STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
CA 07-941
MARK PELTIER, ET AL.
VERSUS
MANUEL BUILDERS, LLC
**********
APPEAL FROM THE SIXTEENTH JUDICIAL DISTRICT COURT PARISH OF IBERIA, NO. 104358-G HONORABLE CHARLES LEE PORTER, DISTRICT JUDGE
JOHN D. SAUNDERS JUDGE
Court composed of John D. Saunders, Marc T. Amy, and Billy Howard Ezell, Judges.
REVERSED.
Edward Paul Landry Landry, Watkins, Repaske & Breaux P. O. Drawer 12040 New Iberia, LA 70562-2040 (337) 364-7626 Counsel for Plaintiffs/Appellees: Mark Peltier Chris Peltier
Sera Hearn Russell, III Attorney at Law P. O. Box 53866 Lafayette, LA 70505-3866 (337) 237-7171 Counsel for Defendant/Appellant: Manuel Builders, LLC Paul Joseph McMahon, III Attorney at Law P. O. Box 3643 Lafayette, LA 70502-3643 (337) 233-6768 Counsel for Defendant/Appellant: Manuel Builders, LLC SAUNDERS, Judge.
This is a case where the parties disagreed as to whether a valid transaction or
compromise had been reached between them. The plaintiffs are homeowners who
entered into a building contract with the defendant, a home builder. After completion
of the home, the plaintiffs filed suit alleging that the home was defectively built. The
defendant filed an Exception of Prematurity pursuant to an arbitration clause in the
construction contract. Prior to a scheduled arbitration hearing, both parties agreed to
continue the arbitration hearing without date. After receiving no communication from
the home builder’s attorney for a period of time, the plaintiffs filed a Motion to
Enforce Settlement that was granted by the trial court. Defendant appealed.
We find that the record does not contain sufficient evidence to grant the
plaintiffs’ Motion to Enforce Settlement. The record has no written transaction or
compromise and no recitation of any transaction or compromise in open court. As
such, we reverse the trial court’s judgment granting plaintiffs’ motion and assess
plaintiffs with all costs of this appeal.
FACTS AND PROCEDURAL HISTORY:
Plaintiffs, Mark and Chris Peltier (hereinafter “the Peltiers”), contracted with
Manuel Builders, LLC (hereinafter “Manuel”) to build a home. On December 22,
2004, the Peltiers filed suit against Manuel alleging defective construction of the
home. Manuel filed an Exception of Prematurity due to an arbitration clause
contained in the construction contract entered into by the Peltiers and Manuel. Both
parties agreed to have the exception hearing continued and proceed with arbitration.
During the process of arbitration, settlement negotiations between the parties
took place. Counsel for Manuel, Mr. Paul J. McMahon, III, wrote a letter dated
November 28, 2006, to counsel for the Peltiers, Edward P. Landry, stating that his client is willing to purchase the house back to settle the case, and, if the Peltiers were
so inclined, to please advise as to the sales price. Manuel’s counsel then wrote a letter
dated November 29, 2006, informing the American Arbitration Association that the
parties were on the verge of resolving the dispute and, therefore, both parties were
requesting that the arbitration hearing presently set for December 4-5, 2006, be
continued. Thereafter, counsel for the Peltiers sent various letters to Manuel,
thorough its attorney, indicating that a settlement had been agreed upon and that the
settlement would be that Manuel would purchase the house back for the appraised
value of $218,500.00.
After communications on the settlement halted, the Peltiers filed a Motion to
Enforce Settlement in the Parish of Iberia. No opposition was filed to the motion, nor
did Manuel or its attorney make any appearance to oppose the motion. The trial court
granted the Peltiers’s motion. Manuel suspensively appealed alleging that the
evidence was insufficient to grant the Peltiers’s motion as the alleged transaction or
compromise was not written, nor was it recited in Open Court as required by
La.Civ.Code art. 3071.
ASSIGNMENT OF ERROR:
Manuel contends that the trial court committed a reversible error when it
granted the Peltiers’s Motion to Enforce Settlement when it ruled that the letters
exchanged between counsel, one containing an offer to begin settlement negotiations
and the other containing an appraisal estimate, was sufficient to create a settlement
agreement. We agree.
