Central Progressive Bank v. David E. Fleisher, Mike Adkinson a/k/a William Michael Adkinson, Robert T. Windham a/k/a Robert T. Windham, Sr. and Lee Freyer Kennedy

STATE OF LOUISIANA

COURT OF APPEAL

FIRST CIRCUIT

NUMBER 2020 CA 0765

CENTRAL PROGRESSIVE BANK

VERSUS

DAVID E. FLEISHER, MIKE ADKINSON A/K/A WILLIAM MICHAEL
ADKINSON, ROBERT T. WINDHAM A/K/ A ROBERT TO WINDHAM, SR.,
AND LEE FREYER KENNEDY

Judgment Rendered: IAPR 16 2021

On appeal from the
Twenty -Second Judicial District Court
In and for the Parish of St. Tammany
State of Louisiana
Docket Number 2008- 13320

Honorable Raymond J. Childress, Judge Presiding

Robin B. Cheatham Counsel for Plaintiff/Appellant
Scott R. Cheatham HCB Financial Corporation,
Robert Parrott substituted party plaintiff for
Jeffrey E. Richardson Central Progressive Bank
Sara Valentine
New Orleans, LA

Jeffrey Oakes Counsel for Defendant/Appellee
Alex L. Ducros Lee Freyer Kennedy
New Orleans, LA
G. Brice Jones
Slidell, LA

BEFORE: GUIDRY, McCLENDON, AND LANIER, JJ.

GUIDRY, J.

This matter is on appeal by the plaintiff from a summary judgment in favor

of the defendant. For the reasons that follow, we affirm.

FACTS AND PROCEDURAL HISTORY

This case arises in the context of a loan default, foreclosure, and deficiency

judgment. The defendant herein, Lee Freyer Kennedy, was an individual member

of a limited liability company, Mississippi Investors VI, L.L.C. In 2006,

Mississippi Investors entered into a business loan agreement with Central

Progressive Bank. The loan was guaranteed by Kennedy and three other individual

members of Mississippi Investors; the loan was also secured by immovable

property located in Florida.

Mississippi Investors defaulted on the loan. Thereafter, in 2008, Central

Progressive Bank brought suit in the 22nd Judicial District Court against Kennedy

and the remaining members of Mississippi Investors to collect on the 2006

guaranties. I Central Progressive Bank also commenced action in a Florida court to

foreclose on the aforementioned property. HCB Financial Corporation ( HCB), the

successor to Central Progressive Bank and the plaintiff herein, obtained a final

judgment of foreclosure on the Florida property on December 6, 2012. HCB

obtained the judgment of foreclosure after having moved for summary judgment

on its foreclosure claim, which was granted by the court. HCB also moved for

summary judgment in opposition to counterclaims, which had been filed by the

Florida defendants.

1 In 2008 and 2010, Central Progressive Bank supplemented and amended its petition.
Additionally, in 2012, the claims against the three remaining members of Mississippi Investors
were settled.

2

On April 10, 2013, a joint stipulation of dismissal with prejudice was

entered into by the Florida parties. The Florida case was then dismissed with

prejudice on May 8, 2013. Thereafter, on February 7, 2019, Kennedy filed a

motion for summary judgment, which is the subject of this appeal. In her motion

for summary judgment, Kennedy argued that the dismissal, with prejudice, of the

Florida case barred HCB from pursuing a deficiency judgment against her. HCB

opposed the motion for summary judgment. A hearing was held on August 16,

2019, after which the district court granted the summary judgment in favor of

Kennedy and entered an order dismissing the case with prejudice. Judgment was

signed on October 1, 2019. HCB now appeals.

ASSIGNMENTS OF ERROR

1. The district court erred when it granted summary judgment, and
dismissed HCB Financial' s claims against Kennedy, with prejudice.

2. The district court erred when it granted summary judgment to the
extent it found Louisiana law required HCB Financial to obtain an
appraisal of the Florida Property in connection with the foreclosure.

3. The district court erred when it granted summary judgment to the
extent it found Florida law required HCB Financial to proceed with its
claim for deficiency judgment in the Florida court.
a. The district court erred when it granted summary judgment to
the extent it found that the Florida Court granted or denied
HCB Financial' s claim for deficiency judgment.

STANDARD OF REVIEW

After an opportunity for adequate discovery, a motion

for summary judgment shall be granted if the motion, memorandum, and

supporting documents show that there is no genuine issue as to material fact and

that the mover is entitled to judgment as a matter of law. La. C. C. P. art. 966A( 3).

