Nohc, Inc. v. Erroll G. Williams, Assessor, Parish of Orleans; Norman White, Director of Finance for the City of New Orleans; Department of Finance, Bureau of the Treasury, City of New Orleans; City of New Orleans and the Louisiana Tax Commission

• Court: Louisiana Court of Appeal
• Decided: December 6, 2022
• Docket: 2022-CA-0248
• Status: Published

Opinion

NOHC, INC. * NO. 2022-CA-0248

VERSUS * COURT OF APPEAL ERROLL G. WILLIAMS, * ASSESSOR, PARISH OF FOURTH CIRCUIT ORLEANS; NORMAN WHITE, * DIRECTOR OF FINANCE FOR STATE OF LOUISIANA THE CITY OF NEW ******* ORLEANS; DEPARTMENT OF FINANCE, BUREAU OF THE TREASURY, CITY OF NEW ORLEANS; CITY OF NEW ORLEANS AND THE LOUISIANA TAX COMMISSION

APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2020-02373, DIVISION “F-14” Honorable Jennifer M. Medley, Judge ****** Judge Dale N. Atkins ****** (Court composed of Chief Judge Terri F. Love, Judge Dale N. Atkins, Judge Pro Tempore James F. McKay III)

Scott R. Huete ELKINS, PLC 201 St. Charles Avenue, Suite 4400 New Orleans, LA 70170

COUNSEL FOR PLAINTIFF/APPELLEE, NOHC, Inc.

John J. Weiler Reese F. Williamson WEILER & REES, LLC 909 Poydras Street, Suite 1250 New Orleans, LA 70112

COUNSEL FOR DEFENDANT/APPELLANT, Erroll G. Williams, Assessor, Parish of Orleans

AFFIRMED IN PART; REVERSED IN PART; REMANDED WITH INSTRUCTIONS December 6, 2022 DNA

TFL

JFM

Appellant, Erroll G. Williams, in his capacity as Assessor for the Parish of

Orleans (“Assessor Williams”), appeals the trial court’s March 8, 2022 judgment,

which denied his Motion for Summary Judgment and granted the Motion for

Summary Judgment filed by Appellee, NOHC, Inc. (“NOHC”). Assessor Williams

also filed Exceptions of Prescription and No Cause of Action with this Court; and

NOHC filed a Motion to Strike Assessor Williams’ Reply Brief to this Court. For

the following reasons, we affirm the trial court’s denial of Assessor Williams’

Motion for Summary Judgment; reverse the trial court’s granting of NOHC’s

Motion for Summary Judgment; deny Assessor Williams’ Exceptions of

Prescription and No Cause of Action; deny NOHC’s Motion to Strike; and remand

this case for further proceedings consistent with this Opinion.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

NOHC is an Internal Revenue Code (“IRC”) Section 501(c)(3) nonprofit

corporation that has received tax exemptions for federal and state income tax

purposes. It owns and operates the Healing Center, which is located at 2372 St.

Claude Avenue in New Orleans. A for-profit corporation known as St. Claude/St.

Roch Revitalization, LLC (“SC/SRR”), formerly owned the Healing Center

1 building and used tax credits under the New Market Tax Credit (NMTC) Program,

which is designed for low-income areas, to renovate the building and open the

Healing Center. In 2018, SC/SRR donated the Healing Center to NOHC, thereby

transferring SC/SRR’s outstanding debt incurred in the renovation of the building.

At the Healing Center, NOHC provides space for various community activities;

and in 2020 NOHC also leased space to various commercial entities, such as a

restaurant, a barber shop, a food co-op, a yoga studio, a dance studio, an

engineering firm, a radio station, and a bar.

NOHC’S REQUEST FOR AN EXEMPTION

In August 2019, NOHC obtained a Section 501(c)(3) designation from the

Internal Revenue Service (“IRS”), exempting it from the payment of federal

income taxes. NOHC then applied to the Orleans Parish Assessor’s Office for an

exemption from the payment of its 2020 ad valorem taxes under La. Const. art.

VII, § 21(B)(1)(a)(i) (1974) and listed the “Address of Property to be Exempted”

as 2372 St. Claude Avenue, i.e., the Healing Center. Assessor Williams denied this

exemption request on December 16, 2019, and he sent a tax bill, which indicated

that NOHC’s taxes would become delinquent on February 1, 2020. On February

12, 2020, NOHC paid its taxes under protest. Additionally, on March 10, 2020,

NOHC filed suit in Orleans Civil District Court, seeking reimbursement of the

amount of taxes it paid in protest; and Assessor Williams filed his answer on July

15, 2020.

MOTIONS FOR SUMMARY JUDGMENT

Thereafter, on October 12, 2021, NOHC filed a Motion for Summary

Judgment, wherein NOHC argued that Assessor Williams incorrectly rejected its

exemption request because “the Healing Center is a 501(c)(3) non-profit

2 corporation and, as a result, all property owned by the Healing Center is exempt

from ad valorem property [taxation].” Assessor Williams responded with his own

Motion for Summary Judgment on January 21, 2022, wherein he argued that the

Healing Center was not entitled to the exemption “because NOHC (the entity) is

not organized or operated exclusively for an exempt purpose.” Further, Assessor

Williams asserted that the Healing Center did not qualify for the exemption

because it “is leased to tenants for a wide variety of commercial uses unrelated to

NOHC’s exempt purpose” and listed these uses as including a fitness center, a

sandwich store, a flower shop, a barber shop, a bar, a veterinarian office, an

engineering firm, a yoga studio, a grocery store, a bank, a law office, and a radio

station.

MARCH 8, 2022 JUDGMENT

On February 23, 2022, the trial court held a hearing on the Motions for

Summary Judgment. At the close of the hearing, the trial court denied Assessor

Williams’ Motion for Summary Judgment and granted NOHC’s Motion for

Summary Judgment. Subsequently, the trial court signed a written judgment on

March 8, 2022, which provided, in pertinent part:

IT IS HEREBY ORDERED, ADJUDGED AND DECREED that the Assessor[’s] Motion be and hereby is DENIED.

IT IS FURTHER HEREBY ORDERED, ADJUDGED AND DECREED that . . . NOHC[’s] Motion be and hereby is GRANTED, finding that the property owned by NOHC and located at 237[2] St. Claude Avenue, New Orleans, Louisiana, 70117 (“Property”) is exempt from ad valorem property taxes under Article VII, Section 21 of the Louisiana Constitution of 1974.

Assessor Williams’ timely appeal of the judgment follows.

3 PRELIMINARY MATTERS

I. ASSESSOR WILLIAMS’ EXCEPTIONS OF PRESCRIPTION AND NO CAUSE OF ACTION

Assessor Williams filed Exceptions of Prescription and No Cause of Action

with this Court. Because any finding of merit regarding these exceptions would

result in dismissal of the lawsuit, we address them first.

In urging his Exception of No Cause of Action, Assessor Williams contends

that “[u]nder Louisiana law, to maintain a cause of action under La. R.S. §

47:2134(C), NOHC must have timely paid its disputed . . . Orleans Parish ad

valorem taxes under protest by January 31, 2020.” He asserts that NOHC’s

payment of its taxes on the Healing Center under protest on February 12, 2022,

was not timely, thus rendering NOHC without a cause of action. In arguing his

Exception of Prescription, Assessor Williams again contends that NOHC failed to

pay its taxes under protest timely, thereby prescribing any claims that NOHC may

have had.

Assessor Williams asserts that ad valorem taxes in Orleans Parish are due on

January 31 and become delinquent on February 1 of the year in which they are due

per La. R.S. 47:1997(B). In addition, he contends that La. R.S. 47:2134(B)(3)(b)

provides that any challenge to the denial of an exemption must name the assessor

for the parish where the property is located as a party to any suit and that La. R.S.

47:2134(C)(1) further provides that the challenger must timely pay the disputed

portion of the assessed taxes under protest.

In its Opposition, NOHC disputes Assessor Williams’ claim that it did not

timely pay its taxes under protest, arguing (1) Assessor Williams admitted in his

answer to the suit that the taxes were timely paid under protest, thus constituting a

4 judicial admission of the payment’s timeliness; (2) the payment was timely

because in 2020, the City of New Orleans had extended the payment deadline to

February 14; and (3) NOHC detrimentally relied on this extension, and the doctrine

of contra non valentem should apply to extend the due date. NOHC also argues

that because Assessor Williams does not collect the taxes for the City of New

Orleans, he has no standing to raise the exceptions.

II. PRINCIPLES APPLICABLE TO AN EXCEPTION OF PRESCRIPTION

A party may raise an exception of prescription on appeal if the case has not

yet been submitted for decision, and if there is proof in the record to determine its

merits; if not, the court may remand the issue for determination. See La. C.C.P. art.

