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Household Finance Corp. v. Borry

Court of Appeals of Louisiana, Fifth Circuit

December 28, 2018

HOUSEHOLD FINANCE CORP, II
v.
JOHN MICHAEL BORRY, JR. AND KAMIE HOTARD A/K/A KAMIE CONRAD HOTARD BORRY

          ON APPEAL FROM THE TWENTY-THIRD JUDICIAL DISTRICT COURT PARISH OF ST. JAMES, STATE OF LOUISIANA NO. 35, 638, DIVISION "D" HONORABLE JESSIE M. LEBLANC, JUDGE PRESIDING

          COUNSEL FOR PLAINTIFF/APPELLEE, U.S. BANK TRUST, N.A., AS TRUSTEE FOR LSF8 MASTER PARTICIPATION TRUST Ashley E. Morris

          DEFENDANT/APPELLANT, JOHN MICHAEL BORRY, JR. AND KAMIE HOTARD A/K/A KAMIE CONRAD HOTARD BORRY John Michael Borry, Jr., In Proper Person Kamie Conrad Hotard Borry, In Proper Person

          Panel composed of Judges Susan M. Chehardy, Fredericka Homberg Wicker, Marc E. Johnson, Stephen J. Windhorst, and Hans J. Liljeberg

          FREDERICKA HOMBERG WICKER JUDGE

         Defendants, John Borry and Kamie Hotard, appeal the summary judgment granted in favor of Plaintiff-bank on its Petition to Enforce Security Interest.[1]Defendants also seek review of an interlocutory judgment-the denial of a motion to dismiss on the ground of abandonment. For the following reasons, we find that the trial judge erred in denying Defendants' motion to dismiss on the ground of abandonment based upon the record before her and improperly considered evidence not in the record. We therefore reverse the trial court's denial of Defendants' motion to dismiss, grant Defendants' motion to dismiss, and dismiss Plaintiff's petition.

         Factual and Procedural Background

         On January 14, 2013, Plaintiff filed a "Petition to Enforce Security Interest" against Defendants in the Twenty-Fourth Judicial District Court, seeking to enforce a loan agreement and mortgage in the amount of $52, 631.38. On March 5, 2013, Defendants answered the petition and filed a reconventional demand, asserting breach of contract claims related to Plaintiff's alleged failure to apply payments in a specific manner as provided for in the loan agreement and failure to release to Defendants certain insurance claim funds following Hurricane Gustav. Additionally, Defendants contended that Plaintiff violated the Fair Credit Reporting Act and improperly charged Defendants late fees for payments made but not applied properly to the loan balance. Plaintiff filed an "Answer and Affirmative Defenses" to Defendants' reconventional demand on August 8, 2013.

         On October 14, 2016, Defendants filed an "Ex parte Motion to Dismiss Due to Abandonment," contending that Plaintiff took no formal step in the prosecution of the litigation in more than three years and, thus, pursuant to La. C.C.P. art. 561, Plaintiff's suit was abandoned as a matter of law.[2] On November 4, 2016, the Honorable Tess Stromberg signed an ex parte judgment, denying the motion to dismiss. On the judgment, the trial judge included the hand-written language "Denied. [A]ction taken[.]"

         Subsequently, on November 14, 2016, Plaintiff filed a motion to compel discovery allegedly propounded upon Defendants on June 2, 2016, in connection with Defendants' reconventional demand.[3] Following a hearing, the trial judge issued a judgment compelling Defendants, who appeared pro se throughout the proceedings, to respond to discovery within thirty days of the January 23, 2017 hearing date. Notice of the written judgment, dated February 9, 2017, was issued on February 15, 2017-seven days prior to the discovery due date. The written February 9, 2017 judgment compelling discovery responses did not articulate the penalty for Defendants' failure to comply with the order.

         On February 23, 2017, Plaintiff filed a "Motion to Dismiss for Failure to Comply with Discovery Order," which the trial court set for hearing. Defendants filed an opposition to Plaintiff's motion to dismiss, challenging Plaintiff's standing to bring suit against Defendants, and a motion for sanctions against Plaintiff's counsel, contending that counsel engaged in ex parte communication with the trial judge concerning Defendants' "Motion to Dismiss Due to Abandonment."[4] On February 24, 2017, Defendants filed a motion for extension of time to respond to discovery, which the trial court also set to be heard on the same date as Plaintiff's motion to dismiss.

         Defendants subsequently filed a motion to recuse Judge Stromberg, which she denied on March 23, 2017. However, on the same date, Judge Stromberg issued a separate judgment recusing herself from the litigation to "eliminate the appearance of partiality." The matter was reallotted to the Honorable Jesse LeBlanc.

         On May 8, 2017, following a hearing, the trial judge granted Plaintiff's "Motion to Dismiss for Failure to Comply with Discovery Order," dismissing Defendants' reconventional demand, with prejudice, for failure to comply with the court's February 9, 2017 order. In the same judgment, the trial judge denied Defendants' pro se motion for extension of time to respond to the discovery requests and motion for sanctions against Plaintiff's counsel.[5]

         On September 18, 2017, Plaintiff filed a motion for summary judgment on its principal demand, attaching various exhibits including a copy of the loan agreement, mortgage, assignment of mortgage, as well as various affidavits attesting that the original note had been lost or destroyed and that Plaintiff had complied with the publication or notice requirements set forth in La. R.S. 13:341.[6] Following a hearing on the motion for summary judgment, the trial judge granted summary judgment in favor of Plaintiff.[7]

         Defendants have appealed, assigning errors related to the trial court's granting of summary judgment on Plaintiff's principal demand as well as the November 4, 2017 denial of their "Motion to Dismiss Due to Abandonment."

         Jurisdictional Issue

         Plaintiff argues on appeal that this Court lacks jurisdiction to consider the trial court's denial of Defendants' "Motion to Dismiss Due to Abandonment." Plaintiff contends that the denial of a motion to dismiss on the ground of abandonment is a final, appealable judgment under La. C.C.P. art. 561(A), which provides that an action is abandoned when the parties fail to take any step in the prosecution or defense in the trial court for a period of three years. The Article further provides:

(3) This provision shall be operative without formal order, but, on ex parte motion of any party or other interested person by affidavit which provides that no step has been timely taken in the prosecution or defense of the action, the trial court shall enter a formal order of dismissal as of the date of its abandonment. The sheriff shall serve the order in the manner provided in Article 1314, and shall execute a return pursuant to Article 1292.
(4)A motion to set aside a dismissal may be made only within thirty days of the date of the sheriff's service of the order of dismissal. If the trial court denies a timely motion to set aside the dismissal, the clerk of court shall give notice of the order of denial pursuant to Article 1913(A) and shall file a certificate pursuant to Article 1913(D).
(5)An appeal of an order of dismissal may be taken only within sixty days of the date of the sheriff's service of the order of dismissal. An appeal of an order of denial may be taken only within sixty days of the date of ...

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