Sauve Heirs, Inc. v. REYNADU CONST. CO., INC.

441 So. 2d 239
CourtLouisiana Court of Appeal
DecidedOctober 6, 1983
DocketCA 0631
StatusPublished
Cited by5 cases

This text of 441 So. 2d 239 (Sauve Heirs, Inc. v. REYNADU CONST. CO., INC.) 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
Sauve Heirs, Inc. v. REYNADU CONST. CO., INC., 441 So. 2d 239 (La. Ct. App. 1983).

Opinion

441 So.2d 239 (1983)

SAUVE HEIRS, INC.
v.
REYNAUD CONSTRUCTION CO., and John D. Reynaud, Jr.

No. CA 0631.

Court of Appeal of Louisiana, Fourth Circuit.

October 6, 1983.
Rehearing Denied December 21, 1983.

*241 Donald A. Meyer, Shushan, Meyer, Jackson, McPherson & Herzog, New Orleans, for defendant-appellee.

C. Ellis Henican, Henican, James & Cleveland, New Orleans, for plaintiff-appellant.

Ralph L. Kaskell, Jr., Deutsch, Kerrigan & Stiles, New Orleans, for third-party defendant-appellee J.J. Krebs & Sons, Inc.

William J. Wegmann, Sr., Frederick R. Bott, Patricia Maureen Joyce, Deutsch, Kerrigan & Stiles, New Orleans, for third-party defendant-appellee J.J. Krebs & Sons, Inc.

C. Murphy Moss, Jr., and George E. Cain, Jr., Lemle, Kelleher, Kohlmeyer & Matthews, New Orleans, for third-party defendant-appellee Commonwealth.

Before REDMANN, SCHOTT and CIACCIO, JJ.

SCHOTT, Judge.

This is an action for damages for fraud allegedly committed in the sale of real estate from defendant, Reynaud Construction Company, Inc., to plaintiff, Sauve Heirs, Inc. Alternatively, plaintiff seeks compensation based upon mutual error in the contract of sale. Also joined as a defendant was John D. Reynaud, Jr. based on an indemnification agreement. This appeal is from the trial court's dismissal of plaintiff's case. The issues are whether plaintiff is precluded from recovering because a levee over a substantial part of the property it purchased constituted an apparent servitude in accordance with Richmond v. Zapata Development Corp., 350 So.2d 875 (La. 1977), and if not, whether the facts support plaintiff's position based on either fraud or mutual error. Other potential issues include the proper measure of damages, the liability of a surveyor, J.J. Krebs & Sons, as third party defendant, and the liability to Krebs of Commonwealth Land Title Insurance company, on third party demand.

The sale in question was confected on December 10, 1973, and transferred title to a number of lots in Sections 2 and 3 of Lake Trail Subdivision in Jefferson Parish as well as Parcel A, which is the focal point of this controversy. All the property was described as follows:

"Parcel "A" of Section III, which said Parcel "A" contains 3.468 acres and measures 179.70 feet front on 45th Street and a first depth of 4.68 feet along its line common to Lot 171, Square 13, Section III, by a second depth along the line adjoining Lot 171 of 204.17 feet and by a third depth along the westerly line of the subdivision of 555.56 feet and a depth on the opposite sideline (David Drive side) of 740.72 feet, with a width in the rear of 255.48 feet."

According to the survey Parcel A is clearly located between 45th Street on the south and the right of way of the Pontchartrain Levee District on the north.

Following the purchase plaintiff sold all the property except Parcel A and four lots just south of it to Don Villarubia, who was to construct a bridge over the canal at 41st Street and cut Lake Trail Drive up the middle of the subdivision to Parcel A. As he was doing this work on September 30, 1974, he discovered that the Lake Pontchartrain levee was located on Parcel A. He reported this to the plaintiff's principals, Charles McHale and Frank Spalitta, who in turn discovered that the southern boundary of the levee right of way was the northern *242 side of 45th Street, so that Parcel A was wholly within the right of way and was virtually useless to plaintiff.

The subject sale was not a typical one, but, instead, was the culmination of a joint project launched by the parties in June, 1972. A proper understanding of the issues requires a discussion of this background. Plaintiff had held title to a forty-two feet wide strip of land stretching almost two miles from Interstate 10 Highway in Kenner toward Lake Pontchartrain. Defendant had an option to purchase an adjacent Tract X measuring about 185 feet wide. Both parties recognized the advantage of combining the properties for the purpose of a residential subdivision since neither property standing alone could be developed economically. The agreement they reached in June, 1972, provided for plaintiff to convey to defendant the Sauve tract and for defendant to purchase Tract X. Defendant would obtain from the governmental authorities approval of a subdivision of the property consisting of Section 1 between 31st Street and West Esplanade Avenue, Section 2 between West Esplanade and 41st Street, and Section 3 from 41st Street to Lake Pontchartrain, and upon completion of the development defendant would retain Section 1, plaintiff would get Section 3, and the parties would divide the lots in Section 2. The transfer of the property allotted to plaintiff would be for one-half the costs expended by defendant in the acquisition and development of the tract.

Although the basic concept seemed clear when the time came for defendant to convey to plaintiff its share of the project differences developed which took several months of difficult negotiations to resolve. However, in November, 1973, the parties finally entered into an agreement to purchase which spelled out exactly what lots plaintiff would take from Section 2 along with the whole of Section 3 and what price would be paid by plaintiff. In the agreement to purchase as in the act of sale Parcel A was included by the description given above.

When McHale and Spalitta contacted Krebs about Parcel A being within the levee right of way they were informed that in October, 1972, defendant's attorneys, Louis Graham and J.B. Kiefer, had been sent a perimeter survey of the property which specifically showed the southern boundary of the right of way to be on the north side of 45th Street. This survey also showed a title problem on the western side of Section 3 consisting of a substantial encroachment on several lots in the northwest corner of Section 3.

According to Graham and Kiefer they never saw this survey but they were told of the title conflict and were shown a tracing in Krebs' office showing the conflict but not the southern boundary of the right of way. They immediately studied their title files along with abstracts of the neighboring properties and concluded that there was no encroachment. They so informed Krebs and asked that the encroachment's designation be removed. The survey was revised to delete the encroachment, but it still showed the southern boundary of the right of way to be at the north line of 45th Street. According to Krebs this corrected perimeter survey would have been sent to Reynaud, Graham and Kiefer, but they all denied having seen this survey.

In any event this perimeter survey dated October 24, 1972, was revised in July, 1973, to show the lots, squares, and streets of the subdivision in Sections 2 and 3. The last lots on the north side of Section 3 were shown to be at 45th Street. However, this revised survey incredibly omitted the southern boundary of the Pontchartrain Levee right of way. Instead, the survey indicated the presence of a viable, useful, and valuable piece of property designated as Parcel A located between 45th Street and the levee right of way line, ostensibly the southern boundary line but in actuality the northern boundary.

Plaintiff's case of fraud against defendant is based on the theory that Reynaud, Graham and Kiefer all knew there was no Parcel A, that this information had been disclosed by the earlier Krebs' surveys, and *243

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Bluebook (online)
441 So. 2d 239, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sauve-heirs-inc-v-reynadu-const-co-inc-lactapp-1983.