Nature Conservancy v. Upland Properties, LLC

48 So. 3d 1257, 2010 La.App. 1 Cir. 0516, 2010 La. App. LEXIS 1439, 2010 WL 4272672
CourtLouisiana Court of Appeal
DecidedOctober 29, 2010
DocketNo. 2010 CA 0516
StatusPublished
Cited by2 cases

This text of 48 So. 3d 1257 (Nature Conservancy v. Upland Properties, LLC) 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
Nature Conservancy v. Upland Properties, LLC, 48 So. 3d 1257, 2010 La.App. 1 Cir. 0516, 2010 La. App. LEXIS 1439, 2010 WL 4272672 (La. Ct. App. 2010).

Opinion

HUGHES, J.

12This is an appeal by Marshall Investments Corporation (MIC) from the grant of a confirmation of a default judgment in favor of The Nature Conservancy (TNC) and against appellant, MIC, and Upland Properties, LLC (Upland),1 in the amount of $456,564.80, plus interest and costs. For the reasons that follow, we reverse the confirmation of the default judgment against MIC and remand for further proceedings.

FACTS AND PROCEDURAL HISTORY

Upland was the owner of a 989-acre tract of land in St. Tammany Parish. Upland intended to improve and develop the land into a residential community known as Bedico Creek. The Bedico Creek project would affect wetlands located on the property. In such a ease, federal and state regulations require that land developers mitigate or offset the damages caused to the wetlands and require the developers to apply for a permit from the United States Army Corps of Engineers (the Corps). The permit necessary for the development of the Bedico Creek property required, among other things, that Upland contract with an off-site mitigation bank to fund the perpetual enhancement and management of 150 acres of pine flatwood/sa-vannah wetlands.

To fund the Bedico Creek project, Upland took out a construction loan with MIC. The loan documents were signed on March 17, 2005. The debt was secured by Mortgages, Security Agreements, and Assignments of Rents and Leases, which [1260]*1260were filed and recorded in the St. Tammany Parish mortgage records.

Thereafter, to meet the permit’s requirement of enhancing and maintaining the wetlands, on May 26, 2005 Upland entered into a |/Mitigation Participation Agreement” with TNC, a conservation organization that protects and restores ecologically important lands and waters. Under the “Mitigation Participation Agreement,” TNC agreed to implement the mitigation required by the permit and Upland agreed to pay a certain sum, pursuant to a payment schedule.

Upland defaulted on both the construction loan with MIC and the “Mitigation Participation Agreement” with TNC. In accordance "with LSA-R.S. 9:5136, et seq., MIC foreclosed on the property and later purchased it at a public auction, which was held pursuant to executory process by order of the United States District Court for the Eastern District of Louisiana. The Act of Sale is dated June 4, 2008 and provides that MIC will acquire all of Upland’s “rights (but not its obligations) under any documents” and “all permits, licenses, franchises, certificates and other rights and privileges obtained in connection with the Land.” Although MIC held mortgages on the property, the subsequent contract, whereby TNC conveyed to Upland the use of the mitigation credits, was unsecured.

Thereafter, on December 10, 2008 TNC filed a “Petition for Damages from Breach of Contract and Unjust Enrichment” against both Upland and MIC for the remaining balance Upland owed it for the wetlands mitigation credits. TNC moved for a default judgment against both parties. That default judgment was confirmed after a hearing on March 25, 2009 and a judgment of $456, 564.80 was rendered against Upland and MIC, in solido. In written reasons for judgment, the trial court held that TNC had established a prima facie case against MIC under the theories of unjust enrichment and third-party beneficiary of a contract.

|4MIC filed a motion for new trial, which was denied by a judgment signed November 3, 2009. MIC appeals and asserts two assignments of error:

(A) The District Court Erred in Granting a Default Judgment to the Petitioner/Appellee Against Marshall Investments Corporation (“MIC”). The Petitioner/Appellee Failed to Establish a prima facie Case of Unjust Enrichment Against MIC as Required by Louisiana Code of Civil Procedure Article 1702(A) Because Cause Exists for the Alleged Unjust Enrichment and the Petitioner/Appellee has Another Remedy Available Under Law.
(B) The District Court Erred in Granting a Default Judgment to the Petitioner/Appellee Against MIC. The Petitioner/Appellee Failed to Establish a prima facie Case That it is a Third-Party Beneficiary of a Permit Between Upland Properties, LLC and the Army Corps of Engineers as Required by Louisiana Code of Civil Procedure Article 1702(A). The Permit Does Not Express an Intent to Benefit any Third-Party.

LAW AND ANALYSIS

To confirm a default judgment, the plaintiff must present proof of the demand sufficient to establish a prima facie case. LSA-C.C.P. art. 1702(A). A prima facie case is established if the plaintiff presents competent evidence sufficient to prove the essential elements of the petition as fully as if each allegation had been specifically denied. Clary v. D’Agostino, 95-0447 (La.App. 1st Cir.12/15/95), 665 So.2d 792, 793. Stated differently, the plaintiff must present competent evidence that convinces the court that it is more probable than not that [1261]*1261he would prevail at a trial on the merits. See Grevemberg v. G.P.A. Strategic Forecasting Group, Inc., 06-0766 (La.App. 1st Cir.2/9/07), 959 So.2d 914, 917-18.

Appellate review of a confirmation of a default judgment is limited to a determination as to the sufficiency of the evidence offered. Grevemberg v. G.P.A., 959 So.2d at 918. And while there is a presumption as to the sufficiency of the evidence if the judgment recites that the plaintiff has | r,produced same, that presumption does not apply where the testimony is transcribed and contained in the record, as in this case. See Bates v. Legion Indem. Co., 01-0552 (La.App. 1st Cir.2/27/02), 818 So.2d 176,179.

1. Unjust Enrichment

Louisiana Civil Code article 2298 provides, in pertinent part, that:

A person who has been enriched without cause at the expense of another person is bound to compensate that person. The term “without cause” is used in this context to exclude eases in which the enrichment results from a valid juridical act or the law. The remedy declared here is subsidiary and shall not be available if the law provides another remedy for the impoverishment or declares a contrary rule.

The root principle of an unjustified enrichment is that the plaintiff suffers an economic detriment for which he should not be responsible, while the defendant receives an economic benefit for which he has not paid. Board of Supervisors of Louisiana State University v. Louisiana Agricultural Finance Authority, 2007-0107 (La.App. 1st Cir.2/8/08), 984 So.2d 72; Scott v. Wesley, 589 So.2d 26, 27 (La.App. 1st Cir.1991). Unjust enrichment is only applicable to fill a gap in the law where no other remedy is provided for by law. Louisiana National Bank of Baton Rouge v. Belello, 577 So.2d 1099, 1102 (La.App. 1st Cir.1991); see also Coastal Environmental Specialists, Inc. v. Chem-Lig International, Inc., 00-1936 (La.App. 1st Cir.11/09/01), 818 So.2d 12,19.

The Louisiana Supreme Court in Minyard v. Curtis Products, Inc., 251 La. 624, 652, 205 So.2d 422, 432 (1967), set forth five prerequisites a plaintiff must prove to prevail under the theory of unjust enrichment:

1) an enrichment;
2) an impoverishment;
3) a connection between the enrichment and the impoverishment;

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48 So. 3d 1257, 2010 La.App. 1 Cir. 0516, 2010 La. App. LEXIS 1439, 2010 WL 4272672, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nature-conservancy-v-upland-properties-llc-lactapp-2010.