Mark Peltier v. Manuel Builders, LLC

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

CA 07-941

MARK PELTIER, ET AL.

VERSUS

MANUEL BUILDERS, LLC

**********

APPEAL FROM THE
SIXTEENTH JUDICIAL DISTRICT COURT
PARISH OF IBERIA, NO. 104358-G
HONORABLE CHARLES LEE PORTER, DISTRICT JUDGE

**********

JOHN D. SAUNDERS
JUDGE

**********

Court composed of John D. Saunders, Marc T. Amy, and Billy Howard Ezell, Judges.

REVERSED.

Edward Paul Landry
Landry, Watkins, Repaske & Breaux
P. O. Drawer 12040
New Iberia, LA 70562-2040
(337) 364-7626
Counsel for Plaintiffs/Appellees:
Mark Peltier
Chris Peltier

Sera Hearn Russell, III
Attorney at Law
P. O. Box 53866
Lafayette, LA 70505-3866
(337) 237-7171
Counsel for Defendant/Appellant:
Manuel Builders, LLC

Paul Joseph McMahon, III
Attorney at Law
P. O. Box 3643
Lafayette, LA 70502-3643
(337) 233-6768
Counsel for Defendant/Appellant:
Manuel Builders, LLC

SAUNDERS, Judge.

This is a case where the parties disagreed as to whether a valid transaction or

compromise had been reached between them. The plaintiffs are homeowners who

entered into a building contract with the defendant, a home builder. After completion

of the home, the plaintiffs filed suit alleging that the home was defectively built. The

defendant filed an Exception of Prematurity pursuant to an arbitration clause in the

construction contract. Prior to a scheduled arbitration hearing, both parties agreed to

continue the arbitration hearing without date. After receiving no communication from

the home builder’s attorney for a period of time, the plaintiffs filed a Motion to

Enforce Settlement that was granted by the trial court. Defendant appealed.

We find that the record does not contain sufficient evidence to grant the

plaintiffs’ Motion to Enforce Settlement. The record has no written transaction or

compromise and no recitation of any transaction or compromise in open court. As

such, we reverse the trial court’s judgment granting plaintiffs’ motion and assess

plaintiffs with all costs of this appeal.

FACTS AND PROCEDURAL HISTORY:

Plaintiffs, Mark and Chris Peltier (hereinafter “the Peltiers”), contracted with

Manuel Builders, LLC (hereinafter “Manuel”) to build a home. On December 22,

2004, the Peltiers filed suit against Manuel alleging defective construction of the

home. Manuel filed an Exception of Prematurity due to an arbitration clause

contained in the construction contract entered into by the Peltiers and Manuel. Both

parties agreed to have the exception hearing continued and proceed with arbitration.

During the process of arbitration, settlement negotiations between the parties

took place. Counsel for Manuel, Mr. Paul J. McMahon, III, wrote a letter dated

November 28, 2006, to counsel for the Peltiers, Edward P. Landry, stating that his

client is willing to purchase the house back to settle the case, and, if the Peltiers were

so inclined, to please advise as to the sales price. Manuel’s counsel then wrote a letter

dated November 29, 2006, informing the American Arbitration Association that the

parties were on the verge of resolving the dispute and, therefore, both parties were

requesting that the arbitration hearing presently set for December 4-5, 2006, be

continued. Thereafter, counsel for the Peltiers sent various letters to Manuel,

thorough its attorney, indicating that a settlement had been agreed upon and that the

settlement would be that Manuel would purchase the house back for the appraised

value of $218,500.00.

After communications on the settlement halted, the Peltiers filed a Motion to

Enforce Settlement in the Parish of Iberia. No opposition was filed to the motion, nor

did Manuel or its attorney make any appearance to oppose the motion. The trial court

granted the Peltiers’s motion. Manuel suspensively appealed alleging that the

evidence was insufficient to grant the Peltiers’s motion as the alleged transaction or

compromise was not written, nor was it recited in Open Court as required by

La.Civ.Code art. 3071.

ASSIGNMENT OF ERROR:

Manuel contends that the trial court committed a reversible error when it

granted the Peltiers’s Motion to Enforce Settlement when it ruled that the letters

exchanged between counsel, one containing an offer to begin settlement negotiations

and the other containing an appraisal estimate, was sufficient to create a settlement

agreement. We agree.

Louisiana Civil Code Article 3071 of the Louisiana Civil Code of 1870,

applicable to the case at bar, provides as follows:

2

A transaction or compromise is an agreement between two or
more persons, who, for preventing or putting an end to a lawsuit, adjust
their differences by mutual consent, in the manner which they agree on,
and which every one of them prefers to the hope of gaining, balanced by
the danger of losing.

This contract must either be reduced into writing or recited in
open court and capable of being transcribed from the record of the
proceeding. The agreement recited in open court confers upon each of
them the right of judicially enforcing its performance, although its
substance may thereafter be written in a more convenient form.
(Emphasis added.)1

The clear and explicit language of the article is that a transaction or

compromise must either: (1)be reduced to writing or (2) be recited in Open Court.

