Junior Money Bags, Ltd. v. Segal

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

__________________

No. 90-3862
__________________

JUNIOR MONEY BAGS, LTD.,
A Louisiana Corporation,

Plaintiff-Appellant
Cross-Appellee,

versus

MOEY SEGAL,

Defendant-Appellee
Cross-Appellant-Third Party
Plaintiff-Appellant,

versus

BLAINE S. KERN,

Third-Party Defendant-Appellee.

* * * * * * * *

NEW ORLEANS CITY OF,

Plaintiff,

versus

MOEY SEGAL,

Defendant-Third Party
Plaintiff-Appellant,

versus

BLAINE S. KERN,

Third-Party Defendant-Appellee.
 ______________________________________________

Appeals from the United States District Court for the
Eastern District of Louisiana
______________________________________________

(August 17, 1992)

Before THORNBERRY and GARWOOD, Circuit Judges*.

GARWOOD, Circuit Judge:

Plaintiff-appellant Junior Money Bags, Ltd. (Money Bags)

appeals the district court's dismissal of its claim for declaratory

relief. Defendant-cross-appellant Moey Segal (Segal) appeals the

district court's dismissal of its counterclaim against Money Bags

and third party claim against Blaine Kern (Kern). Finding no

reversible error, we affirm.

Facts and Proceedings Below

To facilitate its construction and operation of a gondola

system over the Mississippi River at New Orleans, the Mississippi

Aerial River TransitSQPerez, Inc. (MART) entered into a lease with

Money Bags. Money Bags is a Louisiana corporation wholly owned by

Kern. In the lease, MART leased land and airspace to construct the

westbank tower support and landing station for the gondola.

Section 9 of the lease provided in part:

"Lessee may construct towers for the [gondola] System .
. . at Lessee's expense, which towers shall at the
termination of this lease become the property of Lessor,
subject to the rights of Banque de L'Union Europeenne
("BUE"), or BUE's assignee or transferee. Lessee,
however, expressly waives all right to compensation

*
Judge Davis, a member of the panel hearing oral argument,
subsequently recused himself. The decision of the panel is
accordingly rendered by a quorum. 28 U.S.C. § 46(d).

2
 therefor. The Lessor, at its option, may, however,
require the leased premises to be replaced in their
original condition resulting in Lessee having to remove
the towers and all underlying foundations."

The lease further provided that it shall terminate "on the earlier

of April 30, 2083 or three (3) months after cessation of using the

leased premises as an integral part in the operation of an aerial

river crossing system."

MART obtained financing for the gondola through Banque de

L'Union Europeenne (BUE). As security, MART executed three

instruments: a collateral mortgage, a collateral chattel mortgage,

and an Assignment of Contracts and Permits. In the collateral

chattel mortgage, MART mortgaged its physical properties, including

the westbank tower that was to be built on Money Bags' property,

and certain contracts, including the Money Bags' lease.

The gondola system was completed in 1984 and operated in

conjunction with the World's Fair in New Orleans that year.

However, shortly after the World's Fair concluded, the gondola

ceased operation.

At approximately the same time, MART defaulted on its loan

with BUE. BUE filed suit in the United States District Court for

the Eastern District of Louisiana to recover the unpaid balance of

its loan. On October 31, 1986, a consent judgment was entered in

favor of BUE against MART. By the terms of the judgment, the court

recognized and maintained BUE's security interests, including its

interest in the lease with Money Bags.

On May 4, 1989, Segal purchased the consent judgment from BUE

for one million dollars, and the district court substituted Segal

3
as the judgment creditor entitled to exercise all of the rights

granted by the consent judgment. Thereafter, Segal executed the

judgment and a marshal's sale was held. At the marshal's sale,

Segal was the only bidder and by marshal's deed acquired all of the

property that constituted the gondola system, including the lease

with Money Bags.

On September 16, 1986, Money Bags sued MART in Louisiana state

court seeking judicial termination of the lease in question. The

suit was dismissed without prejudice on October 18, 1989.

After the marshal's sale, Segal attempted to negotiate a

servitude agreement with Money Bags to allow him to operate the

gondola system. In the proposed agreement drafted by Segal's

counsel it is recited that Segal is the owner of the foundations.

Money Bags rejected the servitude and suggested instead an

amendment to the Money Bags/MART lease. New Orleans Mayor Sidney

Bartholemy became involved and attempted to facilitate an agreement

between the parties to keep the gondola in New Orleans.

