Spangenberg v. Yale Materials Handling-La.

407 So. 2d 1270
CourtLouisiana Court of Appeal
DecidedDecember 8, 1981
Docket12140
StatusPublished
Cited by7 cases

This text of 407 So. 2d 1270 (Spangenberg v. Yale Materials Handling-La.) 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
Spangenberg v. Yale Materials Handling-La., 407 So. 2d 1270 (La. Ct. App. 1981).

Opinion

407 So.2d 1270 (1981)

Richard B. SPANGENBERG, Robert W. Merrick, and Boh Bros. Construction Co., Inc., a Joint Venture, d/b/a Industrial Property Development Company
v.
YALE MATERIALS HANDLING-LOUISIANA, INC.

No. 12140.

Court of Appeal of Louisiana, Fourth Circuit.

December 8, 1981.
Rehearing Denied January 21, 1982.

*1271 Reuter & Reuter, Arthur C. Reuter, New Orleans, for plaintiffs-appellees.

Sessions, Fishman, Rosenson, Boisfontaine & Nathan, Robert E. Barkley, Jr., New Orleans, for defendant-appellant.

Before SAMUEL, BOUTALL and CHEHARDY, JJ.

CHEHARDY, Judge.

Defendant, Yale Materials Handling-Louisiana, Inc. (Yale), appeals a district court decision in favor of plaintiffs, Richard B. Spangenberg, Robert W. Merrick and Boh Bros. Construction Co., Inc. (a joint venture, doing business as Industrial Property Development Co. [IPD]), and against the defendant in the amount of $84,958 with legal interest due from January 30, 1979. The judgment also noted that it was subject to a credit in favor of defendant, as per joint stipulation of counsel, of $22,296.59.

The defendant has also appealed a trial court decision denying its motion to recuse the district court judge who rendered the decision in the present case.

The issue of this case is the interpretation of a paragraph in a five-year contract of lease (with an option of renewal for another five years) executed between the plaintiffs and defendant, which states:

"24. Improvements by Landlord:
"Prior to the commencement of the term of this lease, Landlord shall at its own expense complete construction, to Tenant's satisfaction, of the improvements on the Premises as shown in Exhibits `A', `B' and `C', attached hereto and made part hereof. In the event that Tenant requests Landlord to make any changes or additions to the improvements delineated on Exhibits `A', `B' and `C' which would result in increased cost, Tenant may pay such increased cost to the Landlord in cash upon completion of said improvements, or in lieu of a cash payment, Tenant may, at its option, choose to pay as additional rent during each year of the term and the extended term, if this lease is extended by Tenant, an amount equal to 17.22% of the actual cost increase to Landlord resulting from Tenant's changes or additions."

The lease between the parties was signed August 9, 1978 and went into effect on December 1, 1978.

In his written reasons for judgment the district court judge stated:

"On August 9, 1978, plaintiffs and defendant entered into a written lease for the rental of certain warehouse space owned by plaintiffs located at 5800 Jefferson Highway and known as Brookhollow Distribution Center. The lease was for a term of five (5) years, with an option to renew for an additional five years. Attached to the lease were drawings identified therein as Exhibits `A', `B' and `C', which indicated improvements which plaintiffs had agreed to make upon the premises.

* * * * * *

"Subsequent to the signing of the lease, defendant requested what it termed `additional improvements', i.e., additions to those delineated in Exhibits `A', `B' and `C'. The cost of these improvements was $84,958.00, and defendant invoked the above-quoted lease clause, electing to pay 17.22% of the cost over the five-year term of the lease. Plaintiffs informed defendant that the improvements could not be funded pursuant to paragraph 24 of the lease agreement, *1272 because the improvements were not additions to those contemplated by the parties and delineated in Exhibits `A', `B' and `C', but rather were completely new and different `special purpose' improvements. Therefore, subsequently, defendant, thinking that plaintiffs would pay for same, ordered the additional improvements directly through Broadmoor Corporation, the contractor who constructed the improvements. After the completion of the improvements, plaintiffs were informed by defendant that defendant was not going to pay Broadmoor for the improvements, but rather was going to pay plaintiffs via an increased monthly rental as stipulated in paragraph 24 of the lease. Plaintiffs were therefore required to pay, under protest, the entire bill due Broadmoor in cash.

"Plaintiffs now institute this action to recover the cost of the `special purpose' improvements, $84,958.00. At issue is the interpretation of paragraph 24 of the lease agreement, i.e., whether or not the improvements are those contemplated as `additional' improvements under the terms of the lease.

"Normally, the contract, or in this case, lease, constitutes the law between the parties and courts are obliged to enforce the contract as written. * * * However, the fact that a real controversy exists between the parties intentions is a valid basis for the consideration of parol evidence. * * * It is abundantly clear that a `real controversy' does exist between the parties in the case at bar; indeed, plaintiffs' and defendant's interpretation of the lease provisions in question are completely at odds.

"The Court therefore has allowed both parties to present evidence regarding these intentions vis a vis the lease agreement. Working well into the evening hours for two days, the Court received lengthy testimony from both plaintiffs and defendant in support of their respective positions.

"The testimony of the witnesses presented was clear and convincing:

"Prior to the signing of the lease, all parties were aware that improvements in the form of generalized office space would be needed. These improvements were to cost approximately $66,000 and were evidenced by original drawings executed by a Mr. Alphonso. Plaintiffs agreed to pay for the improvements as delineated in the Alphonso drawings, and, on August 9, 1978, signed the lease of the property with defendant. Nothing has been mentioned regarding additional improvements up to this date. On August 10, 1978, the very next day, a meeting was held on the job site between Mr. Spangenberg and Mr. Merrick, plaintiffs, and Mr. Joseph Tranno, general manager of defendant's operation, Mr. Dennis Burmaster, project manager for Broadmoor Corporation, and a Mr. Crocker and Mr. Baker, employees of defendant corporation, who apparently flew in from defendant's home base in the East or Midwest.

"At that meeting, Mr. Crocker presented new drawings on behalf of defendant which indicated the `additional improvements' which would be needed. Mr. Spangenberg, Mr. Merrick, and even Mr. Burmaster, defendant's own witness, all testified that they were shocked by the Crocker drawings. The witnesses stated that the improvements called for by the Crocker drawings were radically different from those specified and agreed upon by the parties in the Alphonso drawing. Mr. Spangenberg stated that the Crocker improvements included such special purpose items as a paint spray booth, requiring extensive electrical work to be done through the roof of the warehouse, additions of entire concrete block walls, and the installation of specialized floor drains and intensive lighting equipment. Mr. Merrick testified that he is in the business of leasing warehouse space, owning over 1,000,000 square feet of warehouse rental property in the city. He further stated that defendant's requested additions were strictly `special purpose' and was of little or no value to other potential business. Additionally, Mr. Merrick testified that in order to accommodate the Crocker improvements, over 2,200 square feet of prior-constructed office space had to be demolished.

*1273

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Bluebook (online)
407 So. 2d 1270, Counsel Stack Legal Research, https://law.counselstack.com/opinion/spangenberg-v-yale-materials-handling-la-lactapp-1981.