Judgment rendered January 12, 2022. Application for rehearing may be filed within the delay allowed by Art. 2166, La. C.C.P.
No. 54,128-CA
COURT OF APPEAL SECOND CIRCUIT STATE OF LOUISIANA
*****
VELANDERA PETROPHYSICAL Plaintiffs-Appellants CONSULTING, LLC, GBENGA FUNMILAYO, KEITH FERGUSON, PATTY ABNEY, CATHY BRINKLEY, AKINTUNDE ADEMOLA, OLUKEMI FUNMILAYO
versus
VELANDERA ENERGY PARTNERS LLC Defendant-Appellee
***** Appealed from the Third Judicial District Court for the Parish of Union, Louisiana Trial Court No. 48,640
Honorable Jeffrey L. Robinson, Judge
SMITH & NWOKORIE, LLC Counsel for Appellants By: Anselm N. Nwokorie Brian G. Smith
SHOTWELL, BROWN & SPERRY, APLC Counsel for Appellee By: C. A. Martin, III
Before PITMAN, STONE, COX, STEPHENS, and HUNTER, JJ.
PITMAN, J., concurs in the result.
HUNTER, J., dissents with written reasons.
STONE, J., dissents for reasons assigned by J. HUNTER. COX, J.
Velandera Petrophysical Consulting, LLC (“Velandera Consulting”),
Gbenga Funmilayo (“Funmilayo”), Keith Ferguson (“Ferguson”), Patty
Abney (“Abney”), Cathy Brinkley (“Brinkley”), Akintunde Ademola
(“Ademola”), and Olukemi Funmilayo (“Olukemi”), collectively referred to
as “Plaintiffs,” filed a petition against Velandera Energy Partners, LLC
(“Velandera Energy”). Velandera Energy filed an exception of res judicata,
which the district court sustained. Plaintiffs now appeal. For the following
reasons, we affirm the district court’s judgment.
FACTS
Funmilayo is a member of Velandera Consulting, which has been in
business since at least 2014. As of October 2016, Velandera Consulting
employed six professionals—Funmilayo, Olukemi, Ferguson, Abney,
Brinkley, and Ademola.1 Velandera Consulting was in the business of
researching, sourcing, and negotiating oil and gas interests for other
companies to purchase.
In 2017, Funmilayo, on behalf of Velandera Consulting, approached
Manish Raj (“Raj”) about purchasing oil and gas targets that Velandera
Consulting had been developing to sell. At this time, Funmilayo would
sometimes do business as Velandera Partners, although the record does not
indicate this “partnership” was ever a registered business. Raj agreed to
fully fund and own Velandera Partners and purchase some of the oil and gas
targets that Velandera Consulting had been developing.
1 According to the transcript during the hearing on September 24, 2020, these individuals were never members of or employees of Velandera Energy Partners, LLC, and their services were obtained by Funmilayo on behalf of Velandera Consulting. Raj registered Velandera Energy with the Texas Secretary of State on
January 22, 2018. Raj and Schanti Corporation (a corporation owned by
Raj) are the sole members of Velandera Energy. Raj hired Funmilayo, in his
individual capacity, to manage Velandera Energy in June 2018. Velandera
Energy, through Funmilayo, had engaged the services of Velandera
Consulting to source, vet, and negotiate several acquisition targets, including
“Elevation, Henry, ERG, Amplify, Foothills, BlueRock, Alta Mesa, and
SWN.” On July 19, 2018, Funmilayo was removed as manager of
Velandera Energy.
Actions by Funmilayo while acting as manager prompted Velandera
Energy to fire Funmilayo. Velandera Energy and Funmilayo participated in
a mandatory arbitration, which occurred in Texas, and which arbitration was
initiated by Funmilayo after Velandera Energy filed suit to enjoin Funmilayo
from further action regarding Velandera Energy. The arbitration award was
entered on January 7, 2019, and a Texas state court confirmed the arbitration
award. The arbitration resulted in the following:
1. Manish Raj and Schanti Corp. are the sole members of Velandera Energy Partners, LLC.
2. Gbenga Funmilayo is not and never was a member of Velandera Energy Partners, LLC.
3. Funmilayo no longer has the right to act as a manager of Velandera, effective July 19, 2018 at 4:30 p.m.
4. Actions taken by Funmilayo in the purported capacity of member or manager of Velandera on or after July 19, 2018, are invalid.
