Amoco Production Company v. Texas, Inc.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

03-1625 C/W 03-1423

AMOCO PRODUCTION COMPANY

VERSUS

TEXACO, INC., ET AL.

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APPEAL FROM THE
FIFTEENTH JUDICIAL DISTRICT COURT
PARISH OF VERMILION, DOCKET NO. 64486
HONORABLE KRISTIAN EARLES, PRESIDING

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SYLVIA R. COOKS
JUDGE
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Court composed of Ulysses Gene Thibodeaux, Chief Judge, Sylvia R. Cooks and
Oswald A. Decuir, Judges.

Decuir, J., Concurs in the result.

EXCEPTION OF RES JUDICATA REVERSED; MOTION TO REDUCE
GRANTED IN PART & RENDERED.

J. Michael Veron
Patrick D. Gallaugher, Jr.
Scofield, Gerard, Veron, Singletary & Pohorelsky
P.O. Drawer 3028
Lake Charles, LA 70602-3028
Telephone: (337) 433-9436
COUNSEL FOR PLAINTIFF/APPELLEE:
Amoco Production Company

Anthony J. Fontana, Jr.
210 North Washington St.
Abbeville, LA 70510
Telephone: (337) 898-8332
COUNSEL FOR PLAINTIFF/APPELLEE:
Amoco Production Company

James A. Gillespie

BP Amoco Corporation, Legal Group
501 Westlake Park Boulevard
Houston, TX 77079
Telephone: (281) 366-5448
COUNSEL FOR PLAINTIFF/APPELLEE:
Amoco Production Company

Silas B. Cooper, Jr.
Silas B. Cooper, Jr. & Assoc.
121 East Victor Street
P.O. Box 1213
Abbeville, LA 70511-1213
Telephone: (337) 893-8810
COUNSEL FOR DEFENDANT/APPELLANT:
IMC Exploration Company

Reginald J. Ringuet
William H. Collier
Ringuet, Daniels & Collier
302 La Rue France, Suite 201
P.O. Box 52647
Lafayette, LA 70505
Telephone: (337) 232-0002
COUNSEL FOR DEFENDANT/APPELLANT:
IMC Exploration Company

Robert S. Rooth
Harry R. Holladay
Douglas L. Grundmeyer
Heather M. Valiant
Chaffe, McCall, Phillips, Toler & Sarpy, L.L.P.
1100 Poydras Street, Suite 2300
New Orleans, LA 70163-2300
Telephone: (504) 585-7000
COUNSEL FOR DEFENDANT/APPELLANT:
IMC Exploration Company

P.J. Laborde, Jr.
The Laborde Law Firm
102 Asma Boulevard
P.O. Box 80098
Lafayette, LA 70598-0098
Telephone: (337) 261-2617
COUNSEL FOR DEFENDANT/APPELLANT/CROSS-APPELLEE:
Mallinckrodt, Inc.

COOKS, Judge.

This appeal involves a dispute over how interest on a judgment should be

computed. Defendants, IMC Exploration Company and Mallinckrodt, Inc., argue the

trial court erred in denying its motion seeking to reduce legal interest owed.

FACTS

Amoco filed a lawsuit against IMC Exploration Company and Mallinckrodt,

Inc., contending they deliberately took action/inaction which led to the cancellation

of leases that Amoco had previously assigned to them. After the cancellation of

Amoco’s leases, the defendants acquired new leases directly from the landowners. A

producing gas reservoir was later discovered under the cancelled leases, which Amoco

argued cost them millions of dollars in lost production revenues. 1

Amoco’s petition, filed on April 29, 1994, asked for damages for defendants’

breach of the reassignment clause pertaining to the Baudoin Leases. The petition was

amended in 2001 to add a claim for a breach of the reassignment clause of the Jenkins

Lease. Amoco requested $26,732,000.00 in damages as a result of the loss of the

Baudoin Leases and $8,376,000.00 in damages for the loss of the Jenkins Lease.

