FORECLOSURE FUNDAMENTALS

&

THE USE OF IMAGED DOCUMENTS

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By:

Robert A. MathisNewman, Mathis, Brady & Spedale

212 Veterans Blvd.Metairie, LA 70005

(504) 837-9040rmathis@newmanmathis.com

2008 Bank Counsel ConferenceNovember 14, 2008

Table of Contents

I. Venue for Executory Proceedings . . . . . . . . . . . . . . . . . . . . . . 1

II. Authentic Evidence and Certified Copies . . . . . . . . . . . . . . . . 2

III. Proof of Variable Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

IV. Correction of Errors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

V. Injunction/Appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

VI. Conversion to Ordinary Proceedings . . . . . . . . . . . . . . . . . . . 25

VII. Notice of Seizure and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

VIII. Proceedings Against Representative . . . . . . . . . . . . . . . . . . . 31

IX. Keeper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

X. The Appraisal Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

XI. Rights of the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

XII. The Sheriff's Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

XIII. Delivery of Possession to Purchaser . . . . . . . . . . . . . . . . . . . 45

XIV. Movable Property - UCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

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I. VENUE FOR EXECUTORY PROCEEDINGS

LSA-C.C.P. Art. 2633. Venue

An executory proceeding to enforce a mortgage or privilege may be brought either in the parishwhere the property is situated, or as provided in the applicable provision of Article 42 only.

LSA-C.C.P. Art. 80. Action involving immovable property

A. The following actions may be brought in the parish where the immovable property is situatedor in the parish where the defendant in the action is domiciled:

(1) An action to assert an interest in immovable property, or a right in, to, or against immovableproperty, except as otherwise provided in Article 72;

(2) An action to partition immovable property, except as otherwise provided in Articles 81, 82,and 83; and

(3) An action arising from the breach of a lease of immovable property, including the enforcingof a lessor's privilege or seeking the payment of rent. The venue authorized by this Subparagraphshall be in addition to any other venue provided by law for such action.

B. If the immovable property, consisting of one or more tracts, is situated in more than oneparish, the action may be brought in any of these parishes.

C. Any action by the sheriff after rendition of judgment shall be by the sheriff of the parish inwhich the immovable property is situated; however, if the immovable property, consisting of oneor more tracts, is situated in more than one parish, the action may be brought by the sheriff ofany of the parishes in which a portion of the immovable property is situated.

D. Any action to revoke a donation of immovable property shall be brought in the parish inwhich the property is located. If the property is located in more than one parish, the action maybe brought in any one of them. When such an action is filed a notice of pendency shall be filed inaccordance with the provisions of Article 3751.

Oak Tree Savings Bank v. Creighton Construction Co., Ltd. 556 So.2d 117 (La.App. 4Cir. 1990). This action involved foreclosure of a mortgage encumbering propertiessituated in two different parishes. Question: In which parish must the executory processbe instituted. Held: Under LSA-C.C.P. Art. 80 (B), executory proceedings may beinstituted in either parish.

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LSA-R.S. 13:4111. Venue of executory proceeding against continuous tract of land indifferent parishes

An executory proceeding to enforce a mortgage or privilege affecting the whole of a continuoustract of land situated partly in different parishes, at the option of the plaintiff, may be brought atthe domicile of the defendant, or in any parish where a portion of the tract is situated.

LSA-R.S. 13:4343. Property in two or more parishes; place of sale and advertisement

In all judicial sales, where the property to be sold is situated in two or more parishes, suchproperty may be sold in the respective parishes where it is situated, or all of such property maybe sold in the parish wherein the order of sale issues. In either event the property shall beadvertised for sale in the parishes where situated.

II. AUTHENTIC EVIDENCE AND CERTIFIED COPIES

LSA-C.C.P. Art. 2635. Authentic evidence submitted with petition

A. In order for a plaintiff to prove his right to use executory process to enforce the mortgage,security agreement, or privilege, it is necessary only for the plaintiff to submit with his petitionauthentic evidence of:

(1) The note, bond, or other instrument evidencing the obligation secured by the mortgage,security agreement, or privilege.

(2) The authentic act of mortgage or privilege on immovable property importing a confession of judgment.

(3) The act of mortgage or privilege on movable property importing a confession of judgmentwhether by authentic act or by private signature duly acknowledged.

B. This requirement of authentic evidence is necessary only in those cases, and to the extent,provided by law. A variance between the recitals of the note and of the mortgage or security

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agreement regarding the obligation to pay attorney's fees shall not preclude the use of executory process.

Slidell Building Supply, Inc. v. I.D.S. Mortgage Corporation, 273 So.2d 343 (La. App.1 Cir. 1973). Question: Is the hand note the “note...evidencing the obligation secured bythe mortgage...” under Art. 2635(1)? Held: The collateral mortgage is; not the hand note. Thus there is no need to file the hand note as an exhibit to the petition for executoryprocess.

LSA-C.C.P. Art. 2636. Authentic evidence

The following documentary evidence shall be deemed to be authentic for purposes of executory process:

(1) The note, bond, or other instrument evidencing the obligation secured by the mortgage,security agreement, or privilege, paraphed for identification with the act of mortgage or privilegeby the notary or other officer before whom it is executed, with the exception that a paraph is notnecessary in connection with a note secured by a security agreement subject to Chapter 9 of theLouisiana Commercial Laws, [FN1] or a copy of the note, bond, or other instrument evidencingthe obligation certified as such by the notary before whom the act of mortgage, securityagreement, or privilege was executed;

(2) A certified copy or a duplicate original of an authentic act;

(3) A certified copy of any judgment, judicial letters, or order of court;

(4) A copy of a resolution of the board of directors, or other governing board of a corporation,authorizing or ratifying the execution of a mortgage on its property, certified in accordance withthe provisions of R.S. 13:4103;

(5) A security agreement subject to Chapter 9 of the Louisiana Commercial Laws, which neednot be executed or acknowledged before a notary.

(6) A certified copy of the limited liability company's articles of organization filed with thesecretary of state or a written consent or extract of minutes of a meeting of the persons specifiedin R.S. 13:4103.1, in each case authorizing or ratifying the execution of an act of mortgage on itsproperty and in the form required by R.S. 13:4103.1, certified as provided in R.S. 12:1317(C).

(7) A certified copy of the contract of partnership authorizing the execution of an act ofmortgage filed for registry with the secretary of state.

(8) All other documentary evidence recognized by law as authentic.

Hibernia National Bank in New Orleans v. Con-Agg Equipment Leasing Corporation,478 So.2d 976 (5 Cir. 1985). This matter involved a challenge of a resolution authorizingexecution of the mortgage being foreclosed. The resolution bore the original signature of

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the corporate secretary. Held: The original resolution certified by and bearing theoriginal signature of the corporate secretary and submitted in support of executoryprocess is to be deemed authentic under LSA-R.S. 13:4103.

Whitney National Bank v. Blueridge, Inc. 606 So.2d 902, (La. App. 4 Cir. 1992).Corporate resolution authorizing the execution of collateral mortgage and note oncorporate property was sufficient to support executory process with respect to collateral,even though resolution was signed subsequent to the execution of the collateral mortgageand note.

Aetna Life Insurance Company v. Lama Trusts, 674 So.2d 1086, 28,328 (La.App. 2Cir. 5/8/96). Question: Must an act of assignment of the note be paraphed foridentification with the note itself? In this matter, the act of assignment specifically statedthat the note was paraphed for identification therewith. Held: Finding that the note andmortgage were extensively described in the act of assignment, the Court held that thevariance was not material.

LSA-C.C.P. Art. 2637. Evidence which need not be authentic

A. Evidence as to the proper party defendant, or as to the necessity for appointing an attorney atlaw to represent an unrepresented defendant, or of any agreement to extend or modify theobligation to pay or of written notification of default, or of the breach or occurrence of acondition of the act of mortgage, or of the security agreement, or privilege securing theobligation, or of advances made by the holder of a collateral mortgage note or note for futureadvances, or of an obligation secured under Chapter 9 of the Louisiana Commercial Laws, neednot be submitted in authentic form. These facts may be proved by the verified petition, orsupplemental petition, or by affidavits submitted therewith.

B. If a mortgage sought to be enforced secures the repayment of any advances for the payment oftaxes, insurance premiums, or special assessments on, or repairs to, or maintenance of, theproperty affected by the mortgage or security agreement, the existence, date, and amount ofthese advances may be proved by the verified petition, or supplemental petition, or by affidavitssubmitted therewith.

C. If a mortgage sought to be enforced is a collateral mortgage on movable or immovableproperty, or if the security agreement sought to be enforced secured multiple or other and futureindebtedness of the debtor, the existence of the actual indebtedness may be proved by theverified petition or supplemental petition, with the handnote, handnotes, or other evidencerepresenting the actual indebtedness attached as an exhibit to the petition.

D. Evidence of a name change, merger, purchase and assumption, or similar disposition oracquisition, of a financial or lending institution may be proved by a verified petition or

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supplemental petition, or by an affidavit or affidavits submitted therewith by an appropriateofficer of the successor entity.

E. Evidence of the name change or death of any party need not be submitted in authentic form,but may be proved by verified petition or supplemental petition, or by affidavit submitted therewith.

Whitney National Bank v. Blueridge Inc., 606 So.2d 902 (La. App. 4 Cir. 1992). TheFourth Circuit also held that, in a collateral mortgage foreclosure, production of the handnote in proceedings is unnecessary.

Mid-State Homes, Inc. v. Lertrge, 367 So.2d 1230 (La. App. 3 Cir. 1979). Insurancepremiums paid by seizing creditor may be proved by affidavit or verified petitionitemizing specifics such as date, amount and to whom paid. (See LSA, C.C.P. Art. 2637B)

Dixie Savings and Loan Association v Walter, 557 So.2d 1044 (La. App. 4 Cir. 1990). A foreclosing creditor may cancel any endorsement on the note not necessary to its titleunder LRS-R.S. 10:3-207.

Pelican Homestead and Savings Association v. Winston, 517 So.2d 1220 (La. App. 4Cir. 1987). Must attach to the petition for executory process authentic evidence ofprocuration authorizing execution of the mortgage.

Mellon Financial Services Corporation # 7 v. Cassreino, 499 So.2d 1160 (La. App. 5Cir. 1986). Carruth was the original payee of the promissory note sued on. Carruthchanged its name to Mellon. Subsequently, Mellon filed petition for executory processwithout attaching authentic evidence of the name change. Mellon merely plead the namechange by verified petition. Held: Mellon possessed no right to file executoryproceedings without authentic evidence of the name change. Allegation by verifiedpetition is insufficient. But see later amendment to C.C.P. Art. 2637 allowing for proofof name change by verified petition.

Aetna Life Insurance Company v. Lama Trusts, 674 So.2d 1086, 28,328 (La.App. 2Cir. 5/8/96). Question: Must an act of assignment of the note be paraphed foridentification with the note itself? In this matter, the act of assignment specifically statedthat the note was paraphed for identification therewith. Held: Finding that the note andmortgage were extensively described in the act of assignment, the Court held that thevariance was not material.

Bankers Trust Company of California, N.A. v. Cooley, 884 So.2d 594, (La.App. 1 Cir.2004). An assignee filed petition for executory process without authentic evidence of theassignment, which assignee claimed was lost. Held: Injunction granted stopping theforeclosure proceedings.

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Bank of Coushatta v. King, 522 So. 2d 1328 (La. App. 2 Cir. 1988 ). The SecondCircuit held that, in a collateral mortgage situation, the hand note must be filed as anattachment to executory proceedings. However, the Court further held that, in lieu offiling the hand note, plaintiff could have filed an affidavit in compliance with R.S. 6:334.

