Magnolia Financial Group LLC v. Antos et al

Filing 261

ORDER AND REASONS granting 239 Motion for Summary Judgment. Signed by Judge Jane Triche Milazzo on 1/3/2018. (sa)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
MAGNOLIA FINANCIAL GROUP

CIVIL ACTION

VERSUS

NO: 15-7144

KENNETH ANTOS, ET AL

SECTION “H”

ORDER AND REASONS
Before the Court is a Motion for Summary Judgment filed by Defendantin-Cross-Claim Twin City Fire Insurance Company (“Twin City”) (Doc. 239).
For the following reasons, the motion is GRANTED.
BACKGROUND
This is a declaratory judgment action on a promissory note that was
removed from the 29th Judicial District Court for the Parish of St. Charles. On
November 11, 2013, Defendants KCI Investments, LLC (“KCI”), Kenneth
Antos, and David Becklean executed a Secured Promissory Note (the “Note”)
with Plaintiff Magnolia Financial Group, LLC, (“Magnolia”) for the principal
sum of $2,000,000 with an interest rate of 15% per annum. Defendant
Becklean also executed a Pledge and Security Agreement (the “Security
Agreement”) in favor of Magnolia, wherein he pledged his interest in the

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proceeds of a Settlement Agreement dated September 22, 2012 among Twin
Towers Trading Site Management, LLC (“Twin Towers”), Jeffrey Brandon,
Eric Scholer, Becklean, and SMG Group (the “Settlement Agreement”). This
pledge was recorded. Subsequently, on January 13, 2015, Defendants entered
into a second agreement to borrow an additional $100,000 from Magnolia (the
“Second Note”). Plaintiff contends that no principal payments were paid on the
Notes by the maturity dates and that $2,457,805.60 of principal and interest
remains due and owing on the Notes. On November 20, 2015 Plaintiff filed the
instant suit seeking a declaratory judgment recognizing its rights under the
Notes and the Security Agreement.
The Court granted Plaintiff summary judgment recognizing Plaintiff as
attorney-in-fact for the purposes of carrying out the Security Agreement and
establishing Plaintiff’s right to collect attorneys’ fees at the termination of the
litigation. 1
Twin Towers intervened in this action and filed an interpleader
complaint relative to a portion of the Settlement Agreement proceeds. Plaintiff
responded, averring that Twin Towers is not entitled to interpleader relief.
Plaintiff also brought cross claims against, inter alia, Twin Towers, Donald
Porges, and Porges & Eisenberg CPA, LLC (collectively the “Porges
Defendants”) for tortious interference with contractual relations, fraud, bad
faith breach of conventional obligation, negligent breach of contract, negligent
misrepresentation, and general negligence. 2 Plaintiff alleges that Porges,
acting personally and on behalf of the other Porges Defendants, represented to
Plaintiff that Twin Towers would forward payments under the Settlement
Agreement to Plaintiff in the event of Defendants’ default, but later acted to
prevent Plaintiff from obtaining the funds.
1
2

Doc. 25.
Docs. 48, 123.

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On motions by the Porges Defendants, the Court dismissed Plaintiff’s
claims for tortious interference with contractual relations and denied summary
judgment as to the remaining claims against the Porges Defendants. 3
Plaintiff’s Cross-Claim also alleges that Defendant-in-Cross-Claim Twin
City has one or more insurance policies providing coverage to Twin Towers and
its officers, directors, members, agents, or employees, including Donald Porges,
for Plaintiff’s claims against it. Pursuant to Louisiana’s direct action statute,
Plaintiff asserts those claims against Twin City as a solidary obligor. The Court
previously dismissed Plaintiff’s claims against Twin City with respect to the
insurance policy identified by number in Plaintiff’s Cross-Claim, but declined
to dismiss all claims against Twin City because the Cross-Claim alleged the
existence of other policies providing coverage. 4 Defendant-in-Cross-Claim
Twin City now moves for summary judgment that no other policies exist and
dismissing Plaintiff’s claims against it. Plaintiffs do not oppose the Motion.
LEGAL STANDARD
Summary judgment is appropriate if “the record, including depositions,
documents, electronically stored information, affidavits or declarations,
stipulations. . . , admissions, interrogatory answers, or other materials” “shows
that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” 5 A genuine issue of fact exists only “if
the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” 6

