Pvca, Inc. and Renola Equity Fund II, LLC v. Pacific West Td Fund, Lp, Louisiana Citizens Property Insurance Company Fair Plan, and Maf, Inc. D/B/A Worldclaim Global Claims Management

PVCA, INC. AND RENOLA * NO. 2021-CA-0753
EQUITY FUND II, LLC
*
VERSUS COURT OF APPEAL
*
PACIFIC WEST TD FUND, LP, FOURTH CIRCUIT
LOUISIANA CITIZENS *
PROPERTY INSURANCE STATE OF LOUISIANA
COMPANY FAIR PLAN, AND *******
MAF, INC. D/B/A
WORLDCLAIM GLOBAL
CLAIMS MANAGEMENT

CONSOLIDATED WITH: CONSOLIDATED WITH:

PVCA, INC., AND RENOLA NO. 2022-CA-0046
EQUITY FUND II, LLC

VERSUS

PACIFIC WEST TD FUND LP,
LOUISIANA CITIZENS
PROPERTY INSURANCE
COMPANY FAIR PLAN, AND
MAF, INC., D/B/A WORLDCLAIM
GLOBAL CLAIMS
MANAGEMENT

APPEAL FROM
ST. BERNARD 34TH JUDICIAL DISTRICT COURT
NO. 13-0134, DIVISION “DIVISION D”
Honorable Darren M Roy
******
Judge Tiffany Gautier Chase
******
(Court composed of Judge Rosemary Ledet, Judge Paula A. Brown, Judge Tiffany
Gautier Chase)

Richard A. Tonry, II
TONRY BRINSON AND GLORIOSO, LLC
245 Pontchartrain Drive
Slidell, LA 70458

COUNSEL FOR PLAINTIFFS/APPELLEES

Kermit L. Roux, III

DEUTSCH KERRIGAN, LLP
755 Magazine Street
New Orleans, LA 70130-3672

Isaac H. Ryan
IKE RYAN, APLC
1100 Poydras Street
Suite 2905
New Orleans, LA 70163

COUNSEL FOR INTERVENOR/APPELLANT

Paul A. Tabary, III
Elizabeth R. Borne
TABARY AND BORNE, LLC
Three Courthouse Square
Chalmette, LA 70043

COUNSEL FOR DEFENDANT/APPELLANT

AFFIRMED IN PART;
REVERSED IN PART;
REMANDED
JULY 13, 2022

TGC
RML
PAB
In this consolidated appeal, the parties seek review of the August 27, 2021

trial court judgment. Louisiana Citizens Property Insurance Corporation

(hereinafter “Louisiana Citizens”) seeks review of the portion of the judgment

granting the motion for attorney’s fees and costs filed by plaintiffs PVCA, Inc. and

Renola Equity Fund II, LLC (hereinafter collectively “Plaintiffs”). Plaintiffs

answer Louisiana Citizens’ appeal seeking modification of the interest accrual of

the costs and fees award. They also seek attorney’s fees and cost for work

performed on this appeal. Intervenor, Pacific West TD Fund, LP (hereinafter

“Pacific West”), seeks review of the portion of the trial court judgment granting

Louisiana Citizens’ peremptory exception of res judicata and denying Pacific

West’s motion for attorney’s fees and costs. After consideration of the record

before this Court and the applicable law, we affirm the portion of the trial court’s

August 27, 2021 judgment awarding attorney’s fees and costs to Plaintiffs and

ordering legal interest to accrue as of the date of signing of judgment; reverse the

portion granting Louisiana Citizens’ exception of res judicata; decline to award

attorney’s fees for this appeal; and remand the matter for further proceedings

consistent with this opinion.

1

FACTS AND PROCEDURAL HISTORY

The underlying facts of this case are set forth in this Court’s previous

opinion. See PVCA, Inc. v. Pac. W. TD Fund LP, 2020-0327, p. 1-3 (La.App. 4 Cir.

