PATRICIA B. HEATON, * NO. 2019-CA-0331 HENRY F. HEATON AND LATTER & BLUM, INC. * COURT OF APPEAL VERSUS * FOURTH CIRCUIT EFFIE CHAISSON, REALTY * REVOLUTION, L.L.C. DBA STATE OF LOUISIANA REVOLUTION REALTY AND ******* XYZ INSURANCE COMPANY
APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2018-02257, DIVISION “G-11” Honorable Robin M. Giarrusso, Judge ****** Judge Paula A. Brown ****** (Court composed of Judge Terri F. Love, Judge Regina Bartholomew-Woods, Judge Paula A. Brown)
Steven Thomas Richard 911 Veterans Memorial Blvd., Suite 204 Metairie, LA 70005
COUNSEL FOR PLAINTIFFS/APPELLANTS
Gustave Alexander Fritchie, III McDonald G. Provosty IRWIN FRITCHIE URQUHART & MOORE LLC 400 Poydras Street Suite 2700 New Orleans, LA 70130
COUNSEL FOR DEFENDANTS/APPELLEES
Affirmed September 11, 2019 This appeals arises out of a suit wherein Plaintiffs/Appellants, Patricia B.
Heaton, Henry F. Heaton, and Latter and Blum, Inc. (collectively, the “Heatons”)
sought damages from Defendants/Appellees, Effie Chaisson, Realty Revolution,
L.L.C. dba Revolution Realty1 (collectively, “Ms. Chaisson”) regarding a failed
agreement for Shawn P. Gordon to purchase the Heatons’ home. The Heatons
filed two lawsuits. In the first lawsuit—“Patricia Bannon Heaton, wife of/and
Henry F. Heaton and Latter & Blum, Inc. versus Shawn [P.] Gordon”2 (referred to
as “Heaton v. Gordon” or “first suit”)—the Heatons sued Mr. Gordon, the buyer,
and Mr. Gordon filed a third-party demand against Ms. Chaisson, his real estate
broker. After hearing cross-motions for summary judgment filed by the Heatons
and Mr. Gordon, the district court found no liability as to Mr. Gordon and
dismissed the third-party demand against Ms. Chaisson. Following, the Heatons
filed a second lawsuit (referred to as “Heaton v. Chaisson” or “second suit”)
directly against Ms. Chaisson. In turn, Ms. Chaisson filed a peremptory exception
1 Although “XYZ Insurance Company” appears in the caption of this appeal, the record before this Court does not reflect it was properly named, and there was no request for service by the Heatons. 2 Case No. 2016-12000 of the Civil District Court for the Parish of Orleans, Division N.
1 of res judicata which was granted by the district court. For the reasons set forth
below, we affirm the district court’s judgment.
FACTUAL/PROCEDURAL HISTORY3
In May of 2016, the Heatons contracted with Latter and Blum, Inc., to be the
broker for the sale of their residential property located at 231 36th Street, New
Orleans, Louisiana, 70124. On May 11, 2016, Mr. Gordon, through his real estate
agent, Ms. Chaisson and Realty Revolution, L.L.C., submitted to the Heatons a
purchase offer bearing the alleged signature and initials of Mr. Gordon wherein
Mr. Gordon offered to purchase the Heatons’ home for $485,000.00 with a
$2,500.00 deposit. There was a contingency addendum4 included with the
purchase agreement. The Heatons accepted the purchase offer, and they took their
home off the market. On May 27, 2016, it was represented to the Heatons that the
contingencies were being removed from the agreement. The Heatons attended the
closing on July 15, 2016, but neither Mr. Gordon nor Ms. Chaisson was present.
Due to his failure to appear at the closing, the Heatons placed Mr. Gordon in
default.5
Heaton v. Gordon
On December 8, 2016, the Heatons’ first petition (“Petition I”) against Mr.
Gordon asserted breach of contract. On March 7, 2017, Mr. Gordon filed a third-
party demand against Ms. Chaisson and Realty Revolution, L.L.C. The Heatons
3 The uncontested factual/procedural history was elicited from the appellate record, including but not limited to the Heatons’ petition filed in the second suit. 4 The contingencies involved Mr. Gordon obtaining financing to purchase the Heatons’ home and selling his home. 5 In the event of default, the purchase agreement allowed damages in an amount equal to ten percent (10%) of the $485,000.00 ($48,500.00), plus the tendered $2,500.00 deposit, together with all costs, attorney’s fees, and interest.
2 and Latter and Blum, Inc., did not amend Petition I to name Ms. Chaisson and
Realty Revolution, L.L.C., as defendants.
In November of 2017, the Heatons and Mr. Gordon filed cross-motions for
summary judgment. A hearing on the motions for summary judgment was held on
January 12, 2018. On February 27, 2018, the district court issued a judgment: (1)
denying the motion for summary judgment filed by the Heatons; (2) granting the
motion for summary judgment filed by Mr. Gordon; and (3) dismissing the third-
party demand filed by Mr. Gordon against Ms. Chaisson and Realty Revolution,
L.L.C. as moot. No appeal was filed.
