Christopher Conroy v. Suzico, L.L.C., Madeline Ahlgren Melanson and Jared Blackburn ( 2023 )

STATE OF LOUISIANA
COURT OF APPEAL
FIRST CIRCUIT
2022 CA 0974
CHRISTOPHER CONROY
VERSUS
SUZICO, L.L.C, MADELINE AHLGREN MELANSON AND JARED
BLACKBURN
Judgment Rendered. FEB 2 4 2023
Appealed from the 19th Judicial District Court
In and for the Parish of East Baton Rouge
State of Louisiana
Case No. C702091 Division D, Section 21
The Honorable Ronald R. Johnson, Judge Presiding
Mary Kathryn Gimber Counsel for Defendant/Plaintiff-in- Cross-
William L. Caughman, III Claim/Appellant
Jourdan Curet Suzico, L.L.C.
Randy R. Cangelosi
Baton Rouge, Louisiana
Michael O. Adley Counsel for Defendant/
efendant/ Defendant-Defendant- in-in-
James H. Gibson Cross- Claim/Claim/ Appellee Appellee
Lafayette, Louisiana Madeline Ahlgren Melanson
BEFORE: WELCH, PENZATO, AND LANIER, JJ.
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LANIER, J.
The appellant, Suzico, L.L.C. ( Suzico), appeals the summary judgment of
the Nineteenth Judicial District Court in favor of the appellee, Madeline Ahlgren
Melanson. For the following reasons, we reverse and remand for further
proceedings.
FACTS AND PROCEDURAL HISTORY
On November 25, 2020, Christopher Conroy, the plaintiff in the instant case,
filed a petition for specific performance, attorney fees, and damages against Suzico
and Ms. Melanson. Mr. Conroy alleged that Suzico was a Louisiana limited
liability company that owned commercial property in Baton Rouge, which Mr.
Conroy had attempted to purchase. Mr. Conroy and Suzico allegedly entered into
an agreement to purchase and sell the property on August 25, 2020, wherein Mr.
Conroy agreed to purchase the property for $ 1. 44 million. Mr. Conroy alleged that
Ms. Melancon was the legal representative of Suzico, and she digitally signed the
agreement to purchase and sell, although she is not represented on the document as
signing on behalf of Suzico.
On October 21, 2020, Mr. Conroy and Suzico allegedly agreed to an
extension to the date of the closing. This addendum to the agreement was signed
by Jared Blackburn, who was not represented on the document as representing
Suzico; however, Mr. Conroy claimed that a certificate of authority for Suzico,
which was executed on October 23, 2020, granted authority to Mr. Blackburn to
sign acts of sale and other legal documents on behalf of Suzico. The document
grants the same authority to Susan Waters and Thomas Waters, who are the two
members of Suzico, but not to Ms. Melanson. Additionally, minutes of a special
meeting held on October 2, 2020 by the members of Suzico reflect that Mr.
Blackburn was granted the authority to enter into agreements to purchase and sell
property on behalf of Suzico. Mr. Conroy alleged that despite these documents,
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Ms. Melanson, upon Mr. Conroy' s information and belief, had executed purchase
agreements on behalf of Suzico in the past.
Mr. Conroy further alleged that on November 13, 2020, he received a letter
from an attorney for Suzico, which stated that Ms. Melanson did not have authority
to sell the property on behalf of Suzico and that the property was not for sale. In
response, Mr. Conroy advised Suzico that the closing was scheduled for November
18, 2020. No representative for Suzico appeared for the closing, and ownership of
the property was not transferred to Mr. Conroy.' Thus, Mr. Conroy demanded
specific performance on the contract, as well as attorney fees, which were provided
for in the terms of the agreement. In the alternative, Mr. Conroy demanded if Ms.
