MANDEVILLE PARTNERSHIP 698 LLC v. LUXURY TRANSPORTATION LLC (2026)

This is the second appeal of a partial summary judgment in favor of the lessor and against the lessee's purported assignee of an option to purchase property. In the first appeal, this Court reversed a partial summary judgment in the lessor's favor – this Court found that the lessor's unverified, unsworn, and unauthenticated documents were inadmissible summary judgment evidence and that the lessor's only properly filed evidence was insufficient to carry its burden of proof. Mandeville Partnership v. A Luxury Transportation, LLC, 2021-1450 (La. App. 1 Cir. 8/24/22), 348 So.3d 763, 770-71 (Mandeville I). On remand, the lessor filed another motion for partial summary judgment seeking a declaration that the lessee's purported assignment of the option to purchase was null and not binding on the lessor. The assignee filed its own motion for partial summary judgment seeking a declaration that the lessee timely exercised the option to assign the lease and that the assignment was valid. The trial court signed a judgment, granting the lessor's motion, denying the assignee's motion, and declaring the purported assignment of the option to purchase null and without effect. The assignee appeals. After review, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND 1

This litigation arises from a commercial lease agreement (the Lease) between the Mandeville Partnership ² as Lessor (the Mandeville Partnership or the Lessor) and “Carl Rebel et All [sic]”³ as Lessee (Mr. Revels or the Lessee) and concerning property located at 698 Lafitte Street in Mandeville, Louisiana (the Leased Premises). Mandeville I, 348 So.3d at 765. The Lease provided for an initial term of twelve months, commencing on March 1, 2015, and ending on February 28, 2016, and also contained an automatic renewal of five additional one-year terms, such that the Lease would terminate on February 28, 2020, unless extended in writing. Id. at 765-66. The Lease contained a purchase option, stating that the Lessee “shall have an option to purchase the building[⁴ ] at the end of the five year lease term for [an] agreed price of $750,000.00” (Option to Purchase]. Mr. Revels took possession of the Leased Premises no later than April 2015 and continuously occupied the Leased Premises pursuant to the Lease. Id. at 766.

In March 2018, Cordus E. Bailey, II, filed suit against Mr. Revels, A Luxury Transportation, LLC (Luxury)⁵ , and the Mandeville Partnership, and later added the Mandeville Partnership 698, LLC (MP 698) as a defendant (the Bailey Litigation). Mandeville I, 348 So.3d at 766. Mr. Bailey alleged he was injured while working in the Leased Premises at the direction of Luxury. Id. As a result of the Bailey Litigation, the Mandeville Partnership and MP 698 sought defense and indemnity pursuant to Section 15(E) of the Lease, which provided that the “LESSEE agrees to indemnify, compensate and save and hold the LESSOR harmless from any and all claims, damages and/or liability whatsoever resulting from ․ injury․ of any person ․ in the Leased Premises, including reasonable legal fees and court costs incurred by LESSOR.” Id. The Mandeville Partnership and MP 698 also sought defense and indemnity from Luxury's insurer, Pennsylvania Manufacturers’ Association Insurance Company, but were denied. Neither the Mandeville Partnership nor MP 698 was named as an insured under the relevant policy, despite Section 15(A) of the Lease requiring that the Lessee carry and maintain a general liability insurance policy naming both the Lessee and the Lessor as insureds under the policy. Id.

By letter dated January 15, 2020, the Mandeville Partnership and MP 698 gave Notice of Default and Lease Cancellation to Mr. Revels, informing him that they were exercising their right to terminate the Lease based on his failure to comply with Sections 15(A) and (E) of the Lease and instructing him to vacate the Leased Premises within ten days. Mandeville I, 348 So.3d at 766. On February 5, 2020, the Mandeville Partnership and MP 698 filed a Petition for Lease Termination and Possession (Petition), naming Mr. Revels and Luxury as defendants. Id. The Mandeville Partnership and MP 698 alleged that they never received defense and indemnity relative to the Bailey Litigation and that the Lessee refused to vacate the Leased Premises after being notified on January 19, 2020.⁶ Id. Accordingly, the Mandeville Partnership and MP 698 sought a declaration that the Lease had terminated and further sought to evict the Lessee and regain possession of the Leased Premises. Id.