Docs. 70, 200.
Doc. 234.
5 Fed. R. Civ. P. 56 (2012).
6 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
3
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In determining whether the movant is entitled to summary judgment,
the Court views facts in the light most favorable to the non-movant and draws
all reasonable inferences in his favor. 7 “If the moving party meets the initial
burden of showing that there is no genuine issue of material fact, the burden
shifts to the non-moving party to produce evidence or designate specific facts
showing the existence of a genuine issue for trial.” 8 Summary judgment is
appropriate if the non-movant “fails to make a showing sufficient to establish
the existence of an element essential to that party’s case.” 9 “In response to a
properly supported motion for summary judgment, the nonmovant must
identify specific evidence in the record and articulate the manner in which that
evidence supports that party’s claim, and such evidence must be sufficient to
sustain a finding in favor of the nonmovant on all issues as to which the
nonmovant would bear the burden of proof at trial.” 10 The Court does “not . . .
in the absence of any proof, assume that the nonmoving party could or would
prove the necessary facts.” 11 Additionally, “[t]he mere argued existence of a
factual dispute will not defeat an otherwise properly supported motion.” 12
When a motion for summary judgment is unopposed the court may not
grant the motion by default, but is entitled to accept as undisputed the facts it
presents. 13 “Rule 56 does not impose upon the district court a duty to sift
through the record in search of evidence to support a party’s opposition to
summary judgment.” 14 Instead, the proper inquiry to an unopposed motion for
7 Coleman

v. Houston Indep. Sch. Dist., 113 F.3d 528, 533 (5th Cir. 1997).
Engstrom v. First Nat’l Bank of Eagle Lake, 47 F.3d 1459, 1462 (5th Cir. 1995).
9 Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
10 Johnson v. Deep E. Tex. Reg. Narcotics Trafficking Task Force, 379 F.3d 293, 301
(5th Cir. 2004) (internal citations omitted).
11 Badon v. R J R Nabisco, Inc., 224 F.3d 382, 393–94 (5th Cir. 2000) (quoting Little
v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)).
12 Boudreaux v. Banctec, Inc., 366 F. Supp. 2d 425, 430 (E.D. La. 2005).
13 Eversley v. MBank Dallas, 843 F.2d 172, 174 (5th Cir. 1988).
14 Adams v. Travelers Indem. Co. of Conn., 465 F.3d 156, 164 (5th Cir. 2006).
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summary judgment is to determine whether the facts advanced in the motion
and supported by appropriate evidence make out a prima facie case that the
movant is entitled to judgment. 15
LAW AND ANALYSIS
Plaintiff’s Amended and Supplemental Cross-Claim alleges that, “at all
times material herein [Twin City] had in force and effect a policy of insurance
bearing number 21HUSS3602 (or other policy) which provided or extended
coverage to . . . Twin Towers.” 16 This Court has already determined that, as a
matter of law, Twin City policy number 21HUSS3602 does not provide
coverage. 17 Twin City now submits an affidavit from an employee with
knowledge of its policies who states that Twin City issued no other insurance
policies to Twin Towers. This sets forth a prima facie case that Twin City is
entitled to judgment dismissing all of Plaintiff’s claims against it because there
exists no policy providing insurance coverage for the actions described in
Plaintiff’s Cross-Claim. There is no dispute of material fact because Plaintiff
submits no opposition.
CONCLUSION
For the foregoing reasons, Defendant-in-Cross-Claim Twin City’s Motion
for Summary Judgment is GRANTED. Plaintiff’s claims against Twin City are
dismissed with prejudice.

See id.; Eversley, 843 F.2d at 174.
Doc. 123 at 3–4.
17 Doc. 196.
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New Orleans, Louisiana this 3rd day of January, 2018.

____________________________________
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE

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