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Savoie v. Pennsylvania General Insurance Co.

United States District Court, E.D. Louisiana

October 12, 2017

LORITA M. SAVOIE, ET AL.
v.
PENNSYLVANIA GENERAL INSURANCE CO., ET AL.

         SECTION: J(3)

          ORDER AND REASONS

          CARL J. BARBIER UNITED STATES DISTRICT JUDGE

         Before the Court is a Motion to Re-urge State Court Exception of Res Judicata (Rec. Doc. 161) filed by Owens-Illinois, Inc. (“Defendant”), an opposition thereto (Rec. Doc. 168) filed by Plaintiffs, and a reply (Rec. Doc. 190) filed by Defendant. Having considered the motion and legal memoranda, the record, and the applicable law, the Court finds that the motion should be GRANTED.

         FACTS AND PROCEDURAL BACKGROUND

         On October 7, 1991, Joseph Savoie (“Decedent”) filed a lawsuit in the Civil District Court for the Parish of Orleans against Defendant and others, alleging that asbestos exposure during his employment at Avondale Shipyard caused him to develop asbestosis. During the pendency of that litigation, Decedent and his wife entered into a Receipt, Release, and Indemnification Agreement (“Release Agreement”) with Defendant as part of a group settlement.[1] Per the terms of the Release Agreement, Decedent and his wife agreed to release Defendant from any causes of action arising out of Decedent's asbestos-related injury, including, inter alia, mesothelioma, cancer, wrongful death, and survival claims. The scope of said agreement is the subject of the instant dispute.

         Decedent was diagnosed with mesothelioma, a cancer caused by exposure to asbestos, seventeen years after he entered into the Release Agreement, and for that reason, filed the instant suit against Defendant (and others) in the Civil District Court for the Parish of Orleans on August 21, 2014. Subsequent to filing this lawsuit, Decedent died as a result of his mesothelioma. Decedent's surviving wife and children (“Plaintiffs”) then filed an amended petition for damages and joined the lawsuit seeking survival and wrongful death damages pursuant to Louisiana law. Defendants removed the lawsuit to this Court on April 16, 2015. Defendant then filed the instant Motion to Re-urge State Court Exception of Res Judicata (Rec. Doc. 161) and Plaintiffs filed an opposition thereto (Rec. Doc. 168). After considering the briefs, the motion is now before the Court.

         PARTIES' ARGUMENTS

         Defendant argues that the Court should grant its motion because the Release Agreement clearly and unambiguously releases Defendant from all future claims related to Decedent's asbestos exposure, including any mesothelioma claims, wrongful death claims, and survival actions.

         Plaintiffs argue that the Court should deny Defendant's motion because Defendant has failed to carry its burden regarding two elements of res judicata. Additionally, Plaintiffs contend that the Court should deny Defendant's motion for the following reasons. First, Plaintiffs argue that the parties never intended to release mesothelioma claims. To that end, Plaintiffs also assert that the Release Agreement is void for lack of lawful cause because Decedent and his wife were never compensated for Decedent's mesothelioma diagnosis. Second, Plaintiffs allege that the Release Agreement violates public policy. Next, Plaintiffs contend that the Release Agreement is unenforceable as contra bonos mores because Decedent and his wife never received a copy of the master settlement agreement. Finally, Plaintiffs contend that Defendant failed to produce the complete settlement documents and that production is required before the Court can rule on Defendant's motion.

         DISCUSSION

         The doctrine of res judicata precludes re-litigation of claims and issues arising out of the same factual circumstances when there is a valid final judgment. Myers v. Nat'l Union Fire Ins. Co. of Louisiana, 2009-1517, p. 5 (La.App. 4 Cir. 5/19/10), 43 So.3d 207, 210; see La. Stat. Ann. § 13:4231. A party seeking to assert an exception of res judicata must prove:

(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.

Burguireres v. Pollingue, 02-1385, pp. 8-11 (La. 2/25/03), 843 So.2d 1049, 1053-5. While the doctrine of res judicata is ordinarily predicated upon a final judgment between the same parties, the doctrine is also applicable where a transaction or settlement of a disputed or compromised matter has been entered into between the parties. Ellison v. Michelli, 513 So.2d 336, 338 (La.App. 4 Cir. 1987); see Thompson v. Bank of New Orleans and Trust Co., 422 So.2d 230, 231 (La.App. 4 Cir. 1982); see also Ortego v. State, Dep't of Transp. & Dev., 96-1322, p. 7-8 (La. 2/25/97), 689 So.2d 1358, 1364 (noting that under Louisiana law, a valid compromise may form the basis of a plea of res judicata).

         A compromise is a contract whereby the parties, through concessions made by one or more of them, settle a dispute or an uncertainty concerning an obligation or other legal relationship. La. Civ. Code art. 3071. A compromise precludes the parties from bringing a subsequent action based upon the matter that was compromised. La. Civ. Code art. 3080. A party seeking to interpose a release instrument to support an exception of res judicata bears “[t]he burden of proof . . . to establish the requisites for a valid compromise, including the parties' intent to settle the differences being asserted in the action in which it is interposed.” Brown v. Drillers, Inc., 630 So.2d 741, 747 (La. 1994); Myers, 43 So.3d at 211. However, “[w]here a settlement and release refer expressly to the claim sought to be released by the party seeking to enforce the settlement . . . the burden [shifts] to the party seeking to oppose the enforcement of the [agreement] to prove that there was no meeting of the minds.” Hymel v. Eagle, 2008-1287, p. 13 (La.App. 4 Cir. 3/18/09), 7 So.3d 1249, 1257.

         Accordingly, Defendant bears the burden of establishing res judicata. See Myers, 43 So.3d at 211; see also Brown, 630 So.2d at 747. Plaintiffs contend that Defendant has failed to meet its burden regarding the validity of the Release Agreement. In addition, Plaintiffs assert that Defendant has failed to establish that the causes of action asserted in the current suit existed at the time Decedent and his wife executed the Release Agreement.[2]

         I. The Release Agreement is Valid

         Plaintiffs assert that the Release Agreement is invalid because it was not signed by both parties. Pursuant to La. Civ. Code art. 3072, a compromise must be reduced to writing and signed by the parties or their agents. La. Civ. Code art. 3072; see Sullivan v. Sullivan, 95-2122, p. 4 (La. 4/8/96), 671 So.2d 315; see also Lavan v. Nowell,708 So.2d 1052, 1052 (La. 1998). However, the signatures need not be contained in one document to satisfy the writing requirement of La. Civ. Code art. 3072. See Felder v. Georgia Pac. Corp., 405 So.2d 521, 523 (La. 1981) (“Where two instruments, when read together, outline the obligations each party has ...


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