* * * * * * * (Court composed of Judge Charles R. Jones, Judge Michael E. Kirby, Judge Edwin A. Lombard)

Transcription

1 CAMBRIDGE REALTY WEST, L.L.C. VERSUS GENTILLY SHOPPING CENTER, L.L.C., FULTON PLACE, L.L.C., EDWARD M. HASPEL, INDIVIDUALLY, EDWARD M. HASPEL IN HIS CAPACITY AS MANAGER OF GENTILLY SHOPPING CENTER, L.L.C., EDWARD M. HASPEL IN HIS CAPACITY AS MANAGER OF FULTON PLACE, L.L.C., ET AL. * * * * * * * * * * * NO CA-0978 COURT OF APPEAL FOURTH CIRCUIT STATE OF LOUISIANA APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO , DIVISION A-5 HONORABLE CAROLYN GILL-JEFFERSON, JUDGE * * * * * * JUDGE MICHAEL E. KIRBY * * * * * * (Court composed of Judge Charles R. Jones, Judge Michael E. Kirby, Judge Edwin A. Lombard) ROY C. CHEATWOOD M. DAVID KURTZ MATTHEW A. WOOLF BAKER DONELSON BEARMAN CALDWELL & BERKOWITZ, PC 201 ST. CHARLES AVENUE SUITE 3600 NEW ORLEANS, LA COUNSEL FOR PLAINTIFF/APPELLANT

2 PHILLIP A. WITTMANN CARMELITE M. BERTAUT STONE PIGMAN WALTHER WITTMANN L.L.C. 546 CARONDELET STREET NEW ORLEANS, LA COUNSEL FOR DEFENDANT/APPELLEE (EDWARD M. HASPEL) This case arises our of a dispute between two business partners, Edward Haspel ( Haspel ) and Maurice Kansas ( Kansas ), concerning the offer of Cambridge Realty West, L.L.C. ( Cambridge ) to purchase two pieces of real property (Fulton Place Property and Gentilly Shopping Center) owned by two limited liability companies (Fulton Place, L.L.C. and Gentilly Shopping Center, L.L.C., respectively) in which Haspel and Kansas are the managers. Kansas is the owner of Cambridge. On July 6, 2006 Cambridge executed an agreement with Fulton Place, L.L.C. to purchase the Fulton Project (a retail and parking facility building located at 901 Convention Center Boulevard) allegedly for $8,500,000. Cambridge s efforts to close on this property, and Haspel s efforts to block the closing resulted in litigation. On June 17, 2004, a unanimous jury ruled in favor of Cambridge. On June 22, 2004, the trial court issued a Declaratory Judgment confirming the

3 jury verdict, which declared that Cambridge had the right to enforce the Amended Agreement of Purchase and Sale dated February 18, 2003, and that the price required under the contract was $8,500, The Declarative Judgment further ordered that the Orleans Parish Recorder of Mortgages cancel and erase any relevant Notice of Lis Pendens filed by Haspel affecting the property in question, and that the Clerk of Court distribute the $800, deposited into the Registry of the trial court to Gentilly Shopping Center, L.L.C. Following the denial of post-trial motions, Haspel attempted a suspensive appeal of the Declaratory Judgment, wherein another dispute arose over what the proper amount of security would be necessary to protect Cambridge from any delay damages that it would incur. This Court in two writs fixed the amount of Haspel s security bond as the income generated by the property that Cambridge would forego while awaiting adjudication of Haspel s suspensive appeal. That income is what Cambridge seeks in its Petition for Supplemental Relief. Upon this Court s determination that the security be no less than $600,000, Haspel refused to post the bond and converted his appeal into a devolutive one, said devolutive appeal is

4 currently before this Court. Approximately six months after the Declaratory Judgment was rendered, and on appeal, Cambridge filed a Petition for Supplemental Relief under La. C.C.P. art The Petition for Supplemental relief seeks to give force and effect to the Declaratory Judgment by awarding to Cambridge money damages arising therefrom. The trial court ruled that it lacked subject matter jurisdiction over the Petition for Supplemental Relief because of the still-pending appeal from the underlying Declaratory Judgment, which was brought under La. C.C.P. art Therefore, this appeal presents the issue of whether a trial court has subject matter jurisdiction over an Article 1878 petition for supplemental relief for monetary damages during the pendency of an appeal taken from the underlying declaratory judgment, brought under La. C.C.P. art We answer this question in the affirmative. The existence of subject matter jurisdiction is a question of law, and thus receives de novo review. The basis for the supplemental relief is: (1) Cambridge would have purchased the property long ago but for Haspel s wrongful obstruction of the

