Precept Credit Opportunities Fund, Lp v. Terina L. Walker, Et Al.

Supreme Court of Louisiana
November 18, 2020
Clerk of Court
For the Court
The Supreme Court of the State of Louisiana
PRECEPT CREDIT OPPORTUNITIES FUND,
LP
VS.
TERINA L. WALKER, ET AL.
No.2020-CC-00818
_ _ _ _
_ _
IN R
E: Terina L. Walker - Applicant Defendant; Applying For Writ Of Certiorari,
Parish of Orleans Civil, Orleans Civil District Court Number(s) 2018-11660, Court
of Appeal, Fourth Circuit, Number(s) 2020-C-0131;
_ _ _ _ _ _
November 18, 2020
Writ application granted. See per curiam.
Weimer, J., would grant and docket.
Hughes, J., would deny.
Crichton, J., additionally concurs and assigns reasons.
Boddie, J., would deny.
JTG
BJJ
WJC
SJC
11/18/2020 “See News Release 044 for any Concurrences and/or Dissents.”

11/18/20
S
UPREME COURT OF LOUISIANA
No
. 2020-CC-00818
PRE
CEPT CREDIT OPPORTUNITIES FUND, LP
VS.
TERINA L. WALKER, ET AL.
O
n Writ of Certiorari to the Court of Appeal, Fourth Circuit, Parish of Orleans
PE
R CURIAM
W
e granted this writ to determi ne whether the court of appeal erred in
reversing the trial court’s grant of defendant Terina Walker’s motion for new trial.
For the reasons that follow, we find that the trial court did not abuse its discretion in
granting the motion for new trial, as plaintiff’s counsel failure to notify defendant of
the entry of preliminary default under the uncontested facts of this case constitutes
an “ill practice” sufficient to justify nullification of the default judgment previously
entered against her pursuant to La. C.C.P. art. 2004.
On December 11, 2018, d efendant was served with the petition in this suit,
which sought confirmation of plaintiff’s tax sale title and ownership of defendant’s
home. In January 2019, defendant’s counsel sent an email to plaintiff’s counsel
requesting an extension until February 15, 2019, to file responsive pleadings, to
which plaintiff’s counsel agreed. Although defendant did not subsequently file
pleadings, the parties engaged in discovery, with plaintiff’s counsel providing
discovery responses in May 2019. Plaintiff later retained new counsel, who moved
for an entry of preliminary default against defendant on October 2, 2019. The
following day, the trial court entered a preliminary default against defendant.
Plaintiff subsequently f iled a motion to confirm default judgment, which the trial
court granted on October 22, 2019.

2

On October 31, 2019, defendant filed a motion for new trial, arguing that her
counsel had been engaging in discovery with plaintiff’s counsel, that she had not
been advised that plaintiff had retained new counsel, and that her counsel was not
given notice of the motion for or entry of preliminary default. After a hearing, the
trial court granted defendant’s motion for new trial “in the interest of justice,”
finding “that there was a discussion between prior counsel and mover and that there
was, in my opinion, an agreement to withhold any further action until such time as
the parties could get together.” Plaintiff appealed, and the court of appeal reversed
the trial court, holding that the trial court abused its discretion in granting the motion
for new trial. We disagree.
We find that the trial court did not abuse its discretion in setting aside the
default judgment and granting a new trial in this case. Rather, the uncontested facts
support the trial court’s finding that the plaintiff’s failure to notify the defendant of
its entry of preliminary default in this case constitutes “ill practices,” which is a valid
basis for nullification of the default judgment under La. C.C.P. art. 2004. Russell v.
Illinois Central Gulf R.R., 96-2649 (La.1/10/97), 686 So.2d 817. Although the court
of appeal c orrectly notes that the article which provides the procedure for
confirmation of preliminary default, La. C.C.P. art. 1702, only requires notice of the
entry of preliminary default in cases where a party has “made an appearance of
record,” this provision does not preclude a finding of ill practices where counsel for
one party, through its actions and communications, lulls the other into believing that
no such appearance is necessary, and then fails to provide notice of entry of default
judgment. Having found a basis for nullifying the default judgment, we find no error
by the trial court in vacating that judgment and granting the defendant’s motion for
new trial. Accordingly, we reverse the court of appeal’s decision and reinstate the
judgment of the trial court.