Andrew Douglas Glascock VS Prop Stop Enterprises, Inc. Milton Demars and Robin Demars
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NOT DESIGNATED FOR PUBLICATION STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT r 2011 CA 1183 ANDREW DOUGLAS GLASCOCK 1 VERSUS PROP STOP ENTERPRISES INC MILTON DeMARS AND ROBIN DeMARS On Appeal from the 21st Judicial District Court Parish of Livingston Louisiana Docket No 122 Division B 931 Honorable Bruce C Bennett udge Presiding Rodney C Cashe ashe Coudrain Hammond Sandage LA Attomeys for Appellant Plaintiff Andrew Douglas Glascock and Karli Glascock Johnson Kean Miller LLP Baton Rouge LA Rodney N Erdey Attomey for Denham Springs LA Appellees Defendants Prop Stop Enterprises Inc Milton DeMars and Robin DeMars Ernest M FOrbes Denham Springs LA Attorneyfor Appellees Defendants Lance Valentine Katherine Valentine and KBTS LLC BEFORE CARTER C PARRO AND HIGGINBOTHAM J7 J udgment j i CN cu1 C rendered I 7 201Z PARRO J The plaintiff Andrew Douglas Glascock appeals the judgment of the trial court which dismissed with prejudice all but one of his claims against the defendants For the reasons that follow we affirm FACTUAL AND PROCEDURAL BACKGROUND This matter involves two competing purchase agreements covering property owned by Prop Stop Enterprises Inc Prop Stop Enterprises Milton DeMars and Robin DeMars Prop Stop Enterprises which had been owned and operated by Mr and Mrs DeMars for many years operated the Prop Stop bar and restaurant Prop Stop on the Tickfaw River in Livingston Parish In 2008 Mr DeMars and his wife were having serious financial difficulties and were facing foreclosure on the Prop Stop as well as on their house and a warehouse they owned collectively the affected properties Therefore in April 2008 Mr DeMars contacted his long friend Wayne Glascock time Mr Glascock and requested fnancial assistance Mr Glascock approached representatives of First Guaranty Bank First Guaranty which held the mortgage on the affected properties to inquire if anything could be done to stop the impending sheriff sale of these properties However based on these s conversations Mr Glascock determined that First Guaranty officials were not willing to work with Mr DeMars on this issue Therefore Mr Glascock through Worldwide Financial Worldwide signed a new one note with First Guaranry in the amount year of 147 Worldwide then used the proceeds of that loan to pay off the debt owed OOO by Mr and Mrs DeMars and prevent the sheriff sale of the affected properties The s original notes and mortgages executed by Mr and Mrs DeMars were then assigned to Woridwide Mr Glascock was also required to sign a personal guarantee of the note signed by Worldwide Finally in addition to this personal guarantee Mr Glascock 1 Worldwide was one of the corporate entities through which Mr Glascock sometimes conducted business Mr Glascock testified that First Guaranty officials refused to sell him the note in his personal capacity and that he therefore had no other alternative but to act in a corporate capacity z The original loan had been made to Mr and Mrs DeMars in approximately August 2007 but they had made no payments on the loan Therefore the amount of the loan taken out by Worldwide and Mr Glascock included the amount of the original loan plus interest accelerated interest and additional penalties 2 personally paid fees to the sheriff office and the attorn2ys involved in the foreclosure s proceedings Mr Glascock and Mr DeMars agreed on an initial term of six months for repayment of the loan and Mr DeMars contended that all of his assets consisting of his house a warehouse a boat slip and the Prop Stop business were for sale and sufficient to repay the debt However during the initial six period Mr DeMars month made only one payment on the loan using funds he received from a sale of the boat slip he owned Once certain tax liens were satisfied the remainder of the proceeds of that sale was applied to the Worldwide loan With a balance still remaining at the end of the initial six period Mr Glascock verbally agreed to give Mr DeMars another month six months to pay off the loan Mr Glascock testified that on January 10 2009 Mrs DeMars asked him to come to her home to talk to her husband because he was extremely depressed Mr Glascock agreed to do so and while he was at the house he and Mr DeMars discussed Mr DeMars financial situation During that conversation Mr DeMars indicated that he was interested in selling the Prop Stop and some of his other property at a greatly reduced price Mr Glascock responded that he was not interested in