U.S. Bank National Association, Not in Its Individual Capacity but Solely as Trustee for the Cim Trust 2018-R5 Mortgage-Backed Notes, Series 2018-R5 Versus Timmie G. Owen, (a/K/A Tim G. Owen) and Caren Brown Owen, (a/K/A Caren Brown, Caren Owen) ( 2023 )

U.S. BANK NATIONAL ASSOCIATION, NOT NO. 22-CA-588
IN ITS INDIVIDUAL CAPACITY BUT SOLELY
AS TRUSTEE FOR THE CIM TRUST 2018-R5 FIFTH CIRCUIT
MORTGAGE-BACKED NOTES, SERIES
2018-R5 COURT OF APPEAL
VERSUS STATE OF LOUISIANA
TIMMIE G. OWEN, (A/K/A TIM G. OWEN)
AND CAREN BROWN OWEN, (A/K/A CAREN
BROWN, CAREN OWEN)
ON APPEAL FROM THE FORTIETH JUDICIAL DISTRICT COURT
PARISH OF ST. JOHN THE BAPTIST, STATE OF LOUISIANA
NO. 78,507, DIVISION "A"
HONORABLE VERCELL FIFFIE, JUDGE PRESIDING
September 20, 2023
SCOTT U. SCHLEGEL
JUDGE
Panel composed of Judges Susan M. Chehardy,
Stephen J. Windhorst, and Scott U. Schlegel
REVERSED AND REMANDED
SUS
SMC
SJW
COUNSEL FOR PLAINTIFF/APPELLANT,
U.S. BANK NATIONAL ASSOCIATION
Zara L. Zeringue
Kathleen Legendre
Penny M. Daigrepont
SCHLEGEL, J.
Appellant/Plaintiff, U.S. Bank National Association, Not In Its Individual
Capacity But Solely As Trustee For the CIM Trust 2018-R5 Mortgage ‒ Backed
Notes, Series 2018-R5 (U.S. Bank), appeals the district court’s October 26, 2022
judgment entitled, “Suo Motu Judgment to Dismiss For No Right of Action.” This
matter involves an executory process proceeding wherein U.S. Bank filed a
petition for executory process asking the district court to order the issuance of a
writ of seizure and sale pursuant to La. C.C. art. 2638. In its judgment, the district
court dismissed U.S. Bank’s petition for executory process finding that it did not
have a right of action to proceed because a note allonge that U.S. Bank attached in
support of the petition did not comply with authentic evidence requirements. 1 As
discussed more fully below, we find that the note allonge complied with the
applicable authentic evidence requirements governing executory process
proceedings set forth in La. R.S. 9:4422. Therefore, we reverse the district court’s
October 26, 2022 judgment and remand for further proceedings.
FACTS AND PROCEDURAL BACKGROUND
On August 30, 2022, U.S. Bank filed a Petition for Executory Process With
Benefit of Appraisal seeking to enforce its right to foreclose on property securing a
promissory note executed by appellees, Timmie G. Owen and Caren Brown Owen.
U.S. Bank alleges in its petition that it is the holder of a promissory note dated
June 29, 2005, executed by the Owens and payable to the order of American
General Financial Services of Louisiana, Inc. U.S. Bank contends that it is the last
holder of the note because it was “endorsed in blank, without recourse.”2 The
1
An allonge is a “piece of paper annexed to a ... promissory note, on which to write endorsements for
which there is no room on the instrument itself.” Pioneer Valley Hosp., Inc. v. Elmwood Partners, LLC,
01-453 (La. App. 5 Cir. 10/17/01), 800 So.2d 932, 933, fn. 2.
2
U.S. Bank explains in its appellate brief that based on the blank endorsement, the note is now payable to
bearer and may be negotiated by transfer of possession alone. When an instrument is payable to order,
meaning it is payable to an identified person and then is “indorsed in blank,” the “instrument becomes
payable to bearer and may be negotiated by transfer of possession alone.” La. R.S. 10:3-205(a) and (b).
