Harvey Canal Limited Partnership Versus National Response Restoration Corp.

• Court: Louisiana Court of Appeal
• Decided: January 31, 2024
• Docket: 23-CA-195
• Status: Unknown

Opinion

HARVEY CANAL LIMITED PARTNERSHIP NO. 23-CA-195

VERSUS FIFTH CIRCUIT

NATIONAL RESPONSE RESTORATION COURT OF APPEAL CORP. STATE OF LOUISIANA

ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 628-108, DIVISION "G" HONORABLE E. ADRIAN ADAMS, JUDGE PRESIDING

January 31, 2024

TIMOTHY S. MARCEL JUDGE

Panel composed of Judges Fredericka Homberg Wicker, Stephen J. Windhorst, and Timothy S. Marcel

AFFIRMED TSM FHW SJW COUNSEL FOR PLAINTIFF/APPELLANT, HARVEY CANAL LIMITED PARTNERSHIP Joseph P. Rumage, Jr.

COUNSEL FOR DEFENDANT/APPELLEE, THOMAS MCALISTER Edward P. Sutherland MARCEL, J.

In this case arising from a default judgment on a lease of commercial

properties, Harvey Canal Limited Partnership ("Harvey Canal") appeals a

judgment of the trial court granting a Petition to Annul Judgment filed by judgment

debtor Thomas McAlister. For the following reasons, we affirm.

BACKGROUND

Harvey Canal owns commercial properties located at 2025 Destrehan

Avenue and Buildings "B" and "C" of 2021 Destrehan Avenue, Harvey, Louisiana.

These properties were leased to National Response Restoration Corporation

("NRRC") pursuant to a lease dated September 15, 2005.

On February 10, 2006, Harvey Canal filed a Petition for Damages and Rule

to Evict against NRCC for its purported failure to make timely rent payments and

for damages to the premises. Thereafter, Harvey Canal filed a First Amending and

Supplemental Petition on May 23, 2006. This amended petition added Thomas

McAllister as a defendant and alleges that Mr. McAllister perpetrated a fraud upon

plaintiff in misrepresenting the corporate existence of NRRC.

The trial court entered a default judgment against NRRC and Mr. McAlister

on October 26, 2006 in the amount of $312,417 representing $89,500 for rents due,

subject to a credit of $31,500 for rents collected upon re-leasing parts of the

premises, and $254,047 as the cost of repairs and renovations together with all

costs and expenses of litigation and reasonable attorney’s fees as set forth in the

lease at 20% of the amount of the judgment.

On April 1, 2013, Mr. McAlister filed a Petition to Annul Judgment.

Therein he alleged that NRRC is a New York legal entity and that he has never

been an owner, shareholder, officer, director, or employee of the company. Mr.

McAlister stated that he acted on behalf of NRRC for the sole and limited purpose

23-CA-195 1 of signing the lease with Harvey Canal, pursuant to authority granted by the owner,

Mr. Joseph Sotille. While acknowledging that he was a limited agent for the

purposes of executing the lease, Mr. McAlister contends he was never an agent for

service of process for NRRC.

Mr. McAlister additionally prayed for annulment of the default judgment

because service of Harvey Canal’s Petition for Damages and Rule to Evict and its

First Amending and Supplemental Petition on him was defective. As to service of

the original petition, Mr. McAlister contends it was defective both because it was

served on his 13-year-old niece, Amanda Hymel, who was not a resident in his

domicile, and because NRRC was the only named defendant in the Petition for

Damages and Rule to Evict. Mr. McAlister also claims the service of the First

Amending and Supplemental Petition on May 26, 2006 was defective because it

was served by the deputy sheriff on Wayne Alford, who was not a resident of his

domicile. According to Mr. McAlister, he was never personally served with

citation or a copy of either petition.

On May 24, 2022, the matter proceeded to a trial on the merits on the

Petition to Annul. Presented to the trial court were the testimonies of Mr.

McAlister and a Livingston Parish Sheriff's Office deputy as well as the deposition

testimony of Wayne Alford and other documentary evidence. The court at that

time also considered exceptions of no cause of action and no right of action filed

by Harvey Canal in response to Mr. McAlister's petition. The trial court entered a

judgment in favor of Mr. McAlister granting his petition to annul the default

judgment on October 6, 2022.1 Harvey Canal's timely appeal followed.

