author: 1MAX N. TOBIAS JR., Judge.u

text:
    LIBERTY BANK AND TRUST COMPANY v. Joan Miller, Wife of/and Delmont O. DAPREMONT, Jr.
    No. 2002-CA-1504.
    Court of Appeal of Louisiana, Fourth Circuit.
    Feb. 11, 2003.
    Rehearing Denied April 30, 2003.

      Gerard 0. Salassi TV, Newman, Mathis, Brady, Wakefield & Spedale, Metairie, LA, and John S. Keller, New Orleans, LA, for PlaintiffiAppellant.
    Patrick D. Breeden, New Orleans, LA, and Joseph W. Thomas, New Orleans, LA, for Defendants/Appellees.
    (Court Composed of Judge CHARLES R. JONES, Judge JAMES F. McKAY III, Judge MAX N. TOBIAS, JR.).
   1MAX N. TOBIAS JR., Judge.u

Liberty Bank and Trust Company (“Liberty”) appeals the trial court’s granting of a writ of preliminary injunction, enjoining an order for executory process to seize and sell the defendants’ property. For the reasons below, we reverse the trial court, set aside the writ of preliminary injunction, and permit the seizure and sale of the properties in question to proceed by execu-tory process.

A review of the history of this matter reveals that on 1 February 2000, Liberty filed a verified petition for executory process against the defendants, Delmont Da-premont, Jr. and his wife, Joan Miller Dapremont, seeking to foreclose on property mortgaged by them located at 7421 Chadbourne Drive, New Orleans, Louisiana. Included in the petition was the allegation that the defendants were in default on their obligation. Attached to that verified petition were:

(1) A promissory note (“hand note”) signed by Delmont Dapremont, Jr., on behalf of American Auto Sales, Inc., dated 16 August 1999 for the principal amount of $350,100.00;
(2) A collateral mortgage, dated 18 June 1997, executed in authentic form, naming Delmont Dapremont Jr. d/b/a American Auto Sales as borrower, Del-mont Dapremont, Jr. and Joan Miller Dapremont as | gmortgagors, and signed by Delmont Dapremont, Jr. and Joan Miller Dapremont; and
(3) A collateral mortgage note, payable to the order of bearer, dated 18 June 1997, paraphed “Ne Varietur” for identification with the collateral mortgage, and signed by Delmont Dapre-mont, Jr. and Joan Miller Dapremont.

On 17 March 2000, Liberty filed a supplemental and amending verified petition for executory process, which added Hilda Palao Dapremont and Elaine Dapremont Trotter as defendants. That petition also sought to foreclose on property mortgaged by Delmont Dapremont, Jr., Hilda Palao Dapremont, and Elaine Dapremont Trotter located at 3962-64 Pauger Street, New Orleans, Louisiana. Attached to the supplemental and amending verified petition were:

(1) A collateral mortgage, dated 18 June 1997, executed in authentic form, naming Delmont Dapremont Jr. d/b/a American Auto Sales as borrower, Del-mont Dapremont, Jr., Hilda Palao Da-premont, and Elaine Dapremont Trotter as mortgagors, and signed by Delmont Dapremont, Jr., Hilda Palao Dapremont, and Elaine Dapremont Trotter; and
(2) A collateral mortgage note, dated 18 June 1997, made payable to the order of bearer, paraphed “Ne Varietur” for identification with the collateral mortgage, and signed by Delmont Dapre-mont, Jr., Hilda Dapremont, and Elaine Dapremont Trotter.

Thereafter, the trial court signed an order of executory process pursuant to which the defendants’ properties were seized.

On 22 May 2000, the defendants filed a petition seeking to enjoin the sale, alleging that Liberty’s verified petition and its attachments did not satisfy the law of execu-tory process. A hearing was held on 30 June 2000, at which the trial court granted the defendants’ request for a writ of preliminary injunction.

laOn appeal, a panel of this court affirmed the trial court’s ruling enjoining the sale, finding that Liberty had not met the strict requirements necessary to avail itself of executory process. In addition, the court remanded the case to the trial court to fix the amount of the bond.

On remand, Liberty filed a second supplemental and amending verified petition for executory process on 7 March 2002, and attached the following exhibits in an effort to correct the deficiencies found in its earlier petitions:

(1) A commercial guaranty dated 11 June 1998, executed in authentic form naming American Auto Sales, Inc. as the borrower and Delmont Dapremont, Jr. as the guarantor and signed by Delmont Dapremont, Jr.;
(2) A pledge of collateral mortgage note dated 16 August 1999 executed in authentic form naming American Auto Sales, Inc. as the borrower and Delmont Dapremont, Jr. and Joan Miller Dapre-mont as the grantor and signed by Del-mont Dapremont, Jr. and Joan Miller Dapremont. The document references the collateral mortgage dated 18 June 1997 on the property located at 7421 Chadbourne Drive, New Orleans, Louisiana and a promissory note dated 16 August 1999 in the amount of $350,100.00;
(3) A corporate resolution dated 16 August 1999 executed in authentic form naming American Auto Sales, Inc. as the borrower and authorizing the president of the corporation, Delmont Dapremont, Jr., various powers which are enumerated. The resolution is signed by Delmont Dapremont, Jr.; and
(4) A pledge of collateral mortgage note, dated 18 June 1997 executed in authentic form naming Delmont Dapre-mont, Jr., Hilda Palao Dapremont, and Elaine Dapremont Trotter as the grant- or and signed by Delmont Dapremont, Jr., Hilda Palao Dapremont, and Elaine Dapremont Trotter. This pledge references the collateral mortgage dated 18 June 1997 and a promissory note dated 18 June 1997 in the amount of $75,021.00, which $75,021.00 note is not in the record.

|40n 7 March 2002, the trial court signed a new order of executory process and the defendants’ property was seized. The defendants then filed a supplemental and amending petition for a writ of preliminary injunction and a motion for contempt, alleging that Liberty was in contempt of the trial court’s previous preliminary injunction.

After reviewing the record, the trial court again found that Liberty failed to comply with the strict requirements of ex-ecutory process. It again issued a writ of preliminary injunction with a bond of $4,500.00. In particular, the trial court stated:

[Ljiberty has failed in its petition for executory process to attach a pledge agreement by which the owners of the property at 3962-64 Pauger Street, New Orleans, La., pledged the collateral mortgage and collateral mortgage note to secure the debt of the corporation. Rather, Liberty has attached to its supplemental and amending petition for ex-ecutory process a pledge of collateral mortgage and collateral mortgage note to secure a promissory note in the amount of $75,021.00, which has not been made a part of the record. Nowhere, in the documentation submitted does Liberty submit evidence that the collateral mortgage, and collateral mortgage note executed by Delmont Dapre-mont, Jr., Hilda Palao Dapremont, and Elaine Dapremont Trotter were pledged to secure either the promissory note in the amount of $350,100.00 or the promissory note in the amount of $75,021.00 (which is not in the record).
As such, the Court finds the evidence pertinent for plaintiffs [sic] to proceed via executory process is missing from the record, i.e., the acknowledgment of pledge of the collateral mortgage note and collateral mortgage which secures the debt executed by Delmont Dapre-mont, Jr., Hilda Palao Dapremont, and Elaine Dapremont Trotter. Accordingly, the Court grants defendant’s [sic] petition for preliminary injunction, enjoining the seizure and sale of the defendant’s [sic] property. [Emphasis in original.]

| ¡¡However, finding Liberty in good faith by filing the supplemental and amending verified petition for executory process, the trial court denied the defendants’ motion for contempt for Liberty’s alleged willful disobedience of the first preliminary injunction.

It is from this judgment that Liberty takes an appeal pursuant to La. C.C.P. art. 3612. Liberty contends that it has fulfilled all requirements to proceed by executory process and that the trial court erred by issuing the writ of preliminary injunction.

