Anthem Bank & Trust, A Federal Savings Bank, Formerly Known As First Financial Bank and Trust Co. v. Shahram Nickroo and Mary Ann Heard Nickroo ( 2020 )

NOT DESIGNATED FOR PUBLICATION
STATE OF LOUISIANA
COURT OF APPEAL
FIRST CIRCUIT
NUMBER 2019 CA 1216
ANTHEM BANK & TRUST, A FEDERAL SAVINGS BANK FORMERLY
KNOWN AS FIRST FINANCIAL BANK & TRUST COMPANY
VERSUS
SHAHRAM NICKROO AND MARY ANN HEARD NICKROO
Judgment Rendered: JUL 0 6 2020
Appealed from the
Twenty -First Judicial District Court
In and for the Parish of Livingston
State of Louisiana
Docket Number 147394
Honorable Robert H. Morrison, III, Judge Presiding
David M. Cohn Counsel for Plaintiff/Appellant,
D. Brian Cohn Anthem Bank & Trust, A Federal Savings
Bartley P. Bourgeois Bank, formerly known as First Financial
Allyson S. Jarreau Bank & Trust Company
Baton Rouge, LA
Joseph Paul Rummage, Jr. Counsel for Defendants/Appellees,
Denham Springs, LA Shahram Nickroo and Mary Ann Heard
Nickroo
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BEFORE: WHIPPLE, C.J., GUIDRY, AND THERIOT, JJ.
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WHIPPLE, C.J.
This matter is before us on appeal by plaintiff, Anthem Bank & Trust, a
Federal Savings Bank, formerly known as First Financial Bank & Trust Company,
the Bank") from a judgment of the district court denying the Bank' s motion to
set aside an order of dismissal and ordering the Bank to file a separate ordinary
action for a deficiency judgment. For the reasons that follow, the judgment is
reversed and this matter is remanded for further proceedings.
FACTS AND PROCEDURAL HISTORY
On December 16, 2011, Shahram Nickroo executed a promissory note in the
amount of $ 711, 453. 50 payable to the Bank in one principal payment of
711, 453. 50 due December 16, 2012, with regular monthly payments of accrued
unpaid interest on the loan beginning January 1, 2012. The promissory note was
secured by a collateral mortgage note executed by Shahram Nickroo and Mary
Ann Heard Nickroo on August 7, 2008, in the amount of $1, 500,000.00, affecting
two tracts of property in Livingston Parish. The purpose of the collateral mortgage
note was to secure loans or advances issued by the Bank to the Nickroos. Pursuant
to a " Change in Terms Agreement" dated December 16, 2011, and executed by
Shahram Nickroo on April 18, 2013, the maturity date of the loan was extended to
December 12, 2013.
On January 13, 2015, the Bank filed a petition' and order for executory
process, averring that the Nickroos defaulted on the loan in the amount of
711, 424. 18 in unpaid principal and $ 21, 797.36 in unpaid interest, and requesting
that an immediate writ of seizure and sale issue, directing the Sheriff of Livingston
Parish to seize and sell the immovable property subject to the collateral mortgage
The Bank subsequently amended its petition to properly reflect the Bank' s name and to
attach copies of the Certified Resolutions of the Board of Directors and Articles of Amendment
of the Bank' s charter.
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note? On January 15, 2015, the district court signed the order, granting executory
process and ordering a writ of seizure and sale.
On July 13, 2015, the Nickroos filed a petition to enjoin foreclosure, alleging
defects in the executory process. The district court denied the petition, noting that
the " allegations do not preclude the Sheriff' s Sale, but may be raised in defense
should the creditor seek a deficiency judgment." On August 26, 2015, the Sheriff
sold the immovable property subject to the collateral mortgage for $ 496, 666. 68.
Three years later, on September 28, 2018, the Bank filed a second supplemental
and amending petition, converting the matter to ordinary process and seeking a
deficiency judgment for the balance owed by the Nickroos.'
The Nickroos responded by filing an ex parte motion for order of dismissal
on the grounds of abandonment, averring that no discovery or other action had
been taken by the parties in the litigation since the Bank filed an answer to the
Nickroos' petition to enjoin foreclosure on September 21, 2015, until the Bank' s
filing of its second supplemental and amending petition on September 28, 2018,
and thus, that the proceedings should be dismissed as abandoned, pursuant to LSA-
C. C. P. art. 561, given that more than three years had elapsed with no timely " step"
taken in the prosecution of the case. An ex parte order was signed by the district
court on November 15, 2018, dismissing the proceeding, without prejudice, as
abandoned.
