Graci v. Gasper John Palazzo, Jr., L.L.C.
119 So. 3d 741
La. Ct. App.2013Background
- January 12, 2004 lease: Graci (lessee) and Palazzo (lessor) for Colonnades Plaza unit; three-year term with two 3-year renewal options.
- Plaintiff built a tanning salon build-out inside the unit (12 rooms) at about $72,000 and placed tanning beds; operation under Sunkissed Tanning Studios.
- Hurricane Katrina on Aug. 29, 2005 gutted the center; Palazzo cleaned out the unit and began repairs but did not complete reconstruction.
- Eviction proceedings against Graci filed Oct. 6, 2006; TRO issued; eviction granted March 14, 2007; Graci did not appeal eviction.
- March 23, 2007 suit in 24th JDC for breach of contract and wrongful eviction; prior lis pendens issue and later summary judgments; appeal reversed on remand.
- Remand bench trial resulted in judgment for Graci: $100,250 ($75,000 build-out value, $5,250 undue rent, $20,000 mental anguish).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Unjust enrichment damages proper? | Graci entitled to build-out value. | Build-out becomes Palazzo's; no unjust enrichment. | Yes; award upheld for build-out value as damages. |
| Damages for wrongful eviction and mental anguish? | Damages for eviction and uninhabitable premises are recoverable. | No damages for wrongful eviction or mental anguish. | Mental anguish damages affirmed; supported by evidence. |
| Are improvements part of leased premises ownership discussion? | Lease requires reconstruction; build-out value recoverable; improvements not automatically Palazzo's. | Improvements become lessor’s property on termination under lease. | Trial court’s build-out damage award affirmed; destruction/reconstruction rights apply to lease. |
| Res judicata / law-of-the-case effect of prior ruling? | Prior ruling not to bar damages; claims proceed in 24th JDC. | Res judicata bars new damages based on earlier proceedings. | Law of the case controls; prior decision not to bar damages; issues not barred. |
| Reinstatement of prior summary judgment on damages? | Damages already determined as breach-based. | Summary judgment should be reinstated as per earlier ruling. | affirmed; remand decision sustained; damages affirmed on conventional breach. |
Key Cases Cited
- Pelleteri v. Caspian Group, Inc., 851 So.2d 1230 (La.App. 4 Cir. 2003) (damages for breach of conventional obligation under lease)
- Ganheart v. Executive House Apartments, 671 So.2d 525 (La.App. 4 Cir. 1996) (mental anguish damages for uninhabitable premises)
- Walters v. MedSouth Record Mgmt., LLC, 38 So.3d 245 (La. 2010) (unjust enrichment available only where no other remedy exists)