Anthem Bank & Trust, A Federal Savings Bank, Formerly Known As First Financial Bank and Trust Co. v. Shahram Nickroo and Mary Ann Heard Nickroo

• Court: Louisiana Court of Appeal
• Decided: July 6, 2020
• Docket: 2019CA1216
• Status: Unknown

Opinion

NOT DESIGNATED FOR PUBLICATION

STATE OF LOUISIANA

COURT OF APPEAL

FIRST CIRCUIT

NUMBER 2019 CA 1216

ANTHEM BANK & TRUST, A FEDERAL SAVINGS BANK FORMERLY KNOWN AS FIRST FINANCIAL BANK & TRUST COMPANY

VERSUS

SHAHRAM NICKROO AND MARY ANN HEARD NICKROO

Judgment Rendered: JUL 0 6 2020

Appealed from the Twenty -First Judicial District Court In and for the Parish of Livingston State of Louisiana Docket Number 147394

Honorable Robert H. Morrison, III, Judge Presiding

David M. Cohn Counsel for Plaintiff/Appellant, D. Brian Cohn Anthem Bank & Trust, A Federal Savings Bartley P. Bourgeois Bank, formerly known as First Financial Allyson S. Jarreau Bank & Trust Company Baton Rouge, LA

Joseph Paul Rummage, Jr. Counsel for Defendants/Appellees, Denham Springs, LA Shahram Nickroo and Mary Ann Heard Nickroo

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BEFORE: WHIPPLE, C.J., GUIDRY, AND THERIOT, JJ.

h ' el: A'/ WHIPPLE, C.J.

This matter is before us on appeal by plaintiff, Anthem Bank & Trust, a

Federal Savings Bank, formerly known as First Financial Bank & Trust Company,

the Bank") from a judgment of the district court denying the Bank' s motion to

set aside an order of dismissal and ordering the Bank to file a separate ordinary

action for a deficiency judgment. For the reasons that follow, the judgment is

reversed and this matter is remanded for further proceedings.

FACTS AND PROCEDURAL HISTORY

On December 16, 2011, Shahram Nickroo executed a promissory note in the

amount of $ 711, 453. 50 payable to the Bank in one principal payment of

711, 453. 50 due December 16, 2012, with regular monthly payments of accrued

unpaid interest on the loan beginning January 1, 2012. The promissory note was

secured by a collateral mortgage note executed by Shahram Nickroo and Mary

Ann Heard Nickroo on August 7, 2008, in the amount of $1, 500,000.00, affecting

two tracts of property in Livingston Parish. The purpose of the collateral mortgage

note was to secure loans or advances issued by the Bank to the Nickroos. Pursuant

to a " Change in Terms Agreement" dated December 16, 2011, and executed by

Shahram Nickroo on April 18, 2013, the maturity date of the loan was extended to

December 12, 2013.

On January 13, 2015, the Bank filed a petition' and order for executory

process, averring that the Nickroos defaulted on the loan in the amount of

711, 424. 18 in unpaid principal and $ 21, 797.36 in unpaid interest, and requesting

that an immediate writ of seizure and sale issue, directing the Sheriff of Livingston

Parish to seize and sell the immovable property subject to the collateral mortgage

The Bank subsequently amended its petition to properly reflect the Bank' s name and to attach copies of the Certified Resolutions of the Board of Directors and Articles of Amendment of the Bank' s charter.

2 note? On January 15, 2015, the district court signed the order, granting executory

process and ordering a writ of seizure and sale.

On July 13, 2015, the Nickroos filed a petition to enjoin foreclosure, alleging

defects in the executory process. The district court denied the petition, noting that

the " allegations do not preclude the Sheriff' s Sale, but may be raised in defense

should the creditor seek a deficiency judgment." On August 26, 2015, the Sheriff

sold the immovable property subject to the collateral mortgage for $ 496, 666. 68.

Three years later, on September 28, 2018, the Bank filed a second supplemental

and amending petition, converting the matter to ordinary process and seeking a

deficiency judgment for the balance owed by the Nickroos.'

The Nickroos responded by filing an ex parte motion for order of dismissal

on the grounds of abandonment, averring that no discovery or other action had

been taken by the parties in the litigation since the Bank filed an answer to the

Nickroos' petition to enjoin foreclosure on September 21, 2015, until the Bank' s

filing of its second supplemental and amending petition on September 28, 2018,

and thus, that the proceedings should be dismissed as abandoned, pursuant to LSA-

C. C. P. art. 561, given that more than three years had elapsed with no timely " step"

taken in the prosecution of the case. An ex parte order was signed by the district

court on November 15, 2018, dismissing the proceeding, without prejudice, as

abandoned.

