Fred H. Moran Const. Corp. v. ElnaggarFred H. Moran Const. Corp. v. Elnaggar
This suit commenced as one for executory process on a mortgage note for failure to timely make an installment payment. The mortgagors filed a petition for injunction to arrest the seizure and sale alleging that the executory proceeding was premature because the mortgagee regularly accepted late payment of monthly installments, the mortgaged property had serious redhibitory vices and defects which were the subject of pending litigation, and the mortgage signatures were procured by promises made by the mortgagee which were not kept. The mortgagors obtained a temporary restraining order arresting the sale and sought damages and attorney fees for wrongful seizure. The trial court granted a preliminary injunction, dismissed the claims for damages and attorney fees, ordered each side to pay their own expert witness fees and divided the court costs equally between the parties. The mortgagors devolutively appealed the rulings of the trial court which dismissed their claims for damages and attorney fees, ordered them to pay their own expert witness fees and cast them for one-half of the costs. The mortgagee answered the appeal asserting that the trial court committed error by granting the preliminary injunction, assessing it for its own expert witness fees and casting it for one-half of the costs.
FACTS
On August 20,1981, Hameed A. Elnaggar and Kathleen Jordan Elnaggar purchased a home and lot located in the Meadows Subdivision in East Baton Rouge Parish from Fred H. Moran Construction Corporation (Moran). The purchase price was $235,000. A down payment of $35,000 was made and the balance was financed by a promissory note secured by a mortgage on the property. ($5,000 of the down payment was paid when the sale and mortgage was executed, and a $30,000 unsecured demand note was given to Moran to be paid when the Elnaggars sold their home in Denver, Colorado.) The mortgage note was payable in 36 monthly installments due on the fifth day of each month commencing on October 5, 1981.
During the period of August of 1981 through December of 1981, the Elnaggars discovered what they considered to be numerous defects in the mortgaged premises. They called upon Moran to repair these defects. Moran agreed to make some of the
During the period from August 1981 to March of 1982, Moran proposed to develop the property immediately adjacent to the Elnaggar home and lot as a new subdivision. Apparently, the Elnaggars and others actively opposed this development before the Parish Planning Commission and the Parish Council.
On March 8, 1982, the Elnaggars filed a redhibitory action against Moran alleging the defects that they had called upon Moran to remedy.
On July 30, 1982, Kathleen J. Elnaggar made out the monthly installment check for the payment due on the mortgage note on August 5, 1982. Inadvertently, Mrs. Elnaggar failed to deliver the check to the Baton Rouge Bank and Trust Company before leaving to go on vacation in Florida with her family prior to the installment‘s due date. Moran learned that the August 1982 installment was not timely paid and on August 16, 1982, instituted this suit for executory process. The Elnaggars learned of the suit on August 18, 1982, and thereafter discovered that the payment check had not been delivered. The Elnaggars tendered the check in payment, but this tender was refused.
In preparation for the hearing on their request for a preliminary injunction, the Elnaggars hired consulting experts and allegedly discovered cracks in the sheetrock walls, exterior brick, floor and slab of their home and an upward bulge in the roof.
PRELIMINARY INJUNCTION
The defendant in an executory proceeding may arrest the seizure and sale of the property by injunction when the debt secured by the mortgage is extinguished or is legally unenforceable.
The doctrine of forebearance is succinctly defined in First National Bank v. Higgs, 406 So.2d 673, 675 at footnote 1 (La.App. 2nd Cir.1981), as follows:
Forebearance is a circumstance which can give rise to estoppel. Forebearance exists when a creditor acquiesces in or tolerates substandard performance of an obligation by the debtor without exercising his rights to enforce the obligation, thereby implying that such conduct is sufficient.
When forebearance reaches the level of equitable estoppel the creditor will be barred from suddenly demanding strict performance in order to avoid injustice to the debtor. Calhoun v. Huffman, 217 So.2d 733 (La.App. 3d Cir.1969); Sternberg v. Mason, 339 So.2d 373 (La.App. 1st Cir.1976). However, the creditor‘s mere acquiescence or forebearance by not using all of his rights, when accompanied by protest or complaints to the debtor, does not rise to the level of estoppel which will later bar the creditor from using those rights to enforce the obligation.
