Opinion
NO. 2012 CA 1084
12-21-2012
REGIONS BANK D/B/A REGIONS MORTGAGE v. BERTHA DAKIN RAUCH A/K/A BERTHA DAKIN, BERTHA D. RAUCH, BERTA RAUCH
Patrick D. Breeden New Orleans, Louisiana Appellant / Pro Se Penny M. Daigrepont Eva M. Simkovitz Lindsay M. Graham Metairie, Louisiana and Zara L. Zeringue Covington, Louisiana Counsel for Plaintiff/Appellee Regions Bank d/b/a Regions Mortgage
NOT DESIGNATED FOR PUBLICATION
Appealed from the
22nd Judicial District Court
In and for the Parish of St. Tammany
State of Louisiana
Case No. 2010-13504
The Honorable William J. Crain, Judge Presiding
Patrick D. Breeden
New Orleans, Louisiana
Appellant / Pro Se
Penny M. Daigrepont
Eva M. Simkovitz
Lindsay M. Graham
Metairie, Louisiana
and
Zara L. Zeringue
Covington, Louisiana
Counsel for Plaintiff/Appellee
Regions Bank d/b/a Regions
Mortgage
BEFORE: CARTER, C.J., GUIDRY, AND GAIDRY, JJ.
GAIDRY , J.
This is an appeal of a judgment for sanctions against the Appellant, Patrick Breeden, who was found by the trial court to be in violation of Louisiana Code of Civil Procedure article 863. The motion for sanctions was filed by the Appellee, Regions Bank ("Regions"), who was awarded by the court $937.00 in attorney fees and $295.00 in court costs. For the following reasons, we affirm.
FACTS AND PROCEDURAL HISTORY
The motion for sanctions stems from Mr. Breeden's representation of Ms. Bertha D. Rauch, who was sued by Regions in a petition for executory process. The trial court ruled in favor of Regions in the executory proceeding, and Ms. Rauch's property was seized and sold at sheriff's sale. On behalf of Ms. Rauch, Mr. Breeden filed a motion to enjoin Ms. Rauch's eviction from the property and to return the property to Ms. Rauch after the property had already been sold in the sheriff's sale. The court granted Regions's exception of res judicata against Ms. Rauch and denied her motion for injunction.
For a more detailed factual history of the underlying case, see Regions Bank d/b/a Regions Mortgage v. Bertha Dakin Rauch a/k/a Bertha Dakin, Bertha D. Rauch, Berta Rauch, 2012 CA 0232, 22nd Judicial District Court docket number 2010-13504.
On November 2, 2011, Mr. Breeden filed a suspensive appeal on Ms. Rauch's behalf, in which Mr. Breeden wrote, "Because the Judgment of Appeal is not for a sum of money... the amount of the judgment should be -0- (zero)." Regions filed an objection to Ms. Rauch's motion for suspensive appeal on November 7, 2011, specifically objecting to the language quoted supra and the lack of an appeal bond accompanying the motion. In response, Mr. Breeden on behalf of Ms. Rauch filed a reply to the objection on November 9, 2011, in which he stated that the United States Department of Agriculture, Rural Development ("USDA") had purchased Ms. Rauch's property for $68,863.14, which Ms. Rauch then owed to USDA, and that Regions misled the court by withholding this information and falsely stating that it had purchased the property in the sheriff's sale. Mr. Breeden argued that USDA, and not Regions, is the proper party to raise an objection to the motion for suspensive appeal. Mr. Breeden attached a letter from USDA to Ms. Rauch, dated August 15, 2011, in support of his statements.
