Steven O. Richard v. Fred Taylor

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

15-681

STEVEN O. RICHARD

VERSUS

FRED TAYLOR, ET AL.

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APPEAL FROM THE
SEVENTH JUDICIAL DISTRICT COURT
PARISH OF CONCORDIA, NO. 47805
HONORABLE KATHY A. JOHNSON, DISTRICT JUDGE

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JIMMIE C. PETERS
JUDGE

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Court composed of John D. Saunders, Jimmie C. Peters, and Phyllis M. Keaty,
Judges.

AFFIRMED.

Brian G. Smith
Smith & Nwokorie
P. O. Box 532
Farmerville, LA 71241-0532
(318) 368-9543
COUNSEL FOR PLAINTIFF/APPELLANT:
Steven O. Richard

Stephen N. Elliott
Kenneth J. DeRoche, Jr.
Bernard, Cassisa, Elliott & Davis
3838 North Causeway Boulevard, Suite 3050
Metairie, LA 70002-8357
(504) 834-2612
COUNSEL FOR DEFENDANTS/APPELLEES:
Fred Taylor
Fred’s Automotive Repair & Wrecker Service, L.L.C.
Catlin Specialty Insurance Company

James D. “Buddy” Caldwell
Attorney General
Kodie K. Smith
Assistant Attorney General
Louisiana Department of Justice
Litigation Division
330 Marshall Street, Suite 777
Shreveport, LA 71101
(318) 676-5729
COUNSEL FOR INTERVENOR/APPELLEE:
State of Louisiana
Division of Administration
Office of Risk Management

PETERS, J.

The plaintiff, Steven O. Richard, appeals from the trial court’s grant of both

an exception of res judicata and a motion for summary judgment dismissing Fred

Taylor, Fred’s Automotive Repair & Wrecker Service, L.L.C., and Catlin Specialty

Insurance Company as party defendants in this litigation. For the following

reasons, we affirm.

DISCUSSION OF THE RECORD

On March 8, 2013, Steven O. Richard filed a petition to recover damages he

sustained in a March 27, 2012 automobile accident that occurred in Concordia

Parish, Louisiana. After the filing of a number of responsive pleadings and

amendments to the original petition, the parties identified as defendants were

ultimately established as the following:

FRED TAYLOR, who domiciles in Vidalia, Concordia Parish,
Louisiana.

FRED’S AUTOMOTIVE REPAIR & WRECKER SERVICE,
L.L.C., a major corporation doing business in the State of Louisiana,

CATLIN SPECIALTY INSURANCE COMPANY, a major
corporation doing business in the State of Louisiana who upon
information and belief maintained a policy of liability insurance
covering FRED’S AUTOMOTIVE REPAIR AND WRECKER
SERVICE, L.L.C., a Louisiana corporation doing business in the State
of Louisiana.

In his pleadings, Mr. Richard asserts that on March 27, 2012, he was driving

westbound on U.S. Highway 425 in Concordia Parish, Louisiana, when his vehicle

was struck by a vehicle being driven by Fred Taylor; that the vehicle driven by Mr.

Taylor was one left for repairs with Fred’s Automotive Repair & Wrecker Service,

L.L.C. (Fred’s L.L.C.); that the accident and his resulting injuries were caused by

the fault of Mr. Taylor; and that Catlin Specialty Insurance Company (Catlin

Insurance) provided liability coverage to Fred’s L.L.C.

After answering Mr. Richard’s original and amending petitions, Mr. Taylor,

Fred’s L.L.C., and Catlin Insurance further responded by filing an exception of res

judicata and a motion for summary judgment in a single pleading. Mr. Taylor

asserted that Mr. Richard released him from all liability by executing a January 4,

2013 receipt and release. Fred’s L.L.C. and Catlin Insurance asserted that the

limited liability company had not been formed at the time of the accident and,

therefore, neither it nor its insurer could be liable to Mr. Richard for his injuries.

The defendants attached the following exhibits to their memorandum filed in

support of their exception and motion:

Copies of the original petition for damages and all supplemental and
amending petitions filed by Mr. Richard;

A copy of the answer filed by Catlin Insurance and Fred’s L.L.C.;

A copy of a document entitled “RELEASE OF ALL CLAIMS”
executed by Mr. Richard on January 4, 2013;

A computer printout from the Louisiana Secretary of State’s office
setting forth the pertinent recording and operating information for
Fred’s L.L.C.; and

A copy of the unanswered requests for admission of fact and attached
exhibits addressed to Mr. Richard on July 15, 2014.

Mr. Richard filed nothing in opposition to the exception and motion before

or during the October 6, 2014 hearing addressing those issues. At that hearing, the

defendants offered and introduced into evidence, without objection from Mr.