After a lengthy trial, the jury returned a verdict in favor of Amoco in a lump-

sum verdict of $30 million. There was no indication in the judgment as to what

portion was given for the respective breaches of the reassignment clauses of the

Baudoin and Jenkins leases. A judgment was signed on September 19, 2001 ordering

the defendants to pay Amoco $30 million with legal interest due from “the date of

judgment demand until paid.” The Defendants appealed. This court affirmed the trial

court judgment in its entirety. See Amoco Production Co. v. Texaco, Inc., 838 So.2d

821. Writ applications were filed with the Louisiana Supreme Court, which were

subsequently denied. See Amoco Production Co. v. Texaco, Inc., 845 So.2d 1096.

1
A complete discussion of the factual scenario involved in this matter is contained in our
previous decision, Amoco Production Co. v. Texaco, Inc., 02-240 (La.App. 3 Cir. 1/29/03), 838
So.2d 821, writ denied, 03-1102 (La. 6/6/03), 845 So.2d 1096.

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Therefore, the judgment became final.

Counsel for defendants were provided by Amoco with a written calculation of

the value of the judgment, which included legal interest. Defendants filed a motion

seeking to reduce the legal interest owed under the judgment and/or to stay the

judgment. Defendants contended legal interest should have run on one portion of the

jury award from the date of the amended petition rather than the date of judicial

demand of the original filing. Specifically, defendants argued Amoco alleged two

separate and distinct breach of contract claims, the first in its original petition and the

second in an amendment to the petition filed years later. Thus, they contend there

were two judicial demands and interest must be separately computed on the damages

attributable to each claim. Amoco filed an opposition to the motion and also filed an

exception of res judicata.

The trial court denied the defendants’ motions, holding since the jury made a

lump-sum award it was impossible to determine how much the jury awarded for the

loss of any particular lease. The trial court also determined that defendants should

have raised this issue prior to the judgment becoming final, and granted the exception

of res judicata.

Defendants filed an appeal from the district court’s judgment. Despite its

appeal, defendants also filed a writ application with this court “in an abundance of

caution and to ensure that this court can review the judgment on its merits either

through its supervisory jurisdiction or its appellate jurisdiction.” We granted the writ

application for the limited purpose of ordering the consolidation of the writ

application with the appeal.

Defendants assert the trial court made the following errors in its judgment

below:

1. The district court erred in denying IMC and Mallinckrodt’s motion

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regarding computation of interest on the judgment concluding that legal
interest on the entire principal amount of the final judgment runs from
April 29, 1994, from the date of the filing of suit, instead of computing
interest on damages for each separate breach-of-contract claim from the
date of its respective judicial demand.

2. The district court erred in failing to separately allocate the lump-
sum award by determining what portion of the award was attributable to
the alleged 1981 breach concerning the Baudoin, et al. Leases asserted
in the original petition in 1994 and what portion of the award was
attributable to the alleged 1976 breach concerning the Jenkins Lease
asserted in the amended petition filed in 2001. Alternatively, if the court
could not perform the allocation, it erred in failing to hold that legal
interest on the entire lump-sum award runs from the date of the amended
judicial demand in 2001.

3. The district court erred in granting Amoco’s peremptory exception
of res judicata to bar IMC and Mallinckrodt’s motion.

4. The district court erred in failing to order Amoco to repay IMC any
overpayment of interest on the Judgment.

ANALYSIS

Initially, we note the final judgment in this matter awarded Amoco “the full and

true sum of THIRTY MILLION AND NO/100 (30,000,000) DOLLARS, with legal

interest thereon from the date of judgment demand until paid.” The plain wording of

La.Code Civ.P. art. 1951 provides that a final judgment cannot be substantively

changed. Amoco argues this is what the defendants are trying to do. However,

defendants contend they are merely seeking to have the judgment enforced as written.

