Mary Yvette Lejeune v. Paramount Nissan, LLC

• Court: Louisiana Court of Appeal
• Decided: June 20, 2012
• Docket: CW-0011-1151
• Status: Unknown

Opinion

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

CW 11-1151

MARY YVETTE LEJEUNE

VERSUS

PARAMOUNT NISSAN, LLC, ET AL.

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APPEAL FROM THE FOURTEENTH JUDICIAL DISTRICT COURT PARISH OF CALCASIEU, NO. 2011-707 HONORABLE CLAYTON DAVIS, DISTRICT JUDGE

PHYLLIS M. KEATY JUDGE

Court composed of Elizabeth A. Pickett, Shannon J. Gremillion, and Phyllis M. Keaty, Judges.

WRIT DENIED.

Timothy S. Madden Monica J. Manzella King, Krebs & Jurgens, P.L.L.C. 201 Saint Charles Avenue, 45th Floor New Orleans, Louisiana 70170 (504) 582-3800 Counsel for Defendants/Applicants: Paramount Nissan, LLC Paramount Automotive, LLC John F. Stelly Dean Bernal Christopher K. Jones Virginia J. McLin Keogh, Cox & Wilson, Ltd. Post Office Box 1151 Baton Rouge, Louisiana 70821 (228) 383-3796 Counsel for Plaintiff/Respondent: Mary Yvette LeJeune

P. Jody Lavergne Stutes & Lavergne Post Office Box 1644 Lake Charles, Louisiana 70602 (337) 433-0022 Counsel for Plaintiff/Respondent: Mary Yvette LeJeune KEATY, Judge.

Relators, Paramount Nissan, LLC d/b/a Nissan of Lake Charles; Paramount

Automotive, LLC; John F. Stelly; and Dean Bernal, seek supervisory writs from a

judgment which denied Relators’ declinatory exception of lack of subject matter

jurisdiction, dilatory exception of prematurity, or, alternatively, motion to stay

proceedings and peremptory exception of no cause of action.

STATEMENT OF THE CASE

The following facts were gleaned from the record. On June 17, 2010,

Respondent, Mary Yvette Lejeune, entered Paramount Nissan and/or Paramount

Automotive with the intention of purchasing a vehicle. She was shown a 2008

Nissan Infiniti M45-V8. Upon learning that the total sales price for the vehicle,

including finance charges, would be $56,452.01, Respondent allegedly expressed

to the salesperson that she did not believe she could afford the vehicle. Despite

Respondent’s suggestions, Relators encouraged her to complete a credit

application. Relators then used this application to run a credit check to determine

if Respondent would qualify for a loan. However, it is alleged that Relators

fraudulently misrepresented elements of Respondent’s application without either

Respondent’s consent or her knowledge. When Respondent completed the

application, she listed her job title as “CEO Operations” and her annual salary as

$47,000.00. Before the application was submitted to the financing company, the

Relators allegedly changed the application to state that Respondent’s job title was

“CEO” and her annual salary was $120,000.00. Based upon the alleged fraudulent

information in the application, Respondent was approved for an automobile loan

from Capital One Auto Finance. When Relators notified Respondent of her

approval, she again expressed her concern regarding her ability to make her

monthly payments. Relators reassured Respondent that she would not have been approved for the loan if she could not afford the payments. However, Relators

failed to notify Respondent that they had changed vital information on her credit

application.

Respondent and Paramount Nissan entered into a sales contract whereby

Respondent agreed to purchase the vehicle, agreed to pay the total amount financed

for the vehicle in accordance with the financing terms set forth in the contract, and

further agreed to submit “[a]ll disputes, claims, or controversies arising from or

relating to this Contract or the relationships which result from this Contract, or the

validity of this arbitration clause or the entire Contract” to binding arbitration.

On February 15, 2011, Respondent filed suit against Relators alleging fraud,

general negligence, detrimental reliance, and Louisiana Unfair Trade Practice Act

(LUTPA) 1 violations. She currently faces monthly automobile payments of

$721.53 which her actual salary, as she originally listed on her credit application, is

unable to support. As a result, she claims to have fallen behind on this and other

debts, to have suffered damage to her credit history, and to have suffered stress and

anxiety.

