Mystery House, LLC v. City of New Orleans

• Court: Louisiana Court of Appeal
• Decided: November 25, 2020
• Docket: 2020-CA-0014
• Status: Published

Opinion

MYSTERY HOUSE, LLC * NO. 2020-CA-0014

VERSUS * COURT OF APPEAL CITY OF NEW ORLEANS * FOURTH CIRCUIT * STATE OF LOUISIANA *******

APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2019-03498, DIVISION “F” Honorable Christopher J. Bruno, Judge ****** Judge Terri F. Love ****** (Court composed of Judge Terri F. Love, Judge Joy Cossich Lobrano, Judge Regina Bartholomew-Woods)

LOBRANO, J., CONCURS IN THE RESULT

Jonah A. Freedman JONAH FREEDMAN LAW, LLC 700 Camp Street, Suite 316 New Orleans, LA 70130

COUNSEL FOR PLAINTIFF/APPELLANT

David Patin, Jr. Assistant City Attorney City of New Orleans 1300 Perdido St., Suite 5 E03 New Orleans, LA 70112

COUNSEL FOR DEFENDANT/APPELLEE

AFFIRMED

NOVEMBER 25, 2020 TFL

RBW This is an administrative code enforcement case. The City of New Orleans

Department of Code Enforcement (the “City”) rendered two administrative

judgments against a property located at 3900 St. Bernard Avenue on August 21,

2018 and March 25, 2019, arising out of violations of blighted property public

health ordinances of the New Orleans City Code. The August 21, 2018 judgment

found nine violations and ordered demolition. The March 25, 2019 Daily Fines

and Costs Judgment assessed fines totaling $15,205.00. Mystery House, LLC, the

adverse possessor, appealed the Daily Fines and Costs Judgment to the Civil

District Court for the Parish of Orleans. After a hearing, the district court denied

Mystery House’s appeal as premature. Mystery House lodged the present appeal

of the district court’s judgment. Finding the City retained authority to levy daily

fines after it ordered demolition, we affirm the City’s Daily Fines and Costs

Judgment.

FACTUAL AND PROCEDURAL BACKGROUND

The City instituted a code enforcement investigation of 3900 St. Bernard

Avenue (the “Property”) in 2018. The investigation resulted in an August 21, 2018

1 administrative judgment which found the Property in violation of nine New

Orleans City Code ordinances (NOCC).1 As a result of the violations, the hearing

officer assessed a fine of $4,575.00 against the Property. The judgment ordered

the abatement of the violations and warned that the Property would incur daily

fines, up to a maximum of $500.00 a day, per violation, for each day the violations

remained. The judgment also ordered demolition of the Property. 2 The Property

owner did not attend the hearing.

On September 24, 2018, Mystery House initiated an adverse possessory

action against the Property by filing an Affidavit of Intent to Possess the Property.

Thereafter, Mystery House filed an Affidavit of Possession in the Land Records

Division of Orleans Parish and took corporeal possession of the Property.

The City inspected the Property on January 25, 2019 to determine if any of

the nine violations cited in the August 21, 2018 judgment had been abated. The

inspection concluded that they had not. After an updated records search on the

1 The code violations included:

(1) NOCC Sec. 26-157 (Sanitation) (2) NOCC Sec. 26-159 (Sidewalks) (3) NOCC Sec. 26-160(a) (Weeds and Plant Growth) (4) NOCC Sec. 26-163 (Fences and Walls) (5) NOCC Sec. 26-164 (Motor Vehicles) (6) NOCC Sec. 26-167(b) (Paint or Protective Treatment) (7) NOCC Sec. 26-167(a) (Exterior Surfaces) (8) NOCC Sec. 26-171 (Exterior Walls) (9) NOCC Sec. 26-181 (Doors) 2 The August 21, 2018 judgment included the following:

IT IS FURTHER ORDERED based on the aforementioned violations, the facts establish the property unsafe to a person or property; a fire hazard; a hazard to the public health; a public nuisance; dangerous to a person or property because of the violations which justify abatement by demolition, and DEMOLITION IS ORDERED.

2 Property’s ownership, the City discovered Mystery House’s Affidavit of

Possession. The City sent a Notice of Daily Fines Hearing to both Mystery House

and the owner advising that a March 25, 2019 hearing had been fixed to address

the Property’s continued violations. The notices outlined ways to remedy the

violations before the hearing.3

In advance of the hearing, the City again inspected the Property for any

abatement of the violations. The City inspector took several photographs and

issued a report documenting that the violations remained.

Mystery House attended the March 25, 2019 hearing. The owner did not

attend.4 The City presented photographic evidence to document the on-going

3 The City’s recommended abatement of the violations included the following:

1. NOCC Sec. 26-157 required removal of all trash and debris from the Property.

2. NOCC Sec. 26-159 required the sidewalks of the Property to be maintained in good condition.

3. NOCC Sec. 26-160 required the cutting and removal of weeds and plant growth on the Property.

4. NOCC Sec. 26-163 required fences and walls around the Property to be maintained in good condition.

5. NOCC Sec. 26-164 required the removal or licensure of inoperative motor vehicles found on the Property.

6. NOCC Sec. 26-167(b) required the application of paint or protective treatment to the Property.

7. NOCC Sec. 26-167(a) required the exterior surfaces of the Property to be maintained in good condition.

8. NOCC Sec. 26-171 required the exterior walls of the Property to be maintained in good condition.

9. NOCC Sec. 26-181 required the doors of the Property to be maintained in good condition. 4 The facts uncovered that the owner was incarcerated.

