254 So. 3d 13
La. Ct. App.2018Background
- Lela Mae Marioneaux died in 1994; her residuary estate (including extensive DeSoto Parish land and mineral rights) was held in the LMJM Trust for benefit of her children and successors.
- In 2005 Lucien (as trustee) and others transferred LMJM Trust assets into entities (HBM Interests, HBM CMS, and a Partnership) as part of an estate plan; plaintiffs later allege those October 2005 transfers were absolute nullities and that trust assets were misappropriated.
- Bruce III (grandson) sued in 2014; that suit settled in December 2014 by conveying specified land, mineral rights, cash and brokerage funds to the Bruce III Trust; settlement included releases and a “further instruments” clause.
- In 2015 Sue and the Sue Trust sued the same defendants seeking to annul the 2005 transfers and recover trust assets; defendants excepted nonjoinder and the Bruce III Trust intervened and moved for summary judgment to be dismissed from the suit.
- Trial court granted the Bruce III Trust’s summary judgment and dismissed it (and defendants’ cross-claim against it); defendants appealed arguing genuine issues of material fact exist about whether a nullity finding would affect title conveyed in the settlement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether intervenor Bruce III Trust is entitled to summary judgment/dismissal | Settlement and releases bar claims; no pending claims against Trust; Trust is entitled to dismissal | If 2005 transfers are absolute nullities, title to assets conveyed to Trust in settlement may be invalid; genuine factual issues exist | Reversed: summary judgment improperly granted; genuine issues of material fact exist; remanded |
| Effect of declaring 2005 transfers absolute nullities on title conveyed in settlement | Even if prior transfers are null, La. C.C. art. 2035 protects good-faith third-party transferees; remedies would be damages, not return of property | Nullity would vitiate chain of title and could require rescission or restoration; settlement relied on validity of those transfers | Court found unresolved factual and legal issues on the effect of a nullity; cannot resolve on summary judgment |
| Whether Bruce III Trust is a third party in good faith under La. C.C. art. 2035 | Trust asserts status as good-faith third-party transferee, which would preserve its rights to property | Defendants dispute good-faith status and assert that factual disputes exist about notice/validity | Genuine issue of material fact exists regarding good-faith status; summary judgment inappropriate |
| Whether “further instruments” clause in settlement preserves Trust’s title despite nullity findings | Settlement’s further-instruments clause and releases require parties to execute documents to consummate settlement, preserving Trust’s position | Clause may not bind non-signatories (e.g., Sue individually); clause may not cure defects if underlying conveyances are void | Court held effect of clause is disputed and cannot be resolved on summary judgment; factual issue remains |
Key Cases Cited
- Peironnet v. Matador Res. Co., 144 So.3d 791 (La. 2013) (standard for appellate de novo review of summary judgment)
- Schultz v. Guoth, 57 So.3d 1002 (La. 2011) (purpose and use of summary judgment procedure)
- Jackson v. City of New Orleans, 144 So.3d 876 (La. 2014) (definition of genuine issue of material fact for summary judgment)
- Chanler v. Jamestown Ins. Co., 223 So.3d 614 (La. App. 2 Cir. 2017) (courts should not weigh evidence or make credibility determinations on summary judgment)
- Bank of Am., N.A. v. Green, 249 So.3d 219 (La. App. 2 Cir. 2018) (summary judgment review principles on appeal)