Opinion
2021 CA 0665
04-07-2022
AMERICAN SAND AND GRAVEL, LLC v. KHAI HOANG, THU TAM LE, AND JOHN FORE
Robert J. Carter Jessica Ledet Greensburg, Louisiana Counsel for Plaintiff-Appellant American Sand and Gravel, LLC Ross Anthony Dooley David B. Phelps David C. Fleshman Baton Rouge, Louisiana Counsel for Defendants-Appellees Khai Hoang and Thu Tarn Le Phil P. Breaux, Jr. St. Gabriel, Louisiana Counsel for Defendant-Appellee John Fore
NOT DESIGNATED FOR PUBLICATION
ON APPEAL FROM THE TWENTY-FIRST JUDICIAL DISTRICT COURT NUMBER 153181, DIVISION C, PARISH OF LIVINGSTON STATE OF LOUISIANA HONORABLE ERIKA W. SLEDGE, JUDGE
Robert J. Carter Jessica Ledet Greensburg, Louisiana Counsel for Plaintiff-Appellant American Sand and Gravel, LLC
Ross Anthony Dooley David B. Phelps David C. Fleshman Baton Rouge, Louisiana Counsel for Defendants-Appellees Khai Hoang and Thu Tarn Le
Phil P. Breaux, Jr. St. Gabriel, Louisiana Counsel for Defendant-Appellee John Fore
BEFORE: GUIDRY, HOLDRIDGE, AND CHUTZ, JJ.
CHUTZ, J.
In this case involving a lease for the mining of dirt, sand, and gravel, plaintiff, American Sand and Gravel, LLC (AS&G), appeals a summary judgment dismissing its claims, with prejudice. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
In 2015, Khai Hoang (Hoang) and his wife, Thu Tarn Le (collectively, the Hoangs), purchased immovable property including a house and approximately twenty acres (the Hoang property) from John Fore. A partially completed pond, which had been dug by Fore, was located on the property. As a condition of the sale, Fore agreed to make arrangements for the pond to be completed by Eric Johnson in exchange for Johnson retaining all the dirt, sand, and gravel extracted. Because there is no road on the Hoang property from the highway to the pond, Fore verbally agreed to grant Johnson a right-of-way to the pond over a road (the Fore road) located on Fore's adjacent property. It is undisputed the Fore road was the only means of vehicular access to the pond.
It is disputed whether Fore also granted a right-of-way to Johnson in writing. In opposition to the motions for summary judgment, AS&G presented a written document purportedly signed by Fore granting Johnson a right-of-way to the pond over Fore's property. While Fore admits he verbally granted a right-of-way to Johnson, he denied signing a written document to that effect. Regardless, both Johnson and Fore acknowledged under oath that Johnson was given a right-of-way by Fore.
Johnson subsequently decided the project was too small for his company, so he transferred his right-of-way for $50,000 to AS&G, which was owned by A.W. "Buddy" O'Quinn, Jr., and his wife. On November 18, 2015, the Hoangs entered into a lease with AS&G for the mining of dirt, sand, and gravel on the Hoang property for a twelve-month period (with one six-month extension allowed). In exchange for the minerals excavated, AS&G agreed to complete the pond within delineated specifications. The lease granted AS&G the right of ingress and egress to and across the Hoang property.
Additionally, AS&G reached a verbal agreement with Fore allowing the use of Fore's property for the evacuation and mining of the pond on the Hoang property, including the use of the Fore road for access. The verbal agreement also permitted AS&G to use Fore's water and utilities in its mining operation and to store equipment on Fore's property. Neither party presented evidence setting forth the full terms of the agreement.
For over six months, until June 15, 2016, AS&G worked on the pond, mining sand and gravel in the process, without incident. AS&G's staff and its sand and gravel customers used the Fore road to access the pond from the highway. On June 15, however, Fore posted a notice of trespass on the door of AS&G's office advising that the gate to the Fore property would be locked within twenty-four hours of the delivery of the notice. The following day, Fore locked the gate to his property. It remained locked for one day.
Unless otherwise indicated, all dates referenced in this opinion are dates occurring in 2016.
