author: GULOTTA, Judge.

text:
    Cherie Paysse, wife of Norman LeGLUE, Jr. v. Norman LeGLUE, Jr.
    No. 11580.
    Court of Appeal of Louisiana, Fourth Circuit.
    July 30, 1981.
    Rehearing Denied Oct. 20, 1981.
    John G. Villarrubia, Metairie, for defendant-appellee.
    Greenberg & Dallam, Roger I. Dallam, Gretna, for plaintiff-appellant.
    Before GULOTTA, GARRISON and CHEHARDY, JJ.
   GULOTTA, Judge.

The sole issue in this appeal is whether the trial judge erred when he denied Cherie Paysse LeGlue’s rule to make past due support payments executory.

At the time of the voluntary separation between the parties, in June 1973, it was agreed that two thirteen-year-old twin girls would live with the father, and the remaining two younger girls with their mother. In a November 8, 1973 judgment decreeing a separation from bed and board between the parties, the custody of the four minor children was granted to the mother who was awarded $200.00 per month alimony and $200.00 per month child support. Thereafter, on August 25, 1975, a decree of divorce was rendered and the custody of the four minor children with the mother, as well as the alimony and support award as ordered in the separation, was carried over into the divorce decree.

From August, 1975 up to the time of the hearing of the rule, Norman LeGlue paid his divorced wife $200.00 per month in alimony and $100.00 per month for the support of the two minor children residing with her. According to Norman, he deducted $100.00 per month from the support award because two of the four children were living for a time with him and later with his mother to whom monthly support payments were being made. Based on defendant’s non-compliance with the support order, Cherie LeGlue claims entitlement to a stipulated unpaid accumulated amount of $5,625.00.

It is the divorced wife’s contention on appeal that the custody arrangements (the elder daughters to live with the husband and the younger daughters to live with the wife) were agreed upon when the parties separated and, although the custody decree placed the legal custody of the four children with her, it was understood and contemplated by the parties that the $200.00 support award was support for the two children living with her. Cherie LeGlue further claims the trial judge erred in finding that a mutual agreement to reduce support was made between herself and Norman. According to plaintiff in rule, defendant unilaterally deducted the support amount from $200.00 per month to $100.00 per month, and she is entitled to enforcement of the support order.

We do not agree. Accordingly, we affirm.

It is undisputed that the parties agree that the two older girls would live with their father and the two younger girls would remain with their mother. What is disputed is that an agreement was made to reduce the monthly support award from $200.00 to $100.00. We point out that although the trial judge transferred the custody of the two older children to the father in response to Norman’s rule for transfer of custody, which was heard in connection with the rule to make support payments executory, no appeal from that custody award has been taken by the mother.

In well written reasons for judgment, the trial judge stated in pertinent part:

“Both parties also agreed that $100.00 is the correct amount deducted each month by the husband since the last judgment rendered August 25, 1975.”

The trial judge further concluded:

“However at the time of the August 25, 1975 judgment, the wife and husband mutually agreed that it would be in the best interest of the two oldest daughters that they remain with their father wherein Mr. LeGlue’s mother could help care for them. Consequently, the husband deducted $100.00 per month from the child support payments representing one half of the total award.
Four years later on September 6, 1979, the wife filed a rule seeking to have the $100.00 per month deductions made exec-utory.
This Court finds as a matter of fact that both parties mutually agreed that the two oldest daughters would live with their father and that the father, Norman LeGlue, Jr., fed, clothed and sheltered the two oldest daughters during this period and continues to do so to this day.”

The instant case falls within the ambit of Dubroc v. Dubroc, 388 So.2d 377 (La.1980) where the Supreme Court held that an agreement between divorced parents to suspend support payments under a judgment while the father supports and maintains the child in his home is enforceable if it promotes the best interest of the child.

Although the wife testified that she had not agreed to a reduction in support, the trial judge obviously accepted the father’s testimony that there was a mutual agreement for the deduction. We find no error in the trial court’s conclusion. The record is replete with evidence from both parties that the father incurred medical expenses and other expenses for one of the two children residing with him who is suffering from retardation. Furthermore, the divorced wife acknowledged that other expenses were incurred by the father on behalf of the two children living with her. Moreover, the undisputed agreement regarding the living arrangements of the four children is supportive of the trial court’s conclusions.

We further find no merit to the wife’s contention that she is entitled to an arrearage of $625.00 based on the husband’s alleged payment of less than $100.00 per month child support to her on certain occasions. Although the husband’s record of payments indicates the wife received lesser amounts at various times, the husband testified that he has paid $200.00 per month or more for support of the four children when all medical bills and tuition are considered. According to his present wife, reductions in the payments to the ex-wife were prompted by large medical expenses or other expenditures for the children. We find no error.

We likewise find no error in the trial court’s denial of the wife’s claim for attorney’s fees. LSA-R.S. 9:305 provides for an award of attorney’s fees and costs to the prevailing party in an action to make past due support executory. In our case, the wife did not prevail in her action for past due support and she is not entitled to attorney’s fees.

Having so concluded, we affirm the judgment of the trial court.

AFFIRMED.

      . A stipulation was entered into between the parties to the effect that if the trial judge should find that the divorced wife is entitled to an award for past due support, that amount totals $5,625.00.

      . LSA-R.S. 9:305 provides:
      “§ 305. Attorney fees in alimony and child support proceedings
      When the court renders judgment in an action to make past due alimony or child support executory, except for good cause, the court shall award attorney fees and court costs to the prevailing party.
      Added by Acts 1977, No. 462, § 1. Amended by Acts 1978, No. 693, § I; Acts 1979, No. 326, § 1.”


source: Caselaw Access Project

author: LOTTINGER, Judge.

license: Public Domain

text:
    Hoover DOWDEN v. Curby MILLER, et al.
    No. 14744.
    Court of Appeal of Louisiana, First Circuit.
    Sept. 28, 1981.
    Victor L. Marcello, Talbot, Sotile, Car-mouche, Waguespack & Marchand, Donald-sonville, for plaintiff and appellant.
    Donald R. Smith, Ellison & Smith, Baton Rouge, for defendants Curby Miller and Allstate Ins. Co. and appellees.
    Melanie Ann Kleinpeter, Kleinpeter, Kleinpeter & Kleinpeter, Baton Rouge, for defendant, Charter National Ins. Co., and appellee.
    Before ELLIS, LOTTINGER and PONDER, JJ.
   LOTTINGER, Judge.

Defendant-appellee has filed this motion to dismiss this appeal on the grounds that plaintiff-appellant did not pay the costs of the appeal timely nor did plaintiff qualify in forma pauperis within the time period allowed by law.

We glean the following facts from the record that are relevant to a resolution of this motion. Suit for damages was filed on January 10, 1977. Subsequently on April 11, 1978, an order to proceed in forma pau-peris was signed by the trial court. Judgment was signed on January 19, 1981 with an appeal order signed on March 19. An extension of the return day was granted by the trial court on May 15, with an extension by this court granted on June 19. A second forma pauperis order was signed by the trial court on June 10, and the appeal was lodged on July 16, 1981.

Defendant-appellee cites LeDuff v. Prudential Insurance Company of America, 345 So.2d 72 (La.App. 1st Cir. 1976); Donica v. Donica, 324 So.2d 847 (La.App. 1st Cir. 1975); Brumfield v. Community Mobile Homes, Inc., 315 So.2d 901 (La.App. 1st Cir. 1975) for the rule that a forma pauperis order must be obtained timely, that is within the time provided to perfect an appeal. Thus, since the judgment was signed on January 19, 1981, and the second forma pauperis order was not signed until June 10, the order is not timely, and the appeal must be dismissed. We find these cases inappo-site.

Defendant-appellee mentions in its brief the date of the original forma pauperis order, but after mentioning same seems to forget that this order was ever signed. The importance of this order is that it was never rescinded by the trial court.

La.C.C.P. art. 5185 in part provides:

“When an order of court permits a party to litigate without the payment of costs, until this order is rescinded, he is entitled to:
“(1) All services required by law of a sheriff, clerk of court, court reporter, notary, or other public officer in, or in connection with, the judicial proceeding, including but not limited to the filing of pleadings and exhibits, the issuance of certificates, the certification of copies of notarial acts and public records, the issuance and service of subpoenas and process, the taking and transcribing of testimony, and the preparation of a record of appeal;
“(4) The right to a devolutive appeal, and to apply for supervisory writs.
“He is not entitled to a suspensive appeal, or to an order or judgment required by law to be conditioned on his furnishing security other than for costs, unless he furnishes the necessary security therefor. “No public officer is required to make any cash outlay to perform any duty imposed on him under any article in this Chapter.”

Thus once the trial court allowed plaintiff to proceed in forma pauperis and did not rescind the order, the second forma pauper-is order was not necessary, and plaintiff could perfect a devolutive appeal “without paying the costs in advance, or as they accrue, or furnishing security therefor.” La.C.C.P. art. 5181.

Therefore, for the above and foregoing reasons, the motion to dismiss is denied at defendant-appellee’s cost. MOTION DENIED.


author: JASPER E. JONES, Judge.

text:
    Raymond C. ELLERD, Plaintiff-Appellant, v. John Henry WILLIAMS, Sr., et al, Defendants-Appellees.
    No. 14612.
    Court of Appeal of Louisiana, Second Circuit.
    Sept. 29, 1981.