The Bank filed an opposition to the petition for dismissal and a motion to set
aside the ex parte order of dismissal, contending that a final judgment rendered
pursuant to a completed executory process proceeding precludes application of the
In its petition, the Bank also requested the appointment of an attorney as curator ad hoc
to represent the Nickroos, who were residing in California.
3Louisiana Code of Civil Procedure article 2644 provides that a plaintiff in an executory
proceeding may convert it into an ordinary proceeding by amending his petition so as to pray that
the defendant be cited and for judgment against him on the obligation secured by the mortgage or
privilege.
abandonment principles. Following a hearing, the district court signed a judgment
on May 14, 2019, denying the Bank' s motion to set aside the order of dismissal
and ordering the Bank to file a separate ordinary action for any deficiency balance
remaining after the sheriffs sale, despite the provisions of LSA-C. C.P, art. 2772. 4
The Bank now appeals, contending that the district court erred in: ( 1)
dismissing the lawsuit on the basis of abandonment; ( 2) " circumventing" the
Bank' s right to bring its claim for a deficiency judgment in the same lawsuit under
LSA-C.C.P. art. 2772; and ( 3) improperly ordering the Bank to bring its claim for a
deficiency judgment in a separate suit.5
DISCUSSION
Motion to Dismiss Appeal
As an initial matter, we note that the Nickroos filed with this court a motion
to dismiss the Bank' s appeal, contending that in filing a separate suit as ordered by
the district court and availing itself of relief in accordance with the judgment, the
Bank has acquiesced in the judgment on appeal, such that no justiciable
controversy remains for resolution on this appeal.
Louisiana Code of Civil Procedure article 2085 provides that:
a]n appeal cannot be taken by a party who confessed judgment
in the proceedings in the trial court or who and
voluntarily
unconditionally acquiesced in a judgment rendered against him.
Confession of or acquiescence in part of a divisible judgment or in a
favorable part of an indivisible judgment does not preclude an appeal
as to other parts of such judgment.
4Louisiana Code of Civil Procedure article 2772 provides that a creditor may obtain a
deficiency judgment against the debtor either by converting the executory proceeding into an
ordinary proceeding as provided in Article 2644, or by a separate suit.
5The denial of a motion to set aside a judgment is an interlocutory judgment akin to the
denial of a motion for a new trial, which is generally not appealable absent a showing of
irreparable harm. LSA- C. C. P. art. 2083; Chaney v. Department of Public Safety and Correctons
Office of Motor Vehicles), 2009- 1543 ( La. App. 1St Cir. 3/ 26/ 10, 36 So. 3d 328, 330, n. 1, cit_
int_
Morrison v. Dillard Department Stores, Inc., 99- 2060 ( La. App. 1St Cir. 9/ 22/ 00), 769 So. 2d 742,
744, writ denied, 2000- 3379 ( La. 2/ 2/ 01), 784 So. 2d 646. However, the supreme court has
directed us to consider the denial of a motion for a new trial where it is clear that the appellant
meant to appeal the merits of the case decided by an earlier final judgment. Chaney v.
Department of Public Safety and Corrections ( Office of Motor Vehicles), 36 So. 3d at 330, n. 1.
0
The Nickroos specifically contend in their motion to dismiss that by
instituting a new petition for a deficiency judgment in a separate, ordinary action,
as directed by the district court in its May 14, 2019 judgment, the Bank has
acquiesced in the judgment on appeal, and that the appeal should be dismissed as
moot. In support, the Nickroos rely on attachments to their motion, which include,
inter alia, copies of pleadings purportedly filed by the Bank in a separate suit
below, a petition for deficiency judgment against Mr. Nickroo filed on June 3,
2019, a motion for preliminary default, and related filings, none of which are part
of the appellate record in the instant case. However, attachments to a
memorandum or motion do not form part of the record on appeal, and, thus, cannot
be considered. See English Turn Property Owners Association v. Taranto, 2016-
0319 ( La. App. 41" Cir. 4/ 19/ 17), 219 So. 3d 381, 386, writ denied, 2017- 1100 ( La.
10/ 16/ 17), _ So. 3d( documents attached to a motion to dismiss appeal form no
part of the record on appeal and cannot be considered).
