Opinion
NUMBER 2015 CA 0815
12-23-2015
WHITNEY BANK v. C. NORMAN NOLAN, ELIZABETH A. NOLAN, NEN CRUSHED CONCRETE, LLC, NEN LIME, LLC, AND NEN EQUIPMENT, LLC
Brandon Black David M. Kerth Baton Rouge, LA Attorneys for Appellee Plaintiff - Whitney Bank Phillip W. Preis Charles M. Gordon, Jr. Crystal D. Burkhalter Caroline P. Graham Charles M. Thompson Baton Rouge, LA Attorneys for Appellants Defendants - C. Norman Nolan and Elizabeth A. Nolan
NOT DESIGNATED FOR PUBLICATION
Appealed from the 19th Judicial District Court In and for the Parish of East Baton Rouge, Louisiana
Trial Court Number 634,445 Honorable R. Michael Caldwell, Judge Brandon Black
David M. Kerth
Baton Rouge, LA Attorneys for Appellee
Plaintiff - Whitney Bank Phillip W. Preis
Charles M. Gordon, Jr.
Crystal D. Burkhalter
Caroline P. Graham
Charles M. Thompson
Baton Rouge, LA Attorneys for Appellants
Defendants - C. Norman Nolan and
Elizabeth A. Nolan BEFORE: WHIPPLE, C.J., WELCH, AND DRAKE, JJ. WELCH, J.
The defendants/appellants, Elizabeth A. Nolan and C. Norman Nolan ("Nolans"), appeal a judgment of the trial court signed March 4, 2015 granting a motion for summary judgment filed by the plaintiff/appellee, Whitney Bank ("Whitney"). Whitney has filed an answer to the appeal seeking attorney's fees incurred following the March 4, 2015 judgment. For reasons that follow, we dismiss this appeal and the answer to the appeal for lack of jurisdiction in compliance with Uniform Rules—Courts of Appeal, Rule 2-16.2(A)(1), (2) and (4) and remand this matter to the trial court for further proceedings.
FACTUAL AND PROCEDURAL BACKGROUND
Whitney Bank sued to recover sums due on three promissory notes and to enforce related individual continuing commercial guaranty agreements executed by the defendants, C. Norman Nolan, Elizabeth A. Nolan, NEN Crushed Concrete, LLC, NEN Lime, LLC, and NEN Equipment, LLC. Whitney asserts that the guaranty agreements executed by the defendants secured debts associated with the default of the three promissory notes. The three promissory notes at issue were executed by two entities: NEN Holdings, LLC, under its former name NEN Companies, LLC, and NEN Recycling, LLC.
The first promissory note in the amount of $239,748.00 ("$239k note") was executed by NEN Holdings on March 29, 2011 and matured on May 5, 2014. The $239k note set forth provisions governing late fees and the accrual of interest during the term of the note, as well as in the event of default. Further, the $239k note provided that in the event Whitney referred the note to an attorney or filed suit, then the borrower was liable for reasonable attorney's fees in an amount not exceeding 25.000% of the principal balance due on the loan. Also, on March 29, 2011, the Nolans, NEN Crushed Concrete, LLC, NEN Lime, LLC, and NEN Equipment, LLC, signed substantively identical continuing commercial guaranty agreements purporting to secure the existing and future debts due from NEN Holdings to Whitney.
On May 17, 2012, NEN Recycling, LLC, as borrower, executed the second promissory note at issue herein in the principal amount of $120,555.50 ("$120k note") with Whitney, as the lender. The terms of the $120k note are substantively identical to those of the $239k note with regard to interest and attorney's fees. On the same date that the $120k note was executed, Elizabeth Nolan and C. Norman Nolan each signed substantively identical continuing commercial guaranty agreements purportedly securing all existing and future debts due from NEN Recycling to Whitney.