Heaton v. Chaisson
On March 7, 2018, the Heatons filed a second petition for damages
(“Petition II”) against Ms. Chaisson, which is the subject of this appeal. In
Petition II, the Heatons alleged breach of the purchase agreement. Alternatively,
the Heatons asserted that the actions of Ms. Chaisson, including her admission that
there was no written authority on behalf of Mr. Gordon to execute the purchase
agreement and all other documents related to the sale of the Heatons’ home,
constituted: (1) breach of duty by a relator owed to third-parties, provided under
La. R.S. 9:3894; (2) negligence and/or negligent misrepresentation, provided under
La. C.C. art. 2315; and (3) civil fraud, provided under La. C.C. art. 1953. The
Heatons alleged that Realty Revolution, L.L.C., was liable under the doctrine of
respondeat superior. The Heatons sought damages, which included ten percent of
the purchase price, the deposit, “plus all costs, interest and attorney fees in
attempting to collect this indebtedness, including the filing and prosecution of both
civil action CDC 2016-12000 and this civil action.” Latter and Blum, Inc., sought
its lost real estate broker commission.
3 In response, on August 22, 2018, Ms. Chaisson filed a peremptory exception
of prescription, alternatively, a peremptory exception of res judicata. The hearing
was held on November 30, 2018. At the conclusion of the hearing, the district
court: (1) granted the res judicata exception; (2) found there was no way to amend
Petition II to resolve the issue; and (3) held that there was no need to address the
prescription issue since the case was dismissed based on res judicata. A judgment
was issued by the district court on December 10, 2018. This appeal follows.
DISCUSSION
The Heatons essentially assign two errors: (1) the district court erred by
granting the res judicata exception; and (2) the district court erred by failing to
allow the Heatons to amend Petition II to cure the exception of res judicata. After
a review of the record and the applicable law, we affirm the district court’s
judgment.
RES JUDICATA
The Heatons assert that the district court erred in granting Ms. Chaisson’s
exception of res judicata on three grounds: (1) the district court erred in
considering facts not in the record, which in turn make the appellate record
insufficient; (2) the elements of res judicata were not met; and (3) if this Court
finds res judicata applicable, exceptional circumstances exist.
The standard of review of an exception of res judicata requires an appellate
court to determine if the trial court’s decision is legally correct or incorrect. Bd. of
Sup’rs of Louisiana State Univ. v. Dixie Brewing Co., Inc., 14-0641, p. 6 (La. App.
4 Cir. 11/19/14), 154 So.3d 683, 688 (citations omitted).
“The doctrine of res judicata precludes re-litigation of all causes of action
arising out of the same transaction or occurrence that were the subject matter of a
4 prior litigation between the same parties.” Contogouris v. Ocean Therapy Sols.,
LLC, 15-0472, p. 5 (La. App. 4 Cir. 1/27/16), 187 So.3d 18, 21 (citing Oliver v.
Orleans Parish School Bd., 14-0329, 14-0330, pp. 20-21 (La. 10/31/14), 156 So.3d
596). La. R.S. 13:4231, amended in 1990 and effective January 1, 1991, codified
the res judicata principle:
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:
(1) If the judgment is in favor of the plaintiff, 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.
(2) If the judgment is in favor of the defendant, 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 the judgment bars a subsequent action on those causes of action.
(3) A judgment in favor of either the plaintiff or the defendant is conclusive, in any subsequent action between them, with respect to any issue actually litigated and determined if its determination was essential to that judgment.
To succeed on an exception of res judicata, the jurisprudence has
established that the moving party—Ms. Chaisson in this case—must prove, by a
preponderance of the evidence, the five elements of res judicata:
1) the judgment is valid; 2) the judgment is final; 3) the parties are the same; 4) the cause or causes of action asserted in the second suit existed at the time of final judgment in the first litigation; and 5) the cause or causes of action asserted in the second suit arose out of the transaction or occurrence that was the subject of the first litigation.
Barrasso Usdin Kupperman Freeman & Darver, L.L.C. v. Burch, 14-1020, 14-
1021, pp. 11-12 (La. App. 4 Cir. 3/18/15), 163 So.3d 201, 209 (citing Chevron
USA, Inc. v. State, 07-2469, p. 10 (La. 9/08/08), 993 So.2d 187, 194); See also,
5 Louisiana Workers’ Comp. Corp. v. Betz, 00-0603, p. 2 (La. App. 4 Cir. 4/18/01),
792 So.2d 763, 765.
In addition, La. C.C.P. art. 425, which was also amended in 1990, provides
in part that “[a] party shall assert all causes of action arising out of the transaction
or occurrence that is the subject matter of the litigation.”
