Bradley W. Duke v. Eddie G. Thompson and State Farm Mutual Automobile Insurance Company

• Court: Louisiana Court of Appeal
• Decided: July 13, 2022
• Docket: 54,594-CA
• Status: Published

Opinion

Judgment rendered July 13, 2022. Application for rehearing may be filed within the delay allowed by Art. 2166, La. C.C.P.

No. 54,594-CA

COURT OF APPEAL SECOND CIRCUIT STATE OF LOUISIANA

*****

BRADLEY W. DUKE Plaintiff-Appellee

versus

EDDIE G. THOMPSON AND Defendants-Appellants STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Appealed from the Twenty-Sixth Judicial District Court for the Parish of Bossier, Louisiana Trial Court No. 154,853

Honorable John M. Robinson (Pro Tempore), Judge

LAW OFFICES OF THOMAS Counsel for Appellants BORDELON, LLC By: Thomas A. Bordelon

PATRICK R. JACKSON, APLC Counsel for Appellee By: Patrick R. Jackson J. Kyle McCotter Caitlin M. Cline

Before PITMAN, THOMPSON, and MARCOTTE, JJ. MARCOTTE, J.

This appeal arises from the 26th Judicial District Court, Bossier

Parish. Defendants Eddie G. Thompson and State Farm Mutual Automobile

Insurance Company (“State Farm”) seek review of a declaratory judgment

finding that there was a legally enforceable compromise between defendants

and plaintiff Bradley W. Duke. The case was originally presided over by the

Honorable E. Charles Jacobs who heard oral arguments and rendered written

reasons for judgment in this matter. The case was later presided over by the

Honorable John M. Robinson, who rendered the judgment. For the

following reasons, we reverse and remand.

FACTS

On December 16, 2016, Duke and Thompson were involved in a

motor vehicle accident on Swan Lake Road in Bossier City, Louisiana. On

December 14, 2017, Duke filed a petition for damages naming Thompson

and State Farm as defendants. Thompson had liability coverage with State

Farm at the time of the accident.

On July 20, 2018, defendants filed a motion for summary judgment

claiming that Duke entered into a valid compromise with State Farm for his

bodily injury claims.1 State Farm asserted that it had an audio recording of

Duke agreeing to a compromise and release of his bodily injury claims and

that Duke later negotiated a bank draft sent to him by State Farm in

fulfillment of the alleged compromise. It argued that under the Louisiana

Uniform Electronic Transactions Act (“LUETA”),2 the audio recording

1 The entire suit record was admitted at the hearing on the declaratory judgment. 2 La. R.S. 9:2601, et seq. meets with the writing requirement for a legally enforceable compromise

found in La. C.C. art. 3072.3 The following is a transcript of the audio

recording of the conversation between Duke and the State Farm claims

adjuster Stephanie Benavides (“Adjuster Benavides”):4

Duke opposed defendants’ motion for summary judgment arguing that

the audio recording of his conversation was only a fragment of the

conversation he had with Adjuster Benavides and that the agreement was not

in writing and was not signed by him. In his attached affidavit, Duke

averred that he had a phone conversation with a State Farm representative on

June 15, 2017, and, “In the recorded portion [of the conversation], I

3 La. C.C. art. 3072 states:

A compromise shall be made in writing or recited in open court, in which case the recitation shall be susceptible of being transcribed from the record of the proceedings. 4 Defendants attached the affidavit of State Farm Claims Specialist Joey Ofiana to their motion attesting to the validity of the “attached transcript” of the audio recording between State Farm and Duke. However, no transcript was attached to the affidavit. A transcript of the conversation was attached to later filings made by Duke, which is what is reproduced here.

2 unknowingly agreed to settle all my bodily injury claims against State Farm

in exchange for $6,834.00.” (Emphasis in original.)

Duke claimed that $6,834.00 was the amount of the property damage

to his vehicle, a number that he had previously discussed with Adjuster

Benavides in the conversation prior to when the recording began. He stated

that the focus of the conversation was the property damage to his vehicle.

Duke argued that he did not believe that he was agreeing to settle a claim for

future medical expenses related to his personal injuries. He also stated that

he did not understand that the call itself would function as a binding

agreement, and he did not intend to sign a binding agreement during the call.

Duke asserted that at the time of the call, he possessed no writing setting out

the terms of the agreement, and that if the agreement had been in writing,

and if he had had time to read it and understand his rights, he would not have

compromised the claim for future bodily injuries.

Duke claimed that even after the call, State Farm did not provide him

with a written or electronic record setting out the terms of the agreement.