5. Action taken by Funmilayo to admit members to Velandera without the participation of Manish Raj and Schanti Corp., including the admission of Akintunde Ademola, Michael O. Ojo, and Olukemi Funmilayo, are invalid.
2 6. The “Contract Agreement between Velandera Energy Partners, LLC and Gbenga Funmilayo of Velandera Petrophysical Consulting LLC” is invalid and unenforceable.
The following injunctive relief was confirmed by the Texas court:
1. Velandera Energy Partners LLC’s claims for money damages are denied.
2. Funmilayo’s claim for attorney fees in connection with his motion to compel arbitration is granted as to Velandera Energy Partners LLC in the amount of $4,900.
3. All other claims by Funmilayo are denied.
4. The administrative fees and expenses of American Arbitration Association totaling $6,250 shall be borne as incurred and previously paid to the Association, and the compensation for expenses of the arbitrator totaling $10,745 shall be borne 25% by Velandera Energy Partners LLC and 75% by Funmilayo. Therefore, Funmilayo shall reimburse Velandera Energy Partners LLC the additional sum of $8,058.75, representing that portion of said fees and expenses in excess of the apportioned costs previously incurred by Velandera Energy Partners LLC, Manish Raj and Shanti Corp.
On January 22, 2019, Plaintiffs filed a petition against Velandera
Energy in Union Parish, Louisiana. Plaintiffs alleged that in October 2017,
they secured the acquisition of SWN, located in Union Parish, Louisiana, for
Velandera Energy and continued to provide services to Velandera Energy
until July 19, 2018. They alleged that Velandera Energy agreed to assign
Velandera Consulting a 25 percent overriding royalty interest (“ORRI”) in
SWN in a contract agreement with the date of acquisition as the effective
date.2 Plaintiffs alleged in their petition that as of July 19, 2018, Velandera
2 Plaintiffs stated that they attached this contract as “Exhibit A” to the petition, but there are no attachments filed in the record. However, the contract between Velandera Energy and Funmilayo is included in the record, which includes a 25% ORRI regarding the SWN asset. This ORRI contract was ruled invalid and unenforceable by the arbitration and Texas judgment.
3 Energy owed them $4,393,553 in compensation, costs, and expenses for
services rendered. Plaintiffs also alleged that Velandera Energy agreed that
Plaintiffs would manage and operate the acquired assets and be compensated
with 25 percent of the net revenue from the asset. Velandera Energy closed
on the SWN asset on July 12, 2018. Plaintiffs alleged that Velandera Energy
has refused to assign to them the ORRI, make any payments, or record the
ORRI contract in the conveyance records of Union Parish. Plaintiffs
claimed that the value of the SWN asset was $45 million, Velandera Energy
only contributed $822,748.20 toward the acquisition, Velandera Energy was
enriched by at least $44 million, and Plaintiffs were impoverished by
$4,393,553.
Plaintiffs made the following claims in their petition: specific
performance of contract, fraudulent transfer, unjust enrichment/quantum
meruit, and fraud. Plaintiffs also requested the award of attorney fees and
costs.
On May 15, 2019, Plaintiffs amended their petition, adding Raj as an
individual defendant. Plaintiffs amended their causes of action to include
detrimental reliance and bad faith obligor and withdrew the fraud claim. On
July 24, 2019, Plaintiffs filed a second amended and supplemental petition.
Plaintiffs added Holly Carpenter, an employee of Velandera Energy, as a
defendant, added defamation as a cause of action, and withdrew the action
for bad faith obligor. On October 14, 2019, Plaintiffs filed a third
supplemental petition and withdrew the causes of action for specific
performance and fraudulent transfer based on the ORRI contract.
4 On November 25, 2019, the district court signed an order regarding
the following exceptions filed by Velandera Energy and argued on
September 19, 2019:
• Declinatory exception of lack of personal jurisdiction filed by Raj—
Granted and dismissed with prejudice.
• Declinatory exception of lack of procedural capacity filed by
Velandera Energy—Granted and Velandera Consulting granted an
extension until October 16, 2019, to supplement the record with the
actual certificate of authority from the Louisiana Secretary of State.
