106 So. 3d 653
La. Ct. App.2012Background
- FBT obtained a deficiency judgment after a 2010 sheriff sale of 7515 St. Charles Ave., with judgment entered in early 2012.
- TTI and Todd Tedesco defaulted on a 26 March 2009 note; Tedesco executed a personal continuing guaranty on 28 June 2008.
- The 2009 refinancing merged several prior loans into loan number 100205787 for $1,607,909.35; no new personal guaranty was signed for this loan.
- On 30 April 2009, FBT transferred the 25 June 2008 note and collateral to Terry Tedesco Home Builders, LLC (TTHB); the transfer did not extinguish the underlying debt.
- FBT’s deficiency calculation included principal, interest, fees, taxes, and costs with a credit of $696,666.67; Runco’s later calculation asserted a higher amount.
- The trial court held Tedesco personally liable only for the balance of loan 100200702; the appellate court ultimately reversed in part and amended the judgment, including costs allocation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 28 June 2008 guaranty continued to apply to the 26 March 2009 refinancing | FBT: guaranty is continuing and applicable to future indebtedness | Tedesco/TTI: refinanced loan without new guaranty; guaranty limited to original loan | Yes; guaranty remained in effect and applied to refinancing |
| Whether FBT properly proven Tedesco’s personal liability under the Deficiency Judgment Act | FBT proved obligation and deficiency facts including guaranty | Defendant: insufficient proof without guaranty; delayed production of guaranty improper | Yes; guaranty admitted and liability established under Act |
| Whether the appraisal process complied with statutory requirements and supported the deficiency judgment | Appraisals were valid and sufficient; drive-by appraisal acceptable under substantial compliance | Appraisals defective (no oath/signature) and prejudicial | Appraisals valid under substantial compliance; no reversal of deficiency judgment warranted |
| Who bears the costs of the deficiency judgment on appeal | FBT prevailing should recover costs | FBT should not bear all costs; costs should be allocated | Costs reversed; all costs and attorney’s fees assessed against Tedesco and TTI |
Key Cases Cited
- First Guaranty Bank, Hammond, Louisiana v. Baton Rouge Petroleum Center, Inc., 529 So.2d 834 (La. 1987) (deficiency judgments require pleadings and proof of obligation and proper sale procedures)
- Bourgeois v. Sazdoff, 209 So.2d 320 (La. App. 4th Cir. 1968) (oath and formality issues in appraisal can be non-fatal defects if substantial compliance exists)
- John Deere Co. v. Loewer, 505 So.2d 973 (La. App. 3d Cir. 1987) (lack of formal oath not always fatal; substantial compliance suffices)