Ursulines, LLC v. Regions Bank et al

Filing 45

ORDER denying 37 Motion for Reconsideration ; denying 37 Motion for Partial Summary Judgment; denying 37 Motion for Summary Judgment. Signed by Judge Mary Ann Vial Lemmon. (cbn)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
URSULINES, L.L.C.

CIVIL ACTION

VERSUS

NO: 14-2500

REGIONS BANK AND ABC
INSURANCE COMPANY

SECTION: "S" (1)

ORDER AND REASONS
IT IS HEREBY ORDERED that Regions Bank's Motion to Reconsider Denial of Motion
for Summary Judgment, Motion for Partial Summary Judgment, and Motion for Findings Pursuant
to Rule 56(g), Fed. R. Civ. Pro. and Motion for Summary Judgment on Remaining Claims (Doc.
#37) are DENIED.
BACKGROUND
This matter is before the court on a motion filed by defendant, Regions Bank. Regions seeks
reconsideration of this court's April 10, 2015, Order and Reasons (Doc. #36) denying its motion for
summary judgment on the application of the doctrine of res judicata (Doc. #15). Alternatively,
Regions seeks partial summary judgment or a ruling under Rule 56(g) of the Federal Rules of Civil
Procedure finding that some of plaintiff's claims are precluded under the doctrine of res judicata, and
summary judgment on plaintiff's remaining claims.
In 2005, Ursulines sought to purchase vacant land in the Tremé neighborhood of New
Orleans, Louisiana for the purpose of developing a condominium complex. On July 8, 2005,
Regions' predecessor in interest, AmSouth Bank, wrote to Cesar Burgos, Ursulines' representative,
discussing the possibility of AmSouth's providing a construction loan to Ursulines, and outlining
the terms and conditions of any such loan. That correspondence stated that it was "for discussion
purposes only" and that "[t]his letter is not to be construed as a commitment to lend, but as an