In a sur-reply filed November 9, 2011, Regions stated that it was Mr. Breeden who was making misrepresentations to the court as to who owned the property, when a cursory review of the St. Tammany Parish property records and tax records of the St. Tammany Parish Assessor would show that Regions owned the property. Regions stated the USDA letter merely identified it as the guarantor of the loan to Ms. Rauch from Regions, and advised Ms. Rauch that her debt of $68,863.14 to USDA remained outstanding. Regions filed the motion for sanctions against Mr. Breeden on November 14, 2011, for intentionally misstating facts to the court when he stated that Regions "failed to tell the Court in its Opposition that it had already sold the property" and Regions is "not the proper party to object." Regions accused Mr. Breeden of using the USDA letter as proof of its ownership of the subject property when it in no way purports a transfer of title. Finally, Regions states that Mr. Breeden's actions and statements resulted in frivolous litigation which wasted the time and money of all parties involved, including the trial court.
On November 21, 2011, the court ordered that a suspensive appeal bond be set in the amount of $6,700.00. On January 27, 2012, a motion to convert the appeal to devolutive was subsequently filed by Ms. Rauch. The judgment for sanctions against Mr. Breeden was rendered on March 6, 2012. Mr. Breeden filed a pro se suspensive appeal on the judgment for sanctions in the instant case on March 19, 2012.
ASSIGNMENTS OF ERROR
Mr. Breeden cites ten assignments of error, but they are all summed up within his first two: whether the trial court abused its discretion, and whether the trial court was clearly wrong in its holding.
STANDARD OF REVIEW
In La.C.C.P. art. 863 cases, the standard of review by the appellate court, often referred to as the abuse of discretion standard, is nothing more or less than the manifestly erroneous criteria used by the trial court in its factual findings. First American Bank & Trust v. First Guar. Bank, 615 So.2d 1060, 1063-64 (La. App. 1 Cir. 1993).
DISCUSSION
In determining whether the trial court abused its discretion and was manifestly erroneous in its ruling on Mr. Breeden's representations to the court, we follow the example of the Louisiana Supreme Court in the case In re Zohdy, 2004-2361 (La. 1/19/05), 892 So.2d 1277, where the attorney in question was sanctioned for failing to conduct any sort of factual or legal investigation before he filed his pleadings and appeal. Id. at 1288-89. Furthermore, the attorney was found to have made false statements under oath concerning the cause of his client's husband's death in an effort to obtain attorney fees, and he was found to have filed false pauper pleadings on behalf of his client. Id. at 1289. As a result of these findings, the attorney was sanctioned by the court. Id. We find a similar factual scenario in the instant case, where Mr. Breeden is accused of presenting false information to the court concerning the ownership status of Ms. Rauch's property, where the actual status could have been easily uncovered by a cursory review of St. Tammany Parish's property records or tax records. The supposed underlying cause for Mr. Breeden's misrepresentation was pecuniary, as in Zohdy, since he attempted to avoid posting a bond for a suspensive appeal.
Specifically, the motion for sanctions complains that Mr. Breeden lied when he accused Regions of failing to tell the court that the property had already been sold prior to the appeal being taken. Therefore, we must first determine from the record if Mr. Breeden's allegation is indeed false. Mr. Breeden uses in support of his claim the USDA letter, which is styled "chargeoff notification" in its heading. It is addressed to Ms. Rauch and lists an amount owed by her to USDA for its guarantee of her loan from Regions. Nowhere in the letter is it purported that USDA purchased the property or is the new owner of the property, and nowhere does it aver to a sale of the property from Regions to USDA. Mr. Breeden did not present any title recorded in the St. Tammany Parish public records showing USDA as the owner of the property. In order for Mr. Breeden to have at least a justification for stating that USDA was the owner of the property, there must be in existence a deed translative of title from some entity to USDA. See Montz v. Theard, 2001-0768, p. 7 (La. App. 1 Cir. 2/27/02), 818 So.2d 181, 186.