2 The joint stipulation pertained to the dismissal of the Florida defendants' counterclaims. The
Florida defendants were Mississippi Investors VI, L.L. C., Long Point Cove, L.L.C., Mortgage
One, Inc., and First Premiere Funding, Inc. We note that Kennedy was not a party to the Florida
case, neither were the remaining members of Mississippi Investors.

3

The summary judgment procedure is favored and is designed to secure the just,

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

The burden of proof rests with the mover. Nevertheless, if the mover will

not bear the burden of proof at trial on the issue that is before the court on the

motion for summary judgment, the mover' s burden on the motion does not require

him to negate all essential elements of the adverse party' s claim, action, or defense,

but rather to point out to the court the absence of factual support for one or more

elements essential to the adverse party' s claim, action, or defense. The burden is

on the adverse party to produce factual support sufficient to establish the existence

of a genuine issue of material fact or that the mover is not entitled to judgment as a

matter of law. La. C. C. P. art. 9661)( 1). If, however, the mover fails in his burden

to show an absence of factual support for one or more of the elements of the

adverse party' s claim, the burden never shifts to the adverse party, and the mover

is not entitled to summary judgment. Succession of Hickman v. State Through

Board of Supervisors of Louisiana State Universitygricultural and Mechanical

College, 16- 1069, p. 4 ( La. App. 1st Cir. 4/ 12/ 17), 217 So. 3d 1240, 1244. In

determining whether summary judgment is appropriate, appellate courts review

evidence de novo under the same criteria that govern the trial court' s determination

of whether summary judgment is appropriate. Succession of Hickman, 16- 1069 at

p. 5, 217 So. 3d at 1244.

DISCUSSION

At the outset, we note that the May 8, 2013 final order of dismissal contains

language that differs from the joint stipulation of dismissal. The joint stipulation

of dismissal with prejudice, filed on April 10, 2013, provided that the parties,

pursuant to Rule 1. 420( a), Florida Rules of Civil Procedure, stipulate to the

dismissal with prejudice of any and all of Defendants' claims brought in this

action, including, but not limited to, all claims contained in the Original
4

Counterclaim filed by Defendants on August 11, 2011." 3 The order of dismissal,

however, reads as follows: " THIS CAUSE came before the Court upon

presentation of a JOINT STIPULATION OF DISMISSAL WITH PREJUDICE

and after reviewing same, it is hereby ORDERED, ADJUDGED and DECREED

that this matter is HEREBY DISMISSED, WITH PREJUDICE."

The plaintiff herein, HCB Financial, argues that the district court erred in

granting the defendant' s motion for summary judgment. We disagree. We must

evaluate the order of dismissal on its face, having no means of ascertaining,

beyond the language of the judgment itself, what the court' s motivation was in

rendering it. By its clear terms, the order of dismissal disposes of the entire matter

with prejudice. Thus, what we have before us, is a final determination of the case,

as the words " with prejudice" normally connote that there has been an adjudication

on the merits. See generally, Schindler v. Bank of New York Mellon Trust Co.,

190 So. 3d 102, 104 ( Fla. 4th DCA 2015); W& W Lumber of Palm Beach, Inc. v.

Town & Country Builders, Inc., 35 So. 3d 79, 83 ( Fla. 4th DCA 2010).

Here, prior to the dismissal of the case, HCB Financial was granted

summary judgment on its foreclosure claim, with its deficiency claim reserved, as

evidenced by the December 6, 2012 final judgment of foreclosure. Thereafter, the

3 At the time the joint stipulation was entered into by the parties, Rule 1. 420 provided in part as
follows:

a) Voluntary Dismissal.
1) By Parties. Except in actions in which property has been seized or is in the
custody of the court, an action, a claim, or any part of an action or claim may be
dismissed by plaintiff without order of court ( A) before trial by serving, or during
trial by stating on the record, a notice of dismissal at any time before a hearing on
motion for summary judgment, or if none is served or if the motion is denied,
before retirement of the jury in a case tried before a jury or before submission of a
nonjury case to the court for decision, or ( B) by filing a stipulation of dismissal
signed by all current parties to the action. Unless otherwise stated in the notice or
stipulation, the dismissal is without prejudice, except that a notice of dismissal
operates as an adjudication on the merits when served by a plaintiff who has once
dismissed in any court an action based on or including the same claim.

