Whitney Bank v. Christopher Robert Carbine and Joseph D. Sando

WHITNEY BANK * NO. 2019-CA-1070

VERSUS *
COURT OF APPEAL
CHRISTOPHER ROBERT *
CARBINE AND JOSEPH D. FOURTH CIRCUIT
SANDO *
STATE OF LOUISIANA
*******

CONSOLIDATED WITH: CONSOLIDATED WITH:

JOSEPH D. SANDO NO. 2019-CA-1071

VERSUS

WHITNEY BANK, FREDDIE
ELLIOTT AND CATHEY
SAURAGE

APPEAL FROM
CIVIL DISTRICT COURT, ORLEANS PARISH
NO. 2018-01361, DIVISION “D”
Honorable Nakisha Ervin-Knott, Judge
******
JAMES F. MCKAY III
CHIEF JUDGE
******
(Court composed of Chief Judge James F. McKay III, Judge Terri F. Love, Judge
Dale N. Atkins)

WILLIAM T. FINN
PETER J. SEGRIST
CARVER DARDEN KORETZKY TESSIER FINN BLOSSMAN & AREAUX,
LLC
1100 Poydras Street, Suite 3100
New Orleans, Louisiana 70163
COUNSEL FOR PLAINTIFF/APPELLEE HANCOCK WHITNEY

DOUGLAS M. SCHMIDT
PETER R. BORSTELL
RICCI PARTNERS, LLC
335 City Park Ave.
New Orleans, Louisiana 70119
COUNSEL FOR DEFENDANT/APPELLANT JOSEPH D. SANDO

AFFIRMED

JUNE 24, 2020

JFM
TFL On June 26, 2014, Joseph D. Sando executed a commercial guaranty
DNA
agreement in favor of Hancock Whitney Bank (“Whitney”), whereby he personally

guaranteed the current and future indebtedness of Chris Carbine, Inc. (“Carbine

Motorcars”), a Louisiana Corporation engaged in the business of selling luxury

automobiles. On September 26, 2015, Carbine Motorcars executed a promissory

note in the original principal amount of one million dollars ($1,000,000.00), due

and payable with interest to the order of Whitney. Carbine Motorcars failed to

keep up its payments on the note in accordance with the terms thereof. On October

13, 2017, Whitney made demand upon Carbine Motorcars and Mr. Sando,

notifying them that the full amount of the indebtedness was due immediately.

Neither Carbine Motorcars, nor Mr. Sando made any payments in response to

Whitney’s demand.

On February 9, 2018, Whitney filed suit against Mr. Sando for unpaid

principal, interest, fees, costs and attorneys’ fees under the guaranty.1 Mr. Sando

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On February 26, 2018, Mr. Sando filed a separate lawsuit against Whitney and two of its
former employees, Cathey Saurage and Freddie Elliott, asserting claims of breach of fiduciary
duties, detrimental reliance, unjust enrichment, breach of an implied contract and negligent

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filed a reconventional demand against Whitney and two former Whitney

employees, Cathey Suarage and Freddie Elliott, on April 24, 2018.2

Regarding Mr. Sando’s reconventional demand, Whitney and Ms. Suarage

filed a number of exceptions, including: declinatory exceptions of lis pendens;

peremptory exceptions of no cause of action and prescription; and dilatory

exceptions of vagueness, ambiguity and nonconformity with La. C.C.P. art. 891.

On August 17, 2018, the trial court granted the exceptions of no cause of action

and prescription and dismissed Mr. Sando’s reconventional demand against

Whitney and Ms. Suarage. The trial court refused to give Mr. Sando an

opportunity to amend his petition and/or answer and plead facts and allegations to

cure the objections raised in the exception.

On October 23, 2018, Whitney filed a motion for summary judgment against

Mr. Sando to enforce his obligations under the guaranty. A hearing on the motion

for summary judgment was originally set for December 14, 2018. On December 6,

2018, Mr. Sando filed a motion to continue for medical reasons and because he

needed to take the depositions of Ms. Suarage and Mr. Elliott. The district court

granted the continuance and reset the hearing on the motion for summary judgment

to February 1, 2019.

