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McHugh v. Coon

Court of Appeals of Louisiana, Second Circuit

May 23, 2018

J.B. DUKE McHUGH Plaintiff-Appellant
v.
CLAYTON COLLINS COON Defendant-Appellee

          Appealed from the Fourth Judicial District Court for the Parish of Ouachita, Louisiana Trial Court No. 2016-1754 Honorable Robert C. Johnson, Judge

          LAW OFFICE OF BRIAN E. CRAWFORD, LLC By: Brian E. Crawford Counsel for Appellant

          LUNN, IRION, SALLEY, CARLISLE & GARDNER By: Alexander J. Mijalis Counsel for Appellee

          Before BROWN, WILLIAMS, and STEPHENS, JJ.

          WILLIAMS, J.

         The plaintiff, J.B. Duke McHugh, appeals a district court's judgment sustaining a peremptory exception of res judicata filed by the defendant, Clayton Collins Coon. For the following reasons, we affirm.

         FACTS

         The plaintiff, Dr. J.B. Duke McHugh, and the defendant, Dr. Clayton Collins Coon, are gastroenterologists. The parties formed, managed, and owned various medical entities, including Gastrointestinal Consultants ("GC"), a Professional Medical Corporation. On July 1, 2011, Coon left GC to join a competing gastroenterology practice; however, he continued to be a 50% percent shareholder in GC. McHugh continued to conduct his medical practice at GC.

         Thereafter, Coon filed a lawsuit against McHugh alleging breach of fiduciary duty, fraud and other claims seeking damages and/or reimbursement from McHugh. On March 30, 2015, the parties entered into a detailed 19-page agreement entitled, "Settlement Agreement, " in which they agreed to resolve the lawsuit and various claims. However, the amount of the settlement continued to be an issue, i.e., Coon asserted that McHugh was required to reimburse him approximately $1.4 million, based upon amounts provided by Coon's accountant. Conversely, McHugh maintained that Coon was entitled to reimbursement in the amount of approximately $50, 000, based upon figures provided by McHugh's accountant.

         Thereafter, by virtue of the settlement agreement, the parties agreed to appoint Ted Grace, a certified public accountant, as an independent "arbiter and/or consultant" to determine the sum owed by McHugh to Coon. The settlement agreement also contained a provision that the claims submitted to Grace would be "compromised and dismissed for res judicata purposes" and would be "final, binding, and non-appealable." (Emphasis added). After executing the settlement agreement, the parties filed a joint motion to dismiss the underlying lawsuit, with prejudice in accordance with the language set forth in the agreement.

         Subsequently, on September 15, 2015, Grace issued an initial report. However, McHugh disagreed with the methodology employed and the information considered by Grace. Thereafter, Grace issued a revised report, reducing the amount McHugh owed by $24, 000. Ultimately, McHugh agreed to pay Coon $365, 000. Although McHugh later paid the full sum owed to Coon, he remained dissatisfied with Grace's report and findings.

         On June 3, 2016, McHugh filed a pleading entitled "Motion to Vacate or Modify Arbitration Award." He argued that because they used the term "arbiter, " in referring to Grace, when they executed the settlement agreement, the document was transformed from a settlement agreement to an arbitration agreement.

         In response, Coon filed a peremptory exception of res judicata, arguing that McHugh's motion was barred by the language set forth in the compromise and settlement agreement. Coon also argued that the parties never entered into an arbitration agreement, and the claims asserted in the underlying lawsuit were "compromised and dismissed for res judicata purposes" pursuant to the agreement.

         Following a hearing, the district court denied McHugh's motion and sustained Coon's exception of res judicata. The court found that the document executed by the parties was a ...


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