22-CA-588 1
blank endorsement is contained in the note allonge at issue in this appeal. The
endorsement in the note allonge specifically states: “Pay to the order of: [blank
space] Without recourse SPRINGLEAF FINANCIAL SERVICES OF
LOUISIANA, INC. F/K/A AMERICAN GENERAL FINANCIAL SERVICES OF
LOUISIANA, INC.” This is followed by the signature of Stephen L. Day, as
“Vice President.”
According to U.S. Bank, the note was later modified by means of a Loan
Modification Agreement, which altered the principal amount due to $111,763.51,
payable at an interest rate of 10.9% per annum, with increased monthly payments
of $1,323.94, and a maturity date of September 5, 2030. U.S. Bank further alleges
that the note is officially paraphed “Ne Varietur” for identification with an act of
mortgage passed before a notary public on June 29, 2005, and recorded on August
15, 2005 in St. John the Baptist Parish. In the act of mortgage, the Owens
confessed judgment and consented that if they did not pay the note in accordance
with its terms and conditions, the property securing the mortgage might be seized
and sold by executory process. U.S. Bank contends that the note and mortgage are
past due and exigible because monthly installments due from May 5, 2021 remain
unpaid. According to the verification attached to the petition, the balance due and
owing is $93,290.31, with interest at a rate of 10.9% per annum from April 5, 2021
until paid.
After reviewing the petition for executory process, the district court entered
a judgment sua sponte on October 26, 2022, dismissing U.S. Bank’s petition for
executory process based on the court’s finding that U.S. Bank failed to establish its
right to enforce the note by means of executory process. The district court
reasoned that because the allonge or endorsement of the note did not comply with
22-CA-588 2
authentic evidence requirements, U.S. Bank did not have a right of action to
proceed by means of executory process. 3 This appeal followed.
LAW AND DISCUSSION
An executory proceeding in Louisiana is an in rem proceeding that provides
a simple, expeditious, and inexpensive procedure by which creditors may seize and
sell property upon which they enjoy a mortgage and privilege. Deutsche Bank
National Trust Co. v. Carter, 10-663 (La. App. 5 Cir. 1/25/11), 59 So.3d 1282,
1286, writ denied, 11-392 (La. 4/8/11), 61 So.3d 691. Executory process is “used
to effect the seizure and sale of property, without previous citation and judgment,
to enforce a mortgage or privilege thereon evidenced by an authentic act importing
a confession of judgment.” La. C.C.P. art. 2631. Executory process is a unique
and harsh remedy requiring strict construction. Colonial Finance, LLC v. Colonial
Golf & Country Club, Inc., 11-5 (La. App. 5 Cir. 6/14/11), 72 So.3d 349, 351, writ
denied, 11-2399 (La. 12/16/11), 76 So.3d 1209. Before a court signs an order to
issue a writ of seizure and sale in an executory process proceeding, La. C.C.P. art.
2638 requires the court to satisfy itself that the plaintiff has established the right to
use executory process:
If the plaintiff is entitled thereto, the court shall order the issuance of a
writ of seizure and sale commanding the sheriff to seize and sell the
property affected by the mortgage or privilege, as prayed for and
according to law.
See Hood Motor Co., Inc. v. Lawrence, 320 So.2d 111, 113 (La. 1975).
La. C.C.P. art. 2635(A) provides that in order for a creditor to prove its right
to use executory process to enforce a mortgage secured by immovable property, it
is necessary only to submit authentic evidence of 1) the note, bond or other
instrument evidencing the obligation secured by the mortgage, security agreement,
3
We note that the judgment and reasons for judgment are contained in the same document, contrary to the
mandate of La. C.C.P. art. 1918(B). This provision states that “[w]hen written reasons for the judgment
are assigned, they shall be set out in an opinion separate from the judgment.”
