COMMERCIAL CREDIT GROUP, INC. NO. 23-C-595
VERSUS FIFTH CIRCUIT
DOUBLE R & J TRUCKING SERVICE, INC. COURT OF APPEAL AND HANCOCK WHITNEY BANK STATE OF LOUISIANA
February 14, 2024
Linda Wiseman First Deputy Clerk
IN RE HANCOCK WHITNEY BANK
APPLYING FOR SUPERVISORY WRIT FROM THE TWENTY-NINTH JUDICIAL DISTRICT COURT, PARISH OF ST CHARLES, STATE OF LOUISIANA, DIRECTED TO THE HONORABLE TIMOTHY S. MARCEL, DIVISION "E", NUMBER 91,952
Panel composed of Judges Jude G. Gravois, John J. Molaison, Jr., and Scott U. Schlegel
WRIT GRANTED
Defendant, Hancock Whitney Bank (“Hancock Whitney”), seeks review of
the trial court’s November 14, 2023 judgment denying its exception of no cause of
action. For reasons stated more fully below, we grant Hancock Whitney’s writ
application, reverse the trial court’s judgment, and grant Hancock Whitney’s
exception of no cause of action. We also allow third-party plaintiff, Double R & J
Trucking Service, Inc. (“R&J”), fifteen days (15) to amend its third-party demand
to state a breach of contract claim against Hancock Whitney, if one exists.
However, for reasons stated more fully below, we dismiss R&J’s claim against
Hancock Whitney under the Louisiana Unfair Trade Practices and Consumer
Protection Law, La. R.S. 51:1401, et. seq. (“LUTPL”), with prejudice.
In its Third Party Demand, R&J alleges that it purchased several pieces of
equipment from Extec Texas, LLC, and obtained loans from Hancock Whitney to
finance some of the purchases. R&J alleges that starting in late 2022, it received notices from Commercial Credit Group, Inc. (“CCG”) seeking to recover the
equipment because it was subject to a blanket lien held by CCG. R&J alleges that
it contacted Hancock Whitney, which stated that if CCG repossessed the
equipment, then Hancock Whitney would “call in” its loans. It further alleges that
Hancock Whitney indicated that it was R&J’s responsibility to conduct due
diligence and that Hancock Whitney owed no duty to R&J to discover CCG’s
blanket lien. In its demand, R&J asserts claims against Hancock Whitney for
breach of contract and violations of the LUTPL based on allegations that Hancock
Whitney failed to exercise due diligence and discover CCG’s blanket lien on
behalf of R&J.
In response, Hancock Whitney filed an exception of no cause of action
arguing that R&J’s claims are barred by the Louisiana Credit Agreement Statute,
La. R.S. 6:1121, et. seq. (“LCAS”), because R&J did not cite to a written credit
agreement that obligated Hancock Whitney to search for liens on the equipment on
behalf of R&J. Hancock Whitney also argued that R&J failed to state a LUTPL
claim against it because of the statutory exemption for federally insured financial
institutions provided in La. R.S. 51:1406(1).
In its opposition memorandum, R&J argued that Hancock Whitney’s
conduct constituted a breach of its duty of good faith and fair dealing that is not
subject to the LCAS. R&J further argued that Hancock Whitney should be liable
under LUTPL because its conduct constituted an unfair trade practice. Following a
hearing, the trial court entered a judgment on November 14, 2023, denying
Hancock Whitney’s exception of no cause of action without reasons.
