Torbert Land Company, L.L.C. VS Tommy Montgomery and Lillian Montogomery
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STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT 2009 CA 1955 TORBERT LAND COMPANY L C VERSUS fC TO MONTGOMERY AND LILLIAN MONTGOMERY On Appeal from the 18th Judicial District Court Parish of Pointe Coupee Louisiana Docket No 41 Division B 328 Honorable J Robin Free Judge Presiding John B Brumfield Jr Attorneys for PlaintiffAppellant Ryan E Loyacano Baton Rouge LA Torbert Land Company L C C Jerome D Aquila Attorney for Defendants Appellees Tommy and Lillian Montgomery New Roads LA BEFORE PARRO KUHN AND McDONALD JJ Judgment rendered JUL 9 2010 PARRO J Torbert Land Company C L Torbert appeals a judgment sustaining exceptions raising the objections of no cause of action and no right of action and dismissing its suit against Tommy and Lillian Montgomery the Montgomerys FACTUAL AND PROCEDURAL BACKGROUND In February 2008 Torbert filed a petition alleging that the Montgomerys had contracted with it to represent them in an effort to obtain a lease with the Federal Emergency Management Agency FEMA of property owned by the Montgomerys Torbert further alleged that the Montgomerys had leased the property to FEMA but had not compensated it in accordance with the terms of the contract The Montgomerys filed exceptions contending that Torbert had no cause of action and no right of action because the transaction underlying its demand involved the lease of immovable property and therefore required Torbert to have a Louisiana real estate license which neither it nor its principals had They argued that without a valid Louisiana real estate license the lawsuit could not be maintained because LSA S 1436 R 37 provides that an unlicensed person cannot engage in real estate activity Additionally an unlicensed person or entity cannot file suit to collect a commission without an active Louisiana real estate license The Montgomerys also denied the Louisiana Revised Statute 37 provides in pertinent part 1436 B It shall be unlawful for any person or entity directly or indirectly to engage in or conduct or to advertise or hold himself out as engaging in or conducting the business or acting in the capacity of a real estate broker or real estate salesperson within the state without first obtaining a license as such broker or salesperson and being classed as an active licensee as provided in this Chapter unless he is exempted from obtaining a license as specified herein D Any person corporation partnership limited liability company or other entity who directly or indirectly for another with the intention or upon the promise of receiving any valuable consideration offers attempts or agrees to perform or performs any single act described herein whether as a part of a transaction or as an entire transaction shall be deemed a licensee or registrant within the meaning of this Chapter The commission of a single act by such a person or entity required to be licensed or registered under this Chapter and not so licensed or registered shall constitute a violation of the provisions of this Chapter Z Louisiana Revised Statute 37 states 1445 No action or suit shall be instituted nor recovery be had in any court of this state by any person for compensation for any act done or service rendered the doing or rendering of which is prohibited under the provision of this Chapter to other licensed brokers or licensed salespersons unless such person was duly licensed under this Chapter as a broker or salesperson prior to the time of offering to perform any such act or service or procuring any promise to contract for the payment of compensation for any such contemplated act of service 2 existence of the contractual agreement upon which Torbert suit was based s Torbert maintained that the agreement it entered into with the Montgomerys was a joint venture which is exempt from the requirement of holding a real estate license in order to negotiate the lease of property Its argument was based on LSAR S 1438 37 which provides in pertinent part A The provisions of this Chapter shall not apply to 1 Any person partnership limited liability company association or corporation foreign or domestic which has not been granted a real estate license in Louisiana and which as owner or lessor either individually or through an employee or representative and performs acts of ownership with reference to property owned by him except persons in the business of selling or managing timeshare interests 5 Any individual corporation partnership trust limited liability company joint venture or other entity which sells exchanges leases or manages its own property except persons corporations partnerships trusts limited liability companies joint ventures and other entities who are in the business of selling timeshare interests The Montgomerys argued that this exemption applies only if the person or entity was selling leasing or managing its own property They further contended that because the purported joint venture was not the owner of the property the exemption did not apply to Torbert efforts to lease the Montgomerys property s The court accepted the Montgomerys argument and found that since the joint venture did not own the property Torbert was required to have a valid Louisiana real estate license in order to negotiate a lease of the Montgomerys property Because it did not have such a license Torbert could not enforce the terms of the alleged agreement A judgment dismissing Torbert claims was signed on June 16 2009 and s this appeal followed APPLICABLE LAW The peremptory exception pleading the objection of no right of action tests whether the plaintiff has any interest in judicially enforcing the right asserted Falco Lime Inc v Plaquemine Contracting Co Inc 951784 La App 1st Cir 4 672 96 2d So 356 359 see LSAC arts 681 and 927 Simply stated the objection P C 6 A of no right of action tests whether this particular plaintiff as a matter of law has an interest in the claim sued on Louisiana State Bar Ass v Carr and Assoc Inc 08 n 2114 La App 1st Cir 5 15 So 3d 158 165 writ denied 09 1627 La 09 8 3 09 30 10 21 So 292 Evidence supporting or controverting an objection of no right 3d of action is admissible Jackson v Slidell Nissan 961017 La App 1st Cir 5 97 9 693 So 1257 1261 The party raising a peremptory exception bears the burden of 2d proof Falco Lime 672 So at 359 To prevail on a peremptory exception pleading 2d the objection of no right of action the defendant must show that the plaintiff does not have an interest in the subject matter of the suit or legal capacity to proceed with the suit Jones v McDonald sCorp 618 So 992 995 La App 1st Cir 1993 Whether 2d a plaintiff has a right of action is ultimately a question of law therefore it is reviewed de novo on appeal Jackson v St Helena Parish Sheriffs Dept 01 2792 La App 1st Cir 11 835 So 842 844 02 8 2d In contrast an exception of no cause of action questions whether the law extends a remedy against the defendant to anyone under the factual allegations of the petition Badeaux v Southwest Computer Bureau Inc 050612 La 3 929 06 17 2d So 1211 1217 The peremptory exception of no cause of action is designed to test the legal sufficiency of a petition by determining whether a party is afforded a remedy in law based on the facts alleged in