1/20/21), 313 So.3d 320, 324-25. In the first appeal, this Court affirmed the trial

court’s January 13, 2020 judgment in favor of Plaintiffs and deferred all matters

related to attorney’s fees to a post-trial contradictory hearing. Id., 2020-0327, p.

17, 313 So.3d at 332-33.

By stipulation of the parties, dated November 13, 2019, all matters related to

attorney’s fees and costs were reserved to a post-trial contradictory hearing. On

April 16, 2021, Plaintiffs filed a motion for attorney’s fees and costs requesting

$878,176.08 in attorney’s fees and $269,392.74 in costs, plus judicial interest.

Plaintiffs attached documentation of expenditures to their motion. Louisiana

Citizens opposed Plaintiffs’ request arguing that the amount of fees sought was

excessive and unreasonable. On April 28, 2021, Pacific West filed its motion for

attorney’s fees and costs seeking $685,478.71 in attorney’s fees and $39,076.18 in

costs, plus judicial interest. In response to Pacific West’s request for fees and costs,

Louisiana Citizens filed an exception of res judicata, arguing that Pacific West was

not entitled to attorney’s fees.1 According to Louisiana Citizens, the jury did not

specifically award attorney’s fees to Pacific West and thus, that issue as to Pacific

West was final and barred by res judicata.

On August 9, 2021, the issues of attorney’s fees and costs proceeded to trial.

The trial court issued judgment on August 28, 2021 and awarded Plaintiffs

attorney’s fees in the amount of $878,176.08 and fees and costs in the amount of

1 Louisiana Citizens also filed exceptions of no right of action and no cause of action, which

were denied by the trial court.

2

$234,056.37; ordered interest to accrue from the date of the signing of judgment;

granted Louisiana Citizen’s peremptory exception of res judicata; and denied

Pacific West’s motion for attorney’s fees and costs. This appeal followed.

DISCUSSION

There are two appeals before us. In the first appeal, Louisiana Citizens

asserts that the attorney’s fees and costs award to Plaintiffs is excessive and

unreasonable. Plaintiffs answer the appeal seeking modification of the judicial

interest accrual date utilized by the trial court. In the second appeal, Pacific West

argues the trial court erred in granting Louisiana Citizens’ exception of res

judicata and denying Pacific West an award for attorney’s fees and costs. We will

discuss each appeal in turn.

Louisiana Citizens’ Appeal

Louisiana Citizens challenges the trial court’s attorney’s fees and expert

costs awarded to Plaintiffs. This Court accords great discretion to the trial court in

awarding attorney’s fees as well as costs, including expert witness fees, deposition

costs and related expenses. Bd. of Supervisors of Louisiana State Univ. v. S. Elecs.,

Inc., 2017-0722, p. 6 (La.App. 4 Cir. 6/6/18), 317 So.3d 865, 871-72 (citation

omitted); Watters v. Department of Social Services, 2008-0977, pp. 49-50 (La.App.

4 Cir. 6/17/09), 15 So.3d 1128, 1162. Thus, this Court will not modify the trial

court’s award of attorney’s fees and costs absent a showing of an abuse of

discretion. S. Elecs., Inc., 2017-0722, p. 6, 317 So.3d at 872; Watters, 2008-0977,

p. 49, 15 So.3d at 1162.

Attorney’s Fees

Louisiana Citizens asserts the attorney’s fees awarded by the trial court were

unreasonable and excessive. The crux of their argument is that the trial court erred

3

in using the contingency fee agreement as the basis for the amount of the

attorney’s fees award and that the trial court failed to consider all reasonableness

factors in determining the amount of the award. In its reasons for judgment, the

trial court analyzed the attorney’s fees pursuant to the factors outlined in the Rules

of Professional Conduct, Rule 1.5(a) and awarded Plaintiffs $878,176.08 in

attorney’s fees.2 The trial court considered the following in determining its

calculation:

Jury damages award: $1,143,184.00

Loss of rental income award: $810,000.00

La. R.S 22:1892 penalty award: $571,592.00

Total amount awarded: $2,524,776.00

One-third of the total amount awarded amounts to $833,176.08 and the trial court

awarded an additional $45,000.00 in attorney’s fees for the appeal, which totaled

$878,176.08.

