National Collegiate Student Loan Trust 2006-1 v. James W. Huggins and Lynda Huggins (consolidated with) National Collegiate Student Loan Trust 2006-3 v. James W. Huggins, Jr. and Lynda Huggins (consolidated with) National Collegiate Student Loan Trust 2007-4 v. James W. Huggins and Lynda Huggins (consolidated with) National Collegiate Student Loan Trust 2003-1 v. James W. Huggins and Lydia Huggins (consolidated with) National Collegiate Student Loan Trust 2004-2 v. James W. Huggins and Lynda Huggins (consolidated with) National Collegiate Student Loan Trust 2006-3 v. James W. Huggins and Lynda Huggins

Judgment rendered October 2, 2024.
Application for rehearing may be filed
within the delay allowed by Art. 2166,
La. C.C.P.

No. 55,786-CA
No. 55,787-CA
No. 55,788-CA
No. 55,789-CA
No. 55,790-CA
No. 55,791-CA
(Consolidated Cases)

COURT OF APPEAL
SECOND CIRCUIT
STATE OF LOUISIANA

*****
No. 55,786-CA

NATIONAL COLLEGIATE STUDENT Appellant
LOAN TRUST 2006-1
versus
JAMES W. HUGGINS Appellees
LYNDA HUGGINS

*****
consolidated with
*****

No. 55,787-CA

NATIONAL COLLEGIATE STUDENT Appellant
LOAN TRUST 2006-3
versus
JAMES W. HUGGINS, JR. Appellees
AND LYNDA HUGGINS

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consolidated with
*****

No. 55,788-CA

NATIONAL COLLEGIATE STUDENT Appellant
LOAN TRUST 2007-4
versus
JAMES W. HUGGINS Appellees
LYNDA HUGGINS

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consolidated with
*****

No. 55,789-CA

NATIONAL COLLEGIATE STUDENT Appellant
LOAN TRUST 2003-1
versus
JAMES W. HUGGINS Appellees
LYDIA HUGGINS

*****
consolidated with
*****

No. 55,790-CA

NATIONAL COLLEGIATE STUDENT Appellant
LOAN TRUST 2004-2
versus
JAMES W. HUGGINS Appellees
LYNDA HUGGINS

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consolidated with
*****

No. 55,791-CA

NATIONAL COLLEGIATE STUDENT Appellant
LOAN TRUST 2006-3
versus
JAMES W. HUGGINS Appellees
LYNDA HUGGINS

Appealed from the
Fourth Judicial District Court for the
Parish of Ouachita, Louisiana
Trial Court Nos. 2017-2038, 2017-2764,
2018-0381, 2018-0436, 2018-0437 and 2018-1002

Honorable Robert C. Johnson, Judge

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EATON GROUP ATTORNEYS, LLC Counsel for Appellants
By: Gregory McCarroll Eaton
Michael L. Lancaster

SESSIONS, ISRAEL & SHARTLE, LLC
By: Justin H. Homes

ALBERT WILLIAM BLOCK, JR. Counsel for Appellees

*****

Before PITMAN, STEPHENS, and HUNTER, JJ.

PITMAN, C. J.

Plaintiffs-Appellants National Collegiate Student Loan Trust 2003-1,

National Collegiate Student Loan Trust 2004-2, National Collegiate Student

Loan Trust 2006-1, National Collegiate Student Loan Trust 2006-3 and

National Collegiate Student Loan Trust 2007-4 (collectively, “National

Collegiate”) appeal the trial court’s granting of exceptions of no cause of

action and no right of action in favor of Defendants-Appellees James W.

Huggins (“Huggins”) and Lynda Huggins. For the following reasons, we

reverse and remand for further proceedings.

FACTS

From 2003 to 2007, Huggins took out student loans for his education.1

In 2017 and 2018, National Collegiate filed six petitions in which it alleged

that Huggins defaulted on the loans and is indebted to it for the principal of

the loans, accrued interest, attorney fees and costs of the proceedings. These

petitions were consolidated in 2019.

Huggins filed exceptions of no right of action and no cause of action.

He stated that National Collegiate’s petitions appeared to be suits to enforce

a negotiable instrument or non-negotiable promissory note but were devoid

of well-pleaded facts that set forth the essential elements of such an action.

He noted that there were no exhibits or attachments to the petitions,

including the original promissory notes. He also argued that the petitions

contained no well-pleaded facts to establish that National Collegiate is the

entity entitled to demand payment under the promissory notes.

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Lynda Huggins cosigned these loans. Prior to consolidation, she was dismissed
as a party in the cases.

In the lead case, the trial court denied the exception of no cause of

action and granted the exception of no right of action. It stated that National

Collegiate had 30 days to amend its petition and establish a right of action

against Huggins or the case would be dismissed with prejudice.

