Ouachita Valley Federal Credit Union v. Steed

722 So. 2d 26, 1998 La. App. LEXIS 2975, 1998 WL 749039
CourtLouisiana Court of Appeal
DecidedOctober 28, 1998
DocketNo. 31233-CA
StatusPublished

This text of 722 So. 2d 26 (Ouachita Valley Federal Credit Union v. Steed) 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
Ouachita Valley Federal Credit Union v. Steed, 722 So. 2d 26, 1998 La. App. LEXIS 2975, 1998 WL 749039 (La. Ct. App. 1998).

Opinion

h GASKINS, J.

Following a foreclosure by executory process, summary proceedings were conducted to rank the claims against the funds in the registry of the court. Intervenor, Regions Bank of Louisiana, appeals from a trial court judgment awarding all of the proceeds from the sheriffs sale to the plaintiff, Ouachita Valley Federal Credit Union (“the credit union”). We affirm.

FACTS

In June 1993, Charles Harold Steed and his wife Judy Houston Steed executed a collateral mortgage package in favor of the credit union. The package included a collateral note, mortgage and pledge agreement; the mortgage encumbered real estate located in Ouachita Parish. Thereafter, the Steeds became indebted to the credit union for three individual debts which were secured by the real estate, an automobile and a signature loan, which were cross-collateralized.

On August 20,1997, the credit union filed a petition for executory process against the defendants, asserting that the couple had executed three promissory notes in favor of the credit union and were indebted in the amounts of

• $39,293.48 (with interest of 9.90% per annum on $37,811.33 from 8/19/97 until paid, together with 25% attorney fees);
• $6,874.65 (with interest of 10.90% per annum on $6,584.34 from 8/19/97 until paid, together with 25% attorney fees); and
• $2,204.80 (with interest of 15% per annum on $2,077.59 from 8/19/97 until paid, together with 25% attorney fees).

These debts were secured, giving the credit union the status of superior mortgage holder in all its claims. The credit union prayed for a writ of seizure and sale ordering the sheriff to sell the property without appraisement “to pay and satisfy petitioner’s claim(s) as set forth in paragraph one above, and for all costs hereof; petitioner to be paid from the [28]*28proceeds by preference and priority over all others whomsoever.” Attached to the petition were the collateral mortgage note for k$75,000; the collateral mortgage on the real estate in Ouachita Parish; the related collateral pledge agreement; and the promissory notes. An order signed by the trial court on August 20, 1997, issued executory process “as prayed for and in accordance with law.”

On August 21, 1997, a writ of seizure and sale was issued by the clerk of court for Ouachita Parish. It listed only the debts in the amounts of $6,874.65 and $2,204.80. Due to a clerical error, the debt of $39,293.48 was not included. Service of this writ was made on the defendants on August 27, 1997. Thereafter, the property was seized and advertised.

Prior to the sale of the property, a mortgage certificate was executed listing the previously mentioned $75,000, collateral mortgage as a validly recorded first mortgage. As inferior liens and mortgages, it also showed that Regions Bank of Louisiana held a judicial mortgage of $2,416.72 filed August 27, 1997; a multiple indebtedness mortgage of $16,063.68 filed September 16, 1997; and an amended judicial mortgage of $11,769.38, $4,325.56, and $2,416.72 filed October 1, 1997.1

On October 15, 1997, the property was sold at a sheriffs sale to Regions Bank for $53,-000. After payment of costs, the remaining $50,924.23 was deposited in the registry of the court upon the petition of the Ouachita Parish sheriff.

The credit union filed a motion to withdraw funds and/or rule to rank the claims. Named as defendants in the motion/rule were Regions Bank and the clerk of court for Ouachita Parish. Pursuant to its petition for executory process, the credit union claimed entitlement to the entire sum in the registry of the court.

^Regions Bank filed a petition of intervention under La.C.C.P. art. 1092. It admitted that the credit union was entitled to the sums of $6,874.65 and $2,204.80 listed in the writ of seizure. However, since the writ of seizure did not include the debt of $39,293.48, Regions Bank claimed entitlement to the remaining funds in the registry instead of the credit union. It also filed a peremptory exception of nonjoinder of party, contending that the defendants were necessary parties because there was a possibility that they might be entitled to any remaining funds after the satisfaction of creditors. Finally, Regions Bank filed an opposition to the motion to withdraw funds.

A hearing was held on the motion to withdraw/rule to rank in December 1997. The parties stipulated that each side knew nothing of the defective writ prior to the sale. They also stipulated that immediately prior to the sale counsel for the credit union told a representative of Regions Bank what the credit union’s reduced required payoff would be ($50,000 plus $2,000 in estimated sheriffs costs and commissions) and that its bidding would have to go to at least $52,000. The credit union also introduced copies of Mr. Steed’s Chapter 13 bankruptcy proceedings in which both the credit union and Regions Bank were listed as creditors. Although the bankruptcy was ultimately dismissed, the documents showed that in May 1997 the Steeds owed the credit union secured claims of $36,758 and $6,213, as well as an unsecured claim of $1,975, the same debts upon which the credit union sued in the instant case.

Regions Bank’s exception of nonjoinder was overruled; the trial court found that since the defendants were sued in executory process without appraisement their appearance was unnecessary. Regions Bank’s intervention was dismissed and its opposition rejected. The trial court found that the amount due to the seizing ^creditor was the amount specified in the petition for executory process and declined to impute the clerk’s defective writ to the credit union. It directed the clerk of court to pay the entire sum in the registry of the court to the credit union.

Regions Bank appealed.

[29]*29NONJOINDER OF PARTIES

Regions Bank claims that the trial court erred in failing to sustain its peremptory exception of nonjoinder of parties. It asserts that the Steeds were necessary parties to the motion to withdraw funds from the registry of the court because La.C.C.P. art. 2373 provides that any excess funds remaining from the sale after the payment of all liens and mortgages be paid to the debtors.

The instant suit involves a judicial sale without appraisal. According to the terms of La. R.S. 13:4106, such a sale discharges the personal obligation of the defendants/debtors even if there are insufficient funds to satisfy the debt for which the property is sold. In overruling the exception, the trial court stated that since the Steeds were sued in execu-tory process and the sale was without appraisal, it saw no necessity for the Steeds’ appearance on the motion to withdraw funds.

An objection of nonjoinder of a party under La. C.C.P. art. 641 and 642 may be raised by peremptory exception. See La. C.C.P. art. 927. The provisions of La. C.C.P. art. 641 outlines certain criteria for determining whether joinder of a party is required for just adjudication of a matter. It states:

A person shall be joined as a party in the action when either:
(1) In his absence complete relief cannot be accorded among those already parties.
(2) He claims an interest relating to the subject matter of the action and is so situated that the adjudication of the action in his absence may either:

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Related

Tharp v. Edmiston
155 So. 2 (Supreme Court of Louisiana, 1934)
Succession of Hebrard
18 La. Ann. 485 (Supreme Court of Louisiana, 1866)
Massie v. Brady
41 La. Ann. 553 (Supreme Court of Louisiana, 1889)

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Bluebook (online)
722 So. 2d 26, 1998 La. App. LEXIS 2975, 1998 WL 749039, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ouachita-valley-federal-credit-union-v-steed-lactapp-1998.