Generally, Louisiana only allows for an award of attorney’s fees when fees

are either provided for in a contractual agreement or authorized by statute. Bd. of

Sup’rs of Louisiana State Univ. v. Boudreaux’s Tire & Auto Repair, L.L.C., 2013-

2 Louisiana Rules of Professional Conduct, Rule 1.5(a):

A lawyer shall not make an agreement for, charge, or collect an unreasonable fee
or an unreasonable amount for expenses. The factors to be considered in
determining the reasonableness of a fee include the following:
(1) the time and labor required, the novelty and difficulty of the questions
involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular
employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the
services; and
(8) whether the fee is fixed or contingent.

4

0444, p. 9 (La.App. 4 Cir. 3/5/14), 133 So.3d 1262, 1269. Plaintiffs sought

attorney’s fees and costs pursuant to La. R.S. 22:1892(B), which provides that

reasonable attorney’s fees and costs may be awarded in bad faith claims.3 The

January 13, 2020 judgment indicates that the jury determined that Louisiana

Citizens breached its duty of good faith and awarded Plaintiffs a 50% bad faith

penalty pursuant to La. R.S. 22:1973.4 Likewise, the contingency fee agreement

3 La. R.S. 22:1892(B):

(1)(a) Except as provided in Subparagraph (b) of this Paragraph, failure to make
such payment within thirty days after receipt of such satisfactory written proofs
and demand therefor or failure to make a written offer to settle any property
damage claim, including a third-party claim, within thirty days after receipt of
satisfactory proofs of loss of that claim, as provided in Paragraphs (A)(1) and (4)
of this Section, respectively, or failure to make such payment within thirty days
after written agreement or settlement as provided in Paragraph (A)(2) of this
Section when such failure is found to be arbitrary, capricious, or without probable
cause, shall subject the insurer to a penalty, in addition to the amount of the loss,
of fifty percent damages on the amount found to be due from the insurer to the
insured, or one thousand dollars, whichever is greater, payable to the insured, or
in the event a partial payment or tender has been made, fifty percent of the
difference between the amount paid or tendered and the amount found to be due
as well as reasonable attorney fees and costs. Such penalties, if awarded, shall not
be used by the insurer in computing either past or prospective loss experience for
the purpose of setting rates or making rate filings.
(b) In the case of a presidentially or gubernatorially declared disaster, failure to
make such payment within thirty days after receipt of such satisfactory written
proofs and demand therefor or failure to make a written offer to settle any
property damage claim, including a third-party claim, within thirty days after
receipt of satisfactory proofs of loss of that claim, as provided in Paragraphs
(A)(1) and (4) of this Section, respectively, or failure to make such payment
within thirty days after written agreement or settlement as provided in Paragraph
(A)(2) of this Section when such failure is found to be arbitrary, capricious, or
without probable cause, shall subject the insurer to a penalty, in addition to the
amount of the loss, of fifty percent damages on the amount found to be due from
the insurer to the insured, or two thousand five hundred dollars, whichever is
greater, payable to the insured, or in the event a partial payment or tender has
been made, fifty percent of the difference between the amount paid or tendered
and the amount found to be due as well as reasonable attorney fees and costs or
two thousand five hundred dollars, whichever is greater. The penalties, if
awarded, shall not be used by the insurer in computing either past or prospective
loss experience for the purpose of setting rates or making rate filings.
4 La. R.S. 22:1973:

A. An insurer, including but not limited to a foreign line and surplus line insurer,
owes to his insured a duty of good faith and fair dealing. The insurer has an
affirmative duty to adjust claims fairly and promptly and to make a reasonable
effort to settle claims with the insured or the claimant, or both. Any insurer who

5

between Plaintiffs and their counsel allowed for attorney’s fees in the amount of

one-third of the gross settlement amount. As the award of attorney’s fees is

statutorily mandated and outlined in the contingency fee agreement, we need only

determine whether the amount awarded was reasonable.