The requirements with respect to execu-tory proceedings are found in La. C.C.P. art. 2631 et seq. In particular, articles 2634-37 discuss the authentic evidence that must, and the evidence that need not, be submitted with a petition for executory process, as follows:

Art. 2634. Petition
A person seeking to enforce a mortgage or privilege on property in an exec-utory proceeding shall file a petition therefor, praying for the seizure and sale of the property affected by the mortgage or privilege. This petition shall comply with Article 891, and the plaintiff shall submit therewith the exhibits mentioned in Article 2635.
Art. 2635. Authentic evidence submitted with petition
A. In order for a plaintiff to prove his right to use executory process to enforce the mortgage, security agreement, or privilege, it is necessary only for the plaintiff to submit with his petition authentic evidence of:
(1) The note, bond, or other instrument evidencing the obligation secured by the mortgage, security agreement, or privilege.
(2) The authentic act of mortgage or privilege on immovable property importing a confession of judgment.
|fi(3) The act of mortgage or privilege on movable property importing a confession of judgment whether by authentic act or by private signature duly acknowledged.
B. This requirement of authentic evidence is necessary only in those cases, and to the extent, provided by law. A variance between the recitals of the note and of the mortgage or security agreement regarding the obligation to pay attorney’s fees shall not preclude the use of executory process.
Art. 2636. Authentic evidence
The following documentary evidence shall be deemed to be authentic for purposes of executory process:
(1) The note, bond, or other instrument evidencing the obligation secured by the mortgage, security agreement, or privilege, paraphed for identification with the act of mortgage or privilege by the notary or other officer before whom it is executed, with the exception that a paraph is not necessary in connection with a note secured by a security agreement subject to Chapter 9 of the Louisiana Commercial Laws;
(2) A certified copy or a duplicate original of an authentic act;
(3) A certified copy of any judgment, judicial letters, or order of court;
(4) A copy of a resolution of the board of directors, or other governing board of a corporation, authorizing or ratifying the execution of a mortgage on its property, certified in accordance with the provisions of R.S. 13:4108;
(5) A security agreement subject to Chapter 9 of the Louisiana Commercial Laws, which need not be executed or acknowledged before a notary.
(6) A certified copy of the limited liability company’s articles of organization filed with the secretary of state or a written consent or extract of minutes of a meeting of the persons specified in R.S. 13:4103.1, in each case authorizing or ratifying the execution of an act of mortgage on its property and in the 17form required by R.S. 13:4103.1, certified as provided in R.S. 12:1317(C).
(7) A certified copy of the contract of partnership authorizing the execution of an act of mortgage filed for registry with the secretary of state.
(8) All other documentary evidence recognized by law as authentic.
Art. 2637. Evidence which need not be authentic
A.Evidence as to the proper party defendant, or as to the necessity for appointing an attorney at law to represent an unrepresented defendant, or of any agreement to extend or modify the obligation to pay or of written notification of default, or of the breach or occurrence of a condition of the act of mortgage, or of the security agreement, or privilege securing the obligation, or of advances made by the holder of a collateral mortgage note or note for future advances, or of an obligation secured under Chapter 9 of the Louisiana Commercial Laws, need not be submitted in authentic form. These facts may be proved by the verified petition, or supplemental petition, or by affidavits submitted therewith.
B. If a mortgage sought to be enforced secures the repayment of any advances for the payment of taxes, insurance premiums, or special assessments on, or repairs to, or maintenance of, the property affected by the mortgage or security agreement, the existence, date, and amount of these advances may be proved by the verified petition, or supplemental petition, or by affidavits submitted therewith.
C. If a mortgage sought to be enforced is a collateral mortgage on movable or immovable property, or if the security agreement sought to be enforced secured multiple or other and future indebtedness of the debtor, the existence of the actual indebtedness may be proved by the verified petition or supplemental petition, with the hand-note, handnotes, or other evidence representing the actual indebtedness attached as an exhibit to the petition.
D. Evidence of a name change, merger, purchase and assumption, or similar disposition or acquisition, of a financial or lending institution may be proved by a|sverified petition or supplemental petition, or by an affidavit or affidavits submitted therewith by an appropriate officer of the successor entity.
E. Evidence of the name change or death of any party need not be submitted in authentic form, but may be proved by verified petition or supplemental petition, or by affidavit submitted therewith.

La. R.S. 10:9-629, which took effect on 1 July 2001, provides further guidance on what constitutes “authentic evidence” for the purposes of foreclosure via both execu-tory and ordinary process:

§ 9-629. Judicial proceedings; authentic evidence
(a) Foreclosure. For purposes of ex-ecutory or ordinary process seeking enforcement of a security interest and the obligation it secures:
(1) An authenticated record that contains a confession of judgment shall be deemed to be authentic for purposes of executory process.
(2) The negotiation, assignment, pledge, or other transfer in whole or in part of an obligation or of any right therein or thereto secured by a security interest may be proven by any record authenticated by the secured party or any person entitled to effect such a transfer, and such record shall be deemed authentic for purposes of executory process.
(3) The signatures of all debtors, makers, purchasers, payees, sellers, secondary obligors, or any other persons whose signatures purport to appear upon or be affixed to a written security agreement, instrument, negotiable document, chattel paper, general intangible, or other writing evidencing a security interest, or an obligation secured by a security interest, and the signatures of all secondary obligors, | flendorsers, assignors, pledgors or others whose signatures purport to appear upon or be affixed to any writing transferring rights in or to such a written security agreement, instrument, negotiable document, chattel paper, general intangible, or other security interest or obligation, are presumed to be genuine if the verified petition, or an affidavit attached thereto, for executory or ordinary process with which they are filed or in which they are identified, alleges or affirms that they are genuine to the best of the information, knowledge, or the belief of the plaintiff or affiant and no further evidence shall be required of such signatures for the purposes of exec-utory or ordinary process.
(4) The authority and capacity of persons who purport to sign any written document or instrument described in subsections (a)(1) and (a)(2), in a representative capacity, shall be presumed if such persons’ signatures are presumed genuine in accordance with the provisions of subsection (a)(3), or are proven in any other manner permitted by law and no further evidence of such authority or capacity is required for executory or ordinary process.
(5) The amount of any advances made, whether in written form or otherwise, or of other obligations secured by any security interest or agricultural lien, the terms of such obligations, insofar as they are relevant, the amount thereof due and unpaid, and the fact of the debtors’ default may be proven by affidavit or verified petition.
(6) The affidavits or verified petitions referred to in subsections (a)(3), (a)(4), and (a)(5) may be based upon a plaintiffs or affiant’s personal knowledge or upon information and belief based upon the records of the secured party, any assignee, or any other person that are kept or obtained in the ordinary course of business. The petition or affidavit need not particularize or specifically identify the records or data upon |10which such knowledge, information or belief is founded.
(b) Provisions not exclusive. The provisions of this section are cumulative and shall not preclude proof in any other manner permitted by law of any fact for purposes of executory, ordinary, or other process seeking enforcement of security interests and agricultural liens, and the obligations they secure.

In order to stop the seizure and sale of property, the defendant may assert objections through an injunction proceeding, as set forth in La. C.C.P. arts. 2751-52, as follows:

Art. 2751. Grounds for arresting seizure and sale; damages
The defendant in the executory proceeding may arrest the seizure and sale of the property by injunction when the debt secured by the security interest, mortgage, or privilege is extinguished, or is legally unenforceable, or if the procedure required by law for an execu-tory proceeding has not been followed.
Art. 2752. Injunction procedure
A. The petition for injunction shall be filed in the court where the executory proceeding is pending, either in the ex-ecutory proceeding or in a separate suit. The injunction proceeding to arrest a seizure and sale shall be governed by the provisions of Articles 3601 through 3609 and 3612, except as provided in Article 2753. However, a temporary restraining order shall not issue to arrest the seizure and sale of immovable property, but the defendant may apply for a preliminary injunction in accordance with Article 3602. In the event the defendant does apply for a preliminary injunction the hearing for such shall be held before the sale of the property.
B. If the court finds that the temporary restraining order or preliminary injunction was wrongfully issued, the court, unless the proceedings are stayed, in addition to the damages authorized under Article 3608, may allow the sheriff to proceed with the sale by virtue of the prior advertisement, if not expired.

_JjjA writ of preliminary injunction may only be issued for certain reasons, as set forth in La. C.C.P. art. 3601, as follows:

Art. 3601. Injunction, grounds for issuance; preliminary injunction; temporary restraining order
An injunction shall issue in cases where irreparable injury, loss, or damage may otherwise result to the applicant, or in other cases specifically provided by law; provided, however, that no court shall have jurisdiction to issue, or cause to be issued, any temporary restraining order, preliminary injunction, or permanent injunction against any state department, board or agency, or any officer, administrator or head thereof, or any officer of the State of Louisiana in any suit involving the expenditure of public funds under any statute or law of this state to compel the expenditure of state funds when the director of such department, board or agency, or the governor shall certify that the expenditure of such funds would have the effect of creating a deficit in the funds of said agency or be in violation of the requirements placed upon the expenditure of such funds by the legislature.
During the pendency of an action for an injunction the court may issue a temporary restraining order, a preliminary injunction, or both, except in cases where prohibited, in accordance with the provisions of this Chapter.
Except as otherwise provided by law, an application for injunctive relief shall be by petition.

A preliminary injunction is an ancillary proceeding and the right to the permanent injunction must be proven before a preliminary injunction may issue. See Editors’ Notes to La. C.C.P. art. 3601.