Mr. Sando propounded notices of deposition upon Ms. Suarage and Mr.

Elliott, seeking to take their depositions on January 15, 2019. Ms. Suarage and Mr.

and/or fraudulent misrepresentation. Sando v. Whitney Bank, et al., Case No. 2018-1859. The
district court subsequently consolidated that lawsuit with Whitney’s suit against Mr. Sando.
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Mr. Elliott was not served with the reconventional demand or Mr. Sando’s original lawsuit in
Case No. 2018-1859 until October 13, 2018. The cases were consolidated on December 6, 2018.

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Elliott, along with Whitney, filed a motion to quash the deposition notices.

Following a January 11, 2019 hearing, the district court quashed Mr. Sando’s

deposition notices based upon his admission that he had guaranteed the debt of

Carbine Motorcars when he signed the guaranty. The court also recognized his

failure to identify a single genuinely disputed issue of material fact, a valid

affirmative defense, and/or any other justifiable reason for needing the depositions

of Ms. Saurage and Mr. Elliott. Seeking review of the district court’s judgment,

Mr. Sando took a supervisory writ, which this Court denied.3

The hearing on Whitney’s motion for summary judgment took place on

February 1, 2019. The court granted the motion and awarded Whitney the

principal amount due on the note of $934,063.31, plus interest, costs and fees, in

accordance with the terms thereof. Thereafter, Mr. Sando filed a motion for new

trial, which the court denied on April 12, 2019. Mr. Sando now appeals the trial

court’s judgment granting Whitney’s motion for summary judgment.

In his first assignment of error, Mr. Sando contends that the trial court erred

in not allowing him an opportunity to amend his pleadings to remedy the

objections raised by the exception of no cause of action. The peremptory

exception of no cause of action tests the legal sufficiency of a plaintiff’s petition,

i.e., whether the plaintiff is legally entitled to the relief sought under the allegations

set forth on the face of the petition. Badeaux v. Southwest Computer Bureau, Inc.,

2005-0612, p. 7 (La. 3/1/06), 929 So.2d 1211, 1217; See also La. C.C.P. art. 927.

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2019-C-0099

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The exception thus “questions whether the law extends a remedy to anyone under

the factual allegations of the petition.” Villareal v. 6494 Homes, LLC, 48,302, p. 5

(La. App. 2 Cir. 8/17/13), 121 So.3d 1246, 1250. The exception is tried on the face

of the pleadings, and no evidence may be offered to support or controvert the

exception. La. C.C.P. art. 931. Rather, the court “must consider only the facts

alleged by the plaintiff” and “must determine if the . . . petition presents a case

which legally entitles the plaintiff to the relief sought.” Delta Bank & Trust Co. v.

Lassiter, 383 So.2d 330, 336 (La. 1980). “[T]he decision as to whether to grant

leave to amend or supplement a pleading is within the sound discretion of the trial

court, and its ruling will not be disturbed on appeal except where an abuse of

discretion has occurred and indicates a possibility of resulting injustice.” United

Teachers of New Orleans v. State Bd. Of Elementary and Secondary Educ., 2007-

0031 (La. App. 1 Cir. 3/26/08), 985 So.2d 184, 199. “Amendment, however, is not

permitted when it would constitute a vain and useless act.” Massiha v. Beahm,

2007-0137, p. 4 (La. App. 4 Cir. 8/15/07), 966 So.2d 87, 89.

In his reconventional demand, Mr. Sando alleged that Whitney and its

former employees made various oral agreements with him, and that Whitney and

its former employees subsequently breached those alleged agreements. Mr. Sando

has never alleged that these alleged oral agreements were memorialized in any

written agreement between him and Whitney.

“As a reaction against the situation arising from the increase in litigation

instituted by aggrieved borrowers, special legislation was enacted in Louisiana, as

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in other states, for the purpose of ordering the lender-borrower relation in a manner

that would diminish the number of disputes between such parties.”4 The Louisiana

Credit Agreement Statute5, enacted in 1989, provides that “[a] debtor shall not

maintain an action on a credit agreement unless the agreement is in writing,

expresses consideration, sets forth the relevant terms and conditions, and is signed

by the creditor and the debtor.” La. R.S. 6:1122. The Credit Agreement Statute

also applies to guaranty agreements between lenders and guarantors, such as Mr.

