Nationstar Mortg., LLC v. Schales

261 So. 3d 912
CourtLouisiana Court of Appeal
DecidedDecember 12, 2018
Docket18-439
StatusPublished

This text of 261 So. 3d 912 (Nationstar Mortg., LLC v. Schales) 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
Nationstar Mortg., LLC v. Schales, 261 So. 3d 912 (La. Ct. App. 2018).

Opinion

SAUNDERS, Judge.

This is a case involving a mortgagee using executory process against a mortgagor and the propriety of a mortgagor's response by bringing a reconventional demand alleging damages. Further, the issue is whether the trial court properly dismissed the mortgagor's claims with prejudice rather than allowing the mortgagor to cure the defects or severing the claims.

After a hearing in which neither the mortgagor nor his attorney were present, the trial court granted the mortgagee's motion to strike the mortgagor's reconventional demand for damages and all dilatory and peremptory exceptions filed by the mortgagee. This resulted in the dismissal, with prejudice, of all claims asserted by the mortgagor. Thereafter, the mortgagor filed a motion for new trial on the matters, which was denied. This appeal follows.

FACTUAL AND PROCEDURAL HISTORY:

Appellant, Richard Dewy Schales, executed a $70,000.00 promissory note in favor *915of New South Federal Savings Bank on March 20, 2003. The note is secured by a mortgage encumbering the property located at 2112 Kramer Drive, New Iberia, Louisiana. New South indorsed the note to Countrywide Home Loans. Countrywide indorsed the note in blank and delivered the original note to Appellee, Nationstar Mortgage, LLC.

A dispute arose between Schales and Nationstar regarding the proper monthly payment amount and the process by which Schales was allowed to obtain homeowner's insurance in early 2013. Nationstar contends that Schales defaulted on his obligation under the note and mortgage by failing to pay his November 1, 2014 monthly installment and failed to cure that failure to pay over the next ten months. Schales contends that he timely and consistently paid the agreed-upon note and that his property was improperly placed into a foreclosure proceeding due to the fault of Nationstar during the time the mortgage was transferred from Bank of America to it in early 2013.

On August 13, 2014, Nationstar filed a verified petition for executory process attaching the original note, indorsed in blank, a certified copy of the mortgage, and a copy of the assignment. On August 19, 2014, the trial court found Nationstar entitled to issuance of writ of seizure and sale and the use of executory process based on the petition and attached exhibits. The Iberia Parish clerk of court issued a writ of seizure and sale over the property, and the sheriff recorded a notice of seizure.

On December 18, 2014, Schales filed a petition for preliminary injunction, temporary restraining order, and a reconventional demand for damages against Nationstar. The claims set forth in the reconventional demand were for wrongful foreclosure, negligence, due process, conversion, breach of fiduciary duty, violation of the Louisiana Unfair Trade Practices Act, and violation of the Fair Debt Collections Act.

On November 28, 2016, at the behest of Nationstar, an order was signed by an Iberia Parish judge cancelling the seizure notice because the property described in the seizure notice was not the same property encumbered by the mortgage. According to Nationstar, to date, Schales' property has not been seized and is not subject to sale.

On June 14, 2017, Nationstar filed a motion to strike Schales' reconventional demand, the dilatory exceptions of unauthorized use of summary procedure, improper cumulation of actions, and improper use of executory process, and the peremptory exceptions of no cause of action and prescription. Schales filed no opposition to these filings by Nationstar.

On September 12, 2017, the trial court heard Nationstar's motion and exceptions. Neither Schales nor his attorney attended the hearing.

After the hearing, the trial court granted all of Nationstar's exceptions. Further, the trial court granted Nationstar's motion striking all claims asserted by Schales. As a result, the trial court dismissed all of Schales' claims with prejudice.

On September 26, 2017, once Schales allegedly learned of the judgment, he filed a pro se motion for new trial and hired new counsel. On December 20, 2017, the trial court denied Schales' motion for new trial. It is from these judgments that Schales presents six assignments of error.

ASSIGNMENTS OF ERROR:

1. The trial court erred in granting Nationstar's Exceptions of Unauthorized Executory Proceedings.

*9162. The trial court erred in granting Nationstar's Exceptions of Unauthorized Summary Proceedings.

3. The trial court erred by granting summary Nationstar's Motion to Strike Reconventional Demand.

4. The trial court erred by granting Nationstar's Exceptions of Improper Cumulation.

5. The trial court erred in granting Nationstar's Exceptions of No Cause of Action.

6. The trial court erred in sua sponte dismissing all remaining causes of action.

ASSIGNMENT OF ERROR NUMBER ONE:

Schales' first assignment of error is that the trial court erred in granting Nationstar's Exception of Unauthorized Use of Executory Proceedings. We find no error in granting the exception.

"Executory proceedings are those which are used to effect the seizure and sale of property, without previous citation and judgment, to enforce a mortgage or privilege thereon evidenced by an authentic act importing a confession of judgment, and in other cases allowed by law." La.Code Civ.P. art. 2631. "Defenses and procedural objections to an executory proceeding may be asserted either through an injunction proceeding to arrest the seizure and sale as provided in Articles 2751 through 2754, or a suspensive appeal from the order directing the issuance of the writ of seizure and sale, or both." La.Code Civ.P. art. 2642(A). "The defendant in the executory proceeding may arrest the seizure and sale of the property by injunction when the debt secured by the security interest, mortgage, or privilege is extinguished, or is legally unenforceable, or if the procedure required by law for an executory proceeding has not been followed." La.Code Civ.P. art. 2751.

In this case, Schales filed a reconventional demand seeking, inter alia , damages, penalties, and attorney's fees in response to Nationstar's instituted claims under executory process. This reconventional demand is an incidental action in response to a petition filed using executory process. "The mode of procedure employed in the incidental action shall be the same as that used in the principal action, except as otherwise provided by law." La.Code Civ.P. art. 1036(B). As such, Schales' filing of a reconventional demand against Nationstar alleging damages and entitlement to penalties and attorney's fees is not proper use of executory proceedings. Accordingly, we find no error by the trial court in granting Nationstar's Exceptions of Unauthorized Executory Proceedings.

ASSIGNMENT OF ERROR NUMBER TWO:

In his second assignment of error, Schales asserts that the trial court erred in granting Nationstar's Exception of Unauthorized Use of Summary Proceedings. We find no error by the trial court in granting the exception.

"Summary proceedings are those which are conducted with rapidity, within the delays allowed by the court, and without citation and the observance of all the formalities required in ordinary proceedings." La.Code Civ.P. art. 2591.

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Bluebook (online)
261 So. 3d 912, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nationstar-mortg-llc-v-schales-lactapp-2018.