_JjThe plaintiffs, R-Plex Enterprises, LLC and Harrietta Reed, appeal the trial court judgment granting the exceptions of res judicata and no cause of action filed by the defendants, Joseph Desvignes and Club 1355, Inc.
Relevant Facts and Procedural History
The property underlying this dispute, located at 1355 St. Bernard Ave, is owned by the plaintiffs and managed by Ernest Joubert Company (Joubert). Joubert, through its employee Steve Carson, leased the property to Club 1355, Inc., (with Joseph Desvignes signing as a personal guarantor) to be used as a bar and restaurant. The parties entered into five separate one-year lease agreements, with the final one (at issue in this dispute) covering the period July 1, 2005, though June 30, 2006. Upon termination of the lease on June 30, 2006, Mr. Carson conducted a walk-through of the property on July 3, 2006. On June 29, 2007, the plaintiffs filed the instant lawsuit, asserting that the walk-through revealed contents of the premises had been removed and interior walls had been remodeled without permission and alleging intentional interference or conversion of movable property, intentionally interference with immovable property or committed property damage, and breach of contract.
| aIn response, the defendants filed an exception of res judicata and an exception of no cause of action,
After a hearing, the trial court granted the exception of res judicata. The trial court also granted the exception of no cause of action, but provided the plaintiffs with the right to amend their petition.
The plaintiffs filed a motion to clarify the judgment. Thereafter, the court entered a judgment which granted the exception of res judicata, dismissing all of the plaintiffs’ claims with prejudice. The court again granted the exception of no cause of action, providing plaintiffs with the right to amend their petition.
[I] The plaintiffs argue that the trial court erred in granting the exception of res judicata because the exceptional circumstances standard, found in La.Rev. Stat. 13:4232(A)(1), is applicable to the facts presented herein. Further, plaintiffs argue that the elements of res judicata were not met.
The standard of review of an exception of res judicata requires an appellate court to determine if the trial court’s decision is legally correct or incorrect. Myers v. National Union Fire Ins., 2009-1517, p. 5 (La.App. 4 Cir. 5/19/10),
The doctrine of res judicata in Louisiana is set forth in La.Rev.Stat. 13:4231, which provides as follows:
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 the 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 Louisiana Supreme Court examined this doctrine and determined that based upon the language of the statute, five elements must be satisfied for a finding that a second action is precluded by res judicata: (1) the judgment is valid; (2) the judgment is final; (3) the parties are the same; (4) the cause or causes of action 14asserted 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. Chevron USA, Inc. v. State, 2007-2469, p. 10 (La.9/8/08),
Accordingly, in addressing the plaintiffs’ contention that the elements of res judica-ta are not met, we must look at the judgment obtained in the first proceeding. In that case, the defendants filed suit against Joubert seeking a return of their security deposit paid in connection with the lease of the property located at 1355 St. Bernard Ave. Prior to trial, however, the defendants and Joubert entered into a compromise or settlement agreement in the First City Court proceedings wherein Joubert returned the $1,200.00 security deposit to the defendants and Joseph Desvignes ab
While the doctrine of res judicata is ordinarily premised on a final judgment, a valid compromise may form the basis of a plea of res judicata. Silva v. State Farm Mut. Auto. Ins. Co., 2009-0686, p. 5 (La.App. 5 Cir. 3/23/10),
The plaintiffs are correct. Under Louisiana law, authority to enter into a compromise must be expressly given, La. Civ. Code. art. 2997, but there is no evidence in the record that the plaintiffs gave Joubert express authority to enter |sinto a compromise regarding their rights. See Townsend v. Square, 94-0758, p. 8 (La.App. 4 Cir. 9/29/94),
Assignment of Error II
In their second assignment of error, the plaintiffs argue that the trial court erred in granting the exception of no cause of action because their petitions failed to state a cause of action against one or both defendants. A peremptory exception of no cause of action is a question of law that requires the appellate court to conduct a de novo review. Raspanti v. Litchfield, 2005-1512, 2006-0331, p. 5 (La.App. 4 Cir. 11/21/06),
In this case, the plaintiffs original and amending petitions allege that a commercial lease agreement between the parties terminated on June 30, 2006, and that the defendants intentionally interfered with movables or committed a conversion of the movables, intentionally interfered with immovable property or committed property damage, and breached the contract between the parties. Specifically, the plaintiffs allege that the defendants breached the contract between the parties and caused tortious damage by removing movable property without permission and de
In their exception, the defendants assert that the plaintiffs fail to state a cause of action because the lease that ended on June 30, 2006, was a one-year lease agreement containing an “As Is” clause. Thus, because all the renovations complained of occurred in 2003-2004 during the term of a prior lease agreement, the property was returned to the plaintiffs at the end of the lease in exactly the same condition as it was accepted by the defendants on July 1, 2005. In support of their contentions, defendants attached a copy of the pertinent lease and portions of deposition testimony to their motion and memorandum. While these assertions (with supporting documents) may have merit as an affirmative defense or on motion for summary judgment, upon review of an exception of no cause of action, we may only consider the allegations in the petition, ie., (1) a lease existed; (2) the lease provided certain duties among the parties; and (3) the defendants breached 17those duties. Clearly, taken as true, these allegations are sufficient to state a cause of action against the defendants and, if proven, the law provides a remedy.
Conclusion
Accordingly, upon de novo review, the judgment granting the exceptions of res judicata and no cause of action is reversed and the case is remanded to the trial court for further proceedings.
REVERSED AND REMANDED.
Notes
. The defendants also filed an exception of no right of action. However, that exception was not ruled on by the trial court and there is no assignment of error concerning the exception. Therefore, we will not address the exception of no right of action.