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CRU Shreveport LLC v. United National Insurance Co.

United States District Court, W.D. Louisiana, Shreveport Division

October 18, 2019

CRU SHREVEPORT, LLC
v.
UNITED NATIONAL INSURANCE COMPANY

          MEMORANDUM RULING

          KAREN L. HAYES, UNITED STATES MAGISTRATE JUDGE

         Before the Court is a Motion for Summary Judgment [doc. # 49] filed by defendant United National Insurance Company (“UNIC”). With the consent of all parties, the District Court referred the above-captioned case to the undersigned magistrate judge for the conduct of all further proceedings and the entry of judgment. 28 U.S.C. § 636(c). For reasons stated below, the motion is GRANTED.

         BACKGROUND

         This case arises out of a dispute between CRU Shreveport, LLC (“CRU”) and its insurer UNIC. CRU alleges UNIC breached the contract between the parties and violated the duty of good faith. CRU filed its complaint in this matter on June 5, 2018. On September 7, 2019, UNIC filed the instant motion for summary judgment, claiming that CRU no longer has a right of action because of a dation agreement between CRU and its creditor GreenLake. On September 30, 2019, CRU filed its response to the motion for summary judgment. On October 7, 2019, UNIC filed its reply brief. The matter is ripe.

         PERTINENT FACTS

         Under Local Rule 56.1, every motion for summary judgment must be accompanied by a separate, short and concise statement of the material facts as to which the moving party contends there is no genuine issue to be tried. Under Local Rule 56.2, a party opposing a motion for summary judgment must include a separate, short and concise statement of the material facts as to which there exists a genuine issue to be tried. All facts set forth in the statement required by the moving party will be deemed admitted unless controverted.

         In the present case, CRU has only made a few objections to the statement of material facts presented by UNIC. Thus, all other facts in the statement submitted by UNIC are deemed admitted. For ease of reading and clarity, the court first lists the undisputed facts and then lists the disputed facts.

         Undisputed facts

         1. On October 4, 2013, CRU purchased the hotel located at 1419 E. 70th Street, Shreveport, Louisiana (“the Hotel” or “the Property”).

         2. On November 8, 2013, CRU executed a Mortgage in favor of creditor GreenLake secured by the Hotel and its Movables.

         3. CRU experienced difficulty paying its debts to GreenLake and its government taxes. CRU entered into three amending promissory notes with GreenLake in which GreenLake loaned additional funds and extended the maturity date of the debt.

         4. In September 2016, the boiler allegedly malfunctioned and released water. As a result, CRU made a claim against its insurer UNIC.

         5. UNIC paid on the claim and then, weeks later, CRU alleged numerous additional Hotel rooms were damaged by the boiler leak.

         6. On February 1, 2017, GreenLake says CRU defaulted on its note. CRU was severely delinquent in payment of sales and use taxes to the State of Louisiana and was also out of compliance with the Louisiana Alcohol and Tobacco Control, which rescinded CRU's liquor license.

         7. On August 11, 2017, CRU and GreenLake entered into a forbearance agreement, whereby GreenLake agreed to forbear on the defaulted note as long as CRU complied with various terms.

         8. The Forbearance Agreement required CRU to execute a Partial Dation Agreement to convey the Hotel and its Movables to GreenLake should CRU default on the Forbearance Agreement. The Dation would be effective on the date it was recorded in the public property records of Caddo Parish.

         9. On October 23, 2018, the Dation was recorded. It provided that in consideration for the amount of $6, 315, 000, CRU was “transferring, conveying, delivering, granting and relinquishing the Property and the Movable Property to GreenLake.”

         10. The Dation further provided: “Grantor [CRU] hereby acknowledges and agrees that the conveyance of the Property and the Movable Property to Grantee [GreenLake], or the holder of the note, pursuant to this Partial Dation, is an absolute conveyance of all of Grantor's right, title and interest in and to the Property and the Movable Property. Grantor further acknowledges that, after conveyance of the Property and Movable Property hereunder, Grantor shall have no further interest or claims with respect to the property or the movable property to grantee, or the holder of the note.”

         11. The Dation further provided that CRU shall “immediately and unconditionally surrender complete possession of the Property and the Movable Property to Grantee [GreenLake], the holder of the Note or Grantee's [GreenLake's] designee and Grantee, the holder of the Note or Grantee's designee shall be authorized to secure possession and control of the Property and the Movable Property from the Grantor.”

         12. By Assignment of Right to Take Title and Possession Under Partial Dation En Paiement Deed and Voluntary Surrender, recorded in Caddo Parish on October 23, 2018, 70th ...


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