Justia Louisiana Supreme Court Opinion Summaries

Esplanade Properties Corporation, a subsidiary of R.H. Macy & Co., owned the Macy’s Parcel in Kenner, Louisiana. In 1992, while Esplanade Properties was under bankruptcy protection and subject to an automatic stay, Jefferson Parish assessed ad valorem taxes for that year. In 1993, the Sheriff conducted a tax sale for nonpayment of those taxes, but the sale was later nullified because it occurred during the bankruptcy stay. For nearly two decades, the Parish took no action to collect the 1992 taxes. After subsequent transfers, the property was acquired by Esplanade Mall Realty Holding, LLC, which in 2018 received notice of a large sum due for past taxes, including the 1992 taxes, interest, and costs. The company disputed the collectibility of the old taxes, citing a statutory three-year limitation on tax sales.The 24th Judicial District Court initially dismissed the suit on procedural grounds, and the Louisiana Fifth Circuit Court of Appeal affirmed. The Louisiana Supreme Court reversed and remanded. While proceedings continued, the property was sold to Pacifica Kenner, LLC, which was substituted as plaintiff. The trial court ultimately ruled that La. R.S. 47:2131—which prohibits tax sales for taxes more than three years overdue—was unconstitutional because it conflicted with Louisiana constitutional provisions regarding tax collection and prescription. The trial court denied declaratory relief to the plaintiff.The Supreme Court of Louisiana reviewed the case and chose to avoid the constitutional issue, finding it unnecessary to resolve the dispute. Interpreting the relevant statutes, the court concluded that the Sheriff was required to include all statutory impositions, including the 1992 taxes, interest, and costs, in the 2020 tax sale price. The court held that the redemption price for the property must likewise include these amounts. The judgment was reversed, rendered, and remanded to the trial court to calculate the redemption price consistent with this interpretation. View "ESPLANADE MALL REALTY HOLDINGS, LLC VS. LOPINTO" on Justia Law

Baker Sales, Inc. (“BSI”) obtained two loans from Newtek Small Business Finance, Inc. (“Newtek”) which were secured by mortgages on BSI’s commercial property. Robert and Elsa Baker (collectively “the Bakers”) executed agreements unconditionally guaranteeing payment of all amounts owed on the loans. These agreements were secured by conventional mortgages on the Bakers’ home. BSI filed for bankruptcy approximately two years later. Newtek filed a proof of claim in the bankruptcy proceeding for the total amount of the outstanding balance of the loans. The bankruptcy court granted Newtek’s motion to lift the automatic bankruptcy stay. Newtek then filed a petition for executory process in state court against BSI and the Bakers requesting seizure and sale of BSI’s commercial property without the benefit of appraisal. Newtek purchased the seized property at a sheriff’s sale; the bankruptcy case was subsequently closed. Newtek filed the suit at issue here, seeking to foreclose on the Bakers’ home. The trial court issued a judgment preliminarily enjoining the sale of the Bakers’ home and converted the proceeding from executory to ordinary. The Bakers filed a petition seeking a declaration under the Louisiana Deficiency Judgment Act (“LDJA”) that as the underlying debt was extinguished, Newtek could no longer pursue them as sureties. The Louisiana Supreme Court granted certiorari review to determine whether a creditor’s recovery in a deficiency judgment action was barred against a surety when a creditor forecloses on property through a judicial sale without appraisal. Harmonizing the LDJA with the law of suretyship, the Supreme Court agreed with the court of appeal that such recovery was barred. View "Newtek Small Business Finance, LLC v. Baker" on Justia Law