ROSEMARY LEDET, Judge.
This case has a complex procedural background involving four separate, but interrelated lawsuits. This case originated as a bank's action to collect on a continuing guaranty. The bank, First Bank and Trust ("FB & T"), ultimately obtained a judgment against the continuing guarantor, Norbert A. Simmons. After FB & T began enforcing the judgment in Florida (the state where Mr. Simmons resided), Mr. Simmons filed two suits in the Civil District Court for Orleans Parish ("CDC") seeking to annul the judgment. The present dispute between the parties stems from the trial court's rulings in those suits on the following matters: (i) Mr. Simmons' motions to transfer his two suits from the divisions of CDC to which they were randomly allotted to the division in which the judgment was rendered; (ii) Mr. Simmons' motion to consolidate his second suit with the judgment suit; (iii) FB & T's declinatory exception of lis pendens filed in Mr. Simmons' second suit, which was based on Mr. Simmons' first suit; and (iv) the issuance of a preliminary injunction in Mr. Simmons' second suit against the enforcement of the judgment.
To provide a framework for analysis, we begin by setting forth a brief description of each of the four pertinent suits between the parties, which is as follows:
Three of the four suits are presently before us for consideration; the suit that is not before us is the Neelys' Suit.
In Simmons Suit One, FB & T
For the reasons that follow, we deny FB & T's writ application in Simmons Suit One. We grant in part FB & T's writ application in Simmons Suit Two and reverse the trial court's ruling, denying in part of FB & T's exception of lis pendens; otherwise, we deny FB & T's writ application. Given our finding that FB & T is entitled to the dismissal without prejudice of Mr. Simmons' suit in Simmons Suit Two, we dismiss FB & T's appeal as moot and remand for further proceedings.
On February 11, 2008, Mr. Simmons executed a continuing guaranty in FB & T's favor (the "Guaranty").
On January 29, 2008, two weeks before Mr. Simmons signed the Guaranty, Mr. Neely entered into the first loan with FB & T ("Loan One"). The promissory note for Loan One was signed not only by Mr. Neely, but also by his mother, Sheryl Neely
On the day after the Guaranty was executed, February 12, 2008, Mr. Neely entered into the other loan with FB & T ("Loan Two"). The purpose for Loan Two was to purchase immovable property located at 1141 Robert E. Lee Boulevard in New Orleans, Louisiana. The promissory note for Loan Two was signed only by Mr. Neely. The mortgage in connection with Loan Two encumbered only the Robert E. Lee Boulevard property.
The Neelys defaulted on Loan One. In response, on September 20, 2010, FB & T filed the Collection Suit against Mr. Simmons. According to FB & T's petition in the Collection Suit, Mr. Simmons signed the Guaranty in which he "absolutely and unconditionally guaranteed" payment of "all past, present, and future obligations" owed to FB & T by the Neelys. In the Collection Suit, FB & T alleges that the Neelys defaulted on the note for Loan One and that as of September 17, 2010, the payoff amount of the note was $1,134,572.49, not including other fees that continued to accrue daily.
Mr. Neely also defaulted on Loan Two. On January 26, 2011, FB & T commenced an executory proceeding against Mr. Neely as to the property securing Loan Two — the Robert E. Lee Boulevard property. Thereafter, FB & T and the Neelys entered into negotiations. As a result of the negotiations, on August 29, 2011, FB & T and the Neelys entered into a Forbearance Agreement, which was silent regarding Mr. Simmons' obligations under the Guaranty.
Thereafter, FB & T recorded and began enforcing the judgment in Florida, where Mr. Simmons resided.
Based on the above allegations, Mr. Simmons asserted the following nine causes of action in Simmons Suit One: (1) breach of Forbearance Agreement,
The ninth cause of action was a request for the trial court to order that the Guaranty was unenforceable and that the judgment obtained based on it was null and void. Particularly, the declaratory relief sought in the petition was for the court to order "the continuing guaranty relied upon by [Mr.] Canizaro and/or FB & T in seeking and being awarded a default judgment against Simmons unenforceable, and the default judgment null and void." In addition, Mr. Simmons requested injunctive relief, which he expressly excluded from his request in the petition for a jury trial. The injunctive relief he requested was a judgment by the trial court that "all ongoing attempts by [Mr.] Canizaro and/or First Bank and Trust to seize Mr. Simmons' assets or lien his property cease and no further attempts by [Mr.] Canizaro and/or First Bank and Trust in this regard occur in the future."
In response to Simmons Suit One, FB & T filed exceptions of no cause of action and res judicata. Its exception of no cause of action was based on the Louisiana Credit Agreement Statute, La. R.S. 6:1121-1124.