Moore v. Louisiana Bank and Trust Company 528 So. 2d 606, (La. App. 2 Cir. 1988). “There is no requirement that a bank must file a certificate pursuant to R.S. 6:334. If thebank does comply with R.S. 6:334 that compliance is deemed authentic evidence by lawas allowed in La. C.C.P. Art. 2636(6).”

Asset One, Louisiana, Inc. v. Vulcan Minerals & Energy, Inc., 2002 WL 1303118(E.D.La.) 66 Fed.Appx. 524, 2003 WL 21016527 (C.A.5 (La.)) In order to avail itself ofexecutory process when a note is not paraphed for identification with the mortgage,creditor must follow the provisions of LA R.S. 9:5555.

Moore v. Louisiana Bank & Trust Company, supra. Plaintiff accepted a partialpayment after the institution of executory proceedings. Defendant contended that furtherpursuit of the foreclosure constituted wrongful seizure. Held: The entire amount was dueat filing of executory proceedings. The bank’s substantive right to use executory processwas not defeated by the acceptance of a partial payment.

LSA-R.S. 6:334. Foreclosure of mortgage

In the event of foreclosure by executory process of a mortgage on either movable or immovableproperty in favor of a supervised financial organization, the certificate of any officer thereof,under the seal of the supervised financial organization, certifying as to the amount due on themortgage, the interest rate as applicable, and the maturity thereof by reason of the failure of themortgagor, his assigns, or successors to comply with the obligations imposed on him by the actof the mortgage is authentic evidence of the facts recited in the certificate.

LSA-R.S. 9:4422. Obligations secured by mortgages or privileges; signatures and writingsdeemed authentic for purposes of foreclosure

The following shall apply when foreclosure by executory process is instituted by the transferee,assignee, or pledgee of any negotiable instrument or instrument that would be negotiable but fora limitation of personal liability of the maker or any comaker secured by a mortgage or privilege:

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(1) All signatures of the following persons or entities are presumed to be genuine and no furtherevidence is required of those signatures for the purposes of executory process: endorsers,guarantors, and other persons whose signatures appear on or are affixed to such instrumentsecured by the mortgage or privilege.

(2) The assignment, pledge, negotiation, or other transfer of any obligation secured by amortgage or privilege may be proven by any form of private writing, and such writing shall bedeemed authentic for the purposes of executory process.

(3) The holder of any negotiable instrument or instrument that would be negotiable but for alimitation of personal liability to the maker or any comaker under this Section may enforce themortgage or privilege securing such instrument without authentic evidence of the signatures,assignment, pledge, negotiation, or transfer thereof.

Standard Mortgage Corporation v. Wells, 865 So.2d 93, 2002-0895 (La.App. 4 Cir.10/9/02). Assignee attached its assignment to the suit for executory process. Defendantargued that the assignemnt was not accompanied by authentic evidence of authority forthe said assignment. The court held that attachment of the assignment alone wassatisfactory under LSA-R.S. 9:4422(2) as the transfer of the note can be proved by anyform of private writing.

LSA-R.S. 9:5555. Executory process in the case of notes or other obligations not paraphedfor identification with the mortgage

A. In accordance with Code of Civil Procedure Article 2636(8), there is no requirement that anote or other written obligation secured by a mortgage be paraphed for identification with themortgage in order for the mortgagee to have the right to foreclose under the mortgage utilizingLouisiana executory process procedures. For purposes of executory process, the existence,amount, terms, and maturity of the note or other written obligation not evidenced by aninstrument paraphed for identification with the act of mortgage or privilege may be proved byaffidavit or verified petition.

B. The affidavit or verified petition may be based upon personal knowledge or upon informationand belief derived from the records kept in the ordinary course of business of the mortgagee, thecreditor whose claim is secured by the privilege, or any other person. The affidavit or verifiedpetition need not particularize or specifically identify the records or date upon which suchknowledge, information or belief is based.

C. The affidavit shall be deemed to provide authentic evidence of the existence, amount, terms,and maturity of the obligation for executory process purposes.

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Bankers Trust Company of California, N.A. v. Breaux, 900 So.2d 980, 04-1299(La.App. 5 Cir. 3/29/05). This matter involved an agreement by one mortgage holder tosubordinate to the lien held by another mortgage holder. The subordination relied uponby the foreclosing mortgage holder omitted to state that the foreclosing mortgageholder’s note was paraphed therewith. In fact, the note was so paraphed. Question: Wasthe paraph contained on the note valid? Answer: No. Second Question: Did the invalidparaph on the note defeat mortgage holder’s right to executory process? Held: No. There is no need for a paraph so long as the affidavit or verified petition complies withLSA-R.S. 9:5555 (which actually deals with the paraph of the note with the mortgage).

LSA-R.S. 13:3733. Business records; reproduction by electronic imaging, photographic,photostatic, or miniature photographic process; certification

A. Any business may cause any or all records kept by such business in regular course of itsoperation to be recorded, copied, or reproduced by any electronic imaging, photographic,photostatic or miniature photographic process which correctly, accurately, and permanentlycopies, reproduces or forms a medium for copying or reproducing the original record on a filmor other durable material, and such business may thereafter dispose of the original record,provided that every original record pertaining to any claim, tax, or report due the state ofLouisiana or any of its agencies shall be preserved for five years from the thirty-first day ofDecember of the year in which such claim arose, or such tax or report was due.

B. Any such electronically imaged, photographic, photostatic or miniature photographic copy orreproduction shall be deemed to be an original record for all purposes and shall be treated as anoriginal record in all courts or administrative agencies for the purpose of its admissibility inevidence. An enlargement or facsimile of such reproduction is likewise admissible in evidence ifthe original reproduction is in existence and available for inspection under the direction of the court.

C. For purposes of this Section "business" means and includes each business, industry,profession, occupation and calling of every kind.

D. Whenever any such electronically imaged, photographic, photostatic, or miniaturephotographic copy or reproduction shall be certified with a certificate reading substantially asfollows, it shall be deemed an original or authentic copy of the original record or document forpurposes of its admissibility under Louisiana law, and specifically as authentic evidence forpurposes of Code of Civil Procedure Article 2636:

"STATE OF LOUISIANAPARISH OF _________________________ __________________, Louisiana__________________________________________(DATE)I, _________________________________ do hereby certify that this document is a

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true and correct copy of the original thereof, consisting of ______ page(s),being a reproduction thereof from the records on file with the undersigned,in accordance with Louisiana Revised Statutes, Title 13, Section 3733.__________________________________________NAME:TITLE:ADDRESS:"

LSA-R.S. 13:3733.1. Financial institution records; reproductions; recordkeeping;admissibility into evidence; definitions

A. As used in this Section the following terms shall have the following meanings:

(1) "Financial institution" means every entity organized to engage in the business of bankingpursuant to the laws of the United States, the state of Louisiana, any other state, or the District ofColumbia, including state banks, national banks, savings and loan associations, and all otherentities which lend money or otherwise extend credit and which are supervised by anydepartment, board, agency, or corporation of the United States, the state of Louisiana, any otherstate, or the District of Columbia.

(2) "Record" means any writing, entry, print, instrument, or document evidencing anytransaction or event, including but not limited to books of account, vouchers, documents,agreements, contracts, security agreements, other collateral security documents, checks, and correspondence.

(3) "Reproduce" means to make, generate, produce, or obtain a reproduction.

(4) "Reproduction" means a counterpart, duplicate, or copy, or a durable medium for making acounterpart, duplicate, or copy, produced from the same impression as the original, or from thesame matrix, or produced or obtained by any photographic, photostatic, microfilm, microcard orminiature or microphotographic process, or by any mechanical or electronic recording or re-recording, electronic or optical imaging, chemical process or other process or technique whichaccurately reproduces the original or forms or creates a durable medium for so reproducing theoriginal, including but not limited to computer and other printouts, and counterparts, duplicates,copies, and other output generated or produced by or from an electronic imaging system such ascounterparts, duplicates, or copies produced or obtained from optical disks. A reproduction shallalso mean a substitute check as defined under the federal Check Clearing for the 21st CenturyAct and Regulation CC, 12 CFR 229.2(zz).

B. Any financial institution may reproduce any of its original records used by such financialinstitution during the course of its business activities, and any such financial institution maythereafter destroy the original record in the regular course of its business activities; however, ifthe original record is held by the financial institution in a custodial or fiduciary capacity for or onbehalf of another person or entity, the original record shall not be destroyed without the express

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consent of such other person or entity.

C. Notwithstanding any other statute, rule of law, regulation, ordinance, or other provision to thecontrary, except Subsection G of this Section, each reproduction of a record made pursuant tothis Section shall be considered to be an original of such record for all purposes and shall beadmissible into evidence to the same extent as the original record itself in any judicial,administrative, and other proceedings in all courts, tribunals, and other bodies and in anyproceedings before all boards, bureaus, departments, commissions, and agencies of this state,whether the original record is in existence or not. The introduction of a reproduction does notpreclude introduction of the original record.

D. No destruction or other disposition of any original record by any financial institution in theregular course of its business activities, whether intentionally or unintentionally, shall be deemedto be bad faith on the part of the financial institution under any statute, rule of law, regulation,ordinance, or other provision.

E. Whenever any counterpart, duplicate, or copy or group of counterparts, duplicates, or copiesshall be certified with a certificate reading substantially as follows, each such counterpart,duplicate, or copy shall be a reproduction as defined in this Section and shall be admissible intoevidence as the original record. Except as prohibited in Subsection G of this Section, if theoriginal record would be deemed to be authentic evidence, the reproduction, so certified, shallalso be deemed authentic evidence for all purposes including but not limited to for purposes ofLouisiana Code of Civil Procedure Articles 2631 et seq.

STATE OF __________________________PARISH/COUNTY OF __________________CITY OF ___________________________

I, __________, a representative of __________ (financial institution) do hereby certify that thedocument(s) attached to this certificate, consisting of ___ page(s) is (are each) a true and correctreproduction of the original thereof, being a reproduction made from the records maintained by(financial institution) in the course of its business activities and made in accordance with theprovisions of R.S. 13:3733.1.

___________________________________NAME___________________________________TITLE___________________________________ADDRESS

F. Except as prohibited in Subsection G of this Section, each reproduction shall be an original asdefined in Article 1001 of the Louisiana Code of Evidence, and under any other similar codes ofevidence or other evidentiary law or rule of any other jurisdiction.

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G. (1) A reproduction of a promissory note, negotiable instrument, letter of credit, certificatedsecurity, document of title, or a certificate of title pertaining to a motor vehicle shall not bedeemed to be an original of such record for the following purposes:

(a) Use of the record in executory proceedings as provided in Chapter I of Title II of Book V ofthe Louisiana Code of Civil Procedure, Article 2631 et seq.

(b) Transferring the record.

(c) Presenting the record for payment, acceptance, or honor.

(d) Use of the record in a judicial proceeding or action involving a claim based on such record,unless the original has been lost, stolen, or inadvertently destroyed. However, a reproduction of acheck, as defined in R.S. 10:3-104, that has been destroyed by a financial institution in theregular course of its business activities shall be deemed to be an original of such check in ajudicial proceeding or action involving a claim based on or involving such check. However, asubstitute check, as defined in the federal Check Clearing for the 21st Century Act andRegulation CC, 12 CFR 229.2(zz), may be deemed to be an original of such check in a judicialproceeding or action involving a claim based on or involving such check.

(2) A reproduction of an original record bearing a signature shall not be admissible into evidenceas the original record itself if the signature on the original is omitted from the reproduction.

H. It is further provided that the terms of any record described in Subsection G of this Section,the original of which has been lost, stolen, or inadvertently destroyed, may be enforced and, ifapplicable, a duplicate original of such record reissued, upon compliance with the provisions ofthis Section or compliance with any other applicable laws, rules, or regulations.

I. Notwithstanding any statute, rule of law, regulation, ordinance, or other provisions to thecontrary, reproductions of records, including those described in Subsection G of this Section,shall satisfy all record retention and recordkeeping requirements, whether or not the original ofsuch record is still in existence.

