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Wells Fargo Financial Louisiana, Inc. v. Galloway

Court of Appeals of Louisiana, Fourth Circuit

November 15, 2017


         APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2016-03487, DIVISION "I-14" Honorable Piper D. Griffin, Judge



          Court composed of Judge Daniel L. Dysart, Judge Rosemary Ledet, Judge Regina Bartholomew Woods)


         This is a suit on a promissory note and mortgage. From the trial court's judgment granting, in part, the peremptory exception of prescription filed by the defendants, Betty Galloway and her two children (Valerie Sennette Galloway and Gregory Louis Galloway) (collectively the "Galloways"), the Galloways appeal. For the reasons that follow, we convert the appeal to an application for supervisory writ, grant the writ, reverse the trial court's judgment, and remand with instructions.


         On April 7, 2016, Wells Fargo Financial Louisiana ("Wells Fargo"), as successor to Norwest Financial America, Inc., commenced this suit, entitled "Petition to Enforce Security Interest by Ordinary Process, " against the Galloways. The basis for the suit was two-fold. First, December 1, 1999, the Galloways, as co-owners of a certain immovable property in New Orleans, Louisiana, executed a multiple indebtedness mortgage (the "Mortgage"). Second, on August 14, 2002, Betty Galloway executed a note in the original principal amount of $58, 652.28 (the "Note") and a security agreement; the Note was secured by the Mortgage.

         In its petition, Wells Fargo averred that "[t]he obligor has defaulted on the note and security agreement and mortgage by failing to pay, when due, the monthly installments required by the note and security agreement and mortgage." Wells Fargo further averred that it gave notice of default to the obligor, Betty Galloway.[1] Wells Fargo still further averred that it had exercised its right to accelerate, pleading as follows:

Obligor has failed to timely pay all amounts required to cure their default, and plaintiff [Wells Fargo] has exercised its right to accelerate the entire indebtedness due on the note and security agreement and mortgage, including the monthly installment due February 19, 2009 and all successive monthly installments.

         Wells Fargo prayed for a judgment for the "principal of $45, 852.94 with interest thereon . . . from January 19, 2009, until paid."

         In response, the Galloways filed various exceptions, including a peremptory exception of prescription.[2] The basis for their exception of prescription was the five-year prescriptive period for actions on promissory notes in La. C.C. art. 3498. The Galloways contended that "the last payment made on the obligation alleged to have been created on August 14, 2002 was made by Betty Galloway on May 15, 2010. . . . [N]o further payments were made on the note therefore the entire remaining obligation has prescribed."

         Wells Fargo countered that the Note was not prescribed because the Galloways had acknowledged the debt. Wells Fargo contended that in various correspondence between the parties after the date of Betty Galloway's last payment-May 15, 2010-the Galloways acknowledged the debt, which interrupted the prescriptive period. In the alternative, Wells Fargo contended that only the payments due more than five years before the suit was filed had prescribed.

         Following a hearing, which was held on July 27, 2016, the trial court granted, in part, the exception of prescription. The trial court found that "anything due prior to April 7, 2011 [five years before the suit was filed] is hereby prescribed, but all mortgage payments due on or after April 7, 2011 are deemed exigible." From this judgment, the Galloways appeal, contending that the trial court erred in failing to find the entire debt was prescribed. Before addressing the merits, however, it is necessary for us to address a jurisdictional issue.


         "Before reaching the merits of an appeal, an appellate court has a duty to determine, on its own motion, whether subject matter jurisdiction exists." Moulton v. Stewart Enters., Inc., 17-0243, 17-0244, p. 3 (La.App. 4 Cir. 8/3/17), 226 So.3d 569, 571 (citing Moon v. City of New Orleans, 15-1092, 15-1093, p. 5 (La.App. 4 Cir. 3/16/16), 190 So.3d 422, 425). Accordingly, we initially must determine whether the judgment granting in part and denying in part the Galloways' peremptory exception of prescription is properly before us on appeal.

         This court's appellate jurisdiction extends to "final judgments." Kirby v. Poydras Ctr., LLC, 15-0027, 15-0391, p. 8 (La.App. 4 Cir. 9/23/15), 176 So.3d 601, 606 (citing La. C.C.P. art. 2083). "=[A] judgment that determines the entirety of the merits of the action is appealable under La.Code Civ.Proc. art. 2083, but a judgment that only partially determines the merits of the action is a valid partial final judgment (and therefore appealable) only if authorized by Article 1915.'" Rhodes v. Lewis, 01-1989, p. 3 (La. 5/14/02), 817 So.2d 64, 66 (quoting Douglass v. Alton Ochsner Med. Found., 96-2825 (La. 9/13/97), 695 So.2d 953).

         The right to appeal a partial final judgment is governed by La. C.C.P. art. 1915, which has two subparts. "Subpart A of La. C.C.P. art. 1915 designates certain categories of partial judgments as final judgments subject to immediate appeal without the necessity of any designation of finality by the trial court." Quality Envtl. Processes, Inc. v. Energy Dev. Corp., 16-0171, 16-0172, p. 6 (La.App. 1 Cir. 4/12/17), 218 So.3d 1045, 1053. "Subpart B of La. C.C.P. art. 1915 provides that when a court renders a partial judgment, partial motion for summary judgment, or exception in part, it may designate the judgment as final when there is no just reason for delay." Id.; see also Favrot v. Favrot, 10-0986, pp. 2-3 (La.App. 4 Cir. 2/9/11), 68 So.3d 1099, 1102.

         Subpart B of La. C.C.P. art. 1915 has two subparts. The first subpart provides that "the judgment shall not constitute a final judgment unless it is designated as a final judgment by the court after an express determination that there is no just reason for delay." La. C.C.P. art. 1915(B)(1). The second subpart provides that "[i]n the absence of such a determination and designation, any such order or decision shall not constitute a final judgment for the purpose of an immediate appeal and may be revised at any time prior to rendition of the judgment adjudicating all the claims and the rights and liabilities of all the parties." La. C.C.P. art. 1915(B)(2); see also La. C.C.P. art. 1911(B) (providing, in part, ...

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