The Supreme Court explained in Oliver, 156 So.3d 596, the impact of the
1990 amendment to La. R.S. 13:4231 and its relationship to La. C.C.P. art. 425:
As the Official Comments note, the 1990 amendment to La. R.S. 13:4231 “makes a substantial change in the law,” as under the prior statute, “a second cause of action would be barred by the defense of res judicata only when the plaintiff seeks the same relief based on the same cause of action or grounds.” Under the revised statute, “[t]he central inquiry is . . . whether the second action asserts a cause of action which arises out of the transaction or occurrence which was the subject matter of the first action.” “This serves the purpose of judicial economy and fairness by requiring the plaintiff to seek all relief and to assert all rights which arise out of the same transaction or occurrence.” This is in line with La. C.C.P. art. 425, which also now requires that a party “shall assert all causes of action arising out of the transaction or occurrence that is the subject matter of the litigation.” The Comments to Article 425 explain that Article 425 was amended at the same time as the res judicata statute and “expands the scope” of the Article to reflect those changes made to the res judicata statute and to put “the parties on notice that all causes of action arising out of the transaction or occurrence that is the subject matter of the litigation must be raised.”
Id., 14-0329, 14-330, pp. 20-21, 156 So.3d at 611-12 (footnotes omitted).
Moreover, in Myers v. Nat’l Union Fire Ins. Co. of Louisiana, 09-517, pp. 9-10
(La. App. 4 Cir. 5/19/10), 43 So.3d 207, 213 (quoting Maschek v. Cartemps
USA, 04-031, p. 5 (La. App. 4 Cir. 2/16/05), 896 So.2d 1189, 1193), this Court
explained that, with the 1990 amendment, res judicata under Louisiana law
included both claim and issue preclusion:
Under claim preclusion, a res judicata judgment on the merits precludes the parties from relitigating matters that were or could have been raised in that action. Under issue
6 preclusion or collateral estoppel, however, once a court decides an issue of fact or law necessary to its judgment, that decision precludes re-litigation of the same issue in a different cause of action between the same parties. Thus, res judicata used in the broad sense [h]as two different aspects: 1) foreclosure of re-litigating matters that have never been litigated but should have been advanced in the earlier suit; and 2) foreclosure of re-litigating matters that have been previously litigated and decided.
In Oliver, the Supreme Court reiterated, that under the amendment to La. R.S.
13:4231, the question is not necessarily whether the claims were actually litigated
or adjudicated in the prior suit; rather, the test is “now whether the second action
asserts a cause of action which arises out of the transaction or occurrence which
was the subject matter of the prior action.” Id., 14-0329, p. 34 (La. 10/31/14), 156
So.3d at 619.
With these principles of law in mind, we turn to the Heatons’ raised issues.
Sufficiency of the record
The Heatons assert that the district court erred in considering facts not
introduced into evidence. They point out that the entire record in Heaton v.
Gordon was not admitted into evidence at the hearing on the res judicata
exception, resulting in the court being unable to determine what causes of action
were litigated in the first suit. In support, the Heatons cite Hoddinott v. Hoddinott,
16-1059, p. 2 (La. App. 4 Cir. 4/19/17), 217 So.3d 540, 541 (quoting Sewell v.
Argonaut Southwest Ins. Co., 362 So.2d 758, 760 (La. 1978)), wherein this Court
noted that to determine the merits of an exception of res judicata “‘the court must
examine not only the pleadings of the case at hand but also the entire record in the
first suit, to determine whether the availability of the particular form of relief
sought in the second suit was actually ruled upon.’” The Heatons contend that
because the entire record of the first suit was not introduced into the record at the
7 hearing on the res judicata exception, the appellate record is “devoid of sufficient
facts to show what if any issues were addressed between appellants and appellees
in this proceeding.”
We find the Heatons’ reliance on Hoddinott is misplaced. Markedly, in
Hoddinott, the consent judgment, which was at the heart of the res judicata
exception, was not contained in the record. Id., 16-1059, p. 3 (La. App. 4 Cir.
4/19/17), 217 So.3d at 541 (wherein this Court noted that the appellee conceded
that the consent judgment was not introduced into the record). While this Court in
Hoddinot recognized that the entire record of the first proceeding was needed to
determine the merits of the res judicata exception in that case, we do not find that
it is necessary in every case if the record is sufficient to review the granting or
denial of an exception of res judicata. The Third Circuit in Fogleman v. Meaux
Surface Prot., Inc., 10-1210 (La. App. 3 Cir. 3/9/11), 58 So.3d 1057, made a
similar determination. In Fogleman, the appellant, the non-moving party, sought
review of the trial court’s granting of a res judicata exception. On appeal, the
appellant asserted that the appellee, the moving party, failed to include the entire
record from the first litigation making it impossible for the appellee to meet its
burden of proof for its exception of res judicata. In support, the appellant cited
Union Planters Bank v. Commercial Capital Holding Corp., 04-871 (La. App. 1
Cir. 3/24/05), 907 So.2d 129, wherein the appellate court reversed a trial court’s
grant of an exception of res judicata because the moving party failed to introduce
any of the prior litigation’s record. The Third Circuit found that the Union court
“did not conclude that the entire record from the first suit must be included at the
hearing on the exception of res judicata,” but that the Union court “merely found
that the excepting party failed to carry its burden of proof due to a complete
8 absence of evidence in the record of what was allegedly previously adjudicated.”