Melanson was found to lack the authority to sign the agreement to purchase and
sell on behalf of Suzico, and if Mr. Blackburn was found not to have ratified her
action by signing the addendum, then Ms. Melanson should be held personally
liable for his damages. In response, Ms. Melanson claimed that Mr. Blackburn' s
signing of the addendum resulted in Suzico ratifying her action, and she could not
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be personally liable to Mr. Conroy.
On June 15, 2021, Suzico filed a counterclaim against Mr. Conroy, in which
it claimed that Mr. Conroy knew or should have known that the property was
offered for sale by realtor Lee Lambert of Latter & Blum, Inc. (Latter & Blum) at a
price that was substantially below market value. Further, Suzico claimed that Mr.
Conroy and Mr. Lambert colluded to sell the property well below market value
before the property was actually listed for sale. Suzico specifically alleged that the
agreement to purchase and sell the property was vitiated through fraud. Suzico
Mr. Conroy stated in his petition that he had intended to assign the purchaser rights to Capital
City Investments, LLC, of which he was a member,
2 Ms. Melanson made this claim in a motion for summary judgment, which she filed on January
6, 2021, in the original suit filed by Mr. Conroy, On November 17, 2021, the district court
granted Ms. Melanson' s motion for summary judgment and dismissed all of Mr. Conroy' s claims
against her with prejudice. That judgment is currently not before this Court.
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also claimed that Mr. Blackburn signed the addendum either through coercion or
error as to the property' s value, induced by Mr. Conroy.
In the same pleading, Suzico filed a third -party claim against Mr. Lambert
and Latter & Blum, claiming that on or about August 20, 2020, Ms. Melanson
signed a marketing agreement with Mr. Lambert, who was an agent of Latter &
Blum, to list property owned by Suzico for sale, but the agreement remained blank
so as not to list any particular piece property to be marketed by Mr. Lambert.
Suzico further claimed that Mr. Lambert wrote into the marketing agreement the
name of the property at issue, and made several copies of the blank marketing
agreement so that he could list other properties of Suzico in separate sales.
Suzico alleged that Mr. Lambert listed the property for sale on August 25,
2020, the same day Mr. Conroy signed the agreement to purchase and sell the
property. Suzico alleged that on the following day, Ms. Melanson signed the
agreement to purchase and sell as the seller without Suzico' s authority. Suzico
claimed it relied on Mr. Lambert' s advice as their fiduciary that the agreed upon
price was the best possible price for the property. Suzico further claimed that Mr.
Lambert knew or should have known that the price was substantially below the
property' s true market value. Suzico also claimed that Mr. Lambert had entered
into a scheme with Mr. Conroy to purchase the property for a price substantially
below market value. Suzico further alleged that Mr. Lambert' s and Latter &
Blum' s actions were fraudulent, and that they were liable to Suzico for the
difference between the sale price and the true market value, other damages, and
attorney fees.
Additionally, Suzico filed a cross- claim against Ms. Melanson, claiming that
at no time did she have written or verbal authority to sell property owned by
Suzico. Suzico demanded that in the event specific performance was granted
against it, Ms. Melanson should be held liable for the difference between the $ 1. 44
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million sale price and the actual value of the property. On August 26, 2021, Ms.
Melanson filed the instant motion for summary judgment on the cross- claim, again
claiming that her actions were ratified by Mr. Blackburn when he signed the
addendum, since he was granted in writing the authority to sign on Suzico' s behalf.
The district court heard the motion for summary judgment on the cross-
claim against Ms. Melanson on January 6, 2022. After the hearing, the district
court signed a judgment on March 2, 2022, granting Ms. Melanson' s motion for
summary judgment and dismissing Suzico' s cross- claim against her with prejudice.
Suzico has appealed this judgment.
ASSIGNMENT OF ERROR
Suzico' s sole assignment of error is that the district court erred when it
improperly granted Ms. Melanson' s motion for summary judgment and improperly
dismissed the cross- claim against her with prejudice by misapplying the
evidentiary standard required to determine whether a genuine issue of material fact
exists,
and by failing to consider Suzico' s uncontroverted evidence that the
addendum at issue was void for lack of consent due to fraud or error.
