Aaron & Turner, L.L.C. v. Perret

• Citation: 22 So.3d 910
• Decision Date: 04 May 2009
• Docket Number: No. 2007 CA 1701.,2007 CA 1701.
• Parties: AARON & TURNER, L.L.C. v. Melissa Michelle PERRET and Continental Financial Group, Inc.
• Court: Court of Appeal of Louisiana (US)

22 So.3d 910

AARON & TURNER, L.L.C. v. Melissa Michelle PERRET and Continental Financial Group, Inc.

No. 2007 CA 1701.

Court of Appeal of Louisiana, First Circuit.

May 4, 2009.

Writ Denied October 16, 2009.

Randall A. Shipp, Garth J. Ridge, Baton Rouge, LA, for Defendant-Appellant, Melissa Michelle Perret.

Connell L. Archey, Jennifer A. Hataway, Baton Rouge, LA, for Plaintiff-Appellee, Aaron & Turner, L.L.C.

Before WHIPPLE, KUHN, GUIDRY, PETTIGREW, and HUGHES, JJ.

ON REHEARING¹

HUGHES, J.

In this action on a promissory note and mortgage, the defendant/borrower appeals a summary judgment dismissing her reconventional demand, which asserted a negligence claim against the law firm that performed the loan closing. On June 6, 2008, this court handed down an unpublished opinion in this appeal, reversing in part the decision of the trial court. The matter is now before this court on application for rehearing. Having decided the application for rehearing has merit, we grant the rehearing and render the following decision reversing the trial court judgment and remanding the matter.

FACTS AND PROCEDURAL HISTORY

In 2001, Melissa Michelle Perret refinanced the mortgage on her home by executing a promissory note in favor of ABN AMRO Mortgage Group, Inc. (ABN) and an act of mortgage on her home to secure payment of the promissory note. Aaron & Turner, L.L.C. (Aaron & Turner), the law firm that acted as the closing agent for the transaction, disbursed funds to and on behalf of Ms. Perret during the transaction, acting on the belief that ABN had funded the loan.

When it was discovered several years later that Aaron & Turner had never received the funds to finance the transaction from ABN, Aaron & Turner obtained the February 28, 2001 note by ostensible assignment from ABN and demanded payment from Ms. Perret of the total accumulated amount due on the note, plus late fees and interest. When Ms. Perret refused to remit the sum demanded, Aaron & Turner filed a petition in the 19th Judicial District Court on February 17, 2006, seeking to enforce the mortgage and to recover the amounts outstanding on the note, or in the alternative, to recover the amount loaned under the theory of unjust enrichment. Ms. Perret and Continental Financial Group, Inc. (CFG)² were named as defendants in the petition. By a supplemental petition, Aaron & Turner amended its petition to declare Ms. Perret to be in default on the note and sought to recover the total amount of the note, plus late fees, interest, attorney fees, and court costs. Aaron & Turner also subsequently filed a separate proceeding against Ms. Perret for executory process in a different division of the 19th Judicial District Court.³

In response to the instant ordinary proceeding, Ms. Perret filed a motion for partial summary judgment seeking to have the trial court dismiss "all rights, claims and causes of action" premised on the February 28, 2001 mortgage and note, declare the mortgage and note null, and order cancellation of the mortgage and note. Ms. Perret subsequently filed a reconventional demand seeking compensation for mental, emotional, pecuniary damages, and losses that she allegedly sustained as result of negligence committed by Aaron & Turner in performing the February 28, 2001 loan closing.⁴ Aaron & Turner, in turn, filed a motion for summary judgment seeking dismissal of the claims raised by Ms. Perret in her reconventional demand.

Following a hearing on the cross motions for summary judgment, held May 14, 2007, the trial court denied Ms. Perret's partial motion for summary judgment and granted the motion for summary judgment filed by Aaron & Turner, dismissing with prejudice the claims asserted by Ms. Perret in her reconventional demand. A judgment to that effect was signed on May 29, 2007, from which Ms. Perret appeals. In this appeal, Ms. Perret contends that the trial court erred in dismissing her reconventional demand based on a finding that the note and mortgage at issue in these proceedings were enforceable.

APPELLATE JURISDICTION

This matter comes before us pursuant to a summary judgment granted in favor of Aaron & Turner that was designated as a final judgment by the trial court for purposes of appeal. See LSA-C.C.P. art. 1915(B). The trial court gave no explicit reasons for its determination that no just reason for delay existed, other than the hope that consideration of the underlying judgment could be made in conjunction with review of another appeal pending before this panel under docket number 2007 CA 1425. Since we cannot determine the merits of this appeal unless our jurisdiction is properly invoked by a valid final judgment (see LSA-C.C.P. art.2083), we must make a de novo determination of whether the designation is proper. See R.J. Messinger, Inc. v. Rosenblum, 2004-1664, pp. 13-14 (La.3/2/05), 894 So.2d 1113, 1122.

