Opinion
CIVIL ACTION NO. 01-2103 SECTION: "R" (5).
January 14, 2002
ORDER AND REASONS
Defendants, The Whitney Corporation and Louis Dubos, have filed a motion for summary judgment in this case. For the following reasons, the Court grants defendants' motion for summary judgment.
I. Background
Plaintiff, Ivan David Warner executed two promissory notes with First National Bank of Houma, in connection with two loan transactions. The first note, dated June 15, 1994, was for $124,500, and the second note, dated August 15, 1997, was for $200,558.27. (Mot. Summ. J., EX. A; Ex. B.) First National Bank of Houma later merged with Whitney National Bank, and Whitney National Bank became the holder of the notes.
On February 2, 1998, plaintiff filed for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Louisiana. As a secured creditor, Whitney National Bank retained Clay LeGros of the firm of Newman, Mathis, Brady, Wakefield Spedale, P.L.C. to represent it in the bankruptcy proceedings. LeGros' attorney's fees totaled $4,516.75. The bankruptcy court dismissed plaintiff's bankruptcy proceeding in September 2000. The United States Trustee moved for reconsideration.
On May 4, 2001, while the motion for reconsideration was still pending, the plaintiff, through title company Winters Title Agency, informed Whitney National Bank that plaintiff wanted to sell collateral held by the bank, specifically, residential property, and requested a payout balance of the money plaintiff owed Whitney Bank. Whitney Bank informed plaintiff the he owed $149,517.21.
Principal: $ 143,326.95
Interest (accrued through 5/01/01) $ 1,673.51
Attorney's Fees: $ 4,516.75
(Mot. Summ. J., Aff. Dubos.)
Warner protested the imposition of attorney's fees and argued that he was not required to pay them because the bankruptcy court had not specifically entered a judgment requiring him to pay those fees. Whitney asserted that the promissory notes signed by plaintiff contained provisions authorizing the bank to levy attorney's fees if plaintiff filed for bankruptcy. (Mot. Summ. J., Ex. A; Ex. B.) The 1994 Note, under the heading "Attorneys' Fees" stated:
If Lender refers this Note to an attorney for collection, or files suit against me to collect this Note, or if I file for bankruptcy or other relief from creditors, I agree to pay Lender's reasonable attorneys' fees in an amount not exceeding 25.000% of the unpaid debt then owing under this Note.
(Mot. Summ. J., Ex. A.)
The 1997 note contained the following language under the heading "Attorneys' Fees":
If Lender refers this Note to an attorney for collection, or files suit against Borrower to collect this Note, or if Borrower files for bankruptcy or other relief from creditors, Borrower agrees to pay Lender's reasonable attorneys' fees in an amount not exceeding 25.000% of the unpaid debt then owing under this Note.
( Id., Ex. B.)
Warner paid the balance, including the attorney's fees, in full, but noted that the attorney's fees were "in dispute." (Pre-Trial Order, at 5.) Whitney Bank then released the collateral.
On May 21, 2000, Warner filed this suit in the Civil District Court for the Parish of Orleans, State of Louisiana, alleging that defendants violated Louisiana State law, federal bankruptcy law, various ethics codes, the Louisiana State Constitution, the United States Constitution, and the Civil Rights Acts for in levying attorney's fees. Defendants removed this case to federal court on the basis of 28 U.S.C. § 1441(a), 28 U.S.C. § 1331, 28 U.S.C. § 1343. Plaintiff filed a motion to remand. The Court denied the motion to remand. Defendants have now moved for summary judgment. The Court notes that plaintiff has withdrawn his section 1983 claims. (Pre-trial Order, at 10.)
II. Discussion
A. Sunmary Judgment Standard
Summary judgment is appropriate when there are no genuine issues as to any material facts, and the moving party is entitled to judgment as a matter of law. See FED. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2551 (1986). The court must be satisfied that no reasonable trier of fact could find for the nonmoving party or, in other words, "that the evidence favoring the nonmoving party is insufficient to enable a reasonable jury to return a verdict in her favor." Lavespere v. Niagra Mach. Tool Works, Inc., 910 F.2d 167, 178 (5th Cir. 1990); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510 (1986). The moving party bears the burden of establishing that there are no genuine issues of material fact. Krim v. BancTexas Group, Inc., 989 F.2d 1435, 1445 (5th Cir. 1993).
If the dispositive issue is one for which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record contains insufficient proof concerning an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325, 106 S.Ct. at 2552; Lavespere, 910 F.2d at 178. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts demonstrating that a genuine issue exists. See Celotex, 477 U.S. at 324, 106 S.Ct. at 2553.
The Fifth Circuit has "arguably articulated an even more lenient standard for summary judgment in certain nonjury cases." Phillips Oil Co. v. OKC Corp., 812 F.2d 265, 273 n. 15 (5th Cir. 1987). In Nunez v. Superior Oil Co., 572 F.2d 1119, 1123 (5th Cir. 1978), the Fifth Circuit explained:
There is no litmus test that infallibly distinguishes those issues that are `factual' from those that are `legal' or `mixed.' . . . as we approach the point where facts and the application of legal rule to them blend, appraising evidentiary facts in terms of their legal consequences and `applying' law to fact become inseparable processes.
