Case Name: Arthur TOLIS and Julie Tolis v. BOARD OF SUPERVISORS OF LOUISIANA STATE UNIVERSITY AND AGRICULTURAL AND MECHANICAL COLLEGE, Allen A. Copping, Gregory M. St. L. O'Brien, University of New Orleans, David Sherman, Ron Maestri, and The Silver & Blue Club, Inc.
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 1995-05-16
Citations: 655 So. 2d 747
Docket Number: No. 94-CA-1444
Parties: Arthur TOLIS and Julie Tolis v. BOARD OF SUPERVISORS OF LOUISIANA STATE UNIVERSITY AND AGRICULTURAL AND MECHANICAL COLLEGE, Allen A. Copping, Gregory M. St. L. O’Brien, University of New Orleans, David Sherman, Ron Maestri, and The Silver & Blue Club, Inc.
Judges: Before BARRY, PLOTKIN and WALTZER, JJ.
Reporter: Southern Reporter, Second Series
Volume: 655
Pages: 747–758

Head Matter:
Arthur TOLIS and Julie Tolis v. BOARD OF SUPERVISORS OF LOUISIANA STATE UNIVERSITY AND AGRICULTURAL AND MECHANICAL COLLEGE, Allen A. Copping, Gregory M. St. L. O’Brien, University of New Orleans, David Sherman, Ron Maestri, and The Silver & Blue Club, Inc.
No. 94-CA-1444.
Court of Appeal of Louisiana, Fourth Circuit.
May 16, 1995.
Amelia Williams Koch, Phyllis R. Guin, Locke Purnell Rain Harrell, New Orleans, for appellant/Board of Sup’rs of Louisiana State University and Agricultural and Mechanical College.
Stephen D. Marx, Chehardy, Sherman, Ellis, Breslin & Murray, Metairie, for appellants, Gregory M. St. L. O’Brien, David Sherman, Ron Maestri and The Silver and Blue Club, Inc.
Michelle 0. Lorio and Oscar L. Shoenfelt, III, Moore, Walters, Shoenfelt & Thompson, Baton Rouge, for appellees.
Before BARRY, PLOTKIN and WALTZER, JJ.

Opinion:
JiPLOTKIN, Judge.
In this appeal, we are called on to determine the effect of a written judgment issued after a decision by this court on a supervisory writ application granting an exception of res judicata. The written judgment attempted to memorialize an oral judgment issued prior to the decision on the writ application. Because we find that the decision on the application for supervisory writs granting the exception of res judicata was in error under the circumstances, we vacate the granting of the exception of res judicata. Further, we amend the written judgment issued by the trial judge that is the subject of this appeal and affirm.
Facts
Plaintiff Arthur' Tolis was employed as head basketball coach at the University of New Orleans (UNO) under an April 6, 1987, contract with the Board of Supervisors of Louisiana State University (Board). A dispute arose between Tolis and UNO and its representatives in the spring of 1988; that dispute resulted in the termination of Tolis's contract by -written letter from defendant Ron Maestri, UNO's athletic director, to Tol-is, dated March 21, 1988.
Following the termination, the parties began negotiations, seeking to avoid litigation. The Board was represented by defendants David Sherman and Gregory O'Brien during |2these settlement negotiations. On April 10, 1988, the parties entered a written compromise agreement. The written compromise agreement included a confidentiality clause prohibiting the parties to the agreement from revealing the terms of the agreement. The compromise also provided that any party breaching the confidentiality clause would be liable to the other party for $116,000 in liquidated damages.
Additionally, at the same time the parties entered into the written compromise agreement, they entered into an oral agreement whereby UNO promised to pay Tolis $116,-000 in consideration for the written compromise agreement. Half of the agreed-upon amount, $58,000, was paid to Tolis immediately following the signing of the agreement; the other $58,000 was to be paid by April 21, 1989.
When the second $68,000 was not timely paid, the plaintiffs, Tolis and his wife, Julie, filed the instant case in state court, on May 26, 1989, claiming that the defendants failed to perform under the terms of the oral agreement. Further, the Tolises alleged that the defendants had fraudulently induced them to enter the written compromise agreement.
The defendants initially filed an exception of res judicata, claiming that the written compromise agreement was the only admissible evidence of the agreement between the parties. The exception of res judicata was denied by the trial judge on December 5, 1989, and that decision was not appealed.
