First NBC Bank v. Levy Gardens Partners 2007, LP

Filing 171

ORDER AND REASONS: IT IS ORDERED that the 134 Motion for Summary Judgment is GRANTED. IT IS FURTHER ORDERED that Girod shall submit a proposed judgment, including all sums due under the Promissory Note, within 14 days of this Order. Girod shall also file a motion regarding attorneys' fees and costs within 14 days of this Order. Signed by Chief Judge Nannette Jolivette Brown on December 12, 2019. (mp)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
FIRST NBC BANK

CIVIL ACTION

VERSUS

NO. 17-6652

LEVY GARDENS PARTNERS 2007, LP

SECTION: “G”(2)

ORDER AND REASONS
Pending before the Court is Girod LoanCo, LLC’s (“Girod”) “Motion for Summary
Judgment.”1 In the motion, Girod argues that summary judgment is appropriate because: (1)
Defendant Levy Gardens Partners 2007, LP (“Levy Gardens”) admits that the Promissory Note
at issue is in default; (2) Levy Gardens does not dispute the validity of the signatures on the Note;
and (3) Levy Gardens does not have a valid defense to payment of the Note.2 Defendant has not
filed any opposition to the motion.3 This Court has authority to grant a motion as unopposed,
although it is not required to do so.4 Having considered the motion, the memorandum in support,
and the applicable law, the Court grants the motion.

1

Rec. Doc. 134.

2

Rec. Doc. 134-3 at 1.

3
On September 26, 2019, Levy Gardens attempted to file an opposition to the motion for summary
judgment. Rec. Doc. 138. The filing was marked deficient by the Clerk of Court, and Levy Gardens did not remedy
the deficiency. Therefore, Levy Gardens never properly filed an opposition to the instant motion.
4

Edward H. Bohlin Co., Inc. v. Banning Co., Inc., 6 F.3d 350, 356 (5th Cir. 1993).

1

I. Background5
Levy Gardens executed a promissory note dated April 15, 2008, payable to First NBC Bank
of New Orleans, LA (“First NBC”), in the original principal amount of $3,100,000.00 (“Note
One”).6 Note One was renewed and/or extended by a Second Promissory Note (“Note Two”)
dated September 26, 2008; Note Two memorialized Levy Gardens’ promise to pay First NBC
$5,126,000.00 in one payment of all outstanding principal and interest due September 26, 2010,
with interim monthly payments of all accrued unpaid interest due on the 15th day of each month
until paid in full. 7 The maturity date of Note Two was extended to April 24, 2013, by a Change
in Terms Agreement (“Change in Terms Agreement One”) dated April 25, 2012.8 The maturity
date of Note Two was again extended until May 23, 2018, by an additional Change in Terms
Agreement (“Change in Terms Agreement Two”) dated May 23, 2013.9 Note One,10 Note Two,11
the Change in Terms Agreement One,12 and the Change in Terms Agreement Two13 collectively
constitute the promissory note (the “Promissory Note”) at issue in this case.

5

These facts are drawn, in part, from the summary judgment record. In compliance with Local Rule 56.1,
Girod included a concise Statement of Uncontested Facts. See Rec. Doc. 134-2. This Court’s Local Rules mandate
that the party opposing summary judgment “must include a separate and concise statement of the material facts which
the opponent contends present a genuine issue.” See Local Rule 56.2. Here, Levy Gardens failed to file any such
statement to controvert the plaintiff’s submission and, therefore, “[a]ll material facts in the moving party’s statement
will be deemed admitted, for purposes of the motion.” See id.
6

Rec. Doc. 134-3 at 2 (citing Rec. Doc. 134-5).

7

Rec. Doc. 134-6.

8

Rec. Doc. 134-7.

9

Rec. Doc. 134-8.

10

Rec. Doc. 134-5.

11

Rec. Doc. 134-6.

12

Rec. Doc. 134-7.

13

Rec. Doc. 134-8.

2

In connection with Note One, Levy Gardens executed the “Multiple Indebtedness
Mortgage” (the “MIM”) which acknowledged the indebtedness evidenced by Note One.14 The
MIM was executed to secure repayment of any additional advances First NBC may have made
on behalf of Levy Gardens.15 A “Supplement to and Acknowledgement of Multiple Indebtedness
Mortgage” (the “Supplement to the MIM”) dated September 26, 2008 granted First NBC a
mortgage and security interest over “Additional Mortgaged Property.”16
In 2008, Levy Gardens purchased property (the “Property”) located in New Orleans.17
After the purchase, certain third parties sued Levy Gardens in state court to enforce a 1985 zoning
ordinance.18 Their lawsuit was successful and, as a result, Levy Gardens was unable to use the
Property as it had intended.19 On March 14, 2017, First NBC brought a foreclosure action by
executory process against Levy Gardens in the Civil District Court for the Parish of Orleans, State
of Louisiana.20 In that action, Levy Gardens asserted a third-party demand against Lewis Title
Company, Inc. and Liskow & Lewis, PLC (collectively, the “Liskow Defendants”).21
On April 28, 2017, First NBC was closed by the Louisiana Office of Financial Institutions,
and the FDIC-R was named receiver.22 On July 11, 2017, the FDIC-R filed a Motion for
Substitution of Parties in the state action, as the FDIC-R notified parties that it succeeded to all
14

Rec. Doc. 134-3 at 3 (citing Rec. Doc. 134-9).