On February 20, 2020, despite the pending litigation, Mr. Revels assigned his Option to Purchase to Platinum Holding Group, LLC (Platinum) and recorded the assignment in the St. Tammany Parish public records. According to Mr. Revels, on that same day, he sent written notice of his exercise of the Option to Purchase to the Mandeville Partnership. On February 28, 2020, the Lease terminated by its own terms. On March 3, 2020, Don Perschall, a partner in the Mandeville Partnership, informed Richard E. Regan, Platinum's representative, that the Mandeville Partnership was not going to sell to Platinum.

On June 3, 2020, the Mandeville Partnership and MP 698 filed a First Amended and Restated Petition for Declaratory Relief and Damages (Amended Petition), adding Platinum as an additional defendant. Mandeville I, 348 So.3d at 767. In the Amended Petition, the Mandeville Partnership and MP 698 sought a declaration that the Lease terminated in January 2020, and as such, the Option to Purchase was extinguished and not capable of being exercised by Lessee or anyone else. Accordingly, the Mandeville Partnership and MP 698 sought a declaration that the Option to Purchase was not exercisable by any of the named defendants. Id.

On June 29, 2020, Platinum answered the Amended Petition and asserted a reconventional demand against the Mandeville Partnership and MP 698. Mandeville I, 348 So.3d at 768. Platinum asserted that it was entitled to have its purchase agreement with Mr. Revels, which it made relative to the assigned Option to Purchase, enforced and to have the Mandeville Partnership and MP 698 transfer the entirety of the Leased Premises to Platinum. Platinum also sought damages in connection therewith. Id.

On January 22, 2021, the Mandeville Partnership and MP 698 filed a motion for partial summary judgment, seeking to resolve “the dispute regarding the lease with an option to purchase.” Mandeville I, 348 So.3d at 768. After oppositions and a hearing on the motion, the trial court ultimately signed a Second Amended judgment on May 17, 2022, granting the Mandeville Partnership and MP 698's motion, pertinently declaring the termination of the Lease pursuant to its terms and also declaring the purported assignment of the Option to Purchase to Platinum null ab initio. Id. at 769.

On de novo review, the Mandeville I Court, 348 So.3d at 770-71, reversed the May 17, 2022 judgment, based on its finding that the Mandeville Partnership and MP 698 did not carry their burden of proof as movers. Specifically, seven of their eight exhibits were unverified, unsworn, and unauthenticated documents and had no value for summary judgment purposes – and, the eighth exhibit alone did not carry their burden. Id.

On remand, Platinum filed its own motion for partial summary judgment and the Mandeville Partnership and MP 698 again filed a motion for partial summary judgment. Each side filed an opposition to the other's motion. After a hearing, the parties filed joint stipulations into the record agreeing to the authenticity and admissibility of their respective exhibits. The trial court took the matter under advisement and subsequently signed an order accepting the stipulations and deeming the parties’ exhibits as competent evidence for purposes of their respective motions. On October 25, 2024, the trial court signed a judgment: granting Mandeville Partnership and MP 698's motion for partial summary judgment; affirming the termination of the Lease between the Mandeville Partnership as lessor and “Carl Rebel et [al.]” as lessee; declaring the purported assignment of the Option to Purchase to Platinum to be null and without effect; and denying Platinum's motion for partial summary judgment.

Platinum devolutively appealed the October 25, 2024 judgment, asserting the trial court erred in: determining the Mandeville Partnership and MP 698 proved that Mr. Revels breached the Lease thereby entitling the Mandeville Partnership and MP 698 to terminate the Lease; finding the Lease terminated before Mr. Revels executed the Option to Purchase; and in denying Platinum's motion for partial summary judgment.

