Nicholas Jude Gregory and Sara Hummel Gregory and Progressive Bank v. Landowners Title of Ouachita L.L.C. and Continental Casualty Company

• Court: Louisiana Court of Appeal
• Decided: November 19, 2025
• Docket: 56,629-CA
• Status: Published

Opinion

Judgment rendered November 19, 2025. Application for rehearing may be filed within the delay allowed by Art. 2166, La. C.C.P.

No. 56,629-CA

COURT OF APPEAL SECOND CIRCUIT STATE OF LOUISIANA

*****

NICHOLAS JUDE GREGORY Plaintiffs-Appellants AND SARA HUMMEL GREGORY AND PROGRESSIVE BANK

versus

LANDOWNERS TITLE OF Defendants-Appellees OUACHITA, L.L.C. AND CONTINENTAL CASUALTY COMPANY

Appealed from the Fourth Judicial District Court for the Parish of Ouachita, Louisiana Trial Court No. 2020-3410

Honorable Jefferson Bryan Joyce, Judge

SHER GARNER CAHILL Counsel for RICHTER KLEIN Plaintiffs-Appellants & HILBERT, L.L.C. By: James Michael Garner John Thomas Balhoff, II GIBSON LAW PARTNERS, LLC Counsel for By: James Huey Gibson Defendants-Appellees; Stacy Nicole Kennedy Continental Casualty Company and Landowners Title of Ouachita, L.L.C.

TAYLOR, PORTER, Counsel for BROOKS & PHILLIPS, LLP Defendants-Appellees; By: Michael Allen Crawford Homeland Federal Savings Bank and Homeland Bancshares, Inc

ROUNDTREE LAW OFFICES Counsel for By: James A. Roundtree Defendants-Appellees, Ronnie D. Ward and Shera Denise Albritton Ward

Before PITMAN, THOMPSON, and HUNTER, JJ. HUNTER, J.

Plaintiffs, Nicholas Jude Gregory, Sara Hummel Gregory, and

Progressive Bank, appeal a district court’s ruling which denied their motion

for summary judgment and granted summary judgment in favor of

defendants, Landowners Title of Ouachita, L.L.C., and Continental Casualty

Company. For the following reasons, we affirm in part, reverse in part, and

remand for further proceedings.

FACTS

On December 19, 2017, plaintiffs, Nicholas Jude Gregory and Sara

Hummel Gregory (“the Gregorys”), purchased some property located in

Monroe, Louisiana from Ronnie and Sharon Ward. A portion of purchase

price of the property was secured by a mortgage granted to the Gregorys by

Progressive Bank.

Defendant, Landowners Title of Ouachita, L.L.C. (“Landowners”),

served as the closing title agent for the sale, and the title examination was

conducted by Guy Campbell, III, a closing attorney employed by

Landowners.1 The title examination revealed the property was encumbered

by a collateral mortgage in favor of Homeland Bancshares, Inc., d/b/a

Homeland Federal Savings Bank (“the Homeland mortgage”). The pre-

closing title commitment required Landowners to obtain the cancellation of

the Homeland mortgage.

Prior to the closing date, Kathy Green, a Landowners employee,

contacted Trena Parker, an employee of Homeland Bank, to determine the

amount due on the Wards’ loan and to arrange for the cancellation of the

1 According to the parties, Campbell is a member of the law firm which is the sole member of Landowners. mortgage.2 According to Landowners, Ms. Parker verbally informed Ms.

Greene that Homeland would release the mortgage without any payment and

would issue a mortgage cancellation certificate.

On December 19, 2017, Landowners recorded the deed from the

Wards to the Gregorys and the Gregorys’ Progressive Bank mortgage into

the mortgage records in Ouachita Parish. On December 27, 2017, eight days

after the Gregorys closed on the property, Ms. Greene emailed a mortgage

cancellation certificate to Homeland. However, Homeland did not return the

signed mortgage cancellation certificate and did not cancel the mortgage.

