Court Opinion

ID: 9880715
Source: CourtListenerOpinion
Date Created: 2023-09-28 15:07:28.939299+00
Date Added: 2024-06-11T13:54:22.447145
License: Public Domain

STATE OF LOUISIANA

                                 COURT OF APPEAL

                                    FIRST CIRCUIT

                                     2023 CA 0139

                          GUSTAVE J. LABARRE, JR., ET AL.

                                        VERSUS

                    OCCIDENTAL CHEMICAL COMPANY, ET AL.

                                         Judgment Rendered:             SEP 2 8 2023

                                   Appealed from the
                               23rd Judicial District Court
                           In and for the Parish of Assumption
                                   State of Louisiana
                                 Docket Number 33796

                          Honorable Jason Verdigets, Presiding

Leopold Z. Sher                                 Attorneys for Defendant/ Third-
James M. Garner                                 Party Plaintiff/Appellant
Peter L. Hilbert, Jr.                           Texas Brine Company, LLC
Martha Curtis
Jeffrey D. Kessler
Amanda R. Schenck
New Orleans, LA

Travis J Turner
Gonzales, LA

Mary S. Johnson                                 Attorneys for Third -Party
Ingrid K. Laurendine                            Defendants/ Appellees
Mandeville, LA                                  National Union Fire Insurance Company of
                                                Pittsburgh, PA. and AIG Specialty Insurance
                                                Company
Chad J. MolIere
Nichole M. Gray
New Orleans, LA

Thomas F. A. Hetherington
Kendall J. Burr
Houston, TX

Glen E. Mercer                                  Attorneys for Third -Party
Kourtney Twenhafel                              Defendants/ Appellees
New Orleans, LA                                 Zurich American Insurance Company,
                                                Steadfast Insurance Company and American
                                                Guarantee &   Liability Insurance Company
John K. Daly
Denver, CO
                   BEFORE: PENZATO, LANIER AND WOLFE, JJ.

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LANIER, J.,

          Texas Brine Company, LLC challenges the trial court' s judgment sustaining

the exception of res judicata filed by two separate sets of its insurers: National

Union Fire Insurance Company of Pittsburgh, Pa. and AIG Specialty Insurance

Company ( collectively AIG); and Zurich American Insurance Company, Steadfast

Insurance Company and American Guarantee &               Liability Insurance Company,

LLC (collectively Zurich). For the following reasons, we reverse.

                       FACTS AND PROCEDURAL HISTORY

          On or about August 3, 2412, a sinkhole emerged in Assumption Parish,

Louisiana, following the collapse of a salt mine cavern. Numerous lawsuits were

filed thereafter against Texas Brine Company, LLC (Texas Brine), the operator and

developer of the failed cavern, alleging various forms of damages.

          In the present suit (the LaBarre litigation), the LaBarre plaintiffs are owners

of property adjacent to the area of the sinkhole. They alleged causes of action for

ongoing property damage, contamination, and ground subsidence exacerbated by

the sinkhole. A trio of cases, which this court has referred to as the " pipeline

cases,"    including Florida Gas Transmission Company, LLC v. Texas Brine

Company, LLC, 23rd Judicial District Court, docket no: 34,316 ( the Florida Gas

litigation), involved allegations of damage to oil and gas pipelines after the

emergence of the sinkhole. An arbitration proceeding was initiated and pursued

concurrently between two parties to all of these cases, namely, Texas Brine and

Occidental Chemical Corporation ( Oxy).

          Texas Brine responded to the numerous lawsuits by filing nearly identical

incidental demands against various parties in each suit.        Pertinent to this appeal,

Texas Brine filed amended and incidental demands against its insurers, AIG and

Zurich, in the LaBarre litigation asserting claims of defense and indemnity in the

captioned suit as well as in regard to its arbitration proceeding with Oxy. Texas
Brine filed the same claims against its insurers in the Florida Gas litigation.

Likewise,       many plaintiffs in the various sinkhole litigations also filed claims

against Texas Brine' s insurers.

         AIG and Zurich filed separate motions for summary judgment in each of the

pipeline cases seeking to dismiss both the pipeline plaintiffs' claims as well as

Texas Brine' s incidental demands of indemnity and defense against them under the

    pre -2012" insurance policies.'        In each of the pipeline cases, the trial court ruled

in favor of AIG and Zurich as to the plaintiffs' claims that plaintiffs had not

asserted any allegation which would trigger AIG and Zurich' s pre -2012 insurance

policies.     However, as to Texas Brine' s incidental demands, the trial court found a

genuine issue of material fact as to whether the insurers owed a duty to defend.

