Wachovia Mortgage Corporation v. Stephen Todd Hoover

STATE OF LOUISIANA
COURT OF APPEAL
FIRST CIRCUIT
NO. 2021 CA 1035
V WACHOVIA MORTGAGE CORPORATION
VERSUS
Akf
STEPHEN TODD HOOVER
Judgment Rendered:
APR 0 8 2022
ANN
On Appeal from the
19th Judicial District Court
In and for the Parish of East Baton Rouge
State of Louisiana
Trial Court No. 598, 992
Honorable Wilson Fields, Judge Presiding
John C. Morris, III Attorneys for Plaintiff -Appellee,
Ashley E. Morris Wells Fargo Bank, NA, Successor by
Monroe, LA Merger to Wachovia Bank, NA
Garth J. Ridge Attorney for Defendant -Appellant,
Baton Rouge, LA Stephen Todd Hoover
BEFORE: WHIPPLE, C. J., PENZATO, AND HESTER, JJ.
HESTER, J.
Defendant, Stephen Todd Hoover, appeals the trial court' s grant of summary
judgment in favor of plaintiff, Wells Fargo, NA, Successor by Merger to Wachovia
Bank, NA (hereafter referred to as " Wells Fargo")' in this suit on a promissory note.
For the reasons that follow, we affirm.
FACTS AND PROCEDURAL HISTORY
On February 7, 2011, Wachovia Mortgage Corporation filed a " Petition to
Enforce Security Interest by Ordinary Process" seeking to enforce a note dated
March 15, 2000, in the original principal sum of $351, 000. 00 executed by Mr.
Hoover as maker ( the note). In its petition, Wachovia stated that Mr. Hoover was
required to make monthly payments on the note, Mr. Hoover defaulted on the note
by failing to pay the monthly installment for June 1, 2010, when due, and Mr. Hoover
remained in default by failing to pay all successive monthly installments and other
amounts due on the note and mortgage. Wachovia sought the remaining amount due
on the note plus advances for payments of taxes and insurance, interest, costs, and
fees. The note was secured by an act of mortgage encumbering immovable property
bearing the municipal address 609 Grand Lakes Drive, Baton Rouge, Louisiana.
Attached to Wachovia' s petition were a copy of the note and a copy of the mortgage.
On December 9, 2011, Wachovia filed an ex parte motion to substitute Wells
Fargo as plaintiff. As pertinent to this appeal, on February 19, 2019, Wells Fargo
filed a motion for summary judgment contending that there are no material facts at
issue, and Wells Fargo is entitled to a judgment enforcing the terms of the note.
Wells Fargo attached the following to its motion for summary judgment: discovery
requests and responses by Mr. Hoover; an affidavit of Jeremiah Herberg, a Vice
President of Loan Documentation for Wells Fargo, with the original note, including
1 The original plaintiff, Wachovia Mortgage Corporation (" Wachovia"), merged with and into
Wells Fargo on May 6, 2011.
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an attachment entitled " Allonge to Note," an affidavit of lost note or modification
agreement, a copy of the act of mortgage, and a statement with a certificate by
Brenda S. Bradly, an assistant secretary with Wells Fargo, with several documents
attached.
In response, Mr. Hoover opposed Wells Fargo' s motion for summary
judgment attaching the original petition with a copy of the note attached. In his
opposition, Mr. Hoover pointed out that there are variations in the copies of the note
and the original, and the absence of an allonge in the original note. Mr. Hoover
contended that the inconsistencies in the notes as well as Wells Fargo initially
claiming that the note was lost, but then submitting the original note, created genuine
issues of material fact.
Wells Fargo' s motion for summary judgment came before the trial court for a
hearing on June 24, 2019. 2 After the hearing, the trial court signed a judgment on
July 15, 2019, in favor of Wells Fargo against Mr. Hoover. Mr. Hoover appealed
that judgment to this court. This court dismissed the appeal for lack of subject matter
jurisdiction because the precise amount of "additional amounts accruing thereafter,"
all expenses," " fees," and " reasonable attorney fees," provided for in the judgment
could not be determined from the judgment, and the indefinite awards rendered the
entire judgment not final and not appealable. Wachovia Mortgage Corp. v.
Hoover, 2019- 1520 ( La. App. 1st Cir. 9/ 21/ 20), 314 So. 3d 42, 45.