2163; Walker v. AMID/Metro P’ship, LLC, 2012-0285, p. 5 (La. App. 4 Cir

1/16/13), 109 So.3d 35, 39 (citing La. C.C.P. art. 2163; Cameron v. Delta

Plumbing, 2007-0672, p. 5 (La. App. 4 Cir. 2/13/08), 976 So.2d 343, 346). An

exception of prescription is designed to stop the prosecution of stale claims. See

Prevo v. State ex rel. Dep’t of Pub. Safety & Corr. Div. of Prob. & Parole, 2015-

0823, p. 4 (La. 11/20/15), 187 So.3d 395, 398 (citing Wells v. Zadeck, 2011-1232,

p. 7 (La. 3/30/12), 89 So.3d 1145, 1149). The party raising the exception bears the

burden of proof, unless it is evident on the face of the proceedings that the claim

has prescribed, at which point the burden shifts to the plaintiff to show that the

matter has not prescribed. Id. (citing Campo v. Correa, 2001-2707, p. 7 (La.

6/21/02), 828 So.2d 502, 508; Williams v. Sewerage & Water Bd. of New Orleans,

611 So.2d 1383, 1386 (La.1993)).

5 III. PRINCIPLES APPLICABLE TO AN EXCEPTION OF NO CAUSE OF ACTION

Like the exception of prescription, a party may raise an exception of no

cause of action on appeal if the case has not yet been submitted for decision, and if

there is proof in the record to determine its merits. La. C.C.P. art. 2163. See also

Murphy Oil Corp. v. Gonzales, 316 So.2d 175, 177 (La. App. 4 Cir. 1975); Ross v.

Justice, 229 So.2d 756, 758 (La. App. 3 Cir. 1969). When considering an

exception of no cause of action, a court must only look to the face of the petition,

any supplement, and any attached documents to determine if the law affords a

remedy and if the plaintiff has alleged sufficient facts to support a cause of action.

Henderson v. State Farm Mut. Auto. Ins. Co., 2021-0654, p. 5 (La. App. 4 Cir.

12/17/21), 335 So.3d 349, 353 (quoting Green v. Garcia-Victor, 2017-0695, p. 5

(La. App. 4 Cir. 5/16/18), 248 So.3d 449, 453). While any doubts as to proof are

to be resolved in favor of the plaintiff, “[l]egal conclusions asserted as facts are not

considered well-pled factual allegations for purposes of an exception of no cause

of action.” Id. at pp. 5-6, 335 So.3d at 353 (citing First Natchez Bank v.

Malarcher-Damare Co., 135 La. 295, 65 So. 270, 271 (1914); Kyle v. Civil Serv.

Comm’n, 588 So.2d 1154, 1159 (La. App. 1st Cir. 1991)).

Because both parties’ arguments regarding the exceptions hinge on the

timeliness of the payment, this Court will first determine whether NOHC timely

paid its taxes under protest in deciding whether to sustain or deny Assessor

Williams’ exceptions.

IV. WHETHER NOHC TIMELY PAID ITS TAXES UNDER PROTEST

In the instant case, a review of the record shows that there is no dispute that

NOHC paid its taxes under protest on February 12, 2020, which is past the time

6 provided in La. R.S. 47:1997(B). We consider the parties’ arguments as to whether

this constitutes timely payment under the circumstances presented herein.

A. Standing

As discussed, NOHC contends that because Assessor Williams does not

collect the taxes for the City of New Orleans, he has no standing to raise the

exceptions. However, this Court has previously held that the assessor is a proper

party to bring suit for the collection of taxes. See generally Williams v. Belle of

Orleans, LLC, 2003-1203 (La. App. 4 Cir. 12/1/04), 890 So.2d 670. Thus, we find

that Assessor Williams is a necessary party to any suit for review of a denial of an

exemption of ad valorem tax payments. Because Assessor Williams was a

necessary party to the suit, he has standing to file his Exceptions of Prescription

and No Cause of Action.

B. Alleged Judicial Admission

With respect to NOHC’s argument regarding the alleged judicial admission

by Assessor Williams, NOHC asserted in paragraph 14 of its petition that it “took

the necessary steps to timely pay said Tax Bill under protest pursuant to La. R.S.

47:2134” and that Assessor Williams admitted those allegations in his answer.

NOHC asserts that this was a judicial admission of the timeliness of NOHC’s

payment under protest and that Assessor Williams cannot now allege untimeliness.

In support, NOHC cites La. C.C. art. 1853, which defines a judicial confession as

“a declaration made by a party in a judicial proceeding” that “constitutes full proof

against the party who made it.” In the cases cited by NOHC in support of its

argument, the “confession” involved matters of fact, not conclusions of law. See

Traina, Inc. v. Sunshine Plaza, Inc., 2003-1003 (La. 12/3/03), 861 So.2d 156;

Cheatham v. City of New Orleans, 378 So.2d 369 (La. 1979).

7 However, as noted by Assessor Williams in his reply to NOHC’s

Opposition, conclusions of law cannot form the basis of a judicial admission. In

support, he cites Howard Trucking Co. v. Stassi, wherein the Louisiana Supreme

Court found that a party’s “admission” that the agreements between the parties

were leases, not contracts, could not be a judicial admission because it was a legal

conclusion, not a confession of fact. 485 So.2d 915, 918 (La. 1986). Therein, the

Louisiana Supreme Court further stated that “[a] judicial admission or confession

is the express acknowledgment of adverse fact.” Id. (citing Crawford v. Deshotels,

359 So.2d 118, 122 (La. 1978)). “Questions of law cannot be confessed or

admitted . . . .” Id. See also 2802 Magazine Street v. Eggspressions of N. Am.,

L.L.C., 2019-0085, p. 4 (La. App. 4 Cir. 5/22/19), 274 So.3d 1279, 1282 (holding

that prescription is a question of law); Robert v. Robert Mgmt. Co., 2011-0406, p. 3

(La. App. 4 Cir. 12/7/11), 82 So.3d 396, 398 (holding that interpretation of a

statute is a question of law).

Likewise, in the instant case, the issue of the timeliness of NOHC’s payment

is not a question of fact, but rather a question of law. Thus, we agree with Assessor

Williams that his answer does not constitute a judicial admission; therefore, we

find that he was able to question the timeliness of NOHC’s payment.

C. Alleged Extension of the Deadline to Pay Taxes under Protest

NOHC next argues that its payment under protest was timely because the

City of New Orleans extended the deadline for making ad valorem payments from

January 31, 2020, to February 14, 2020, due to problems caused by a cyberattack

that the City experienced in December 2019. Further, NOHC argues that the

extension was a necessary response to the cyberattack, without which the City’s

ability to exercise its governmental powers would have been hampered. NOHC

8 maintains that the time limit for paying taxes under protest set forth in La.

R.S.47:2134 cannot be used to limit the City from extending the deadline for

payment under protest.

Louisiana Revised Statutes 47:2134 provides that a person challenging an ad

valorem tax is to timely pay the disputed amount under protest. In support, NOHC

cites La. Const. art. VI, § 6, which provides that “[t]he legislature shall enact no

law the effect of which changes or affects the structure and organization or the

particular distribution and redistribution of the powers and functions of any local

governmental subdivision which operates under a home rule charter.” Noting that

New Orleans operates under a Home Rule Charter, NOHC contends that the

legislature cannot impinge upon the City’s ability to extend the deadline for the

payment of taxes, even under protest. It cites Home Rule Charter art. II, Section 2-

101(4), which provides that the City has the authority to adopt its regulations

“pertaining to its local affairs, property and government, which are necessary or

proper in the legitimate exercise of its corporate powers and municipal functions.”

Assessor Williams disputes the City’s ability to extend the time limitation of

La. R.S. 47:1997(B), which states, in pertinent part, that “[t]he collection of taxes

shall begin on the first day of January of the year 1972, and for each year

thereafter, for which such taxes are levied. Beginning with the year 1972, the entire

amount of such taxes shall become delinquent on the first day of February . . . .”

Assessor Williams points to La. R.S. 47:2130(B), which specifically provides for

“the postponement of the payment of ad valorem taxes” in case of public calamity.

That statute requires that an emergency be declared by the governor or the parish

president via the Louisiana Homeland Security & Emergency Assistance &

Disaster Act, but only in cases of disaster caused by “overflow, general

9 conflagration, general crop destruction, or other public calamity . . . .” La. R.S.

47:2130(B). Only under these circumstances may the tax debtor request a

“postponement of the payment of ad valorem taxes” on property located in the

designated geographical area. Id.

We agree with Assessor Williams. There was no such declaration of a

calamity that would allow NOHC to request a postponement of the payment of its

ad valorem taxes under protest or to permit the City or the Legislature to declare an

extension under La. Const. art. VII, § 25(F).1 Moreover, as noted by the Louisiana

Supreme Court in New Orleans Campaign for a Living Wage, the City’s powers

are limited by the Louisiana Constitution, the laws permitted by the Louisiana

Constitution, and the home rule charter. 2002-0991, p. 7 (La. 9/4/02), 825 So.2d

1098, 1103 (quoting Morial v. Smith & Wesson Corp., 2000-1132, p. 16

(La.4/3/01), 785 So.2d 1, 14). While the City could extend the time to pay taxes

without penalties, costs, and assessments, it could not extend the time for paying

under protest as provided by the Legislature in La. R.S. 47:1997(B).