In his deposition, O'Quinn testified he contacted Fore to discuss the matter, but Fore refused to discuss it with him on the phone and later failed to show up for a meeting at the pond they had arranged. O'Quinn made no further attempt to contact Fore, but instead contacted Hoang to demand he provide AS&G with a right-of-way to the pond, claiming the Hoangs were obligated to do so under the lease. According to O'Quinn, Hoang responded that it was not his problem, and the matter was between AS&G and Fore. Even though Hoang was not a party to the right-of-way agreement between AS&G and Fore, he spoke with Fore to express his desire that Fore unlock the gate, which Fore did the following day.
On June 16, the Hoangs sent a letter to AS&G by certified mail giving notice of default, without specifying the nature of the default. In a second letter, dated June 21, also sent by certified mail, Hoang again gave notice of default to AS&G, complaining of certain work on the pond AS&G had failed to perform. By a letter to O'Quinn, dated June 22, Fore advised AS&G that "[t]he gate to the [pond] was closed for one day" but has been open every day since. In the letter, Fore explained he locked the gate for one day in order to prompt AS&G to pay for the water and utilities it had used during its mining operation.
On June 24, AS&G's attorney sent a letter to the Hoangs demanding they "provide a right of way" to AS&G as allegedly required by the lease. Shortly thereafter, by a letter to O'Quinn dated June 29 and signed on June 30, Hoang again complained that AS&G had failed to perform required work on the pond and advised that he considered AS&G to be in breach of the lease. On the same day, Fore sent a letter to O'Quinn complaining AS&G had failed to pay for the water and utilities it had used, for the storage of its equipment on Fore's property, and for damages it caused to Fore's property. After again informing O'Quinn that the gate had been locked for only one day, Fore requested O'Quinn contact him so they could meet and reach an equitable solution. In a third letter dated July 22, Fore once again advised O'Quinn the gate had been locked for one day, June 16, and had remained unlocked since that date. Fore repeated his desire to reach a reasonable solution with O'Quinn.
Following the June 15 notice of trespass and one-day closure of the gate, AS&G never resumed work on the pond/mining operation on the Hoang property. AS&G did not use the Fore road again, except to retrieve its equipment and stockpile several months later. Although O'Quinn admitted he received Fore's June 22 letter more than ten days after the letter was sent, informing him the gate had been locked for only one day, he asserts the letter did not release the June 15 notice of trespass or state AS&G could use the road again. He further asserted there was nothing preventing Fore from locking the gate again. In support of his position that it was not possible for AS&G to resume the mining operation, O'Quinn introduced the deposition testimony of Eric Johnson stating a gravel business could not be operated if it was not known from day to day whether the access gate would be locked.
On September 1, AS&G filed a petition for damages for breach of contract and for contractual interference with a contract, naming the Hoangs and Fore as defendants. In the petition, AS&G alleged the posting of the notice of trespass constituted contractual interference by Fore with the lease between the Hoangs and AS&G, the Hoangs' June 30 letter unilaterally terminated the lease, and the defendants conspired to end the lease with AS&G. AS&G claimed it sustained damages consisting of lost profits, loss of stockpiled materials, and loss of business opportunities.
The letter actually was dated June 29, but was signed on June 30.
After filing answers denying AS&G's claims, the Hoangs and Fore each filed a motion for summary judgment seeking dismissal of AS&G's claims. In their motion, the Hoangs argued they had fulfilled every obligation owed to AS&G under the lease and, moreover, were not parties to the right-of-way agreement between Fore and AS&G. Fore based his motion on the fact he was not a party to the lease at issue, as well as upon an admission O'Quinn made in his deposition that Fore was not responsible for the breach of the lease. Following a joint hearing on October 26, 2020, the district court granted both motions for summary judgment, assigning written reasons for judgment. On January 26, 2021, the district court signed a judgment dismissing AS&G's claims against the Hoangs and Fore, with prejudice.AS&G now appeals, raising two assignments of error.
Judge Robert H. Morrison, III, now retired, rendered the oral rulings and issued the written reasons for judgment. The judgment was signed by Judge Morrison's successor, Judge Erika W. Sledge. See La. R.S. 13:4209.
