JPMorgan Chase Bank, NA v.

Bickham, La: Court of Appeals, 1st Circuit 2017 - Google Scholar 2/4/19, 11(48 PM

JPMORGAN CHASE BANK, N.A. AS TRUSTEE,

v.
KENNETH W. BICKHAM AND MARY BRUMFIELD BICKHAM.

No. 2016 CA 0946.

Court of Appeal of Louisiana, First Circuit.

Judgment Rendered: June 2, 2017.

Appealed from the Twenty-First Judicial District Court Parish of Tangipahoa State of Louisiana Docket Number 2007-
0001864, Honorable M. Douglas Hughes, Judge Presiding.

Bradley Knapp, Natalie White, New Orleans, LA, Counsel for Plaintiff/Appellant, Bank of New York Mellon Trust
Company.

Allison Beasley, Anthony J. Russo, Jr., Jessica w. Chapman, Baton Rouge, LA.

Daniel A. Ranson, Steven D. Oliver, Gretna, LA, Counsel for Defendants/Appellees, Kenneth Bickham and Mary
Bickham.

BEFORE: WHIPPLE, C.J., GUIDRY, AND McCLENDON, JJ.

NOT DESIGNATED FOR PUBLICATION

WHIPPLE, C.J.

Plaintiff-appellant, the Bank of New York Mellon Trust Company, National Association f/k/a the Bank of New York Trust
Company, N.A. Successor to JPMorgan Chase Bank, N.A as Trustee for RASC 2003-KS11 ("the Bank of New York"),
appeals a judgment of the trial court denying plaintiff's motion to set aside the dismissal of plaintiff's claims due to
abandonment. For the following reasons, we affirm.

FACTUAL AND PROCEDURAL HISTORY

On June 19, 2007, the Bank of New York ("plaintiff") filed a petition to enforce its security interest by executory process
against defendants, Kenneth Bickham and Mary Brumfield Bickham ("defendants"), seeking to enforce a note and
mortgage executed by the Bickhams on October 31, 2003, in favor of Homecoming Financial Network, for $73,000.00.[1]
On June 21, 2007, an order was signed by the trial court issuing a writ of seizure and sale as to the property described
in the petition. Thereafter, the sheriff's office issued a notice of seizure on June 25, 2007, and the attorney for plaintiff
filed into the record affidavits of notice to lienholders on July 31, 2007, and August 3, 2007. However, a sheriff's sale did
not take place due to title defects of the seized property.[2]

Following the filing of the affidavit of notice to lien holders on August 3, 2007, there was various correspondence
between the title insurer,[3] the Bickhams, and Bank of New York and various other lawsuits filed in an attempt to resolve
the title issue. However, there was no further action taken in the record of the subject executory foreclosure proceeding
until December 20, 2013, when the Bank of New York filed a motion to substitute counsel.

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Following the filing of the motion to substitute counsel, the Bickhams filed an ex parte motion to dismiss the executory
foreclosure proceeding on grounds of abandonment, averring that the motion to substitute counsel was filed six years
after the last action in the record of the proceeding. By judgment dated October 8, 2015, the trial court agreed and
dismissed, without prejudice, the executory foreclosure proceeding, deeming the suit abandoned.

The Bank of New York subsequently filed a motion to set aside the dismissal. Following a hearing, a judgment was
signed by the trial court, on February 17, 2016, denying the motion to set aside the dismissal. From this judgment, the
Bank of New York appeals, contending that the trial court erred in dismissing the executory foreclosure proceeding on
grounds of abandonment, when it was actively working, through its title insurer, to correct the underlying title defect that
precluded conclusion of the executory foreclosure proceeding and the sheriff's sale.

DISCUSSION

Louisiana Code of Civil Procedure article 561 addresses abandonment and provides, in part:

A. (1) An action [. . .] is abandoned when the parties fail to take any step in its prosecution or defense in
the trial court for a period of three years[.]

***

(3) This provision shall be operative without formal order, but, on ex parte motion of any party or other
interested person by affidavit which provides that no step has been timely taken in the prosecution or
defense of the action, the trial court shall enter a formal order of dismissal as of the date of its
abandonment.