They argue the issue before this court is as follows:

Where two separate breach-of-contract claims are asserted at different
times in a single suit by way of two separate judicial demands and the
judgment awards interest “from date of judicial demand,” does interest
on both claims run from the filing of suit asserting only one of the
claims, as Amoco argues and as the trial court held, or does interest on
each claim run separately from the date each was judicially demanded,
as Appellants argue and as every case that has addressed this issue has
held?

Defendants call our attention to the Louisiana Supreme Court’s decision in

Abraham v. Abraham, 233 La. 808, 98 So.2d 197 (1957), wherein the court found that

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the filing of an amended petition asserted a new demand and that judicial interest on

the cause of action of the amended petition would not begin to run until the date they

were judicially demanded. In Abraham, the husband filed an original petition seeking

a separation from bed and board. The petition was later amended to ask for an

accounting and settlement of the community, for which he eventually received a

money judgment. The question facing the Abraham court was whether the judicial

interest on the money judgment should begin to run from judicial demand of the

original petition or from the amended petition. The court discussed its reasoning as

follows:

Plaintiff contended that judicial demand commenced when he filed
his suit for separation from bed and board on February 13, 1953, and not
from the date of his prayer for settlement of the community. For this
reason, he would not acquiesce in marking the Docket of the Civil
District Court for the Parish of Orleans ‘satisfied’. The present
proceeding followed.

Plaintiff argues in this Court that all pleadings filed subsequent to
February 13, 1953 were auxiliary pleadings to the main suit. He
contends that there can be only one date of judicial demand in any given
court proceeding--that is, the date a petition is filed in a court of
competent jurisdiction, which includes all parties necessary to the suit
and is prosecuted to a final successful conclusion.

Article 1, Louisiana Code of Practice, defines an action as follows:

‘An action is the right given to every person, to claim
judicially what is due or belongs to him.

‘Action means also the exercise of that right, that is to say,
a judicial demand founded on a contract, or given by law,
by which the plaintiff prays that the person against whom
he proceeds be ordered to do that which he has bound
himself towards him to perform.’

When a plaintiff files a suit predicated on a legal right he is
entitled to assert (Rapides Grocery Co. v. Vann, 230 La. 829, 89 So.2d
359), he brings an action. Article 1, Code of Practice, supra. The filing
of the petition is certainly a judicial demand. However, it does not
necessarily follow that the original judicial demand will be the only
demand filed in the proceeding. There may be many incidental demands,
and also other demands, which emanate from the original demand in the
same action. Such demands are filed in a court of justice and must be

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classed as judicial demands, even though they are not the first demand
or the original action.

The community herein involved was not dissolved until there was
a judgment of separation from bed and board. Tanner v. Tanner, 229 La.
399, 86 So.2d 80; Abunza v. Olivier, 230 La. 445, 88 So.2d 815.
Plaintiff waited from that date, May 15, 1953, until October 20, 1953, to
make a demand for an accounting and settlement of the community.
This was the judicial demand we were speaking of in our original decree.
It was an outgrowth or incident of the action for separation from bed and
board, and it might be classed as auxiliary; but, no matter what it is
called and when it was filed, it was a judicial demand. In the instant
matter, ‘Interest from judicial demand’ means interest from October 20,
1953.

Abraham, 98 So.2d at 198.

In Mehta v. Baton Rouge Oil Co., Inc., 99-1773 (La. App. 1 Cir. 9/22/00), 768

So.2d 243, the court was faced with a dispute over how interest on a judgment should

be computed. In 1987, the plaintiffs filed suit against defendants for rentals and late

charges due under a written lease. During trial beginning in 1992, plaintiffs attempted

to introduce evidence of subsequent delinquencies on rental payments. Defendants

objected to the introduction, and the trial court sustained the objection. Plaintiffs then

orally moved for permission to amend the petition. Shortly thereafter, plaintiffs filed

an amended and supplemental petition, alleging defaults on rental payments for a

different time period than set forth in the original petition. Judgment was rendered in

favor of the plaintiffs, awarding them a lump sum “together with legal interest thereon

from date of judicial demand.” The defendant made regular payments on the

judgment for approximately five years until it believed the judgment was satisfied.

