Everything On Wheels Subaru, Inc. v. Subaru South, Inc.

• Citation: 616 So.2d 1234
• Decision Date: 12 April 1993
• Docket Number: No. 91-C-2708,91-C-2708
• Parties: EVERYTHING ON WHEELS SUBARU, INC. v. SUBARU SOUTH, INC., et al.
• Court: Supreme Court of Louisiana

Page 1234

616 So.2d 1234

EVERYTHING ON WHEELS SUBARU, INC. v. SUBARU SOUTH, INC., et al.

No. 91-C-2708.

Supreme Court of Louisiana.

April 12, 1993.

Michelle O. Lorio, H. Evans Scobee, Durrett, Hardin, Hunter, Dameron & Fritchie, for applicant.

William A. Morvant, Shows, Cohn, & Cali, for respondent.

LEMMON, Justice. ^*

The issue is this case is whether a court may render a judgment partially maintaining an exception of no cause of action when the judgment adjudicates one or more, but less than all, of the demands or causes of action asserted against the excepting party. A related issue is whether the party opposing the exception must appeal from the judgment partially maintaining the exception in order to prevent the judgment from acquiring the authority of the thing adjudged. These issues implicate the concepts of cumulations of actions and joinder of parties, partial final judgments, and appealability of partial final judgments.

Facts

In 1987 plaintiff dealer entered into an exclusive Dealer Franchise Agreement with defendant distributor whereby plaintiff became an authorized Subaru dealer for the retail sales and service of automobiles and parts which were furnished by defendant. Because of financial problems, plaintiff terminated the franchise in March, 1988 and ultimately sold the dealership.

After terminating the franchise, plaintiff filed the instant action seeking recovery of damages based on the following four causes of action:

1. Defendant shipped more vehicles to plaintiff than could reasonably be expected to be sold in the ordinary course of business;

2. Defendant charged interest over and above the floor plan financing arrangement with plaintiff;

3. Defendant induced plaintiff to accept shipment of late model vehicles; and

4. Defendant violated the provisions of La.Rev.Stat. 32:1257 which require the repurchase of inventory, and defendant unreasonably withheld its consent for the approval of the new franchisee.

Defendant filed an exception of no cause of action, arguing that none of the four sets of allegations in the petition stated facts upon which relief could be granted. The trial court maintained the exception and dismissed plaintiff's "claims" as to the first and fourth causes of action, but overruled the exception as to the second and third causes of action. The court then granted plaintiff a devolutive appeal from the portion of the judgment partially maintaining the exception.

The court of appeal approved the procedure of granting a partial exception of no cause of action under these circumstances and also determined on the merits that the petition did not state a cause of action as to the first and fourth claims for relief. 593 So.2d 1269.

This court granted certiorari to review the decisions of the lower courts. 594 So.2d 1305.

Exception of No Cause of Action

The function of an exception of no cause of action is to test the legal sufficiency of the petition by determining whether the law affords a remedy on the facts alleged in the pleading. Darville v. Texaco, Inc., 447 So.2d 473 (La.1984). No evidence may be introduced to support or controvert the objection that the petition fails to state a cause of action. La.Code Civ.Proc. art. 931. Therefore, the court reviews the petition and accepts well pleaded allegations of fact as true, and the issue at the trial of the exception is whether, on the face of the petition, the plaintiff is legally entitled to the relief sought. Hero Lands Co. v. Texaco, Inc., 310 So.2d 93 (La.1975); Kuebler v. Martin, 578 So.2d 113 (La.1991).

An early decision of this court addressing the problem of partial judgments on exceptions of no cause of action was Succession of Curtis, 156 La. 243, 100 So. 412 (1924). The plaintiff filed a petition for partition of property belonging to a succession, as well as for recognition of the plaintiff's ownership of certain property included in the succession which allegedly had been the subject of a simulated sale. The defendant filed an exception of no cause of action only as to that part of the petition seeking to have the sale declared a simulation. The trial court maintained the exception and dismissed the demand to declare the simulated sale. On appeal, plaintiff complained that the court's ruling on the exception of no cause of action forced plaintiff to appeal from the judgment, leaving the balance of the case undetermined. This court stated that it could "discover no sufficient reason, if the exception should be found to be well taken, for sending the case back merely to have the court to hold the ruling on the exception in abeyance until the decision of the case on the merits." Id. at 245, 100 So. at 413. Because the exception was directed at a cause of action wholly independent from the action for partition, the court stated:

[A] peremptory exception founded on law may be filed at any time during the progress of the case, either before or after issue joined, and if well taken as to part of the demand it may be sustained to that extent in advance of the trial on the merits or even during the trial.

