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Federal National Mortgage Association v. Duong

Court of Appeal of Louisiana, Fifth Circuit

February 11, 2015

FEDERAL NATIONAL MORTGAGE ASSOCIATION
v.
THAO THI DUONG

ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA. NO. 710-168, DIVISION " N" . HONORABLE STEPHEN D. ENRIGHT, JR., JUDGE PRESIDING.

ETHAN A. HUNT, ATTORNEY AT LAW, Monroe, Louisiana, COUNSEL FOR PLAINTIFF/APPELLEE.

MARC R. MICHAUD, ATTORNEY AT LAW, New Orleans, Louisiana, COUNSEL FOR DEFENDANT/APPELLANT.

Panel composed of Judges Jude G. Gravois, Robert A. Chaisson, and Stephen J. Windhorst.

OPINION

JUDE G. GRAVOIS, Judge.

[14-689 La.App. 5 Cir. 2] Defendant/appellant, Thao Thi Duong, appeals the trial court's May 16, 2014 grant of summary judgment in favor of plaintiff/appellee, Federal National Mortgage Association (" Fannie Mae" ). For the reasons that follow, we affirm.

FACTS AND PROCEDURAL HISTORY

On March 5, 2007, Thao Thi Duong executed a promissory note in the amount of $200,000.00 in favor of America's Wholesale

Page 921

Lender. The note was secured by a mortgage which encumbered property located at 7461 Silverado Drive in Marrero, Louisiana.

On January 11, 2012, after Ms. Duong had failed to pay her September 1, 2011 and thereafter installments due on the note, Fannie Mae filed a petition to enforce security interest via executory process. The note was attached to the petition. It contained the following indorsement: " PAY TO THE ORDER OF [blank space] WITHOUT RECOURSE COUNTRY HOME LOANS, INC., A NEW YORK CORPORATION DOING BUSINESS AS AMERICA'S WHOLESALE LENDER." This was followed by the signature of Michele [14-689 La.App. 5 Cir. 3] Sjolander, as " Executive Vice President." The petition alleged that Fannie Mae was owed the principal amount of $212,497.19 on the note, together with interest thereon at the rate of 6.87500% per annum, from August 1, 2011 until paid, and for all additional expenses incurred in enforcing the note and mortgage, including reasonable attorney's fees. The petition prayed for the issuance of a writ of seizure and sale of the encumbered property. The trial court signed an order on January 12, 2012, directing that a writ of seizure and sale of the property be issued.

On February 3, 2012, Ms. Duong filed a petition for an order to suspend the seizure and sale of the property, for a preliminary and/or permanent injunction, for damages, and for the return of the seized property. She argued, among other things, that the indorsement on the note rendered it incomplete and " insufficient to support the use of executory process." On April 9, 2012, the trial court denied Ms. Duong's claims for injunctive relief, suspension of the seizure and sale order, and return of the seized property, and further ordered that her claim for damages be converted to an ordinary proceeding. On August 22, 2012, the property was sold at a Sheriff's Sale to Fannie Mae.

On September 18, 2012, Ms. Duong filed an amended and supplemental petition for damages and/or for return of the seized property, which Fannie Mae subsequently answered. On May 15, 2013, Fannie Mae filed a motion for summary judgment, arguing that Ms. Duong's claims for return of the seized property and for damages were barred by law of the case and/or res judicata and should be dismissed. On May 16, 2014, the trial court granted Fannie Mae's motion for summary judgment and dismissed Ms. Duong's claims with prejudice.

In its written reasons for judgment, pertinent to this appeal, the trial court found that La. R.S. 10:3-109(c) and 10:3-205(b) state that an instrument, such as a promissory note that is payable " to order," can be converted by a blank [14-689 La.App. 5 Cir. 4] indorsement to bearer paper and may be assigned merely by transferring possession of the instrument. Therefore, as holder of the subject note, Fannie Mae had standing to seize and sell Ms. Duong's property, ...


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