Singleton v. United Servs. Auto. Ass'n

• Decision Date: 17 October 2018
• Docket Number: NO. 18-CA-15,18-CA-15
• Citation: 258 So.3d 1074
• Parties: Tonyel SINGLETON v. UNITED SERVICES AUTOMOBILE ASSOCIATION
• Court: Court of Appeal of Louisiana — District of US

258 So.3d 1074

Tonyel SINGLETON

v.UNITED SERVICES AUTOMOBILE ASSOCIATION

NO. 18-CA-15

Court of Appeal of Louisiana, Fifth Circuit.

October 17, 2018

COUNSEL FOR PLAINTIFF/APPELLANT, TONYEL SINGLETON, Gregory J. Chiartano, Donald C. Douglas, Jr., Mandeville

COUNSEL FOR DEFENDANT/APPELLEE, UNITED SERVICES AUTOMOBILE ASSOCIATION, William H. Dunckelman, Jr., T. Gregory Schafer, New Orleans

Panel composed of Judges Susan M. Chehardy, Fredericka Homberg Wicker, Jude G. Gravois, Marc E. Johnson, Robert A. Chaisson, Stephen J. Windhorst, Hans J. Liljeberg, and John J. Molaison, Jr.

GRAVOIS, J.

Plaintiff/appellant, Tonyel Singleton, appeals a trial court judgment that granted a peremptory exception of res judicata filed by defendant/appellee, United Services Automobile Association ("USAA"). For the reasons that follow, we reverse and remand.

FACTS AND PROCEDURAL HISTORY

On July 1, 2015, Tonyel Singleton was involved in an automobile accident with Jamie Lynn Petkovich. No suit was filed against Ms. Petkovich or her liability insurer, State Farm Mutual Automobile Insurance Company ("State Farm"). On August 5, 2016, Ms. Singleton executed a release, in consideration of State Farm's liability policy limits of $15,000.00, which stated, in pertinent part:

the undersigned hereby releases and forever discharges Louis Petkovich, Julie Petkovich, Jayna Petkovich, Jamie Lynn Petkovich and State Farm Mutual, their heirs, executors, administrators, agents and assigns, and all other persons, firms or corporations liable or, who might be claimed to be liable , none of whom admit any liability to the undersigned but all expressly deny any liability, from any and all claims, demands, damages, actions, causes of action or suits of any kind or nature whatsoever, and particularly on account of all bodily injuries, known and unknown, which has resulted or may in the future develop from an accident which occurred on or about the 1st day of July, 2015, at or near, Gretna, LA.

(Emphasis added.)

Also on August 5, 2016, Ms. Singleton filed a petition for damages against USAA, her uninsured/underinsured motorist ("UM") insurer. In due course, on August 4, 2017, USAA filed a peremptory exception of res judicata asserting that the clear and unambiguous language of the release, discharging "all other persons, firms or corporations liable or, who might be claimed to be liable," demonstrated Ms. Singleton's intent to release and discharge USAA from the causes of action asserted against it in her petition.

Ms. Singleton filed an opposition to the exception, arguing that the release was a relative simulation¹ and that by looking outside of the release, specifically to correspondence between Ms. Singleton and State Farm, and between Ms. Singleton and USAA, the true intent of the parties was revealed—that Ms. Singleton released State Farm and its insureds in exchange for State Farm's policy limits and never intended to compromise her claims against USAA. Ms. Singleton also argued that regardless of the intent, res judicata is not applicable in this case since USAA was not a party to the release agreement.

Following a hearing, by written judgment rendered and signed on September 7, 2017, the trial court granted the peremptory exception of res judicata and dismissed all claims against USAA with prejudice. This appeal followed.

On appeal, Ms. Singleton argues that the trial court erred: 1) in granting the exception of res judicata based on a compromise raised by a non-party to that compromise; and 2) in refusing to consider extrinsic evidence regarding the intent of the parties to the compromise when there is evidence in the record substantiating that she did not intend to compromise her claim against USAA for UM benefits.

LAW AND ANALYSIS

Under Louisiana law, a release executed in exchange for consideration is a compromise. Tran v. Farmers and Merchants Ins. Co. , 04-793 (La. App. 5 Cir. 12/14/04), 892 So.2d 88, 89, writ denied , 05-147 (La. 4/1/05), 897 So.2d 604. La. C.C. art. 3071 defines a 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 compromise settles only those differences that the parties clearly intended to settle, including the necessary consequences of what they express. La. C.C. art. 3076. A compromise precludes the parties from bringing a subsequent action based upon the matter that was compromised. La. C.C. art. 3080. The compromise instrument is governed by the same general rules of construction applicable to contracts. Ortego v. State, Dept. of Transp. and Dev. , 96-1322 (La. 2/25/97), 689 So.2d 1358, 1363. 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. Id. A valid compromise may form the basis of a plea of res judicata . Id. at 1364.

