Opinion
Civil Action No. 99-0294 SECTION "N"
May 15, 2000
ORDER AND REASONS
Before the Court is plaintiff Asean Homes, Inc.'s Motion for Summary Judgment. For the following reasons, plaintiffs Motion for Summary Judgment is GRANTED.
BACKGROUND
This dispute arises out of six promissory notes executed by defendant. Miller in favor of plaintiff Asean Homes, Inc. ("Asean Homes"). Between April 8, 1993 and April 26, 1995, plaintiff and defendant entered into a series of agreements under which plaintiff agreed to loan Miller and/or his company sums of money totaling $265,000.00. The amounts of the six promissory notes executed in favor of plaintiff by defendant Miller are as follows: $100,000.00 on April 8, 1993, $40,000.00 on June 30, 1993, $75,000.00 on December 4, 1993, $20,000.00 on January 14, 1994, $10,000.00 on April 26, 1995, and $20,000.00 on April 26, 1995. Each note evidencing a loan provides for an interest rate of 4% and for payment of 25% of principal and interest as attorney's fees. With the exception of the June 30, 1993 note, each demand note is "payable on or before six (6) months from date of this promissory note." Miller signcd four promissory notes personally, but signed the first two promissory notes as president of his company, Legend Financial Group, Inc. ("Legend"). Miller also signed a Continuing Guaranty on July 2, 1993, however, under which he is personally liable for $60,000.00 of the first $100,000.00 note drawn by Legend. Miller also signed an Acknowledgment of Debt on that same date, under which he is personally liable for the entire $40,000.00 note drawn by Legend.
The note of June 30, 1993 specifies no date on which the note becomes due and payable. The note remains, however, a demand note.
On January 28, 1999, plaintiff brought suit against Miller to collect on the outstanding promissory notes. Plaintiff claims that no payments have been made to satisfy any of the promissory notes. Plaintiff seeks $225,000.00 in principal, 4% interest from the date of each of the six promissory notes, attorney's fees in the amount of 25% of principal and interest, and costs. Plaintiff now moves for summary judgment.
Plaintiff also brought suit originally against defendant Charles A. Ramos, Miller's partner, seeking $60,000.00. On April 28, 2000, however, Asean Homes voluntarily dismissed its claims against Ramos for inability to effect service of process. Thus, Asean Homes' claims remain solely against Miller.
STANDARD OF REVIEW
Summary Judgment is proper if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A genuine issue of fact exists where the evidence is such that a reasonable jury could return a verdict for the non-moving party.See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The party seeking summary judgment bears the burden of demonstrating an absence of evidence to support the non-movant's case. See Celotex Corp v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). If the opposing party bears the burden of proof at trial, the moving party need not 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. See Saunders v. Michelin Tire Corp., 942 F.2d 299, 301 (5th Cir. 1991). To oppose a motion for summary judgment, the non-movant must set forth specific facts to establish a genuine issue of material fact, and cannot merely rest on allegations and denials. See Celotex, 477 U.S. at 324, 106 S.Ct. at 2552. Factual controversies are to be resolved in favor of the non-moving party. See Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
LAW AND ANALYSIS
Plaintiff asserts that the total due by Miller under the six promissory notes, continuing guaranty and debt acknowledgment is $265,000.00, plus interest, attorney's fees and costs. Because no payments have been made by Miller, plaintiff argues that this Court should enter summary judgment in its favor. In support of its argument, plaintiff offers copies of the promissory notes, continuing guaranty and debt acknowledgment, all signed by Miller, and affidavit testimony of Nicholas Popich, owner of Asean Homes, Christopher Odient, president of Asean Homes, as well as affidavit testimony of Marian Livaudais, Asean Homes' legal counsel.
Popich states that demand for payment was made on Miller. The affidavits of Livaudais and Popich also state that in April; 1995, Miller acknowledged that several of the notes were due and payable, and further state that Miller promised to pay such notes at the completion of one of two projects. Livaudais states that in June, 1995, Miller again promised to pay the balance of the notes upon completion of his project. The affidavit of Odient attests to the amounts and dates of the six promissory notes in question, and further attests to the fact that Asean Homes has received no payment from Miller in satisfaction of the notes.