5 sale; and (2) the said property is income producing property such that Haspel s wrongful obstruction of its sale to Cambridge deprived Cambridge of the money it otherwise would have received as owner. La. C.C.P. art sets forth the scope of declaratory judgments in Louisiana, and states: Courts of record within their respective jurisdictions may declare rights, status, and other legal relations whether or not further relief is or could be claimed. No action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for; and the existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is appropriate. The declaration shall have the force and effect of a final judgment or decree. The official commentary to Article 1871 further defines the unique nature of the declaratory judgment by contrasting it with the conventional type of judgment: The conventional type of judgment embodies two elements: (1) an ascertainment or declaration of the rights of the parties (usually implied); and (2) a specific award of relief. The declaratory judgment embodies only the first element which, of course, is always express. There is actually no such thing as a declaratory action, even if the sole relief prayed for is a declaratory judgment. The action is identical, regardless of whether greater or lesser relief is prayed for; the difference is only as to the type of judgment to be rendered.

6 A petition for supplemental relief, on the other hand, seeks precisely that which cannot be awarded via a declaratory judgment a specific award of relief. The type of action necessary to obtain such relief is defined in La. C.C.P. art. 1878, which states: Further relief based on a declaratory judgment or decree may be granted whenever necessary or proper. The application therefor shall be by petition to a court having jurisdiction to grant the relief. If the application is considered sufficient, the court, on reasonable notice, shall require any adverse party whose rights have been adjudicated by the declaratory judgment or decree, to show cause why further relief should not be granted forthwith. Article 1878 clearly differentiates between the underlying declaratory judgment proceeding and the subsequent and separate proceeding for supplemental relief based thereon. Not only does the Article require a separate petition for supplemental relief, it expressly requires that the petition be filed in a court of proper jurisdiction. Claitor v. Delahoussaye, (La. App. 1 Cir. 5/28/03), 858 So.2d 469. Article 1878 addresses jurisdiction because it presupposes that a petition for supplemental relief is separate and proper jurisdiction could differ from the jurisdiction under Article In Louisiana Riverboat Gaming Comm n. v. Louisiana State Police

7 Riverboat Gaming Enforcement Div., (La. App. 1 Cir. 6/20/97), 696 So.2d 645, our brethren distinguished the subject matter jurisdiction that flowed from a petition for supplemental relief from that of the original action for declaratory judgment, stating: [W]here a declaratory judgment has been sought and rendered, as here, article 1878 of the Code of Civil Procedure allows the court to grant further relief based upon that judgment whenever necessary or proper. Technically such relief is sought by means of a petition. Herein, the respondent filed a new and separate petition seeking supplemental relief. Therefore, the subject matter jurisdiction of the district court does not stem from the original action for declaratory relief, but rather from the new petition seeking supplemental relief. The trial court correctly dismissed relator's motion to dismiss and overruled relator's exception of lack of subject matter jurisdiction. Louisiana Riverboat Gaming Comm n., supra, at 647. [Emphasis added.] Thus, a petition for supplemental relief is separate and distinct from an action seeking a declaratory judgment. Procedurally, they are two separate proceedings, each with their own distinct object. Moreover, La. C.C.P. art provides that, on the granting of an appeal, the jurisdiction of the trial court is divested, and that of the appellate court attaches, only over those matters in the case reviewable under the

8 appeal. La. C.C.P. art Because a declaratory judgment may not encompass a claim for monetary damages, Cambridge s supplemental relief claim for monetary damages cannot be reviewable by this Court in the preceding devolutive appeal of the Declaratory Judgment. We note that what is occuring in fact in this case is that Haspel is suspending the effects of the Declaratory Judgment without having to post security. For the aforementioned reasons, the trial court erred in granting the exception of lack of subject matter jurisdiction. REVERSED AND REMANDED