Louisiana Civil Code Article 3071 of the Louisiana Civil Code of 1870,
applicable to the case at bar, provides as follows:
2 A transaction or compromise is an agreement between two or more persons, who, for preventing or putting an end to a lawsuit, adjust their differences by mutual consent, in the manner which they agree on, and which every one of them prefers to the hope of gaining, balanced by the danger of losing.
This contract must either be reduced into writing or recited in open court and capable of being transcribed from the record of the proceeding. The agreement recited in open court confers upon each of them the right of judicially enforcing its performance, although its substance may thereafter be written in a more convenient form. (Emphasis added.)1
The clear and explicit language of the article is that a transaction or
compromise must either: (1)be reduced to writing or (2) be recited in Open Court.
Here, the record contains evidence of neither. Our Louisiana Supreme Court, in
Felder v. Georgia Pacific Corp., 405 So.2d 521, 523 (La.1981), held that even though
La.Civ.Code art. 3071 does not provide for the consequences of failing to reduce a
compromise into writing, “a compromise which is not reduced to writing is
unenforceable.” Bourgeois v. Franklin, 389 So.2d 358 (La.1980); Jasmin v. Gafney,
Inc., 357 So.2d 539 (La.1978).
Since Felder, La.Civ.Code art. 3071 has been amended to add the possibility
that a compromise be enforceable if its contents were recited in Open Court and are
capable of being transcribed from the record of the proceeding. After reviewing the
record, we find no such recitation in Open Court as neither Manuel, nor its counsel,
appeared at the proceeding.
The editor’s notes from the Louisiana Civil Code (2008) state the following: “Book III, Title XVII of the Louisiana Civil Code of 1870, ‘Of Transaction or Compromise,’ consisting of Articles 3071 through 3083 was revised, amended and reenacted by Acts 2007, No. 138, effective August 15, 2007, to consist of Articles 3071 through 3083.” In that revision, Louisiana Civil Code of 1870 Article 3071, at issue here, was revised into La.Civ.Code arts. 3071 and 3072. Although this change was made, Revision Comments (a) under both articles state that the intent of the Legislature was not to change the law. Revision Comment (a) under La.Civ.Code Art. 3072 also states that it “preserves the requirement of Article 3071 of the Louisiana Civil Code of 1870 that a compromise must be reduced to writing.”
3 The Peltiers contend that the letters exchanged between the parties respective
counsel, when read in light of the other letters included in the record, show that a
transaction or compromise was reached. The Peltiers attempt to bolster their argument
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STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
CA 07-941
MARK PELTIER, ET AL.
VERSUS
MANUEL BUILDERS, LLC
**********
APPEAL FROM THE SIXTEENTH JUDICIAL DISTRICT COURT PARISH OF IBERIA, NO. 104358-G HONORABLE CHARLES LEE PORTER, DISTRICT JUDGE
JOHN D. SAUNDERS JUDGE
Court composed of John D. Saunders, Marc T. Amy, and Billy Howard Ezell, Judges.
REVERSED.
Edward Paul Landry Landry, Watkins, Repaske & Breaux P. O. Drawer 12040 New Iberia, LA 70562-2040 (337) 364-7626 Counsel for Plaintiffs/Appellees: Mark Peltier Chris Peltier
Sera Hearn Russell, III Attorney at Law P. O. Box 53866 Lafayette, LA 70505-3866 (337) 237-7171 Counsel for Defendant/Appellant: Manuel Builders, LLC Paul Joseph McMahon, III Attorney at Law P. O. Box 3643 Lafayette, LA 70502-3643 (337) 233-6768 Counsel for Defendant/Appellant: Manuel Builders, LLC SAUNDERS, Judge.
This is a case where the parties disagreed as to whether a valid transaction or
compromise had been reached between them. The plaintiffs are homeowners who
entered into a building contract with the defendant, a home builder. After completion
of the home, the plaintiffs filed suit alleging that the home was defectively built. The
defendant filed an Exception of Prematurity pursuant to an arbitration clause in the
construction contract. Prior to a scheduled arbitration hearing, both parties agreed to
continue the arbitration hearing without date. After receiving no communication from
the home builder’s attorney for a period of time, the plaintiffs filed a Motion to
Enforce Settlement that was granted by the trial court. Defendant appealed.