We acknowledge NOHC’s counterargument that because La. R.S. 47:2134

itself does not provide a time limitation for paying ad valorem taxes under protest

(instead stating “[a] taxpayer . . . .shall timely pay the disputed amount of tax due .

. . .”), the City was free to set any time limitation it saw fit. However, La. R.S.

47:2134 and La. R.S. 47:1997(B) must be read in tandem. See Lindy Dev., L.L.C.

v. Degan, 2003-1078, p. 8 (La. App. 4 Cir. 4/21/04), 874 So.2d 252, 258 (wherein

1 Louisiana Constitution Article VII, § 25(F) provides, in part, that “The

legislature may postpone the payment of taxes, but only in cases of overflow, general conflagration, general crop destruction, or other public calamity, and may provide for the levying, assessing, and collecting of such postponed taxes.”

10 this Court held that La. R.S. 47:1997 and the predecessor to La. R.S. 47:2134 must

be read together).2

D. Contra Non Valentem

NOHC also argues that its alleged untimeliness should not bar this suit

because it detrimentally relied upon the City’s extension of the due date for paying

under protest. Additionally, NOHC argues that the doctrine of contra non valentem

should apply to excuse its untimeliness.

The doctrine of contra non valentem (“doctrine”) is an equitable doctrine

that “no one is required to exercise a right when it is impossible for him or her to

do so.” Prevo, 2015-0823, p. 5, 187 So.3d at 398. It is based on the premise that

prescription does not run if a plaintiff cannot bring suit. Ramos v. Le, 2018-0677,

p. 5 (La. App. 4 Cir. 12/12/18), 261 So.3d 959, 963 (quoting Corsey v. State,

Through Dep’t of Corr., 375 So.2d 1319, 1321 (La. 1979); Dominion Exploration

& Prod., Inc. v. Waters, 2007-0386, p. 10 (La. App. 4 Cir. 11/14/07), 972 So.2d

350, 358). The doctrine applies in limited circumstances in which prescription is

suspended because the plaintiff essentially was prevented from enforcing his rights

not due to his own will. Id. The doctrine “must be strictly construed” and

“applie[d] only in ‘exceptional circumstances.’” Id. (quoting Harsh v. Calogero,

615 So.2d 420, 422 (La. App. 4th Cir. 1993); Renfroe v. State ex rel. Dep’t of

Transp. & Dev., 2001-1646, p. 9 (La. 2/26/02), 809 So.2d 947, 953).

2 NOHC also argues that the Legislature anticipated that local authorities

would extend tax payment dates, citing La. R.S. 47:2127(A), which provides that “[t]axes assessed shall be due in that calendar year as soon as the tax roll is delivered to the tax collector, and they shall be paid on or before December thirty- first in each respective year.” However, this time limitation does not apply to Orleans Parish, which is specifically governed by La. R.S. 47:1997(B). We further note that NOHC does not argue that La. R.S. 47:1997 is an unconstitutional infringement on the City’s rights under the Home Rule Charter.

11 The Louisiana Supreme Court discussed the doctrine in Marin v. Exxon

Mobil Corp., wherein it recognized four situations to which the doctrine applies:

(1) where there is a legal cause that prevented the court from taking cognizance or

acting on the plaintiff’s action; (2) where there is a condition coupled with the

contract or connected to the proceedings which prevented the creditor from suing

or acting; (3) where the debtor has done some act that effectively prevented the

creditor from availing himself of a cause of action; or (4) where the cause of action

was neither known nor reasonably could be known by the plaintiff, even though it

was not induced by the defendant. 2009-2368, p. 12 (La. 10/19/10), 48 So.3d 234,

245 (quoting Plaquemines Par. Comm’n Counsel v. Delta Dev. Co., 502 So.2d

1034, 1054-55 (La. 1987)). With respect to the third category, the Louisiana

Supreme Court in Marin set forth three additional requirements: (a) the

defendant’s conduct must rise to the level of concealment, misrepresentation,

fraud, or ill-practice; (b) the defendant’s action must have effectively prevented the

plaintiff from pursuing his cause of action; and (c) the plaintiff’s reliance must

have been reasonable. Id. (citing Fontenot v. ABC Ins. Co., 1995-1707, p. 5 (La.

6/7/96), 674 So.2d 960, 963; Hendrick v. ABC Ins. Co., 2000-2403, 2349, pp. 12-

13 (La. 5/15/01), 787 So.2d 283, 290, 293; Jordan v. Emp. Transfer Corp., 509

So.2d 420, 423 (La. 1987); Allstate Ins. Co. v. Fred’s Inc., 2009-2275 (La.

1/29/10), 25 So.3d 821).

Here, NOHC argues that it is entitled to application of the doctrine under

categories two, three, and four. With respect to the second category that there were

conditions that prevented NOHC from timely paying its taxes under protest,

NOHC asserts that the City’s extension prevented NOHC from paying on time

because the City’s action lulled NOHC into believing that its February 12, 2020

12 payment under protest would be considered timely. That is, NOHC states that the

City did not inform NOHC that the extension did not apply to payments under

protest. However, NOHC does not explain how this prevented NOHC from paying

under protest by January 31, 2020. In fact, NOHC admits that it could have paid

the taxes under protest if it knew they really were due on January 31, 2020. We

also note that the check written for NOHC’s taxes was dated January 29, 2020; but

the check and the protest were not filed until February 12, 2020. Considering the

foregoing, we find that NOHC has failed to show that the City’s action prevented

NOHC from timely paying its taxes under protest.

We also find that NOHC has failed to demonstrate application of category

three, which applies when the other party has committed some act that effectively

prevented the mover from availing itself of its cause of action. In support of its

claim, NOHC asserts that Assessor Williams did not prove whether he tacitly or

directly participated in the City’s decision to extend the time for paying taxes to

February 14, 2020; but NOHC points to no authority to show that Assessor

Williams had the burden of proving this. Rather, because NOHC’s petition showed

on its face that the claim had prescribed, NOHC had the burden of proof, not

Assessor Williams. See Prevo, 2015-0823, p. 4, 187 So.3d at 398 (holding that

“[o]rdinarily, the exceptor bears the burden of proof at the trial of the peremptory

exception” unless “prescription is evident on the face of the pleadings,” in which

case “the burden shifts to the plaintiff to show the action has not prescribed”

(citing Campo, 2001-2707, p. 7, 828 So.2d at 508; Williams, 611 So.2d at 1386)).

As for the fourth category of the doctrine that the cause of action was neither

known nor reasonably knowable by the plaintiff even though this lack of

knowledge was not caused by the defendant, NOHC asserts that it did not

13 reasonably know that the extension did not apply to payments made under protest.

However, in Marin, the Louisiana Supreme Court explained that the fourth

category of the doctrine “will not exempt the plaintiff’s claim from the running of

prescription if his ignorance is attributable to his own willfulness or neglect; that

is, a plaintiff will be deemed to know what he could by reasonable diligence have

learned.” 2009-2368, p. 13, 48 So.3d at 246 (quoting Renfroe v. State ex rel. Dep’t

of Transp. & Dev., 2001-1646, p. 10 (La. 2/26/02), 809 So.2d 947, 953).

Additionally, the Marin court stated that “prescription runs from the date on which

[a plaintiff] first suffered actual and appreciable damage, . . . even though he may

thereafter come to a more precise realization of the damages he has already

incurred or incur further damage . . . ” Id. at 13-14, 48 So.3d at 246 (quoting

Harvey v. Dixie Graphics, Inc., 593 So.2d 351, 354 (La. 1992)). Here, Assessor

Williams denied NOHC’s exemption request on December 16, 2019, and thereafter

sent a tax bill that indicated that NOHC’s taxes would become delinquent on

February 1, 2020. Thus, NOHC first learned of its potential cause of action on

December 16, 2019, and has not shown that it was prevented from paying its taxes

under protest by January 31, 2020. See Colón v. Dillard Univ., No. 16-1819, 2016

WL 4593770, at *4 (E.D. La. Sept. 2, 2016) (holding that the doctrine did not

apply to bar prescription in an equal employment matter because “learning of one’s

own termination does give rise to the knowledge of a cause of action and starts the

proverbial clock’s ticking” (quoting Eastin v. Entergy Corp., 2003-1030, p. 9 (La.

2/6/04), 865 So.2d 49, 56)).

14 E. Detrimental Reliance

In the alternative, NOHC asserts that it relied to its detriment on the

extension that the City issued for payment of taxes. In support, NOHC cites La.

C.C. art. 1967, which provides, in pertinent part:

A party may be obligated by a promise when he knew or should have known that the promise would induce the other party to rely on it to his detriment and the other party was reasonable in so relying. Recovery may be limited to the expenses incurred or the damages suffered as a result of the promisee’s reliance on the promise. Reliance on a gratuitous promise made without required formalities is not reasonable.

NOHC asserts that it relied on the extended deadline to its detriment. Further,

NOHC maintains that it would have paid its taxes under protest by January 31,

2020, if it had known that the City’s extension did not include payments under

protest.