“When considering the reasonableness of the amount of attorney’s fees

awarded, we must consider the totality of the trial, including but not limited to the

length of trial, complexity of the issues, large amount of evidence and testimony

presented, and the trial court’s benefit of having witnessed the trial first-hand.” S.

Elecs., Inc., 2017-0722, p. 12, 317 So.3d at 874. The Louisiana Supreme Court has

established the essential factors a court should consider when determining a

reasonable award of attorney’s fees as follows:

breaches these duties shall be liable for any damages sustained as a result of the
breach.
B. Any one of the following acts, if knowingly committed or performed by an
insurer, constitutes a breach of the insurer's duties imposed in Subsection A of
this Section:
(1) Misrepresenting pertinent facts or insurance policy provisions relating to any
coverages at issue.
(2) Failing to pay a settlement within thirty days after an agreement is reduced to
writing.
(3) Denying coverage or attempting to settle a claim on the basis of an application
which the insurer knows was altered without notice to, or knowledge or consent
of, the insured.
(4) Misleading a claimant as to the applicable prescriptive period.
(5) Failing to pay the amount of any claim due any person insured by the contract
within sixty days after receipt of satisfactory proof of loss from the claimant when
such failure is arbitrary, capricious, or without probable cause.
(6) Failing to pay claims pursuant to R.S. 22:1893 when such failure is arbitrary,
capricious, or without probable cause.
C. In addition to any general or special damages to which a claimant is entitled for
breach of the imposed duty, the claimant may be awarded penalties assessed
against the insurer in an amount not to exceed two times the damages sustained or
five thousand dollars, whichever is greater. Such penalties, if awarded, shall not
be used by the insurer in computing either past or prospective loss experience for
the purpose of setting rates or making rate filings.
D. The provisions of this Section shall not be applicable to claims made under
health and accident insurance policies.
E. Repealed by Acts 1997, No. 949, § 2.
F. The Insurance Guaranty Association Fund, as provided in R.S. 22:2051 et seq.,
shall not be liable for any special damages awarded under the provisions of this
Section.

6

(1) the ultimate result obtained; (2) the responsibility incurred; (3) the
importance of the litigation; (4) amount of money involved; (5) extent
and character of the work performed; (6) legal knowledge, attainment,
and skill of the attorneys; (7) number of appearances made; (8)
intricacies of the facts involved; (9) diligence and skill of counsel and
(10) the court’s own knowledge.

State, Dep’t of Transp. & Dev. v. Williamson, 597 So.2d 439, 442 (La. 1992).

While the trial court’s reasons for judgment analyze the reasonableness of

attorney’s fees under the factors outlined in Louisiana Rules of Professional

Conduct, Rule 1.5, we note that those factors are intertwined and often referred to

as the Williamson factors. Additionally, “[w]hile trial courts are not bound to

award fees consistent with a contingency fee agreement, courts may certainly

consider contingency agreements when awarding fees.” Boudreaux’s Tire & Auto

Repair, 2013-0444, p. 11, 133 So.3d at 1271 (citations omitted). “In fact, this

Court has affirmed fee awards consistent with contingent fee agreements.” Id.,

2013-0444, p. 12, 133 So.3d at 1271 (citing Vela v. Plaquemines Parish Gov't,

2000–2221, pp. 26–28 (La.App. 4 Cir. 3/13/02), 811 So.2d 1263, 1280–81).

In the case sub judice, the trial court applied several factors in determining

the amount of attorney’s fees noting the complexity of the case, the amount of

money involved, the knowledge and skill of the attorneys, and the significant

amount of time preparing for trial. The trial court never indicated that it was bound

by the contingency fee agreement; rather, the trial court noted that the attorney’s

fees sought amounted to one-third of Plaintiffs’ award and determined that amount

to be reasonable given the nature of the litigation. Additionally, the parties

thoroughly briefed the issue of attorney’s fees and the trial court conducted a

thorough hearing on the issue. The fact that the trial court's award is consistent

with the contingency fee agreement does not alone amount to an abuse of

7

discretion. See Boudreaux’s Tire & Auto Repair, 2013-0444, p. 12, 133 So.3d at

1271. Based on the record before this Court, we cannot conclude that the trial court

abused its discretion in its award of attorney’s fees to Plaintiffs.