Additionally, the Wards received the purchase price for the property but did

not use the proceeds to pay off the amount due ($575,000) under the

Homeland mortgage.

At the request of Progressive Bank, the Gregorys purchased title

insurance through First American Title Insurance Company (“First

American”), and a title policy was issued to the Gregorys in the amount of

$575,000, and to Progressive Bank, as mortgagee, in the amount of

$515,000. The title policy did not show any encumbrances against the

property, other than the mortgage in favor of Progressive Bank.

In 2019, the parties discovered the Homeland mortgage on the

property was never cancelled. Following an investigation, counsel for

Landowners met with employees of Homeland Bank and requested a

cancellation of the mortgage. Homeland Bank refused to cancel the

mortgage and denied ever agreeing to cancel the mortgage without

2 In some portions of the record, Ms. Parker is referred to as “Trena,” while in other portions, she is referred to as “Teena.”

2 payment.3 Landowners notified the Gregorys and facilitated the retention of

a law firm to represent them in the matter. Landowners also notified First

American regarding the potential claim by the Gregorys. Subsequently,

Homeland Bank began sending communications to the Gregorys, threatening

foreclosure.

On December 21, 2020, plaintiffs, the Gregorys and Progressive

Bank, filed a lawsuit against defendants, Landowners and its insurer,

Continental Casualty Company. Plaintiffs alleged as follows: (1)

Landowners’ failure to obtain the cancellation of the Homeland mortgage

“causes or will cause damage” to plaintiffs; (2) Landowners “remains

obligated to obtain the cancellation” of the Homeland mortgage “or to pay

[plaintiffs] the sum required to obtain its cancellation”; and (3) Continental

Casualty is liable, in solido, with Landowners for any losses sustained by

plaintiffs.4

Meanwhile, the Gregorys’ title insurer, First American, tendered the

full limits of the policy, $575,000, to the Gregorys. In turn, the Gregorys

3 By this time, Ms. Greene was no longer employed by Homeland Bank and had moved to another state.

4 On March 8, 2021, Landowners filed an answer and third-party demand against Homeland Bank and the Wards, alleging it “relied on the verbal promise of Teena Parker, a Homeland employee would cancel the Ward/Homeland mortgage without requirement of payment.” On October 19, 2021, plaintiffs filed a “First Supplemental and Amended Petition,” to add Ronnie and Sharon Ward as additional defendants. Plaintiffs alleged the Wards failed to obtain cancellation of the Homeland mortgage. In response to the third- party demand, the Wards filed an exception of no cause of action, asserting Landowners did not alleged they (the Wards) owed a duty to it and did not allege “a breach of duty, contractual or delictual, by Ronnie or Sharon Ward.” The Wards also filed an answer to plaintiffs’ first supplemental and amended petition generally denying plaintiffs’ claims, and alleging, “The fault lies entirely with the Gregorys’ agent, whom they insisted close the transaction.” The Wards also filed a reconventional demand, alleging if they are liable to plaintiffs, then they are entitled to a judgment against Landowners and Guy Campbell, III for any amount for which they may be held liable to plaintiffs.

The parties’ claims against Homeland Bank and the Wards are not at issue in this appeal.

3 paid the amount of $575,000 to Homeland Bank to obtain the cancellation of

the mortgage. On April 29, 2022, Homeland Bank filed a request to cancel

the mortgage.5

On June 11, 2024, Landowners filed a motion for summary judgment

arguing First American, the Gregorys’ title insurance company, paid the

Homeland mortgage in full, therefore, plaintiffs have been returned to their

original position and have not suffered any loss. Landowners attached

documents in support of its position, including plaintiffs’ petition, an

affidavit executed by Guy Campbell, III, the closing agent/attorney,

mortgage records, the Act of Cash Sale by which the property was sold by

the Wards to the Gregorys, the First American policy of title insurance, the

April 2022 request for cancellation of the Homeland mortgage, and certain

closing documents from the 2017 sale.