In February of 1991, the plaintiffs filed another suit in federal court, claiming breach of the alleged compromise. Many of the allegations in the federal complaint were very similar to the allegations in the petition of the previously-filed state court action. However, the federal court action also included a claim for deprivation of civil rights based on misrepresentations allegedly made by the defendants during negotiation of the written compromise agreement.
The defendants answered the federal suit, then filed a motion for summary judgment. The federal court granted the motion for summary judgment on May 28, 1991, dismissing the case with prejudice. The minute entry explaining the trial judge's reasons for granting the motion for summary judgment stated as follows:
This civil action is before the Court on the defendants' two motions for summary judgment.
|3The plaintiffs have filed no opposition. Further, by telephone, [plaintiffs' attorney's] office represented that he would not be opposing either motion and would be filing his own motion for voluntary dismissal (which the Court has not yet received).
Accordingly, and noting that the defendants' motions are all well-founded in light of the plaintiffs failure to present any evidence of a genuine dispute of material fact, the court GRANTS both motions, CANCELS the hearings thereon (previously set for May 29, 1991), and shall forthwith ENTER JUDGMENT in the defendants' favor at the plaintiffs' costs.
(Emphasis in original.)
Meanwhile, on January 28, 1991, all of the defendants except the Board filed a motion for summary judgment in the state court action. The Board filed a similar motion for summary judgment on the same grounds on September 13, 1991; the Board also filed an exception of res judicata based on the federal suit. The trial court granted the motion for summary judgment filed by the individual defendants, assigning as reasons for judgment the fact that the plaintiffs were not entitled to present parol evidence to prove that the defendants failed to fulfill the terms of the alleged oral agreement accompanying the written compromise. The trial court also granted the Board's motion, without assigning reasons for judgment. In a consolidated appeal, this court reversed both judgments, finding that parol evidence was admissible to prove the terms of the alleged oral agreement. Tolls v. Board of Supervisors, 602 So.2d 99 (La.App. 4th Cir.1992). All issues other than the parol evidence issue were pretermitted; the exception of res judicata was not addressed.
On remand to the trial court, both plaintiffs and defendants filed motions for partial summary judgment. On December 10, 1993, the trial court orally granted the motion for partial summary judgment filed by the plaintiffs; no written judgment was signed at that time. Then, on December 27,1993, all defendants filed an exception of res judicata that was denied by the trial court on January 20, 1994. This court granted certiorari on that judgment, reviewed the trial court judgment, maintained the exception of res judicata, and dismissed the plaintiffs suit with prejudice on March 29, 1994. Tolis v. Board of Supervisors, 94-0154 (La.App. 4th Cir. 3/29/94) 635 So.2d 1349, unit denied, 94-1072 (La. 6/17/94) 638 So.2d 1101. Following this court's decision in writ number 94-C-0154 granting the exception of res jtidicata and dismissing the case, on May 2, 1994, the trial court signed a written judgment | ¿¡granting the plaintiffs' motion for partial summary judgment that had been orally granted on December 10, 1993.
Defendants appeal the May 2, 1994, trial court judgment granting the partial summary judgment in favor of the plaintiffs. On appeal, the primary argument advanced by the defendants is that the May 2, 1994, judgment is invalid because the trial court had no jurisdiction to enter the judgment in light of the fact that the case had already been dismissed with prejudice by this court's March 29, 1994, judgment in writ number 94-C-0154. Alternatively, the defendants contest the substance of the May 2, 1994, judgment.
Validity of May 2, 199 j judgment
The defendants' argument that the trial court lacked jurisdiction to enter the May 2, 1994, judgment is based on the fact that this court granted certiorari on an application for supervisory writs, then granted an exception of res judicata dismissing the plaintiffs case with prejudice prior to the trial court's entrance of the May 2, 1994 written judgment in writ number 94-C-0154. Because the Louisiana Supreme Court, on June 17, 1994, denied an application for supervisory writs to review this court's judgment in writ number 94-C-0154, the defendants claim, this court's March 29, 1994 judgment is final. According to the defendants, the trial court had no jurisdiction to enter the May 2, 1994 judgment granting the plaintiffs motion for partial summary judgment because the suit had previously been dismissed with prejudice.
