United States District Court, E.D. Louisiana
ORDER AND REASONS
J. BARBIER UNITED STATES DISTRICT JUDGE
the Court is a Motion to Dismiss (Rec. Doc.
130) filed by Defendant, Huyen T. Nguyen, in her
capacity as Trustee of the Nguyen Family Trust
(“Defendant Trustee”). Plaintiff, Robert Najor,
opposes the motion (Rec. Doc. 131). Defendant Trustee filed a
reply (Rec. Doc. 137). Having considered the motion and legal
memoranda, the record, and the applicable law, the Court
finds that the motion should be GRANTED IN PART AND
DENIED IN PART.
AND PROCEDURAL HISTORY
litigation derives from a default judgment rendered in this
Court on November 9, 2017, against Hai Nguyen
(“Judgment Debtor”) and the Nguyen Family Trust
(“the Trust”) by and in favor of Robert Najor
(“Plaintiff”). (Rec. Doc. 80).
April 5, 2013, Plaintiff instituted an action against
Judgment Debtor and Plaquemines Clay Co., LLC to recover
payment owed on a promissory note dated February 22, 2012.
(Rec. Doc. 1, at 3). This Court entered a default judgment in
favor of Plaintiff and against Judgment Debtor and
Plaquemines Clay Co., LLC on March 14, 2014. (Rec. Doc. 23).
Thereafter, Plaintiff filed suit against Judgment Debtor and
the Trustee of the Trust, and the case was consolidated with
the action instituted on April 5, 2013. (See Rec.
16, 2017, default was entered against Judgment Debtor and
Defendant Trustee. (Rec. Doc. 69). This Court held an
evidentiary hearing on October 18, 2017. (Rec. Doc. 75).
Plaintiff's counsel submitted a Trial Exhibit containing,
among other things, a copy of the purported cash sale of
property located at 1725 Lakeshore Drive in New Orleans,
Louisiana (“the Property”) to the Trust. (Rec.
Doc. 77, at 1). The cash sale specifically names Huyen Nguyen
as the Trustee of the Trust and appears to list her mailing
address as that of the Property where service upon Defendant
Trustee was executed. (See Rec. Doc. 77, at 1).
November 9, 2017, this Court entered a judgment against
Judgment Debtor and the Trust. (Rec. Doc. 80). On October 5,
2018, this Court granted Defendant Trustee's motion for a
new trial. (See Rec. Docs. 84, 94). This Court
subsequently granted Defendant Trustee's Motion to
Alter, Clarify or Amend Judgment (Rec. Doc. 98),
concluding that the Court's October 5, 2018 Order had the
effect of granting a new trial on all issues and entirely
setting aside the Court's November 9, 2017 Judgment.
(See Rec. Doc. 139).
Defendant Trustee's Motion
Trustee moves this Court to dismiss Plaintiff's first,
fourth, sixth, and seventh claims to relief pursuant to Rule
12(b)(6). (Rec. Doc. 130 at 1). First, Defendant Trustee
asserts that Plaintiff's revocatory action seeking to
annul the transfer of the Property from Judgment Debtor to
the Trust is perempted and must be dismissed. (Rec. Doc.
130-1 at 6). Specifically, Defendant Trustee argues that the
applicable three-year peremptive period began running when
the Property was transferred to the Trust on December 4, 2002
and expired on December 4, 2005. (Rec. Doc. 130-1 at 7).
Given that Plaintiff did not file the above-captioned action
until well after three years from the relevant date,
Defendant Trustee asserts that dismissal is required. (Rec.
Doc. 130-1 at 6). Defendant Trustee notes that
Plaintiff's attempt to circumvent prescription or
peremption by alleging that the transfer of the Property was
fraudulent fails because his “fraud allegations wholly
lack any kind of factual support in contravention of Rule
9.” (Rec. Doc. 130-1 at 7). Moreover, Defendant Trustee
contends that Plaintiff's reliance on the theory of
fraudulent transfer “is not the kind of fraud
contemplated to permit [Plaintiff] to avoid the three-year
peremptive period of article 2041.” (Rec. Doc. 130-1 at
8). Defendant Trustee also argues that even if Plaintiff had
alleged the proper type of fraud to allow him to avoid the
peremptive period, “the 2013 inclusion of the fraud
exemption to article 2041 does not apply retroactively to
allow [Plaintiff] to bring his action.” (Rec. Doc.