Expert Fees

Louisiana Citizen maintains that the trial court abused its discretion by

awarding Plaintiffs an unreasonable amount in expert testimony fees and costs for

expert reports used at trial.5 The trial court awarded the following in expert costs

and fees:

Expert Testimony Fees

• Rick Murphy- expert appraiser $1,320.00

• Daniel Sheehan- expert engineer $3,400.00

• Micah Bass- expert water remediation $13,750.00

• Michael Fusco- expert adjuster $15,000.00

Total $33,470.00

Expert Reports Used at Trial

• Murphy Appraisal Service (Rick Murphy) $5,250.00

• Daniel Sheehan engineer report $2,400.00

• Emergency Services 24 (Micah Bass) $29,021.25

• Worldclaim (Michael Fusco) $150,000.00

Total $186,671.25

“The determination of the reasonableness of an expert fee award turns on the

particular facts and circumstances of the case.” Bd. of Sup’rs of Louisiana State

Univ. & Agr. & Mech. Coll. v. 1732 Canal St., L.L.C., 2013-0976, p. 12 (La.App. 4

5 Louisiana Citizens does not challenge the trial court’s award to Plaintiffs for deposition costs

and “other” costs, which when combined with the above referenced award amounts to
$234,056.37 awarded in costs.

8

Cir. 1/15/14), 133 So.3d 109, 119-20. Multiple factors are utilized in determining

the reasonableness of an expert fee award, including: “the time spent testifying;

time spent in preparing for trial; the extent and nature of the work performed; the

knowledge, attainments and skill of the report; the helpfulness of the expert’s

report and testimony to the trial court; and the complexity of the problem

addressed by the expert.” FIE, LLC v. New Jax Condo Ass’n, Inc., 2016-0843, p.

51 (La.App. 4 Cir. 2/21/18, 241 So.3d 372, 405. However, the most important

factor in determining an expert fee award is that the award be reasonable. 1732

Canal St., L.L.C., 2013-0976, p. 13, 133 So.3d at 120.

Louisiana Citizens contends the trial court abused its discretion by awarding

separate fees for the expert time testifying at trial and the expert reports used at

trial. It asserts that the law allows for costs regarding time spent testifying at trial,

not additional expenses obtained outside of that timeframe. Additionally, Louisiana

Citizens maintains that the expert testimony fees awarded are unreasonable and not

warranted based on the time the experts actually spent testifying at trial.

“[T]he court may render judgment for costs, or any part thereof, against any

party, as it may consider equitable.” La. C.C.P. art. 1920. La. R.S. 13:3666(A)

provides:

Witnesses called to testify in court only to an opinion founded on
special study or experience in any branch of science, or to make
scientific or professional examinations, and to state the results thereof,
shall receive additional compensation, to be fixed by the court, with
reference to the value of time employed and the degree of learning or
skill required.

“Expert witness fees for testifying at trial and for time spent preparing for that

testimony are recoverable.” Bd. of Supervisors of Louisiana State Univ. v. Gerson,

2017-0229, p. 32 (La.App. 4 Cir. 11/14/18), 260 So.3d 634, 656 (quoting Bayou

9

Fleet, Inc. v. Bollinger Shipyards, Inc., 2015-0702, p. 21 (La.App. 4 Cir. 7/21/16),

197 So.3d 797, 811).

It is undisputed that the Plaintiffs’ experts testified at trial. However,

Louisiana Citizens’ complaint is that the amount of time spent at trial does not

justify the fees awarded and that experts are not entitled to recover fees for

preparation of the case. Specifically, Louisiana Citizens objects to the expert

testimony fees awarded to Daniel Sheehan, Michael Fusco and Micah Bass. As

noted, a trial court is allowed to award fees for expert witness testimony. Gerson,

2017-0229, p. 32, 260 So.3d at 656. Regardless of the actual amount of time spent

testifying, the experts are entitled to be compensated for their expert testimony.