However, a dispute arose as to the appropriate amount of interest due. Plaintiffs

argued interest was due on the entire amount from the date of the original petition and

defendants argued interest on the second claim was due only from the date of the

filing of the amended and supplemental petition. The trial court held that judicial

interest on the claims for subsequent rentals set forth in the amending petition would

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run from the date of that judicial demand. Plaintiffs appealed.

In affirming the trial court’s judgment, the first circuit relied on the Abraham

decision, and further stated:

The plaintiffs in the present case would propose a rule of law that
judicial demand in any judgment, without further specification, must
relate back to the filing of the original petition, regardless of subsequent
supplements or amendments. For this, plaintiffs rely upon Article 1153
of the Code of Civil Procedure which provides:

When the action or defense asserted in the amended
petition or answer arises out of the conduct, transaction, or
occurrence set forth or attempted to be set forth in the
original pleading, the amendment relates back to the date of
filing the original pleading.

It is generally recognized that the doctrine of Article 1153 affects
the issue of prescription. Hardy v. A+ Rental, Inc., 95-2176, p. 2
(La.App. 4th Cir. 5/8/96), 674 So.2d 1155, 1156-57, writ denied,
96-1945 (La.11/1/96), 681 So.2d 1268. While appellants would want to
give the article an interpretation which would make it controlling on the
question of judicial demand, that is contrary to the jurisprudence of the
state. In fact, it has been held that, even in the event that claims not
raised by the pleadings are tried by express or implied consent of the
parties at the trial, this impromptu expansion constitutes a new judicial
demand, and damages arising from the new claim or claims only bear
interest from the time of the trial. Red River Realty, Inc. v. Relmm
Corporation, 372 So.2d 792, 798 (La.App. 2nd Cir.1979).

....

Therefore, all damages relating to the cause set forth in the supplemental
and amending petition should bear interest only from the date of that
demand.

Mehta, 768 So.2d at 246-247.

Amoco argues in brief that the phrase “date of judicial demand” means the date

the original petition was filed. Amoco cites Sanders v. American Fidelity Fire Ins.

Co., 98-308 (La.App. 3 Cir. 9/23/98), 750 So.2d 210, in support of this contention.

In Sanders, two suits were filed over a construction dispute. LIGA was named only

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in the second suit. The cases were consolidated, and the jury rendered an award in

favor of the plaintiffs in both suits. LIGA appealed, arguing judgment was improperly

rendered against it in the first suit. The appellate court agreed, finding LIGA was not

a party to the main demand. The Louisiana Supreme Court amended the judgment to

reduce the damages awarded. LIGA then paid the amount it believed it owed,

including interest from the date the second suit was filed. Contending that it satisfied

the final judgment, and that it did not owe any judicial interest in the first suit filed,

as it was never named as a party defendant, LIGA filed a Motion to Deem Judgment

Satisfied with the district court. However, the district court modified the final

judgment to require LIGA to pay legal interest from the date of the filing of the

original suit. LIGA appealed. This court stated as follows:

Sanders argues in his brief that he “did not seek modification of
a final judgment-rather he sought a more appropriate definition of the
words ‘... from judicial demand’ [in the judgment]” regarding LIGA’s
responsibility for judicial interest in [the first] suit. Even if we were to
assume for the sake of argument that Sanders were legally entitled to the
legal interest in the modified judgment, as found in the district court's
holding in question here, the proper time for him to have raised this
issue, since it was not awarded, was following the signing of the
judgment in the district court, either by a motion for new trial, or a
motion for appeal. This, he failed to do for whatever reason. It is too
late, now that the judgment has long since become final, to contend that
he is entitled to a substantial award of judicial interest, representing a
large sum, because of the reinterpretation of the words found in the
judgment “... from date of judicial demand.” Fundamentally, Sanders
seeks to have us affirm a district court’s substantive modification of a
final judgment in which the delays for appeal had expired. This La.Code
Civ.P. art.1951 will not permit.

