Nguyen v. Tran

841 So. 2d 62, 2001 La.App. 4 Cir. 1612, 2003 La. App. LEXIS 483, 2003 WL 549046
CourtLouisiana Court of Appeal
DecidedFebruary 19, 2003
DocketNo. 2001-CA-1612
StatusPublished
Cited by1 cases

This text of 841 So. 2d 62 (Nguyen v. Tran) 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
Nguyen v. Tran, 841 So. 2d 62, 2001 La.App. 4 Cir. 1612, 2003 La. App. LEXIS 483, 2003 WL 549046 (La. Ct. App. 2003).

Opinion

1PATRICIA RIVET MURRAY, Judge.

Defendant, Mrs. Ngot Tran, appeals the judgment of the trial court, which found her liable for negligent misrepresentation and awarded damages to the plaintiffs, Mrs. Tuat Nguyen and Mrs. Chi Nguyen. For the reasons that follow, we affirm.

Plaintiffs sued Mrs. Tran seeking rescission of an oral contract confected in April, 1998, whereby plaintiffs purportedly purchased from Mrs. Tran a business known as “Seafood City.” In their petition, plaintiffs alleged that as a result of Mrs. Tran’s fraudulent misrepresentation to them that she owned the business and other pertinent misrepresentations by her, they were evicted from the leased premises on which they were operating Seafood City in February, 1999, were forced to abandon the business, and suffered monetary damages.

The matter was tried to the district court without a jury on December 18-21, 2000. On March 22, 2001, with the parties present, the trial court dictated its judgment and extensive reasons for judgment into the record. The court found that the agreement between the parties was not subject to rescission on grounds of error Ror fraud, but held that it could be rescinded for negligent misrepresentation. Recognizing that the plaintiffs had derived some benefit from the contract, the court awarded $141,000 in damages against Mrs. Tran, which amount is equal to sixty percent of the amount the plaintiffs paid for the business.

There was significant disagreement among the parties as to the facts of this case both at trial and in the appellate court. Because we find no manifest error in the facts as determined by the trial court, we adopt those facts, which are as follows.

At a meeting in April 1998 at the home of Mrs. Tran, the parties entered into an oral agreement whereby the plaintiffs, Mrs. T. Nguyen and Mrs. C. Nguyen, agreed to purchase from Mrs. Tran for $245,000 the business known as Seafood City, including all its inventory and equipment. The business, located at 5769 Crowder Boulevard, had been in operation for two months. The trial court found that Mrs. Tran led the plaintiffs to believe that she owned the business. $235,000 of the agreed-upon price was ultimately paid, the bulk of it in cash, delivered to Mrs. Tran at her home in May of 1998; the payment also included two checks for $5,000 each made out to Mrs. Tran.

There were other people besides the plaintiffs and Mrs. Tran present at the April meeting, including the husband of plaintiff C. Nguyen, the brother of plaintiff [64]*64T. Nguyen, and several members of Mrs. Tran’s family. The only written document given to the plaintiffs at the meeting was a copy of the lease for the premises; however, the lease was written in English, which the plaintiffs could not |3read. Mrs. T. Nuyen’s brother, who testified that he could read English “somewhat,” did not attempt to read the lease.

The lease, which was introduced into evidence, reflected that on September 1, 1997, for a period of sixty months, Mr. Scott Wolfe leased the premises at 5769 Crowder Boulevard to Twin’s Anchor, Inc. Twin’s Anchor, Inc. was, in fact, owned by the daughter and son-in-law of Mrs. Tran, Tami and Tuyen Nguyen. The lease provided for a total rental of $150,000 for the five-year term ($2,500 per month), required the lessee to escrow each month an amount equivalent to one-twelfth of the anticipated taxes for the year, and prohibited the lessee from subletting the premises without the written consent of the lessor. An addendum to the lease gave the lessor the exclusive right to put video poker gaming devices on the premises, and stated that if the lessee personally or his business failed to qualify for a video poker license within six months of operation, the rent would increase to $3,500 per month.

Despite the terms of the lease, the trial judge found that the plaintiffs in making the agreement relied on several assertions made by Mrs. Tran, whom they had known as a friend for many years. These assertions included that Mrs. Tran was the owner of the business; that she had or would obtain the landlord’s approval of the plaintiffs as sublessees; that video poker machines would be installed within a few weeks of the sale; and that she would personally handle the landlord and the lease obligations; that the business typically grossed $5,000 to $6,000 per day in Usales; and that all the equipment was in good working order and under warranty. The plaintiffs accepted these assertions without attempting to verify them.

Once the plaintiffs began operating Seafood City, they became dissatisfied because the sales never approached the level indicated by Mrs. Tran, the equipment broke down repeatedly, and no video poker machines were ever installed. Although Mrs. Tran’s witnesses claimed that she applied for the video poker license in July of 1998, it was never granted. Therefore, in October of 1998, the landlord, Mr. Wolfe, increased the rent to $3500 per month. Because during the time they operated the business, the plaintiffs paid the rent to Mrs. Tran who then paid Mr. Wolfe, the trial court found that “months went by” before the landlord realized that the premises had been sublet. On January 22, 1999, Mr. Wolfe sent a letter to Twin’s Anchor, Inc., stating that the rent was being increased by $400 per month to cover the property taxes. Plaintiffs refused to pay this amount, and testified that Mrs. Tran then agreed to pay the taxes. However, on February 25, 1999, Mr. Wolfe sent Mrs. T. Nguyen a certified letter informing her she was being evicted. Plaintiffs attempted to return the keys to Mrs. Tran, but she refused to accept them. Plaintiffs then left the keys at Mrs. Tran’s home and abandoned Seafood City, leaving the inventory and equipment in the store. Mrs. Tran’s son-in-law, Mr. Tuyen Nguyen, subsequently sold Seafood City, including the inventory and equipment, to Mr. Wolfe.

At trial, plaintiffs sought rescission of the contract and damages. Mrs. Tran argued that plaintiffs had no cause of action against her for rescission because there |Rwas no sale by her. She asserted that she could not have sold Seafood City to the plaintiffs because she did not own it; her daughter and son-in-law owned it, and she [65]*65had merely negotiated the sale for them. The trial court found that because Mrs. Tran held herself out as the owner, rescission was an appropriate remedy.1 Nevertheless, the court held that the contract could not be rescinded on the ground of error, because it found the plaintiffs guilty of inexcusable neglect in failing to undertake even the most rudimentary investigation of Mrs. Tran’s assertions.2 Similarly, the court found that the contract could not be rescinded for fraud, as the law is that fraud does not vitiate consent to an agreement when the party against whom the fraud was directed could have ascertained the truth without difficulty, inconvenience or special skill.3 Although the jurisprudence recognizes an exception to this rule when there is a “relation of confidence” between the opposing parties, the trial court determined that no such relationship existed between the plaintiffs and Mrs. Tran 4; therefore, the plaintiffs had a duty to attempt to ascertain the truth, which they could have done easily, before agreeing to purchase the business.

After holding that the contract could not be rescinded for error or fraud, however, the trial court concluded that it could be rescinded on the basis of negligent misrepresentation.

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Bluebook (online)
841 So. 2d 62, 2001 La.App. 4 Cir. 1612, 2003 La. App. LEXIS 483, 2003 WL 549046, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nguyen-v-tran-lactapp-2003.