On appeal, Harvey Canal argues that the trial court erred in granting the

petition to annul because Mr. McAlister acquiesced to the default judgment and

1 The trial court initially signed a judgment granting Mr. McAlister’s petition and annulling the October 26, 2006 judgment on June 30, 2022, but later amended this judgment on October 6, 2022 to clarify that the October 26, 2006 judgment was declared annulled only with respect to Mr. McAlister, but not NRRC.

23-CA-195 2 because Mr. McAlister failed to provide satisfactory proof to overcome the legal

presumption of valid service of process. We consider these arguments in our

discussion below.

DISCUSSION

A final judgment shall be annulled if rendered against a defendant who has

not been served with process as required by law, and may be annulled for vices in

form or substance. La. C.C.P. arts. 2002, 2001. In civil cases, the appropriate

standard for appellate review of factual determinations is the manifest error-clearly

wrong standard, which precludes the setting aside of a district court's finding of

fact unless that finding is clearly wrong in light of the record reviewed in its

entirety. Hall v. Folger Coffee Co., 03-1734, (La. 4/14/04), 874 So.2d 90, 98;

Richard v. Richard, 14-1365, (La. App. 4 Cir. 6/3/15), 171 So.3d 1097, 1100.

Service of the Petition

We address first the question of whether Mr. McAlister was properly served

with the First Amending and Supplemental Petition naming him personally as a

defendant. Discussion of service of the Petition for Damages and Rule to Evict is

pretermitted because Mr. McAlister was not named as a defendant in that pleading.

Except as otherwise provided, an action to annul a judgment for lack of

service of process may be brought at any time. Id. The justification for requiring a

defendant to bring a separate suit to annul a judgment for insufficient service is to

permit a hearing with the introduction of evidence to ascertain facts regarding

whether a defendant was properly served. Hall v. Dep't of Pub. Safety & Corr., 22-

374, (La. App. 5 Cir. 7/26/23), 374 So.3d 139, 144.

Service of citation or other process may be either personal or domiciliary,

and except as otherwise provided by law, each has the same effect. La. C.C.P. art.

1231. Except as otherwise provided by law, service shall be made by the sheriff of

the parish where service is to be made or the parish where the action is pending.

23-CA-195 3 La. C.C. art. 1291. Domiciliary service is made when a proper officer leaves the

citation or other process at the dwelling house or usual place of abode of the person

to be serviced with a person of suitable age and discretion residing in the

domiciliary establishment. La. C.C.P. art. 1234. It is well settled that service upon

one not living at the domicile of the defendant is not valid and no judgment can be

rendered thereon. KCREW Investments, LLC v. Clark, 54,003, (La. App. 2 Cir.

6/30/21), 324 So.3d 242, 245, (citing Wilson v. King, 227 La. 546, 79 So.2d 877,

(1955)).

A completed service return is prima facie proof of valid service. La. C.C.P.

art. 1292. However, this presumption is rebuttable. A party seeking to overcome

the rebuttable presumption afforded by a completed sheriff's return of service must

prove by a preponderance of the evidence, or more probably than not, proper

service was not made. Hall v. Folger Coffee Co., 874 So.2d at 98; Roper v. Dailey,

393 So.2d 85, 88 (1980).

Introduced into evidence at trial was a copy of the sheriff's return for the

First Amending and Supplemental Petition. The return reflects domiciliary service

was made upon Wayne Alford on May 26, 2006 by a Livingston Parish Sheriff's

Deputy. A deputy with that sheriff's office, Jason Schleigelmeyer, was called to

testify at trial. His testimony was limited to service of the Notice of Default

Judgment on November 21, 2006. Deputy Schleigelmeyer was unable to provide

specific factual testimony regarding the domiciliary service of the First Amending

and Supplemental Petition.

As to Livingston Parish Sheriff’s Office policies concerning domiciliary

service, Deputy Schleigelmeyer testified that he would “speak to a person at the

residence to see if, in this case, Mr. Thomas, would still be living there. And

they'll say ‘yes’ or ‘no’. If they say ‘yes’, I will get their information, serve them

as a domiciliary service and return it as that.” Deputy Schleigelmeyer did not

23-CA-195 4 testify that he inquires as to the age of the individual served or whether that

individual resides at the residence. “I’m not sure of a policy [on domiciliary

service]…but…that’s how we were trained to do it.”

