Ford Motor Credit Co. v. Epps

708 So. 2d 824, 1998 WL 100438
CourtLouisiana Court of Appeal
DecidedMarch 6, 1998
DocketNo. 96-1306
StatusPublished

This text of 708 So. 2d 824 (Ford Motor Credit Co. v. Epps) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ford Motor Credit Co. v. Epps, 708 So. 2d 824, 1998 WL 100438 (La. Ct. App. 1998).

Opinion

l1DOUCET, Chief Judge.

This is an appeal from a deficiency judgment in favor of petitioner-appellee, Ford Motor Credit Company, and against the defendants-appellants, Nathaniel Epps, Sr. and Barbara Epps, in the amount of $8,463.25.

FACTS .

Barbara Epps bought a vehicle from appel-lee, Ford Motor Credit Corporation (FMCC), signed an installment contract with her signature and forged her husband’s signature. After default, appellee seized and sold the vehicle pursuant to executory process and proceeded against both Barbara and Nathaniel Epps, Sr. praying for a deficiency judgment in the amount of $8,463.25.

IzAt trial, the court agreed with appellants’ contention that, due to the forgery, Nathaniel was not a party to the installment contract. However, the trial court disagreed with appellants’ allegátion that because the document supporting the petition for executory process was not executed in authentic form the petition for deficiency judgment must fall. The trial court found that the executory proceeding resulting in the sale and seizure of the vehicle was valid as to Barbara Epps. Nevertheless, the trial court found that both Barbara and Nathaniel were liable for the deficiency judgment insofar as the debt was a community debt. Defendants now appeal. We find no error in the ruling of the trial court and affirm.

ASSIGNMENT OF ERROR

Appellants contend that the trial court was clearly wrong in ruling that the community of acquits and gains existing between Mr. and Mrs. Epps was liable for a deficiency judgment which was rendered pursuant to an executory process based upon fraud.

DISCUSSION

The trial court found the following in its written reasons for judgment, which state, in part:

This Court finds that there was in fact a vice of fraud in the contract between Ford Motor Credit Company and Nathaniel Epps,. Sr., however, I do not find such a vice exist between the Petitioners and Barbara Epps. This Courts finds that Barbara Epps signed her name and forged her husband’s signature, Nathaniel Epps, Sr., [826]*826through her own admission in testimony. The effect was that she signed her name twice once as Barbara Epps and secondly as Nathaniel Epps, Sr., both having a binding effect on her as a valid signature. The ■contract as to Nathaniel Epps is rescinded as the vice of fraud requires it.
Be it as it may, it is the ruling and finding of this Court that the defendant Barbara Epps is liable for. a deficiency judgment in this matter and that Nathaniel Epps, Sr. is released as a party to this initial contract, however, under the laws of matrimonial regime, he is liable in solido with his wife for any and all community debts.

13As to appellants’ contention that a lack of authenticity of evidence filed in an executory process proceeding bars the plaintiff from obtaining a deficiency judgment, we find that First Guaranty Bank v. Baton Rouge Petroleum, 529 So.2d 834 (La.1987) refutes that contention. Prior to First Guaranty in League Central Credit Union v. Montgomery, 251 La. 971, 207 So.2d 762 (1968), the Louisiana Supreme Court held that a defect in an executory proceeding precluded a subsequent suit for a deficiency judgment.

However, First Guaranty, 529 So.2d at 842-844 (La.1987), in overruling League Central stated as follows:

This court concluded in League Central that the deficiency judgment was void because the executory proceeding which preceded the deficiency action was based on inauthentic evidence,.... After reviewing the pertinent statutes and their legislative history, we realize that the reasoning underlying the League Central decision was erroneous and that it must be overruled.
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The deficiency judgment action, although related to the executory proceeding, is established by the legislated law as a separate and independent proceeding, different in concept and purpose, involving different kinds of procedure, evidence and defenses.
The Code of Civil Procedure and statutes require a creditor seeking to obtain a deficiency judgment to prove only that there is a deficiency due on the debt after the distribution of the proceeds of the judicial sale and that the property was sold under executory proceeding after appraisal in accordance with La.C.Civ.P. art. 2723. La.C.Civ.P. art. 2771. The legislated law does not require a creditor to prove that he presented flawless authentic evidence in the executory proceeding in order to obtain a deficiency judgment or grant the debtor a defense to a deficiency judgment based upon the creditor’s failure to do so.
On the other hand, the creditor may not rely on the executory proceeding to prove his right to a deficiency judgment. The creditor must prove by ordinarily admissible evidence the existence of the obligation, the deficiency due, and the judicial sale under executory proceeding after appraisal. Further, the creditor must prove his case in an independent ordinary proceeding, affording the debtor all of the rights of a defendent(sic) in an ordinary proceeding, including the requirement of personal jurisdiction and service of process. La.C.Civ.P. arts. 2644, 2772.
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Although this policy is broad and strong, there is nothing in its history or expressions that indicates an intention to bar a creditor who fully complies with appraisal requirements from obtaining a deficiency Ujudgment simply because of a lack of authentic evidence in the executory proceeding.

In the instant case, FMCC proved the existence of the obligation and proved that the property was sold under executory proceeding after appraisal. FMCC also proved that a deficiency was due on the debt after the distribution of the proceeds of the judicial sale.

Under First Guaranty, a defendant cannot rely upon a lack of authentic evidence in the executory proceeding to prevent a creditor from proceeding and proving its case on the deficiency action. The appellants cite no authority for their contention, other than to argue that the Louisiana Supreme Court in First Guaranty was incorrect.

[827]*827The defect in the underlying security agreement relied upon by appellants is the signature of Nathaniel, which Barbara forged. There is no doubt that Barbara Epps signed the contract and is personally hable on the contract. Therefore, we find that the trial court was correct in finding that Barbara is estopped from claiming her own fraud as a defense to liability on the contract.

In determining whether the trial court was correct in determining that Na-thániel was also hable for the deficiency judgment as a member of the community of acquits and gains, we note that FMCC did not plead either in the original petition for executory process or in the supplemental petition for deficiency that Nathaniel was the husband of Barbara or that he is hable as a member of the community. FMCC merely alleges that Nathaniel signed the contract and that the vehicle was seized and sold in an executory proceeding. The answer to the original petition for executory process denies these allegations and further alleges that Nathaniel Epps, Sr., did not sign the contract.

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Related

League Central Credit Union v. Montgomery
207 So. 2d 762 (Supreme Court of Louisiana, 1968)
First Guar. Bk. v. Baton Rouge Petroleum Center, Inc.
529 So. 2d 834 (Supreme Court of Louisiana, 1988)

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Bluebook (online)
708 So. 2d 824, 1998 WL 100438, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ford-motor-credit-co-v-epps-lactapp-1998.