He stated that in June 2017, he received and cashed a State Farm check in

the amount of $6,834.00. Duke stated that the check contained no notice

stating that it was in satisfaction of future bodily injury claims, and it was

not accompanied by any writing stating the same. He asserted that he

understood the check to be in satisfaction of a claim for property damage to

his vehicle.

On October 16, 2019, defendants filed a petition for declaratory

judgment asking the trial court to declare that the June 15, 2017 audio

recording of the conversation between Duke and State Farm is a valid and

3 enforceable compromise to settle Duke’s bodily injury claims and that he

released his claims against defendants.

Duke then filed a motion for partial summary judgment asking the

trial court to find that the subject audio recording is not a legally enforceable

compromise. Duke attached to his motion a copy of the check made out to

him from State Farm in the amount of $6,834.00. There is no notation on

the check stating which claims were settled. Defendants opposed Duke’s

motion for partial summary judgment.

On October 1, 2020, a hearing was held on Duke’s motion for partial

summary judgment and the petition for declaratory judgment. Judge Jacobs

presided over the hearing. Duke’s motion for partial summary judgment

was argued and denied. The entire suit record was admitted at the hearing.

Duke, the defendant in the declaratory judgment action, filed into the record

copies of three bank drafts made out to him from State Farm. One draft is

the check mentioned above in the amount of $6,834.00. The other two

drafts include check stubs which state “Coverage Description: Property

Damage Liability.” The two drafts are in the amounts of $20,191.45 and

$500.00.

Duke also gave testimony about his accident and the conversation he

had with Adjuster Benavides prior to and while it was recorded. Defense

counsel objected to his testimony as parol evidence. Duke’s counsel

countered that parol evidence is admissible to show that a written instrument

is incomplete. The trial court stated in response:

In applying that to 9:2601, et seq., the statute says an electronic signature is any electronic sound; yes, I agree, oral acquiescence, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign a record. The question is, what in this 4 case is the record. The…suit record has been put into evidence; [there] are allegations that have been made that this doesn’t contain the entire record, there [is] certain language in the actual one minute…conversation…and again, if I’m going to apply…the oral transaction and compromise to the record then I need to know at least what the record is. What I consider the, quote, record to be is the entire series of conversations that Mr. Duke may or may not have had with the State Farm people. And so I think that…he should be allowed to give oral testimony concerning his record or his series of conversations with State Farm as I do find at this point, one minute, thirty second…oral transaction in compromise to be ambiguous as to what…individual matters or provisions that he thought…to which he was agreeing.

Duke testified that his June 15, 2017 conversation with Adjuster

Benavides lasted about 30 minutes, and he told her that he still had several

bills that needed to be submitted. He stated that Adjuster Benavides offered

the $6,834.00 after he informed her that he was going to hire an attorney.

Duke stated that he never intended to release State Farm for that amount. He

stated that he didn’t sign anything during the conversation, but he

acknowledged that he signed the check from State Farm in the amount of

$6,834.00. Duke testified that his understanding from his conversation with

Adjuster Benavides was that he would be able to receive payments from

State Farm for future medical bills. He testified that, at the time of

conversation with Adjuster Benavides on June 15, 2017, he was still having

pain from the accident, specifically abdominal pain.

Duke testified that he listened to the conversation from June 15, 2017,

and confirmed that it was his voice in the audio recording. He testified that

he contacted State Farm again after June 15, 2017, and was told that his case

was closed. Duke stated that he did not think he was owed any additional

money from State Farm to repair his vehicle, and he did not think that the

$6,834.00 was for property damage to his vehicle. He testified that the

5 audio recording of the June 15, 2017 conversation did not include the

discussion of his ability to collect future medical expenses from State Farm

and to collect the depreciation value of his truck.

On March 23, 2021, Judge Jacobs issued written reasons for

judgment, stating that there is a valid compromise between defendants and

Duke under the LUETA, but parol evidence is needed to determine the intent

of the parties. The trial court stated that Duke “alleged and the recording

verifies that the conversation consisted of more than the one minute sixteen

second audio that was recorded.” The trial court said that additional

evidence is necessary “in the form of all correspondence, regardless of

medium, that concerned Mr. Duke’s bodily injury settlement.”

On September 7, 2021, Judge Robinson signed a judgment stating that

a legally binding compromise was executed on June 15, 2017, between Duke

and State Farm. The trial court then stated that parol evidence “in the form

of all correspondence, regardless of the medium, that concerned Mr. Duke’s

bodily injury settlement is necessary to clarify any ambiguity as [to] the

terms of the release and/or the parties’ intentions.” State Farm and

Thompson now appeal.

