Trustee for Bondholders under that certain Trust Indenture dates December 1, 2007, relative to Louisiana Local Government Environmental Authority Tax-Exempt Revenue Bonds (Southgate Suites Project), Series 2007A (GO Zone) (Non-Amt) VS Southgate Suites LLC, Southgate Towers LLC, Robert W. Day, Janice E. Day, and Washington State Bank
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NOT DESIGNATED FOR PUBLICATION STATE OF LOUISIANA COURT OF APPEAL t VYV FIRST CIRCUIT NO 2013 CA 0242 RUSTEE FOR BONDHOLDERS UNDER THAT CERTAIN TRUST INDENTURE DATES DECEMBER 1 2007 RELATIVE TO LOUISIANA LOCAL GOVERNMENT ENVIRONMENTAL AUTHORITY TAX REVENUE BONDS EXAMPT SOUTHGATE SUITES PROJECT SERIES 2007A GO ZONE NON AMT VERSUS SOUTHGATE SUITES LLC SOUTHGATE TOWERS LLC ROBERT W DAY JANICE E DAY WASHINGTON STATE BANK Judgment Rendered EC 1 0 Z013 On Appeal from the 19 Judicial District Court In and for East Baton Rouge Parish State of Louisiana Trial Court No 611 Section 24 831 The Honorable R Michael Caldwell Judge Presiding James M Garner Cahill Balhoff II Elwood F John T Jr Jeffrey D Kessler New Orleans Louisiana Attorneys for Plaintiff Appellant Wells Fargo Bank National Assoc as Trustee for Bondholders Phillip W Pries Charles M Gordon Jr C rystal D Burkhalter Caroline P Graham Attorneys for Defendants Appellees Southgate Towers LLC Southgate Suites LLC Robert W Day Janice E Day Charles Matthew Thompson aton E Rouge Louisiana ichard F C Jennifer L Stanley Attorneys for Defendant Appellee Thomton Crews Associates Inc Plicholas R Pitre T1ew Orleans Louisiana Steven G Durio Attorneys far Defendant Appellee ravis Broussard Washington State Bank afayette Louisiana I BEFORE WHIPPLE C WELCH AND CRAIN JJ J z C RAIN J Wells Fargo Bank National Association Trustee appeals a judgment siistaining an exception of no cause or right of action and dismissing its claims a Washington State Bank After consideration of the evidence adduced at the eridentiary hearing held pursuant to this court remand order we dismiss this s aapeal as moot FACTS AND PROCEDiIRAL HISTORY This suit arises from Southgate Suites LLC construction of the Staybridge s Suites Hotel in Baton Rouge Pertinent to this appeal Trustee alleges that the roperiy on which the hotel was to be built was owned by Southgate Towers LLC and encumbered by a mortgage in favor of Washington State Bank Southgate Towers conveyed the tract on which the hotel was to be built to Southgate Suites nd Washington State Bank executed a partial release of its mortgage as to that tract As part of the financing for the construction Southgate Suites entered into a loan agreement with payment and obligations secured by a mortgage in favor of Crustee After construction it was discovered that the tract on which the hotel was built is approximately thirty feet shorter than originally represented or two believed resulting in the hotel encroaching onto land still owned by Southgate Cowers and encumbered by Washington State Bank mortgage Trustee explains s rhat approximately fourteen guest rooms as well as portions of the hotel lobby s The plaintiff in this suit is Wells Fargo Bank National Association as Trustee for 3ondholdexs under that certain Trust Indenture dated December 1 2007 relative to Louisiana ocal Government Environmental Facilities and Community Development Authority Tax Exempt Revenue Bonds Southgate Suites Project Series 2007A GO Zone Non AMT Wells Fargo Bank is the successor trustee to iJ Bank National Association and was S substituted as party plaintiff For ease of reference the plaintiff is refened to herein as Trustee 3 food service conference room areas and parking improvements lie upon Southgate Tower tract which has impaired its rights with respect to the hotel s Trustee instituted this suit against multiple defendants including ashington V State Bank Trustee claims against Washington State Bank include s reformation of the partial release of mortgage to reflect the parties true intention a to the length of the tract released and reco of a predial mtion r servit ude allowin g for the continued use and operation of the Hotel without any interference from Southgate Towers without compensation owed to Southgate Towers or dashington State Bank The trial court sustained an exception of no cause or right of action filed by Washington State Bank and dismissed Trustee claims against it s rustee 7 appeals contending the trial court erred in sustaining the exception and dismissing both its reformation and servitude claims against Washington State Etank In their appellate briefs the parties referenced events that occurred after the appeal was taken Specifically Trustee stated that the hotel was sold at judicial sale as a result of a separate foreclosure proceeding and that it credit bid on the r otel with the resulting sheriffls deed issued in the name of its affiliate Red Stick Operating Company L Trustee also stated that Red Stick had filed a motion C to be added as an additional plaintiff in the suit During oral arguments the parties cknowledged that the hotel was sold in the foreclosure proceeding and as a result the mortgage held by Trustee was eatinguished Because of the parties representations this court questioned whether this appeal is now moot and correlatively whether this court now lacks subject matter jurisdiction In an effort to answer that question this appeal was stayed and the rnatter was remanded to the trial court for the limited purpose of receiving vidence e of the referenced judicial sale and whether the mortgage on the property a ld h by Trustee had been extinguished The record has been supplemented with e tt evidence adduced at that hearing the parties have submitted supplemental iefs b on the jurisdictional issue and the stay has been lifted DISCUSSION Subject matter jurisdiction is the legal power and authority of a court to hear a ld determine a particular class of actions or proceedings based upon the object of ie t demand the amount in dispute or the value of the right asserted La Code Civ Pro art 2 Appellate courts have