APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH
OF JEFFERSON, STATE OF LOUISIANA NO. 633-873, DIVISION
"J" HONORABLE STEPHEN C. GREFER, JUDGE PRESIDING
COUNSEL FOR PLAINTIFF/APPELLEE, FIRST BANK AND TRUST AND
FIRST BANK CDC Patricia S. LeBlanc Deborah A. Villio James C.
COUNSEL FOR DEFENDANT/APPELLANT, WARREN G. TREME Joseph R.
composed of Judges Susan M. Chehardy, Robert A. Chaisson, and
John J. Molaison, Jr.
J. MOLAISON, JR. JUDGE
G. Treme ("Treme"), a building contractor and
former customer of First Bank and Trust ("First
Bank"), appeals a judgment dismissing his claims for
damages against the bank and its subsidiary, First Bank and
Trust Community Development Corporation ("First Bank
CDC"), under the anti-tying provisions of the Bank
Holding Company Act, 12 U.S.C. § 1972, et seq.
(the "anti-tying claims"), with prejudice after a
jury trial. Treme asserted these claims in response to the
bank's lawsuit against him for sums due on promissory
notes. The bank's claims were resolved by a consent
judgment and are not at issue in this appeal.
trial of his anti-tying claims, Treme maintained that the
bank violated federal law by requiring him to continue
providing construction services to First Bank CDC on
community development projects as a condition or requirement
for obtaining loans from the bank. The jury found the evidence
insufficient to prove that a tying arrangement existed. The
trial court dismissed Treme's claims with prejudice based
on the jury verdict.
appeal, Treme seeks to have the judgment of dismissal
reversed. He claims the trial court committed reversible
error in its instructions to the jury and contends the jury
was clearly wrong in finding that no tying arrangement
existed. For the reasons that follow, we affirm.
lawsuit originated in 2006 with First Bank's collection
efforts against Treme by executory process and a petition for
a deficiency judgment. Treme answered the petition and filed
a reconventional demand against the bank and third party
demands against First Bank CDC and Joseph C. Canizaro, the
bank's chairman, asserting claims for breach of contract,
fraud, fraudulent inducement, illegal tying, extortionate
banking transactions, and breach of fiduciary duty. Canizaro
was dismissed from the lawsuit by summary judgment, which
this Court affirmed in First Bank and Trust v.
Treme, 13-168 (La.App. 5 Cir. 10/30/13), 129 So.3d 605.
2009 judgment on exceptions, the trial court sustained an
exception of prescription as to some of Treme's illegal
tying claims, which involved bank loans and construction
contracts spanning the period 1996-2005. Noting that
anti-tying claims must be brought within four years of when
the alleged violation occurred, the trial court found that
claims arising from contracts executed before July 28, 2002,
were prescribed. 12 U.S.C. § 1277.
August 2017, First Bank and Treme entered into a consent
judgment in the bank's favor for over $2 million in
principal, interest and attorney fees owed by Treme on
promissory notes. The consent judgment recognized Treme's
right to offset this indebtedness by any amount that may be
awarded to him on his demands against First Bank and First
time of the jury trial in 2017, Treme's only remaining
claims against First Bank and First Bank CDC were the
anti-tying claims. At trial, Treme limited his damage claims
to contracts executed after July 28, 2002, in accordance with
the trial court's ruling on the prescription exception.
However, the court allowed the parties to introduce evidence
of contracts executed before that date to provide a complete
narrative to the jury about the relationships between the
parties, which began with the earlier contracts, and to
provide context for references to the earlier contracts in
the evidence concerning non-prescribed claims.
claims against First Bank and its subsidiary, First Bank CDC,
are founded on the following provisions in the Bank Holding
Company Act, 12 U.S.C. § 1972(1)(C) and (1)(D):
(1) A bank shall not in any manner extend credit, lease or
sell property of any kind, or furnish any service, or fix or
vary the consideration for any of the foregoing, on the
condition or requirement-
(C) that the customer provide some additional credit,
property, or service to such bank, other than those related
to and usually provided in connection with a loan, discount,
deposit, or trust service; [or]
(D) that the customer provide some additional credit,
property, or service to a bank holding company of such bank,
or to any other subsidiary of such bank holding company[.]
trial court instructed the jury that the plaintiff in an
anti-tying claim must prove three things: (1) that the bank
extended credit or made a loan to a borrower with a
requirement or condition that the borrower obtain or provide
some service to the bank or its subsidiary; (2) that the
arrangement is considered unusual; and (3) that the bank
received a benefit from the arrangement.
