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Payne v. Hurwitz, 978 So.2d 1000 (2008)
2007-0081 (La.App. 1 Cir. 1/16/08)
978 So.2d 1000
Court of Appeal of Louisiana,
First Circuit.
Wesley and Gwendolyn PAYNE
v.
Keefe HURWITZ.
No. 2007 CA 0081.
|
Jan. 16, 2008.
Synopsis
Background: Prospective purchasers of home brought action
against prospective vendor, alleging that the vendor breached
the parties’ purchase agreement and refused to complete sale
after the home was damaged in Hurricane Katrina. The 22nd
Judicial District Court, Parish of St. Tammany, No. 2005–
14249, Larry J. Green, J., entered judgment in favor of
purchasers, and vendor appealed. Purchasers answered the
appeal, asserting they were entitled to specific performance.
Holdings: The Court of Appeal, Gaidry, J., held that:
vendor’s performance under purchase agreement was not
impossible, and
purchasers were entitled to specific performance of
agreement.
Affirmed as amended and remanded.
McDonald and McClendon, JJ., concurred with reasons.
Attorneys and Law Firms
*1001 Michelle Mayne Davis, Mandeville, LA, for
Plaintiffs/Appellees, Wesley and Gwendolyn Payne.
Prescott L. Barfield, Covington, LA, for Defendant/
Appellant, Keefe Hurwitz.
Before GAIDRY, McDONALD, and McCLENDON, JJ.
Opinion
*1002 GAIDRY, J.
**2 The prospective purchasers of a home under a
purchase agreement sued the prospective seller, alleging the
seller’s noncompliance with the agreement and refusal to
consummate the sale. The trial court rendered judgment in
favor of the prospective purchasers for the return of their
deposit, a contractual penalty, and attorney fees, expenses,
and costs. The seller appeals and the prospective purchasers
have answered his appeal, asserting error by the trial in
failing to grant them specific performance. For the following
reasons, we amend the judgment to grant the prospective
purchasers specific performance, vacate the awards for the
deposit return and contractual penalty, affirm the judgment
in all other respects, and remand the case for further
proceedings.
FACTS AND PROCEDURAL BACKGROUND
The plaintiffs, Wesley Payne and Gwendolyn Payne (the
Paynes), decided to purchase a smaller home, and in July
2005 began searching for one. Using the Internet, they
eventually located a home for sale at 4018 Willow Lane
in Madisonville, Louisiana. The owner was Keefe Hurwitz.
After viewing the home, the Paynes made an offer that was
acceptable to Mr. Hurwitz, and a purchase agreement for the
price of $241,500.00 was signed on August 22, 2005. On
the same date, the Paynes wrote a check in the amount of
$1,000.00, representing the required deposit, made payable to
Houlemarde Realty, the real estate agency representing Mr.
Hurwitz. The purchase agreement provided for a closing date
for execution of the act of sale of September 26, 2005, or
sooner if mutually agreed. However, it also provided for an
automatic extension of the closing date for up to sixty days in
the event repairs were necessary.
**3 On August 29, 2005, Hurricane Katrina made landfall,
causing extensive damage to property in southeast Louisiana,
including Madisonville. Mr. Hurwitz’s home sustained
substantial roof damage from the hurricane winds and a fallen
tree, as well as water damage to the sheetrock, windows,
and other interior fixtures of the left side of the home.
The costs of repair were estimated by Mr. Hurwitz, a selfemployed contractor with experience as an insurance adjuster,
at approximately $60,000.00.
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Payne v. Hurwitz, 978 So.2d 1000 (2008)
2007-0081 (La.App. 1 Cir. 1/16/08)
Due to disruption of electronic communications systems and
mail service following the hurricane, the Paynes, who had
evacuated to Kansas City, Missouri, experienced considerable
difficulty in contacting Mr. Hurwitz regarding the status of
the sale of the home. On September 9, 2005, they handdelivered a letter containing their contact information to
Michelle Poliski, Mr. Hurwitz’s wife, and attempted to contact
Mr. Hurwitz by e-mail directed to Angela Houlemarde,
Mr. Hurwitz’s agent. The Paynes also contacted their loan
officer, who suggested that they ask the lender’s title attorney
to attempt to contact Mr. Hurwitz regarding the status of
the closing date and a proposed extension of that date, as
authorized by the agreement.