On September 17, 2024, the Gregorys filed a motion for summary

judgment, arguing Landowners breached its duty to obtain cancellation of

the mortgage, and its negligence resulted in them having to pay $575,000 to

Homeland to remove the mortgage from the property. Therefore, according

to the Gregorys, they were entitled to summary judgment “on their full claim

against Landowners for $575,000.” In argument, the Gregorys asserted,

“Because [they] were faced with imminent threat of foreclosure on their

Property, First American tendered the policy’s full $575,000 limit to the

Gregorys,” and they used the funds to pay Homeland Bank to cancel the

mortgage. The Gregorys also argued the collateral source rule prevented

5 In October 2023, the Gregorys paid off the Progressive Bank mortgage in full. On May 28, 2024, plaintiff, Progressive Bank, filed a motion to dismiss, without prejudice, its claims against all parties named. The district court granted the motion and dismissed Progressive Bank’s claims without prejudice. The matter proceeded with the Gregorys as plaintiffs. 4 Landowners, the tortfeasor, from benefitting from the title insurer’s

settlement of the mortgage.

Following a hearing, the district court denied the Gregorys’ motion

for summary judgment and granted summary judgment in favor of

Landowners. In its reasons for judgment, the court stated:

The Court acknowledges that Landowners failed to fulfill a duty owed to the Gregorys by neglecting to secure the cancellation of the mortgage on the property held by the Wards. However, the obligation of [$575,000] owed to Homeland was resolved through the title insurance held by the Gregorys, rather than through a direct payment by the Gregorys themselves. In a Duty Risk Analysis, the responsibility lies with the [plaintiff] to substantiate claims with proof of actual damages. Landowners point to the fact that because the Gregorys did not personally pay the mortgage, they have failed to establish any actual losses or damages. This Court concludes there is insufficient evidence to support the Gregorys’ claims that they have been damaged and have experienced a severe change in position because of First American’s settlement of the uncanceled mortgage. *** [R]egardless of the Gregorys’ assertion that they are not fully compensated due to the actions of the Landowners, the Louisiana Supreme Court has consistently ruled that an injured party is not permitted to receive double recovery. In fact, Louisiana courts have long recognized that “windfalls” or “double dipping” are prohibited. In this case, the Gregorys have sought the [$575,000] that their title insurance company paid to Homeland to cancel the mortgage. Awarding the Gregorys an additional [$575,000] would contravene the prohibition against windfalls established by Louisiana courts.

(Internal footnotes omitted). The district court dismissed the Gregorys’

claims against Landowners and its insurer, and each party was ordered to

bear their own costs.

The Gregorys appeal.

DISCUSSION

The Gregorys contend the district court erred in denying their motion

for summary judgment and granting summary judgment in favor of

Landowners. They argue Landowners breached its duty to obtain the 5 cancellation of the mortgage, and its negligence was a cause-in-fact and a

legal cause of their damages. The Gregorys also claim they were forced to

pay off the mortgage “to stave off foreclosure of their Property[.]” They

also argue they “used their own title insurance proceeds to make that

payment, and they also lost their title insurance policy they would otherwise

have intact absent Landowners’ negligence.” The Gregorys maintain “if

Landowners had properly canceled the Homeland mortgage at closing,

[they] would have unencumbered property and a fully intact title insurance

Policy with $575,000 of coverage.”

A party may move for a summary judgment for all or part of the relief

for which he has prayed. La. C.C.P. art. 966(A)(1). After an opportunity for

adequate discovery, a motion for summary judgment shall be granted if the

motion, memorandum and supporting documents show that there is no

genuine issue as to material fact and that the mover is entitled to judgment as

a matter of law. La. C.C.P. art. 966(A)(3).