Fogleman, 10-1210, p. 4 (La. App. 3 Cir. 3/9/11), 58 So.3d at 1061. The Third
Circuit opined that “[c]learly, a party pleading res judicata cannot succeed without
any evidence of what was adjudicated,” but it was not persuaded by the appellant’s
argument because the record before it contained part of the previous litigation,
including the judgment which was under consideration on appeal. Id., 10-1210, p.
5 (La. App. 3 Cir. 3/9/11), 58 So.3d at 1061.6
In the case sub judice, the appellate record notably includes Petition II, the
transcript of the hearing on the res judicata exception, exhibits—A, B, C, and D—
that were admitted into evidence at the hearing on the res judicata exception, and
the judgments from Heaton v. Gordon and Heaton v. Chaisson.
In Petition II, the Heatons set forth the basis for Mr. Gordon’s summary
judgment filed in Heaton v. Gordon:
12. On November 8, 2017, plaintiffs in CDC Case No. 2016- 120000 [sic] filed a motion for summary judgment against the defendant Shawn P. Gordon. On or about November 30, 2017, Shawn Gordon filed a Motion for summary judgment as to the Plaintiffs’ claims against him for breach of contract, wherein he asserted that the defendants hereon, Effie Chaisson and Realty revolution, L.L.C. dba Revolution Realty had no written authority to execute the Purchase Agreement or any other documents related to the sale and purchase of the Heatons’ home at 231 36th Street, NOLA 70124, as no formal Power of Attorney existed to provide her with such authority.
13. At the January 12, 2018, [sic] hearing in CDC Case No. 2016-12000 on both motions for summary judgment, the Court contemporaneously denied Plaintiffs’ motion for summary judgment and granted Shawn Gordon’s motion for summary judgment. At the summary judgment hearing, Effie Chaisson and Realty Revolution, L.L.C. dba Revolution Realty, via counsel, stipulated to the Court via judicial admission that Effie Chaisson had no power of attorney
6 The Third Circuit, after a review of the record, concluded that because the Texas and Louisiana actions did not arise out of the same transaction, the trial court erred in granting the exception of res judicata. Fogleman, 10-1210, p. 5, 58 So.3d at 1061-62.
9 authorizing her to execute the Purchase Agreement or any other documents related to the sale of the subject property.
Exhibit (A), the affidavit of Philip A. Gattuso, attorney for Mr. Gordon,
shows that before the filing of Petition I, in Heaton v. Gordon, Mr. Gattuso wrote
to the attorney representing the Heatons on October 17, 2016, and December 1,
2016, informing the attorney that the purchase agreement and related documents
were not signed by Mr. Gordon and that Ms. Chaisson did not have a signed power
of attorney giving her legal authority to sign Mr. Gordon’s name on the documents.
Attached to exhibit A were the referenced letters. In the letter dated December 1,
2016, Mr. Gattuso explained Ms. Chaisson’s role in the matter to the Heatons’
attorney:
I want to go on record stating that I have made you (and presumably your clients through you) aware that my client did not sign the agreement to purchase nor did he grant proper legal authority for Ms. Chaisson to sign his name to such or to any of the other legal documents waiving the predication and financing contingencies. I believe due diligence requires that if your investigation findings agree with mine, that Mr. Gordon not be sued, and that to do so knowing that there was no valid legal authority given to sign his name to the documents in question could render your clients liable for sanctions and attorneys[‘] fees.
***
If you think you have a cause of action against Ms. Chaisson, whom I don’t represent, I see no reason why you can’t sue her and her E&O carrier directly without having to sue my client. If you find during your discovery period after suit is filed something contrary to what I have been saying, then you can always bring Mr. Gordon in at a later date. But if he didn’t sign the [sic] both the agreement and addendum cancelling the predication and waiving financing, nor gave anyone valid legal authority to do so, then I don’t believe he has any liability in this matter.
Exhibit (B), responses to discovery propounded in Heaton v. Gordon, dated
July 31, 2017, (before the motions for summary judgment were filed in Heaton v.