purchasing any of the property but he indicated that his son Andrew had recently moved back home from Dallas and that he might be interested in buying the property Mr Glascock advised Mr DeMars that he would send Andrew over to discuss the purchase of the property Andrew attempted to find Mr DeMars that same day but he was unsuccessful Mr DeMars and Andrew subsequently discussed the purchase of the property on January 11 Z009 however no purchase agreement was signed at that time On January 12 2009 Mr and Mrs DeMars signed a purchase agreement with Lance and Katherine Kathy Valentine in which they agreed to sell Prop Stop 3 According to Mr Glascock stestimony Mrs DeMars called him and told him that Mr DeMars was sitting on the couch with a gun In his testimony Mr DeMars denied that he ever had a gun or that he was depressed however he did acknowledge that he and his wife were in a bad financial situation at the time In any event by the time Mr Glascock arrived at the house Mr DeMars did not have a gun Mrs DeMars did not testify at the trial 3 Enterprises to the Valentines Specifically the agreement stated that Mr and Mrs DeMars agreed to sell Prop Stop Enterprises which include sa building located on the Tickfaw River and all its furniture camera equipment and sound equipment a home located at 32410 Keila Lane and a property on 32746 Cypress ive Dr to the Valentines for the amount of 140 000 The Valentines agreed to pay a deposit and the sale was to close within forty 500 five days Despite having already signed this purchase agreement with the Valentines Mr DeMars later signed a second purchase agreement for the same property with Andrew Glascock Andrew on January 21 2009 This second purchase agreement provided that Mr and Mrs DeMars Prop Stop Enterprises and Andrew came to the following agreement Andrew agrees to buy and Prop Stop Enterprises and Milton DeMars and Robin DeMars individually agree to sell all furniture fixtures tools equipment three boats structures where Prop Stop is located on the Tickfaw R and any patents trademarks and logos including iver but not limited to Prop Stop and Worm Bucket work in progress or finished or any items used in the operation of the Prop Stop Andrew agrees to pay or assume any mortgages currently held by Worldwide Financial First Guaranty Bank or any other holder in due course on property belonging to Prop Stop Enterprises or property belonging to Milton DeMars or Robin DeMars individually including real estate at 32746 Cypress Drive and 32410 Keila Drive Livingston Parish Louisiana Once said mortgages are paid or assumed it is agreed that Milton DeMars and Robin DeMars will receive or continue to hold the properly at 32410 Keila Lane free of any mortgages or liens related to the mortgages held by Worldwide Financial First Guaranty Bank or any holder in due courseJ Milton DeMars and Robin DeMars agree that once said mortgages are paid or assumed Prop Stop Enterprises Milton DeMars and Robin DeMars will deed the property located at 32746 Cypress Drive to Andrew Payment to Prop Stop Enterprises Milton DeMars and Robin DeMars will consist of 85 in cash paid by Andrew Cash will 00 000 be paid as follows 5 at the signing of this agreement receipt of 00 000 which is acknowledged 00 000 10 at the closing of real estate as agreed above and 5 per month payable on the first of every 00 000 month starting in March 1 2009 until November 1 2009 when whatever balance is due on the 85 will be paid in full Parties will 00 000 execute a note at the real estate closing in favor of Milton DeMars and Robin DeMars by Andrew Parties agree that this is a firm and binding agreement Purchaser 4 The agreement was signed by the Valentines and by Mr and Mrs DeMars The agreement did not indicate that Mr and Mrs DeMars were signing in both their individual capacities and their capacities as representatives of Prop Stop Enterprises 4 reserves right of specific performance in case of default by seller Closing will take place within 30 days of today date Signed this 21st day of s January 2009 After the parties signed this purchase agreement Mr DeMars gave Andrew keys to the Prop Stop and possession of certain boats belonging to the business because as he testified he fully expected to complete the sale and he wanted to let Andrew check out the property Andrew set a closing on this agreement for February 11 2009 I Kathy Valentine discovered However that Mr DeMars had DeMars about this signed a purchase I I agreement with and Andrew contended that he had she only signed questioned this second under the impression that the Valentines afraid