Brian M. Stelly v. Jeanne B. Stelly

NOT DESIGNATED FOR PUBLICATION

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

14-604

BRIAN M. STELLY

VERSUS

JEANNE B. STELLY

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APPEAL FROM THE
FIFTEENTH JUDICIAL DISTRICT COURT
PARISH OF LAFAYETTE, NO. 20133290
HONORABLE PATRICK LOUIS MICHOT, DISTRICT JUDGE

**********

JOHN E. CONERY
JUDGE

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Court composed of Shannon J. Gremillion, Phyllis M. Keaty, and John E. Conery,
Judges.

REVERSED AND REMANDED.

Daniel M. Landry, III
Post Office Box 3784
Lafayette, Louisiana 70502
(337) 237-7135
COUNSEL FOR DEFENDANT/APPELLANT:
Jeanne B. Stelly

D. Reardon Stanford
Hoyt & Stanford, L.L.C.
315 South College Road, Suite 165
Lafayette, Louisiana 70503
(337) 234-1012
COUNSEL FOR PLAINTIFF/APPELLEE:
Brian M. Stelly

CONERY, Judge.

Jeanne and Brian Stelly were married on April 28, 2010. Brian Stelly (Brian)

filed a petition for divorce on June 28, 2013. Jeanne Stelly (Jeanne) filed a

reconventional demand on September 19, 2013. She requested a divorce, both

interim and permanent spousal support, and partition of the community property.

Brian filed an exception of res judicata, claiming that the parties had previously

reached an agreement to settle the issues of spousal support and the partition of

community property.

A hearing on Brian’s exception was held before the trial court on November

4, 2013. At the hearing, the transcripts of the pertinent e-mails between Jeanne,

who was then unrepresented, and counsel for Brian, Mr. Daniel Stanford, were

admitted into evidence by the trial court pursuant to a stipulation of counsel. The

submission to the trial court also included what was referred to in the e-mail

correspondence as a draft of a document entitled, “STIPULATION AND

SETTLEMENT AGREEMENT REGARDING SPOUSAL SUPPORT,

PARTITION OF COMMUNITY PROPERTY AND MATTERS INCIDENTAL

THERETO” (Compromise Draft).

After the hearing, in open court, the trial court granted Brian’s exception of

res judicata and dismissed Jeanne’s demands for both spousal support and partition

of the community property, finding that a compromise agreement had been reached

by the parties. A judgment was signed by the trial court on January 2, 2014, and

on January 3, 2014, new counsel, Daniel M. Landry, was enrolled on behalf of

Jeanne.

After the Judgment was signed, Jeanne filed a motion for new trial and

requested that the trial court issue written reasons for ruling pursuant to

La.Civ.Code art. 1917. The trial court issued its written reasons on January 31,

2014, on the exception of res judicata and denied Jeanne’s motion for new trial.

Jeanne now timely appeals the trial court’s judgment of January 2, 2014. The

parties were granted a divorce on April 3, 2014, pursuant to La.Civ.Code art. 2374,

and the divorce is not at issue on appeal. For the following reasons, we reverse

and remand.

ASSIGNMENT OF ERROR

Jeanne asserts the following assignment of error on appeal, “The trial court

erred in granting the Exception of Res Judicata filed by Plaintiff-Appellee, Brian

M. Stelly, concerning issues of interim and final spousal support, the detailed

descriptive list and community property finding that an agreement had been

reached which was a valid and enforceable compromise and settlement.”

LAW AND DISCUSSION

Standard of Review

The proper standard of review is whether the trial court committed an error

of law or made a factual finding that was manifestly erroneous or clearly wrong.

Gibson v. State, 99-1730 (La. 4/11/00), 758 So.2d 782, cert. denied, 531 U.S. 1052,

121 S.Ct. 656 (2000). The supreme court’s two-part test for appellate review of a

factual finding requires: “1) The appellate court must find from the record that

there is a reasonable factual basis for the finding of the trial court, and 2) The

appellate court must further determine that the record establishes that the finding is

not clearly wrong (manifestly erroneous).” Mart v. Hill, 505 So.2d 1120, 1127

(La.1987). The reviewing court must review the record in its entirety to make this

determination. Stobart v. State, DOTD, 617 So.2d 880 (La.1993).