In Diamond Services Corp. v. Benoit, 2000-0469, pp. 5-8 (La.2/21/01), 780 So.2d 367, 370-72, the Supreme Court explained collateral mortgages as follows:

The collateral mortgage, though now recognized by statute, is a form of conventional mortgage that was developed by Louisiana’s practicing lawyers and has long been recognized by Louisiana courts. Levy v. Ford, 41 La. Ann. 873, 6 So. 671 (La.1889); Merchants’ Mut. Ins. Co. v. Jamison, 25 La. Ann. 363 (La.1873); Succession of Dolhonde, 21 La. Ann. 3, 1869 WL 4559 (La.1869). The collateral mortgage arose out of the need for a special form of mortgage to secure revolving lines of credit and multiple present and future cross-collat-eralized debts for which there was no provision in the Civil Code. David S. Willenzik, Future Advance Priority Rights of Louisiana Collateral Mortgages: Legislative Revisions, New Rules, and a Modem Alternative, 55 La. L.Rev. 1, 7 (1999). The collateral mortgage was designed “to create a mortgage note that can be pledged as collateral security for either a pre-exist-ing debt, or for a debt created contemporaneously with the mortgage, or for a future debt or debts, or even for a series of debts.” Max Nathan, Jr. & H. Gayle Marshall, The Collateral Mortgage, 33 La. L.Rev. 497 (1973). One advantage it holds for creditors is that liabilities are ranked from the date of the original pledge of the collateral mortgage note (assuming the mortgage has been recorded), rather than [2000-0469 La. 6] from the date of the individual, subsequent advances. Further, the creditor is able to secure multiple present and future loans and obligations on a cross-collateralized basis.
This Court discussed the fundamentals of a collateral mortgage in First Guaranty Bank v. Alford, 366 So.2d 1299, 1302 (La.1978), as follows:
A mortgage is an accessory right which is granted to the creditor over the property of another as security for the debt. La. Civ.Code arts. 3278, 3284. Mortgages are of three types: conventional, legal and judicial. La. Civ.Code art. 3286. Within the area of conventional mortgages, three different forms of mortgages are recognized by the Louisiana statutes and jurisprudence: an “ordinary mortgage” (La. Civ.Code arts. 3278, 3290); a mortgage to secure future advances (La. Civ.Code arts. 3292, 3293); and a collateral mortgage. See Thrift Funds Canal, Inc. v. Foy, 261 La. 573, 260 So.2d 628 (1972). Unlike the other two forms of conventional mortgages, a collateral mortgage is not a “pure” mortgage; rather, it is the result of judicial recognition that one can pledge a note secured by a mortgage and use this pledge to secure yet another debt.
| i;iA collateral mortgage indirectly secures a debt via a pledge. A collateral mortgage consists of at least three documents, and takes several steps to complete. First, there is a promissory note, usually called a collateral mortgage note or a “ne varie-tur” note. The collateral mortgage note is secured by a mortgage, the so-called collateral mortgage. The mortgage provides the creditor with security in the enforcement of the collateral mortgage note.
Up to this point, a collateral mortgage appears to be identical to both a mortgage to secure future advances and an ordinary mortgage. But a distinction arises in the collateral mortgage situation because money is not directly advanced on the note that is paraphed for identification with the act of mortgage. Rather, the collateral mortgage note and the mortgage which secures it are pledged to secure a debt.
366 So.2d at 1302 (emphasis in original).
Pledge is an accessory contract by which one debtor gives something to a creditor as security for the debt. La. Civ.Code art. 3133; Texas Bank of Beaumont v. Bozorg, 457 So.2d 667, 671 n. 4 (La.1984). Invariably, the thing given as security for the debt is a movable, in which case the contract is more accurately called pawn. La. Civ.Code arts. 3134 and 3135. A person may give a pledge not only for his own debt, but also for that of another. La. Civ.Code art. 3141. The pledge secures only that debt or debts contemplated in the contract between the pledgor and pledgee. Alford, 366 So.2d at 1304 (quoting Durham v. First Guaranty Bank of Hammond, 331 So.2d 563, 565 (La.App. 1st Cir.1976)); see also Peter S. Title, Louisiana Real Estate Transactions, Second Edition, § 14.9 (2000).
A collateral mortgage is not a “pure” mortgage; instead, it combines the security devices of mortgage and pledge into one. First Federal Savings & Loan Ass’n v. Moss, 616 So.2d 648, 654 (La.1993). It is important to remember that the collateral mortgage does not directly secure a debt; instead, the collateral mortgage device “is | udesigned to create a mortgage note for a fictitious debt that can be pledged as collateral security for a real debt.” Bozorg, 457 So.2d at 671; see also David S. Willenzik, Louisiana Secured Transactions, § 2:13 (2000) (“The borrower’s mortgage secures a fictitious collateral mortgage note, which is payable to bearer on demand. The collateral mortgage note is then pledged under a collateral pledge agreement to secure the borrower’s true indebtedness under one or more hand notes.”). Because the mortgagor, after executing the collateral mortgage and the collateral mortgage note, then pledges the collateral mortgage note as security for a debt, usually represented by a separate hand note, the collateral mortgage package combines the security devices of pledge and mortgage. Bozorg, 457 So.2d at 671 (citing Nathan & Marshall, The Collateral Mortgage, 33 La. L.Rev. at 498). (Footnotes omitted.)

We now turn to the documents at issue in this litigation, first addressing those attached to the original verified petition for executory process. Liberty is suing to collect on a promissory note (hand note) made by American Auto Sales, Inc. (“AAS”), as borrower, to Liberty, as lender, dated 16 August 1999, in the principal amount of $350,100.00. The note is signed by Delmont Dapremont, Jr., as President of AAS, and is secured by the following, as stated therein:

Detailed Collateral Description. 2nd DCM IN THE AMOUNT OF $300,000.00 DATED 6/18/97 ON PROPERTY LOCATED AT 7421 CHAD-BOURNE DRIVE AND A 1st DCM IN THE AMOUNT OF $300M DATED 6/18/97 ON PROPERTY LOCATED AT 3962-64 PAUGER STREET, NEW ORLEANS, LA.
UCC-1 ON BLANKET INVENTORY OF AMERICAN AUTO SALES, INC CONSISTING OF ALL VEHICLES PRESENTLY OWNED OR TO BE ACQUIRED. [Emphasis in original.]

Also attached to the verified petition is a collateral mortgage note signed by Del-mont Dapremont, Jr. and Joan Miller Da-premont, dated 18 June 1997, in the amount of $300,000.00. The collateral mortgage note states in pertinent part:

ON DEMAND, THE UNDERSIGNED, WHETHER ONE OR MORE, JOINTLY, SEVERALLY AND I, .SOLIDARILY PROMISE TO PAY TO THE ORDER OF BEARER, AT THE OFFICES OF LIBERTY BANK AND TRUST COMPANY, LENDING DIVISION, 3801 CANAL ST., NEW ORLEANS, LA. 70119, THE PRINCIPAL SUM OF THREE HUNDRED THOUSAND & 00/000 DOLLARS (U.S.$300,000.00) FOR VALUE RECEIVED, WITH INTEREST THEREON AT THE RATE OF 18.000 PERCENT PER ANNUM FROM DATE UNTIL PAID.
The maker(s) of the Note and all endorsers, guarantors and sureties hereon hereby severally waive presentment for payment, notice of nonpayment, protest, notice of protest, and all pleas of division and discussion, and agree that the time of payment hereof may be extended from time to time, one or more times, without notice of such extension or extensions and without previous consent, hereby binding themselves jointly, severally and solidarily, unconditionally and as original promisors, for the payment hereof, in principal, interest, costs and attorneys’ fees. Furthermore, no discharge or release of any collateral securing this Note or any delay on the part of the holder hereof in exercising any rights hereunder shall operate as a waiver of such rights, or to otherwise diminish or release such collateral.
This note is secured by a Collateral Real Estate Mortgage dated June 18, 1997, executed by the undersigned in favor of Liberty Bank and Trust Company, Lending Division, and any future holder or holders of this Note, with this Note being paraphed “Ne Varietur” for identification with said Collateral Real Estate Mortgage by Notary Public before whom said mortgage was passed. [Emphasis in original.]

The collateral mortgage on 7421 Chad-bourne Drive, New Orleans, securing this collateral mortgage note is also dated 18 June 1997, and the mortgagors are identified at Delmont Dapremont, Jr. and Joan Dapremont. The borrower is listed as Delmont Dapremont, Jr., d/b/a American Auto Sales, and the lender/mortgagee is Liberty. The collateral mortgage states in pertinent part:

COLLATERAL MORTGAGE NOTE. Desiring to secure the prompt and punctual payment and satisfaction of any and all present and future indebtedness in favor of 11fiMortgagee, as defined above, Mortgagor executed a certain Collateral Mortgage Note dated June 18, 1997, in the principal amount of U.S. $300,000.00, payable to the order of BEARER on demand, at the offices of Mortgagee, which note stipulates to bear interest at the rate of 18.000 percent per annum from the date until paid and is paraphed “Ne Varietur” for identification with this Mortgage by the Notary Public before whom this Mortgage is passed, a copy of which Note is attached hereto as an exhibit and is expressly made a part hereof by reference.
PLEDGE OF COLLATERAL MORTGAGE NOTE TO SECURE INDEBTEDNESS. The aforesaid Note, after having been paraphed “Ne Varietur” for identification with this Mortgage by the Notary Public before whom this Mortgage is passed, was delivered to Mortgagor, who hereby acknowledges receipt thereof. Mortgagor declared that said Note has been and/or will be pledged to Mortgagee as the initial Mortgagee under this Mortgage for the purpose of securing any and all present and future indebtedness that Borrower and/or Mortgagor may obtain or incur, from time to time, one or more times, from Mortgagee and any subsequent holder or holders of said Note as heretofore stated.
GRANTING OF MORTGAGE TO SECURE PLEDGED NOTE. And now, in order to secure the prompt and punctual payment and satisfaction of the aforesaid Note, in principal, interest, costs, expenses, attorneys’ fees and other fees and charges, and additionally to secure repayment of any and all Additional Advances that Mortgagee may make on behalf of Mortgagor as provided in this Mortgage, together with interest thereon, Mortgagor does by these presents specifically mortgage, affect and hy-pothecate unto and in favor of Mortgagee, any and all of Mortgagor’s present and future rights, title and interest in and to the following described property.
* * *
The Real Property or its address is commonly known as 7421 CHAD-BOURNE DRIVE, NEW ORLEANS, LA 70126. [Emphasis in original.]