Some of the factors we are advised to consider in our de novo determination of whether the judgment is properly designated as a final judgment include: (1) the relationship between the adjudicated and the unadjudicated claims; (2) the possibility that the need for review might or might not be mooted by future developments in the district court; (3) the possibility that the reviewing court might be obliged to consider the same issue a second time; and (4) miscellaneous facts such as delay, economic and solvency considerations, shortening the time of trial, frivolity of competing claims, expense, and the like. R.J. Messinger, Inc., 2004-1664 at 14, 894 So.2d at 1122-23.

Based on our consideration of all the relevant factors, we find the trial court's designation of the judgment as final is proper.

STANDARD OF REVIEW

A motion for summary judgment should be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any show that there is no genuine issue as to material fact and that the mover is entitled to judgment as a matter of law. LSA-C.C.P. art. 966(B). On a motion for summary judgment, the burden of proof is on the mover. If the moving party will not bear the burden of proof at trial on the matter, that party's burden on a motion for summary judgment is to point out an absence of factual support for one or more essential elements of the adverse party's claim, action, or defense. Thereafter, if the adverse party fails to produce factual support sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial, there is no genuine issue of material fact, and the mover is entitled to summary judgment. LSA-C.C.P. art. 966(C)(2); Robles v. ExxonMobile, 2002-0854, p. 4 (La.App. 1 Cir. 3/28/03), 844 So.2d 339, 341. An appellate court's review of a summary judgment is de novo, using the same criteria that govern the trial court's consideration of whether summary judgment is appropriate. R.G. Claitor's Realty v. Rigell, 2006-1629, p. 4 (La. App. 1 Cir. 5/4/07), 961 So.2d 469, 471-72, writ denied, 2007-1214 (La.9/21/07), 964 So.2d 340.

DISCUSSION

In granting Aaron & Turner's motion for summary judgment, and consequently denying Ms. Perret's partial motion for summary judgment, the trial court found that "consideration" was given for the note.⁵ It further found that Aaron & Turner was entitled to judgment as a matter of law based on a judgment declaring the note to be valid that was rendered in the executory process suit filed by Aaron & Turner.

At the outset, we address the apparent application by the trial judge in this case of the doctrine of res judicata, in that the decision he rendered was "primarily based on Judge Calloway's prior ruling" in the executory process suit. To the extent that the trial judge in this ordinary proceeding relied on a ruling made by the judge in the executory process action, that reliance was in error. The ruling made by the trial judge in the executory proceeding addressed only the propriety of injunctive relief in that summary proceeding. Thus, we do not find the requirements of LSA-R.S. 13:4231 sufficiently satisfied for application of the doctrine of res judicata.

Thus, turning to the merits of the motion for summary judgment, as previously outlined, Aaron & Turner filed the motion for summary judgment to obtain dismissal of Ms. Perret's reconventional demand. The law firm "pointed out," as the basis for seeking dismissal of her reconventional demand, that Ms. Perret would not be able to establish that the note and mortgage were invalid. The trial court agreed, stating its finding in open court that "consideration" was given for the note and mortgage, and granting Aaron & Turner's motion for summary judgment.

Our review of the pertinent Louisiana Civil Code articles and the record presented herein leads us to conclude that the parties and the trial court were misguided in examining the validity of the promissory note and mortgage at issue herein from the perspective of "consideration."

"An obligation cannot exist without a lawful cause." LSA-C.C. art.1966 (emphasis added). "Cause is the reason why a party obligates himself." LSA-C.C. art. 1967 (emphasis added).⁶ The comments to Article 1967 state, in pertinent part:

Under this Article, "cause" is not "consideration." The reason why a party binds himself need not be to obtain something in return or to secure an advantage for himself. An obligor may bind himself by a gratuitous contract, that is, he may obligate himself for the benefit of the other party without obtaining any advantage in return.

LSA-C.C. art.1967, Comment (c) (emphasis added).⁷

Louisiana does not follow the common law tradition that requires consideration to effect an enforceable contract. Rather, the mere will of the parties will bind them, without what a common law court would consider to be consideration to support a contract, so long as the parties have a lawful "cause." The cause need not have any economic value. Sound/City Recording Corp. v. Solberg, 443 F.Supp. 1374,...