NOT DESIGNATED FOR PUBLICATION
STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT
08-809
JACOB FLOYD, ET AL.
VERSUS
PALM HARBOR HOMES, INC., ET AL.
********** APPEAL FROM THE THIRTEENTH JUDICIAL DISTRICT COURT PARISH OF EVANGELINE, NO. 69294-B HONORABLE THOMAS F. FUSELIER, DISTRICT JUDGE **********
CHRIS J. ROY, SR.1 JUDGE
**********
Court composed of Michael G. Sullivan, Elizabeth A. Pickett, and Chris J. Roy, Sr., Judges.
AFFIRMED.
Jonathan Clyde Vidrine West & Vidrine P. O. Drawer 1019 Ville Platte, LA 70586 (337) 363-2772 Counsel for Plaintiffs/Appellees: Jacob Floyd Courtney Floyd
Lee H. Ayres Ayres, Warren, Shelton Post Office Box 1764 Shreveport, LA 71166-1764 (318) 227-3500
1 Judge Chris J. Roy, Sr. appointed judge pro tempore of the Court of Appeal, Third Circuit. Counsel for Defendants/Appellants: Palm Harbor Homes, Inc. Palm Harbor Manufacturing, L.P. Roy, Judge (pro tempore).
The defendants, Palm Harbor Homes, Inc. and Palm Harbor Manufacturing,
L.P. (Palm Harbor), appeal the trial court’s denial of their Exception of Prematurity
and Petition to Compel Arbitration. Palm Harbor seeks to examine an arbitration
provision executed by plaintiffs, Jacob and Courtney Floyd, under federal law, so that
only the validity of the arbitration provision itself is considered here. Such an
examination, Palm Harbor argues, requires this action to be referred to arbitration at
this point and for this lawsuit to be stayed pending arbitration. However, Palm
Harbor fails to consider whether the contract meets the requirements of a sale under
Louisiana law. For the following reasons, we affirm the trial court’s denial of the
exception and petition.
PROCEDURAL AND FACTUAL BACKGROUND
In April 2007, the Floyds traveled to Vidor, Texas to shop for and purchase a
mobile home to be delivered to their property in Chataignier, Louisiana. After close
inspection of a particular peach home with white trim at the Palm Harbor yard, the
Floyds decided to purchase that home. The Floyds noted “no blemishes or anything
that [they] couldn’t . . . deal with . . . the small things that were wrong [they] could
deal with.” Palm Harbor placed a "sold" sign on that home, wrote the Floyds’ names
on a wall chart next to the entry for that particular home, and told the Floyds no one
would even enter that home until it was delivered to them. That was the home the
Floyds wanted and agreed to purchase.
The Floyds signed the necessary paperwork to purchase the mobile home in
May 2007 at an attorney’s office in Ville Platte, Louisiana. In June 2007, Jacob
signed an agreement to arbitrate “any and all controversies or claims arising out of,
or in any way relating to, the Retail Installment Contract or Cash Sale Contract or the
1 negotiation, purchasing, financing, installation, ownership, occupancy, habitation,
manufacture, warranties (express or implied), repair or sale/disposition of the home
which is the subject of the Retail Installment Contract or Cash Sale Contract”
according to the rules and procedures of the American Arbitration Association and
“applicable state law.” (Emphasis added). Palm Harbor would not deliver the home
unless or until the papers were signed.
Once the paperwork was complete, Palm Harbor delivered a blue mobile home
with white trim from Lafayette, Louisiana, not the peach mobile home with white trim
from Vidor, Texas. The delivered home included a number of flaws, totally different
colors, and several fixtures very different from those in the home the Floyds had
selected.
To date, the Floyds have refused to accept the home Palm Harbor delivered to
them and placed on their property, and they have never moved into it. Because of
their financing agreement, however, they have made monthly payments on it, and
apparently continue to do so. Although Palm Harbor offered to replace the delivered
home with another one, it apparently was unable to deliver the particular home the
Floyds selected and agreed to purchase.
