United States District Court, E.D. Louisiana
ORDER AND REASONS
J. BARBIER, UNITED STATES DISTRICT JUDGE.
the Court are two Motions for Summary Judgment
(R. Docs. 18, 30) filed by Plaintiff, Bank
of Ruston (“the Bank”). Defendant, United States
of America (“Federal Defendant”), opposes both
motions (R. Docs. 22, 31). The Bank filed
replies (R. Docs. 25, 34). Having considered
the motions and legal memoranda, the record, and the
applicable law, the Court finds that pursuant to Federal Rule
of Civil Procedure 56(f), the Bank's motions should be
DENIED and that summary judgment in favor of
Federal Defendant should be
AND PROCEDURAL BACKGROUND
litigation derives from the purported sale of 565 Lotus
Drive, North, in Mandeville, Louisiana (“the
Property”) on August 17, 2012, from the Justin Patrick
Cardwell and Jordan Canterbury Cardwell Testamentary Trust
(“the Trust”) to Ronald Ray Cardwell
(“Trustee Cardwell” or “Cardwell”)
and his wife, Debra.
August 25, 2005, Cardwell was indicted for Mail Fraud and
Bank Fraud and conspiracy to commit same with his wife
against First National Bank in Ruston. (R. Doc. 22,
at 2-3). Cardwell pleaded guilty to one count of
Bank Fraud. (R. Doc. 22, at 3). On December
5, 2006, he was sentenced to serve jail time and make
restitution to First National Bank in the principal amount of
$162, 440.78. (R. Doc. 22, at 3). On April
27, 2007, the United States recorded the judgment as a lien
against Cardwell in the mortgage and conveyance records of
St. Tammany Parish. (R. Doc. 22, at 3). On
March 16, 2007, the United States Attorney's Office for
the Western District of Louisiana obtained a judgment against
Cardwell, individually, in the amount of $162, 440.78 for
restitution pursuant to the Anti-Terrorism and Effective
Death Penalty Act of 1963. (R. Doc. 18-1, at
Cardwell's criminal proceedings were underway, his
father, Pat Ray Cardwell, established a testamentary trust in
favor of his grandsons, Justin Patrick Cardwell and Jordan
Canterbury Cardwell (“Justin” and
“Jordan”), and named Ronald Ray Cardwell as the
trustee. (R. Doc. 18-1, at 3). The Trust
became effective upon Pat Ray Cardwell's death on April
30, 2007. (R. Doc. 18-1, at 3). Cardwell is
the sole trustee and Justin and Jordan are the sole income
and principal beneficiaries of the Trust. (R. Doc.
18-1, at 3).
September 10, 2007, the Trust acquired the Property from
Cecil A. Collins and Sharon L. Collins. (See
R. Doc. 18-4). Bank of Ruston (“the
Bank”) loaned the Trust $244, 115.03 to finance the
purchase. (R. Doc. 18-1, at 3). The
loan was secured by a mortgage in favor of the Bank and
encumbering the Property, and Cardwell signed a promissory
note in his capacity as trustee. (R. Doc. 18-1, at
3-4). The mortgage was recorded with the Clerk of
Court of St. Tammany Parish on September 11, 2007.
(R. Doc. 18-1, at 4).
23, 2009, the IRS levied a federal tax lien against Cardwell,
individually, in the principal amount of $19, 011.00
(“the IRS Lien”). (R. Doc. 18-1, at
4). On July 27, 2010, Asset Acceptance, L.L.C.
(“Asset”) obtained a judgment against Cardwell,
individually, in the principal amount of $6, 133.43, plus
interest, costs, and attorney's fees (“the Asset
Lien”). (R. Doc. 18-1, at 4).
August 17, 2012, Trustee Cardwell purported to sell the
Property from the Trust to himself and his wife, Debra.
