Wagner v. Fairway Villas Condominium Assoc.

• Decision Date: 13 March 2002
• Docket Number: No. 01-0734.,01-0734.
• Citation: 813 So.2d 512
• Parties: W.L. WAGNER, et ux. v. FAIRWAY VILLAS CONDOMINIUM ASSOCIATES, INC., et al.
• Court: Court of Appeal of Louisiana — District of US

813 So.2d 512

W.L. WAGNER, et ux. v. FAIRWAY VILLAS CONDOMINIUM ASSOCIATES, INC., et al.

No. 01-0734.

Court of Appeal of Louisiana, Third Circuit.

March 13, 2002.

Rehearing Denied May 1, 2002.

Michael Steven Beverung, Book & Beverung, Lake Charles, LA, Counsel for Plaintiffs/Appellees, W.L. Wagner, Nina Wagner.

James Richard Mitchell, Leesville, LA, Counsel for Defendant/Appellant, Fairway Villas Condominium Associates, Inc., Rael, Inc., Toro Investment Corporation.

Court composed of ULYSSES GENE THIBODEAUX, JOHN D. SAUNDERS, BILLIE COLOMBARO WOODARD, GLENN B. GREMILLION, and ELIZABETH A. PICKETT, Judges.

GREMILLION, Judge.

The defendant, Rael Inc., appeals the judgment of the trial court granting a permanent injunction in favor of the plaintiffs, W.L. and Nina Wagner, ordering it to restore water service to their condominiums located in the Emerald Hills Resort. After further review, we reverse.

FACTS

Hodges Gardens and its associated resort were established by Andrew Jackson Hodges in Florien, Louisiana. Prior to his death in 1966, Mr. Hodges sold the resort and contracted to continue providing water to it from his well located on the property containing the garden. The resort became known as Toro Hills Resort. At some point, condominiums were constructed on the resort near the golf course. They also received their water from the supply received by the resort's hotel from Hodges Gardens. The Wagners purchased their first condominium in 1989, but did not begin living there permanently until 1991. Initially, they paid sixty dollars per month for services received from Toro Hills, which included water, but this increased to seventy-five dollars per month after 1991.¹ The Wagners purchased their second condominium approximately one year prior to the date of trial, but have never paid any additional amounts for services associated with this condominium. In addition to owning these two condominiums, the Wagners manage other condominiums that are part of the Fairway Villas Condominium Association, Inc.

In February 1997, Rael purchased Toro Hills, including the golf course and all of the land surrounding the condominiums. Thereafter, it became known as the Emerald Hills Resort. Steve Alford is the sole shareholder of Rael. Following its purchase, Rael entered into a contract with the A.J. and Nona Trigg Hodges Foundation for the sale of surplus water from Hodges Gardens to the Emerald Hills Resort. The contract provided for such at the rates prevailing for the sale of water in the Town of Many, and further provided that the water would solely be used "within the motel or hotel and adjacent condominiums constituting Emerald Hills Resort."

Prior to the sale, the Wagners entered into a service agreement with George Gouffray, the president of Toro Investment Corporation, on February 22, 1996. The agreement provided that the listed services would continue at the amount of seventy-five dollars per month, would not be increased unless agreed to by the Wagners, and would be binding on all future owners of the property. Although this agreement was filed with the Sabine Parish Clerk of Court on July 10, 1996, it was not included in the sale of the resort at Alford's insistence.

In June 1997, the Wagners filed suit seeking a declaratory judgment that the February 22, 1996 service agreement was binding against Rael. Rael reconvened against the Wagners on a non-related issue pertaining to the ownership of their second condominium. Following a hearing, the trial court declared that the recorded service agreement constituted a valid personal servitude, via a right of use, in favor of the Wagners. On appeal, a five judge panel of this court reversed the trial court's judgment finding that no personal servitude arose as a result of the service agreement. See Wagner v. Alford, 98-1726 (La.App. 3 Cir. 6/30/99); 741 So.2d 884 (Doucet, C.J., Cooks, J. dissenting), writ denied, 99-2265 (La.11/5/99); 750 So.2d 192.

Following this judgment, but prior to October 1999, the services provided to the Wagners had been reduced to only the provision of water. In October, Rael refused the Wagners' seventy-five dollar check and, without warning, shut off their water the day before Thanksgiving. On November 24, 1999, the Wagners filed a Petition for Damages and Injunctive Relief seeking to have their water restored. Named as defendants were the Fairway Villas Condominium Association, Inc., Rael, and Toro Investment Corporation. On December 14, 1999, the trial court issued a temporary restraining order directing Rael to immediately restore water service to the Wagner's condominiums. The Fairway Villas Condominium Association was later dismissed from the action on an exception of no cause of action. Although there is no record of it, Rael filed an exception of res judicata based on our prior decision; however, this exception was denied by the trial court. Thereafter, Rael answered and reconvened against the Wagners seeking payment of seventy-five dollars per month per condominium from February 1997, through the date of the trial if a valid contract was held to have existed between the parties.