The function of an exception of no cause of action is to test the legal
sufficiency of the petition by determining whether the law affords the plaintiff a
remedy on the facts alleged in the pleading. Hancock Bank of Louisiana v. 3429
H, LLC, 15-355 (La. App. 5 Cir. 1/13/16), 184 So.3d 274, 279, writ denied, 16-453 (La. 4/22/16), 191 So.3d 1038. No evidence may be introduced to support or
controvert the objection that the petition fails to state a cause of action. La. C.C.P.
art. 931. Therefore, the court reviews the petition and accepts well pleaded
allegations of fact as true, and the issue at trial of the exception is whether, on the
face of the petition, the plaintiff legally is entitled to the relief sought. Hall v. Zen–
Noh Grain Corp., 01-324 (La. 4/27/01), 787 So.2d 280, 281.1
In reviewing a trial court’s ruling sustaining an exception of no cause of
action, the appellate court conducts a de novo analysis because the exception raises
a question of law. Show-Me Const., LLC v. Wellington Specialty Ins. Co., 11-528
(La. App. 5 Cir. 12/29/11), 83 So.3d 1156, 1159. Every reasonable interpretation
must be accorded the language of the petition in favor of maintaining its
sufficiency and affording the plaintiff the opportunity to present evidence at trial.
Industrial Companies, Inc. v. Durbin, 02-665 (La. 1/28/03), 837 So.2d 1207, 1213.
We first address R&J’s breach of contract claim. R&J seeks to recover
against Hancock Whitney based on an alleged breach of a duty of good faith and
fair dealing to discover a blanket lien on the equipment it financed with Hancock
Whitney. However, in order for R&J to state a claim against Hancock Whitney,
the relevant provisions of the LCAS require a written agreement establishing the
duty or obligation at issue. See Jesco Const. Corp. v. Nationsbank Corp., 02-57
(La. 10/25/02), 830 So.2d 989, 992; Hovell v. Origin Bank, 20-1417 (La. 3/2/21),
311 So.3d 340, 341. Specifically, La. R.S. 6:1122 of the LCAS provides that “[a]
debtor shall not maintain an action on a credit agreement unless the agreement is in
writing, expresses consideration, sets forth the relevant terms and conditions, and
is signed by the creditor and the debtor.” A “credit agreement” is defined as “an
agreement to lend or forbear repayment of money or goods or to otherwise extend
1 As indicated in our order granting Hancock Whitney’s motion to strike, we did not consider any new facts or attachments included with R&J’s opposition to the writ application. credit, or make any other financial accommodation.” La. R.S. 6:1121(1). La. R.S.
6:1123 further provides that a “credit agreement shall not be implied from the
relationship, fiduciary, or otherwise, of the creditor and the debtor.”
Finally, La. R.S. 6:1124 provides that financial institutions and their
employees owe no fiduciary obligations or responsibilities to a customer unless
specified in a written agreement:
No financial institution or officer or employee thereof shall be deemed or implied to be acting as a fiduciary, or have a fiduciary obligation or responsibility to its customers or to third parties other than shareholders of the institution, unless there is a written agency or trust agreement under which the financial institution specifically agrees to act and perform in the capacity of a fiduciary. The fiduciary responsibility and liability of a financial institution or any officer or employee thereof shall be limited solely to performance under such a contract and shall not extend beyond the scope thereof. Any claim for breach of a fiduciary responsibility of a financial institution or any officer or employee thereof may only be asserted within one year of the first occurrence thereof. This Section is not limited to credit agreements and shall apply to all types of relationships to which a financial institution may be a party.
In Jesco, supra, the Louisiana Supreme Court explained that the primary
purpose of the LCAS is to prevent potential borrowers from bringing claims
against lenders based upon oral agreements. The court reasoned that “to allow
debtors to skirt the [LCAS] by bringing actions other than breach of contract, but
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COMMERCIAL CREDIT GROUP, INC. NO. 23-C-595
VERSUS FIFTH CIRCUIT
DOUBLE R & J TRUCKING SERVICE, INC. COURT OF APPEAL AND HANCOCK WHITNEY BANK STATE OF LOUISIANA
February 14, 2024
Linda Wiseman First Deputy Clerk
IN RE HANCOCK WHITNEY BANK
APPLYING FOR SUPERVISORY WRIT FROM THE TWENTY-NINTH JUDICIAL DISTRICT COURT, PARISH OF ST CHARLES, STATE OF LOUISIANA, DIRECTED TO THE HONORABLE TIMOTHY S. MARCEL, DIVISION "E", NUMBER 91,952
Panel composed of Judges Jude G. Gravois, John J. Molaison, Jr., and Scott U. Schlegel
WRIT GRANTED
Defendant, Hancock Whitney Bank (“Hancock Whitney”), seeks review of
the trial court’s November 14, 2023 judgment denying its exception of no cause of
action. For reasons stated more fully below, we grant Hancock Whitney’s writ
application, reverse the trial court’s judgment, and grant Hancock Whitney’s
exception of no cause of action. We also allow third-party plaintiff, Double R & J
Trucking Service, Inc. (“R&J”), fifteen days (15) to amend its third-party demand
to state a breach of contract claim against Hancock Whitney, if one exists.
