Opinion
No. 82-515.
February 3, 1983. Writ Denied April 5, 1983.
APPEAL FROM 9TH JUDICIAL DISTRICT COURT, PARISH OF RAPIDES, STATE OF LOUISIANA, HONORABLE LLOYD G. TEEKELL, J.
Antoon, Dalrymple Beck, Robert L. Beck, Jr., Alexandria, for plaintiffs-appellants-appellees.
William E. Skye, Alexandria, for defendants-appellees-appellants.
Before STOKER, YELVERTON and KNOLL, JJ.
This appeal was brought by the plaintiffs for a breach of contract to buy and sell and the damages awarded. The defendants answered the appeal denying that any damages were due.
FACTS
Gerald Wayne Waldon and his wife, Alice Waldon, entered into a contract to buy and sell with C R Construction Company, a partnership comprised of Richard M. Baker and Champ Baker. The Waldons agreed to purchase from C R lot #65 of the Donahue East Subdivision. C R Construction Company was to build the home for the price and sum of $47,500.00. The house plans agreed upon by the Waldons and C R were approved by the Veterans Administration.
The Waldons submitted their loan application to Rapides Bank Trust Co. of Alexandria for a VA loan under the Rapides Parish Housing Mortgage Finance Authority program, which offered an interest rate of 8.125% per annum. Three inspections were required by the Veterans Administration, namely, the foundation inspection, the black out inspection, and the final inspection.
Work on the house commenced on February 3, 1980. The foundation inspection (first stage) was approved by the Veterans Administration inspector, Overton Miller, on February 13, 1980.
On February 29, 1980, inspector Miller found the builder had gone beyond the second inspection stage (the black out) because the bricks had already been laid, therefore, Mr. Miller did not approve the second inspection. He then ordered that the builder, C R, cease work on the house until it was approved by the New Orleans Office of Veterans Administration.
Richard Baker immediately contacted Inspector Miller's superior in New Orleans and received a verbal approval of the second stage. This verbal approval was subsequently confirmed by letter dated March 17, 1980.
After the second stage approval was concluded, Inspector Miller then required a sheet of paneling be removed from each exterior wall so he could check to see that the insulation was stapled. Richard Baker refused. On March 20, 1980, Inspector Miller closed his files. Apparently there was a personality conflict between Champ Baker and Inspector Miller. On March 21, 1980, Champ Baker foresaw that Inspector Miller's remaining inspections would not coincide with the construction, which in turn would result in exceeding C R's original price of $47,500.00. On March 21, 1980, Champ Baker delivered to the Waldons their deposit of $1,000.00, and notified them that the terms of the contract to buy and sell could not be met. The deposit refund check was never cashed. The loan was never consummated because the final VA inspection was never made.
The Waldons attempted to find a similar house. They applied for financing at other lending institutions but qualified for a maximum loan of $32,000.00 at a higher rate of interest.
The Waldons filed a suit for specific performance based on the contract, and alternatively, for damages occasioned by the breach of the contract.
The plaintiffs did not file a notice of lis pendens which would have put prospective third party purchasers on guard. The defendants sold the property on June 2, 1980. Thus the plaintiffs are left only with a claim for damages resulting from the breach of contract by the defendants. Southern Savings Association v. Langford Land Company, 372 So.2d 713 (La.App. 4th Cir. 1979, writ denied 374 So.2d 659).
The defendants contend the contract to buy and sell was rescinded by virtue of the actions of Inspector Miller when he requested a sheet of paneling be removed from each exterior wall, after the Bakers received approval of the second inspection. At this point Inspector Miller closed his file.
The trial court held that the defendants breached the contract with the plaintiffs. Damages were awarded to plaintiffs in the amount of $3,878.48, plus the refund of plaintiffs' $1,000.00 deposit. We affirm.
DAMAGES FOR BREACH
A binding contract existed between the Waldons and C R. The contract was solely between the purchasers and the sellers. It did not include the Veterans Administration. We find C R breached the contract. The defendants raise the action of the inspector for the Veterans Administration as a defense. This would give rise to an action by C R against the Veterans Administration, which is not before us for determination.