National Collegiate filed a supplemental and amending petition. It

explained that Huggins requested a federally guaranteed non-negotiable

credit agreement student loan from Bank One; the loan was funded; Huggins

did not honor the repayment terms; Bank One requested reimbursement of

the advanced funds; National Collegiate honored the request for

reimbursement; and Bank One transferred ownership of the account to

National Collegiate. It stated that the credit agreement, pooling and transfer

of ownership documents and a detailed financial transaction report were all

filed into the record.

Huggins filed an exception of no right of action to the supplemental

and amending petition. He contended that National Collegiate did not

include any exhibits, including the original promissory note sued upon. He

argued that the right of action relies upon the contract between the parties,

i.e., the promissory note, and that without the promissory note, National

Collegiate has no right of action to enforce the note.

At a hearing on June 13, 2022, the trial court granted Huggins’s

exceptions of no right of action and gave National Collegiate 60 days within

which to amend its pleadings to state a right of action. It noted that if

National Collegiate failed to amend its petitions to state a right of action

within that period, the court would dismiss the matters with prejudice. The

trial court continued the exceptions of no cause of action until after the

petitions had been amended.
2

On July 25, 2022, National Collegiate filed supplemental and

amending petitions in all the consolidated cases. It alleged that Huggins

entered into the student loan agreements issued through different banks,

including Charter One Bank, JP Morgan Chase Bank and Bank One. It

stated that these banks transferred, sold and assigned the notes to National

Collegiate Funding, LLC, which then transferred, sold and assigned the

notes to National Collegiate.2 It alleged that Huggins defaulted on the notes

and is indebted to it for the full principal together with accrued interest and

costs of the proceedings. It attached to the petitions copies of the non-

negotiable credit agreements, pool supplement statements, deposit and sale

agreements between it and National Collegiate Funding, financial activity,

loan details and payment summaries.

On August 4, 2022, the parties filed a stipulated judgment in which

they agreed that the exception of no right of action was granted in the

consolidated cases but that National Collegiate had 60 days to amend the

petition to state a right of action, otherwise the petition would be dismissed.

On September 22, 2022, Huggins filed a response to the amended

petition. He noted that absent from the amended petitions were the

promissory notes or satisfactory proof of the sale, transfer or acquisition of

the promissory notes. He argued that none of the petitions allege the facts

necessary to establish a cause of action or right of action for enforcement of

a promissory note held by a third party or for the recovery of the principal,

interest or attorney fees based upon the promissory notes.

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It stated that one loan was transferred, sold and assigned directly from Bank One
to National Collegiate.
3

A hearing on the exceptions was held on September 26, 2022. The

trial court took the matters under advisement.

On March 31, 2023, the trial court filed a ruling and order on the

exceptions. It stated that National Collegiate offered no evidence of a prima

facie case that would support a cause of action because it failed to submit the

promissory note itself or proof of the promissory note. It noted that National

Collegiate admitted that it did not have a promissory note and that there is

no evidence that the original note was lost, destroyed or otherwise

unavailable. The trial court stated that National Collegiate cannot claim that

it has a cause of action when the basis of its suit, i.e., the promissory note, is

absent from the record. It found that as there is no cause of action, there

exists no right of action. Accordingly, the trial court granted the exceptions

of no right of action and no cause of action.

On May 3, 2023, the trial court filed a judgment of dismissal with

prejudice. It granted the exceptions of no right of action and no cause of

action and dismissed with prejudice the consolidated cases.

National Collegiate appeals.

DISCUSSION

No Cause of Action

National Collegiate argues that the trial court erred when it sustained

Huggins’s peremptory exception of no cause of action. It contends that

Huggins mischaracterized and the trial court misunderstood the petitions to

be actions on negotiable instruments rather than breach of contract claims. It

argues that the trial court incorrectly concluded that it should have offered

extrinsic evidence. It explains that extrinsic evidence shall not be

considered to support or controvert an exception of no cause of action; and,
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thus, it was error for the trial court to require it to produce evidence of a

note. It contends that the petitions contained the essential elements of a

breach of contract claim and that the trial court was bound to accept each

allegation in the petitions as true.

Huggins argues that the trial court correctly granted the exception of

no cause of action. He contends that none of the petitions state a cause of

action because they do not include the essential extrinsic evidence of the

promissory notes sought to be enforced.

Three different modes of procedure are used in civil matters in the

trial courts of this state: ordinary, summary and executory. La. C.C.P.

art. 851. Ordinary proceedings are to be used in the district courts in all

cases, except as otherwise provided by law. Id. Executory proceedings are

those which are used to effect the seizure and sale of property, without

previous citation and judgment, to enforce a mortgage or privilege thereon

evidenced by an authentic act importing a confession of judgment and in

other cases allowed by law. La. C.C.P. art. 2631.