Burris v. Gay, 324 So.2d 11 (La. App. 2d Cir.1975), writs denied 326 So.2d 377 [La.1976].
In Sternberg v. Mason, 339 So.2d 373, 377 (La.App. 1st Cir.1976), writ denied 341 So.2d 901 (La.1977), appears the following:
An obligee is, of course, entitled to have the contract strictly complied with and to receive his payments promptly when due. However, when there has developed a course of conduct, i.e., routine late payments without complaint or objection over an extended period of time sufficient to create a justifiable belief that it is of no moment, it is essential in the interest of fairness that the obligee make known to the obligor his intent to discontinue acceptance of late payments.
The Elnaggars made their monthly installment payments at the Baton Rouge Bank and Trust Company for the account of Moran. The bank‘s collection ledger shows the following payments:
| DUE DATE | DATE PAID |
|---|---|
| October 5, 1981 | October 8, 1981 |
| November 5, 1981 | November 6,1981 |
| December 5, 1981 | December 21,1981 |
| January 5, 1982 | January 20,1982 |
| February 5,1982 | February 9,1982 |
| March 5, 1982 | March 5,1982 |
| April 5, 1982 | April 5,1982 |
| May 5, 1982 | May 5,1982 |
| June 5, 1982 | June 7,1982 |
| July 5, 1982 | July 7,1982 |
Fred H. Moran, Moran‘s President, testified that after the Elnaggars filed the redhibitory action, he started checking with the bank on when their monthly payments were made. He candidly admitted that no advance warning was given to the Elnaggars that suit would be instituted if payment was late and that he authorized foreclosure because the Elnaggars were resisting his new subdivision. He learned that the August 5, 1982 payment was late on August 8th or 9th and authorized the filing of suit. When the Elnaggars tendered payment of the August installment, he instructed his attorney and the bank not to accept it.
The trial court ruled that Moran acquiesced in a course of conduct that tolerated routine late installment payments without complaint, that Moran did not put the Elnaggars on notice that no additional late payments would be accepted and that if payment was not timely executory proceedings would be initiated. The trial court concluded that the Elnaggars had proven the affirmative defense of forebearance as defined in Sternberg v. Mason. Nolan J. Cunningham Apartments, Inc. v. Dupre, 428 So.2d 1046 (La.App. 1st Cir.1983). After this case, we conclude these findings of fact this case, we conclude these findings of fact of the trial court are not clearly wrong. Arceneaux v. Domingue, 365 So.2d 1330 (La.1978).1
DAMAGES AND ATTORNEY FEES
In the event injunctive relief is granted to the defendant, if the court finds the seizure in the executory proceeding to be wrongful, it may allow damages to the defendant. Attorney‘s fees for the services rendered in connection with the injunction may be included as an element of the damages. (Emphasis added).
The official revision comment for this part of Article 2751 provides as follows:
The second paragraph to this Article, which was enacted in 1981, is intended to give the trial judge the discretion to award damages and attorney‘s fees where the seizure through executory process was wrongful. It is not intended to require that damages and attorney‘s fees be awarded in every case where an injunction is issued, for example, where an injunction is issued because of a technical deficiency or a technical error.
(Emphasis added).
COSTS
Both sides to this dispute contend that the trial court committed error by dividing the costs equally between them and requiring each side to pay its own expert witness fees.
CONCLUSION
For the foregoing reasons, the judgments of the trial court are correct and are affirmed. The costs of this appeal are to be divided equally between the parties.
AFFIRMED.
ON APPLICATION FOR REHEARING
PER CURIAM.
In its application for a rehearing Moran contends that the Elnaggars have committed new and independent defaults which render moot their claim for injunctive relief on the ground of forebearance of prior late payments. Moran attaches an affidavit asserting these facts for this court to review. Moran argues that since the forebearance claim is now moot we should consider and reverse the allegedly erroneous redhibition ruling of the trial court so that a new suit for executory process can be filed. This court has no jurisdiction to review the new evidence contained in the affidavit.