J. It is further provided that if any record specifically described in Subsection G of this Sectioncontains a signature which is made or created by electronic or digital means, such that it is storedin a computer or similar device, any printout or other tangible output readable by sight, shown toreflect the data accurately, shall be deemed an original of such record.

LSA-R.S. 13:4102. Executory process; bearer paper, movable or immovable property,authentic evidence; certification of documents

A. Whenever the holder of bearer paper, such as a note, bond, or other instrument evidencing an

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obligation secured by a mortgage or privilege on movable or immovable property, seeks toforeclose by executory process, all requirements for authentic evidence regarding the transfer,assignment, pledge, or negotiation shall be inapplicable, provided that all other requirements forauthentic evidence have been satisfied.

B. Whenever the holder of a note, bond, or other instrument evidencing an obligation secured bya mortgage or privilege on movable property seeks to foreclose by executory process, thetransfer, assignment, pledge, or negotiation of such document by private act, duly acknowledgedin any manner provided by law, shall be deemed to be authentic evidence and in compliancewith Code of Civil Procedure Article 2636.

C. Whenever the holder of a note, bond, or other instrument evidencing an obligation secured bya mortgage or privilege on movable property approves the sale of the property from one personto another, such approval may be made by private act, duly acknowledged in any mannerprovided by law, and shall be deemed to be authentic evidence and in compliance with Code ofCivil Procedure Article 2636.

D. (1) Whenever the law requires a certified copy of any document, including a photographic,photostatic, or miniature photographic copy or reproduction of such document, for purposes ofexecutory process, a notary public who has the original or a copy of such document on file in hisoffice, custodian of notarial records, or clerk of court shall note on the copy of the document thatit is a correct copy and may include words such as "certified copy", "true copy", or any otherwords which reasonably indicate that the copy of the document is a certified copy, and the copyso certified shall be deemed authentic evidence.

(2) A document containing a certificate reading substantially as follows shall satisfy therequirements of (1) above and shall be deemed authentic:

"STATE OF LOUISIANA __________________, Louisiana

PARISH OF __________________ __________________, (Date)

I, __________________, (Custodian of Notarial Records, Clerk of Court, Notary Public) for theParish of __________________, State of Louisiana, do hereby certify that the attacheddocuments are true and correct copies of __________________, dated the ___ day of__________________, 19___, consisting of ___ pages (executed before, attached to__________________ executed before) __________________ __________________, a NotaryPublic of the Parish of __________________, State of Louisiana, the original or certified copyof which document(s) is on file in my office.

Name __________________

1. Title

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Address"

LSA-R.S 35:323. Central office; preservation of notarial records; permanent volumes

Text effective until January 1, 2009

E. Every living, qualified notary public is authorized to certify true copies of any authentic act orany instrument under private signature hereafter or heretofore passed before him oracknowledged before him, and to make and certify copies, by any method, of any certificate,research, resolution, survey or other document annexed to the original of any authentic actspassed before him, and may certify such copies as true copies of the original document attachedto the original passed before him.

LSA-R.S. 13:4103. Executory process against mortgaged corporation property; proof ofauthority to execute mortgage

A. The following shall be deemed to constitute authentic evidence for purposes of an executoryproceeding to enforce a mortgage, chattel mortgage, or other security agreement against acorporate debtor:

(1) The consent of the shareholders evidenced as provided in R.S. 12:76 authorizing or ratifyingthe granting of such a mortgage, chattel mortgage, or other security agreement.

(2) An extract of the minutes of the meeting of the board of directors or other governing body ofthe corporation, or a written consent by the shareholders or directors of the corporation, signedand certified by the corporate secretary or any assistant secretary, setting forth the resolution orresolutions authorizing or ratifying the granting of such a mortgage or other security agreementor security interest, whether the specific transaction, mortgage, or security agreement or securityinterest is described with particularity, or more general authority is granted or ratified.

(3) A photocopy of the extract of minutes provided in Subsection (2) above, certified either by:

(a) A notary before whom the mortgage, chattel mortgage, or other security agreement waspassed or acknowledged, or

(b) By the custodian of notarial archives for the parish of Orleans if the mortgage, chattelmortgage, or other security agreement, together with a certified copy of the extract of minutes,has been recorded in Orleans Parish, or by the clerk of the district court of any other parish inwhich the mortgage, chattel mortgage, or other security agreement, together with a certified copyof the extract of minutes, has been recorded.

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B. The right of an interested party to question or attack the authority of the purported officer oragent to execute the mortgage is not affected in any manner by the provisions of this Section.

Washington Bank & Trust Company v. Hodge, 495 So.2d 953 (La.App. 1Cir. 1986). This matter involved the assertion by defendant that the mortgage attached to a petitionfor executory process was not properly certified. The mortgage in question contained thestamp of the clerk of court identifying the book and page where the mortgage wasrecorded, but did not contain the words “true copy” or “certified copy.” Held: Themortgage was not properly certified under LSA-R.S. 13:4103.

Hibernia National Bank in New Orleans v. Con-Agg Equipment Leasing Corporation,478 So.2d 976 (5 Cir. 1985). This matter involved a challenge of a resolution authorizingexecution of the mortgage being foreclosed. The resolution bore the original signature ofthe corporate secretary. Held: The original resolution certified by and bearing theoriginal signature of the corporate secretary and submitted in support of executoryprocess is to be deemed authentic under LSA-R.S. 13:4103.

LSA-R.S. 13:4103.1. Executory process against mortgaged or secured limited liabilitycompany property; proof of authority to execute mortgage or security agreement

Any of the following shall be deemed to constitute authentic evidence for purposes of anexecutory proceeding to enforce a mortgage, collateral mortgage, or other security agreementagainst a limited liability company:

(1) A certified copy of the limited liability company's articles of organization filed with thesecretary of state containing a grant of authority to one or more individuals to execute amortgage or security agreement for and on behalf of the limited liability company, whether thespecific transaction, mortgage, or security agreement is described with particularity or moregeneral authority is granted.

(2) A written consent by all of the then members of the limited liability company, or such otherpersons as may have been delegated authority pursuant to R.S. 12:1318(B), signed and certifiedby any person named in the statement provided for in R.S. 12:1305(C)(5), or, if no such personor persons are so named, upon a certificate of a member, if management is reserved to themembers, or a manager, if management is vested in one or more managers pursuant to R.S.12:1312, of the limited liability company, authorizing or ratifying the grant of authority to one ormore individuals to execute a mortgage or security agreement for and on behalf of the limitedliability company, whether the specific transaction, mortgage, or security agreement is describedwith particularity or more general authority is granted or ratified.

(3) An extract of the minutes of the meeting of the then members of a limited liability company,or such other persons as may have been delegated authority pursuant to R.S. 12:1318(B), signed

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and certified by any person named in the statement provided for in R.S. 12:1305(C)(5), or, if nosuch person or persons are so named, signed and certified by a member, if management isreserved to the members, or manager, if management is vested in one or more managers pursuantto R.S. 12:1312, of the limited liability company, setting forth the resolution or resolutionsauthorizing or ratifying the granting of a mortgage or security agreement, whether the specifictransaction, mortgage, or security agreement is described with particularity or more generalauthority is granted or ratified.

LSA-R.S. 13:4104. Variance between act of mortgage and note; correction

The right to an order for executory process shall exist when there is a variance between a notarialact of mortgage and the note or notes issued in connection therewith, when such variance is dueto a clerical error and the fact that such variance is so due is certified on the note or notes or onthe act of mortgage, or both, over the official signature of the notary before whom the mortgagewas passed.

R.S. 44:329. Certified copies admissible in evidence

Certified copies from the record of any deed, bond, mortgage, or other instrument of writingshall be admissible as evidence, and shall have the same force and effect as certified copies ofthe original.

LSA-C.C. Art. 1840. Copy of authentic act

When certified by the notary public or other officer before whom the act was passed, a copy ofan authentic act constitutes proof of the contents of the original, unless the copy is proved to beincorrect.

R.S. 9:2758. Notarial certified copy of lost original

When the original title or record is no longer in being, a copy is good proof, and supplies thewant of the original, when it is certified as being conformable to the record, by the notary whohas received it, or by one of his successors, or by any other public officer, with whom the recordwas deposited and who had authority to give certified copies of it, provided the loss of theoriginal be previously proved.

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LSA-R.S. 9:2759. Lost original, certified copy from public record

When an original title, by authentic act, or by private signature duly acknowledged, has beenrecorded in any public office, by an officer duly authorized, either by the laws of this State, or ofthe United States, to make such record, the copy of such record, duly authenticated, shall bereceived in evidence, on proving the loss of the original, or showing circumstances supported bythe oath of the party, to render such loss probable.

III. PROOF OF VARIABLE RATE

LSA-R.S. 9:3504. Certain types of transactions exempt from the application of the laws onusury and interest upon interest; adjustable rate mortgage loan

D. To further promote the objectives of R.S. 9:3502, to encourage the flow of money into Louisianafor homebuilding, home financing, real estate financing, and business development and to assist thecitizens of Louisiana in obtaining needed financing at affordable terms and cost, adjustable ratemortgage loans are authorized in accordance with the following terms:

(1) An adjustable rate mortgage loan is any loan of money, credit sale, or extension of credit whichprovides that the rate of simple interest charged on the unpaid balance may be adjusted from timeto time during the term of the loan in accordance with the method of adjustment set forth in thepromissory note or other documents evidencing the loan, and which is secured, in whole or in part,directly or indirectly, by a mortgage on leasehold improvements, a mobile home, residential mobile

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home, or immovable property located in this state.

(2) When the adjustable rate mortgage loan is made for the purpose of financing or refinancing amobile home, residential mobile home or a one-to-four family dwelling and when applicable to thetransaction, either the promissory note or other evidence of the loan shall set forth the following:

(a) The contractual index formula or other basis agreed upon, and any alternate or substitutetherefor, upon which changes in the simple interest rate will be based.

(b) The frequency of allowable interest rate adjustments.

(c) Any contractual limitations on interest rate adjustments, such as maximum or minimum interestrates.

(d) The manner and method by which the unpaid balance and, if the loan is to be repaid ininstallments, the manner and method by which installments will be adjusted periodically to reflectadjustments in the interest rate and the effect, if any, on the number of installments or maturity dateof the loan.

(e) The agreement of the parties as to the method by which any changes in the contractual indexwhich are not reflected in a rate adjustment may be carried over to subsequent rate adjustmentperiods, and be implemented to the extent not offset by opposite movement in the index.

(3) Adjustments in the interest rate shall be based upon changes in the contractual index formula orother basis agreed upon as set forth in either the promissory note or other evidence of the loan.While the parties may agree that the increases in the interest rate caused by increases in thecontractual index formula will be made at the option of the lender, notwithstanding any agreementto the contrary, decreases in the interest rate caused by decreases in the contractual index formulashall be implemented at the succeeding adjustment date; provided that no increase or decrease shallbe made which would affect any contractual limitations on interest rate adjustments includingmaximum or minimum interest rates to which the parties have agreed. The parties may agree to useas an index any measurement of interest rates described in either the promissory note or otherevidence of the loan, including, but not limited to, the prime or base lending rate of any national orstate bank as fixed from time to time by its board of directors or management; the federal reservediscount rate in effect from time to time at any federal reserve bank; the average yield to maturityon United States Treasury obligations of any stipulated terms; or any standard or measurementwhich may be authorized or permitted in any regulation or statute, or both, for residential mortgageloans by the Federal Home Loan Bank Board or by the Office of the Comptroller of the Currency,Department of the Treasury, or any other federal department, agency, or board.

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(4) The provisions of a promissory note evidencing an adjustable rate mortgage loan meeting therequirements of this Subsection shall not impair or destroy the negotiability of the promissory note,nor shall such provisions be deemed potestative conditions.