Negotiations, however, broke down. Segal hired Arthur Tolar to

negotiate with officials in Corpus Christi, Texas, regarding moving

the gondola there. The Texas State Aquarium was being built in

Corpus Christi, and Segal apparently thought that the gondola might

serve as transportation across the channel to the aquarium from the

city proper.

In a letter dated October 12, 1989, Segal's attorney requested

permission from Kern and Money Bags on behalf of his client "to

come on your land to remove the Gondola Tower," purportedly so the

gondola could be moved to Corpus Christi. Kern's attorney

4
responded in a somewhat elliptical letter dated October 13, 1989.

The letter began by acknowledging receipt of the letter of October

12, 1989, which "was evidently being written on behalf of Mr. Moey

Segal but does not so state" and continued by stating that if the

letter were written on behalf of Segal to so advise and provide

Segal's address. The letter went on to say, "In the event that you

have any legal basis (other than the MART lease) or authority

requiring Junior Money Bags, Ltd. to allow Mr. Segal to traverse

its property or to remove the gondola tower located therein, please

furnish us with the basis for your opinion for our review." The

letter closed by stating that Money Bags "does not grant your

unnamed client permission to come on its land to remove the gondola

tower but is willing to reconsider its position based on your

response to this letter."

Segal's lawyer responded on October 17, 1989, explicitly on

behalf of Segal. The letter stated that Money Bags' intentional

refusal to allow Segal to obtain possession of his property was

causing Segal damages of at least $15 million, demanded immediate

payment thereof, and threatened suit if such payment was not

immediately forthcoming.

On October 18, 1989, Money Bags sued Segal, seeking a

declaration that Segal's right of occupancy under the lease had

terminated and that Segal had succeeded to MART's obligation to

remove the gondola tower and underlying foundation from the leased

property. As an alternative to requiring Segal to restore the

leased premises to their original condition according to the terms

of the lease, Money Bags sought relief in the form of money damages

5
in an amount sufficient to cover the costs of removal plus

attorneys' fees and costs. In order to obtain personal

jurisdiction over Segal, Money Bags sought a writ of nonresident

attachment against the property Segal had acquired in the marshal's

sale. When Segal submitted himself to the jurisdiction of the

district court, Money Bags released the attachment.1

Segal counterclaimed against Money Bags and filed third party

demands against Kern and the City of New Orleans. Segal alleged

wrongful conversion, tortious interference with business relations

and opportunities, interference with contract, and abuse of

process.

Segal filed a Motion for Summary Judgment. In a minute entry

dated May 22, 1990, the district court granted Segal summary

judgment in part. The district court held that Segal had no

obligation to remove the foundations and restore the land to its

original condition. The district court noted that the leased

premises had not been used as an integral part of the operation of

an aerial river crossing system for a period of far longer than

three months prior to the filing of the lawsuit. However, because

of the potential for uncertainty regarding when the leased premises

stopped being used as an integral part of the system, the district

court found that the lease had not expired as a matter of course

1
In the district court, one of Segal's counterclaims was
based on abuse of process by wrongful attachment. The district
court ultimately dismissed the counterclaim. While Segal does
not challenge the district court's ruling on the abuse of process
by wrongful attachment claim, we note in passing that there
appears to be nothing improper in this use of the writ of
attachment to obtain jurisdiction over a nonresident defendant
such as Segal.

6
and judicially dissolved the lease effective from the date of its

ruling. The district court then determined that Segal had not

assumed the obligation under the lease of removing the gondola

tower because Segal had never been in a position to acquire any

real rights or benefits under the lease. The district court noted

that even though the lease had not formally terminated, the leased

premises had not been used in the operation of an aerial river

transport system for three years prior to Segal's acquisition.

Money Bags thus had the option of procuring a judicial dissolution

of the lease at any time; there was thus no unexpired term of the

lease for Segal to acquire. The district court refused to require

Segal to discharge the obligations under the lease when he had

never had an opportunity to enjoy the benefits, and accordingly

entered summary judgment in his favor on the issue of restoring the

land.