The purpose of the doctrine of res judicata is to promote judicial efficiency and the final resolution of disputes. Avenue Plaza, L.L.C. v. Falgoust , 96-0173 (La. 7/2/96), 676 So.2d 1077, 1079 ; Hawthorne v. Couch , 41,603 (La. App. 2 Cir. 12/20/06), 946 So.2d 288, 295, writ not considered , 07-0173 (La. 3/16/07), 952 So.2d 685. The doctrine of res judicata is stricti juris , and any doubt concerning application of the principle of res judicata must be resolved against its application. Kelty v. Brumfield , 93-1142 (La. 2/25/94), 633 So.2d 1210, 1215 ; Hawthorne , supra .

The res judicata effect of a prior judgment is a question of law that is reviewed de novo . Muhammad v. Office of Dist. Attorney for Parish of St. James , 16-9 (La. App. 5 Cir. 4/27/16), 191 So.3d 1149, 1155-1156.

On appeal, in her first assignment of error, Ms. Singleton argues that a party raising a peremptory exception of res judicata based on a compromise agreement must have been a party to the compromise. She argues that because USAA was not a party to the compromise agreement, res judicata cannot apply.

In response, USAA argues that the ordinary rules of contract interpretation apply to compromise agreements, and the unambiguous language in the present compromise agreement supports the exception of res judicata by USAA.

In rendering its decision, the trial court relied on this Court's opinion in Silva v. State Farm Mut. Auto. Ins. Co. , 09-686 (La. App. 5 Cir. 3/23/10), 38 So.3d 934, writ denied , 10-0932 (La. 6/25/10), 38 So.3d 342. There, the plaintiff filed suit against the tortfeasor and his liability insurer, USAgencies, and the plaintiff's own UM insurer, State Farm, for injuries sustained in an accident. State Farm was never served and was later dismissed without prejudice from the suit. Subsequently, the plaintiff executed a release agreement, releasing "USAgencies Casualty Insurance Company, [the tortfeasor], and any and all persons, firms and corporations of and from any and all actions, causes of action, claims or demands for damages ...." The plaintiff then filed suit against State Farm. In response, State Farm filed a peremptory exception of res judicata , asserting that the suit should be dismissed because the broad language of the release dismissed all claims arising out the accident, including any claims against State Farm as UM carrier. The trial court granted the exception. Id. at 935-936. On appeal, the majority of this Court found that the broad language of the executed release, which it found was clear and unambiguous, evidenced an intent on the plaintiff's part to settle and dismiss claims against anyone arising out of the accident, including State Farm. Thus, the release operated as a dismissal of the claims against State Farm, and the plaintiff's claims were thus precluded. Id. at 938-939.

The majority in Silva adopted the reasoning set forth by this Court in Tran , supra . In Tran , the plaintiff was a guest passenger in a vehicle involved in a collision. The plaintiff executed a release discharging the driver of the vehicle he was a passenger in and his insurer. The plaintiff then filed suit against the tortfeasor, his employer, and their insurer ("the defendants"). In response, the defendants filed an exception of res judicata , which the trial court granted. Tran , 892 So.2d at 89. On appeal, this Court found that a clear and explicit reading of the release discharged "all other persons, firms or corporation liable or who might be claimed to be liable," and this broad language included the defendants. Id. at 90.²

Recently the other Louisiana circuit courts of appeal, when presented with this same issue on an exception of res judicata , have relied on the "same parties" requirement in rendering their decisions. This "same parties" requirement arises out of La. R.S. 13:4231 which provides, in pertinent part: "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 ...." (Emphasis added.) The other Circuits have found further support for this requirement in Ortego , wherein the Louisiana Supreme Court stated that "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 1363.³

The Second Circuit considered this "same parties" requirement in Hines v. Smith , 44,285 (La. App. 2 Cir. 8/12/09), 16 So.3d 1234. There, the plaintiffs signed a settlement agreement and release with St. Francis Hospital. The release discharged "any and all claims and demands made by them and/or rights and causes of action arising out of the January 14, 2006 visit to St. Francis Emergency Room." Nearly two years later, the plaintiffs filed a medical malpractice claim against the treating emergency room doctor and her insurer. The doctor filed an...