The motion for summary judgment is a procedural device used when

there is no genuine issue of material fact for all or part of the relief prayed

for by a litigant. La. C.C.P. art. 966 (A)(3). A genuine issue is one about

which reasonable persons could disagree. King v. Town of Clarks, 21-01897

(La. 2/22/22), 345 So. 3d 422. Any doubt as to a dispute regarding a

material issue of fact must be resolved against granting the motion and in

favor of trial on the merits. Id. When the motion is made and supported as

provided in Art. 966, an adverse party may not rest on the mere allegations

or denials of his pleadings but must set forth specific facts showing there is a

genuine issue for trial. La. C.C.P. art. 967 (B); Latour v. Brock, 23-00262

(La. 6/21/23), 362 So. 3d 405. Appellate courts review motions for 6 summary judgment de novo, using the same criteria that govern the trial

court’s determination of whether summary judgment is appropriate. Farrell

v. Circle K Stores Inc., 22-00849 (La. 3/17/23), 359 So. 3d 467; Noland v.

Lenard, 55,342 (La. App. 2 Cir. 11/15/23), 374 So. 3d 1133, writ denied, 23-

01670 (La. 2/14/24), 379 So. 3d 32.

La. C.C.P. art. 966(D)(1) allocates the burden of proof on summary

judgment as follows:

The burden of proof rests with the mover. Nevertheless, if the mover will not bear the burden of proof at trial on the issue that is before the court on the motion for summary judgment, the mover’s burden on the motion does not require him to negate all essential elements of the adverse party’s claim, action, or defense, but rather to point out to the court the absence of factual support for one or more elements essential to the adverse party’s claim, action, or defense. The burden is on the adverse party to produce factual support sufficient to establish the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law.

To avoid dismissal, the plaintiff in a negligence action must introduce

(for the purpose of summary judgment) prima facie evidence of the element

or elements of that claim challenged by the motion for summary judgment.

McGee v. Ashford Place Apartments, LLC, 54,795 (La. App. 2 Cir.

11/16/22), 351 So. 3d 899.

The collateral source rule is a rule of evidence and damages that is of

common law origin, yet it is embraced and applied by Louisiana courts.

Bozeman v. State, 03-1016 (La. 7/2/04), 879 So. 2d 692, 697. In both

Bozeman, supra, and La. Dept. of Transp. & Dev. v. Kansas City Southern

Ry. Co., 02-2349 (La. 5/20/03), 846 So. 2d 734, 739, the Louisiana Supreme

Court cited the Restatement (Second) of Torts § 920A (1979) as source

material for the collateral source rule. Restatement (Second) of Torts §

920A provides: 7 (1) A payment made by a tortfeasor or by a person acting for him to a person whom he has injured is credited against his tort liability, as are payments made by another who is, or believes he is, subject to the same tort liability.

(2) Payments made to or benefits conferred on the injured party from other sources are not credited against the tortfeasor’s liability, although they cover all or a part of the harm for which the tortfeasor is liable.

Under the collateral source rule, a tortfeasor may not benefit, and an

injured plaintiff’s tort recovery may not be reduced, because of monies

received by the plaintiff from sources independent of the tortfeasor’s

procuration or contribution. Bozeman, supra. Hence, the payments received

from the independent source are not deducted from the award the aggrieved

party would otherwise receive from the wrongdoer, and a tortfeasor’s

liability to an injured plaintiff should be the same, regardless of whether or

not the plaintiff had the foresight to obtain insurance. Bozeman, supra. As a

result of the collateral source rule, the tortfeasor is not able to benefit from

the victim’s foresight in purchasing insurance and other benefits. Thomassie

v. Amedisys La Aquisitions, LLC, 20-01229 (La. 1/20/21), 308 So. 3d 1165;

Bozeman, supra.