In Suire v. Lafayette City-Parish Consolidated Government, the Louisiana

Supreme Court stated that detrimental reliance applies to “prevent injustice by

barring a party from taking a position that is contrary to his prior acts, admissions,

representations, or silence.” 2004-1459, 1460, 1466, p. 31 (La. 4/12/05), 907 So.2d

37, 59 (quoting Babkow v. Morris Bart, P.L.C., 1998-0256, p. 7 (La. App. 4 Cir.

12/16/98), 726 So.2d 423, 427). In order for the doctrine of detrimental reliance

(“detrimental reliance”) to apply, the movant must show: (1) a representation by

words or actions; (2) justifiable reliance on the representation; and (3) reliance on

the change was detrimental to the movant. Id. (citing Lakeland Anesthesia, Inc. v.

United Healthcare of La., Inc., 2003-1662, p. 18 (La. App. 4 Cir. 3/17/04), 871

So.2d 380, 393). In MR Pittman Group, LLC v. Plaquemines Parish Government,

this Court noted that detrimental reliance is to be applied only in exceptional

circumstances, stating that “[t]he ultimate issue is the reasonableness of the

15 plaintiff’s action or inaction in light of his education, intelligence, and the nature of

the defendant’s conduct.” 2015-0513, p. 12 (La. App. 4 Cir. 12/2/15), 182 So.3d

303, 310-11 (citing Campo, 2001-2707, p. 12, 828 So.2d at 511).

NOHC, in addition to untold numbers of citizens and entities, relied on the

City’s proclamation that the due date for ad valorem taxes was extended from

January 31, 2020, to February 14, 2020. The fact that the City did not have the

authority to extend the date does not change the nature of NOHC’s good-faith

reliance on that extension. Therefore, we find that the doctrine of detrimental

reliance applies in this case. Based on this finding, we deny Assessor Williams’

Exception of Prescription. Likewise, as his Exception of No Cause of Action is

based on his claim that NOHC’s cause of action against him had prescribed

because NOHC did not timely pay its taxes under protest, we deny Assessor

Williams’ Exception of No Cause of Action as well.

V. NOHC’s MOTION TO STRIKE ALL OR PART OF ASSESSOR WILLIAMS’ REPLY BRIEF

Prior to addressing Assessor Williams’ assignments of error, we address

another preliminary matter. In response to the Appellee Brief filed by NOHC,

Assessor Williams filed a Reply Brief with this Court. Thereafter, NOHC filed a

Motion to Strike, contending that Assessor Williams’ Reply Brief should be

stricken in part or in its entirety. NOHC raises four claims with respect to its

motion:

A. Assessor Williams alleged in his Reply brief that NOHC committed perjury;

B. Assessor Williams’ Reply Brief contains offensive expressions and insulting and discourteous criticisms of NOHC and its employees;

16 C. Assessor Williams’ Reply Brief contains negative inferences made as statements of fact that constitute blatant arguments outside of the record; and

D. Assessor Williams’ Reply Brief went beyond the scope of rebuttal of NOHC’s appellee brief.

NOHC bases its arguments on Rule 2-12.2(C), Uniform Rules, Courts of Appeal,3

which provides:

The language used in the brief shall be courteous, free from vile, obscene, obnoxious, or offensive expressions, and free from insulting, abusive, discourteous, or irrelevant matter or criticism of any person, class of persons or association of persons, or any court, or judge or other officer thereof, or of any institution. Any violation of this Subsection shall subject the author, or authors, of the brief to punishment for contempt of court, and to having such brief returned.

We address each of NOHC’s arguments in turn.

A. Perjury

First, NOHC argues that Assessor Williams’ Reply Brief should be stricken

because he alleged that NOHC and its employees committed perjury, which

constitutes a criminal offense prohibited by La. R.S. 14:123. In support, NOHC

cites Anzelmo v. Pelican Computer, LLC, wherein the defendant alleged in his brief

that the plaintiff and his witnesses either committed perjury or suborned perjury.

2004-464, p. 5 (La. App. 5 Cir. 12/28/04), 892 So.2d 659, 661. The Louisiana

Fifth Circuit Court of Appeal found that these allegations rose to the level of “vile,

obscene, obnoxious, and offensive expressions” and struck those portions of the

defendant’s brief because “[t]he accusations made in [the] defendant’s brief

constitute[d] accusations of commissions of felonies.” Id.

However, as countered by Assessor Williams in his Opposition to NOHC’s

Motion to Strike, he never alleged that NOHC or its employees committed perjury.

3 We note that Rule 2-12.2, Uniform Rules, Courts of Appeal, has been

amended: as of January 1, 2023, the subject paragraph will become paragraph B.

17 Instead, he pointed to allegations that he termed false, inaccurate, erroneous, or

incorrect. Assessor Williams notes that pointing out that an allegation is false does

not constitute an allegation of perjury. In support, he cites Farrar v. Whaley,

wherein the Louisiana Third Circuit Court of Appeal refused to strike a brief

containing allegations that the plaintiff’s evidence was “flimsy,” “forge[d],” and

“scripted.” 2016-790, p. 4 (La. App. 3 Cir. 2/1/17), 211 So.3d 449, 453.

Our review of the Reply Brief reveals that Assessor Williams is correct that

he did not accuse NOHC or its employees of perjury. His allegations of falsity or

inaccuracy were proper in response to assertions made by NOHC. This claim by

NOHC has no merit.

B. Offensive Expressions, Criticisms of NOHC and Its Employees

NOHC next alleges that Assessor Williams’ Reply Brief should be stricken

because it contains offensive expressions and insulting and discourteous criticisms

of NOHC and its employees. Specifically, NOHC contends that Assessor Williams

accused businesses in the area of the Healing Center of being discriminatory on the

basis of sexual orientation. NOHC asserts that Assessor Williams paraphrased its

statements and improperly set forth negative implications of established facts.

Further, NOHC alleges that Assessor Williams impugned the motives of its

individual members, suggesting that NOHC desires its tax exemption to pay its

executive director’s salary and the debt it assumed when SC/SRR donated the

Healing Center. NOHC further contends that Assessor Williams suggested that the

executive director should lower her salary.

In response, Assessor Williams states that he did not accuse other businesses

competing with NOHC’s tenants of being discriminatory. He asserts that if anyone

made that allegation, it was NOHC. In particular, Assessor Williams notes that

18 NOHC has consistently averred that one of its tenants at the Healing Center, a

barber shop, furthered its business goals by providing services to LGBTQ+

customers who were not served by other hair salons in the area. Additionally,

NOHC alleged in its Appellee Brief that Assessor Williams did not identify any

other LGBTQ+ hair salon in the neighborhood. Therefore, the issue of

“discrimination” was raised by NOHC, and Assessor Williams’s Reply Brief

pointed out that this allegation was false.

With respect to Assessor Williams’ statements about NOHC’s finances and

the executive director’s salary, he asserts that these statements were not outside the

scope of replying to NOHC’s Appellee Brief. He contends that NOHC repeatedly

asserted that it operated at a loss and that his statements addressed NOHC’s

financial situation as set forth in the financial documents that NOHC produced.

Assessor Williams asserts that he did not intentionally single out anyone who

worked there but that the documents NOHC provided showed that it had only one

paid employee. Assessor Williams maintains that his argument as to NOHC’s

financial state, which NOHC made an issue, included this person’s salary.

Considering the foregoing, we find that Assessor Williams’ statements do not

constitute a basis upon which to strike his Reply Brief.

C. Negative Inferences Made as Statements of Fact

Third, NOHC asserts that this Court should strike Assessor Williams’ Reply

Brief because it contains statements of fact that are really negative inferences,

including “blatant arguments” that are outside of the record. In particular, NOHC

refers to Assessor Williams’ statement that NOHC had no signed statements from

its tenants, which it supposedly used as a basis for showing that it vetted its tenants

to ensure that they abided by NOHC’s goals. NOHC also points to Assessor

19 Williams’ inference that NOHC did not vet the tenants it inherited from the

Healing Center’s previous owner. However, as noted by Assessor Williams in his

Opposition to the Motion to Strike, NOHC objects to statements that pointed out

things that NOHC failed to produce to show it is eligible for the tax exemption. In

addition, contrary to NOHC’s arguments about Assessor Williams’ statements

regarding similar businesses in the area, these statements are not beyond the scope

of the record because NOHC itself insisted that its tenants provided services not

addressed in the area. As stated by Assessor Williams, it is permissible for him to

point to a lack of evidence on NOHC’s part. Indeed, it is his burden under La.

C.C.P. art. 966(D)(1) in connection with his motion for summary judgment.4 Thus,

we find that this claim provides no basis for striking Assessor Williams’ Reply

Brief.