Gordon), reflects that Ms. Chaisson admitted Mr. Gordon did not sign the purchase
10 agreement and other related documents; she signed Mr. Gordon’s name with his
express authority; and she signed Mr. Gordon’s name to the contingency
addendum without written power of attorney authorizing her to do so.7
Exhibit (C), a demand letter from the Heatons’ trial counsel8 dated August 3,
2017, (before the motions for summary judgment were filed in Heaton v. Gordon),
to the attorney representing Ms. Chaisson reveals that trial counsel for the Heatons
knew of and acknowledged Ms. Chaisson’s admission:
I cannot tell you how shocked I was to read your discovery responses which admitted that Ms. Chaisson did, in fact, execute Mr. Gordon’s name on all of the documentation, and did so without a written power of attorney.
Having litigated this issue countless times, you know as well as I, that without a written power of attorney it is problematic whether I have a binding agreement with Gordon, but I have a simple and winnable claim against Ms. Chaisson which will be filed next week if we do not resolve this matter now.
Exhibit (D), the February 27, 2018 judgment from Heaton v. Gordon,
discussed supra, indicates Mr. Gordon’s motion for summary judgment was
granted, and Mr. Gordon’s third-party demand against the Heatons was dismissed
as moot.
7 The pertinent request for admissions provided:
REQUEST FOR ADMISSION NO. 5: The Contingency Addendum relative to the property located at 231 36th Street, New Orleans, Louisiana 70124, dated May 11, 2016 and May 12, 2016, was signed by Effie Chaisson on behalf of the Buyer without any written power of attorney authorizing her to sign his name thereto.
RESPONSE TO REQUEST FOR ADMISSION NO. 5: Admitted. The Addendum was signed by Effie Chaisson with the voluntary, knowing and express authority of Shawn P. Gordon, through e-mail, text, or verbal authorization, to execute documents on his behalf. 8 Jack A. Ricci was trial counsel for the Heatons and Latter and Blum, Inc. in Heaton v. Gordon; Steven T. Richard is counsel for the Heatons and Latter and Blum, Inc. in the instant suit.
11 The transcript of the hearing on the res judicata exception reflects that the
attorney for Ms. Chaisson argued the Heatons’ action was barred by claim
preclusion pursuant to La. C.C.P. art. 425. The attorney asserted that the presiding
judge in Heaton v. Gordon granted Mr. Gordon’s summary judgment on the
grounds that Mr. Gordon did not sign the documents, and there was no formal
power of attorney authorizing Ms. Chaisson to do so resulting in Mr. Gordon, by
law, not being bound by the purchase agreement. The attorney pointed out there
was nothing prohibiting the Heatons from adding Ms. Chaisson and Realty
Revolution, L.L.C., as defendants in Heaton v. Gordon. In response, the attorney
for the Heatons urged that res judicata was inapplicable because “there was [sic]no
findings of fact with regard to Chaisson and Revolution Realty.”
We find the appellate record is sufficient to review the district court’s
judgment, denying Ms. Chaisson’s res judicata exception. In addition, we find the
record does not support the Heatons’ assertion that the district court relied on facts
not introduced into evidence.
Thus, we find this claim lacks merit.9
Elements of Res judicata
We find the first two elements of res judicata—the judgment is valid and
final—which are not contested by the Heatons were met.10 The third element of
9 We note the better practice would be to introduce the entire record of the first proceeding into the record at a hearing on an exception of res judicata. 10 The judgment in Heaton v. Gordon pertinently provided:
When after hearing the pleadings, evidence and argument of counsel, the Court being of the opinion that the defendant, Shawn P. Gordon, is entitled to the relief prayed for as per reasons this day orally assigned:
IT IS ORDERED, ADJUDGED and DECREED that the Motion for Summary Judgment filed by Shawn P. Gordon against plaintiffs, Patricia Bannon
12 res judicata—whether the parties in the first suit are the same as the parties in the
second suit—is contested by the Heatons. The Heatons’ contend that “Appellees
were named only as third-party defendants” in the first suit, and under La. C.C.P.
art. 1111, they were not required to assert a demand against the third-party
defendants. Louisiana Code Civil Procedure Article 1111 provides that a
“defendant in a principal action by petition may bring in any person. . . . The
plaintiff in the principal action may assert any demand against the third-party
defendant arising out of or connected with the principal demand.”
Heaton, wife of/and Henry F. Heaton and Latter & Blum, Inc [sic] is granted, and the petition of the plaintiffs is hereby dismissed at their costs.
*** IT IS FURTHER ORDERED, ADJUDGED and DECREED that plaintiffs[‘], Patricia Bannon Heaton, wife of/and Henry F. Heaton and Latter & Blum, Inc., Motion for Summary Judgment against defendant, Shawn [P.] Gordon, be and same is hereby denied.
IT IS FURTHER ORDERED, ADJUDGED and DECREED that the third[-]party petition against Effie Chaisson and Revolution Realty, LLC d/b/a Revolution Realty is dismissed, the same being moot.
