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Johnson v. Williams

Court of Appeal of Louisiana, Second Circuit

April 15, 2015

DONALD JOHNSON, Plaintiff-Appellant
v.
CLARENCE WILLIAMS, JR., AMERICAN WASTE AND POLLUTION CONTROL COMPANY, D/B/A WASTE MANAGEMENT OF NORTHEAST LOUISIANA, AND CONTINENTAL CASUALTY COMPANY, Defendants-Appellees

Page 881

Appealed from the Fifth Judicial District Court for the Parish of Franklin, Louisiana. Trial Court No. 28,930B. Honorable James M. Stephens, Judge.

BRUSCATO & ASSOCIATES, By: Anthony J. Bruscato, Counsel for Appellant.

ELKINS, PLC, By: Jennifer M. Lawrence, Virginia N. Roddy, Counsel for Appellees, Symetra Life Insurance Company and Symetra Assigned Benefits Service Company.

Before BROWN, DREW, and GARRETT, JJ.

OPINION

Page 882

[49,749 La.App. 2 Cir. 1] GARRETT, J.

The plaintiff, Donald Johnson, appeals from a summary judgment in favor of one of the defendants, Symetra Life Insurance Company, f/k/a Safeco Life Insurance Company.[1] Mr. Johnson filed suit seeking a declaratory judgment against the company, claiming that it failed to fulfill its obligation under an annuity contract which was entered into pursuant to a settlement agreement arising out of a 1991 personal injury claim. We affirm the trial court ruling granting summary judgment in favor of Symetra. We also affirm a trial court judgment granting an exception of no cause of action in favor of another defendant, Symetra Assigned Benefits Service Company, which dismissed the plaintiff's claims against that entity with prejudice.

FACTS

In 1991, Mr. Johnson, who was single, was injured in an auto accident in Franklin Parish. He filed suit there on June 10, 1992, against the other driver, Clarence Williams, Jr.; Williams' employer, American Waste and Pollution Control Company, d/b/a Waste Management of Northeast Louisiana; and the employer's insurer, Continental Casualty Company. In 1993, Mr. Johnson's claims were dismissed with prejudice pursuant to a settlement agreement, which provided for a portion of the settlement to be paid in a series of disbursements over a 20-year period. After an initial cash payment of $300,000, he was to receive the following: $7,500 on August 15, 1997; $10,000 on August 15, 2001; $20,000 on August 15, 2005; $35,000 on August 15, 2009; and $50,000 on August 15, 2013. The agreement authorized the defendants to purchase an annuity from Safeco [49,749 La.App. 2 Cir. 2] Life Insurance Company. It also provided that Mr. Johnson had no right to sell, mortgage, encumber or anticipate the periodic payments, or parts thereof, by assignment or otherwise.

Before the suit was settled and dismissed, Mr. Johnson married Therese Palermino in 1992, and they moved to Maryland. The settlement documents reflected that Mr. Johnson was a Maryland resident and the annuity application listed his wife as a beneficiary. One child was born of this marriage in July 1994. After Mr. Johnson and his wife separated in August 1996, he returned to Louisiana.[2] Mr. Johnson's wife and son remained in Maryland, where she initiated divorce proceedings in December 1996. In July 1997, she was awarded sole custody of the child and obtained a judgment ordering Mr. Johnson to pay child support of $663 per month. Review of the Maryland court documents shows that Mr. Johnson was served with the divorce proceedings and that he retained Maryland counsel to represent him after child support was set.[3] His attorney's

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efforts to seek modification of the child support order were unsuccessful.

By his own admission, Mr. Johnson never paid any monthly child support. Consequently, his child's mother was required to resort to the Maryland courts to enforce compliance with his support obligation to his son. As the annuity payments came due, she moved for and obtained orders [49,749 La.App. 2 Cir. 3] from the Maryland court requiring disbursal of the payments directly to her by the annuity company to satisfy Mr. Johnson's child support arrearages.