Thereafter, Wells Fargo filed a " Motion to Reform Judgment and Establish
Attorney Fees" and a hearing was set to address the motion. After the hearing, the
trial court signed a " Reformed Judgment" on April 27, 2021, in favor of Wells Fargo
and against Mr. Hoover in the following amounts:
a) principal of $293, 763. 91 with interest thereon at 9. 625% per annum
from May 1, 2010, until paid; ( b) the following amounts accrued
2 The motion for summary judgment initially came before the trial court on April 8, 2019, but the
ruling was not rendered until June 24, 2019, because the trial court wanted to review Mr. Hoover' s
opposition before ruling.
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through February 5, 2019: late charges of $ 1, 193. 36, advances of
30, 625. 39 for the payment of hazard insurance, advances of
34, 517. 64 for the payment of taxes, property inspections/preservation
of $680. 00; (c) expenses of $1, 286.29 and attorney' s fees in the amount
of $7, 532. 50, and ( d) all law charges, cost and expenses including
Sherriff' s commission.
The judgment also ordered that the mortgage securing the described debt in favor of
Wells Fargo be recognized and declared enforceable in accordance with the law and
with preference and priority over all inferior encumbrances to the property located
at 609 Grand Lakes Drive, Baton Rouge, Louisiana. It is from this judgment that
Mr. Hoover appeals, raising three assignments of error contending that the
discrepancies between the copies of the note and the original note raise a genuine
issue of material fact; that Wells Fargo should have amended its petition based on
the discrepancies in the original note and the copy of the note; and that Wells Fargo' s
initial statement that the note was lost was a judicial confession that was not properly
revoked and creates a genuine issue of material fact.
LAW AND ANALYSIS
After an opportunity for adequate discovery, a motion for summary judgment
shall be granted if the motion, memorandum, and supporting documents show that
there is no genuine issue as to material fact and that the mover is entitled to judgment
as a matter of law. La. Code Civ. P. art. 966( A)(3). A " genuine" issue is a triable
issue, which means that an issue is genuine if reasonable persons could disagree; if
on the state of the evidence, reasonable persons could reach only one conclusion,
there is no need for a trial on that issue. A fact is " material" when its existence or
nonexistence may be essential to plaintiff' s cause of action under the applicable
theory of recovery. Kasem v. State Farm Fire & Cas. Co., 2016- 0217 ( La. App.
1st Cir. 2/ 10/ 17), 212 So. 3d 6, 13. The summary judgment procedure is favored
and is designed to secure the just, speedy, and inexpensive determination of every
action. La. Code Civ. P. art. 966( A)(2).
El
If the party moving for summary judgment will bear the burden of persuasion
on the subject issue at trial, as here, that party must support its motion with credible
evidence that would entitle it to directed verdict if not controverted at trial. Hines
v. Garrett, 2004- 0806 ( La. 6/ 25/ 04), 876 So. 2d 764, 766; Aucoin v. Larpenter,
2020- 0792 (La. App. 1 st Cir. 4/ 16/ 21), 324 So. 3d 626, 632, writ denied, 2021- 00688
La. 9/ 27/ 21), 324 So. 3d 87. A motion for directed verdict is appropriately granted
when, after considering all evidentiary inferences in the light most favorable to the
party opposing the motion, it is clear the facts and inferences are so overwhelmingly
in favor of the moving party that reasonable men could not arrive at a contrary
verdict. LAD Services of Louisiana, L.L.C. v. Superior Derrick Services,
L.L.C., 2013- 0163 ( La. App. 1st Cir. 11/ 7/ 14), 167 So. 3d 746, 751, writ not
considered, 2015- 0086 ( La. 4/ 2/ 15), 162 So. 3d 392. Such an affirmative showing
shifts the burden of production to the party opposing the motion for summary
judgment and requires that party to produce evidentiary materials that demonstrate
the existence of a " genuine issue" for trial. Aucoin, 324 So. 3 at 632. However, if
there is any evidence in the record from any source from which a reasonable
inference in the nonmoving party' s favor may be drawn, the moving party simply
cannot obtain a summary judgment. Hines, 876 So.2d at 766- 67 ( citations omitted).
