WELLS FARGO BANK, N.A., AS TRUSTEE FOR OPTION ONE MORTGAGE LOAN TRUST 2000-C, ASSET-BACKED CERTIFICATES, SERIES 2000-C
FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2010-02155,
DIVISION "L" Honorable Kern A. Reese, Judge
STEPHEN RIDER -and- ZELMA M. FREDERICK McGLINCHEY STAFFORD,
PLLC COUNSEL FOR PLAINTIFF/APPELLANT
L. HYATT, II DONALD L. HYATT, II APLC COUNSEL FOR
composed of Chief Judge James F. McKay III, Judge Daniel L.
Dysart, Judge Joy Cossich Lobrano)
F. MCKAY III CHIEF JUDGE.
action on a petition to enforce security interests by
ordinary process, the plaintiff, Wells Fargo Bank, N.A., as
trustee for Option One Mortgage Loan Trust 2000-C,
Asset-Backed Certificates, Series 2000-C (Wells Fargo),
appeals the trial court's granting of a peremptory
exception of prescription in favor of the defendant, Tracie
Washington. For the reasons that follow, we affirm.
AND PROCEDURAL HISTORY
26, 2000, Ms. Washington obtained a mortgage for her home
located at 8004 Belfast Street in New Orleans, Louisiana. Ms.
Washington executed a promissory note for $140, 000.00
payable to Bourgeois & Associates Mortgage, L.L.C. and
granted a mortgage encumbering the property. The loan was
subsequently assigned to Option One, which later assigned the
loan to Wells Fargo.
Washington failed to make the monthly installment payment due
on November 1, 2001 or any other payment due thereafter. On
February 11, 2002, Wells Fargo filed a petition for executory
process, where the unpaid principal balance and interest due
was then accelerated under the note. This foreclosure lawsuit was
dismissed, without prejudice, after the parties reached a
settlement as to the arrears owed by Ms. Washington.
December 16, 2003, a second petition for executory process
was filed.As in the first lawsuit, Wells Fargo again
accelerated the debt because, as of September 1, 2003, Ms.
Washington again failed to pay the full monthly installments
on her mortgage loan obligations. This foreclosure lawsuit
was also dismissed without prejudice on May 9,
March 4, 2010, Wells Fargo filed the instant suit via a
petition to enforce security interest by ordinary process. In
response, Ms. Washington filed an answer, exceptions,
alternative affirmative defenses, and a reconventional demand
on September 16, 2010. On March 24, 2016, Ms. Washington
filed an amended answer, alternative affirmative defenses,
and reconventional demand. On May 22, 2018, Ms. Washington
filed an exception of prescription, which was heard by the
trial court on November 29, 2018. Ms. Washington argued that
in cases involving more than one lawsuit over a note which is
accelerated in the first case, any subsequent case is
prescribed if it is brought more than five years after the
initial acceleration. Both sides also put on competing
evidence as to whether or not Ms. Washington acknowledged the
debt. The trial court ruled from the bench and later
memorialized a judgment on February 8, 2019, granting Ms.
Washington's exception of prescription. It is from this
judgment that Wells Fargo now appeals.
appeal, Wells Fargo raises the following assignment of error:
the trial court erred in granting Washington's exception
of prescription because Washington acknowledged the mortgage
loan debt by: (1) making a payoff request to Option One, her
prior mortgage loan servicer, on September 19, 2005; (2)
calling American Home Mortgage Servicing, Inc., her
subsequent mortgage loan servicer, to ask about the status of
the unpaid principal balance on the loan; and (3) admitting
she tendered payments on the loan in her reconventional
demand. Alternatively, Wells Fargo argues even if there was
no acknowledgement of the debt, the trial court erred in
finding that the entire mortgage debt should be canceled on
prescription grounds, because only those mortgage loan
installment payments that came due more than five years
before the filing of this foreclosure suit could be
policy basis for prescription is simple; parties who are
actual or possible defendants should not have to worry about
possible litigation for limitless periods of time after an
event triggers the right to sue. The standard of review of a
trial court's ruling on a peremptory exception of
prescription turns on whether evidence is introduced.
