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Succession of Schelfhaudt

Court of Appeals of Louisiana, Fourth Circuit

May 8, 2019

SUCCESSION OF MARY-LOUISE SCHELFHAUDT

          APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2017-10317, DIVISION "G" Honorable Robin M. Giarrusso, Judge.

          Betsy A. Fischer Betsy A. Fischer LLC COUNSEL FOR PLAINTIFF/APPELLEE

          Aaron D. Beyt Beyt & Beyt, PLC COUNSEL FOR DEFENDANTS/APPELLANTS

          Court composed of Judge Edwin A. Lombard, Judge Rosemary Ledet, Judge Tiffany G. Chase.

          Tiffany G. Chase Judge.

         Appellants, Marie P. Schelfhaudt, Renée M. Means, and Amy E. Meunier (collectively the "Schelfhaudt Heirs"), appeal the trial court's October 15, 2018 judgment assigning sole liability of a home mortgage debt to the decedent's estate.[1]For the reasons that follow, the judgment of the trial court is affirmed.

         FACTUAL AND PROCEDURAL HISTORY

         The facts of this case are not in dispute. Mary-Louise Schelfhaudt (hereinafter "Ms. Schelfhaudt") died intestate on June 9, 2017. Relevant to this appeal is the primary asset of Ms. Schelfhaudt's succession, a house on Royal Street in the Bywater neighborhood of New Orleans (hereinafter "the House"). Ms. Schelfhaudt purchased the House on July 30, 1999, and lived there together with appellee, David Stephens (hereinafter "Mr. Stephens"), whom she was in a relationship with for thirty years before her death. An authentic act was executed on October 23, 2001, whereby Ms. Schelfhaudt donated a one-half interest in the House to Mr. Stephens subject to a mortgage in favor of Countrywide Home Loans, Inc.[2]

         On December 11, 2014, the home was refinanced by USAA Federal Savings Bank (hereinafter "USAA"). Ms. Schelfhaudt executed a note in favor of USAA promising to repay the sum of $143, 000 over a period of thirty years at a rate of 3.750% interest per annum (hereinafter "the Note"). Mr. Stephens did not sign the Note. Contemporaneously, a mortgage was executed with USAA encumbering the House (hereinafter "the Mortgage"). Both Ms. Schelfhaudt and Mr. Stephens are listed as "Borrowers" in the Mortgage, and both signed the Mortgage. The Mortgage enumerates a series of covenants wherein the Borrowers agree to various provisions specified in individual sections.[3] Section 35 of the Mortgage, in relevant part, provides:

Each Borrower covenants and agrees that Borrower's obligations and liabilities under this Security Instrument and under the Note shall be joint, several and solidary with all other Borrowers and with each guarantor of the Note (if applicable).[4]

         It is the contention of the Schelfhaudt Heirs that this language included in the Mortgage makes Mr. Stephens liable to pay the obligation on the Note.

         After Ms. Schelfhaudt's death, Mr. Stephens filed a petition appointing himself independent administrator of her succession. The order appointing Mr. Stephens as administrator was signed by the trial court on November 6, 2017. On December 1, 2017, the Schelfhaudt Heirs filed a motion to remove Mr. Stephens as independent administrator, as they did not consent to his initial appointment. The Schelfhaudt Heirs also requested Mr. Stephens provide an accounting of his activities as administrator. The matter was scheduled for a contradictory hearing on March 9, 2018, wherein the trial court granted the motion, removing Mr. Stephens as administrator and further ordering him to provide the requested accounting. As Mr. Stephens did not timely file his accounting, the Schelfhaudt Heirs filed motions for contempt and to compel discovery.

         On May 7, 2018, Mr. Stephens filed his final accounting and requested it be homologated. The accounting listed, among other assets, Ms. Schelfhaudt's undivided one-half interest in the House. It also listed the full amount of the remaining $131, 885.64 owed on the Note as a debt of the decedent. The Schelfhaudt Heirs filed an opposition contesting the allocation of this debt.

         A hearing on the collective issues before the trial court was held on September 18, 2018. Ruling from the bench, and pertinent to this appeal, the trial court held the Mortgage did not obligate Mr. Stephens to pay the debt on the Note and that Ms. Schelfhaudt's succession was solely liable for the total amount owed. The judgment was reduced ...


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