First National Bank of Houma v. Bailey

558 N.E.2d 1153, 29 Mass. App. Ct. 193, 1990 Mass. App. LEXIS 491
CourtMassachusetts Appeals Court
DecidedSeptember 5, 1990
DocketNo. 89-P-409
StatusPublished
Cited by9 cases

This text of 558 N.E.2d 1153 (First National Bank of Houma v. Bailey) is published on Counsel Stack Legal Research, covering Massachusetts Appeals Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First National Bank of Houma v. Bailey, 558 N.E.2d 1153, 29 Mass. App. Ct. 193, 1990 Mass. App. LEXIS 491 (Mass. Ct. App. 1990).

Opinion

Perretta, J.

This is an appeal by the defendant from a judgment entered under Mass.R.Civ.P. 56, 365 Mass. 864 (1974), on the plaintiff’s complaint brought under G. L. c. 235, § 14(a),1 seeking recognition and enforcement of a Louisiana money judgment. The defendant’s materials submitted in opposition to the plaintiff’s motion for summary [194]*194judgment did not put in issue any material fact entitling him to a trial on' the complaint. Those materials do show, however, that the defendant was allowed by the Louisiana court to file a postjudgment motion. That motion was pending in Louisiana at the time of the judge’s allowance of the plaintiff’s motion for summary judgment. The defendant argues that it was error to enter summary judgment against him because, if he prevails on his pending motion in Louisiana, the debt upon which the Louisiana judgment is based will be deemed discharged. We conclude that the Louisiana judgment is entitled to recognition but that enforcement of it should be postponed until the Louisiana court acts upon the defendant’s motion. Therefore, as matter of deference to Louisiana, we affirm the judgment but stay its execution.

1. The Louisiana judgment. We learn from the plaintiff’s complaint, exhibits, and affidavits that the Louisiana judgment is based upon the following facts. On August 18, 1983, and January 16, 1984, the Century Mineral Corporation (Century) gave its promissory notes to the plaintiff in the amounts of $925,000 and $300,000, respectively. The defendant gave his “continuing guaranty” for the payment of each of the notes. The identical provision is contained in each of the guaranties: “The Bank may, without notice to or consent of the undersigned, also apply all moneys received from the debtor and others, or from securities, as it may think best, without in any way being required to marshal securities or assets, and any such application of moneys shall not in any way alter, affect, limit or lessen the liability of the undersigned under this guaranty. The Bank shall not be bound to exhaust its recourse against the debtor or other persons or upon the securities it may hold before being entitled to payment from the undersigned of the amount hereby guaranteed.” Compare Danca Corp. v. Raytheon Co., 28 Mass. App. Ct. 942, 943 (1990).

When Century and the defendant failed to pay as promised and guaranteed, the notes were accelerated. The plaintiff brought an action on both the notes, and on January 16, 1987, obtained a partial final judgment against the defend[195]*195ant, that is, a final judgment, on the second note, in the amount of $300,000, with interest. No appeal was taken from the judgment and, as represented at oral argument before us, so much of the Louisiana complaint as relates to the first note ($925,000) remains pending.2

2. The Massachusetts complaint. On June 17, 1987, the plaintiff brought this action on the partial final judgment rendered in Louisiana. The defendant answered and asserted defenses to his liability on the note which raised matters more properly put before the court in Louisiana. The plaintiff then filed, on April 22, 1988, its motion for summary judgment. The defendant responded to the motion on October 14, 1988, with an affidavit signed by his Louisiana counsel on September 20, 1988.

As alleged in that affidavit, Century executed a collateral mortgage and collateral mortgage note on August 18, 1983, the same date that appears on the first promissory note and continuing guaranty. The affiant stated that those two documents “constituted a mortgage upon certain mineral property . . . and constituted security for payment” of the two promissory notes.

As further alleged in the affidavit, there was a foreclosure sale of the mineral property on March 18, 1987, two months after the partial final judgment. The plaintiff purchased the property at the sale for $105,000.

We digress from the affidavit to explain the significance of the sale to the present dispute. “The jurisprudence on when failure to comply with the Louisiana Deficiency Judgment Act will extinguish the obligation of a surety is set forth in [University Properties Corp. v. Fidelity Natl. Bank, 500 So. 2d 888 (La. Ct. App. 1986)] .... In the instant case, there was a private sale of the encumbered property without appraisal and without the consent of the sureties herein. Under the jurisprudence, this action by the creditor has extin[196]*196guished the obligations of these two sureties.” City Natl. Bank v. Smith, 504 So. 2d 892, 894-895 (La. Ct. App. 1987). See La.Rev.Stat.Ann. §§ 13:4106 and 13:4107 (West 1968 & Supp. 19903).

Returning to the affidavit, we learn that the foreclosure sale prompted Louisiana counsel, on an undisclosed date, to amend the answer to the pending complaint on the first note ($925,000) in the Louisiana State court by asserting satisfaction and discharge under the Louisiana Deficiency Judgment Act. Some seven months after the foreclosure sale, counsel filed a complaint in the United States District Court for the Eastern District of Louisiana, seeking a determination that the partial final judgment be deemed satisfied and discharged. The Federal court dismissed the action “[a]s a matter of comity and in deference to the State court,” as the complaint was based on the identical ground asserted in the defendant’s amended answer to the pending action on the first note.

Next, Louisiana counsel was allowed to file in the Louisiana State court action an “Answer to Amending and Supplemental Petition and Counterclaim,” claiming discharge and satisfaction of the partial final judgment. As of the time of the ruling on the plaintiff’s motion for summary judgment in the Massachusetts Superior Court, October 14, 1988, as well as at oral argument before this court, Louisiana had not acted upon the defendant’s claim of satisfaction and discharge of the two notes by reason of the foreclosure sale.3 4

Resolution of the claim appears to involve what may be questions of fact. As related in the affidavit of Louisiana counsel: “. . .1 have employed a petroleum engineer as an [197]*197expert. He has not yet written a report, but he has informed me that two of the three ‘appraisals’ (accomplished by desig-nees of the Sheriff . . .) are not appraisals at all. He is still examining the third.”

3. Recognition of the Louisiana judgment. In the absence of certain defenses directed at the validity of a final judgment of a sister State (see, e.g., Quinn v. Quinn, 5 Mass. App. Ct. 794 [1977]; Berrios v. Perchik, 20 Mass. App. Ct. 930, 931-932 [1985]), Massachusetts will recognize and enforce that judgment. See Wright Mach. Corp. v. Seaman-Andwall Corp., 364 Mass. 683, 688-689 (1974). See also Restatement (Second) of Conflict of Laws § 100 (1971) (“A valid judgment for the payment of money rendered in a State of the United States will be enforced in a sister State, except as stated in §§ 103-121”). The defendant does not attack the validity of the judgment on any due process grounds.

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Bluebook (online)
558 N.E.2d 1153, 29 Mass. App. Ct. 193, 1990 Mass. App. LEXIS 491, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-national-bank-of-houma-v-bailey-massappct-1990.