Opinion
NO. 2011-CA-1291
01-18-2012
CHRISTUS FERNANDO v. NORMAN MCSWAIN, JR., CHUBB GROUP OF INSURANCE COMPANIES, AND XYZ INSURANCE CARRIERS
Pius A. Obioha Alistair A. Adkinson Michal J. Harris PIUS A. OBIOHA & ASSOCIATES, LLC COUNSEL FOR PLAINTIFF/APPELLANT Thomas H. Huval Stefini W. Salles HUVAL, VEAZEY, FELDER & RENEGAR, L.L.C. COUNSEL FOR DEFENDANT/APPELLEE
NOT DESIGNATED FOR PUBLICATION
APPEAL FROM
CIVIL DISTRICT COURT, ORLEANS PARISH
NO. 2008-10705, DIVISION "N-8"
Honorable Ethel Simms Julien, Judge
PER CURIAM
(Court composed of Judge James F. McKay, III, Judge Roland L. Belsome, Judge Paul A. Bonin)
Pius A. Obioha
Alistair A. Adkinson
Michal J. Harris
PIUS A. OBIOHA & ASSOCIATES, LLC
COUNSEL FOR PLAINTIFF/APPELLANT
Thomas H. Huval
Stefini W. Salles
HUVAL, VEAZEY, FELDER & RENEGAR, L.L.C.
COUNSEL FOR DEFENDANT/APPELLEE
AFFIRMED
In this appeal, Christus Fernando, plaintiff-appellant, seeks review of the trial court's judgment granting the motion to enforce settlement filed by the defendants, Norman McSwain, Jr. and Vigiliant Insurance Company. Specifically, Mr. Fernando argues that error vitiated his consent to the settlement agreement. For the following reasons, we affirm.
I
On October 15, 2008, Mr. Fernando filed a petition for damages alleging that on November 8, 2007, he was the driver of a 2002 Chevrolet Suburban. Mr. Fernando claimed that as he approached the intersection of Andrew Higgins and Camp Streets, Mr. McSwain opened the driver's door of his vehicle, causing Mr. Fernando to strike the door, allegedly causing injuries and damages.
Discovery ensued and eventually the trial court conducted a settlement conference. At the conclusion of the settlement conference, the parties recited an agreement in open court whereby the defendants agreed to pay Mr. Fernando:
[A] total sum of $9,000.00. That's in full and final settlement of all of Mr. Fernando's claims. He will sign an appropriate receipt and release of all claims of indemnity, and he will be responsible for satisfying any outstanding medical bills or liens that may exist.Counsel for Mr. Fernando agreed that the recitation was correct.
When questioned by the trial court as to whether or not court costs were included, counsel for defendants responded, "No, Your Honor. That $9,000.00 is the total amount." The trial court questioned counsel for Mr. Fernando as to whether or not that was his understanding and counsel for Mr. Fernando responded, "Yes, Your Honor. That's correct."
Later, Mr. Fernando refused to execute the necessary receipt and release. Defendants filed a motion to enforce settlement. After holding a hearing, the trial court granted the motion to enforce settlement, made the settlement the judgment of the trial court, and ordered Mr. Fernando to execute an appropriate receipt and release and a motion to dismiss all claims in exchange for the defendants tendering him the sum of $9,000.00. From that judgment, Mr. Fernando appeals.
II
This Court uses the manifest error standard in reviewing judgments granting motions to enforce settlements. Sileo v. Berger, 11-0295, p. 7 (La. App. 4 Cir. 9/28/11), -- So. 3d --, 2011 WL 4486509; Howard v. La. Citizens Property Ins. Corp., 10-1302, p. 3 (La. App. 4 Cir. 4/27/11), 65 So. 3d 697, 699. In Howard, this Court noted that the trial court "made a factual determination that a contract existed between the parties when the court ruled on the motion to enforce settlement agreement." Howard, 10-1302, p. 3, 65 So. 3d at 699, quoting Rogers v. Mumford, 08-1144, p. 5 (La. App. 3 Cir. 2/4/09), 6 So. 3d 848, 851. Thus, the manifest error or clearly wrong standard is applied. Id.
