Opinion
2018 CA 1034
02-25-2019
NEWTEK SMALL BUSINESS FINANCE, LLC AS SUCCESSOR IN INTEREST BY MERGER TO NEWTEK SMALL BUSINESS FINANCE, INC. v. ROBERT A. BAKER AND ELSA M. BAKER
Jill S. Willhoft Steven B. "Beaux" Jones New Orleans, Louisiana Counsel for Plaintiff-Appellant Newtek Small Business Finance, LLC as successor in interest by merger to Newtek Small Business Finance, Inc. Andrew Tillman Lilly New Orleans, Louisiana Counsel for Defendants-Appellees Robert A. Baker and Elsa M. Baker
NOT DESIGNATED FOR PUBLICATION ON APPEAL FROM THE TWENTY-SECOND JUDICIAL DISTRICT COURT
NUMBER 2016-10884, DIVISION H, PARISH OF ST. TAMMANY
STATE OF LOUISIANA HONORABLE DENNIS WALDRON, JUDGE PRO TEMPORE Jill S. Willhoft
Steven B. "Beaux" Jones
New Orleans, Louisiana Counsel for Plaintiff-Appellant
Newtek Small Business Finance, LLC
as successor in interest by merger to
Newtek Small Business Finance, Inc. Andrew Tillman Lilly
New Orleans, Louisiana Counsel for Defendants-Appellees
Robert A. Baker and Elsa M. Baker BEFORE: WELCH, CHUTZ, AND LANIER, JJ.
Disposition: APPEAL DISMISSED. RELIEF REQUESTED IN ANSWER DENIED.
CHUTZ, J.
Plaintiff-appellant, Newtek Small Business Finance, LLC (Newtek), appeals the trial court's grant of a preliminary injunction in favor of defendants-appellees, Robert A. and Elsa M. Baker, revoking a writ of seizure and enjoining the sheriff from selling immovable property. The judgment also converted the executory proceedings initiated by Newtek to ordinary proceedings. For the reasons that follow, we dismiss the appeal and deny the relief requested by the Bakers in their answer to the appeal.
This matter has been the subject of an earlier appellate review wherein the salient facts were set forth. Newtek initiated this action by filing a petition for executory process, seeking an immediate writ of seizure and sale of the Bakers' immovable property to satisfy outstanding debts owed by Baker Sales, Inc. (BSI). The trial court granted a preliminary injunction. We dismissed the Bakers' appeal, finding that the Bakers' appellate complaint challenged the trial court's written reasons for granting the relief and did not seek a modification of the relief itself. See Newtek Small Business Financial , LLC v. Baker , 2016-0919 (La. App. 1st Cir. 4/18/17), 2017 WL 1409707, *2 (unpublished opinion). Insofar as the Bakers' attempt to review the trial court's denial of the request to convert the proceedings from executory to ordinary under our supervisory jurisdiction, we found that because the order approving of the use of executory process had been dissolved, and there has been no viable amendment of Newtek's petition, the issue was premature and failed to raise a justiciable controversy. Id.
Following this court's dismissal of that appeal, Newtek filed an amended petition, and on June 12, 2017, the trial court signed an order for executory process. On November 16, 2017, the Bakers filed a petition for an injunction seeking to arrest seizure and sale of their immovable property, averring that the executory procedure had again not been properly followed. They also asserted that because Newtek had already foreclosed without appraisal on mortgages that secured the same debt, it was barred under the Louisiana Deficiency Judgment Act (LDJA), see La. R.S. 13:4106, from further collection or enforcement attempts. The trial court signed an order on November 21, 2017, cancelling the sheriff's sale scheduled for December 13, 2017 and set a hearing on the Bakers' request for a preliminary injunction for January 31, 2018. The hearing was held that day, and the trial court took the matter under advisement.
See La. C.C.P. art. 2751 (providing that the defendant in the executory proceeding may arrest the seizure and sale of the property by injunction when, among other things, the debt secured by the security interest is legally unenforceable or if the procedure required by law has not been followed).
On February 10, 2018, the trial court issued a judgment, revoking an amended writ of seizure that it had issued on June 16, 2017, preliminarily enjoining the Sheriff of St. Tammany Parish (Sheriff) or anyone acting at his direction from proceeding with the sale of the Bakers' immovable property, ordering the Sheriff to restore the immovable property to the Bakers, and converting the proceedings from executory to ordinary. On March 12, 2018, Newtek devolutively appealed.
La. C.C.P. art. 2752 provides, in part, that the injunction proceeding available to a defendant in the executory proceeding shall be governed by the provisions of La. C.C.P. art. 3612 and also provides a defendant may apply for a preliminary injunction pursuant to La. C.C.P. art. 3602, in which case the hearing shall be held before the sale of the property. According to the pertinent provisions of La. C.C.P. art. 3612:
Because the hearing was held before the sale of the property as required under La. C.C.P. art. 2752A, we find no merit in Newtek's contention that the trial court treated the Bakers' request for a preliminary injunction as one for permanent injunctive relief since the hearing was not assigned within the delays mandated in La. C.C.P. art. 3602, i.e., not less than two nor more than ten days after service of the notice.
