Ralph Brockman v. Monet Acreslimited Partnership I

• Court: Louisiana Court of Appeal
• Decided: May 6, 2015
• Docket: CA-0014-1302
• Status: Unknown

Opinion

STATE OF LOUISIANA

COURT OF APPEAL, THIRD CIRCUIT

14-1302

RALPH W. BROCKMAN

VERSUS

MONET ACRES LIMITED PARTNERSHIP I, RENOIR ACRES LIMITED PARTNERSHIP I, REGIONS BANK, AAMAGIN PROPERTY GROUP, L.L.C., WJ BELTON COMPANY, L.L.C., AND WILLIAM J. BELTON

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APPEAL FROM THE FOURTEENTH JUDICIAL DISTRICT COURT PARISH OF CALCASIEU, NO. 2013-3759, DIVISION “A” HONORABLE DAVID KENT SAVOIE, DISTRICT JUDGE

JAMES T. GENOVESE JUDGE

Court composed of Marc T. Amy, James T. Genovese, and John E. Conery, Judges.

AFFIRMED.

Arthur R. Thomas Ernest L. Johnson Arthur R. Thomas & Associates, LLC 3313 Government Street, Suite G Baton Rouge, Louisiana 70806 (225) 334-7490 COUNSEL FOR DEFENDANTS/APPELLANTS: Monet Acres Limited Partnership I and Renoir Acres Limited Partnership I David F. Dwight Dwight Law Firm, L.L.C. 1400 Ryan Street Lake Charles, Louisiana 70601 (337) 439-3138 COUNSEL FOR DEFENDANTS/APPELLANTS: Monet Acres Limited Partnership I and Renoir Acres Limited Partnership I

Brady D. King, II April L. Martin McNew, King, Burch & Landry, LLP 2400 Forsythe Avenue, Suite 2 Monroe, Louisiana 71201 (318) 361-3140 COUNSEL FOR PLAINTIFF/APPELLEE: Ralph W. Brockman GENOVESE, Judge.

In this subrogation suit, prior counsel for Defendants, Monet Acres Limited

Partnership I (Monet) and Renoir Acres Limited Partnership I (Renoir), appeal the

trial court’s grant of a Motion to Substitute Counsel for Defendant, which ordered

that Attorney David F. Dwight be substituted as counsel for these Defendants in

place of Arthur R. Thomas and Ernest L. Johnson and the law firm of Arthur R.

Thomas & Associates, LLC.1 For the reasons that follow, we affirm.

FACTS AND PROCEDURAL HISTORY

Plaintiff, Ralph W. Brockman, filed a pleading titled Suit in Subrogation on

Note and Guaranties, Recognition of Mortgage and Security Interests, and for

Declaratory Judgment, naming Monet and Renoir as Defendants, among others.2

Mr. Brockman, as a guarantor of the obligations incurred by Monet with Regions

Bank (Regions), paid $351,512.59 plus interest, for a total of $358,249.92, to

Regions upon Monet’s default. As a result of these payments, Mr. Brockman

contended that he was subrogated to the rights of Regions against Monet and

entitled to the security held by Regions for Monet’s obligations. He sought

repayment from Monet of $351,512.59, plus interest and attorney fees. Also, in his

capacity as guarantor, upon Renoir’s default of its obligation to Regions,

Mr. Brockman paid $350,601.56 plus interest, for a total of $357,321.43, to

Regions. Mr. Brockman likewise asserted his subrogation rights against Renoir

1 Prior counsel, Mr. Thomas and Mr. Johnson, also seek to appeal the trial court’s grant of Plaintiff’s Motion for Summary Judgment; however, considering our opinion affirming the trial court’s grant of the Motion to Substitute Counsel for Defendant, the issue of the trial court’s grant of summary judgment is not before this court. 2 Mr. Brockman also named AAmagin Property Group, L.L.C. and Willard J. Belton (erroneously named as William J. Belton), co-guarantors, as Defendants. W.J. Belton Company, L.L.C., also named as a Defendant, was alleged to have assigned and granted a security interest in all of its membership interests in AAmagin Property Group, which interest Mr. Brockman sought to have recognized as security for the debt. The claims asserted against these Defendants, which did not involve the mortgages but sought to enforce contractual rights via various Guaranty Agreements and Assignment of Membership Interests, were severed and transferred to the Nineteenth Judicial District Court and are not before this court. and sought repayment of $350,601.56, plus interest and attorney fees from Renoir.

