Whitney Bank VS Jerry Michael Case and Trudy Bernucho Case
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NOT DESIGNATED FOR PUBLICATION STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT NLJMBER 20i CA 0291 2 AND NO 201 C 2395 W VJHITNEY BANK VERSUS JERRY MICHAEL CASE AND TRUDY BERNUCHO CASE Judgment Rendered November 2 2012 Appealed from the First Twenty Judicial District Court v i In and for the Parish of Tangipahoa State of Louisiana Suit Number 2011 0002570 Honorable Bruce C Bennett Presiding Mark C Counsel for Plaintiff Appellant Clay Whitney Bank J Landry Legros Metairie LA Hobart O Pardue Jr Springfield LA BEFORE CARTER Counsel for Defendants Appellees Jerry and Trudy Case J C GUIDRY AND GAIDRY JJ GUIDRY J In this executory proceeding plaintiff Whimey Bank Whitney appeals from a judgment of the trial court in favor of defendants Jerry Michael Case and Trudy Bernucho Case enjoining Whitney and the Sheriff of Tangipahoa Parish Sheriffl from proceeding in executory process against the Cases and enjoining the Sheriff from further seizing and proceeding to sherif sale on the property or s described in the original petition for executory process For the reasons that follow we reverse FACTS AND PROCEDURAL HISTORY On August 4 2011 Whitney filed a petition for executory process asserting that it is the holder of a promissory note executed by the Cases in the amount of 09 898 352 payable on demand and two multiple indebtedness mortgages securing the indebtedness encumbering 78240 Hope Road Kentwood Louisiana 202 First Street Kentwood Louisiana 58263 Old US 51 Amite Louisiana 15646 Hwy 16 Amite Louisiana and 62335 Commercial Street Amite Louisiana Whitney alleged that the note had not been paid in accordance with its terms and conditions thereby causing a default under the terms of the note and that there remains a principal sum of 364 plus interest Whitney attached copies of 23 595 the promissory note and mortgages to its petition Whimey asserted that the ariginal holder of the note was Hancock Bank of Louisiana but by name change effective June 4 2011 Hancock changed its name to Whitney after merging with Whitney National Bank Whitney asserted therefare that it is the proper holder of the note The petition was verified by William H Price Jr credit officer of Whitney Thereafter the trial court signed an order ardering that executory process be issued as prayed for and that the properiy described in Attachment C attached to s Whitney petition be seized and sold as prayed far After the writ of seizure was 2 issued and notices were served the Sheriff set the sale of the property for October 12 201 L On October 7 2011 the Cases filed a petition for preliminary injunction asserting that they had not received notification of demand for payment and disputing Whitney assertion that they confessed judgment waived homestead s exemption or consented to attorney fees The Cases prayed that a preliminary s ction injw issue against Whitney and the Sheriff enjoining them from presenting the immovable property at issue in Whitney petition for executory process for s s sheriff sale and thereafter for a permanent injunction The trial court set the hearing on the preliminary injunction for November 10 2011 to be tried by affidavit only pursuant to La C art 3609 P Whitney answered the Cases petition for preliminary injunction asserting that the Sheriff cancelled the sale set for October 12 2011 and that defendants petition is not grounded in fact or law Whitney also submitted a memorandum in opposition to the Cases request for a preliminary injunction and an affidavit of Brian Berns Sr Vice President ofWhitney Bank At the November 10 2011 hearing the court gave the Cases five days to file affidavits and gave Whitney five days to respond stating that the matter would be fully submitted in ten days On November 15 2011 the Cases filed an amended petition for preliminary injunction and reconventional demand and a memorandum asserting that Whitney engaged in predatory lending practices and that the methods used by Whimey for collection and lending are in violation of state and federal law In particular the Cases alleged that one of the mortgages sued upon covers their residence and Whitney violated the Truth in Lending Act by failing to provide notice to the Cases of their right to rescind the transaction as required by 15 U C S 1635 The Cases attached their affidavit to the memorandum acknowledging that they signed the 3 promissory note and mortgage in the amount of 352 that the mortgage 09 895 included their residence at 78240 Hope Road Kentwood Louisiana and that they were never furnished with notice of their right to rescind Whitney submitted a supplemental memorandum in opposition to the Cases request for preliminary