Levine v. First National Bank of Commerce

First National Bank of Commerce held a federally compliant, due-on-sale mortgage on Dr. Jeffrey Levine's (defendant) house, letting the bank demand full repayment if Levine conveyed any interest in the property. Richard and Sandra Carrara later took occupancy under a Louisiana bond-for-deed contract, assuming Levine's mortgage payments in exchange for Levine's promise to convey title once the loan was paid off. When the bank learned of the bond-for-deed arrangement, it invoked the due-on-sale clause and sued to foreclose; the Carraras sued Levine for disturbing their quiet enjoyment. Levine argued Louisiana law barred enforcing due-on-sale clauses while payments were current and no title had passed. The trial court ruled for Levine on the bank's claim and for the Carraras, ordering the bank to indemnify Levine; the appellate court dismissed the Carraras' claim but otherwise affirmed. The bank appealed.