* Pursuant to Local Rule 47.5, the court has determined that

this opinion should not be published and is not precedent except

under the limited circumstances set forth in Local Rule 47.5.4.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

___________________

No. 95-31103

Summary Calendar

 

CANTERBURY JOINT VENTURE,

Plaintiff-Appellant,

versus

THE PRUDENTIAL INSURANCE COMPANY

OF AMERICA; BHNO PARTNERS LIMITED,

Defendants-Appellees.

________________________________________________

Appeal from the United States District Court for the

Eastern District of Louisiana

(95-CV-2135-A)

________________________________________________

September 27, 1996

Before GARWOOD, WIENER and PARKER, Circuit Judges.*

GARWOOD, Circuit Judge:

Appellant Canterbury Joint Venture (Canterbury) appeals the

district court’s dismissal pursuant to Federal Rule of Civil

Procedure 12(b)(6) for failure to state a claim upon which relief

can be granted. We affirm.

Facts and Proceedings Below
2

This appeal presents a narrow question of Louisiana law which

may be stated as whether the payee’s transfer to a third party of

a defaulted and admittedly owing promissory note constitutes the

sale of a litigious right, and therefore triggers the maker’s right

of redemption.

In December 1970, Canterbury signed a promissory note in favor

of appellee Prudential Insurance Company of America (Prudential)

secured by a mortgage on a commercial property located at 1010

Common Street in New Orleans, Louisiana. Canterbury concedes that

it defaulted on the note on December 31, 1993, with a balance of

approximately $8 million owing. On April 24, 1994, Prudential

filed an executory proceeding to foreclose on the mortgage.

However, Prudential and Canterbury entered into a forbearance

agreement in July 1994 that allowed Canterbury until January 1,

1995, to pay the balance owing on the note. In consideration for

this agreement, Canterbury agreed to pay Prudential $70,110.75 and

waive all defenses to enforcement of the note as well as foregoing

its right to seek bankruptcy protection. Canterbury failed to pay

the remaining balance by the agreed upon date, yet offered to

purchase the note from Prudential for $4 million on February 17,

1995. Prudential made a counteroffer to sell the note to

Canterbury for $5.5 million to which Canterbury did not respond.

Canterbury alleges that it notified Prudential on March 6, 1995, of

its intent to exercise its right of redemption should Prudential

assign the note to a third party. 
3

On April 11, 1995, Prudential assigned the note to appellant

BHNO Partners, Ltd. (BHNO). Canterbury alleges that Prudential and

BHNO entered into a confidentiality agreement to prevent the

disclosure of the price paid for the assignment to Canterbury.

BHNO was substituted for Prudential as plaintiff in the executory

proceeding on April 11, 1995, and on April 27, 1995, caused the

property to be readvertised for sheriff’s sale on June 29, 1995.

At the June 29, 1995, sheriff’s sale BHNO purchased the property.

On July 3, 1995, Canterbury filed the instant complaint in the

United States District Court for the Eastern District of Louisiana

alleging that Prudential and BHNO had: (1) conspired to deprive

Canterbury of its right to redeem a litigious right, (2)

intentionally deprived Canterbury of its right of redemption, and

(3) breached an unspecified “special duty” to disclose to

Canterbury the amount which BHNO had paid for the assignment.

Prudential and BHNO moved to dismiss for failure to state a claim

upon which relief can be granted pursuant to Rule 12(b)(6). By

order entered September 18, 1995, the district court dismissed

Canterbury’s claims with prejudice. A Rule 58 judgment dismissing

the suit with prejudice was subsequently entered on September 20.

The district court reasoned that all of Canterbury’s claims

were premised upon the existence of a litigious right, yet no such

right existed as the facts pleaded by Canterbury demonstrated that

Canterbury had failed to contest the executory proceeding, and had

in fact waived all defenses to such proceeding. The district court
4

noted that it is necessary that the suit be contested for any

litigious right to arise under Louisiana law. The court below

additionally held that even if a litigious right were found to

exist, Canterbury had waived its right of redemption by failing to

assert it in a timely manner. The court additionally observed that

the twin policies of preventing speculation in litigation and

putting an end to litigation that underlie the right of redemption

where a litigious right is sold would not be served under the facts

of the present case. Finally, the court held that Canterbury’s

conspiracy claim under Louisiana Civil Code Article 2324 could not

succeed because such a claim must be premised upon the commission

of some underlying tort under Louisiana law, and no such tort could

be pleaded in this case as no litigious right existed, and that the

absence of any such litigious right was similarly fatal to

Canterbury’s claim that some special duty was owed by the

defendants. 