expression of [AmSouth's] interest in providing the financing outlined above." One of the terms of
the proposal was the pre-sale of five of the condominium units.
On July 13, 2005, AmSouth issued a commitment letter to Burgos, in which it agreed to lend
Ursulines $1,050,000 or 80% of the acceptable appraised value of the land or 75% of the contract
price for the purchase of the land. The commitment letter did not include discussion of the
construction loan that was proposed in the July 8, 2005, communication.
On August 12, 2005, a certified appraiser valued the property at $1,400,000. On August 15,
2005, Ursulines purchased the property for $1,400,000, and executed a loan agreement and a
promissory note secured by a mortgage on the property in favor of AmSouth in the principal amount
of $1,050,000. Thereafter, Ursulines engaged an architect to design the condominium complex, and
began to pre-sell the properties. By August 29, 2005, Ursulines had pre-sold five units.
In February 2006, a certified appraiser reconfirmed that the value of the land was
$1,400,000, and found that the value of the proposed improvements had a prospective market value
of $7,600,000.
In May 2006, AmSouth merged with Regions, and Regions became the owner of the August
15, 2005, loan agreement and promissory note. However, Regions would not offer Ursulines a
construction loan conforming to the terms that AmSouth outlined in the July 8, 2005, proposal.
Instead, Regions required Ursulines to pre-sell all of the units to obtain the construction loan.
Thereafter, Ursulines renewed the promissory note with Regions several times, each time
extending its maturity date. Ursulines alleges that it timely made all payments on the loan and
reduced the principal balance while Regions held it. Ursulines claims that it invested over
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$1,094,730 toward the project, and Regions' new requirements to obtain the construction loan
rendered impossible the condominium construction project.
Ursulines alleges that in August 2009, it learned that the loan was placed in Regions'
"'Special Assets' division, typically reserved for non-payment loan accounts," and was informed that
Regions "wished for Ursulines to either move the loan or 'right-size' the loan." Ursulines also alleges
that it "learned that Regions had conducted an appraisal of the Property in November 2008 and
valued the property at: $575,000, which was 41% of the appraised value in August 2005." Ursulines
claims that the November 2008 appraisal was incorrect because the property did not flood during
Hurricane Katrina or Hurricane Rita and was adjacent to the French Quarter, and that Regions would
not provide Ursulines with a copy of the appraisal.
Ursulines alleges that Regions then became "unyielding in its refusal to extend the maturity
date of the loan beyond September 25, 2009," and Ursulines "was thus forced to seek assistance
from another lending institution before discharging the loan, and also incur additional refinancing
costs."
Ursulines sought to refinance the loan with First NBC Bank. First NBC conducted an
appraisal of the land on September 15, 2009, and found its value to be $1,215,000, which was 86%
of the August 2005 appraisal value. However, First NBC would refinance only 70% of the appraised
value, which was $789,750. Thus, Regions retained the remaining $218,224 of the mortgage note,
"and Ursulines was told to move the note or Regions would move forward with defaulting Ursulines
and its guarantors on its mortgage note." Ursulines alleges that it:
was forced to abandon the condominium construction project and due
to Regions['] ardent pursuit of defaulting Ursulines on the property[,]
on May 18, 2010[,] had to sacrifice the project and the valuation of
the construction, even recognized by Regions, and sell the Property
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to a third party purchaser for one million two-hundred and fourteen
thousand dollars ($1,214,000.00) at a great loss to Ursulines, between
interest payments, principal payments, architecture fees, and loss of
business opportunity in excess of three million eight hundred
thousand dollars ($3,800,000.00).
Ursulines alleges that Regions is liable for breach of contract, bad faith, error, detrimental reliance,
unjust enrichment, loss of business opportunity and unfair trade practices due to its actions regarding
the parties' business relationship stemming from the August 15, 2005, loan agreement and
promissory note and any renewals thereof.
Civil Action No. 12-2974
In 2012, Ursulines filed a lawsuit against Regions. Ursulines, L.L.C. v. Regions Bank and
ABC Ins. Co., Civil Action No. 12-2974, (E.D. La.). In that action, Ursulines alleged that Regions
damaged Ursulines by failing to offer Ursulines a construction loan that conformed to the terms
proposed by AmSouth in July 2005. Ursulines alleged that, as a result of Regions' failure to lend,
it was forced to abandon the condominium project and lost profits and pre-paid out-of-pocket
expenses. Ursulines contended that Regions is liable to it under the theories of breach of contract,
fraud, detrimental reliance and unjust enrichment.
Regions filed a motion to dismiss, or alternatively, motion for summary judgment, arguing
that Ursulines could not maintain a cause of action against it for failure to lend money to Ursulines
because there was never a credit agreement that meets the requirements of Louisiana law. In support
of its motion, Regions attached the affidavit of its Assistant Vice President, John W. "Casey"
Thornton, Jr. Thornton attested that he maintains the pertinent records at the bank, and there was no
credit agreement for the construction loan, only the July 8, 2005, proposal that specifically states that
it is not a commitment to lend.

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Ursulines argued that its claims were not entirely about the proposed construction loan, but
rather that Regions' inducement of Ursulines to enter into the loan to purchase the property, and its
detrimental reliance on Regions' representations regarding the construction loan. Ursulines also
argued that whether Regions acted fraudulently during the parties' business relationship is a fact
question that could not be determined on summary judgment.
This court granted Regions' motion, finding that Ursulines could not maintain an action
against Regions under Louisiana law regarding Regions' alleged oral agreement to enter into the
construction loan with Ursulines. Specifically, the court applied Louisiana Revised Statutes §
6:1122, which provides that "[a] debtor shall not maintain an action on a credit agreement unless the
agreement is in writing, expresses consideration, sets the relevant terms and conditions, and is
signed by the creditor and the debtor," and held that the lack of a writing was dispositive. As a
result, this court dismissed with prejudice, Ursulines' complaint in Civil Action No. 12-2974 in
which Ursulines sought to bring claims against Regions regarding Regions' alleged oral agreement
to extend the construction loan to Ursulines.
Civil Action No. 14-2500
On October 30, 2014, Ursulines filed the current lawsuit, Civil Action No. 14-2500. This
time, Ursulines claims that Regions is liable to it because Regions acted in bad faith with respect to
the administration of the August 15, 2005, land loan agreement and promissory note and any
renewals thereof. Regions filed a motion for summary judgment arguing that this court's dismissal
of Ursulines' prior suit bars this action under the doctrine of res judicata. Regions pointed out that
the complaints are nearly identical, and Ursulines could, and should, have brought any claims
regarding the land loan in the first action.