Mr. Brockman also prayed for recognition and enforcement of the mortgages

securing the indebtedness of Monet and Renoir. Finally, Mr. Brockman named

Regions as a Defendant and sought a judicial declaration that Regions must turn

over all original notes, security devices, and mortgage agreements evidencing said

indebtedness and that it be precluded from taking any action eliminating or

impairing the security interest to which he was entitled by means of his right of

subrogation.

On June 2, 2014, Mr. Brockman filed a Motion for Summary Judgment,

asserting that there were no genuine issues of material fact relative to his Suit in

Subrogation on Note and Guaranties, Recognition of Mortgage and Security

Interests, and for Declaratory Judgment. Therein, he argued that summary

judgment in his favor was appropriate since the amounts that he paid to Regions in

satisfaction of the obligations of Monet and Renoir upon their default were

established, thereby entitling him to reimbursement and subrogation as a matter of

law. Filed in support of the Motion for Summary Judgment were the affidavits of

Mr. Brockman and David N. Payne, Vice President of Regions, with the

documents of indebtedness attached thereto. The trial court set Mr. Brockman’s

Motion for Summary Judgment for hearing on September 2, 2014. No opposition

to Mr. Brockman’s Motion for Summary Judgment was filed on behalf of Monet

and Renoir by their counsel of record, Mr. Thomas and Mr. Johnson.

On August 21, 2014, a Motion to Substitute Counsel for Defendant (Motion

to Substitute) was filed by Attorney David F. Dwight on behalf of Monet and

Renoir in order to substitute Mr. Dwight in place of Arthur R. Thomas and Ernest

L. Johnson and the law firm of Arthur R. Thomas & Associates, LLC, as counsel

of record for these Defendants. The trial court signed the order granting the 2 Motion to Substitute, ex parte, on the day of its filing, August 21, 2014. No

opposition to the Motion to Substitute was filed by Mr. Thomas and Mr. Johnson.

The following day, August 22, 2014, a Memorandum in Opposition to

Motion for Summary Judgment was filed on behalf of Monet and Renoir by

Mr. Dwight. Monet and Renoir argued therein that Mr. Brockman sought

judgment against Monet and Renoir “not only for the amount of principal and

interest he paid as a guarantor on the loans, but also for attorney’s fees.” In

opposition, Monet and Renoir took the position that the only amount that

Mr. Brockman was entitled to recover was “the principal and interest he actually

paid on each loan.”

According to the trial court minutes, on September 2, 2014, counsel for

Mr. Brockman and both Mr. Dwight and Mr. Johnson were present in court for the

hearing on Mr. Brockman’s Motion for Summary Judgment. When the matter was

called, “[a] discussion [was] had between the Court and Counsel as to proper legal

representation of Defendants (i.e., Mr. Dwight’s Substitution of Counsel).” After

discussions with counsel, the trial court rescheduled the hearing for September 4,

2014, to address the issue of legal representation prior to considering the merits of

Mr. Brockman’s Motion for Summary Judgment, with notice being given in open

court to all counsel. There was no objection by counsel to the rescheduling of the

matter; no writ was taken; and, no stay was requested.

On September 4, 2014, the issue pertaining to Monet and Renoir’s legal

representation was heard, and evidence was introduced, with Mr. Thomas

participating in the hearing. Thereafter, the trial court found Mr. Dwight to be the

proper attorney to represent Monet and Renoir. On the same day, after deciding

the issue of legal representation of Monet and Renoir, Mr. Brockman’s Motion for

Summary Judgment was taken up, heard, and granted by the trial court. 3 Thereafter, the trial court rendered judgment in favor of Mr. Brockman against

Monet in the amount of $358,249.22 plus interest, and in favor of Mr. Brockman

against Renoir in the amount of $357,321.43 plus interest, and ordered that the

corresponding mortgages be recognized as security for the respective debts.