The mortgage also contains a “confession of judgment,” in order to allow Liberty to proceed with foreclosure via executo-ry process.

|17On 17 March 2000, Liberty filed a supplemental and amending verified petition for executory process to add Hilda Palao Dapremont and Elaine Dapremont Trotter as additional defendants. In addition, Liberty sought to foreclose on property located at 3962-64 Pauger Street, New Orleans, Louisiana pursuant to a second collateral mortgage note secured by a collateral mortgage on the aforesaid property, which had been used to secure the promissory note in the amount of $350,100.00 made by Delmont Dapremont, Jr. on behalf of AAS.

A review of these additional documents reveals that the collateral mortgage note in the amount of $300,000.00 is dated 18 June 1997, and was signed by Delmont Dapremont, Jr., as well as Hilda Palao Dapremont and Elaine Dapremont Trotter. The language contained in the collateral mortgage note is identical to the language quoted above from the collateral mortgage note signed by Joan and Delmont Dapremont, Jr. on the property at 7421 Chadbourne Drive. The collateral mortgage on 3962-64 Pauger Street lists Delmont Dapremont, Jr. d/b/a/ American Auto Sales as borrower/mortgagee, Liberty as lender, and Delmont Dapremont, Jr., Hilda Palao Dapremont, and Elaine Da-premont Trotter as mortgagors. The above language quoted from the mortgage on the Chadbourne property is identical to the language in the mortgage on the Pauger property, except for the description of the immovable property on which the mortgage is held.

Following remand of this case in December 2001, Liberty filed a second supplemental and amending verified petition, to which is attached four documents. The first is an unlimited guaranty, listing AAS as borrower, Liberty as lender, and Del-mont Dapremont, Jr., as guarantor. The document contains the following language:

^GUARANTEE OF BORROWER’S INDEBTEDNESS. Guarantor hereby absolutely and unconditionally agrees to, and by these presents does hereby, guarantee the prompt and punctual payment, performance and satisfaction of any and all of Borrower’s present and future indebtedness in favor of Lender.
* * *
DETAILED COLLATERAL DESCRIPTION. 2nd DCM IN THE AMOUNT OF $300,000.00 DATED 6/18/97 ON PROPERTY LOCATED AT 7421 CHADBOURNE DRIVE AND A 1st DCM IN THE AMOUNT OF $300M DATED 6/18/97 ON PROPERTY LOCATED AT 3962-64 PAUGER STREET, NEW ORLEANS, LA.
UCC-1 ON BLANKET INVENTORY OF AMERICAN AUTO SALES, INC CONSISTING OF ALL VEHICLES PRESENTLY OWNED OR TO BE ACQUIRED. [Emphasis in original.]

The second document is an Acknowledgment of Pledge of Collateral Mortgage Note, dated 16 August 1999 in which the borrower is AAS, the lender is Liberty and the Grantors are Joan and Delmont Da-premont, Jr. This document states in pertinent part:

COLLATERAL MORTGAGE NOTE. Desiring to secure the prompt and punctual payment and satisfaction of any and all then present and future indebtedness as may be outstanding from time to time, one or more times, Grantor previously executed certain Collateral Mortgage Note or Notes, payable to the order of Bearer, on demand, at the offices of Lender, a copy or copies of which Note or Notes are attached hereto and are expressly made a part hereof by reference:
2nd DCM IN THE AMOUNT OF $300,000.00 DATED 6/18/97 ON PROPERTY LOCATED AT 7421 CHAD-BOURNE DRIVE, NEW ORLEANS, LA
PREVIOUS PLEDGE OF NOTE. Grantor acknowledges that Grantor previously pledged, granted a continuing security interest in and delivered Grant- or’s Note or Notes to Lender to secure the prompt and punctual payment and satisfaction of any and all present and future indebtedness. [Emphasis in original.]

119The third document attached to the verified petition is a corporate resolution by Delmont Dapremont, Jr., as President of AAS and as the corporation’s Secretary or Assistant Secretary of AAS, dated 16 August 1999. The resolution grants to Mr. Dapremont, as President of AAS, the specific authority to do the following on behalf of the corporation:

Loan. To negotiate and obtain a revolving' line of credit from Lender in the amount of Three Hundred Fifty Thousand One Hundred & 00/100 Dollars (U.S.$350,100.00) under such terms and conditions as said officers or employees may agree to in their sole discretion, and for such additional sum or sums of money as in their judgment should be borrowed, without limitation.
Note. To execute and deliver to Lender a promissory note evidencing the Corporation’s obligations and indebtedness under the aforesaid revolving fine of credit.
Grant Security. To mortgage, pledge, transfer, endorse, hypothecate, or otherwise encumber and deliver to Lender, as security for the payment of any loans or credit accommodations so obtained, any promissory notes so executed (including any amendments to or modifications, renewals, and extensions of such promissory notes), or any other or further indebtedness of the Corporation to Lender at any time owing, however the same may be evidenced, any property now or hereafter belonging to the Corporation or in which the Corporation now or hereafter may have an interest, including without limitation all real (immovable) property and all personal (movable) property and rights of the Corporation. Such property may be mortgaged, pledged, transferred, endorsed, hypothecated, encumbered or otherwise secured at the time such loans are obtained or such indebtedness is incurred, or at any time or times, and may be either in addition to or in lieu of any property theretofore mortgaged, pledged, transferred, endorsed, hypothecated, encumbered or otherwise secured.
Security Agreements. To execute and deliver one or more mortgages, collateral mortgages, pledge agreements and other security agreements in favor of Lender to secure the prompt and punctual payment and satisfaction of the aforesaid revolving line of credit, under which said | Mofficers or employees may grant a continuing security interest in the property and/or the rights of the Corporation as more fully described therein, which mortgages, collateral mortgages, pledge agreements and other security agreements may contain provisions for foreclosure under Louisiana executory process procedures, confessions of judgment, waivers or appraisal and other rights and notices, all of which remedies upon default are specifically consented to by this Board of Directors. [Emphasis in original.]

The final document attached to the verified petition is a pledge of a collateral mortgage note in the principal amount of $75,021.00, dated 18 June 1997. The pledge is signed by Delmont Dapremont, Jr., Hilda Palao Dapremont, and Elaine Dapremont Trotter in favor of Liberty. The document indicates that the $75,021.00 note was being pledged to secure the collateral mortgage note in the amount of $300,000.00, executed and dated the same day, which was secured by a collateral mortgage, also dated 18 June 1997.

We now turn to the trial court’s reasons for issuing the writ of preliminary injunction. First, the trial court stated that Liberty failed to attach a pledge agreement by which the owners of the property at 3962-64 Pauger Street, New Orleans, Louisiana, pledged the collateral mortgage and collateral mortgage note to secure the $350,100.00 note, which represents the debt of the corporation. However, delivery of the promissory or “bearer” note itself constitutes the necessary pledge. No requirement exists that the pledge be contained in a separate document or that the pledge even be in writing.

\mPursuant to La. R.S. 10:9 — 310(b)(6), a creditor must have physical possession of a collateral mortgage note to perfect a security interest. Moreover, La. R.S. 9:5554 states that:

There is no requirement that there be a registry of:
(1) Any evidence of pledge of the written obligation secured by a collateral mortgage or a vendor’s privilege.
(3) Any security interest in a collateral mortgage or vendor’s privilege or written obligation secured by each.

This statute works in conjunction with La; C.C.P. art. 2637(C), which states that no need exists to have authentic evidence of the hand note, for “the existence of the actual indebtedness may be proved by the verified petition or supplemental petition, with the hand note, hand notes, or other evidence representing the actual indebtedness attached as an exhibit to the petition.” In the instant matter, Liberty filed three verified petitions, which all state that the two $300,000.00 collateral mortgage notes were pledged by the defendants to secure the hand note.

We fail to find any deficiencies with Liberty’s ability to proceed with foreclose by executory process. As per Diamond Services, supra, Liberty has produced two bearer collateral mortgage notes that are secured by collateral mortgages on two separate pieces of immovable property, that in turn were pledged by the maker as security for the contemporaneous debt of AAS. The Civil Code | ¡^provides that a person may give a pledge not only for his own debt, but also for the debt of another. La. C.C. art. 3141. Here, the mortgages on the Chadbourne and Pauger properties secured collateral mortgage notes, which are payable to bearer on demand. The notes were then pledged by the physical delivery to Liberty and in the collateral mortgages to secure AAS’s true indebtedness under the $350,100.00 promissory note. Proof of the pledge is found by: (1) the bearer notes being in possession of Liberty; (2) the language of the collateral mortgage which contains a pledge of the collateral mortgage notes to secure the mortgages; and (3) the allegations contained in the verified petitions, as supplemented and amended, which allegations have never been disputed or denied by the defendants. Consequently, we find no impediment to Liberty’s seizure and sale of the properties in question by executory process.

