Louisiana Ag Credit v. Livestock Producers

954 So. 2d 883, 2007 La. App. LEXIS 632, 2007 WL 984399
CourtLouisiana Court of Appeal
DecidedApril 4, 2007
Docket42,072-CA
StatusPublished
Cited by15 cases

This text of 954 So. 2d 883 (Louisiana Ag Credit v. Livestock Producers) 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
Louisiana Ag Credit v. Livestock Producers, 954 So. 2d 883, 2007 La. App. LEXIS 632, 2007 WL 984399 (La. Ct. App. 2007).

Opinion

954 So.2d 883 (2007)

LOUISIANA AG CREDIT, PCA, Plaintiff-Appellee
v.
LIVESTOCK PRODUCERS, INC., et al., Defendant-Appellant.

No. 42,072-CA.

Court of Appeal of Louisiana, Second Circuit.

April 4, 2007.
Rehearing Denied May 3, 2007.

*885 William H. Hallack, Jr., Dennis W. Hallack, West Monroe, for Appellant.

Michael A. Stroud, Roger J. Naus, for Appellee.

Before WILLIAMS, DREW and MOORE, JJ.

WILLIAMS, J.

Livestock Producers, Inc., Mary Alice Stratton and George Ronald Stratton (collectively referred to as "Livestock Producers") seek reversal of the district court's ruling granting summary judgment in favor of Louisiana AG Credit, PCA ("PCA"). For the reasons that follow, the judgment of the district court is hereby reversed and we remand this matter for further proceedings.

FACTS

Livestock Producers was in the business of operating a cattle-sale barn. PCA is a farm credit association. On or about October 21, 1999, Livestock Producers executed a revolving credit promissory note in favor of PCA in the principal amount of $800,000, plus interest at a variable rate as provided in the note. The promissory note required Livestock Producers to pay the note on demand at PCA's discretion. If no demand was made, Livestock Producers was required to pay all advances made by PCA pursuant to the revolving credit note, plus interest following each cattle auction conducted by Livestock Producers. The revolving credit note further required Livestock Producers to make regular monthly payments of accrued unpaid interest to PCA.

Over the next five years, PCA continued to provide financing to Livestock Producers on substantially the same terms and conditions set forth in the original promissory note. During the course of the lending relationship, Livestock Producers executed other revolving credit promissory notes in favor of PCA. The last note and loan agreement were executed on February 28, 2005.

From the time the initial loan agreement was made, Livestock Producers issued checks made payable to PCA following each cattle auction, and PCA advanced additional funds. On or about March 10, 2005, following an auction, Livestock Producers issued four checks, totaling $446,733.23, payable to PCA, toward the amount owed under the revolving credit agreement. In turn, PCA advanced an additional $447,379.40 in principal to Livestock Producers. Soon thereafter, Livestock Producers placed stop payment orders on the four checks.

On April 29, 2005, PCA instituted an action to recover the monies owed. On September 7, 2005, PCA filed a motion for summary judgment, alleging it was entitled to a judgment against Livestock Producers in the amount of $893,466.46, plus court costs and attorneys' fees. Livestock Producers opposed the motion for summary judgment, submitting a 13-page joint *886 affidavit from George Ronald Stratton ("Ronnie") and Mary Alice Stratton ("Mary").

On October 6, 2005, Livestock Producers filed a "First Amended Answer, Reconventional Demand and Third Party Demand," asserting a reconventional demand against PCA for lender liability. Livestock Producers also asserted a third-party demand against James B. Smith ("Smith"), President and Chief Executive Officer of PCA, and Leotis Hyde, Jr. ("Hyde"), PCA's Senior Vice President and Chief Credit Officer, for intentional interference with contractual relations. An additional third-party demand was asserted against Hyde for intentional infliction of emotional distress.

On October 19, 2005, the district court granted summary judgment against Livestock Producers and awarded $893,466.46, plus legal interest, to PCA pursuant to LSA-R.S. 9:2782.2(A). The district court also rendered judgment against Livestock Producers, Ronnie and Mary in solido, for indebtedness owed to PCA under a revolving credit note in the principal amount of $791,320.21, plus interest and attorneys' fees. The district court did not address any of the incidental demands asserted by Livestock Producers. The judgment was not appealed.

On May 16, 2006, PCA filed a motion for summary judgment with regard to the claims asserted in Livestock Producers' reconventional and third-party demands. In response, Livestock Producers filed a memorandum in opposition which "incorporated by reference" the joint affidavit from Ronnie and Mary previously submitted with the opposition to the motion for summary judgment in the principal action. No new affidavits or other evidence was introduced in opposition to the motion.

In the affidavit, the Strattons attested, inter alia, that the lending relationship between PCA and Livestock Producers began without problems. Mary would call the bank to request funds and a check would be issued to her when she arrived at the bank. However, on August 8, 2002, when she arrived at the bank, Mary was told by bank employees that Hyde had instructed them not to issue a check. Ronnie called Smith, who authorized the funds. The following day, the Strattons attended a social event at which Hyde and his wife were in attendance. At some point during the event, Hyde approached Mary and rubbed his finger down her arm, commenting that he "sure would like to have sex" with her and she "would be surprised how he could make any problems with the Livestock Producers loan disappear." Mary declined Hyde's offer, and he told her that she "really needed to think about it."

The Strattons stated that the lending relationship between Livestock Producers and PCA began to deteriorate after Mary rebuffed Hyde's sexual advance. Hyde changed the paperwork required to obtain the weekly advances against the line of credit, making the process increasingly difficult. Whether the funds would be advanced and in what amount was within Hyde's sole discretion. In 2004, Hyde began to require weekly meetings with regard to the renewal or extension of the line of credit, and Mary's presence was always requested at the meetings. During one of the meetings held in February 2005, Hyde stated that he had a "Plan B" with regard to the lending relationship between PCA and Livestock Producers. While alluding to the alternate plan, Hyde looked directly at Mary and refused to explain what he meant to the meeting's other attendees. Later that month, Hyde went to Livestock Producers' auction barn and approached Mary, telling her that he still *887 thought the two of them could "work this out."

In July 2004, the three-year line of credit was due for renewal. Hyde began to issue renewals or extensions on a month-to-month basis only, causing Livestock Producers to face a monthly note in excess of $800,000. PCA also "tightened the screws" by causing unscheduled audits of Livestock Producers' custodial account by both Packers and Stockyard Administration and the Louisiana Department of Agriculture. The Strattons further attested that Mary began treatment for "stress-related medical problems" as a result of Hyde's conduct.

Following a hearing, the district court granted summary judgment in favor of PCA and dismissed the reconventional and third-party demands with prejudice. The district court refused to consider the joint affidavit submitted, stating:

I really don't think that I can consider the stale affidavit submitted in a completely different motion. I think that it would have had to have been resubmitted and updated as an opposition to the motions that are before the Court this morning. So I think for that reason that the motions for summary judgment are entitled to be granted as a matter of law.

The district court further stated:

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Bluebook (online)
954 So. 2d 883, 2007 La. App. LEXIS 632, 2007 WL 984399, Counsel Stack Legal Research, https://law.counselstack.com/opinion/louisiana-ag-credit-v-livestock-producers-lactapp-2007.