In determining whether summary judgment is appropriate, appellate courts
review evidence de novo under the same criteria that govern the trial court' s
determination of whether summary judgment is appropriate. Reynolds v. Bordelon,
2014- 2371 ( La. 6/ 30/ 15), 172 So. 3d 607, 610. Because it is the applicable
substantive law that determines materiality, whether a particular fact in dispute is
material can be seen only in light of the substantive law applicable to the case.
Succession of Hickman, 217 So. 3d at 1244. Summary judgment is an appropriate
procedural device to enforce a negotiable instrument when the defendant establishes
no defense against enforcement. Winston v. Hall, 2017- 1097 ( La. App. 1st Cir.
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4/ 6/ 18), 2018 WL 1663020 * 3 (unpublished), citing American Bank v. Saxena, 553
So. 2d 836, 844- 846 ( La. 1989). In a suit to collect on a promissory note, once the
plaintiff, as holder of the note, proves the maker' s signature, or the maker admits it,
the holder has made out his prima facie case by mere production of the note and is
entitled to recover in the absence of any further evidence. The burden then shifts to
the defendant to prove the existence of a triable issue of material fact and/or any
affirmative defenses. Riedel v. Fenasci, 2018- 0538 ( La. App. 1st Cir. 12/ 28/ 18),
269 So. 3d 995, 999. Under La. R.S. 10: 3- 301 a " Person entitled to enforce" an
instrument means ( i) the holder of the instrument, ( ii) a nonholder in possession of
the instrument who has the rights of a holder, or ( iii) a person not in possession of
the instrument who is entitled to enforce the instrument pursuant to La. R.S. 10: 3-
309 or 10: 3- 418( d).
Wells Fargo' s motion for summary judgment is based on its assertion that it
has established the right to enforce the note as well as the default of Mr. Hoover. In
the affidavit of Mr. Herberg attached to Wells Fargo' s motion for summary
judgment, Mr. Herberg stated that, due to the regular performance of his job
functions, he is familiar with the business records maintained by Wells Fargo for the
purpose of servicing mortgage loans and has acquired personal knowledge of the
matters stated in his affidavit by examining the business records. Mr. Herberg said
that Wells Fargo is an entity that owns and has possession of the note executed by
Mr. Hoover. The note was attached to his affidavit and provided that Mr. Hoover
promised to pay to the lender, Landmark Mortgage Corporation, the amount of
351, 000. 00 plus interest at the yearly rate of 9. 625%. Attached to the note was an
Allonge to Note" wherein Landmark Mortgage Corporation endorsed the note to
First Union Mortgage Corporation. Also attached to the affidavit was the mortgage,
which secured the note, executed by Mr. Hoover affecting the property located at
609 Grand Lakes Drive.
rel
The statement with the Bank' s certificate executed by Ms. Bradly, the Wells
Fargo assistant secretary, certified that First Union Mortgage Corporation changed
its name to Wachovia Mortgage Corporation in February 2002, and Wachovia
merged with and into Wells Fargo National Association in May 2011. Attached to
her statement was the paperwork evidencing the name change and merger of
Wachovia with and into Wells Fargo.
Regarding Mr. Hoover' s default on the note, Mr. Herberg pointed out in his
affidavit that his review of the account of Mr. Hoover revealed that Mr. Hoover
defaulted on the note, and the default has not been cured. Mr. Herberg stated that as
of February 5, 2019, the amount due on the note totaled $ 608, 494. 31. 3 In the
requests for admission and interrogatories directed to Mr. Hoover attached to Wells
Fargo' s motion for summary judgment, Mr. Hoover admitted that he did not timely
make all payments contemplated by the note and mortgage pertaining to the
mortgage loan, and he did not enter into a written loan modification agreement at
any point since March 15, 2000. Additionally, in Wells Fargo' s request for
production of documents, Wells Fargo asked for proof of all payment made by Mr.
Hoover pursuant to the mortgage obligation, and Mr. Hoover stated that he " does
not have any of those document[ s]."
Finally, Mr. Herberg attached to his affidavit a lost note affidavit executed in
2012 that stated that the original note could not be located. However, Mr. Herberg
expressly stated in his affidavit that the original note was subsequently located
around June 2018 and the lost note affidavit was cancelled.