Money Bags promptly filed a Motion to Reconsider and its own

Motion for Summary Judgment. In a second minute entry dated July

12, 1990, the district court disposed of these motions and

addressed the source of Segal's right to claim ownership of the

gondola tower while at the same time avoiding the obligation of

removing the foundations and restoring the land. The court

stressed that Segal's rights to the tower derived not from the

lease, but from the chattel mortgage that Segal had acquired from

BUE. The court noted that at the termination of the lease, Money

Bags also acquired an ownership interest in the tower under the

lease, and proceeded to determine whose interest had priority. In

deciding that Segal's interest deriving from the chattel mortgage

7
had priority, the district court rejected Money Bags' argument that

MART's interest in the tower was subject to Money Bags' option to

retain ownership of the tower at the expiration of the lease. The

court concluded that MART's interest was unencumbered because Money

Bags' interest did not arise until the tower was built, after MART

had executed the chattel mortgage to BUE, and because the lease

specifically conditioned Money Bags' option to assert ownership on

the rights of BUE. The court explained:

"Therefore, the rights that Segal acquired from [BUE]
pursuant to the collateral chattel mortgage were not
burdened by Money Bags' right to claim ownership of the
tower under the terms of the lease. Accordingly, the
court concludes that, having acquired [BUE]'s rights and
having been substituted as the judgment creditor entitled
to exercise all rights granted by the consent judgment
previously rendered, Segal is entitled to claim ownership
of the westbank tower to the gondola incident to his
rights that flow from the collateral chattel mortgage
between MART and Banque."

The court thus granted in part and denied in part Money Bags'

motions for reconsideration and for summary judgment. The court

declared Segal to be the owner of the westbank gondola tower and to

be entitled to access to Money Bags' land to remove the tower

without obligation to remove the foundations. The court also

granted Money Bags' partial summary judgment and dismissed Segal's

claim for intentional interference with contractual relations on

the grounds that no such tort existed in Louisiana.2

2
Segal does not challenge on appeal the district court's
dismissal of his claim for intentional interference with
contractual relations. We note in passing that such dismissal
appears to be correct. The Louisiana Supreme Court has recently
recognized the tort of interference with contract, but stressed
its restrictive scope:

"It is not our intention, however, to adopt whole and

8
 After thus disposing of Money Bags' claims and Segal's

counterclaim for interference with contract, a bench trial was held

on Segal's remaining counterclaims and third party claims, namely

abuse of process, abuse of rights, tortious inference with business

relations, and conversion. On October 24, 1990, the district court

entered its Findings of Fact and Conclusions of Law and dismissed

all of Segal's counterclaims. In its Judgment of October 29, 1990,

the district court dismissed Money Bags' action and Segal's

counterclaims with prejudice. Both Segal and Money Bags appeal.

Discussion

Because Money Bags and Segal each appeal from the district

court's judgment, we will address separately the arguments relating

to Money Bags' complaint and Segal's counterclaims. As a prelude,

we note that both Money Bags' claims and Segal's counterclaims are

governed by Louisiana substantive law, and as the Supreme Court

recently held, we "review de novo a district court's determination

of state law." Salve Regina College v. Russell, 111 S.Ct. 1217,

1221 (1991). Our role when presented with an unsettled point of

undigested the fully expanded common law doctrine of
interference with contract, consisting of `a rather
broad and undefined tort in which no specific conduct
is proscribed . . . .' In the present case we
recognize . . . only a corporate officer's duty to
refrain from intentional and unjustified interference
with the contractual relation between his employer and
a third person." 9 to 5 Fashions v. Spurney, 538 So.2d
228, 234 (La. 1989).

Federal courts have respected the restricted nature of this new
delict. See American Waste & Pollution Cont. v. Browning-Ferris,
949 F.2d 1384, 1386-90 (5th Cir. 1991); Nowling v. Aero Services
Intern., 752 F.Supp. 1304, 1310 (E.D. La. 1990); Matrix v. Drug
Emporium, 756 F.Supp. 280, 284. The district court properly
dismissed this claim.

9
state law "is to determine how the [Louisiana] Supreme Court would

resolve the issue if presented to it." American Waste & Pollution

Cont. v. Browning-Ferris, 949 F.2d 1384, 1386 (5th Cir. 1991)

(quoting Coatings Mfrs. Inc. v. DPI, Inc., 926 F.2d 474, 479 (5th

Cir. 1991)).

I. Money Bags v. Segal

On appeal, Money Bags argues that the district court erred in

holding that Segal derived the right to remove the gondola towers

without being bound by any obligation to remove the foundations

under the lease. Money Bags contends that Segal's right to the

towers arises solely from the lease, and thus Segal cannot remove

the towers without becoming subject to the obligations of the

lease, through which Money Bags could either require Segal to

remove the foundations as part of restoring the land to its

original condition or choose to retain both the towers and

foundation. Alternatively, Money Bags contends that if the lease

is held not to govern, Segal's and Money Bags' rights are

established by article 493 of the Louisiana Civil Code, and under

article 493 Segal is obligated to remove the foundations.