The Bank concedes in its opposition that it initially did file a separate suit
for a deficiency judgment, as ordered by the district court, but argues that this
action in no way constitutes a voluntary and unconditional acquiescence of its
rights to appeal, nor does any subsequent filing change the fact that its motion to
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set aside dismissal was improperly denied. With regard to the record that is
before us, the Bank contends that a real and ongoing dispute exists between the
parties where: no settlement has been reached; it did not execute a satisfaction of
judgment; it has not accepted any benefit of a judgment; and it did not waive its
right to appeal. The Bank points out that there is nothing in the district court or
appellate court record of these proceedings that evidences any intent by the Bank
6Even if we were able to consider documents or filings in a subsequent matter, the Bank
noted without contradiction at oral argument that the referenced suit was subject to an exception
of lis pendens or was not otherwise viable. Again, these arguments also refer to matters outside
the appellate record.
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to abandon its right to appeal, and that its dispute with the Nickroos is ripe and
definitive and is properly before this court. We agree.
A party against whom a judgment was rendered is not entitled to appeal if he
or she has " voluntarily and unconditionally acquiesced in a judgment rendered
against him." LSA-C.C. P. art. 2085. However, appeals are favored in law and
forfeiture of the right to appeal through acquiescence is never presumed. Coleman
Oldsmobile Inc. v. Johnson, 474 So. 2d 20, 21 ( La. App. I" Cir. 1985). Thus, the
party alleging acquiescence must establish by direct or circumstantial evidence that
the party now appealing intended to acquiesce. Succession of Marcel, 387 So. 2d
1363, 1364 ( La. App. 11 Cir. 1980). Acquiescence should be decreed only when
the party' s intention to abandon his right of appeal is clearly demonstrated.
Coleman Oldsmobile, Inc. v. Johnson, 474 So. 2d at 22; see also Ourso v. Wal-
Mart Stores Inc., 2008- 0780 ( La. App. 1St Cir. 11/ 14/ 08), 998 So. 2d 295, 299, writ
denied, 2008- 2885 ( La. 2/ 6/ 09), 999 So. 2d 785. The term " acquiescence"
envisions voluntary execution of a judgment. See LSA-C.C. P. art. 2085, Official
Revision Comments, Comment ( d).
Such acquiescence must be voluntary, unconditional, complete, and coupled
with the intention of abandoning the appeal. Acquiescence is never presumed and
must be established by evidence which leaves no doubt regarding appellant' s
alleged acquiescence, considering that appeals are favored in law. Ponder v.
Pechon, 169 So. 2d 671, 673 ( La. App. I" Cir. 1964), writ refused, 170 So. 2d 868La. 1965). A party favored by judgment may accept the full amount thereof from
the party cast or may even cause execution on the judgment without forfeiting his
right of appeal because of acquiescence. Succession of Marcel, 387 So. 2d at
1364.
On the record before us, we are unable to say that the Bank' s filing of a
petition when ordered to do so by the district court in an adverse judgment was
on
sufficient to establish a voluntary and unconditional acquiescence in the Bank' s
right to appeal the judgment giving rise to the filing of a separate suit. The Bank
contends in its opposition that it filed the separate action because it was ordered to
do so by the district court, which caused it to incur " increased costs" and resulted
in " judicial inefficiencies." Moreover, the Bank contends that despite filing the
separate suit, it never conceded that the district court was correct in finding that the
Bank had abandoned its right to a deficiency judgment in the executory process
action or in ruling that the Bank could not convert the executory process
proceeding into an ordinary proceeding to pursue a deficiency judgment as
specifically permitted by LSA-C.C.P. art. 2772. As the Bank notes, the instant
appeal challenges these rulings of the district court.
To constitute acquiescence to defeat an appeal, an intention to accept the
judgment and not to appeal must be shown. Ourso v. Wal- Mart Stores Inc., 998
So. 2d at 299. Neither showing has been made herein. Because the Nickroos have
failed to establish that the Bank intended to acquiesce or otherwise waive or
abandon its right to assert these challenges on appeal, we will deny the motion to
dismiss the appeal and will consider the issues before us on appeal by the Bank.
Abandonment
Assignment of Error Number One)
In its first assignment of error, the Bank contends that the district court erred
in refusing to set aside its order of dismissal, as the rules of abandonment do not
apply in the instant case, where, as here, the executory proceeding was complete.
The concept of abandonment can apply to executory proceedings.
Countrywide Home Loans, Inc. v. Estate of Rowe, 51, 489 ( La. App. 2" d Cir.
6/ 21/ 17), 224 So. 3d 1152, 1157. Thus, until there is a sale of the property, the
abandonment articles continue to apply, and the executory process is not complete.