(See R. Doc. 18-9). The act of sale
was recorded in the conveyance records of St. Tammany Parish
the same day. (R. Doc. 22, at 4). The
Bank's mortgage prohibited the Trust from transferring
the Property without the Bank's consent, but the Bank did
not consent to the transfer. (R. Doc. 18-1, at
April 16, 2016, the Bank filed suit against Cardwell in the
Twenty Second Judicial District Court of Louisiana to enforce
the mortgage on the Property. (R. Doc. 18-1, at
1). On July 21, 2016, the court rendered judgment in
favor of the Bank against the Trust in the amount of $91,
470.62, plus 25 percent attorney's fees, contract
interest of 12 percent per annum from the date of judicial
demand until judgment, and legal interest therein from the
date of judgment until paid and all costs of those
proceedings. (R. Doc. 18-1, at 1-2). A writ
of fifa was issued for the seizure of the Property, and a
sale to satisfy the Bank's judgment was set to be held on
January 18, 2017. (R. Doc. 18-1, at 2).
However, before the sale could occur, the Sheriff notified
counsel for the Bank that Cardwell had individually purchased
the Property from the Trust on August 17, 2012. (R.
Doc. 18-1, at 2). Additionally, individual judgment
creditors of Cardwell-including Federal Defendant and Asset-
were identified as holding secured interests in the Property,
impeding the Bank's ability to have the Property sold to
satisfy the judgment against the Trust. (R. Doc.
18-1, at 2).
the Bank filed the above-captioned matter in the Twenty
Second Judicial District Court of Louisiana against Cardwell
(in his individual capacity and as trustee of the Trust),
Debra Canterbury Cardwell, Federal Defendant, and Asset,
seeking to annul the August 17, 2012 sale (“the
Sale”) of the Property by the Trust to Cardwell.
(R. Doc. 18-1, at 2). Federal Defendant
removed the case to federal court. (R. Doc.
13, 2018, the Bank filed a Rule 56 Motion for Summary
Judgment seeking a declaration that the Sale is null and
void. (See R. Doc. 18). Federal
Defendant opposed the motion (See R. Doc.
22), and the Bank filed a reply
(See R. Doc. 25). On August 28,
2018, the Bank filed a Rule 56 Motion for Summary
Judgment seeking summary judgment on alternative
grounds. (See R. Doc. 30).
Specifically, if this Court determines that the Sale is not a
nullity, the Bank asks that this Court rule that the
Bank's mortgage is the superior security interest on the
Property. (See R. Doc. 30). Federal
Defendant opposed the motion (See R. Doc.
31), and the Bank filed a reply
(See R. Doc. 34).
judgment is appropriate when “the pleadings, the
discovery and disclosure materials on file, and any
affidavits show that there is no genuine issue as to any
material fact and that the movant is entitled to judgment as
a matter of law.” Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986) (citing Fed.R.Civ.P. 56); Little
v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
When assessing whether a dispute as to any material fact
exists, a court considers “all of the evidence in the
record but refrains from making credibility determinations or
weighing the evidence.” Delta & Pine Land Co.
v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398
(5th Cir. 2008). All reasonable inferences are drawn in favor
of the nonmoving party, but a party cannot defeat summary
judgment with conclusory allegations or unsubstantiated
assertions. Little, 37 F.3d at 1075. A court
ultimately must be satisfied that “a reasonable jury
could not return a verdict for the nonmoving party.”
Delta, 530 F.3d at 399.
dispositive issue is one on which the moving party will bear
the burden of proof at trial, the moving party “must
come forward with evidence which would ‘entitle it to a
directed verdict if the evidence went uncontroverted at
trial.'” Int'l Shortstop, Inc. v.
Rally's, Inc., 939 F.2d 1257, 1264-65 (5th Cir.
1991). The nonmoving party can then defeat the motion by
either countering with sufficient evidence of its own, or
“showing that the moving party's evidence is so
sheer that it may not persuade the reasonable fact-finder to
return a verdict in favor of the moving party.”
Id. at 1265.
dispositive issue is one on which the nonmoving party will
bear the burden of proof at trial, the moving party may
satisfy its burden by merely pointing out that the evidence
in the record is insufficient with respect to an essential
element of the nonmoving party's claim. See
Celotex, 477 U.S. at 325. The burden then shifts to the
nonmoving party, who must, by submitting or referring to
evidence, set out specific facts showing that a genuine issue
exists. See id. at 324. The nonmovant may not rest
upon the pleadings, but must identify specific facts that
establish a genuine issue for trial. See, e.g., id.
at 325; Little, 37 F.3d at 1075.