Aaron & Turner, L.L.C. v. Perret
22 So.3d 910, 2007 La.App. 1 Cir. 1701, 2009 La. App. LEXIS 652 (2009)
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Rule of Law:
Under Louisiana law, a contract's validity depends on consent and lawful cause, not common law consideration, and a party moving for summary judgment to dismiss a tort claim (such as legal malpractice) must specifically point to an absence of evidence for an element of that tort, not merely challenge the validity of a related contract.
Facts:
- In 2001, Melissa Michelle Perret sought to refinance her home mortgage with ABN AMRO Mortgage Group, Inc. (ABN) as the intended lender.
- The law firm Aaron & Turner, L.L.C. acted as the closing agent for the transaction.
- Perret executed a promissory note and mortgage in favor of ABN.
- Aaron & Turner disbursed the loan funds to and on behalf of Perret under the mistaken belief that ABN had funded the loan.
- In fact, ABN never provided the funds for the transaction.
- Several years later, upon discovering the error, Aaron & Turner obtained an assignment of the note and mortgage from ABN.
- Aaron & Turner then demanded payment from Perret for the full amount disbursed plus interest and fees.
Procedural Posture:
- Aaron & Turner, L.L.C. filed a petition in the 19th Judicial District Court (a trial court) to enforce a promissory note and mortgage against Melissa Michelle Perret.
- Perret filed a reconventional demand (counterclaim) against Aaron & Turner, asserting a claim for negligence in its handling of the loan closing.
- Aaron & Turner filed a motion for summary judgment seeking the dismissal of Perret's reconventional demand.
- Perret filed a cross-motion for partial summary judgment to have the note and mortgage declared null.
- The trial court granted summary judgment in favor of Aaron & Turner, dismissing Perret's reconventional demand with prejudice, and denied Perret's motion.
- Perret, as appellant, appealed the grant of summary judgment to the Court of Appeal of Louisiana, First Circuit (an intermediate appellate court).
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Issue:
Is summary judgment dismissing a borrower's legal malpractice counterclaim proper when genuine issues of material fact exist regarding whether the original lender consented to the underlying loan agreement, and where the moving party fails to address the specific elements of the malpractice claim?
Opinions:
Majority - Hughes, J.
No. Summary judgment was improper for two main reasons. First, a genuine issue of material fact exists as to whether a valid contract was ever formed, because there is no conclusive evidence that the lender, ABN, consented to the agreement. A contract is null without a meeting of the minds, and if ABN never consented, it had no rights in the note or mortgage to assign to Aaron & Turner. Second, Aaron & Turner failed to meet its burden as the movant for summary judgment. To dismiss Perret’s legal malpractice claim, it was required to point out an absence of factual support for an essential element of that claim. Instead, it only argued that the note was valid, which is insufficient to defeat a separate tort claim based on the law firm's alleged negligence in handling the closing.
Concurring - Pettigrew, J.
Yes, I concur with the result to reverse the summary judgment. The procedural issues in this case arose because the creditor improperly filed a suit for executory process after having already filed an ordinary proceeding on the same promissory note and mortgage.
Concurring - Guidry, J.
Yes, I concur in the result that summary judgment should be reversed. However, I disagree with the majority's reasoning that questions ABN's consent to the contract. The issue of a defect in consent creates a relative nullity, which can only be raised by the party whose consent was defective (ABN), not by the court on its own initiative. The majority's inappropriate raising of this issue seems intended to influence a separate, related appeal.
Analysis:
This decision reinforces the distinction between Louisiana's civilian concept of 'cause' and the common law doctrine of 'consideration,' clarifying that non-performance of an obligation is a breach, not a failure of cause. More significantly, it provides a strong precedent on the procedural requirements for summary judgment. The ruling clarifies that a party moving to dismiss a claim for which it will not bear the burden of proof at trial must specifically attack the elements of that claim. A general challenge to a related but distinct issue, like the validity of an underlying contract, is not sufficient to dismiss a tort claim like legal malpractice, thereby protecting the non-moving party's right to a trial on the merits.
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