(5) An adjustable rate mortgage loan shall rank from the date the mortgage is recorded as requiredby statute, and the priority of the mortgage and all amounts secured thereby shall not be affected byadjustments in the interest rate, or by the effects of such adjustments.

(6) Proof of changes in the interest rate may be made by affidavit of the lender or the holder of thepromissory note or other evidence of the loan, or by any officer, partner, or employee of the lenderor the holder, if the lender or the holder is not a natural person. Any such affidavit may refer to thecontents of an official government publication. In the event of foreclosure by executory process ofan adjustable rate mortgage loan, such affidavit shall be authentic evidence of the facts recitedtherein. Whenever appropriate, proof may also be made by corporate resolution, or by other writteninstrument. The taking of testimony concerning the content of any affidavit, official governmentpublication, corporate resolution, or other written instrument shall be permitted and shall not beconsidered a violation of the provisions of R.S. 9:3500 or 9:3503 relative to the taking of testimonialproof of the rate of interest.

(7) The provisions of Louisiana Civil Code Art. 1939 shall not apply to adjustable rate loans.

(8) Except as otherwise provided in either the promissory note or other evidence of the loan, uponthe filing of suit for payment of an adjustable rate mortgage loan, the interest rate in effect on thedate suit is filed shall be fixed as the interest rate on the loan thereafter and no further adjustmentin the rate shall be made; provided that, if the loan is thereafter reinstated, the interest rate maythereafter be adjusted as if no judicial demand had been made.

(9) Nothing herein shall be construed as impairing the validity or enforceability of adjustable rateloans made prior to the effective date hereof. All adjustable rate loans made prior to the effectivedate of this Act which are not otherwise specifically prohibited by law shall be valid andenforceable.

(10) Except as otherwise provided herein, the provisions of this Subsection shall only be applicableto the types of mortgage loan transactions defined in Paragraph (1) of this Subsection, including, butnot limited to, loan transactions made pursuant to the Louisiana Consumer Credit Law R.S. 9:3510,et seq. and the Louisiana Motor Vehicle Sales Finance Act R.S. 6:951, et seq.

E. Notwithstanding any law to the contrary, particularly but not exclusively R.S. 9:3500, anobligation secured by a mortgage on immovable property where the mortgagee is the former owner

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of said property, may bear such rate of interest or be discounted at such rate as the parties may agreeupon in writing within the maximum limitations permitted to be charged by federally insuredfinancial institutions under federal law or regulation. The interest rate may be in excess of themaximum rate of conventional interest authorized by law, and as to any such obligation, the claimor defense of usury, or the taking of interest in excess of the maximum rate of conventional interest,by the obligor or by any guarantor or endorser of the obligation, is prohibited. However, in noinstance shall the interest rate exceed seventeen percent.

First Acadiana Bank v. Bieber, 582 So.2d 1293 (La. 1991). Creditor failed to provideevidence of the variable interest due during executory proceedings. A later suit fordeficiency was filed against a guarantor on the loan. The Court of Appeal held at 562So.2d 1025 (La.App. 3 Cir.,1990) that failure to prove variable interest during executoryproceedings invalidated any creditor’s rights to a deficiency. Held by the Supreme Court:The Supreme Court reversed holding that failure to prove variable rate interest “at mostwould preclude the creditor from collecting interest.”

IV, CORRECTION OF ERRORS

LSA-R.S. 13:4105. Notarial act acknowledging error, when sufficient

In any case where such variance exists and it is not possible to secure the certificate referred to inR.S. 13:4104, the right to an order for executory process will lie upon execution by the debtor or byhis heirs, executors, administrators, or assigns, of a notarial act acknowledging the clerical error.

LSA-R.S. 35:2.1. Affidavit of corrections

A. A clerical error in a notarial act affecting movable or immovable property or any other rights,corporeal or incorporeal, may be corrected by an act of correction executed by the notary or one ofthe notaries before whom the act was passed, or by the notary who actually prepared the actcontaining the error. The act of correction shall be executed by the notary before two witnesses andanother notary public.

B. The act of correction executed in compliance with this Section shall be given retroactive effect

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to the date of recordation of the original act. However, the act of correction shall not prejudice therights acquired by any third person before the act of correction is recorded where the third personreasonably relied on the original act. The act of correction shall not alter the true agreement andintent of the parties.

C. A certified copy of the act of correction executed in compliance with this Section shall be deemedto be authentic for purposes of executory process.

D. This Section shall be in addition to other laws governing executory process.

In re Huber Oil of Louisiana, Inc., 311 B.R. 440 (B.R.W.D. La.) Property omitted from amortgage was added by subsequent act of correction under LSA-R.S. 35:2.1, which allowscorrection of clerical errors. Debtor asserted that the omission was not “clerical error.”Held: The property description was omitted through inadvertance, thus the act of correctionwas proper. The court distinguished clerical error from errors resulting from incorrectreasoning, determination or thought process wherein an interested party made a consciousand reasoned decision to excludethe property description from the mortgage.

V. INJUNCTION/APPEAL

LSA-C.C.P. Art. 2751. Grounds for arresting seizure and sale; damages

The defendant in the executory proceeding may arrest the seizure and sale of the property byinjunction when the debt secured by the security interest, mortgage, or privilege is extinguished, oris legally unenforceable, or if the procedure required by law for an executory proceeding has notbeen followed.

LSA-C.C.P. Art. 2752. Injunction procedure

A. The petition for injunction shall be filed in the court where the executory proceeding is pending,either in the executory proceeding or in a separate suit. The injunction proceeding to arrest a seizureand sale shall be governed by the provisions of Articles 3601 through 3609 and 3612, except asprovided in Article 2753. However, a temporary restraining order shall not issue to arrest the seizureand sale of immovable property, but the defendant may apply for a preliminary injunction in

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accordance with Article 3602. In the event the defendant does apply for a preliminary injunction thehearing for such shall be held before the sale of the property.

B. If the court finds that the temporary restraining order or preliminary injunction was wrongfullyissued, the court, unless the proceedings are stayed, in addition to the damages authorized underArticle 3608, may allow the sheriff to proceed with the sale by virtue of the prior advertisement, ifnot expired.

LSA-C.C.P. Art. 2642. Assertion of defenses; appeal

Defenses and procedural objections to an executory proceeding may be asserted either through aninjunction proceeding to arrest the seizure and sale as provided in Articles 2751 through 2754, ora suspensive appeal from the order directing the issuance of the writ of seizure and sale, or both.

A suspensive appeal from an order directing the issuance of a writ of seizure and sale shall be takenwithin fifteen days of the signing of the order. The appeal is governed by the provisions of Articles2081 through 2086, 2088 through 2122, and 2124 through 2167, except that the security thereforshall be for an amount exceeding by one-half the balance due on the debt secured by the mortgageor privilege sought to be enforced, including principal, interest to date of the order of appeal, andattorney's fee, but exclusive of court costs.

Rao v. Towers Partners, L.L.C., 688 So.2d 709, 96-1529 (La.App. 4 Cir. 2/12/97). Afterseizure and sale under executory process, debtor filed a wrongful seizure suit. Held: Thewrongful seizure suit was waived by debtor’s failure to seek an appeal or injunctive reliefduring executory proceedings.

Antoine v. Chrysler Financial Corporation, 782 So.2d 651, 2000-0647 (La.App. 4 Cir.3/7/01). This was an automobile foreclosure case. Instead of seeking an injunction or appealfrom the order of executory process, debtor filed Chapter 13 and debtor’s automobile wasreturned minus some personal items. One year later, debtor filed a wrongful seizure actionseeking damages for loss of personal items. Held: Debtor’s failure to seek injunctive reliefor an appeal from the order of executory process resulted in res judicata and waiver on theissue of wrongful seizure.

Aaron & Turner, LLC v. Perret, 971 So.2d 1049, 2006-2433 (La.App. 1 Cir. 9/14/07).Sheriff’s sale rendered debtor’s devolutive appeal of judgment denying injunction moot.This decision was reversed in part and remanded on other technical grounds in anunpublished opinion found at 2008 WL 2566780 (La.App. 1 Cir.), 2007-1701 (La.App. 1Cir. 6/6/08).

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Washington Mutual Bank v. Monticello, 976 So.2d 251, 2007-1018 (La.App. 3 Cir. 2/6/08).Creditor negligently allows property to be adjudicated at sheriff’s sale despite borrowers’reinstatement. Borrowers’ daughter, who lived in the foreclosed house at the time of thesheriff’s sale, filed a suit against creditor for damages resulting from the wrongful sale.Held: The daughter does not possess a cause of action. The creditor owed no duty todaughter under the usual duty-risk analysis.

Mercedes-Benz Credit Corporation v. Sciacchetano, Not Reported in So.2d, 2007 WL437692 (La.App. 1 Cir.), 2006-0850 (La.App. 1 Cir. 2/9/07). Borrower purchaced anautomobile and financed the purchase price. Repayment of the loan balance was to be madeby monthly automatic drafts from his checking account. Subsequently, he changed banksand notified Creditor of the new bank to draft for loan payments. Creditor did not draft thenew bank; obviously an error. After the loan became deliquent, Creditor made demand andlater seized its collateral. Held: Wrongful seizure.

Levine v. First National Bank of Commerce, 948 So.2d 1051, 2006-0394 (La. 12/15/06).Mortgagee transferred possession of mortgaged property via a Bond for Deed contract.Mortgagor, taking the position that the bond for deed violated the Due on Sale Clause in themortgage, foreclosed. Mortgagor sued mortgagee for wrongful seizure and obtained a$300,000.00 jury verdict. The Louisiana Supreme Court reversed by finding that the bondfor deed contract did violate the due on sale clause under 12 C.F.R. §§ 591.1, et seq., whichpreempts Louisiana law. Thus, the seizure was not wrongful.

Williams v. First Heritage Credit of La. LLC, Not Reported in So.2d, 2007 WL 861039(La.App. 1 Cir.), 2006-1066 (La.App. 1 Cir. 3/23/07). Debtor files a separate suit fordamages in response to a suit for executory process. Creditor obtains dismissal of theseparate suit and, apparently, the property was sold at sheriff’s sale. The debtor appeals thedismissal of his damage suit. The court held that debtor-defendant in executory proceedingshas only two choices. First, defendant can seek an injunction under C.C.P. Art. 2751 or thedefendant can tale a suspensive appeal from the order of executory process under C.C.P. Art.2642. This debtor-defendant did neither; therefore, the judgment dismissing his damage suitwas affirmed.

Hancock Bank of Louisiana v. McElwee Brothers, Inc., Not Reported in So.2d, 2006 WL3813749 (La.App. 1 Cir.), 2006-0454 (La.App. 1 Cir. 12/28/06). Defendant filed a suit toenjoin a suit for executory process claim prematurity. Defendant provided the court with awritten forbearance agreement executed by the parties. The plaintiff-bank maintained thatthe forbearance agreement was breached by Defendant’s failure to pay the extension fee toobtain the forbearance. The problem is that the agreement did not mention an extension fee;it only acknowledged “for valuable consideration.” Nevertheless, the court denied theinjunction as it found that the Defendant was in breach of the forbearance agreement itselfby failing to make two payments due thereunder.

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LSA-R.S. 13:4112. Actions to set aside or annul judicial sales in executory proceedings

No action may be instituted to set aside or annul the judicial sale of immovable property byexecutory process by reason of any objection to form or procedure in the executory proceedings, orby reason of the lack of authentic evidence to support the order and seizure, where the sheriffexecuting the foreclosure has either filed the proces verbal of the sale or filed the sale for recordationin the conveyance records of the parish. Any party seeking to annul or set aside a judicial sale ofimmovable property through executory proceedings filed for record before the adoption of thisSection must do so within six months of September 12, 1975. Nothing herein shall be construed toaffect legal defenses otherwise available to any person against whom a deficiency judgment issought after the public sale of immovable property through executory proceedings.