Id. at 245, 100 So. at 413. Nevertheless, the court recognized:

It may be better practice to delay the signing of the judgment, or not to sign any judgment, where an exception of no cause of action is sustained which does not dispose of the whole case, until final judgment on the merits. This would avoid splitting up the case and a multiplicity of appeals.

Id. at 245, 100 So. at 413.

In Succession of Nelson, 163 La. 458, 466, 112 So. 298, 301 (1927), this court observed:

Where, as in this case, a litigant alleges, among his grounds of complaint, one which is distinct from the others, and does not show a cause of action, the judge does not err in sustaining the exception as to such ground. It would be vain, in this instance, to sustain counsel's contention by overruling the exception, when the law says that evidence shall not be admitted to sustain the ground against which the exception is leveled.

This court continued to struggle with the problem and used a different approach in Reeves v. Barbe, 200 La. 1073, 9 So.2d 426 (1942). In Reeves, the plaintiffs asserted a number of claims based on separate agreements involving two tracts of land. The defendant admitted that the petition stated a cause of action as to one tract, but filed an exception of no cause of action as to the other tract. This court stated that "[a] judgment dismissing, on exception of no cause of action, only a part of the case is an interlocutory judgment from which no appeal lies unless irreparable injury will result." Because the judgment maintaining the exception as to one cause of action did not dispose of all the points in controversy between the parties and did not cause the parties irreparable injury, this court refused to allow the appeal. In effect this court allowed the granting of an exception of no cause of action on one of several causes of action asserted in the same petition, but ruled that no appeal ordinarily lies from such a judgment.

In modern times this court has developed a general rule against maintaining an exception of no cause of action in part. If the petition states a cause of action as to any ground or portion of the demand, the exception of no cause of action generally should be overruled. Spiers v. Davidson, 233 La. 239, 96 So.2d 502 (La.1957); Harwood Oil & Mining Co. v. Black, 240 La. 641, 124 So.2d 764 (La.1960); Matte v. Continental Trailways, Inc., 278 So.2d 60 (La.1973); Hero Lands Co. v. Texaco, Inc., 310 So.2d 93 (La.1975); Rodriguez v. American Bankers Insurance Co. of Florida, 386 So.2d 652 (La.1980); Leenerts Farms, Inc. v. Rogers, 421 So.2d 216 (La.1982). The purpose of this general rule is to prevent a multiplicity of appeals which forces an appellate court to consider the merits of the action in a piecemeal fashion. Rodriguez v. American Bankers Insurance Co. of Florida, 386 So.2d 652 (La.1980).

The courts of appeal (as in the present case) have recently distinguished cases in which the petition asserts several separate and distinct causes of action from cases in which the petition asserts only one cause of action but demands several types of relief or several elements of damages. In Bordelon v. Cochrane, 533 So.2d 82 (La.App. 3d Cir.1988), cert. denied, 536 So.2d 1255 (La.1989), the court noted that an exception should generally be overruled if any part of the petition can withstand the exception, but held that the general rule does not apply when the petition sets forth separate and distinct causes of actions. The court concluded that the trial court, which had maintained the exception as to all causes of action, was correct in dismissing two actions (the minority shareholder's action to recover individually for the corporation's directors' and officers' breaches of fiduciary duties and the shareholder's derivative action for alleged losses due the corporation), but reversed and remanded on the other cause of action for breach of the shareholder's agreements. See also Ward v. Tenneco Oil Co., 564 So.2d 814 (La.App. 3d Cir.1990), and Milstead v. Louisiana Power and Light Co., 581 So.2d 1085 (La.App. 2d Cir.), cert. denied, 587 So.2d 697 (La.1991).

Other intermediate courts have applied the general rule while recognizing that it may not always be applicable. See Bailey v. Texas Pacific Coal and Oil Co., 134 So.2d 339 (La.App. 3d Cir.1961) (when a petition sets out two separate and distinct demands, an exception of no cause of action may lie to eliminate one while the other is maintained, but here the plaintiff's petition was based on one incident and one set of facts, and simply demanded two types of relief); McGowan v. H.L. Ramey, 484 So.2d 785 (La.App. 1st Cir.1986) (if a petition asserts two or more causes of action, an exception of no cause of action may be maintained as to one cause of action and overruled as to the other, but dismissing a claim for treble damages in an unfair...