On March 31, 2014, before the exceptions in Simmons Suit One were heard, the Neelys filed their own suit against FB & T — the Neelys' Suit. In their suit, the Neelys alleged that FB & T had breached, or was planning to breach, the Forbearance Agreement. On May 6, 2014, Mr. Simmons filed an intervention in the Neelys' Suit — the Intervention. In the Intervention, Mr. Simmons named as defendants FB & T, Mr. Canizaro, and the Neelys, seeking indemnity from Mr. Neely.
On June 24, 2014, Mr. Simmons filed Simmons Suit Two, which was captioned a "Petition to Annul Judgment." In this suit, Mr. Simmons named as defendant only FB & T. In his petition in Simmons Suit Two, Mr. Simmons made the following averments:
Contemporaneously with the allotment of Simmons Suit Two, Mr. Simmons filed an ex parte motion to transfer Simmons Suit Two from Division "C" — the division to which it was randomly allotted — to Division "I" — the division to which the Collection Suit was originally allotted. He contended that the suit should be transferred because the petition in Simmons Suit Two sought to annul the judgment rendered in the Collection Suit. A transfer order was signed that same day by the judges of both divisions "C" and "I."
In Simmons Suit Two, the trial court in Division "I" subsequently granted Mr. Simmons' request for a TRO, ordering that FB & T be restrained from undertaking or continuing the prosecution of any collection efforts against Mr. Simmons in regards to the January 14, 2011 judgment in the Collection Suit. The trial court also set a preliminary injunction hearing for July 2, 2014, ordering that the application was "to be heard upon the verified pleadings and/or supporting affidavits only." See La. C.C.P. art. 3609.
On June 25, 2014, Mr. Simmons filed a motion in the Collection Suit to consolidate that suit with Simmons Suit Two. FB & T filed an opposition to the motion to consolidate and a motion to vacate the order of transfer. On June 26, 2014, FB & T filed a declinatory exception of lis pendens in Simmons Suit Two, which was the first pleading FB & T filed in that suit.
On July 2, 2014, a hearing was held on both the preliminary injunction and the various motions. In the Collection Suit, the trial court granted Mr. Simmons' motion to consolidate that case with Simmons Suit Two. In Simmons Suit One, the trial court granted the motion to transfer the suit from Division "A" to Division "I."
In Simmons Suit Two, the trial court granted a preliminary injunction.
Although FB & T raises multiple issues in its appeal and writ applications, we find the following two issues dispositive: (i) whether the trial court erred in transferring Simmons Suit One and Simmons Suit Two to the division in which the Collection Suit was originally allotted and consolidating Simmons Suit Two with the Collection Suit; and (ii) whether the trial court erred in overruling in part FB & T's
FB & T's argument regarding the transfer and consolidation of the cases is three-fold. First, it argues that the trial court erred by ordering the transfer of Simmons Suit Two from Division "C" to Division "I" (and by refusing to vacate that order). Second, it argues that the trial court erred by consolidating Simmons Suit Two with the Collection Suit. And, third, it argues that the trial court erred by ordering the transfer of Simmons Suit One from Division "A" to Division "I."
The issues presented in this case regarding the transfer and consolidation of cases are questions of law. Questions of law are reviewed by appellate courts de novo "without deference to the legal conclusions of the courts below." Durio v. Horace Mann Ins. Co., 11-0084, p. 14 (La. 10/25/11), 74 So.3d 1159, 1168; see also Jackson v. Pfeifer, 13-0440, 13-0450, p. 4 (La.App. 4 Cir. 7/31/13), 156 So.3d 113, 116 (citing Hospitality Consultants, LLC v. Angeron, 09-1738, p. 5 (La.App. 4 Cir. 6/9/10), 41 So.3d 1236, 1240). The standard of review for an appellate court addressing a question of law is simply whether the trial court's interpretive decision was legally correct. 727 Toulouse, L.L.C. v. Bistro at the Maison De Ville, L.L.C., 12-1014, pp. 7-8 (La.App. 4 Cir. 8/21/13), 122 So.3d 1152, 1157-58, writ denied, 13-2414 (La. 1/10/14), 130 So.3d 327; Olavarrieta v. St. Pierre, 04-1566, p. 3 (La.App. 4 Cir. 5/11/05), 902 So.2d 566, 568.
Interdivisional transfers are governed by La. C.C.P. art. 253.2, which provides:
Under Article 253.2, a case can be transferred to another division in only three circumstances: (i) when the parties consent; (ii) when the transfer is for consolidation for trial, as provided in La. C.C.P. art. 1561; and (iii) when a Supreme Court rule permits the transfer. See State v. Sprint Commc'ns Co., L.P., 96-3094, p. 6 (La.9/9/97), 699 So.2d 1058, 1063 (noting, albeit in the negative, the three circumstances as follows: "[i] the parties did not consent, [ii] the initial transfer was not for consolidation, and [iii] no Supreme Court rule permitted the transfers.").