In August 1997, the wife received $5,304 in arrearages after she obtained a court order directing Safeco to deduct that sum from the $7,500 annuity payment and deposit it into the registry of the court. Due to Mr. Johnson's ongoing failure to pay child support, for which he had already been held in contempt of court, his wife sought a temporary restraining order (TRO) in October 1997. The TRO was granted; it ordered Mr. Johnson not to sell, transfer, borrow against, or otherwise dissipate the Safeco annuity and directed Safeco not to transfer, relinquish, make any payments on, or make any distributions from the annuity pending further order of the court. On November 10, 1997, following a hearing, the Maryland court issued a " Final Injunction" which stated the following: Mr. Johnson had failed to pay his monthly child support obligation of $663; he had been held in contempt for this failure; his wife had " successfully attached [his] annuity to secure payment of child support" ; and he had threatened to liquidate the annuity and change his name and social security number to avoid paying child support. Mr. Johnson was ordered not to sell, transfer, borrow against or otherwise dissipate the annuity pending the court's further order; however, the order provided that he could move to modify or dissolve the injunction. Safeco was ordered not to transfer, relinquish, make any payments on, or make any distributions from the annuity pending further order of the court. Attorney fees were awarded to the wife. Pursuant to Maryland law, the injunction was deemed binding upon service on Mr. Johnson's counsel. Counsel for the wife certified service by mail of the final [49,749 La.App. 2 Cir. 4] injunction on Mr. Johnson's counsel and Safeco. Subsequently, on November 19, 1997, Mr. Johnson's counsel was allowed to withdraw. Mr. Johnson was notified of his lawyer's withdrawal. Judgment granting a divorce was rendered in December 1997, and the prior provisions for custody and child support were incorporated by reference. At this time, Mr. Johnson's former wife resumed use of her maiden name.

Thereafter, pursuant to the orders of the Maryland court, Ms. Palermino was able to secure payments of Mr. Johnson's substantial child support arrearages every four years when an annuity payment to him became payable. In 2001, she received $10,000, at a time when she was owed $32,487 in child support. In 2005, she was paid $20,000 when the arrearage owed was $37,162.32. In 2009, she was paid $35,000 when the arrearage was $55,370.82. By his own admission, Mr. Johnson never opposed any of his ex-wife's motions to obtain these funds.

In July 2012, Mr. Johnson's son reached the age of majority. Deciding that his son no longer needed financial support, Mr. Johnson contacted the annuity company, now known as Symetra Life Insurance Company, to request that the final payment of $50,000 due on August 15, 2013, be made to him. However, the company informed him that it was prohibited from

Page 884

doing so by the Maryland court order.[4] Furthermore, on July 2, 2013, Ms. Palermino filed a request in the Maryland court for judgment for $53,477.58 in child support arrearages and for satisfaction [49,749 La.App. 2 Cir. 5] through the annuity. As explained below, she actively pursued this litigation, which was not opposed by Mr. Johnson, and she obtained judgments in her favor.

Instead of going to Maryland to contest his ex-wife's demands, Mr. Johnson -- who was domiciled in Florida -- filed pleadings in the original Franklin Parish personal injury suit, which had been fully dismissed in October 1993. Mr. Johnson filed a petition for declaratory judgment, enforcement of settlement agreement, damages, and injunctive relief on August 12, 2013, two days before the final payment was due to be distributed. The suit was recaptioned, and named as defendants were Safeco Life Insurance Company, Safeco Assigned Benefits Service Company, Symetra Life Insurance Company, and Symetra Assigned Benefits Service Company (SABSCO). Mr. Johnson asked for a declaratory judgment determining the rights of the parties, as well as damages for breach of contract and injunctive relief ordering direct payment of the $50,000 final installment to him or into the registry of the Louisiana court (not the Maryland court, which he contended lacked jurisdiction over the annuity or payments under it). Mr. Johnson asserted in his petition that the Maryland order had no res judicata effect and was not entitled to full faith and credit. He also claimed that he was in the process of hiring counsel in Maryland to seek modification or elimination of the Maryland order. A rule to show cause was set for October 7, 2013, in the Louisiana court.

Faced with litigation in two different states and the potential for conflicting court orders, Symetra sought an emergency hearing before the Maryland court. Its request for a TRO was granted on September 17, 2013, [49,749 La.App. 2 Cir. 6] prohibiting Mr. Johnson from proceeding in the Louisiana court in contravention of the Maryland court's orders. In its order, the Maryland court made note of several facts, including the provisions of the November 1997 final injunction; the ex-wife's request for a judgment of arrearages and an order requiring payment of the annuity payment in partial satisfaction of such a judgment; and Mr. Johnson's actions seeking dissipation of the annuity to himself without order of the Maryland court. The TRO stated that Mr. Johnson could move to vacate the order on two days' notice to his former wife and Symetra and that it would expire not later than 35 days after issuance.[5] Also on September 17, 2013, due to Mr. Johnson's failure to file any responsive pleadings, a default judgment was rendered in favor of Ms. Palermino on her requests for judgment for $53,477.58 in child support arrearages and for satisfaction through the annuity, subject to Mr. Johnson's right to move to vacate the order within 30 days of its entry.

Meanwhile, some legal jockeying occurred in the Louisiana proceedings. Mr. Johnson filed a motion to file documents into the record on September 17, 2013. Among these were letters and ...


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