Our jurisprudence allows for recovery of “an expert’s trial preparation and

development of facts on which the expert’s opinions are based.” 1732 Canal St.,

L.L.C., 2013-0976, p. 26, 133 So.3d at 127. The trial court pointed out that it only

included the time spent in preparation for trial and at trial, and removed any other

fees.6 The purpose of Plaintiffs’ experts was to provide evidentiary support in order

to demonstrate satisfactory proof loss for their insurance claim. The record

supports Plaintiffs’ contention that the experts spent significant time performing

work associated with establishing Plaintiffs’ satisfactory proof of loss.

We likewise find no merit to Louisiana Citizens’ assertion that Plaintiffs’

experts should not also be compensated for preparing the report, La. R.S. 13:3666

“in no way prevents the trial court from awarding court costs for the preparation of

[an expert’s] report. It simply allows, in the trial court’s discretion, for “additional

compensation” to be awarded should [the expert] be required to testify in court.”

6 The trial court reduced the expert testimony fees to include only the time in preparation for trial

or the time at trial. The trial court removed any fees associated with travel expenses such as
travel time, mileage, hotels or meals.

10

Burtner v. Lafayette Par. Consol. Gov’t, 2014-1180, p. 12 (La.App. 3 Cir.

4/15/15), 176 So.3d 1056, 1065. The expert reports used at trial were the reports

from the experts who testified at trial. The trial court is allowed to consider the

knowledge, attainments and skill of the expert, as well as the helpfulness of the

expert report. See FIE, LLC, 2016-0843, p. 51, 241 So.3d at 405. Accordingly, we

find the record supports the expert fees awarded and find no abuse of discretion by

the trial court.

Answer to Louisiana Citizens’ Appeal

In its answer to appeal, Plaintiffs seek modification of the judicial interest

accrual date implemented for the attorney’s fees and costs. The trial court awarded

judicial interest from the date of the signing of judgment. Plaintiffs argue that

judicial interest should accrue from the date of judicial demand.

The Louisiana Supreme Court has expressly held that interest on attorney’s

fees begins to run only on the date of judgment, not from the date of judicial

demand. Sharbono v. Steve Lang & Son Loggers, 1997-0110, p. 10 (La. 7/1/97),

696 So.2d 1382, 1388-89. In distinguishing between judicial interest on damages

awarded and judicial interest on attorney’s fees, the Louisiana Supreme Court

stated that “[b]ecause attorney’s fees awards depend for their very existence upon a

discretionary finding of the trier of fact, any amount of attorney’s fees awarded to

the victor is ‘due’ only from the date of judgment. Prior to the time, the victor was

not entitled to those funds.” Id., 1997-0110, pp. 9-10, 696 So.2d at 1388-89. Thus,

we find the trial court did not err in awarding judicial interest on the attorney’s fees

and costs from the date of the signing of judgment.

Plaintiffs also request an additional award of attorney’s fees for their post-

judgment work on appeal. It is well settled that,

11

[A]ttorney fees [are] usually awarded where a party who was awarded
attorney fees by the trial court is forced to and successfully defends an
appeal. The award of additional attorney fees is to keep the appellate
judgment consistent with the underlying judgment. To determine the
amount of attorney fees, factors that are considered include “the skill
exercised by the attorney and the time and work required on appeal.”

Maldonado v. Cannizzaro, 2018-0177, p. 14 (La.App. 4 Cir. 10/10/18), 257 So.3d

733, 743, writ denied, 2018-1749 (La. 1/8/19), 260 So.3d 591 (quoting State of

Louisiana Dept. of Transp. & Develop. v. Monteleone, 2011-1013, p. 34 (La.App.

5 Cir. 11/13/12), 106 So.3d 153, 174); See also Gloria’s Ranch, L.L.C. v. Tauren

Expl., Inc., 2017-1518, 2017-1519, 2017-1522, p. 23 (La. 6/27/18), 252 So.3d 431,

446.