In response, Relators filed a declinatory exception of lack of subject matter

jurisdiction and a dilatory exception or prematurity, or, in the alternative, a motion

to stay proceedings and peremptory exception of no cause of action. Specifically,

Relators asserted that based on the wording of the arbitration provision,

Respondent’s claims were improperly and prematurely submitted to the trial court

for consideration. For the same reason, Relators further argued that the trial court

lacked subject matter jurisdiction over Respondent’s claims. Alternatively,

Relators requested that the trial court stay the litigation pending Respondent’s

exhaustion of the arbitration procedure set forth in the contract. With regard to the

1 See La.R.S. 51:1401-1430. 2 exception of no cause of action, Relators asserted that the contract was

indisputably by and between Respondent and Paramount Nissan, not Paramount

Automotive. As such, Relators argued that Respondent cannot state a viable cause

of action against Paramount Automotive upon which relief may be granted.

Respondent opposed Relators’ exceptions insisting that her claims pertain to

the alleged fraudulent misrepresentation on her credit application and, therefore, do

not “arise out of” or “relate to” the contract or the relationships formed by the

contract and are not subject to arbitration. Respondent further claimed that

Paramount Automotive was a proper defendant because she was provided with

paperwork that listed both Paramount Nissan and Paramount Automotive as parties

to the pending sale.

On July 26, 2011, following a contradictory hearing, the trial court denied

Relators’ exceptions and motion to stay in open court. The trial court signed a

written order to that effect on August 19, 2011, and Relators timely filed a notice

of intention to apply for supervisory writs with this court. Thereafter, we received

Relators’ application for supervisory writs and Respondent’s opposition thereto.

By order dated February 17, 2012, this court stayed the trial court

proceedings pending further action. The clerk of the Fourteenth Judicial District

Court was ordered to forward the complete record of these proceedings to this

court by April 2, 2012. In addition, the parties were notified that the matter was

going to be set for oral argument, and they were given additional deadlines within

which to file any additional briefs for this court’s consideration. After receiving

the trial court record, this court set this matter for oral argument on May 30, 2012.

No additional briefs were filed.

3 SUPERVISORY RELIEF

This court has stated,

The exercise of supervisory jurisdiction by appellate courts is within their plenary power. La. Const. art. 5, § 10. Appellate courts generally will not exercise such jurisdiction unless an error in the trial court’s ruling will cause the petitioner irreparable injury or an ordinary appeal does not afford an adequate remedy.

Borrel’s, Inc. v. City of Marksville, 05-48, p. 1 (La.App. 3 Cir. 6/1/05), 904 So.2d

938, 939.

Relators assert two assignments of error. First, Relators submit that the trial

court erroneously concluded that Respondent’s claims were not subject to the

arbitration provision contained in the contract, “despite the fact that such claims

unequivocally arose out of or are related to the Contract and/or the relationships

which resulted from the Contract.” Second, Relators assert that the trial court

erroneously determined “that Lejeune met her burden of stating a viable cause of

action against Paramount Automotive when the Contract plainly lists Paramount

Nissan as the Seller of the Vehicle.”

Are Respondent’s Claims Subject to Arbitration?

The failure of a party to arbitrate in accordance with the terms of an agreement may be raised either through a dilatory exception of prematurity demanding dismissal of the suit or by a motion to stay the proceedings pending arbitration. The defense to a petition that plaintiffs are not entitled to judicial relief because of a valid agreement to submit their claims to arbitration may be raised by the dilatory exception pleading prematurity pursuant to La. C.C.P. art. 926(A)(1), which is determined on the basis of the showing made at the in limine trial of the exception, including evidence introduced at the trial thereof. When the issue of failure to arbitrate is raised by the exception pleading prematurity, the defendant pleading the exception has the burden of showing the existence of a valid contract to arbitrate, by reason of which the judicial action is premature.

Long v. Jeb Breithaupt Design Build Inc., 44,002, pp. 6-7 (La.App. 2 Cir. 2/25/09),

4 So.3d 930, 935 (citations omitted). An appellate court reviews a judgment

denying a dilatory exception of prematurity for manifest error. Granger v.

4 Granger, 11-77 (La.App. 3 Cir. 6/15/11), 69 So.3d 666, writ denied, 11-1882 (La.

9/16/11), 69 So.3d 1152.