• Dilatory exception of vagueness or ambiguity of the petition for
specific performance of contract/fraudulent transfer filed by
Velandera Energy—Granted and Plaintiffs given extension until
October 16, 2019, to amend their pleading.
• Peremptory exception of no cause of action with respect to claim of
attorney fees filed by Velandera Energy—Granted and dismissed
with prejudice.
• Peremptory exception of no cause of action with regard to unjust
enrichment claims of Velandera Consulting and Funmilayo filed by
Velandera Energy—Granted and dismissed with prejudice.
• Declinatory exception of lack of subject matter jurisdiction;
Peremptory exceptions of no cause of action and no right of action
filed by Velandera Energy—Denied.
• Dilatory exception of improper cumulation of actions, including
improper joinder of parties field by Carpenter—Granted; defamation
claims by Funmilayo against Carpenter are dismissed without
5 prejudice; all other exceptions filed by Carpenter are dismissed as
moot.
On December 13, 2019, Velandera Energy answered the original
petition and three supplemental petitions, but because of the order issued by
the district court in November 2019, it only addressed the second and third
supplemental petitions that remained after the exceptions were granted.
Velandera Energy argued that Plaintiffs failed to state an action upon which
relief can be granted. Velandera Energy generally denied the allegations in
the petitions, but specifically denied the allegation that it requested
Velandera Consulting perform any work of any type with regard to the
alleged target properties. It also denied that the work performed by
Velandera Consulting was exclusively performed for Velandera Energy and
stated it did not accept the services. Velandera Energy admitted to entering
into a bill of sale with SWN Production Company, LLC.
Velandera Energy argued that Plaintiffs did not allege any act,
omission, breach, or fault by it which was the proximate cause of Plaintiffs’
alleged loss. It argued that any loss or damage to Plaintiffs was the result of
Plaintiffs’ negligence or the acts of a third party, which would result in a bar
to or a diminution of recovery by Plaintiffs. Velandera Energy also asserted
that Plaintiffs failed to mitigate any alleged damages that they might have
sustained. Velandera Energy argued that Plaintiffs’ claims are barred in
whole or in part by the doctrines of waiver, estoppel, laches, assumption of
risk, ratification, impossibility, and/or unclean hands. Finally, it pled the
affirmative defense of res judicata.
6 Velandera Energy filed a supplemental petition to recognize foreign
judgment. As detailed above, a Texas court issued its judgment on January
18, 2019,3 confirming the arbitration award. The Louisiana district court
recognized the Texas judgment and granted the judgment full faith and
credit in the State of Louisiana on June 18, 2020.
Velandera Energy asserted that res judicata applied to the plaintiffs
who were not specifically named in the Texas judgment because they were
adequately represented in the arbitration and the claims raised in the
arbitration arose out of the same transaction and occurrence as set forth in
the petitions in this matter. Plaintiffs argued that res judicata did not apply
because they were not signatories to any agreement with Velandera Energy,
Funmilayo was not authorized to arbitrate on their behalf, and they are not
bound by the arbitration agreement between Funmilayo and Velandera
Energy.
A hearing on the exception of res judicata was held on September 24,
2020. Court Smith (“Mr. Smith”),4 Velandera Energy’s attorney from the
Texas suit, testified regarding the Texas litigation and arbitration. He stated
that during the arbitration, Funmilayo asserted claims that both he and his
team were entitled to compensation. He testified that Funmilayo argued in a
motion after the arbitration that he only appeared in arbitration only as a
manager of Velandera Energy, not in his individual capacity or on behalf of
Velandera Consulting, but the Texas court denied the motion. Mr. Smith
3 Plaintiffs Ferguson, Abney, and Brinkley were not named in the Texas judgment. 4 His name is listed as “Clark Smith” in the transcript, but it is a typographical error and should read “Court Smith.”
7 stated that it was his understanding that the net revenue and ORRI were, in
effect, the same thing. He testified that although the arbitration award does
not mention net revenue, it was discussed in testimony during the arbitration.