      Donald R. Miller, Shreveport, for plaintiff-appellant.
    James E. Bookter, Bossier City, for defendants-appellees.
    Before PRICE, HALL and JASPER E. JONES, JJ.
   JASPER E. JONES, Judge.

Plaintiff, Raymond C. Ellerd, appeals a judgment rejecting his demand to annul a sheriff’s sale of a lot owned by him in an executory process proceeding initiated by defendant, John Williams. We affirm.

John Williams sold plaintiff a subdivision lot in Shreveport in 1976. Plaintiff delivered defendant his $6,000 monthly installment note secured by a mortgage on the property as part of the consideration for the lot. Plaintiff failed to timely pay the installment due on May 15, 1977, and probably had not paid at least one other earlier due installment on said note. On June 16, 1977 defendant sued to enforce collection of the note by executory process.

Since plaintiff resided in Albuquerque, New Mexico a curator was appointed to represent him. The curator notified plaintiff of the impending seizure and sale, and plaintiff advised the curator that he wanted to avoid the sale and requested the curator to obtain from defendant’s attorney the amount which would be required to pay off the note, which the curator did. Plaintiff was then advised that defendant would cancel the sale only if plaintiff paid the entire balance due on the note, plus interest, attorney’s fees, and all costs. The payoff figure effective through September 1 given the curator, and presumably transmitted to plaintiff, was $6693.11. Plaintiff advised the curator that he would have the funds to pay defendant on July 20, August 15, and August 20, and each time plaintiff was unable to borrow the funds necessary to pay defendant.

Because of plaintiff’s numerous failures to pay the note and costs defendant proceeded to have the sheriff’s sale set for September 21. Plaintiff finally succeeded in negotiating a loan with his employer in the amount of $6500 which was to be secured by a mortgage of the seized lot. The note and mortgage in the amount of $6500 to be executed by plaintiff was prepared by the curator and sent on September 19 to the Albuquerque National Bank who was representing plaintiff’s employer in connection with the loan. Plaintiff planned to come to Shreveport from New Mexico on the day of the sale to bring the money, but it was agreed between defendant’s attorney and the curator on the morning of the sale that plaintiff did not need to bring the money to Shreveport on the date of the sale. It was agreed that defendant’s attorney would buy the property at the sheriff’s sale in the name of defendant, and plaintiff would send the money to Shreveport. The curator would then deliver the money to defendant who would deed the property to plaintiff. The payoff figure on September 21 was $6728.14. The curator discussed the whole transaction with plaintiff on the phone on the night of September 21. There is a dispute between defendant’s attorney and the curator as to when the money would have to be paid to the defendant in order for defendant to be required to reconvey the lot to plaintiff. Defendant’s attorney stated that the agreement was that the funds must be paid on September 22, the day following the sheriff’s sale. The curator testified the agreement was that the funds must be paid by September 26, which was five days after the sheriff’s sale. The curator testified the check arrived at his office September 26 and he advised defendant’s attorney of its receipt the same day and was advised that defendant would not accept the money and reconvey the property.

Plaintiff sued to have the judicial sale declared a nullity because of fraud and also sued for damages. An exception of no cause of action was sustained by the trial court. The judgment sustaining the exception was reversed by this court. Ellerd v. Williams, 864 So.2d 648 (La.App.2d Cir. 1978). The judgment now appealed was rendered following a trial on the merits.

A final judgment can be annulled if it was obtained by fraud or ill practices. LSA-C.C.P. art. 2004 . A sheriff’s sale pursuant to judgment ordering executory process is subject to annulment for fraud or ill practices by the creditor and adjudicatee where no third rights have intervened. See Eilerd, supra, and authorities cited therein.

Plaintiff assigns as error the trial court’s refusal to annul the sale and award him damages.

Plaintiff contends that he was misled by defendant into believing that he need not pay the suit off before the sheriff’s sale or have his curator bid on the property at the sale because defendant promised to recon-vey the property to him if he sent the money by September 26. Plaintiff contends that defendant broke this promise by refusing to accept the money sent on September 26 and refusing to reconvey the property. It is this conduct that plaintiff contends is the fraud and ill practice which requires that the sheriff’s sale be annulled.

The trial judge refused to annul the judicial sale because he concluded that plaintiff failed to establish any fraud or ill practices had been practiced by defendant.

All the evidence established that the agreement as to when the money must be paid before defendant was required to convey the property back to plaintiff was made between defendant’s attorney and the curator. The trial judge found there was no clear agreement between the defendant’s attorney and the curator as to when the money must be paid because the defendant’s attorney testified that it was required to have been on the day following the sale, or September 22, whereas the curator testified that if the money was paid by September 26 the defendant was required to recon-vey the property.

The threshold issue presented on appeal is whether the plaintiff, through the curator who was serving as his attorney, tendered the required payoff by the required date.

The curator testified he received the money on September 26, and on the same day called defendant’s attorney preparatory to completing the reconveyance transaction, and was told by defendant’s attorney that defendant would not reconvey the property except for a much greater sum than the agreed payoff.

Defendant’s attorney testified that the curator did not advise him that he had received the money from plaintiff until September 27, and he stated that he documented the date of the call in his daily office diary which he had in his hand at the time he testified, and upon which he was cross-examined by plaintiff’s attorney.

The trial judge did not decide whether the money had to be tendered by September 22 or by September 26, but rather made what we construe to be a finding of fact that the money was not tendered until September 27.

The trial judge in his written reasons for judgment stated:

“The evidence seems to indicate that it was actually Tuesday (Sept. 27) before Mr. McMichael (the curator) got in touch with Mr. Bookter (defendant’s attorney) and informed him that he had the check. That’s verified first by the time record of Mr. Bookter.”
The trial judge later stated:
“It was simply a case where the work was not performed in accordance with the contract timely.”

We conclude that the trial court here made a determination that even if the last date upon which the money could be paid was September 26 as stated by the curator, that it was not tendered until September 27 which was one day late. We note that the evidence establishes that from the time suit was filed on June 16 until the sale more than three months later on September 21, that the defendant’s attorney had been told numerous times by the curator pursuant to instruction from plaintiff that the payoff money would be there on various dates and the money was never paid at the time promised. The trial judge observed these facts, which were admitted by plaintiff in his testimony, in his reasons as circumstances which contributed to his conclusion that there was no fraud or ill practices established to justify setting aside the sale when plaintiff tendered the money late, even based upon the agreement as understood by the curator.

The trial court has much discretion in determining whether a judgment should be annulled because of fraud or ill practices. In Re Koonce, 380 So.2d 140 (La.App.lst Cir. 1979). His finding should not be disturbed in the absence of an abuse of discretion. Succession of Van Skye, 364 So.2d 1361 (La.App.3d Cir. 1978); Succession of Davis, 347 So.2d 906 (La.App.3d Cir. 1977); Thomas v. Beasley, 295 So.2d 213 (La. App.3d Cir. 1974). Plaintiff has made no showing tliat the trial judge abused his discretion.

Plaintiff quotes in brief the testimony of defendant to the effect that plaintiff had five or six days from the date of the sale to pay the money and get the property returned. Plaintiff then contends that even if the curator did not offer the money to defendant’s attorney until September 27 that this would be six days from the date of the sale.

It is significant that defendant never participated in the agreement concerning the reconveyance of the property and unequivocally testified that this was totally handled by his attorney. Under the circumstances the trial judge committed no error when he considered the last day upon which the payment could be made as September 26, which was five days from the sale. This is not inconsistent with defendant’s testimony which stated that it was to be either five or six days from the date of the sale:

“I’m thinking it was five or six days after the sale he could have bought it back at the same price.”

The trial judge’s factual determination involved an evaluation of the testimony of witnesses whom he saw and heard testify, and it cannot be reversed on appeal unless manifestly erroneous. Canter v. Koehring Co., 283 So.2d 716 (La. 1973); Arceneaux v. Dominque, 365 So.2d 1330 (La. 1978). There has been no manifest error shown in the trial judge’s factual determination.

We further observe that even if the testimony of the defendant is construed as giving plaintiff until September 27 to pay, that the cashier’s check of $6500 would not have satisfactorily complied with the agreement. The agreement was for plaintiff to pay defendant the unpaid balance of the note, interest, attorney’s fees, and cost. The payoff as of September 1 was $6639.11, an amount of $139.11 more than the $6500, and the payoff as of September 21 was $6728.14, resulting in the $6500 sent to the curator being $228.14 short on the date of the sale. The curator testified that he had expected to receive the full amount of the payoff. He said he thought perhaps he would have received defendant’s personal check to supplement the Bank of Albuquerque’s check, but that he did not receive it. The facts indicate that the amount of the check was never discussed between defendant’s attorney and the curator after the curator received it, but the curator acknowledged at trial that he never had enough of the plaintiff’s money to comply with the payoff agreement.

Had defendant agreed to accept the payment on September 27 he would have been fully justified in rejecting the $6500 check and refusing to convey the property to plaintiff. Plaintiff’s conduct in sending an inadequate amount to conclude the re-conveyance transaction was a continuation of his pattern of conduct for the previous three months wherein he had on numerous occasions promised payment on given dates and on each occasion defaulted in making the payoff required to get the foreclosure suit dismissed. Considering the totality of these circumstances we fully agree with the trial judge that the plaintiff failed to establish fraud or ill practices which would entitle plaintiff to have the sheriff’s sale annulled or entitle him to any damages.