***

B. Any formal discovery as authorized by this Code and served on all parties whether or not filed of
record, including the taking of a deposition with or without formal notice, shall be deemed to be a step in
the prosecution or defense of an action.

Louisiana Code of Civil Procedure article 561 imposes three legal requirements on plaintiffs: (1) a party must take some
"step" in the prosecution or defense of the action; (2) the step must be taken in the proceedings and appear in the
record of the suit, unless the action is formal discovery; and (3) the step must be taken within the legislatively-prescribed
time period from the last step taken by either the plaintiff or the defendant. Louisiana Dept. of Transp. and Development
v. Oilfield Heavy Haulers, L.L.C., 2011-0912 (La. 12/6/11), 79 So. 3d 978, 981 citing Clark v. State Farm Mutual
Automobile Ins. Co., 2000-3010 (La. 5/15/01), 785 So.2d 779, 784.

Abandonment is not a punitive concept; rather, it a balancing concept. Clark 785 So. 2d at 787. Abandonment balances
two equally sound, competing policy considerations: "on the one hand, the desire to see every litigant have his day in
court, and not to lose same by some technical carelessness or unavoidable delay; on the other hand, the legislative
purpose that suits, once filed, should not indefinitely linger, preserving stale claims from the normal extinguishing
operation of prescription." Clark, 785 So. 2d at 787.

In this case, it is undisputed that prior to the December 20, 2013 filing of the motion to substitute counsel, the last step
taken in this action that appears in the record is the affidavit of the notice to lienholders filed on August 3, 2007.
Additionally, it is undisputed that there was no formal discovery served on all parties. See LSA-C.C.P. art. 561(B). Thus,
the Bickhams contend that the trial court was correct in dismissing the executory foreclosure proceeding as abandoned.
Contrariwise, the Bank of New York contends that Louisiana courts have created exceptions to the abandonment rule
that should apply under the circumstances of this case.

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In support, the Bank of New York cites the Fourth Circuit decision of Nationstar Mortgage LLC v. Harris, 2013-1335 (La.
App. 4th Cir. 5/14/14), 141 So. 3d 829, 836-37, wherein the court found that in executory proceedings, title-clearing
actions, specifically the filing of a mortgage cancellation in the mortgage records, constitutes a "step" in the prosecution
for purposes of precluding a dismissal due to abandonment. Other than Nationstar, we have found no precedent,
statutory or jurisprudential, for the proposition that filing a document into the mortgage records constitutes a "step" in
furtherance of the prosecution of an executory proceeding. Moreover, this court is not bound by a decision of another
circuit. More importantly, the facts of this case are distinguishable from those before the court in Nationstar.

Here, the Bank of New York is not relying on a document filed into the public conveyance or mortgage records in
support of its argument that there was a "step" in furtherance of the prosecution of the executory foreclosure
proceeding. Rather, the Bank of New York is relying on correspondence between the title insurer and various involved
parties and separate lawsuits involving the title insurer and various involved parties to negate the abandonment rule.
Moreover, while the Bank of New York did introduce two mortgage distinctions in support of its motion to set aside the
judgment of dismissal, these documents were filed into the public records on July 27, 2007, and October 5, 2007, and
thus, were filed well beyond three years prior to the filing of the motion to substitute counsel on December 20, 2013.
Thus, even if we were to apply the rationale of the Fourth Circuit in Nationstar, the Bank of New York's claims in the
executory foreclosure proceeding at issue herein would still be abandoned. For these reasons, we disagree with the
Bank of New York that the "Nationstar exception," as recognized by the Fourth Circuit only, applies herein to preclude
the abandonment of the bank's executory foreclosure proceeding.