The Bank filed an opposition to the petition for dismissal and a motion to set

aside the ex parte order of dismissal, contending that a final judgment rendered

pursuant to a completed executory process proceeding precludes application of the

In its petition, the Bank also requested the appointment of an attorney as curator ad hoc to represent the Nickroos, who were residing in California.

3Louisiana Code of Civil Procedure article 2644 provides that a plaintiff in an executory proceeding may convert it into an ordinary proceeding by amending his petition so as to pray that the defendant be cited and for judgment against him on the obligation secured by the mortgage or privilege. abandonment principles. Following a hearing, the district court signed a judgment

on May 14, 2019, denying the Bank' s motion to set aside the order of dismissal

and ordering the Bank to file a separate ordinary action for any deficiency balance

remaining after the sheriffs sale, despite the provisions of LSA-C. C.P, art. 2772. 4

The Bank now appeals, contending that the district court erred in: ( 1)

dismissing the lawsuit on the basis of abandonment; ( 2) " circumventing" the

Bank' s right to bring its claim for a deficiency judgment in the same lawsuit under

LSA-C.C.P. art. 2772; and ( 3) improperly ordering the Bank to bring its claim for a

deficiency judgment in a separate suit.5

DISCUSSION

Motion to Dismiss Appeal

As an initial matter, we note that the Nickroos filed with this court a motion

to dismiss the Bank' s appeal, contending that in filing a separate suit as ordered by

the district court and availing itself of relief in accordance with the judgment, the

Bank has acquiesced in the judgment on appeal, such that no justiciable

controversy remains for resolution on this appeal.

Louisiana Code of Civil Procedure article 2085 provides that:

a]n appeal cannot be taken by a party who confessed judgment in the proceedings in the trial court or who and voluntarily unconditionally acquiesced in a judgment rendered against him. Confession of or acquiescence in part of a divisible judgment or in a favorable part of an indivisible judgment does not preclude an appeal as to other parts of such judgment.

4Louisiana Code of Civil Procedure article 2772 provides that a creditor may obtain a deficiency judgment against the debtor either by converting the executory proceeding into an ordinary proceeding as provided in Article 2644, or by a separate suit.

5The denial of a motion to set aside a judgment is an interlocutory judgment akin to the denial of a motion for a new trial, which is generally not appealable absent a showing of irreparable harm. LSA- C. C. P. art. 2083; Chaney v. Department of Public Safety and Correctons Office of Motor Vehicles), 2009- 1543 ( La. App. 1St Cir. 3/ 26/ 10, 36 So. 3d 328, 330, n. 1, cit_ int_ Morrison v. Dillard Department Stores, Inc., 99- 2060 ( La. App. 1St Cir. 9/ 22/ 00), 769 So. 2d 742, 744, writ denied, 2000- 3379 ( La. 2/ 2/ 01), 784 So. 2d 646. However, the supreme court has directed us to consider the denial of a motion for a new trial where it is clear that the appellant meant to appeal the merits of the case decided by an earlier final judgment. Chaney v. Department of Public Safety and Corrections ( Office of Motor Vehicles), 36 So. 3d at 330, n. 1.

0 The Nickroos specifically contend in their motion to dismiss that by

instituting a new petition for a deficiency judgment in a separate, ordinary action,

as directed by the district court in its May 14, 2019 judgment, the Bank has

acquiesced in the judgment on appeal, and that the appeal should be dismissed as

moot. In support, the Nickroos rely on attachments to their motion, which include,

inter alia, copies of pleadings purportedly filed by the Bank in a separate suit

below, a petition for deficiency judgment against Mr. Nickroo filed on June 3,

2019, a motion for preliminary default, and related filings, none of which are part

of the appellate record in the instant case. However, attachments to a

memorandum or motion do not form part of the record on appeal, and, thus, cannot

be considered. See English Turn Property Owners Association v. Taranto, 2016-

0319 ( La. App. 41" Cir. 4/ 19/ 17), 219 So. 3d 381, 386, writ denied, 2017- 1100 ( La.

10/ 16/ 17), _ So. 3d( documents attached to a motion to dismiss appeal form no

part of the record on appeal and cannot be considered).