Sando. See Hancock Bank of La. v. 3429 H, LLC, 2015-0355, pp. 8-9 (La. App. 5

Cir. 1/13/16), 184 So.3d 274, 279-280. In the instant case, there exists no written

agreement between Mr. Sando and Whitney. Therefore, allowing Mr. Sando the

opportunity to amend his petition would be a vain and useless act. Accordingly,

the trial court did not abuse its discretion when it denied Mr. Sando an opportunity

to amend his pleadings.

In his second assignment of error, Mr. Sando contends that the trial court

erred in not allowing him to take the depositions of Ms. Suarage and Mr. Elliott,

who were and/or still are employed by Whitney as vice-presidents, who acted on

its behalf, regarding the loan(s) made to Carbine Motorcars and the guarantees

signed by Christopher Robert Carbine and Mr. Sando. In Louisiana, “the trial

court has broad discretion in ruling on discovery matters.” Stolzle v. Safety &

Systems Assur. Consultants, Inc., 2002-1197, p. 4 (La. 5/24/02), 819 So.2d 287,

4
RONALD J. SCALISE, JR., Writing Required, 6 LA. CIV. L. TREATISE, LAW OF
OBLIGATIONS § 15:23 (2d ed. Nov. 2016 update)
5
La. R.S. 6:1121 et seq.

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289. The trial judge is likewise “vested with a great deal of discretion in limiting

the right of parties to take discovery depositions.” Brewer v. Loewer, 383 So.2d

1325, 1327 (La. App. 3 Cir. 1980). “In its discretion, a court can refuse or limit

discovery of matters not relevant, unreasonably vexatious, or tardily sought.”

Belonga v. Crescent City Dodge, LLC, 2000-3419, p. 2 (La. 3/9/01), 781 So.2d

1247, 1248. “Trial courts in Louisiana have broad discretion when regulating pre-

trial discovery. This discretion will not be disturbed on appeal absent a clear

showing of abuse.” Cantuba v. American Bureau of Shipping, 2008-0497, p. 4

(La. App. 4 Cir. 6/3/09), 31 So.3d 397, 400. Mr. Sando has never articulated any

good faith basis for requiring the depositions of the former employees. He never

initiated a discovery conference, nor filed a motion to compel. In his own

pleadings, Mr. Sando admits that he signed the guaranty, and Carbine Motorcars’

indebtedness is past due and owing. There is no hypothetical testimony that either

Ms. Suarage or Mr. Elliott could offer that would alter these undisputed,

dispositive facts. Accordingly, we find no abuse of discretion in the trial court not

giving Mr. Sando an opportunity to amend his petition.

In his third assignment of error, Mr. Sando contends that the trial court erred

in granting Whitney summary judgment and a monetary judgment, while in his

fourth assignment of error, he contends that the trial court erred in not finding

material issues of fact and law precluding summary judgment. Motions for

summary judgment are “favored and shall be construed to accomplish” the “just

speedy, and inexpensive determination of every action.” La. C.C.P. art. 966(A)(2);

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Babin v. Winn-Dixie La., Inc., 2000-0078, p. 3 (La. 6/30/2000), 764 So.2d 37, 39.

A court must grant a motion for summary judgment ‘if the pleadings, depositions,

answers to interrogatories, and admissions on file, together with the affidavits, if

any, show that there is no genuine issue as to material fact, and that mover is

entitled to judgment as a matter of law.’” Murphy v. Savannah, 2018-0991, p. 7

(La. 5/8/19), 282 So.3d 1034, 1038 (citing La. C.C.P. art. 966(B). “A summary

judgment is reviewed on appeal de novo, with the appellate court using the same

criteria that govern the trial court’s determination of . . . whether there is any

genuine issue of material fact, and whether the movant is entitled to judgment as a

matter of law.” Id. (citing Wright v. La. Power & Light, 2006-1181, p. 16 (La.