15

Rec. Doc. 134-9 at 2.

16

Rec. Doc. 134-10 at 1–2.

17

Rec. Doc. 6-1 at 1.

18

Id.

19

Id.

20

See Rec. Doc. 1-2; see also Rec. Doc. 13-1 at 1.

21

Rec. Doc. 1-3.

22

Rec. Doc. 13-1 at 1.

3

rights, titles, powers, and privileges of First NBC.23 Moreover, on July 11, 2017, the FDIC-R
filed a Notice of Removal, removing the state action to this Court pursuant to 12 U.S.C.
§ 1819(b)(2)(B) and 28 U.S.C. § 1441.24
On October 5, 2017, this Court granted a motion to stay this matter pending exhaustion
of administrative remedies filed by FDIC-R.25 On December 5, 2017, this Court granted a
“Motion to Substitute Party Plaintiff,” substituting Girod for First NBC Bank pursuant to Federal
Rule of Civil Procedure 25(c).26 This Court found that Rule 25(c) provides that when there is a
transfer of interest, the Court may substitute the transferee as the party litigant. 27 Further, this
Court found that Girod was the holder of the note described in and attached to the state-court
Petition that initiated this civil action, having acquired same from the FDIC-R as Receiver for
First NBC.28 The Court found that Girod should be substituted as the party plaintiff due to the
closure of First NBC Bank, and the fact that Girod is the current holder of the note that forms the
basis of this litigation.29
On September 18, 2018, upon a motion by Levy Gardens, the Court reopened the case.30
On April 12, 2019, the Court granted a “Rule 12(b)(6) Motion to Dismiss”31 filed by the Liskow
Defendants because this Court had previously issued a final judgment dismissing the same claims
23

See Rec. Doc. 1-4; see also Rec. Doc. 13-1 at 2.

24

Rec. Doc. 1; see also Rec. Doc. 13-1 at 2.

25

Rec. Doc. 57.

26

Rec. Doc. 61.

27

Id. at 2.

28

Id.

29

Id.

30

Rec. Doc. 66.

31

Rec. Doc. 6.

4

against Levy Gardens and a party in privity with Liskow Defendants. 32 On April 29, 2019, the
Court entered a final judgment pursuant to Federal Rule of Civil Procedure 54(b) against Levy
Gardens and in favor of the Liskow Defendants, dismissing all claims that Levy Gardens had
asserted against the Liskow Defendants in this action with prejudice.33 On May 7, 2019, Levy
Gardens filed a notice of appeal.34 On July 19, 2019, the United States Court of Appeals for the
Fifth Circuit dismissed the appeal for want of prosecution.35 On August 16, 2019, the Fifth Circuit
denied Levy Gardens’ motion to reinstate the appeal.36 On October 28, 2019, Levy Gardens filed
a “Motion to Direct the Clerk to File a Petition for a Writ of Certiorari Out of Time” before the
United States Supreme Court.37 On November 25, 2019, the Supreme Court denied the motion.38
On September 10, 2019, Girod filed the instant motion for summary judgment. 39 On
September 17, 2019, Levy Gardens filed an “Unopposed Motion to Extend Time to Respond to
Motion for Summary Judgement Field by Girod.”40 The Court granted Levy Gardens’ motion
and stated that any opposition by Levy Garden must be filed by September 23, 2019. 41 Levy
Gardens has not filed any opposition to the motion.42 On September 26, 2019, Girod filed a
32

Rec. Doc. 111.

33

Rec. Doc. 116.

34

Rec. Doc. 119.

35

Rec. Doc. 129.

36

Rec. Doc. 132.

37

Rec. Doc. 154-1.

38

Levy Gardens Partners 2007, L.P. v. Lewis Title Co., Inc., et al., __ S. Ct. __, 2019 WL 6257400 (Nov.

25, 2019).
39

Rec. Doc. 134.

40

Rec. Doc. 135.

41

Rec. Doc. 136.

42

On September 26, 2019, Levy Gardens attempted to file an opposition to the motion for summary
judgment. Rec. Doc. 138. The filing was marked deficient by the Clerk of Court, and Levy Gardens did not remedy

5

“Notice of No Opposition to Motion for Summary Judgment.”43
II. Parties’ Arguments
A.

