IberiaBank v. Live Oak Circle Development, L.L.C.

118 So. 3d 27, 2012 La.App. 1 Cir. 1636, 2013 WL 1952195, 2013 La. App. LEXIS 912
CourtLouisiana Court of Appeal
DecidedMay 13, 2013
DocketNo. 2012 CA 1636
StatusPublished
Cited by18 cases

This text of 118 So. 3d 27 (IberiaBank v. Live Oak Circle Development, L.L.C.) 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
IberiaBank v. Live Oak Circle Development, L.L.C., 118 So. 3d 27, 2012 La.App. 1 Cir. 1636, 2013 WL 1952195, 2013 La. App. LEXIS 912 (La. Ct. App. 2013).

Opinion

McClendon, j.

|2Intervenors appeal a judgment of the district court granting an exception raising the objection of no cause of action and dismissing their intervention with prejudice. For the following reasons, we recognize that the intervenors have no right of action to intervene in the underlying exec-utory process proceedings, grant the exception raising the objection of no right of action, and dismiss intervenors’ action without prejudice.

FACTS AND PROCEDURAL HISTORY

Allen Walsh and John McClelland created various business entities (Walsh/MeClelland entities) to purchase real estate to develop condominiums. The Walsh/McClelland entities included Live Oak Circle Development, LLC, among others.1 The Walsh/McClelland entities bor[29]*29rowed funds from IberiaBank to purchase the real estate associated with the various entities. Allen Walsh and John McClel-land guaranteed these loans.

Allen Walsh and Ruby Walsh, husband and wife, owned other entities (Walsh/ Walsh entities)2 through which they made other real estate investments. The Walsh/ Walsh entities also borrowed money from IberiaBank to purchase the real estate acquired by their entities. These loans were guaranteed by Allen Walsh and Ruby Walsh.

The Walsh/McClelland entities and the Walsh/Walsh entities began experiencing financial difficulties due to a decline in the value of condominium properties, and the entities fell behind on a number of loan payments. To renegotiate various loans, the Walsh/McClelland entities and the Walsh/Walsh entities entered into a “Master Business Loan Agreement” with Iber-iaBank on September 30, 2010.

In the Master Business Loan Agreement, Ruby Walsh acknowledged and reaffirmed her guarantee as to the Walsh/ Walsh entities. Ruby Walsh also | ^provided a security interest “in and over certain real property owned by Ruby A. Walsh in Rankin County, Mississippi” as additional and new collateral securing the Walsh/Walsh entities’ obligations to Iberia-Bank.

Despite the Master Business Loan Agreement, the loans remained in default. Accordingly, the parties executed a “First Amended Master Business Loan Agreement” on June 14, 2011. In connection therewith, Ruby Walsh signed an “All-Encompassing Guaranty,” which Iberia-Bank asserts guaranteed all obligations owed by both the Walsh/Walsh entities and the Walsh/McClelland entities.

Because the loans remained in default, IberiaBank began executory proceedings in Louisiana. Specifically, at issue here, on May 14, 2012, IberiaBank filed a “Petition for Executory Process” in the 19th Judicial District Court, naming Live Oak Circle Development, LLC, a Walsh/McClelland entity, defendant. The district court issued a Writ of Seizure and Sale on May 16, 2003, ordering the seizure and sale of Live Oak’s condominium units.

Also, IberiaBank filed notices of intent to sell the Mississippi property. The Mississippi foreclosure is separate and distinct from the executory proceedings against Live Oak filed in the 19th Judicial District Court.

On June 1, 2012, Ruby Walsh and her company, RW Real Estate — Star Road Development, LLC, (Appellants) intervened in the above referenced executory process proceedings and filed a “Motion for Temporary Restraining Order, Preliminary Injunction and Suit for Damages,” naming IberiaBank as a defendant.3 Therein, Appellants sought to enjoin Iber-iaBank from selling the Mississippi property of Ruby Walsh or RW Real Estate, alleging that the property does not secure any obligations owed by the Walsh/McClel-land entities.

In response to the intervention, Iberia-Bank filed exceptions raising the objections of lack of subject matter jurisdiction, improper cumulation of actions, and no [30]*30cause of action. IberiaBank urged that the 19th Judicial District Court Rlacked subject matter jurisdiction to enjoin the foreclosure proceedings in Mississippi, that the intervention sought to improperly cu-mulate the pending executory process proceedings with an ordinary proceeding, and that Appellants failed to state a cause of action.

At a hearing on the exceptions, the district court denied IberiaBank’s exception of lack of subject matter jurisdiction, finding that it had subject matter jurisdiction to address the validity of the loans. The district court then granted the exception raising the objection of improper cumulation of actions, and ordered the claims to be tried separately. Subsequently, the district court also granted IberiaBank’s exception of no cause of action, dismissing all claims set forth by Appellants with prejudice.

Appellants have sought review of the district court ruling granting IberiaBank’s exception of no cause of action. Iberia-Bank has answered the appeal contending that the district court erred in failing to grant its exception of lack of subject matter jurisdiction.

DISCUSSION

SUBJECT MATTER JURISDICTION

In answer to the appeal, Iberia-Bank asserts that the trial court lacked subject matter jurisdiction to consider the merits of the intervention. Subject matter jurisdiction is a threshold issue insofar a judgment rendered by a court that has no jurisdiction over the subject matter of the action or proceeding is void. LSA-C.C.P. art. 3; Bordelon v. Dehnert, 99-2625 (La.App. 1 Cir. 9/22/00), 770 So.2d 433, 435, writ denied, 2000-2923 (La.3/19/01), 787 So.2d 995. Jurisdiction over the subject matter is the legal power and authority of a court to hear and determine a particular class of actions or proceedings based upon the object of the demand, the amount in dispute, or the value of the right asserted. LSA-C.C.P. art. 2. Subject matter jurisdiction cannot be waived by the parties, and the lack thereof can be recognized by the court at any time, with or without formal exception. LSA-C.C.P. arts. 3, 925; Bordelon, 770 So.2d at 435. Accordingly, we will address IberiaBank’s answer to the appeal first.

| JberiaBank concedes that there is no prohibition on a Louisiana court determining the legal rights and obligations between the parties to an action, and that a Louisiana court has the power to determine the validity of the loan agreements. See Dickerson v. Scott, 476 So.2d 524, 526-27 (La.App. 1 Cir.1985).

IberiaBank contends, however, that the district court lacks jurisdiction to enjoin the Mississippi foreclosure proceedings over Mississippi real property. Iberia-Bank urges that the power to enjoin such proceedings lies solely with a Mississippi court. IberiaBank notes that “judgments of one state cannot directly affect or determine title to immovable property.” Dickerson, 476 So.2d at 526. IberiaBank asserts that enjoining the Mississippi foreclosure would have a direct effect on the Mississippi immovable property. Iberia-Bank concludes that any judgment affecting a Mississippi immovable would be outside of the scope of any Louisiana court.

Essentially, Appellants seek injunctive relief preventing IberiaBank from taking any action to authorize the sale until the existence of the scope of the underlying obligation is determined. Because the relief sought seeks to enjoin IberiaBank from taking adverse action in Louisiana, we conclude that the district court did not err in denying IberiaBank’s exception raising the objection of lack of subject matter [31]*31jurisdiction. Accordingly, IberiaBank’s assignment of error raised in its answer to the appeal is without merit.

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118 So. 3d 27, 2012 La.App. 1 Cir. 1636, 2013 WL 1952195, 2013 La. App. LEXIS 912, Counsel Stack Legal Research, https://law.counselstack.com/opinion/iberiabank-v-live-oak-circle-development-llc-lactapp-2013.