However, for reasons stated more fully below, we dismiss R&J’s claim against
Hancock Whitney under the Louisiana Unfair Trade Practices and Consumer
Protection Law, La. R.S. 51:1401, et. seq. (“LUTPL”), with prejudice.
In its Third Party Demand, R&J alleges that it purchased several pieces of
equipment from Extec Texas, LLC, and obtained loans from Hancock Whitney to
finance some of the purchases. R&J alleges that starting in late 2022, it received notices from Commercial Credit Group, Inc. (“CCG”) seeking to recover the
equipment because it was subject to a blanket lien held by CCG. R&J alleges that
it contacted Hancock Whitney, which stated that if CCG repossessed the
equipment, then Hancock Whitney would “call in” its loans. It further alleges that
Hancock Whitney indicated that it was R&J’s responsibility to conduct due
diligence and that Hancock Whitney owed no duty to R&J to discover CCG’s
blanket lien. In its demand, R&J asserts claims against Hancock Whitney for
breach of contract and violations of the LUTPL based on allegations that Hancock
Whitney failed to exercise due diligence and discover CCG’s blanket lien on
behalf of R&J.
In response, Hancock Whitney filed an exception of no cause of action
arguing that R&J’s claims are barred by the Louisiana Credit Agreement Statute,
La. R.S. 6:1121, et. seq. (“LCAS”), because R&J did not cite to a written credit
agreement that obligated Hancock Whitney to search for liens on the equipment on
behalf of R&J. Hancock Whitney also argued that R&J failed to state a LUTPL
claim against it because of the statutory exemption for federally insured financial
institutions provided in La. R.S. 51:1406(1).
In its opposition memorandum, R&J argued that Hancock Whitney’s
conduct constituted a breach of its duty of good faith and fair dealing that is not
subject to the LCAS. R&J further argued that Hancock Whitney should be liable
under LUTPL because its conduct constituted an unfair trade practice. Following a
hearing, the trial court entered a judgment on November 14, 2023, denying
Hancock Whitney’s exception of no cause of action without reasons.
The function of an exception of no cause of action is to test the legal
sufficiency of the petition by determining whether the law affords the plaintiff a
remedy on the facts alleged in the pleading. Hancock Bank of Louisiana v. 3429
H, LLC, 15-355 (La. App. 5 Cir. 1/13/16), 184 So.3d 274, 279, writ denied, 16-453 (La. 4/22/16), 191 So.3d 1038. No evidence may be introduced to support or
controvert the objection that the petition fails to state a cause of action. La. C.C.P.
art. 931. Therefore, the court reviews the petition and accepts well pleaded
allegations of fact as true, and the issue at trial of the exception is whether, on the
face of the petition, the plaintiff legally is entitled to the relief sought. Hall v. Zen–
Noh Grain Corp., 01-324 (La. 4/27/01), 787 So.2d 280, 281.1
In reviewing a trial court’s ruling sustaining an exception of no cause of
action, the appellate court conducts a de novo analysis because the exception raises
a question of law. Show-Me Const., LLC v. Wellington Specialty Ins. Co., 11-528
(La. App. 5 Cir. 12/29/11), 83 So.3d 1156, 1159. Every reasonable interpretation
must be accorded the language of the petition in favor of maintaining its
sufficiency and affording the plaintiff the opportunity to present evidence at trial.
Industrial Companies, Inc. v. Durbin, 02-665 (La. 1/28/03), 837 So.2d 1207, 1213.