The record suggests that the trial court incorrectly considered these

consolidated cases to be executory proceedings, which would have required

National Collegiate to produce the negotiable papers at issue. See La. C.C.P.

art. 2635. However, the trial court should have applied the following rules

of procedure for ordinary proceedings in these breach of contract cases.

The function of an exception of no cause of action is to test the legal

sufficiency of the petition by determining whether the law affords a remedy

on the facts alleged in the pleading. Everything on Wheels Subaru, Inc. v.

Subaru S., Inc., 616 So. 2d 1234 (La. 1993). No evidence may be

introduced at any time to support or controvert the objection that the petition
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fails to state a cause of action. La. C.C.P. art. 931. An exception of no

cause of action is triable on the face of the petition; and, for the purpose of

determining the issues raised by the exception, the well-pleaded facts in the

petition must be accepted as true. Indus. Companies, Inc. v. Durbin,

02-0665 (La. 1/28/03), 837 So. 2d 1207. It should be granted only when it

appears beyond doubt that the plaintiff can prove no set of facts in support of

any claim which would entitle him to relief. Badeaux v. Sw. Computer

Bureau, Inc., 05-0612 (La. 3/17/06), 929 So. 2d 1211. If the petition states a

cause of action on any ground or portion of the demand, the exception

should generally be overruled. Id. Every reasonable interpretation must be

accorded the language used in the petition in favor of maintaining its

sufficiency and affording the plaintiff the opportunity of presenting evidence

at trial. Indus. Companies, Inc. v. Durbin, supra.

In reviewing a trial court’s ruling sustaining an exception of no cause

of action, the appellate court should conduct a de novo review because the

exception raises a question of law, and the trial court’s decision is based

only on the sufficiency of the petition. Indus. Companies, Inc. v. Durbin,

supra.

In order to prevail on a breach of contract claim, a plaintiff must prove

by a preponderance of the evidence that (1) defendant owed them an

obligation; (2) defendant failed to perform that obligation; and (3)

defendant’s failure resulted in damages to the plaintiff. Hayes Fund for

First United Methodist Church of Welsh, LLC v. Kerr-McGee Rocky

Mountain, LLC, 14-2592 (La. 12/8/15), 193 So. 3d 1110.

A de novo review of the record demonstrates that the petitions allege a

cause of action for breach of contract. National Collegiate sufficiently pled
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the existence of contracts between it and Huggins, that Huggins breached the

contracts through nonpayment and that these breaches resulted in damages

to National Collegiate. The trial court’s insistence that National Collegiate

produce a promissory note in order to establish a cause of action is

misplaced.

Accordingly, this assignment of error has merit.

No Right of Action

National Collegiate argues that the trial court erred when it sustained

Huggins’s peremptory exception of no right of action on the erroneous

ground that the amended petitions failed to state a cause of action. It

contends that it is the proper party to bring the breach of contract claims,

which is demonstrated in its exhibits that establish it purchased and acquired

the obligations that are the subject of the petitions and own the student loan

debts.

Huggins argues that the trial court correctly granted the exception of

no right of action. He states that without a promissory note there is no cause

of action and contends that no one has a right of action to enforce a

nonexistent cause of action.

An action can be brought only by a person having a real and actual

interest which he asserts. La. C.C.P. art. 681. The exception of no right of

action is designed to test whether the plaintiff has a real and actual interest in

the action. Indus. Companies, Inc. v. Durbin, supra. The function of the

exception of no right of action is to determine whether the plaintiff belongs

to the class of persons to whom the law grants the cause of action asserted in

the suit. Id. The exception of no right of action assumes that the petition

states a valid cause of action for some person and questions whether the
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plaintiff in the particular case is a member of the class that has a legal

interest in the subject matter of the litigation. Id.

An exception of no right of action presents questions of law requiring

a de novo review by the appellate court. Campbell v. Nexion Health at

Claiborne, Inc., 49,150 (La. App. 2 Cir. 10/1/14), 149 So. 3d 436.

A de novo review of the record demonstrates that National Collegiate

clearly has a right of action in these consolidated matters. As a party to the

contracts, it has real and actual interests in these breach of contract claims.

Further, as discussed above, National Collegiate belongs to the class to

whom the law grants the cause of action asserted in its petitions.

Accordingly, this assignment of error has merit.

CONCLUSION

For the foregoing reasons, we reverse the trial court’s granting of

exceptions of no cause of action and no right of action and remand the

matter for further proceedings. Costs of this appeal are assessed to

Defendant-Appellee James W. Huggins.

REVERSED AND REMANDED.

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