On September 20, 2005, Mr. Hurwitz e-mailed the lender’s
title attorney, acknowledging a conversation of that date and
stating:
Per our conversation today I was blunt
that the house was in need of major
repair due to storm damage. It will take
months to get this work completed.
I will not be interested in selling for
the same amount when and if I decide
to sell my house. Naturally the house
goes up in value each day. Your client
states on the contract a sale for cash.
That means no bank loan or approval
is needed. I understand that Katrina
was an inconvenance [sic ] to every
*1003 one[.] I’m sorry at this time I
cannot afford to sell my house under
the previous terms and conditions or
the present status of my house and my
life at this time. I thank you for your
understanding. KH
**4 On October 3, 2005, the Paynes filed a petition seeking
specific performance and damages, alleging that Mr. Hurwitz
breached the terms of the purchase agreement. On October
28, 2005, Mr. Hurwitz answered the petition, alleging that the
agreement was unenforceable due to Hurricane Katrina and
that his performance was impossible due to force majeure. He
also alleged that the property could not be repaired within the
automatic sixty-day extension for closing, or by November
24, 2005.
The matter was tried on May 8, 2006. At the conclusion of
the trial, the trial court took the matter under advisement
after ordering the submission of posttrial memoranda. On
September 11, 2006, the trial court issued its judgment,
incorporating its written reasons. 1 The court ruled in favor
of the Paynes, awarding them the return of their $1,000.00
deposit and an equal amount representing a contractual
penalty, as well as costs, fees, expenses and reasonable
attorney fees, as provided in the agreement.
The Paynes answered the appeal, seeking amendment of the
trial court’s judgment to grant them the alternative remedy of
specific performance in lieu of the return of their deposit and
the contractual penalty. 2
ASSIGNMENTS OF ERROR
**5 Mr. Hurwitz designates four assignments of error on the
part of the trial court:
(1) The trial court erred in determining that he breached the
terms and conditions of the purchase agreement;
(2) The trial court erred in determining that the home could
have been repaired in time to accomplish the closing;
(3) The trial court erred in determining that the obligation was
not rendered null and void due to force majeure or an “Act
of God”; and
(4) The trial court erred in determining that he was in bad faith
under the terms and conditions of the purchase agreement.
In their answer to the appeal, the Paynes assign the following
error on the part of the trial court:
(5) The trial court erred in holding that the Paynes were
required to set a closing or to “put the seller in default,” in
order to be entitled to the remedy of specific performance
authorized by the terms of the purchase agreement.
DISCUSSION
The purchase agreement at issue was signed by the Paynes
on August 19, 2005 and presented in the form of an offer, and
was accepted and signed by Mr. Hurwitz on August 22, 2005.
© 2020 Thomson Reuters. No claim to original U.S. Government Works.
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Payne v. Hurwitz, 978 So.2d 1000 (2008)
2007-0081 (La.App. 1 Cir. 1/16/08)
It consisted of a *1004 two-page form agreement entitled
“Agreement to Purchase or Sell,” and bore language stating
that it was produced through the use of a computer software
program. The first page, bearing the parties’ signatures,
confirmed that the Paynes’ offer was submitted to Angela
Houlemarde, Mr. Hurwitz’s designated real estate agent.
The purchase agreement contained the following provision
relating to the effect of necessary title work or repairs upon
the date of the act of sale:
Louisiana Civil Code article 2623 sets forth the requisite
elements of a contract to sell, or purchase agreement:
CURATIVE WORK/REPAIRS In the event curative work
in connection with the title is required, and/or if repairs
are a requirement for obtaining the loan(s) upon which
this **6 agreement is conditioned, the parties agree to
and do extend the date for passing the Act of Sale to a
date not more than fifteen (15) days following completion
of curative work/repairs; but in no event shall extension
exceed sixty (60) days without the written consent of all
A contract to sell must set forth the thing and the price, and
meet the formal requirements of the sale it contemplates.