Girod’s Arguments in Support of the Motion for Summary Judgment
In support of the motion, Girod first argues that this proceeding is ripe for summary

judgment.44 Girod next contends that it has an indisputable legal right to enforce the Note and the
MIM.45 Girod further argues that Levy Gardens admits all material allegations in the Petition.46
Lastly, Girod contends that Levy Gardens cannot state a defense to payment of the promissory

Note based on alleged wrongdoing by First NBC.47
First, Girod argues that this proceeding is ripe for summary judgment.48 Girod contends
that in a suit on a promissory note, “summary judgment is appropriate when the maker’s signature
on the note is proved or admitted, the holder produces the note, and the maker cannot produce
evidence establishing a defense to payment.”49 Girod contends that under this legal scheme, once
the holder of the note establishes that the signature is genuine, the burden shifts to the defendant
to present a triable issue of fact.50 Girod argues that to satisfy this burden, a defendant must
produce evidence that is both admissible and contains specific factual details.51 Girod contends

the deficiency. Therefore, Levy Gardens never properly filed an opposition to the instant motion.
43

Rec. Doc. 137.

44

Rec. Doc. 134-3 at 6.

45

Id. at 7.

46

Id. at 9.

47

Id.

48

Id. at 6.

49

Id. (citing Bankers Trust Co. of Cal., NA v. Boydell, 46 F. App’x. 731, *3 (5th Cir. 2002)).

50

Id. (citing Boydell, 46 F. App’x. 731, *3).

51

Id.at 6–7 (citing Equipment, Inc. v. Anderson Petroleum, Inc., 471 So. 2d 1068, 1070 (La. App. 3 Cir.

6

that claims that are separate and unrelated to the question of liability and claims without factual
support are insufficient to overcome summary judgement.52 Girod argues that there is no dispute
about Levy Gardens’ signature on the Note, the MIM, the Supplement, or any other relevant
document.53 Furthermore, Girod argues that the Fifth Circuit has explicitly recognized that suits
on promissory notes are especially appropriate for disposition by summary judgment, given the
relatively simple requirements.54
Second, Girod contends that it has an indisputable legal right to enforce the Note and
MIM.55 Girod reviews the history of the Note at issue.56 Girod argues the Note is made payable
“to the Order of First NBC Bank.”57 Girod contends that the Receivership Order transferred title
of the Note to the FDIC-R.58 Girod argues that the Allonge states that the FDIC-R indorsed,
transferred, and assigned the Note to Girod.59 Girod contends that the FDIC-R’s indorsement
makes Girod a “holder” of the Note, and thereby entitled to enforce the Note, which remains
unpaid and past due.60 Regarding the MIM, Girod argues the “FDIC-R’s assignment of the Note
to Girod necessarily included an assignment of the accessory rights created by the MIM” and that

1985)).
52

Id.at 7.

53

Id.

54

Id.at 6.

55

Id.at 7.

56

Id.at 7–8.

57

Id. at 7 (citing Rec. Doc. 134-6).

58

Id. at 7–8 (citing Rec. Doc. 134-14).

59

Id. at 8 (citing Rec. Doc. 134-6).

60

Id. (citing La. R.S. § 10:3-301).

7

the “FDIC-R assigned the MIM to Girod via the Mortgage Assignment.”61 Therefore, Girod
contends it is entitled to enforce the Note.62
Third, Girod argues Levy Gardens admits all material allegations in the Petition.63 Girod
contends that Levy Gardens admits it signed the Note and the MIM, and that the Note is in default
for non-payment.64 Therefore, Girod argues summary judgment is appropriate.65
Fourth, Girod contends that Levy Gardens cannot state a defense to payment of the
promissory note based on alleged wrongdoing by First NBC.66 Girod argues that this Court does
not have jurisdiction to hear claims regarding First NBC’s alleged wrongful conduct and that such
conduct does not excuse payment.67 Girod contends FIRREA establishes a statutorily-mandated
administrative process for any claim arising from an alleged bad act by a bank taken over by the
FDIC-R.68 Therefore, Girod argues this Court does not have jurisdiction to hear such claims.69
Girod contends that “[w]hen the FDIC-R is appointed as the Receiver of a failed institution, it
succeeds to all of the institution’s rights, titles, powers, privileges, assets, and liabilities.”70 Girod
argues that under the statutory regime, the FDIC-R is obligated to pay all valid claims consistent

61

Id. (citing Rec. Doc. 134-11).

62

Id.

63

Id. at 9.

64

Id. (citing Rec. Doc. 134-17).

65

Id. at 9.

66

Id.

67

Id.

68

Id. at 9–10.

69

Id. at 10.

70

Id.