that he was to lose his going Mr were properly Mr DeMars was I was I any return otherwise I purchase agreement because he unable to obtain without getting I loan and that he a Kathy Valentine assured Mr DeMars that this information was incorrect and that she and her husband still intended to buy the property Therefore Mr DeMars decided not to attend the closing set by Andrew and instead decided to I recognize the purchase agreement with the Valentines According to the Valentines they attempted to obtain the payoff amount owed by Mr and Mrs DeMars from Worldwide and Mr Glascock but they were unsuccessful Because they wanted to begin making repairs to the Prop Stop so that it could be open in April the Valentines purchased the goodwill trade names and leasehold interest of I the Prop Stop on February 11 2009 To make this purchase the Valentines used some of their cash savings as well as funds from an existing line of credit at Whitney Bank They did not however obtain a new loan from the bank as they had originally planned nor did they purchase the home and warehouse from Mr and Mrs DeMars as provided in the original purchase agreement The Valentines ultimately purchased the physical assets of the Prop Stop which consisted entirely of movable property after an appraisal on May 1 2009 The Valentines carried out the transaction involving the trade names goodwill and leasehold interest through their limited liability company 5 The Prop Stop is a seasonal business and is generally open from April through September 6 A new lease was negotiated with the lessor on April 22 2009 5 i KBTS LLC KBTS The sale of the physical assets was to the Valentines individually Meanwhile after Mr and Mrs DeMars failed to appear at the scheduled February 11 2009 closing Andrew filed the underlying petition on February 12 2009 against them and Prop Stop Enterprises seeking specific performance of the purchase agreement between them In addition Andrew recorded a notice of lis pendens against the immovable property subject to the purchase agreement which apparently prevented the Valentines from getting a loan from the bank to buy the house and warehouse as they had planned Thereafter Andrew discovered that certain assets of the Prop Stop had been sold therefore he amended his petition to name KBTS and the Valentines as defendants According to the amended petition KBTS and the Valentines acted in concert with Prop Stop Enterprises and Mr and Mrs DeMars in an effort to defraud Andrew and to deprive him of his exclusive right to the purchase of the Prop Stop Assets in accordance with his agreement with Prop Stop Enterprises and Mr and Mrs DeMars Andrew further requested a preliminary injunction to prohibit the Valentines and KBTS from taking possession or in any way exercising ownership over any of the Prop Stop assets until after a hearing could be held to determine the rightful owner s The request for a preliminary injunction was denied After a trial on the merits the trial court issued written reasons finding that s Andrew purchase agreement was null and void because it was procured under false circumstances and erroneous impressions The trial court further determined that Andrew was required to return the boats in his possession as they had been sold in good faith to the Valentines The trial court also found that Andrew had failed to prove by sufficient evidence that he was entitled to reimbursement for improvements he had allegedly made to the Prop Stop premises s or assets However the trial court There is nothing in the record to suggest that the Valentines ever transferred their rights from the first purchase agreement to KBTS Furthermore the original purchase agreement did not mention the trade names goodwill or leasehold interest belonging to Prop Stop Instead it referred only to a building furniture camera equipment and sound equipment as well as the house and warehouse belonging to Mr and Mrs DeMars e Andrew referred to the claim against KBTS and the Valentines as a third party demand however it appears that he was merely adding them as additional defendants 6 concluded that Andrew was entitled to the refund of the 5000 down payment he had paid to Mr DeMars at the time of the signing of the purchase agreement A judgment in accordance with these reasons was signed on February 22 2011 This appeal by Andrew followed APPLICABLE LAW A court of appeal may not overturn a judgment of a trial court absent an error of law or a factual finding that is manifestly erroneous or clearly wrong Morris v Safewav Ins Co of Louisiana 03 La App lst Cir 9 897 So 616 617 writ 1361 