Texas Brine appealed these judgments, and AIG and Zurich answered the

respective appeals in which they were involved.                      See Florida Gas, 2019 WL

168583; and Florida Gas, 272 So. 3d 547.2

         Turning to the Florida Gas appeals which form the basis for AIG and

Zurich' s plea of res judicata, this court affirmed the trial court' s ruling, dismissing

the plaintiff' s causes of action against AIG and Zurich.                 See, Florida Gas, 2019

WL 168583 at * 1; Florida Gas, 272 So. 3d at 550.                   Next, addressing Texas Brine' s

incidental demands against AIG and Zurich, this court reversed the trial court' s

    These particular insurance policies all expired prior to the formation of the sinkhole.     See
Florida Gas Transmission Company, LLC v. Texas Brine Company, LLC, 2018- 0062 ( La.
App. 1st Cir. 1/ 11119), 2019 WL 168583, * 1 ( unpublished), writs denied, 2019- 00509 ( La.
9/ 24/ 19),   279 So. 3d 931,   and 2021- 00794 ( La. 6/ 29/ 21),   319 So. 3d 299; and Florida Gas

Transmission Company, LLC v. Texas Brine Company, LLC, 2018- 0218 ( La. App. 1 st Cir.
1111119), 272 So. 3d 547, 548- 49, writs denied, 2019- 00510 ( La. 9124119), 279 So. 3d 385, and
2021- 00793 ( La. 6/ 29/ 21), 319 So. 3d 301.

2
 Nearly identical appeals and answers were taken in the remaining pipeline cases. See Crosstex
Energy Services, LP v. Texas Brine Company, LLC, 2017-0863 ( La. App. 1 st Cir. 12121117),
240 So. 3d 1024, writ denied, 2018- 0144 ( La. 3123118), 238 So. 3d 962; Crosstex Energy
Services, LP v. Texas Brine Company, LLC, 2017- 0895 ( La. App. l st Cir. 12/ 21/ 17), 240
So. 3d 932, writ denied, 2018- 0145 ( La. 3/ 23/ 18), 238 So. 3d 963; Pontchartrain Natural Gas
System v. Texas Brine Company, LLC, 2018- 0244 ( La. App. 1st Cir. 10/ 11118), 264 So -3d
545, writ denied, 2019- 0080 ( La. 3/ 6/ 19), 264 So. 3d 1204; Pontchartrain Natural Gas System
v. Texas Brine Company, LLC, 2018- 0254 ( La. App. 1st Cir. 12112119), 293 So. 3d 1157, writs
denied, 2020- 00397 ( La. 6122/ 20), 297 So. 3d 724, and 2020-00334 ( La. 6122120), 297 So. 3d 762.

                                                     3
ruling and held that because Florida Gas' s uncontroverted admissions established

no pre -sinkhole damage to which the pre -2012 insurers' coverage would apply,

Texas Brine could not maintain third party demands of indemnity and defense

against its pre -2012 insurers in the Florida Gas litigation. Florida Gas, 2019 WL

168583 at * 1; Florida Gas, 272 So. 3d at 551. In other words, Texas Brine' s relief

against AIG and Zurich in the Florida              Gas litigation was contingent upon

plaintiff' s causes of action and because Florida Gas had not asserted a claim or

cause of action against Texas Brine that would trigger coverage under AIG or

Zurich' s respective pre -2012 insurance policies, Texas Brine was neither entitled

to indemnity nor defense under those policies.'

       Thereafter, a case management order was issued in Florida Gas, setting

certain remaining claims between Texas Brine, AIG, and Zurich for a bench trial.

Notably, the case management order included claims for potential arbitration

defense costs owed by Zurich and AIG. ( Id.) Zurich and AIG sought supervisory

review by this court, which on March 6, 2019, vacated the case management order

as to AIG and Zurich,        noting that the insurers were no longer parties to this

litigation and citing to Florida Gas, 2019 WL 168583, and Florida Gas, 272

So. 3d 547, respectively. See,       Florida Gas Transmission Company, LLC v.

Texas Brine Company, LLC, 2019- 0103 ( La. App. 1st Cir. 316119), 2019 WL

10778581 writ denied, 2019- 01333 ( La. 10121119), 280 So. 3d 1172; and Florida

Gas Transmission Co. v. Texas Brine Company, LLC, 2019- 0081 ( La. App. 1st

Cir. 316119), 2019 WL 1084227, writ denied, 2019- 01334 ( La. 10121119), 280

So. 3d 1168.