An agreement whereby one party promises to sell and the
other promises to buy a thing at a later time, or upon the
happening of a condition, or upon performance of some
**7 obligation by either party, is a bilateral promise of
sale or contract to sell. Such an agreement gives either party
the right to demand specific performance.
Delivery of an immovable is deemed to take place upon
execution of the writing that transfers its ownership. La. C.C.
art. 2477. Louisiana Civil Code article 2489 expresses the
obligation of the seller as to the condition of the thing sold at
time of delivery:
parties. 3
The purchase agreement also included the following pertinent
provisions:
BREACH OF AGREEMENT BY SELLER In the event
SELLER fails to comply with this agreement, for any
reason other than inability to deliver a merchantable
title, within the time specified, PURCHASER shall
have the right to demand specific performance; or, at
PURCHASER’S option, PURCHASER shall have the right
to demand the return of his deposit in full, plus an equal
amount to be paid as penalty by SELLER. In either event,
PURCHASER shall have the right to recover any costs and/
or fees, including expenses and reasonable attorney’s fees,
incurred as a result of this agreement or breach thereof.
…
DEADLINES Time is of the essence and all deadlines are
final except where modifications, changes, or extensions
are made in writing and signed by all parties.
Mr. Hurwitz testified at trial that no repairs had been made
by the original scheduled closing date of September 26,
2005. According to Mr. Hurwitz, the roof repair began on
October 21, 2005, and was completed on October 28, 2005.
He received the final supplemental check from his insurer for
the estimated cost of repairs on November 15, 2005. He also
testified that additional needed repairs were still incomplete
at the time of trial.
*1005 The seller must deliver the
thing sold in the condition that, at the
time of the sale, the parties expected,
or should have expected, the thing to
be in at the time of delivery, according
to its nature.
Under article 2489, the seller must care for and preserve
the thing sold as a reasonably prudent administrator, in
accordance with the overriding obligation of good faith.
La. C.C. art. 2489. Revision Comments—1993, (b). Thus,
Mr. Hurwitz as seller bore the risk of any damage to the
home pending the sale, and had the legal duty to restore
it to its expected condition prior to delivery to the buyers.
As the obligor in that respect, the extensions provided for
in the “Curative Work/Repairs” provision of the purchase
agreement were primarily for his benefit as seller, to assist
him in fulfilling that obligation.
Our Civil Code provides that “[a]n obligor is not liable for
his failure to perform when it is caused by a fortuitous
event that makes performance impossible.” La. C.C. art.
1873. A fortuitous event is one that, at the time the contract
was made, could not have been reasonably foreseen. La.
C.C. art. 1875. Our jurisprudence uses the terms “fortuitous
event” and force majeure (irresistible force) interchangeably.
La. C.C. art. 1873, Revisions Comments—1984, (c). Force
majeure is defined as “an event or effect that can be neither
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Payne v. Hurwitz, 978 So.2d 1000 (2008)
2007-0081 (La.App. 1 Cir. 1/16/08)
anticipated nor controlled.” Black’s Law Dictionary 673–74
**8 8th ed.2004). It includes such acts of nature as floods
and hurricanes. Id. It is essentially synonymous with the
common law concept of “act of God,” and the latter term has
also found its way into our jurisprudence. See Saden v. Kirby,
94–0854, p. (La.9/5/95), 660 So.2d 423, 428; Bass v. Aetna
Ins. Co., 370 So.2d 511, 513 n. 1 (La.1979); and A. Brousseau
& Co. v. Ship Hudson, 11 La.Ann. 427 (La.1856). The parties
concede, as we do, that Hurricane Katrina undoubtedly was
a force majeure. 4 But this is only part of the contractual
defense of impossibility of performance.