Here, the record contains evidence of neither. Our Louisiana Supreme Court, in

Felder v. Georgia Pacific Corp., 405 So.2d 521, 523 (La.1981), held that even though

La.Civ.Code art. 3071 does not provide for the consequences of failing to reduce a

compromise into writing, “a compromise which is not reduced to writing is

unenforceable.” Bourgeois v. Franklin, 389 So.2d 358 (La.1980); Jasmin v. Gafney,

Inc., 357 So.2d 539 (La.1978).

Since Felder, La.Civ.Code art. 3071 has been amended to add the possibility

that a compromise be enforceable if its contents were recited in Open Court and are

capable of being transcribed from the record of the proceeding. After reviewing the

record, we find no such recitation in Open Court as neither Manuel, nor its counsel,

appeared at the proceeding.

1

The editor’s notes from the Louisiana Civil Code (2008) state the following: “Book III, Title XVII
of the Louisiana Civil Code of 1870, ‘Of Transaction or Compromise,’ consisting of Articles 3071
through 3083 was revised, amended and reenacted by Acts 2007, No. 138, effective August 15, 2007,
to consist of Articles 3071 through 3083.” In that revision, Louisiana Civil Code of 1870 Article
3071, at issue here, was revised into La.Civ.Code arts. 3071 and 3072. Although this change was
made, Revision Comments (a) under both articles state that the intent of the Legislature was not to
change the law. Revision Comment (a) under La.Civ.Code Art. 3072 also states that it “preserves
the requirement of Article 3071 of the Louisiana Civil Code of 1870 that a compromise must be
reduced to writing.”

3

The Peltiers contend that the letters exchanged between the parties respective

counsel, when read in light of the other letters included in the record, show that a

transaction or compromise was reached. The Peltiers attempt to bolster their argument

on language that appears in Felder, 405 So.2d at 524, that is as follows: “Where two

instruments, when read together, outline the obligations each party has to the other

and evidence each party’s acquiescence in the agreement, a written compromise

agreement, as contemplated by La.C.C. art. 3071 has been perfected.” The Peltiers’s

reliance on this language is misguided.

In Felder, 405 So.2d at 523-24, our supreme court stated:

[T]he requirement that the agreement be in writing and signed by both
parties does not necessarily mean that the agreement must be contained
in one document. It would suffice that there be a written offer signed by
the offerer and a written acceptance signed by the acceptor, even if the
offer and the acceptance are contained in separate writings.

After reviewing the record, we find no such written offer or acceptance signed

by Manuel. The language cited by the Peltiers refers to a situation where, for

example, a plaintiff offers, via a signed document, to settle a case for a certain sum

and a defendant, in a different signed document, accepts the plaintiff’s offer to settle

that case for that certain sum. Here, the first letter referenced by the Peltiers consists

of a letter from Manuel’s attorney indicating that Manuel is agreeable to purchasing

the house back from the Peltiers. The November 28, 2006, letter, in pertinent part,

states, “[a]s we discussed, my client [Manuel] is amiable to purchasing the house

back from the Peltiers. If the Peltiers are so inclined please advise us as to the sales

price of the same.” There is no language that can reasonably be interpreted to indicate

that Manuel offered to purchase the house back for any particular sales price. This

language can only reasonably be interpreted as an invitation for an offer to be made

4

by the Peltiers, not as an offer by Manuel.

The next document that the Peltiers contend can be interpreted to indicate a

transaction or compromise is a letter from Manuel’s attorney to an arbitrator wherein

it, in pertinent part, states:

This correspondence is to advise you that the parties are on the verge of
resolving this matter and thereby are both requesting that the arbitration
hearing presently set for December 4 -5, 2006 be continued, without
date, in order to allow the settlement to be consummated. (Emphasis
added.)

First, the plain language of the letter is that the parties are “on the verge” of

settling the matter, not that they have settled the matter. Second, this letter is not

addressed to the Peltiers. Accordingly, to find that this letter constitutes a signed offer

or acceptance of settlement from Manuel to the Peltiers would be unreasonable.

The Peltiers claim that two other documents show a transaction or compromise.

They point to a letter from their attorney to Manuel’s attorney and a letter from the

arbitrator to their and Manuel’s attorney. While these letters may be construed as

evidence that a settlement was reached, the article and jurisprudence clearly require

that either Manuel or his representative sign a written offer or acceptance. Neither

letter contains a written offer or acceptance on Manuel’s behalf..

The Peltiers also argue that because Manuel filed no opposition to their Motion

to Enforce Settlement, despite being notified of its existence, and also because

counsel for Manuel failed to respond to repeated communication attempts, the trial

court correctly granted the motion. This argument lacks merit. Neither Manuel nor its

counsel are under any legal obligation to appear to oppose the motion; nor was

Manuel apparently aware of the attempts made by counsel for the Peltiers to contact

Manuel’s counsel. The lack of an opposition to a motion does not guarantee its

5

success. The party that brings a motion still has the burden of proving that the motion

has merit. Here, the Peltiers failed to do so.

CONCLUSION:

We find that the trial court committed reversible error when it ruled that the

letters exchanged between counsel for the Peltiers and Manuel, along with other

letters included in the record, were sufficient to create an enforceable settlement

between the parties. The record does not contain the evidence necessary to prove that

a valid transaction or compromise had been reached between Manuel and the Peltiers.

As such, the judgment granted to the Peltiers by the trial court is reversed. All costs

associated with this appeal are to be paid by the Peltiers.

REVERSED.

6