Fla. R. Civ. P. 1. 420( a)( 1) ( emphasis in original); In re Amendments to the Florida Rules
of Civil Procedure, 52 So. 3d 579, 587 ( Fla. 2010).

l.7

remaining issues before the court included the reservation of the deficiency claim,

counterclaims that had been filed by the Florida defendants, and a second motion

for summary judgment filed by HCB Financial.' As shown by the defendant,

Kennedy, the fourteen -count counterclaim filed by the Florida defendants

challenged HCB' s right to a deficiency judgment.' Subsequently, HCB' s motion

for summary judgment, in so defending against the counterclaims, asserted HCB' s

right to a deficiency. HCB sought relief from the court in its favor, asking the

court to resolve all of the claims and counterclaims brought by the defendants, as

they fail as a matter of law.

From our view, as asserted by Kennedy, at the time of dismissal, both the

Florida defendants and HCB Financial had placed before the court the issue of

HCB' s entitlement to a deficiency judgment. By virtue of the stipulation, the

Florida defendants' counterclaims were dismissed. Then, by order of the court, all

issues that remained before it, were dismissed, with prejudice. Significantly, we

note that there was no reservation of HCB' s deficiency claim in the order of

dismissal. Rather, that claim was pending before the court and summarily

dismissed.

Florida law provides that a plaintiff in a foreclosure action has the option of

suing at common law to recover a deficiency unless the court in the foreclosure

action has granted or denied deficiency relief. See Fl. St. 702. 06. 6 HCB argues

4 HCB first moved for summary judgment on the Florida defendants' counterclaims prior to
obtaining the foreclosure judgment. The first motion for summary judgment was denied.

The Florida defendants filed a counterclaim with 14 counts, including claims for declaratory
judgment, fraud, and breach of contract. As it relates to a deficiency judgment in particular,
Count 11 sought a judgment declaring that " the fair market value of the Horizon Property and
Villages D & E was in excess of the debt owed to Plaintiff." Count I sought a judgment

declaring that Central Progressive Bank charged usurious rates of interest.

6 Florida Statutes 702. 06 provides:

In all suits for the foreclosure of mortgages heretofore or hereafter executed the
entry of a deficiency decree for any portion of a deficiency, should one exist, shall
be within the sound discretion of the court ... The complainant shall also have the
6

that a court has not ruled on its deficiency claim. However, the order dismissing

the entire matter effectively denied the requested deficiency relief that was pending

at the time. While the facts surrounding the differences in the joint stipulation of

dismissal and order of dismissal are unknown to us, what is known is that HCB did

not seek a modification. Thus, the final order of dismissal controls. It follows that,

pursuant to La. R.S. 13: 4108( 4), a party may not preserve its right to a deficiency

judgment by exercising rights against a property located in a foreign state and then

discarding the laws of that state. See La. R.S. 13: 4108( 4); see also Purchase Corp.

v. Starkes, 560 So. 2d 1005, 1008 ( La. App. 4th Cir. 1990) ( a party may exercise

rights against a property located in a foreign state, follow the law of that state, and

then bring a deficiency judgment action against a debtor in Louisiana). As noted

above, the Florida court undoubtedly dismissed HCB' s deficiency claim. HCB

cannot now seek its deficiency judgment here.

The evidence considered, we find no merit in the assertion that the district

court erred in granting summary judgment to the defendant.

CONCLUSION

For the above and foregoing reasons, we affirm the October 1, 2019

summary judgment granted in favor of the defendant/appellee, Lee Freyer

right to sue at common law to recover such deficiency, unless the court in the
foreclosure action has granted or denied a claim for a deficiency judgment.

7 Louisiana Revised Statutes 13: 4108 provides in pertinent part:

Notwithstanding any other law to the contrary, including but not limited to R. S.
13: 4106 and 4107, none of the following actions by a mortgagee or other creditor
shall prohibit the mortgagee or other creditor from obtaining a deficiency
judgment against any debtor, guarantor, or surety, notwithstanding the fact that a
sale of property or collateral may have occurred at a judicial sale without
appraisal, at a public or private sale with or without appraisal, or at a judicial sale
with a defective appraisal:

4) The mortgagee' s or other creditor' s exercise of its rights against property
subject to a mortgage, pledge, privilege, security interest, or encumbrance in favor
of such creditor, when the property or collateral is located outside the state of
Louisiana, and the creditor has elected to proceed under the laws of the state,
county, or territory where the property or collateral is then located to seize or sell
such property or collateral.

7

Kennedy. All costs of this appeal are assessed to the plaintiff/appellant, HCB

Financial Corporation.

AFFIRMED.