Capitol Anesthesia Group, P.A. v. Gus Watson

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

05-1020

CAPITOL ANESTHESIA GROUP, P.A.

VERSUS

GUS WATSON

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APPEAL FROM THE
SEVENTH JUDICIAL DISTRICT COURT,
PARISH OF CATAHOULA, NO. 20,348,
HONORABLE LEO BOOTHE, DISTRICT JUDGE

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JIMMIE C. PETERS
JUDGE

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Court composed of Oswald A. Decuir, Jimmie C. Peters, and Elizabeth A. Pickett,
Judges.

AFFIRMED.

Walter D. White
Attorney at Law
111 Freestate Blvd., Suite 117
Shreveport, LA 71107
(318) 213-9350
COUNSEL FOR PLAINTIFF/APPELLEE:
Capitol Anesthesia Group, P.A.

Jon Guice
Hammond & Sills
1103 Royal Avenue
Monroe, LA 71201
(318) 324-0101
COUNSEL FOR DEFENDANT/APPELLEE:
Gus Watson

Pamela Bartfay Rice
State of Louisiana, Division of Administration,
Office of Group Benefits
Post Office Box 94095
Baton Rouge, LA 70804
(225) 219-4616
COUNSEL FOR THIRD-PARTY DEFENDANT/APPELLANT:
Louisiana Office of Group Benefits

PETERS, J.

This is an appeal by the Louisiana Office of Group Benefits (hereinafter

“OGB”) from the trial court’s rejection of its exception of improper venue and its

motion to dismiss a third-party demand. For the reasons that follow, we affirm the

trial court’s judgment.

DISCUSSION OF THE RECORD

The third-party plaintiff in this litigation, Gus Watson, underwent gastric

bypass surgery in October of 1995. At that time, he was an employee of the

Catahoula Parish School Board and was covered by a plan of health insurance

administered by OGB. Prior to the surgery, he requested that OGB pre-approve the

procedure, but OGB declined to do so, taking the position that the procedure was to

address an obesity problem not covered by the benefit plan. Despite OGB’s position

with regard to the payment of benefits, Mr. Watson proceeded with the surgery.

Subsequent to the surgery, various medical providers filed claims with OGB,

seeking payment of their claims. OGB refused to pay these claims, relying on its

position that its group plan did not cover services, supplies, or treatment in

connection with, or related to, obesity.

After having its claim rejected by OGB, one medical provider, Capitol

Anesthesia Group, P.A. (Capitol Anesthesia), made demand on Mr. Watson for

payment. When Mr. Watson failed to pay the claim, Capitol Anesthesia instituted suit

against him, seeking to recover the amount due ($931.00), together with attorney fees,

legal interest, and costs of court. Capitol Anesthesia brought this suit in Catahoula

Parish, Mr. Watson’s domicile, on February 24, 1998.

Mr. Watson answered the suit in March of 1998 and incorporated in his answer

a third-party demand against State Employees Group Benefits Program, the

predecessor of OGB.1 Over five years later, on May 12, 2003, OGB filed its answer

to the third-party demand.2

At a May 17, 2004 pretrial conference, the trial court scheduled the trial on the

merits for November 15, 2004. On June 28, 2004, Capitol Anesthesia mailed to the

clerk’s office a motion and order to dismiss its suit with prejudice. In the cover letter

accompanying the motion and order, Capitol Anesthesia’s counsel stated in part that

it had settled with Mr. Watson “as per a compromise settlement paid by Office of

Group Benefits.” Although the motion and order reflect a filing date of June 30,

2004, the trial court has yet to execute the order of dismissal contained in the motion

to dismiss. Additionally, the trial court minutes fail to reflect any action by the trial

court in open court dismissing Capitol Anesthesia’s suit.

This appeal arises from pleadings filed after Capitol Anesthesia filed its motion

to dismiss. On July 1, 2004, Mr. Watson filed a new pleading against OGB which he

designated as a First Amended and Restated Third Party Demand. On August 16,

2004, OGB filed a declinatory exception of improper venue and motion to dismiss

Mr. Watson’s third-party demand.3 The trial court held a hearing on the issues raised

by these filings on October 21, 2004, and, after completion of the hearing, the trial

court rejected OGB’s exception and motion to dismiss the third-party demand. OGB

appealed, asserting the following assignments of error:

1
By legislation in 2001, State Employees Group Benefits Program was reorganized and
renamed Office of Group Benefits.
2
The extensive delay evident throughout these judicial proceedings appears to be the result
of a similar delay in administrative proceedings before the OGB in which Mr. Watson sought review
of the denial of benefits. The parties in the trial court and in their briefs before us spend significant
time discussing the administrative proceedings, which are irrelevant to this appeal.
3
A peremptory exception of prescription of Mr. Watson’s claim for penalties under La.R.S.
22:657 was filed at the same time, but at the hearing OGB deferred that exception and the court did
not rule on it.