III
The defendants filed the motion to enforce settlement agreement alleging that the parties confected a valid compromise, recited in open court, to settle the dispute existing between them.
On appeal, Mr. Fernando argues that he mistakenly believed that the $9,000.00 represented what he would receive after payment of the expenses. Mr. Fernando points out that his medical treatment totaled $3,900.00 and that he missed work for a number of weeks. Mr. Fernando argues that the offer seems low based on his treatment and injuries, and that this perception strengthened the erroneous impression that the settlement represented his net recovery.
The Civil Code articles pertinent to this matter are provided as follows:
LA. CIVIL CODE ART. 3071. Compromise; definition
A compromise is a contract whereby the parties, through concessions made by one or more of them, settle a dispute or an uncertainty concerning an obligation or other legal relationship.
LA. CIVIL CODE ART. 3072. Formal requirements; effects
A compromise shall be made in writing or recited in open court, in which case the recitation shall be susceptible of being transcribed form the record of the proceedings.
LA. CIVIL CODE ART. 3076. Scope of the act
A compromise settles only those differences that the parties clearly intended to settle, including the necessary consequences of what they express.
LA. CIVIL CODE ART. 3082. Recession
A compromise may be rescinded for error, fraud, and other grounds for annulment of contracts. Nevertheless, a compromise cannot be rescinded on grounds of error of law or lesion.
Mr. Fernando cites no case law in support of his argument that his mistaken belief is sufficient to rescind the compromise for error. The case law provides that "contracts of compromise may be vitiated by error of fact bearing on the principal cause, and may be rescinded whenever there exists an error on the matter in dispute." Pittman v. Pittman, 01-2528, p. 4 (La. App. 1 Cir. 12/20/02), 836 So. 2d 369, 372, quoting Succession of Morvant, 578 So. 2d 549, 554 (La. App. 3 Cir. 1991).
One case in which a compromise was rescinded is Dimitri v. Dimitri, 00-2641, p. 7 (La. App. 4 Cir. 1/30/02), 809 So. 2d 481, 486. In that case, Mr. Dimitri sustained severe injuries after a fall at the nightclub run by his grandmother. Id. at p. 1, 809 So. 2d at 483. Mr. Dimitri spoke with the insurance company and was told that in order for his then-existing medical bills to be paid, Mr. Dimitri would need to execute a release form. Id. at p. 2, 809 So. 2d at 483. Later, when Mr. Dimitri sued, the insurance company filed an exception of res judicata. Id. at p. 1, 809 So. 2d at 483. Mr. Dimitri's brother averred that he spoke with the insurance adjuster and informed the adjuster that his brother was seriously injured and could not work and was told that a release would need to be executed in order for the medical bills to be paid. Id. at p. 3, 809 So. 2d at 483-484. The Court noted that there was no discussion about anything other than Mr. Dimitri's then-existing medical bills. Id. at p.6, 809 So. 2d at 485. The Court stated that the amount of the settlement check, which did not even cover all of the then-existing medical bills, seemed grossly insufficient to compensate Mr. Dimitri considering the nature and the extent of the injuries. Id. The Court noted that there was no meeting of the minds as Mr. Dimitri submitted sufficient evidence to support his claim that the release was for the then-existing medical expenses. Id. at p.7, 809 So. 2d at 486. Thus, there was an error bearing on the principal cause of the compromise.
However, in Brown v. Simoneaux, 593 So. 2d 939, 940 (La. App. 4 Cir. 1992), the plaintiff entered into a settlement with the defendant approximately one month after the accident. Later, Mr. Brown filed suit seeking damages for personal injury. Id. The defendant filed an exception of res judicata, arguing that the settlement resolved all claims arising out of the accident, including damages for personal injury. The Court noted that the language of the release was clear and unambiguous. Brown, 593 So.2d at 941. The Court went on to state that the fact that the plaintiff may have made a bad bargain was not sufficient grounds for invalidating the compromise. The Court stated, "[a] transaction has the authority of things adjudged and cannot be attacked on account of lesion." Id. at p. 942, citing LA. CIVIL CODE ART. 3078. (Other citations omitted.).