the pleading Everything on Wheels Subaru Inc v Subaru South Inc 616 So 1234 1235 La 1993 see LSAC art 927 2d P C 5 A All well pleaded allegations of fact are accepted as true and correct and all doubts are resolved in favor of sufficiency of the petition so as to afford litigants their day in court Foti v Holliday 090093 La 10 27 So 813 817 see LSAC art 865 09 30 3d P C The burden of demonstrating that a petition fails to state a cause of action is upon the mover Foti 27 So at 817 3d In reviewing a district court ruling sustaining an s exception of no cause of action appellate courts conduct a de novo review because the exception raises a question of law and the district court decision is based only on s the sufficiency of the petition Badeaux 929 So at 1217 2d ANALYSIS Addressing first the Montgomerys contention that Torbert has no right of action we are struck by the strong and explicit wording of LSAR 37 That statute S 1436 D states that any person or entity who directly or indirectly for another with the intention or upon the promise of receiving any valuable consideration offers attempts 4 or agrees to perform or performs any single act described herein licensee or registrant within the meaning of this Chapter shall be deemed a It further states that the commission of even a single act by an unlicensed person or entity will constitute a violation of the provisions of the Chapter We note also that LSA R 37 S 1445 specifically states that no one can institute any action or suit in any court of this state for compensation for any act done or service rendered for which a real estate license was required unless that person or entity was already licensed before offering to perform such act or service or procuring a promise to contract for payment of compensation for such contemplated act or service It is very clear from these provisions that persons conducting transactions involving immovable property unless they are exempted from these provisions must have a real estate license before taking any action in furtherance of such transactions Reading these provisions in pad mateda with the exemptions provided in LSA S 1438 R 37 it would appear that a person or entity may conduct such transactions for its own property or as a representative of the owner of the property but may not do so with the intention of being compensated for that transaction unless that person holds a real estate license In other words a property owner may allow a trusted employee family member or friend to represent him and perform acts of ownership involving his property and such acts would not violate the licensing requirements unless the representative performs such acts for the purpose and with the intention of receiving a commission on the transaction The owner may even agree to pay such compensation but the representative may not sue to enforce any such agreement See Brumfield v Brumfield 450 So 1019 1022 La App 1st Cir 1984 Ponder v Succession of Wall 2d 486 So 209 210 La App 1st Cir 1986 2d Applying these tenets to the facts of the case before us it is clear that the purported joint venture did not own the property that was intended to be leased 3 That property was owned by the Montgomerys and Torbert had no ownership interest in it Therefore even if Torbert and the Montgomerys had agreed that Torbert would act as We note the record does not contain evidence establishing a contractual agreement or a joint venture between Torbert and the Montgomerys other than the testimony of one of Torbert members Mr s Charles Langlois that a contractual agreement had been effected he was unable to produce this document at the trial of the exceptions 5 the Montgomerys representative and attempt to obtain a lease with FEMA for the property any compensation that was promised for such acts could not be legally enforced in this state unless Torbert had a valid real estate license Accordingly we find no error in the district court dismissal of Torbert suit on the grounds that it had s s no right of action CONCLUSION For the above reasons the judgment dismissing Torbert claims against the s Montgomerys is affirmed All costs of this appeal are assessed against Torbert AFFIRMED Having determined that Torbert had no right of action we pretermit consideration of whether it had a cause of action 51 STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT 2009 CA 1955 TORBERT LAND COMPANY L C VERSUS TOMMY MONTGOMERY AND LILLIAN MONTGOMERY McDONALD J DISSENTS I respectfully dissent and would reverse the decision of the trial court The district court and the majority have found that to qualify for the exemption from the Louisiana real estate licensing law found in La R 37 S 1438 it is necessary for the business entity engaging in real estate activity to own the property I believe the exceptions to the real estate licensing law are to allow a person or any legal entity to perform acts of ownership with regard to property they own If the property is not titled in the name of the business entity the exception should still apply Otherwise a person could manage his own property through an employee or a representative and none of the persons involved would have to be licensed But if the person seeks to manage his property by forming a joint venture or other business association the person entrusted with any activity that would ordinarily require a real estate license would be in violation of the law I A The provisions ofthe Chapter shall not apply to 1 Any person partnership limited liability company association or corporation foreign or domestic which has not been granted a real estate license in Louisiana and which as owner or lessor either individually or through an employee or representative and performs acts of ownership with reference to property owned by him except persons in the business of selling or managing timeshare interests se 5 Any individual corporation partnership trust limited liability company joint venture or other entity which sells exchanges leases or manages its own property except persons corporations limited partnerships trusts liability companies joint other entities who are in the business of selling timeshare interests ventures and I believe that the real estate licensing law allows Mr Montgomery to manage his property by forming a joint venture as alleged by the plaintiff I note however that the defendants disclaim that any contractual agreement existed to entrust the management of their property to Torbert Land The district court assumed the existence of a contract simply to make the point that even if such a contract existed it would not avail the plaintiff because the joint venture did not own the land While I do not reach this legal conclusion I also do not believe that issue is properly before us In order to reach the issue it is necessary for a judicial determination that a joint venture existed It does not appear that the district court did so and there is insufficient evidence in the record to enable this court to do so Further the law requires that when there is any doubt whether a litigant has a cause or a right of action the decision be made in favor of maintaining the action For these reasons I respectfully dissent and would reverse the judgment of the district court dismissing the plaintiffs suit
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