D. Scope of Assessor Williams’ Reply Brief

Lastly, NOHC argues that this Court should strike Assessor Williams’ Reply

Brief because it exceeded the scope of rebuttal, i.e., the rebuttal of points raised in

NOHC’s Appellee Brief. Specifically, NOHC notes that Assessor Williams listed

the names of the Healing Center’s tenants, which were not named in NOHC’s

4 Louisiana Code of Civil Procedure Article 966(D)(1), which is discussed

more fully throughout this Opinion, pertains to the burden of proof on a motion for summary judgment and states:

The burden of proof rests with the mover. Nevertheless, if the mover will not bear the burden of proof at trial on the issue that is before the court on the motion for summary judgment, the mover’s burden on the motion does not require him to negate all essential elements of the adverse party’s claim, action, or defense, but rather to point out to the court the absence of factual support for one or more elements essential to the adverse party’s claim, action, or defense. The burden is on the adverse party to produce factual support sufficient to establish the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law.

20 Appellee Brief; presented mathematical suggestions on how NOHC could make a

profit; and argued about the admissibility of information in an affidavit supplied by

NOHC’s executive director. NOHC argues that because it did not raise any of

these issues in its Appellee Brief, Assessor Williams’ arguments concerning these

issues exceeded the scope of his Reply Brief and should thus be stricken.

However, we find that this claim has no merit. Assessor Williams’

discussion of NOHC’s tenants was designed to counter NOHC’s claim that it

carefully vetted all its tenants to ensure that the tenants furthered NOHC’s

charitable goals. As for Assessor Williams’ discussion of NOHC’s finances,

NOHC made its finances an issue, arguing at some length about the fact that it did

not earn a profit. Thus, Assessor Williams was entitled to address this issue.

Finally, because NOHC’s Appellee Brief raised the issue of the admissibility of

portions of the executive director’s affidavit, Assessor Williams’ responsive

comments were within the scope of rebuttal.

Because NOHC has shown no basis to strike any portion of Assessor

Williams’ brief, NOHC’s Motion to Strike is denied. Next, we turn to Assessor

Williams’ assignments of error.

DISCUSSION

ASSIGNMENTS OF ERROR

On appeal, Assessor Williams raises the following assignments of error:

A. The [trial court] erred in granting NOHC’s [Motion for Summary Judgment] and denying Assessor Williams’ Cross-[Motion for Summary Judgment].

B. The [trial court] erred in accepting “in toto” all of NOHC’s allegations of facts, evidence submitted in support and conclusions of law, and disregarding all of Assessor Williams’ allegations of facts, evidence submitted in support and conclusions of law.

21 C. The [trial court] failed to correctly apply the legal test to determine whether property is exempt from ad valorem taxation pursuant to La. Const. [a]rt. VII, § 21(B)(l)(a)(i).

D. The [trial court] erred in summarily finding that NOHC and the [Healing Center] met the constitutional test set forth in La. Const. [a]rt. VII, § 21(B)(l)(a)(i), and that the [Healing Center] thus qualifies for an ad valorem tax exemption.

Assessor Williams contends in his assignments of error that the trial court erred in

denying his Motion for Summary Judgment and in granting NOHC’s Motion for

Summary Judgment. In particular, Assessor Williams argues that NOHC failed to

show through its Motion for Summary Judgment and attachments thereto that it

was entitled to the exemption from paying ad valorem taxes pursuant to La. Const.

art. VII, § 21(B)(1)(a)(i). Further, Assessor Williams asserts that his Motion for

Summary Judgment proved this failure.

I. SUMMARY JUDGMENT PRINCIPLES

“The summary judgment procedure is designed to secure the just, speedy,

and inexpensive determination of every action . . . .” La. C.C.P. art. 966(A)(2). It

“is favored and shall be construed to accomplish these ends.” Id. See Citron v.

Gentilly Carnival Club, Inc., 2014-1096, p. 10 (La. App. 4 Cir. 4/15/15), 165 So.3d

304, 310-11. “After an opportunity for adequate discovery, a motion for summary

judgment shall be granted if the motion, memorandum, and supporting documents

show that there is no genuine issue as to material fact and that the mover is entitled

to judgment as a matter of law.” La. C.C.P. art. 966(A)(3).

“An appellate court applies the de novo standard of review in examining the

trial court’s ruling on a motion for summary judgment and utilizes ‘the same

criteria that govern the trial court’s determination of whether summary judgment is

appropriate.’” Jones v. Boot Bar & Grill, C. Napco, Inc., 2022-0154, p. 12 (La.

22 App. 4 Cir. 10/05/22), ___ So.3d ___, ___, 2022 WL 5110928, at *5 (quoting

Knox v. Elite Prot. Sols. & Willie’s Chicken Shack, LLC, 2021-0419, p. 9 (La. App.

4 Cir. 10/13/21), ___ So.3d ___, ___, 2021 WL 4771758, at *4). Accordingly,

“appellate courts ask the same questions the trial court does in determining

whether summary judgment is appropriate: whether there is any genuine issue of

material fact, and whether the mover is entitled to judgment as a matter of law.” Id.

(quoting Hood v. Cotter, 2008-0215, 0237, p. 9 (La. 12/2/08), 5 So.3d 819, 824).

On a motion for summary judgment, “[t]he burden of proof rests with the

mover.” La. C.C.P. art. 966(D)(1). “The party seeking summary judgment has the

burden of proving there is no genuine issue of material fact.” Jones, 2022-0154, p.

12, ___ So.3d at ___, 2022 WL 5110928, at *6 (citing Suire, 2004-1459, 1460,

1466, pp. 26-27, 907 So.2d at 56). Thereafter, “[i]f the movant satisfies the initial

burden, the burden shifts to the party opposing summary judgment to present

factual support sufficient to show he will be able to satisfy the evidentiary burden

at trial.” Id. at pp. 12-13, ___ So.3d at ___, 2022 WL 5110928, at *6. See also La.

High Sch. Athletics Ass’n, Inc. v. State, 2012-1471, p. 18 (La. 1/29/13), 107 So.3d

583, 598.

“However, if the mover will not bear the burden of proof at trial on the issue

that is before the court on the motion for summary judgment, the mover’s burden

on the motion does not require him to negate all essential elements of the adverse

party’s claim, action, or defense, but rather to point out to the court the absence of

factual support for one or more elements essential to the adverse party’s claim,

action, or defense.” Jones, 2022-0154, p. 13, ___ So.3d at ___, 2022 WL 5110928,

at *6 (quoting Knox, 2021-0419, p. 9, ___ So.3d at ___, 2021 WL 4771758, at *5).

Only after the motion has been made and properly supported does the burden shift

23 from the mover to the adverse party. Id. Subsequently, “the adverse party [must]

produce factual support sufficient to establish the existence of a genuine issue of

material fact or that the mover is not entitled to judgment as a matter of law.” La.

C.C.P. art. 966(D)(1). “The adverse party may not rely on mere allegations or

denials to defeat a motion for summary judgment but must provide specific facts

showing that a genuine issue remains for trial, and failure to do so will result in the

rendering of the summary judgment.” Jones, 2022-0154, p. 13, ___ So.3d at ___,

2022 WL 5110928, at *6 (citing La. C.C.P. art. 967(B)). Any supporting or

opposing affidavits filed in connection with a motion for summary judgment must

be based upon the affiant’s personal knowledge. La. C.P.P. art. 967(A). “‘If the

adverse party fails to provide factual evidence sufficient to establish that he will be

able to satisfy his evidentiary burden of proof at trial, there is no genuine issue of

material fact’ and summary judgment is appropriate.” Jones, 2022-0154, p. 13, ___

So.3d at ___, 2022 WL 5110928, at *6 (quoting Knox, 2021-0419, pp. 9-10, ___

So.3d at ___, 2021 WL 4771758, at *5).

In considering a motion for summary judgment, the trial court cannot make

credibility determinations but must construe reasonable factual inferences in favor

of the party opposing the motion, resolving all doubt in favor of the opponent. Id.

at p. 14, ___ So.3d at ___, 2022 WL 5110928, at *6 (citing Citron, 2014-1096, p.

12, 165 So.3d at 312-13).

“A genuine issue is a triable issue.” Id. (quoting Knox, 2021-0419, p. 10, ___

So.3d at ___, 2021 WL 4771758, at *5). “More precisely, an issue is genuine if

reasonable persons could disagree.” Id. “However, ‘if on the state of the evidence,

reasonable persons could reach only one conclusion, there is no need for a trial on

that issue.’” Id. “A fact is material when its existence or non-existence may be

24 essential to the plaintiff’s cause of action under the applicable theory of recovery.”

Id. “Facts are material if they potentially insure or preclude recovery, affect a

litigant’s ultimate success, or determine the outcome of the legal dispute.” Id.

“Because it is the applicable substantive law that determines materiality, whether a

particular fact in dispute is material can be seen only in light of substantive law

applicable to the case.” Id.

A. NOHC’s Motion for Summary Judgment

NOHC asserted in its Motion for Summary Judgment that it was entitled to

an ad valorem tax exemption pursuant to La. Const. art. VII, § 21(B)(1)(a)(i)

because it fit all of the criteria for eligibility. Louisiana Constitution Article VII, §

21(B)(1)(a)(i), provides:

In addition to the homestead exemption provided for in Section 20 of this Article, the following property and no other shall be exempt from ad valorem taxation:

....

