Jackson v. Fontenot Building, Inc.

314 So. 2d 516
CourtLouisiana Court of Appeal
DecidedSeptember 25, 1975
Docket10259 and 10260
StatusPublished
Cited by7 cases

This text of 314 So. 2d 516 (Jackson v. Fontenot Building, 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
Jackson v. Fontenot Building, Inc., 314 So. 2d 516 (La. Ct. App. 1975).

Opinion

314 So.2d 516 (1975)

Dr. Allen JACKSON
v.
FONTENOT BUILDING, INC.
FONTENOT BUILDING, INC.
v.
Dr. Allen JACKSON.

Nos. 10259 and 10260.

Court of Appeal of Louisiana, First Circuit.

May 19, 1975.
Rehearing Denied June 30, 1975.
Writ Refused September 25, 1975.

*517 George & George, Ltd., James A. George, Baton Rouge, for Jackson.

Mengis, Roberts, Durant & Carpenter, Warren L. Mengis, Baton Rouge, Teddy W. Airhart, Jr., Baton Rouge, for Fontenot Building, Inc.

Before SARTAIN, ELLIS and BARNETTE, JJ.

BARNETTE, Judge.

On March 17, 1972 Dr. Allen Jackson entered into a contract with Fontenot Building, Incorporated whereby Dr. Jackson purchased certain facilities and equipment for the operation of a car wash business. By the terms of the contract he also leased from Fontenot the realty upon which the car wash facility was located.

Dr. Jackson brought suit against Fontenot May 18, 1973, seeking annullment and rescission of the contract based on allegations of lack of consent resulting from error of motive and fact and "false and/or fraudulent" representations bearing upon material facts and the principal reason for entering into the contract.

On March 14, 1974, Fontenot filed suit against Dr. Jackson seeking to invoke the acceleration clause of the lease agreement and for judgment in the amount of $28,755.50 with interest.

The two suits were consolidated for trial and are now before us on appeal by Dr. Jackson.

*518 The trial court judge gave written reasons for judgment. We are in complete agreement with him on every aspect of the case and find his statement of the case, the analysis of the issues, findings of fact and application of the pertinent law and jurisprudence to be complete in every respect and the conclusion reached well founded. We adopt the same as the opinion and judgment of this Court.

"In these consolidated suits the primary question at issue is whether or not Dr. Allen Jackson is entitled on the basis of error in the motive and/or fraud to nullify and rescind contracts entered into by and between himself and Fontenot Building, Inc., and by virtue of which he purchased a car wash structure with equipment and leased the realty upon which it is located.
"We find the following facts in this case. In 1971 Fontenot Building, Inc., through its President, Emery J. Fontenot, was contacted by William Maeser, Baton Rouge realtor, who inquired as to whether several car wash businesses owned by the corporation might be placed on the market for sale. Mr. Fontenot informed Maeser that he was not interested in selling certain locations but would consider selling others. The contact by Maeser did result in Maeser obtaining a listing agreement authorizing him to find buyers for the realty, structures and equipment at two locations, one on Acadian Thruway at Fairfields and one on Highland Road. While the exact details are unclear, it appears that Maeser asked Fontenot for certain financial information relative to the businesses so that he might pursue his role as broker. Fontenot's office did furnish Maeser with certain figures but the exact figures furnished and their precise source are not established. Mr. Fontenot's secretary had access only to sales tax reports and deposit records either or both of which would reflect gross receipts. Accounting records, such as profit and loss statements, were not available to the secretary. We can only conclude that the secretary did furnish Mr. Maeser with some information but did not have access to and could not, therefore, have furnished him with such proper accounting items as depreciation and operating expenses which would be necessary to reflect an accurate financial picture.
"Subsequently, Maeser made an appointment with Dr. Jackson for the purpose of discussing business. He at first attempted to get Dr. Jackson interested in buying apartment houses. Failing in that, he then attempted to interest Dr. Jackson in a combination lease-purchase arrangement of six car wash locations, including the two owned by Fontenot Building, Inc. In furtherance of the latter possibility, Maeser furnished to and discussed with Dr. Jackson the information shown on the exhibits introduced into evidence as Dr. Jackson 1, 2 and 3. These exhibits had been prepared by Maeser prior to his seeing Dr. Jackson.
"A close analysis of the three exhibits show conclusively that Maeser's initial approach to dealing with the Fontenot properties envisioned the lease of the land, not the sale thereof as authorized by the listing agreement. Also, the exhibits, corroborated by the testimony of Dr. Jackson, show that the Fontenot properties were only part of a single proposed deal involving all six businesses listed thereon. Investment aspects evidenced by the exhibits include such matters as rate of return, equity income, cost basis, taxable income, tax brackets, expenses, interest, depreciation and ownership. Clearly, the information evidenced by the aforesaid exhibits, as well as the lease-purchase vehicle proposed, is keyed to the type investment which has due regard for the minimizing of income taxes, including the possible reduction of income taxes on earnings from other sources. Additionally, the exhibits show *519 that three owners of the properties were apparently contemplated, that the car wash business in general was undergoing a sharp decline in recent years, and that the two properties of Fontenot in particular had suffered greatly decreased profits during the period from 1967 through 1971.
"Comparing the cash receipt figures on the aforesaid exhibits with those evidenced by Fontenot's sales tax reports which are also admitted into evidence establishes that the former are erroneous in that they greatly exceed the actual receipts. As stated, the exact source of these erroneous figures, as well as the expense figures, cannot be explained from the evidence. We are satisfied that Maeser informed Jackson that the figures were obtained from the various owners.
"At the first meeting between Jackson and Maeser, Jackson asked Maeser why, if it was such a good deal, didn't he join with him in buying the several locations. To this Maeser agreed and from thereon the two men proceeded together with their plans to engage in the car wash business. It was decided by them that they would limit their joint investment to the two locations owned by Fontenot and that Maeser would maintain and operate the premises. Maeser returned to Fontenot with proposals to effectuate the lease of the land and the purchase of the other assets. After negotiations, Fontenot agreed to lease and sell. Shortly before consummation of the deal it was ascertained that Maeser was having financial difficulties and it was then decided that instead of dealing jointly with the properties, Jackson would separately acquire the location at Fairfields and Acadian and Maeser would separately acquire the Highland Road location. Maeser, however, was still to operate and maintain both locations. With this final arrangement in mind, Jackson was advised by Maeser of a scheduled conference in the office of a local attorney for the stated purpose of discussing the transaction. Upon arriving, Jackson was somewhat surprised to learn that the real purpose of the meeting was to consummate the lease and purchase. The attorney, whose fee was paid jointly by Jackson and Maeser and who was in no way retained by or connected with Fontenot, completed the necessary documents and they were finally executed.

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