Opinion
NO. 2023-C-0491
11-07-2023
Billy SPAIN v. H&H INVESTORS, L.L.C., et al.
James M. Garner, Joshua S. Force, Grant G. Butler, SHER GARNER CAHILL RICHTER KLEIN & HILBERT, L.L.C., 909 Poydras Street, 28th Floor, New Orleans, Louisiana 70112, COUNSEL FOR DEFENDANT/RELATOR Hannah D. Adams, Julia K. Jack, David H. Williams, SOUTHEAST LOUISIANA LEGAL SERVICES, 1340 Poydras St. Suite 600, New Orleans, LA 70112, COUNSEL FOR PLAINTIFF/RESPONDENT
ON SUPERVISORY WRIT FROM THE CIVIL DISTRICT COURT, ORLEANS PARISH, NO. 2022-10771, DIVISION "E", Honorable Omar Mason, Judge
James M. Garner, Joshua S. Force, Grant G. Butler, SHER GARNER CAHILL RICHTER KLEIN & HILBERT, L.L.C., 909 Poydras Street, 28th Floor, New Orleans, Louisiana 70112, COUNSEL FOR DEFENDANT/RELATOR
Hannah D. Adams, Julia K. Jack, David H. Williams, SOUTHEAST LOUISIANA LEGAL SERVICES, 1340 Poydras St. Suite 600, New Orleans, LA 70112, COUNSEL FOR PLAINTIFF/RESPONDENT
(Court composed of Judge Roland L. Belsome, Judge Joy Cossich Lobrano, Judge Paula A. Brown, Judge Tiffany Gautier Chase, Judge Nakisha Ervin-Knott)
Judge Paula A. Brown
1Relator, Archon Information Systems, L.L.C., seeks review of the district court’s June 29, 2023 judgment, which overruled its exception of no cause of action and exception of prescription. For the reasons that follow, we grant Relator’s writ application, reverse the district court’s judgment overruling its exception of no cause of action, sustain its exception of no cause of action, and dismiss Respondent’s, Billy Spain, claim of absolute nullity.
FACTS AND PROCEDURAL HISTORY
Respondent became delinquent on the property taxes due for the property located at 6310 Stratford Place, New Orleans, Louisiana 70131 ("the property"). On July 12, 2011, September 19, 2011, July 23 2012, and September 11, 2012, the City of New Orleans ("the City") through its contractor, Relator, sent notices by certified mail to Respondent notifying him that his taxes were delinquent and his property was scheduled for tax sale. The green cards from all four certified mailings were returned "unclaimed/unable to forward." Allegedly, these notices were also sent to Respondent by first-class mail, but he did not receive the notices.
2On September 25, 2012, the property went to tax sale. Because there was no buyer at the tax sale, the property was adjudicated to the City. A tax sale certificate was recorded on July 1, 2016. Respondent did not redeem the property. On July 1, 2022, the City sent notice to Respondent that his interest in the property would be terminated if he did not redeem the property by making all required payments to the tax collector or file a lawsuit within sixty days. Respondent admits that he received this notice.
Despite receiving the July 1, 2022 predeprivation notice, Respondent did not redeem the property or file a lawsuit within the sixty-day time period. On September 10, 2022, the City sold the property to H&H Investors, L.L.C. On November 22, 2022, after the sixty-day time period had expired, Respondent filed a lawsuit seeking to annul the tax adjudication and subsequent property sale. Thereafter, on February 9, 2023, Relator filed exceptions of no cause of action and prescription. Respondent filed an opposition memorandum on Juno 7, 2023. The matter came for hearing on June 16, 2023, and the district court signed a written judgment denying the exceptions on June 29, 2023.
In overruling Relator’s exception of no cause of action, the district court held that the alleged defects or deficiencies in the pre-tax sale notice to Respondent were sufficient to support a "cause of action under the law with respect to absolute nullity with respect to the tax sale in this matter." The court overruled the exception of prescription on the basis that "there is no prescription with respect to absolute nullities." This timely writ application for supervisory review followed.