SUMMARY JUDGMENT

The summary judgment procedure is designed to secure the just, speedy, and inexpensive determination of every action, except those disallowed by La. C.C.P. art. 969. La. C.C.P. art. 966(A)(2). The procedure is favored and shall be construed to accomplish these ends. Id. After an opportunity for adequate discovery, a motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show there is no genuine issue as to material fact and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(A)(3). The burden of proof rests with the mover. La. C.C.P. art. 966(D)(1). Nevertheless, if the mover will not bear the burden of proof at trial on the issue that is before the court on the motion, the mover's burden does not require him to negate all essential elements of the adverse party's claim, action, or defense, but rather to 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. Id. The burden then shifts to the adverse party to produce factual support sufficient to establish the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law. See Id. When a motion for summary judgment is made and supported, an adverse party may not rest on the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided, must set forth specific facts showing that there is a genuine issue for trial. See La. C.C.P. art. 967(B). If he does not so respond, summary judgment, if appropriate, shall be rendered against him. Id.

An appellate court reviews the grant or denial of summary judgment de novo under the same criteria governing the trial court's consideration of whether summary judgment is appropriate. Wiggins v. Schneider, 2023-1303 (La. App. 1 Cir. 9/19/24), 405 So.3d 622, 626. Because it is the applicable substantive law that determines materiality, whether a particular fact in dispute is material can be seen only in light of the substantive law applicable to the case. Id. at 626.

APPLICABLE LAW

The lessor's and lessee's contractual duties are set forth in their lease contract; in Civil Code Title IX, Of Lease; and in Civil Code Title III, Of Obligations in General. Carriere v. Bank of Louisiana, 95-3058 (La. 12/13/96), 702 So.2d 648, 665-66 (on rehearing). The Civil Code, however, while defining and governing the parties’ lease relationship, still leaves the parties free to contractually agree to deviate from all but the most fundamental Civil Code provisions that govern their lease relationship. Id. at 666; MIE Properties-LA, L.LC. v. Victory Physical Therapy LLC, 2011-0835 (La. App. 1 Cir. 12/21/11), 2011 WL 6742534 *2. Thus, a lease contract is the law between the parties, and it defines their respective rights and obligations so long as the agreement does not affect the rights of others and is not contrary to the public good. See La. C.C. art. 1983; Carriere, 702 So.2d at 666. The lessee has the right to assign his rights in the lease, unless expressly prohibited by the lease contract. See La. C.C. art. 2713 (emphasis added); La. C.C. art. 2653 (A right cannot be assigned when the contract from which it arises prohibits the assignment of that right.)

In this case, Section 3 of the Lease stated that the Lessee “shall have an option to purchase the building at the end of the five year lease term for the agreed price of $750,000.00[.]” Section 21 of the Lease stated, “This lease may not be assigned, and the Leased Premises may not be sublet, without [LESSOR] approval.” As noted by the trial court in its reasons for judgment, it is undisputed that Mr. Revels did not seek nor obtain the Mandeville Partnership's approval before assigning its Option to Purchase to Platinum. Specifically, the Mandeville Partnership and MP 698's summary judgment evidence included the affidavit of Adam Perschall, who attested, “The Mandeville Partnership did not authorize, approve, or have knowledge of the purported assignment of the option to purchase to Platinum.”

On appeal, Platinum argues that Section 21's prohibition against assigning the Lease did not also include a prohibition against assigning the Option to Purchase, which was contained in a separate provision of the Lease. Further, Platinum argues that, once exercised, an option to purchase becomes a separate nominate contract, a contract to sell, which is “assignable by default,” and that nothing in the Lease modified this “legal principle.” Based on the provisions of the Lease, we disagree with both arguments.

The words of a contract must be given their generally prevailing meaning. La. C.C. art. 2047. And, each provision in a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the whole. La. C.C. art. 2050; Abbott Paul Oak, LLC v. Sampedro, 2010-1701 (La. App. 1 Cir. 5/12/11), 2011 WL 2623550 *4. Further, the determination of whether a contract is clear or ambiguous is a question of law. Fontanille v. Robertson, 2019-1135 (La. App. 1 Cir. 5/28/20), 2020 WL 2766072 *4. When a contract can be construed from the four corners of the instrument, without looking to extrinsic evidence, the question of contractual interpretation is a matter of law, and summary judgment is appropriate. Id.; Abbott Paul Oak, LLC, 2011 WL 2623550 at *3.