Respondent contends that Relators’ exceptions of prematurity and lack of

subject matter jurisdiction and motion to stay were properly denied because

Respondent’s lawsuit did not “arise from” or “relate to” the sales contract. Rather,

Respondent argues that the fraudulent acts which form the basis of her claim took

place before the parties were bound by the arbitration agreement, and, thus,

Relators cannot meet their burden of establishing a valid and enforceable

arbitration agreement. Respondent is not merely arguing that her claims did not

arise from or relate to the sales contract; she is arguing that Relators’

misrepresentations regarding Respondent’s income and job title on her credit

application rendered the obligations created by the sales contract, including the

obligation to arbitrate, invalid and unenforceable.

The Vehicle Retail Installment Contract (VRIC) that Respondent signed is

attached to the writ application as Exhibit 1. The VRIC acknowledges

Respondent’s loan and monthly payment obligation but does not contain any of the

information Respondent alleges was fraudulently provided to the lender. This

court has not been provided with a copy of the sales contract. Likewise, this court

has not been given a copy of the credit application that Respondent initially filled

out or the credit application that Relators allegedly altered to ensure that financing

would be approved for the sale.

In denying Relators’ exceptions and motion to stay, the trial court stated,

“The allegation of fraud committed by the defendants is – cannot be considered as

a subject of arbitration in a financing agreement. It’s outside of the agreement, it’s

unrelated to the agreement, it’s the issue of the inducement for her to sign the

agreement. . . .” 5 Relators offered no proof that the credit application and financing agreement

were part of the sales contract containing the arbitration provision. Based on the

limited showing made, Relators have not shown that the trial court committed

manifest error in its denial of their exceptions and motion to stay.

Has Respondent Stated a Cause of Action Against Paramount Automotive?

No evidence may be introduced to support or controvert the objection that the petition fails to state a cause of action. La.Code Civ.Proc. art. 931. Therefore, the court reviews the petition and accepts well pleaded allegations of fact as true, and the issue at the trial of the exception is whether, on the face of the petition, the plaintiff is legally entitled to the relief sought.

Everything on Wheels Subaru, Inc. v. Subaru S., Inc., 616 So.2d 1234, 1235

(La.1993).

Relators contend that Respondent cannot sustain a viable cause of action

against Paramount Automotive in this matter because the damages Respondent

seeks solely arise out of the purchase and financing of the vehicle from Paramount

Nissan. Relators further contend that Paramount Automotive is neither a seller of

the vehicle nor a party to the contract, and, therefore, Louisiana law does not afford

Respondent a remedy against Paramount Automotive.

Conversely, Respondent contends that the trial court properly denied

Relators’ exception because Relators failed to meet their burden. Specifically,

Respondent contends that “[a]lthough it is proper to grant an exception when there

is no privity of contract between the parties, it would be improper to grant such an

exception before Respondent has that opportunity to determine whether such

privity exists.” Respondent further contends that evidence indicating that

Paramount Automotive was involved in the act of sale exists in the form of a

document which lists both Paramount Automotive and Paramount Nissan as parties.

This document contains language limiting liability for Paramount Automotive, not

6 Paramount Nissan, and naming Paramount Automotive as a party. Finally,

Respondent contends that granting Relators’ exception of no cause of action at this

time would be premature because discovery has not yet commenced in this matter.

Here, the allegations of the petition belie Relators’ contention that

Respondent failed to state a cause of action against Paramount Automotive. To the

contrary, Respondent supported her fraud, negligence, and LUTPA claims against

Paramount Automotive with well-pleaded allegations. Moreover, the petition

reveals that Respondent’s claims arose not only from the actual sale of the vehicle,

but also from several fraudulent misrepresentations preceding the sale. Thus, a

lack of contractual privity might not preclude causes of action Respondent may

have against Paramount Automotive for fraud, negligence, or under LUTPA. As

noted by the trial court, “the parties need to determine through further discovery

which defendants are the proper ones” to remain in this suit. Accepting the well-

pleaded allegations of Respondent’s petition as true, we are satisfied that she stated

a valid cause of action against Paramount Automotive. The trial court did not err

in overruling Relators’ exception of no cause of action.

DISPOSITION

The application for supervisory writs by Relators, Paramount Nissan, LLC

d/b/a Nissan of Lake Charles; Paramount Automotive, LLC; John F. Stelly; and

Dean Bernal is denied. For the foregoing reasons, the judgment of the trial court

denying Relators’ declinatory exception of lack of subject matter jurisdiction,

dilatory exception of prematurity, or, alternatively, motion to stay proceedings and

peremptory exception of no cause of action is affirmed. This matter is remanded to

the trial court for further proceedings.