Approximately two years later, on April 18, 2014, NEN Recycling executed the third promissory note at issue herein, in the amount of $500,000.00 ("$500k note"). The $500k note provided that in the event Whitney refers the $500k note to an attorney for collection or files suit, NEN Recycling agreed to pay Whitney's reasonable attorney's fees in an amount not to exceed 20.000%. Under the original terms, the $500k note matured on July 1, 2014; however, pursuant to an allonge, the maturity date was extended to September 1, 2014. The Nolans both signed a Guarantor Acknowledgement on April 18, 2014, but separate guaranty agreements were not executed in connection with the $500k note. Whitney asserts that the debt owed on the $500k note is secured by the continuing guaranty agreements executed by the Nolans on May 17, 2012.
On October 6, 2014, Whitney sent a formal demand letter notifying the defendants that all three promissory notes were in default and demanding payment under the terms of the promissory notes and guaranty agreements. Whitney filed suit on October 20, 2014, against the defendants alleging that all three promissory notes had matured and were due and owing. The petition prayed for recovery of the remaining principal due on the promissory notes, interest accrued prior to default, post default interest, late charges, and attorney's fees. The petition also alleged that the Nolans had executed a Stock Pledge Agreement, which granted Whitney a security interest in their shares of stock in NEN Holdings and NEN Recycling as additional security for the three promissory notes. The petition alleges that the Stock Pledge Agreement grants Whitney the right to re-register the pledged shares of stock in its name, to exercise proxy rights with respect to the shares, and to sell the pledged the shares of stock. The petition prayed for recognition of the Stock Pledge Agreement, and authorization to take any action with the Stock Pledge Agreement Whitney deems appropriate, including but not limited to re-registering shares of stock, and/or selling the pledged shares of stock.
Additionally, the petition alleged that the Nolans, individually, executed various Assignment of Life Insurance Policy agreements, which were allegedly pledged, collaterally assigned, transferred, delivered, and granted a continuing security interest in favor of Whitney for all present and future liabilities of NEN Recycling. The petition prayed for recognition of Whitney's security interest in the insurance policies and a judgment authorizing Whitney to take any action it deems appropriate, including (i) collecting from each insurer the net proceeds of each policy from a claim based on death or maturity; (ii) surrendering each policy and receiving the surrender value; (iii) obtaining loans or advances on each policy, either from the insurer or other persons, and pledging or assigning each policy as security for such loans and advances; (iv) collecting and receiving all distributions or shares of surplus, dividend deposits or additions to the policy, and exercising any option in the policy with respect thereto; and (v) exercising all nonforfeiture rights permitted by the terms of each policy or allowed by each insurer, and receiving all benefits and advantages derived therefrom.
On November 17, 2014, the defendants filed a joint answer and affirmative defenses to Whitney's petition. Whitney moved for summary judgment on December 5, 2014. Whitney supported the motion with the petition, answer, and an affidavit by Mark J. Modona, a vice president of Whitney, charged with the duty of pursing collection of the amounts owed by the defendants. Attached to Mr. Modona's affidavit were the three promissory notes, the commercial guarantees executed by the named defendants, Whitney's October 6, 2014 demand letter, the Guarantor Acknowledgement executed April 18, 2014, and the allonge to the $500k note dated July 30, 2014. The defendants opposed the motion for summary judgment. Attached to the defendants' opposition were a UCC Financing Statement and amendment thereto listing NEN Recycling as debtor and Hancock Bank as the secured party, a commercial security agreement between NEN Recycling and Hancock Bank, an order permitting sale of inventory issued in a separate matter before the 19th Judicial District Court, and the affidavit by Elizabeth A. Nolan. The motion for summary judgment did not raise or seek a judicial determination of Whitney's claims for enforcement of the Stock Pledge Agreement or the Assignment of Life Insurance Policy agreements, nor are either of these agreements contained in the record before this court.