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On April 10, 1015, this court denied Regions' motion for summary judgment finding that res
judicata did not apply because:
The central claim of Civil Action No. 12-2974 was that Regions
harmed Ursulines by failing to offer Ursulines a construction loan
that conformed to the terms proposed by AmSouth in July 2005. The
central claim of Civil Action No. 14-2500 is that Regions acted in
bad faith in its administration of the August 15, 2005, loan agreement
and promissory note and any renewals thereof. These claims are
entirely different. The court's holding in its May 21, 2013, Order and
Reasons dismissing Civil Action No. 12-2974 addressed only the
application of the Louisiana Credit Agreement Statutes, which
requires that such agreements be in writing, to the alleged oral
agreement. It did not address the merits of Ursulines' claims
regarding Regions' actions concerning the administration of the
August 15, 2005, loan agreement and promissory note and any
renewals thereof. It is undisputed that the August 15, 2005, loan
agreement and promissory note were in writing as required by La.
Rev. Stat. § 6:1122, and applying that statute would not result in the
dismissal of Ursulines' claims asserted in this lawsuit. Therefore,
Ursulines' claims in this suit are not the same as those asserted in
Civil Action No. 12-2974, and are not barred by the doctrine of res
judicata.
Doc. #36.
Regions seeks reconsideration of that order. Regions argues that the court relied on
Ursulines' opposition to the motion for summary judgment, rather than a comparison of the
complaint filed in this case and the petition filed in the prior action. Regions contends that the
complaint and petition are nearly identical, and that the only material difference is in paragraph 7
of the petition and paragraphs 7 and 8 of the complaint. Paragraph 7 of the petition in Civil Action
No. 12-2974 states:
Thereafter, on August 15, 2005, AmSouth approved a
commercial development loan in the amount of four million and eight
hundred thousand dollars ($4,800,000). Of this loan, one million and
four hundred thousand dollars ($1,400,000) would become available
immediately for the purchase of the land property. The remaining
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funds, three million and four hundred thousand ($3,400,000.00), for
the construction of the condominium complex, would be available as
a line of credit and required that five (5) units be presold prior to
commencing disbursement of the funds.
Civil Action No. 12-2974, Doc. #1-1.
Paragraphs 7 and 8 of the complaint in Civil Action No. 14-2500 state, in pertinent part:
7.
Thereafter, on August 15, 2005, AmSouth approved a
commercial development loan in the amount of one million and four
hundred thousand dollars ($1,400,00.00) that would become available
immediately for the purchase of the land property. This Complaint
concerns Regions actions related to this loan and its breach of this
loan agreement.
8.
Ursulines and AmSouth, Regions predecessor in interest, also
discussed and contemplated entering into a separate, later agreement
for construction of the condominium complex development
anticipated for the land purchased under the Loan. This anticipated
loan would be for, three million and four hundred thousand
($3,400,000.00) would require that five (5) units be presold prior to
commencing disbursement of the funds.
Civil Action No. 12-2974, Doc. #1-1.
Regions also points out that the prayers for relief in the complaint and petition are identical,
stating:
Defendants are liable for damages occasioned unto Ursulines as a
result of Defendants actions outlined, above, including but not
limited to:
a) failure to honor terms of agreement on which the loan was
predicated, and
b) all costs paid by Ursulines in furtherance of the construction
project, whether loan payment, marketing, planning or otherwise, and