However, statutory interpretations are a question of law. Shell v. Wal-Mart

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Stores, Inc., 00-997 (La.App. 3 Cir. 3/21/01), 782 So.2d 1155, writ denied, 01-

1149 (La. 6/15/01), 793 So.2d 1244. Although a reviewing court defers to a trial

court’s reasonable decision on a question or matter properly within the trial court’s

discretion, if the trial court’s decision is based on an erroneous interpretation or

application of the law, such an incorrect decision is not entitled to deference. Kem

Search, Inc. v. Sheffield, 434 So.2d 1067 (La.1983).

Although Brian filed an “Exception of Res Judicata,” in actuality the relief

he was seeking was to enforce the settlement agreement negotiated between his

counsel and Jeanne, who had no attorney at the time. Although “the doctrine of res

judicata is ordinarily premised on a final judgment on the merits, it also applies

where there is a transaction or settlement of a disputed or compromised matter that

has been entered into by the parties.” Ortego v. State of Louisiana, Dep’t. of

Transp. and Dev., 96-1322, p. 6 (La. 2/25/97), 689 So.2d 1358, 1363.

Louisiana Civil Code Article 3071 provides the law applicable to a motion

to enforce a settlement or compromise, “A compromise is a contract whereby the

parties, through concessions made by one or more of them, settle a dispute or an

uncertainty concerning an obligation or other legal relationship.” “Consequently, a

party claiming res judicata based on a compromise agreement must have been a

party to the compromise, and the authority of the thing adjudged extends only to

the matters those parties intended to settle.” Ortego, 689 So.2d at 1363. See also

Brown v. Drillers, Inc. 93-1019 (La. 1/14/94), 630 So.2d 741.

Louisiana Civil Code Article 3072 requires, “[a] compromise shall be made

in writing or recited in open court, in which case the recitation shall be susceptible

of being transcribed from the record of the proceedings.” “The purpose of a

compromise, therefore, is to prevent or to put an end to litigation. The essential

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elements of a compromise are (1) mutual intention of putting an end to the

litigation and (2) reciprocal concessions of the parties in adjustment of their

differences.” Rivett v. State Farm Fire & Cas. Co., 508 So.2d 1356, 1359

(La.1987). “The party urging an exception of res judicata based on a contract of

compromise has the burden of proving each of the essential requirements by a

preponderance of the evidence.” Id. Brian had the burden of proof in this case.

Using summary proceedings, the trial court found that a compromise existed

pursuant to La.Civ.Code art. 3072 based on the e-mail correspondence between

Jeanne and Mr. Stanford, which began on July 26, 2013 and concluded on August

12, 2013. Brian Stelly argued Jeanne Stelly evidenced her consent to settle in her

e-mail exchanges, with his counsel. The trial court stated:

The statutory requirement that the agreement to compromise be in
writing does not mean that the agreement must be contained in one
document; where two instruments, read together, outline the
obligations each party has to the other and evidence each party’s
acquiescence in the agreement, a written compromise has been
perfected. Dozier v. Rhodus, 17 So.3d 302 (La. App.1 Cir. 5/5/09)

The trial court correctly found that the exchange of e-mails referenced could

constitute a valid compromise of Jeanne’s claims. The Louisiana Supreme Court

in Felder v. Georgia Pacific Corp., 405 So.2d 521, 524 (La.1981), held “where

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

other and evidence each party’s acquiescence in the agreement,” the requirement of

a writing is met.

The trial court also correctly found that:

The parties’ positions “may be” expressed in writings,
including e-mails, which are recognized by the Louisiana Uniform
Electronic Transactions Act, La. R. S. 9:2607. State law gives effect
to both electronic contracts and signatures. Id. Such e-mails provide
sufficient writings to establish the parties’ intent to compromise and
settle their obligations by acquiescence and agreement. See,

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Klebanoff v. Haberle, 978 So. 2d 598, (La. App. 2 Cir. 03/19/08);
Dozier v. Rhodus, l7 So. 3d 402 (La. App. 1 Cir. 5/05/09); and
Succession of Wilson, 2013 WL 539323 (La. App. 3 Cir. 10/9/13);
Preston Law Firm v. Mariner Health Care Management, 622 F. 3d
384 (U.S.5th Cir. 10/1/10).

