Frederick W. Strickland and Cheryl D. Strickland VS Ameriquest Mortgage Company
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NOT DESIGNATED FOR PUBLICATION STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT utJ NUMBER 2011 CA 1677 FREDERICK W STRICKLAND AND CHERYL D STRICKLAND VERSUS AMERIQUEST MORTGAGE COMPANY Judgment Rendered MUL 18 2012 Appealed from the TwentyFirst Judicial District Court In and for the Parish of Livingston State of Louisiana Docket Number 114 109 The Honorable Elizabeth P Wolfe Judge Presiding Hansel M Harlan David A LeClere Counsel for Defendant Appellant Ameriquest Mortgage Company Baton Rouge LA Jeffery T Oglesbee Sherman Q Mack Counsel for PlaintiffsAppellees Frederick Strickland and Cheryl Albany LA Strickland WHIPPLE J This matter is again before us on appeal by the defendantplaintiffin reconvention Ameriquest Mortgage Company hereinafter Ameriquest from a judgment of the trial court maintaining exceptions of res judicata and no right of action filed Strickland by plaintiffsdefendantsinreconvention the Stricklands and Frederick and Cheryl dismissing Ameriquest reconventional s demand against the Stricklands with prejudice For the following reasons we reverse and remand for further proceedings FACTS AND PROCEDURAL HISTORY As set forth in our previous opinion rendered in this matter this case originated as a suit to set aside an invalid mortgage on property owned by Frederick and Cheryl Strickland which they sought to cancel through this litigation In March 2005 the Stricklands son Stephen Strickland donated to them an undeveloped tract of land in Livingston Parish property the Bull Run Thereafter in June 2005 the Stricklands donated to Stephen a developed lot in Livingston Parish Lot 1 A The following month in July 5 2005 Stephen and his wife Mary Ellen borrowed 00 000 60 from Ameriquest to be secured by a mortgage on Lot 15 A However although the body of the mortgage prepared by Ameriquest correctly identified the collateral property for the loan as Lot 15 A Ameriquest attached the plat signed by Stephen describing the Bull Run property then owned by the Stricklands to the mortgage rather than the plat describing Lot 15 A then owned by Stephen After Ameriquest refused to release the mortgage the Stricklands filed the instant suit for declaratory judgment wherein they sought a judicial declaration and judgment ordering that the mortgage placed by Ameriquest on their property was absolutely null given that 2 1 they were not parties to the loan transaction between their son and his wife and Ameriquest and 2 they did not consent to the mortgage Thus the Stricklands sought judgment ordering the mortgage erased from the mortgage records as an absolute nullity Ameriquest filed an answer and reconventional demand against the Stricklands and a third party demand against Stephen and his then wife Mary Ellen Ameriquest acknowledged that while the body of the mortgage expressly described Lot 15A the attached plat signed by Stephen described the Stricklands Bull Run property However Ameriquest averred that Stephen and Mary Ellen upon realizing that the loan to them from Ameriquest was seemingly unsecured had subsequently confected a sham loan mortgage and dation en paiement of Lot 15 A to the Stricklands to the detriment of s Ameriquest rights and in an attempt to prevent Ameriquest from seizing Lot 5 1 A to satisfy the earlier unpaid loan Stephen and Mary Ellen had obtained from Ameriquest Specifically Ameriquest averred that less than six months after Stephen and Mary Ellen borrowed the 60 sum from Ameriquest which they 00 000 had agreed to secure by a mortgage on Lot 15 A they also purportedly borrowed 00 000 50 from the Stricklands for which they granted the Stricklands a mortgage on Lot 15 A Ameriquest alleged in its reconventional and thirdparty demand however that the mortgage granted by Stephen and Mary Ellen was an absolute or relative simulation and should be set aside in that it did not express the true intent of the parties According to Ameriquest Stephen and Mary Ellen never paid the Stricklands anything on that loan Further approximately two months later on March 6 2006 Stephen and Mary Ellen made their last loan payment to Ameriquest and did not make any further payments on the commercial loan thereafter Then in April of 2006 Stephen and Mary Ellen dationed Lot 15 A to the Stricklands in satisfaction of the 3 purported 50 loan According to Ameriquest on the same day that the 00 000 dation en paiement was recorded and Lot 15A consequently was no longer in s Stephen name the Stricklands counsel who was alleged to have supplied the 50 loan funds given by the Stricklands to Stephen wrote to 00 000 Ameriquest and demanded that the mortgage on the Bull Run property be released contending that Stephen and Mary Ellen had no authority to grant a mortgage on this property as Stephen did not own it at the time the mortgage in favor of Ameriquest was confected In sum through its reconventional and third party demand Ameriquest averred that the mortgage on Lot 15 A granted to the Stricklands and the dation en paiement transferring Lot 15 A to the Stricklands were absolute or relative simulations and thus that Lot 15 A was still owned by Stephen Accordingly