SUMMARY JUDGMENT LAW
A motion for summary judgment shall be granted only if the motion, memorandum, and supporting documents admitted for purposes of the motion for summary judgment show there is no genuine issue as to material fact and the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(A)(3) & (4). A fact is material if it potentially ensures or precludes recovery, affects a litigant's ultimate success, or determines the outcome of the legal dispute. A genuine issue of material fact is one as to which reasonable persons could disagree; if reasonable persons could reach only one conclusion, there is no need for trial on that issue and summary judgment is appropriate. Higgins v. Williams Energy Partner, L.P., 17-1662 (La.App. 1st Cir. 4/10/19), 280 So.3d 195, 203, writ denied, 19-00722 (La. 9/6/19), 278 So.3d 371. In determining whether summary judgment is appropriate, appellate courts review evidence de novo under the same criteria governing the district court's determination of whether summary judgment is appropriate. Alvarado v. Lodge at the Bluffs, L.L.C., 16-0624 (La.App. 1st Cir. 3/29/17), 217 So.3d 429, 432, writ denied, 17-0697 (La. 6/16/17), 219 So.3d 340.
The burden of proof rests with the mover. Nevertheless, if the mover will not bear the burden of proof at trial on the matter before the court on the motion, the mover's burden does not require that all essential elements of the adverse party's claim, action, or defense be negated. Instead, the mover must point out to the court the absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. La. C.C.P. art. 966(D)(1). Thereafter, if the adverse party fails to produce factual evidence sufficient to establish the existence of a genuine issue of material fact, the mover is entitled to summary judgment as a matter of law. La. C.C.P. art. 966(D)(1); Alvarado, 217 So.3d at 432.
THE HOANGS' MOTION FOR SUMMARY JUDGMENT
In its first assignment of error, AS&G argues the district court erred in granting the Hoangs' motion for summary judgment when there were issues of material fact precluding summary judgment, including whether the Hoangs had the right to place AS&G in default, whether the Hoangs gave AS&G proper notice of default, whether the Hoangs breached the lease by failing to provide AS&G with an alternate right-of-way to the pond, and whether Hoang conspired with Fore to terminate the lease and concurred in Fore's posting of the notice of trespass. We disagree, finding no genuine issues of material fact precluding summary judgment existed.
AS&G also asserts the district court made impermissible factual findings in granting the defendants' motions for summary judgment. Because appellate courts review summary judgments on appeal under a de novo standard applying the same criteria governing the district court's determination, it is immaterial to our review whether the district court did so. See Alvarado, 217 So.3d at 432.
Because AS&G's claims against the Hoangs are based on alleged breaches of the mining lease, its claims are governed by the lease. One breach alleged by AS&G is the Hoangs' alleged refusal to provide, or even discuss, AS&G's demand that the Hoangs provide an alternative right-of-way across their property to the pond. AS&G argues this refusal violated the lease provision granting it the right to "full ingress and egress to and across [the Hoang property]."
The provision at issue provides:
LESSEE shall have full ingress and egress to and across the "Property" and such use of the surface as may be necessary for its operations. LESSEE may use, maintain and operate washing plants, pipelines, engines, dredges, pumps and other equipment or machinery necessary and useful to its operations, and shall have the right to construct and maintain roads, canals and ponds or other such improvements necessary to its operations; and shall have the right to transport the materials which are subject to this lease and like minerals from nearby lands over the leased property....
In arguing the Hoang property could have provided an "alternate route to the highway," AS&G ignores the undisputed fact that no alternate means of access to the pond existed because there was no road across the Hoang property from the highway to the pond. In his deposition, O'Quinn acknowledged this fact, testifying it would cost approximately $100,000.00 to construct a road to the pond across the Hoang property. Although the lease granted AS&G "the right to construct and maintain roads" on the Hoang property, AS&G evidenced no intent to do so, instead demanding the Hoangs provide an alternate right-of-way. The provision in question did not impose any obligation on the Hoangs to construct an access road across their property from the highway to the pond. The clear language of the provision merely imposed an obligation on the Hoangs to allow AS&G access onto and off of their property and to allow AS&G to construct a road on the property, if it chose to do so. AS&G produced no evidence the Hoangs ever denied AS&G access onto or off of the Hoang property. In fact, O'Quinn admitted that, having received no notice of trespass for the Hoang property, he entered onto and crossed the Hoang property several times after June 15 in order to check on his equipment at the pond. Nor did the lease require the Hoangs to provide AS&G with a right-of-way across the adjacent property owned by Fore. Nevertheless, even though the Hoangs were not parties to the verbal agreement between Fore and AS&G, after being contacted by O'Quinn, Hoang spoke to Fore, requesting he unlock the gate, which Fore did shortly thereafter.