The record of this matter indicates Palm Harbor inserted the serial number of
the home it actually delivered in the sales contract prepared either by them or on their
behalf, even though the home delivered was not the home Palm Harbor knew the
Floyds had selected and intended to purchase.2 The papers were signed in Ville Platte
approximately a month after the Floyds selected their home in Vidor, and no home
had yet been delivered at the time the papers were signed. Thus, the Floyds had no
way to determine whether the serial number Palm Harbor used in the contract was the
2 The sales contract itself does not appear in the record of this matter.
2 same as the serial number of the home they intended to purchase. Of course, as we
now know, it was not.
The Floyds filed suit alleging, inter alia, fraud under La.Civ.Code art. 1953,
claiming that Palm Harbor fraudulently planned to sell and deliver a home it knew
the Floyds did not agree to purchase. Palm Harbor filed a Dilatory Exception of
Prematurity and a Petition to Compel Arbitration. The trial court denied both
motions. Palm Harbor thereafter applied for a supervisory writ with this court; that
application was denied because the trial court’s judgment was properly appealable.
See Floyd v. Palm Harbor Homes, Inc., an unpublished writ bearing docket number
08-439 (La.App. 3 Cir. 6/5/08). Thus, this court treated the application for
supervisory writ as a timely filed motion and order for appeal. Palm Harbor assigns
as error the trial court’s failure to grant its Dilatory Exception of Prematurity and
Petition to Compel Arbitration and the trial court’s failure to stay further proceedings
in this action in favor of arbitration.
DISCUSSION
We review questions of law de novo. Louisiana Municipal Association v.
State, 04-227 (La.1/19/05), 893 So.2d 809. The trial court found no valid underlying
contract existed, and thus, held the arbitration agreement does not apply. We agree
with the trial court’s result. We take care not to address, comment on, or imply
anything pertaining or related to the merits of the allegations of fraud made by the
Floyds, a matter yet to be considered by the trial court.
Palm Harbor’s argument that the issue of arbitrability itself must be decided
under federal law relies greatly on Williams v. Litton, 03-805 (La.App. 3 Cir.
12/23/03), 865 So.2d 838. Williams dealt with the arbitrability of controversies
arising out of the underlying contract and discussed whether the federal law of
3 arbitration applied to determine the issue of fraud in the inducement of the underlying
contract. We need not address the issue of fraud in the inducement of the contract
here, however, because the underlying contract fails on other grounds. Thus, Williams
is distinguishable from this case.
A contract of sale requires an object, a price, and the consent of the parties.
La.Civ.Code art. 2439. Such a contract is governed by the law of conventional
obligations when no particular provision is made for a contract of sale. La.Civ.Code
art. 2438. Under the law of conventional obligations, error vitiates consent “when it
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NOT DESIGNATED FOR PUBLICATION
STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT
08-809
JACOB FLOYD, ET AL.
VERSUS
PALM HARBOR HOMES, INC., ET AL.
********** APPEAL FROM THE THIRTEENTH JUDICIAL DISTRICT COURT PARISH OF EVANGELINE, NO. 69294-B HONORABLE THOMAS F. FUSELIER, DISTRICT JUDGE **********
CHRIS J. ROY, SR.1 JUDGE
**********
Court composed of Michael G. Sullivan, Elizabeth A. Pickett, and Chris J. Roy, Sr., Judges.
AFFIRMED.
Jonathan Clyde Vidrine West & Vidrine P. O. Drawer 1019 Ville Platte, LA 70586 (337) 363-2772 Counsel for Plaintiffs/Appellees: Jacob Floyd Courtney Floyd
Lee H. Ayres Ayres, Warren, Shelton Post Office Box 1764 Shreveport, LA 71166-1764 (318) 227-3500
1 Judge Chris J. Roy, Sr. appointed judge pro tempore of the Court of Appeal, Third Circuit. Counsel for Defendants/Appellants: Palm Harbor Homes, Inc. Palm Harbor Manufacturing, L.P. Roy, Judge (pro tempore).
