Master Automotive Warehouse, Inc. v. Amato
Docket: Nos. 89-CA-38, 89-CA-111
Court: Louisiana Court of Appeal; June 16, 1989; Louisiana; State Appellate Court
A mortgage foreclosure proceeding led to consolidated appeals involving the second-ranked mortgage holder, Master Automotive Warehouse, Inc., contesting attorney's fees claimed by the first-ranked mortgage holder's attorneys. The judicial auction did not yield enough funds to satisfy the second mortgage after covering the first mortgage's costs. Master Automotive sued the attorneys of the first mortgage holder, alleging their refusal to advise a compromise in the foreclosure and their failure to address a title defect, causing financial harm to Master. The defendants filed exceptions of no cause of action, no right of action, res judicata, and lis pendens. The trial court dismissed Master Automotive's claim on the basis of no cause of action, ruling that there were no allegations of privity of contract, warranty of results, or retention by the plaintiff regarding the defendants. The appellate court agreed with the dismissal, adopting reasoning from a prior case (Central Progressive Bank v. Bradley), which established that second mortgage holders could intervene in foreclosure to contest attorney's fees but had no direct right of action against the first mortgage holder's attorneys, as the obligation to pay attorney's fees arose from the debtor's mortgage, not from any contract with the attorneys. Consequently, Master Automotive had no right of action against the attorneys, and the dismissal of the lawsuit was affirmed. The court did not address additional exceptions or claims regarding title issues, as they were not raised on appeal. Costs of the appeal were assessed against the appellant.