3 DISCUSSION
[1–5] A district court’s ruling on a peremptory exception of no cause of action presents a legal question and is thus reviewed under the de novo standard of review. Phillips v. Gibbs, 10-0175, p. 3 (La. App. 4 Cir. 5/21/10), 39 So.3d 795, 797 (citing Tuban Petroleum, L.L.C, v. SIARC, Inc., 09-0302, p. 3 (La. App. 4 Cir. 4/15/09), 11 So.3d 519, 522). The pertinent question on an exception of no cause of action is whether, when viewed in the light most favorable to the plaintiff and with every doubt resolved in his behalf, the petition states any valid cause of action for relief. Id. (citing Wright v. Louisiana Power & Light, 06-1181, p. 15 (La. 3/9/07), 951 So.2d 1058, 1069). This exception is designed to test the legal sufficiency of a petition by determining whether a party is afforded a remedy in law based on the facts alleged in the pleading. Phillips, 10-0175, p. 3, 39 So.3d at 797-98 (citing Foti v. Holliday, 09-0093, p. 5 (La. 10/30/09), 27 So.3d 813, 817). All well-pleaded allegations of fact are accepted as true and correct, and all doubts are resolved in favor of sufficiency of the petition so as to afford litigants their day in court. Phillips, 10-0175, p. 3, 39 So.3d at 798. The burden of demonstrating that a petition fails to state a cause of action is upon the mover. Id. (citing Ramey v. De-Caire, 03-1299, p. 7 (La. 3/19/04), 869 So.2d 114, 119).
This Court has held that a deficiency in pre-tax sale notice is insufficient for purposes of nullifying a tax sale. Sunset Harbour v. Brown, 22-0572, p. 6 (La. App. 4 Cir. 1/9/23), 356 So.3d 1167, 1171-72 (citing Cmty. Associates, Inc. v. Taylor, 19-0242, p. 7 (La. App. 4 Cir. 7/31/19), 364 So.3d 1, 6); see also 4 PCOF Properties, L.L.C. v. Joseph, 21-0341, p. 6 (La. App. 4 Cir. 12/1/21), 332 So.3d 220, 224 n. 2 (where this Court observed that "only deficiencies in post-tax sale notice provide a ground for seeking nullification of a tax sale"). Further, this Court has recognized that "any deficiency in pre-sale notices can be cured by proper post-sale notice." Klein v. Henderson, 21-0317, p. 19 (La. App. 4 Cir. 11/17/21), 332 So.3d 764, 777 n. 13 (quoting Stow-Serge v. Side by Side Redevelopment, Inc., 20-0015, p. 7 (La. App. 4 Cir. 6/10/20), 302 So.3d 71, 77 n. 9). This Court has also recognized that "[u]nder the 2008 revisions [to the tax sale laws], ‘tax sales may no longer be attacked as absolute nullities.’ " Precept Credit Opportunities Fund, L.P. v. Walker, 21-0670, p. 8 (La. App. 4 Cir. 6/22/22), 343 So.3d 299, 305 (quoting Stow-Serge, 20-0015, p. 5, 302 So.3d at 76).
[6] In the case sub judice, the record reflects that Respondent acknowledged receipt of post-sale notice of the tax sale. As such, we find that the district court erred in overruling the Relator’s exception of no cause of action on the basis that the alleged defects in the pre-tax sale notices to Respondent were sufficient to support a cause of action for the absolute nullity of the tax sale.
Having found that the Respondent failed to state a sufficient cause of action, we must now determine if an amendment to the petition would have cured the grounds for Relator’s exception of no cause of action. Pursuant to La. C.C.P. art. 934, "[w]hen the grounds of an objection pleaded by the peremptory exception [of no cause of action] may be removed by amendment of the petition, the judgment sustaining the exception shall order such amendment within the delay allowed by 5the court. If the grounds raised through the exception cannot be so removed, the action, claim, demand, issue, or theory shall be dismissed." In light of the fact that Respondent received post-sale notice, an amendment to the petition would not cure the grounds for the exception of no cause of action; thus, dismissal is the appropriate remedy.
CONCLUSION
For the reasons stated above, we grant Relator’s writ application, reverse the district court’s judgment overruling Relator's exception of no cause of action, sustain Relator’s exception of no cause of action, and dismiss Respondent’s claim of absolute nullity .
Because this Court concludes Respondent has no cause of action for absolute nullity, it is not necessary for this Court to address the peremptory exception raising the objection of prescription.