The primary policy reason for the application of the collateral source

rule is tort deterrence. The rule reflects the belief that the tortfeasor should

not profit from the victim’s prudence in obtaining insurance, and that by

reducing the amount the tortfeasor would have to pay, the deterrent effect of

the law would be hampered. Cutsinger v. Redfern, 08-2607 (La. 5/22/09),

12 So. 3d 945.

Subrogation is an exception to the collateral source rule. Pelle v.

Munos, 19-0549 (La. App. 1 Cir. 2/19/20), 296 So. 3d 14; Great West Cas.

8 Co. v. State ex rel. Dept. of Transp. & Dev., 06-1776 (La. App. 1 Cir.

3/28/07), 960 So. 2d 973, writ denied, 07-1227 (La. 9/14/07), 963 So. 2d

1005. Thus, the collateral source rule is inapplicable where the right of

subrogation is involved, even if the party subrogated does not appear to

assert its subrogation rights and the defendants do not timely object to the

nonjoinder of the necessary party. Id.

Subrogation is the substitution of one person or entity to the rights of

another. La. C.C. art. 1825. Subrogation is the legal fiction established by

law whereby an obligation, extinguished with regard to the original creditor

by payment which he has received from a third person, or from the original

debtor but with funds that a third person has provided, is regarded as

substituting in favor of this third person who in essence steps into the shoes

of the original debtor and is entitled to assert, in the measure of what he has

paid, the rights and actions of the former creditor. A. Copeland Enterprises,

Inc. v. Slidell Mem. Hosp., 94-2011 (La. 6/30/95), 657 So. 2d 1292; Safeway

Ins. Co. of La. v. State Farm Mut. Auto. Ins. Co., 36,853 (La. App. 2 Cir.

3/5/03), 839 So. 2d 1022.6

In the instant case, the following material facts are not in dispute: (1) The

Gregorys purchased the property from the Wards; (2) the property was

encumbered by a mortgage in favor of Homeland Bank; (3) the Wards

received the proceeds from the sale of the property but did not pay off the

6 Subrogation may be either conventional or legal. La. C.C. art. 1825. It may result from either the agreement of the obligor or the obligee or both with a third person (i.e., conventional subrogation), or directly from the operation of law (i.e., legal subrogation). Thus, the intention of subrogation is to protect such persons who perform certain acts. A. Copeland Enterprises, Inc., supra; Safeway Ins. Co. of La., supra. When subrogated to the rights of the insured, the insurer stands in the shoes of the insured and thereby acquires the independent right to assert the actions and rights of the insured. La. C.C. arts. 1825 and 1826; Barreca v. Cobb, 95-1651 (La. 2/28/96), 668 So. 2d 1129; Safeway Ins. Co. of La., supra.

9 Homeland mortgage; (4) Landowners acted as the closing title agent for the

sale; (5) Landowners was required to ensure the cancellation of the

Homeland mortgage; (6) Landowners did not obtain the cancellation of the

mortgage; (7) the Gregorys’ title insurer paid the limits of its policy,

$575,000; and (8) the Gregorys used the $575,000 to pay off the Homeland

mortgage.

Our de novo review of this record establishes genuine issues of

material fact exist as to whether First American has a right of subrogation

and whether any recovery by the Gregorys, pursuant to the collateral source

rule, would result in a “windfall.” Thus, summary judgment is not

warranted at this time. Consequently, we conclude the district did not err in

denying the Gregorys’ motion for summary judgment, but it did err in

granting summary judgment in favor of Landowners.

CONCLUSION

For the foregoing reasons, we affirm the district court’s judgment

denying the motion for summary judgment filed by plaintiffs, Nicholas Jude

Gregory and Sara Hummel Gregory, and we reverse the grant of summary

judgment in favor of defendants, Landowners Title of Ouachita, L.L.C. and

Continental Casualty Company. We remand for further proceedings. The

costs of the appeal will be borne equally by the parties.

AFFIRMED IN PART; REVERSED IN PART; REMANDED.