Latter & Blum, Inc. v. Obolensky

288 So. 2d 370, 1974 La. App. LEXIS 3825
CourtLouisiana Court of Appeal
DecidedJanuary 8, 1974
DocketNo. 5876
StatusPublished
Cited by5 cases

This text of 288 So. 2d 370 (Latter & Blum, Inc. v. Obolensky) 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
Latter & Blum, Inc. v. Obolensky, 288 So. 2d 370, 1974 La. App. LEXIS 3825 (La. Ct. App. 1974).

Opinion

SAMUEL, Judge.

Plaintiff is a real estate brokerage firm. The defendant is the owner and lessor of a building located at 516-524 Royal Street in New Orleans. The object of plaintiff’s suit is to recover brokerage commissions claimed by it under an April 25, 1949 agreement between it and the defendant. A summary judgment in favor of the plaintiff was remanded by this court for further proceedings.1 Following remand and after a trial on the merits, the district court rendered judgment ordering defendant to pay plaintiff brokerage commissions of 6% of the rental received for the 10 year period commencing October 1, 1969, together with an identical commission for an additional 10 years in the event the lessee should exercise an option to renew the lease. The defendant has appealed.

On April 19, 1949, defendant leased the property to WDSU Broadcasting Services, Inc. for 10 years. The lease contained two 5-year renewal options, with the second renewal period ending on September 30, 1969. On April 25, 1949, defendant consented by letter agreement prepared by a representative of the plaintiff, in consideration of its services in negotiating the lease with privilege of renewal, to compensate the plaintiff by granting it a commission of 6% of the monthly rent collected during the term of the lease, “and/or any extensions or renewals thereof.”

The lease was assigned on several occasions, and either the original lessee or an assignee exercised both renewal options. On June 19, 1965, during the term of the second renewal option of the 1949 lease, the defendant owner and Royal Street Corporation, an assignee of the original lessee, executed an agreement by which the lessee was permitted to remain on the property for an additional 10 year period commencing September 30, 1969, the termination of the second renewal period of the 1949 lease. This agreement also contained an option allowing the lessee to renew for an additional period of 10 years beyond September 30, 1979. While the document grants to the lessee an extension of the existing lease, it does contemplate the drafting of a new lease.2

The only testimony on behalf of plaintiff is that of Shepard M. Latter, one of its firm members. He testified he handled the negotiations for the 1949 lease, but admit[372]*372ted he had nothing whatsoever to do with the 1965 agreement or with the negotiations which culminated in the execution of that agreement. It was stipulated that if the defendant herself were present, she would testify she had no independent recollection of the 1949 letter agreement other than that it was submitted to her for her signature and that she did in fact sign it.

The only issue before us is whether the 1965 agreement was a new contract or merely an extension or renewal of the April 25, 1949 lease agreement. If it is a new contract, plaintiff is not entitled to recover; if it is merely an extension or a renewal of the old contract, plaintiff is entitled to recover a 6% commission on the monthly rental collected during such extension or renewal. We hold that the 1965 agreement was a new contract and that the ruling of the trial court must be reversed.

The defendant’s property is adjacent to the Royal-0 rleans Hotel. During the construction of that building there was substantial damage to the leased property as well as to other properties in the surrounding area. Consequently, numerous law suits were filed, including: (1) a suit for $91,367 by the present defendant for damages to the property in suit against the owners of the hotel, the contractors involved in its construction, and their respective insurance companies; (2) a suit against the present defendant by her tenant for $62,921, representing the amount allegedly necessary to effect repair of the building, or alternatively, for a judgment directing the defendant to repair the building herself, together with a demand for $25,500 representing losses caused by the tenant’s interruption of business;3 and (3) two other suits by the owners of properties at 535 Chartres Street and 615 Toulouse Street, located next to the defendant’s building, for damages to these buildings caused by the hotel construction.

The defendants or cross defendants, being primarily the owner, contractors, and various insurers connected with construction of the Royal-Orleans Hotel, proposed a settlement or compromise by which they offered the sum of $61,766.03 in settlement of all claims and cross claims. From this sum, $4,911.57 was paid to the lessee and owners of the adjacent properties for emergency repairs by the lessee and for damages to 535 Chartres Street and 615 Toulouse Street. In addition the sum of $3,143 was paid to the lessee to reimburse it for expenses incurred in shoring part of the defendant’s building known as the “slave quarters”. The remaining sum of $53,711.46 was deposited in a bank to be used only for the repair of the defendant’s property. The agreement between defendant and her lessee provided that the latter was to hire and supervise architects and contractors in effecting repairs to the defendant’s building, and the lessee agreed to absorb any additional cost in repairing the building in excess of the sum designated for that purpose. A further condition of the agreement was that the defendant consent to the lessee’s continuation of occupancy of the premises for an additional 10 year period to commence at the expiration of the 1949 lease on September 30, 1969. The rental for this original 10 year period was fixed at the sum of $18,000 per year, as opposed to the $12,000 per year paid under the 1949 lease. The parties also agreed the lessee should have an option for still an additional 10 year period at a rental to be determined by arbitration in the event of their inability to agree on a renewal rental. Moreover, the lessee agreed to assume the risk of business interruption during the construction and repair of the building, at no risk or expense to the defendant.

In the 1965 agreement the parties recognized that the nature of the building had changed from apartment house use to use [373]*373as an office building. The 1949 lease, which is now in the record, stated that the lessee could make changes and improvements in the building provided it restore the premises to the same condition at the end of the lease. The 1965 agreement recognized that the two top floors, which were originally designed for apartment house use, were then being used for office space. The repairs made in 1965 were to be made according to the office building use, and the lessee was no longer obligated to restore the building at the termination of the lease to the same condition and order in which it existed in 1949.

Moreover, in addition to a $6,000 per year increase in rental in the 1965 agreement, to commence on October 1, 1969, the 1965 agreement granted to the lessee the right of first refusal to purchase the property in the event the defendant received a bona fide offer to purchase which was desirable to her. The lessee did not have such a right of refusal in the 1949 lease.

In the 1949 lease, any necessary structural alterations were to be made at the expense of the defendant, unless these alterations were required by the lessee’s use of the property or by changes or improvements made by the lessee. However, the 1965 agreement imposed all responsibility for the structural soundness of that part of the leased premises known as the “slave quarters”, and the manner in which it was connected to the other portions of the building, during the remaining term of the lease upon the lessee.

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Cite This Page — Counsel Stack

Bluebook (online)
288 So. 2d 370, 1974 La. App. LEXIS 3825, Counsel Stack Legal Research, https://law.counselstack.com/opinion/latter-blum-inc-v-obolensky-lactapp-1974.