As prior counsel for Monet and Renoir, Mr. Thomas and Mr. Johnson have

appealed the trial court’s grant of the Motion to Substitute.

ASSIGNMENTS OF ERROR

Mr. Thomas and Mr. Johnson, as prior counsel for Monet and Renoir, assign

the following errors for our review:

A. Assignment of Error No. 1: Whether the trial court erred in removing Attorneys Jules B. LeBlanc, III,[3] Arthur R. Thomas, and Ernest L[.] Johnson as counsels of record for the Defendants.

B. Assignment of Error No. 2: Whether the trial court erred in granting Plaintiff’s Motion for Summary Judgment without prior notice of hearing against Defendants without giving their original counsels of [r]ecord an opportunity to file opposition within the allotted time.

LAW AND DISCUSSION

Mr. Thomas and Mr. Johnson argue that the trial court’s grant of the ex parte

Motion to Substitute was procedurally erroneous as they did not sign the motion,4

they were not served with a copy of the motion, and they were not granted a

hearing on the motion. While we agree that the trial court improvidently signed

the order granting the Motion to Substitute ex parte, upon being advised on

September 2, 2014, that there existed a dispute as to the proper legal representation

of Monet and Renoir, the trial court scheduled a hearing on the matter for

3 This is erroneous. The Judgment of the trial court does not name Mr. LeBlanc as an attorney being removed as counsel for Monet and Renoir. 4 Mr. Thomas and Mr. Johnson contend that their signature was required on the Motion to Substitute, relying on La.Dist.Ct.R. 16(D) relative to the withdrawal of counsel; however, that rule governs family and juvenile courts and is inapplicable to the present proceedings. 4 September 4, 2014. Thus, Mr. Thomas and Mr. Johnson were given the

opportunity to oppose the Motion to Substitute and offer testimony and evidence in

opposition thereto.

Additionally, we note that when Mr. Dwight filed the Motion to Substitute,

Mr. Thomas and Mr. Johnson were sent a copy. Despite the contents thereof

seeking their removal and replacement with Mr. Dwight as counsel for Monet and

Renoir, Mr. Thomas and Mr. Johnson did not file any opposition thereto, nor did

they notify the trial court that they disputed the motion. Their inaction left the trial

court wholly unaware that the motion was contested. Still without having voiced

any opposition to the Motion to Substitute, Mr. Thomas appeared at the September

2, 2014 hearing on Mr. Brockman’s Motion for Summary Judgment. At that time,

Mr. Thomas was allowed to participate in the discussions with the trial court and

was aware that that the trial court was going to consider the issue of Monet and

Renoir’s legal representation on September 4, 2014. Thereafter, on September 4,

2014, with Mr. Thomas participating, the trial court entertained testimony and

considered documentary evidence on the substitution of counsel issue.

Although Mr. Thomas and Mr. Johnson complain of “procedural defects

leading up to the trial court’s removal of original counsels of record[,]” the record

clearly indicates that in providing counsel the opportunity for a full hearing on the

matter of legal representation, the trial court rectified any procedural deficiencies

that resulted from it having unknowingly and improvidently signing the ex parte

order granting the Motion to Substitute. Therefore, we do not find any procedural

deficiencies warranting a reversal of the trial court’s judgment.

Substantively, in order to address the merits of the Motion to Substitute, we

must ascertain who, or which entity, had the legal authority to retain counsel for

5 Monet and Renoir.5 In order to do so, we must examine the underlying ownership

structure of these entities.

Monet and Renoir are both partnerships owned by AAmagin Property Group

(APG), the fiscal and limited partner, and Metro City Redevelopment Coalition,

Inc., the managing general partner. The Articles of Partnership of both Monet and

Renoir provide, relative to litigation, that “[t]he Fiscal Partner shall prosecute and

defend such actions as may be necessary to enforce or protect the interest of the

Partnership.” Pursuant to this provision, APG had the authority to retain counsel to

represent Monet and Renoir. The next step in the inquiry is, therefore, determining

who had the authority to act on behalf of APG.