the duty to examine subject matter jiirisdiction sua sponte even when the issue is not raised by the parties Gaten v 7angipahoa Parish School System 11 La App 1 Cir 3 91 So 3d 1133 12 23 1073 1074 Tobin v Jindal 11 La App 1 Cir 291 So 3d 317 321 0838 12 10 6 n It is well settled that courts will not decide abstract hypothetical or moot controversies or render advisory opinions with respect to such controversies s Cat Meow Inc v City ofNew Orleans through the Department of Finance 98 0601 La 10 720 So 2d 1186 1193 Tobin 91 So 3d at 321 An issue is 98 20 nioot when a judgment ar decree on that issue has been deprived of practical significance or made abstract or purely academic Animal Legal Defense Fund v 0971 13 25 tate S Dept of Wildlife and Fisheries 12 La App 1 Cir 4 3d So writ denied 13 La 10 122 So 3d 1025 A case is moot 1565 13 4 hen v a rendered judgment or decree can serve no useful purpose and give no ractical relief or effect Id If the case is moot there is no subject matter on which the judgment of the court can operate Id Although jurisdiction may exist at the outset it may abate if the case becomes moot while the case is proceeding ee 5 Tobin 91 So 3d at 321 The controversy must normally exist at every stage of fie proceeding including the appellate stages Id 5 The judgment that is the subject of this appeal sustains a peremptory ception e of no cause or right of action and dismisses Trustee claims against s ashington R State Bank which included reformation of a release of mortgage and recognition of a predial servitude On appeal Trustee raises two issues 1 whether Trustee has a right to reform a release of mortgage to which it was not a party based on alleged mutual mistake of the contracting parties where the release o mortgage affects Trustee separate mortgage and 2 whether Trustee has s standing to seek declaratory judgment regarding the existence of a predial rvitude se under Louisiana Civil Code article 670 in favor of the owner of the hotel tilding b based on its securiry interest in the hotel Both issues are asserted by Trustee as holder of a mortgage which is reflected in the following assignments of ror e urged by Trustee L The district court erred in sustaining Washington State Bank s peremptory exception of no right or no cause of action with respect to s Trustee claim for contractual reformation as its security interest in the Hotel was directly impacted by Washington State Bank s mortgage over the encroaching portion of the Hotel and because numerous cases from Louisiana courts have allowed non to a parties contract to seek judicial reformation under Louisiana Civil Code article 1949 2 The district court erred in sustaining Washington State Bank s peremptory exception of no right ar no cause of action with respect to s Trustee claim for a predial servitude under Louisiana Civil Code article 670 as Trustee merely requested that a declaratory judgment issue regarding the existence ofthe servitude in order to adequately protect its interest in the hotel mphasis added l The evidence adduced at the hearing conducted on remand confirms the rties p representations that after this appeal was taken the hotel was sold at There is no single exceprion of no cause ox right of action Win v State Through eld Dept ofTransp and Development 97 La App 1 Cir 6716 So 2d 164 166 writ 67 1 98 29 denied 98 La 11 728 So 2d 395 Although often confused and improperly 2068 98 6 combined the peremptory exceptions of no cause of action and no right of action are separate id a distinct La Code Civ Pro art 927A and 6 Badeaux v Southwest Corrcputer Bureau 5 Irc OS La 3I17 0612 0929 So 2d 1211 1216 6 dicial jt sale and is now owned by Red Stick Further Trustee mortgage has been s ctinguished e Thus the issue of whether Trustee as holder of a security interest in ttie hotel has a right of action is moot Trustee argues that this appeal is not moot because it currently holds a 100 onomic e interest in the hotel as the sole shareholder of Red Stick the hotel s current owner However Red Stick is a legal entity separate and distinct from its shareholder in terms of procedural capacity See Bankston v Tasch LLC 09 1573 La App 4 Cir 6 40 So 3d 495 498 Mareover the parties have indicated 10 2 at t Red Stick is pursuing its own rights with regard to the property it now owns In its supplemental brief filed after remand Trustee argues that it has the right to assert the reformation claim because it was a party to the four pariy transaction that underlies this litigation and also because it was a third party beneficiary of the release of mortgage However the record as supplemented ieflects that Trustee now holds no mortgage on the subject property Accordingly the issues presented in this appeal namely the rights of one holding a security interest in the hotel are now moot Appeals are favored in the law and will not be dismissed for technicalities mmons v Agricultural Ins Co 158 So 2d 594 599 La 1963 Both parties arge this court to render an opinion on the substantive issues raised in this appeal ecause it would affect the litigation currently pending in the trial court However he issues of whether Trustee as holder of a security interest in the hotel has a ight or cause of action for reformation of the release of mortgage or for recognition of a predial servitude are moot because Trustee no longer holds that ecurity interest This court is limited in its subject matter jurisdiction to justiciable controversies and is not empowered to render an advisory opinion regarding the rights of other litigants despite the parties requests Cf Williams v Irzternational Offshore SeNVices LLC 11 La App 1 Cir 12 106 So 1240 12 7 3 i 212 217 writ denied 13 La 3 109 So 3d 367 recognizing that 0259 13 8 zbject s matter jurisdiction cannot be waived or conferred by the consent of the parties CONCLUSION For the foregoing reasons this appeal is dismissed as moot Costs of this appeal are assessed to Wells Fargo Bank National Association APPEAL DISMISSED s
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