91 So. 3d 1056
La. Ct. App.2012Background
- Pierrotti and Johnson entered a Master Settlement Agreement (MSA) on January 15, 2004 to settle all claims between them, including Agreement #6 which contemplated transfer of two parcels of real property as consideration.
- At inception both Cloverland and Nelson parcels were mortgaged with no equity owned by either party.
- Johnson executed an Act of Donation in 2005 transferring his Cloverland ownership to Pierrotti, with Pierrotti securing a new mortgage and Johnson being released as maker/guarantor on loans.
- Pierrotti paid mortgages on Cloverland for about five years; Johnson did not contribute payments on Cloverland and was not required to pay on Cloverland thereafter.
- Nelson property went delinquent in early 2005; arbitration in 2005 held that Johnson’s obligation to transfer was canceled due to his liability for the Nelson mortgage, and Pierrotti later transferred Nelson back to Johnson upon reimbursement of amounts advanced.
- In 2010, Pierrotti sued to clear title to Cloverland and recover damages arising from Johnson’s alleged obstruction of the Cloverland sale; Johnson challenged res judicata and no-cause-of-action defenses, leading to a trial court ruling dismissing the case as res judicata and moot on no-cause-of-action.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata bars Pierrotti’s title action | Arbitration involved only Nelson; Cloverland not adjudicated. | Agreement 6 and the broader MSA were resolved in arbitration, barring subsequent actions. | Res judicata not applicable; arbitration did not adjudicate Cloverland, requiring remand. |
| Whether Pierrotti’s petition states a valid cause of action to clear title | Petition asserts title cloud and entitlement to curative documents. | No cause of action because prior arbitration precludes relitigation. | No cause of action granted; reversed on the no-cause-of-action ruling and remanded. |
| Whether the prior arbitration covered Cloverland or only Nelson property | Arbitration was limited to Nelson, so Cloverland remains unresolved. | MSA and Agreement 6 were the basis for transfer concerns in arbitration. | Arbitration did not involve Cloverland; not barred by res judicata. |
Key Cases Cited
- Ourso v. Wal-Mart Stores, Inc., 998 So.2d 295 (La.App. 1 Cir. 2008) (no-cause-of-action standard; sufficiency of petition)
- Treasure Chest Casino, L.L.C. v. Parish of Jefferson, 691 So.2d 751 (La.App. 1 Cir. 1997) (allowing evidence to enlarge pleadings in no-cause-of-action context)
- City Nat. Bank of Baton Rouge v. Brown, 599 So.2d 787 (La.App. 1 Cir. 1992) (limits on enlarging pleadings; evidentiary consideration)
- Burguieres v. Pollingue, 843 So.2d 1049 (La. 2003) (elements of res judicata; four-factor test)
- Avenue Plaza, L.L.C. v. Falgoust, 676 So.2d 1077 (La. 1996) (scope and preclusion under res judicata; same transaction)
- Union Planters Bank v. Commercial Capital Holding Corp., 907 So.2d 129 (La.App. 1 Cir. 2005) (burden of proving res judicata elements)
- Fogleman v. Meaux Surface Protection, Inc., 58 So.3d 1059 (La.App. 3 Cir. 2011) (res judicata: de novo review for questions of law)
- Leray v. Nissan Motor Corp. in U.S.A., 950 So.2d 707 (La.App. 1 Cir. 2006) (appellate standard of review for exceptions)