Funmilayo testified that his attorney in the Texas suit only represented
him in his capacity as manager of Velandera Energy. Funmilayo, who
testified to having a Ph.D. in petroleum engineering, stated that net revenue
and ORRI are not the same. Funmilayo stated that the net revenue was not
discussed in arbitration. He stated that the net revenue agreement was
partially memorialized in an email prior to the formation of Velandera
Energy Partners, on January 12, 2018.5
On December 11, 2020, the district court granted Velandera Energy’s
exception of res judicata and dismissed the claims with prejudice. The
district court found that the allegations of the petitions in this matter arose
out of the same transactions and occurrences as those stated and resolved in
the arbitration and confirmed by the Texas judgment.
Plaintiffs now appeal the district court’s judgment granting the
exception of res judicata.
DISCUSSION
All of the Plaintiffs’ arguments center around the arbitration
agreement and whether it should have been ruled res judicata. They argue
that according to the Federal Arbitration Act, Louisiana Arbitration Law,
and Texas Arbitration Act, an arbitration award is only binding and
enforceable on parties who have agreed to arbitrate the dispute. Thus, the
5 This alleged email agreement is not in the record.
8 threshold question is whether they have agreed to arbitrate. Appellants
argue that they were not parties to the operating agreement that required the
arbitration; therefore, the arbitration does not apply to them. They highlight
that the arbitration was only between Velandera Energy and Funmilayo and
they were not added to the Texas suit or arbitration. They also state that
they did not seek to benefit from the operating agreement or Funmilayo’s
employment agreement.
Velandera Energy argues that res judicata applies when a party’s
interests are adequately represented in the prior action, including arbitration.
It asserts that nonparties can be “privies” and adequately represented by
“virtual representation.” Velandera Energy argues that even though the
Appellants were not parties to the arbitration agreement, the issues of unjust
enrichment and detrimental reliance were fully litigated in Texas. It asserts
that the Texas judgment and the allegations in the current suit arise out of
the same transactions, making it an issue of res judicata. It argues that
Appellants’ interests were adequately represented by Funmilayo as a
member and manager of Velandera Consulting.
When an objection of res judicata is raised before the case is
submitted and evidence is received on the objection, the standard of review
on appeal is traditionally manifest error with regard to factual findings of the
district court. Glob. Mktg. Sols., L.L.C. v. Chevron U.S.A. Inc., 2018-1765,
(La. App. 1 Cir. 9/27/19), 286 So. 3d 1054, writ denied, 2019-01886 (La.
2/10/20). However, the res judicata effect of a prior judgment is a question
of law that is reviewed de novo on appeal. Id.
9 The doctrine of res judicata is not discretionary and mandates the
effect to be given final judgments. The burden of proving the facts essential
to sustaining the objection is on the party pleading the objection. If any
doubt exists as to its application, the exception raising the objection of res
judicata must be overruled and the second lawsuit maintained. The concept
should be rejected when doubt exists as to whether a plaintiff’s substantive
rights actually have been previously addressed and finally resolved. Id.
The doctrine of res judicata precludes the relitigation of all causes of
action arising out of the same transaction and occurrence that were the
subject matter of a prior litigation between the same parties. Oliver v.
Orleans Par. Sch. Bd., 2014-0329 (La. 10/31/14), 156 So. 3d 596.
Louisiana’s res judicata statute, La. R.S. 13:4231, provides:
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 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
10 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. Oliver v.
Orleans Par. Sch. Bd., supra. The Louisiana Supreme Court has set out the
following five prerequisites for a finding of res judicata under the revised
statute: (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 the 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 matter of the first litigation. Id.
Regarding the first and second factors, the arbitration agreement was
confirmed by the Texas district court in a valid, final judgment. As to the
fourth factor, the allegations of nonpayment existed in 2019, at the time of
the first litigation and arbitration.
As to the third factor, jurisprudence does not require that the parties in
the two lawsuits be physically identical as long as they share the same
quality as parties. Wicker v. Louisiana Farm Bureau Cas. Ins. Co., 2018-
0225 (La. App. 1 Cir. 9/21/18), 257 So. 3d 817. The preclusive effect of a
judgment binds the parties to the action and nonparties who are deemed
“privies” of the parties in these limited circumstances: (1) the nonparty is a
successor in interest of a party; (2) the nonparty controlled the prior
litigation; or (3) the nonparty’s interests were adequately represented by a
party to the action who may be considered the “virtual representative” of the
nonparty because the interests of the party and the nonparty are so closely
aligned. Davisson v. Davisson, 52,015 (La. App. 2 Cir. 5/23/18), 248 So. 3d
633.