3 violations. Mystery House did not present any rebuttal evidence. Instead, Mystery

House claimed the City lacked statutory authority to levy daily fines once it had

ordered the Property’s demolition in the August 21, 2018 judgment. At the

hearing’s conclusion, the hearing officer levied a Daily Fines and Costs Judgment

against the Property for failing to abate any of the outstanding nine code violations.

The daily fines totaled $15,205.00.

Mystery House appealed the Daily Fines and Costs Judgment to the Civil

District Court for the Parish of Orleans. In opposition, the City filed an exception

of no right of action. The City argued that La. R.S. 13:2575 (2013) afforded

appeal rights only to an owner or mortgagee of record, not a mere possessor, such

as Mystery House. 5

The district court overruled the City’s exception of no right of action,

finding that under La. C.C. art. 3423, a possessor is considered a provisional owner

of the thing he possesses until the rights of the true owner are established.

However, the district court denied Mystery House’s appeal as premature. The

district court opined:

While this Court believes that Mystery House has an interest in challenging the code enforcement procedure, its challenge is premature. Mystery House has no obligation to pay any fine or penalty assessed against the property until which time it meets all the criteria under LSA R.S. 9:5633.6

5 La. R.S. 13:2575(H) provides, in pertinent part, that:

Any property owner or mortgagee of record of property determined to be blighted or abandoned property, or any person determined by the hearing officer to be in violation of a public health, housing, fire code, or environmental, or historic ordinance may appeal this determination to the appropriate district court.

4 Mystery House filed the instant appeal of the district court’s judgment.

DISCUSSION

Standard of Review

This Court summarized in Nola Bourbon, LLC v. City of New Orleans,

2019-0847, pp. 2-4 (La. App. 4 Cir. 1/29/20), 290 So.3d 225, 227–28, the

parameters by which appeals are taken from administrative judgments involving

violations of city ordinances as follows:

A party aggrieved by a final agency decision in an adjudication proceeding is entitled to have that decision reviewed initially by the district court of the parish in which the agency is located. La. R.S. 49:964(A)(1) and (B). The district court acts in the capacity of an intermediate appellate court. A party aggrieved by the district court's decision is entitled to appeal to the appropriate appellate court as in other civil cases. La. R.S. 49:965. When an appellate court reviews the district court's judgment, no deference is owed by the appellate court to the district court's fact findings or legal conclusions, “ ‘just as no deference is owed by the Louisiana Supreme Court to factual findings or legal conclusions of the court of appeal. Thus, an appellate court sitting in review of an administrative agency reviews the findings and decision of the administrative agency and not the decision of the district court.’ ” Bourgeois v. Louisiana State Racing Comm'n, [20] 10-0573, p. 7 (La. App. 4 Cir. 11/12/10), 51 So.3d 851, 856 (quoting Smith v. State, Dep't of Health and Hospitals, 39,368, pp. 4-5 (La. App. 2d Cir. 3/2/05), 895 So.2d 735, 739). (Emphasis added).

The standard of appellate review of an administrative agency's decision is distinct from and narrower than that which applies to ordinary civil and criminal appeals. Reaux v. Louisiana Bd. of Med. Examiners, [20] 02-0906, p. 3 (La. App. 4 Cir. 5/21/03), 850 So.2d 723, 726. The exclusive grounds upon which an administrative agency's decision may be reversed or modified on appeal are enumerated in La. R.S. 49:964(G) of the Administrative Procedure Act (“APA”). Armstrong v. Louisiana State Bd. of Medical

6 La. R.S. 9:5633(A) (2011) specifies the criteria by which “[o]wnership of an immovable may be acquired by the prescription of three years without the need of just title or possession in good faith.”

5 Examiners, [20] 03-1241, pp. 9-11 (La. App. 4 Cir. 2/18/04), 868 So.2d 830, 837-38.

DMK Acquisitions & Properties, L.L.C. v. City of New Orleans, [20] 13-0405, p. 8 (La. App. 4 Cir. 9/18/13), 124 So.3d 1157, 1163 (quoting Clark v. Louisiana State Racing Comm'n, [20] 12-1049, pp. 9-11 (La. App. 4 Cir. 12/12/12), 104 So.3d 820, 826-27).

Under La. R.S. 49:964(G), a reviewing court may affirm an administrative decision or remand the case for further proceedings; the court may also reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:

(1) In violation of constitutional or statutory provisions;

(2) In excess of the statutory authority of the agency;

(3) Made upon unlawful procedure;

(4) Affected by other error of law;

(5) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion;

or

(6) Not supported and sustainable by a preponderance of evidence as determined by the reviewing court. In the application of this rule, the court shall make its own determination and conclusions of fact by a preponderance of evidence based upon its own evaluation of the record reviewed in its entirety upon judicial review. In the application of the rule, where the agency has the opportunity to judge the credibility of witnesses by first-hand observation of demeanor on the witness stand and the reviewing court does not, due regard shall be given to the agency's determination of credibility issues.