In the petition for executory process, the subject property is described as "situated in Section 12, Township 7 South, Range 11 East in Red Gap Acres Subdivision, Parish of St. Tammany and designated as Lot 15, Block 6." In the letter presented by Regions from the St. Tammany Parish Assessor, Regions is shown as the payor of property tax for the year 2011 of a piece of property described as Lot 15, Block 6, Red Gap Acres. The Assessor's letter further provides book and instrument numbers which likely refer to an instrument recorded in the St. Tammany public records, but this instrument, whatever it may be, is not included in the record. What we can be certain of is that the property described in the petition for executory process and the Assessor's letter is one and the same, and in the Assessor's letter, Regions is listed as the taxpayer of the property in 2011, not USDA. We believe that the ownership of this property was easily discoverable, especially for an attorney of considerable experience such as Mr. Breeden, but that he simply did not do so. He instead put forth a letter that is in no way indicative of the ownership of the property in question, but held it out to be proof of ownership when he knew in fact that it was no such thing.
Only the trial court has the authority to impose sanctions for violation of the pleading certification requirements; the court of appeal's authority is limited to awarding damages solely for frivolous appeal. The sanction article, La.C.C.P. art. 863, relating to the signing of pleadings is intended to be used only in exceptional circumstances, and when there is even the slightest justification for the assertion of a legal right, sanctions are not warranted. Failure to prevail does not trigger an award for sanctions. Only when the evidence is clear that there is no justification for the assertion of a legal right, should sanctions be considered.
Curole v. Avondale Industries, 2001-1808 (La. App. 10/17/01), 798 So.2d 319, 322, citations omitted.
We can only affirm the trial court's award of sanctions if there is no justification whatsoever for the false or frivolous statements in the pleadings filed by Mr. Breeden. As stated, we find Mr. Breeden's assertion that the Regions was aware that USDA owned the subject property prior to the appeal was false, and that he either knew or should have known that the assertion was false. The false assertion appears in Ms. Rauch's reply to Region's objection to her motion for a suspensive appeal, and that pleading is signed by Mr. Breeden in two places, once at the signature line and again under the certificate of service. Because there is no evidence of Mr. Breeden doing even a nominal search of the public records to verify that USDA owned the property, his statements go beyond simply being mistaken or incorrect. These false statements of Mr. Breeden were directed to achieve a pecuniary goal for his client, which was to avoid posting a suspensive appeal bond, and in turn led to unnecessary litigation and unnecessary cost. The actions of Mr. Breeden follow very closely to the actions of the attorney in Zohdy, and we do not think the trial court was manifestly erroneous or abused its discretion when it ruled to sanction Mr. Breeden.
In his original brief, Mr. Breeden uses La.C.C. art. 3048 as support that when USDA paid off Region's loan to Ms. Rauch, it became the owner by operation of law. This certainly cannot be true. Article 3048 states, "The surety who pays the principal obligation is subrogated by operation of law to the rights of the creditor" (Emphasis added) The article contemplates a surety assuming a creditor's rights and not an owner's rights. A creditor's rights are rights of reimbursement, and it is reimbursement to which a surety is entitled from an obligor. See First City Bank v. 740 Esplanade Ave., 611 So.2d 715, 717 (La. App. 4 Cir. 1992). Article 3048 is furthermore included in Title XVI of the Civil Code, which deals with suretyship and has no relation whatsoever to ownership. Mr. Breeden provided no legal basis as to how the rules of suretyship can be construed to the rules of ownership, because no such legal basis exists.
CONCLUSION
We find Mr. Breeden's statements complained of in the motion for sanctions to be deliberately false with no legal justification. Mr. Breeden, through his misrepresentations to the court, created frivolous and unnecessary litigation for the purpose of saving his client from posting a bond. Art. 863 states that an attorney's signature on a pleading is effective as a certificate that (in Mr. Breeden's case) he is not attempting to harass, cause unnecessary delay or cost in litigation, and that each claim or legal assertion is warranted by law, not frivolous, and supported by evidence after a reasonable opportunity for further investigation or discovery. The trial court found Mr. Breeden's actions to be woefully deficient in these respects, and we conclude that the court's finding is not manifestly erroneous or clearly wrong.
DECREE
The judgment for sanctions by the 22nd Judicial District Court against Patrick Breeden, counsel for Bertha D. Rauch, is affirmed. All costs of this appeal are assessed to the Appellant, Patrick Breeden.
AFFIRMED.