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Fidelity Bank v. Vaughn

Court of Appeals of Louisiana, Third Circuit

June 5, 2019

FIDELITY BANK
v.
LLOYD VAUGHN

          APPEAL FROM THE NINTH JUDICIAL DISTRICT COURT PARISH OF RAPIDES, NO. 253, 861-B HONORABLE MONIQUE F. RAULS, DISTRICT JUDGE

          Richard A. Rozanski Wheelis & Rozanski, COUNSEL FOR DEFENDANT/APPELLANT: Lloyd Vaughn

          Barbara Bell Melton Faircloth Melton, LLC, COUNSEL FOR PLAINTIFF/APPELLEE: Fidelity Bank

          Court composed of Elizabeth A. Pickett, Billy Howard Ezell, and D. Kent Savoie, Judges.

          Elizabeth A. Pickett Judge.

         A personal surety appeals the trial court's judgment granting summary judgment against him in favor of the holder of two promissory notes for which he guaranteed payment. As discussed below, the trial court's judgment is reversed, and the matter is remanded to the trial court.

         FACTS

         In 2013, Lloyd Vaughn entered into a business venture for the development of a residential development in Fort Mitchell, Alabama. Mr. Vaughn signed a personal guaranty guaranteeing the debt of Westgate Homes, L.L.C., which consisted of two promissory notes, with The Bank of Georgia (The Bank). Westgate defaulted on the promissory notes and filed for bankruptcy. In 2015, The Bank sued Mr. Vaughn to collect the balance Westgate owed on the notes.

         In October 2015, The Bank entered into receivership with the Federal Deposit Insurance Corporation (FDIC). Pursuant to a purchase and assumption agreement with the FDIC, Fidelity Bank acquired the assets of The Bank, including enforcement rights of promissory notes payable to The Bank. The trial court granted leave for Fidelity Bank to be substituted as plaintiff in place of The Bank.

         Thereafter, Fidelity Bank filed two motions for summary judgment. One motion sought judgment against Mr. Vaughn as guarantor of Westgate's debt. The second motion sought dismissal of reconventional demands Mr. Vaughn asserted in his answer to the petition. The trial court denied both motions after hearings held in July 2016, finding that the parties had not had adequate time to conduct discovery.

         In May 2017, Fidelity Bank substituted its counsel, and the new counsel filed a peremptory exception of no cause of action to have Mr. Vaughn's reconventional demands dismissed. The trial court sustained the exception, and Mr. Vaughn did not appeal the judgment dismissing those demands.

         In April 2018, Fidelity Bank filed another motion for summary judgment to enforce Mr. Vaughn's guaranty of Westgate's debt. After a hearing, the trial court granted the motion and signed a judgment granting judgment in favor of Fidelity Bank in the principal amount of $373, 207.92, together with legal interest, late fees, attorney fees, and judicial interest. Mr. Vaughn filed a motion for new trial, which was denied; he then filed a motion for appeal.

         ASSIGNMENT OF ERROR

         Mr. Vaughn's sole assignment of error states:

The [t]rial [c]ourt erred in granting Fidelity Bank's [m]otion for [s]ummary [j]udgment where genuine issues of material fact existed as to whether Lloyd Vaughn's Guaranty was extinguished by breach by The Bank . . . (and Fidelity Bank as the assignee of the FDIC) of its contractual obligation of good faith and fair dealing and impairment of collateral securing the Westgate Homes, L.L.C. loan

         DISCUSSION

         Jurisdiction

         Fidelity Bank asserts that this court does not have jurisdiction to consider Mr. Vaughn's assigned error because Mr. Vaughn designated the judgment denying his motion for a new trial by title and date as the judgment being appealed in his motion for appeal. Contrary to that designation, Mr. Vaughn addresses only the trial court's judgment granting Fidelity Bank's motion for summary judgment in his assignment of error and his arguments to this court.

         We addressed this issue in Babineaux v. University Medical Center, 15-292, p. 5 (La.App. 3 Cir. 11/4/15), ...


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