22-CA-588 3
or privilege; and 2) the authentic act of mortgage or privilege on immovable
property importing a confession of judgment. La. C.C. P. art. 2635(B) further
emphasizes that “this requirement of authentic evidence is necessary only in those
cases, and to the extent, provided by law. A variance between the recitals of the
note and of the mortgage or security agreement regarding the obligation to pay
attorney’s fees shall not preclude the use of executory process.”
The district court found that U.S. Bank did not have a right to proceed by
means of executory process because the allonge does not comply with authentic
evidence requirements. U.S. Bank counters on appeal that the note allonge
complies with the executory process requirements for transfers of promissory notes
established in La. R.S. 9:4422.
We agree. Following amendments to the executory process provisions in
1989, La. C.C.P. art. 2635 no longer requires every document submitted in support
of a petition for executory process to be in authentic form. See Tanner v.
Succession of Bourland, 52,918 (La. App. 2 Cir. 11/20/19), 285 So.3d 104, 110.
Furthermore, La. R.S. 9:4422, enacted in 1989 and amended in 2012, requires
compliance with the following evidentiary rules when foreclosure by executory
process is instituted by the transferee, assignee, or pledgee of any promissory note,
whether negotiable or not:
(1) All signatures of the following persons or entities are presumed to
be genuine and no further evidence is required of those signatures for
the purposes of executory process: endorsers, guarantors, and other
persons whose signatures appear on or are affixed to such instrument
secured by the mortgage or privilege.
(2) The assignment, pledge, negotiation, or other transfer of any
obligation secured by a mortgage or privilege may be proven by
any form of private writing, and such writing shall be deemed
authentic for the purposes of executory process.
(3) The holder of any promissory note, whether negotiable or not,
and any negotiable instrument under this Section may enforce the
mortgage or privilege securing such instrument without authentic
22-CA-588 4
evidence of the signatures, assignment, pledge, negotiation, or
transfer thereof. [Emphasis added.] 4
Accordingly, La. R.S. 9:4422 now provides in Section (2) that a document
evidencing the transfer of a promissory note provided in support of a petition for
executory process may be proven by any form of private writing and that writing is
deemed authentic for executory process purposes. Furthermore, Section (3)
provides that the holder of a promissory note may enforce the mortgage securing
that note without authentic evidence of the assignment or transfer thereof. We find
that the note allonge in the instant case complies with La. R.S. 9:4422(2) because it
is a private writing, which “shall be deemed authentic for the purposes of
executory process.”
The district court did not cite to La. R.S. 9:4422 in the reasons it provided
for dismissing U.S. Bank’s petition, but rather cited to various cases to support its
position that authentic evidence of an assignment, transfer or endorsement of a
note is required to use executory process. We agree with U.S. Bank that the rules
set forth in La. R.S. 9:4422 supersede the cases cited by the district court. In fact,
three of the cases cited by the district court were decided prior to the enactment of
La. R.S. 9:4422 in 1989, and the district court relied on language in the dissent in
one of the more recent cases it cited.5
The district court also quoted Aetna Life Ins. Co. v. Lama Trusts, 28,328
(La. App. 2 Cir. 5/8/96), 674 So.2d 1086, 1089, for its statement that “[a]uthentic
evidence of the assignment and endorsement of an order note is required to support
the use of executory process.” We first observe that the Aetna case did not cite to
4
The Louisiana legislature enacted La. R.S. 9:4422 by Acts 1989, No. 292, § 1, and amended the
provision in 2012 by Acts 2012, No. 400, §1.
5
See Miller v. Cappel, 36 La.Ann. 264 (1884); Colonial Financial Service, Inc. v. Stewart, 481 So.2d
186, 189 (La. App. 1st Cir. 1985); American Sec. Bank of Ville Platte v. Deville, 368 So.2d 167, 169 (La.
App. 3rd Cir. 1979); and U.S. Bank National Ass’n v. Dumas, 12-1902 (La. App. 1 Cir. 4/3/14), 144 So.3d
29, 49, writ denied, 14-943 (La. 8/25/14), 147 So.3d 1119 (citing to dissent). The majority in Dumas
recognized that La. R.S. 9:4422 now governs evidentiary requirements for indorsements and transfers of
notes in executory process proceedings. Id. at 45.