STANDARD OF REVIEW
The burden of proof on a motion for summary judgment rests with the
mover: here, Ms. Melanson. It must first be determined whether the supporting
documents presented by the mover are sufficient to resolve all material fact issues.
Bass v. DISA Global Solutions, Inc., 2020- 0071 ( La. App. 1 Cir. 12130120), 318
So. 3d 909, 916, writ denied, 2021- 00147 ( La. 3123121), 313 So. 3d 273. Once the
motion for summary judgment has been properly supported by the moving party
i.e., the mover has established the material facts through its supporting
documentary evidence), and the mover has made a prima facie showing that the
motion for summary judgment should be granted, the mover does not have to
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negate all of the essential elements of the adverse party' s claim, action, or defense.
La. C. C. P. art. 966( D)( 1).
Thereafter, the burden shifts to the non-moving party, Suzico, to produce
factual support sufficient to establish the existence of a genuine issue of material
fact, or that Ms. Melanson is not entitled to judgment as a matter of law. Suzico
may not rest on the mere allegations of denials in its pleadings, but its responses
must set forth specific facts showing that there is a genuine issue for trial. See
Acadian Properties Northsore, L.L. C. v. Fitzmorris, 2019- 1549, 2019- 1550 ( La.
App. 1 Cir. 11/ 12/ 20), 316 So. 3d 45, 50. In determining whether summary
judgment is appropriate, appellate courts review evidence de novo under the same
criteria that govern the trial court' s determination of whether summary judgment is
appropriate. Id.DISCUSSION
Ms. Melanson submitted her motion for summary judgment at the hearing,
with the following attached exhibits: Mr. Conroy' s petition and its attached
exhibits; Suzico' s supplemental and amended answer to that petition; an excerpt
from Suzico' s responses to Mr. Conroy' s discovery requests; and Suzico' s
responses to Ms. Melanson' s discovery requests. The attached exhibits to Mr.
Conroy' s petition were: the agreement to purchase and sell; the addendum to the
agreement; the certificate of authority for Suzico; and the November 13, 2020
letter to Mr. Conroy from Suzico' s attorney. In response, Suzico submitted its
memorandum in opposition to the motion for summary judgment, with affidavits
of Ms. Waters and Mr. Blackburn attached.
Ratification is the adoption by one person of an act done on his behalf by
another without authority. Ratification amounts to a substitute for prior authority.
Bamber Contractors, Inc. v. Morrison Engineering & Contracting Co., Inc., 385
C
So. 2d 327, 331 ( La. App. 1 Cir. 1980). The burden of proving ratification is on the
party asserting it, and to find ratification of an unauthorized act, the facts must
indicate an absolute intent to ratify the act, and no intent will be inferred when the
alleged ratification can be explained otherwise. Id. Ratification will occur when
the principal, knowing of the contract, does not repudiate it but accepts its benefits.
Id.Our review of the documents submitted at the hearing indicate that Ms.
Melanson executed the agreement to purchase and sell prior to execution of the
certificate of authority that expressly authorized Mr. Blackburn to sign on behalf of
Suzico. While it is unclear as to whether Ms. Melanson actually had authority to
sign the agreement on behalf of Suzico, Mr. Blackburn clearly had the authority to
sign the addendum. The exhibits submitted by Ms. Melanson satisfied her burden
to prove that Mr. Blackburn had ratified her signature on the agreement to
purchase and sell. At that point, the burden shifted to Suzico to prove that a
genuine issue of material fact existed as to whether Mr. Blackburn actually ratified
Ms. Melanson' s signature. See La. C. C.P. art. 966( D), To that end, Suzico
submitted the affidavits of Ms. Waters and Mr. Blackburn.'
In his affidavit., Mr. Blackburn stated that he signed the addendum under the
belief that Suzico would suffer " substantial financial penalties" if he did not sign it,
and that the price of $1. 44 million was the best price available for the property.