A. Competing interests in the gondola system

Segal wore two different hats in claiming rights to the

gondola system. After MART defaulted on its loan with BUE, BUE

sued and a consent judgment was entered in favor of BUE against

MART. By the terms of the judgment, the court recognized and

maintained BUE's security interests, including its interest in the

lease with Money Bags and in the collateral chattel mortgage. On

May 4, 1989, Segal purchased BUE's rights under the consent

10
judgment, and the district court substituted Segal as the judgment

creditor. A writ of fieri facias was subsequently entered

directing the marshal to seize and sell the property of MART

mortgaged to BUE. Specifically included was "the property

encumbered by that certain Collateral Mortgage and Collateral

Chattel Mortgage granted by [MART]"3 and "the right, title and

interest of [MART] to the following: . . . (f) Lease from Junior

Money Bags, Ltd. to Borrower dated September 28, 1983."4 Segal was

the successful purchaser at the execution sale. The marshal

subsequently executed a deed to Segal transferring all of MART's

property and rights mortgaged to BUE, including the Money Bags'

lease and "all buildings, improvements, structures, towers and

other betterments located on the aforedescribed properties whether

now existing or hereinafter constructed," and all of MART's

interest in the permits or contracts listed in the Assignment of

Contracts and Permits, including the Money Bags' lease, necessary

to permit the purchaser to exercise the rights to operate the

gondola system. The Deed also directed the Recorder of Mortgages

to cancel the Collateral Chattel Mortgage granted by MART on any

document in which it was listed as an encumbrance. Segal thus not

3
The Lease from Junior Money Bags to MART was one of the
properties mortgaged by MART in the Collateral Chattel Mortgage.
Also included were "all buildings, improvements, structures,
towers and other betterments located on the aforedescribed
properties whether now existing or hereinafter constructed."
4
In addition to the Money Bags' lease, twelve other leases,
ordinances, agreements, and servitudes were listed as rights,
titles and interests of MART specifically included in the seizure
and sale. These thirteen interests were the same interests
listed in the "Assignment of Contracts and Permits" from MART to
BUE.

11
only acquired MART's interest in the lease, but also acquired all

of MART's ownership interest in the gondola system by foreclosing

on the chattel mortgage and purchasing the system at the execution

sale. We do not understand Money Bags to dispute, or have

disputed, this.

Money Bags, however, also had an interest in the gondola

system. The lease between MART and Money Bags provided that MART

could construct towers on Money Bags' land, but at the termination

of the lease, the towers became the property of Money Bags, subject

to the rights of BUE, or BUE's assignee or transferee.

We recognize that wearing either hat, Segal could acquire no

greater interest in the gondola system than his transferor had.

See LA. CIV. CODE ANN. arts 2620, 3142 (West 1952). The rights that

Segal has in the lease are thus equivalent to the rights that MART

had in the lease. Money Bags, however, conflates the interest that

Segal had in the gondola system through his purchasing the chattel

mortgage and subsequently foreclosing on it at the execution sale

with Segal's purchase of MART's interest as lessee under the lease.

While Segal could only acquire the rights that BUE had in the

chattel mortgage, and BUE could only acquire a security interest in

the property rights that MART had, MART's property rights to the

tower do not arise from the lease. MART did not acquire the

gondola system from or through Money Bags. MART independently

acquired an ownership interest in the gondola system, not simply a

right of possession as a lessee.5 In granting a security interest

5
Money Bags contends that MART, and subsequently Segal, had
only the dominium utile of the improvements until Money Bags

12
in the gondola system to BUE, MART conveyed to BUE the ownership

rights to the gondola system if a stated event occurred, namely a

default by MART. This is essentially the same right that MART

granted to Money Bags in the lease; MART conveyed to Money Bags the

ownership rights to the gondola system on a stated

occurrenceSQnamely the termination of the lease and Money Bags'

decision to retain the gondola.

The inquiry thus becomes what the district court correctly

focused onSQwhether Money Bags or Segal had the prior interest in

the gondola system. The lease and chattel mortgage were executed

concurrently. The district court noted that under Louisiana law,

chattel mortgages are effective from the date of recording. The

district court also found that Money Bags' right to claim ownership

of the tower came into existence only when the tower was erected.