Ameriquest sought judgment annulling the mortgage and the dation en paiement of Lot 15 A to the Stricklands as sham transactions entered into in derogation of Ameriquest rights and interests s The Stricklands filed a motion for summary judgment seeking cancellation of the Ameriquest mortgage on both properties Finding that the Stricklands were entitled to judgment in their favor as a matter of law the trial court rendered judgment ordering the release of all encumbrances by Ameriquest against both Lot 15 A and the Bull Run property and dismissed with prejudice Ameriquest reconventional demand against the Stricklands s However the judgment did not address or dispose of Ameriquest sthird party demand against Stephen and Mary Ellen Strickland On Ameriquest appeal of the trial court summary judgment this court s s affirmed the portion of the summary judgment annulling the mortgage affecting Lot 15 A but reversed the portion of the judgment dismissing Ameriquest s reconventional demand against the Stricklands 11 See Strickland v Ameriquest Mortgage Compaa 20090463 La App l st Cir 102309 unpublished opinion While the earlier appeal was proceeding on July 10 2008 Ameriquest filed a motion for summary judgment against thirdparty defendant Stephen Strickland seeking judgment against him for the outstanding indebtedness in the amount of 77 as of July 1 2008 and increasing at the rate of 12 per 84 199 15 diem until paid as well as any other relief to which Ameriquest may be entitled The matter was heard before the trial court on September 29 2008 Stephen did not appear at the hearing personally or through counsel After Ameriquest presented its case in chief and introduced evidence the trial court rendered summary judgment in favor of Ameriquest as prayed for in its third party demand against Stephen A written judgment in conformity with the trial s court ruling was signed on September 29 2008 in favor of Ameriquest and against Stephen alone in the principal sum of 78 49bearing the contractual 305 interest rate of 7 and to accrue at the rate of 12 per diem until paid The 6 15 judgment further ordered that Stephen was responsible for costs and attorneys tees in the amount of 25 of the principal amount awarded or 19 for a total 37 576 award of 97 i the entire amount due on the loan with interest 86 881 e thereafter continuing to accrue at the above stated rate This judgment was designated as final for purposes of immediate appeal but Stephen did not appeal According to Ameriquest brief Ameriquest then began collecting on the s judgment through a garnishment of Stephen swages Thereafter on November 1 2010 the Stricklands filed peremptory 2 exceptions of res judicata and no right of action herein contending that since the judgment against Stephen was for the full amount of the loan was designated as The record and briefs suggest that Stephen and Mary Ellen were divorced at this point in the proceedings Strickland In any event Ameriquest did not proceed against Mary Ellen 5 final and indeed had become final when Stephen failed to appeal the judgment all causes of action or claims that Ameriquest may have had at the time of the final judgment regarding or arising out of the Ameriquest loan transaction have merged with and have been extinguished by said judgment The Stricklands further contended that Ameriquest had no right of action against them in that allowing Ameriquest to satisfy its judgment on the outstanding loan to Stephen by seizing the Lot 15 A property belonging to the Stricklands would allow it to collect on the Ameriquest loan twice which would constitute an impermissible double recovery The Stricklands contended that Ameriquest s claims against them were meritless and that since the Lot 15 A property would be paramount in the adjudication of that matter this current dispute i e s Ameriquest reconventional demand against the Stricklands regarding the dation ofthat property is null and should be dismissed Moreover in order to prove the allegations against the Stricklands in its reconventional demand i that Stephen and Mary Ellen upon realizing that e the loan to Ameriquest was potentially unsecured had confected a 50 00 000 sham loan mortgage and dation en paiement of Lot 15 A to the Stricklands to prevent Ameriquest from seizing Lot 15 A to satisfy the unpaid Ameriquest loan using funds provided to the Stricklands by their attorney and relative Ameriquest propounded discovery to the Stricklands to determine the source of the 50 funds When the trial court refused to order the Stricklands to 00 000 disclose this information Ameriquest filed a writ application to this court On July 21 2010 this court issued a writ action stating that relator has adequately explained how the requested information can assist the trier of fact in determining the merit of relator theory of recovery and ordered that s s Frederick Strickland reply to all outstanding discovery requests See Strickland v Ameriquest Mortgage Company 2010 0 CW 0624 La App 1 Cir 2010 21 7 The Stricklands ultimately answered Ameriquest interrogatories s acknowledging that they obtained the 50 used to confect the mortgage 00 000 and loan of Lot 15A to Stephen and Mary Ellen by borrowing funds from their nephew Sherman Mack Ameriquest thereafter