We find that the record does not contain sufficient evidence to grant the
plaintiffs’ Motion to Enforce Settlement. The record has no written transaction or
compromise and no recitation of any transaction or compromise in open court. As
such, we reverse the trial court’s judgment granting plaintiffs’ motion and assess
plaintiffs with all costs of this appeal.
FACTS AND PROCEDURAL HISTORY:
Plaintiffs, Mark and Chris Peltier (hereinafter “the Peltiers”), contracted with
Manuel Builders, LLC (hereinafter “Manuel”) to build a home. On December 22,
2004, the Peltiers filed suit against Manuel alleging defective construction of the
home. Manuel filed an Exception of Prematurity due to an arbitration clause
contained in the construction contract entered into by the Peltiers and Manuel. Both
parties agreed to have the exception hearing continued and proceed with arbitration.
During the process of arbitration, settlement negotiations between the parties
took place. Counsel for Manuel, Mr. Paul J. McMahon, III, wrote a letter dated
November 28, 2006, to counsel for the Peltiers, Edward P. Landry, stating that his client is willing to purchase the house back to settle the case, and, if the Peltiers were
so inclined, to please advise as to the sales price. Manuel’s counsel then wrote a letter
dated November 29, 2006, informing the American Arbitration Association that the
parties were on the verge of resolving the dispute and, therefore, both parties were
requesting that the arbitration hearing presently set for December 4-5, 2006, be
continued. Thereafter, counsel for the Peltiers sent various letters to Manuel,
thorough its attorney, indicating that a settlement had been agreed upon and that the
settlement would be that Manuel would purchase the house back for the appraised
value of $218,500.00.
After communications on the settlement halted, the Peltiers filed a Motion to
Enforce Settlement in the Parish of Iberia. No opposition was filed to the motion, nor
did Manuel or its attorney make any appearance to oppose the motion. The trial court
granted the Peltiers’s motion. Manuel suspensively appealed alleging that the
evidence was insufficient to grant the Peltiers’s motion as the alleged transaction or
compromise was not written, nor was it recited in Open Court as required by
La.Civ.Code art. 3071.
ASSIGNMENT OF ERROR:
Manuel contends that the trial court committed a reversible error when it
granted the Peltiers’s Motion to Enforce Settlement when it ruled that the letters
exchanged between counsel, one containing an offer to begin settlement negotiations
and the other containing an appraisal estimate, was sufficient to create a settlement
agreement. We agree.
Louisiana Civil Code Article 3071 of the Louisiana Civil Code of 1870,
applicable to the case at bar, provides as follows:
2 A transaction or compromise is an agreement between two or more persons, who, for preventing or putting an end to a lawsuit, adjust their differences by mutual consent, in the manner which they agree on, and which every one of them prefers to the hope of gaining, balanced by the danger of losing.
This contract must either be reduced into writing or recited in open court and capable of being transcribed from the record of the proceeding. The agreement recited in open court confers upon each of them the right of judicially enforcing its performance, although its substance may thereafter be written in a more convenient form. (Emphasis added.)1
The clear and explicit language of the article is that a transaction or
compromise must either: (1)be reduced to writing or (2) be recited in Open Court.
Here, the record contains evidence of neither. Our Louisiana Supreme Court, in
Felder v. Georgia Pacific Corp., 405 So.2d 521, 523 (La.1981), held that even though
La.Civ.Code art. 3071 does not provide for the consequences of failing to reduce a
compromise into writing, “a compromise which is not reduced to writing is
unenforceable.” Bourgeois v. Franklin, 389 So.2d 358 (La.1980); Jasmin v. Gafney,
Inc., 357 So.2d 539 (La.1978).
Since Felder, La.Civ.Code art. 3071 has been amended to add the possibility
that a compromise be enforceable if its contents were recited in Open Court and are
capable of being transcribed from the record of the proceeding. After reviewing the
record, we find no such recitation in Open Court as neither Manuel, nor its counsel,
appeared at the proceeding.