Richard, the attachments to their memorandum. After hearing the argument of

counsel, the trial court orally rendered judgment granting the exception of res

judicata and dismissing Mr. Taylor as a defendant. The trial court then granted the

motion for summary judgment and dismissed Fred’s L.L.C. and Catlin Insurance

as defendants as well. The trial court executed a written judgment on October 6,

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2014, dismissing Mr. Richard’s claims against Mr. Taylor, Fred’s L.L.C., and

Catlin Insurance.

On appeal, Mr. Richard raises one assignment of error and couches it in the

form of a question: “Whether the District Court erred in granting Defendant’s [sic]

Exception of Res Judicata/Summary Judgment?”

OPINION

Exception of Res Judicata

With regard to the application of the doctrine of res judicata, La.R.S.

13:4231 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 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.

The supreme court set forth the factors to be considered in evaluating a res judicata

claim in Chauvin v. Exxon Mobil Corp., 14-808, pp. 5-6 (La. 12/9/14), 158 So.3d

761, 765:

Under La.Rev.Stat. 13:4231, a second action is precluded when
all of the following are satisfied: (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 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
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that was the subject matter of the first litigation. Burguieres v.
Pollingue, 02-1385, pp. 6-8 (La.2/25/03), 843 So.2d 1049, 1052-53;
see also Chevron U.S.A., Inc. v. State, 07-2469, pp. 10-11 (La.9/8/08),
993 So.2d 187, 194. Since the 1990 amendment to the res judicata
statute, “the chief inquiry is whether the second action asserts a cause
of action which arises out of the transaction or occurrence that was the
subject matter of the first action.” Id. (citing Avenue Plaza, L.L.C. v.
Falgoust, 96-0173, p. 6 (La.7/2/96), 676 So.2d 1077, 1080, and
La.Rev.Stat. 13:4231 cmt. a (1990)).

Additionally:

While 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, Dept. of Transp. and
Development, 96-1322, p. 6 (La.2/25/97); 689 So.2d 1358, 1363. La.
Civ.Code. art. 3071 defines a transaction or compromise as “. . . 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.” 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, 96-1322, p. 7, 689
So.2d at 1363. A compromise instrument is the law between the
parties and must be interpreted according to the parties’ intent. The
compromise instrument is governed by the same general rules of
construction applicable to contracts. Id. Therefore, when the words
of a settlement or compromise are clear and explicit and lead to no
absurd consequences, no further interpretation may be made in search
of the parties’ intent. La. Civ.Code art.2046.

Id. at 765-66.

Furthermore, in Brown v. Drillers, Inc., 93-1019, pp. 7-10 (La. 1/14/94), 630 So.2d

741, 748-50 (alteration in original) (footnotes omitted), the supreme court stated:

Shifting back to the codal provisions, LSA-C.C. Art. 3071
further provides that a compromise is a written contract. It follows
that the compromise instrument is the law between the parties and
must be interpreted according to the parties’ true intent. Ritchey v.
Azar, 383 So.2d 360, 362 (La.1980); Succession of Magnani, 450
So.2d 972, 975 (La.App. 2d Cir.1984). It also follows that the
compromise instrument is governed by the same general rules of
construction applicable to contracts.

LSA-C.C. Art. 2046 sets forth a general rule of construction,
providing that “[w]hen the words of a contract are clear and explicit
and lead to no absurd consequences, no further interpretation may be
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made in search of the parties’ intent.” LSA-C.C. Art. 2046 (emphasis
supplied). The underscored word “further” in this article signifies the
true nature of contractual interpretation. The determination that the
language contained in a contract is clear and explicit, in itself,
involves an interpretive process. For that reason, LSA-C.C. Art. 2046
emphasizes that the process involves no further interpretation, as
opposed to no interpretation at all. Expose’ Des Motifs of the Project
of Titles III and IV of Book III of the Civil Code of Louisiana, p. 67
(1984); R. MacLean, Judicial Discretion in the Civil Law, 43
La.L.Rev. 45, 55-56 n. 28 (1982).

LSA-C.C. Art. 3073 contains a supplementary rule of
construction governing the interpretation of the operative language,
and the determination of the scope, of a compromise agreement.
LSA-C.C. Art. 3073 provides that a compromise agreement extends
only to those matters that the parties expressly intended to settle and
that the scope of the transaction cannot be extended by implication.
See Comment, Compromise in Louisiana, 14 Tul.L.Rev. 282, 283
(1940). More precisely, LSA-C.C. Art. 3073 set forth the following
four factors to be considered in determining the scope of a
compromise instrument:

[1] Transactions regulate only the differences which
appear clearly to be comprehended in them by the
intention of the parties,

[2] whether it be explained in a general or particular
manner,

[3] unless it be the necessary consequence of what is
expressed; and

[4] they do not extend to differences which the parties
never intended to include in them.

