Ross v. Brown Title Corporation

356 F. Supp. 595
District Court, E.D. Louisiana·Decided June 11, 1973·No. Civ. A. 71-1813·Published·Cited by 16 cases

Opinions

R. BLAKE WEST, District Judge:

Plaintiff homeowners Dorothy D. Ross, Shannon McClendon, and Dell Clafin have sued defendants to enjoin foreclosure by defendant mortgagees of mortgages on plaintiffs’ homes pursuant to the “executory process” procedure provided by Louisiana Code of Civil Procedure, Article 2631 et seq., which procedure plaintiffs maintain is violative of their Fourteenth Amendment rights. Plaintiffs claim that (a) defendants, under authority of the challenged statutes, have moved to seize and sell their homes without providing them with adequate notice and the opportunity for hearing prior to the seizure, and (b) plaintiffs are unable to assert defenses to the foreclosure proceedings, due to their financial inability to meet the security requirements which the challenged articles of the Louisiana Code of Civil Procedure allegedly make a prerequisite for a hearing on the merits of their cases. Jurisdiction of the Court is based upon 28 U. S.C. § 1343 and 42 U.S.C. § 1983.

Defendants admit the foreclosure of the mortgages on plaintiffs’ property pursuant to the executory process procedure; however, defendants; intervenor, Louisiana Savings and Loan League; and amici curiae, Louisiana Bankers Association and numerous Louisiana attorneys, contend, first, that the procedure is constitutional and that plaintiffs assert no valid defenses to their obligations, and, further, that, if such defenses do in fact exist, Articles 2753, 2754, and 3610 of the Louisiana Code of Civil Procedure make provision for the presentation of such defenses in a manner not violative of plaintiffs’ constitutional rights.

After careful consideration of the entire record, the stipulation of facts, the oral arguments of counsel, and the detailed trial briefs submitted on behalf of the parties and amici curiae, it is the opinion of the Court that Louisiana’s ex-ecutory process procedure as to immovable property is not violative of plaintiffs’ constitutional guarantees of due process and equal protection of the law.

FACTS

The three plaintiffs herein are purchasers of homes secured by mortgages, the terms of which provide for summary foreclosure via executory process. In each instance the mortgagee has sought to foreclose upon the property of the plaintiff through utilization of this procedure.

Plaintiffs Dell Clafin and Shannon McClendon are purchasers of low-income housing under the Section 235 plan of the Housing and Urban Development Act of 1968, 82 Stat. 476, Pub.L. 90-448. Each received a mortgage payment subsidization based upon his or her income; each was required to contribute a certain percentage of his or her income to the mortgage payments; each was unable to meet his or her share of the monthly mortgage payments, and therefore the subsidizations were terminated and foreclosures ensued.

Specifically, plaintiff Clafin encountered difficulty in meeting his share of the monthly payments on his mortgage because of a dispute arising between himself and the mortgagee over the payment of 1970 property taxes. The mortgagee, having paid the taxes for plaintiff, increased the required monthly payment for plaintiff in order to cover costs attendant thereto. Plaintiff alleges that the increased payments imposed an impossible burden upon his family budget.

Plaintiff Shannon McClendon alleges that she faces the loss of her section 235 home because of a serious drop in her income which prevented her from meeting her monthly mortgage payments.

Plaintiff Dorothy Ross purchased a parcel of property from her vendor-mortgagee in August, 1969, with the intent and purpose of using it for establishing a home. Shortly before the date of purchase the Federal Truth in Lending Act, 15 U.S.C. § 1635, became effec[597]*597tive, whereby real property purchased for the purpose plaintiff intended is accompanied by a three-day right of rescission. Plaintiff Ross asserts that, under applicable jurisprudence, her right to rescission has remained viable because of her vendor’s violation of the Act—specifically the vendor’s failure to give notice of the right of rescission.

On May 17, 1971, plaintiff Ross was served with a demand for payment. On May 25, 1971, she was served with notice that her property was to be seized and sold.

On May 27, 1971, plaintiff McClendon, having waived demand for payment, was served with notice that her home was to be seized and sold.

In July, 1971, plaintiff Clafin, having waived demand for payment, was served with notice that his home was to be seized and sold.

On July 2, 1971, the instant suit was filed, in which plaintiffs allege that they are unable effectively to urge their respective defenses to the seizures of their real estate—Clafin’s and McClendon’s defenses being grounded upon the Housing and Urban Development Act of 1968 and regulations promulgated thereunder, and Ross’ defense being based upon the Truth in Lending Act—without the posting of security, as required by the Louisiana statutes under attack, which they allegedly are financially unable to provide.

On July 26, 1971, a temporary restraining order was issued by the District Court, enjoining any further prosecution of the foreclosure proceedings against the plaintiffs until determination by a three-judge court of the constitutionality of the challenged articles of Louisiana Code of Civil Procedure.

At the time of oral argument on December 20, 1972, and on the date of this decision, the temporary restraining order was still in effect, and plaintiffs were, and are, still in possession of their properties, never having been dispossessed at any time during the course of these proceedings.

THE LOUISIANA PROCEDURE

Article 2631 et seq., of the Louisiana Code of Civil Procedure provide a method of summary execution of judgments known as executory process.

Executory procedure has been utilized for centuries in the various continental jurisdictions, and in those portions of the Western Hemisphere which inherited their procedural law in whole or in part from Spain. Its characteristics are firstly, the ex parte judicial enforcement by the creditor on maturity or default of an obligation formally acknowledged at its confection before a notary or judge, without any necessity of obtaining judgment contradictorily against the debtor; and secondly, the assertion by the debtor of whatever defenses he may have by way of opposition or injunction to arrest the seizure and subsequent judicial sale of the debtor’s property. Its theoretical bases are that the debtor has already confessed judgment on the obligation before a public officer; that this confession is entitled to at least prima facie judicial recognition; and that its enforcement should be arrested in the same manner as the enforcement of a judgment is arrested. If the debtor has no defense on the obligation, the proceeding remains an ex parte one. If the debtor asserts a defense, the action is converted into a contradictory proceeding, with the debtor the actor bearing the burden of proving his defense.
McMahon, “The Historical Development of Executory Procedure in Louisiana”, 32 Tul.L.Rev. 555, 556 (1958).

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Ross v. Brown Title Corporation, 356 F. Supp. 595 (E.D. La. 1973).

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Ross v. Brown Title Corporation
356 F. Supp. 595 (E.D. Louisiana, 1973)