(B)(1)(a)(i) Property owned by a nonprofit corporation or association organized and operated exclusively for religious, dedicated places of burial, charitable, health, welfare, fraternal, or educational purposes, no part of the net earnings of which inure to the benefit of any private shareholder or member thereof and which is declared to be exempt from federal or state income tax[.]

None of the property listed in Paragraph (B) shall be exempt if owned, operated, leased, or used for commercial purposes unrelated to the exempt purposes of the corporation or association.

As this Court noted in Gulf Coast Housing Partnership, Inc. v. Bureau of the

Treasury of City of New Orleans, “[i]t is well-established that exemptions from

taxation are construed against the taxpayer claiming the benefit thereof and must

be clearly, unequivocally, and affirmatively established by the taxpayer.” 2013-

25 0556, p. 12 (La. App. 4 Cir. 11/27/13), 129 So.3d 817, 824 (citing Sherwood

Forest Country Club v. Lichfield, 2008-0194, p. 6 (La. 12/19/08), 998 So.2d 56,

61). See also Whitten Found. v. Granger, 2004-0934, p. 8 (La. App. 1 Cir.

11/3/06), 950 So.2d 720, 724 (citing Archer Daniels Midland Co. v. Par. Sch. Bd.

of the Par. of St. Charles, 2001-0511, p. 11 (La.11/28/01), 802 So.2d 1270, 1278).

In order to qualify for an exemption under La. Const. art. VII, §

21(B)(1)(a)(i), the applicant must meet four requirements: (1) it must be a

nonprofit corporation or organization; (2) no net earnings may inure to the benefit

of any private shareholder or member; (3) the nonprofit must be exempt from

federal or state income tax; and (4) the property cannot be owned, operated, leased,

or used for any commercial purpose unrelated to the exempt purposes of the

nonprofit. Whitten, 2004-0934, p. 8, 950 So.2d at 724. See also La. Const. art. VII,

§ 21(B).

For example, the plaintiff failed to show entitlement to the La. Const. art.

VII, § 21(B)(1)(a)(i) exemption in Whitten. Therein, the plaintiff claimed it was a

nonprofit tax-exempt organization organized and operated for “charitable”

purposes to provide safe, decent, and sanitary rental housing to low- and moderate-

income tenants. Whitten, 2004-0934, p. 3, 950 So.2d at 721. The plaintiff owned

two buildings, and it stipulated that lower-income tenants occupied 30.5% of one

of the units, while 88.6% of tenants in the second building were lower-income. Id.

at pp. 3-4, 950 So.2d at 722. However, the plaintiff granted no rent reductions to

lower-income tenants; and the rents were based on the size and type of the units

and were comparable to others in the parish. Id. at p. 11, 950 So.2d at 726. The

Louisiana First Circuit Court of Appeal concluded that the plaintiff failed to show

that its use of the commercial property was exclusively related to its charitable

26 purposes listed in its application. Id. at p. 11, 950 So.2d at 727. In so concluding,

the Louisiana First Circuit Court of Appeal noted that La. Const. art. VII, §

21(B)(1)(a)(i) “requires that the corporate owner must operate exclusively for the

charitable purposes and that the property cannot be used for any commercial

purpose unrelated to the exempt purposes of the corporation.” Id.5

In its Motion for Summary Judgment, NOHC also asserted that it was a

nonprofit corporation that was exempt from federal and state income taxes, having

attained IRC Section 501(c)(3) status. NOHC contended that as stated in its

Articles of Incorporation, its purpose was to provide “community, healing,

education and charitable purposes including but not limited to, creating and

providing affordable services with a focus on healing (physical, emotional and

spiritual) and education opportunities, acting on its own behalf and in cooperative

endeavors with other not for profit entities.” NOHC stated that it vetted all tenants,

which it referred to as “silos,” to ensure that the goods and services provided by

them would be in compliance with and supportive of NOHC’s charitable purpose

and to serve the community. Additionally, NOHC insisted that the tenants provided

services not readily accessible to the community it served and that their goods or

services all fit within NOHC’s stated charitable purposes. NOHC also maintained

that it reviewed all tenants before signing off on their leases and that each tenant

was required to sign a copy of the NOHC “Credo,”6 committing its business to

5 See also Ruston Hosp., Inc. v. Riser, 191 So.2d 665 (La. App. 2nd Cir.

1966), (wherein the plaintiff remodeled a hospital and reopened it as a nursing home that took no charity patients but charged scheduled rates even to welfare patients. The plaintiff sought an exemption from taxation under a similar provision under the 1921 Louisiana Constitution. The Louisiana Second Circuit Court of Appeal held that the plaintiff failed to show that it qualified as a charity for exemption purposes.).

27 furthering the nonprofit’s objectives. NOHC stated that rents were set at fair

market rate, with no profit motive, but to cover the Healing Center’s overhead:

NOHC averred it and its members did not financially benefit from the rentals.

NOHC also included a list and description of some of the Healing Center’s tenants,

as well as a list of events hosted at the Healing Center.

NOHC attached to its Motion for Summary Judgment the affidavit of

Darlene Marcello (“Ms. Marcello”), NOHC’s executive director, as well as copies

of its application and attachments for its award of Section 501(c)(3) tax-exempt

status. It included copies of: Assessor Williams’ denial of its request for the

exemption from ad valorem property taxes; the tax bill issued for the Healing

Center; its payment under protest; and various financial documents showing a net

loss of income.

In her affidavit, Ms. Marcello stated she was the executive director of

NOHC. Ms. Marcello attested that her statements were based on her personal

knowledge and her review of NOHC’s books and records as maintained in the

ordinary course of its business. She asserted that NOHC was a nonprofit

corporation formed under Louisiana law and had been designated a 501(c)(3)

charity by the IRS on August 15, 2019, stating that the application, supplements,

documents, and award letter were attached to her affidavit. She also identified the

6 NOHC asserts that its Credo states:

We agree to work together, synergistically and holistically, and to create a center rooted in hospitality where neighbors are respected and members of the community are welcomed warmly . . . . Our governing principles are grounded in the spirit of collaborative, cooperative, consensus-driven decision-making. We strive to make decisions based in positivity and courage, rather than fear and negativity . . . . We are dedicated to creating a vibrant and harmonious community that honors diversity, strengthens cultural traditions, and seeks and celebrates common ground.

28 Act of Donation of Immovable Property dated April 30, 2018, that transferred the

building housing the Healing Center from SC/SRR to NOHC, which was also

attached to her affidavit. Ms. Marcello attested that the Healing Center had been

renovated by SC/SRR, using tax credits through the NMTC Program, whose

purpose was to encourage businesses to invest in low-income communities with

limited access to financial resources and to spur economic development. She stated

that SC/SRR had completed its seven-year commitment under the NMTC Program

prior to transferring the property to NOHC, but that operations of the Healing

Center remained the same by serving the surrounding low-income community.

Ms. Marcello set forth NOHC’s descriptions of its charitable purpose used in

both its Articles of Incorporation and its application for its 501(c)(3) status. She

stated that all operations at the Healing Center are carefully and thoroughly vetted

to ensure they are in compliance with NOHC’s charitable purpose and to serve the

community. She explained that the Healing Center is “uniquely structured to be

able to simultaneously help, heal, and empower individuals and communities,”

serving its surrounding downtown neighborhoods “at the economic, social,

environmental, physical/mental, and spiritual levels.” To do so, Ms. Marcello

attested that NOHC provides space to third-parties who supply services and

resources not readily accessible to the nearby community. Ms. Marcello described

the rented spaces as “silos” that allow the tenants to provide services and products

that focus on “promoting physical, nutritional, emotional, intellectual, spiritual,

economic, environmental, cultural, and civil well-being” of the community. She

stated that each silo was designed to promote one or more of these goals. Further,

Ms. Marcello attested that the Board of Directors reviews each potential tenant and

signs off on every lease. She also attested that all tenants must sign a copy of

29 NOHC’s Credo. She explained that rent is set by a third-party leasing agent at

market value with no profit motive but includes a portion of overhead expenses.

Ms. Marcello attested that no member of NOHC’s organization receives profits

from rents paid.

Additionally, Ms. Marcello listed the tenants NOHC had at the time of the

assessment and what they provided, grouping them by the area of benefit to the

community they served. She noted that some of these businesses closed during the

COVID-19 pandemic and that the vacancies had not been re-rented. Ms. Marcello

also provided a list of events that the Healing Center hosted that she described as

fulfilling NOHC’s objectives and purposes. She identified the Application for

Exemption that NOHC filed with the Assessor’s Office, as well as the letter of

denial, the tax bill, and the payment in protest (all of which were also attached to

her affidavit).

B. Assessor Williams’ Motion for Summary Judgment

In his Motion for Summary Judgment, Assessor Williams argued that

NOHC failed to show that it met the test for a tax exemption under La. Const. art.