subpoenaed Frederick s Strickland bank records which identified and confirmed the deposit of 00 000 50 from their attorney in January of 2006 from a personal checking account at Community Bank held in the name of the attorney and his wife However when Ameriquest then subpoenaed their Community Bank personal records the attorney and his spouse filed a motion to quash objecting to s Ameriquest subpoena and subpoena duces tecum of their financial records on the basis that the records were protected from discovery pursuant to the attorneyclient privileges set forth in LSAC art 1424 and LSAC art P C E 506 The Sticklands peremptory exceptions of res judicata and no right of action as well as the attorney motion to quash were set for hearing before the s trial court on February 14 2011 At the conclusion of the hearing the trial court maintained the exceptions of res judicata and no right of action and dismissed s Ameriquest claims against the Stricklands The court then ruled that the motion to quash filed by the attorney and his wife accordingly was moot On March 10 2011 a written judgment maintaining the exceptions and dismissing with prejudice Ameriquest reconventional demand against the Stricklands was s signed by the trial court Ameriquest then filed the instant suspensive appeal Although 2 a rule to show cause was issued by this court noting that the March 10 2011 judgment maintaining the exceptions and dismissing Ameriquest reconventional s demand appeared to be a partial judgment without the proper designation of finality required by LSA C 1915 on further review this court ultimately maintained the appeal finding P that although the judgment dismissed Ameriquest reconventional demand against Frederick s and suit Strickland the judgment did not dismiss Stephen or Mary Ellen Strickland from Cheryl the Specifically because the judgment dismissed the suit as to less than all of the parties it was deemed to be a partial final judgment subject to an immediate appeal without the need for the trial court certification of such s 1 A 1915 V See LSA C arts P 1911 and On appeal Ameriquest contends that the trial court erred in maintaining the Stricklands exception of res judicata and in failing to rule on and deny the smotion to quash attorney DISCUSISION Assignment of Error Number One Res judicata bars relitigation of a subject matter arising from the same transaction or occurrence of a previous suit Avenue Plaza L v Fal oust C 96 0173 La 7 676 So 2d 1077 1079 LSAR 13 It promotes 96 2 S 4231 judicial efficiency and final resolution of disputes Inc v Placid Refining Com an Terrebonne Fuel Lube 95 0654 950671 La 1 666 So 2d 96 16 624 635 Res judicata is governed by LSA R 13 which provides as follows S 4231 Except as otherwise provided by law a valid and final judgment is conclusive between the same parties except on appeal or other direct review to the following extent 1 If the judgment is in favor of the plaintiff all causes of action existing at the time of final judgment arising out of the transaction or occurrence that is the subject matter of the litigation are extinguished and merged in the judgment 2 If the judgment is in favor of the defendant all causes of action existing at the time of final judgment arising out of the transaction or occurrence that is the subject matter of the litigation are extinguished and the judgment bars a subsequent action on those causes of action The 3 March 10 2011 judgment before us on appeal maintains the Stricklands exceptions of res judicata and no right of action It appears that in sum the Stricklands argue that since the September 29 2008 judgment against Stephen is final res judicata applies to bar any subsequent claims by Ameriquest and that Ameriquest has no right to proceed The Stricklands failed however to make any separate argument as to the exception of no right of action in their supplemental memorandum given that the underlying basis asserted for both exceptions was the same Cf Nelson v Wiseman 20060048 p 2 n La l App 1s Cir 11 306 opinion unpublished Although 4 a separate judgment was also signed on March 10 2011 disposing of s Ameriquest motion to quash as moot when an unrestricted appeal is taken from a final judgment the appellant is entitled to seek review of all adverse interlocutory rulings such as on motions to quash which are prejudicial to him or her in addition to review of the final judgments Ghassemi v Ghassemi 20071927 La App 1 Cir 10 998 So 2d 731 08 15 750 n writs denied 20082674 20082675 La 1 36 09 16 3 A judgment in favor of either the plaintiff or the defendant is conclusive in any subsequent action between them with respect to any issue actually litigated and determined if its determination was essential to that judgment The chief inquiry is whether the second action asserts a cause of action that arises out ofthe transaction or occurrence that was the subject matter of the first action Avenue Plaza L v Falgoust 676 So 2d at 1080 However C the Louisiana Supreme Court has also emphasized that all of the following elements must be satisfied in order for res judicata to preclude a second action 1 the first judgment is valid and final 2 the parties are the same 3 the cause or causes of action asserted in the second suit existed at the time