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Najor v. Plaquemines Clay Co., LLC

United States District Court, E.D. Louisiana

April 15, 2019

ROBERT NAJOR
v.
PLAQUEMINES CLAY CO., LLC, ET AL.

          ORDER AND REASONS

          CARL J. BARBIER UNITED STATES DISTRICT JUDGE

         Before 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.

         FACTS AND PROCEDURAL HISTORY

         This 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).

         On April 5, 2013, Plaintiff instituted an action against Judgment Debtor and Plaquemines Clay Co., LLC to recover payment owed on a promissory note[1] 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. Doc. 43).[2]

         On June 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).

         On 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).

         PARTIES' ARGUMENTS

         I. Defendant Trustee's Motion

         Defendant 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).

         Defendant 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).

         Additionally, 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).

         While 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).

         Finally, 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).

         II. Plaintiff's Opposition

         Plaintiff 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 ...


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