Siemens Water Technologies Corp. v. Revo Water Systems, LLC

• Court: Louisiana Court of Appeal
• Decided: January 8, 2014
• Docket: CA-0013-0631
• Status: Unknown

Opinion

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

13-631

SIEMENS WATER TECHNOLOGIES CORP.

VERSUS

REVO WATER SYSTEMS, LLC, ET AL.

**********

APPEAL FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF LAFAYETTE, NO. C-20087316 HONORABLE GLENNON P. EVERETT, DISTRICT JUDGE

JOHN D. SAUNDERS JUDGE

Court composed of John D. Saunders, Shannon J. Gremillion, and Phyllis M. Keaty, Judges.

AFFIRMED.

Alan K. Breaud Breaud & Meyers P. O. Drawer 3448 Lafayette, LA 70502 (337) 266-2200 COUNSEL FOR PLAINTIFF/APPELLEE: Siemens Water Technologies Corp. Russell Joseph Stutes Jr. Stutes & Lavergne, LLC 600 Broad Street Lake Charles, LA 70601 (337) 433-0022 COUNSEL FOR DEFENDANTS/APPELLANTS: Revo Water Systems, LLC Jacob J. David SAUNDERS, Judge.

Appellants, Revo Water Systems, LLC and Jacob J. David, appeal the trial

court’s judgment granting Appellee, Siemens Water Technologies’, motion to

execute judgment, in which Siemens requested the trial court to “execute a

Judgment memorializing the Court’s award of a Permanent Injunction and

awarding attorney fees and expenses.” Revo asserts that res judicata bars the

granting of this motion and that, in the alternative, the motion was untimely. For

the reasons discussed herein, we affirm.

FACTS AND PROCEDURAL HISTORY

On June 24, 2010, a jury reached a verdict in favor of Appellee Siemens

Water Technologies (hereinafter “Siemens”) and against Appellants Jacob J. David

(hereinafter “David”) and Revo Water Systems, LLC (hereinafter “Revo”), finding

David/Revo willfully and maliciously misappropriated Siemens’ trade secrets and

engaged in unfair trade practices by copying Siemens’ trade dress. The jury

awarded damages to Siemens in the amount of $1,482,000.

Siemens then filed a motion seeking a permanent injunction to prevent Revo

and David from continuing to infringe upon Siemens’ trade secrets and trade dress,

as well as an award of attorney fees and expenses. At a hearing on August 12,

2010, the parties presented arguments regarding the specifics of the injunction.

The trial court granted Siemens’ motion, specifying in the transcript the nature of

the injunction as well as awarding attorney fees and costs in the amount requested

by Siemens, which totaled $122,187.11.

Both parties submitted proposed judgments to the trial court. Siemens

presented a judgment including attorney fees with the judgment on the jury verdict

and presented a separate judgment on the permanent injunction. Revo and David

presented a judgment including attorney fees and the permanent injunction in the same judgment. Both parties presented judgments which included the award of

attorney fees in the amount of $122,187.11. However, the parties were unable to

agree on the form of the judgment due to a dispute about wording. Following a

telephone conference with the trial court on the matter, the court executed a

judgment on the jury verdict on August 20, 2010. This judgment did not include

the attorney fees or the permanent injunction. However, the judgment includes a

statement specifying: “Injunctive relief and other collateral issues will [be]

submitted to the Court for judgment at a later date.”

Revo and David filed an appeal with this court from the August 20, 2010

judgment on the jury verdict. The trial court had not yet executed a judgment on

the collateral issues; those matters were absent from the judgment before this court

and were not addressed on appeal. This court amended the judgment by reducing

the jury’s award of damages, and affirmed. See Siemens Water Technologies Corp.

v. Revo Water Sys., LLC, 11-248 (La.App. 3 Cir. 10/5/11), 74 So.3d 824.

Siemens filed a motion for execution of judgment on December 13, 2012,

seeking execution of a judgment on the collateral issues reserved in the judgment

on the jury verdict – attorney fees and the permanent injunction. The trial court

issued a Judgment on Permanent Injunction and Attorney Fees on February 26,

2013, in which it awarded Siemens attorney fees in the amount of $122,187.11 and

a permanent injunction against further use of Siemens’ trade dress, which the

judgment notes are “established in the Verdict of the jury at the Trial on the Merits

on June 21-24, 2010.”

Revo and David now appeal the February 26, 2013 judgment. Siemens

requests an award of additional attorney fees for the instant appeal. We find that

res judicata does not bar the trial court’s judgment on the collateral issues of

attorney fees and the injunction, nor was Siemens’ request for a judgment untimely. 2 Therefore, we affirm the trial court’s judgment and award Siemens additional

attorney fees for this appeal.