At trial, Mr. McAlister testified that he was never served with a petition for

damages. According to Mr. McAlister’s testimony, Wayne Alford was a friend

who was performing remodeling work to his house and who was never a resident

of any household which he owned. Further, Mr. McAlister testified that he had

never seen the papers given to Mr. Alford and was unaware that he had received

any papers until much later. While acknowledging personal service of the notice

of the default judgment against him in November of 2006, Mr. McAlister testified

that he did not understand the judgment to be against him personally, rather than

NRRC, until he was advised so by his bankruptcy attorney in 2011.

The deposition testimony of Wayne Alford was introduced into evidence at

trial in lieu of live testimony without objection. In his deposition, Mr. Alford

testified that he has never lived in Thomas McAlister's domicile. Mr. Alford

testified to living on Denham Road in Baton Rouge, Louisiana at the time the

deputy sheriff served him with papers at Mr. McAlister’s dwelling. According to

his testimony, Mr. Alford was remodeling Mr. McAlister's house and he did not

recall what he did with the papers or telling Mr. McAlister that he had received

legal papers.

Harvey Canal argued at the trial and argues again on appeal that this

evidence is insufficient to rebut the presumption of valid service. Supporting its

argument, Harvey Canal contends Mr. McAlister's testimony is not credible, and

cites Mr. Alford’s inability to recall sufficient details regarding the service of the

petition. We disagree.

Under the manifest error standard of review, reasonable evaluations of

credibility and reasonable inferences of fact should not be disturbed unless it is

23-CA-195 5 clearly wrong. Uddo v. Jefferson Par. Hosp. Serv. Dist. No.2, 22-403, (La. App. 5

Cir. 4/12/23), 361 So.3d 1123, 1131, writ denied, 23-00677, (La. 9/26/23), 370

So.3d 475. Upon review, we find no error in the trial court's decision to credit the

testimonies of Mr. McAlister and Mr. Alford.

The evidence indicates that Mr. Alford was neither domiciled at Mr.

McAlister's residence nor was he authorized to receive service of process for Mr.

McAlister. We agree with the trial court that Mr. McAlister has met his burden in

showing that, more probably than not, he was not served with the First Amending

and Supplemental Petition as required by law.

Acquiescence under La. C.C.P. art. 2003

Harvey Canal also presents on appeal that the trial court erred in failing to

find Mr. McAlister acquiesced in the default judgment. Vices of form or substance

are permissible grounds for annulling a final judgment. La. C.C. art. 2001. Under

La. C.C.P. art. 2003, a defendant who voluntarily acquiesced in the judgment, or

who was present in the parish at the time of its execution and did not attempt to

enjoin its enforcement, may not annul the judgment on any of the grounds for vices

of form enumerated in La. C.C.P. art. 2002. While it is settled in Louisiana law that

a defendant may acquiesce in a judgment illegally rendered by voluntarily

executing it, or by permitting it to be executed when the defendant is in the parish

where the execution takes place, a promise to pay the amount of the judgment does

not constitute acquiescence. La. C.C.P. art. 2003; Andrews v. Sheehy, 125 La. 217,

222, 51 So. 122, 124, (1909); see also Donnell v. Quatroy, 03-1145, (La. App. 5

Cir. 1/27/04), 866 So.2d 917.

Acquiescence in a judgment is never presumed and must be established by

evidence that leaves no doubt of the required intent. The party seeking to prove

acquiescence must show that it is both voluntary and unconditional. Bergman v.

Bergman, (La. App. 5 Cir. 12/9/82), 425 So.2d 831, 833; see also Orgeron v. Sec.

23-CA-195 6 Indus. Funeral Homes, Inc., 96-2127, (La. App. 4 Cir. 2/26/97), 690 So.2d 243,

245.