The Bank concedes in its opposition that it initially did file a separate suit

for a deficiency judgment, as ordered by the district court, but argues that this

action in no way constitutes a voluntary and unconditional acquiescence of its

rights to appeal, nor does any subsequent filing change the fact that its motion to 6 set aside dismissal was improperly denied. With regard to the record that is

before us, the Bank contends that a real and ongoing dispute exists between the

parties where: no settlement has been reached; it did not execute a satisfaction of

judgment; it has not accepted any benefit of a judgment; and it did not waive its

right to appeal. The Bank points out that there is nothing in the district court or

appellate court record of these proceedings that evidences any intent by the Bank

6Even if we were able to consider documents or filings in a subsequent matter, the Bank noted without contradiction at oral argument that the referenced suit was subject to an exception of lis pendens or was not otherwise viable. Again, these arguments also refer to matters outside the appellate record.

R to abandon its right to appeal, and that its dispute with the Nickroos is ripe and

definitive and is properly before this court. We agree.

A party against whom a judgment was rendered is not entitled to appeal if he

or she has " voluntarily and unconditionally acquiesced in a judgment rendered

against him." LSA-C.C. P. art. 2085. However, appeals are favored in law and

forfeiture of the right to appeal through acquiescence is never presumed. Coleman

Oldsmobile Inc. v. Johnson, 474 So. 2d 20, 21 ( La. App. I" Cir. 1985). Thus, the

party alleging acquiescence must establish by direct or circumstantial evidence that

the party now appealing intended to acquiesce. Succession of Marcel, 387 So. 2d

1363, 1364 ( La. App. 11 Cir. 1980). Acquiescence should be decreed only when

the party' s intention to abandon his right of appeal is clearly demonstrated.

Coleman Oldsmobile, Inc. v. Johnson, 474 So. 2d at 22; see also Ourso v. Wal-

Mart Stores Inc., 2008- 0780 ( La. App. 1St Cir. 11/ 14/ 08), 998 So. 2d 295, 299, writ

denied, 2008- 2885 ( La. 2/ 6/ 09), 999 So. 2d 785. The term " acquiescence"

envisions voluntary execution of a judgment. See LSA-C.C. P. art. 2085, Official

Revision Comments, Comment ( d).

Such acquiescence must be voluntary, unconditional, complete, and coupled

with the intention of abandoning the appeal. Acquiescence is never presumed and

must be established by evidence which leaves no doubt regarding appellant' s

alleged acquiescence, considering that appeals are favored in law. Ponder v.

Pechon, 169 So. 2d 671, 673 ( La. App. I" Cir. 1964), writ refused, 170 So. 2d 868

La. 1965). A party favored by judgment may accept the full amount thereof from

the party cast or may even cause execution on the judgment without forfeiting his

right of appeal because of acquiescence. Succession of Marcel, 387 So. 2d at

1364.

On the record before us, we are unable to say that the Bank' s filing of a

petition when ordered to do so by the district court in an adverse judgment was

on sufficient to establish a voluntary and unconditional acquiescence in the Bank' s

right to appeal the judgment giving rise to the filing of a separate suit. The Bank

contends in its opposition that it filed the separate action because it was ordered to

do so by the district court, which caused it to incur " increased costs" and resulted

in " judicial inefficiencies." Moreover, the Bank contends that despite filing the

separate suit, it never conceded that the district court was correct in finding that the

Bank had abandoned its right to a deficiency judgment in the executory process

action or in ruling that the Bank could not convert the executory process

proceeding into an ordinary proceeding to pursue a deficiency judgment as

specifically permitted by LSA-C.C.P. art. 2772. As the Bank notes, the instant

appeal challenges these rulings of the district court.

To constitute acquiescence to defeat an appeal, an intention to accept the

judgment and not to appeal must be shown. Ourso v. Wal- Mart Stores Inc., 998

So. 2d at 299. Neither showing has been made herein. Because the Nickroos have

failed to establish that the Bank intended to acquiesce or otherwise waive or

abandon its right to assert these challenges on appeal, we will deny the motion to

dismiss the appeal and will consider the issues before us on appeal by the Bank.

Abandonment Assignment of Error Number One)

In its first assignment of error, the Bank contends that the district court erred

in refusing to set aside its order of dismissal, as the rules of abandonment do not

apply in the instant case, where, as here, the executory proceeding was complete.

The concept of abandonment can apply to executory proceedings.

Countrywide Home Loans, Inc. v. Estate of Rowe, 51, 489 ( La. App. 2" d Cir.

6/ 21/ 17), 224 So. 3d 1152, 1157. Thus, until there is a sale of the property, the

abandonment articles continue to apply, and the executory process is not complete.