 Similar conclusions were reached in Crosstex and Pontchartrain in that because the plaintiffs
had not stated a cause of action to trigger the insurers' respective pre -2012 policies, Texas
Brine' s incidental demands invoking any pre -2012 polices were dismissed.   Crosstex, 240 So. 3d
at 1032- 33; Crosstex, 240 So. 3d at 939; Pontchartrain, 264 So. 3d at 553- 54; Pontchartrain,
293 So. 3d at 1161.

                                               4
       In the interim, Texas Brine twice amended its incidental demands in the

LaBarre proceeding.         First,   in a February 2019 amendment, Texas Brine re -

alleged claims against AIG and Zurich for indemnity and defense costs in the

arbitration proceeding attributed to the LaBarre litigation. Then in November

2019, Texas Brine amended its incidental demands against AIG and Zurich once

again, this time asserting in regards to the arbitration, that "[ t] o the extent the

previous demands were not broad enough, Texas Brine seeks ald defense fees and

                                                             4(
costs —not just those   attributed to the LaBarre case.           Emphasis in original)

       Subsequent to Texas Brine' s amendments, AIG and Zurich filed exceptions

of res judicata regarding Texas Brine' s claims of defense and indemnity in the Oxy

arbitration proceeding, citing the Florida Gas opinions for support.             Texas Brine

opposed the exceptions.

       Following the hearing on AIG and Zurich' s exceptions of res judicata, the

trial court signed a judgment on September 15, 2022, granting Zurich' s exception

of res judicata and dismissing Texas Brine' s amended incidental demands with

prejudice,
             and granting AIG' s exception of res judicata and dismissing with

prejudice Texas Brine' s claims for attorney' s fees and costs incurred in the

arbitration proceeding with Oxy.

       Texas Brine now appeals, contending that the trial court erred in granting the

exceptions of res judicata, as the judgments relied upon by AIG and Zurich related

to a different plaintiff' s causes of action ( Florida Gas),       who is not a party in the

LaBarre litigation.      Texas Brine further contends that the previous restricted

appeals did not address the causes of action for indemnity and defense in the

4 The record on appeal indicates that on March 12, 2020, the trial court executed a judgment in
the LaBarre proceeding, sustaining an exception of lis pendens in favor of Zurich and AIG
dismissing with prejudice Texas Brine' s claims for fees and costs incurred in sinkhole cases
other than LaBarre and Marchand.

                                               5
arbitration; and alternatively, that the exceptional circumstances exception to res

judicata should apply because of the complex nature of these proceedings.

                                         DISCUSSION

Appealability

       On March 7, 2023,         this court ex proprio motu issued a rule ordering the

parties to show cause why the appeal should not be dismissed since it was taken

from a partial judgment lacking designation of finality, as required by La. Code

Civ. P. art. 1915( B).      Further, this court remanded the matter to the trial court for

the limited purpose of allowing the trial court to sign a judgment with a 1915( B)

designation; and/ or allowing the trial court to issue a per curiam in the event it

certified the judgment under art. 1915( B).

       Thereafter,    the    appellate   record       was   supplemented   with   an   amended

judgment signed by the trial court on March 22, 2023, certifying the September 15,

2022 judgment under La. Code of Civ. P. art. 1915( B), and the trial court included

its reasons for so doing. On May 8, 2023, a different panel of this court referred

the rule to show cause to the appeal panel. Because this court does not believe that

this issue will be mooted by future developments in this proceeding, or that we will

need to consider this particular issue again on appeal, we find no error in the trial

court' s designation of the September 15,              2022 judgment as being immediately

appealable.    See R.J. Messinger, Inc. v. Rosenblum, 2004- 1664 ( La. 312105), 894

So. 2d 1113, 1122. Therefore, we maintain the appeal of this judgment.

Res Judicata

       Louisiana Revised Statutes 13: 4231 embraces the broad usage of the phrase

 res judicata" to include both claim preclusion ( res judicata) and issue preclusion

 collateral   estoppel).     Henkelmann v.        Whiskey Island Preserve, LLC, 2013-

0180 ( La. App. 1st Cir. 5/ 15/ 14), 145 So. 3d 465, 470. The statute provides:

                                                  I
       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 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.

La. R. S. 13: 4231.

       Thus, under La. R. S. 13: 4231, all of the following elements must be satisfied

in order for res judicata to preclude a second action: ( 1) the first judgment is valid;

 2) the first 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 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.

Burguieres        v.   Pollingue, 2002- 1385 ( La.        2/ 25/ 03),     843   So. 2d   1049,    1053;

Matherne v. TWH Holdings, L.L.C., 2012- 1878 ( La. App. 1st Cir. 1216113), 136

So. 3d 854, 860, writ denied, 2014- 0854 ( La. 6/ 20114), 141 So. 3d 810.