Amoco attempts to rely on the court’s concern that Sanders did not ask for relief

within the “proper time.” However, we note two of the three judges concurred in the

result, finding the “case should be decided on the basis that LIGA should not be liable

for all of the judicial interest in [the first] suit . . . on the basis that it was not a party

to the litigation. . .”

The Abraham and Mehta cases indicate when a judgment awards interest from

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the date of judicial demand and when multiple judicial demands are pleaded in the

same suit, interest on each claim accrues from the time the judicial demand was made

for that claim. We find Sanders is not applicable to the situation presented here and

does not affect the holdings in Abraham and Mehta. In Sanders, LIGA could not be

responsible for interest on a judgment to which it was not a party.

Amoco argues in brief that defendants consented to an expansion of the

pleadings under La.Code Civ.P. art. 1154 when it filed a motion for summary

judgment in “anticipation” of Amoco amending its petition. However, the facts are

clear that Amoco amended its pleadings on September 11, 2001, to add a claim for

damages concerning the Jenkins Lease. At that time, defendants objected, arguing any

claim for damages on the Jenkins Lease had never been pled by Amoco. Also, we

find the trial court erred in granting Amoco’s peremptory exception of res judicata to

bar IMC and Mallinckrodt’s motion. Amoco’s basis for the argument that res judicata

applies is that a final judgment cannot be substantively changed. However, as

discussed earlier, defendants are not requesting that the final judgment be changed or

altered in any way; rather, they merely ask that the interest awarded by the judgment

be computed according to the law. Therefore, res judicata is inapplicable, and the

trial court erred in granting the exception.

In its answer to the appeal, Amoco asserted the appeal and writ application were

untimely. We disagree. As the defendants are not requesting that the final judgment

be changed or altered in any way, the appeal is not untimely.

Finding the jurisprudence supports defendants’ contention that interest on each

claim accrues separately from the time of the judicial demand was made for that claim,

we are faced with the problem of how to determine what portion of the award was

allocated to each claim. The trial court in rendering its decision in open court felt in

would be “unduly burdensome on the Court” to “go back and determine how [the

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jury] calculated” the damage awards. We agree it would be “unduly burdensome,” if

not impossible.

At trial, Amoco presented separate evidence and damage calculations for each

breach of the leases. With regard to the breach of the Baudoin Leases, Amoco sought

$26,732,000.00 in damages. For the breach of the Jenkins Lease, Amoco requested

damages in the amount of $8,376,000.00. The jury awarded a lump-sum of

$30,000,000.00. As defendants note, since the jury’s award was for an amount greater

than what Amoco sought for the breach of the Baudoin Leases, it is obvious the jury

awarded some measure of damages for the breach of the Jenkins Lease.

Nothing we do today will satisfy either side on this issue. Fairness, however,

must serve as our guide. At a minimum, we must conclude the jury awarded

$3,268,000.00 for the breach of the Jenkins lease. Therefore, we find interest on that

amount begins to run from the date of the filing of the amended petition asserting the

Jenkins claim for the first time.

Amoco in its answer to the appeal, requested damages and attorney fees for

frivolous appeal. Given our disposition on the merits, we decline this request.

DECREE

For the foregoing reasons, the judgment of the trial court granting Amoco’s

exception of res judicata is reversed. We also reverse the denial of defendants’

motion seeking to reduce legal interest owed. The motion is hereby granted in part

and defendants are ordered to pay Amoco interest on $3,268,000.00 from the date the

amended claim on the Jenkins Lease was filed. In all other respects the motion is

denied. Costs of this appeal are assessed to Amoco.

EXCEPTION OF RES JUDICATA REVERSED; MOTION TO REDUCE
GRANTED IN PART & RENDERED.

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