Yarbrough v. Federal Land Bank Ass'n of Jackson

616 So. 2d 1327, 1993 La. App. LEXIS 1236, 1993 WL 96477
CourtLouisiana Court of Appeal
DecidedMarch 31, 1993
Docket24606-CA
StatusPublished
Cited by11 cases

This text of 616 So. 2d 1327 (Yarbrough v. Federal Land Bank Ass'n of Jackson) 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
Yarbrough v. Federal Land Bank Ass'n of Jackson, 616 So. 2d 1327, 1993 La. App. LEXIS 1236, 1993 WL 96477 (La. Ct. App. 1993).

Opinion

616 So.2d 1327 (1993)

George C. YARBROUGH, et al., Plaintiffs-Appellants,
v.
The FEDERAL LAND BANK ASSOCIATION OF JACKSON, et al., Defendants-Appellees.

No. 24606-CA.

Court of Appeal of Louisiana, Second Circuit.

March 31, 1993.

*1329 William A. Yarbrough, Vidalia, for plaintiffs-appellants.

Hayes, Harkey, Smith, Cascio & Mullens by Joseph D. Cascio, Jr., Monroe and Fellers, Snider, Blankenship, Bailey & Tippens by Michael R. Ford and Cynthia Hines Majors, Oklahoma City, OK, for defendants-appellees, Federal Land Bank of Jackson in Receivership and Federal Land Bank Assn. of Jackson in Receivership.

W. Brian Babin, Baton Rouge, for defendant-appellee, Warner L. Bruner, Jr.

Before MARVIN, BROWN and STEWART, JJ.

MARVIN, Chief Judge.

In this breach-of-contract action against the Federal Land Bank of Jackson, Miss., now in receivership, and its officers, the widow and succession representative of George Yarbrough, the original plaintiff, appeal judgments that dismissed the action on exceptions. The action against the officers was based on their alleged intentional interference with a provision in a 1985 lease of farmland that gave George Yarbrough the right of first refusal to purchase the farmland from the Bank during the term of the lease.

Appellants were substituted as plaintiffs following Yarbrough's death in 1989 while the action was pending. These plaintiffs joined other defendants, including Walter Bruner, Jr., who was the president of the Bank before and during the 10-month term of the lease.

The judgments sustained Bruner's exceptions of prescription and of no cause of action and granted the Bank's motion for summary judgment.

We affirm the Bank's summary judgment. Federal Sav. and Loan Ins. Corp. v. Locke, 718 F.Supp. 573 (W.D.Tex.1989). We reverse and render judgment overruling Bruner's exceptions.

FACTS

Owing more than $13 million to Federal Land Banks in Jackson, Miss., Alexandria and Rayville, La., in the 1980's, George Yarbrough had secured his debts by pledging his Federal Land Bank stock and by mortgaging some 8,200 acres of farmland he owned in Franklin and Catahoula Parishes.

Yarbrough defaulted on the loans in 1985 when the depression grossly affected the value of farmland. In lieu of taking bankruptcy, Yarbrough dationed his land and stock to the Federal Land Bank of Jackson to satisfy the indebtedness, while leasing back from the Bank 2,662 acres of the land, to which he claimed "a very personal [family] attachment." The dation and the lease were executed March 20, 1985.

The lease gave Yarbrough the "first right of refusal" to buy all or part of the leased land "at the purchase price offered [to the Bank] by a third party within 30 days after receiving written notice of said offer." The term "third party" was not defined in the lease. The right of first refusal terminated with the lease on January 10, 1986.

A cotton gin which Yarbrough had long operated was among the improvements on the leased property. In July 1985, the Bank notified Yarbrough that it had received *1330 an offer to buy the cotton gin property for $200,000. Yarbrough exercised his right of first refusal and bought back the cotton gin property (about six acres) for that price.

Other offers to buy, if any, were not communicated to Yarbrough before the lease terminated January 10, 1986.

Yarbrough suspected that the Bank had received but had not notified him of other offers to buy the 2,656 acres remaining after the cotton gin transaction. On March 4, 1986, Yarbrough's attorney inquired in writing whether the Bank had received any offers on the property or had "taken any action to prevent consideration of offers prior to the expiration of the lease under which Mr. Yarbrough was granted a right of first refusal."

The Bank replied that it "was obligated to give Mr. Yarbrough the opportunity to purchase the land at such time as an offer from a third party acceptable to the Bank was received. Our files indicate that we received no offers."

Yarbrough's action against the Bank, filed August 4, 1986, made these factual allegations:

—Yarbrough's son-in-law, George McAlister, made a good faith offer to the Bank to buy about 1,900 acres while the right of first refusal was in effect;

—the Bank did not communicate the offer to Yarbrough;

—the Bank included the land in a published list of bank-owned property it offered to sell but indicated that this property would not be sold until January 1, 1986, shortly before Yarbrough's right of first refusal expired; and
—Yarbrough did not learn, until after his right of first refusal expired, that the Bank had an internal policy that it would not sell land it had acquired because of a mortgage loan default to either the defaulting debtor or that debtor's spouse, parents or children.

Yarbrough alleged that the Bank had no intention of honoring his right of first refusal and claimed $10,000,000 in damages for alleged loss of profits he would have realized had he had the opportunity to buy the land back.

Yarbrough died June 7, 1989. The substituted plaintiffs filed an amended and supplemental petition on May 29, 1990, increasing the demand for damages to $30 million. By that time, the Federal Land Banks in Jackson, Alexandria and Rayville had been placed in receivership after having gone through mergers into "Federal Land Bank Associations." The amended and supplemental petition further joined as defendants these entities, including the Banks in Receivership and the Federal Land Bank Associations in Receivership.

Bruner, the exceptor-appellee in this appeal, was among the individual officers who were also joined as defendants in the amended and supplemental petition. In that petition, plaintiffs alleged with more particularity in over 100 paragraphs the actions taken by defendants to intentionally avoid honoring Yarbrough's right of first refusal. Reiterating the Bank's policy of refusing to sell to a defaulting debtor property it acquired because of the default, plaintiffs asserted that the Bank sold to others for less than the amount of Yarbrough's debt the property that Yarbrough leased from the Bank.

Plaintiffs effectively alleged that Bruner, before January 10, 1986, while the right of first refusal was in effect, rejected two offers to the Bank to buy the leased land: one offer by Yarbrough's son-in-law for $929 per acre and the other by a neighboring farmer, J.C. Gilbert, for $1,000 per acre, and thereafter caused the Bank to sell the land to other buyers for about $640-740 per acre.

While increasing their claim for damages, plaintiffs sought specific performance of the right of first refusal in their amended petition. Plaintiffs have not argued, however, either below or here, that their demand for specific performance remains viable. In the light of the allegation that the Bank sold the land to others, we consider the only practical, viable demand against the appellees is for damages.

*1331 BRUNER'S EXCEPTIONS

Bruner's exception of prescription asserted that the plaintiffs' claim against him, brought on May 29, 1990, being delictual in nature, prescribed at the latest on January 10, 1987, one year after the lease and the right of first refusal terminated.

Plaintiffs contended that Bruner and the Bank were solidary obligors and that the original petition, timely filed against the Bank, interrupted prescription against Bruner. Plaintiffs also claimed prescription was interrupted by

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Bluebook (online)
616 So. 2d 1327, 1993 La. App. LEXIS 1236, 1993 WL 96477, Counsel Stack Legal Research, https://law.counselstack.com/opinion/yarbrough-v-federal-land-bank-assn-of-jackson-lactapp-1993.