Sunset Harbour v. Brown, 22-0572 (La. App. '4 Cir. 1/9/23), 356 So.3d 1167 (summary judgment); Cmty. Assocs., Inc. v. Taylor, 19-0242 (La. App. 4 Cir. 7/31/19), 364 So.3d 1 (trial); PCOF Props., L.L.C. v. Joseph, 21-0341 (La. App. 4 Cir 12/1/21), 332 So.3d 220 (summary judgment); Klein v. Henderson, 21-0317 (La. App. 4 Cir. 11/17/21), 332 So.3d 764 (summary judgment); Stow-Serge v. Side by Side Redevelopment, Inc, 20-0015 (La. App. 4 Cir. 6/10/20), 302 So.3d 71 (summary judgment); Precept Credit Opportunities Fund, L.P. v. Walker, 21-0670 (La. App. 4 Cir 6/22/22), 343 So.3d 299 (summary judgment).
La. C.C.P. art. 934 provides:
When the grounds of an objection pleaded by the peremptory exception [of no cause of action] may be removed by amendment of the petition, the judgment sustaining the exception shall order such amendment within the delay allowed by the court. If the grounds raised through the exception cannot be so removed, the action, claim, demand, issue, or theory shall be dismissed.
WRIT GRANTED; REVERSED
LOBRANO, J., DISSENTS AND ASSIGNS REASONS
CHASE, J., DISSENTS
LOBRANO, J„ DISSENTS AND ASSIGNS REASONS
1I respectfully dissent. I would deny the writ. I find no support in the record or in the jurisprudence for disposing of the nullity claim in this matter’s current procedural posture. Every case on which the majority relies dismissed a claim on summary judgment or at trial.1a I have not found a single case that has done so on an exception of no cause of action, let alone without affording any opportunity for amendment of the petition and without introduction of any evidence.
Construing the petition "in the light most favorable to plaintiff and with every doubt resolved in plaintiff's behalf," State, Div. of Admin., Off. of Facility Plan. & Control v. Infinity Sur. Agency, L.L.C., 10-2264, p. 9 (La. 5/10/11), 63 So.3d 940, 946, it can be viewed that the petition states a cause of action for redemption nullity, because Respondent, Billy Spain, claims no notice of post-sale redemptive rights. Considering this claim along with the constitutional claims in the petition, the exception in dispute is merely a partial exception of no cause of action. Louisiana jurisprudence has "has long disfavored the granting of partial exceptions of no cause of action." Scott v. Zaheri, 14-0726, p. 3 (La. App. 4 Cir. 12/3/14), 157 So.3d 779, 782-83 (citing Everything on Wheels Subaru, Inc. v Subaru S., Inc., 616 So.2d 1234, 1239 (La. 1993)). "The reason for this disfavor is that granting a partial 2exception of no cause of action fosters multiple appeals, ‘which forces an appellate court to consider the merits of the action in a piecemeal fashion.’ " Parker v. Paladin Contractors, LLC, 20-0492, p. 7 (La. App. 4 Cir. 3/3/21), 314 So.3d 1128, 1134 (quoting Zaheri, 14-0726, p. 17, 157 So.3d at 789). Where "the petition asserts several demands or theories of recovery based on a single cause of action arising out of one transaction or occurrence, … the court should overrule the exception of no cause of action when the petition states a cause of action as to any demand or theory of recovery." Parker, 20-0492, p. 8, 314 So.3d at 1135 (quoting Subaru, 616 So.2d at 1242). Such is the case here, and overruling the exception is the proper remedy.
Moreover, the petition alone does not ascertain whether the City of New Orleans or any tax purchaser has brought any litigation to quiet title. It is prudent to deny the writ at this stage to avoid piecemeal litigation and clarify the claims with evidence introduced at the summary judgment stage or at trial.
CHASE J., DISSENTS
1I respectfully dissent and would deny the writ.
