First NBC Bank v. Levy Gardens Partners 2007, LP

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).

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.

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.

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.

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

“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.

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).

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.

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

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 non-

moving 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)).

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.

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.

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.

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.

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.

123 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.

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.”).

125 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).

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.

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.

139 “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. § 10:3-

308.

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.

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.

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).

157 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.”).

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

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).

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”!®’ 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

'67 Rec. Doc. 134.

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