Wells Fargo Financial Louisiana, Inc. v. Galloway,
17-0413, p. 7 (La.App. 4 Cir. 11/15/17), 231 So.3d 793, 800.
When no evidence is introduced, appellate courts review
judgments sustaining an exception of prescription de
novo, accepting the facts alleged in the petition as
true. Id.; Lennie v. Exxon Mobil Corp.,
17-0204, p. 3 (La.App. 5 Cir. 6/27/18), 251 So.3d 637, 642,
writ denied, 18-1435 (La. 11/20/18), 256 So.3d 994.
However, when evidence is introduced at a hearing on an
exception of prescription, the trial court's findings of
fact are reviewed under the manifest error standard.
Id.; Tenorio v. Exxon Mobil Corp., 14-0814
(La.App. 5 Cir. 4/15/15), 170 So.3d 269, 273. When evidence
is introduced but the case involves only the determination of
a legal issue, not a dispute regarding material facts, an
appellate court must review the issue de novo,
giving no deference to the trial court's legal
determination. Wells Fargo, 17-0413, p. 8, 231 So.3d
at 800; Cawley v. National Fire & Marine Ins.
Co., 10-2095, p. 3 (La.App. 1 Cir. 5/6/11), 65 So.3d
the party urging prescription bears the burden of proving
that the cause of action has prescribed. Vicari v. Window
World, Inc., 14-870 (La.App. 5 Cir. 5/28/15), 171 So.3d
425, 435. However, when prescription is evident on the face
of the pleadings, the burden shifts to the plaintiff to show
the action has not prescribed. Id.
on instruments, whether negotiable or not, and on promissory
notes, whether negotiable or not, are subject to a liberative
prescription of five years. This prescription commences to
run from the day payment is exigible." La. C.C. art.
3498. An installment note normally has a separate five-year
prescriptive period for each scheduled payment. When the note
has been accelerated, however, the five-year prescription for
the entire note begins to run on the date of acceleration.
JP Morgan Chase Bank, N.A. v. Boohaker, 14-0549, pp.
10-11 (La.App. 1 Cir. 11/20/14), 168 So.3d 421, 428. When
there has been more than one lawsuit over a note, and the
note is accelerated in the first suit, and a later suit is
not filed until more than five years after the acceleration
in the first suit, then the claim asserted in the later suit
has prescribed. See Occidental Props., Ltd. v.
Zufle, 14-0494, p. 10 (La.App. 5 Cir. 11/25/14), 165
So.3d 124, 130.
matter, Wells Fargo sued in 2002 and dismissed the matter
without prejudice after some sort of settlement. In 2003,
Wells Fargo sued again, although its efforts to use executory
process for a quick seizure were unsuccessful, Wells Fargo
decided to dismiss without prejudice. On March 4, 2010, Wells
Fargo filed the present action as an ordinary proceeding. The
present litigation was initiated more than seven years after
the note at issue was accelerated. Because of the
acceleration, the note at issue appears prescribed on its
face. On February 11, 2002, Wells Fargo filed a petition for
executory process, which accelerated and/or recognized a
prior acceleration of the June 26, 2000 note. This case was
dismissed. On December 16, 2003, Wells Fargo filed its second
petition for executory process, including acceleration of the
note. This case was also dismissed. However, at the time of
acceleration the entire debt/note became due. Accordingly,
based on the five-year prescriptive period of La. C.C. art.
3498, the debt at issue in the instant case prescribed on
either February 11, 2007 or at the latest on December 16,
Fargo urges that Ms. Washington tacitly acknowledged the
obligation by making two alleged phone calls, one on
September 19, 2005, to a loan servicer to obtain a payoff
amount, and the other on July 1, 2009, to a loan servicer to
learn the unpaid balance. These are the only communications
which Wells Fargo identified in response to written discovery
as occurring between Ms. Washington and Wells ...