Initially, we note that the March 29, 1994 judgment in writ number 94-C-0154 issued by this court was rendered after the court granted certiorari on an application for supervisory writs, not after consideration of the case on formal appeal. Generally, when an appellate court considers arguments made in supervisory writ applications or responses to such applications, the court's disposition on the issue considered usually becomes the "law of the case," foreclosing relitigation of that issue either at the trial court on remand or in the appellate court on a later appeal. Easton v. Chevron Industries, Inc., 602 So.2d 1032, 1038 (La.App. 4th Cir.), ivrits denied, 604 So.2d 1315, 1318 (La.1992).
|sHowever, application of the law of the case doctime in decisions made on applications for supervisory writs is discretionary. Sharkey v. Sterling Drug, Inc., 600 So.2d 701, 705 (La.App. 1st Cir.), writs denied, 605 So.2d 1099, 1100 (La.1992) (citing Landry v. Aetna Insurance Co., 442 So.2d 440 (La. 1983); Board of Levee Commissioners of Orleans Levee District v. Newport Ltd., 578 So.2d 191, 193 (La.App. 4th Cir.), writs denied, 584 So.2d 681, 683 (La.1991), cert, denied 503 U.S. 970, 112 S.Ct. 1584, 118 L.Ed.2d 303 (1992)). Further, the law of the case doctrine generally does not apply "in cases of palpable error or where, if the law of the case were applied, manifest injustice would occur." Sharkey, 600 So.2d at 705. Therefore, a prior determination in a pretrial writ is not necessarily binding on a subsequent appeal. State v. Carey, 609 So.2d 897, 900 (La.App. 4th Cir.1992). See also, in the context of supervisory review, Goodivin v. Goodwin, 607 So.2d 8, 10 (La. App. 2d Cir.1992).
We have thoroughly reviewed both the record in the instant case and the record in the federal case that formed the basis of the writ panel's granting of the exception of res judi-cata. For the reasons that follow, review'' of both records convinces us that strict application of the law of the case doctrine to the instant case is improper both because the writ application decision was "palpably" erroneous and because "manifest injustice would occur." Sharkey, 600 So.2d at 705. Thus, we decline to consider this court's May 2, 1994 judgment a final judgment that divested the trial court of jurisdiction to enter the written judgment granting the motion for partial summary judgment in favor of the plaintiffs.
As noted previously, the federal court's minute entry explaining its reasons for granting the motions for summary judgment in favor of the defendants and dismissing the plaintiffs' case whth prejudice indicates that an important reason for his decision was the fact that the plaintiffs' attorney had indicated his intention to file a motion for voluntary dismissal. Although that motion was not filed prior to the granting of the defendants' motions for summary judgment, the federal court record does include the anticipated motion. That motion states, in pertinent part, as follows:
NOW INTO COURT, through the undersigned counsel, comes plaintiffs, Arthur and Julie Tolis, and move this Court, pursuant to Rule 41(a)(2), Fed.R.Civ.Pro. to enter an order dismissing with prejudice all federal claims they may have |6herein against defendants, Allen A. Copping, Gregory M. St. L. O'Brien, Ronald Maes-tri, David Sherman, and the Board of Supervisors of Louisiana State University and Agricultural and Mechanical College, with all parties to bear their own costs. Counsel for all defendants have agreed to this dismissal.
This motion is predicated upon plaintiffs' inability to overcome defendants' argument of Eleventh Amendment Immunity for defendant, Board of Supervisors. Plaintiffs reserve their right to pursue any and all actions filed in state court or to be filed in state court, connected with defendants.
(Emphasis added.) The above motion was never signed by the federal court because the case had already been dismissed on the motions for summary judgment. However, the federal court record reveals that the defendants' motions for summary judgment were indeed premised on Eleventh Amendment immunity. As the above discussion indicates, the plaintiffs have never had an opportunity to have their case considered on the merits.
The doctrine of res judicata is to be interpreted stricti juris; thus, any doubt concerning application of principle of res ju-dicata must be resolved against its application. Kelty v. Brumfield, 93-1142 (La. 2/25/94), 633 So.2d 1210, 1215. Res judicata is not applicable unless all essential elements are present and each element has been established beyond all question. Id.
In Louisiana, res judicata is governed by LSA-R.S. 13:4231, which provides, in pertinent part, 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:
(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 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.
Although the above statute would seem to bar the state court action in the instant case, we note that it is subject to an express exception "as otherwise provided by law." Further, LSA-R.S. 13:4232 provides for specific exceptions to the general rule of res judicata established by LSA-R.S. 13:4231. Subsection (1) of that statute states that res judicata does not apply, even when the requirements of LSA-R.S. 13:4231 are present "[w]hen exceptional ^circumstances justify relief from the res judicata effect of the judgment." That exception has been explained by this court has follows:
According to the official comment on the statute it is designed to allow the court to balance the principle of res judicata with the interests of justice. In the present case, plaintiff alleges that he has been the victim of a horrendous injustice. His interest in proceeding with the law suit outweighs any interest in the strict application of res judicata, especially considering that his predicament is the result of his attorney's conduct and not his own.