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c) lost profits resulting form the inability to complete the
contemplated construction project, and
d) losses resulting from Defendants having forced Ursulines to "right
size" the loan, and
e) losses resulting from Defendants having failed to present Burgos
with a copy of the alleged appraisal that significantly undervalued the
property, and
f) losses resulting from the forced sale of the Property to a third party
purchaser, and
g) other damages to be shown at trial or hearing thereon.
Civil Action No. 12-2974, Doc. #1-1, at paragraph 42; Civil Action No. 12-2974, Doc. #1-1 at
paragraph 45.
Regions argues that:
. . . if the allegations in both documents are virtually identical, other
than making it clear that the loan was for $1,400,000.00, not
$4,800,000.00, if the petition in the first action did not seek relief for
the way in which the original loan was administered, the complaint
in this action CANNOT be asserting those claims.
If, on the other hand, the complaint in the second action IS
asserting claims for the way in which the one and only loan
transaction was administered, th[e]n the petition in the first case,
which contains the identical factual allegations, had to also have
asserted those claims.
Civil Action No. 12-2974, Doc. #40. Thus, Regions argues that all of the causes of action were
disposed of in Civil Action No. 12-2974, and res judicata applies to prevent the relitigaiton of those
claims in this action.
Alternatively, Regions seeks partial summary judgment or a ruling under Rule 56(g) of the
Federal Rules of Civil Procedure finding that some of Ursulines' claims are precluded under the
doctrine of res judicata and summary judgment on plaintiff's remaining claims. Regions points to
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various allegations and claims in the complaint that it contends relate only to the alleged oral
construction loan. Regions argues that, because this court found in Civil Action No. 12-2974 that
by application of Louisiana Revised Statutes § 6:1122 Ursulines could not bring claims against
Regions regarding the alleged oral contract, Ursulines cannot seek damages related to it in this case.
Regions then argues that it is entitled to summary judgment on Ursulines' remaining claims because
there are no facts alleged to support claims those claims or that they are prescribed.
Ursulines opposes the motion arguing that Regions has not presented any new facts or
evidence to support reconsideration of this court's April 10, 2015, Order and Reasons. Ursulines
also argues that summary judgment on any issue is premature because no discovery has been
conducted.
ANALYSIS
A.

Regions' Motion for Reconsideration
Regions has moved the court to reconsider its April 10, 2015, ruling denying Regions'

motion for summary judgment. Rule 54(b) of the Federal Rules of Civil Procedure states, in
pertinent part:
[A]ny order or other decision, however designated, that adjudicates
fewer than all the claims or the rights and liabilities of fewer than all
the parties does not end the action as to any of the claims or parties
and may be revised at any time before the entry of a judgment
adjudicating all the claims and all the parties’ rights and liabilities.
Under this rule, the district court “possesses the inherent procedural power to reconsider, rescind,
or modify an interlocutory order for cause seen by it to be sufficient.” Melancon v. Texaco, Inc., 659
F.2d 551, 553 (5th Cir. 1981). A denial of a motion for summary judgment is an interlocutory order.
See Fed. R. Civ. P. 54(b); see also Lavespere v. Niagara Machine & Tool Works, Inc., 910 F.2d 167,

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185 (5th Cir. 1990), abrogated on other grounds by Little v. Liquid Air Corp., 37 F.3d 1069, 1075
n. 14 (5th Cir. 1994) (en banc). However, the district court must exercise this broad discretion
sparingly to forestall the perpetual reexamination of orders and the resulting burdens and delays. See
Calpecto 1981 v. Marshall Exploration, Inc., 989 F.2d 1408, 1414-15 (5th Cir. 1993); 18B CHARLES
A. WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 4478.1(2d ed. 2002).
The general practice in the United States District Court for the Eastern District of Louisiana
has been to evaluate motions to reconsider interlocutory orders under ths same standards that apply
to motions to alter or amend final judgments made pursuant to Rule 59(e) of the Federal Rules of
Civil Procedure. See Rosemond v. AIG Ins., 2009 WL 1211020, at *2 (E.D. La. 5/4/09) (Barbier,
J.); In re Katrina Canal Breaches, 2009 WL 1046016, at *1 (E.D. La. 4/16/09) (Duval, J.); Castrillo
v. Am. Home Mortg. Servicing, Inc., 2010 WL 1434398, at * 3-4 (E.D. La. 4/5/10) (Vance, J.). A
Rule 59(e) motion calls into question the correctness of a judgment. In re Transtexas Gas Corp., 303
F.3d 571, 581 (5th Cir. 2002). “Rule 59(e) is properly invoked to correct manifest errors of law or
fact or to present newly discovered evidence.” In re Transtexas Gas Corp., 303 F.3d at 581. “A
Rule 59(e) motion should not be used to relitigate prior matters that should have been urged earlier
or that simply have been resolved to the movant’s dissatisfaction.” In re Self, 172 F. Supp. 2d 813,
816 (W.D. La. 2001).
Regions has not demonstrated that reconsideration is warranted. Instead, Regions re-urges
arguments it made in support of its motion for summary judgment. Further, Regions has not shown
that the court erred. After carefully analyzing the complaint, petition, and this court's Order and
Reasons dismissing Civil Action No. 12-2974, the court concluded that the causes of action asserted
in the two lawsuits were different because the ruling in Civil Action No. 12-2974 that Louisiana