of final judgment in the first litigation and 4 the cause or causes of action asserted in the second suit arose out of the transaction or occurrence that was the subject matter of the first litigation Bur uieres y Pollingue 2002 1385 La 2 03 25 843 So 2d 1049 1053 The burden of proving the facts essential to sustaining the objection is on the party pleading the objection Union Planters Bank v Commercial Capital st Holding Corporation 2004 0871 La App l Cir 3 907 So 2d 129 05 24 130 If any doubt exists as to its application the exception raising the objection of res judicata must be overruled and the second lawsuit maintained Denkmann Associates v IP Timberlands Operating Company Limited 96 2209 La App 1 Cir 2 710 So 2d 1091 1096 writ denied 981398 st 98 20 La 7 724 So 2d 738 The concept should be rejected when doubt exists 98 2 as to whether a plaintiffs substantive rights actually have been previously addressed and finally resolved Patin y Patin 2000 0969 La App 1 Cir 01 22 6 808 So 2d 673 676 When as here an objection of res judicata is raised before the case is submitted and evidence is received on the objection the standard of review on 01 appeal is traditionally manifest error Lera v Nissan Motor Co oration in A S U 2005 2051 La App I Cir 11 950 So 2d 707 710 However 06 3 the res judicata effect of a prior judgment is a question of law that is reviewed de novo Pierrotti v Johnson 2011 1317 La App I Cir 3 12 19 So 3d Thus in the instant case we are required to conduct a de novo review to determine if the trial court was legally correct in sustaining the res judicata exception In support of their exception of res judicata the Stricklands contend that on September 29 2008 judgment was signed in favor of Ameriquest and against Stephen Strickland for the principal sum due on the defaulted loan Thus the Stricklands contend any and all causes of action Ameriquest may have had at the time of the judgment against Stephen regarding or arising out of the Ameriquest loan transaction have merged with extinguished by the September 29 2008 judgment contend that since the Lot and have been The Stricklands further A 15 property would be paramount in the adjudication of that matter this current dispute regarding the dation of that property is null and should be dismissed post haste Ameriquest concedes that the first and third elements of res judicata are satisfied As to the first element Ameriquest contends that the September 29 2008 judgment in favor of Ameriquest and against Stephen for the principal sum of the loan is valid and final Further as to the third element Ameriquest does not dispute that the facts giving rise to the present cause of action i e Stephen Strickland April 14 2006 transfer dation of property to his parents s existed at the time that Ameriquest obtained the September 29 2008 judgment against Stephen 5 T the extent that the Stricklands contend that the September 29 2008 judgment against Stephen has res judicata effect because it was designated as final for purposes ofan immediate appeal we reject that argument as meritless 1111 However as Ameriquest notes we must also consider the second and fourth elements of res judicata The second element of res judicata that must be satisfied for res judicata to preclude a second action is that the parties must be the same This requirement does not mean that the parties must have the same physical identity but that the parties must appear in the same capacity in both suits Burg uiy Pollingue 843 So 2d at 1054 The September 29 2008 judgment was rendered in favor of Ameriquest and against Stephen Strickland Undisputedly Frederick and Cheryl Strickland were not parties to the events giving rise to that judgment i the obtaining of a loan from Ameriquest by e Stephen and his wife and Stephen subsequent failure to pay same nor were s they parties to that judgment Nonetheless the Stricklands filed the exception of res judicata in response to the reconventional demand asserted against them by Ameriquest In sum the Stricklands are contending that the September 29 2008 judgment has res judicata effect barring any future claims by Ameriquest even though they were not named or involved in the prior judgment On de novo review we are constrained to agree with Ameriquest that the second element ofres judicata is not established herein We likewise must find that the fourth element of res judicata i that the e cause or causes of action asserted in the second suit arose out of the transaction or occurrence that was the subject matter of the first litigation such that further litigation of such issues are precluded by the earlier judgment has not been established The cause of action now prosecuted by Ameriquest seeks to set aside the April 2006 elation of Lot 15 A from Stephen and Mary Ellen to the Stricklands which Ameriquest alleges is purely a sham Ameriquest notes that the September 29 2008 judgment against Stephen on the Ameriquest loan was rendered in Ameriquest claim or suit on a note i based on Stephen s e s execution of a July 15 2005 promissory note Thus Ameriquest argues two 11 entirely different underlying transactions are at issue in that Ameriquest s claims against the Stricklands and Stephen and Mary Ellen are for revocation of a subsequent