We find the trial court's findings are correct. The trial court is given much discretion in its award of damages. Canter v. Koehring Company, 283 So.2d 716 (La. 1973); Coco v. Winston Industries, Inc., 341 So.2d 332 (La. 1976); Arceneaux v. Domingue, 365 So.2d 1330 (La. 1978); Roberts v. Rolene Corp., 415 So.2d 546 (La.App. 1st Cir. 1982).
For the reasons assigned the judgment of the trial court is affirmed with costs assessed one-half to each party. AFFIRMED.
STOKER, J., concurs and assigns written reasons.
I concur in the result reached by the majority in this case. I find I am in some disagreement with the trial court's oral reasons for judgment in this case. Therefore, I file this concurring opinion to set forth why I feel that the defendants breached their contract with the plaintiffs.
Although there is no written contract for the construction of any improvements on the lot which plaintiffs agreed to buy and defendants agreed to sell, Mr. Richard M. Baker, one of the partners, admitted under oath in the course of the trial that there was such a contract. Mr. Richard M. Baker was the only member of the partnership to testify. He appears to have been the only member of the partnership actively engaged in the dealing with the plaintiffs, the inspector for the Veterans Administration (Mr. Overton Miller), the lending institution and the New Orleans office of the Veterans Administration.
The record discloses that Richard Baker saw the construction through the first two VA inspections although he had to appeal to the New Orleans office of the VA in order to get approval at the second inspection stage. Although Mr. Miller denied any knowledge of the fact that the New Orleans office of the VA had overridden his rejection of the construction at the second stage, two facts should be noted. First, the New Orleans office issued written instructions overriding Mr. Miller, a fact of which Mr. Miller should ordinarily have been advised by his own agency. Second, Mr. Waldon testified that he told Mr. Miller that Richard Baker had notified Waldon that the New Orleans office of the VA had overridden Miller and had given approval of the second inspection.
Despite the fact that the defendant received their second inspection approval, Mr. Miller for reasons he does not explain, at least to my satisfaction, went back to the construction site and demanded that Richard Baker order his workmen to remove certain paneling in order that he might check behind it for such matters and installation of insulation. Such an inspection related to the second inspection which the defendants had already received through the New Orleans office of the VA.
Richard Baker refused to have the paneling removed as requested by Miller. Baker claims that Miller threatened to refuse approval of the house unless Baker complied with the request. Miller did in fact issue a written request on a VA compliance inspection report form "that the file be closed as Builder will not comply with Compliance Inspection." At about this time Richard Baker gave Waldon a check for $1,000.00 signed by his brother Champ L. Baker made payable to Waldon. Richard Baker explained that in view of the action of Miller, the defendant partnership could not hope to obtain final approval of the house for VA financing.
The trial court found that the defendants breached the contract to build the house through the refusal of Richard Baker to order the removal of the paneling. The record discloses that defendants were not obligated to do that. Miller's action could only be based on an ignorance of the fact that his rejection of the second inspection had been overruled. Obviously, there was a lack of communication. If Mr. Miller was not informed by his own agency, the VA, of the fact that he had been overridden, that was a failure in interagency communication. It does not appear that Richard Baker reminded (or informed) Miller at the time he refused to remove the paneling that he already had second inspection approval. The parties appear to have squared off at that point, Miller determined not to approve defendant's house and Baker not to comply with Miller's request — even if it meant loosing VA approval. In my opinion the trial court was in error in holding that the defendants breached the contract to build through refusal to remove the paneling.
While I disagree with the trial court's conclusions, I think that the defendants did breach the contract. The breach resulted in the failure of defendants to request the third and final inspection after the house was completed. The house was completed and was sold to another party. Richard Baker testified that the house met VA standards and was built to comply with the plans and specifications agreed upon by plaintiffs and defendants and approved by the VA.
In summary, it is clear that Richard Baker and his partner broke off the contract with the Waldons upon the assumption that they had reached an impasse with Miller which made it impossible for them to obtain the necessary final approval. Although Mr. Miller's role in the breakdown in relations may be subject to question, the request for the third inspection should have been made. Had it been made, approval might have been forthcoming. On the other hand, had Miller persisted in his obstinacy upon request for a final inspection, it would then have been reasonable to conclude that the defendants were not at fault and had not breached the contract. For the reasons I have given above, I concur in the result reached by the majority opinion which affirms the trial court.