To relieve an obligor of liability, a fortuitous event must
make the performance truly impossible. La. C.C. art. 1873,
Revision Comments—1984, (d). The nonperformance of a
contract is not excused by a fortuitous event where it may be
carried into effect, although not in the manner contemplated
by the obligor at the time the contract was entered into.
Dallas Cooperage & Woodenware Co. v. Creston Hoop Co.,
161 La. 1077, 1078–79, 109 So. 844 (La.1926). In other
words, if the fortuitous event prevents the obligor from
performing his obligation in the manner contemplated at the
time of contracting, he must pursue reasonable alternatives
to render performance in a different manner before he can
take advantage of the defense of impossibility. West v.
Cent La. Limousine Serv., Inc., 03–373, p. 2 (La.App. 3rd
Cir.10/1/03), 856 So.2d 203, 205. An obligor is not released
from his duty to perform under a contract by the mere
fact that such performance has been made more difficult or
more burdensome by a fortuitous event. Schenck v. Capri
Constr. Co., 194 So.2d 378, 380 (La.App. 4th Cir.1967).
The fortuitous event must pose an insurmountable obstacle
in order to excuse the obligor’s nonperformance. 5 **9
Saúl Litvinoff, Louisiana Civil Law Treatise: The Law of
Obligations, § 16.17, at 476 (2nd ed.2001).
The leading commentator cited above has also made the
following observations relevant to the situation of this case:
*1006 A question arises when a fortuitous event prevents
the timely performance of an obligation without making
that performance impossible in an absolute sense. That
is the case of a fortuitous event of limited duration that
temporarily prevents the use of but does not destroy the
means on which the obligor was counting in order to
perform the obligation….
If the obligation is [such] that a delayed performance is still
useful to the obligee, then the obligor remains bound to
perform once the impediment ceases and owes no damages
for the delay caused by the fortuitous event.
Id., § 16.62.
Louisiana Civil Code article 1759 provides that good faith
governs the conduct of both the obligor and the obligee in
whatever pertains to the obligation. Similarly, La. C.C. art.
1983 provides that contracts, or conventional obligations,
must be performed in good faith. Thus, a party to a contract
has an implied obligation to put forth a good faith effort to
fulfill the conditions of the contract. Bond v. Allemand, 632
So.2d 326, 328 (La.App. 1st Cir.1993), writ denied, 94–0718
(La.4/29/04), 637 So.2d 468.
The recent case of Associated Acquisitions, L.L.C. v.
CarboneProperties of Audubon, L.L.C., 07–0120 (La.App.
4th Cir.7/11/07), 962 So.2d 1102, also arose in the aftermath
of Hurricane Katrina. The defendant in that case also
urged the defense of force majeure in an effort to excuse
its nonperformance. The court there rejected the defense,
observing that under settled Louisiana jurisprudence, “a party
is obliged to perform a contract entered into by him if
performance be possible at all, and regardless of any difficulty
he might experience in performing it.” Id., 07–0120 at p. 9,
962 So.2d at 1107, citing **10 Picard Const. Co. v. Bd. of
Comm’rs of Caddo Levee Dist., 161 La. 1002, 1007, 109 So.