The defendants have raised various arguments to support the trial court’s entry of the writ of preliminary judgment, from which we discern three principal contentions. First, the defendants argue that the first appeal before this 'court provides a basis for the application of res judicata and/or the law of the case doctrine. Second, the defendants contend Liberty failed to attach a proper corporate resolution to any of its petitions. Finally, the defendants argue that the affidavits filed by Liberty to support executory process were not made upon personal knowledge. We address each argument separately.

| {^First, a writ of preliminary injunction is essentially an interlocutory order issued in a summary proceedings incidental to the main demand for permanent injunctive relief. It is designed to and serves the purpose of preventing irreparable harm by preserving the status quo between the parties pending a determination on the merits of the controversy. Bally’s Louisiana, Inc. v. Louisiana Gaming Control Board, 99-2617, p. 7 (La.App. 1 Cir. 1/31/01), 807 So.2d 257, 263; Freeman v. Treen, 442 So.2d 757, 763 (La.App. 1 Cir.1983). The principal demand, as opposed to the injunction, is determined on its merits only after a full trial under ordinary process, even though the hearing on the summary proceedings to obtain the injunction may touch upon or decide issues regarding the merits. Smith v. West Virginia Oil & Gas Co., 373 So.2d 488, 494 (La.1979). In order to plead res judicata, there must be a final judgment. As none exists in this case (i.e., a permanent injunction was not issued), this argument is without merit.

We also find no merit in the defendants’ contention that the law of the case doctrine prohibits this appeal. Under the “law of the case” doctrine, an appellate court ordinarily will not reconsider its own rulings of the law in the same case. Evans v. Nogues, 99-2761, p. 4 (La.App. 4 Cir. 9/13/00), 775 So.2d 471, 474; Sharkey v. Sterling Drug, Inc., 600 So.2d 701, 705 (La.App. 1 Cir.), writ denied, 605 So.2d 1099, 1100 (La.1992). However, the law of the case doctrine is a discretionary guide and is not applicable in cases of palpable error or where, if the law of the case doctrine were applied, manifest injustice would occur. Sharkey, 600 So.2d at 705.

In the instant case, our prior ruling merely held that Liberty had not met the strict requirements necessary to avail itself of executory process. Following'remand, the trial court permitted Liberty to file an amending and supplemental | ¡^verified petition for executory process and specifically found that it had not violated the first preliminary injunction by doing so. Here, there is no prior ruling for us to apply to the instant matter.

The defendants’ assertion that the corporate resolution is invalid is equally meritless. Simply put, Mr. Dapremont did not mortgage corporate property; he mortgaged properties owned as an individual with his wife and siblings to secure a corporate debt. Consequently, the defendants’ reliance on First Guaranty Bank v. Baton Rouge Petroleum Center, Inc., 529 So.2d 834 (La.1987), is misplaced. We also note that La. C.C.P. art. 2636(4) requires a board of directors resolution only when the board is authorizing or ratifying the execution of a mortgage on the property of the corporation. In addition, even if Mr. Da-premont had improperly mortgaged corporate property, only the corporation would have standing to complain of his unauthorized act. Here, Liberty does not seek to foreclose on any property of the corporation, AAS.

Finally, we find no merit to the defendants’ criticism of the affidavits submitted by Liberty. First, the defendants failed to challenge the affidavits before the trial court. Further, the affiant clearly states that he is personally familiar with the accounts at issue and the affidavits are based on his personal knowledge. Thus, the affidavits are sufficient.

However, we agree with the trial court’s denial of the defendants’ motion for contempt. As demonstrated above, Liberty was in good faith when it filed the second supplemental and amended verified petition for executory process.

Based on the foregoing, we find that Liberty has proven entitlement to proceed by executory process. Therefore, we reverse the trial court in part, affirm the denial of the contempt motion, set aside the writ of preliminary injunction, and | ^remand the matter for further proceedings consistent with this opinion. All costs of this appeal are assessed against the defendants.

REVERSED IN PART; AFFIRMED IN PART.

      . See La. C.C.P. art. 2636(4).

      . See La. R.S. 10:9-701.

      . Because Liberty is not seeking repayment of the $75,021.00 collateral mortgage note, it is irrelevant to these proceedings. However, we note the pledge of the $75,021.00 note states that it is "intended and shall secure any and all present and future indebtedness of Grantor and/or Borrower in favor of Lender, as may be outstanding from time to time...."

      . The trial court stated that an "acknowledgment of pledge of the collateral mortgage note and collateral mortgage which secures the debt, executed by Delmont Dapremont, Jr., Hilda Palao Dapremont, and. Elaine Dapre-mont Trotter” is missing from the record. However, such a document is not required since the pledge is set forth in the promissory note (hand note) and was accomplished through deliveiy to Liberty, Further, a separate pledge is set forth in the collateral mortgage document itself.
      It is elementary hornbook law in Louisiana that a pledge need not be in writing to be effective between the parties. See M. Truman Woodward, Jr., Louisiana Notarial Manual, § 15.01 at p. 531 (2 ed.1962). The pledgee must be put in possession of the object of the pledge and actual delivery must be made to him. Id. at § 15.02 at p. 532. The pledge of a negotiable instrument before its maturity carries with it all the privileges by which the instrument is secured. Id. at § 15.03 at p. 533. Negotiable instruments may be pledged by mere delivery without the necessity of notice to the maker. The requirement of notice does not apply to the immediate parties to the contract of pledge and may only be invoked by third persons. Id. at § 15.04 at p. 533. A pledge is effective even as to third parties, though not recorded, if the pledgee acquires actual possession of the object before any conflicting claims or privileges háve attached to it. Id. at § 15.06 at p. 534. (Citations of authorities omitted.)

      . In addition, La. C.C. art. 3295 provides that a person may establish a mortgage over his own property to secure the obligation of another. That is what the defendants did in this case.

      . Nowhere can we find a requirement that Liberty produce a separate document of pledge or an acknowledgment of pledge of the collateral mortgage note and collateral mortgage as required by the trial court in its reasons for judgment.


source: Caselaw Access Project

author: 3WILLIAM F. KLINE, JR., Judge Pro Tem.

license: Public Domain

text:
    Joseph HAMILTON, Jr. and Mable Young Hamilton v. ANCO INSULATION, INC., the McCarty Corporation, Pittsburgh Corning Corporation, Rapid American Corporation, and C F Industries, Inc.
    No. 2002 CA 0221.
    Court of Appeal of Louisiana, First Circuit.
    Feb. 14, 2003.

      J. Burton LeBlanc, Baton Rouge, Counsel for Appellee Joseph Hamilton, Jr.
    Susan B. Kohn, New Orleans, Counsel for Appellee McCarty Corporation.
    Daniel J. Balhoff, Baton Rouge, Counsel for Appellee C.F. Industries.
    Gordon P. Wilson, New Orleans, Counsel for Appellee Travelers Casualty and Surety Co.
    Michael R. Sistrunk, Metairie, Counsel for Appellee W.R. Grace & Co.
    William F. Grace, Earl F. Sundmaker, III, New Orleans, Counsel for Appellee Marsh & McLennan Co., Inc.
    Glenn L.M. Swetman, New Orleans, Counsel for Appellee Garlock, Inc.
    John J. Hainkel, III, New Orleans, Counsel for Appellee Owens Corning.
    James F. Holmes, New Orleans, Counsel for Appellee M.W. Kellogg Constructors, Inc.
    Robert A. Redwine, New Orleans, Counsel for Appellant Allianz Underwriters, Inc.
    Before: FOIL, McCLENDON, and KLINE, JJ.

      . Hon. William F. Kline Jr., retired, is serving as judge pro tempore by special appointment of the Louisiana Supreme Court.

   3WILLIAM F. KLINE, JR., Judge Pro Tem.

This is an appeal of a summary judgment rendered in favor of an insured regarding the applicability of provisions in an insurance contract. For the following reasons, we reverse.

FACTS AND PROCEDURAL HISTORY

Joseph Hamilton, Jr. was employed by C F Industries, Inc. (CFI) at its Donald-sonville, Louisiana facility as a warehouse operator from 1968 to 1983. In June of 1999, Mr. Hamilton was diagnosed with mesothelioma, a known asbestos-related disease. So severe was Mr. Hamilton’s illness that his doctor surmised that he would probably not survive beyond June of 2000. On January 19, 2000, Mr. Hamilton filed suit against several defendants including CFI. The petition sought damages for Mr. Hamilton’s “occupational exposure to asbestos” and his resulting “contraction of mesothelioma” and asserted a claim on behalf of Mrs. Hamilton for loss of consortium. The petition alleged that in connection with his work at CFI, Mr. Hamilton “was exposed to and inhaled or otherwise ingested significant quantities of asbestos.... ”

From July 1, 1983 until July 1, 1984, primary insurance coverage for CFI was provided by The Hartford in the form of a Standard Workmen’s Compensation and Employer’s Liability Policy. The Workmen’s Compensation portion of the policy only applied if an employee was covered under state workers’ compensation law. In the present case, Mr. Hamilton’s claim was not covered under Louisiana’s workers’ compensation law, thus precluding the applicability of that portion of the policy. The Employer’s Liability portion of the policy covered damages caused by “bodily injury by accident or disease” sustained by an “employee of the insured arising out of and in the course of his employment by the insured” that were not covered under state workers’ compensation law. The limit of liability under the Employer’s Liability portion of the policy was $100,000 per occurrence. When CFI determined that its liability Lexposure in this case might exceed Hartford’s $100,000 Employer’s Liability policy limit, it sent notice of the suit to Allianz Underwriters, Inc. (Allianz), its excess insurer, on September 1, 2000. Al-lianz had issued an Umbrella Liability Policy to CFI for the same period to provide coverage in excess of The Hartford’s Workmen’s Compensation and Employer’s Liability Policy.