AFFIRMED at appellant’s cost.

      . LSA-C.C.P. art. 2004 — A final judgment obtained by fraud or ill practices may be annulled.
      An action to annul a judgment on these grounds must be brought within one year of the discovery by the plaintiff in the nullity action of the fraud or ill practices.


author: PRICE, Judge.

text:
    LEON A. MINSKY, INC., Plaintiff-Appellant, v. PROVIDENCE FASHIONS, INC., et al, Defendants-Appellees.
    No. 14626.
    Court of Appeal of Louisiana, Second Circuit.
    Sept. 29, 1981.

      Lancaster, Baxter & Seale by Michael E. Lancaster, Tallulah, for plaintiff-appellant.
    Captan Jack Wyly, Lake Providence, for defendant-appellee Providence Fashions, Inc.
    Lensing, Gravel, Nelson & Rosenzweig by James L. Nelson, Lake Providence, for defendant-appellee, Bank of Dixie.
    Hudson, Potts & Bernstein by Fritz B. Ziegler, Monroe, for defendant-appellee-garnishee Royal Globe Ins. Co.
    Before PRICE, MARVIN and FRED W. JONES, Jr., JJ.
   PRICE, Judge.

This appeal concerns the conflicting claims of mortgage creditors to the proceeds of fire insurance on the mortgaged property. The dispute arises from the following sequence of events.

On May 11, 1976, M & J Fashions, Inc., sold to Providence Fashions, Inc., all of the inventory, merchandise, furniture, equipment, and fixtures located in their Lake Providence store. At the time of saíe, M & J Fashions owed $19,000 to plaintiff, Leon A. Minsky, Inc. As part of the sales agreement, Providence Fashions assumed this debt and gave two notes payable to plaintiff in the amount of $4,000 and $15,000, each note being secured by a conventional chattel mortgage on the purchased property. As further security, Providence Fashions obligated itself to obtain a fire insurance policy on the mortgaged property, with a loss payable clause to the holder of the note.

To finance the cash portion of the purchase, Providence Fashions on this same date borrowed $35,058.24 from Bank of Dixie and executed a note secured by conventional chattel mortgage. In connection with the financing arrangements, plaintiff was required to subordinate its two mortgage notes, totaling $19,000, to the bank’s mortgage on the property being transferred.

In December 1976 Providence Fashions borrowed an additional $13,391.52 from Bank of Dixie to open another store in Winnsboro. This loan was secured by a conventional chattel mortgage on all the merchandise and fixtures located in Winns-boro store.

On January 22,1979, Providence Fashions signed a new note to Bank of Dixie in the amount of $58,864.68 which represented its aggregate indebtedness to the bank on this date. This note was secured by what the parties termed a “pledge” of the two previous chattel mortgage notes held by the bank, a pledge of two certificates of deposit, and the personal guarantee of a third party. At the time, $17,860.90 remained due on the May 1976 note and the entire balance was outstanding on the December 1976 note.

The Winnsboro store was closed and all of the merchandise and fixtures were removed to Lake Providence in January of 1979.

On May 4, 1979, Providence Fashions obtained a $40,000 fire insurance policy on its Lake Providence store. This policy did not designate plaintiff as a loss payee. It did name Bank of Dixie as a loss payee in an endorsement which was erroneously prepared on a printed form intended for use in connection with a public employee blanket coverage policy.

The Lake Providence store was completely destroyed by fire on January 23, 1980. After the fire it was discovered that the wrong endorsement form had been used to designate a loss payee in the fire insurance policy. At the suggestion of the insurance company, the policy was amended by substituting the correct endorsement naming Bank of Dixie as loss payee. The new endorsement was made retroactive to the date of issuance of the policy.

Prior to payment of the insurance proceeds, plaintiff obtained judgment against Providence Fashions for the $12,300 still owing on its $15,000 chattel mortgage note. This judgment also recognized plaintiff’s chattel mortgage on certain described fixtures and furnishings which had been destroyed in the fire.

Plaintiff filed a petition for garnishment citing Royal Globe Insurance Company as garnishee and alleging the company was indebted to Providence Fashions under the terms of the fire insurance policy which it had issued. Royal Globe answered the interrogatories propounded by plaintiff, claiming that any indebtedness owed under the policy was due to the named loss payee, Bank of Dixie, whose claims exceed the $40,000 proceeds of the policy. Plaintiff filed a rule to traverse garnishee’s answers and joined Bank of Dixie as defendant-in-rule.

On trial of the rule plaintiff contended it was the holder of a vendor’s lien and as such entitled to preference over the proceeds of insurance under the provisions of La.R.S. 9:45s!. Plaintiff further took the position that the bank was not a bona fide loss payee at the time of the fire as the wrong endorsement form was attached to the policy, therefore, the subsequent amendment of the policy by the insurer had no effect on plaintiff’s rights which became vested at the time of the loss. Plaintiff further contended that if the court ordered reformation of the policy to reflect the bank as loss payee, the court should also reform the policy so as to include plaintiff as a named loss payee in the policy. Plaintiff also contended the bank’s interest as loss payee was limited to the balance owed on the note secured by the May 1976 mortgage.

After trial of the rule, the district court found that correction of the loss payable clause to name the bank as loss payee was permissible as it conformed to the true intent of the parties; furthermore, plaintiff was not entitled to a vendor’s lien on the policy proceeds because there was no showing plaintiff held a valid vendor’s lien on the insured property prior to the fire. Judgment was rendering dismissing the garnishment proceeding and ordering payment of the entire insurance proceeds to Bank of Dixie.

We do not find it necessary to resolve the issue of whether plaintiff had a vendor’s lien or a preference to the insurance proceeds under La.R.S. 9:4581 since we are of the opinion plaintiff is entitled to the relief sought for the reasons assigned hereafter.

Considering the particular facts and circumstances of this case, we find plaintiff is entitled to an equitable reformation of the insurance contract so as to share in the policy proceeds as its interest may appear.

We are aware that equitable reformation of any contract is seldom allowed. However, under La.C.C. Articles 21 and 1965, this court is charged with the duty of applying equitable principles in all situations where the express law is silent.

The record shows that Providence Fashions agreed in the act of mortgage to provide insurance on the mortgaged property for the benefit of the plaintiff. It is clear plaintiff relied upon this agreement and suffered a loss of security when insurance was obtained without plaintiff being included as a loss payee. The executive vice president of the bank testified that when he made the original loans to Providence Fashions in 1976, he knew plaintiff had a chattel mortgage on the property in question. Since the bank required a subordination of plaintiff’s mortgage to the bank’s mortgage of the same date, it must be presumed the bank was aware of all of the provisions of plaintiff’s mortgage, including the obligation of the mortgagor to protect plaintiff’s security with insurance and to designate plaintiff as a loss payee. Additionally, we find it significant that the original reformation of the loss payee endorsement was accomplished at the request of the insurance company, a party with a limited interest in the outcome of this litigation. The mortgagor, Providence Fashions, made no effort to amend the incorrect loss payee endorsement. In fact, there was no valid loss payee designation in effect in the policy on the date of the fire. Therefore, the intent of the mortgagor in designation of loss payees at the time of the procurement of the policy should be determined solely by the obligations previously assumed by him in relation to both plaintiff and the Bank of Dixie. To do otherwise would permit the mortgagor to unilaterally granted an unfair preference to one of his secured creditors. It must be assumed the debtor intended to carry out his legally contracted obligations. Under the circumstances, to prevent an unjust enrichment at the expense of plaintiff, equity dictates that the insurance contract be reformed to list both Bank of Dixie and Leon A. Minsky, Inc., as loss payees as their interest may appear.

In reaching this decision, this court is guided by Diaz v. Cherokee Insurance Co., 275 So.2d 922 (La.App. 4th Cir. 1973); and Taylor v. Audubon Insurance Co., 357 So.2d 912 (La.App. 4th Cir. 1978), writ denied, 359 So.2d 1307 (La.1978).

In Diaz v. Cherokee Insurance Co., supra, the mortgagor obtained a homeowner’s policy with the first mortgagee named as loss payee, but failed to list the second mortgagee, whose mortgage was executed simultaneously with the first mortgage. Both acts of mortgage required mortgagor to obtain insurance for the protection of mortgagees. Neither the insured mortgagor nor the named mortgagee made a claim for the loss. The court determined the unnamed second mortgagee had a right to reformation of the policy.

In Taylor v. Audubon Insurance Co., supra, the court held that even though the mortgagors were unnamed in the insurance policy acquired by the mortgagee, the mortgagors had a right to equitable reformation of the policy and were entitled to recover for fire loss. In the court’s opinion, reformation was allowable because there was no indication the insurer would have written the policy in any different way, charged any different premium, insured the structure for any different amount, or imposed any different requirements for coverage if the mortgagors had been included in the policy.

We interpret both cases to stand for the proposition that under the appropriate factual situation, a court has the authority to grant reformation of the loss payable clause of an- insurance contract to prevent an unjust enrichment.