objection, the jury was instructed as follows:
A claim made under the Bank Holding Company Act requires
proof that the extension of credit was conditioned on the
bank's customer obtaining some other product or service
from the bank or one of its subsidiaries. The term
"conditioned" or "required" means that
something was demanded or required as a prerequisite to the
loan. What is required here is proof that the bank conveyed
its intention to withhold credit unless the borrower
fulfilled a prerequisite of purchasing or furnishing some
additional product or service other than repayment of the
loan. Further, that additional product or service must be
shown to be a tying arrangement which actually benefited the
its deliberations, the jury used a verdict form with
questions concerning each element of proof in the case. By a
vote of 9-3, the jury answered "No" to the first
question: "Do you find by a preponderance of the
evidence that a tying arrangement(s) existed between Warren
G. Treme and First Bank and Trust?" The jury did not
answer the other questions in the verdict form.
Bank CDC, a wholly owned subsidiary of First Bank and Trust,
coordinated community development projects involving blighted
homes in New Orleans by assisting property owners with hiring
architects and contractors and obtaining financing to
renovate their property. During the construction phase,
funding came primarily from sales of tax credits to investors
and from community development block grants. Once the
renovations were completed, the owner could obtain a bank
loan. The community development work of First Bank CDC was
important to its parent company, First Bank, because federal
law requires banks to do a certain amount of business in
a self-employed general contractor, began working on First
Bank CDC projects in the late 1990s and entered into more
than a dozen construction contracts involving First Bank CDC
projects from 1996 until 2003. Initially, the properties were
owned by various nonprofit organizations, with First Bank CDC
serving as the developer. First Bank CDC was a for-profit
organization and charged development fees on the projects. On
three of the later projects, First Bank CDC was the property
fixed-price construction contract was signed for each
project, meaning that Treme could not get paid any more than
the stated contract price unless the property owner approved
a change order for an additional payment. Whether serving as
owner or as developer, First Bank CDC calculated the price to
be paid to the contractor by considering the amount of
financing that was available for a particular project,
primarily from tax credits and grants, and did not solicit
bids from contractors to determine what the proposed work
would cost. The contract prices in Treme's contracts
ranged from $47, 000 to $1.2 million, depending on the number
of properties involved in a project.
was paid the full contract price on each contract but claimed
that he lost money on every project he did for First Bank CDC
because the contract price was never enough to cover the
construction costs. He testified that all of the money he
borrowed from First Bank was used to pay for cost overruns on
First Bank CDC projects, but he did not produce any documents
to substantiate that cost overruns occurred or the amount of
any overruns. He acknowledged that his accounting was not
what it should be and said all of his business and personal
records were destroyed in Hurricane Katrina.
direct examination, Treme identified several loan documents
he signed from 2003-2005 and testified:
Q. So as late as March 2005, you were still getting
extensions of credit at the bank and you were still working
on bank, CDC property?
Q. You understood that they are not going to give you this
credit unless you keep working on the projects?
Q. Did you understand that you had told the bank that they
could get any profit - any profit would go to them to pay
these notes, if they needed that?
testified that his relationship with First Bank CDC began
when a loan officer at First Bank asked him to be part of a
team the bank was putting together to revitalize inner city
neighborhoods. Throughout his testimony, Treme said he
considered himself to be part of the team. When asked why he
continued working on unprofitable projects, Treme said the
bank's owner, Joseph Canizaro, and its president, David
Moore, told him to "keep going" on the projects,
which they said were important to them, and assured him that
the bank would cover the losses and that he would make money
on future projects.
testified that he did not read any of the construction
contracts or loan documents he signed. He did not consult a
lawyer about the contracts before he signed them, explaining
that he signed some of the contracts in meetings he attended
with bankers, architects, First Bank CDC representatives and
lawyers present. Treme said he assumed the lawyers
represented everyone on the team, including him.
asked why he continued to sign the contracts, Treme said:
A. I was part of a team of these people. Whatever they told
me to sign, I just signed. I wasn't paying attention to
all of this stuff. I wanted to get into the bigger picture of
these with Mr. Canizaro and Mr. David Moore and all these
people that promised me.
Q. Why didn't you stick it to them? You had a deal?
A. The only way I can tell you is I was part of a team. I was
part of --working with this bank to improve the inner city,
so maybe I would get a better deal later.
point before the fall of 2000, Ashton Ryan became president
of the bank. Treme described a meeting he had with Ryan and
with First Bank CDC's president, Jamie Neville, ...