Following a trial on the merits, the trial court rendered judgment in favor of the Wagners ordering the December 14, 1999 preliminary injunction be made permanent. It further awarded damages in the amount necessary for the installation of a water meter on the water line supplying their condominiums, and ordered the damages paid within thirty days. Finally, the trial court denied Rael's reconventional demand. At Rael's request, written reasons for judgment were issued by the trial court on February 20, 2001. This appeal by Rael followed.

ISSUES

On appeal, Rael raises four assignments of error:

1) The trial court erred in finding it liable to the Wagners for a breach of contract.

2) The trial court erred by finding evidence of a predial servitude benefitting the Wagners' property.

3) The trial court erred by finding it liable to the Wagners for an abuse of rights.

4) The trial court erred by dismissing its reconventional demand.

RES JUDICATA

In its first assignment of error, Rael argues that the trial court erred in finding it liable for a breach of contract because the Wagners' claims were barred pursuant to res judicata based on our prior decision.

In the prior matter, the Wagners sought, via a declaratory judgment, to have the February 22, 1996 service agreement declared binding and enforceable against Rael. The trial court held that it was based on a finding that a personal servitude, right of use, arose from the agreement. We reversed the trial court's judgment finding:

Only those advantages that may be provided by a predial servitude are permissible rights of use. La.Civ.Code art. 640. Further, "[a] right of use is regulated by application of the rules governing usufruct and predial servitudes to the extent that their application is compatible with the rules governing a right of use servitude."

Wagner, 741 So.2d at 887.

Applying these precepts, we held that the provision of utilities was not a permissible right of use since it related "solely to the resort services to be provided for the plaintiffs," and did "not relate to the plaintiffs' right of use of the servient estate." This, we held, failed to comport with the intent of La.Civ.Code art. 651, which provides:

The owner of the servient estate is not required to do anything. His obligation is to abstain from doing something on his estate or to permit something to be done on it. He may be required by convention or by law to keep his estate in suitable condition for the exercise of the servitude due to the dominant estate.

However, in a footnote, we stated, "We have not been asked to, nor do we, consider the enforceability of any potential contractual obligation under the agreement." Wagner, 741 So.2d at 888, n. 3.

In Avenue Plaza, L.L.C. v. Falgoust, 96-0173, pp. 4-5 (La.7/2/96); 676 So.2d 1077, 1079, the supreme court stated the law pertaining to res judicata:

Res judicata bars relitigation of a subject matter arising from the same transaction or occurrence of a previous suit. LSA-R.S. 13:4231. It promotes judicial efficiency and final resolution of disputes. Terrebonne Fuel & Lube v. Placid Refining, 95-0654, 95-0671, pp. 11-12 (La.1/16/96); 666 So.2d 624, 631. A judgment determining the merits of a case is a final judgment. La.C.C.P. art. 1841. See also, Tolis v. Board of Sup'rs of Louisiana State University, 95-1529 (La.10/16/95); 660 So.2d 1206. A valid and final judgment is conclusive between the same parties, except on appeal or other direct review. LSA-R.S. 13:4231. . . .

A final judgment from which there can be no appeal acquires the authority of the thing adjudged. La.C.C. art. 3506(31). Once a final judgment acquires the authority of the thing adjudged, no court has jurisdiction to change the judgment, regardless of the magnitude of the final judgment's error. Tolis at 3; 660 So.2d 1206-1207.

The supreme court went on to state:

In 1990, the Legislature amended LSA-R.S. 13:4231, the Louisiana res judicata statute. Terrebonne Fuel addressed the amended statute. The original Louisiana doctrine of res judicata was based on a correctness presumption rather than a cause of action's extinguishment: a decided case precluded a second suit only if the prior suit involved the same parties, the same cause, and the same object of demand. Terrebonne Fuel at 12; 666 So.2d at 632. However, the amended res judicata statute's chief inquiry is whether the second action asserts a cause of action which arises out of the transaction which was the subject matter of the first action. Id.

Id. at 1080.

Several exceptions to the general rule of res judicata are provided in La.R.S. 13:4232:

A. A judgment does not bar another action by the plaintiff:

(1) When exceptional circumstances justify relief from the res judicata effect of the judgment;

(2) When the judgment dismissed the...