The defendants, Palm Harbor Homes, Inc. and Palm Harbor Manufacturing,
L.P. (Palm Harbor), appeal the trial court’s denial of their Exception of Prematurity
and Petition to Compel Arbitration. Palm Harbor seeks to examine an arbitration
provision executed by plaintiffs, Jacob and Courtney Floyd, under federal law, so that
only the validity of the arbitration provision itself is considered here. Such an
examination, Palm Harbor argues, requires this action to be referred to arbitration at
this point and for this lawsuit to be stayed pending arbitration. However, Palm
Harbor fails to consider whether the contract meets the requirements of a sale under
Louisiana law. For the following reasons, we affirm the trial court’s denial of the
exception and petition.
PROCEDURAL AND FACTUAL BACKGROUND
In April 2007, the Floyds traveled to Vidor, Texas to shop for and purchase a
mobile home to be delivered to their property in Chataignier, Louisiana. After close
inspection of a particular peach home with white trim at the Palm Harbor yard, the
Floyds decided to purchase that home. The Floyds noted “no blemishes or anything
that [they] couldn’t . . . deal with . . . the small things that were wrong [they] could
deal with.” Palm Harbor placed a "sold" sign on that home, wrote the Floyds’ names
on a wall chart next to the entry for that particular home, and told the Floyds no one
would even enter that home until it was delivered to them. That was the home the
Floyds wanted and agreed to purchase.
The Floyds signed the necessary paperwork to purchase the mobile home in
May 2007 at an attorney’s office in Ville Platte, Louisiana. In June 2007, Jacob
signed an agreement to arbitrate “any and all controversies or claims arising out of,
or in any way relating to, the Retail Installment Contract or Cash Sale Contract or the
1 negotiation, purchasing, financing, installation, ownership, occupancy, habitation,
manufacture, warranties (express or implied), repair or sale/disposition of the home
which is the subject of the Retail Installment Contract or Cash Sale Contract”
according to the rules and procedures of the American Arbitration Association and
“applicable state law.” (Emphasis added). Palm Harbor would not deliver the home
unless or until the papers were signed.
Once the paperwork was complete, Palm Harbor delivered a blue mobile home
with white trim from Lafayette, Louisiana, not the peach mobile home with white trim
from Vidor, Texas. The delivered home included a number of flaws, totally different
colors, and several fixtures very different from those in the home the Floyds had
selected.
To date, the Floyds have refused to accept the home Palm Harbor delivered to
them and placed on their property, and they have never moved into it. Because of
their financing agreement, however, they have made monthly payments on it, and
apparently continue to do so. Although Palm Harbor offered to replace the delivered
home with another one, it apparently was unable to deliver the particular home the
Floyds selected and agreed to purchase.
The record of this matter indicates Palm Harbor inserted the serial number of
the home it actually delivered in the sales contract prepared either by them or on their
behalf, even though the home delivered was not the home Palm Harbor knew the
Floyds had selected and intended to purchase.2 The papers were signed in Ville Platte
approximately a month after the Floyds selected their home in Vidor, and no home
had yet been delivered at the time the papers were signed. Thus, the Floyds had no
way to determine whether the serial number Palm Harbor used in the contract was the
2 The sales contract itself does not appear in the record of this matter.
2 same as the serial number of the home they intended to purchase. Of course, as we
now know, it was not.
The Floyds filed suit alleging, inter alia, fraud under La.Civ.Code art. 1953,
claiming that Palm Harbor fraudulently planned to sell and deliver a home it knew
the Floyds did not agree to purchase. Palm Harbor filed a Dilatory Exception of
Prematurity and a Petition to Compel Arbitration. The trial court denied both
motions. Palm Harbor thereafter applied for a supervisory writ with this court; that
application was denied because the trial court’s judgment was properly appealable.
