Opinion ID: 1723159
Heading Depth: 1
Heading Rank: 4

Heading: Minuteness of Appraisal

Text: In the present case, plaintiffs have satisfied the first requirement for obtaining a deficiency judgment. The mortgaged tracts sold for $822,973.84 at the judicial sale. Of that amount, $770,000.00 was credited toward the debt of the defendants. However, at the time of the sheriff's sale, the debt secured by the mortgage exceeded $1,000,000.00 with accrued interest. Thus, it is clear that the sale proceeds were insufficient to satisfy the underlying debt of the defendants. As such, it is the second prerequisite to a deficiency judgment, sale of the seized property after appraisal in accordance with the codal and statutory requirements, which forms the basis of the present dispute. In order to establish their entitlement to a deficiency judgment, plaintiffs are required to prove that the mortgaged property was sold after a valid appraisal in accordance with law. This requirement stems from La. Code Civ.P. art. 2771, which states: Unless otherwise provided by law, the creditor may obtain a judgment against the debtor for any deficiency due on the debt after the distribution of the proceeds of the judicial sale only if the property has been sold under the executory proceeding after appraisal in accordance with the provisions of Article 2723. La.Code Civ.P. art. 2723 provides in pertinent part: Prior to the sale, the property seized must be appraised in accordance with law, unless appraisal has been waived in the act evidencing the mortgage, the security agreement, or the document creating the privilege and plaintiff has prayed that the property be sold without appraisal, and the order directing the issuance of the writ of seizure and sale has directed that the property be sold as prayed for. Defendants herein contend that, based upon the above law, plaintiffs are precluded from obtaining a deficiency judgment because the appraisals submitted in the executory proceeding failed to comply with La.R.S. 13:4365(C), which provides that [t]he property seized must be appraised with such minuteness that it can be sold together or separately, and therefore were not made in accordance with law. In this case, as alleged by plaintiffs and admitted by both appraisers, the property in question was appraised in globo, rather than separately. Accordingly, defendants argue that the minuteness requirement has not been adhered to and that a deficiency judgment is therefore barred. In determining whether the in globo appraisals submitted herein were valid, we look to the purpose for which the minuteness requirement was established. Several intermediate appellate courts have correctly noted that the purpose of minute appraisals is to protect debtors from unnecessary deficiency judgments by realizing as much money as possible from judicial sales. See First National Bank of Jefferson Parish v. Samuels, 618 So.2d 444 (La.App. 5th Cir.1993); Bank of New Roads v. Livonia South, Inc., 527 So.2d 1132 (La.App. 1st Cir.), writ denied 532 So.2d 150 (La.1988); International Harvester Credit Corp. v. Majors, 467 So.2d 1251 (La.App. 2d Cir.1985). In the present dispute, it is clear that the defendants were fully protected from an unnecessary deficiency judgment by the method of appraisal employed. Separate appraisals of the three contiguous tracts would not have resulted in a greater cumulative appraised value than that obtained through in globo valuation. In fact, the converse would have been true, as both of the appraisers testified that their appraisals resulted in the highest possible value of the subject tracts. Accordingly, requiring minute appraisals in this case would in no way have increased the amount realized upon sale of the property, nor would it have decreased the amount of the deficiency judgment faced by defendants. Thus, plaintiffs, when presented with a challenge to their right to a deficiency judgment on the basis of alleged defects in the appraisal process, met the challenge by clearly showing that the defendants were in no way prejudiced by the in globo appraisals of the mortgaged property, and that the purpose of the appraisal process was served. Defendants failed to rebut this showing and, in fact, failed to offer any evidence that separate appraisals would have resulted in a higher cumulative valuation of the subject tracts. We therefore hold that the failure to conduct separate appraisals in this case does not bar plaintiffs from obtaining a deficiency judgment.