The affidavits refer to the notes of April 8, 1993, December 4, 1993, and January 14. 1994.
In his answer, Miller asserted several defenses. Miller states that the obligations upon which the notes were made have been satisfied and extinguished. In the alternative, Miller claims that the obligations have been diminished or reduced. Miller also contends that plaintiff and/or plaintiffs agents have converted sums and moneys intended for Miller's own use. Now, in opposition to plaintiffs Motion for Summary Judgment, Miller specifically claims that the monies paid by Asean Homes totaling $265,000.00 were fees and advances to cover Legend's operating expenses and services rendered by Miller in development of an independent power plant in Malaysia, and thus the notes were never intended to be loans. In support of his opposition, Miller submits his own affidavit testimony and the affidavit testimony of Mohammad Suhaimi Abdullah, managing director of a company involved in the power plant project. Miller claims that negotiations took place during project planning with Brian Chang, part owner of Asean Homes at the time, and that Chang and Popich promised Miller that "all would be forgiven" despite the executed promissory notes. Specifically, Miller asserts that the notes would be torn up when the project came to completion or terminated in cancellation. Miller further asserts that the notes were executed only "as a formality" for U.S. tax purposes. Finally, Miller asserts that during the course of the project, he was promised a sum of $400,000.00, paid through another company of Popich, and that Popich has never paid the $400,000.00 sum to Miller. Overall, Miller contends that the money transferred from Asean Homes to Miller was never intended to constitute a loan, nor was repayment of such monies contemplated by the parties before the Court, and as such, because genuine issues of material fact exist as to whether the monies advanced were loans, summary judgment should be denied. The Court also notes that Miller's opposition asserts, for the first time, that the notes sued upon have prescribed.
The Court notes that it is uncontested that Abdullah is not an agent of Asean Homes. Furthermore, Abdullah's affidavit is not sworn under the seal of a notary public.
The Court concludes that Miller's arguments are best summarized as an attempt to establish that the true intent of the parties is not apparent from the face of the promissory notes and accompanying agreements. Miller attempts to convince the Court to look outside the notes and make an inquiry into the surrounding facts and circumstances at the time of the agreements. Moreover, Miller attempts to establish that the notes are simulations under Louisiana law in that the parties intended the notes to have effects between them other than the effects necessitated by the written terms of the notes. See La. Civ. Code arts. 2025 2027. Miller fully admits that "no payments, either principal or interest, were made on any of the notes."
Under Louisiana law, "[w]hen the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent." La. Civ. Code art. 2046. Here, the Court finds that the terms of the notes are clear and explicit, and thus no further interpretation may be made by the Court to search for the intent of the parties. Further, "[p]arol evidence is not admissible to show a prior or contemporaneous agreement to vary the terms of a note in ordinary form." Central Bank v. Simmons, 595 So.2d 363, 367 (La.Ct.App. 2d Cir. 1992), superseded on other grounds, Reading Bates Constr. Co. v. Baker Energy Resources Corp., 698 So.2d 413 (La.Ct.App. 3d Cir. 1997); see also Bossier Orthopaedic Clinic v. Durham, 747 So.2d 731, 735 (La.Ct.App. 2d Cir. 1999). "Parol evidence is admissible to show that a written agreement was incomplete and not intended by the parties to exhibit the entire agreement." United Investors Life Ins. Co. v. Alexander, 662 So.2d 831, 833 (La.Ct.App. 2d Cir. 1995). This scenario is not presented by the case at hand. Rather, as a matter of law, the Court finds that the intent of the parties is clearly discernable from within the four corners of the notes, and thus it is both unnecessary and unlawful of the Court to look beyond the written terms of the notes to the facts and circumstances surrounding their execution in order to determine the true intent of the parties. The Court finds that the intent of Asean Homes to loan Miller sums of money totaling $265,000 is clear from the face of the notes and accompanying agreements, and further finds that Miller has failed to satisfy his burden of coming forward with specific facts sufficient to establish a genuine issue of material fact. Miller cannot merely rest on allegations and denials. Miller's assertions of oral agreements in conflict with the written promissory notes are not admissible as parol evidence when the language of the notes is clear and unambiguous. Thus, in light of the explicit terms of the notes, and the failure of Miller to establish ambiguity such that parol evidence is admissible to vary the terms of a written agreements, after a thorough review of the evidence, the Court finds that there exists no genuine issue of material fact as to whether the monies transferred from Asean Homes to Miller under the terms of the six promissory notes at issue were intended to be loans subject to repayment. The evidence simply does not support a mutual agreement that the monies transferred from Asean Homes to Miller were not to be repaid.