injunction a supplemental affidavit of Brian Berns Sr promissory notes loan boarding data sheets a disbursement request and authorization and an affidavit of William H Price Jr On November 29 2011 the trial court signed a judgment in favor of the Cases and against Whitney and the 3heriff enjoining them from proceeding in executory process against the Cases and further enjoining the Sheriff from further seizing andlor proceeding to sheriff sale on the property described in Attacl s ment C to the original petition for executory process Whitney now appeals from this judgment JURISDICTION At the outset we note that in addition to filing an appeal Whitney also filed with this court a writ of supervisory review By order dated February 29 2012 this court referred the writ application to the same panel to which the appeal is assigned Louisiana Code of Civil Procedure article 3612B and C provides that n a appeal may be taken as a matter of right from an order or judgment relating to a preliminary injunction but it must be taken within fifteen days from the date of the arder or judgment In the instant case Whitney filed its motion for appeal on December 7 2011 within the required fifteen days Accordingly our review of the trial court judgment enjoining Whitney and the Sheriff from s proceeding in executory process against the Cases comes within our appellate jurisdiction As such we decline to exercise our supervisory jurisdiction 4 DISCUSSION Executory process is an accelerated procedure whereby a mortgage creditor may provoke the sale of encumbered property to satisfy his mortgage Aetna Life Insurance Companv v The Lama Trusts 28 p 3 App 2nd Cir 5 328 La 96 8 674 So 2d 1086 1089 writ not considered 96 La 9 679 So 2d 1502 96 13 100 Executory process entitling a creditar to seize the debtor properiy without s citation ar the usual delays or formal judgment is regarded as a harsh remedy requiring for its use a strict compliance by the creditor with the letter of the law Reed v Meaux 292 So 2d 557 560 La 1974 A creditar seeking to enforce a mortgage or privilege on property by executory process must file a petition praying for the seizure and sale of the property affected by the mortgage or privilege La GC art 2634 To prove his P right to use executory process a plaintiff must submit with his petition creditor authentic evidence of 1 the note bond or other instrument evidencing the obligation secured by the mortgage security agreement or privilege and 2 the authentic act of mortgage or privilege on immovable properiy importing a confession of judgment La C art 2365A P Defenses and procedural objections to an executory proceeding may be asserted through an injunction proceeding to anest the seizure and sale as provided in La GC arts 2751 La C art 2642 The defendant in an executory P 2754 P proceeding may arrest the seizure and sale of the property by injunction when the debt secured by the security interest mortgage or privilege is extinguished or is legally unenforceable or if the procedure required by law for an executory proceeding has not been followed La P C art 2751 The injunction proceeding to arrest a seizure and sale shall be govemed by the provisions of La P C arts 3601 and 3612 but the defendant may apply for a preliminary injunction in accordance with article 3602 La C art 2752A In the event the P 5 defendant does apply for a preliminary injunction the hearing for such shall be held before the sale ofthe property La C art 2752A The court may hear an P application for a preliminary injunction upon the verified pleadings or supporting affidavits or may take proof as in ardinary cases La C art 3609 P The applicant for a preliminary injunction need make only a prima facie showing that he will prevail on the merits Paddison Builders Inc v Turncliff 95 1753 p 4 App lst Cir 4672 So 2d ll33 1136 writ denied 96 La 96 1675 La 10 679 So 2d 1386 Whether to grant or deny a preliminary injunction 96 4 lies within the sound discretion of the trial court Absent a clear abuse of this discretion the trial court ruling will not be disturbed on appeal Citv of Baton s Parish e Rou of East Baton Rouge v 200 Government Street LLC 08 p 4 0510 La App lst Cir 9 995 So 2d 32 36 writ denied 08 La 1 08 23 2554 09 9 998 So 2d 726 In the instant matter the Cases sought to enjoin Whitney and the Sheriff from presenting the immovable property at issue far executory process and for s sheriff sale asserting 1 they had received no notification of demand for payment 2 they did not confess judgment waive homestead exemption or consent to attorney fees and 3 Whitney engaged in predatory lending practices s by making unaffordable loans based on the Cases assets inducing the Cases to refinance existing commercial loans and add their residence