VII, § 21(B)(1)(a)(i). He noted that under the test, NOHC was required to prove

six things: (1) NOHC owns the property for which it seeks the exemption; (2)

NOHC was exclusively organized for a charitable purpose; (3) NOHC exclusively

operates for a charitable purpose; (4) NOHC is exempt from paying federal and

state income taxes; (5) NOHC’s net earnings do not inure to its shareholders or

members; and (6) NOHC’s building is not owned, operated, leased, or used for any

commercial purpose unrelated to its exempt purpose. Assessor Williams argued

that NOHC failed to prove elements (2) and (3) above because it listed purposes in

addition to those included in the exclusive list provided in La. Const. art. VII, §

30 21(B)(1)(a)(i). He also argued that NOHC failed to show element (6) because not

all of the goods and services provided by its tenants were in furtherance of

NOHC’s stated exempt purpose. Assessor Williams stated that he rejected

NOHC’s application on the grounds that NOHC was not organized or operated

exclusively for a purpose enumerated in La. Const. art. VII, § 21(B)(1)(a)(i) and

NOHC did not show that all of its tenants engaged in business that was related to

its exempt purpose.

In support of his Motion for Summary Judgment, Assessor Williams

attached affidavits from himself; Thomas Sandoz (“Mr. Sandoz”), the director of

the Commercial Appraisal Department for the Orleans Parish Assessor’s Office;

Tung Nguyen (“Mr. Nguyen”), a former tenant at the Healing Center; Keith

Lavigne (“Mr. Lavigne”), an appraiser employed by the Assessor’s Office; and

Reese F. Williamson (“Mr. Williamson”), the attorney for the Orleans Parish

Assessor (Mr. Williamson’s affidavit stated that he had personal knowledge of all

exhibits attached to Assessor Williams’ Motion for Summary Judgment). Assessor

Williams also attached copies of a memorandum from Mr. Lavigne to him

concerning a January 7, 2022 analysis of businesses in the Marigny and Bywater

neighborhoods that were comparable to the businesses that were tenants in the

Healing Center; the December 31, 2019 Financial Statements and Independent

Auditor’s Report for NOHC; and Transcripts of the 1973 Louisiana Constitutional

Convention concerning the enactment of La. Const. art. VII, § 21(B)(1)(a)(i).

1. Assessor Williams’ Affidavit

In his affidavit, Assessor Williams identified the property at issue and

described its tenants as a mixture of commercial tenants conducting various trades

or businesses, which he termed as typical for a commercial building. Assessor

31 Williams stated that because this mix of tenants could be found in any commercial

building, he denied NOHC’s application for its exemption. Specifically, he stated

that he “did not find that NOHC is organized or operates” the Healing Center

“exclusively for any enumerated exempt purpose such as: religious, dedicated

places of burial, charitable, health, welfare, fraternal or educational purposes.” He

noted that the rents and fees charged to the tenants were in the range of similar

businesses in the area, and he opined that the tenants do not provide unique

services or sell unique products not otherwise available in the area, contrary to

NOHC’s claim. Assessor Williams further pointed out that prior to NOHC’s

ownership of the Healing Center, these same tenants were providing the exact

services or goods as when the Healing Center was owned by SC/SRR, a for-profit

entity. He stated that NOHC and SC/SRR performed the same functions and

offered leases to almost all of the same tenants. He explained that while SC/SRR

owned the building, it paid the ad valorem taxes and did not seek an exemption.

2. Mr. Sandoz’s Affidavit

Mr. Sandoz stated that he is a Louisiana State Certified Residential Real

Estate Appraiser who is the Director of the Commercial Appraisal Department for

the Orleans Parish Assessor’s Office. He attested that he reviewed and analyzed

the rents paid by the tenants at the Healing Center and then compared them to the

current fair market value of rents reported for leased space in the surrounding

neighborhoods. Mr. Sandoz stated that the Healing Center had 32,761 square feet

of net rentable space, which computed to a total gross annual rent of $559,833.

Further, Mr. Sandoz stated that rentals in the Healing Center ranged from $6 to $60

a square foot: omitting these outliers, he provided that the average cost was $17.09

per square foot. Additionally, Mr. Sandoz stated that tenants also paid a portion of

32 the Healing Center’s overhead, based upon each tenant’s percentage of the square

footage it occupied. Adding in these costs, Mr. Sandoz calculated that the average

rental rate was $23.58 per square foot. He further stated that the average range of

rental for the area was $18-$22 per square foot.

Mr. Sandoz stated that he also analyzed the Healing Center’s tenant list to

determine if their services were unique to the neighborhood or if there were

existing comparable businesses in the neighborhood. He identified his attached

analysis. Mr. Sandoz stated that Mr. Lavigne, also a Louisiana State Certified Real

Estate Appraiser who works for the Assessor’s Office, helped him with his analysis

through data collection and analysis, relevant market research, and verbal and

electronic communication with involved parties.

3. Mr. Nguyen’s Affidavit

Mr. Nguyen identified himself as a former tenant of the Healing Center. He

explained that he operated the Em Trai Sandwich Company until Hurricane Ida in

August 2021, which caused him to close. Mr. Nguyen stated that he became aware

of the vacant area in the Healing Center when he saw a “for lease” sign, and he

contacted the real estate agent to rent the property. He also stated that his company

received no special break in rent: he paid $5000 a month in rent and $1500 for gas

and electricity. Mr. Nguyen described the rental as a purely commercial

transaction.

4. Mr. Lavigne’s Affidavit

Mr. Lavigne stated that he is a Louisiana licensed Certified Residential Real

Estate Appraiser who is employed by the Assessor’s Office. In this capacity, Mr.

Lavigne explained that he was asked to review the businesses in the Healing

Center and in the surrounding neighborhood to see if the ones in the Healing

33 Center were unique to the area. Mr. Lavigne attested that he obtained a list of the

Healing Center’s tenants and documented his findings in a memo to Assessor

Williams entitled “Analysis of Marigny and Bywater Neighborhood[s].” He stated

that his study showed that there were many comparable businesses within a 1.25-

mile radius of the Healing Center. Mr. Lavigne also described the St. Claude

Avenue corridor as “a popular neighborhood that has experienced a continued

influx in commercial and rental activity.” He concluded that his analysis showed

that within a 1.25-mile radius of the Healing Center were businesses that provided

services or products similar to those that the Healing Center’s tenants provided.

II. ASSESSOR WILLIAMS’ ASSIGMENTS OF ERROR AS TO THE DENIAL OF HIS MOTION FOR SUMMARY JUDGMENT AND THE GRANTING OF NOHC’S MOTION FOR SUMMARY JUDGMENT

In his brief to this Court, Assessor Williams reiterates the arguments he

presented in his Motion for Summary Judgment. He recounts the history of the

ownership of the Healing Center, noting that at least fourteen of the Healing

Center’s tenants in 2020 had begun their leases under SC/SRR’s ownership of the

building. Assessor Williams explains that NOHC’s Articles of Incorporation lists

NOHC’s four main purposes as community, healing, educational, and charitable.

He notes that NOHC’s overall mission is to provide “healing services” to the

community, and it characterized each lease as a type of “healing,” including

economic, social, environmental, physical, or spiritual healing. Further, Assessor

Williams points out that NOHC identified four tenants that are nonprofits, but its

pleadings either do not reference them or produced no documentation for them;

and he contends that one was not a nonprofit as listed in NOHC’s audited

financials and audited report.

34 Assessor Williams explains that the Healing Center leased space to a fitness

center, a sandwich shop, a barber shop, a veterinarian, an engineering firm, a yoga

studio, a law firm, a radio station, a bar, a florist, and a credit union, each of which

NOHC argues provides unique goods and services that are not readily accessible to

the community and fits within NOHC’s category of healing. Assessor Williams

counters, however, that these goods and services are not unique. He points out

with respect to the Healing Center’s hair cutting service, which NOHC classified

as “physical healing,” that there were at least seven other hair cutting services

within a one-mile radius. While NOHC classified its credit union tenant as “the

sole provider of economic healing” for the neighborhood, Assessor Williams noted

that there were six other financial institutions in the neighborhood, four of which

are within walking distance. He disputes NOHC’s claims of uniqueness as to its

businesses’ “physical healing” (a yoga studio, a group dance center, and a fitness

center), noting there were seven others in the area; a physical therapy business,

noting three others in the area; a co-op grocery store, noting five other grocery

stores in the area; a sandwich shop (“nutritional healing”), noting four others on

the same street; and a veterinarian, an engineering firm, and a florist

(“environmental healing”), noting four pet care businesses, three engineering

firms, and three plant stores/florists in the area. Assessor Williams also reiterates

the average rental rate for tenants of the Healing Center.

Assessor Williams cites the standards for when a property owner is entitled

to a La. Const. art. VII, § 21(B)(1)(a)(i) exemption and concludes that NOHC did

not establish that it could meet these; thus, the trial court erred by denying his

Motion for Summary Judgment and by granting NOHC’s Motion for Summary

Judgment. He breaks down his assignment into five arguments on the merit; his

35 sixth argument concerns the trial court’s reliance on facts that he asserts were

inadmissible. We combine the first three arguments for discussion, as well as the

fourth and fifth.