Id.

The proceedings and findings of an administrative agency are presumed to

be legitimate and correct. Reaux, 2002-0906, p. 2, 850 So.2d at 726 (citations

omitted). The burden of proof is on the appellant to demonstrate any grounds for

reversal or modification. Id.

6 7 La. C.C.P. art. 926(B) provides that “[a]ll objections which may be raised through the dilatory exception are waived unless pleaded therein.”

7 August 21, 2018 administrative

judgment. Mystery House represents that once the City issued the demolition

order, the City made a “codified” choice to seek demolition over abatement of the

violations. Mystery House avers that once a demolition order has been rendered,

the City cannot assess daily fines because the assessment does not promote public

safety and welfare. It urges that the City cannot expect owners to expend

thousands of dollars to correct code violations on an “unsafe” and “dangerous”

property that has been ordered for demolition. Mystery House emphasizes that no

specific NOCC ordinance permits a fine to be levied for failure to demolish. As

such, Mystery House concludes that the Daily Fines and Costs Judgment is an

excessive fine based on the City’s unconstitutional application 8 of both La. R.S.

13:2575 and NOCC Sec. 26-232. We disagree.

Mystery House acknowledges that La. R.S. 13:2575 provides the City with

the authority to assess civil fines for blighted property 9 and NOCC Sec. 26-232

permits a hearing officer to assess fines for each day a violation continues

unabated.10 However, Mystery House contends that the Daily Fines and Costs

8 Mystery House represents that its appeal is not a direct challenge to the underlying constitutionality of La. R.S. 13:2575 or NOCC Sec. 26-232. 9 La. R.S. 13:2575A(1) states, in part, that:

Any municipality or parish may prescribe civil fines for blighted property, abandoned property, or violation of public health, housing, fire code, environmental, and historic district ordinances in the municipality or parish by owners of immovable property, their agents, tenants, or representatives pursuant to the procedures for administrative adjudication provided in this Chapter. 10 NOCC Sec. 26-232. –Penalties

8 Judgment exceeds the City’s authority as no specific ordinance exists that permits

the City to levy a fine for failure to abate a demolition order. Notwithstanding

whether an ordinance exists that specifically authorizes daily fines for failure to

abate by demolition, Mystery House overlooks that the Daily Fines and Costs

Judgment was not rendered against the Property for the owner’s failure to demolish

the Property, but rather because the nine NOCC violations cited in the August 21,

2018 administrative judgment had not been corrected.

As referenced herein, a reviewing court may reverse or modify an

administrative judgment if the administrative findings or decision have prejudiced

the appellant because they exceed the statutory authority of the agency. See Nola

Bourbon, 2019-0847, p. 3, 290 So.3d at 228. Here, Mystery House does not

contest that the City has the explicit authority to order the demolition of the

Property11 and the authority to assess daily fines and costs for non-abatement of

violations. These statutes were enacted to provide the City with the requisite

authority to regulate public health, housing, and environmental regulations. See

Whipple v. City of New Orleans Department of Safety and Permits, 2020-0111, p. 2

(La. App. 4 Cir. 8/5/20), ---So.3d---, 2020-0111 WL 4499647, *3. Here, on its

face, the City’s application of the penal measures outlined in La. R.S. 13:2575 or

NOCC Sec. 26-232 does not conflict with its express municipal authority to

enforce public health and safety ordinances intended to eliminate or mitigate

against the deleterious effects of blighted or abandoned property. Mystery House

A penalty may be imposed for each violation existing in or upon a premises. The penalty for each noticed violation shall not exceed the maximum provided in Section 6-37. Each day that a violation continues after due notice has been served shall be deemed a separate offense. 11 NOCC Sec. 26-240 states, in part, that “if, in the opinion of the hearing officer, the facts justify that a building or structure is unsafe, and by reason of its nature or condition endangers the public health, welfare or safety, it may be ordered to be abated by demolition.”

9 cites no binding legal authority that prohibits the City from assessing daily fines

for failure to abate on-going violations subsequent to the issuance of a demolition

order or moreover, any authority that prohibits the City from assessing fines and

ordering demolition. Mystery House’s mere declaration that the City exceeded its

authority because any attempted abatement of the violations after a demolition

order by the offending owner would be a “vain and useless act” is insufficient to

show the City exceeded its authority. The question as to whether the City could

have executed the demolition order had the nine violations been corrected is not

before this Court for review. The undisputed fact is that the evidence offered at the

hearing showed that none of the violations were corrected. Hence, in accord with

La. R.S. 13:2575 and NOCC Sec. 26-232, the City had authority to render the

Daily Fines and Costs Judgment. This assigned error is without merit.

CONCLUSION

Based on the foregoing reasons, the City’s Daily Fines and Costs Judgment

is affirmed.