On October 13, 2000, CFI filed a First Supplemental Third Party Demand against Allianz seeking (1) a declaratory judgment that the Allianz policy provided coverage of the Hamiltons’ claims against CFI, and (2) damages allegedly incurred by CFI as a result of Allianz’s breach of contract. In a letter to CFI dated October 19, 2000, Allianz declined to indemnify CFI for any loss arising from the Hamiltons’ claims. Allianz based its denial on the following contract provisions.

The Allianz policy provided:

CONDITIONS
D. SPECIAL CONDITIONS APPLI-CABALE TO OCCUPATIONAL DISEASE. As regards personal injury by occupational disease sustained by any employee of the Insured, this policy is subject to the same warranties, terms and conditions (except as regards the premium, the amount and limits of liability and the renewal agreement (if any), as are contained in or as may be added to the Underlying Insurance prior to the happening of an occurrence for which claim is made hereunder, [sic]
The “Underlying Insurance,” provided by the Hartford policy, set forth, in pertinent part, as follows:
I. Coverage B — Employers’ Liability: To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury by accident or disease, including death at any time resulting therefrom...
III. Definitions:
(c) Bodily Injury by Accident; Bodily Injury by Disease. The contraction of disease is not an accident within the meaning of the word “accident” in the term “bodily injury by accident” and only such disease as results directly from a bodily injury by accident is included within the term “bodily injury by accident.” The term “bodily injury by disease” includes only such disease as is not included within the term “bodily injury by accident.”
IV. Application of Policy: This policy applies only to injury (1) by accident occurring during the policy period, or (2) by disease caused or aggravated by exposure of which the last day of the last exposure, in the employment of the insured, to conditions causing the disease occurs during the policy period.
| ^Exclusions
This policy does not apply:
(e) under coverage B, to bodily injury by disease unless prior to thirty-six months after the end of the policy period written claim is made or suit is brought against the insured for damages because of such injury or death resulting therefrom;
Conditions
5. Notice of Injury: When an injury occurs written notice shall be given by or on behalf of the insured to the company or any of its authorized agents as soon as practicable. Such notice shall contain particulars sufficient to identify the insured and also reasonably obtainable information respecting the time, place and circumstances of the injury, the names and addresses of the injured and of available witnesses.
6. Notice of Claim or Suit: If claim is made or suit or other proceeding is brought against the insured, the insured shall immediately forward to the company every demand, notice, summons or other process received by him or his representative.

Allianz averred that although the Hamil-tons’ suit had been filed in January of 2000, Allianz was not given notice of the suit until September of 2000. Consequently, Allianz argued that “policy Condition # 6 (prompt notice) ha[d] been breached, thus voiding any coverage which might otherwise have been available under the policy(ies).” Allianz further contended that Mr. Hamilton’s January 2000 claim for bodily injury by disease was not made within thirty-six months of the end of the policy period, and as the Allianz policy was subject to Hartford’s Exclusion (e), Allianz would decline to indemnify CFI for any liability arising from Mr. Hamilton’s claim.

On November 22, 2000, the Hamiltons filed a Second Supplemental and Amended Petition to add Allianz as a defendant pursuant to La. R.S. 22:655, Louisiana’s Direct Action Statute. Subsequently, the Hamiltons settled their claim with CFI on November 30, 2000. The settlement agreement, entitled “Full and Final Release, Indemnity Agreement and Contractual Assignment of Rights,” provided that in return for a specified sum, the Hamil-tons agreed to “completely release, acquit and forever discharge [CFI], their predecessors, successors, parents, affiliates, subsidiaries, divisions ... from any and all rights, claims, demands, or actions of any kind or nature whatsoever” which the Hamiltons “now | fihave, or may have in the future, in whole or in part arising out of, related to, resulting from, or contributed to by [Mr. Hamilton’s] alleged exposure to asbestos or asbestos-containing materials.... ” It further provided that “[i]n partial consideration” of the settlement payment, the Hamiltons agreed to assign all their rights against Allianz to CFI.

On May 8, 2001, CFI filed a motion for summary judgment against Allianz on the two issues raised by Allianz to deny coverage: the thirty-six month exclusion and the late notice. CFI argued that the thirty-six month exclusion was an impossible resolutory condition and therefore should be given no effect. Furthermore, CFI urged that Allianz must prove that it was prejudiced by any alleged untimely notice of suit.

On May 18, 2001, Allianz filed a cross-motion for summary judgment seeking dismissal of the Hamiltons’ and CFI’s claims. On July 9, 2001, Allianz filed an opposition to CFI’s motion. Subsequently, CFI opposed Allianz’s motion on July 11, 2001. A hearing on the motions was held on July 16, 2001. In a judgment rendered on July 31, 2001, the trial court granted CFI’s motion for summary judgment and denied the motion of Allianz.

Regarding the thirty-six month exclusion, the trial court noted the following in its reasons for judgment:

This court finds that such a provision is an impossible resolutory condition under the facts of this case and that the provision should be given no effect. In Mr. Hamilton’s case, there was no way he could have known or should have known that he had mesothelioma until 1999. In fact, evidence in the record shows that Mr. Hamilton had a chest x-ray in 1982, one year prior to leaving CFI’s employ and the x-ray showed no signs of the disease. Subsequent x-rays in the years following also revealed no signs of the mesothelioma. Because of the latency period associated with the disease, it is not surprising that Mr. Hamilton did not discover that he was afflicted with it until almost 20 years after he was exposed to asbestos in his workplace.

On the issue of untimely notice of suit, the trial court found that:

Notwithstanding the fact that Allianz may not have received the notice initially, this Court finds that, under Louisiana law, Allianz must show that it was prejudiced by the alleged untimely notice in order to successfully deny coverage. Miller v. Marcantel, 221 So.2d 557 (La.App. 3d. Cir.1969). Under the facts of this case, this Court does not find that Allianz was prejudiced in any way by the timing of the notice.

|7On August 13, 2001, the judgment was amended to include a designation by the trial court that it was a final judgment. Subsequently, Allianz sought a devolutive appeal and a stay of the trial court proceedings as between Allianz and CFI, which was granted on September 12, 2001. In this posture, the matter comes before us. On appeal, Allianz urges the following assignments of error:

(1) The insurance policy in question contained an exclusion of coverage of claims for occupational disease. The sole exception to that exclusion was that, if such a claim were made within thirty-six (36) months following the expiration of the policy, then the exclusion would not be enforced. The trial court erred in treating the 36-month exception as though the exception were itself an exclusion, rather than an extension of coverage.
(2) The trial court erred in refusing to find that the result of an impossible suspensive condition to coverage under an insurance policy is no coverage.
(3) The trial court erred in refusing to find that treating an exception to an exclusion as not having been written results in an absolute exclusion, without exception, and thus no coverage under the insurance policy.
(4) The trial court erred in finding that the 36-month provision was an impossible condition as between the parties to the insurance contract.
(5) In ruling on a summary judgment motion, the trial court erred in considering affidavits which were not made upon personal knowledge.
(6) The trial court erred in finding that, since the insured “thought it was providing notice” of a lawsuit to its insurer, the fact that the insurer did not receive notice until some months later, is of no [sic] “no import”, [sic]
(7) The trial court erred in holding that, under Louisiana law, an insurer must show prejudice from late notice when notice is an express condition of coverage under the policy and when the party seeking coverage is not a third-party claimant, but is the insured as a sophisticated business entity.
(8) The trial court erred in implicitly finding that plaintiffs assignment of his rights against his employer’s insurer, as a result of settlement between plaintiff and his employer, resulted in the employer “stepping into the shoes” of plaintiff and his Direct Action rights, so that the party seeking coverage is actually a third-party claimant rather than the insured as a sophisticated business entity.
(9) The trial court erred in finding that Allianz was not prejudiced by the late notice

As an appellate court, we review de novo trial court rulings regarding summary judgments and employ the same criteria as the trial court in conducting |sthat review. Smith v. Our Lady of the Lake Hosp., Inc., 93-2512, p. 26 (La.7/5/94), 639 So.2d 730, 750. That criteria is contained in La. C.C.P. art. 966 which provides, in pertinent part, as follows:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact, and that mover is entitled to judgment as a matter of law.

Finding merit in appellant’s fourth assignment of error, we conclude that summary judgment in this case was improperly granted as CFI was not entitled to judgment as a matter of law.