We first address R&J’s breach of contract claim. R&J seeks to recover
against Hancock Whitney based on an alleged breach of a duty of good faith and
fair dealing to discover a blanket lien on the equipment it financed with Hancock
Whitney. However, in order for R&J to state a claim against Hancock Whitney,
the relevant provisions of the LCAS require a written agreement establishing the
duty or obligation at issue. See Jesco Const. Corp. v. Nationsbank Corp., 02-57
(La. 10/25/02), 830 So.2d 989, 992; Hovell v. Origin Bank, 20-1417 (La. 3/2/21),
311 So.3d 340, 341. Specifically, La. R.S. 6:1122 of the LCAS provides that “[a]
debtor shall not maintain an action on a credit agreement unless the agreement is in
writing, expresses consideration, sets forth the relevant terms and conditions, and
is signed by the creditor and the debtor.” A “credit agreement” is defined as “an
agreement to lend or forbear repayment of money or goods or to otherwise extend
1 As indicated in our order granting Hancock Whitney’s motion to strike, we did not consider any new facts or attachments included with R&J’s opposition to the writ application. credit, or make any other financial accommodation.” La. R.S. 6:1121(1). La. R.S.
6:1123 further provides that a “credit agreement shall not be implied from the
relationship, fiduciary, or otherwise, of the creditor and the debtor.”
Finally, La. R.S. 6:1124 provides that financial institutions and their
employees owe no fiduciary obligations or responsibilities to a customer unless
specified in a written agreement:
No financial institution or officer or employee thereof shall be deemed or implied to be acting as a fiduciary, or have a fiduciary obligation or responsibility to its customers or to third parties other than shareholders of the institution, unless there is a written agency or trust agreement under which the financial institution specifically agrees to act and perform in the capacity of a fiduciary. The fiduciary responsibility and liability of a financial institution or any officer or employee thereof shall be limited solely to performance under such a contract and shall not extend beyond the scope thereof. Any claim for breach of a fiduciary responsibility of a financial institution or any officer or employee thereof may only be asserted within one year of the first occurrence thereof. This Section is not limited to credit agreements and shall apply to all types of relationships to which a financial institution may be a party.
In Jesco, supra, the Louisiana Supreme Court explained that the primary
purpose of the LCAS is to prevent potential borrowers from bringing claims
against lenders based upon oral agreements. The court reasoned that “to allow
debtors to skirt the [LCAS] by bringing actions other than breach of contract, but
which are based upon oral agreements to lend money, would thwart the intent of
the legislature and render the entire statute meaningless.” Id. at 992. The Jesco
court also unequivocally determined that the LCAS “precludes all actions for
damages arising from oral credit agreements, regardless of the legal theory of
recovery asserted.” Id.
In Hovell, supra, the plaintiff alleged that the defendant lender was negligent
and breached its commitment, outside of the written loan documents, to obtain
additional collateral to secure the loan at issue. The Louisiana Supreme Court
reinstated the judgment of the trial court and granted the defendant lender’s exception of no cause of action pursuant to La. R.S. 6:1122, because the plaintiff
failed to cite to a written agreement that required the lender to secure additional
collateral. Id. at 341. The court reasoned that the “plaintiff’s allegations plainly
constitute an action for damages based upon an oral credit agreement, which is
expressly prohibited by statute. La. R.S. 6:1122.” Id; see also King v. Parish
National Bank, 04-337 (La. 10/19/04), 885 So.2d 543, 548; Hancock Bank, 184
So.3d at 279-80 (trial court did not err in granting an exception no cause of action
because oral agreement to forbear foreclosure on mortgage was unenforceable
under LCAS).