Harvey Canal argues that Mr. McAlister 'acquiesced' to the default judgment

when he proposed to pay the judgment as part of his Chapter 13 bankruptcy plan

which he filed in federal court in 2011. In support of this argument, Harvey Canal

introduced as evidence the schedule of assets and debts filed by Mr. McAlister in

bankruptcy court. In that filing, Harvey Canal contends Mr. McAlister failed to

mark the debt owed to Harvey Canal as "disputed" and included a plan of

reorganization that proposed payment plans of the judgment debt owed Harvey

Canal. The bankruptcy proceedings were later voluntarily dismissed with the

consent of all parties. While the documents do list the default judgment as an

unsecured debt, the same documents contained an objection to the default

judgment stating:

Harvey Canal Limited Partnership has filed an unsecured claim in excess of $312,000, which is based upon a default judgment; and the Debtors expect to object to this claim and to dramatically reduce the amount or unsecured claims.

Such statements, as well of those made by Mr. McAlister in the course of his

testimony at trial are not indicative of someone who has voluntarily and

unconditionally acquiesced in the execution of the default judgment against him.

Applying the manifest error standard of review, we find no error in the trial court's

factual determination that Mr. McAlister did not acquiesce in the default judgment

pursuant to La. C.C.P. art. 2003.2

2 In support of its contention that Mr. McAlister's filings in the bankruptcy court constitute a voluntary acquiescence in the default judgment against him, Harvey Canal cites many out-of-state cases and federal rules, but only three Louisiana cases: Meridian Fertilizer Factory v. Collier, 193 La. 815, 192 So. 358 (1939); Chalkley v. Pellerin, (La. App. 1 Cir. 2/15/1939), 186 So. 382; and Bank of New York Mellon v. Oldemeyer, 19-348, (La. App. 3 Cir. 10/9/19), 282 So.3d 1098, writ denied, 20-00034 (La. 2/26/20), 347 So.3d 869. We do not find Harvey Canal's citation to these cases persuasive. They are all distinguishable because they concern what constitutes the acknowledgment of a debt in bankruptcy proceedings for purposes of interrupting prescription. None of these cases concern voluntary acquiescence to a default judgment under La. C.C.P. art. 2003. This argument is without merit.

23-CA-195 7 In the alternative, Harvey Canal asserts that Mr. McAlister's statements in

the bankruptcy proceedings should be construed as a judicial confession. A

judicial confession is a declaration made by a party in a judicial proceeding that

constitutes full proof against the party who made it. La. C.C. art. 1853; see also

Fields v. Ochsner Med. Ctr. - Kenner, L.L.C., 22-64, 2022 WL 1486065, (La. App.

5 Cir. 5/11/22). To constitute a judicial confession, the statement must be the

express acknowledgment of an adverse fact. Hayes v. Air & Liquid Sys. Corp.,

54,017, (La. App. 2 Cir. 8/11/21), 326 So.3d 324, writ denied, 21-01387, (La.

11/23/21), 328 So.3d 83.

Admissions in proceedings other than the one being currently adjudicated

are considered extrajudicial confessions or admissions. Such admissions are

evidence, but do not create conclusive presumptions or operate as an estoppel

against the party making them. Kaufmann v. Corp. Realty, Inc., 99-1104, (La.

App. 5 Cir. 4/12/00), 759 So.2d 969, 974, writ denied, 00-1967, (La. 9/29/00), 769

So.2d 1221. We find that Mr. McAlister's statements in the federal court

proceeding do not constitute judicial confessions in this proceeding, and therefore

Harvey Canal's argument is without merit.

CONCLUSION

We find no manifest errors in the trial court’s determinations that Mr.

McAlister was never properly served with the First Amending and Supplemental

Petition and that he did not voluntarily and unconditionally acquiesce to the default

judgment with his statements made in the bankruptcy court. The trial court

correctly granted Mr. McAlister’s Petition to Annul the default judgment for vices

of form pursuant to La. C.C.P. art. 2002. The October 6, 2022 judgment of the

trial court is affirmed. We dismiss as moot the Motion to Supplement the Record

filed by appellee.

AFFIRMED

23-CA-195 8 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

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23-CA-195 E-NOTIFIED 24TH JUDICIAL DISTRICT COURT (CLERK) HONORABLE E. ADRIAN ADAMS (DISTRICT JUDGE) JOSEPH P. RUMAGE, JR. (APPELLANT)

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