ASSIGNMENTS OF ERROR

1. The February 26, 2013, judgment awarding attorney fees is barred

by res judicata.

2. The February 26, 2013, judgment is untimely under La.Code Civ.

P. art. 1911.

LAW AND ANALYSIS

Res Judicata

This court reviews the res judicata effect of a prior judgment de novo as it is

a question of law. Fogleman v. Meaux Surface Prot., Inc., 10-1210 (La.App. 3 Cir.

3/9/11), 58 So.3d 1057, writ denied, 11-712 (La. 5/27/11), 63 So.3d 995.

Louisiana’s res judicata statute is La.R.S. 13:4231, which states:

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.

The statute “is interpreted stricti juris, and any doubt regarding compliance

with its requirements is to be resolved in favor of the plaintiff. A plea of res

judicata should not be sustained unless its application is clearly justified.” 3 Brouillard v. Aetna Cas. & Sur. Co., 94-1559, p. 2 (La.App. 3 Cir. 5/10/95), 657

So.2d 231, 233 (internal citations omitted).

“The burden of proof is upon the pleader to establish the essential facts to

sustain the plea of res judicata.” Mundell v. Mundell, 03-631, p. 2 (La.App. 3 Cir.

11/5/03), 858 So.2d 768, 770 (quoting Ins. Assoc., Inc. v. Francis Camel Const.,

Inc., 95-1955, p. 3 (La.App. 1 Cir. 5/10/96), 673 So.2d 687, 689). However, “the

doctrine of res judicata is not discretionary and mandates the effect to be given

final judgments.” Owens v. Book, 02-90, p. 3 (La.App. 3 Cir. 6/5/02), 819 So.2d

484, 487 (quoting Leon v. Moore, 98-1792, p. 5 (La.App. 1 Cir. 4/1/99), 731 So.2d

502, 505, writ denied 99-1294 (La. 7/2/99), 747 So.2d 20).

The doctrine of res judicata is subject to several exceptions, one of which is

“exceptional circumstances”:

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.

La.R.S. 13:4232. This court has recognized that the exceptional circumstances

exception “gives a court the authority to exercise its equitable discretion to balance

the principle of res judicata with the interests of justice under exceptional

circumstances.” Brouillard, 657 So.2d at 233. Furthermore, “convoluted factual

or legal scenarios could qualify as exceptional circumstances which justify the

application of this exception.” Id. As the first circuit has explained, this exception

is “likely to be applied most often in complex procedural situations, in which

litigants are deprived of any opportunity to present their claims because of some

quirk in the system which could not have been anticipated.” Mandalay Oil & Gas,

L.L.C. v. Energy Dev. Corp., 01-993, p. 22 (La.App. 1 Cir. 8/4/04), 880 So.2d 129,

144, writ denied, 04-2426 (La. 1/28/05), 893 So.2d 72 (quoting Chaisson v. 4 Oceanside Seafood, 97-2756 (La.App. 1 Cir. 6/29/98), 713 So.2d 1286). The

exception is also applicable to “factual scenarios that could not possibly be

anticipated by the parties or decisions that are totally beyond the control of the

parties.” Id.

Revo and David argue that the issue of attorney fees was merged in the

August 20, 2010 judgment on the jury verdict and this court’s judgment on appeal,

barring subsequent action. Thus, Revo and David argue that the doctrine of res

judicata requires us to reverse the trial court’s February 26, 2013 judgment.

Siemens argues that res judicata does not apply to the instant facts.

We agree that, although attorney fees constitute a separate cause of action,

they arise out of the same transaction or occurrence as the claims addressed in the

August 20, 2010 judgment, as contemplated by La.R.S. 13:4231. See Diamond B

Constr. Co., Inc. v. Dep't of Transp. & Dev., 02-573 (La.App. 1 Cir. 2/14/03), 845

So.2d 429. Had Siemens not already raised a claim for attorney fees, and had the

trial court not explicitly reserved collateral issues in its August 20, 2010 judgment,

res judicata might apply to bar the trial court’s follow-up judgment. However, the

fact that the trial court addressed and granted Siemens’ claim for attorney fees at a

hearing and reserved this issue in its judgment creates an exceptional circumstance

such that res judicata, if applicable, would still not bar the trial court’s February 26,

2013 judgment.

