Charles David Pugh, Et Ux. v. Cameron State Bank

• Court: Louisiana Court of Appeal
• Decided: April 4, 2007
• Docket: CA-0006-1541
• Status: Unknown

Opinion

NOT DESIGNATED FOR PUBLICATION

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

06-1541

CHARLES DAVID PUGH, ET UX.

VERSUS

CAMERON STATE BANK

************

APPEAL FROM THE THIRTY-EIGHTH JUDICIAL DISTRICT COURT, PARISH OF CAMERON, NO. 10-17108 HONORABLE H. WARD FONTENOT, DISTRICT JUDGE

JIMMIE C. PETERS JUDGE

Court composed of Jimmie C. Peters, Billy H. Ezell, and James T. Genovese, Judges.

AFFIRMED.

Charles David Pugh Post Office Box 555 Cameron, LA 70631 (337) 775-5290 PLAINTIFFS IN PROPER PERSON & APPELLANTS Charles David Pugh Deanna Beth Pugh

Ronald J. Bertrand Attorney at Law 714 Kirby Street Lake Charles, LA 70601 (337) 436-2541 COUNSEL FOR DEFENDANT/APPELLEE: Cameron State Bank PETERS, J.

Charles David Pugh and Deanna Beth Pugh, who are husband and wife and the

plaintiffs in this litigation, appeal the trial court’s grant of peremptory exceptions of

res judicata and no cause of action filed by the defendant, Cameron State Bank. For

the following reasons, we affirm the trial court judgment in all respects.

DISCUSSION OF THE RECORD

This litigation arises from a series of loans by Cameron State Bank (Bank) to

the plaintiffs for the construction of an ocean-going fishing vessel, the F/V Princess

Bayleigh Anna. The loans were secured by promissory notes and a Preferred Ship

Mortgage on the fishing vessel. When the plaintiffs defaulted on their payments and

obligations under the Preferred Ship Mortgage, the Bank filed a foreclosure action in

federal court. Cameron State Bank v. Pugh, 04-672 (W.D. La. Dec. 15, 2004). This

action resulted in an October 20, 2004 public sale of the F/V Princess Bayleigh Anna

by the United States Marshal’s Office with a subsequent deficiency judgment being

recognized in favor of the Bank.

Thereafter, on March 16, 2005, the Pughs instituted the instant suit against the

Bank, asserting breach of contract and fraud. Specifically, the Pughs asserted that the

Bank had agreed that, when construction of the F/V Princess Bayleigh Anna was

complete, it would consolidate the interim financing loans into one loan for a term of

ten years; that upon completion of the construction, the Bank refused to do so; and

that this refusal constituted both breach of contract and fraud, by which they were

financially damaged.

In response to the petition, the Bank filed peremptory exceptions of res

judicata, no cause of action, and no right of action. After a hearing, the trial court

granted the exceptions of res judicata and no cause of action. The Pughs appealed this judgment, asserting three assignments of error: 1) the judgment of dismissal is

in error as no oral reasons were assigned in open court on July 26, 2006; 2) the trial

court erred in granting the Bank’s peremptory exception of res judicata because the

issues of fraud and breach of contract were not adjudicated in the federal suit; and 3)

the trial court erred in granting the Bank’s peremptory exception of no cause of

action.1

OPINION

The trial court held the hearing on the exceptions on November 16, 2005,

rendered judgment in open court on July 26, 2006, and executed a written judgment

granting the exceptions on August 14, 2006. The plaintiffs’ first assignment of error

is apparently based on the language of the judgment, which states that “for oral

reasons assigned in Open Court on July 26, 2006,” the trial court granted the Bank’s

peremptory exceptions. They argue that the judgment of dismissal was not supported

by oral reasons and, therefore, should be reversed.

We agree that on July 26, 2007, the trial court stated no reasons for rendering

its judgment in favor of the Bank and dismissing the plaintiffs’ suit. However, the

trial court had no obligation to issue reasons for judgment absent a request pursuant

to La.Code Civ.P. art. 1917(A), and neither party to this litigation made such a

request. Meyers v. Fairfield Inn, 01-801 (La.App. 3 Cir. 12/12/01), 801 So.2d 632,

writ denied, 02-119 (La. 3/22/02), 811 So.2d 933. Thus, while the phraseology of the

judgment preamble may be inaccurate, the judgment itself effects the trial court

ruling. Therefore, we find no merit in this assignment of error.

1 The Pughs also assert that the trial court erred in granting Cameron’s peremptory exception of no right of action. However, the trial court judgment does not mention that exception.

2 The Pughs next argue that the trial court erred in granting the peremptory

exception of res judicata because the issues of breach of contract and fraud were not

adjudicated in federal court. We also find no merit in this assignment of error.

Louisiana law provides that “[t]he defendant in the principal action . . . shall

assert in a reconventional demand all causes of action that he may have against the

plaintiff that arise out of the transaction or occurrence that is the subject matter of the

principal action.” La.Code Civ.P. art. 1061(B) (emphasis added). Rule 13(a) of the

Federal Rules of Civil Procedure has the same requirement:

A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction ....

A final judgment in a federal court may form the grounds of a plea of res judicata in

Louisiana state courts. McCoy v. Tangipahoa Parish Sch. Bd., 308 So.2d 382

(La.App. 1 Cir.), writ denied, 310 So.2d 856 (La.1975). Additionally, La.R.S.

13:4231(1) provides that when a judgment is rendered in favor of a plaintiff in a prior

suit between the same parties, “all causes of action existing at the time of final

judgment arising out of the transaction or occurrence that is the subject matter of the

litigation are extinguished and merged in the judgment.”

Although the Pughs filed no counterclaim against the Bank in the federal

foreclosure action, they did assert a number of affirmative defenses to the foreclosure

action.2 The trial court concluded that the plaintiffs’ claims of breach of contract and

fraud arose out of the same transactions or occurrences as the federal suit, thereby

2 These affirmative defenses included, among others, promissory estoppel, misplacement of loan payments, lack of consent, lack of diligence, failure to mitigate damages, set-off for wrongful action of the Bank, wrongful foreclosure, and misrepresentation by the Bank.

3 barring the current suit by the doctrine of res judicata. “Whether a cause of action

arises out of the same transaction or occurrence is determined by an examination of

the facts underlying the event in dispute.” Holly & Smith Arc. v. St. Helena

Congregate Facility, 03-481, p. 5 (La.App. 1 Cir. 2/23/04), 872 So.2d 1147, 1152.

Given the record before us, we find no error in the trial court’s grant of the exception

of res judicata. See Pace Royalty Trust Fund, Inc. v. O’Neal, 40,841, 40,842

(La.App. 2 Cir. 4/19/06), 927 So.2d 687, writ denied, 06-1197 (La. 9/15/06), 936

So.2d 1271.

Our conclusion that the trial court did not err in granting the exception of res

judicata and in dismissing the plaintiffs’ suit on that basis renders the plaintiffs’ third

assignment of error moot. Therefore, we will not address whether the trial court erred

in granting the exception of no cause of action.

DISPOSITION

For the foregoing reasons, we affirm the judgment of the trial court. We assess

all costs of the appeal to the plaintiffs, Charles David Pugh and Deanna Beth Pugh.3

This opinion is NOT DESIGNATED FOR PUBLICATION. Uniform Rules—Courts of Appeal, Rule 2-16.3.

3 When judgment is rendered against a party who has been allowed to litigate without the payment of costs, the party “shall be condemned to pay the costs incurred by him . . . and those recoverable by the adverse party.” La.Code. Civ.P. art. 5188.