Therefore, in a non-jury case, such as this case, the Court is encouraged to draw inferences, even when they appear to be factual, if a "trial on the merits would reveal no additional data." Id. at 1124. See also Professional Geophysics, Inc. v. Placid Oil Co., 932 F.2d 394, 398 (5th Cir. 1991).
A. Claims Against Whitney Holding Corporation
Defendant Whitney Holding Corporation asks the Court to dismiss these claims against it because it contends that Warner's contractual relationship was with Whitney National Bank, a separate corporation. Whitney Holding Corporation states that although it owns all of Whitney National Bank's stock, Whitney National Bank is a separate legal entity. Whitney Holding Corporation also asserts that it informed plaintiff's counsel that it was not the proper defendant in this litigation, but that plaintiff's counsel made no effort to amend the pleadings. (Opp. Mot. Summ. J., Ex. 1, letter from defense counsel to plaintiff's counsel.) ("As The Whitney Corporation is not affiliated with Whitney National Bank or Whitney Holding Corporation, your petition is defective. It will be necessary for it to be amended to set forth the appropriate party plaintiff.").
In support of their position, defendants submit the affidavit of Joseph S. Schwertz, Jr., Corporate Secretary of Whitney Holding Corporation, and Senior Vice President and General Counsel for Whitney National Bank, who states that Whitney Holding Corporation and Whitney National Bank are separate corporations. Schwertz attests:
That the two entities are separate corporations, Whitney Holding Corporation being a bank holding company, and Whitney National Bank being a banking association.
That Whitney Holding Corporation is a stockholder in Whitney National Bank, but does not do business under the name Whitney National Bank.
(Mot. Summ. J., Aff. Schwertz.) Schwertz also stated "that Whitney Holding Corporation did not extend any loans to Ivan David Warner, III, and did not acquire any loans owed by Ivan David Warner, III." ( Id.)
Plaintiff proffers no evidence to refute Whitney Holding Corporation's evidence that Whitney Holding Corporation and Whitney National Bank are separate corporations. Beyond conclusorily referring to defendant in his briefs as "Whitney Holding Corporation d/b/a The Whitney National Bank," plaintiff presents no evidence that the two corporations are the same entity, and has pointed to no factors that weigh in favor of "piercing the corporate veil." Accordingly, the Court finds that Whitney Holding Corporation is not the proper defendant in this case and dismisses plaintiff's claims against it.
Louisiana courts have indicated that the corporate veil should be pierced when adherence to the corporate fiction would clearly result in inequity. See Watson v. Big T Timber Co., Inc., 382 So.2d 258, 262 (La.Ct.App. 1980); Giuffifria Realty Co., Inc. v. Kathrnan-Landry, Inc., 173 So.2d 329, 334 (La.Ct.App. 1965).
B. Claims against Louis Dubos
The other defendant in this case is Louis Dubos, the Vice President of Whitney Bank, who was responsible for Warner's loan accounts during the bankruptcy proceeding.
1. Louisiana Constitutional Claims
Plaintiff has asserted an unlawful takings claim under Article 1, § 4 of the Louisiana State Constitution. The plain language of the section states that government action is a necessary component of this claim. See, e.g., Price v. U-Haul Co. of Louisiana, 745 So.2d 593, 594 (La. 1999). As plaintiff has not asserted that any government action was involved here, the Court dismisses plaintiff's state constitutional claims.
Section four provides in part: Property shall not be taken or damaged by the state or its political subdivisions except for public purposes and with just compensation paid to the owner or in to court for his benefit. Property shall not be taken or damaged by any private entity authorized by law to expropriate, except for a public and necessary purpose and with compensation paid to the owner. . .
C. Fraud, Extortion and Violations of Federal Bankruptcy Law
The central question here is whether the bank was required to request attorney's fees from the bankruptcy court or whether the bank could collect those fees based on the preexisting loan agreement without a court order. Dubos argues that Warner had a contractual obligation to pay the attorney's fees, which was unaffected by plaintiff's dismissed federal bankruptcy proceedings. Warner, in contrast, contends that Whitney National Bank was not entitled to attorney's fees, notwithstanding those contractual provisions, because it did not present a claim for those fees before the bankruptcy court. Warner contends that Dubos' action in requiring him to pay attorney's fees without a court order, constituted fraud and extortion under Louisiana state law and violated federal bankruptcy law.
Warner's bankruptcy case had been dismissed when he voluntarily approached the Whitney for a payout balance on his secured loan. He cites no authority, and the Court is aware of none, that required the Whitney to obtain a judgment from the bankruptcy court before it could collect the contractually stipulated attorney's fees after the bankruptcy had been dismissed. Warner paid the fees and did not ask the bankruptcy court to review them first. Moreover, Warner points to no evidence of either fraud or extortion.
As Dubos correctly points out, Louisiana law "does not permit a party to recover voluntary payments merely because he paid under protest" absent extraordinary circumstances. See DLJ of Louisiana #1 v. Green Thumb, Inc., 376 So.2d 121, 123 (La. 1979) (Dennis, J., concurring). A contrary rule, would lead to unending litigation. See Hicks v. Levert, 140 So. 276 (1932). Warner does not assert that such exceptional circumstances existed here.
III. Conclusion
For the foregoing reasons, the Court grants defendants' motion for summary judgment.