3/9/07), 251 So.2d 1058, 1070).

Louisiana courts routinely grant lenders’ motions for summary judgment

against guarantors upon proof of both the existence of an underlying debt and the

guarantor’s signature upon a guaranty agreement covering that debt. See Gulf

Coast Bank and Trust Co. v. Elmore, 2010-1237 (La. App. 4 Cir. 1/26/11), 57

So.3d 553. “When the words of a contract are clear and explicit and lead to no

absurd consequences, no further interpretation may be made in search of the

parties’ intent.” La. C.C. art. 2046.

In the instant case, the guaranty provides that Mr. Sando “absolutely and

unconditionally guarantees full and punctual payment and satisfaction of the

Indebtedness of [Carbine Motorcars] . . . to [Whitney], and the performance and

discharge of all [Carbine Motorcars’] obligations under the Note and the Related

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Documents.” Mr. Sando agreed that his “obligations and liability under [the

guaranty] shall be on a ‘solidary’ or ‘joint and several’ basis along with [Carbine

Motorcars] to the same degree and extent as if [Mr. Sando] had been and/or will be

a co-borrower, co-principal obligor and/or co-maker of [Carbine Motorcars’]

Indebtedness.” The guaranty further provides that “[Mr. Sando’s] liability is

unlimited and [his] obligations are continuing.” As such, the plain language of the

guaranty shows that Mr. Sando bound himself to Carbine Motorcars as a solidary

obligor, liable for the full amount of Carbine Motorcars’ indebtedness to Whitney.

Whitney attached the guaranty to its motion for summary judgment. Mr.

Sando admits in his answer and reconventional demand that he executed the

guaranty. He further admits that Carbine Motorcars defaulted on the loan, and it is

undisputed that Carbine Motorcars’ indebtedness to Whitney is past due and

owing. Therefore, under the clear and unambiguous terms of the guaranty and the

undisputed summary judgment evidence, Mr. Sando is obligated to pay to Whitney

the entirety of Carbine Motorcars’ debt on demand. Accordingly, there are no

genuine issues of material fact and Whitney is entitled to judgment as a matter of

law.

In his fifth and final assignment of error, Mr. Sando contends that the trial

court erred in not finding material issues of fact and law precluding summary

judgment when the security was impaired and therefore, the suretyship was

extinguished. Mr. Sando argues that he should be relieved of his obligations under

the guaranty because (1) he is an ordinary surety, and (2) the “real security

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underlying the obligation was impaired by the creditor Appellee Whitney Bank

without [Mr. Sando’s] consent or knowledge[.]” Mr. Sando’s position is

mistakenly based upon La. C.C. Article 3062. In pertinent part, that article

provides:

The modification or amendment of the principal obligation, or the
impairment of real security held for it, by the creditor, in any material
manner and without the consent of the surety, has the following effects.

An ordinary suretyship is extinguished.

A commercial suretyship is extinguished to the extent the surety is
prejudiced by the action of the creditor. . . .

Id.

Mr. Sando is a commercial, not an ordinary, surety. “A commercial

suretyship is one in which . . . (2) the principal obligor . . . is a business

corporation, partnership, or other business entity [or] (3) [t]he principal obligation

arises out of a commercial transaction of the principal obligor[.]” It is undisputed

that the principal obligor, Carbine Motorcars, was a business entity, and that the

principal obligation (the indebtedness under the note) arose out of a commercial

transaction of Carbine Motorcars. The guaranty itself was also entitled

“Commercial Guaranty.” Accordingly, Mr. Sando is a commercial surety.

In any event, there is no evidence that Whitney impaired the vehicle

inventory that secured the note, and, even if Whitney had, Mr. Sando specifically

consented in writing so that Whitney could manage, sell, exchange, dispose of,

surrender, release, and/or “otherwise deal with” any and all collateral securing the

note. As a result, Mr. Sando has waived any purported right under La. C.C. art.

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3062 to challenge Whitney’s handling of the collateral and we find no merit in Mr.

Sando’s fifth and final assignment of error.

For the above and foregoing reasons, we affirm the judgment of the trial

court.

AFFIRMED

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