See Smith v. Bratsos, 12 So.2d 245, 248-49 (La. 1942). In Bratsos,

the Louisiana Supreme Court held that a chattel mortgage primes a

exercised its option under the lease to decide whether to retain
the tower and foundations at the termination of the lease. Money
Bags, however, does not define dominium utile; thus, we turn to
Black's Law Dictionary, which notes that in the civil law,
dominium utile means "equitable or praetorian ownership." BLACK'S
LAW DICTIONARY 486 (6th ed. 1990). It stands in contrast to
dominium directum, which in civil law means strict ownership.
Dominium directum et utile represents ownership in the manner we
normally envisage it: "The complete and absolute dominion in
property; the union of the title and the exclusive use." Id.
Money Bags' assertion that MART had only the dominium utile (or
right of possession) of the gondola system mischaracterizes
MART's interest. By necessity, if MART had only the dominium
utile until the lease's end, someone, presumably Money Bags, must
have retained the dominium directum. The Money Bags' lease,
however, clearly provides that the towers shall become the
property of lessor "at the termination of the lease." Money
Bags' characterization of MART's and Segal's interest, besides
having no adequate support in Louisiana law, appears illogical in
light of this provision in the lease.

13
lessor's lien where "the mortgage on the chattel was recorded prior

to the time the chattel was placed in the leased premises." Money

Bags contends forcefully that Bratsos is not applicable because it

has not asserted a lessor's lien. Despite this distinction, we

find Bratsos convincing. Bratsos stands for the general

proposition that a security interest arising from a chattel

mortgage has priority over a lessor's interest in the chattel under

a lease if the mortgage is perfected before the chattel is placed

on the land. In Bratsos itself, the Louisiana Supreme Court

rejected the contention that a prohibition in the lease against

installing equipment subject to a chattel mortgage that would take

precedence over the lessor's lien affected the rights of the

mortgagee and prevented him from claiming a prior interest. Id.

The court noted that "[t]he violation of such a provision in the

lease might be grounds to set aside or annul the lease, but it

could not affect third parties who held a mortgage on a chattel

before the chattel was placed in the leased premises." Id. The

provision in the Money Bags' lease is functionally similar to the

prohibition in Bratsos; both attempt to preserve the lessor's claim

to chattels placed on the land that arises on termination of the

lease. We refuse to find, following Bratsos, that such a provision

in the lease displaces the chattel mortgagee's claim.

In this case, the record reflects that the movables were not

placed on the land and work did not begin on the systemSQall of

which was done by MART or its contractorsSQuntil after the chattel

mortgage was recorded and perfected. Under the reasoning of

Bratsos, BUE's interest in the gondola system was thus senior to

14
Money Bags'; Segal inherited BUE's interest in the chattel

mortgage, unencumbered by any interest of Money Bags. Money Bags

focuses solely on Segal's rights and obligations under the lease;

it does not address Segal's rights under the chattel mortgage.

While Money Bags concedes that Segal took in two different

capacities, it ignores that crucial fact in focusing on the lease

as the sole source of Segal's rights.

B. Segal's purchase of the lease

We must next address whether Segal, by acquiring the lease at

the execution sale, became obligated to remove the foundations and

return the property to its original condition under and by virtue

of the terms of the lease. Instead of foreclosing separately on

the gondola system and the lease and holding separate execution

sales, Segal caused one writ of execution to be issued and an in

globo sale to be held. Segal, among other things, purchased the

lease at the execution sale, apparently because he was not

convinced that it was an unarguable nullity and wanted to prevent

someone else from purchasing the lease and attempting to claim some

rights to the gondola system under the lease.

The lease is clear that any successor to MART's interest under

the lease is obligated to the same extent as MART. While Segal is

in the strictest sense a successor, we question whether a successor

to the lessee's interest after the lease has terminated for all

intents and purposes is a successor within the meaning of the lease

required to discharge the obligations of the lease. The district

court resolved this issue in favor of Segal. The district court

specifically refused to find that the lease had wholly terminated

15
on its own, necessitating the judicial dissolution of the lease.

However, the district court reasoned that because the gondola had

not been used for over three years at the time Segal acquired the

lease, Money Bags had possessed the unconditional right to procure

dissolution of the lease long before, and ever after, Segal

acquired it. Segal had thus in actuality not acquired any rights

under the lease because any time Segal attempted to assert a right,

Money Bags could have the lease dissolved. The district court

accordingly refused to impose the obligations under the lease on

Segal because it would be inequitable.

We do not disturb this conclusion. We note after reviewing

the record that Segal never claimed a right to the gondola system

under the lease or represented that the lease was still effective.