8

with federal law.71
Girod contends a potential claimant who wishes to make a claim against a failed institution,
its assets, or the FDIC-R must follow the administrative procedure established by FIRREA;
failure to follow this procedure results in a jurisdictional bar in any court to review the claim.72
Girod argues that the first step in that process is to file a claim with the FDIC-R.73 Here, Girod
contends this Court does not have jurisdiction to hear any claims by Levy Gardens related to the
alleged wrongdoings of First NBC because Levy Gardens never submitted a claim regarding First
NBC’s alleged wrongdoing.74 Lastly, Girod argues that Levy Gardens has offered no evidence of
wrongdoing by First NBC.75 Rather, Girod contends that Levy Gardens relies only on statements
from its attorney and has failed to explain how any alleged wrongdoing by First NBC unwinds
its obligation to pay the amount due under the Note.76 Therefore, Girod argues there is no genuine
issue of material fact, and summary judgment is appropriate.77
III. Legal Standard
A. Legal Standard for Summary Judgment
Summary judgment is appropriate when the pleadings, the discovery, and any affidavits
show that “there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.”78 When assessing whether a dispute as to any material fact exists,

71

Id.

72

Id. at 11 (citing 12 U.S.C. § 1821(d)(5)– (8)).

73

Id.

74

Id. at 12–13.

75

Id. at 13.

76

Id.

77

Id. at 14.

78

Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986); Little v. Liquid Air

9

the court considers “all of the evidence in the record but refrain[s] from making credibility
determinations or weighing the evidence.”79 All reasonable inferences are drawn in favor of the
nonmoving party, but “unsupported allegations or affidavits setting forth ‘ultimate or conclusory
facts and conclusions of law’ are insufficient to either support or defeat a motion for summary
judgment.”80 If the record, as a whole, “could not lead a rational trier of fact to find for the nonmoving party,” then no genuine issue of fact exists, and the moving party is entitled to judgment
as a matter of law.81 The nonmoving party may not rest upon the pleadings, but must identify
specific facts in the record and articulate the precise manner in which that evidence establishes a
genuine issue for trial.82
The party seeking summary judgment always bears the initial responsibility of informing
the court of the basis for its motion and identifying those portions of the record that it believes
demonstrate the absence of a genuine issue of material fact.83 Thereafter, the nonmoving party
should “identify specific evidence in the record, and . . . articulate” precisely how that evidence
supports his claims.84 To withstand a motion for summary judgment, the nonmoving party must
show that there is a genuine issue for trial by presenting evidence of specific facts. 85 The
nonmovant’s burden of demonstrating a genuine issue of material fact is not satisfied merely by

Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
79

Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398–99 (5th Cir. 2008).

80

Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); Little, 37 F.3d at 1075.

81

Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

82

See Celotex, 477 U.S. at 325; Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998).

83

Celotex, 477 U.S. at 323.

84

Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir.), cert. denied, 513 U.S. 871 (1994).

85

Bellard v. Gautreaux, 675 F.3d 454, 460 (5th Cir. 2012) (citing Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248–49 (1986)).

10

creating “some metaphysical doubt as to the material facts,” “by conclusory allegations,” by
“unsubstantiated assertions,” or “by only a scintilla of evidence.”86 Rather, a factual dispute
precludes a grant of summary judgment only if the evidence presented by the nonmovant is
sufficient to permit a reasonable trier of fact to find for the nonmoving party. 87 Further, a court
“resolve[s] factual controversies in favor of the nonmoving party, but only when there is an actual
controversy, that is, when both parties have submitted evidence of contradictory facts.”88 Hearsay
evidence and unsworn documents that cannot be presented in a form that would be admissible in
evidence at trial do not qualify as competent opposing evidence.89 Ultimately, summary judgment
is appropriate in any case “where critical evidence is so weak or tenuous on an essential fact that
it could not support a judgment in favor of the nonmovant.”90
IV. Analysis
On a motion for summary judgment, the movant bears the burden of identifying those
portions of the record that it believes demonstrate the absence of a genuine issue of material fact.91
Girod contends that it has an indisputable legal right to enforce the Promissory Note.92 Girod also
requests summary judgment in its favor recognizing the enforceability of the security interest
granted by the MIM.93

86

Little, 37 F.3d at 1075.

87

Anderson, 477 U.S. at 248.

88

Little, 37 F.3d at 1075.

89

Fed. R. Civ. P. 56(c)(2); Martin v. John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir. 1987).

90

Armstrong v. City of Dallas, 997 F.2d 62, 67 (5th Cir. 1993).

91

Celotex, 477 U.S. at 323.

92

Rec. Doc. 134-3 at 7.

93

Id.

