Reyes-Ramirez v. Progressive Sec. Ins. Co.

• Decision Date: 05 November 2008
• Docket Number: No. 08-374.,08-374.
• Citation: 996 So.2d 1213
• Parties: Maria Guadalupe REYES-RAMIREZ, et al. v. PROGRESSIVE SECURITY INSURANCE CO., et al.
• Court: Court of Appeal of Louisiana — District of US

996 So.2d 1213

Maria Guadalupe REYES-RAMIREZ, et al. v. PROGRESSIVE SECURITY INSURANCE CO., et al.

No. 08-374.

Court of Appeal of Louisiana, Third Circuit.

November 5, 2008.

John W. Redmann, Law Offices of John W. Redmann, Metairie, Louisiana, for Plaintiffs/Appellants, Maria Guadalupe Reyes-Ramirez, Jose Luis Baez-Acuna, Yolanda Reyes-Ramirez De Baez.

V. Ed McGuire, III, Plauché, Smith & Nieset, Lake Charles, Louisiana, for Defendants/Appellees, Progressive Security Insurance Company, Greta E. Painter.

Court composed of SYLVIA R. COOKS, MICHAEL G. SULLIVAN, and BILLY HOWARD EZELL, Judges.

SULLIVAN, Judge.

Plaintiffs appeal the trial court's grant of Defendants' exception of res judicata, which asserted that Plaintiffs' reservation of rights in releases they signed did not reserve them the right to thereafter pursue claims for exemplary damages against Defendants. For the following reasons, we reverse the trial court's judgment.

Facts

Jose Luis Baez-Acuna, Yolanda Reyes-Ramirez, their minor son, Jose Luis Baez-Reyes, and Maria Guadalupe Reyes-Ramirez were injured in an automobile accident in Calcasieu Parish on July 31, 2005. They all filed suit against the driver of the other automobile involved in the accident and her insurer to recover damages they allegedly suffered as a result of the accident. They also asserted a claim for exemplary damages, alleging that the other driver's intoxication caused the accident.¹

On September 20, 2006, Plaintiffs signed releases prepared by Defendants after inserting additional language. As written by Defendants, the releases provided in pertinent part:

[Plaintiff ... does] forever release, acquit, discharge and agree to hold harmless ... from any and all claims, actions, causes of actions, demands, rights, damages, costs, loss of wages, expenses, hospital and medical expenses, loss of consortium, loss of service, any compensation whatsoever, known or unknown, which the undersigned now has (have) or which may hereafter accrue on account of or in any way arising of an accident which occurred on or about July 21, 2005, at or near Interstate 10, Calcasieu Parish, State of Louisiana.

Plaintiffs inserted an asterisk after the above-quoted paragraph and another asterisk at the bottom of each release and thereafter inserted the following language: "Note — this release is with regard to Bodily Injury claims only, and any & all Rights with regard to the property claim are reserved." Upon receipt of the executed releases, Defendants issued payment to Plaintiffs.

On January 16, 2007, Plaintiffs filed a motion to compel discovery. Defendants responded by filing an exception of res judicata, seeking dismissal of Plaintiffs' petition for damages on the ground that Plaintiffs "have already resolved all claims asserted" in their petition for damages. Plaintiffs, Jose Luis Baez-Acuna and Yolanda Reyes-Ramirez, then filed a first supplemental and amending petition for damages "solely for purposes of pursuing their property damage claim and exemplary damages claims flowing from the property damage claim." Plaintiffs averred in their first supplemental and amending petition for damages that all of their minor son's and Maria Guadalupe Reyes-Ramirez's claims were "fully and finally settled" and that they are no longer Plaintiffs in this litigation.

After a hearing, the trial court denied Plaintiffs' motion to compel and granted Defendants' exception of res judicata with regard to Plaintiffs' claims for exemplary damages, dismissing those claims. Plaintiffs appeal. They urge that the trial court erred in dismissing their claims for exemplary damages because they intended to release only their claims for bodily injury and to reserve their claims for property damage and exemplary damages. Alternatively, they urge that exceptional circumstances justify relief from the res judicata effect of their settlements.

Standard of Review

Appellate courts review a trial court's grant of an exception of res judicata to determine if it is "legally correct or incorrect." New Orleans Firefighters Ass'n v. City of New Orleans, 04-2078, p. 2 (La. App. 4 Cir. 3/15/06), 925 So.2d 757, 759, writ denied, 06-1067 (La.6/23/06), 930 So.2d 986 (quoting Glass v. Alton Ochsner Med. Found., 04-1824, p. 5 (La.App. 4 Cir. 6/1/05), 907 So.2d 782, 785).

Discussion

Plaintiffs argue that when they signed their release they released their claims for bodily injuries, not their claims for property damages and exemplary damages, and that the language they added to the releases evidence that intent. They also urge that correspondence directed to Defendants establishes what their intent was when they executed the releases. Defendants dispute that Plaintiffs reserved their claims for exemplary damages when they executed their releases but do not dispute that Plaintiffs reserved their property damage claim.

A transaction or compromise, which is a contract which settles a dispute, can serve as the basis for an exception of res judicata. La.Civ.Code art. 3071; Brown v. Drillers, Inc., 93-1019 (La.1/14/94), 630 So.2d 741. "A compromise settles only those differences that the parties clearly intended to settle." La.Civ.Code art. 3076. Being a contract, a compromise is interpreted by determining the common intent of the parties. La.Civ.Code art.2045; Brown, 630 So.2d 741. "When the words of a contract 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.

In Brown, 630 So.2d at 748 (citation omitted), the supreme court explained how a court determines the extent of a compromise agreement pursuant to La.Civ.Code art. 3073:

[A] compromise agreement extends only to those matters that the parties expressly intended to settle and ... the scope of the transaction cannot be extended by implication. More precisely, LSA-C.C. Art. 3073 set[s] 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.

The supreme court then observed that "the intent which the words of the compromise instrument express in light of the surrounding circumstances at the time of execution...