Mr. Johnson and Mr. Thomas contend that they are counsel for Monet and

Renoir by virtue of their being retained by APG through Willard J. Belton, in his

capacity as president of APG.6 Contrarily, Mr. Dwight contends that he is counsel

for Monet and Renoir by virtue of his being retained by Mr. Brockman, in his

capacity as president of APG.

The question of which individual, Mr. Belton or Mr. Brockman, was the

president of APG was the subject matter of prior litigation captioned Metro City

Redevelopment Coalition, Inc. v. Brockman, 13-1615 (La.App. 1 Cir. 3/21/14), 143

So.3d 495. In that quo warranto proceeding, the trial court considered whether

Mr. Belton had properly been removed as president of APG and replaced by

Mr. Brockman. The trial court found that Mr. Belton’s removal was properly

achieved and ruled in favor of Mr. Brockman. On appeal, the first circuit affirmed;

5 The trial court’s grant of the Motion to Substitute also required the trial court to make this underlying factual determination. Factual determinations made by a district court may not be overturned on appeal absent a finding of manifest error. Hyatt v. Mut. of Omaha Ins. Co., 14-282 (La.App. 3 Cir. 10/1/14), 149 So.3d 406. 6 More specifically, they contend that APG retained Mr. Jules LeBlanc, III, who then associated Mr. Thomas and Mr. Johnson to assist in the representation of Monet and Renoir. 6 thus, by virtue of that decision, it was judicially determined that the president of

APG was Mr. Brockman.

Mr. Thomas and Mr. Johnson argue that following the rendition of the first

circuit’s opinion in Metro, Mr. Brockman was removed as president at an April 19,

2014 meeting of APG. They conclude, therefore, that Mr. Belton had authority to

retain them as counsel for Monet and Renoir and that the hiring of Mr. Dwight by

Mr. Brockman was without authorization. We disagree. Mr. Thomas and

Mr. Johnson failed to present the necessary proof establishing that Mr. Brockman

was removed as president at an April 19, 2014 meeting.

Considering the Metro decision, and based on the testimony and evidence

introduced at the September 4, 2014 hearing, we find no error in the trial court’s

conclusion that Mr. Brockman had the authority to retain Mr. Dwight to represent

Monet and Renoir. Pursuant to the respective Articles of Partnership, the fiscal

partner of each, APG, had the authority to engage, prosecute and defend all

litigation. The evidence was sufficient to prove that Mr. Dwight was retained to

represent Monet and Renoir by the fiscal partner of each, APG, acting through its

president, Mr. Brockman, via the resolutions of August 19, 2014, and as confirmed

by the letters of engagement signed August 29, 2014. Although these actions were

accomplished without there being a meeting of APG called, the trial court found

that no such meeting was required. We agree. For these reasons, we affirm the

judgment of the trial court granting the Motion to Substitute Mr. Dwight as counsel

of record for Monet and Renoir in place of Mr. Thomas and Mr. Johnson.

Having concluded that Mr. Dwight is the proper counsel of record for Monet

and Renoir, it is he, not Mr. Thomas and Mr. Johnson, who has the authority to

represent Monet and Renoir and to act on their behalf. Therefore, we need not

address the second assignment of error raised by Mr. Thomas and Mr. Johnson on 7 the propriety of the trial court’s grant of summary judgment in favor of

Mr. Brockman. Having affirmed the trial court’s ruling that Mr. Thomas and

Mr. Johnson are not counsel of record for Monet and Renoir, they have no standing

to raise this issue on appeal; therefore, that matter is not before this court.

DECREE

For the reasons assigned, we affirm the judgment of the trial court granting

the Motion to Substitute Counsel for Defendant and ordering that David F. Dwight,

with the Dwight Law Firm, LLC, be substituted as counsel of record for

Defendants, Monet Acres Limited Partnership I and Renoir Acres Limited

Partnership I, in place of Arthur R. Thomas and Ernest L. Johnson and the law firm

of Arthur R. Thomas & Associates, LLC. Costs of this appeal are assessed to

Arthur R. Thomas and Ernest L. Johnson and the law firm of Arthur R. Thomas &

Associates, LLC.