04 17 2d denied 04 La 12 888 So 872 With regard to a factual finding of the 2572 04 17 2d trier of fact the supreme court posited a two test for the appellate review of facts part 1 the appellate court must find from the record that there is a reasonable factual basis for the finding of the trier of fact and 2 the appellate court must further determine that the record establishes that the finding is not clearly wrong manifestly erroneous Mart v Hill 505 So 1120 1127 La 1987 Thus if there is no reasonable factual 2d basis in the record for the trier of fact finding no additional inquiry is necessary to s conclude there was manifest error However if a reasonable factual basis exists an appellate court may set aside a factual finding only if after reviewing the record in its entirety it determines the factual finding was clearly wrong See Stobart v State through Deo Transp and Dev 617 So 880 882 La 1993 Moss v State 07 tof 2d 1686 La App lst Cir 8 993 So 687 693 writ denied 08 La 08 2d 2166 08 14 996 So 1092 il 2d If the trial court factual findings are reasonable in light of the record reviewed s in its entirety the court of appeal may not reverse those findings even though convinced that had it been sitting as the trier of fact it would have weighed the evidence differently Hulse v Sears Roebuck Co 96 La App lst Cir 2704 97 29 12 705 So 1173 1176 However an appellate court may find manifest 2d 77 error or clear wrongness even in a finding purportedly based upon a credibility 9 The Valentines and KBTS had filed a reconventional demand seeking damages they allegedly sustained for the delay in being able to open their business because of the legal proceedings and other actions carried out by Andrew The trial court denied the reconventional demand finding that the Valentines and KBTS had failed to prove their damages by sufficient evidence This part of the judgment has not been appealed 7 determination where documents or objective evidenee so contradict the witness sstory or the story itself is so internally inconsistent or implausible on its face that a reasonable fact finder would not credit the witness story Id at 1177 s DISCUSSION In the judgment in this matter the trial court rendered judgment in favor of Andrew and against Prop Stop Enterprises Milton DeMars and Robin DeMars in the amount of 5 representing the down payment Andrew had made The trial court 000 then dismissed all other claims Andrew had brought against all other parties with prejudice The judgment itself makes no declaration or finding of fraud or any other vice of consent with regard to the purchase agreement entered into between Andrew Prop Stop Enterprises Mr DeMars and Mrs DeMars However in its written reasons the trial court specifically found that Andrew purchase agreement was null and void s and that it had been procured under false circumstances and erroneous impressions The trial court further found that Mr DeMars had been acting under severe duress and the mistaken impression of imminent foreclosure On appeal Andrew has challenged these specific findings of the trial court in an effort to overturn the judgment Although we do not believe that the evidence in the record was sufficient to support a finding of fraud or duress we find that it is not necessary to reach such issues We note that the original purchase agreement in favor of the Valentines in addition to being signed first simply provided for the sale of Prop Stop Enterprises and lo Consent may be vitiated by error fraud or duress LSA art 1948 Fraud need only be proved by C a preponderance of the evidence and may be established by circumstantial evidence LSA art 1957 C The finding of fraud appears to have been based solely on the testimony of Mr DeMars who claimed that Mr Glascock told him that the Valentines were not going to be able to get a loan to complete the deal and that he had heard this information from the Valentines banker Both Mr Glascock and the banker flatly denied that they had ever said any such thing and Mr DeMars said that he never attempted to confirm the information with either of the Valentines While this testimony is clearly contradictory even the choice by the trial court to credit Mr DeMars testimony over that of the others does not rise to the level of proof for fraud by a preponderance of the evidence The trial court suggested that the circumstances supported this finding however aside from the simple fact that Mr DeMars acted the way he did it is unclear to what circumstances the trial court is referring Furthermore a threat of doing a lawful act or of exercising a right does not