Meeting of the Minds

The Compromise Draft between the parties is only valid if the parties shared

a meeting of the minds as to their intent. See Am. Bank & Trust Co. v. Hannie, 568

So.2d 216 (La.App. 3 Cir. 1990), writ denied, 572 So.2d 64 (La.1991). See also

Wortham v. Fielder, 30-102 (La.App. 2 Cir. 4/8/98), 711 So.2d 399, writ denied,

98-1254 (La. 6/19/98), 721 So.2d 474; Lemoine v. Thornton, 13-889 (La.App. 3

Cir. 2/12/14) ____So.3d.___, writ denied, 14-541 (La. 4/25/14), 138 So.3d 648.

The e-mail negotiations between Mr. Stanford and Jeanne eventually resulted

in a July 30, 2013 e-mail, wherein Mr. Stanford outlined a compromise offer from

Brian. Mr. Stanford indicated that “the issue of the property settlement seems to

be a non-issue, i.e. Brian is agreeable.”

The main focus of the e-mail is the issue of spousal support, a discussion of

which concluded with, “Brian is willing to agree to $500 per month in spousal

support, for a six month fixed period, running, say, from August. Any further

spousal support, interim or fixed, to be thereafter waived.”

Subsequently, on Friday, August 9, 2013 at 4:24 p.m., Mr. Stanford sent

Jeanne an e-mail, and attached a “Compromise Draft” proposal. The August 9,

2013 e-mail reads as follows:

Jeanne

I’ve prepared a Draft settlement for you and Brian to execute. We’d
like to arrange for you to come by and sign, as well as to-sign off on
the cash sale (Brian indicates you have a copy in your possession that
can be signed). Please advise as to when you might be available. Brian
would like to move forward as quickly as possible.

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D. Reardon Stanford

Jeanne responded at 4:44 p.m. on Friday, August 9, 2013 with, “Is it

necessary that we are both there at the same time? Jeanne Stelly”

Mr. Stanford responded at 4:55 on Friday, August 9, 2013:

No. In fact, as long as you can print it out (it’s Drafted on legal size
paper but that’s not a huge issue), if you sign it in front of a notary
and two witnesses (same for the cash sale deed which, I believe, is set
up the same way), you can simply bring it to me executed, and I can
get Brian to sign it after the fact. I have the August support payment
for you in my possession.

D. Reardon Stanford

On Friday, August 9, 2013, at 5:12 p.m., Jeanne responded, “I don’t have an

issue going to your office to sign it, I just don’t have a desire to be around him if

[it’s] not necessary. I can be there as soon as it fits your schedule.

Jeanne Stelly”

Nothing in these e-mails by Jeanne specifically contains any language that

the proposal contained in the Compromise Draft was accepted by Jeanne.

On Monday of the following week, on August 12, 2013 at 8:32 a.m., Jeanne

responded, “Reardon I apologize for the last minute notice but I need to reschedule

for this morning. Jeanne Stelly” Jeanne did not reschedule a time or date to sign

the Compromise Draft, but in fact retained counsel shortly after receiving the

Compromise Draft.

The various issues and general proposals discussed by Jeanne and Mr.

Stanford during their e-mail negotiations, as summarized by counsel for Jeanne,

included the following:

A. Assumption of all credit card debt from the marriage by Brian
Stelly.

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B. Waiver of interest in funds held in accounts during the marriage,
including checking, savings and retirement.

C. Waiver of any and all interest in the property and contents located
at 120 Windermere Circle.

D. Interim spousal support for six months with an amount to be
determined, but based on his income, Defendant-Appellant requested
$1,000.00- $1,500.00 per month.

E. Brian Stelly to pay all court costs.

The Compromise Draft sent on August 9, 2013, via email attachment,

obviously included new provisions and details not previously mentioned in the e-

mail exchanges and was never accepted by Jeanne. Instead, after considering the

terms of the Compromise Draft, she canceled the scheduled appointment with Mr.

Stanford and retained counsel. Jeanne’s actions in retaining counsel reflect a

decision that it was not in her best interest to accept the terms of the Compromise

Draft and “put an end to the litigation.” Rivett, 508 So.2d at 1359.