22-CA-588 5
or recognize the rules contained in La. R.S. 9:4422 in its analysis. Furthermore, in
U.S. Bank Trust National Ass’n v. Parks, 22-56 (La. App. 5 Cir. 11/2/22), 353
So.3d 228, 233, this Court recently distinguished Aetna and further recognized that
“per La. R.S. 9:4422, authentic evidence of how U.S. Bank came into possession
of the note was not necessary to establish that it had standing to bring the action for
executory process.”
Finally, the district court cited to Bankers Trust Co. of California v. Cooley,
03-1942 (La. App. 1 Cir. 6/25/04), 884 So.2d 594, which was decided prior to the
2012 amendment to La. R.S. 9:4422. The Cooley court determined that La. R.S.
9:4422 was not applicable to its analysis due to language limiting the application of
the statute to instruments that would be negotiable “but for a limitation of personal
liability of the maker or comaker secured by a mortgage or privilege.” Id. at 595,
fn. 1. In the 2012 amendment, however, the Louisiana legislature removed this
language and added language expanding the application of La. R.S. 9:4422 to “any
promissory note, whether negotiable or not.”6
Accordingly, La. R.S. 9:4422 clearly provides that the transfer of any
obligation secured by a mortgage may be proven by any form of private writing,
which shall be deemed authentic for executory process purposes. The note allonge
provided with U.S. Bank’s petition for executory process satisfies this requirement.
DECREE
Based on the foregoing, we find that the district court erred by finding that
U.S. Bank did not have a right of action to proceed by means of executory process
because the note allonge did not meet authentic evidence requirements. Therefore,
we reverse the district court’s August 26, 2023 judgment and remand this matter
for further proceedings.
REVERSED AND REMANDED
6
See La. Acts 2012, No. 400, §1.
22-CA-588 6
SUSAN M. CHEHARDY CURTIS B. PURSELL
CHIEF JUDGE CLERK OF COURT
SUSAN S. BUCHHOLZ
FREDERICKA H. WICKER
CHIEF DEPUTY CLERK
JUDE G. GRAVOIS
MARC E. JOHNSON
ROBERT A. CHAISSON LINDA M. WISEMAN
STEPHEN J. WINDHORST
FIRST DEPUTY CLERK
JOHN J. MOLAISON, JR.
SCOTT U. SCHLEGEL FIFTH CIRCUIT
MELISSA C. LEDET
JUDGES 101 DERBIGNY STREET (70053)
DIRECTOR OF CENTRAL STAFF
POST OFFICE BOX 489
GRETNA, LOUISIANA 70054 (504) 376-1400
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www.fifthcircuit.org
NOTICE OF JUDGMENT AND CERTIFICATE OF DELIVERY
I CERTIFY THAT A COPY OF THE OPINION IN THE BELOW-NUMBERED MATTER HAS BEEN DELIVERED
IN ACCORDANCE WITH UNIFORM RULES - COURT OF APPEAL, RULE 2-16.4 AND 2-16.5 THIS DAY
SEPTEMBER 20, 2023 TO THE TRIAL JUDGE, CLERK OF COURT, COUNSEL OF RECORD AND ALL
PARTIES NOT REPRESENTED BY COUNSEL, AS LISTED BELOW:
22-CA-588
E-NOTIFIED
40TH DISTRICT COURT (CLERK)
HONORABLE VERCELL FIFFIE (DISTRICT JUDGE)
VERCELL FIFFIE (APPELLANT) KATHLEEN LEGENDRE (APPELLANT) ZARA L. ZERINGUE (APPELLANT)
MAILED
L. CLAIRE MAYER (APPELLANT) TIMMIE G. OWEN (APPELLEE)
PENNY M. DAIGREPONT (APPELLANT) CAREN BROWN OWEN (APPELLEE)
REMY F. SYMONS (APPELLANT) 524 FRISCO DRIVE
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