816, 818 (La.1926). The court concluded: “The unexpected
and unforeseen damage of Hurricane Katrina does not change
the agreement between these parties; therefore, this is an
agreement which can still be performed.” Id. 07–0120 at p. 9,
962 So.2d at 1107–08.
Here, the only possible obstacle to Mr. Hurwitz’s performance
under the purchase agreement was a temporal one: the
completion of the necessary repairs and the closing
within the automatic sixty-day deadline or any additional
extension agreeable to the parties. The Paynes, as obligees,
unequivocally expressed their willingness to agree to the
latter extension, but Mr. Hurwitz did not, and preemptively
rejected the consummation of the agreement as impossible
of performance even before the expiration of the automatic
sixty-day extension. Mr. Hurwitz could certainly have
rendered performance in a different manner, that is, at a later
time based upon a mutual written extension of the closing
deadline. We agree with the trial court’s conclusion that the
real basis of Mr. Hurwitz’s failure to perform was volitional
in nature, rather than the type of insurmountable obstacle
necessary to invoke the defense of force majeure. The
determination of whether performance was truly impossible
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Payne v. Hurwitz, 978 So.2d 1000 (2008)
2007-0081 (La.App. 1 Cir. 1/16/08)
was a factual one, and the trial court expressly concluded
in its reasons that Mr. Hurwitz was disingenuous in his
explanation regarding the availability of materials and
delay in repairs. 5 Being *1007 based upon a reasonable
credibility assessment, the trial court’s conclusion cannot be
manifestly erroneous.
**11 In summary, we conclude that none of Mr. Hurwitz’s
assignments of error have merit. As to the Paynes’ assignment
of error, however, we conclude that there is merit. Louisiana
Civil Code article 1986 provides:
Upon an obligor’s failure to perform an obligation to
deliver a thing, or not to do an act, or to execute an
instrument, the court shall grant specific performance plus
damages for delay if the obligee so demands. If specific
performance is impracticable, the court may allow damages
to the obligee.
Upon a failure to perform an obligation that has another
object, such as an obligation to do, the granting of specific
performance is at the discretion of the court.
The factual situation before us clearly falls within the
mandatory relief provided in the first paragraph of the article,
rather than the discretionary relief authorized by the second
paragraph. Additionally, both La. C.C. art. 2623 (relating to
purchase agreements) and the express terms of the purchase
agreement at issue grant the Paynes the right to seek specific
performance. The record does not support a finding that
specific performance is impracticable as a remedy under the
circumstances of this case.
The trial court based its finding that the Paynes were not
entitled to specific performance because they “failed to
demand specific performance as provided for in the [c]ontract
by setting a closing date or otherwise … putting [Mr. Hurwitz]
in default.” We agree with the Paynes that the trial court erred
in that regard as a matter of law. Putting the obligor in default
is not a prerequisite to filing suit for specific performance
because in such a case the judicial demand itself amounts to a
putting in default. La. C.C. art.1989, Revision Comments—
1984, (d). And even if a putting in default might somehow be
considered a prerequisite to obtaining specific performance,
our jurisprudence holds that “there is no need for a putting
in default of a seller who has advised the buyer that he,
the seller, will not appear to execute the **12 final act of
sale at the time fixed for that purpose.” 6 Saúl Litvinoff,
Louisiana Civil Law Treatise: The Law of Obligations, Part
II: Putting in Default and Damages, § 1.18 (1999). Similarly,
if the seller simply refuses to agree to the fixing of a mutually
acceptable date for the closing, and affirmatively repudiates
his obligation to sell under a purchase agreement, it is quite
clear that there is no requirement for a putting in default as a
prerequisite to seeking specific performance. See id., § 1.19
at 23. Such is the situation here. We conclude that the Paynes
are entitled to specific performance under the facts before us,
and will amend the judgment in their favor to grant them that
relief.
DECREE
The judgment of the trial court is amended to vacate the
award of $2,000.00, representing the return of the deposit of
$1,000.00 and the penalty of $1,000.00, and in lieu thereof
to grant the plaintiffs-appellees, *1008 Wesley Payne and
Gwendolyn Payne, specific performance of the Agreement to
Purchase and Sell, and to order the defendant, Keefe Hurwitz,
to sell the immovable property to the plaintiffs-appellees for
the sum of TWO HUNDRED FORTY–ONE THOUSAND
FIVE HUNDRED AND NO/100 DOLLARS ($241,500), in
default of which the trial court shall render a judgment that
shall stand for the act, pursuant to Louisiana Civil Code article
1988. In all other respects, the judgment is affirmed. This
matter is further remanded to the trial court for the entry of an
order setting a convenient date and time for the execution of
the act of sale, or the entry of a judgment that shall stand for
the act. All costs of this appeal are assessed to the defendantappellant, Keefe Hurwitz.