Reformation to include both the bank and the plaintiff in the instant situation will not adversely affect Royal Globe’s position as insurer. Royal Globe is further protected by the fact they have not yet paid out the policy proceeds, and consequently will not face the prospect of paying twice on the policy. We therefore find the circumstances presented warrant the reformation of the policy to include both mortgagees as loss payees.

Having found plaintiff is entitled to reformation of the insurance policy, we must now decide how the insurance proceeds are to be distributed.

Where insurance is taken out by a mortgagor for the benefit of a mortgagee, the mortgagee is entitled to the proceeds of the policy to the extent of his mortgage debt due at the time of loss. Durbin v. Allstate Insurance Co., 267 So.2d 779 (La. App.2d Cir. 1972). This principle of law also applies to the instant situation where an insurance contract has been reformed for the benefit of a previously unnamed mortgagee.

To determine the amount of mortgage debt owing to each party at the time of the fire, this court is required to evaluate four notes, all allegedly secured by chattel mortgages on property located in the Lake Providence store:

(1) The May 1976 note in favor of Bank of Dixie secured by a conventional chattel mortgage, on which there was a balance due of $17,860.90 at the time of loss.
(2) The May 1976 note in favor of plaintiff, secured by a conventional chattel mortgage that was subordinated to the bank’s above described mortgage, on which there was a balance due of $12,300 at the time of loss.
(3) The December 1976 note in favor of Bank of Dixie, secured by a conventional chattel mortgage on property located in the Winnsboro store, on which there was a balance due of $13,391.52.
(4) The January 1979 note in the amount of $58,864.68, executed in favor of Bank of Dixie, allegedly secured by a “pledge” of the May and December 1976 notes.

Bank of Dixie contends the January 1979 note is a mortgage debt by virtue of the “pledge” of the May and December 1976 chattel mortgage notes. We hold this attempted pledge is improper in that it would have the effect of increasing the debt burden upon the earlier mortgages to the prejudice of the mortgage held by plaintiff.

In Thrift Funds Canal, Inc. v. Foy, 261 La. 573, 260 So.2d 628 (1972), the Supreme Court stated:

When partial payment is made of a mortgage installment note for a specific debt, the payment of the installments extinguishes the note pro tanto. At the same time, the payment reduces the debt burden upon the mortgage. Thereafter, the debt burden cannot be increased to the prejudice of junior mortgages.. . . [Citations omitted.]

In the present case, there is no dispute that the May and December 1976 instruments held by Bank of Dixie were conventional mortgages, given to secure particular existing debts. At the time of issuance of the 1979 note, the May 1976 note had been reduced to $17,860.90 and the entire balance of the December 1976 note was outstanding. According to jurisprudence, the attempted pledge of the earlier notes could not increase the debt burden bearing upon the mortgages securing those notes. In other words, the May 1976 mortgage could only secure a debt of $17,860.90. Likewise, the December 1976 mortgage was limited to securing a debt of $13,391.52.

Concerning the December 1976 note to the bank, the evidence shows that it was secured by a chattel mortgage on the merchandise and fixtures located in the Winns-boro store. This store was closed and the merchandise and fixtures were removed to the Lake Providence store in January of 1979. Approximately four months later, insurance was obtained on the property situated in the Lake Providence store, including the merchandise and fixtures brought over from Winnsboro. At least some of the merchandise and fixtures from Winnsboro must have been present in the Lake Providence store at the time of the fire. For this reason, the December 1976 note, with an outstanding balance of $13,391.62 is a mortgage debt on the insured property.

Since the insurance proceeds are limited to $40,000 and both parties are entitled to share in the money as their interests appear, the competing mortgages must be ranked to determine each party’s respective share. By authentic act, plaintiff subordinated its mortgage to the May 1976 mortgage held by Bank of Dixie. However, Bank of Dixie’s December 1976 mortgage was perfected subsequent to plaintiff’s mortgage and is therefore inferior to plaintiff’s mortgage. Thus, we find Bank of Dixie’s May 1976 mortgage primes plaintiff’s May 1976 mortgage, which in turn primes the December 1976 mortgage held by Bank of Dixie.

By virtue of its superior mortgage, Bank of Dixie is entitled to the balance owed on its May 11, 1976 note from the policy proceeds. Plaintiff is entitled to next be paid the balance owed on its mortgage note. The remaining policy proceeds accrue to Bank of Dixie because of the second mortgage note which it holds.

For the foregoing reasons the judgment appealed is reversed, and it is ordered that plaintiff’s garnishment against Royal Globe Insurance Company be maintained; that the insurance policy of Royal Globe issued to Providence Fashions, Inc., No. PYN427375, in the amount of $40,000 be reformed to include both Bank of Dixie and plaintiff, Leon A. Minsky, Inc., as loss payees as their interests may appear; that the proceeds of the policy be paid to these loss payees in the proportion to the balance owed, together with interest and attorney fees, on their respective chattel mortgage notes which are hereby ranked as follows:

(1) Bank of Dixie — Chattel mortgage note dated May 11, 1976, in the original sum of $35,058.24, with an approximate balance of $17,860.90.
(2) Leon A. Minsky, Inc. — Chattel mortgage note dated May 11, 1976, in the original amount of $15,000, with an approximate balance owed of $12,300.
(3) Bank of Dixie — Chattel mortgage note dated December 24, 1976, in the original amount of $13,391.52.

It is further ordered that all costs of these proceedings, including this appeal, be paid equally by plaintiff, Leon A. Minsky, Inc., and defendant-in-rule, Bank of Dixie.

      . § 4581. Holder of vendor’s privilege on property destroyed by fire, privilege on insurance.
      The holder of a'vendor’s privilege on movable property which is destroyed by fire has a privilege to the amount of the unpaid portion of the purchase price on the claim or money due the owner or vendee under policies of insurance covering that property. This privilege has the rank of a vendor’s privilege on the thing sold and is superior in rank to any privilege growing out of the attachment, garnishment, or seizure of the claim or money.

      . Art. 21. Absence of express law, court’s duty to decide equitably.
      In all civil matters, where there is no express law, the judge is bound to proceed and decide according to equity. To decide equitably, an appeal is to be made to natural law and reason, or received usages, where positive law is silent.

      . Art. 1965. Basis of equity.
      The equity intended by this rule is founded in the Christian principle not to do unto others that which we would not wish others should do unto us; and on the moral maxim of the law that no one ought to enrich himself at the expense of another. When the law of the land, and that which the parties have made for themselves by their contract, are silent, courts must apply these principles to determine what ought to be incidents to a contract, which are required by equity.


author: PRICE, Judge. MARVIN

text:
    Malcolm WEAVER d/b/a Certified Real Estate, Plaintiff-Appellee, v. LOUISIANA REAL ESTATE AND DEVELOPMENT COMPANY, Defendant-Appellant, B & S Supply, Inc., Intervenor and Appellee, Paul Woodall, Defendant-In-Intervention and Appellee.
    No. 14627.
    Court of Appeal of Louisiana, Second Circuit.
    Sept. 29, 1981.
    En Banc. Rehearing Denied Nov. 6, 1981.

      Tucker, Martin, Holder, Jeter & Jackson by Jeffrey P. Victory, Shreveport, for defendant-appellant.
    C. William Gerhardt, Shreveport, for plaintiff-appellee.
    Charles E. Tooke, Jr., Shreveport, for in-tervenor and appellee.
    Paul Woodall, pro se.
    Before PRICE, HALL and JASPER E. JONES, JJ.
   PRICE, Judge.

Defendant, Louisiana Real Estate and Development Co., appeals a judgment ordering it to pay $10,000 to plaintiff, Malcolm Weaver d/b/a Certified Real Estate, based upon a real estate contract executed between defendant and Paul Woodall as agent for plaintiff. We reverse.

On July 16, 1975, defendant and Paul Woodall entered into a written contract contemplating the promotion of a federally funded apartment project to facilitate the sale of a certain five-acre tract of land. Pertinent provisions of the contract state:

. .. We as owners are interested in selling this tract of ground that includes the old service station for a total of $125,-000.00. We realized that in order to sell this land, much work needs to be done to make it more attractive to a purchaser. With this in mind, we hereby grant unto you the right to start work on an FHA D4 apartment project. The original period of time for this project will be six months, however this can be extended if you have developed something, but a sale has not been completed.
Louisiana Real Estate & Development Co. as owners will advance up to $5,000.00 in expense money, and you as developer will donate your time and effort to this project. If this project can be put together and sold, Louisiana Real Estate & Development Co. will receive $125,000.00 for the land, up to $5,000.00 for expenses, and you will receive $10,000.00 for your time and effort. Any amounts received from the sale of this tract in excess of the total of the amounts mentioned above, will be divided one-half to Certified Real Estate and one-half to us.

Woodall was unsuccessful in promoting a FHA D4 project for the property. Later, after becoming employed by Boucher & Slack, real estate developers, to engage in similar work, he was instrumental in interesting these parties and others in purchasing the property for use in the development of a different type of FHA apartment complex. The property was conveyed for a total consideration of $125,000. Some time thereafter Woodall demanded a commission of $10,000 from defendant and was refused. This action was filed by Malcolm Weaver d/b/a Certified Real Estate, a licensed real estate broker, who contends Woodall was his agent in the subject transaction and that defendant owes him the $10,000 commission under the terms of the above written agreement. Defendant filed an exception of no right of action and then answered with a general denial. A decision on the exception, which put interpretation of the contract and Woodall’s agency status at issue, was deferred until after trial on the merits.