We note the judgment was silent as to the dismissal of the Heatons’ petition with prejudice. Notwithstanding, in Jackson v. State Farm Mutual Automobile Insurance Company, 27,611, pp. 4-5 (La. App. 2 Cir. 12/6/95), 665 So.2d 661, 664, the trial court, in granting the summary judgment in favor of insurer, dismissed the action “without prejudice.” On appeal, in granting the insured’s request, in answering the appeal, for amendment of the judgment to reflect dismissal of the claims with prejudice, the Second Circuit explained:
When summary judgment is proper, the resulting judgment is final, granting a party part or all of the requested relief. LSA–C.C.P. Arts. 966 and 1915(A)(3). The relief granted is final and not subject to revision by the trial court outside of new trial procedures. Just as it is erroneous to grant a dismissal without prejudice after a trial on the merits, it is erroneous to grant a dismissal without prejudice pursuant to the granting of a motion for summary judgment. By its nature the granting of summary judgment indicates that there is nothing left to determine and the law requires judgment be entered for one party.
Id., 27,611, pp. 4-5 (La. App. 2 Cir. 12/6/95), 665 So.2d 661, 664. See also, Fiveash v. Pat O’brien’s Bar, Inc., 15-1230, p. 5 (La. App. 4 Cir. 9/14/16), 201 So.3d 912, 916 (quoting Vega v. Wal-Mart Stores, Inc., 03-2239, p. 3 (La. App. 1 Cir. 9/17/04), 888 So.2d 242, 243)(wherein this Court explained that “‘[b]y its nature the granting of summary judgment indicates that there is nothing left to determine and the law requires judgment be entered for one party.’”
13 Analogous to this case is Glass v. Alton Ochsner Med. Found, 04-1824 (La.
App. 4 Cir. 6/1/05), 907 So.2d 782, wherein this Court reviewed the trial court’s
judgment which granted a res judicata exception when the exception was filed by a
third-party defendant that was named in the initial suit by the defendant but not by
the plaintiff. In Glass, Wayne Hicks, a mentally disabled adult, was a resident at
the Magnolia School for the mentally disabled when he nearly drowned in the
school’s swimming pool. Following the incident, Mr. Hicks was brought to
Ochsner Hospital where he was treated by Dr. Summer. Four days after being
admitted to the hospital, Mr. Hicks died. Mr. Hicks’ mother, Ms. Glass, filed a
survival action and wrongful death claim against Magnolia School, its staff, and its
insurer. Magnolia School filed a third-party demand against Ochsner and Dr.
Summer; Ms. Glass did not name Ochsner and Dr. Summer as defendants. At trial,
the jury found in favor of the Magnolia School, but on appeal, the Fifth Circuit
reversed the trial court and concluded that the Magnolia School was 100% liable
for the damages suffered by Ms. Glass.11 In a separate suit, Ms. Glass filed a
survival action and wrongful death claim against Oschner and Dr. Summer.
Oschner sought dismissal of Ms. Glass’ claims by filing an exception of res
judicata and no right of action, which were granted by the trial court. On appeal,
Ms. Glass argued that the trial court erred in granting the res judicata exception as
all of the elements of res judicata were not met. This Court disagreed and
affirmed the trial court’s judgment. In addressing the element of res judicata of
whether the parties were the same, this Court opined:
La. C.C.P. Art. 1111 illustrates that a Third Party steps into the shoes of the defendant and can assert the same objections and defenses that
11 Glass v. Magnolia School, Inc., 01-1209 (La. App. 5 Cir. 3/13/02) 815 So.2d 143.
14 are allotted to the principal defendant. Therefore, once a party is added to the action as a Third Party defendant he is considered a party to the action for the purposes of res judicata.
Id., 04-824, p. 6 (La. App. 4 Cir. 6/1/05), 907 So.2d 782, 786, (footnote omitted).
Similarly, in the case sub judice, Ms. Chaisson and Realty Revolution,
L.L.C., were named as third-party defendants in Heaton v. Gordon; thus, they were
parties to first suit. We find the third element of res judicata was met.
We also conclude that the fourth element of res judicata—the cause or
causes of action asserted in the second suit existed at the time of final judgment in
the first litigation—was met. Unquestionably, the cause of action asserted in
Petition II existed at the time of the final judgment in Heaton v. Gordon, and
counsel for the Heatons acknowledged, via demand letter to Ms. Chaisson’s
attorney before the motions for summary judgment were filed, that the Heatons had
a viable claim against Ms. Chaisson.12
The fifth element of res judicata—whether the cause or causes of action
asserted in the second suit arose out of the transaction or occurrence that was the
subject of the first litigation—is not directly contested by the Heatons. Rather, the
Heatons’ assert that res judicata is inapplicable because the claims between the
Heatons and Ms. Chaisson were never litigated in Heaton v. Gordon as they were
dismissed as moot. In support, the Heatons cite Interdiction of Hunter, 18-685, p.