The first step is FB & T's argument that because it objected, the transfers could only be valid under La. C.C.P. art. 253.2 if the transfers were for consolidation for trial under La. C.C.P. art. 1561, which provides in pertinent part:
La. C.C.P. art. 1561(A) (Emphasis supplied). In support, FB & T cites In re Dendinger, 99-1624 (La.App. 4 Cir. 7/21/99), 766 So.2d 554.
According to FB & T, the trial court erred in concluding that it could transfer two of Mr. Simmons' cases, and consolidate one of them, based on the fact that the Collection Suit was the first-filed case. Given the Collection Suit was reduced to a final judgment in 2011, FB & T submits that the Collection Suit was no longer "pending" in 2014 and no longer susceptible of being consolidated for trial pursuant to La. C.C.P. art. 1561. FB & T argues that "[a] case that has been resolved by final judgment cannot be consolidated with a case that has not been resolved by final judgment."
FB & T's argument poses the question of whether a pending case can be consolidated with one that is not still pending. It unnecessary in this case to address that question since it is based on the assumption that the transfers were pursuant to La. C.C.P. art. 1561, which includes the "pending" language.
The next step in FB & T's argument is its contention that CDC App. 9.3 — insofar as it provides for the transfer to a division in which there is no longer a pending case-conflicts with two statutory provisions — La. C.C.P. art. 253.1, which provides that
FB & T's argument is based on the well-settled principle that a local rule cannot override a statutory enactment. See Rodrigue v. Rodrigue, 591 So.2d 1171 (La. 1/10/92) (holding that local rules of court cannot conflict with legislation). In this case, however, FB & T's argument is belied by the Supreme Court's promulgation, pursuant to the last sentence of La. C.C.P. art. 253.2, of La. Dist. Ct. R. 9.3,
Pursuant to La. Dist. Ct. R. 9.3, the CDC's local rules for allotment of cases and transfer and consolidation are set forth in CDC App. 9.3. Hence, CDC App. 9.3 is a Supreme Court rule for reassigning case as contemplated by the last sentence of La. C.C.P. art. 253.2.
The last step in FB & T's argument is its contention that CDC App. 9.3, despite its inclusion in the appendix to La. Dist. Ct. R. 9.3, is invalid because it does not provide a uniform rule. FB & T contends that "[t]he [L]egislature did not intend, and the Supreme Court did not allow, district courts to decide in what cases they would chose to transfer cases by placing something that was not uniform, in Appendix 9.3." Stated otherwise, it contends that the Legislature's mandate in the last sentence of La. C.C.P. art. 253.2 "did not contemplate, and the Supreme Court rule [La. Dist. Ct. R. 9.3] does not allow, district courts to abrogate the law regarding random allotment, or transfer for the purpose
FB & T additionally argues that the Legislature's mandate to the Supreme Court in the last sentence of La. C.C.P. art. 253.2 was that it adopt "uniform rules" for the transfer of cases. FB & T acknowledges that La. Dist. Ct. R. 9.3 allows district courts to enact local rules as to the manner in which random allotment is to be accomplished and to submit them for inclusion in Appendix 9.3. FB & T, however, contends that district courts are allowed to place only "certain procedures into Appendix 9.3." FB & T contends that "allowing each district court to decide for itself how... cases should be transferred or consolidated is not a `uniform rule' contemplated by C.C.P. art. 253.2."
Contrary to FB & T's suggestion, La. C.C.P. art. 253.2 does not refer to the Supreme Court adopting uniform rules; rather, it refers to the Supreme Court adopting uniform procedures.
This type of local rule "provide[s] for automatic consolidation (by reallotment between divisions) of related cases." 1 Frank L. Maraist and Harry T. Lemmon, LOUISIANA CIVIL LAW TREATISE: CIVIL PROCEDURE § 10:8 (1999).
Summarizing, the transfers and the consolidation at issue in this case were pursuant to CDC App. 9.3, which is a Supreme Court rule for reassigning cases contemplated by La. C.C.P. art. 253.2. Accordingly, the trial court did not err in granting the motions to transfer Simmons Suit One and Simmons Suit Two to Division "I"; denying the motion to vacate the transfer of Simmons Suit Two; and granting the motion to consolidate Simmons Suit Two and the Collection Suit.
The denial of an exception of lis pendens presents for review a question of law. See Glass v. Alton Ochsner Med. Found., 02-0412, p. 3 (La.App. 4 Cir. 11/6/02), 832 So.2d 403, 405; Krecek v. Dick, 13-0804, pp. 3-4 (La.App. 4 Cir. 2/19/14), 136 So.3d 261, 264. As noted earlier, the standard of review of the appellate court in reviewing a question of law is whether the court's interpretive decision is legally correct. 727 Toulouse, L.L.C., 12-1014 at p. 7, 122 So.3d at 1157.