ANSWER TO APPEAL MAINTAINED; JUDGMENT
AMENDED AND, AS AMENDED, AFFIRMED; CASE
REMANDED.
McDONALD, J., concurs and assigns reasons.
McCLENDON, J., concurs with the result and assigns
reasons.
McDONALD, J., concurring:
**1 Under the facts of this case, Mr. Hurwitz was obligated
to make a good faith effort to repair the property. He breached
the contract when he unilaterally and erroneously concluded
that Hurricane Katrina relieved him of his obligation, as
evidenced by his e-mail of September 20, 2005 stating that he
was no longer willing to sell the house. Mr. Hurwitz did not
offer any evidence regarding the extent of the damage to the
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Payne v. Hurwitz, 978 So.2d 1000 (2008)
2007-0081 (La.App. 1 Cir. 1/16/08)
house or the time required to repair it. Although he testified
that some of the repairs still had not been made at the time of
the trial, the trial court found his testimony “disingenuous,”
and I agree with this opinion’s conclusion that the failure to
repair was volitional. The purchase agreement allowed the
buyer to demand specific performance if the seller was in
default. The buyer has made such a demand and there is
no reason not to grant it. Therefore, I agree with the result
reached, and respectfully concur in the opinion.
Based on that finding, the application and ramifications of the
60 day provision need not be addressed. Although specific
performance may not be the correct or appropriate remedy
in all default cases following a devastating hurricane, such
as Hurricane Katrina, the buyer herein was entitled to pray
for specific performance pursuant to the clear language of
the purchase agreement, and answered the appeal seeking
an order of specific performance. For these reasons, I
respectfully concur.
McCLENDON, J., concurs and assigns reasons.
After reviewing the particular facts of this case, I believe that
the seller by virtue of his e-mail dated September 20, 2005
to the closing attorney, defaulted on the purchase agreement.
All Citations
978 So.2d 1000, 2007-0081 (La.App. 1 Cir. 1/16/08)
Footnotes
1
2
3
4
5
It was technically improper for the trial court to incorporate its reasons for judgment in the judgment itself, rather than
in an opinion separate from the judgment. See La. C.C.P. art. 1918. Such does not affect the validity of the judgment,
however, nor the appeal of the actual judgment, apart from the findings of fact and stated reasons.
We previously ordered the parties, ex proprio motu, to show cause by briefs why the Paynes’ answer to the appeal should
not be dismissed as untimely. Considering the brief submitted by the Paynes and Mr. Hurwitz’s lack of opposition to the
timeliness of the answer, we conclude that it was in fact timely, and accordingly maintain the answer to the appeal.
The record confirms that the Paynes obtained financing for the purchase from a lender, but there is no evidence that
the loan was conditioned upon any repairs. Regardless of whether or not the Paynes’ loan was conditioned upon repairs
being made, the parties have conceded the applicability of the extension provision.
See, e.g., Carrolton Cent. Plaza Associates v. Piccadilly Restaurants, LLC, 06–0731, p. 4 (La.App. 4th Cir.2/7/07), 952
So.2d 756, 758.
The trial court also observed that although Mr. Hurwitz testified that he had “fired” his real estate agent, Ms. Houlemarde,
before Hurricane Katrina, and never listed the home for sale after the hurricane, testimony from another real estate
agent at trial confirmed that the home was listed for sale as of September 29, 2005, on the MLS (Multi–Listing Service)
accessible to realtors, with a new price of $287,000.00. That agent also testified that as of April 28, 2006, Ms. Houlemarde
was still shown as the listing agent, with the home’s price at $287,000.00. The trial court also pointedly expressed its
belief that Mr. Hurwitz did not feel obligated to fulfill his contractual obligations after the hurricane, and “thereby could
profit from Katrina’s destruction by insisting on a higher sales price.”
End of Document
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