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Saturday, November 2, 2024

Federal judge partially dismisses lawsuit dating back to 2002 property transfer

Lawsuits

NEW ORLEANS — A federal judge has dismissed the majority of a lawsuit involving a disputed property transfer.

On Nov. 9, 2017, Judge Carl Barbier entered a default judgment against Hai Nguyen and the Nguyen Family Trust in favor of Robert Najor. But on Oct. 5, 2018, Barbier granted Nguyen’s motion for a new trial, and later determined that order effectively set aside the 2017 judgment.

The legal history goes back to April 2013, when Najor sued Nguyen and Plaquemines Clay Co., seeking to recover payment on a promissory note from February 2012. Barbier entered judgment in Najor’s favor in March 2014. When Najor later sued Nguyen and the trust, the case was consolidated with the earlier action.

In an opinion issued April 15, Barbier weighed in on Nguyen’s motion to dismiss five of Najor’s claims to relief.

The root issue is property at 1725 Lakeshore Drive in New Orleans. Najor alleges the property was improperly transferred to the trust on Dec. 4, 2002, in an attempt to protect it from creditors. Nguyen countered by saying Najor’s 2013 promissory note is too far removed from the transfer to endow him with the standing to have that transaction annulled, and as such his complaint should be dismissed.

Nguyen also said Najor didn’t claim he was ever a judgment creditor of the trust, and that even if he prevailed based on the argument that no money changed hands along with the property transfer, the window to claim it was an excessive donation closed in December 2007. Nguyen also said that Najor had no grounds to ask the court to award him legal fees.

Barbier explained there’s no dispute about whether the 2002 transfer caused or increased Nguyen’s insolvency, but agreed Najor “has failed to allege any facts to suggest the 2002 transfer occurred after (Najor’s) rights arose.”

The only exception to Louisiana’s statutory limitations on raising objections to such transfers is when a plaintiff alleges fraud, and Barbier said that Najor failed to reach that standard.

“In order to state a claim for fraud under Louisiana law, a plaintiff must allege a misrepresentation or suppression of the truth that was made with the intention to obtain an unjust advantage for one party or cause a loss or inconvenience to the other,” Barbier wrote. He said that Najor’s allegations were only conclusory, and that while he claimed the transfer happened “without the intent for legitimate estate-planning purposes” and was only done to place the property “beyond the reach of (Nguyen’s) creditors,” Najor didn’t offer any facts to support the assertion.

Setting aside the timing issue, Barbier continued, Najor “fails to specify any allegedly fraudulent statements, identify the individual or individuals who made such statements, state when and where the statements were made or explain why the statements were fraudulent.”

Barbier only sided with Najor in his claim that the 2002 transfer was a simulation, because the record doesn’t show any party paid the stated price of $600,000. Although that part of Najor’s complaint survives, Barbier clarified that he would not be able to use a finding in his favor to have the transfer nullified.

Finally, Barbier agreed that Najor is not entitled to be compensated for legal fees incurred while pursuing this complaint.

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