We utilize these four factors below as the framework for analyzing the
issue of contractual interpretation presented in the instant case.

In applying the rule of construction set forth in LSA-C.C. Art.
3073, courts are guided by the general principle “that the contract
must be construed as a whole and in light of attending events and
circumstances.” Succession of Teddlie, 385 So.2d 902, 904 (La.App.
2d Cir.), writ refused, 393 So.2d 742 (La.1980); LSA-C.C. Art. 2050.
Thus, the intent which the words of the compromise instrument
express in light of the surrounding circumstances at the time of
execution of the agreement is controlling.

The meaning and intent of the parties to a written instrument,
including a compromise, is ordinarily determined from the four
corners of the instrument, and extrinsic (parol) evidence is
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inadmissible either to explain or to contradict the terms of the
instrument. Maltby v. Gauthier, 526 So.2d 455, 457 (La.App. 5th
Cir.), writ denied, 531 So.2d 474 (La.1988); Smith v. Leger, 439
So.2d 1203 (La.App. 1st Cir.1983). Louisiana courts, however, have
crafted a special exception to the extrinsic evidence rule for
compromise agreements based on an in pari materia reading of LSA-
C.C. Art. 3073’s provision that a compromise extends only to those
differences the parties’ clearly comprehended and LSA-C.C. Art.
3079’s provision that an error as to the subject matter in dispute is a
ground to rescind a compromise. Moak v. American Automobile Ins.
Co., 242 La. 160, 134 So.2d 911 (1961).

Moak, supra stands for the proposition that when a dispute
arises as to the scope of a compromise agreement, extrinsic evidence
can be considered to determine exactly what differences the parties
intended to settle. Following Moak, a long line of jurisprudence holds
that a general release will not necessarily bar recovery for those
aspects of a claim not intended by the parties to be covered by the
release. Under that jurisprudential rule, the parties to a release
instrument are permitted to raise a factual issue as to whether
unequivocal language in the instrument was intended to be
unequivocal.

Louisiana courts, however, have tempered that jurisprudential
rule, recognizing that absent some substantiating evidence of mistaken
intent, no reason exists to look beyond the four corners of the
instrument to ascertain intent. Duet v. Lucky, 621 So.2d 168, 173
(La.App. 4th Cir.1993). Utilizing a case-by-case, factual analysis,
Louisiana courts have limited the rule’s application to cases in which
substantiating evidence is presented establishing either (1) that the
releasor was mistaken as to what he or she was signing, even though
fraud was not present; or (2) that the releasor did not fully understand
the nature of the rights being released or that the releasor did not
intend to release certain aspects of his or her claim. Higgins v.
Spencer, 531 So.2d 768, 772 (La.App. 1st Cir.), writ denied, 532
So.2d 106 (La.1988). When the factual circumstances surrounding
the execution of the release instrument do not fall within either of the
above categories, Louisiana courts, applying LSA-C.C. Art. 2046’s
general rule of construction, have not hesitated to confine their
analysis to the four corners of the instrument. When, as in that
instance, a contract can be construed from the four corners of the
instrument without looking to extrinsic evidence, the question of
contractual interpretation is answered as a matter of law and thus
summary judgment is appropriate. Wilson v. Cost + Plus of Vivian,
Inc., 375 So.2d 683, 685 (La.App. 2d Cir.1979); Horton v. Mobley,
578 So.2d 977, 982 (La.App. 2d Cir.1991).

The presentation of evidence on a peremptory exception of res judicata is

governed by La.Code Civ.P. art. 931, which reads, in part, as follows:
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On the trial of the peremptory exception pleaded at or prior to
the trial of the case, evidence may be introduced to support or
controvert any of the objections pleaded, when the grounds thereof do
not appear from the petition.

When the peremptory exception is pleaded in the trial court
after the trial of the case, but prior to a submission for a decision, the
plaintiff may introduce evidence in opposition thereto, but the
defendant may introduce no evidence except to rebut that offered by
plaintiff.

If, as in this case, the exception is tried beforehand and evidence is admitted

supporting or opposing the exception, the trial court’s factual findings are reviewed

pursuant to the manifest error—clearly wrong standard of review. Richard v.

Richard, 11-229 (La. 10/25/11), 74 So.3d 1156.