American Thrift & Finance Plan Inc. v. Richardson, 977 So.2d 105, 07-640 (La.App. 5Cir. 1/22/08). Defendant attempted, but failed to enjoin the sheriff’s sale in the executoryprocess proceedings. Subsequent to the sheriff’s sale, defendant filed a suit to annul thesheriff’s sale alleging technical issues with the creditor documents. He also questioned hissignature to the promissory note, but did not allege fraud. Question: May a defendant whoneither appealed the order of executory process nor enjoined the sale maintain an action toannul the completed sheriff’s sale? Considered: Citing Reed v. Meaux, 292 So.2d 557(La.1973), the court noted that “The jurisprudence holds that a mortgagor who has failed toenjoin the sale of property by executory process, or who did not take a suspensive appealfrom the order directing the issuance of the writ of seizure and sale, may institute andmaintain a direct action to annul the sale on certain limited grounds, provided that theproperty was adjudicated to and remains in the hands of the foreclosing creditor.” Held: Adefendant who neither appealed nor enjoined the foreclosure proceedings may sue to annula sheriff sale only if the property remains in the hands of the seizing creditor and fraud isalleged. This defendant did not allege fraud; thus the petition was dismissed.

LSA-R.S. 9:5622. Informalities in auction sales, two and five year prescription

All informalities of legal procedure connected with or growing out of any sale at public auction orat private sale of real or personal property made by any sheriff of the Parishes of this State, licensedauctioneer, or other persons authorized by an order of the courts of this State, to sell at publicauction or at private sale, shall be prescribed against by those claiming under such sale after thelapse of two years from the time of making said sale, except where minors or interdicted personswere owners or part owners at the time of making it, and in the event of such ownership or partownership by said minors or interdicted persons, the prescription thereon shall accrue after five

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years from the date of public adjudication or private sale thereof.

Ellis Construction, Inc. v. Vieux Carre Resort Properties, L.L.C., 934 So.2d 206, 2005-1109 (La.App. 4 Cir. 6/7/06). This case presented what the court described as “a res novaissue of the interaction of the right to executory process and a contract containing anarbitration clause.” The parties executed a construction contract containing an arbitrationclause. Indebtedness under the contract was evidenced by a promissory note, which was,in turn, secured by a mortgage. A dispute arose. The plaintiff-contractor filed a suit forexecutory process. Defendant, seeking arbitration, sought an injunction to arrest seizure andsale based upon the arbitration clause contained in he construction contract. Held: Theinjunction is warranted to allow arbitration of the issues.

LSA-R.S. 9:5642. Prescription, five years, sheriff's deeds

Actions to set aside sheriffs' deeds are prescribed by five years, reckoning from their date. Thisprescription applies only where the owner knew that the sheriff was proceeding to sell his propertyand where the purchaser or those claiming under him went into possession under the deed andremained in actual, open, and peaceable possession as owner for five years, and where the purchaserpaid consideration for the property which was then paid over by the sheriff to the creditors of thereal owner of the property.

This prescription does not apply to any attempted sale of property, not belonging to the defendantin execution, nor does it apply to minors and interdicts.

VI. CONVERSION TO ORDINARY PROCEEDINGS

LSA-C.C.P. Art. 2644. Conversion to ordinary proceeding

The plaintiff in an executory proceeding may convert it into an ordinary proceeding by amendinghis petition so as to pray that the defendant be cited and for judgment against him on the obligationsecured by the mortgage or privilege.

The plaintiff in an ordinary proceeding may not convert it into an executory proceeding.

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Marshall Investments Corp. v. Carbone Properties of Audubon, LLC, 973 So.2d 816(La.App. 4 Cir.,2007). This matter started in federal court as a complaint by creditor againsta guarantor of the debt. The principal obligor- borrower intervened and filed counterclaimagainst creditor, who then filed counterclaim against principal obligor on the unpaidindebtedness. While the federal court case proceeded, creditor filed executory process instate court. Borrower asserted that creditor waived executory process by proceeding infederal court by ordinary process under LSA-C.C.P. Art. 2644. Held: The executoryproceedings were not waived. Creditor’s counterclaim against the principal obligor was acompulsory counterclaim under federal law, thus its “assertion of its claims under themortgage and promissory note in federal court was involuntary (lest they lose its right toever assert a claim on the mortgage and promissory note) and thus it did not waive or loseits rights to proceed by executory process in state court.”

Liberty Bank and Trust Company v. Dapremont, 973 So.2d 816, 2007-1505 (La.App. 4 Cir.12/5/07), affirmed in part and reversed in part and remanded on other grounds at 984 So.2d 152, 2007-0518 (La.App. 4 Cir. 4/16/08). Among other executory process issues,this case involved the issuance of a preliminary injunction stopping the process.Subsequently, the plaintiff amended its petition for executory process to cure the technicalproblems with the first petition. A new order of seizure and sale was issued. Defendantargued that the order granting the first preliminary injunction was res judicata and prohibitedthe issuance of the second order of seizure and sale.

Held: “In the instant case, our prior ruling merely held that Liberty had not met the strictrequirements necessary to avail itself of executory process. Following remand, the trial courtpermitted Liberty to file an amending and supplemental verified petition for executoryprocess and specifically found that it had not violated the first preliminary injunction bydoing so. Here, there is no prior ruling for us to apply to the instant matter.” Thus, resjudicata was held inapplicable.

Germania Plantation, Inc. v. Hayward, 2008 WL 1930155 (La.App. 1 Cir.), 2007-2572(La.App. 1 Cir. 5/2/08) Unpublished. Plaintiff sued defendant in an ordinary proceeding ona promissory note. The plaintiff did not sue to recognize the mortgage in the ordinaryproceeding. Subsequently, plaintiff sued on both the promissory note and mortgage in anexecutory proceeding. Defendant sought an injunction contending that plaintiff waived itsright to executory process by the original filing of the suit on a promissory note. The courtstated that plaintiff “first sought to enforce the note only. He then filed another suit forexecutory process to enforce his mortgage. While both suits relate to the debt evidenced bythe promissory note, they do not involve identical remedies; only one can be enforced byexecutory process.” Held: Plaintiff did not waive its right to executory process.

Holmes v. Peoples State Bank, 796 So.2d 176, 35,072 (La.App. 2 Cir. 9/26/01). Creditor

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filed a suit for executory process against debtor seeking foreclosure of a mortgage. Shortlythereafter, debtor filed a separate lender liability type action against creditor allegingdamages. Creditor filed an answer to debtor’s damage action along with a reconventionaldemand for the loan amounts due. Five days later, a sheriff’s sale was held on creditor’sforeclosure action. Debtor then amended the damage action assertng additional damages byclaiming that creditor wrongfully converted its executory proceeding to an ordinaryproceeding by the filing of the reconventional demand in the damage suit. Thus, debtorclaimed that the sheriff’s sale was wrongful. Held: The sale is not wrongful as “a creditormay maintain two simultaneous actions, one executory and one ordinary, as long as there isonly one satisfaction.”

Gulf National, L.L.C. v. Alfortish, Inc., 926 So.2d 676, 05-804 (La.App. 5 Cir. 3/14/06).This case involved an ordinary suit. Question: Does prescription run in favor of a debtorwhose debt is secured by the pledge of a collateral mortgage note? Held: The court followeda long line of jurisprudence holding that the pledge acts as a constant acknowledgment.Thus, prescription does not run on the hand notes.

VII. NOTICE OF SEIZURE AND SALE

LSA-C.C.P. Art. 2721. Seizure of property; notice

A. The sheriff shall seize the property affected by the mortgage, security agreement, or privilegeimmediately upon receiving the writ of seizure and sale.

B. The sheriff shall serve upon the defendant a written notice of the seizure of the property.

C. Since secured collateral subject to a security interest under Chapter 9 of the LouisianaCommercial Laws need only be reasonably described in the debtor's security agreement, the sheriffshall have no liability to the debtor or to any third party for wrongful or improper seizure of thedebtor's or third party's property of the same general type as described in the debtor's securityagreement. If necessary, the sheriff shall request the secured creditor to identify the property subjectto the security agreement and shall act pursuant to the secured creditor's instructions. The debtor'sand other owner's sole remedy for the wrongful or improper seizure of the property shall be foractual losses sustained under R.S. 10:9-625 against the secured creditor on whose behalf andpursuant to whose instructions the sheriff may act.

Turner v. Associates Commercial Corp., 860 So.2d 244 (La.App. 5 Cir. 10/28/03), writdenied 865 So.2d 731, 2003-3247 (La. 2/6/04). A writ of seizure and sale issued inconnection with executory process does not expire in one year as does a writ of fieri facias

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under LSA-C.C.P. Art. 2294.

LSA-C.C.P. Art. 2701. Alienation of property to third person disregarded

A mortgage or privilege evidenced by authentic act importing a confession of judgment, affectingproperty sold by the original debtor or his legal successor to a third person, may be enforced againstthe property without reference to any sale or alienation to the third person. The executory proceedingmay be brought against the original debtor, his surviving spouse in community, heirs, legatees, orlegal representative, as the case may be. The third person who then owns and is in possession of theproperty need not be made a party to the proceeding.

R.S. 13:3886. Request for notice of seizure on specific property; notification by sheriff; failureto notify

A. Any person desiring to be notified of the seizure of specific immovable property or of a fixturelocated upon specific immovable property shall file a request for notice of seizure in the mortgagerecords of the parish where the immovable property is located. The request for notice of seizure shallstate the legal description of the immovable property, the owner of the property, and the name andaddress of the person desiring notice of seizure. The person requesting notice of seizure shall paythe sum of ten dollars to the sheriff.

B. (1) Any interested person may request, by simple written application to the sheriff, that a writtennotice of seizure be given to any other person or persons. A fee of fifteen dollars for each person tobe notified by mail, or twenty dollars for each person to be notified by service shall accompany therequest for notice. After his receipt of the request and the appropriate fee, the sheriff shall, upon theseizure of the property, promptly give the requested notices.

(2) Additionally, in the event of seizure of immovable property or a fixture, the sheriff shall givewritten notice of the seizure and a list of the property seized to each person who, prior to the filingof the notice of seizure, has requested notice under the provisions of Subsection A and who has paidthe fee required therein.

C. In the event of seizure of immovable property or a fixture, the sheriff shall request from the clerkof court, or the recorder of mortgages for the parish of Orleans, at least twenty-one days prior to thefirst scheduled sheriff's sale, a mortgage certificate effective as of the date and time of the filing ofthe notice of seizure. The mortgage certificate shall include any requests for notice of seizure. Uponreceipt of the mortgage certificate the sheriff shall notify, at least ten days prior to the first scheduledsheriff's sale, those persons requesting notice of the seizure. The notice of seizure shall be bycertified mail, return receipt requested, actual delivery, or any manner provided for service ofcitation, and shall include the name and address of the seizing creditor, the method of seizure andthe sum owed, and the date of the first scheduled sheriff's sale.

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D. Notices under this Section may be given by certified mail, return receipt requested, actualdelivery, or by any manner provided by service of citation. Each notice shall be mailed or servedat least ten days before the first scheduled date of the sheriff's sale, and shall include the time, date,and place of such sale.

E. Neither the clerk of court nor the sheriff, or any of their officers, agents, or employees, shall beheld liable if a reasonable attempt has been made to mail or deliver the notice to the addressprovided in the request.

F. The failure of the sheriff to notify a person requesting notice of seizure shall not affect the rightsof the seizing creditor nor invalidate the sheriff's sale.