Judge Paula A. Brown
1Respondent, Billy Spain ("Respondent"), seeks rehearing of this Court’s September 26, 2023 writ disposition, which reversed the district court’s June 29, 2023 judgment that overruled Relator’s, Archon Information Systems, L.L.C.’s ("Relator"), exception of no cause of action. In our September 26, 2023 writ disposition, this Court found: (1) the district court erred in overruling the Relator’s exception of no cause of action on the basis that the alleged defects in the pre-tax sale notices to Respondent were sufficient to support a cause of action for the absolute nullity of the tax sale; (2) an amendment to the petition would not cure the grounds for the exception of no cause of action; and (3) dismissal of Respondent’s claim of absolute nullity was the appropriate remedy. Spain v. H&H Inv’rs, L.L.C., 23-0491 (La. App. 4 Cir. 9/26/23), 382 So.3d 312. The narrow issue presented on rehearing is whether Respondent is entitled to amend his petition and raise a facial constitutionality challenge, pursuant to La. C.C.P. art. 934.1b
[7] 2Respondent contends that the issue of whether he is entitled to relief through a facial due process challenge of the 2008 amendment of La R.S. 47:2121, et seq. ("the 2008 amended tax sale regime") was neither presented to the district court nor this Court. As such, an amendment of his petition would allow him to present this facial constitutionality challenge and potentially cure the grounds for the exception of no cause of action. In support, Respondent cites Adair Asset Management, LLC v. Turney, 50,574, p. 22 (La. App. 2 Cir. 5/4/16), 195 So.3d 501, 513, wherein the appellate court held that the 2008 amended tax sale regime is presumed constitutional until its constitutionality is specifically challenged.
Relator argues that because Respondent failed to seek leave in the district court to amend his petition to assert a new constitutionality claim, his request before this Court is untimely. Relator cites Bergeron v. Blake Drilling & Workover Co., Inc., 599 So.2d 827 (La App. 1 Cir. 1992), wherein the appellate court held that when a constitutionality challenge is raised for the first time after an adverse judgment, it is not timely and will not be considered by the appellate court. However, we find that Bergeron is distinguishable from the facts of this case. In Bergeron, the case had been tried before a jury, and the constitutionality challenge was raised for the first time in a motion for new trial. In the case sub judice, Respondent’s case is in the infancy stage, where amendments to pleadings are permissible.
See supra note 1.
3In further support of his argument, Respondent cites to Rismiller Tutrix for Goins v. Gemini Ins. Co., 18-2089 (La. 2/18/19), 263 So.3d 1145, wherein the Louisiana Supreme Court remanded the matter to allow the plaintiffs an opportunity to amend their petition in an attempt to plead a facial constitutionality challenge. In its writ application to the appellate court, defendants sought review of the district court’s judgment, which overruled them exceptions of no right of action, and found that the biological children of decedent who were given up for adoption had a right to assert survival and wrongful death claims against the defendants. Rismiller v. Gemini Ins. Co., 17-809, p. 3 (La. App. 3 Cir. 10/3/18), 316 So.3d 1178, 1180. The appellate court reversed and sustained defendants’ exceptions of no right of action. Id. Thereafter, the plaintiffs sought review with the Louisiana Supreme Court challenging the constitutionality of La. C.C. arts. 2315.1 and 2315.2 on the basis that the codal articles provided no right of action for adopted children to assert survival action or wrongful death claims following the death of a biological parent. Rismiller, 18-2089, p. 1, 263 So.3d at 1145. The Louisiana Supreme Court, observing that the plaintiffs had not raised the constitutionality challenge in the district court, did not rule on the constitutionality arguments. Rather, it found it appropriate to remand the case to the district court to give the plaintiffs an opportunity to amend their petition to raise a facial constitutionality challenge. Id.
La. C.C. art. 2315.1 provides a right of action for injuries suffered by a person who eventually dies from said injuries in favor of designated beneficiaries.
La. C.C. art. 2315.2 creates a cause of action that allows designated beneficiaries to recover damages for the wrongful death of another.
4Considering that Respondent is seeking to present a facial constitutionality challenge to the 2008 amended tax sale regime, and our research has yielded no cases, to-date, that have presented a constitutionality challenge to the statute, we find that the Respondent should be given an opportunity to amend his petition to plead said challenge, pursuant to La. C.C.P. art. 934.
Based on the foregoing, we grant Respondent’s application for rehearing for the sole purpose to allow Respondent an opportunity to amend his petition in an attempt to remove the objection to the exception of no cause of action.
REHEARING GRANTED; REMANDED
LOBRANO, J., DISSENTS
1I respectfully dissent. For the reasons discussed in my original dissent to the majority opinion, I would grant rehearing and deny the writ in its entirety.
CHASE J, DISSENTS
1I respectfully dissent and would deny the writ.