DISCUSSION

An insurance policy is a contract that constitutes the law between the parties. Marcus v. Hanover Insurance Company, Inc., 98-2040, p. 4 (La.6/4/99), 740 So.2d 603, 606, citing Pareti v. Sentry Indemnity Company, 536 So.2d 417, 420 (La.1988). If the wording of the policy is clear and expresses the intent of the parties, the policy must be enforced as written. Id. Absent a conflict with statutory provisions or public policy, insurers are entitled to limit their liability and to impose reasonable conditions upon the obligations they contractually assume. Marcus v. Hanover Insurance Company, 98-2040 at p. 4 (La.6/4/99), 740 So.2d at 606, citing Louisiana Insurance Guaranty Association v. Interstate Fire & Casualty Company, 93-0911, p. 6 (La.1/14/94), 630 So.2d 759, 763.

In brief to this court, Allianz argues that the trial court erred in finding the thirty-six month provision was an impossible condition. However, even if the condition were found to be impossible, Allianz contends it is a suspensive condition, which would render the contract null and thus, “the result, as a matter of law, is no coverage.” Conversely, in its brief, CFI argues that the thirty-six month exclusion is an “impossible resolutory condition” and consequently only the exclusion “should be regarded as not written.”

|3We begin by noting that a conditional obligation is one dependent on an uncertain event. La. C.C. art. 1767. The event is uncertain in that it may or may not occur. Alain A. Levasseur, Précis in Conventional Obligations: A Civil Code Analysis 9 (1980). Louisiana Civil Code article 1767 provides, in pertinent part:

If the obligation may not be enforced until the uncertain event occurs, the condition is suspensive.
If the obligation may be immediately enforced but will come to an end when the uncertain event occurs, the condition is resolutory.

According to these definitions, it is quite clear that the condition at issue herein (that a claim for “bodily injury by disease” must be made within thirty-six months of the policy’s expiration) is sus-pensive, rather than resolutory, since unless or until the uncertain event of making a claim occurs, the obligation of Allianz to indemnify CFI cannot be enforced. See Levasseur at 9.

This determination is noteworthy. The comments to La. C.C. art. 1769 provide that if an impossible condition is reso-lutory, “and if the obligation to which the written condition is attached is otherwise valid, [only] the condition is regarded as not written.” However, La. C.C. art. 1769 provides that in the case of an impossible suspensive condition, the [entire] obligation is rendered null. Nevertheless, the jurisprudence has not held this rule to be absolute. The Supreme Court in Morse v. J. Ray McDermott & Co., Inc., 344 So.2d 1353, 1358 (La.1976) (quoting Plainol, Civil Law Treatise Volume 2, Section 1269, p. 720) stated that such a condition within a contract annuls the entire agreement only

“to the extent to which the agreement depends on it. The judges are therefore always free to recognize, by interpretation of the will of the parties, that the condition inserted in the contract is only an accessory clause to which the contract was not subject for its existence; in which case, the illegal, immoral, or impossible condition is effaced and the agreement subsists as to the rest.”

In the present case, there is a lack of evidence regarding the will of the parties to' the contract. Such evidence is unnecessary however because we find that the suspensive condition in question is not an impossible condition.

There is no question that Mr. Hamilton could not have made a claim against CFI for damages within thirty-six months of the end of the policy period. Mr. Hamilton left his employment at CFI in 1983. The applicable policies expired |10on July 1, 1984 thus requiring claims for occupational diseases to be made by July 1, 1987. However, Mr. Hamilton was not diagnosed with mesothelioma until June of 1999. A chest x-ray taken less than one year prior to his diagnosis showed that his lungs were “clear.” Furthermore, Dr. Victor Roggli, Mr. Hamilton’s medical expert, testified that the cancer cell that caused the tumor probably did not begin to develop until five or ten years before the 1999 diagnosis, at least some six years after the last date of Mr. Hamilton’s employment with CFI. Finally, the totality of the medical evidence supports a finding that mesothelioma has a lengthy latency period. Hence, we agree with the trial court’s determination that the thirty-six month exclusion was impossible “under the facts of this case.” Nevertheless, we do not find it to be impossible in all cases.

An impossible condition is one contemplating the occurrence of an event which cannot take place. However, the Civil Code is concerned with absolute impossibility. Levasseur at 11. Thus, impossible conditions, as contemplated in La. C.C. art. 1769, are those in which “no one can bring about the events of which they consist.” 5 Saúl Litvinoff, Louisiana Civil Law Trea tise: The Law of Obligations § 5.5 p. 75 (2nd ed.2001). (Emphasis added). In the case sub judice, CFI failed to present any evidence that all occupational disease claims have such lengthy latency periods that it would preclude coverage under the terms of the contract in all cases. Without such evidence, we cannot conclude that the thirty-six month exclusion is an impossible condition.

In sum, while the thirty-six month exclusion at issue herein is a suspensive condition, it is not an impossible suspensive condition. Accordingly, the trial court’s grant of summary judgment based on finding that the thirty-six month exclusion was an impossible resolutory condition was improper as a matter of law. Based on our finding on this issue we pretermit entertaining appellant’s remaining assignments of error.

[^CONCLUSION

For the foregoing reasons, the summary judgment rendered by the trial court in favor of CFI is reversed. All costs of this appeal are to be borne by appellee herein, C F Industries, Inc.

REVERSED.

      . Because he suffered from mesothelioma allegedly caused by exposure to asbestos while employed by CFI from 1966 to 1983, CFI concludes that Mr. Hamilton’s disease had to be evaluated under the workers' compensation law as existed prior to the 1975 amendments. Because mesothelioma was not a listed covered disease, CFI contends Mr. Hamilton’s claim was not covered by Louisiana workers’ compensation law. The issue of whether or not the pre-1975 workers’ compensation law applies in this case has not been contested and is not presently before us.

      . This court, in an unpublished opinion, found that a thirty-six month exclusion, such as the one in the present case, does not violate public policy when the dispute is between the parties to the contract and the exclusion is clear and unambiguous. Hubbs v. Anco Insulations, Inc., 2001-0508, p. 11 (La.App. 1 Cir. 6/21/02), 826 So.2d 1199 (unpublished opinion).


author: 2PICKETT, Judge.

text:
    CITY OF EUNICE v. Earlyn CARRIER.
    No. 02-1132.
    Court of Appeal of Louisiana, Third Circuit.
    Feb. 19, 2003.
    Writ Denied May 9, 2003.

      Christopher R. Philipp, Attorney at Law, Lafayette, LA, for Plaintiff/Appellee, City of Eunice.
    Michael W. Robinson, Attorney at Law, Eunice, LA, for Defendant/Appellant, Ear-lyn Carrier.
    Court composed of JOHN D. SAUNDERS, BILLIE COLOMBARO WOODARD and ELIZABETH A. PICKETT, Judges.
   2PICKETT, Judge.

FACTS

Mr. Carrier began working for the City of Eunice (City) on May 25, 1995. Before beginning that employment, he completed the City’s medical history form in which he was asked to “list all injuries you have had (either on or off the job).” He answered “thoracic outlet.” In March of 1996, nearly one year after beginning his employment, he ruptured a disc in his neck while moving a large corrugated pipe. The City paid for cervical - surgery and indemnity benefits until he returned to work, this time as a street sweeper. He performed his assigned duties, but suffered frequent pain and had difficulty doing his job as he had not fully recovered. On November 17, 1997, while moving big chunks of concrete, he aggravated his neck condition to the point that he became totally disabled again. As a result of this aggravation of his injury, Carrier stopped working for the City on December 12, 1997. Carrier received supplemental earnings benefits from the City.

On May 24, 1999, the City offered Mr. Carrier his previous job as a street sweeper with modifications. The job offered was for four hours per day, five days a week, and paid the same rate Mr. Carrier earned prior to the accident. Mr. Carrier appeared for the job, but left after a period of two to three hours.

The City of Eunice sought to terminate Mr. Carrier’s workers’ compensation benefits on the ground that he could return to work earning ninety percent of his previous wages and alleging fraud pursuant to La.R.S. 23:1208.1. The workers’ compensation judge ruled that Carrier forfeited his benefits pursuant to La.R.S. 23:1208.1 for his failure to list a previous injury on his pre-employment medical history questionnaire. We reversed, finding that “The City is required to prove all three elements, which La.R.S. 23:1208.1 requires, but has failed to prove even one. |aThus, forfeiture is inappropriate.” City of Eunice v. Carrier, 01-1184, p. 9 (La.App. 3 Cir. 2/20/02); 821 So.2d 3. Mr. Carrier filed for rehearing, limiting the issue to whether this court’s ruling also addressed and included the reversal of the trial court’s holding that he had not carried his burden of proving that he was entitled to supplemental earnings benefits (SEBs). This court remanded, directing the workers’ compensation judge to address the issue of whether Mr. Carrier was entitled to SEBs. The matter was heard on June 24, 2002. At that time the City was paying Mr. Carrier SEBs. On remand, the workers’ compensation judge ruled that Mr. Carrier was not entitled to SEBs and denied his claim for indemnity benefits, finding he had not made a good faith effort to attempt to return to work. It is from this ruling the claimant appeals.