See JP Morgan Chase Bank, N.A. v. Bickham, 2016- 0946 ( La. App. 1St Cir.

7 6/ 2/ 17) ( unpublished); Countrywide Home Loans, Inc. v. Estate of Rowe, 224 So.

3d at 1157; and Nationstar Mortgage, LLC v. Harris, 2013- 1335 ( La. App. 4th Cir.

5/ 14/ 14), 141 So. 3d 829, 834- 835. See also Hibernia National Bank v. Aero-

Mech, Inc., 50, 608 ( La. App. 2nd Cir. 8/ 3/ 16), 215 So. 3d 350 ( creditor' s efforts to

enforce and/ or satisfy a money judgment were not subject to LSA-C.C. P. art. 561

governing abandonment).

In the instant case, a writ of seizure and sale was ordered by the district court

on January 15, 2015, and the property subject to the collateral mortgage was sold

at sheriff' s sale on August 25, 2015. Thus, at the time the Nickroos filed their ex

parte motion for an order of dismissal on the grounds of abandonment on

November 145 2018, an order granting the executory process had been rendered

such that the executory process was accomplished and complete, and the principles

of abandonment no longer applied.' Accordingly, the district court erred in

granting the ex parte order dismissing the proceeding as abandoned.'

Once an executory proceeding is converted into an ordinary proceeding pursuant to LSA-C. C. P. arts. 2644 and 2772, the ordinary proceeding is considered a " new proceeding." As the supreme court explained in First Guaranty Bank, Hammond. Louisiana v. Baton Rouge Petroleum Center, Inc., 529 So. 2d 834, 841 ( La. 1987) ( on rehearing):

When the property has been sold under the executory proceedings after appraisal and in accordance with statutory provisions governing appraisal, the creditor may obtain a personal judgment against the mortgagor for any deficiency remaining after the application of the net proceeds of sale to the secured debt. La. C. Civ.P. art. 2771.However, the creditor can do so only by converting the executory proceeding into an ordinary one, or by instituting a new suit against the mortgagor. La. C. Civ.P. arts. 2644, 2772. Under either method, the new proceeding is a personal action, in which the defendant has all of the rights of a defendant in an ordinary proceeding, e. g, he must be subjected personally to the jurisdiction of the court and process must be served on him. The confession of judgment, having served its purpose in the executory proceeding, has become functus officio, and the mortgagee must prove the indebtedness asserted by the usual modes of proof. La. C. Civ.P. art. 2772. [ Citations omitted] [ Emphasis added].

8In addition to finding that the principles of abandonment no longer applied herein, we note that there is a five- year prescriptive period for purposes of pursuing a deficiency judgment, which period commences from the date of the sheriffs sale. See LSA- C. C. art. 3498 and Dyck - O' Neal, Inc. v. Sands, 98- 3042 ( La. App. 41h Cir, 8/ 18/ 99), 745 So. 2d 68, 70, writ denied, 99- 3123 ( La. 1/ 7/ 00), 752 So. 2d 871.

M Error in Ordering the Bank' s Claim for Deficiency Judgment to be Asserted in a Separate Suit Assignment of Error Numbers Two and Three)

In these related assignments of error, the Bank contends the district court

erred in " circumventing" the Bank' s right to seek a deficiency judgment in the

same suit and further in ordering that the Bank assert its claim in a separate suit.

After careful review, we agree. As noted above, LSA-C. C. P. art. 2772 specifically

grants a creditor the right to obtain a deficiency judgment against a debtor by

converting the executory proceeding into an ordinary proceeding as provided in

LSA-C. C.P. art. 2644 or by filing a separate suit. Accordingly, the district court

erred in concluding otherwise and in ordering the filing of a separate suit after

finding the prior matter abandoned.

CONCLUSION

For the above and foregoing reasons, the motion to dismiss filed by the

Nickroos is hereby denied. Finding merit to the Bank' s assignments of error, the

May 14, 2019 judgment of the district court, denying the Bank' s motion to set

aside the district court' s November 15, 2018 order of dismissal on grounds of

abandonment and ordering that the Bank file a separate ordinary action for any

deficiency balance due after the Sheriff's Sale of August 26, 2015, is hereby

reversed and the matter is remanded to the district court for further proceedings.

Costs of this appeal are assessed to the defendants/ appellees, Shahram Nickroo and

Mary Ann Heard Nickroo.

MOTION TO DISMISS APPEAL DENIED; JUDGMENT REVERSED AND MATTER REMANDED.