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I. The court erred in denying Group Benefits’ exception of improper
venue because the Code of Civil Procedure provides a specific
statute for venue only in East Baton Rouge Parish. Group
Benefits timely asserted an exception of improper venue, after the
principal demand was compromised.

II. The trial court erred as a matter of law when it failed to determine
that Gus Watson’s third party demand against Office of Group
Benefits was a claim for indemnity and should be dismissed, due
to a settlement which compromised all claims between the
plaintiff and the defendant/third party plaintiff.

III. Alternatively, the trial court erred when it failed to order the
transfer of Gus Watson’s third party demand and his amended
third party demand to East Baton Rouge Parish, where venue is
proper.

OPINION

In its first assignment of error, OGB asserts that the trial court erred in failing

to recognize that venue ceased to be proper in Catahoula Parish when the main

demand was compromised. It suggested that the compromise and motion to dismiss

triggered the application of La.Code Civ.P. art. 84, which provides in relevant part

that “[a]ctions involving the . . . Office of Group Benefits . . . shall be brought in the

parish of East Baton Rouge or in the parish of the domicile of the . . . employee

benefit program.”4 With regard to the amended third-party demand, OGB asserts that,

because the amendment raised new claims and was filed after the motion to dismiss

the main demand, proper venue for these new claims is East Baton Rouge Parish.

The second and third assignments of error relate to the trial court’s refusal to

grant OGB’s motion to dismiss or, in the alternative, to transfer the matter to East

Baton Rouge Parish. OGB asserts that Mr. Watson’s original third-party demand was

simply a claim for indemnity and should have been dismissed at the same time as

Capitol Anesthesia’s principal demand. As in its argument in the venue exception,

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It is not disputed that the OGB is domiciled in East Baton Rouge Parish.

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OGB asserts that the amended third-party demand attempted to expand the original

demand to allow Mr. Watson to recover the unpaid claims of other providers not party

plaintiffs in the main demand.

In response to OGB’s argument, Mr. Watson asserts that the original pleading

was not limited to Capitol Anesthesia’s claim and did in fact encompass a claim

against OGB for all medical expenses connected to the bypass surgery. He further

asserts that he filed the amending petition to furnish more details in accordance with

an agreement the parties reached at the pretrial conference. In rendering its decision,

the trial court obviously accepted Mr. Watson’s position with regard to the nature of

the pleadings.

We first note that OGB’s argument with respect to all three assignments of

error is predicated on the status of Capitol Anesthesia’s main demand. Specifically,

OGB assumes that the main demand no longer exists. At the same time, OGB

recognizes that the main demand has yet to be formally dismissed in that the trial

court has not executed the order of dismissal. Still, it argues that, because there is no

impediment to the trial court executing the order of dismissal, this court should treat

the principal demand as having been dismissed.

We conclude that OGB’s position with regard to the status of the principal

demand falls for several reasons. First, we cannot determine from the record whether

a settlement exists or, if one does exist, whether it was between Capitol Anesthesia

and OGB or between Capitol Anesthesia and Mr. Watson.5 Equally important, the

record contains no written compromise agreement, nor does it contain any evidence

5
Capital Anesthesia filed a brief in this appeal stating that OGB had “paid” its claim. The
apparent purpose of the brief was to inform the court that it had no interest in the litigation, that it
was not taking sides, and that it desired to be dismissed from the appeal “without prejudice to the
remaining litigants.”

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of a recitation in open court setting forth the compromise. These are the specific

formalities mandated by La.Civ.Code art. 3071 for there to have been a transaction

or compromise.

Even assuming the existence of a compromise agreement, that in itself might

not be enough to put an end to the litigation between Capitol Anesthesia and Mr.