ASSIGNMENTS OF ERROR

The appellant has urged the following assignments of error:

1) The Hearing Officer erred in finding that Mr. Carrier could return to gainful employment earning ninety per cent or more of his average weekly wage.
2) The Hearing Officer erred in not considering all of the medical evidence, and in not considering Mr. Carrier’s entire condition from the viewpoints of all of the medical specialists.
3) The Hearing Officer erred in not considering all of the evidence, both expert and lay testimony, in deciding Mr. Carrier’s fate.

DISCUSSION

This matter was submitted to the workers’ compensation judge by record on May 29, 2001, when it was heard following the remand from this court. The workers’ compensation judge ruled on this matter on June 24, 2002, stating his reasons for ruling orally for the record. The workers’ compensation judge noted:

| ¿“From the testimony of Mr. Carrier and from the medical records that were submitted into evidence and the exhibits and testimony of Louis Hebert, who is a vocational rehabilitation counselor, it is patently obvious that Mr. Carrier is unable to return to the position that he held before his accident of November 17, 1997. And because of his accident and the resulted injuries and, also, because of his educational background and his transferable job skills, there is a very small market for him due to the fact that he fives in a small town.”

The workers’ compensation judge went on to note that Mr. Carrier was offered a job as a street sweeper, with modifications, on June 1, 2000. The judge noted Dr. Lopez had approved the position. Mr. Carrier appeared for work. He testified he attempted to work for a period of two to three hours and left because he felt he was incapable of performing the job. The workers’ compensation judge ultimately-determined this was not a good faith attempt to return to work at a position authorized by his treating physician. Because the judge found the position was open to him, offered to him, and would have paid him at the same rate of pay he was earning before his accident, the judge determined no SEBs are owed to Mr. Carrier by the City.

All three assignments of error pertain to whether the workers’ compensation judge was manifestly erroneous in his conclusions regarding Mr. Carrier’s ability to return to work. Accordingly, they will be addressed together.

An appellate court may not set aside the factual findings of a workers’ compensation judge in the absence of manifest error or unless it is clearly wrong. Wackenhut Corrections Corp. v. Bradley, 96-796 (La.App. 3 Cir. 12/26/96); 685 So.2d 661. The issue to be resolved by the reviewing court is not whether the trier of fact was right or wrong, but whether the fact finder’s conclusion was a reasonable one. Even though an appellate court may feel its own evaluations and inferences are |Rmore reasonable than the factfinder’s, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review where conflict exists in the testimony. Stobart v. State through Dep’t of Transp. and Dev., 617 So.2d 880 at 882 (La.1993).

An employee is entitled to receive SEBs if he sustains a work-related injury that results in his inability to earn ninety percent (90%) or more of his average pre-injury wage. La.R.S. 23:1221(3)(a). “Initially, the employee bears the burden of proving, by a preponderance of the evidence, that the injury resulted in his inability to earn that amount under the facts and circumstances of the individual ease.” Freeman v. Poulan/Weed Eater, 93-1530 p. 7 (La.1/14/94); 630 So.2d 733, 739.

Once the employee’s burden is met, the burden shifts to the employer. In order to defeat the employee’s claim for SEBs or establish the employee’s earning capacity, the employer must prove, by a preponderance of the evidence, that the employee is physically able to perform a certain job. In addition, the employer must prove that the job was offered to the employee or that the job was available to the employee in his or the employer’s community or reasonable geographic region. La.R.S. 23:1221(3)(c)(i); Daigle v. Sherwin-Williams Co., 545 So.2d 1005 (La.1989). Actual job placement is not required. Romero v. Grey Wolf Drilling Co., 594 So.2d 1008 (La.App. 3 Cir.1992).

An employer may discharge its burden of proving job availability by establishing, at a minimum, the following: 1) the existence of a suitable job within claimant’s physical capabilities and within claimant’s or the employer’s community or reasonable geographic region; 2) the amount of wages that an employee with claimant’s experience and training can be expected to earn in that job; and 3) an | (¡actual position available for that particular job at the time that the claimant received notification of the job’s existence. Banks v. Industrial Roofing & Sheet Metal Works, Inc., 96-2840 (La.7/1/97); 696 So.2d 551. A “suitable job” is a job that the claimant is not only physically capable of performing, but one that also falls within the limits of the claimant’s age, experience, and education. Id.

After reviewing the record in the instant matter, we cannot agree with the workers’ compensation judge that the employer discharged its duty of proving job availability.

The City contends that the evidence proves that there was a modified job available to Mr. Carrier on June 1, 1999, which his treating physician, Dr. Lopez had approved. This job was as a street sweeper, his previous position, which had been modified for Mr. Carrier’s benefit. A review of the record reflects that Dr. Lopez never actually approved that position.

The record reflects that a job description was sent to Dr. Lopez for a street sweeper operator by the City which contained modifications that related to heavy lifting. Dr. Lopez made the following notation on the form: “Will approve as a part time (4 hour/day) trial at work, with increments of 2 hour/day after 2 weeks of successfully tolerating the job.” He notes, “I still do not understand all the details of the job.” (emphasis ours). This job description, signed by Dr. Lopez on May 14, 1999, cannot be considered an approval of the job as described with modifications. It is obvious on the face of the document that Dr. Lopez did not understand all the job entailed. Dr. Lopez’s deposition was taken on May 9, 2000, nearly one year later. In his sworn testimony Dr. Lopez indicated that he believed Mr. Carrier to be truthful in his complaints, with a whole body impairment of 25%. In response to specific 17questions regarding Mr. Carrier’s ability to return to work he stated:

Q: In terms of disability, taking into account these past three years and all that you’ve seen him try to do, and what he’s reported to you, what is your opinion, as to whether he can return to work now, you know? I know you signed a few things, and looked at — “let’s try this, let’s try this.” What do you think now, today, as to whether he’s employable or not?
A: Well, considering a level of employment — I mean, level of education, work history, and the condition that he has, plus the fact that he’s been truly out of work for better than three years, the opportunity of getting this man to work is as close to zero as it can get; and his capacity for — to engage in competitive employment, the same, almost nothing.
Q: In other words, he might be able to return to work, but not on a sustained basis; is that fair to say? He couldn’t keep the job, because of his pain and his depression?
A: Well, this man has pain that he will want to change position, change to — change where he is. He will move and stretch, and do this, and do that. He .comes to the — to my evaluation, and in a 15 minute period, he stands, he sits, he twists around. So he’s barely paying attention to my conversation and my examination of him, and that’s in a short period of time, where he is captive audience. So extending that to a work situation, I don’t think that he would perform at all.
Q: Okay. And I’m speaking now is the prognosis basically the same? Is it—
A: Very poor, about as poor as can be.

Dr. Lopez further stated an individual taking the type medications Mr. Carrier is taking cannot safely operate a motor vehicle.

Mr. Carrier was also seen by Dr. J. Frazer Gaar, an orthopaedic surgeon. Dr. Gaar had also been provided with a modified job description from the City. He was of the opinion that Mr. Carrier could not perform this type of work because it would require him to turn his head from side to side. June 24, 1999, he returned the form to the City stating he did not approve this job description as a job Mr. Carrier could Isperform. In his deposition he stated as follows regarding Mr. Carrier’s ability to work while taking the medications he presently is required to take:

Q: And along those lines, as long as he is on that type of medication, could he perform the jobs reviewed or for that matter, even a sedentary or— A: I’m not sure he could do any of that • as long as he’s on narcotics.
Q: Okay, Mostly likely he could not; is that—
A: I would not hire him personally, put it that way.
Q: Not just for the job you reviewed but basically even for a sedentary job or a light-duty job?
A: Well, anything where he’s got to drive or he’s got to — he certainly can’t be around any type of moving machinery, things like that.

Mr. Carrier was also seen by Dr. G. Gregory Gidman who performed an Independent Medical Examination (IME). In his IME report Dr. Gidman noted it was his opinion that Mr. Carrier could perform light duty work. He further noted, however, as follows:

I do not feel that it would be safe for him to drive vehicles, even though he is driving his personal car. I do not feel that he should be assigned to any type of vehicle at work. He should have maximum lifting of 20 pounds. He should not be on any activity requiring repetitive head motion or holding his head in a fixed position for long periods of time.

When Dr. Gidman’s deposition was taken on September 14, 1999, he maintained his position that Mr. Carrier should not drive because of the limitation of movement in his neck.

DECREE

After reviewing the totality of the evidence, we find the workers’ compensation judge committed manifest error by concluding that Mr. Carrier failed to make a good faith effort to return to work at an approved job, thereby terminating his entitlement | ato SEBs. We do not find that Mr. Carrier has been offered a position by the City that could be considered a “suitable job,” one that Mr. Carrier is physically capable of performing. The City has failed to carry its burden of proving by a preponderance of the evidence that Mr. Carrier is capable of performing the job offered. In fact, the evidence established quiet the opposite. Accordingly, we reverse the ruling of the trial court and reinstate Mr. Carrier’s SEBs. Costs of this appeal are to be borne by the City of Eunice.

REVERSED AND RENDERED.