Revo and David point to Ken Lawler Builders, Inc. v. Delaney, 36,865

(La.App. 2 Cir. 3/5/03), 840 So.2d 672, in which the second circuit found that res

judicata barred a motion for attorney fees where the trial court’s judgment did not

contain attorney fees. Revo and David argue that Ken Lawler Builders “shows that

(1) if a judgment doesn’t award attorney fees as prayed for, then a party must take

action before an appeal; and (2) when the judgment does not reserve an issue for 5 later adjudication, the trial court has no jurisdiction to enter a judgment after the

judgment has become final.” (Emphasis added.) Revo and David fail to

acknowledge that in the instant case the trial court explicitly reserved collateral

issues – which include attorney fees – in its judgment on the jury verdict. Ken

Lawler Builders does not apply to the facts of the instant case.

Furthermore, the supreme court has recognized that, “inherent in the concept

of res judicata is the principle that a party had the opportunity to raise a claim in

the first adjudication, but failed to do so.” Jackson v. Iberia Parish Gov't, 98-1810,

p. 9 (La. 4/16/99), 732 So.2d 517, 524. Conspicuously absent from the facts of this

case is a failure on Siemens part to raise claims for attorney fees. Siemens did not

fail to raise a claim for attorney fees at any stage of the litigation. Rather, this

claim had been properly raised and a verbal judgment had been entered by the trial

court on the record after a hearing on collateral issues.

Siemens’ motion to execute judgment is not an attempt to relitigate issues or

to raise a new cause of action that it previously failed to raise. Rather, it is an

attempt to memorialize an issue that had clearly already been litigated, as the trial

court reached a judgment on this issue. The trial court’s judgment on the jury

verdict explicitly reserved collateral issues for a later judgment, and the record

supports that these matters had been fully litigated. Furthermore, both parties

recognized the award of attorney fees in the same amount in the judgments they

presented to the trial court after the August 12, 2010 hearing. The attorney fees

were never a subject of disagreement, and the parties could not have anticipated

that they would be omitted from the trial court’s judgment on the jury verdict. The

interests of justice would not be served by employing a technical and expansive

application of res judicata to bar an attorney fees award which Revo and David

themselves acknowledged that they owed in the judgment they presented to the 6 trial court. Accordingly, we find exceptional circumstances exist such that an

exception to res judicata is met regardless of whether res judicata would otherwise

bar the granting of Siemens’ motion to execute judgment.

Untimeliness

Revo argues in the alternative that Siemens’ motion to execute judgment

was untimely under La.Code Civ.P. art. 1911, which states:

Except as otherwise provided by law, every final judgment shall be signed by the judge. For the purpose of an appeal as provided in Article 2083, no appeal may be taken from a final judgment until the requirement of this Article has been fulfilled. No appeal may be taken from a partial final judgment under Article 1915(B) until the judgment has been designated a final judgment under Article 1915(B). An appeal may be taken from a final judgment under Article 1915(A) without the judgment being so designated.

Revo and David offer comment (a) to Article 1911, which provides in part, “No

time limit for the signing is imposed in any of these articles, but it is contemplated

that all judgments will be signed within a reasonable time after rendition, which in

turn depends upon the circumstances.” Revo and David argue that “it is

unreasonable to present a judgment for signature more than a year after an

appellate court renders a judgment on the principal demand in a case and more

than thirty months after the attorney’s fee issue was heard by the trial court.”

However, they provide no authority in support of this contention. Moreover, they

acknowledge in their statement of facts that Siemens did present such a judgment

timely, which is also included in the record, and that it was the trial court that

failed to include attorney fees in the final judgment on the jury verdict. Revo and

David argue that because “Siemens neglected to take action” regarding the absence

of attorney fees in the trial court’s judgment until after Revo and David appealed

the judgment on the jury verdict, this court must reverse the trial court’s eventual

award of attorney fees. We find no merit in this argument.

7 Attorney Fees

Siemens requests an additional attorney fee award in the amount of $5,000

for this appeal. “Generally, when an award for attorney’s fees is granted at the trial

level, additional attorney’s fees are proper for work done on appeal.” Wilczewski v.

Brookshire Grocery Store, 08-718, p. 18 (La.App. 3 Cir. 1/28/09), 2 So.3d 1214,

1226, writ denied, 09-456 (La. 4/13/09), 5 So.3d 170. Because Siemens has

successfully defended its award given by the trial court, and based upon our review

of the appellate record, we award $5,000 for work done on this appeal.

CONCLUSION

Revo and David alleged that the trial court erred in signing the judgment

memorializing the collateral issues because it was barred by res judicata and

because it was untimely. We find both assignments of error lack merit.

Accordingly, we affirm the trial court’s judgment. Further, we award Siemens

$5,000 in attorney fees for work done on this appeal. All costs of this appeal are

assessed to Revo and David.