At trial, plaintiff’s evidence included the written contract, testimony establishing Woodall’s agency status, and testimony concerning his efforts in procuring a buyer of the property. Defendant attempted to introduce parol evidence which would explain the agreement and tend to prove Woodall was acting on his own behalf as a land developer rather than as a real estate agent for plaintiff. In an effort to show that Woodall had not performed pursuant to the agreement, defendant also tried to introduce testimony showing all parties had agreed that the contemplated FHA D4 project had ceased to exist prior to the sale of the land. Upon the timely objections of plaintiff, the trial court refused to admit this evidence.

In rendering judgment for the plaintiff, the trial court reasoned as follows:

. . . Reading the contract clearly reveals that Louisiana Real Estate and Development was looking for a sales price of $125,000 plus reimbursement of the expenses, if any, advanced to Mr. Woodall. If Louisiana Real Estate Development Company received that then Mr. Woodall, as agent for Certified Real Estate, would be entitled to $10,000 for time and effort expended in the development.. . .
. . . [Ijt’s inconceivable that Louisiana Real Estate would not have expected to have to pay a fee when presented with the option to purchase for $125,000. . . .

On appeal defendant’s primary allegations of error are that the trial court misinterpreted the contract and improperly excluded relevant evidence.

Defendant contends the contract at issue shows on its face that it is not merely a contract for the sale of property, but rather a contract for the promotion of a specific FHA D4 housing project to enable defendant to sell the property for a net amount of $125,000. Since such a project was not developed on the property, defendant argues plaintiff has not performed pursuant to the terms of the contract. Furthermore, defendant contends that by the terms of the contract, nothing was due Woodall unless defendant realized a net profit of $125,000 from the sale, after payment of all expenses. In the instant case, although no expenses were advanced, defendant’s net profit will be reduced to $115,000 if it is forced to pay a commission.

The contract before us, although complete and unambiguous, is not the type of standard listing agreement ordinarily employed by a real estate broker. Indeed, the evidence shows that this particular agreement was drawn by the defendant. After careful study of this document, we find the trial court erred in its interpretation of the agreement existing between the parties, as evidenced by the written contract.

On its face, this contract clearly contemplates the promotion of a specific FHA D4 apartment project to enhance the market value of defendant’s tract of land. The contract calls upon Woodall, as developer, to “donate your time and effort to this project.” The parties further agree that a commission is due only “if this project can be put together and sold” for a specified sum of money.

The record reflects that the FHA D4 apartment project was not developed upon the property. Since Woodall has not complied with the terms of the agreement, his efforts in the promotion of another project and sale of the tract cannot be considered as performance under this particular contract.

An additional reason plaintiff cannot prevail under the contract sued upon is that the sale to the Boucher & Slack group was not for a sufficient amount to have earned him the fee contemplated under the literal provisions of the agreement, which clearly provides for distribution of proceeds in the following order:

(1) The first $125,000 to defendant, Louisiana Real Estate and Development Company.
(2) The next $5,000 to defendant for expenses advanced.
(3) The next $10,000 to Woodall.
(4) Any amounts in excess of the above, to be divided equally between plaintiff and defendant.

In the instant case, no expenses were advanced to Woodall. Therefore, under the provisions of the contract, the property would have to be sold for a minimum of $135,000 to ensure both defendant’s profit and the contemplated commission. Since the property was sold for only $125,000, no commission is due under the contract.

For the reasons assigned, the judgment of the trial court is reversed, with all costs of this appeal assessed to plaintiff.

ON APPLICATION FOR REHEARING

Before PRICE, HALL and JASPER E. JONES, JJ.

MARVIN and FRED W. JONES, Jr., JJ., concur in the denial of the rehearing application.

MARVIN

and FRED W. JONES, Jr., Judges, concurring.

The essence of this contract, first providing that defendant will advance $5,000 to develop the project for the eventual sale of the property and that plaintiff will donate time and effort to the development, is that

“If this project can be put together and sold, [defendant] will receive $125,000 for the land, up to $5,000 for expenses [advanced], and [plaintiff] will receive $10,-000 for [plaintiff’s] time and effort. Any amounts received from the sale of this tract in excess of the total of the amounts mentioned above, will be divided one-half to [plaintiff] and one-half to [defendant].”

The contract is not ambiguous and clearly provides that defendant was to receive $125,000 plus its advanced expenses up to $5,000, that plaintiff was to receive the next $10,000, and that if the project or tract sold for more than the total of these amounts, the excess would be divided between plaintiff and defendant.

When the contract is construed as a whole, as the applicant for rehearing suggests, it cannot be construed as meaning the defendant will pay $10,000 commission if the property is sold for a “total of $125,-000”. The contract is ambiguous only if the second sentence of the contract is construed to mean that the defendant will sell for $125,000. This sentence, however, states only the defendant’s interest in selling the property for that price, while the sentences that follow state the terms that will be followed for the sale of the property in this language: Defendant will advance, plaintiff will donate, defendant will receive, and the excess will be divided.

Viewed in the entirety, the contract expressed defendant’s intention to receive a minimum of $125,000 for the property.

We concur in the denial of the rehearing application.


author: HALL, Judge.

text:
    Jane LeMay GETER, Plaintiff-Appellee, v. Waymon Dale GETER, Defendant-Appellant.
    No. 14628.
    Court of Appeal of Louisiana, Second Circuit.
    Sept. 29, 1981.

      Burnett, Sutton, Walker & Callaway by Glenn E. Walker, Shreveport, for defendant-appellant.
    O’Hearn & Brun by Taylor W. O’Hearn, Shreveport, for plaintiff-appellee.
    Before PRICE, HALL and JASPER E. JONES, JJ.
   HALL, Judge.

The only issue presented by this appeal is whether the trial court abused its discretion in awarding the plaintiff former wife $125 per month permanent alimony. The wife had obtained a separation on the grounds of abandonment and was awarded $250 per month alimony pendente lite in accordance with the agreement of the parties. Several months later the husband obtained a final divorce on the grounds of having lived separate and apart for one year and the wife was awarded $125 per month permanent alimony. The husband appealed from the judgment, contesting only the amount of permanent alimony awarded.

On appeal the husband makes two assignments of error:

(1) The trial court erred in awarding the wife permanent alimony considering her means and the husband’s income; and

(2) The trial court erred in failing to consider the wife’s earning capacity in determining the amount of alimony due her.

The parties were married in 1975 and lived together for about four and one-half years prior to their separation. The wife has been employed by the Caddo Parish School Board as a school bus driver for about 20 years and, currently, her gross pay is $594.50 per month with take-home pay after pay roll deductions of $433.91 per month. Her expenses were established to be $647.91 per month. Appellant argues that a $120 per month payment the wife is making on a debt incurred to buy some furniture should be excluded from her list of monthly expenses. The argument is without merit because it was necessary for her to buy some furniture after her husband took furniture belonging to him when the parties separated. The note would not be paid off until several months after trial of the alimony matter.

Appellant also argues that the part of plaintiff’s gasoline expense attributable to her use of the car to travel to and from college should not be considered, but this argument is also without merit because reasonable transportation cost was recognized by Bernhardt v. Bernhardt, 283 So.2d 226 (La.1973), as a necessary expensé to be considered by the trial court in setting the amount of alimony. Plaintiff’s basic conservative needs exceed her net income by $214 per month.

Prior to going to work for the school board 20 years ago, plaintiff worked for five years as a bookkeeper-teller for a bank. While working for the school board plaintiff also worked as a grocery store checker for 12 years, making approximately $5 per hour. Since the separation she has been attending Bossier Community College taking key punch, typing, art, and history with the intention of pursing a four-year curriculum for a degree. She has made some effort to find part-time employment but has been unable to do so.

Appellant is a painting contractor who operates through a small, one-man corporation. He testified that his income in 1980 was $493.87 per month before taxes which he estimated would be $200-$300 for the year. His income in 1979 was approximately $23,000, $9,000 from painting houses and about $14,000 from construction of new homes, a venture in which he is no longer engaged. Appellant testified that his income is down substantially because he works primarily on painting newly-constructed homes and the market for such construction has been very poor over the past year.

The trial court found that although appellant was being honest in his estimate of his current income, his income and means were actually greater than the estimate made by him. The evidence concerning appellant’s means is meager, but there is substantial evidence supporting the trial court’s finding. A profit and loss statement for the corporation covering the second and third quarters of 1980 shows that appellant drew $2,431.54 as salary or commission and that the corporation had a net profit of $1,531.94, making appellant’s total earnings or profit from the corporation for that period $3,963.48, which would average $660.58 per month. Evidence offered by appellant as to his earnings in the first and last quarters of 1980 was incomplete and inconclusive.

There was evidence that appellant had additional income from painting a house or houses which was handled separate from the corporation. There was also evidence that the appellant and his son had some other income related to lots purchased from the proceeds of a sale of property appellant acquired during a previous marriage. It could reasonably be inferred from appellant’s testimony that he limited his work to new construction and did not do remodeling and other jobs and from his substantially greater earnings in the previous year that he was not earning to his full capacity since the litigation with his wife commenced. The evidence supports the trial court’s finding that appellant had the income, means, and assets to pay the $125 per month alimony award. It should be noted that appellant’s expense list of $610.89 per month, exclusive of the alimony he was paying, was very conservative as was the wife’s expense list.