11 The parties in the Texas suit/arbitration are not absolutely identical to
the parties in the suit before us. The Texas suit was initiated by Velandera
Energy against Funmilayo, they were the only two named parties and both
participated in the arbitration. In the instant suit, Velandera Consulting,
Funmilayo, Ferguson, Abney, Brinkley, Ademola, and Olukemi were all
originally listed as plaintiffs. Not all of the Plaintiffs in the current suit were
named in the Texas judgment. However, all of the individuals listed in the
current suit were employees of Funmilayo and Velandera Consulting.6
Velandera Consulting was hired to source mineral acquisitions for Velandera
Energy. Therefore, any arguments by the individuals that they were not
properly compensated for work performed on the Velandera Energy projects
were “closely aligned,” and actually identical to the claims Velandera
Consulting and Funmilayo had alleged improper compensation for the same
projects. The district court did not err in finding that Funmilayo and
Velandera Consulting were “virtual representatives” of the current Plaintiffs
in the previous Texas suit.
The fifth and final requirement for res judicata is whether the causes
of action in the current suit arose out of the same transaction or occurrence
that was the subject of the Texas suit. 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 asserts a cause of action
which arises out of the transaction or occurrence which was the subject
6 There is no formal contract between Funmilayo and the Plaintiffs listed in this suit. According to Appellant’s counsel, Funmilayo and the Plaintiffs only worked together. The record clearly shows Funmilayo was in charge of obtaining the Plaintiffs’ services in developing the acquisition through Raj and Velandera Energy and that Raj and Velandera Energy never hired those individuals.
12 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. La. R.S. 13:4231,
comment (a).
In determining whether the instant suit arose out of the same
transaction or occurrence as the Texas suit, the district court made a finding
of fact after reviewing the evidence filed in the record and presented at the
hearing. Funmilayo testified that his attorney in the Texas suit only
represented him only in his capacity as manager of Velandera Energy and
that the net revenue was not discussed in arbitration. On the other hand, Mr.
Smith testified that during the arbitration, Funmilayo asserted claims that
both he and his team were entitled to compensation. He stated that although
the arbitration award does not mention net revenue, it was discussed in
testimony during the arbitration. The suit before us is for nonpayment,
which was also discussed in the Texas arbitration.
We find that the district court was not manifestly erroneous in
evaluating the evidence and making a factual finding that both the Texas suit
and current suit arise out of the same transaction or occurrence. In the Texas
suit, Funmilayo asserted claims that he and “his team” had incurred costs,
expenses, and unpaid wages for the work performed for Velandera Energy
on the SWN acquisition. The current suit also alleges non-payment for work
performed on the SWN acquisition. Therefore, as the district court found,
both suits arose out of the same transaction—Velandera Consulting’s work
performed on the SWN acquisition. For this reason, the fifth requirement of
res judicata has been met. Because all five elements of res judicata have
13 been met under our de novo review of the record, we affirm the district
court’s judgment.
CONCLUSION
Based on our review of the record, we affirm the judgment of the
district court, which sustained the exception of res judicata. Costs associated
with this appeal are cast on Plaintiffs.
AFFIRMED.
14 HUNTER, J., dissenting.
Under res judicata a second action is precluded when there is a valid
final judgment, the parties are the same, the cause of action existed at the
time of the final judgment in the first action, and the cause of action asserted
in the second suit arose out of the transaction or occurrence which was the
subject of the first litigation. La. R.S. 13:4231. The preclusive effect of a
judgment binds the parties to the action and nonparties who are deemed the
“privies” of the parties in a situation when the nonparty’s interests were
adequately represented by a party in the first action who is considered the
“virtual representative” of the nonparty because the interests of the party and
the nonparty are so closely aligned. Forum for Equality PAC v. McKeithen,
2004-2551 (La. 1/19/05), 893 So. 2d 738.