Watson. A similar argument was presented in Hebert v. Doctors Memorial Hospital,

486 So.2d 717 (La.1986), where it was argued that a release given by the plaintiff to

the defendant should be considered as having put an end to the suit. The supreme

court disagreed, stating:

If an executed release is in fact later determined in court to be
valid, it is entitled judicially to “a force equal to the authority of things
adjudged.” La.Civ.Code art. 3078. Held valid in Court, it will thus
support a litigant’s effort to dismiss a then pending lawsuit, with
prejudice. Nonetheless, the mere existence of an instrument purporting
to be a valid release can hardly have any bearing on the fact that, until
the lawsuit is dismissed, it, the lawsuit, is still pending. Surely, until
that suit is dismissed, the existence, validity and/or binding nature of the
release is subject to judicial scrutiny, and then no doubt in the very same
pending lawsuit, one which has yet to be dismissed.

Id. at 720-21.

We cannot agree with OGB that, because there exists evidence in the record of a

compromise, we can ignore the fact that the principal demand of Capitol Anesthesia

has not been dismissed.

We disagree with OGB’s argument that we should consider the main demand

dismissed because Capitol Anesthesia filed a motion to dismiss its main demand with

prejudice. As previously stated, the dismissal of this demand has not yet occurred.

With regard to voluntary dismissals, La.Code Civ.P. art. 1671 provides:

A judgment dismissing an action without prejudice shall be
rendered upon application of the plaintiff and upon his payment of all
costs, if the application is made prior to any appearance of record by the

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defendant. If the application is made after such appearance, the court
may refuse to grant the judgment of dismissal except with prejudice.

As the official revision comment (d) to this article states, “[t]his article requires an

actual judgment of dismissal and thus prohibits independent and unilateral action by

the plaintiff.” “[A] suit is pending until a final judgment dismissing it has been

filed.” Hebert, 486 So.2d at 721. Because there has been no final judgment

dismissing it, the main demand of Capitol Anesthesia against Mr. Watson is still

pending.

So sure it is that the main demand is imminently subject to dismissal and lacks

only the formality of an order, OGB asks us to exercise our supervisory jurisdiction

and order the trial court to dismiss the main demand. However, La.Code Civ.P. art.

1671 does not mandate a dismissal under the pleadings in this case. It simply

provides that, if an application to dismiss is made by a plaintiff after any appearance

by the defendant, the plaintiff’s right to dismiss is absolute only when he moves to

dismiss with prejudice and provided all costs are paid. In the present case, Capitol

Anesthesia’s motion asked for a dismissal with prejudice, but it asked also that the

defendant, Mr. Watson, be required to pay one-half the costs of the litigation.

Louisiana Code of Civil Procedure Article 1671 does not mandate the trial court to

enter a judgment of dismissal absent evidence of the payment of all costs. As minor

a decision as this might seem to be, the record on appeal contains no evidence

confirming Mr. Watson’s agreement to pay one-half of the costs such that we could

make an independent determination, as envisioned by Gonzales v. Xerox Corp., 320

So.2d 163 (La.1975), and decide the matter.

The dismissal of the principal demand is not a mere formality and requires

further adjudicatory proceedings at the trial court level. In our resolution of the issues

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before us, we are bound by the reality of the still-pending state of the main demand

of Capitol Anesthesia against Mr. Watson, and, given the status of the record before

us, we conclude that the trial court properly rejected OGB’s exception of improper

venue. OGB concedes in its brief before us that the principal action in Mr. Watson’s

home parish of Catahoula was instituted in the proper venue.

A defendant in an incidental action may plead any of the
exceptions available to a defendant in a principal action, and may raise
any of the objections enumerated in Articles 925 through 927, except
that an objection of improper venue may not be urged if the principal
action has been instituted in the proper venue.

La.Code Civ.P. art. 1034 (emphasis added).

Because the principal action there remains pending, venue for the third-party

demand and incidental action remains proper, and OGB’s first assignment of error has

no merit. Additionally, our resolution of the venue issue makes it unnecessary for us

to consider the remaining assignments of error.

DISPOSITION

For the foregoing reasons, we affirm the trial court’s judgment rejecting the

exception of venue and motion to dismiss filed by the Louisiana Office of Group

Benefits. We assess the costs of this appeal in the amount of $2,097.10, pursuant to

La.R.S. 13:5112, to the Louisiana Office of Group Benefits.

AFFIRMED.

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