FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2018-00262,
DIVISION "I-14" Honorable Piper D. Griffin, Judge
C. Landry NEWMAN MATHIS BRADY & SPEDALE, PLC COUNSEL FOR
E. Seago SEAGO & CARMICHAEL, APLC COUNSEL FOR
composed of Judge Rosemary Ledet, Judge Sandra Cabrina
Jenkins, Judge Paula A. Brown
Rosemary Ledet, Judge.
a suit on a promissory note. From the trial court's
judgment granting the motion for summary judgment filed by
the plaintiff, SBN V FNBC LLC ("SBN"), the
defendant, Vista Louisiana, LLC ("Vista"), appeals.
Vista also seeks review of the trial court's
interlocutory judgment denying its motions for new trial and
to compel discovery. The issues before us on this appeal are
two-fold: (i) whether the trial court prematurely granted
summary judgment without allowing Vista adequate discovery;
and (ii) whether the trial court erred in finding that SBN
was entitled to summary judgment on its claims against Vista.
Because SBN's motion for summary judgment revolves around
two legal determinations- construction of a contract (the
Business Loan Agreement) (the "Contract") and
interpretation of a statute (the Louisiana Loansharking
Statute, La. R.S. 14:511) (the
"Statute")-we find the trial court did not
prematurely rule on SBN's summary judgment motion. On the
merits, we find no legal error in the trial court's
rejection of Vista's defenses. For these reasons, we
affirm the trial court's judgment granting SBN's
summary judgment motion.
AND PROCEDURAL BACKGROUND
15, 2015, Vista executed a promissory note payable to the
order of First NBC Bank ("FNBC") (the
"Note"). The original principal amount of the Note
was $1, 000, 000.00. The Note was payable "in full
immediately upon Lender's demand" or, if no demand
was made, "no later than February 28, 2016." The
Note had a variable interest rate. Contemporaneously with the
execution of the Note, Vista executed the Contract with FNBC.
Pursuant to the Contract, Vista provided a Letter of Credit
(the "LOC"), which was in the same amount as the
Note, as security for the Note.
April 2017, FNBC closed; and the Federal Deposit Insurance
Corporation (the "FDIC") was named as FNBC's
receiver. At that time, the Note was in default. In October
2017, the FDIC entered into a loan sale agreement with SBN.
Pursuant to that agreement, SBN purchased from the FDIC a
pool of loans, which included the Note. On the allonge
attached to the Note, the FDIC endorsed the Note to the order
January 2018, SBN commenced this suit on the Note against
Vista. In its petition, SBN averred that it was the holder of
the Note and that it had the rights of a holder in due
course. In its petition, SBN prayed for a judgment against
Vista for the following five items: (i) the unpaid principal
balance of the Note- $1, 000, 000.00; (ii) the accrued unpaid
interest due on the Note through January 5, 2018-$75, 104.16;
(iii) additional default interest of 21% from January 6,
2018, until paid; (iv) late charges-$2, 000.00; and (v)
attorneys' fees of 25% of the total sum due.
March 2018, Vista answered the suit asserting the following
two defenses: (i) off-set based on FNBC's failure to
timely draw down on the LOC (the "LOC Defense");
and (ii) absolute nullity based on the Statute (the
after Vista's answer was filed, SBN filed a motion for
summary judgment, contending that it was a holder in due
course. In support, SBN provided an affidavit of Kelli Wood,
SBN's custodian of records. In her affidavit, Ms. Wood
identified the Note and the facts surrounding SBN's
acquisition of the Note. Attached to her affidavit and
identified in it were copies of the Note and the Contract.
the motion, Vista acknowledged the validity of the Note and
the Contract; however, it disputed SBN's status as a
holder in due course. On the merits, Vista asserted the same
two defenses it asserted in its answer-the LOC Defense and
the Loansharking Defense.
support, Vista attached to its opposition affidavits from the
following three people: (i) Lawrence Starkman, Vista's
manager; (ii) John Seago, Vista's attorney; and (iii)
Rene Meaux, a certified public accountant retained by Vista.
Mr. Starkman attested that Vista had "filed
Interrogatories, Requests for Production of Documents and
Admissions of Fact which requested SBN to provide the exact
amount SBN paid for the Vista loan" (the "Discovery
Requests"). Mr. Seago attested that he prepared the
Discovery Requests. Attached to and identified in Mr.
Seago's affidavit was a copy of the Discovery Requests.
Mr. Meaux attested that he performed calculations based on
the average price paid in each pool for each loan and that he
concluded the rate of return sought by SBN exceeded 45% per
annum. Attached to Mr. Meaux's affidavit were
copies of his report and a summary of his calculations.