A hearing was held on February 23, 2015. The trial court's judgment, signed on March 4, 2015, granted Whitney's motion for summary judgment and entered judgment against the guarantors jointly and in solido as demanded in the petition for the remaining principal due on the promissory notes, interest accrued prior to default, post default interest, late charges, and attorney's fees. The judgment also rendered an award of $25,000.00 for attorney's fees in favor of Whitney and against the defendants jointly and in solido.
On April 8, 2015, the five defendants herein filed a devolutive appeal, and the order was signed by the trial court on April 9, 2015. An appellants' brief was filed solely on behalf of the Nolans. The Nolans' appeal is expressly limited to the trial court's judgment as it relates to their liability for the $500k note. The Nolans argue that deficiencies in the affidavit supporting Whitney's motion for summary judgment precluded the trial court from granting the motion for summary judgment. The Nolans also contend that issues of material fact exist regarding whether the continuing guaranties they executed on May 17, 2012, encompass the obligations arising out of the $500k note. Whitney filed an answer to the appeal under La. C.C.P. art. 2133, seeking an increase in the amount of the attorney's fees awarded to cover expenses incurred since the issuance of the March 4, 2015 judgment.
Attached as an exhibit to the defendants' motion for devolutive appeal is a copy of the March 4, 2015 judgment as well as a notice of judgment dated March 4, 2015. The March 4, 2015 judgment in the record contains a certification by the deputy clerk indicating that the judgment was mailed to counsel of record on March 5, 2014; however, the reference to "2014" appears to be an inadvertent error in light of the fact that the judgment itself was signed on March 4, 2015.
The appellant brief filed on behalf of the Nolans expressly states that the appellants do not contest the March 4, 2015 judgment as it relates to the $239k note or the $120k note. We note that no appellant brief was filed by counsel of record on behalf of NEN Crushed Concrete, NEN Lime or NEN Equipment; therefore, we are constrained to find that these defendants seek no relief in the instant appeal. Further, because the defendants, NEN Crushed Concrete, NEN Lime, and NEN Equipment do not seek relief in the instant appeal, we do not address the status of the March 4, 2015 judgment as to those parties.
LAW AND DISCUSSION
Appellate courts have the duty to examine subject matter jurisdiction sua sponte, even when the parties do not raise the issue. Rush v. Rush, 2012-1502 (La. App. 1st Cir. 3/25/13), 115 So.3d 508, 510, writ denied, 2013-0911 (La. 5/31/13), 118 So.3d 398. The appellate jurisdiction of this court extends to "final judgments." See La. C.C.P. arts. 1911, 1915, 2083. A final judgment is one that determines the merits in whole or in part, while an interlocutory judgment is one that does not determine the merits, but only preliminary matters in the court of the action. La. C.C.P. art. 1841. While a final judgment is appealable, an interlocutory judgment is appealable only when expressly provided by law. La. C.C.P. art. 2083. A judgment that only partially determines the merits of the action is a partial final judgment, and therefore only appealable if authorized by La. C.C.P. art. 1915. Rhodes v. Lewis, 2001-1989 (La. 5/14/02), 817 So.2d 64, 66.
Louisiana Code of Civil Procedure article 1915 provides, in pertinent part, that:
A. A final judgment may be rendered and signed by the court, even though it may not grant the successful party or parties all of the relief prayed for, or may not adjudicate all of the issues in the case, when the court:
(1) Dismisses the suit as to less than all of the parties, defendants, third party plaintiffs, third party defendants, or interveners.
(2) Grants a motion for judgment on the pleadings, as provided by Articles 965, 968, and 969.
(3) Grants a motion for summary judgment, as provided by Articles 966 through 969, but not including a summary judgment granted pursuant to Article 966(E).
(4) Signs a judgment on either the principal or incidental demand, when the two have been tried separately, as provided by Article 1038.
(5) Signs a judgment on the issue of liability when that issue has been tried separately by the court, or when, in a jury trial, the issue of liability has been tried before a jury and the issue of damages is to be tried before a different jury.