Jenkins v. State, 615 So.2d 405, 406 (La.App. 4th Cir.), writ denied, 617 So.2d 932 (La. 1993).
We believe that such exceptional circumstances exist in the instant case. The record reveals that the only reason the plaintiffs' federal suit was dismissed on the motions for summary judgment was because their attorney failed to file the motion for voluntary dismissal promptly after discovering the fact that the plaintiffs could not defend against the defendants' Eleventh Amendment claims, claims that barred only the federal court suit, and did not affect the plaintiffs' right to proceed in state court. This position is supported by the fact that the plaintiffs' motion for voluntary dismissal specifically reserves them right to pursue their cause of action in state court. Thus, the federal judge never intended for his granting of the motion for summary judgment to be res judicata to the state court claims presented in the instant suit. Further, as in Jenkins, the conduct on the part of the attorney in this case — failing to file the necessary motion for voluntary dismissal — should not bar the clients from an opportunity to have their suit adjudicated on the merits.
Additionally, and perhaps most importantly, we find that the policy reasons behind the res jtidicata doctrine weigh against application of the doctrine in the instant case. This court has recently stated as follows:
The policies of res judicata are to increase judicial efficiency and to protect parties against unnecessary burdens of litigation arising from repeated lawsuits. La.R.S. 13:4231 Comments — 1990. Thus, a denial of the application of res judicata when it might, perhaps, be applied, will cause harm only in the forms of a lessening of judicial efficiency and an increase in the burdens of litigation on the defendant. Although we recognize that those possible harms are not trivial matters, we believe they are preferable to possible loss of the plaintiffs substantive rights without their merits ever having been addressed if res judicata were to be applied, when, perhaps, it should not be.
IsMavromatis v. Lou-Mar, Inc., 93-0379, 93-1212 (La.App. 4th Cir. 2/11/94), 632 So.2d 828, 832. In the instant case, as in Mavro-matis, the possible loss of the plaintiffs' substantive rights without then- ever being addressed outweighs the need to promote judicial efficiency and to protect against the unnecessary burdens of litigation.
All of the above discussion is based on Louisiana jurisprudence and principles interpreting the res judicata doctrine. However, because the federal court's jurisdiction in the instant case was based on federal question jurisdiction, rather than diversity jurisdiction, a state court considering the preclusive effect of the judgment must apply the federal law of res judicata. Reeder v. Succession of Palmer, 623 So.2d 1268, 1271 (La.1993), cert. denied, — U.S. -, 114 S.Ct. 1191, 127 L.Ed.2d 541 (1994). Nevertheless, nothing-in the federal law of res judicata would require a different result. In fact, based on the following language from Reeder, we find that the policy reasons for granting an exception of res judicata are not present in this case:
Under federal precepts, "claim preclusion" or "true res judicata" treats a judgment, once rendered, as the full measure of relief to be accorded between the same parties on the same "claim" or "cause of action." When the plaintiff obtains a judgment in his favor, his claim "merges" in the judgment; he may seek no further relief on that claim in a separate action. Conversely, when a judgment is rendered for a defendant, the plaintiffs claim is extinguished; the judgment then acts as a "bar." Under these rules of claim preclusion, the effect of a judgment extends to the litigation of all issues relevant to the same claim between the same parties, whether or not raised at trial. The aim of claim preclusion is thus to avoid multiple suits on identical entitlements or obligations between the same parties, accompanied, as they would be, by the redetermination of identical issues of duty and breach.
Claim preclusion will therefore apply to bar a subsequent action on res judica-ta principles where parties or their privies have previously litigated the same claim to a valid final judgment. In most cases, the key question to be answered in adjudging the propriety of a claim preclusion defense is whether in fact the claim in the second action is "the same as," or "identical to," one upon which the parties have previously proceeded to judgment.