The governing code article is La. C.C.P. art. 531. As amended in 1990,
Since the 1990 amendment to La. C.C.P. art. 531, "the requirements for establishing lis pendens conform to the requirements of res judicata, and the test for lis pendens is whether a final judgment in the first suit would be res judicata in the subsequently filed suit." Citizens Sav. Bank v. G & C Development, L.L.C., 12-1034, pp. 6-7 (La. App. 1 Cir. 2/15/13), 113 So.3d 1085, 1089.
The jurisprudence has identified the following three requirements for lis pendens to apply:
FB & T contends that, regardless which test applies, its exception of lis pendens should have been granted and the entire second suit, Simmons Suit Two, dismissed. FB & T submits that a judgment in the First Simmons Suit — either annulling, or refusing to annul, the judgment — would be res judicata. Likewise, FB & T submits that the three requirements the jurisprudence has identified are met. First, two suits are pending — Simmons Suit One and Simmons Suit Two. Second, Simmons Suit One has one party that Simmons Suit Two does not — Mr. Canizaro; otherwise, the parties in both suits are the same. As to the common parties in the pending suits — FB & T and Mr. Simmons — the second requirement for lis pendens is satisfied. Third, the claims in Simmons Suit Two arise out of the same transaction or occurrence that forms the basis of the claims made in Simmons Suit One.
Although the trial court agreed in part with FB & T that the tests for lis pendens were met and partially dismissed the petition in Simmons Suit Two, the trial court disagreed in part and partially denied the exception. In this regard, the trial court, in its judgment on the exception of lis pendens, ordered as follows:
The trial court partially denied FB & T's exception of lis pendens based on its finding that the suit in Simmons Suit One did not assert a direct action to annul the judgment. The trial court orally reasoned that in order to assert a direct action for nullity, it was necessary to file a petition for nullity. The trial court thus found it significant that the petition in Simmons Suit One was entitled "Petition for Damages and Declaratory Judgment;" in contrast, the petition in Simmons Suit Two was entitled "Petition to Annul Judgment."
To the extent the trial court relied on the caption of the first suit, we find its reliance misplaced. The caption of a
FB & T submits that when, as was done in Simmons Suit One, a suit is brought that clearly seeks a declaration that the judgment is a nullity, there is no prohibition against that suit, which is an ordinary proceeding, being cumulated with other claims that must use ordinary process. See La. C.C.P. art. 462.
Continuing, FB & T submits that all of Mr. Simmons' claims, to the extent they are otherwise viable, should be asserted in one lawsuit — Simmons Suit One. FB & T contends that the trial court's denial of its exception of lis pendens, if allowed to stand, will result in two lawsuits proceeding against the same defendant — FB & T — brought by the same plaintiff — Mr. Simmons — seeking to annul the same judgment — the judgment in the Collection Suit. FB & T contends that this is the exact outcome that lis pendens is designed to preclude. FB & T notes that the trial court seemed to conclude that because the petition in Simmons Suit One sought relief in addition to nullity of the judgment, Simmons Suit Two should remain
To summarize, we find that there are two suits pending, that the suits are between the same parties in their same capacities,
For the foregoing reasons, we reverse the trial court's decision denying in part First Bank and Trust's exception of lis pendens in Norbert A. Simmons v. First Bank and Trust, CDC No. 2014-06211; we grant the exception of lis pendens and dismiss the suit without prejudice. Given
FB & T further points out that "[i]n a further attempt to execute the judgment, [it] was contemplating the seizure of certain real estate owned by Mr. Simmons in Miami-Dade County." For this apparent reason, in November 2013, Mr. Simmons filed a Notice of Designation of Homestead in the Miami-Dade. County real estate records; and he provided notice of that filing to FB & T. According to FB & T, for it then to proceed with the seizure and sale, it was required by Florida law to file a declaratory judgment action against Mr. Simmons to have the court determine if he was entitled to homestead protection. In January 2014, FB & T filed such a declaratory judgment action against Mr. Simmons in Florida. Thus, there are two pending suit in the Florida courts involving this matter (the "Florida Cases").
Whitney, 436 So.2d at 1192, n. 9.
Furthermore, the comments to La. Distr. Ct. R. 9.3 reference Judge Shortess' dissent in Lane Mem'l Hosp. v. Watson, 98-0273 (La. App. 1 Cir. 3/3/99), 734 So.2d 28, writs granted, decision vacated, 99-0930, 99-0947 (La. 5/28/99), 743 So.2d 676. In his dissent, Judge Shortess discusses this type of local rule, stating:
Lane Mem'l Hosp., 734 So.2d at 33.