AS&G argues the Hoangs could have demanded Fore allow AS&G to use the Fore road since there was "a binding" provision in the Hoangs' purchase agreement with Fore allowing them the use of the road for access to the pond. Our examination of the purchase agreement provides no support for AS&G's contention because its express terms do not grant the Hoangs a right-of-way over Fore's property. Rather, the purchase agreement grants a sixty-foot right-of-way to the seller (Fore) over a dirt road crossing the back of the Hoang property. We note Fore initially testified he was unaware of any agreement granting the Hoangs the use of the Fore road for purposes of the pond/mining operation. When he was then asked specifically whether such a provision was not included in the purchase agreement with the Hoangs, he responded, "Yes. I'm sure it was in the purchase agreement." Nevertheless, "[testimonial or other evidence may not be admitted to negate or vary the contents of an authentic act or an act under private signature." La. C.C. art. 1848. Therefore, the actual terms of the purchase agreement govern.
AS&G further contends the Hoangs breached the lease's ingress/egress provision by conspiring with Fore to terminate the lease by denying the use of the Fore road, knowing AS&G could not continue its mining operations without the use of the road for access to the pond. According to AS&G, the conspiracy is evident from Hoang's concurrence in Fore's action of posting a notice of trespass to AS&G, as evidenced by Fore's deposition testimony indicating Hoang was aware of and did not object to the posting of the notice. AS&G also points out that Fore assisted Hoang in drafting the default notices sent to AS&G and even typed the notices. AS&G contends the intent of the Hoangs and Fore was to force it off of the Hoang property, thereby ending its mining operations and terminating the lease.
In his deposition, Hoang, who is Vietnamese, testified Fore assisted him in preparing the letters to AS&G because he wanted his language to be clear. Similarly, Fore testified Hoang requested his assistance because Hoang had a "language barrier." AS&G presented no evidence refuting this testimony. Further, any issues of fact as to why Fore assisted Hoang or whether Hoang failed to object to Fore posting the notice of trespass are not material issues of fact because such actions do not breach any obligation Hoang owed to AS&G under the lease.
Moreover, regardless of Hoang's motivation, the alleged acts are not tortious acts that could support AS&G's conspiracy claim against the Hoangs. Louisiana Civil Code article 2324(A) provides "[h]e who conspires with another person to commit an intentional or willful act is answerable, in solido, with that person, for the damage caused by such act." Conspiracy by itself, however, is not an actionable claim under Louisiana law. The actionable element of a conspiracy claim is not the conspiracy itself, but rather the underlying tort the conspirators agree to perpetrate and actually commit in whole or in part. Ross v. Conoco, Inc., 02-0299 (La. 10/15/02), 828 So.2d 546, 552; Jones v. Americas Insurance Company, 16-0904 (La.App. 1st Cir. 8/16/17), 226 So.3d 537, 543. In this case, AS&G only contends there was a conspiracy by the Hoangs to breach and/or terminate the lease by denying AS&G access to the pond. AS&G has produced no evidence, nor even made any allegations, of a conspiracy by the Hoangs to commit any tortious act.
Finally, AS&G argues Hoang's June 29 letter to O'Quinn constituted an arbitrary termination of the lease without the required sixty-day notice of default (the first notice of default having been given on June 16), thereby breaching the lease's terms. In the letter, Hoang details several items of work he asserted AS&G had failed to perform on the pond as required by the lease. He concluded the letter with the statement that, "It is apparent that you do not intend to accomplish the items required of you under the terms of our agreement, and I therefore am notifying you that I feel you are in breach of our contract."