4 (La. App. 4 Cir. 12/19/19)(unpubl.), writ denied, 19-0208 (La. 4/8/19), 267 So.3d
608, wherein this Court, in reviewing the trial court’s granting of a res judicata
12 As discussed supra, the Heatons’ trial counsel in Heaton v. Gordon sent a demand letter to the attorney representing Ms. Chaisson wherein: he acknowledged Ms. Chaisson’s admitted, in the request for admissions, that she “executed Mr. Gordon’s name . . . without a written power of attorney”; he asserted that he had a “winnable claim” against Ms. Chaisson; and he demanded damages.
15 exception, noted that “[t]he court must determine what matters were actually
litigated and decided.”
In the case sub judice, the record reflects that the district court litigated the
claims asserted by the Heatons against Mr. Gordon. In Petition II, the Heatons
allege that the basis for Mr. Gordon’s summary judgment was that Ms. Chaisson
signed Mr. Gordon’s name on the purchase agreement and related documents
without a written power of attorney. The judgment in Heaton v. Gordon reflects
Mr. Gordon’s motion for summary judgment was granted, and the Heatons’
summary judgment was denied. Finding no liability against Mr. Gordon, the
district court dismissed Mr. Gordon’s third-party demand against Ms. Chaisson as
moot. As the Fifth Circuit explained in Howard v. Baker Heritage Hosiery, 96-
335, p. 6 (La. App. 5 Cir. 10/1/96), 683 So.2d 827, 830:
[A] third-party defendant cannot be held liable on the main demand unless the plaintiff amends the petition to make the third-party defendant a direct defendant. La.C.C.P. art. 1111; Johnson v. Acadian Contractors, 590 So.2d 623 (La. App. 3rd Cir.1991), writ denied, 591 So.2d 700 (La.1992); Shaffer v. Illinois Cent. Gulf R. Co., 479 So.2d 927 (La. App. 1st Cir.1985), writ denied, 483 So.2d 1021 (La.1986).
See also, Ebinger v. Venus Const. Corp., 10-2516, p. 10 (La. 7/1/11), 65 So.3d
1279, 1286-87. Thus, the Heatons’ failure to amend their petition naming Ms.
Chaisson and Realty Revolution, L.L.C., as defendants constrained the district
court to dismiss the claims as moot.
Moreover, the Heatons’ argument that the merits of their claims against Ms.
Chaisson were never litigated in the first suit is misdirected. The pertinent issue is
whether the second suit (Heaton v. Chaisson) should be barred because it involves
re-litigating claims that should have been advanced in the first suit (Heaton v.
16 Gordon) as the claims arise out of the same transaction and occurrence that were
the subject matter of the first suit (Heaton v. Gordon).13
Once more, Glass, 907 So.2d 782, discussed supra, lends guidance. After
Ms. Glass filed a suit directly against Oschner and Dr. Summers, Oschner filed an
exception of res judicata which was granted. On appeal, this Court found the
element of res judicata of whether the same claim or cause of action was involved
in each case was met. Quoting the comment to La. R.S. 13:4231, this Court
wrote:
Under the new R.S. 13:4231, a second action would be barred because it arises out of the occurrence which was the subject matter of the prior litigation. The central inquiry is not whether the second action is based on the same cause or cause of action (a concept which is difficult to define) but whether the second action assert a cause of action which arises out of the transaction or occurrence which was the subject of the first action. . . . For purposes of res judicata it would not matter whether the cause of action asserted in the second action was the same as that asserted in the first or different as long as it arose out of the transaction or occurrence that was the subject matter of the first action. La. R.S. 13:4231 cmt. A (1990).
Id., 04-1824, p. 7, 907 So.2d at 786. This Court concluded that both causes of
action arose out of the same transaction because “[b]oth claims arose out of the
death of Ms. Glass’ son after injury at school and treatment at the hospital. The
13 Compare, Interdiction of Irma D. Hunter, 18-685 (La. App. 4 Cir. 12/19/18)(unpubl.), writ denied, 19-0208 (La. 4/8/19), 267 So.3d 608, wherein this Court found dismissal of the first suit on procedural grounds did not meet the res judicata prohibition as to a second suit. In Hunter, the first suit was brought by Mrs. Hunter’s husband who sought full interdiction of his wife. Mrs. Hunter filed exceptions of no right of action, no cause of action, and vagueness. Because Mr. Hunter failed to file an opposition brief, the trial court prohibited Mr. Hunter from opposing the exception, granted the exceptions, and dismissed the case with prejudice. Following, Mrs. Hunter’s daughter sought a full interdiction of her mother. In response, Mrs. Hunter filed exceptions including a res judicata exception. After the trial court granted Mrs. Hunter’s exception, Mrs. Hunter’s daughter appealed. On appeal, this Court reversed the granting of the res judicata exception writing “the judgment on the first petition granted the Defendant’s exceptions of no right of action, no cause of action and vagueness. The merits of the interdiction, particularly concerning the Defendant’s ability to make reasoned decisions, were not litigated. Accordingly, since these issues were never litigated and decided, the exception of res judicata was improperly sustained.” Id., 18-0685, p. 4 (La. App. 4 Cir. 12/19/18)(unpubl.), writ denied, 19-0208 (La. 4/8/19), 267 So.3d 608. See also, Igbokwe v. Moser, 12-1366 (La. App. 4 Cir. 4/24/13), 116 So.3d 727.