On October 2, 1995, Canterbury filed a motion for

reconsideration followed by a motion on October 13 to amend its

complaint to include two new claims under the abuse of rights

doctrine. By order entered October 17, the district court denied

Canterbury’s motion to amend as untimely as a matter of law in

light of the fact that the action had already been dismissed. The

district court subsequently entered an order on October 20 denying

Canterbury’s motion for reconsideration on the grounds that

Canterbury had failed to present any new argument or authority
5

which would persuade the court to vacate its judgment, and that no

claim regarding the asserted right of redemption could be

established based upon the undisputed facts. Canterbury now brings

this appeal.

Discussion

I. Failure to State a Claim

We review a dismissal for failure to state a claim under the

same standard as the district court: a claim may not be dismissed

unless it is certain that the defendant cannot prove any set of

facts in support of his claim that would entitle him to relief.

Leffall v. Dallas Ind. School Dist., 28 F.3d 521, 524 (5th Cir.

1994). We assume the truth of the facts alleged in the complaint,

but we do not assume facts that are not alleged. McCormack v.

National Collegiate Athletic Ass’n, 845 F.2d 1338, 1343 (5th Cir.

1988).

Under Louisiana law, “[w]hen a litigious right is assigned,

the debtor may extinguish his obligation by paying to the assignee

the price the assignee paid for the assignment, with interest from

the time of the assignment.” La. Civ. Code Ann. art. 2652 (Supp.

1996). “A right is litigious, for that purpose, when it is

contested in a suit already filed.” Id; Martin Energy Co. v.

Bourne, 598 So.2d 1160, 1162 (La. App. 1st Cir. 1992).
6

Canterbury challenges the district court’s conclusion that no

litigious right existed because Canterbury failed to contest the

executory proceeding, and therefore Canterbury necessarily lacked

any right of redemption under Article 2652. Canterbury’s arguments

on this point are twofold: (1) the district court’s holding rests

on an overly mechanistic application of the contestation

requirement as no answer is provided for in executory proceedings;

and (2) Canterbury was de facto contesting the executory proceeding

by negotiating the forbearance agreement and continuing to

negotiate for the purchase of the note. We address these arguments

seriatim.

Canterbury’s first argument ignores the fact that there are

other procedural avenues available to contest an executory

proceeding. “[A] right is contested once an answer or defense has

been filed in response to the petition.” First Nat’l Bank of

Jefferson Parish v. Keyworth, 670 So.2d 1288, 1291 (La. App. 5th

Cir. 1996) (emphasis added). While no answer is provided for in

executory proceedings, “[d]efenses and procedural objections to an

executory proceeding may be asserted either through an injunction

proceeding to arrest the seizure and sale . . . or a suspensive

appeal from the order directing the issuance of the writ of seizure

and sale, or both.” La. Code Civ. P. art. 2642. Either of these

mechanisms would suffice to constitute a contest within the meaning

of Article 2652. See Keyworth, 670 So.2d 1291 (petition for
7

temporary restraining order and preliminary injunction contested

right to seize and sell property, although holding no sale of

litigious right because did not contest until after transfer of

note). Canterbury’s complaint does not allege that Canterbury

sought to file any formal contest to the executory proceeding

whatsoever.

Furthermore, Canterbury affirmatively pleaded that it had

waived all defenses to foreclosure as partial consideration for the

forbearance agreement. Therefore, the complaint reflects that not

only did Canterbury fail to contest the executory proceeding, but

it could not do so having waived all defenses to the action.

Finally, Canterbury does not dispute that the note was due and

owing. See FSLIC v. Mmahat, 89 B.R. 573, 575 (E.D. La.

1988)(holding that the purchase of a loan did not create a

litigious right where the loan is undisputed by the obligor).

With respect to Canterbury’s second argument that the

negotiation of the forbearance agreement and for the purchase of

the note constituted a contest, Canterbury cites no authority to

the effect that the Louisiana courts have recognized anything other

than a contested judicial proceeding as satisfying this

requirement.

In short, we agree with the court below that the facts alleged

by Canterbury affirmatively demonstrate that no litigious right

existed in the present case, and that therefore Canterbury’s
1 For instance, Canterbury’s claim for conspiracy must fail in

the absence of any valid right of redemption under article 2652

because article 2324 of the Louisiana Civil Code does not provide

an independent basis for liability, but must be premised upon a

wrong which would otherwise give rise to a cause of action. See,

e.g., Magee v. Employers Information Serv., Inc., 468 So.2d 712,

714 (La. App. 4th Cir. 1985). 