The editor’s notes from the Louisiana Civil Code (2008) state the following: “Book III, Title XVII of the Louisiana Civil Code of 1870, ‘Of Transaction or Compromise,’ consisting of Articles 3071 through 3083 was revised, amended and reenacted by Acts 2007, No. 138, effective August 15, 2007, to consist of Articles 3071 through 3083.” In that revision, Louisiana Civil Code of 1870 Article 3071, at issue here, was revised into La.Civ.Code arts. 3071 and 3072. Although this change was made, Revision Comments (a) under both articles state that the intent of the Legislature was not to change the law. Revision Comment (a) under La.Civ.Code Art. 3072 also states that it “preserves the requirement of Article 3071 of the Louisiana Civil Code of 1870 that a compromise must be reduced to writing.”
3 The Peltiers contend that the letters exchanged between the parties respective
counsel, when read in light of the other letters included in the record, show that a
transaction or compromise was reached. The Peltiers attempt to bolster their argument
on language that appears in Felder, 405 So.2d at 524, that is as follows: “Where two
instruments, when read together, outline the obligations each party has to the other
and evidence each party’s acquiescence in the agreement, a written compromise
agreement, as contemplated by La.C.C. art. 3071 has been perfected.” The Peltiers’s
reliance on this language is misguided.
In Felder, 405 So.2d at 523-24, our supreme court stated:
[T]he requirement that the agreement be in writing and signed by both parties does not necessarily mean that the agreement must be contained in one document. It would suffice that there be a written offer signed by the offerer and a written acceptance signed by the acceptor, even if the offer and the acceptance are contained in separate writings.
After reviewing the record, we find no such written offer or acceptance signed
by Manuel. The language cited by the Peltiers refers to a situation where, for
example, a plaintiff offers, via a signed document, to settle a case for a certain sum
and a defendant, in a different signed document, accepts the plaintiff’s offer to settle
that case for that certain sum. Here, the first letter referenced by the Peltiers consists
of a letter from Manuel’s attorney indicating that Manuel is agreeable to purchasing
the house back from the Peltiers. The November 28, 2006, letter, in pertinent part,
states, “[a]s we discussed, my client [Manuel] is amiable to purchasing the house
back from the Peltiers. If the Peltiers are so inclined please advise us as to the sales
price of the same.” There is no language that can reasonably be interpreted to indicate
that Manuel offered to purchase the house back for any particular sales price. This
language can only reasonably be interpreted as an invitation for an offer to be made
4 by the Peltiers, not as an offer by Manuel.
The next document that the Peltiers contend can be interpreted to indicate a
transaction or compromise is a letter from Manuel’s attorney to an arbitrator wherein
it, in pertinent part, states:
This correspondence is to advise you that the parties are on the verge of resolving this matter and thereby are both requesting that the arbitration hearing presently set for December 4 -5, 2006 be continued, without date, in order to allow the settlement to be consummated. (Emphasis added.)
First, the plain language of the letter is that the parties are “on the verge” of
settling the matter, not that they have settled the matter. Second, this letter is not
addressed to the Peltiers. Accordingly, to find that this letter constitutes a signed offer
or acceptance of settlement from Manuel to the Peltiers would be unreasonable.
The Peltiers claim that two other documents show a transaction or compromise.
They point to a letter from their attorney to Manuel’s attorney and a letter from the
arbitrator to their and Manuel’s attorney. While these letters may be construed as
evidence that a settlement was reached, the article and jurisprudence clearly require
that either Manuel or his representative sign a written offer or acceptance. Neither
letter contains a written offer or acceptance on Manuel’s behalf..
The Peltiers also argue that because Manuel filed no opposition to their Motion
to Enforce Settlement, despite being notified of its existence, and also because
counsel for Manuel failed to respond to repeated communication attempts, the trial
court correctly granted the motion. This argument lacks merit. Neither Manuel nor its
counsel are under any legal obligation to appear to oppose the motion; nor was
Manuel apparently aware of the attempts made by counsel for the Peltiers to contact
Manuel’s counsel. The lack of an opposition to a motion does not guarantee its
5 success. The party that brings a motion still has the burden of proving that the motion
has merit. Here, the Peltiers failed to do so.
CONCLUSION:
We find that the trial court committed reversible error when it ruled that the
letters exchanged between counsel for the Peltiers and Manuel, along with other
letters included in the record, were sufficient to create an enforceable settlement
between the parties. The record does not contain the evidence necessary to prove that
a valid transaction or compromise had been reached between Manuel and the Peltiers.
As such, the judgment granted to the Peltiers by the trial court is reversed. All costs
associated with this appeal are to be paid by the Peltiers.