Occidental Properties, Ltd. v. Reed

79 So. 3d 1135, 11 La.App. 5 Cir. 77, 2011 La. App. LEXIS 1364, 2011 WL 5554512
CourtLouisiana Court of Appeal
DecidedNovember 15, 2011
DocketNo. 11-CA-77
StatusPublished
Cited by1 cases

This text of 79 So. 3d 1135 (Occidental Properties, Ltd. v. Reed) 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
Occidental Properties, Ltd. v. Reed, 79 So. 3d 1135, 11 La.App. 5 Cir. 77, 2011 La. App. LEXIS 1364, 2011 WL 5554512 (La. Ct. App. 2011).

Opinion

MARION F. EDWARDS, Chief Judge.

| j>This appeal is taken by plaintiff/appellant, Occidental Properties, Ltd. (“Occidental”), from a judgment of abandonment of action for failure to prosecute in three years pursuant to La. C.C.P. art. 561. For reasons that follow, we affirm.

This matter began on September 8, 2003 when Occidental filed a “Suit on Promissory Note and for Recognition of Mortgage.” The petition asserted that Occidental was the holder of a promissory note executed by “Diane Reed, divorced wife oPand Tim T. Zufle” in the amount of $125,000. The note was executed on August 25, 1988, and the Zufles were to pay the note in 120 equal payments of $1,376 per month. A mortgage on immovable property in Jefferson Parish was filed to secure the promissory note on August 25, 1988. The petition alleges that the principal balance due on the note as of June 29, 1998 was $65,595.05. Occidental filed a “Notice of Reinscription of Mortgage” on July 13, 1998 that was recorded in the Parish mortgage records. In the petition, Occidental prays for judgment and a total of sums due for the principal amount remaining on the note, interest, attorney fees, and the cost of the proceedings. Documentation of [1137]*1137these allegations is attached to the original petition.

Diane Zufle was served but has never answered this petition, and a preliminary default judgment was taken against her on November 17, 2003.1 Because Tim Zufle could not be located, a curator was appointed to represent him on October 14, 2003. It appears that, from the curator’s note of evidence, Tim |aZufle was never located. However, the curator filed an answer and general denial to the action on Mr. Zufle’s behalf on November 4, 2003.

On December 9, 2003, a “Petition of Intervention and Answer to the Original Petition” was filed by Brae Asset Fund, L.L.C. (“Brae”) to contest the amount due on the note, the allegedly excessive attorney fees demanded in the petition, and for the purpose of asserting its position as second in rank to Occidental’s mortgage. In that petition, Brae represents that it is the owner of a judgment rendered against the Zufles in federal court on March 19, 1991 in favor of the FDIC and against the Zufles in the amount of $227,820, plus interest. Occidental answered the intervention petition on January 15, 2004.

On August 20, 2010, Brae filed a motion to dismiss the main action pursuant to La. C.C.P. art. 561.2 In the motion, Brae states that Occidental propounded interrogatories and a request for production of documents to Brae on January 9, 2007. However, those interrogatories were never answered and no other discovery was conducted, and no pleadings have been filed by Occidental since the answer of January 15, 2004.

^Occidental opposed the motion to dismiss the action as abandoned arguing that other actions relating to the ranking of creditors on the same piece of immovable property are currently pending in other divisions of the Twenty-Fourth Judicial District. Occidental attached docket [1138]*1138sheets taken from “JeffNet.” Although it does not appear that Occidental is a party-in any of these actions, it seems that Brae is party in one.3

Brae supported its motion in the trial court by arguing that the attachments relied upon by Occidental do not show that Occidental was a party to any of the other pending cases, or, in fact, if Occidental participated in any way. Brae also attached an affidavit by counsel as required by law asserting the action was abandoned as of January 9, 2010.

The trial court took the matter under advisement to review the record, and it ultimately rendered judgment in favor of Brae, granting its motion to dismiss Occidental’s action as abandoned. Occidental appeals that ruling.

LAW AND ANALYSIS

In the matter before us, the issues are: (1) whether other pending and related, but unconsolidated suits, provide an exception to abandonment of Occidental’s action; (2) whether the interrogatories propounded to Brae that remain unanswered constitute a step in the discovery process that would preclude the judgment of abandonment; and (3) whether the rein-scription of Occidental’s mortgage in the parish mortgage office constitutes a step in the prosecution on the promissory note as envisioned by La. C.C.P. art. 561.

La. C.C.P. art. 561(A)(1) provides that an “action ... is abandoned when the parties fail to take any step in its prosecution or defense in the trial court for a | ¿period of three years.... ” Section (A)(3) of that article further provides, in part, that:

This provision shall be operative without formal order, but, on ex parte motion of any party or other interested person by affidavit which provides that no step has been timely taken in the prosecution or defense of the action, the trial court shall enter a formal order of dismissal as of the date of its abandonment. ...
Section B provides:
B. Any formal discovery as authorized by this Code and served on all parties whether or not filed of record, including the taking of a deposition with or without formal notice, shall be deemed to be a step in the prosecution or defense of an action.

Occidental argues three things that preclude the judgment of abandonment: (1) the reinscription of the mortgage; (2) the interrogatories propounded to Brae; and (3) the pending, related actions. Occidental also asks this Court to include all divisions of a district court in the word “court” for purposes of La. C.C.P. art. 561.

Occidental reinscribed its mortgage on the property on May 20, 2008.4 It argues that filing shows intent to continue litigation and extends the abandonment date until May 20, 2011. Occidental offers no legal support for this argument.

The recordation of mortgages is part of the public records doctrine and has been described by the Louisiana Supreme Court as a negative doctrine because it does not create rights; but, rather, denies the effect of certain rights unless they are recorded.5 The primary focus of the public records [1139]*1139doctrine is the protection of third persons against unrecorded interests.6 Reinscription of Occidental’s mortgage merely renews the recordation and continues its effect as provided by law. [ ^However, it does not create rights.7 Nor does it serve as a step in the prosecution of an action on a promissory note secured by the mortgage.

Occidental also argues that, because Brae has not responded to interrogatories propounded on January 8, 2007, the action is not abandoned. Occidental asserts that Brae is a “disobedient party” in this discovery action and, therefore, has the burden to show that its failure is justified. In support of that argument, Occidental cites Allen v. Smith.8 Occidental’s reliance on Allen is misplaced. Allen involved a plaintiff who refused to allow discovery by one of the defendants. That defendant filed a motion to compel or dismiss. In reversing the dismissal of plaintiffs action as to that defendant, the Allen court held that the applicable law did not allow for dismissal as a sanction in that instance.

In the matter before us, there was no motion to compel filed by Occidental.

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Related

Occidental Properties Ltd. v. Zufle
165 So. 3d 124 (Louisiana Court of Appeal, 2014)

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Bluebook (online)
79 So. 3d 1135, 11 La.App. 5 Cir. 77, 2011 La. App. LEXIS 1364, 2011 WL 5554512, Counsel Stack Legal Research, https://law.counselstack.com/opinion/occidental-properties-ltd-v-reed-lactapp-2011.