8

allegations premised on interference with the right of redemption

on sale of a litigious right necessarily fail to state a claim upon

which relief can be granted.1

II. Denial of Motion to Amend

Canterbury additionally complains of the district court’s

denial of its motion to amend its complaint to allege causes of

action under the Louisiana abuse of rights doctrine. We find no

error in denying the motion to amend. Amendment simply was not

available because the district court had dismissed Canterbury’s

entire action rather than just its complaint.

In Whitaker v. City of Houston, 963 F.2d 831 (5th Cir. 1992),

we were confronted with facts similar to those in the present case

in that the district court had entered an order dismissing the

plaintiff’s “claims” which we noted gave little indication as to

whether the court intended to dismiss the complaint or the entire

action. Much turns on this distinction as it governs whether the

plaintiff may seek leave to amend under Federal Rule of Civil

Procedure 15(a). In Whitaker, we held: 

“A district court’s order dismissing a complaint

constitutes dismissal of the action when it states or

clearly indicates that no amendment is possible——e.g.,
9

when the complaint is dismissed with prejudice or with

express denial of leave to amend——or when circumstances

otherwise indicate that no amendment is possible——e.g.,

when the limitations period has expired. In any such

case, dismissal of the complaint terminates the action

even though the district court does not use those precise

words, and thus constitutes a final order, subject to the

thirty-day appeal limit——assuming, that is, that a Rule

58 judgment was entered, which was not the case here.

If, on the other hand, the district court’s order does

not expressly or by clear implication dismiss the action,

then under Czeremcha, such order merely dismisses the

complaint. In that case, the plaintiff may amend under

Rule 15(a), but only with permission of the court.

. . . .

As no Rule 58 judgment was entered in this case, we

are not directly concerned with the effect of entry of a

Rule 58 judgment on the plaintiff’s option to file a

motion for permissive amendment. Nevertheless, we note

that post-Czeremcha decisions in the Eleventh Circuit

have held that once a Rule 58 judgment is entered

amendment of the complaint is no longer possible.” Id.

at 835.

Unlike in Whitaker, the court’s order dismissing the action in the

present case expressly stated that the dismissal was with

prejudice, and a Rule 58 judgment was entered shortly thereafter.

As the district court had dismissed Canterbury’s entire action,

there was simply nothing left for Canterbury to amend, and

therefore Canterbury’s only remaining options were a motion to
2 Even if there were something left to amend, the Louisiana

abuse of rights doctrine would not have resurrected Canterbury’s

action as Canterbury’s proposed amended complaint still failed to

state a cause of action. “The Louisiana abuse-of-rights doctrine

applies only if one of the following conditions is met: (1) The

rights were exercised ‘exclusively for the purpose of harming

another or with the predominant motive to cause harm;’ (2) an

absence of [sic] ‘of a serious and legitimate interest that is

worthy of judicial protection;’ (3) using ‘the right in violation

of moral rules, good faith or elementary fairness;’ or (4)

‘exercising the right for a purpose other than that for which it

was granted.’” Deus v. Allstate Ins. Co., 15 F.3d 506, 520 (5th

Cir.)(quoting Illinois Cent. R.R. v. International Harvester Co.,

368 So.2d 1009 (La. 1979)), cert. denied, 115 S.Ct. 573 (1994); see

also Massachusetts Mut. Life Ins. Co. v. Nails, 549 So.2d 826 (La.

1989). “The doctrine of abuse of rights has been invoked sparingly

in Louisiana. The doctrine is a civilian concept which is applied

only in limited circumstances because its application renders

unenforceable one’s otherwise judicially protected rights.” Oliver

v. Central Bank, 658 So.2d 1316, 1321 (La. App. 2d Cir.

1995)(internal citations omitted); see also Dufour v. Westlawn

Cemeteries, Inc., 639 So.2d 843 (La. App. 5th Cir. 1994).

Canterbury’s proposed amended complaint alleged: (1)

“Prudential abused the right to assign the Promissory Note because

it did so for the predominant motive of causing harm to

Canterbury;” and (2) “Prudential and BHNO abused the right to enter

into the confidentiality agreement because: (a) the predominant

motive for entering into the agreement was to harm Canterbury; (b)

there was no legitimate motive for not disclosing the amount paid

for the assignment; and (c) the refusal to disclose the amount paid

for the assignment was unfair and done in bad faith.”

We fail to see how the assignment itself caused any harm to

Canterbury in the absence of a valid right of redemption. As for

Canterbury’s claim relating to the confidentiality agreement, this

act could cause harm to Canterbury only if Canterbury possessed a

valid right of redemption which we have already concluded that it

did not. 

10

reconsider the judgment or an appeal of the dismissal.2 See

Whitaker, 963 F.2d at 834.

For the foregoing reasons, the judgment of the district court

is hereby

AFFIRMED.