11

In a suit for a collection of a promissory note under Louisiana law,94 the plaintiff establishes
a prima facie case by establishing that the defendant executed the note and by producing the
note.95 In support of its motion for summary judgment, Girod has included copies of Note One,96
Note Two,97 the Change in Terms Agreement One,98 and the Change in Terms Agreement Two.99
These documents together constitute the promissory note (the “Promissory Note”) at issue in this
case.
Girod contends that it has an indisputable legal right to enforce the Promissory Note.100
Note One states that “Levy Gardens Partners 2007, LP (“Borrower”) promises to pay to the order
of First NBC Bank (“Lender”) . . . the sum of Three Million One Hundred Thousand . . . Dollars
. . .”101 Note One further states that “Borrower [Levy Gardens] will pay this loan in full
immediately upon Lender’s [First NBC] demand. If no demand is made, Borrower [Levy
Gardens] will pay this loan in one payment of all outstanding principal plus all accrued unpaid
interest on July 15, 2008.”102 Note One lists Levy Garden as the borrower.103 Note One bears the
signature of Henry L. Klein (“Klein”), a managing member of Levy Gardens, as an authorized
94
Note One states, under the section entitled “Governing Law,” that “[t]his note will be governed by federal
law applicable to Lender [First NBC] and, to the extent not preempted by federal law, the laws of the State of
Louisiana without regard to its conflict of law provisions.” See Rec. Doc. 134-5 at 2.
95

See Am. Bank v. Saxena, 553 So.2d 836, 842 (La. 1989); Dugas v. Modular Quarters, Inc., 561 So.2d
192, 200 (La. Ct. App. 1990).
96

Rec. Doc. 134-5.

97

Rec. Doc. 134-6.

98

Rec. Doc. 134-7.

99

Rec. Doc. 134-8.

100

Rec. Doc. 134-3 at 7.

101

Rec. Doc. 134-5 at 1.

102

Id.

103

Rec. Doc. 134-5.

12

signatory of the borrower.104 Levy Gardens does not present any evidence or legal authority to
support a claim that Klein’s signature on Note One is not valid.
Note One was renewed and/or extended by a Second Promissory Note (“Note Two”) dated
September 26, 2008.105 Note Two memorialized Levy Gardens’ promise to pay First NBC
$5,126,000.00 in one payment of all outstanding principal and interest due September 26, 2010,
with interim monthly payments of all accrued unpaid interest due on the 15th day of each month
until paid in full. 106 Note Two lists Levy Garden as the borrower.107 Note Two bears the signature
of Klein, a managing member of Levy Gardens.108 Levy Gardens does not present any evidence
or legal authority to support a claim that Klein’s signature on Note Two is not valid. The maturity
date of Note Two was extended to April 24, 2013, by a Change in Terms Agreement (“Change
in Terms Agreement One”) dated April 25, 2012.109 The maturity date of Note Two was again
extended until May 23, 2018, by an additional Change in Terms Agreement (“Change in Terms
Agreement Two”) dated May 23, 2013.110 Change in Terms Agreement Two lists Levy Gardens
as the borrower and bears the signature of Klein, a managing member of Levy Gardens.111 Levy
Gardens does not present any evidence or legal authority to support a claim that Klein’s signature
on Change in Terms Agreement Two is not valid.

104

Id. at 2.

105

Rec. Doc. 134-6.

106

Id.

107

Id.

108

Id. at 3.

109

Rec. Doc. 134-7.

110

Rec. Doc. 134-8.

111

Id. at 1.

13

On April 28, 2017, First NBC was closed by the Louisiana Office of Financial Institutions,
and the FDIC-R was named receiver.112 On July 11, 2017, the FDIC-R filed a Motion for
Substitution of Parties in the state action, as the FDIC-R notified parties that it succeeded to all
rights, titles, powers, and privileges of First NBC.113 The FDIC-R assigned Note Two to Girod,
as memorialized by the Allonge dated November 13, 2017.114 On December 5, 2017, this Court
granted an unopposed “Motion to Substitute Party Plaintiff,” substituting Girod for First NBC
Bank pursuant to Federal Rule of Civil Procedure 25(c).115 This Court found that Rule 25(c)
provides that when there is a transfer of interest, the Court may substitute the transferee as the
party litigant.116 Further, this Court found that Girod was the holder of the note described in and
attached to the state-court Petition (the “Promissory Note”) that initiated this civil action, having
acquired same from the FDIC-R as Receiver for First NBC.117 The Court found that Girod should
be substituted as the party plaintiff due to the closure of First NBC Bank, and the fact that Girod
is the current holder of the Promissory Note that forms the basis of this litigation.118
Girod argues that the Promissory Note is in default for non-payment.119 In its answer dated
January 31, 2019, Levy Gardens admitted that is has not made payment on the Promissory Note
since September 30, 2016.120 In further support of its motion for summary judgment, Girod
112

Rec. Doc. 13-1 at 1.

113

See Rec. Doc. 1-4; see also Rec. Doc. 13-1 at 2.

114

Rec. Doc. 134-6 at 4.

115

Rec. Doc. 61.

116

Id. at 2.

117

Id.

118

Id.

119

Rec. Doc. 134 at 4.

120

Rec. Doc. 85 at 10.