Mr. Fernando's argument - that he believed he would receive $9,000.00 after expenses - attacks the compromise on account of lesion. "Lesion is defined as an injury suffered by one who does not receive a full equivalent for what he gives in a commutative contract." Chasisson v. Central Crane Service, 10-0112, p. 10 (La. App. 1 Cir. 7/29/01), 44 So. 3d 883, 890, citing Mullins v. Page, 457 So. 2d 64, 71 (La. App. 2 Cir. 1984).
This Court recently affirmed that "a compromise may not be rescinded for lesion, i.e., a compromise may not be rescinded because it is later determined that the bargain struck was a poor one." Hymel v. Eagle, Inc., 08-1287, p. 10 (La. App. 4 Cir. 3/18/09), 7 So. 3d 1249, 1256. In Hymel, the plaintiff entered into a settlement agreement after contracting asbestosis. Id. at pp. 2-3, 7 So. 3d at 1251. The written agreement provided that Mr. Hymel was releasing defendants from then existing injuries, and injuries which might arise in the future, such as mesothelioma. Id. at p. 4, 7 So. 3d at 1252. After contracting mesothelioma, Mr. Hymel sued. The trial court granted the defendants' exception of res judicata. Id. at p. 3, 7 So. 3d at 1252. This Court found "[a] party represented by counsel may not defeat a written settlement and release that is unambiguous on its face by merely alleging that he did not understand it. Otherwise, no settlement would be enforceable without more litigation, which defeats the whole public policy favoring settlements." Id. at p. 13, 7 So. 3d at 1257. Thus, this Court affirmed the judgment granting the exception of res judicata. Id. at p. 15, 7 So. 3d at 1258.
In this case, Mr. Fernando's error does not bear on the principal cause for making the compromise - the resolution of all claims arising from the November 11, 2007 accident. As compared to Dimitri, Mr. Fernando and the defendant entered into a compromise on the day of the settlement conference with the district court, after the full extent of Mr. Fernando's injuries and medical bills were known. The transcript reveals that the counsel for defendants explicitly stated that the $9,000.00, total, was in full settlement of Mr. Fernando's claims. There is no evidence in the record that counsel for defendants ever stated that Mr. Fernando would receive a net settlement of $9,000.00, after the payment of expenses. Indeed, the transcript supports an opposite result. When questioned by the trial court as to whether or not court costs were included, counsel for defendants responded, "No, Your Honor. That $9,000.00 is the total amount." When asked by the trial court if he agreed with defense counsel's statement, the plaintiff's counsel replied, "Yes, Your Honor. That's correct."
When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent. LA. CIVIL CODE ART. 2046. Herein, as in Brown and Hymel, the settlement agreement recited in open court was clear, explicit, and unambiguous. Mr. Fernando agreed to $9,000.00 in full settlement of all of his claims. Mr. Fernando also agreed that he would be responsible for any outstanding medical bills or liens.
In Hymel, this Court noted that:
Settlements are especially effective in situations where there is uncertainty for where there is certainty there is no reason to compromise. Where a party has performed an allegedly negligent act that has or could result in damage to another, then the uncertainty surrounding litigation, liability and extent of damages provides fertile soil for compromise.Hymel, 08-1287, p. 9, 7 So. 3d at 1255. Considering the uncertainty surrounding litigation, it is not an absurd consequence for parties to enter into settlement agreements and compromise their claims. The words of the compromise are clear, explicit, and lead to no absurd consequences. No further interpretation may be made in search of the parties' intent.
Thus, we find no manifest error in the judgment of the trial court granting the motion to enforce settlement.
DECREE
Accordingly, the judgment of the district court granting the motion to enforce settlement is affirmed.
AFFIRMED