130-1 at 8). Defendant Trustee argues that the oblique action
asserted in Plaintiff's amended complaint must also be
dismissed as perempted because it is subject to the same
prescriptive and peremptive period as the revocatory action.
(Rec. Doc. 130-1 at 9).
Trustee next argues that Plaintiff cannot advance on a theory
of fraudulent transfer of the Property to the Trust because
(1) Plaintiff has not alleged that he is now or has ever been
a judgment creditor of the Trust, and (2) Plaintiff's
complaint admits by its terms that Plaintiff was not a
creditor of Judgment Debtor at the time of the 2002 transfer
of the Property. (Rec. Doc. 130-1 at 9). Specifically,
Defendant Trustee emphasizes that the promissory note that
formed the basis of the 2013 action against Judgment Debtor,
whereby Plaintiff became a creditor of Judgment Debtor, was
not even executed until nearly ten years after the Property
was transferred to the Trust. (Rec. Doc. 130-1 at 10). Based
on the foregoing, Defendant Trustee argues that
Plaintiff's first claim to relief should be dismissed
with prejudice. (Rec. Doc. 130-1 at 10).
Defendant Trustee asserts that Plaintiff's action to
declare the 2002 transfer of the Property to the Trust a
nullity and a simulation is prescribed and should be
dismissed. (Rec. Doc. 130-1 at 10). Defendant Trustee asserts
that Plaintiff's amended complaint offers no facts to
support the allegation that the transfer was illicit or
immoral with respect to Plaintiff given the fact that
Plaintiff was neither a judgment creditor nor an unsecured
creditor of Judgment Debtor or the Trust at the time of the
transfer. (Rec. Doc. 130-1 at 10). Defendant Trustee argues
that Plaintiff's allegation that there was no
consideration for the transfer implicates the law of relative
nullity, though Plaintiff has not advanced any assertion in
his amended complaint to invalidate the transfer on that
basis. (Rec. Doc. 130-1 at 11, 12). However, Defendant
Trustee asserts that even if Plaintiff had alleged
circumstances to nullify the transfer of the Property based
on relative nullity, Plaintiff's failure to file suit
within five years of the 2002 transfer renders the claim
untimely. (Rec. Doc. 130-1 at 13).
Defendant Trustee contends that any allegations that the
transfer was a simulation are not supported by factual
assertions, Defendant Trustee argues that even if Plaintiff
were successful in proving a simulation because no
consideration was paid, the transfer would constitute a
donation from Judgment Debtor to the Trust. (Rec. Doc. 130-1
at 13, 14). Defendant Trustee notes that an action to recover
a portion of the Property on the basis that it constitutes an
excessive donation is subject to a five-year prescriptive
period that expired in December of 2007. (Rec. Doc. 130-1 at
14). Thus, any attack on a donation of the Property would be
prescribed. (Rec. Doc. 130-1 at 14).
Defendant Trustee argues that Plaintiff's claims for
attorney's fees and costs should be dismissed. (Rec. Doc.
130-1 at 15). Defendant Trustee first argues that the amended
complaint cites no law or support and fails to “give
fair notice to the factual circumstances by which [the] claim
arises.” (Rec. Doc. 130-1 at 15). Additionally,
Defendant Trustee contends that there is no breach of a
conventional obligation presently before the Court to support
attorneys' fees and costs based on bad faith discharge of
duties under article 1997. (Rec. Doc. 130-1 at 15).
raises several arguments in opposition. (Rec. Doc. 131-1).
First, Plaintiff asserts that actual fraud-where a debtor
intentionally transfers assets to avoid a creditor's
claims- always voids asset transfers. (Rec. Doc. 131-1 at 3,
4). Plaintiff argues that because Judgment Creditor acted
with “actual fraudulent intent” when he
transferred the Property to the Trust in 2002, the transfer
is void ab initio as to creditors. (Rec. Doc. 131-1
at 4). Plaintiff goes on to note that under Louisiana law,
“[t]ransfers of real estate, property, made for the
purpose of defrauding creditors have always been held to have
an unlawful cause and constitute an absolute nullity. (Rec.
Doc. 131-1 at 4, 5). Plaintiff acknowledges ...