DISCUSSION

State Farm and Thompson argue that the exceptions to the parol

evidence rule are inapplicable here. Defendants argue that State Farm

expressly stated in the recorded release that the compromise was to apply to

Duke’s bodily injury claims, whether known or unknown, and the payment

was being made for “medical bills, lost wages, and pain and suffering.”

Defendants contend that Duke orally agreed to the terms of the release, and

6 he later affirmed in court that he did not find the recording ambiguous and

that he did not believe the $6,834.00 was for property damage.

Defendants argue that the trial court first found that there was a valid

compromise achieved through an audio recording, but then it wanted to treat

the audio compromise differently than a written compromise by allowing

parol evidence, in the form of settlement negotiations, to be considered.

Defendants ask this Court to reverse the portion of the judgment ordering

additional proceedings to examine parol evidence.

Duke claims that the trial court “was correct in declining to grant

declaratory judgment to defendants.” He argues that the trial court’s

determination that parol evidence is necessary to clarify any ambiguity as to

the terms of the release and/or the parties’ intentions, was not to vary the

terms of the agreement, but was, rather, to determine what was agreed to in a

“whole” conversation, only part of which was recorded by State Farm.

Duke states that no Louisiana appellate court has found that an audio

recorded statement is an electronic writing or document. Duke argues that

the terms of the compromise cannot be established, because the audio

recording is only a fragment of the entire conversation between Duke and

Adjuster Benavides.

Duke claims that review of the transcript of the audio recording

suggests that a further conversation was not recorded prior to State Farm

commencing recording the conversation. He states that he never intended to

release State Farm from all of its obligations for $6,834.00, which is

supported by his actions following the conversation had on June 15, 2017.

Duke states that should this Court agree that the LUETA and La. C.C. art.

3072 are reconcilable, then the entirety of his claims negotiation with State 7 Farm should have been recorded to ensure it comprises all of the terms

agreed to by the parties.

The purpose of the declaratory judgment articles of the Louisiana

Code of Civil Procedure is to settle and afford relief from uncertainty and

insecurity with respect to rights, status, and other legal relations, and they

are to be liberally construed and administered. La. C.C.P. art. 1881;

Goodwin v. City of Mandeville, 18-1118 (La. App. 1 Cir. 5/31/19), 277 So.

3d 822, writ denied, 19-01083 (La. 10/8/19), 319 So. 3d 856. A person is

entitled to relief by declaratory judgment when his rights are uncertain or

disputed in an immediate and genuine situation, and the declaratory

judgment will remove the uncertainty or terminate the dispute. Id.

A compromise is 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. La. C.C. art. 3071. A compromise

shall be made in writing or recited in open court, in which case the recitation

shall be susceptible of being transcribed from the record of the proceedings.

La. C.C. art. 3072. 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.

The trial court’s interpretation of an alleged compromise agreement is

subject to manifest error or clearly wrong review. Klebanoff v. Haberle,

43,102 (La. App. 2 Cir. 3/19/08), 978 So. 2d 598. This is because the

existence or validity of a compromise depends on a finding of the parties’

intent, an inherently factual finding. Id. There are two essential elements of

a compromise: (1) mutual intention of preventing or putting an end to the

litigation, and (2) reciprocal concessions of the parties to adjust their 8 differences. Trahan v. Coca Cola Bottling Co. United, Inc., 04-0100 (La.

3/2/05), 894 So. 2d 1096; Klebanoff v. Haberle, supra. A compromise is

valid only if there is a meeting of minds between the parties as to exactly

what they intended at the time the compromise was reached. Farris v. Kolb,

47,886 (La. App. 2 Cir. 2/27/13), 135 So. 3d 674.

The trial court here stated in its judgment that there was a valid

compromise between Duke and defendants, essentially finding that there

was a meeting of the minds between the parties as to exactly what they

intended at the time the compromise was reached. Id. However, the trial

court then stated in the following paragraph of its judgment that parol

evidence is needed “to clarify any ambiguity as [to] the terms of the release

and/or the parties’ intentions.” The judgment contradicts itself. The trial

court cannot first determine that the there is a valid compromise, and then

state that there is ambiguity as to the parties’ intentions. Therefore, the

declaratory judgment is reversed and the matter is remanded for further

proceedings.

CONCLUSION

For the foregoing reasons, we reverse the September 7, 2021

judgment of the trial court and remand this matter for further proceedings

consistent with this opinion. The costs of the appeal are assessed to

appellants.

REVERSED AND REMANDED.