See Floyd v. Palm Harbor Homes, Inc., an unpublished writ bearing docket number
08-439 (La.App. 3 Cir. 6/5/08). Thus, this court treated the application for
supervisory writ as a timely filed motion and order for appeal. Palm Harbor assigns
as error the trial court’s failure to grant its Dilatory Exception of Prematurity and
Petition to Compel Arbitration and the trial court’s failure to stay further proceedings
in this action in favor of arbitration.
DISCUSSION
We review questions of law de novo. Louisiana Municipal Association v.
State, 04-227 (La.1/19/05), 893 So.2d 809. The trial court found no valid underlying
contract existed, and thus, held the arbitration agreement does not apply. We agree
with the trial court’s result. We take care not to address, comment on, or imply
anything pertaining or related to the merits of the allegations of fraud made by the
Floyds, a matter yet to be considered by the trial court.
Palm Harbor’s argument that the issue of arbitrability itself must be decided
under federal law relies greatly on Williams v. Litton, 03-805 (La.App. 3 Cir.
12/23/03), 865 So.2d 838. Williams dealt with the arbitrability of controversies
arising out of the underlying contract and discussed whether the federal law of
3 arbitration applied to determine the issue of fraud in the inducement of the underlying
contract. We need not address the issue of fraud in the inducement of the contract
here, however, because the underlying contract fails on other grounds. Thus, Williams
is distinguishable from this case.
A contract of sale requires an object, a price, and the consent of the parties.
La.Civ.Code art. 2439. Such a contract is governed by the law of conventional
obligations when no particular provision is made for a contract of sale. La.Civ.Code
art. 2438. Under the law of conventional obligations, error vitiates consent “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.Civ.Code art.
1949.
Here, the parties were never in agreement as to the object of the sale. The
Floyds intended to and contracted to purchase the peach mobile home from Vidor.
Palm Harbor intended and contracted to sell the Floyds the blue mobile home from
Lafayette. We find the Floyds would never have incurred an obligation under the
purported contract of sale and would never have agreed to the arbitration provision,
had they known the object of the sale was the blue home and not the peach one.
Further, we find Palm Harbor knew the Floyds expected the cause of their obligation
to be the peach home and not the blue one. Thus, two of the required elements of a
contract of sale are absent here.
This case does not involve any alleged breach or invalidity of any particular
term or provision of the underlying contract. It does not involve a claim or
controversy arising out of the contract or a dispute relating to “the home which is the
subject of” the underlying contract. Those are the types of disputes contemplated by
the arbitration provision. Rather, this case involves the alleged fraudulent actions of
4 Palm Harbor outside the contract—actions that nullified the terms and conditions of
Palm Harbor’s agreement with the Floyds. We therefore decline to apply an
arbitration provision where the parties did not agree as to the object of the sale and
where Palm Harbor knew the Floyds would not have been willing to incur an
obligation for the blue mobile home delivered to them.
The underlying purported contract is invalid. Thus, an agreement to arbitrate
disputes arising out of the purported contract is likewise invalid. Easterling v. Royal
Manufactured Housing, LLC, 07-192 (La.App. 3 Cir. 6/6/07), 963 So.2d 399. It is
not necessary to address whether federal or state law determines the arbitrability of
the contract, or whether arbitration should determine whether there was fraud in the
inducement of the contract, as Palm Harbor wants us to do, where no contract ever
existed in the first place.
No contract of sale is involved here. Whether fraud is involved is an issue for
the trial court to determine on the merits of this case.
CONCLUSION
An agreement to arbitrate disputes arising out of a contract or the object of the
contract cannot be enforced where the underlying contract is invalid according to
Louisiana law because it lacks the required elements of a sale and because of a vice
of consent. Easterling, 963 So.2d 399. There is simply nothing to arbitrate in this
case. Therefore, the trial court correctly denied Palm Harbor’s Exception of
Prematurity and Petition to Compel Arbitration and correctly declined to stay these
proceedings in favor of arbitration. Accordingly, we affirm the decision of the trial
court.