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Bank of Jackson Hole v. Robinson

United States District Court, W.D. Louisiana, Shreveport Division

December 10, 2014



KAREN L. HAYES, Magistrate Judge.

Before the undersigned Magistrate Judge, on reference from the District Court, is a "motion for leave to file an amended, supplemental, and restated complaint, " [doc. # 23], filed by Plaintiff Bank of Jackson Hole. Defendants oppose the Motion. [doc. # 28]. For reasons assigned below, the Motion is GRANTED.


Plaintiff filed the instant suit against Defendants Lewis Robinson, III, Linda Robinson, David Robinson, Joye Qualls, Elisa McKnight, William Robinson, and Stephan Robinson on June 17, 2014. [doc. # 1]. In the initial Complaint, Plaintiff alleges that Defendants Lewis and Linda Robinson failed to repay a loan that it extended to them on November 8, 2011. [doc. #s 1, p. 4; 1-1, p. 1]. Under the terms of the promissory note, Lewis and Linda Robinson were required to repay the principle and interest on the loan by February 3, 2012. [doc. # 1-1]. Plaintiff claims that the amount due is secured by an "Act of Mortgage and Security Agreement" and a "Commercial Security Agreement." [doc. # 1, p. 11]. Under both, according to Plaintiff, all Defendants mortgaged their respective interests in two Louisiana properties. Id. at 11-12.

As a result of Defendants' alleged failure to pay, Plaintiff asked the Court to issue a writ of seizure and sale ordering the United States Marshals Service to seize the mortgaged property, sell it, and apply the proceeds to the unpaid interest and principal. [doc. # 1, p. 18-19]. Plaintiff also claimed that it was entitled to judgment against Lewis and Linda Robinson for any amounts owed "and for the recognition, maintenance, and enforcement of all other security rights, including pledges and assignments executed by those defendants, securing the debt sued upon herein and any other promissory notes or indebtedness owed to plaintiff by those defendants." Id. at 21.

On July 7, 2014, Plaintiff filed an "Ex Parte Motion for Issuance of Writ, " and asked the Court, pursuant to Federal Rule of Civil Procedure 64, to issue a writ of seizure and to appoint Plaintiff as the keeper of the property to be seized. [doc. # 5]. On July 8, 2014, the Court granted Plaintiff's Motion and issued the Writ. [doc. #s 6, 7]. On September 25, 2014, Defendants filed a "Motion to Dismiss and Alternative Motion to Enjoin and Dissolve Writ of Seizure and Sale, " and asked the Court to dismiss Plaintiff's Complaint for three reasons: (1) the properties at issue cannot be the subject of executory process because the mortgages are not "authentic acts" as defined in LA. CIV. CODE art. 1833; (2) Plaintiff cannot seek relief via executory process because Rule 64 cannot be used to award final relief; and (3) Defendants were not properly served with process. [doc. # 20-1].

Plaintiff filed the instant Motion on October 14, 2014, seeking to amend its initial Complaint to cure the deficiencies outlined in Defendants' Motion to Dismiss. [doc. # 23]. Plaintiff claims that the Amended Complaint converts the action into one for a money judgment instead of one for executory process, thereby mooting any concerns over whether Plaintiff can pursue relief via executory process. Id. at 2. Consequently, in addition to seeking leave to amend, Plaintiff asks the Court to recall the extant Writ. Id. Plaintiff also maintains that it will properly serve each Defendant with a summons and a copy of the Amended Complaint, thereby mooting Defendants' insufficient service of process argument. Id.

Defendants filed an opposition on November 5, 2014. [doc. # 28]. They contend that Plaintiff cannot rely on LA. CODE CIV. PROC. art. 2644 to convert this action into one for monetary relief and that Plaintiff's proposed amendment is futile. Id. at 7. Plaintiff filed a Reply on November 21, 2014, [doc. # 33], and asserted that Defendants' opposition is simply a disguised effort "to have this case decided summarily on the merits...." [doc. # 31-1, p. 1]. Plaintiff argues further that Defendants have not made a clear showing that the Amended Complaint is futile. Id.

The matter is now before the Court.

Law and Analysis

Federal Rule of Civil Procedure 15(a) provides that leave to amend shall be "freely [granted] when justice so requires." FED. R. CIV. P. 15(a)(2). "Whether leave to amend should be granted is entrusted to the sound discretion of the district court....'" Quintanilla v. Texas Television Inc., 139 F.3d 494, 499 (5th Cir. 1998) (quoted source omitted). Yet, "[i]n the context of motions to amend pleadings, discretion' may be misleading, because FED. R. CIV. P. 15(a) evinces a bias in favor of granting leave to amend.'" Martin's Herend Imp. v. Diamond & Gem Trading U.S. of Am. Co., 195 F.3d 765, 770 (5th Cir. 1999) (quoting Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 597 (5th Cir. 1981)). A district court must have a "substantial reason" to deny a request for leave to amend. Lyn-Lea Travel Corp. v. Am. Airlines, Inc., 283 F.3d 282, 286 (5th Cir. 2002) (citation omitted).

In deciding whether to grant leave, courts consider the following: (1) undue delay; (2) bad faith or dilatory motive; (3) repeated failure to cure deficiencies by previous amendments; (4) undue prejudice to the opposing party; and (5) futility of amendment. Rosenzweig v. Azurix Corp., 332 F.3d 854, 864 (5th Cir. 2003) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). Absent any of these factors, leave should be granted. Smith v. EMC Corp., 393 F.3d 590, 595 (5th Cir. 2004) (citing, Foman, 371 U.S. at 182).

I. LA. CODE CIV. PROC. art. 2644

Defendants first claim that Plaintiff cannot amend the Complaint to convert the instant executory proceeding into an ordinary proceeding because the appropriate procedure for doing so arises from LA CODE CIV. PROC. art. 2644, "a state procedural rule... not applicable to federal proceedings." [doc. # 28, p. 9]. The Court is unconvinced. Although Article 2644 does not apply, Federal Rule of Civil Procedure 15 does. See Gillson v. Vendome Petroleum Corp., 35 F.Supp. 815, 819 (E.D. La. 1940) (holding that "executory process is a suit of a civil nature and the Federal Rules govern the procedure in the district courts of the United States in ALL suits of a civil nature... except such as may be specifically exempted from their operation by Rule 81; and, as already noted, this suit of a civil nature is not excepted by said Rule 81.").

II. Futility

Defendants next contend that leave to amend should be denied on the basis of futility. [doc. # 28, p. 7]. The Fifth Circuit has stated that in the context of Rule 15, an amendment is futile if it "would fail to state a claim upon which relief could be granted." Stripling v. Jordan Prod. Co., 234 F.3d 863, 873 (5th Cir. 2000). A pleading states a claim for relief when, inter alia, it contains a "short and plain statement... showing that the pleader is entitled to relief...." FED. R. CIV. P. 8(a)(2). To withstand a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

A claim is facially plausible when it contains sufficient factual content for the court "to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id . Plausibility does not equate to possibility or probability; it lies somewhere in between. See Iqbal, supra . Plausibility simply calls for enough factual allegations to raise a reasonable expectation that discovery will reveal evidence to support the elements of the claim. See Twombly, 550 U.S. at 556. Although the court must accept all factual allegations set forth in the complaint as true, the same presumption does not extend to legal conclusions. Iqbal, supra . A pleading comprised of "labels and conclusions" or "a formulaic recitation of the elements of a cause of action" does not satisfy Rule 8. Id. ...

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