Although Plaintiffs have successfully defended this appeal, we find it

difficult, based on the record before this Court, to sufficiently ascertain the

appropriate amount of an additional award of attorney’s fees. See 1732 Canal St.,

L.L.C., 2013-0976, p. 34, 133 So.3d at 131 (“the difficulty in determining this

additional award of attorney[’]s fees is the result…of the fact that the post-

judgment work on appeal encompasses not only the instant appeal, but also the

prior appeal of the judgment on the merits… .”); see also State, Dep’t of Transp. &

Dev. v. Monteleone, 2011-1013, p. 34 (La.App. 5 Cir. 11/13/12), 106 So.3d 153,

174. Accordingly, we decline to award attorney’s fees for this appeal and remand

this matter for a hearing on the issue.

Pacific West’s Appeal

Pacific West asserts two assignments of error: (1) the trial court erred in

granting Louisiana Citizens’ exception of res judicata and (2) the trial court erred

in denying its motion for attorney’s fees. We begin our analysis by discussing the

exception of res judicata.

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Exception of Res Judicata

Pacific West asserts the trial court erred in granting the exception of res

judicata because the issue of its attorney’s fees and costs was never previously

litigated. Conversely, Louisiana Citizens maintains that the jury made no award

specifically to Pacific West that triggered its right to attorney’s fees. Thus,

according to Louisiana Citizens, once the January 13, 2020 trial court judgment

became final, all issues relating to attorney’s fees and costs were barred.

“The standard of review of a peremptory exception of res judicata requires

an appellate court to determine if the trial court’s decision is legally correct or

incorrect.” BBCL Enterprises, LLC v. Am. Alternative Ins. Corp., 2015-0469, p. 3

(La.App. 4 Cir. 2/3/16), 187 So.3d 65, 67 (quoting Myers v. Nat’l Union Fire Ins.

Co. of Louisiana, 2009-1517, p. 5 (La.App. 4 Cir. 5/19/10), 43 So.3d 207, 210).

“We review factual issues relating to an exception of res judicata on a manifest

error/clearly wrong basis.” Id. (quoting Countrywide Home Loans Servicing, LP v.

Thomas, 2012-1304, p. 3 (La.App. 4 Cir. 3/20/13), 113 So.3d 355, 357).

The doctrine of res judicata prohibits the re-litigation of an issue, arising out

the same factual circumstances, validated by a final judgment. Igbokwe v. Moser,

2012-1366, p. 4 (La.App. 4 Cir. 4/24/13), 116 So.3d 727, 730. The exceptor is

tasked with proving the essential elements of the doctrine of res judicata by a

preponderance of the evidence. Id. The doctrine of res judicata is codified in La.

R.S. 13:4231, which provides:

Except as otherwise provided by law, a valid and final judgment is
conclusive between the same parties, except on appeal or other direct
review, to the following extent:

(1) If the judgment is in favor of the plaintiff, all causes of action
existing at the time of final judgment arising out of the transaction or

13

occurrence that is the subject matter of the litigation are extinguished
and merged in the judgment.

(2) If the judgment is in favor of the defendant, all causes of action
existing at the time of final judgment arising out of the transaction or
occurrence that is the subject matter of the litigation are extinguished
and the judgment bars a subsequent action on those causes of action.

(3) A judgment in favor of either the plaintiff or the defendant is
conclusive, in any subsequent action between them, with respect to
any issue actually litigated and determined if its determination was
essential to that judgment.

Five elements must be satisfied for a determination that a second action, on

an issue, is precluded by res judicata:

(1) the judgment is valid; (2) the judgment is final; (3) the parties are
the same; (4) the cause or causes of action asserted in the second suit
existed at the time of the final judgment in the first litigation; and (5)
the cause or causes of action asserted in the second suit arose out of
the transaction or occurrence that was the subject matter of the first
litigation.

Igbokwe, 2012-1366, p. 5, 116 So.3d at 731. It is undisputed that the January 13,

2020 judgment is a valid final judgment and that the parties are the same.

Accordingly, our analysis focuses on the fourth element of the doctrine of res

judicata: namely, whether the cause of action for attorney’s fees existed at the time

of the first trial.