After a de novo review of the evidence presented by Wells Fargo, we find that
Wells Fargo proved its prima facie case against Mr. Hoover by producing the
3 This included the remaining principal in the amount of $293, 763. 91; interest in the amount of
247, 714. 01; late charges in the amount of $1, 193. 36; hazard insurance disbursements in the
amount of $30, 625. 39; tax disbursements in the amount of $34, 517. 64; and property inspections
in the amount of $680. 00. This summary included Wells Fargo' s exercise of its right to accelerate
all amounts due in accordance with the promissory note.
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original note, which establishes the debt, unrefuted evidence that Wells Fargo
currently owns the note, and proof of Mr. Hoover' s default on the note. With this
showing, the burden shifted to Mr. Hoover to prove the existence of a triable issue
of material fact and/ or any affirmative defenses.
In opposition to Wells Fargo' s motion for summary judgment, Mr. Hoover
did not introduce evidence of payment, but rather his attorney raised several
arguments. First, Mr. Hoover argued that differences in the copy of the note attached
to the original petition, the copy of the note attached to a 2012 motion for summary
judgment, and the original note attached to the current motion for summary
judgment raise a genuine issue of material fact. Specifically, Mr. Hoover contends
that there was an allonge attached to the copy of the note attached to the original
petition that was not attached to the original note, and that there were endorsements
on an allonge attached to the original note that were not attached to the copy. Mr.
Hoover also argued that Wells Fargo' s previous statements in court and in affidavits
that the note was lost constitute a judicial confession that can only be revoked on the
grounds of error of fact. Mr. Hoover further argued that Wells Fargo should have
amended its petition because the original petition indicated that a copy of the note
was attached and the motion for summary judgment relies on the original note.
While there were some differences between the allonges and endorsements on
the copies of the note and the original note, the differences do not bear on Mr.
Hoover' s obligation to pay the note, and these facts raised by Mr. Hoover are not
material in that their existence or nonexistence are not essential to Wells Fargo' s
cause of action for enforcement of a note by ordinary process. Therefore, the
differences in the note do not raise a genuine issue for trial.
Furthermore, we are not persuaded by Mr. Hoover' s arguments that a
statement that a note is lost is a judicial confession that can only be revoked for error
of fact or that Wells Fargo should have amended its petition. Recently, the Louisiana
Supreme Court addressed a similar issue in Consumer Solutions, LLC v.
Thompson, 2020- 01359 ( La. 2/ 9/ 21) 309 So. 3d 730 ( per curiam), wherein the
plaintiff attached a copy of a note to the original petition and stated in their response
to an exception of no right of action that the note was lost,' but the plaintiff produced
the original note at trial. The Supreme Court determined that the fact that the
plaintiff may not have had physical possession of the note when the suit was filed
does not in and of itself defeat plaintiff' s claim to the right to enforce. The Supreme
Court did not find that the plaintiff' s statement in a pleading that the note was lost
constituted a judicial confession and did not require the plaintiff to amend the
petition to attach the original note before addressing the merits of the petition. See
Consumer Solutions, LLC, 309 So. 3d at 730- 731. Furthermore, the relief
requested, enforcement of the note, is the same in the original petition and the motion
for summary judgment, and there are no new causes of action alleged in the motion
for summary judgment.
As the facts raised by Mr. Hoover are not material to Wells Fargo' s cause of
action to enforce the note by ordinary process, and summary judgment cannot be
defeated by mere argument of counsel, we find no merit to Mr. Hoover' s
assignments of error. Mr. Hoover failed to prove the existence of a triable issue of
material fact and/or any affirmative defenses sufficient to defeat summary judgment;
therefore, the trial court did not err in granting summary judgment in favor of Wells
Fargo and ordering Mr. Hoover to pay the amount due on the note.
4 The fact that the plaintiff stated in a response to an exception that the note was lost is from this
court' s opinion in Consumer Services. See Consumer Solutions LLC v. Thompson, 2019- 0214
La. App. 1st Cir. 9/ 2/ 20), 2020 WL 5229434 ( unpublished), writrag nted, 2020- 01359 ( La.
2/ 9/ 21), 309 So. 3d 730.This court' s opinion was ultimately overturned by the Supreme Court,
but this fact was not disputed.
1
CONCLUSION
For the foregoing reasons, the trial court' s grant of summary judgment in
favor of Wells Fargo is affirmed. All costs of the appeal are assessed to defendant -
appellant, Mr. Stephen Hoover.
AFFIRMED.
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