Investor Inns, Inc. v. Wallace

408 So. 2d 978
CourtLouisiana Court of Appeal
DecidedDecember 7, 1981
Docket14728
StatusPublished
Cited by11 cases

This text of 408 So. 2d 978 (Investor Inns, Inc. v. Wallace) 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
Investor Inns, Inc. v. Wallace, 408 So. 2d 978 (La. Ct. App. 1981).

Opinion

408 So.2d 978 (1981)

INVESTOR INNS, INC., Plaintiff-Appellee,
v.
Melvin J. WALLACE, d/b/a El Pollino Mexican Food Restaurants, Defendant-Appellant.

No. 14728.

Court of Appeal of Louisiana, Second Circuit.

December 7, 1981.

*979 Goff & Goff by A. K. Goff, Jr., Ruston, for defendant-appellant.

Grant, Scott, Dean & Kneipp by Donald L. Kneipp, Monroe, for plaintiff-appellee.

Before PRICE, MARVIN and FRED W. JONES, Jr., JJ.

PRICE, Judge.

Defendant, a non-resident, appeals a judgment evicting him from certain leased premises for failure to timely pay rent. We affirm.

On December 12, 1974, defendant, Melvin J. Wallace, entered into a contract for the lease of restaurant facilities owned by plaintiff-corporation, Investor Inns, Inc., whose sole stockholder is Joe Bailey Grant. This lease, for a primary term of five years, was ultimately extended for an additional eight years pursuant to the provisions of the original agreement.

Under the terms of the lease, rental payments were to be calculated as a fixed percentage of the monthly gross receipts from the restaurant business. Rent was due and payable by the 20th day of each succeeding month. The agreement also contained the following provision regarding payment of rent:

... [I]f lessee should default in the payment of any two (2) consecutive installments of rent, Lessor may at its option declare all remaining installments of rent due and exigible and bring suit to enforce collection thereof or may demand the cancellation of this lease and of all rights and obligations of the parties hereunder.

During the course of the lease, defendant was frequently late in meeting his monthly rental obligations. On several occasions checks tendered by defendant for payment of rent were returned unpaid because of a lack of sufficient funds. However, at no time did defendant fail to pay two consecutive months rent within the time frame provided until the incident which precipitated this proceeding.

The December 1980 rent, due by January 20, 1981, was not timely paid by defendant. Sometime in early February 1981, plaintiff received a check drawn on a Texas bank for $5,695.55 which purported to be payment for the December 1980 rent. On February 20, 1981, the due date for January's rent, *980 Joe Bailey Grant flew to Texas and personally presented the December 1980 rent check to the bank for payment. Payment was refused because of insufficient funds to cover the obligation. At this point, defendant had failed to timely pay two consecutive months rent, thereby activating lessor's option to cancel the lease.

A five-day notice to vacate the leased premises was mailed to defendant on February 23, 1981, which was received February 25, 1981. Plaintiff filed this eviction proceeding on February 24, 1981, alleging that since defendant had defaulted in payment of two consecutive rent installments, plaintiff was entitled to cancellation of the lease agreement. Personal jurisdiction over the non-resident defendant was obtained by use of the long arm statute (La. R.S. 13:3201 et seq.). Accordingly, certified copies of the citation and rule were served on defendant by certified mail.

On March 5, 1981, defendant filed an exception to the use of the long arm statute in a summary proceeding. Subsequently, defendant filed an exception of no cause of action and plea of prematurity, contending that any breach of the lease was passive, requiring a prior putting in default before institution of suit. Defendant also answered plaintiff's suit and plead two affirmative defenses:

(1) compensation or set-off which allegedly occurred because of amounts owed by plaintiff to defendant in excess of the rent owed; and

(2) customary acquiescence by plaintiff in accepting late rental payments without complaint which has allegedly altered the lease provisions pertaining to collection of rent.

After argument the exceptions of improper use of summary procedure and no cause of action were overruled. The plea of prematurity was referred to the merits.

Thereafter, on April 23, 1981, the rule for eviction was heard. At the conclusion of the trial of the rule, judgment was granted in favor of the plaintiff. The trial court found there had been no acquiescence in acceptance of late rental payments because under the terms of the lease, plaintiff was forced to accept all late rental payments unless defendant was overdue with two consecutive months rent. The court further found defendant had taken advantage of this situation in the past and often attempted to pay rent with insufficient checks which were paid before the next rental installment came due. The trial court rejected the claim of compensation since defendant failed to prove that all of his claims were liquidated, which is a prerequisite for a plea of compensation.

The court also noted that plaintiff had failed to comply with La.C.C.P. Art. 4701, which requires a five-day notice to vacate before institution of eviction proceedings. However, since defendant did not raise lack of proper notice as a defense, the court deemed this requirement waived.

On appeal, the following issues are raised:

(1) Was it permissible to use the long arm statute to gain personal jurisdiction over a non-resident in this summary eviction proceeding?

(2) Did defendant effectively waive the notice requirement provided for by La.C.C.P. Art. 4701?

(3) Under this particular lease agreement, is the non-payment of rent a passive breach which requires a putting in default before institution of suit?

(4) Was the trial court correct in denying defendant's claim of compensation or set off?

(5) Was a custom of accepting late rental payments by plaintiff proved?

(6) Should the trial court have exercised judicial control and have found the lease could not be dissolved for untimely payment of rent?

USE OF LONG ARM STATUTE

Citing this court's decision in Clay v. Clay, 369 So.2d 1199 (La.App.2d Cir. 1979), defendant contends the long arm statute cannot be used to gain personal jurisdiction over a non-resident in an eviction proceeding.

*981 In Clay, plaintiffs sought a writ of quo warranto directing a non-resident defendant to show by what authority he held certain corporate offices in a Louisiana corporation. Defendant received certified copies of the pleadings on August 3, 1978. The writ was made returnable on August 9, 1978. Prior to the hearing on the writ, defendant excepted to the jurisdiction of the court, contending the long arm statute was not applicable in summary proceedings, and that he received no citation as required by the statute. The trial court overruled the exception and the quo warranto proceedings were heard on August 9.

In reversing the trial court and sustaining defendant's exception, this court found that the long arm statute was not intended to be used to assert jurisdiction over non-residents in summary proceedings in instances where the defendant is ordered to appear in less than 10 days. The decision should be interpreted to limit the availability of the long arm statute in summary proceedings only when the non-resident is not afforded the same delays he would be entitled to in ordinary proceedings.

The Supreme Court in Clay v. Clay, 389 So.2d 31 (La.1979) sustained defendant's exception to jurisdiction for reasons closely akin to those set out by this court. The Supreme Court held that personal jurisdiction did not attach over the defendant because the service of process did not comport with the service provisions of the long arm statute (La.R.S.

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Bluebook (online)
408 So. 2d 978, Counsel Stack Legal Research, https://law.counselstack.com/opinion/investor-inns-inc-v-wallace-lactapp-1981.