alleged sham transacton ithe dation On the record before e us we must agree Moreover as pointed out by Ameriquest the rendition of the earlier judgment in favor of Ameriquest and against Stephen Strickland on his indebtedness can have no res judicata effect on Ameriquest reconventional s demand against the Stricklands as anteriority of the debt and insolvency of the debtor are prerequisites to the revocatory action Comment t LSAC C art 2036 Thus Ameriquest correctly contends that the September 28 2008 judgment on the July 15 2006 promissory note does not bar Ameriquest from attacking the April 2006 transfer dation of property and has no res judicata effect on the instant claims Instead if we followed the Stricklands argument to its logical conclusion any creditor who obtained a money judgment against a debtor would be thereafter precluded from attacking the s debtor efforts to put his assets out of reach of that creditor not warranted in law Such a result is Thus on review the fourth element of res judicata likewise is not satisfied herein Accordingly we find merit to Ameriquest first assignment oferror s Assignment of Error Number Two Ameriquest next contends that the trial court erred in finding that the motion to quash filed by the Stricklands attorney was rendered moot by the s court other rulings Ameriquest requests that this court consider the merits of the motion to quash and render judgment denying it In oral reasons for judgment the trial court stated m I going to grant the peremptory exception of res judicata and no right of action That will make your motion to quash the subpoena moot 12 The motion to quash is moot That would be moot peremptory exception and no right ofaction was granted as the As a reviewing court we are not inclined to render judgment where the trial court has not addressed the merits of a motion or issue Accordingly we vacate the trial court determination that the motion to quash was rendered moot and s remand this matter for further proceedings including a ruling by the trial court on the merits of the motion CONCLUSION For the above and foregoing reasons the March 10 2011 judgment of the trial court dismissing s Ameriquest reconventional demand against the Stricklands and pretermitting disposition of the motion to quash is hereby reversed and the matter is remanded to the trial court for further proceedings consistent with the views expressed herein Costs of this appeal are assessed against the plaintiffsdefendantsinreconventionappellees Frederick and Cheryl Strickland REVERSED AND REMANDED 13 FIRST CIRCUIT FREDRICK W STRICKLAND AND CHERYL D STRICKLAND 141111Ia I TJ VERSUS STATE OF LOUISIANA AMERIQUEST MORTGAGE COMPANY NO 2011 CA 1677 J concurring While I agree with the majority opinion I write separately to point out that s the record is devoid of evidence to support many of the statements made in the brief Specifically this record contains no deposition testimony of Stephen ex s wife And a sworn statement of Stephen exwife which was taken without s notice to Stephen or plaintiffs is hearsay of questionable reliability and was never filed into evidence Nevertheless references to comments by the ex wife are set forth in brief Although there has been no evidence adduced on the merits of the alleged simulation ino witnesses have been called or cross examined a reading e of the briefs suggests differently Additionally the parties have cluttered the record with memoranda discussing facts for which there is no testimony or duly adduced evidentiary support Thus I believe the parties have violated La URCA Rule 2 12 which provides in relevant part 4 The brief of the appellant or relator shall set forth the jurisdiction of the court a concise statement of the case the ruling or action of the trial court thereon a specification or assignment of alleged errors relied upon the issues presented for review an argument confined strictly to the issues of the case free from unnecessary repetition giving accurate citations of the pages of the record and the authorities cited and a short conclusion stating the precise relief sought The argument on a specification or assignment of error in a brief shall include a suitable reference by volume and page to the place in the record which contains the basis for the alleged error The court may disregard the argument on that error in the event suitable reference to the record is not made The language used in the brief shall be courteous free from vile obscene obnoxious or offensive expressions and free from insulting abusive discourteous or irrelevant matter or criticism of any person class of or association ofpersons or any court persons or judge or other officer thereof or of any institution Any violation of this Rule shall subject the author or authors of the brief to punishment for contempt of court and to having such brief returned Emphasis added The obvious acrimony between the attorneys for the parties is apparent both from briefs and the hostile back andforth memoranda I urge they proceed more cautiously and mindful of the professionalism standards required of attorneys or they could risk more severe sanctions including those permitted by the Uniform Rules of the Courts of Appeal
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