The pertinent release language at issue in this litigation reads as follows:

This Indenture Witnesseth that, in consideration of the sum of fifteen
thousand dollars ($15,000.00), receipt whereof is hereby
acknowledged, for myself and for my heirs, personal representatives
and assigns, I do hereby release and forever discharge Warren
McGaughey, Fred Taylor, Allstate Insurance Company and any other
person, firm or corporation charged or chargeable with responsibility
or liability, their heirs, representatives and assigns, from any and all
claims, demands, damages, costs, expenses, loss of services, actions
and causes of action, arising from any act or occurrence up to the
present time and particularly on account of all personal injury,
disability, property damages, loss or damages of any kind already
sustained or that I may hereafter sustain in consequence of an accident
that occurred on or about this 27th day of March, 2012, at or near
HWY 84, Ridge Crest, , [sic] LA.

Immediately above Mr. Richard’s signature on the release form is the

notation “(CAUTION-READ BEFORE SIGNING)[.]” At the trial on the

exception, Warren McGaughey was identified as the owner of the vehicle being

driven by Mr. Taylor, and Allstate Insurance Company was identified as the

insurer of the automobile. Additionally, Mr. Richard’s counsel acknowledged in

argument that the document was provided to him for review before it was signed

by his client. Furthermore, as the insurer of the vehicle and its driver, Allstate

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Insurance Company had an interest in releasing all parties for whom it might have

liability.

We find that the release executed by Mr. Richard was valid and final. Mr.

Richard and Mr. Taylor are parties in both the release and this suit; the cause of

action asserted in the current suit existed at the time of the execution of the release;

and the cause of action asserted in this suit arose out of the occurrence that was the

subject matter of the release. Thus, all of the factors set forth in Chauvin are

satisfied, and under La.R.S. 13:4231, Mr. Richard’s current action against Mr.

Taylor is precluded under the doctrine of res judicata.

Accordingly, we find no error in the trial court’s grant of the exception of res

judicata and in its dismissal of Mr. Richard’s claims against Mr. Taylor.

Motion for Summary Judgment

It is well settled that appellate courts review the grant of summary judgment

de novo; that is by applying the same criteria applied by trial courts in deciding

whether summary judgment is appropriate. In re Succ. of Holbrook, 13-1181 (La.

1/28/14), 144 So.3d 845. Although the summary judgment proof requirements

have been the subject of several recent amendments, the procedure itself is still

favored and is “designed to secure the just, speedy, and inexpensive determination

of every action, except those disallowed by Article 969.” La.Code Civ.P. art. 966

(A)(2).

The burden of proving summary judgment still remains with the movant.

La.Code Civ.P. art. 966(C)(2). However, if the ultimate burden will lie with the

non-moving party at a trial on the merits, the movant need only point out a lack of

factual support on at least one essential element of the non-moving party’s claim,

action, or defense. Id. The burden then shifts to the non-moving party to produce

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factual support sufficient to counter the movant’s claim, and the failure to do so

results in a finding that no genuine issue of material fact exists. Id.

The law in effect at the time of the October 6, 2014 hearing provided that

summary judgment “shall be rendered forthwith if the pleadings, depositions,

answers to interrogatories, and admissions, together with the affidavits, if any,

admitted for purposes of the motion for summary judgment, show” that it is

appropriate. La.Code Civ.P. art. 966(B)(2). Moreover, evidence cited in and

attached to the motion for summary judgment or in the non-moving party’s

opposition memorandum is deemed admitted unless objected to properly. La.Code

Civ.P. art. 966(F)(2).

Turning to the trial court’s grant of the motion for summary judgment and its

dismissal of Mr. Richard’s claims against Fred’s L.L.C. and Catlin Insurance, we

note that Mr. Richard’s accident occurred on March 27, 2012, and the records of

the Louisiana Secretary of State reflect that Fred’s L.L.C. was not formed until

April 23, 2012. Furthermore, this fact is deemed admitted based on Mr. Richard’s

failure to answer the defendants’ requests for admission on this issue within fifteen

days after the service of their July 15, 2014 request. See La.Code Civ.P. art.

1467(A). Thus, if Fred’s L.L.C. was not in existence on the date of the accident,

then neither it nor Catlin Insurance were legally obligated to Mr. Richard for the

damages he suffered as a result of that accident. See La.Civ.Code art. 1756.

Accordingly, we find that there is no genuine issue of material fact regarding

this issue, and the trial court judgment granting summary judgment in favor of

Fred’s L.L.C. and Catlin Insurance is affirmed.

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DISPOSITION

For the foregoing reasons, we affirm the judgment of the trial court

dismissing Fred Taylor, Fred’s Automotive Repair & Wrecker Service, L.L.C., and

Catlin Specialty Insurance Company as party defendants in this litigation. We

assess all costs of this appeal to Steven O. Richard.

AFFIRMED.

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