On September 19, 2013, Mr. Peter Piccione filed a reconventional demand on

behalf of Jeanne, seeking both interim and permanent spousal support, and a

detailed descriptive list in order to facilitate a division of the community assets.

The reconventional demand clearly demonstrates that Jeanne did not intend to

accept the language of the Compromise Draft with respect to either spousal support

or the division of the community property.

In Amy v. Schlumberger Technology Corp., 00-175, p. 5 (La.App. 3 Cir.

6/14/00), 771 So.2d 669, 672, a panel of this circuit found there was “no meeting

of the minds” when, after the release was put in writing, “the plaintiff refused to

accept the release language offered by Schlumberger.” Although counsel had

agreed in principle to the settlement, it was apparent that each party envisioned a

different outcome as a result of the settlement when the agreement was reduced to

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writing. See also Soileau v. Allstate Ins. Co., 03-120 (La.App. 3 Cir. 10/15/03),

857 So.2d 1264, writ denied, 03-3170 (La. 2/6/04), 865 So.2d 724.

A comparison of the Compromise Draft with the e-mails between Mr.

Stanford and Jeanne show that the Compromise Draft included numerous

proposals that were not discussed or included in the e-mails, as outlined below in

Jeanne’s briefing to this court:

Section 3. The payment of the $500.00 was contingent upon
execution of the agreement. - (NOT IN EMAIL.)

Section 4. A purchase of the immovable property by Brian Stelly
with Jeanne Stelly agreeing to appear indicating that he
is purchasing same with his separate funds and that
thereafter it would be his separate property.- (NOT IN
EMAIL.)

Section 5. Discussion of vehicles- (NOT ADDRESSED IN
EMAIL)

Section 6. All financial depository or investment accounts currently
open as opposed to the statement in the emails- funds
being held in accounts during the marriage in possession
of the parties.
Any and all right, title, interest and benefits pursuant to
that certain 401 K retirement account and/or plan and/or
assets contained therein in the name of Brian M. Stelly
with Hewitt Associates. (THIS WAS NOT
ADDRESSED IN THE EMAILS, NOR WAS AN
AMOUNT STATED AS TO THE VALUE)

Section D. Miscellaneous movable property concerning various
jewelry in the respective parties’ possession. (ALL OF
WHICH WAS NOT DISCUSSED OR ADDRESSED
IN THE SUPPOSED COMPROMISE EMAILS.)

Items 16-21. WERE NOT DISCUSSED ANYWHERE IN ANY E
MAIL CONCERNING REIMBURSEMENT
CLAIMS AND/OR INDEMNIFICATION AND
SUBROGATION RIGHTS.

Item 22. Brian Stelly was cast with court cost for the divorce, but
excluded other matters other than the divorce which
would obviously deal with spousal support and/or

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community property. - (THIS WAS ALSO NOT
ADDRESSED IN ANY OF THE EMAILS.)

Based on the record before us, we find there was an absence of a “meeting of

the minds” between Brian, as represented by counsel and Jeanne, who was

unrepresented at the time of the e-mail correspondence. Although there may have

been an agreement in principal between the parties on some of the issues, the terms

of the Compromise Draft clearly went beyond the terms discussed in the e-mails.

We find the evidence presented in support of Brian’s exception of res

judicata does not support his claim that Jeanne accepted the terms of the

Compromise Draft, entitled “Stipulation And Settlement Agreement Regarding

Spousal Support, Partition Of Community Property And Matters Incidental

Thereto.” As stated previously, no testimony was taken at the hearing, and the

issue was decided solely on the basis of the e-mails and Compromise Draft

submitted by Brian. Based upon our review of the evidence, we conclude that the

trial court committed manifest error in finding that a valid compromise agreement

was reached between the parties.

DISPOSITION

For the foregoing reasons, the January 2, 2014 judgment of the trial court

granting Brian M. Stelly’s exception of res judicata is reversed, and the matter is

remanded to the trial court for further proceedings consistent herewith. Costs of

this appeal are assessed to Brian M. Stelly.

REVERSED AND REMANDED.

This opinion is NOT DESIGNATED FOR PUBLICATION. Uniform Rules—Courts

of Appeal, Rule 2-16.3.

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