Interpreting Section 3 of the Lease in light of Section 21 of the Lease, and giving the words of the provisions their generally prevailing meaning, we conclude that the Lease required Mandeville Partnership's approval before Mr. Revels could assign his Option to Purchase to Platinum. A lease of a thing and the option to purchase the leased thing, being part of the same contract, are inseparable. Fontanille, 2020 WL 2766072 at *4; Landau v. Groves, 397 So.2d 866, 868 (La. App. 4 Cir. 4/7/81); Smith Enterprises, Inc. v. Borne, 245 So.2d 9, 11 (La. App. 1 Cir.), writ refused, 258 La. 574, 247 So.2d 393 (1971). Based on the inseparable nature of these contractual rights, we find a requirement that the lessor's approval be obtained before assigning an entire lease includes a requirement that the lessor's approval be obtained before assigning an option to purchase contained in that lease. Here, Section 21 of the Lease clearly required that Mr. Revels obtain the Mandeville Partnership's approval before assigning the Lease - thus, necessarily, Mr. Revels was also required to obtain the Mandeville Partnership's approval before assigning the Option to Purchase, which was contained in the Lease. Mr. Revels’ undisputed failure to obtain the Mandeville Partnership's approval renders the assignment to Platinum null and partial summary judgment in favor of the Mandeville Partnership and MP 698 and against Platinum proper. See Kano Investments, L.L.C. v. Kojis Construction, LLC., 2012-1269 (La. App. 3 Cir. 3/6/13), 113 So.3d 1113, 1116-17, writ denied, 2013-1191 (La. 9/13/13), 120 So.3d 697.

Because we affirm the partial summary judgment based on the nullity of the assignment, we need not address the parties’ arguments regarding whether there are genuine issues of material fact as to Mandeville Partnership and MP 698's right to terminate the Lease based on Mr. Revels’ alleged breach of Section 15 of the Lease, and if they were so entitled, whether the termination occurred before Mr. Revels assigned his Option to Purchase to Platinum.

CONCLUSION

For the foregoing reasons, we affirm the October 25, 2024 judgment insofar as it granted partial summary judgment in favor of the Mandeville Partnership and the Mandeville Partnership 698, LLC; declared that the purported assignment of the Option to Purchase to The Platinum Holding Group, LLC, is null and without effect; and denied the motion for partial summary filed by The Platinum Holding Group, LLC. We assess costs of the appeal to The Platinum Holding Group, LLC.

AFFIRMED.

FOOTNOTES

2.   Despite the Mandeville Partnership being identified as the Lessor under the Lease, MP 698 was the owner of the Leased Premises when the Lease was confected in March 2015. The Mandeville Partnership transferred title to the property to MP 698 in March 2012. Under La. C.C. art. 2674, a “lease of a thing that does not belong to the lessor may nevertheless be binding on the parties.” Mandeville I, 348 So.3d at 765, n.1.

3.   The Lease identifies the Lessee as Carl Rebel; however, the record indicates the Lessee's correct name is Carl Revels.

4.   The Option to Purchase and other Lease provisions use the term “building,” but the Lease does not define “building.”

5.   At all relevant times, Luxury was a Louisiana limited liability company with Mr. Revels as its agent and Holly Revels as its manager. Mandeville I, 348 So.3d at 766, n.5.

6.   The record indicates that, before the Petition was filed, counsel for the parties corresponded regarding Mr. Revels’ counsel taking over defense and indemnity of the Mandeville Partnership and MP 698 relative to the Bailey Litigation. However, the parties apparently did not reach an agreement on the issue. On June 28, 2021, the trial court signed an order dismissing the Mandeville Partnership and MP 698's claims for liquidated damages and indemnification to be paid by Luxury and/or Mr. Revels, Mandeville I, 348 So.3d at 768.

GREENE, J.