Mr. Blackburn stated he was told this by Mr. Lambert. Mr. Blackburn relied on
Mr. Lambert' s advice and representations when he signed the addendum. After the
addendum was signed, other " trusted advisors" of Suzico raised concerns that the
sale price was far below the actual value of the property. Mr. Blackburn then
3 The testimony contained in the affidavits of Ms. Waters and Mr. Blackburn are substantially
similar.
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stated that it was later determined that the actual value of the property was more
than double the sale price of $1. 44 million.
Consent may be vitiated by error, fraud, or duress. La. C.C. art. 1948.
However, error vitiates consent only when it concerns a cause without which the
obligation would not have been incurred and that cause was known or should have
been known to the other party. La. C. C. art. 1949. Mr. Blackburn stated in his
affidavit that Suzico relied on Mr. Lambert' s advice to determine the best sale
price for the property, and that the sale price was a " principal cause for Suzico to
go forward with the sale." Mr. Blackburn claimed that he discovered after he had
signed the addendum that the agreed upon sale price of $1. 44 million was less than
half of the property' s actual value. If Suzico was mistaken as to the actual value of
the property when Mr. Blackburn signed the addendum as a result of Mr.
Lambert' s misrepresentation, then that mistake may vitiate Suzico' s consent if Mr.
Lambert knew or should have known. See Peironnet v. Matador Resources Co.,
2012- 2292, 2012- 2377 ( La. 6128113), 144 So. 3d 791, 807.
Suzico specifically pled error and fraud as counterclaims to Mr. Conroy' s
suit, and alleged the same against Mr. Lambert. See Sonnier v. Boudreaux, 95-
2127 ( La. App. 1 Cir. 5110196), 673 So. 2d 713, 717. The issue before this Court,
as set forth by Ms. Melanson' s motion for summary judgment on Suzico' s cross-
claim, is whether Mr. Blackburn' s signature on the addendum ratified Ms.
Melanson' s signature on the agreement to purchase and sell. The issue of this
ratification is so factually intertwined with the issue of fraud or error, that if it were
found that fraud or error existed when Mr. Blackburn signed the addendum, then
his consent to do so would be vitiated. If the consent is vitiated, then Ms.
Melanson' s authority to sign on behalf of Suzico becomes a genuine material issue
of fact.
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One of the possible remedies for fraud or error is rescission. See Peironnet,
144 So. 3d at 808. Rescission would put the parties in the position in which they
were prior to the attempted agreement; which, in the instant case, would return the
parties to their position prior to the signing of the addendum. See La. C.C. art.
1952, Revision Comments - 1984, comment ( b); See Insurance Storage Pool, Inc.
v. Parish Nat. Bank, 97- 2757 ( La. App. 1 Cir. 5114199), 732 So. 2d 815, 821. Only
after it is decided whether the addendum should be rescinded can it be decided
whether Ms. Melanson acted without the authority of Suzico, or whether Suzico
ratified her action.
Based on our review, we find that the district court erred in granting Ms.
Melanson' s motion for summary judgment. Ms. Melanson initially met her burden
by presenting sufficient evidence showing her signature on the agreement to
purchase and sell was potentially ratified
by Mr. Blackburn' s signature.
Thereafter, the burden shifted to Suzico, and Suzico presented sufficient evidence
to show that a genuine issue of material fact existed as to whether error or fraud
vitiated Mr. Blackburn' s consent. Mr. Blackburn' s lack of consent based on error
or fraud would vitiate the addendum, which would then no longer operate to ratify
Ms. Melanson' s signature.
DECREE
The summary judgment of the Nineteenth Judicial District Court in favor of
the appellee, Madeline Ahlgren Melanson, dismissing the cross- claim of the
appellant, Suzico, L.L. C., against Ms. Melanson, is reversed, and this matter is
remanded for further proceedings. All costs of this appeal are assessed to the
appellee, Madeline Ahlgren Melanson.
REVERSED; REMANDED.
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