Indeed, in the above-mentioned October 12, 1989, letter from

Segal's counsel to Money Bags, Segal indicated specifically that he

did not feel bound by any lease between Money Bags and a third

party. Additionally, we note that before Segal had even purchased

the lease at the execution sale, Money Bags had sued MART in

Louisiana state court to have the lease dissolved. Segal could

never enjoy the benefits of or any rights under the lease because

Money Bags could dissolve the lease at any time, and therefore

Segal's mere purchase of the lease at the foreclosure did not bind

him to personally discharge the lessee's removal obligations under

the lease. Cf. Grace-Cajun Oil Co. No. 3 v. MBank, 882 F.2d 1008,

1012 (5th Cir. 1989).

16
 C. Article 493

Money Bags' last argument is that if we reject its claims

based on the terms of the lease, nevertheless Segal is still

obligated to remove the foundations under article 493 of the

Louisiana Civil Code. Article 493 provides:

"Buildings, other constructions permanently attached
to the ground, and plantings made on the land of another
with his consent belong to him who made them. They
belong to the owner of the ground when they are made
without his consent.

"When the owner of buildings, other constructions
permanently attached to the ground, or plantings no
longer has the right to keep them on the land of another,
he may remove them subject to his obligation to restore
the property to its former condition. If he does not
remove them within 90 days after written demand, the
owner of the land acquires ownership of the improvements
and owes nothing to their former owner." LA. CIV. CODE
ANN. art. 493 (West Supp. 1992).6

The Louisiana Supreme Court has discussed article 493:

"[T]his article fills a gap in the code, which previously
had neglected to specify the rights and obligations
between the owner of the improvements and the owner of
the ground when their legal relationship terminated.
This paragraph may apply when a lease expires . . . . It
gives the owner of the improvements the right to remove
them, but if he does not do so ninety days after written
demand, the owner of the land acquires ownership of the
improvements. It does not give the new owner of the
improvements the right to compel removal by the old

6
We note that this version of article 493 was enacted in
1984, after the lease and chattel mortgage had been executed.
The previous version of article 493 had no provision requiring
the owner of improvements to restore the property if he removed
the improvements. While it is not clear that the amended version
of article 493 should apply to relationships that existed before
1984, neither of the parties have questioned its applicability in
this case. Additionally, we note that the Louisiana Supreme
Court has applied the amended article 493 in a situation where a
servitude agreement was entered into in 1955 and allegedly
terminated after 1984. See Guzzetta v. Texas Pipe Line Co., 485
So. 2d 508, 511 (La. 1986). Accordingly, we assume that the
amended article 493 applies.

17
 owner, nor to recover payment for the costs of removal."
Guzzetta v. Texas Pipe Line Co., 485 So.2d 508, 511 (La.
1986) (emphasis added).

Because MART made the improvements with Money Bags' consent,

MART, and subsequently Segal, was the owner of the improvements

under article 493. After the lease terminated, Segal had the right

to remove the gondola system "subject to his obligation to restore

the property to its former condition." Thus, article 493 affords

Segal the relief he is seeking in this lawsuit: he has the right

to remove the towers. If Segal does not remove the improvements,

Money Bags can demand removal in writing, and 90 days after such

demand, Money Bags, as owner of the land, acquires ownership of the

improvements without owing any compensation to Segal. However,

under article 493, Money Bags has no right "to compel removal by

the old owner, nor to recover payment for the costs of removal" of

the gondola system. Guzzetta, 485 So.2d at 511; see also

Symeonides, Developments in the Law: 1983-84, Property, 45 LA. L.

REV. 541, ___ ("Under new article 493, . . . the landowner does not

have the right to force removal at the builder's expense . . . .").

Compare LA. CIV. CODE ANN. art. 495 (providing the owner of an

"immovable," to which another consensually attaches or incorporates

things that become component parts of the immovable, with the right

to have the improvements removed at the expense of the person who

made them).7 Money Bags sole remedy is to retain the improvements

7
Money Bags has not relied on Art. 495. Under La.R.S. 9:5357
a movable subject to a chattel mortgage that is installed on
immovable property so as to become immovable nevertheless "shall
be and will remain movable insofar as the mortgage upon it is
concerned."