14

provides the declaration of David Silverstein, the Senior Vice President for Capital Crossing
Service Company, LLC, the loan servicer for Girod.121 The declaration indicates that as of August
28, 2019, the amount due under the Promissory Note totaled $281,619.51, excluding legal fees
and other costs of collection.122
In a suit for collection of a promissory note under Louisiana law, 123 a plaintiff establishes
a prima facie case by (1) establishing that the defendant executed the note and (2) by producing
the note.124 Once the plaintiff establishes a prima facie case, the burden shifts to the defendant to
submit evidence establishing a triable issue of fact on a bona fide defense.125 “In light of this
clear-cut and simple legal scheme, [the Fifth Circuit] has recognized that ‘[s]uits to enforce
promissory notes are especially appropriate for disposition by summary judgment.’”126
Here, the Court finds that Girod has established a prima facie case to enforce the Promissory
Note under Louisiana law. Girod has produced copies of Note One,127 Note Two,128 the Change

121

Rec. Doc. 134-4 at 1.

122

Id. at 5.

Note One states, under the section entitled “Governing Law,” that “[t]his note will be governed by federal
law applicable to Lender [First NBC] and, to the extent not preempted by federal law, the laws of the State of
Louisiana without regard to its conflict of law provisions.” See Rec. Doc. 134-5 at 2.
123

124

See Saxena, 553 So.2d at 842; see also Bank of America, N.A. v. World of Smiles, No. CV 16-2874, 2017
WL 750400, at *6 (E.D. La. Feb. 27, 2017) (“In a suit for a collection of a promissory note under Louisiana law, the
plaintiff establishes a prima facie case by establishing that the defendant executed the note and by producing the
note.”).
Saxena, 553 So.2d at 842 (“When signatures are admitted or established, production of the instrument
entitles a holder to recover on it unless the defendant establishes a defense.”). See also Dugas, 561 So.2d at 200
(“Once the note is introduced into evidence, the burden of proof shifts to the debtor to establish the nonexistence,
extinguishment, or variance in payment of the obligation”) (internal citation omitted).
125

126

Bankers Trust Co. of California, NA v. Boydell, 46 F. App’x. 731, at *3 (5th Cir. 2002) (quoting
Resolution Trust Corp. v. Marshall, 939 F.2d 274, 276 (5th Cir.1991)); see also Federal Deposit Ins. Corp. v.
Cardinal Oil Well Servicing Co., Inc., 837 F.2d 1369, 1371 (5th Cir. 1988) (“Typically, suits on promissory notes
provide fit grist for the summary judgment mill.”).
127

Rec. Doc. 134-5.

128

Rec. Doc. 134-6.

15

in Terms Agreement One,129 and the Change in Terms Agreement Two,130 which collectively
constitute the Promissory Note andmemorialized Levy Gardens’ promise to pay a set sum of
$5,126,000.00 in one payment of all outstanding principal and interest to First NBC by May 23,
2018. 131 Levy Gardens has admitted that it executed Note One and Note Two.132 The signature
of Henry L. Klein, a managing member of Levy Gardens, appears on Note One,133 Note Two,134
the Change in Terms Agreement One,135 and the Change in Terms Agreement Two.136 Unless
specifically denied in the pleadings, each signature on an instrument is admitted.137 Levy Gardens
does not dispute the validity of it’s managing member’s signature in its pleadings.138 Moreover,
Levy Gardens does not present any evidence or legal authority to support a claim that the
Promissory Note is not valid or to show that Girod is not the holder of the Promissory Note.
Therefore, the Court finds that Girod is entitled to enforce payment of the Promissory Note,
unless Levy Gardens can establish a defense by a preponderance of the evidence. 139 Because

129

Rec. Doc. 134-7.

130

Rec. Doc. 134-8.

131

See Rec. Docs. 134-6, 134-8.

132

Rec. Doc. 85 at 10.

133

Rec. Doc. 134-5.

134

Rec. Doc. 134-6.

135

Rec. Doc. 134-7.

136

Rec. Doc. 134-8.

137
La. Rev. Stat. § 10:3-308(a) (“In an action with respect to an instrument, the authenticity of, and authority
to make, each signature on the instrument is admitted unless specifically denied in the pleadings.”).
138

See Rec. Doc. 85.

“If the validity of signatures is admitted or proved and there is compliance with Subsection (a), a plaintiff
producing the instrument is entitled to payment if the plaintiff proves entitlement to enforce the instrument under
[La. Rev. Stat. §] 10:3-301, unless the defendant proves a defense or claim in recoupment.” La. Rev. Stat. § 10:3308.
139