17 same transaction was the catalyst for the creation of both causes of action;
therefore the exception of res judicata is applicable.” Id., 04-1824, p. 7, 907 So.2d
at 787.
In the case sub judice, the claims from the second suit arose out of the same
transaction and occurrence—the failed purchase agreement—as the first suit. That
same transaction was the catalyst for the creation of the causes of action in the first
and second suit. Thus, we conclude the fifth element of res judicata was met.
Accordingly, we find that all of the statutory requirements of res judicata
were met.
Exceptional circumstances
The Heatons contend that even if this Court finds that the requirements of
res judicata are met, there are exceptional circumstances in this case under La.
R.S. 13:4232 to justify relief from the granting of the res judicata exception.
The pertinent exception relied on by the Heatons, pursuant to La. R.S.
13:4232(A)(1), provides that a judgment does not bar another action by a plaintiff
“[w]hen exceptional circumstances justify relief from the res judicata effect of the
judgment.” In Oliver, 14-0329, 14-0330, p. 32, 156 So.3d at 618 (footnote
omitted), the Supreme Court explained that “[t]he Official Comments [to La. R.S.
13:4232] note that the ‘exceptional circumstances’ rule is a severely limited
category where a court’s discretion to apply the rule ‘must be exercised on a case
by case basis and such relief should be granted only in truly exceptional cases,
otherwise the purpose of res judicata would be defeated.’”
The Heatons assert that by applying res judicata, Ms. Chaisson will escape
all wrongdoing and “applying res judicata blindly or mechanically in this case does
not foster judicial economy or fundamental fairness.” The Heatons explain that
18 Ms. Chaisson first admitted, on January 12, 2018, at the hearing on the motion for
summary judgment, that she signed Mr. Gordon’s name without a written power of
attorney. On that same date, the judgment was issued by the district court which
dismissed the claims against Mr. Gordon, including Mr. Gordon’s third-party
demand against Ms. Chaisson and Realty Revolution, L.L.C. The record before
this Court, contrary to the Heatons’ assertion, reflects that the Heatons were aware
of Ms. Chaisson’s actions, at the latest, prior to the filing of the motions for
summary judgment.14
Next, the Heatons assert that the exceptional circumstance—that their claims
were not fully litigated because they were dismissed—should prohibit application
of res judicata. In Oliver, 14-0329, 14-0330, p. 34 (La. 10/31/14), 156 So.3d at
619, the Supreme Court rejected a similar argument. We likewise conclude the
Heatons’ failure to advance their claims against Ms. Chaisson in the first suit—in
which they were aware and were litigated against Mr. Gordon—does not warrant
this Court’s exercise of discretion to bar the application of res judicata pursuant to
La. R.S. 13:4232.
Accordingly, we find this claim lacks merit.
AMENDING PETITION II
The Heatons assert that the district court erred in not allowing them to
amend Petition II to cure the exception. In support, the Heatons cite La. C.C.P.art.
934 which provides:
When the grounds of the objection pleaded by the peremptory exception may be removed by amendment of the petition, the judgment sustaining the exception shall order such amendment within
14 The district court, at the hearing on the exception, noted that Ms. Chaisson should have been sued during the first suit and “the issue should have come up . . . .[t]here was knowledge and they didn’t do anything about it.”
19 the delay allowed by the court. If the grounds of the objection raised through the exception cannot be so removed, or if the plaintiff fails to comply with the order to amend, the action, claim, demand, issue, or theory shall be dismissed.
The decision to allow a plaintiff to amend a petition under La. C.C.P. art.
934 is within the discretion of the trial court, and will not be disturbed absent
manifest error or abuse of discretion. Faubourg Saint Charles, LLC v. Faubourg
Saint Charles Homeowners Ass’n, Inc., 18-0806, p. 9 (La. App. 4 Cir. 2/20/19),
265 So.3d 1153, 1159 (citations omitted). In denying the Heatons’ request to
amend Petition II at the hearing on the exception the district court noted that “I do
not see anyway to amend it.” We agree, and find that the district court did not
abuse its discretion in declining to allow amendment of Petition II. Thus, this
claim lacks merit.
CONCLUSION
Based on the foregoing, the district court’s judgment is affirmed.
AFFIRMED.