18
without incurring any obligation to pay for them. As noted by a

commentator, under new article 493, "it seems that in the case of

improvements which are valueless, yet costly to remove, the

landowner is at the mercy of the builder, since he cannot force

removal at the builder's expense." Symeonides, 45 LA. L. REV. at

___.

We also hold that in this particular setting Segal is not

required to remove "all or nothing" under article 493. Segal wants

to remove the gondola towers, which are readily and designedly

separable from the foundations, without being required to remove

the foundations, which are anchored by underground pilings. While

we could unearth no Louisiana case or scholarly writing addressing

this issue and it is not expressly covered by article 493, we

conclude that, on the facts of this case, such a course appears to

be permissible under the general structure of article 493. Under

article 493, if Segal chose not to remove any portion of the

gondola system from Money Bags' land, Money Bags could not force

Segal to remove the system or be reimbursed for the costs of

removal. On these facts, it appears that Segal can remove the

towers without damaging the foundations. While the foundations

likely have little utility except as part of a gondola or similar

system, removing the towers does not impair Money Bags' ability to

replace towers on the foundations at some point in the future.

Because partial removal of the system by Segal does not damage what

remains on Money Bags' land, we find it inconsistent with the

overall structure of article 493 to afford Money Bags a right to

force removal if Segal chooses to remove part of the system where

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Money Bags would not be afforded a similar right if Segal chose not

to remove anything.

II. Segal v. Money Bags and Kern

A. Interference with business relations

Segal asserts that when Money Bag's attorney wrote the above-

referenced letter of October 13, 1989, Segal was prevented from

removing the westbank tower and from forming a profitable

relationship with Corpus Christi to place the gondola system at the

aquarium there. Following the bench trial, the district court

found that Segal failed to establish a claim because he did not

show any communications between Money Bags or Kern and officials in

Corpus Christi. The district court also found that Segal failed to

show that his negotiations with officials in Corpus Christi had

progressed to the stage where interference would have been

tortious: "Segal's negotiations with Corpus Christi were only in

the embryonic stage when Segal himself terminated them."

Segal contends that Louisiana courts have recognized a tort of

interference with business relations consistent with that found in

RESTATEMENT (SECOND) OF TORTS § 766B. Section 766B provides:

"One who intentionally and improperly interferes with
another's prospective contractual relation (except a
contract to marry) is subject to liability to the other
for the pecuniary harm resulting from loss of the
benefits of the relation, whether the interference
consists of

"(a) inducing or otherwise causing a third person
not to enter into or continue the prospective relation or
"(b) preventing the other from acquiring the
prospective relation."

Segal does not dispute the district court's conclusion that he has

failed to state a claim under section 766B(a), but asserts that he

20
has stated a claim under section 766B(b).

Louisiana courts have recognized a cause of action for

tortious interference with business. See Dussouy v. Gulf Coast

Inv. Corp., 660 F.2d 594, 601 (5th Cir. 1981) (citing Graham v. St.

Charles St. Railroad Co., 47 La.Ann. 1656, 18 So. 707 (1895)).

This tort does not appear to be as broad as it is under the

RESTATEMENT or as Segal urges. See Nowling v. Aero Services Intern.,

Inc., 752 F.Supp. 1304, 1311-12 (E.D.La. 199). In Louisiana, the

delict is based on the principle that the right to influence others

not to deal is not absolute. See Ustica Enterprises, Inc. v.

Costello, 434 So.2d 137, 140 (La. App. 5th Cir. 1983); see also

Muslow v. A.G. Edwards & Sons, Inc., 509 So. 2d 1012, 1020 (La.

App. 2d Cir. 1987), writ denied, 512 So.2d 1183 (La. 1987). We

summarized in Dussouy that "Louisiana law protects the businessman

from `malicious and wanton interference,' permitting only

interferences designed to protect a legitimate interest of the

actor." Dussouy, 660 F.2d at 601. "Thus, the plaintiff in a

tortious interference with business suit must show by a

preponderance of the evidence that the defendant improperly

influenced others not to deal with the plaintiff." McCoin v.

McGehee, 498 So.2d 272, 274 (La. App. 1st Cir. 1986) (citing

Ustica, 434 So.2d at 140). The district court properly held that

because Segal had made no showing that Kern or Money Bags

influenced third parties (i.e., those representing Corpus Christi)

not to do business with Segal, Segal has not stated a claim within

the present construct of the Louisiana tort. As a federal court

sitting in diversity, we decline to significantly expand the scope

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of this very limited form of recovery. See Mitchell v. Random

House, Inc., 865 F.2d 664, 672 (5th Cir. 1989) (declaring that "in

diversity cases, `it is not for us to adopt innovative theories of

recovery or defense for . . . [Louisiana] law, but simply to apply

that law as it currently exists'") (quoting Galindo v. Precision

American Corp, 754 F.2d 1212, 1217 (5th Cir. 1985)).

B. Conversion

Conversion is the commission of a wrongful act of dominion

over the property of another in denial of or in a manner

inconsistent with the owner's rights. Security Home Mort. Corp. v.