16

Girod, as holder, has produced the promissory note, and because Levy Gardens does not dispute
the authenticity of the signatures, Girod has satisfied its summary judgment burden.140 The burden
shifts to Levy Gardens to establish the existence of a material fact, which would preclude the
Court from granting summary judgment.
Under Louisiana Revised Statute § 10:3-308, Levy Gardens may successfully defeat
summary judgment if it establishes, by a preponderance of the evidence, the grounds of defenses
raised in its Answer.141 Bare recitals of defenses without factual evidence or argument offered in
support are insufficient to defeat summary judgment.142 Louisiana Revised Statute § 10:3-305
permits raising any defenses that would be available against a simple contract enforcement suit.143
Here, Levy Gardens has failed to meet its burden to prove any defenses by a preponderance of
the evidence. Levy Gardens failed to submit an opposition to the motion for summary judgment
raising any disputed issues of material fact and has failed to provide any evidence in support of
its defenses. Levy Gardens’ Answer likewise provides only a bare recital of asserted defenses
without factual evidence or argument offered in support.144 Levy Gardens admits there is an

140
See Premier Bank, Nat'l Ass’n v. Percomex, Inc., 92-243 (La. App. 3 Cir. 3/3/93), 615 So.2d 41, 43
(“Once the plaintiff, the holder of a promissory note, proves the maker’s signature, or the maker admits it, the holder
has made out his case by mere production of the note and is entitled to recover in the absence of any further
evidence.”); Saxena, 553 So.2d at 842 (“When signatures are admitted or established, production of the instrument
entitles a holder to recover on it unless the defendant establishes a defense.”). See also Dugas, 561 So.2d at 200
(“Once the note is introduced into evidence, the burden of proof shifts to the debtor to establish the nonexistence,
extinguishment, or variance in payment of the obligation”) (internal citation omitted).
141

See Wright v. Blue, No. 16-9405, 2016 WL 4799102, at *4 (E.D. La. Sept. 13, 2016) (Brown, J.) (citing
Saxena, 553 So. 2d at 842; Bank of America Nat. Trust & Sav. Ass’n v. Reeves, Nos. 94-2580, 94-3692, 1997 WL
537691, at *3 (E.D. La. Aug. 25, 1997) (Wilkinson, Mag.)).
142

Bank of America, 2017 WL 750400, at *7.

143
See id.; La. Rev. Stat. § 10:3-302. If Girod is found to be a holder in due course, then Levy Gardens is
limited to asserting only “real” defenses provided for in Section 305. See Saxena, 553 So. 2d at 842 (“Because Saxena
has not established by a preponderance the available defenses allowed against a holder under [La. Rev. Stat. §] 10:3–
306, we need not consider the question of whether the bank's status is that of a holder in due course.”).
144

Rec. Doc. 85.

17

outstanding balance due on the Promissory Note.145 However, Levy Gardens does not assert any
facts or point to any evidence to contest Girod’s evidence of the amount due.
As the Fifth Circuit stated in Galindo v. Precision Am. Corp., unsupported allegations of
conclusory facts and conclusions of law are insufficient to defeat a summary judgment motion.146
A party “may not rest upon mere allegations contained in the pleadings,” but rather must articulate
the specific facts showing the existence of a genuine issue of material fact for trial.147 Here, Levy
Gardens has not articulated specific facts demonstrating that the amount due under the Promissory
Note is in dispute. Therefore, the Court finds that Levy Gardens has not met its burden to establish
any defense to enforcement of the promissory note by a preponderance of the evidence.
Girod also requests summary judgment in its favor recognizing the enforceability of the
security interest granted by the Multiple Indebtedness Mortgage (the “MIM”). 148 In connection
with Note One, Levy Gardens executed the MIM, dated April 15, 2008, which acknowledged the
indebtedness evidenced by Note One.149 The MIM was executed to secure repayment of any
additional advances First NBC may have made on behalf of Levy Gardens. 150 The MIM
encumbers certain immovable property described in the MIM.151 A “Supplement to and
Acknowledgement of Multiple Indebtedness Mortgage” (the “Supplement to the MIM”) dated
September 26, 2008 granted First NBC a mortgage and security interest over “Additional

145

Rec. Doc. 85.

146

754 F.2d 1212, 1216 (5th Cir. 1985).

147

Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998) (citing Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 255–57 (1986)).
148

Rec. Doc. 134-3 at 7.

149

Rec. Doc. 134-9.

150

Id. at 2.

151

Id. at 2, 15.

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Mortgaged Property.”152 Girod argues that the FDIC-R’s assignment of the Promissory Note
included an assignment of the collateral rights granted by the MIM. 153 Girod further argues that
the FDIC-R memorialized the assignment by an “Assignment of Multiple Indebtedness Mortgage
(the “Mortgage Assignment”).154
Here, Levy Garden does not dispute any facts regarding the security interest granted by the
MIM. Levy Gardens admits that it executed the MIM.155 Under Louisiana law, “the assignee
‘steps into the shoes’ of the assignor and acquires only those rights possessed by the assignor at
the time of the assignment.”156 Louisiana law generally supports free assignment.157 Furthermore,
“[t]he assignment of a right includes its accessories such as security rights.”158 This provision
“makes clear that assigning a promissory note also transfers the mortgage securing the note.”159
Lastly, “an assignment is valid even without the debtor’s consent, since, as a general rule, the
identity of the creditor should be immaterial to the debtor who owes the performance
involved.”160 Therefore, the Court finds that the undisputed facts in the record indicate that Girod
has the right to enforce the security interest created by the MIM, and summary judgment is
warranted in favor of Girod on this issue as well.161

152

Rec. Doc. 134-10 at 1-2.

