McClain v. NMP, LLC

262 So. 3d 409
CourtLouisiana Court of Appeal
DecidedDecember 12, 2018
DocketNO. 18-CA-297
StatusPublished
Cited by3 cases

This text of 262 So. 3d 409 (McClain v. NMP, LLC) 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
McClain v. NMP, LLC, 262 So. 3d 409 (La. Ct. App. 2018).

Opinion

MOLAISON, J.

Plaintiff, Gina McClain, appeals a trial court judgment granting an exception of no cause of action in favor of defendant, V. J. Investments, LLC ("VJI"), thereby dismissing her claims against VJI to annul the transfer of immovable property, with prejudice, and canceling the notice of lis pendens recorded in the records of the Jefferson Parish Mortgage Office. For the following reasons, we affirm.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Defendant, NMP, LLC ("NMP"),1 through its managing member, defendant, Jessica Haggard, borrowed the sum of $45,000.00 from Ms. McClain in order to purchase a house situated at 13 Sarah Street in Westwego, Louisiana (the "Property") from the seller, Federal Home Loan Mortgage Corporation ("Federal Home"). According to the Cash Sale Without Warranty, which was executed on February 24, 2016 and recorded in the public records of Jefferson Parish on March 1, 2016, NMP purchased the property from Federal Home "for [$48,000.00], cash in hand paid, for which acquittance [was] [t]herein granted."2

As evidence of NMP's $45,000.00 loan from Ms. McClain to purchase the Property, NMP executed a "Promissory Note"

*413dated February 23, 2016, wherein NMP agreed that the "obligation would be secured by a 'Deed of Trust' [i.e., a mortgage] on the Property to be executed and recorded in Jefferson Parish, Louisiana." Ms. McClain entrusted the preparation, execution and recordation of the Deed of Trust [hereinafter referred to interchangeably with "the mortgage"] to Ms. Haggard, NMP's managing member.

After NMP failed to pay the monthly installments and the full sum of the loan when due in accordance with the terms of the Promissory Note, Ms. McClain retained legal counsel to pursue collection of the money owed and, if necessary, was prepared to seize and sell the Property subject to the Deed of Trust (or "mortgage"). Unfortunately, in the process of doing so, Ms. McClain learned that not only had NMP failed to execute or record the mortgage on the Property, apparently Ms. Haggard never even prepared one, and had not otherwise perfected any recorded security interest in the Property.3 Consequently, no mortgage of record on the Property exists.

Ms. McClain, through counsel, made several attempts to reach an agreement with Ms. Haggard to repay the loan and to enforce her obligation to execute and record a security interest in the Property to no avail. On or about February 9, 2017, communications between the parties ceased. Consequently, on March 2, 2017, Ms. McClain filed the instant suit against NMP and Jessica Haggard seeking to enforce the Promissory Note, for declaratory relief to order NMP to execute and record a mortgage on the Property, and for damages "[a]rising [o]ut of [f]raudulent [m]isconduct." Additionally, in the event NMP sought to transfer the Property, on March 28, 2017, Ms. McClain filed a notice of lis pendens , in order to place any prospective purchaser of the Property on notice of litigation relating to the Property. The notice of lis pendens recorded by Ms. McClain provided the following:

Please take notice that Gina McClain has filed in the above numbered proceeding a petition to , inter alia , assert a security interest in the [P]roperty .... [Emphasis supplied.]

Ms. McClain alleges that NMP, acting through Ms. Haggard, transferred the Property by "Quit Claim" to Statler-Waldorf, LLC ("Statler"), another entity co-owned by Ms. Haggard, for the sum of $1.00. The transfer of the Property was recorded in the public records of Jefferson Parish on February 15, 2017, prior to the recordation of the notice of lis pendens . According to Ms. McClain, the "Quit Claim" transfer took place without her knowledge or consent, and was "clearly a shell game" made "with the intent of selling the Property to a third party and keep[ing] for the benefit of Jessica Haggard and her entity(ies) all of the profits therefrom, to the detriment of [Ms. McClain] and in derogation of [her] rights against Haggard and NMP."

Unbeknownst to Ms. McClain, on April 10, 2017, Statler sold the Property to defendant, VJI, for $60,000.00 pursuant to an Act of Cash Sale.4 The act of sale was filed into the Jefferson Parish conveyance records on April 11, 2017. Ms. McClain contends that the first she learned of Statler's sale of the Property to VJI was on May 1, 2017. On that day, the closing attorney *414handling the sale for VJI notified Ms. McClain's counsel that, when updating the mortgage certificate, it was discovered that a notice of lis pendens had been filed on Ms. McClain's behalf two weeks prior to the closing of the sale. After further review of Jefferson Parish's public records, counsel for Ms. McClain discovered the previous sale of the Property from NMP to Statler.

Ms. McClain then filed a "Supplemental, Amending, and Restated" petition on October 24, 2017 adding Statler and VJI as defendants. The petition states that VJI was being added "for the reason that its title to the [Property] may be adversely affected by the resolution of some or all of the issues in this case ...." In her amending petition, Ms. McClain asserts several claims against NMP, Jessica Haggard, and/or Statler, and seeks the following relief against them: a judgment against NMP enforcing the Promissory Note; a judgment against NMP and Ms. Haggard for fraudulently inducing Ms. McClain to loan NMP money to purchase the Property by representing that Ms. Haggard would prepare, execute and record a Deed of Trust, or mortgage, against the Property; and, a judgment against NMP, Ms. Haggard, and Statler disgorging them of all profits and benefits received from their fraudulent transfer of the Property for $60,000. None of these claims involve VJI.

In the claims made by Ms. McClain against or involving VJI, she seeks a judgment declaring her security interest in the Property, retroactive to the date NMP purchased the Property. Ms. McClain also seeks a judgment annulling the transfer of the Property from NMP to Statler,5 which she contends would then annul Statler's transfer of the Property to VJI, and obligate Statler to return to VJI the price VJI paid for the Property.

On January 10, 2018, in response to Ms. McClain's supplemental, amending, and restated petition, VJI filed an exception of no cause of action arguing that, under the public records doctrine, its Property cannot be encumbered by a mortgage that was not recorded when VJI purchased the Property. Additionally, VJI argued that, as an innocent third party purchaser of the Property for value, it was entitled to rely on the face of the public records. Here, those records evidenced a prior transfer of the Property from NMP to Statler, the entity who subsequently sold the Property to VJI. VJI also claimed that Ms. McClain's notice of lis pendens was defective because it did not contain the name of the person or entity against whom it was to be effective, i.e. , Statler, and, thus, without it, there was no chance of VJI obtaining notice of the lis pendens against the Property in the public records.

VJI's exception of no cause of action came for hearing on April 10, 2018.

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Bluebook (online)
262 So. 3d 409, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcclain-v-nmp-llc-lactapp-2018.