96 So. 3d 521
La. Ct. App.2012Background
- Brothers Dimitri owned property in Jefferson Parish and leased it to Andrew Jaeger; Winning Legends, Inc. later assumed the lease; Fabien Mang is Legends’ sole shareholder.
- Legends renewed the lease through February 28, 2007, and the lease was properly recorded, preserving the right of first refusal.
- Dimitri’s wife, Josephine DeSalvo Dimitri, died in 1993; her undivided one-half interest passed to a bankruptcy trustee in a May 2000 Chapter 11 proceeding.
- The bankruptcy trustee recognized a creditor with a first mortgage on the North Hullen Street property, which was later sold at a public auction in October 2003 to the Garrett Succession.
- Legends had recorded the lease before the foreclosure sale, so the lease survived the foreclosure and remained valid; in 2005 Legends sold the business to Townsend Legends, Inc.
- Fabien Mang, as Legends’ president, filed to substitute as plaintiff and claimed retention of the rights of first refusal; Townsend intervened asserting a vested interest as current leaseholder.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Mang’s right of action for specific performance | Mang asserts Mang/L Legends retains rights to pursue performance. | Garrett Succession/Heisler argue Mang has no standing after transfer. | Mang has no right of action; rights passed to Townsend; Mang cannot pursue. |
| Summary judgment proper on lease validity/rights | Mang contends Royal Oldsmobile not controlling due to differing leases. | Royal Oldsmobile applies; involuntary sale did not trigger ROFR. | Summary judgment affirmed; ROFR not triggered by involuntary bankruptcy sale. |
| Exceptions of no right of action against Mang and Heisler | Mang challenges standing of the defendants to question transfers. | The transfers defeated Legends’ ROFR; Mang lacks standing. | Affirmed; Mang has no right of action; transfers defeated ROFR. |
| Notice/operational effect on ROFR for Mang | Mang seeks Mennonite-like notice if required. | Notice requirement not applicable given no ROFR trigger. | Not reached; Court affirmed on other grounds; notice deemed unnecessary. |
Key Cases Cited
- Royal Oldsmobile Co., Inc. v. Heisler Properties, L.L.C., 58 So.3d 483 (La. App. 5th Cir. 2010) (summary judgment proper where involuntary sale did not trigger ROFR)
- Louisiana Paddlewheels v. Louisiana Riverboat Gaming Comm'n, 646 So.2d 885 (La. 1994) (general principle referenced)
- Gorum v. La. Hosp. Assoc. Employee Benefit Trust, 664 So.2d 662 (La. App. 3d Cir. 1995) (evidentiary/exception considerations in action)
- Acorn Community Land Assoc. of La., Inc. v. Zeno, 936 So.2d 836 (La. App. 4th Cir. 2006) (parole evidence/contract interpretation context)