Bogues, 519 So.2d 307 (La. App. 2d Cir. 1988). Segal argues that

Kern and Money Bags converted his property, namely the westbank

tower, by refusing to grant him permission to remove the tower on

October 13 and by filing a writ of attachment on the property in

order to gain jurisdiction over Segal. The district court

determined, following the bench trial, that neither act constituted

a conversion. First, the district court found that "Money Bags did

not unequivocally tell Segal he could not come onto its property."

Specifically, the district court noted that Segal's counsel had

informed Money Bags that his unnamed client did not consider

himself bound by the lease with MART, which contained provisions

requiring that liability insurance be obtained before any

demolition of the gondola system proceed. The district court found

that Money Bags made a reasonable inquiry concerning Segal's

removal of the tower and procurement of insurance, but "immediately

after questioning Segal's right to remove the tower without regard

to the foundation, Money Bags was presented with a demand for

22
$15,000,000 for a mere three-day delay in granting access to its

property." The district court further found that "Money Bags was

not unreasonable in seeking some type of insurance or other

protection against potential liability claims as land owner in

connection with the tower removal." With regard to the second

claim, the district court found that "[t]he filing of the non-

resident attachment suit was not an act inconsistent with Segal's

ownership." The court noted that in filing the attachment, Money

Bags had to allege that the property was owned by Segal and that

conversion cannot arise from the exercise of a legal right.

The district court was not clearly erroneous in finding that

Money Bags did not convert Segal's property. We first address the

conversion claim based on what Segal characterizes as the wrongful

attachment. Attachment is a proper method of obtaining

jurisdiction over a party. LA. CIV. CODE ANN. art. 9. Once Segal,

a nonresident, appeared by filing a counterclaim and thus submitted

to the jurisdiction of the trial court, Money Bags dismissed the

attachment. Conversion cannot arise from the exercise of a legal

right. Commercial Credit Equipment Corp. v. People's Loan Serv.,

Inc., 351 So.2d 852 (La. App. 2d Cir. 1977); Delort Hardware Co. v.

Peoples Bank & Trust, 490 So.2d 547 (La. App. 4th Cir. 1986).

Segal's claim that Money Bags converted his property by

denying him access to remove the tower gives us a little more

pause. Ultimately, however, we hold that the district court's

finding that Money Bags did not unequivocally deny Segal access to

the land is not clearly erroneous. The letter from Money Bags'

counsel to Segal dated October 13, 1989, is, when viewed in its

23
entirety, clearly an invitationSQalmost a pleaSQto negotiate. The

letter requests a response detailing Segal's name and address and

any authority besides the lease that Segal relied on in claiming a

right to go on the land or remove the towers. Finally, we note

that a careful reading of the letter reveals that Money Bags'

counsel did not deny Segal entry on the land, but instead simply

declined to affirmatively grant Segal permission to enter and

expressly stated that Money Bags was "willing to reconsider its

position based upon your response to this letter." There is a

distinction, albeit a fine one, between refusing someone entry and

not granting permission to enter. There was no evidence either of

any threat of any kind or of any sort of obstruction or anything

similar by Money Bags. It simply declined to make an affirmative

grant of permission.

Nor was the district court clearly erroneous in finding that

Kern's reasonable concerns about insurance prompted him to decline

to grant Segal permission to enter his land and remove the towers.

Money Bags' lease with MART specified that before the gondola was

demolished, a specific plan and insurance must be provided. While

the district court subsequently determined that Segal was not bound

by the lease with MART, Segal had purchased the lease and it was

not wholly clear on October 13, 1989, that Segal was not bound by

it. Additionally, the existence of the gondola towers alone, and

certainly their removal, presented a real threat of injury making

insurance a necessary concern. Given Kern's reasonable concerns

about injury and the need for insurance, Kern's insistence that

Segal obtain insurance before Money Bags would grant permission for

24
entry to remove the towers is not a wrongful act inconsistent with

Segal's rights.8 The land belonged to Money Bags, and Segal had no

absolute, unfettered right of entry onto it, but only an implied

right of reasonable entry for purposes of proper removal of the

towers.

Conclusion

Concluding that neither Money Bags nor Segal has demonstrated

reversible error, we affirm.

AFFIRMED

8
Segal contends that Kern's concerns about insurance were
never communicated to him. The district court, however, could
legitimately have found otherwise. Segal testified at the bench
trial that Kern told him about the insurance and was always
talking about insurance; Segal simply discounted Kern's talk
about insurance as a mere negotiating ploy.

25