Bertha Hillman v. Emerson Loga, III
2012 U.S. App. LEXIS 20351
| 5th Cir. | 2012Background
- Condominium Purchasers sued Lacote and its members after Katrina; Lacote rebuilt Village at Henderson Point but halted construction in June 2008 due to funding issues; SI Realty provided a second loan and foreclosed after Lacote’s bankruptcy; Purchasers had entered Purchase Agreements requiring completion within 24 months; district court held the 24-month obligation falls within ILSA § 1702(a)(2) exemption; this court reviews de novo the ILSA exemption and Mississippi contract law applied to the agreements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the 24-month completion clause create a legal obligation under ILSA exemption? | Purchasers contend the 24-month term is illusory and negates remedies. | Loga/Stieffel argue the clause imposes a real duty and is exempt under § 1702(a)(2). | Yes, exemption applies; clause not illusory. |
| Do the Default and Down Payment provisions negate remedies, rendering the obligation illusory? | Provisions limit remedies to refunds, undermining damages/specific performance. | Language does not negate remedies; Mississippi law requires explicit negation, which is absent. | Not illusory; remedies remain available, so exemption stands. |
Key Cases Cited
- Nickell v. Beau View of Biloxi, L.L.C., 636 F.3d 752 (5th Cir. 2011) (ILO interpretation of ILSA aligns with HUD guidance and deference to federal law)
- Kamen v. Kemper Fin. Servs., Inc., 500 U.S. 90 (1991) (federal-law interpretation governs ILSA issues)
- Stein v. Paradigm Mirasol, LLC, 586 F.3d 849 (11th Cir. 2009) (two-year exemption requires a legal duty to construct)
- Osborne v. Bullins, 549 So.2d 1337 (Miss. 1989) (Mississippi law requires explicit language negating remedies to render obligations illusory)
- Maguire v. Southern Homes of Palm Beach, LLC, 591 F. Supp. 2d 1269 (S.D. Fla. 2008) (illustrates treatment of the two-year exemption and contractual defenses)
- Ndeh v. Midtown Alexandria, L.L.C., 300 F. App’x 203 (4th Cir. 2008) (illustrates the necessity of a viable remedy for obligation)