       The party raising the objection of res judicata bears the burden of proving

the essential facts to support the objection.             State ex rel. Guilbeau v. BEPCO,

L.P., 2020- 0429 ( La. App. 1st Cir. 9/ 20121),               341 So. 3d 1, 8, writ denied, 2022-

00882 ( La.       414123),   358   So. 3d   854.        The    doctrine    of res judicata       is   not

discretionary and mandates that final judgments be given effect. Id. If any doubt

exists as to its application, the objection of res judicata must be overruled and the

second        lawsuit maintained.     Wicker       v.    Louisiana Farm Bureau Casualty
Insurance Company, 2018- 0225 ( La. App. 1st Cir. 9121118), 257 So. 3d 817, 821.

The concept should be rejected when doubt exists as to whether a plaintiffs

substantive rights actually have been previously addressed and finally resolved.

Id. at 822.    The res judicata effect of a prior judgment is a question of law that is

reviewed de novo.      Pierrotti v. Johnson, 2011- 1317 ( La. App. 1st Cir. 3119112),

91 So. 3d 1056, 1063.

       In the instant case, there is no dispute over the existence of a previous valid

and final judgment.     There is neither a dispute that the causes of action alleged in

the LaBarre litigation existed at the time the Florida Gas cases were decided.

The controversies before us are whether the parties in the Florida Gas cases and

the instant action are the same and whether the causes of action asserted in the

instant action arise out of the same transaction or occurrence that was the subject

matter of the first action.

       An identity of parties exists whenever the same parties, their successors, or

others appear so long as they share the same quality as parties.       Guilbeau, 241

So. 3d at 9.    A person has the same quality when he or she appears in the same

capacity in both suits, or when he or she is in privy to a party in the prior suit.

Burguieres, 843 So. 2d at 1054.      Identity of parties depends on the circumstances

of each case.
                 Mandalay Oil & Gas, LLC v. Energy Development Corp., 2001-

0993 ( La. App. 1st Cir. 8/ 4104), 880 So. 2d 129, 140 n.9, writ denied, 2004- 2426

La. 1128105), 893 So. 2d 72.

       Although we acknowledge that Texas Brine, AIG, and Zurich are parties in

both Florida Gas and LaBarre, and that Texas Brine set forth nearly identical

demands for defense and indemnity against AIG and Zurich in both Florida Gas

and LaBarre, the most important party and interests in the Florida Gas cases is

missing in this suit, namely, Florida Gas. As noted above, in the two Florida Gas

cases which dismissed Texas Brine' s incidental demands against AIG and Zurich,

                                            F1
Texas Brine' s claims for indemnity and defense depended on the allegations made

by the plaintiff against Texas Brine. Those cases turned on the fact that Florida

Gas did not allege any causes of action for property damage prior to the sinkhole,

thus, AIG and Zurich' s pre -2012 insurance policies could not be triggered, and

therefore, AIG and Zurich could not be called upon to defend or indemnify Texas

Brine in the Florida Gas litigation.

      In the instant action, the LaBarre plaintiffs asserted causes of action for

property damage predating and postdating the sinkhole.        The causes of action for

property damage that predate the sinkhole may affect what duties AIG and Zurich

owe to Texas Brine under the pre -2012 policies.        However, this court makes it

expressly clear that no merits analysis is being made regarding those duties in this

opinion.

      The plaintiffs in these two suits are different. Some of the alleged causes of

action for damages are also different. Therefore, we find that the parties are not

appearing in the same capacities in the instant action as they did in Florida Gas,

and the causes of action asserted in the Florida Gas cases are of a different subject

matter.
           Therefore, we find that the trial court erred in sustaining AIG and Zurich' s

exceptions raising the objection of res judicata in the LaBarre litigation.

                                    CONCLUSION

      For the foregoing reasons, we reverse the trial court' s judgment sustaining

the exception of res judicata regarding National Union Fire Insurance Company of

Pittsburgh, Pa.    and AIG Specialty Insurance Company, and Zurich American

Insurance Company, Steadfast Insurance Company and American Guarantee &

Liability Insurance Company, LLC' s duty to defend and indemnify Texas Brine

Company, LLC in the arbitration proceeding attributable to the LaBarre litigation.

Costs of this appeal are to be assessed to the defendants.

                                            N
       REVERSED. s

5 On August 17, 2023, Texas Brine filed a motion to enroll Martha Y. Curtis as additional
counsel in this matter, which was granted.   The motion to withdraw Christopher T. Chocheles,
Rebekka C. Veith, David M. Peterson, and Robert Ryland Percy, III as Texas Brine' s counsel of
record is also granted.

                                               10