Pendleton v. Shell Oil Co.

399 So. 2d 1276
CourtLouisiana Court of Appeal
DecidedJune 2, 1981
Docket11933
StatusPublished
Cited by6 cases

This text of 399 So. 2d 1276 (Pendleton v. Shell Oil Co.) 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
Pendleton v. Shell Oil Co., 399 So. 2d 1276 (La. Ct. App. 1981).

Opinion

399 So.2d 1276 (1981)

Patricia McCarthy, wife of Neal PENDLETON, Jacqulin Ann DeLaune, wife of Gerald DeLaune, Virginia Fremaux, wife of L. C. Soileau, III, Rose Mary Fremaux, wife of Robert Schlicher, Jr. and Edward C. Fremaux
v.
SHELL OIL COMPANY.

No. 11933.

Court of Appeal of Louisiana, Fourth Circuit.

June 2, 1981.

*1277 Alonzo T. Stanga, III, Metairie, for plaintiffs-appellees.

Hulse, Nelson & Wanek, Craig R. Nelson, New Orleans, for defendant-appellant.

Before BOUTALL, BARRY and KLEES, JJ.

BARRY, Judge.

Defendant appeals from a judgment ordering its eviction resulting from an alleged breach of contractual obligations as a lessee.

This scenario began in 1954 when Luchester McCarthy purchased property in Jefferson Parish and subsequently filed a counter letter providing that Edna C. Neely was a co-owner[1]. In 1957 McCarthy leased the property to Shell Oil Company for fifteen years at $375.00 per month with a five year option at $600.00 monthly. Shell then constructed a service station and, in 1969, contacted McCarthy seeking an extension of the lease. On June 13, 1969 a new lease was negotiated to become effective August 1, 1969 at a rental of $600.00 per month and during the following four years Shell spent approximately $80,000.00 to renovate the property. In 1979 Shell demolished the service station and constructed a self-service facility; on adjacent land, previously leased from another owner in 1958, Shell built a four-bay service station in conjunction with its operation.

Plaintiffs filed a rule to evict Shell alleging that under terms of the 1957 lease they became owners of the service station when that lease was terminated in 1969 and demolition of their station constituted a breach of the lease. Shell filed dilatory and peremptory exceptions, the matter received a full hearing, and the district court orally stated that "... by a preponderance of the evidence the lease was in fact breached". Shell filed this appeal urging: that its dilatory exception to use of a summary proceeding for eviction was valid; that dismissal of its peremptory exception of non-joinder of an indispensable party, Shell's sub-lessee, was error; that the trial court erred in determining Shell breached its lease and in holding that plaintiffs had a right of reversion; that the trial court committed error on rulings concerning admissibility of evidence; and that Shell did not receive a fair trial because of the lower court's conduct during trial.

*1278 Ownership of the service station building at the time of its demolition should be determined first. Under the 1957 lease, Article 6, Shell had the right to and did construct an automobile service station at a cost of $25,000.00 and Article 14 of the lease provides in part:

"All buildings and improvements constructed, installed or placed on the premises by Shell, at any time during the term of this lease or any extension thereof or any tendency thereafter, shall become lessor's property at the termination of this lease or any tenancy thereafter."

It should be noted Article 14 was a specially typewritten clause used in lieu of a standard clause which provided that improvements on the leased property would be owned by the lessee at the end of the lease.

Again, in the 1969 lease the following standard language was stricken:

"All buildings, improvements, equipment, and other property constructed, installed or placed on the premises by Shell or acquired by Shell, at any time during the continuance of this or any previous lease or any tenancy thereafter; shall be and remain Shell's property, and Shell shall have the right to remove any or all of the same from the premises at any time during, and within sixty (60) days after any termination of this lease or any tenancy thereafter."

Had this provision remained a part of the 1969 lease, Shell could have reasonably argued that it retained ownership of the original service station and had the right to remove it during the term of the 1969 lease. However, the provision was lined out and initialed by the parties with the notation "see rider attached" which provides:

"All buildings and improvements constructed, installed or placed on the premises by Shell, at any time during the term of this lease or any extension thereof or any tenancy thereafter, shall become lessor's property at the termination of this lease or any tenancy thereafter. All equipment or other property installed or placed on the premises by Shell or acquired by Shell, at any time during the term of this or any previous lease or any extension thereof or any tenancy thereafter, shall be and remain Shell's property, and Shell shall have the right to remove any or all of the same from the premises, at any time during, and within sixty (60) days after any termination of, this lease or any tenancy thereafter."

This rider to the 1969 lease refers to "buildings and improvements" constructed during the term of the 1969 lease, and makes no reference to buildings constructed during the 1957 lease. We also note that the 1969 lease distinguishes between "buildings and improvements" and "equipment and other property", the former belonging to the lessors and the latter belonging to the lessee upon termination of the lease.

After the parties negotiated the new lease on June 13, 1969, for some reason they signed an agreement on July 30, 1969 to terminate the 1957 lease effective July 31, 1969, one day prior to commencement of the re-negotiated lease on August 1, 1969. The termination agreement provided that the parties:

"Agree that the lease dated June 19, 1957 ... shall be and is hereby terminated, effective as of July 31, 1969; and release each other from all claims which either now has against the other under or by virtue of the lease, as amended, supplemented or extended, reserving, however, to Shell its rights thereunder to remove its property from the premises...".

Shell argues that this provision released both parties from any cause of action and there is no basis for this lawsuit. However, when the termination agreement was executed in 1969 the service station building had not been demolished and this cause of action had not yet accrued. The last portion, providing for Shell to remove its property from the premises, refers to "equipment or other property". The provision "or any tenancy thereafter" is an alternative period to determine ownership of improvements, but is inapplicable if the lease is terminated.

*1279 Our courts have consistently enforced lease agreements providing that improvements placed on leased premises would become the property of the landowner on termination of the lease. Collette v. Blanchard, 348 So.2d 722 (La.App. 1st Cir. 1977); Salem v. Haggart, 189 So.2d 283 (La.App. 3rd Cir. 1966). Clearly, the 1957 lease provided and we conclude that any building constructed on the property during the lease became the lessors' property when the lease was terminated in 1969.

The lessors urge, in the alternative, that the second (1969) lease constituted a novation between the parties; however, since the original lease was effectively terminated by the parties in writing there is no reason to consider a novation.

The next question is whether demolition of lessors' building was sufficient to rescind the lease. Article 5 of the 1969 lease reads:

"USE OF PREMISES.

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Related

Allain v. Shell Western E & P, Inc.
762 So. 2d 709 (Louisiana Court of Appeal, 2000)
Shataka v. Bragg
491 So. 2d 671 (Louisiana Court of Appeal, 1986)
Johnson v. Patcraft Mills, Inc.
486 So. 2d 1178 (Louisiana Court of Appeal, 1986)
Pendleton v. Shell Oil Co.
408 So. 2d 1341 (Supreme Court of Louisiana, 1982)
McCarthy v. Shell Oil Co.
404 So. 2d 1258 (Supreme Court of Louisiana, 1981)

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399 So. 2d 1276, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pendleton-v-shell-oil-co-lactapp-1981.