LSA-R.S. 13:3886.1. Failure to notify

A. The failure to notify any lienholder or other interested person having an interest in the propertyshall not affect the rights of the seizing creditor nor invalidate the sheriff's sale; nor shall any lien,privilege, or other encumbrance that is inferior to the rank of the lien of the seizing creditor affectthe property after the sheriff's adjudication. The exclusive remedy for any person affected by theprovisions of this Subsection shall be to institute a claim by summary pleadings, within one yearfrom the date of the sheriff's adjudication, proving that he has been damaged by the failure to notifyhim. In connection with any such claim, the court shall consider and the person claiming damagesshall have the burden of proving all of the following:

(1) That his name and address were reasonably ascertainable through the exercise of reasonable diligence.

(2) That he lacked actual knowledge of the seizure.

(3) The respective ranking and amounts of all liens, privileges, and other encumbrances affectingthe property as of the date of the sheriff's adjudication.

(4) The value of such respective rights.

(5) The value of the property as of the date of the sheriff's adjudication.

(6) The respective positions the parties would have occupied had the required notice been given.

(7) His ability and capacity to have obtained funds to purchase the property at the foreclosure salehad the required notice been given.

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(8) That in such circumstances he would have bid on the property in such an amount as to haveprevented him from suffering the alleged damages, either by such bid being successful or by suchbid leading to a higher bid by another party.

B. In no event shall the claim of any such person exceed the value of the interest he possessed onthe date of the sheriff's adjudication.

C. The provisions of this Section shall be applied both retrospectively and prospectively; however,any action for which the time period for bringing such action would otherwise be shortened by theprovisions hereof shall be instituted within one year from July 17, 1991, and any suit not institutedwithin that time and any claims relating thereto shall be forever barred.

Mennonite Board of Missions v. Adams, 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180.This is the decision that initiated the “Mennonite Notice” requirement in foreclosureproceedings. The United States Supreme Court held that “[n]otice by mail or other meansas certain to ensure actual notice is a minimum constitutional precondition to a proceedingwhich will adversely affect the liberty or property interests of any party, whether unletteredor well-versed in commercial practice, if its name and address are reasonably ascertainable.”The Court found that constructive notice of an impending tax sale was not sufficient tosatisfy due process “[w]hen a mortgagee is identified in a mortgage that is publiclyrecorded.”

Davis Oil Co. v. Mills, 873 F.2d 774 (C.A.5 La.1989), rehearing denied 877 F.2d 972,certiorari denied 110 S.Ct. 331, 493 U.S. 937, 107 L.Ed.2d 321. This case involved achallenge to a superior mortgagee’s sheriff’s sale by a mineral lessee who received no noticeand whose interest was terminated by virtue of the sheriff’s sale. Lessee failed to requestnotice under 13:3886. The court held that failure to request notice under 13:3886 does notact as a waiver of constitutional due process rights. Noting the difficulty of ascertaining theidentity of mineral interests in general, the court held that the seizing creditor must exercise“reasonable diligence” in determining the identity of parties in interest for notice purposes.This did not require a complex and unduly burdensome search of the conveyance records bythe seizing creditor. Thus, the court held that constructive notice was adequate.

Henderson v. Kingpin Development Company, 859 So.2d 122, 2001-2115 (La.App. 1 Cir.8/6/03).Mortgagor Juban sold the mortgaged property to Henderson. Creditor’s suit for executoryprocess named Juban as defendant, but afforded no notice of proceedings to the recordowner, Henderson. Post-sheriff sale, Henderson filed a suit to annul the sale. Question: WasHenderson entitled to notice? The court found that Henderson did not file a request fornotice under LSA-R.S. 13:3886. Despite the non-filing of the 13:3886 notice, the Court held

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as follows:

“Accordingly, a party with an interest in property does not waive its due process rights byfailing to request notice...”

* * *

“the burden of searching the conveyance records to determine whether Juban had transferredthe property to a third possessor would not have been unreasonable under the circumstancesof this case. Based on the allegations of record, a search of the conveyance records for thetransfer to Henderson would have involved only a single search. Accordingly, we find thatthe exercise of reasonable diligence required that Kingpin search the conveyance records toascertain the identity of a subsequent owner of the subject property.”

VIII. PROCEEDINGS AGAINST REPRESENTATIVE

LSA-C.C.P. Art. 2672. Proceeding against heirs or legatees

When the original debtor is dead, and his heirs or legatees have accepted his succession, theexecutory proceeding may be brought against his heirs or legatees.

If an heir or legatee is dead, incompetent, or absent, his heirs, legatees, succession, or legalrepresentative may be made a party defendant to the executory proceeding as provided above andin Articles 2673 and 2674, as the case may be.

LSA-C.C.P. Art. 2673. Proceeding against legal representative

When the property of the original debtor is under the administration of a legal representative, theexecutory proceeding may be brought against his legal representative, and no other person need bemade a party to the proceeding.

Lumar v. Mid State Trust II, 749 So. 2d 712 ( La. App. 5 Cir 11/10/99). The administratrixof the succession of the deceased mortgagor argued that a creditor’s proceeding by executoryprocess against the administratrix alone, without joinder of a representative of a minor childheir, was improper. Held: The foreclosure was proper under LSA-C.C.P. Art. 2673.

LSA-C.C.P. Art. 5251. Words and terms defined

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Except where the context clearly indicates otherwise, as used in this Code:

(1) "Absentee" means a person who is either a nonresident of this state, or a person who is domiciledin but has departed from this state, and who has not appointed an agent for the service of processin this state in the manner directed by law; or a person whose whereabouts are unknown, or whocannot be found and served after a diligent effort, though he may be domiciled or actually presentin the state; or a person who may be dead, though the fact of his death is not known, and if dead hisheirs are unknown.

LSA-C.C.P. Art. 2674. Attorney appointed to represent unrepresented defendant

The court shall appoint an attorney at law to represent the unrepresented defendant in an executoryproceeding under the following circumstances:

(1) When the defendant is an absentee;

(2) When the debtor is dead, no succession representative has been appointed, and his heirs andlegatees have not been sent into possession;

(3) When the debtor's property is under the administration of a legal representative, but the latter hasdied, resigned, or been removed from office, and no successor thereof has qualified;

(4) When the defendant is a corporation or a partnership upon which process cannot be served forany reason; and

(5) When the defendant is a minor, or a mental incompetent, who has no legal representative at thetime of the institution of the proceeding

LSA-C.C.P. Art. 2641. Service upon, and seizure and sale prosecuted against, attorney forunrepresented defendant

In all cases governed by Article 2674, all demands, notices, and other documents required to beserved upon the defendant in an executory proceeding shall be served upon the attorney at lawappointed by the court to represent him, against whom the seizure and sale shall be prosecutedcontradictorily.

Donnelly v. Federal National Mortgage Association, 920 So.2d 257, 05-434 (La.App. 5 Cir.

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12/27/05). Mortgagor who moved to another state to find employment for the three yearswas deemed to be an absentee against whom foreclosure proceedings could be prosecutedthrough an appointed attorney at law.

Security Homestead Association v. Fuselier, 591 So.2d 335 (La. 1991). Cannot finddefendant? Have no knowledge of defendant’s whereabouts? You must conduct a due anddiligent search before seeking appointment of a curator; otherwise no deficiency judgment.Reason: Defendant has not been served with notice of seizure and notice to appoint anappraiser.

Citizens Savings and Loan Association, 622 So.2d 662 (La. 1993). Modifies Fusilier. Onlyservice of notice to appoint an appraiser upon defendant required in order to preservedeficiency rights.

First National Bank of Jefferson Parish v. Samuels, 618 So.2d 444 (La. App. 5 Cir. 1993).Creditor caused an attorney at law to be appointed to represent a defendant whosewhereabouts were unknown. Defendant during later deficiency proceedings argued that theappointment of an attorney at law was improper as his whereabouts could have been easilyascertained by a diligent search. Held: Creditor did conduct a due and diligent search, thus,the appointment was proper. The court found that the creditor sent letters to the defendantwhich were returned “unclaimed” and hired a skip tracer to find defendant to no avail.These activities by the creditor were held to be satisfactory.

IX. KEEPER

LSA-R.S. 9:5136. Designation in mortgage or other instrument of keeper of property

The parties to a mortgage of either immovable property or movable property, or both, or the partiesto a security agreement under Chapter 9 of the Louisiana Commercial Laws (R.S. 10:9-101, et seq.),may designate a keeper of the property to be appointed pursuant to R.S. 9:5137 by expressly namingor identifying in the mortgage or security agreement the person who is to serve as keeper or bydescribing the method by which he is to be selected. The parties may designate the mortgagee, orsecured party, or his agent as the keeper or may permit the mortgagee or secured party to name the

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keeper at the time the seizure is effected. If the designation of the keeper by the parties to themortgage or security agreement is not made in the original instrument, it may be made by any otherinstrument executed by them, either concurrently with or subsequent to the act of mortgage orsecurity agreement, which in the case of a mortgage on immovable property shall be by aninstrument duly acknowledged by the parties in the presence of a notary public and two witnesses.

R.S. 9:5137. Appointment of person designated by parties

A. If any immovable or any movable property, or both immovable and movable property, affectedby a mortgage is seized as an incident to an action for the recognition or the enforcement of themortgage, whether by executory process, writ of fieri facias, sequestration, or otherwise, the courtissuing the order under which the seizure is to be effected shall, if such order is petitioned for by theseizing creditor, direct the sheriff or other officer making the seizure to appoint as keeper of theseized property such person as the parties may have designated as herein provided. The designationof a keeper of the property in accordance with the provisions of R.S. 9:5136 is for the benefit of theseizing creditor, but such designation shall not be deemed to require the seizing creditor to provokethe appointment of any such keeper.

B. If the parties have not designated a keeper of the property in accordance with the provisions ofR.S. 9:5136, and if the sheriff or other officer making the seizure fails, refuses, or declines to operateor administer the seized property or for any reason wishes to have the court appoint a keeper, thenupon application of either the seizing creditor, the mortgagor, or the sheriff and in a summaryproceeding, with notice to the mortgagor, the mortgagee, and the sheriff or other officer making theseizure if they are not party to such application, the court before whom the proceedings are pendingshall direct the sheriff or other officer making the seizure to appoint as keeper of the property aperson whom the court designates.

R.S. 9:5138. Powers, duties, and compensation

A. The keeper or receiver shall perform his duties as a prudent administrator, and neither the keepernor the seizing creditor shall be liable to the mortgagor or the owner of the seized property or anyother person for any financial or pecuniary loss or damage claimed to have been suffered by themortgagor or owner of the seized property or any other person by reason of the administration ormanagement of the property by the keeper or receiver acting as a prudent administrator. A keeper

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appointed under the provisions of R.S. 9:5136 through 5140.2 shall have full powers of managementand administration of the property and may operate the property seized, whether immovable,movable, or both, in the ordinary course of business.

B. All revenues or other amounts received by the keeper during his administration first shall beapplied to the costs and expenses incurred by him in the administration or preservation of theproperty, including meeting any obligations the owner might have to provide services, amenities,or other obligations as provided in the prior recorded existing leases of the tenants or lessees of theproperty, and any balance shall be applied to the debt secured by the mortgage.

C. The keeper shall render an accounting of his administration at such time or times as the courtbefore whom the proceedings are pending may direct, and all costs and expenses necessarilyincurred by him in the course of his administration shall be taxed as a part of the costs of theproceedings to the extent they have not been satisfied out of revenues previously received by thekeeper. Costs and expenses of administration shall not include any compensation to a keeperappointed under R.S. 9:5136 through 5140.2 for his services, unless he was particularly identifiedby the parties in the act of mortgage and the manner of determining such compensation is thereinagreed to, or unless the keeper was appointed by the court pursuant to the provisions of R.S. 9:5137(B).

Pioneer Bank and Trust Company v. Oechsner, 468 So.2d 1164 (La. 1985). The LouisianaSupreme Court upheld the keeper code articles and allowed an appointment of keeper duringordinary proceedings with sequestration to stand.