11, 2018, the summary judgment hearing was held. At the
hearing, SBN conceded, contrary to the allegation in its
petition, that it was not a holder in due course; and Vista
requested a continuance to conduct discovery. Vista stressed
that, on April 17, 2018, it filed the Discovery Requests;
that SBN had not yet answered them; and that SBN's
responses were not due until May 17, 2018, six days after the
hearing. At the hearing, the trial court orally granted
SBN's motion for summary judgment and, by implication,
denied Vista's request for a continuance. Although the
trial court granted SBN's summary judgment motion at the
hearing, two weeks later (on May 25, 2018), Vista filed a
motion to compel, seeking a response to the Discovery
1, 2018,  the trial court rendered a written
judgment granting SBN's summary judgment; the judgment
was in favor of SBN and against Vista for the amounts prayed
for in the petition with the one exception. Five days later
(on June 6, 2018), Vista filed a motion for new trial,
asserting the same two defenses that it raised in its answer
and its opposition to the motion for summary judgment. The
trial court denied both the motion to compel and motion for
new trial. Vista appealed.
judgments are reviewed de novo on appeal, with the
reviewing court using the same criteria that govern the trial
court's determination of whether summary judgment is
appropriate; whether there is any genuine issue of material
fact, and whether the movant is entitled to judgment as a
matter of law." Smith v. Robinson, 18-0728, p.
5 (La. 12/5/18), __ So.3d __, __, 2018 WL 6382118, *3 (citing
La. C.C.P. art. 966; Louisiana Safety Ass'n of
Timbermen Self-Insurers Fund v. Louisiana Ins. Guar.
Ass'n, 09-0023, p. 5 (La. 6/26/09), 17 So.3d 350,
353). Likewise, "when a matter involves the
interpretation of a statute, it is a question of law, and a
de novo standard of review is applied." New
Orleans Fire Fighters Pension & Relief Fund v. City of
New Orleans, 17-0320, p. 5 (La.App. 4 Cir. 3/21/18), 242
So.3d 682, 688 (citing Red Stick Studio Dev., L.L.C. v.
State ex rel. Dep't. of Econ. Dev., 10-0193, p. 9
(La. 1/19/11), 56 So.3d 181, 187).
summary judgment procedure is favored. La. C.C.P. art.
966(A)(2).The standard for obtaining a summary
judgment is set forth in La. C.C.P. art. 966(A)(3), which
provides that "[a]fter an opportunity for adequate
discovery, a motion for summary judgment shall be granted if
the motion, memorandum, and supporting documents show that
there is no genuine issue as to material fact and that the
mover is entitled to judgment as a matter of law."
Whether a fact is material is a determination that must be
made based on the applicable substantive law. Roadrunner
Transp. Sys. v. Brown, 17-0040, p. 7 (La.App. 4 Cir.
5/10/17), 219 So.3d 1265, 1270 (citing Smith v. Our Lady
of the Lake Hosp., Inc., 93-2512, p. 27 (La. 7/5/94),
639 So.2d 730, 751).
suits on promissory notes are appropriate for summary
judgment when the debtor establishes no defense against
enforcement. American Bank v. Saxema, 553 So.2d 836,
845 (La. 1989); Premier Bank v. Percomex, Inc., 615
So.2d 41, 43 (La.App. 3d Cir. 1993); see also Fed.
Deposit Ins. Corp. v. Cardinal Oil Well Servicing Co.,
Inc., 837 F.2d 1369, 1371 (5th Cir.1988) (observing that
"[t]ypically, suits on promissory notes provide fit
grist for the summary judgment mill").
suit on a promissory note, the plaintiff-lender's burden
of proof is straightforward; "the
[plaintiff-lender's] production of the note sued upon
makes his case." Merchants Trust & Sav. Bank v.
Don's Int'l, Inc., 538 So.2d 1060, 1061 (La.App.
4th Cir. 1989); Pannagl v. Kelly, 13-823, p. 6
(La.App. 5 Cir. 5/14/14), 142 So.3d 70, 74 (observing that
"[o]nce the plaintiff, the holder of a promissory note,
proves the maker's signature, or the maker admits it, the
holder has made out his case by mere production of the note
and is entitled to recover in the absence of any further
evidence"). In order to defeat summary judgment, the
defendant-borrower must assert a valid defense to liability
on the promissory note, not separate and distinct claims that
are unrelated to the question of liability. Saxena,
553 So.2d at 844.
Vista does not dispute the validity of the Note produced by
SBN. Rather, as noted elsewhere in this opinion, Vista
asserts two defenses to the Note. Villa also asserts the
procedural argument that summary judgment was prematurely
granted and that its request to continue and to compel
discovery should have been granted. Addressing the issues
Vista raises on appeal, we divide our analysis into three
parts-prematurity, the LOC Defense, and the Loansharking