Lobell v. Rosenberg

158 So. 3d 874, 2014 La.App. 4 Cir. 0060, 2015 La. App. Unpub. LEXIS 12, 2015 WL 114147
CourtLouisiana Court of Appeal
DecidedJanuary 7, 2015
DocketNo. 2014-CA-0060
StatusPublished
Cited by7 cases

This text of 158 So. 3d 874 (Lobell v. Rosenberg) 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
Lobell v. Rosenberg, 158 So. 3d 874, 2014 La.App. 4 Cir. 0060, 2015 La. App. Unpub. LEXIS 12, 2015 WL 114147 (La. Ct. App. 2015).

Opinion

PAUL A. BONIN, Judge.

| Kenneth H. Lobell, the plaintiff in the present case, acquired in 1997 the balance of several pre-existing leases. One of these was a sixty-year lease of several parcels of land, a three-story office building of approximately 44,000 square feet, and a parking structure all located at 2025 Canal Street in New Orleans. Relations between Mr. Lobell and the lessors deteriorated in the wake of Hurricane Katrina. These lessors are the heirs of Simon and Herman H. Rosenberg, the two original lessors. The Rosenberg heirs transferred their individual rights under the 1957 lease to 2025 Canal St., L.L.C., which was formed in 2008 shortly before Mr. Lobell filed his initial petition.1

On December 28, 2007, some of the Rosenberg heirs, acting through counsel, addressed a letter to Mr. Lobell alleging that he had defaulted on the lease in several respects and served notice that they were electing to terminate the lease. Mr. Lobell subsequently sued the Rosenberg heirs and 2025 Canal for damages, claiming anticipatory breach of contract, and wrongful eviction because they failed Uto afford him the lease’s thirty-day cure period. 2025 Canal, on the other hand, intervened, named Mr. Lobell and K.H.L. Canal as defendants-in-intervention, and argued that Mr. Lobell’s numerous defaults entitled it to a termination of the lease, and an award of back rent and damages. Mr. Lobell responded that the December 28, 2007 letter could not serve as a lawful condition precedent to the termination of the lease in 2025 Canal’s favor because it did not specifically afford him the cure period set out in the lease. After a four-day bench trial, the trial judge ruled in favor of 2025 Canal and the Rosenberg heirs, dismissed Mr. Lobell’s claims for damages, terminated the lease, and awarded 2025 Canal building restoration costs, past unpaid rent, attorney’s fees, and reimbursement for monies spent by the Rosenberg heirs on the payment of ad valorem taxes.

Mr. Lobell now argues that the trial judge erred when he: 1) found that Rosenberg heirs’ default letters did not constitute anticipatory breaches of contract by the heirs and 2025 Canal; 2) concluded [878]*878that the Rosenberg heirs and 2025 Canal did not terminate the lease and -wrongfully evict him from the property prior to the end of the leases’ term; 8) failed to award him damages for breach of the lease; 4) terminated the lease in favor of 2025 Canal, and, 5) awarded 2025 Canal too much money for restoration costs.

Because the Rosenberg heirs’ default letters failed to specifically afford Mr. Lo-bell a cure period, they failed to comply with the terms of the lease. Because the Rosenberg heirs did not comply with the lease provisions, the trial court erred when it granted 2025 Canal’s request to terminate the lease and evict Mr. Lobell. |aWe must, accordingly, vacate that portion of the judgment which terminated the lease in favor of 2025 Canal and awarded it building restoration costs, past unpaid rent, attorney’s fees, and reimbursement for monies spent by the Rosenberg heirs on the payment of ad valorem taxes. We remand these claims to the trial court for further proceedings.

On the other hand, we conclude that the trial judge was not clearly wrong in finding that the Rosenberg heirs’ correspondence neither terminated the lease nor deprived Mr. Lobell of his right to attempt to cure his defaults. We, accordingly, conclude that the trial judge did not err in concluding that the Rosenberg heirs and 2025 Canal did not commit anticipatory breaches of the lease or wrongfully evict Mr. Lobell. Because we affirm these findings, we likewise conclude that the trial judge properly refused to award Mr. Lo-bell damages. We now explain our opinion in more detail.

I

We first summarize this matter’s facts and procedural history. At the outset we examine briefly this matter’s contractual history and set out the relevant lease provisions. We then briefly examine the deterioration of the parties’ business relationship in the wake of Hurricane Katrina. Finally, we discuss this matter’s procedural history, and the trial court’s judgment.

A

The record establishes that Simon and Herman H. Rosenberg leased several parcels of property, which are located in the city block bounded by Canal, |4Iberville, North Johnson, and North Prieur streets in New Orleans, Louisiana, to Eagle Enterprises, Inc., on January 25, 1957, for a term of fifty years. The lease was amended several times in the 1950’s, and subsequently assigned and transferred several times. On December 3, 1997, E.E.W. Properties, Ltd., an intermediate lessee, transferred and assigned its lease interest to Mr. Lobell.2 On May 4, 1998, Mr. Lo-bell contributed his interest in the property to K.H.L. Canal, L.L.C., by Act of Contribution of Property.3 The Rosenberg heirs were not asked to consent to [879]*879these various transfers, as their consent was not required under the original lease or its subsequent amendments.

In connection with his acquisition of the lease interest, Mr. Lobell borrowed $600,000.00 in 1998 from Hibernia National Bank4, secured by a Multiple Indebtedness Mortgage, and granted a mortgage in favor of Hibernia in the lease and leasehold improvements. In order to accommodate Hibernia’s desire to subordinate the leaseholders’ interests to Hibernia’s mortgage rights, some — but not all — of the Rosenberg heirs, along with Mr. Lobell and Hibernia, executed individual Consent and Agreements on June 25, 1998, which modified and |fisuperseded portions of the original amended lease.5 In 2008, Mr. Lo-bell borrowed an additional $200,000.00 from Hibernia, secured by the same Multiple Indebtedness Mortgage.

Of significance to the present dispute, the 1957 lease, as amended, provides that Mr. Lobell was obligated to pay the Rosenbergs $2,083.83 in rent per month until the end of the lease in 2017. The lease also obligated Mr. Lobell to pay all ad valorem taxes and assessments levied on or against the premises. Mr. Lobell, moreover, was obligated to keep the buildings subject to the lease in good repair and condition. In the event the buildings on the property were damaged, the lease obligated Mr. Lobell to repair or rebuild the buildings at least to the “same general character” as existed before the loss within six months of the loss. Additionally, the 1957 lease required Mr. Lobell to maintain $400,000.00 in insurance on his leasehold interests and provided that “all policies issued ... are to be assigned to, and in case of loss or destruction be made payable to the Lessor ... and any and all moneys which Lessor shall receive by reason of any loss or destruction of the buildings or improvements is hereby constituted a trust fund, to be used for rebuilding of the buildings and improvements.”

The lease also afforded the Rosenbergs the option of bringing lease termination proceedings in the event of Mr. Lobell’s default with respect to the | (-.aforementioned provisions. On this point, the lease obligates the Rosenbergs to first provide Mr. Lobell with a notice of default and afford him a thirty-day cure period, or some other reasonable amount of time “if the default is one which cannot be cured within the said thirty (30) days.” In the event that Mr.

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Bluebook (online)
158 So. 3d 874, 2014 La.App. 4 Cir. 0060, 2015 La. App. Unpub. LEXIS 12, 2015 WL 114147, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lobell-v-rosenberg-lactapp-2015.