constitute duress LSA C art 1962 The testimony was contradictory as to whether Mr Glascock threatened to foreclose on the mortgage of Mr DeMars for his failure to make payments on his note Mr Glascock again flatly denied that he had ever threatened to foreclose However even if such threats had been made he and Worldwide had a legal right to do so The fact that Mr DeMars may have felt pressured by that knowledge or by his precarious financial situation does not constitute duress under the law 8 some additional immovable property owned by Mr and Mrs DeMars Although there is some confusion in the record Prop Stop Enterprises consisted entirely of movable property and conducted its business in leased premises When the Valentines attempted to obtain a payoff amount from Worldwide and First Guaranty so that they could complete the sale they were apparently prevented from obtaining this information for reasons that are not entirely clear from the record The Valentines claim that they requested the information but were not given the information by the bank or by Mr Glascock Mr DeMars contends that officers of First Guaranty simply refused to give him the information and that he believed one of them was trying to undermine the sale nevertheless he had no evidence to support any of this testimony However there was evidence that the initial payoff amount given to the Valentines was several thousand dollars too high For whatever reason the Valentines had difficulty obtaining this information and they were therefore unable to obtain a loan in a timely fashion Accordingly they decided to purchase the Prop Stop business alone which was the true focus of the agreement until they could work out other arrangements for a loan As noted previously the Prop Stop business consisted entirely of movable property therefore the ownership of those assets was transferred immediately by a contract between the Valentines and Prop Stop Enterprises Milton DeMars and Robin DeMars The transfer was complete as to third parties once the movables were delivered to the Valentines See LSA art 518 C Andrew did not file his lawsuit until after the transfer of the Prop Stop business to the Valentines and his notice of lis pendens listed only the immovable property that was part of the agreement Because of that notice and this litigation the Valentines have been unable to secure any loan to complete the purchase of the immovable property as originally contemplated in the purchase agreement As the first party to sign a purchase agreement regarding this property the Valentines were entitled to an expectation that their purchase agreement would be 1 The parties noted repeatedly in testimony that the purpose of purchasing this immovable property which included the DeMars family home was to use it as collateral for a loan The true object of the purchase was to obtain the Prop Stop 9 honored for the period of time during which the agreement was to remain in efFect Therefore it was improper for Mr DeMars and his wife to sign a new purchase agreement with Andrew while the Valentines agreement was still in effect Because the Valentines agreement had not expired Andrew purchase agreement could not s supersede it As the holder of the second purchase agreement Andrew was limited to signed a claim for any damages he may have sustained However Andrew attempted to prove that he suffered damages as a result of his involvement in this matter at the trial and the trial court found that he failed to prove his entitlement to damages by sufficient evidence After a thorough review of the record we find no error of fact or law in this I finding by li the trial court The evidence in the record supports the judgment of the trial court which dismissed Andrew sclaims against the defendants reimbursement of his 5 down payment 000 with the exception I of his claim for While we do not agree with the trial s court factual findings suggesting that Mr DeMars was acting under a vice of consent at the time he signed the second purchase agreement we are mindful of the well I I settled rule that v Lucksin4er review of the appellate 0571 09 record courts review La 4 11 1 judgments 61 So 3d 507 not reasons for 572 we find no manifest error in the judgment Woolev I after a thorough I of the trial court I Accordingly factual findings relative to the ultimate findings of fact nor do we find any error of law CONCLUSION For the foregoing reasons we affirm the judgment of the trial court All costs of this appeal are assessed to Andrew Douglas Glascock I I AFFIRMED I i I I 10
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