 (Louisiana Court of Appeal, 1999)
Huckabay v. Red River Waterway Com'n
663 So. 2d 414 (Louisiana Court of Appeal, 1995)
STATE, DOTD v. Morein
628 So. 2d 1191 (Louisiana Court of Appeal, 1993)
Red River Waterway Com'n v. Fry
628 So. 2d 38 (Louisiana Court of Appeal, 1993)
Packard's Western Store, Inc. v. STATE, DOT
618 So. 2d 1166 (Louisiana Court of Appeal, 1993)
Holland v. State Department of Transportation
559 So. 2d 125 (Supreme Court of Louisiana, 1990)

Cite This Page — Counsel Stack

Bluebook (online)
554 So. 2d 727, 1989 La. App. LEXIS 2464, 1989 WL 150173, Counsel Stack Legal Research, https://law.counselstack.com/opinion/holland-v-state-dept-of-transp-lactapp-1989.