(6) Imposes sanctions or disciplinary action pursuant to Article 191, 863, or 864 or Code of Evidence Article 510(G).
B. (1) When a court renders a partial judgment or partial summary judgment or sustains an exception in part, as to one or more but less than all of the claims, demands, issues, or theories against a party, whether in an original demand, reconventional demand, cross-claim, third-party claim, or intervention, the judgment shall not constitute a final judgment unless it is designated as a final judgment by the court after an express determination that there is no just reason for delay.
(2) In the absence of such a determination and designation, any such order or decision shall not constitute a final judgment for the purpose of an immediate appeal and may be revised at any time prior to rendition of the judgment adjudicating all the claims and the rights and liabilities of all the parties.
Although La. C.C.P. art. 1915(A) sets forth six circumstances under which a trial court may render a partial final judgment (that is immediately appealable), we find none of those circumstances applicable herein. Instead, the motion for summary judgment as it relates to claims asserted by Whitney against the Nolans appears to be a partial motion for summary judgment under La. C.C.P. art. 966(E), which is expressly excluded under La. C.C.P. art. 1915(A)(3). Louisiana Code of Civil Procedure article 966(E) and (F)(1) provide as follows:
E. A summary judgment may be rendered dispositive of a particular issue, theory of recovery, cause of action, or defense, in favor of one or more parties, even though the granting of the summary judgment does not dispose of the entire case as to that party or parties.
F. (1) A summary judgment may be rendered or affirmed only as to those issues set forth in the motion under consideration by the court at that time.
The petition alleges that the Nolans are liable, as guarantors, for all sums due and owing under the terms of the $500k note and the continuing guaranty agreements. However, the petition also seeks a judgment against the Nolans recognizing Whitney's right to enforce the terms of the Stock Pledge Agreement and the various Assignment of Life Insurance Policy agreements. The motion for summary judgment filed by Whitney seeks only an award against the defendants, including the Nolans, for sums due under the promissory notes and guaranty agreements for the three promissory notes, including attorney's fees. Accordingly, the trial court's March 4, 2015 judgment is limited to the relief requested by Whitney in its motion for summary judgment. However, the judgment does not dispose of Whitney's claims alleged in the petition against the Nolans related to the Stock Pledge Agreement or the various Assignment of Life Insurance Policy agreements.
The March 4, 2015 judgment granting the motion for summary judgment does not dispose of the case as to all of Whitney's claims against the Nolans and falls under La. C.C.P. art. 1915(B). As such, the judgment does not constitute a final judgment unless designated as a final judgment by the court after an express determination that there is no just reasons, for delay. See La. C.C.P. art. 1915(B). Without such a determination and designation, the judgment shall not constitute a final judgment for the purpose of an immediate appeal. La. C.C.P. art. 1915(B).
In this case, there was no such designation in the trial court's judgment. Therefore, this appeal must be dismissed. See La. C.C.P. art. 1911 and 2083(A). Accordingly, the Nolans' appeal of the March 4, 2015 judgment of the trial court and the answer to appeal filed by Whitney are hereby dismissed for lack of jurisdiction and this matter is remanded to the trial court for further proceedings. All costs of this appeal are assessed to the appellants, Elizabeth A. Nolan and C. Norman Nolan.
Additionally, we are unable to exercise our discretion to convert the Nolans' appeal to an application for supervisory writs and consider the merits of the appeal under our supervisory jurisdiction because the Nolans failed to file their motion for appeal within the thirty-day delay applicable to supervisory writs contained in Uniform Rules—Courts of Appeal, Rule 4-3. See Wooley v. Amcare Health Plans of Louisiana, Inc., 2005-2025 (La. App. 1st Cir. 10/25/06), 944 So.2d 668, 674 n.4; see also Stelluto v. Stelluto, 2005-0074 (La. 6/29/05), 914 So.2d 34, 39 (noting that the decision to convert an appeal to an application for supervisory writs is within the discretion of the appellate courts).
APPEAL DISMISSED.