The most serious issue in this case is raised by appellant’s argument that the trial court failed to take into account plaintiff’s earning capacity as required by LSA— C.C. Art. 160 . He argues that her work as a school bus driver only takes two hours a day and that she has the capacity to hold other employment, as she did for years pri- or to and during her marriage. He argues, in effect, that he should not be required to subsidize a four-year college course for his former wife.

The evidence establishes that plaintiff has been employed by the school board as a bus driver for 20 years. She drives the bus between 7:30 and 8:30 and 3:00 and 4:00 each morning and afternoon. Prior to working with the school board she worked as a bank teller for five years. While working for the school board she also worked as a checker in a grocery store for 12 years at a wage of $5 per hour. She worked as a checker for an undisclosed period of time while the parties were married.

Plaintiff testified she would like to find a job and had inquired about work with several friends in various businesses, but there were no openings. Obviously, she is limited to part-time other employment because of her work with the school board. She explained that she is older now than when she worked as a grocery store checker and that checking is tough work. She is trying to better her opportunities for the future by pursuing college courses. At time of trial she was completing her first year of college work. The trial court determined that plaintiff was to be admired for trying to better herself and we agree.

The spouse’s earning capacity is a factor to be considered in determining need for purposes of permanent alimony. Here, plaintiff is exercising her earning capacity in a substantial way through her employment with the school board with significant earnings. However, there are hours available to her during a normal working day for additional part-time employment, which she has pursued in the past for many years, demonstrating her capacity to earn additional income, probably sufficient to meet her basic needs as reflected on her affidavit.

While the earning capacity of a spouse is to be considered in establishing need and the amount of alimony, it does not necessarily follow that the spouse should be required to take immediate employment of any nature immediately following the separation and divorce. Difficulty in finding part-time employment which would fit in with the plaintiff’s long-time gainful employment with the school board and which is suitable for her age, training, and ability was a proper consideration. Another proper consideration in evaluating earning capacity, specifically mentioned in Article 160, is further training and education for a reasonable period of time directed toward improving earning capacity.

On the other hand, the alimony article does not contemplate that a spouse should be required, in effect, to subsidize a four-year college curriculum for the other spouse under circumstances such as exist here, where the claimant spouse has a high school education and has worked for many of her adult years in positions within her capabilities and previous training both prior to and during the relatively brief marriage.

We believe that under the facts and circumstances as they existed at the time of trial of this alimony proceeding, the award made by the trial court was within the court’s sound discretion and was consistent with the criteria of the code article. We hold, however, that it would be inconsistent with the codal mandate requiring consideration of earning capacity to require defendant to subsidize a four-year college curriculum for plaintiff at this stage of her life, where she has a demonstrated capacity to earn sufficient wages to meet her basic needs. Any future proceedings for modification of the alimony award should take this holding into account. While we have no way of knowing what changes in circumstances may have taken place since this matter was tried some eight months ago, it would seem that by the time this judgment becomes definitive, more than two years after the parties separated arid almost a year after the divorce judgment, “the time necessary for the recipient to acquire appropriate education, training, or employment” will have elapsed.

For the reasons assigned, the judgment of the district court is affirmed at appellant’s costs.

Affirmed.

      . “Art. 160. When a spouse has not been at fault and has not sufficient means for support, the court may allow that spouse, out of the property and earnings of the other spouse, alimony which shall not exceed one-third of his or her income. Alimony shall not be denied on the ground that one spouse obtained a valid divorce from the other spouse in a court of another state or country which had no jurisdiction over the person of the claimant spouse. In determining the entitlement and amount of alimony after divorce, the court shall consider the income, means, and assets of the spouses; the liquidity of such assets; the financial obligations of the spouses, including their earning capacity; the effect of custody of children of the marriage upon the spouse’s earning capacity; the time necessary for the recipient to acquire appropriate education, training, or employment; the health and age of the parties and their obligations to support or care for dependent children; any other circumstances that the court deems relevant.
      “In determining whether the claimant spouse is entitled to alimony, the court shall consider his or her earning capability, in light of all other circumstances.
      “This alimony shall be revoked if it becomes unnecessary and terminates if the spouse to whom it has been awarded remarries.”


text:
    Wilbert WAINWRIGHT, Plaintiff-Appellee, v. FILES TIMBER COMPANY, INC. and Worldsurance, Inc., Defendants-Appellants.
    No. 14629.
    Court of Appeal of Louisiana, Second Circuit.
    Sept. 29, 1981.

      O. P. Barnes, III, Monroe, for defendants-appellants.
    Simmons & Nelson by Otha Curtis Nelson, Sr., Baton Rouge, for plaintiff-appellee.
    Before PRICE, HALL and JASPER E. JONES, JJ.
   HALL, Judge.

Plaintiff, who cut and hauled pulpwood for his employer, Files Timber Company, Inc., suffered an on-the-job injury to his back in March, 1979. Plaintiff reported his injury to his employer and a claim for workmen’s compensation benefits was filed with the employer’s insurer, defendant Worldsurance, Inc. In August 1979 the insurer paid to plaintiff $1,400, constituting payment of benefits for 14 weeks at $100 per week. No further benefits were paid. Plaintiff filed this suit against his employer and its insurer to recover the additional benefits allegedly due him for the period of his temporary total disability and also asked for penalties and attorney fees for the insurer’s arbitrary termination of benefits.

The trial court rendered judgment awarding plaintiff $166.33 per week for 49 weeks, the period of plaintiff’s temporary total disability, and travel expenses in the amount of $126. The trial court further assessed penalties of 12 percent and attorney fees in the sum of $1,000 against the defendants for the arbitrary and capricious termination of benefits. Defendants sus-pensively appeal. We amend to correct an error in the calculation of the weekly benefit amount and to assess penalties and attorney fees solely against defendant World-surance, Inc., and otherwise affirm.

Defendants’ initial complaint on appeal is that the trial court erred in finding that plaintiff’s average weekly wage was $200. Admittedly, the nature of plaintiff’s work and the manner in which he was paid made the determination of his average wage difficult.

Plaintiff and his partner were engaged in the business of cutting and hauling pulpwood for Files Timber Company, Inc. The partners were paid on a weekly basis per cord of wood delivered to the pulpwood mill. Payment per cord varies with the type and quality of the pulpwood. From the total amount payable for all of the cords of wood cut and delivered during the weekly period Files deducted certain amounts (unspecified in the record) toward the purchase by plaintiff of a logging truck and for use of equipment supplied by Files. Out of the total sum paid to the partners by Files, the partners had to pay any casual laborers who worked for them during the week. The partners split the remainder between themselves.

At trial plaintiff testified that, on the average, he brought home at least $200 per week. This testimony was corroborated by his wife. Defendants offered no evidence to the contrary and did not produce any records which would contradict plaintiff’s testimony in this regard. Consequently, the trial court did not err in determining, from the only evidence offered, that plaintiff’s average weekly wage was $200.

LSA-R.S. 23:1221(1) requires an employer to pay an employee who suffers an injury producing temporary total disability weekly benefits in the amount of 66% percent of the employee’s wages. All parties agree that, based on a $200 average weekly wage, the weekly benefit amount should be $133.33 rather than $166.33 as provided in the judgment. Therefore, the judgment will be amended to correct this error in calculation.

Defendants next argue that the evidence does not establish that plaintiff suffered a temporary total disability from April 2, 1979 until March 10, 1980 as found by the trial court. Defendants contend that plaintiff’s disability did not begin until April 27, 1979 and continued until October 23, 1979 at the latest.

The evidence establishes that plaintiff suffered an injury to his back on March 19, 1979. Apparently plaintiff continued working but was in substantial pain and finally sought medical treatment on April 2, 1979. At that time, Dr. J. E. Booth of the Norris Clinic in Farmerville diagnosed plaintiff’s injury as a para-thoracieolumbar muscle spasm and prescribed a muscle relaxer and a mild analgesic. Plaintiff returned to Dr. Booth on April 27,1979 complaining of back pain. The doctor’s notes reveal that plaintiff returned to work on April 23 but that his back had continued to give him trouble. Defendants argue from this that plaintiff must have worked until April 27, 1979 and that his disability did not begin until this date. This argument lacks merit. Dr. Booth’s records clearly indicate that plaintiff returned to work for only a few days after his first office visit and was still disabled as a result of his initial injury. The trial court was correct in determining that plaintiff’s disability began on April 2, 1979.

Plaintiff was under Dr. Booth’s care through May 1979 and then was referred to Dr. Altenberg, an orthopedic surgeon. Dr. Altenberg diagnosed plaintiff’s injury as an acute protruded lumbar disc and advised plaintiff to restrict all of his activities. Plaintiff was also fitted with a lumbosacral corset which he was instructed to wear all of the time. In a report dated October 23, 1979, Dr. Altenberg noted that he had advised plaintiff to return to work; thus, defendants argue that plaintiff’s disability ceased on this date. The report, however, makes it clear that plaintiff had not fully recovered from his injury and that he was not discharged from treatment. Further, it seems that plaintiff was advised to resume work more or less on a trial basis. Plaintiff was not discharged to resume full and normal work activities until March 10, 1980, as reflected by Dr. Altenberg’s report of that date. The trial court’s determination that plaintiff’s temporary total disability endured for 49 weeks is correct.