Id. (Emphasis added.) In the instant case, the plaintiffs have never litigated their claims to a valid judgment; none of the substantive issues have been determined. Thus, the policy reasons behind the federal claim preclusion doctrine do not require application of the res judicata doctrine to the instant case.
| QAccordingly, this court's March 19, 1994 decision in writ number 94-C-0154 granting the defendants' exception of res judicata is vacated. Because the judgment dismissing the case was improper and has now been vacated, the defendant's arguments that the trial court lacked jurisdiction to enter the May 2, 1994 judgment granting the motion for partial summary judgment on behalf of the plaintiffs are moot. The May 2, 1994 judgment is valid and will be reviewed for correctness.
Correctness of May ¾ 1991 judgment
The trial court's judgment granting the motion for partial summary judgment in favor of the plaintiffs states, in pertinent part, as follows:
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Plaintiffs' Motion for Partial Summary Judgment is granted, and the Court finds that defendants breached the compromise agreement of April 10, 1988. The Court further finds that the plaintiffs are entitled to a partial summary judgment, decreeing that plaintiffs are entitled to $116,000.00 in damages as provided by the compromise agreement.
The defendants contest this judgment on two grounds: (1) that the written judgment differs from the oral judgment issued by the trial court on December 10,1993, and (2) that the trial judge improperly awarded the plain tiffs $116,000 in damages based on the compromise agreement.
Concerning the first issue, the trial judge stated, on December 10, 1994, in his oral reasons for granting the motion for partial summary judgment in favor of the plaintiffs, as follows:
I believe that a motion for partial summary judgment by the plaintiff should be granted to this extent: to the extent that the defendants have, in fact, breached the contract — agreement, let's call it; and, two, that they are entitled to the sum of $116,000.
Now, I am denying the motion for summary judgment insofar as the first $59,000 [sic].
I'll put it this way. I have not made a decision.
I have my own thoughts probably about it that I'll tell you later about at the settlement conference.
I think that's a question that the jury should decide; that is, as to whether it was a donation or whether it was, in fact, a credit to be applied to the one hundred and sixteen thousand dollars.
hoThe defendants claim that in stating the above judgment, the trial judge intended only to recognize that the plaintiffs were entitled to the total $116,000 promised in the oral agreement that accompanied the written compromise agreement, which would make the defendants liable only for the $58,000 second payment that was not timely paid but has since been deposited into the registry of the court. The defendants claim that the above-quoted oral judgment does not anticipate the plaintiffs receiving damages as outlined by the compromise agreement.
We find that the trial judge's above-quoted comments indicate that he intended to award the plaintiffs $116,000, possibly in addition to the first $58,000 payment made by the defendants in April of 1988. The trial judge reserved for trial only the issue of whether the plaintiffs were entitled to keep the initial $58,000 payment as a "donation." However, the defendants are correct in noting that the trial judge's oral comments do not mention "damages," as does the written judgment. However, under the provisions of La.C.C.P. art. 1911, a final, appealable judgment must be signed by the judge who issued the judgment. Thus, the defendants are entitled to appeal only the terms of the May 2, 1994 written judgment.
We must now consider whether the trial judge was correct in awarding the plaintiffs "$116,000 in damages as provided by the compromise agreement." The written compromise agreement provided for liquidated damages only for breach of the confidentiality provision; nowhere else in the contract are liquidated damages for breach of other portions of the agreement stipulated. Further, nowhere in their petitions or in other documents filed in the trial court do the plaintiffs claim that the defendants breached the confidentiality provision. Rather, the plaintiffs claim that the defendants breached the agreement both by failing to timely pay the second $58,000 and by fraudulently inducing the plaintiffs to enter the written compromise agreement. Although the plaintiffs may be entitled to damages as a result of the defendants' breach of the contract, they are not entitled to the $116,000 in stipulated damages.
To the extent that the trial court judgment granting the partial motion for summary judgment in favor of the plaintiffs holds that the defendants breached the compromise | nagreement, it is affirmed. However, the award of $116,000 in stipulated damages is improper under the circumstances.
Further, we would note that the defendants have admitted that the plaintiffs are entitled to the second $58,000 that has been deposited into the registry of the court. However, the trial court judgment, as written, does not award that amount.
Accordingly, the portion of the trial court judgment granting the motion for partial summary judgment holding that the defendants have breached the written compromise agreement is affirmed. The judgment is amended to delete the award of $116,000 in stipulated damages under the written compromise agreement. The case is remanded for determination of the amount of damages suffered by the plaintiffs as a result of the defendants' breach of the compromise agreement. Costs are assessed to appellee.
AMENDED; AS AMENDED, AFFIRMED; REMANDED.
BARRY, J., concurs with reasons.