153

Rec. Doc. 134-3 at 4 (citing La. Civ. Code art. 2645, La. R.S. § 10:9-203).

154

Id. at 4-5 (citing Rec. Doc. Rec. Doc. 134-11).

155

Rec. Doc. 85 at 10.

156

Conerly Corp. v. Regions Bank, 668 F. Supp. 2d 816, 823 (E.D. La. 2009).

La. Civ. Code art. 2642 (“All rights may be assigned, with the exception of those pertaining to obligations
that are strictly personal. The assignee is subrogated to the rights of the assignor against the debtor.”).
157

158

La. Civ. Code art. 2645.

159

KeyBank Nat. Ass'n v. Perkins Rowe Associates, LLC, 823 F. Supp. 2d 399, 406 (M.D. La. 2011).

160

La. Civ. Code art. 2642, comment (b).

161

Matsushita Elec. Indus. Co., 475 U.S. at 586. See also, e.g., Bank of America, N.A. v. Garden Dist. Pet

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Based on the forgoing, the Court finds that there are no genuine issues of material fact at
issue here. Girod has submitted a valid promissory note, and Levy Gardens has not established
any defenses to their enforcement by a preponderance of the evidence. Levy Gardens signed Note
Two agreeing to pay First NBC $5,126,000.00 by September 26, 2010.162 Girod has submitted
evidence that as of August 28, 2019, the amount due under the Promissory Note totaled
$281,619.51, excluding legal fees and other costs of collection.163 Both Note One and Note Two
state that “[i]f Lender refers this Note to an attorney for collection, or files suit against Borrower
to collect this Note, or if Borrower files for bankruptcy or other relief from creditors, Borrower
agrees to pay Lender’s reasonable attorneys’ fees in an amount not exceeding 25.000% of the
principal balance due on the loan.”164 Levy Gardens has admitted that there is an outstanding
balance due on the Promissory Note165 and has not submitted any evidence to contradict Giord’s
calculation of the amount due under the Promissory Note. Therefore, this Court finds that
summary judgment in favor of Girod is warranted. Levy Gardens shall pay Girod all sums due
under the Promissory Note, including attorneys’ fees, to be established by separate motion.
Furthermore, the Court finds that the undisputed facts in the record indicate that
the security interest created by the MIM is enforceable, and summary judgment is warranted in
favor of Girod on this issue as well.166

Hotel, Inc., No. 15-1386, 2016 WL 952250, at *5 (E.D. La. Mar. 14, 2016) (Vance, J.) (applying Louisiana law and
granting summary judgment in favor of plaintiff where defendant did not challenge validity of security interest).
162

Rec. Doc. 134-6.

163

Rec. Doc. 134-4 at 5.

164

Rec. Docs. 134-5 at 2, 134-6 at 2.

165

Rec. Doc. 85.

166

Matsushita Elec. Indus. Co., 475 U.S. at 586 . See also, e.g., Bank of America, N.A. v. Garden Dist. Pet
Hotel, Inc., No. 15-1386, 2016 WL 952250, at *5 (E.D. La. Mar. 14, 2016) (Vance, J.) (applying Louisiana law and
granting summary judgment in favor of plaintiff where defendant did not challenge validity of security interest).

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IV. Conclusion
Girod has produced a valid promissory note executed by Levy Gardens. Levy Gardens does
not dispute the validity of the promissory note. Moreover, Levy Gardens has not established any
defense to payment by a preponderance of the evidence and does not dispute the amount due to
Girod under the promissory note. Therefore, this Court finds that summary judgment in favor of
Girod is warranted. Levy Gardens shall pay Girod all sums due under the Promissory Note,
including attorneys’ fees, to be established by separate motion. Furthermore, the Court finds that
the undisputed facts in the record indicate that the security interest created by the MIM
is enforceable, and summary judgment is warranted in favor of Girod on this issue as well.
Accordingly,
IT IS HEREBY ORDERED that Girod LoanCo, LLC’s (“Girod”) “Motion for Summary
Judgment”167 is GRANTED.
IT IS FURTHER ORDERED that Girod shall submit a proposed judgment, including
all sums due under the Promissory Note, within fourteen days of this Order. Girod shall also file
a motion regarding attorneys’ fees and costs within fourteen days of this Order.
NEW ORLEANS, LOUISIANA, this 12th day of December, 2019.
_____

_________________________________
NANNETTE JOLIVETTE BROWN
CHIEF JUDGE
UNITED STATES DISTRICT COURT

167

Rec. Doc. 134.

21