W.A.C., Inc. v. Day, 649 So.2d 971, 93 0370 (La.App. 1 Cir. 11/24/93). Second mortgageeinstituted a sequestration of an apartment building; obtained an order appointing its agentas keeper of the property and commenced collecting the rents. Later, the first mortgageeinstituted executory process and was appointed keeper in replacement of the secondmortgagee’s agent. First mortgagee then sought a ruling that the rents collected by thesecond mortgagee should be applied to first mortgagee’s indebtedness. Held: The rentscollected by second mortgagee may be applied to its indebtedness.

X. THE APPRAISAL PROCESS

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LSA-C.C.P. Art. 2723. Appraisal of property, unless waived

Prior to the sale, the property seized must be appraised in accordance with law, unless appraisal hasbeen waived in the act evidencing the mortgage, the security agreement, or the document creatingthe privilege and plaintiff has prayed that the property be sold without appraisal, and the orderdirecting the issuance of the writ of seizure and sale has directed that the property be sold as prayedfor. There is no requirement that seized property subject to a security interest under Chapter 9 of theLouisiana Commercial Laws (R.S. 10:9-101, et seq.), be appraised prior to the judicial sale thereof.

LSA-R.S. 13:4363. Appointment of appraisers

A. Not less than seven days, exclusive of holidays, before the sale of seized property, the sheriffshall serve written notice on the debtor and on the seizing creditor, in the manner provided for theservice of a citation, directing each to name an appraiser to value the property and to notify thesheriff of his appointment prior to the time stated in the notice, which shall be at least four days,exclusive of holidays, prior to the time of the sale. The appraisal of the debtor and seizing creditorshall be made and delivered to the sheriff at least two days, exclusive of holidays, prior to the timeof the sale.

B. If there are two or more debtors or seizing creditors and these parties cannot agree as to whichshould act as or appoint an appraiser, and in any case where an appraisal is required prior to thejudicial sale and which is not otherwise provided for in this Section, on the ex parte application ofthe sheriff or of any interested party, the court shall designate the party to act as or appoint theappraiser, and the notice required by Sub-section A of this Section shall be served on the party sodesignated.

LSA-R.S. 13:4364. Sheriff to appoint appraiser if party does not appoint; delivery of appraisal

A. If a party neglects to appoint an appraiser or to notify the sheriff within the time designated, thesheriff shall appoint an appraiser for him.

B. The appraisal of any appraiser appointed by the sheriff shall be made and delivered to the sheriffat a time prior to the sale.

LSA-R.S. 13:4365. Oaths of appraisers; sheriff appoints third appraiser if two cannot agree;

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minute, written appraisal; delivery

A. The appraisers shall take an oath to make a true and just appraisal of the property.

B. If the appraisers cannot agree, and (1) the difference in value between the two appraisals does notexceed two hundred and fifty thousand dollars, and (2) the value assigned by the lower of the twoappraisers is at least ninety percent of the value assigned by the higher of the two appraisers, thenthe sheriff shall average the two figures and use the average as the appraised value for purposes ofdetermining the opening bid. In those cases where the two appraisers do not agree and the valuesare not within the averaging limits, then the sheriff shall appoint a third appraiser, who shall also besworn, and whose decision shall be final.

C. The property seized must be appraised with such minuteness that it can be sold together or separately.

D. The appraisers shall reduce their appraisal to writing, sign it, and deliver it to the sheriff.

E. The appraisal of any appraiser appointed by the sheriff shall be made and delivered to the sheriffat a time prior to the sale.

Williams v. Perkins-Siegen Partnership, 649 So.2d 367, 93-2131 (La. 1/27/95). Appraisalmust be conducted with “such minuteness that it can be sold together or separately” underLSA-R.S. 13:4365C. This case involved foreclosure of three separate, but contiguous tractsof land. Plaintiff appraised the three in globo. Question: Was an in globo appraisalsufficiently minute. The Court of Appeal held no. Held by the Supreme Court: Theappraisal was sufficiently minute because the in globo appraisal did not in fact result in alower appraised amount.

American Bank and Trust Company v. Price, 688 So.2d 536, 28,018 (La.App. 2 Cir.4/3/96). Mere fact that plaintiff’s appraiser was an employee of plaintiff was insufficient todisqualify plaintiff’s appraisal. The question is whether the appraisal is fair. The court heldthat it was.

Whitney National Bank v. F.W.F., Inc., 635 So.2d 361, 1993-1152, 1993-1153 (La.App.4 Cir. 3/2, rehearing denied, writ denied 642 So.2d 1301, 1994-1546 (La. 9/23/94),reconsideration denied 644 So.2d 1045, 1994-1546 (La. 11/4/94). This was a suit forexecutory process involving equipment and inventory. The appraisals, which are no longerrelevant under Article 9, failed to value the property with minuteness, as required underLSA-R.S. 13:4365C. Defendant had been served with notice of seizure and notice to appointan appraiser. Defendant failed to appoint an appraiser. Defendant objected for the first time

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during deficiency judgment proceedings. Held: Defendant waived the “minuteness” requirement.

Gulf Coast Bank and Trust Company v. G S & R Properties, 809 So.2d 1238, 2001-1345(La.App. 3 Cir. 3/6/02). Read this case to see how bad things can turn during the appraisalprocess. Here an appraisal was held to be defective and a deficiency was lost. Was it toominute? I know this unfortunate lawyer quite well.

Estate of Petrovich v. Jules Melancon, Inc., --- So.2d ----, 2008 WL 4415779 (La.App. 5Cir.), 08-185 (La.App. 5 Cir. 9/30/08). This case involved the foreclosure by executoryprocess on mortgages on oyster bed leases. The petition prayed for sheriff’s sale withappraisal. However, shortly before sale the plaintiff requested that the sale be held withoutappraisal. The sale was subsequently held without appraisal and the plaintiff purchased theproperty. In the meantime, The State of Louisiana through the Department of Wildlife andFisheries deposited $105,719.30 into the registry of the court pursuant to a court order. Thefunds represented compensation for two oyster bed leases related to the project known as the“Davis Pond Relocation Program.” These two oyster bed leases, along with six other oysterbed leases, had been the subject of executory process proceedings. Plaintiff filed a suit fordeficiency judgment coupled with a claim to withdraw the funds from the registry of thecourt. Held: The plaintiff waived deficiency judgment by conducting a sheriff’s sale withoutappraisal. Thus, the plaintiff possessed no further indebtedness against which it could applythe monies in the registry of the court.

XI. RIGHTS OF THE UNITED STATES

26 U.S.C.A. §§ 7425. Discharge of liens

(a) Judicial proceedings.--If the United States is not joined as a party, a judgment in any civilaction or suit described in subsection (a) of section 2410 of title 28 of the United States Code, ora judicial sale pursuant to such a judgment, with respect to property on which the United States hasor claims a lien under the provisions of this title--

(1) shall be made subject to and without disturbing the lien of the United States, if notice of such lienhas been filed in the place provided by law for such filing at the time such action or suit iscommenced.

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(2) shall have the same effect with respect to the discharge or divestment of such lien of the UnitedStates as may be provided with respect to such matters by the local law of the place where suchproperty is situated, if no notice of such lien has been filed in the place provided by law for suchfiling at the time such action or suit is commenced or if the law makes no provision for such filing.

If a judicial sale of property pursuant to a judgment in any civil action or suit to which the UnitedStates is not a party discharges a lien of the United States arising under the provisions of this title,the United States may claim, with the same priority as its lien had against the property sold, theproceeds (exclusive of costs) of such sale at any time before the distribution of such proceeds is ordered.

(b) Other sales.--Notwithstanding subsection (a) a sale of property on which the United States hasor claims a lien, or a title derived from enforcement of a lien, under the provisions of this title, madepursuant to an instrument creating a lien on such property, pursuant to a confession of judgment onthe obligation secured by such an instrument, or pursuant to a nonjudicial sale under a statutory lienon such property--

(1) shall, except as otherwise provided, be made subject to and without disturbing such lien or title,if notice of such lien was filed or such title recorded in the place provided by law for such filing orrecording more than 30 days before such sale and the United States is not given notice of such salein the manner prescribed in subsection (c)(1); or

(2) shall have the same effect with respect to the discharge or divestment of such lien or such titleof the United States, as may be provided with respect to such matters by the local law of the placewhere such property is situated, if--

(A) notice of such lien or such title was not filed or recorded in the place provided by law for suchfiling more than 30 days before such sale,

(B) the law makes no provision for such filing, or

(C) notice of such sale is given in the manner prescribed in subsection (c)(1).

(c) Special rules.--

(1) Notice of sale.--Notice of a sale to which subsection (b) applies shall be given (in accordancewith regulations prescribed by the Secretary) in writing, by registered or certified mail or bypersonal service, not less than 25 days prior to such sale, to the Secretary.

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(2) Consent to sale.--Notwithstanding the notice requirement of subsection (b)(2)(C), a saledescribed in subsection (b) of property shall discharge or divest such property of the lien or title ofthe United States if the United States consents to the sale of such property free of such lien or title.

(3) Sale of perishable goods.--Notwithstanding the notice requirement of subsection (b)(2)(C), asale described in subsection (b) of property liable to perish or become greatly reduced in price orvalue by keeping, or which cannot be kept without great expense, shall discharge or divest suchproperty of the lien or title of the United States if notice of such sale is given (in accordance withregulations prescribed by the Secretary) in writing, by registered or certified mail or by personalservice, to the Secretary before such sale. The proceeds (exclusive of costs) of such sale shall beheld as a fund subject to the liens and claims of the United States, in the same manner and with thesame priority as such liens and claims had with respect to the property sold, for not less than 30 daysafter the date of such sale.

(4) Forfeitures of land sales contracts.--For purposes of subsection (b), a sale of property includesany forfeiture of a land sales contract.

(d) Redemption by United States.--

(1) Right to redeem.--In the case of a sale of real property to which subsection (b) applies to satisfya lien prior to that of the United States, the Secretary may redeem such property within the periodof 120 days from the date of such sale or the period allowable for redemption under local law,whichever is longer.

(2) Amount to be paid.--In any case in which the United States redeems real property pursuant toparagraph (1), the amount to be paid for such property shall be the amount prescribed by subsection(d) of section 2410 of title 28 of the United States Code.

(3) Certificate of redemption.--

(A) In general.--In any case in which real property is redeemed by the United States pursuant to thissubsection, the Secretary shall apply to the officer designated by local law, if any, for the documentsnecessary to evidence the fact of redemption and to record title to such property in the name of theUnited States. If no such officer is designated by local law or if such officer fails to issue suchdocuments, the Secretary shall execute a certificate of redemption therefor.

(B) Filing.--The Secretary shall, without delay, cause such documents or certificate to be dulyrecorded in the proper registry of deeds. If the State in which the real property redeemed by the

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United States is situated has not by law designated an office in which such certificate may berecorded, the Secretary shall file such certificate in the office of the clerk of the United States districtcourt for the judicial district in which such property is situated.

(C) Effect.--A certificate of redemption executed by the Secretary shall constitute prima facieevidence of the regularity of such redemption and shall, when recorded, transfer to the United Statesall the rights, title, and interest in and to such property acquired by the person from whom the UnitedStates redeems such property by virtue of the sale of such property.

Myers v. U.S., 647 F.2d 591, 48 A.F.T.R.2d 81-5223, 81-2 USTC P 9490 (5th Cir.(La.) Jun12, 1981) (NO. 80-3245). A sheriff sale was held, adequate notice of which was not givento inferior lienholder, IRS, resulted in a sale subject to the federal tax lien.

Delta Savings and Loan Association, Inc. v. Internal Revenue Service 847 F.2d 248, 62A.F.T.R.2d 88-5051, 88-2 USTC P 9398, Bankr. L. Rep. P 72,391 (U.S.C.A. 5 Cir. 1988).The court held that when the IRS timely redeems, it must pay only the adjudication price atthe sheriff’s sale plus statutory interest.