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Revised Statutes § 6:1122 precluded Ursulines from pursuing claims related to the alleged oral
agreement regarding the construction loan would not apply to preclude Ursulines from litigating
claims in this lawsuit related the administration of the land loan, which was in writing. Therefore,
Regions' motion to reconsider is DENIED.
B.

Regions' Motion for Partial Summary Judgment, Motion for Findings Pursuant to
Rule 56(g) and Motion for Summary Judgment on Remaining Claims
Regions moves for partial summary judgment or for a finding under Rule 56(g) that some

of Ursulines' claims are precluded under the doctrine of res judicata because they related to the
alleged oral agreement regarding the construction loan, and summary judgment on Ursulines'
remaining claims.
Rule 56 of the Federal Rules of Civil Procedure provides that the "court shall grant summary
judgment if the movant shows that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law." Granting a motion for summary judgment is proper if
the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits filed in
support of the motion demonstrate that there is no genuine issue as to any material fact that the
moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Anderson v. Liberty
Lobby, Inc., 106 S.Ct. 2505, 2509-10 (1986). The court must find "[a] factual dispute . . . [to be]
'genuine' if the evidence is such that a reasonable jury could return a verdict for the nonmoving party
. . . [and a] fact . . . [to be] 'material' if it might affect the outcome of the suit under the governing
substantive law." Beck v. Somerset Techs., Inc., 882 F.2d 993, 996 (5th Cir. 1989) (citing Anderson,
106 S.Ct. at 2510).
If the moving party meets the initial burden of establishing that there is no genuine issue, the
burden shifts to the non-moving party to produce evidence of the existence of a genuine issue for
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trial. Celeotex Corp. v. Catrett, 106 S.Ct. 2548, 2552 (1986). The non-movant cannot satisfy the
summary judgment burden with conclusory allegations, unsubstantiated assertions, or only a scintilla
of evidence. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc). If the
opposing party bears the burden of proof at trial, the moving party does not have to submit
evidentiary documents to properly support its motion, but need only point out the absence of
evidence supporting the essential elements of the opposing party’s case. Saunders v. Michelin Tire
Corp., 942 F.2d 299, 301 (5th Cir. 1991).
Rule 56(g) provides: "If the court does not grant all the relief requested by the motion, it may
enter an order stating any material fact – including an item of damages or other relief – that is not
genuinely in dispute and treating the fact as established in the case." This Rule uses the term "may"
and is discretionary. See U.S. Bank v. Verizon, 761 F.3d 409, 425 n. 15 (5th Cir. 2014).
There has been no discovery conducted in this case. It would be premature at this juncture
to issue summary judgment as to any of Ursulines' claims, or to determine which facts are
undisputed under Rule 56(g). Thus, Regions' motion for partial summary judgment, rulings under
Rule 56(g), and for summary judgment as to remaining claims is DENIED. Regions may re-file
such motion after discovery has been conducted.
CONCLUSION
IT IS HEREBY ORDERED that Regions Bank's Motion to Reconsider Denial of Motion
for Summary Judgment, Motion for Partial Summary Judgment, and Motion for Findings Pursuant
to Rule 56(g), Fed. R. Civ. Pro. and Motion for Summary Judgment on Remaining Claims (Doc.
#37) are DENIED.

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New Orleans, Louisiana, this _____ day of June, 2015.
25th

____________________________________
MARY ANN VIAL LEMMON
UNITED STATES DISTRICT JUDGE

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