Similar to the plaintiff in Hovell, R&J argues that Hancock Whitney had an
unwritten obligation to search for the lien on its behalf. R&J further argues that
the LCAS does not bar all claims against lenders. However, this argument does
not demonstrate why the statute does not apply to its claims. R&J fails to cite to a
written agreement requiring Hancock Whitney to conduct a lien search on R&J’s
behalf. Therefore, we find that just as in Hovell, supra, the trial court erred by
failing to grant R&J’s exception of no cause of action as to the breach of contract
claim. Pursuant to La. C.C.P. art. 934, we allow R&J, 15 days to amend its
demand to allege a breach of contract claim, if one exists. If R&J fails to comply
with the order to amend and cite to a written agreement, the breach of contract
claim shall be dismissed.
We also find that the trial court erred by failing to grant Hancock Whitney’s
exception of no cause of action with respect to R&J’s LUTPL claim because
Hancock Whitney is a federally insured financial institution that is expressly
exempt. La. R.S. 51:1406 provides that LUTPL does not apply to “[a]ny federally
insured financial institution.” The Federal Deposit Insurance Corporation lists
Hancock Whitney Bank as a federally insured financial institution on its website at https://banks.data.fdic.gov/bankfind-suite/bankfind/details/12441.2 Accordingly,
we find that the trial court erred by failing to grant the exception of no cause of
action as to R&J’s LUTPL claim. See also Gulf Coast Housing & Development
Corporation, 16-296 (La. App. 4 Cir. 10/5/16), 203 So.3d 366, 371 (recognizing
that federally insured financial institutions are exempted from liability under
LUTPL). Because we find there is no possibility for R&J to amend his demand to
allege a claim against Hancock Whitney under the LUTPL, we dismiss this claim,
with prejudice. See La. C.C.P. art. 934.
Based on the foregoing, we grant this writ application and grant defendant
Hancock Whitney Bank’s exception of no cause of action. We dismiss plaintiff
Double R & J Trucking Service, Inc.’s claim against defendant Hancock Whitney
Bank under the Louisiana Unfair Trade Practices and Consumer Protection Law,
with prejudice. However, we allow plaintiff Double R & J Trucking Service, Inc.
15 days to amend its third-party demand to state a breach of contract claim against
defendant Hancock Whitney Bank, if one exists.
Gretna, Louisiana, this 14th day of February, 2024.
SUS JGG JJM
2 Courts are allowed to take judicial notice of government websites. Jackson v. B.A.L. & Associates, LLC, 22-179 (La. App. 5 Cir. 9/21/22), 350 So.3d 187, 188-89 fn.1; La. C.E. art. 201. SUSAN M. CHEHARDY CURTIS B. PURSELL
CHIEF JUDGE CLERK OF COURT
SUSAN S. BUCHHOLZ FREDERICKA H. WICKER CHIEF DEPUTY CLERK JUDE G. GRAVOIS MARC E. JOHNSON STEPHEN J. WINDHORST LINDA M. WISEMAN JOHN J. MOLAISON, JR. FIRST DEPUTY CLERK SCOTT U. SCHLEGEL TIMOTHY S. MARCEL FIFTH CIRCUIT MELISSA C. LEDET JUDGES 101 DERBIGNY STREET (70053) DIRECTOR OF CENTRAL STAFF POST OFFICE BOX 489 GRETNA, LOUISIANA 70054 (504) 376-1400
(504) 376-1498 FAX www.fifthcircuit.org
NOTICE OF DISPOSITION CERTIFICATE OF DELIVERY I CERTIFY THAT A COPY OF THE DISPOSITION IN THE FOREGOING MATTER HAS BEEN TRANSMITTED IN ACCORDANCE WITH UNIFORM RULES - COURT OF APPEAL, RULE 4-6 THIS DAY 02/14/2024 TO THE TRIAL JUDGE, THE TRIAL COURT CLERK OF COURT, AND AT LEAST ONE OF THE COUNSEL OF RECORD FOR EACH PARTY, AND TO EACH PARTY NOT REPRESENTED BY COUNSEL, AS LISTED BELOW:
23-C-595 E-NOTIFIED 29th Judicial District Court (Clerk) Honorable Timothy S. Marcel (DISTRICT JUDGE) Marc R. Michaud (Respondent) William T. Finn (Relator) John P. Gaffney (Relator)
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