The January 13, 2020 judgment awarded attorney’s fees and costs to

Plaintiffs, but did not specifically name Pacific West in the judgment. While

Louisiana Citizens asserts that the jury’s silence on the issue in the first trial

indicates a denial of an attorney’s fees award to Pacific West, the record reflects

that this particular issue was never presented to the jury. The narrow issue before

this Court today is whether Pacific West’s request for attorney’s fees and costs was

specifically litigated in the first trial. We find that it was not. Pacific West and

PVCA were aligned in such a manner that it was contemplated that Pacific West

14

would benefit from the November 13, 2019 stipulation.7 All parties: PVCA, Renola

Equity Fund, II, LLC, Pacific West, and Louisiana Citizens signed the November

13, 2019 stipulation and agreed to reserve “all matters related to an award of

attorney’s fees and cost” to be decided by the trial court judge in a post-trial

contradictory hearing.8 Thus, since the issue of Pacific West’s attorney’s fees was

never litigated and decided, the trial court erred in granting the exception of res

judicata.

Attorney’s Fees

Although we find that the trial court erred in granting the exception of res

judicata, we find the record insufficient to establish whether Pacific West is

entitled to attorney’s fees and, if so, the appropriate amount of such fees due to

Pacific West. Therefore, we remand the matter for a determination of the amount

of attorney’s fees due to Pacific West.
7 An award of attorney’s fees is only allowed by statute or contractual agreement. Boudreaux’s

Tire & Auto Repair, L.L.C., supra. Pacific West relies on La. R.S. 22:1892(B)(1) for its assertion
that it is entitled to attorney’s fees because Louisiana Citizens was found to have acted in bad
faith in failing to timely pay Plaintiffs’ insurance claim. The purpose of La. R.S. 22:1892 is to
“provide remedies to insureds whose insurance claims are improperly handled or to whom
payment is unreasonably delayed.” Lee v. Sapp, p. 7, 2017-0490 (La.App. 4 Cir. 12/6/17), 234
So.3d 122, 128 (citation omitted). “It is generally agreed that an insurer’s duties run primarily in
favor of its insured as an outgrowth of duties that have their foundation in the contract between
the parties. It is the relationship of the parties that gives rise to the implied covenant of good faith
and fair dealing.” Theriot v. Midland Risk Ins. Co., 1995-2895, p. 15 (La. 5/20/97), 694 So.2d
184, 193. Thus, the purpose of a penalty statute is the bad faith conduct of the insurer relative to
its relationship with the policy holder. The core justification of a penalty statute is to discourage
the bad faith conduct of the insurer towards the policy holder not the mortgagee. See Sultana
Corp. v. Jewelers Mut. Ins. Co., 2003-0360, p. 7 (La. 2/3/03), 860 So.2d 1112, 1118 (quoting
Midland Risk Ins. Co. v. State Farm Mut. Auto. Ins. Co., 1993-0161, p. 5 (La.App. 3 Cir.
9/21/94), 643 So.2d 242, 244) (“[p]enalties are imposed to discourage certain types of conduct
by an insurer.”).
8 The stipulation specifically provides:

Now into Court, comes PVCA, Inc., Renola Equity Fund II, LLC, Pacific West
TD Fund, LP, and Louisiana Citizens Property Insurance Company Fair Plan who
stipulate to the following:
The parties stipulate and agree that all matters related to an award of
attorney’s fees and costs shall be reserved and deferred to a post[-]trial
contradictory hearing decided by the Honorable Darren M. Roy and not by the
jury.

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CONCLUSION

Based on the foregoing, we affirm the portion of the trial court’s August 27,

2021 judgment awarding attorney’s fees and costs to Plaintiffs and ordering legal

interest to accrue as of the date of signing of judgment; reverse the portion granting

Louisiana Citizens’ exception of res judicata; decline to award attorney’s fees for

this appeal; and remand the matter for further proceedings consistent with this

opinion.

AFFIRMED IN PART;
REVERSED IN PART;
REMANDED

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