Another exception urged by the Bank of New York is based on the concept of contra non valentem, and it is applicable
in situations where the plaintiff is prevented by circumstances beyond his control from prosecuting the case. Voisin, 924
So. 2d at 280. This exception was recognized by this court in American Eagle, Inc. v. Employers' Liab. Assur. Corp.,
Ltd., 389 So. 2d 1339, 1342-43 (La. App. 1st Cir. 1980), writs denied, 396 So. 2d 885, 886 (La. 1981) wherein we noted
that this exception to the abandonment rule should apply when the trial judge orders briefs to be filed after the
submission of a transcript, and the transcript is then not submitted, and cannot be submitted because of the death or
other inability of the initial reporter to transcribe it, as "the matter is clearly outside the plaintiff's control." American
Eagle, 389 So. 2d at 1343. Here, however, the Bank of New York was not prevented, by circumstances beyond its
control, from taking steps in this action. The Bank of New York could have converted this proceeding to an ordinary
proceeding, and the trial court could have then resolved the title defects that prevented the advancement of the
executory proceeding and the sheriff's sale. Instead, the Bank of New York has maintained the suit as an executory
proceeding, and the suit has lingered without a sheriff's sale for ten years, with no action in the record for at least six
years.

Lastly, the Bank of New York relies on an exception to the abandonment rule, wherein the courts have recognized that a
defendant may waive the right to assert abandonment by taking actions inconsistent with the intent to treat the case as
abandoned. Voisin, 934 So. 2d at 280. In Clark, the Supreme Court found that an unconditional tender by the defendant
automobile insurer was an "acknowledgment and thus within the waiver exception," resulting in an interruption of
prescription and a recommencement of the abandonment period from the date of the tender. Clark, 785 So. 2d at 793.
Here, there is no evidence in the record that the Bickhams waived their right to assert abandonment by taking
inconsistent actions during the three-year period. Rather, the Bank of New York contends that the Bickhams' actions in
refusing to participate in the title curative process supports a finding of waiver. We disagree. There is no evidence in the
record of bad faith on behalf of the Bickhams concerning the deed, the execution of the mortgage, or the resulting title
defect. Moreover, we are unable to find that the Bickhams had a "duty" to participate in the title curative process for the
Bank of New York's benefit. Accordingly, we disagree with the Bank of New York that the Bickhams' alleged failure to
participate in the title-curative process supports a finding of waiver of abandonment.

In sum, we find that the trial court correctly determined, as a matter of law, that a jurisprudential exception to the

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abandonment rule should not apply under the facts of this case to preclude the dismissal of the executory foreclosure
proceeding for abandonment, where no action was taken in the record of the proceeding for a six-year period.

Thus, these arguments lack merit.

CONCLUSION

For the above and foregoing reasons, the February 17, 2016 judgment of the trial court, denying the Bank of New York's
motion to set aside the dismissal of the bank's executory foreclosure proceeding against Kenneth and Mary Bickham, is
hereby affirmed. Costs of this appeal are assessed against plaintiff, the Bank of New York.

AFFIRMED.

[1] The petition was originally filed by JPMorgan Chase Bank, N.A as Trustee; however, on May 15, 2014, a supplemental and
amended petition was filed substituting the Bank of New York, as the successor to JPMorgan Chase Bank, as plaintiff. Therefore,
we will refer to the plaintiff as the Bank of New York.

[2] Specifically, the property description in the Bickhams' deed and the subject mortgage described a piece of property that was not
"legally owned" by the Bickhams. Pot-O-Gold, the entity that sold the property to the Bickhams, acquired an unimproved lot in a
foreclosure sale, which was next to an improved lot. Apparently, Pot-O-Gold and the Bickhams both believed that the improved lot
was being conveyed to the Bickhams and the property description on the deed to the Bickhams was for the improved lot. After the
Bickhams refurbished the home on the improved lot, the heirs of Leander Roberts, Sr. filed suit against the Bickhams alleging that
they owned all or a portion of the property, and the Bickhams were ultimately evicted. The Bickhams stopped paying the monthly
installments on the mortgage after they were evicted from the property, giving rise to the foreclosure proceedings at issue herein.

[3] Security Title of Baltimore ("Security Title") issued an owners' and lender's title insurance policy in connection with the sale to
the Bickhams and the subject mortgage. Thus, Security Title took an active role in attempting to resolve this title issue.

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