as additional collateral engaging in fraud to conceal the true nature of the loans and failing to provide the Cases with notice of their right to cancel the mortgage on their residence as required by the Truth in Lending Act 15 U C S 1635 From our review of the record we fmd that the Cases failed to present sufficient evidence to establish a prima facie showing that they will prevail on the merits First the law does not require that a defendant in an executory proceeding be provided with notification of demand for payment prior to the issuance of a writ 6 of seizure and sale See 2003 La Acts 1072 repealing La C art 2639 2 P relating to demand for payment before issuance ofa writ of seizure and sale Second Whitney presented certified copies of the acts of mortgage which clearly state that the Cases agreed to confess judgment waive homestead exemption and consent to attorney fees s These authentic acts constitute full proof of the agreement they contain as against the parties La C art 1835 Further though the Cases made allegations regarding predatory lending practices and fraud by Whitney in obtaining the mortgages on the Cases property they presented no evidence supporting these allegations Finally the Cases asserted that Whitney failed to provide notice of their right to cancel the mortgage on their residence as required by the Truth in Lending C S Act 15 U 1635 The Truth in Lending Act was enacted as part of the Consumer Credit Protection Act of 1968 and specifically deals only with consumer credit transactions characterized as one in which the party to whom credit is offered or extended is a natural person and the money property or services which are the subject of the transaction are primarily for personal family ar household purposes 15 U C S i 1602 see also Baker Bank and Trust Companv v Matthews 401 So 2d 1246 1248 La App lst Cir 1981 In determining whether a particular transaction is exempt from the Truth in Lending Act the purpose of the transaction or extension of credit is controlling not the property on which the security interest is retained R Anderson v C Lester 382 So 2d 1019 1022 La App 2nd Cir 1980 cert denied 450 U S 1045 101 S Ct 1767 68 L Ed 2d 244 1981 citing Saventer v Dre Inc yco 326 F Supp 871 E La 1971 affd 450 F 2d 941 Sth Cir 1971 cert denied D 406 U 920 92 S Ct 1775 32 L Ed 2d 120 1972 see also Baker Bank and S Trust Com 401 So 2d at 1248 looking at the purpose for which loan anv 1249 7 proceeds were used in determining whether a credit transaction was a consumer transaction or a commercial transaction In conjunction with their amended petition for preliminary injunction the Cases submitted a loan operating memorandum from Hancock Bank This memorandum states that the purpose of the loan is to consolidate two loans originally funded to refinance various investment properties In response Whitney submitted loan boarding data sheets indicating that the purpose of the original two loans was not for personal family or household purposes or for personal investment purposes Additionally a loan disbursement request and authorization shows that the primary purpose of the loan at issue is for Business Including Real Estate Investment and specifically for consolidation of the two previous loans Accordingly the documentary evidence in the recard indicates that the purpose of the loan which was secured by the mortgage on the Cases residence and other properties was not far personal family or household purposes or personal investment purposes Further though the Cases submitted an affidavit attesting that the note and mortgage included their residence the affidavit did not speak to the purpose of the loan itself Therefare the Cases failed to establish that the loan at issue was a consumer credit transaction and therefore it is exempt from the requirements of the Truth in Lending Act Based on the foregoing we find that the Cases failed to make a prima facie showing that they will prevail on the merits of their claim and the trial court abused its discretion in granting their request for a preliminary injunction CONCLUSION For the foregoing reasons we reverse the judgment of the trial court ordering that a preliminary injunction issue in favar of the Cases and against Whitney and the Sheriff enjoining them from proceeding in executory process against the Cases and further enjoining the Sheriff from further seizing and or 8 proceeding to sherifPs sale on the property described in Attachment C to the original petition for executory prc Further ha exercised our appellate cess ing jurisdiction we deny Whitney writ for supervisory review s proceeding are assessed to the appellees Jerry and Trudy Case REVERSED WRIT DENIED 9 All costs of this
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