See JP Morgan Chase Bank, N.A. v. Bickham, 2016- 0946 ( La. App. 1St Cir.
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6/ 2/ 17) ( unpublished); Countrywide Home Loans, Inc. v. Estate of Rowe, 224 So.
3d at 1157; and Nationstar Mortgage, LLC v. Harris, 2013- 1335 ( La. App. 4th Cir.
5/ 14/ 14), 141 So. 3d 829, 834- 835. See also Hibernia National Bank v. Aero-
Mech, Inc., 50, 608 ( La. App. 2nd Cir. 8/ 3/ 16), 215 So. 3d 350 ( creditor' s efforts to
enforce and/ or satisfy a money judgment were not subject to LSA-C.C. P. art. 561
governing abandonment).
In the instant case, a writ of seizure and sale was ordered by the district court
on January 15, 2015, and the property subject to the collateral mortgage was sold
at sheriff' s sale on August 25, 2015. Thus, at the time the Nickroos filed their ex
parte motion for an order of dismissal on the grounds of abandonment on
November 145 2018, an order granting the executory process had been rendered
such that the executory process was accomplished and complete, and the principles
of abandonment no longer applied.' Accordingly, the district court erred in
granting the ex parte order dismissing the proceeding as abandoned.'
Once an executory proceeding is converted into an ordinary proceeding pursuant to
LSA-C. C. P. arts. 2644 and 2772, the ordinary proceeding is considered a " new proceeding." As
the supreme court explained in First Guaranty Bank, Hammond. Louisiana v. Baton Rouge
Petroleum Center, Inc., 529 So. 2d 834, 841 ( La. 1987) ( on rehearing):
When the property has been sold under the executory proceedings after
appraisal and in accordance with statutory provisions governing appraisal, the
creditor may obtain a personal judgment against the mortgagor for any deficiency
remaining after the application of the net proceeds of sale to the secured debt. La.
C. Civ.P. art. 2771.However, the creditor can do so only by converting the
executory proceeding into an ordinary one, or by instituting a new suit against the
mortgagor. La. C. Civ.P. arts. 2644, 2772. Under either method, the new
proceeding is a personal action, in which the defendant has all of the rights of a
defendant in an ordinary proceeding, e. g, he must be subjected personally to the
jurisdiction of the court and process must be served on him. The confession of
judgment, having served its purpose in the executory proceeding, has become
functus officio, and the mortgagee must prove the indebtedness asserted by the
usual modes of proof. La. C. Civ.P. art. 2772. [ Citations omitted] [ Emphasis
added].
8In addition to finding that the principles of abandonment no longer applied herein, we
note that there is a five- year prescriptive period for purposes of pursuing a deficiency judgment,
which period commences from the date of the sheriffs sale. See LSA- C. C. art. 3498 and Dyck -
O' Neal, Inc. v. Sands, 98- 3042 ( La. App. 41h Cir, 8/ 18/ 99), 745 So. 2d 68, 70, writ denied, 99-
3123 ( La. 1/ 7/ 00), 752 So. 2d 871.
M
Error in Ordering the Bank' s Claim for
Deficiency Judgment to be Asserted in a Separate Suit
Assignment of Error Numbers Two and Three)
In these related assignments of error, the Bank contends the district court
erred in " circumventing" the Bank' s right to seek a deficiency judgment in the
same suit and further in ordering that the Bank assert its claim in a separate suit.
After careful review, we agree. As noted above, LSA-C. C. P. art. 2772 specifically
grants a creditor the right to obtain a deficiency judgment against a debtor by
converting the executory proceeding into an ordinary proceeding as provided in
LSA-C. C.P. art. 2644 or by filing a separate suit. Accordingly, the district court
erred in concluding otherwise and in ordering the filing of a separate suit after
finding the prior matter abandoned.
CONCLUSION
For the above and foregoing reasons, the motion to dismiss filed by the
Nickroos is hereby denied. Finding merit to the Bank' s assignments of error, the
May 14, 2019 judgment of the district court, denying the Bank' s motion to set
aside the district court' s November 15, 2018 order of dismissal on grounds of
abandonment and ordering that the Bank file a separate ordinary action for any
deficiency balance due after the Sheriff's Sale of August 26, 2015, is hereby
reversed and the matter is remanded to the district court for further proceedings.
Costs of this appeal are assessed to the defendants/ appellees, Shahram Nickroo and
Mary Ann Heard Nickroo.
MOTION TO DISMISS APPEAL DENIED; JUDGMENT REVERSED
AND MATTER REMANDED.
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