The concept of virtual representation is narrowly construed and is not
satisfied merely by showing that the party and the nonparty have common or
parallel interests in the factual and legal issues presented in the respective
actions. Hudson v. City of Bossier, 33,620 (La. App. 2 Cir. 8/25/00), 766
So. 2d 738, writ denied, 2000-2687 (La. 11/27/00), 775 So. 2d 450. Virtual
representation requires there be a legal relationship in which a party to the
first suit is accountable to nonparties who file a subsequent suit raising
similar issues. Condrey v. Howard, 28,442 (La. App. 2 Cir. 8/21/96), 679
So. 2d 563, writ denied, 96-2335 (La. 11/22/96), 683 So. 2d 281.
A person who has been enriched without cause at the expense of
another is bound to compensate that person. La. C.C. art. 2298. A claim of
unjust enrichment requires: (1) an enrichment, (2) an impoverishment, (3) a
connection between and an absence of justification for the enrichment and
1 impoverishment, and (4) the lack of another remedy at law. Matter of BCL
Investments, LLC, 52,387 (La. App. 2 Cir. 1/16/19), 264 So. 3d 675, writ
denied, 2019-0276 (La. 4/22/19), 268 So. 3d 296.
A party not entitled to an action in contract has an action in quasi
contract under the theory of quantum meruit when his work provides a
benefit to defendant. Quantum meruit provides a remedy where equity
demands recovery which is not available in tort or contract. Quantum meruit
is appropriate when a defendant is enriched by a plaintiff’s time, talent,
labor, or where plaintiff’s efforts inure to defendant’s benefit under
circumstances implying an obligation to pay for the services rendered.
Fullerton v. Scarecrow Club, Inc., 440 So. 2d 945 (La. App. 2 Cir. 1983).
Quantum meruit awards are determined after considering the extent and skill
of the work performed and the value and benefit received by defendant from
plaintiff’s work. Fullerton, supra. The principles of quasi contract apply in
situations where, absent an express agreement, one party performed services
for the benefit of another. Smith v. Hudson, 519 So. 2d 783 (La. App. 1 Cir.
1987).
The individual plaintiffs in this case, Patty Abney, Cathy Brinkley,
Keith Ferguson, Akintunde Ademola, and Olukemi Funmilayo, allege in
their petitions they performed professional services related to evaluating and
sourcing the SWN property. Plaintiffs argue they should be compensated by
Velandera Energy under the theory of quantum meruit because it gained a
benefit from their services. There is nothing in the record to suggest (1)
their professional services rendered did not form the basis for any future
business dealings and (2) their intellectual property, which served as the
2 impetus to the matter before the court, was not utilized for the other party’s
benefit.
Velandera Energy argues the plaintiffs’ claims were already
considered in the arbitration proceeding because Gbenga Funmilayo
(“Funmilayo”) was also representing their interests. Velandera Energy can
only point to several paragraphs in Funmilayo’s arbitration counterclaim and
a single sentence in his post-hearing brief to support its assertion Funmilayo
was representing the claims of the individual plaintiffs to recover for the
value of their services. Velandera Energy also presented the testimony of its
own attorney, who could only assert in the arbitration Funmilayo referred to
the management team of Velandera Consulting, alleged a total amount
owed, and referred to the overriding royalty interest (ORRI) as a means of
payment.
This testimony failed to demonstrate any evidence was presented
during the arbitration regarding the extent of the particular services the
plaintiffs provided or the value of those services to Velandera Energy.
Without such evidence being presented to the arbitrator, it cannot be fairly
deduced the interests of the individual plaintiffs were adequately represented
by Funmilayo or that their claims to be compensated for the services each
performed were actually litigated in the arbitration proceeding.
Based upon this record, Velandera Energy failed to satisfy its burden
of proving Funmilayo acted as the virtual representative of the individual
plaintiffs in the arbitration hearing. Thus, the trial court erred in granting the
exception of res judicata as to the individual plaintiffs, who should have the
opportunity to present any evidence they have to pursue their claims for
3 payment of the value of their services which ultimately directly benefitted
Consequently, I would reverse the judgment in part as to the claims of
the individual plaintiffs to recover the value of their services based on
considerations of quantum meruit and unjust enrichment.