Finally, defendants contend that the evidence does not support the finding that defendants acted arbitrarily and capriciously in terminating benefits and that, therefore, the trial court erred in awarding penalties and attorney fees under LSA-R.S. 22:658.

Plaintiff reported his injury to his employer in March 1979. The employer’s insurer paid all medical bills incurred by plaintiff but did not pay any worker’s compensation benefits until August 1979 when a $1,400 payment was made to plaintiff. Although the record is not clear on this point, it seems that plaintiff was paid benefits in the sum of $100 per week for 14 weeks. The $100 per week figure was arbitrarily arrived at by the insurer because plaintiff’s average wage was difficult to determine. No additional payments were made by defendants. The difficulty in determining plaintiff’s average weekly wage did not justify defendants’ failure to pay any benefits whatsoever after the $1,400 payment was made.

The trial court determined that the only possible reason defendants made no further payments was because of a report by Dr. Altenberg dated August 2, 1979 in which the doctor stated that plaintiff had continued to work. That same report, however, indicated that plaintiff would require further treatment for at least six more months. With a little investigation defendant insurer could have ascertained that plaintiff was no longer working for Files Timber Company, Inc., and that he was doing much lighter work and was still disabled. Additionally, Dr. Altenberg continued to send reports to defendant insurer concerning plaintiff’s progress. These later reports clearly indicated that plaintiff was not fully recovered and had not been discharged to return to his normal work activities. We find no error in the trial court’s determination that the defendant insurer terminated benefits without probable cause and in an arbitrary and capricious fashion. The judgment for penalties and attorney fees should, however, be against the insurer only under the provisions of LSA-R.S. 22:658.

In brief, plaintiff-appellee asks that the attorney fees be increased for services rendered on appeal. Plaintiff neither appealed nor answered the appeal and, therefore, the amount of the judgment for attorney fees cannot be increased on appeal.

For the reasons assigned, the judgment of the district court is amended to change the amount of the weekly benefit awarded from $166.33 to $133.33. The judgment is further amended to reflect that the award of penalties and attorney fees is solely against defendant Worldsurance, Inc. The judgment of the district court is otherwise affirmed. Costs of this appeal are assessed to defendants-appellants, Files Timber Company, Inc. and Worldsurance, Inc.

Amended and, as amended, affirmed.


text:
    TOWN OF RAYVILLE, Louisiana, Plaintiff-Appellee, v. Dallas THOMASON, et al., Defendants-Appellants.
    No. 14637.
    Court of Appeal of Louisiana, Second Circuit.
    Sept. 29, 1981.

      Coenen, Berry & Bruyninckx by James W. Berry, Rayville, for defendants-appellants, Dallas Thomason and Sarah Aycock Thomason.
    Law Offices of William R. Coenen by William R. Coenen, Jr., Rayville, for plaintiff-appellee.
    Before PRICE, HALL, and FRED W. JONES, Jr., JJ.
   HALL, Judge.

The Town of Rayville filed suit to expropriate a part of defendants’ 200 acre farm property for the purpose of enlarging the Rayville Municipal Airport. The primary issue at trial was the highest and best use of the property: farmland as contended by plaintiff or rural residential as contended by defendants. The extent of severance damages was also an issue. The district court found the highest and best use to be as farmland and found the value of the affected property to be $2,100 per acre. Defendants were awarded a total of $79,000, consisting of (1) $60,000 for the taking in fee of 28.45 acres; (2) $4,300 for the taking in fee of 2.037 acres; (3) $5,800 for the taking of a clear zone easement affecting 6.867 acres, figured at 60 percent of the $2,100 per acre value; and (4) $8,800 severance damages to a 10.5 acre remaining tract, figured at 40 percent of the $2,100 per acre value.

Defendants appealed, specifying as error that:

(1) The trial court erred in finding that the highest and best use of the property taken is for agricultural purposes; and
(2) The trial court erred in that its award of severance damages was inadequate.

Defendants have also filed in this court a motion to remand the case for a determination by the district court of the increase in value of the property since the date of trial in February 1980 to the time of actual taking of the property, alleging that the plaintiff has not paid the amount of the judgment, has not taken title to the property, and that the value of the property has increased substantially during the interim period of time over a year and a half.

We deny the motion to remand, amend the judgment to increase the award of severance damages and to award legal interest, and otherwise affirm.

The property being taken is part of a 200 acre farm owned by the defendants, on which they reside, located about a mile from the Rayville town limits and less than a mile north of U. S. Highway 80. Defendants’ property lies north and northwest of the Rayville Municipal Airport. The property is, in effect, divided by a private lake and the appraisers for both sides dealt only with that part of the property lying east of the lake as a separate unit for purposes of valuation and damages.

There are about 55 acres lying east of the lake, 47.9 acres of which is prime cotton farming land. On the remaining 7 plus acre tract fronting the lake are located defendants’ home, equipment shed, barn, and a couple of tenant houses.

The airport adjoins defendants’ property to the south. The existing north-south paved runway comes to within 110 feet of defendants’ south property line. Defendants’ home is located 500-600 feet northwest of the end of the runway. The primary expansion planned is an extension of the north-south runway a distance of some 1,800 feet to the north.

The 28.45 acre tract being taken is a rectangular tract measuring approximately 643 feet east and west and 2,013 feet north and south. The 6.867 acre clear zone or height limitation easement tract is a northerly extension of the 28.45 acre tract. The 2.037 acre tract for drainage lies at the north end of the property. The 10.5 acre remaining tract out of the 47.5 acre farming unit lies between the property taken and the lake to the west.

HIGHEST AND BEST USE

Market value means the worth of the land considered in light of its best and highest use, this being the most favorable employment to which the property is adaptable and may reasonably be put in the not too distant future. State, Department of Highways v. Rapier, 246 La. 150, 164 So.2d 280 (1964). If unimproved property is to be valued on the basis of residential development, there must be some reasonable expectation that the property will be used for that purpose in the not too distant future. State, Department of Highways v. Talbot, 200 So.2d 97 (La.App. 1st Cir. 1967), writ refused 251 La. 49, 202 So.2d 658 (1967). Some factors to be considered in determining highest and best use are: proximity to areas already developed in a manner compatible with the intended use; action already taken to develop land for that use; scarcity of land available for that use; use permitted by zoning ordinances; use to which the property is being put at the time of taking; existence of offers to buy property by those wanting to develop residential property or by those wanting to buy residences; and residential market in the vicinity. City of New Orleans v. Cloutet, 296 So.2d 357 (La.App. 4th Cir. 1974).

Defendants’ two appraisers were of the opinion that the highest and best use of the property is for rural residential development. Some of the reasons given for this opinion were proximity of the property to the Town of Rayville, the amenities of the lake, lack of available homesites in the town, and the existence of a few nice homes, including defendants’, in the area. The appraisers discounted the effect of the existing airport with its attendant noise, danger factors, and the like, pointing out that property near airports in other cities has been developed for residential purposes.

Plaintiff’s two appraisers were of the opinion that the highest and best use of the property is for agricultural purposes. The trial court found their testimony to be persuasive and well supported, and we agree. Some of the more persuasive reasons for reaching the conclusion that the highest and best use of the property is for agricultural purposes rather than residential development are: the land, except for the lake frontage, is presently being farmed and is prime, highly productive cotton land; the land to the east and north is farmed by other owners and the land to the south is occupied by the airport; the proximity of the airport, which is used primarily by agricultural aircraft, with attendant noise, pollution, and safety hazards, renders the property undesirable for residential development; the airport zoning ordinance limits the height of improvements which may be located on defendants’ property north of the existing runway; the property is unimproved with no existing sewerage lines and the like; more desirable land suitable for rural residential development in the Ray-ville area is not scarce; and defendants have no plans for sale or development for residential purposes in the foreseeable future.

The district court correctly concluded that the highest and best use of the property is for agricultural purposes. The value of the land for agricultural purposes as testified to by plaintiff’s appraisers and adopted by the trial court, was higher than that testified to by defendants’ appraisers, so defendants make no complaint in this respect.

SEVERANCE DAMAGES

Severance damages are the difference between the market value of the remaining property immediately before and immediately after the taking. The before and after test may be applied to segmented areas of the remainder and the several sums added to make up the total award. M. Dakin & M. Klein, Eminent Domain In Louisiana, at pp. 76-77 (1970). Where the landowner’s farm is composed of different tracts, each tract may be valued separately according to the extent to which it is affected by the taking. State, Department of Highways, v. Anding, 189 So.2d 445 (La.App. 3d Cir. 1966).

Defendants’ argument that severance damages awarded for the 10.5 acre tract remaining out of the 47.9 acre farm tract are inadequate is based on their contention that the highest and best use of the land is for rural residential development. Their appraisers calculated severance damages on the basis of a reduction in value from rural residential property to agricultural property. The determination that the highest and best use of the land is agricultural is dispos-itive of defendants’ contention in this regard. It is notable that defendants’ appraisers assigned full agricultural value to the remainder tract. Plaintiff’s appraisers testified the remaining tract was damaged to the extent of 10 percent of its value. Nevertheless, the trial court concluded the remainder tract was damaged because of its reduced size and awarded damages based on a 40 percent reduction in value, an award entirely favorable to the defendants once the highest and best use issue was decided.

