166 So. 3d 998
La. Ct. App.2014Background
- JOD operated a Metairie bar/nightclub; it borrowed funds via MVP promissory notes later acquired by Lucky Coin.
- Jaume acquired JOD stock and signed notes as personal guarantor; debt from MVP/JOD included in stock purchase.
- Multiple promissory notes were signed by Jaume on behalf of JOD, some bearing interest; several notes were transferred between entities.
- Payments were made by JOD/Jaume directly or via withholding video poker revenues, ending with a final payment in 2011.
- Lucky Coin filed suit March 13, 2012; 2013 trial resulted in judgment for Lucky Coin for about $47,182 plus interest, fees, costs; Jaume liable in solido with JOD; debt deemed consolidated.
- Appeal followed challenging prescription, consolidation, solidary liability, and calculation methods; appellate review affirmed trial court’s rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Prescription of the debts | Lucky Coin: notes not prescribed; payments interrupted prescription | Defendants: notes prescribed; five-year period elapsed | Not prescribed; payments interrupted prescription; timely filing |
| Consolidation of debts | Debts accounted for as one consolidated debt; payments apply to overall debt | No evidence of consolidation; promissory notes should be separate | Debts treated as one consolidated and continuing debt |
| Solidary liability of Jaume | Jaume signed as guarantor; in solido language shows intent | Jaume signed only some notes; not solidary for all | Jaume liable in solido with JOD |
| Calculation of award | Payments applied to most burdensome debt per articles; proper imputation | No evidence of agreed imputation; payments misapplied to Jaume’s benefit | Payments imputed correctly; calculation affirmed |
Key Cases Cited
- Babin v. Babin, 10 So.3d 735 (La.App. 5 Cir. 2009) (interruption of prescription; standard of review for prescription)
- Alvarez v. Southeast Commercial Cleaning, LLC, 136 So.3d 329 (La.App. 5 Cir. 2014) (prescription and burden of proof; peremptory exception review)
- N.E.N.H, L.L.C. v. Broussard-Baehr Holdings, L.L.C., 142 So.3d 91 (La.App. 5 Cir. 2014) (suretyship and solidarity liability; express guaranty)