1. NOHC failed to show it was organized exclusively for exempt purposes as listed in [La. Const. art. VII, § 21(B)(1)(a)(i)];

2. NOHC failed to show and Assessor Williams proved [NOHC] was not operated exclusively for exempt purposes listed in [La. Const. art. VII, § 21(B)(1)(a)(i)]; and

3. NOHC erroneously relied upon its income tax exempt status under IRC Section 501(c)(3) to show that it is entitled to a property tax exemption under La. Const. art. VII, § 21(B).

As noted above, NOHC’s Articles of Incorporation set forth that NOHC’s

four main purposes are community, healing, educational, and charitable. By

contrast, the exclusive purposes allowed by La. Const. art. VII, § 21(B)(1)(a)(i) are

for religious, dedicated places of burial, charitable, health, welfare, fraternal, or

education purposes. It further provides that none of the property listed in Paragraph

B shall be exempt if owned, operated, leased, or used for commercial purposes

unrelated to the exempt purposes of the corporation or association. Assessor

Williams points to the fact that in addition to the allowed purposes of charitable

and educational, NOHC’s avowed purposes are also community and healing, two

purposes not allowed by La. Const. art. VII, § 21(B)(1)(a)(i).

Likewise, Assessor Williams alleges that NOHC cannot meet its burden of

proving that it operated exclusively for the enumerated purposes set forth in La.

Const. art. VII, § 21(B)(1)(a)(i). He points out that NOHC appears to equate its

exempt status under IRC Section 501(c)(3) from paying federal income tax with its

requested exempt status for ad valorem taxes under La. Const. art. VII, §

21(B)(1)(a)(i). However, these two provisions do not have the same requirements.

36 The list of approved purposes of Section 501(c)(3) includes scientific, testing for

public safety, literary, fostering sports competitions, preventing cruelty to children,

and preventing cruelty to animals, none of which is an exclusive purpose listed in

La. Const. art. VII, § 21(B)(1)(a)(i), while some of the purposes of La. Const. art.

VII, § 21(B)(1)(a)(i) would not be acceptable for Section 501(c)(3) purposes.

We find that NOHC failed to show in its Motion for Summary Judgment and

attachments thereto that it will meet its burden of showing that it was exclusively

organized and operated pursuant to one or more purposes set forth in La. Const.

art. VII, § 21(B)(1)(a)(i). Many of NOHC’s “purposes” as set forth in its pleadings

are generalized and arguably could fall within the definition of “charitable,” but

such possibility does not amount to a showing that NOHC would prevail at trial on

this issue. Because there are genuine issues of material fact and reasonable minds

could differ on this issue, we conclude that the trial court erred in granting

NOHC’s Motion for Summary Judgment. See La. C.C.P. art. 966; Jones, 2022-

0154, p. 13, ___ So.3d at ___, 2022 WL 5110928, at *6 (quoting Knox, 2021-

0419, p. 10, ___ So.3d at ___, 2021 WL 4771758, at *5).

4. NOHC failed to show that it met requirement (6), relying on erroneous law; and

5. Assessor Williams has established NOHC cannot prove requirement (6) because the Healing Center was used for commercial purposes unrelated to NOHC’s exempt purpose.

In these assignments of error, Assessor Williams asserts that NOHC failed to

show that the tenants used the Healing Center exclusively for the permitted exempt

purposes NOHC listed in its application for the exemption. He also argues that

NOHC erroneously relies for support upon the case of Pratt-Stanton Manor Corp.

v. Parish of Orleans, which addressed only the taxpayer’s purpose of operation,

37 not whether the property was operated for a commercial purpose unrelated to the

nonprofit’s exempt purpose. 2002-0358 (La. App. 4 Cir. 6/19/02), 821 So.2d 748.

In addition, Assessor Williams asserts that he has established that NOHC cannot

show that the Healing Center was not used for commercial purposes unrelated to

the exempt purposes of NOHC.7 As noted above, the only purposes that NOHC

adopted in its Articles of Incorporation that fit within the requirements of La.

Const. art. VII, § 21(B)(1)(a)(i) are charitable and educational; therefore, Assessor

Williams contends that NOHC must show that none of its tenants conducted their

businesses for a commercial purpose unrelated to NOHC’s exempt purpose.

First, Assessor Williams points to the fact that NOHC never provided an

accurate list of tenants: he asserts that the list varies between the pleadings,

affidavits, financial records, etc. He notes that twenty-five of twenty-six tenants

listed in NOHC’s Motion for Summary Judgment are nonprofits, but NOHC made

no argument that these tenants offered goods or services for free or at reduced cost,

or that there was any restriction by NOHC on how much the tenant could charge.

At best, Assessor Williams contends that NOHC stated that the goods and services

of some tenants are provided at “affordable” rates or costs. Additionally, Assessor

Williams notes that while NOHC stated that each tenant signed its Credo, NOHC

never produced any signed copies of the Credo, despite his requests for them in

discovery. He also notes that the signed leases that NOHC provided did not

reference the Credo.

Assessor Williams also points out inconsistencies in NOHC’s pleadings with

respect to how NOHC vetted its potential tenants to ensure that their businesses

7 Assessor Williams also argues that NOHC cannot show its own charitable

purpose because it charges rent to its tenants at full market value and adds overhead costs.

38 would further NOHC’s exempt purpose under La. Const. art. VII, § 21(B)(1)(a)(i).

NOHC originally stated that it used a three-part test to vet its tenants: the tenant

had to accept NOHC’s mission statement; the tenant had to agree and abide by

NOHC’s Credo; and the tenant had to submit an application showing its

qualifications. Later, NOHC admitted that it did not require an application; instead

it required the tenant to submit a business plan and a signed Credo. In his Reply

Brief, Assessor Williams additionally notes that almost all of the Healing Center’s

tenants signed leases before SC/SRR donated the building to NOHC, and it was

difficult to determine how NOHC vetted them.

Assessor Williams further points out that while NOHC asserted that the

tenants provided service not otherwise available in the area, he supplied evidence

that there were other similar services available in the area. Assessor Williams notes

that merely labeling a service or business as a form of “healing” does not show that

it is a business conducted within an exempt purpose for La. Const. art. VII, §

21(B)(1)(a)(i) purposes.

In its Appellee Brief, NOHC argues that it is entitled to the exemption

because it is a nonprofit that is exempt from the payment of income taxes under

Section 501(c)(3). It also asserts that it was organized and operated “exclusively”

for broad charitable purposes. NOHC points to its Articles of Incorporation and

asks this Court not to penalize it because it did not specify how each of its acts and

those of its tenants was charitable.8

We find that the competing Motions for Summary Judgment and their

respective attachments show that there are genuine issues of material fact that

8 NOHC also argues that it will be forced to close if it does not obtain the tax

exemption.

39 preclude the granting of the motions on either side. NOHC’s lack of specificity in

its Motion for Summary Judgment as to how each of its 2020 tenants furthered

NOHC’s avowed charitable purpose does not preclude it doing so at trial: this

merely establishes that NOHC failed to carry its burden in its Motion for Summary

Judgment. Thus, the trial court erred by granting NOHC’s Motion for Summary

Judgment. Likewise, because NOHC may be able to carry this burden at trial, the

trial court correctly denied Assessor Williams’ Motion for Summary Judgment.

Having reversed the trial court’s ruling on NOHC’s Motion for Summary

Judgment, we remand this matter for further proceedings.

6. Whether the Trial Court’s Rulings Were Based on Facts Contrary to the Record and on Inadmissible Evidence to Which Assessor Williams Had Objected.

Lastly, Assessor Williams contends that the trial court’s rulings on the

Motions for Summary Judgment must be reversed because they were based “in

toto” on arguments and attachments contained in NOHC’s Motion for Summary

Judgment and in NOHC’s Opposition to Assessor Williams’ Motion for Summary

Judgment. He points to the inconsistencies in NOHC’s various pleadings and

documents. Assessor Williams also notes that he had objected to most of Ms.

Marcello’s affidavit and its attached documents on the basis of the hearsay nature

of some of her statements and the lack of authentication of the attachments but that

the trial court failed to rule on his objections. Because we reverse the trial court’s

ruling on NOHC’s Motion for Summary Judgment and remand the case for further

proceedings, the trial court should rule on Assessor Williams’ objections on

remand.

40 DECREE

Considering the foregoing, we affirm the trial court’s denial of Assessor

Williams’ Motion for Summary Judgment; reverse the trial court’s granting of

NOHC’s Motion for Summary Judgment; deny Assessor Williams’ Exceptions of

Prescription and No Cause of Action; deny NOHC’s Motion to Strike Assessor

Williams’ Reply Brief; and remand this case for further proceedings consistent

with this Opinion, including a ruling by the trial court on Assessor Williams’

objections to evidence provided by NOHC.

AFFIRMED IN PART; REVERSED IN PART; REMANDED WITH INSTRUCTIONS