The applicable provision of the lease provides:
If any party to this lease should consider that the other party is in default under this lease for any reason, the party shall give notice by certified mail to the party alleged to be in default and such allegedly defaulting party shall have sixty (60) days from the date of receipt of such notice to correct any such default without such party being liable for the termination of this lease.
Contrary to AS&G's contentions, the June 29 letter did not terminate the lease. Hoang merely stated therein that he considered AS&G to be in breach of the lease. The letter essentially was another notice of default to AS&G. Under the lease, either party who considered the other party to be in default was entitled to give notice of default to the allegedly defaulting party. The mere fact that Hoang sent AS&G the notices of default did not constitute a breach of the lease.
Because the Hoangs pointed out the lack of factual support to establish they breached any obligation they owed to AS&G under the lease or conspired with Fore to commit any tortious act, AS&G was required to produce factual evidence sufficient to establish either the existence of a genuine issue of material fact or that the Hoangs were not entitled to summary judgment as a matter of law. La. C.C.P. art. 966(D)(1); Alvarado, 217 So.3d at 432. Because AS&G failed to meet this burden of proof, the district court properly granted summary judgment dismissing AS&G's claims against the Hoangs.
FORE'S MOTION FOR SUMMARY JUDGMENT
In its second assignment of error, AS&G contends the district court erred in granting summary judgment dismissing its claims against Fore. We disagree, finding there are no genuine issues of material fact precluding summary judgment in Fore's favor.
AS&G contends Fore is liable to AS&G because he conspired with the Hoangs to breach the mining lease by posting the notice of trespass, thereby blocking its access to the pond, and by assisting the Hoangs in preparing default notices delivered to AS&G. In addition to citing these actions as support for its conspiracy claim, AS&G argues these actions also constituted contractual interference with the lease by Fore.
Initially, we observe Fore is not a party to the mining lease and, therefore, cannot be held responsible for any breach thereof. O'Quinn seemingly acknowledged this fact when he stated in his deposition that Fore was "not responsible" because it was Hoang's responsibility to provide AS&G with access to and from the pond. On appeal, however, AS&G argues "O'Quinn was not aware of the conspiring between [Hoang] and Fore" when he made the statement in question, and he would not have made the statement if he had had the knowledge he now possesses.
Regardless, as previously noted, the actionable element of a conspiracy claim is the underlying tort the conspirators agree to perpetrate and actually commit, rather than the conspiracy itself. Ross, 828 So.2d at 552; Jones, 226 So.3d at 543. The only tort AS&G alleges Fore committed is tortious interference with a contract. Yet, Louisiana law recognizes only a very narrow and limited claim for tortious interference with contract, which only precludes a corporate officer from unjustifiably interfering with the contractual relation between his employer and a third party. Hawkins v. Decuir, Clark, & Adams, LLP, 16-1338 (La.App. 1st Cir. 8/16/17), 2017 WL 3528872, at *6-7 (unpublished). It is undisputed the parties to the mining lease were AS&G and the Hoangs, who appeared as individuals rather than on behalf of a corporation. Accordingly, there being no question Fore was not a corporate officer of any party to the lease, AS&G cannot establish Fore committed tortious interference with a contract. Further, because AS&G cannot establish an underlying tort committed by Fore, AS&G produced insufficient evidence to support its civil conspiracy claim against Fore. There are no genuine issues of material fact precluding summary judgment in this matter. Given the lack of factual support for essential elements of AS&G's claims of conspiracy and tortious interference with a contract, the district court properly granted summary judgment in favor of Fore.
AS&G contends a genuine issue of material fact exists regarding whether Fore had the right to terminate the right of passage with only twenty-four hours' notice. This contention is made in the context of AS&G's claim for tortious interference with a contract, AS&G having specifically alleged in its petition that Fore's posting of the notice of trespass constituted interference with a contract. Since we have already determined AS&G produced insufficient evidence to support an essential element of this claim, it is immaterial whether Fore gave sufficient notice to AS&G.
CONCLUSION
For the reasons assigned, the judgment of the district court dismissing AS&G's claims against the Hoangs and Fore, with prejudice, is affirmed. All costs of this appeal are to be paid by appellant, AS&G.
AFFIRMED.