Defendants also complain about the trial court’s failure to award severance damages for a reduction in value of the lake front property on which defendants’ home and other improvements are located. This contention has merit.

Plaintiff’s appraisers assigned no reduction in value to the lake front property including defendants’ residence, apparently because of their approach in only considering value and damages for the 47.9 acre farm tract and omitting entirely from their consideration the lake front property lying between the farm tract and the lake.

On the other hand, defendants’ appraisers considered the entire tract east of the lake, including the lake front property, in their calculations of value and damages. They concluded that the value of defendants’ residence and improved property would be reduced substantially by the expansion of the airport. The approach of defendants’ appraisers makes sense. The property east of the lake should be considered as a unit composed of a farm residence and improvements with adjoining farmland. Because of the close proximity of the residential lake front property to the land being taken and because it is a part and parcel of the parent tract out of which the property is being taken, there is no justification for treating it as an unrelated, unaffected tract.

After the taking, the improved lake front property will be bounded not by farmland, but by the expanded airport. Surely the value of the defendants’ remaining improved property east of the lake will be reduced by virtue of this change in character of the adjoining property. This conclusion logically flows from the reasoning of plaintiff’s own appraisers as to the undesirability of property adjacent to an airport for rural residential purposes.

We are persuaded that the remaining lake front property will be reduced in value, but not to the full extent estimated by defendants’ appraisers. Assuming a value of $175,000 for this property including defendants’ residence, which value we derive from the totality of the evidence, we find a diminution in value of 10 percent, and that an appropriate award of severance damages to this property is $17,500. The judgment will be amended to reflect this increase in the award.

MOTION TO REMAND

Defendants filed in this court a motion to remand, alleging that the plaintiff has not paid the amount of compensation awarded and has not taken title to the property, that the value of the property has increased substantially since the case was tried more than 15 months ago, and praying that the case be remanded to determine the increase in value from the time of trial to the time of actual taking by the plaintiff.

LSA-R.S. 19:110 provides that in estimating the value of the property to be expropriated, the basis of assessment shall be the value which the property possessed before the contemplated improvement was proposed.

Cases have held that the property should be valued as of the time of filing suit, or the time of trial, or the date of the proceedings. State, Department of Highways v. Hayward, 243 La. 1036, 150 So.2d 6 (1963); Parish of Iberia v. Cook, 238 La. 697, 116 So.2d 491 (1959); Louisiana Power & Light Company v. Simmons, 229 La. 165, 85 So.2d 251 (1956); City of New Orleans v. Giraud, 346 So.2d 1113 (La.App. 4th Cir. 1977), writs denied 349 So.2d 884 (La.1977) and 362 So.2d 579 (La.1978); and Cypress-Black Bayou Rec. & W. Con. Dist. v. Conger, 234 So.2d 212 (La.App. 2d Cir. 1970).

The expropriation statutes do not provide specifically when the award must be paid, but provide only that payment of the compensation fixed in the judgment entitles the plaintiff to the property rights described in the judgment of expropriation. LSA — R.S. 19:111.

In this case, the value of the property was determined as of the time the contemplated improvement was proposed. There is no authority for redetermining the value as of a later date because of delays occasioned after trial due to the appeal process or because of nonpayment by the municipality of the amount of compensation fixed in the judgment. Here, defendants have apparently continued to have full use of this property and allege no damages occasioned by the delays.

Defendants did not pray for legal interest on the amount of compensation fixed in the judgment from the date of judgment. Nevertheless, under the authority of LSA-C.C.P. Art. 1921, we will amend the judgment to award legal interest on the amount of compensation fixed in the judgment from the date of judgment, December 31,1980. Trunkline Gas Company v. Rawls, 394 So.2d 1250 (La.App. 2d Cir. 1981); Greater Baton Rouge Airport v. Hays, 339 So.2d 431 (La.App. 1st Cir. 1970).

EXPERT WITNESS FEES

Defendants point out that the district court judgment does not fix expert witness fees and ask that this court do so. This matter should be raised in the trial court by a rule to fix costs. LSA-R.S. 13:3666; LSA-C.C.P. Art. 1920.

DECREE

For the reasons assigned the judgment of the district court is amended to award defendants an additional sum of $17,500 as severance damages and to provide for legal interest on the amount of compensation fixed in the judgment from date of judgment until paid. As amended, the judgment is affirmed..

Amended, and as amended, affirmed.


text:
    COMMERCIAL UNION INSURANCE COMPANY, Plaintiff-Appellant, v. Warren Clifford LaFRANCE and LaFrance Enterprises Inc., Defendants-Appellees.
    No. 14639.
    Court of Appeal of Louisiana, Second Circuit.
    Sept. 29, 1981.

      Davenport, Files, Kelly & Marsh by Thomas W. Davenport, Jr., Monroe, for plaintiff-appellant.
    Guerriero, Smith Hingle & Anzalone by Rick C. Anzalone, Monroe, for defendants-appellees.
    Before PRICE, MARVIN and FRED W. JONES, Jr., JJ.
   PRICE, Judge.

Plaintiff-surety filed this suit seeking indemnification from defendants for amounts paid as claims under a fidelity bond issued by plaintiff. The trial court rendered judgment for plaintiff against LaFrance Enterprises, Inc., but dismissed its demand against Warren Clifford LaFrance individually. Plaintiff appeals that portion of the judgment rejecting its claim against LaF-rance individually, and we reverse.

In February 1973 LaFrance operated a retail drug store and desired to include a postal unit by contract with the United States. Plaintiff obtained the fidelity bond from plaintiff through Montgomery Insurance Agency. The contract with the post office listed “W. Clifford LaFrance” as principal, plaintiff as surety, and the United States as obligee. In the formal application for the bond, LaFrance agreed to indemnify plaintiff for any losses incurred as surety on the bond. The indemnity agreement further stated that it applied to “every continuation, renewal, substitute, or new bond.”

Upon realizing his potential personal liability for the financial affairs of the post office, LaFrance contacted the Montgomery Agency and requested that the principal on the bond be amended to “LaFrance Enterprises, Inc.” Plaintiff issued a rider effective June 22,1976, and signed June 28,1976, which stated:

It is understood and agreed that the bond described above is hereby modified so as to state the name of the Principal therein as LaFrance Enterprises, Inc., Warren Clifford LaFrance, President instead of Warren Clifford LaFrance.

In July 1978 LaFrance suspected embezzlement and a subsequent audit showed substantial shortages. Plaintiff cancelled the bond and paid $5,085.69, representing the amount lost, to the federal government.

Plaintiff alleges the trial court erred in finding LeFrance immune from liability on the indemnity agreement. It contends that the bond application evidencing LaF-rance’s indemnity obligation and the j>ond are two separate documents, and that the rider changing the identity of the principal affected only the bond and not the bond application. We find merit in plaintiff’s contentions, and therefore we reverse.

The trial court reasoned that the rider amended both the bond and the indemnity agreement and that the amended bond represented a new obligation to which the original indemnity agreement did not apply. It noted that certain correspondence prepared by plaintiff referred to “LaFrance Enterprises, Inc.,” and that this is proof that LaFrance had no future liability on the bond.

The trial court erred in finding that the rider amended the indemnity agreement. The rider referred only to a change in the principal on the bond and made no reference to the indemnity agreement. While the application and bond are to be read together, they remain separate documents, and it is an incorrect interpretation of the rider to say that it applies to the indemnity agreement.

The trial court was also in error in finding that the rider converted the bond into a new obligation. The rider simply amended a provision in the bond. It became part of the bond and is to be read with and harmonized with the provisions of the bond. Le Doux v. Old Republic Insurance Company, 233 So.2d 731 (La.App.3d Cir.1970); Maggio v. Manchester Insurance Co., 292 So.2d 255 (La.App. 4th Cir.1974); La. R.S. 22:654.

The indemnity agreement signed by LaFrance specified that it applied to “every continuation, renewal, substitute, or new bond.” By its clear terms this agreement applied to the bond regardless of whether the bond was amended or a new one was substituted. It represented his continuing obligation of indemnifying plaintiff for amounts paid as surety. A fidelity bond must be interpreted as any other contract, and where the language clearly expresses the will and intention of the parties, it will be enforced as written. Verneco Inc. v. Fidelity and Casualty Company of N.Y., 207 So.2d 828 (La.App.3d Cir.1968).

LaFrance testified that his intent in changing the name of the principal was to avoid personal liability. He probably did not realize when he signed the bond application containing the continuing indemnity agreement that he would be bound to indemnify plaintiff regardless of who was listed as principal. There was nothing ambiguous in the agreement, and he must be assumed to have known its contents. If a loss is to be suffered because of his misunderstanding, it must be borne by him who caused it and not by the innocent party who acted in good faith in reliance upon his act. Trinity Universal Insurance Company v. Good, 202 So.2d 379 (La.App. 4th Cir.1967); Travelers Indemnity Co. v. Ducote, 380 So.2d 10 (La.1979).

For the reasons assigned, that portion of the judgment dismissing plaintiff’s demand against Warren Clifford LaFrance is reversed. Judgment is hereby rendered in favor of plaintiff and against Warren Clifford LaFrance for $5,085.69, together with legal interest thereon from date of judicial demand until paid and for all costs of these proceedings including cost of this appeal.