B. An appeal may be taken as a matter of right from an order or judgment relating to a preliminary or final injunction, but such an
order or judgment shall not be suspended during the pendency of an appeal unless the court in its discretion so orders.
C. An appeal from an order or judgment relating to a preliminary injunction must be taken, and any bond required must be furnished, within fifteen days from the date of the order or judgment. The court in its discretion may stay further proceedings until the appeal has been decided.
D. Except as provided in this Article, the procedure for an appeal from an order or judgment relating to a preliminary or final injunction shall be as provided in Book III.
Newtek did not file its appeal of the preliminary injunction signed by the trial court on February 10, 2018 until March 12, 2018. Since more than fifteen days passed before Newtek filed its appeal, under the plain language of Article 3612, it was untimely.
Despite the plain language of Article 3612, this court has suggested that the date of notice of judgment commences the delays for an appeal of a preliminary injunction. See Roba , Inc. v. Courtney , 2009-0509 (La. App. 1st Cir. 8/10/10), 47 So.3d 509, 514, n.12. But even if delays commenced as of the February 15, 2018 date of notice of judgment, Newtek's appeal on March 12, 2018 exceeds fifteen days and is, therefore, still untimely.
Newtek urges that because the trial court issued reasons for judgment concluding that the LDJA rendered the Bakers' debt legally unenforceable, the effect of the grant of a preliminary injunction arresting seizure and sale of the immovable property for all intents and purposes constituted a final injunction. We disagree.
As we noted in our dismissal of the Bakers' appeal of the trial court's earlier issuance of a preliminary injunction, it is the judgment -- not the reasons for judgment -- that we review on appeal. See Newtek Small Business Financial , LLC , 2017 WL 1409707 at *2 (relying on Wooley v. Lucksinger , 2009-0571 (La. 4/1/11), 61 So.3d 507, 572). Accordingly, we conclude that any assertions challenging the propriety of the preliminary injunction are not properly before us because Newtek failed to timely appeal.
Newtek asks that this court use its supervisory jurisdiction to review the issues it set forth in its appellate brief. Insofar as those related to the preliminary injunction, we decline to do so. See Lake Villas No. II Homeowners' Ass'n , Inc. v. LaMartina , 2015-0244 (La. App. 1st Cir. 12/23/15), 2015 WL 9435193, *3 (unpublished) (conversion of an appeal to a writ application if this court finds the appeal untimely is appropriate only if the appeal would have been timely had it been filed as a writ application).
Generally, conversion of an appeal to an application for a supervisory writ occurs when an appeal was taken from a non-appealable judgment rather than from an appealable judgment that was untimely appealed as in this case. --------
Insofar as the trial court's order converting the executory proceeding to an ordinary proceeding, we are mindful that when a creditor is unable to demonstrate entitlement to proceed by executory procedure, the creditor's alternative remedy is to proceed via ordinary procedure. See Moore v. Louisiana Bank & Trust Co., 528 So.2d 606, 609 (La. App. 2d Cir.), writ denied, 531 So.2d 269 (La. 1988) (citing American Bank and Trust Co. in Monroe v. Carson Homes , Inc., 316 So.2d 732 (La. 1975)). Under the procedural posture before us, where review of the preliminary injunction is not properly before us because Newtek was untimely in its appeal and the trial court did not dismiss Newtek's claims, we decline to exercise supervisory jurisdiction to review the trial court's order converting the proceeding.
The Bakers filed an answer seeking attorney fees for frivolous appeal for their efforts opposing Newtek's motion for appeal. Damages for frivolous appeal are awarded pursuant to La. C.C.P. art. 2164. But because the statute is penal in nature, it must be strictly construed. Moreover, appeals are favored and penalties for frivolous appeal will not be imposed unless they are clearly due. Even when an appeal lacks serious legal merit, damages for a frivolous appeal will not be awarded unless it is clear that the appeal was taken solely for the purpose of delay or that appellant is not serious in the position it advocates. Mars Beach , LLC v. McQuirter , 2017-0670 (La. App. 1st Cir. 11/1/17), 234 So.3d 908, 914, writ denied, 2017-02000 (La. 2/2/18), 233 So.3d 614.
In the present case, Newtek submitted a brief pursuant to this court's show-cause order, with citations of authority, setting forth its position of why it sought to have the judgment reviewed. Although we find Newtek's arguments insufficient to overcome its untimeliness in appealing, we realize it was sincere in advocating its position and did not take this appeal solely for the purpose of delay. Clearly, Newtek seriously advocates its position seeking to have the issues related to the applicability of the LDJA determined such that it may fully resolve whether it is entitled to enforce BSI's outstanding debts. Damages for frivolous appeal are not warranted in this case.
DECREE
For these reasons, the appeal is dismissed. Costs of this review are assessed against plaintiff-appellant, Newtek Small Business Finance, LLC.
APPEAL DISMISSED. RELIEF REQUESTED IN ANSWER DENIED.