Vardanega v. United States 528 U.S. 872, 120 S.Ct. 174, 145 L.Ed.2d 147, 68 USLW 3219,68 USLW 3228, 68 USLW 3079 170 F.3d 1184, 83 A.F.T.R.2d 99-1448, 99-1 USTC P50,353, 99 Cal. Daily Op. Serv. 1990, 1999 Daily Journal D.A.R. 2588 (S.Ct. 1999) Thiscase is a right of redemption case. It involved a mortgage granted by three individualowners of property. Federal tax liens were filed against one of the owners. Foreclosureproceedings were instituted by the mortgage holder which resulted in a foreclosure sale.Proper notice was given to the United States (“adequate notice”). The plaintiff acquired theproperty at trustee’s sale. Question: Does the IRS possess the right to redeem the propertyin its entirety or merely that portion of the property owned by the tax lien debtor. Held: TheIRS may redeem the property in its entirety.

XII. THE SHERIFF’S COMMISSION

LSA-R.S. 33:1428. Fees in civil matters

A. Sheriffs shall be entitled to no more than the following fees and compensation of office in allcivil matters:

(1) For all service and returns of legal documents, notices, and subpoenas, twenty dollars.

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(2) For execution of all writs and court orders, thirty dollars; for each notice of seizure and sale andreturns thereon, twenty dollars; for return of any writ, twenty dollars.

(3) For advertising sale under writ of fieri facias, seizure and sale, or other order of court, the ratesestablished by existing laws for judicial advertisements and no more.

(4) For preparing advertisement for newspapers, for each one hundred words or part thereof, fifteendollars.

(5) For keeping property under seizure when stored in warehouse, the usual charge ofwarehousekeepers shall be allowed and no more. The sheriffs may collect the costs of insuranceaffected or of drayage or other incidental expenses necessary for preservation or keeping of propertyand actually paid by them

(6) For keeping property when a keeper or guardian is required, the sheriffs shall be allowed theactual amount paid the keeper appointed by them but not to exceed sixty dollars for each eight hoursof keeping; and in all cases in which the property under seizure is of a nature requiring the constantattention of the sheriffs, they may appoint one or more additional keepers for which allowance shallbe made on the basis above set forth.

(7)(a) For commission on sales of property made by the sheriffs, three percent shall be allowed onthe price of adjudication of immovable property, and six percent shall be allowed on the price ofadjudication of movable property. As used herein, "the price of adjudication" shall mean the amountof the successful bid price at the sale conducted by the sheriff.

(b) When the amount necessary to be realized to satisfy any writ under which the property, movableor immovable, is to be offered for sale by the sheriffs is in excess of fifty thousand dollars, includinginterest and costs, the sheriffs and the seizing creditor may, with the approval of the court, agreeupon the fee or commission to be paid to the sheriffs for making the sale, irrespective of the rateshereinabove set forth, prior to the offer and adjudication of the property by the sheriffs.

(c) No agreement shall be valid which provides for a fee or commission in any case of less thanfifteen hundred dollars.

(8) For commission on monies realized under mesne or final process, the same rates as in case ofsale; but no commission shall be allowed in cases where nothing is realized by the plaintiff inexecution or other writ except as otherwise provided herein.

(9) For traveling each mile necessary in going to make and returning from service of any processof court, a mileage allowance based upon the mileage rate established by the division ofadministration for the use of state owned vehicles and all actual expenses incurred in the service ofthe process, but such mileage shall not be charged for a greater distance than that of the residenceor domicile of the party on whom service is made, and when service is made upon different parties

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in the same case by the same officer on the same day or official tour, only one mileage shall becharged. This Section shall not be construed to prevent the officer from charging mileage as aboveprovided in each separate suit.

(10) For each deed of conveyance of immovable property, fifty dollars in addition to the cost ofregistering the deed in the conveyance office and of recording it in the office of the clerk of thedistrict court.

(11) For each proces verbal of the sale of movable or immovable property, thirty dollars.

(12)(a) For executing writ of possession or writ of ejectment, twenty dollars.

(b) For service of each notice to vacate on defendant or occupants, twenty dollars

(c) If the defendant or occupants do not vacate the premises named in the writ upon service of noticeto vacate and the sheriffs are required to do anything further to obtain possession, they shall beentitled to an additional fee of twenty dollars.

(d) Nothing herein shall be construed to bar the sheriffs from charging and collecting for costs oflabor and other costs and expenses actually paid or incurred by them in order to obtain possessionof the premises described in the writ.

(13)(a) In all cases where the sheriffs have in their possession for execution a writ of fieri facias,a writ of seizure and sale, or any conservatory or other writ under which property is or may beseized:

(i) When there has been an adjudication which is not completed as a result of instructions given bythe plaintiff in writ or for any other reason, or

(ii) When the plaintiff in writ receives cash, other consideration, or both pursuant to judgmentrendered in suit in which the writ issued without the necessity of judicial sale, or

(iii) When the suit in which the writ issued is discontinued by the plaintiff in writ, or

(iv) When at the request of the plaintiff in writ the writ is recalled or dissolved or its furtherexecution discontinued, or

(v) When the parties in interest make an amicable settlement or compromise or enter into any otheragreement under the terms of which the writ is recalled or dissolved or its further execution discontinued,

the sheriffs shall be entitled to receive a fee or commission as in the case of a sale.

(b) But in the discretion of the sheriffs and under circumstances satisfactory to them, they maymodify or reduce any fee or commission due and payable under the provisions of this Paragraph.However, if the property is the debtor's homestead exempt residence and there has been a settlementor compromise between the parties, the fee or commission shall be calculated on the amount of the

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settlement or compromise.

(c) The fees or commission provided for in this Paragraph shall be due and payable in every caseby the plaintiff in writ and shall be due and payable under the circumstances above set forth eventhough there has only been a constructive seizure or where property seized under any of the writshereinabove enumerated has been released on bond.

(d) In a case where there has been an amicable settlement by compromise or otherwise, but nojudgment has been rendered, the fee or commission shall be due and payable in solido by all partiesto the compromise agreement or settlement who may be proceeded against by the sheriffs by ruleto be tried in a summary manner in term time or in vacation.

(e) In the event a defendant in seizure files for bankruptcy before a sheriff's sale and a stay orderis issued cancelling the sale, the plaintiff in the suit shall be liable for all costs, other thancommissions, incurred while the property was under seizure.

(14) For any services rendered or duties performed by the sheriffs not otherwise herein speciallyprovided for, they shall be entitled to a fee or commission to be determined by agreement with theparties in interest or fixed by the court by rule tried in a summary manner in term time or in vacation.

B. These costs shall be due and collectible as provided for clerks of the district courts in ordinarysuits and when realized on any process of court by collections or sales, except in those parisheswhere the sheriffs collect their fees independently of the clerks.

C. The fees or commissions provided for in this Section may be taxed as costs of court pursuant toCode of Civil Procedure Article 1920.

Riddle v. Simmons, 965 So.2d 998, 42,501 (La.App. 2 Cir. 9/19/07), writ denied 970 So.2d 537, 2007-2008 (La. 12/14/07). Plaintiff in writ is liable for the sheriff’s commission.

Tucker v. Fowler, 668 So.2d 718, 95-1649 (La. 2/28/96). Once the writ is issued to thesheriff, the commission is earned.

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XIII. DELIVERY OF POSSESSION TO PURCHASER

LSA-R.S. 13:4346. Failure of occupant to deliver possession to purchaser; writ of possession

Whenever a sheriff or constable acting under a writ of fieri facias, seizure and sale, or other orderof sale, sells and adjudicates immovable property, and the occupant thereof does not deliverpossession thereof on demand to the purchaser after the latter has paid the price of adjudication andhas received an act of sale from the sheriff or constable, and due return has been made on the writor order of sale, the clerk of the court which issued the writ or rendered the order, on the writtendemand of the purchaser, his agent, or attorney at law, shall issue a writ of possession. This writshall be addressed to the sheriff or constable, commanding him to put the purchaser in physicalpossession of the property sold, in the same manner as now provided by law for other writs of possession.

XIV. MOVABLE PROPERTY - UCC

LSA-R.S. 13:4108.3.3. Relation to Chapter 9 of the Louisiana Commercial Laws

The rights or absence thereof of a secured creditor to pursue and collect a deficiency from a debtor,guarantor, or surety in connection with a secured transaction subject to Chapter 9 of the LouisianaCommercial Laws (R.S. 10:9-101, et seq.) shall be exclusively subject to the provisions of Chapter9.

Gulfco Finance Company v. Boyd, 702 So.2d 342, 29,975 (La.App. 2 Cir. 10/29/97). UnderLSA-R.S. 13:4108.3, an appraisal of property subject to a Chapter 9 security interest is notrequired to preserve subsequent deficiency rights.

R.S. 10:9-629. Judicial proceedings; authentic evidence

(a) Foreclosure. For purposes of executory or ordinary process seeking enforcement of a securityinterest and the obligation it secures:

(1) An authenticated record that contains a confession of judgment shall be deemed to be authentic

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for purposes of executory process.

(2) The negotiation, assignment, pledge, or other transfer in whole or in part of an obligation or ofany right therein or thereto secured by a security interest may be proven by any record authenticatedby the secured party or any person entitled to effect such a transfer, and such record shall be deemedauthentic for purposes of executory process.

(3) The signatures of all debtors, makers, purchasers, payees, sellers, secondary obligors, or anyother persons whose signatures purport to appear upon or be affixed to a written security agreement,instrument, negotiable document, chattel paper, general intangible, or other writing evidencing asecurity interest, or an obligation secured by a security interest, and the signatures of all secondaryobligors, endorsers, assignors, pledgors or others whose signatures purport to appear upon or beaffixed to any writing transferring rights in or to such a written security agreement, instrument,negotiable document, chattel paper, general intangible, or other security interest or obligation, arepresumed to be genuine if the verified petition, or an affidavit attached thereto, for executory orordinary process with which they are filed or in which they are identified, alleges or affirms that theyare genuine to the best of the information, knowledge, or the belief of the plaintiff or affiant and nofurther evidence shall be required of such signatures for the purposes of executory or ordinaryprocess.

(4) The authority and capacity of persons who purport to sign any written document or instrumentdescribed in subsections (a)(1) and (a)(2), in a representative capacity, shall be presumed if suchpersons' signatures are presumed genuine in accordance with the provisions of subsection (a)(3), orare proven in any other manner permitted by law and no further evidence of such authority orcapacity is required for executory or ordinary process.

(5) The amount of any advances made, whether in written form or otherwise, or of other obligationssecured by any security interest or agricultural lien, the terms of such obligations, insofar as theyare relevant, the amount thereof due and unpaid, and the fact of the debtors' default may be provenby affidavit or verified petition.

(6) The affidavits or verified petitions referred to in subsections (a)(3), (a)(4), and (a)(5) may bebased upon a plaintiff's or affiant's personal knowledge or upon information and belief based uponthe records of the secured party, any assignee, or any other person that are kept or obtained in theordinary course of business. The petition or affidavit need not particularize or specifically identifythe records or data upon which such knowledge, information or belief is founded.

(b) Provisions not exclusive. The provisions of this section are cumulative and shall not precludeproof in any other manner permitted by law of any fact for purposes of executory, ordinary, or otherprocess seeking enforcement of security interests and agricultural liens, and the obligations they secure.

Finova Capital Corp. v. IT Corp., 774 So.2d 1129, 33,994 (La.App. 2 Cir. 12/15/00). The

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holder of a security interest in equipment possesses no cause of action against third partiesfor unjust enrichment with respect to the encumbered equipment. Holder’s remedy is to suefor executory process to obtain return of its collateral.