As to the issue of prescription, the Court "should resolve any doubts regarding a peremptory exception by overruling the exception and allowing the litigant her day in Court." Schoen v. Walling, 728 So.2d 982, 985 (La.Ct.App. 2d Cir. 1999). With this in mind, "prescriptive statutes are strictly construed against prescription and in favor of the obligation sought to be extinguished." Id. It is true that under Louisiana law, "[a]ctions on instruments, whether negotiable or not, and on promissory notes, whether negotiable or not, are subject to a liberative prescription of five years." La. Civ. Code art. 3498. See also La. Rev. Stat. § 10:3-118 (addressing demand notes) (stating "if demand for payment is made to the maker of a note payable on demand, an action to enforce the obligation of a party to pay the note must be commenced within five years after the demand. If no demand for payment is made to the maker, an action to enforce the note is barred if neither principal nor interest on the note has been paid for a continuous period of five years."). Prescription commences to run from the date on which payment is exigible. See id. The notes at issue are demand notes, and thus are payable on the demand of the note holder. Prescription may be interrupted, however, upon acknowledgment of a debt, so long as the acknowledgment is specific and expressed in clear and certain, direct terms. See La. Civ. Code art. 3464 (stating "Prescription is interrupted when one acknowledges the right of the person against whom he had commenced to prescribe."); Smith v. McKeller, 638 So.2d 1192, 1197 (La.Ct.App. 1st Cir. 1994); Dryades Savings Loan Ass'n v. Miller, 593 So.2d 841, 844 (La.Ct.App. 4th Cir. 1992). Such an acknowledgment is considered recognition by the debtor of the existence of the debt.
A defendant pleading prescription bears the burden of proving it. See Schoen, 728 So.2d at 985. When a cause of action is prescribed on the face of the petition, however, the plaintiff has the burden of showing how the claim has not prescribed. See id. Here, the Court finds that plaintiff has produced evidence sufficient to establish that Miller acknowledged his indebtedness to Asean Homes. Both Popich and Livaudais testify not only to Miller's acknowledgment of indebtedness, but also to Miller's promise to pay the demand notes at the completion of his project. Moreover, Livaudais testifies that Miller promised to pay on two separate occasions. More importantly, not only does Miller fail to deny having made acknowledgment in his opposition, he makes no denial in his affidavit, as well. Miller's affidavit merely states that he informed Livaudais on at least one occasion that the notes were a formality "as there was no requirement that the money be repaid." Said statement does not, however, set forth a specific fact to raise a genuine issue of material fact as to whether Miller did not acknowledge his debt on two specific dates. The Court believes that Miller's allegation that it is unreasonable to assume that he acknowledged that certain notes were due and payable during conversations with Popich and Livaudais because he was under the assumption that his agreements with Asean Homes did not require repayment of the monies advanced is nebulous, at best. Miller's blatant failure to deny acknowledgment establishes plaintiffs claim that Miller acknowledged the debts at issue. Thus, because Miller fails to rebut plaintiffs evidence of his acknowledgments of debt, and such acknowledgments serve to interrupt prescription, the applicable five-year prescription period does not bar plaintiffs collection of the notes at issue.
Finally, the Court addresses Miller's assertion that Popich has retained a sum in the amount of $400,000.00 due to Miller and thus any amounts due under the notes are extinguished. Other than Miller's own self-serving affidavit, the Court has no evidence before it to indicate the existence of an agreement under which Miller was to receive $400,000.00, nor does the Court find evidence to establish that Popich received this sum of money or that Popich has refused to transfer said sum to Miller. In the absence of such evidence, the Court is not convinced of the merit of Miller's defense. Summary judgment is therefore appropriate in the amount of $225,000.00 plus interest and the amount of attorney's fees for which the six promissory notes provide. Accordingly,
IT IS ORDERED that plaintiffs Motion for Summary Judgment is hereby GRANTED.