Lorraine A. Ryan, James Ventle, Individually and On Behalf of His Minor Children, Erica and Tracy and Bill and Susan Wozniak, Individually and On Behalf of Their Minor Children, Crystal, Braden and Cody VS State Farm Mutual Automobile Insurance Company and Jackie D. Ventle (2010CA0961 Consolidated With 2010CA0962)

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STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT NUMBER 2010 CA 0961 LORRAINE A RYAN BILL AND SUSAN WOZNIAK INDIVIDUALLY AND ON BEHALF OF THEIR MINOR CHILDREN CRYSTAL BRADEN AND CODY AND JAMES VENTLE INDIVIDUALLY AND ON BEHALF OF HIS MINOR CHILDREN ERICA AND TRACY VERSUS STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY ET AL CONSOLIDATED WITH NUMBER 2010 CA 0962 GUS HERNANDEZ VERSUS JACKIE VENTLE PAUL MANIFOLD STATE FARM MUTUAL AUTOMOBILE INS CO CREDIT GENERAL INS CO AND CANA TEX INTERNATIONAL INC Judgment Rendered December 22 2010 Appealed from the Eighteenth Judicial District Court In and for the Parish of Pointe Coupee State of Louisiana Suit Number 32 c 32 101 w 497 Honorable James J Best Judge Donald A Hoffman Counsel for Mary Ann Wegmann New Orleans LA Appellant Intervenor American Home Assurance Company a AIG Worker k s Compensation Gerald A Melchiode Counsel for Mary E Lorenz DefendantAppellee Evanston Insurance Company New Orleans LA 14k C Counsel for Andrew P Sellers Jr Baton Rouge LA Defendant Appellee National Union Fire Insurance Co of Pittsburgh Pennsylvania EMEMEM BEFORE PARRO GUIDRY AND HUGHES JJ 2 GUIDRY J American Home Assurance Company also known International Group Inc Worker Compensation AIGWC s as American appeals a summary judgment of the trial court dismissing its claim for reimbursement against the Evanston Insurance Company Evanston The underlying facts of this case which has previously come before this court twice on appeal are not in dispute and will only be recounted as necessary herein In this appeal AIGWC has asserted several assignments of error that largely center on two main allegations 1 that the trial court denied it due process of law and fundamental fairness by setting aside its January 20 2009 Ruling of the Court without notice and by failing to provide it notice that Evanston and s National Union Motions for Summary Judgment would be heard on September s12J 11 2009 and 2 that the trial court erred in failing to find that the facts surrounding the highlow agreement executed by Evanston and the plaintiffs constituted a compromise made in violation of La R 23 for which S 1102 1 C Evanston is liable to AIGWC for reimbursement of the full amount of compensation benefits and medical benefits paid to the plaintiffs s AIGWC first assignment of error is without merit As acknowledged by AIGWC following remand of this matter to the trial court AIGWC Evanston and National Union all filed cross motions for summary judgment on the issue of whether the highlow agreement between Evanston National Union and the plaintiffs constituted a compromise for which the insurers could be held liable under La R 23 A hearing on the cross motions was held on August S 1102 1 C 1 See Ran v State Farm Mutual Automobile Insurance Company 022303 La App 1 st Cir 03 27 6 unpublished opinion writ denied 03 2132 La 11 857 So 2d 503 and Ryan v 03 7 State Farn Mutual Automobile Insurance Company 05 0268 La App 1st Cir 02 06 10 unpublished opinion 2 National Union Fire Insurance Company of Pittsburgh Pennsylvania National Union also referred to as AIG AIG Business Auto and AIG Primary in the record filed a separate motion for summary judgment on the same grounds asserted by Evanston C 8 2008 following which the trial court issued a Ruling of the Court signed January 20 2009 wherein it stated that for the reasons stated in AIGWC brief it s granted AIGWC motion for summary judgment and denied Evanston motion for s s summary judgment The Ruling of the Court concluded with the instruction udgment j to be submitted accordingly Thereafter AIGWC filed a motion for entry of final judgment wherein it contended that it had drafted a proposed judgment in conformity with the trial s court January 20 2009 Ruling of the Court Evanston however objected to the proposed judgment On the date the motion for entry of judgment was scheduled to be heard the trial court held a status conference instead following which the trial court issued a judgment with reasons signed September 28 2009 In that judgment which is the judgment appealed herein after reciting certain findings of fact and conclusions of law intended to clarify and supersede its ruling on January 20 2009 the trial court decreed that it was granting the motions for summary judgment filed by Evanston and National Union on February 27 2008 and March 27 2008 respectively Pursuant to that decree the trial court dismissed s AIGWC claims against Evanston and National Union with prejudice and denied s AIGWC motion for entry of final judgment as moot A final judgment can be inconsistent with the written reasons for judgment Written reasons for judgment are considered to be interlocutory rulings and do not carry the finality of a judgment Prior to final judgment a trial judge may at his discretion change the substance or the result of interlocutory rulings Thurman v Thurman 521 So 2d 579 581 La App 1st Cir 1988 As previously stated a hearing on AIGWC Evanston and National Union cross motions for ss s summary judgment on the issue of whether the highlow agreement would constitute a compromise under La R 23 was held on August 8 S 1102 1 C 2008 thus all interested parties were heard on the issue Although the trial court C initially indicated that it would render judgment in favor of AIGWC it still acted within its authority and with due process in rendering the judgment appealed Hence we reject this assertion of error Accordingly we must now consider the primary issue in this appeal whether the trial court erred in not finding that the highlow agreement was a compromise pursuant to La R 23 That statute provides S 1102 1 C When a suit has been filed against a third party defendant in which the employer or his insurer has intervened if the third party defendant or his insurer fails to obtain written approval of the compromise from the employer or his insurer at the time of or prior to such compromise and the employee fails to pay to the employer or his insurer the total amount of compensation benefits and medical benefits out of the funds received as a result of the compromise the third party defendant or his insurer shall be required to reimburse the employer or his insurer to the extent of the total amount of compensation benefits and medical benefits previously paid to or on behalf of the employee to the extent said amounts have not been previously paid to the employer or his insurer by the employee pursuant to the provisions of Subsection B of this Section Notwithstanding such payment all rights of the employer or his insurer to assert the defense provided herein against the employee s claim for future compensation or medical benefits shall be reserved Lorraine A Ryan Bill and Susan Wozniak individually and on behalf of their minor children and James Ventle individually and on behalf of his minor children plaintiffs filed suit against several defendants including Evanston and National Union relative to a car accident that occurred in Pointe Coupee Parish on February 27 1 Soon after the plaintiffs filed suit in this matter AIGWC filed 997 a petition for intervention seeking reimbursement of any workers compensation and medical payment benefits it paid to or on behalf of the plaintiffs Prior to litigating the issues of liability and damages the parties sought a ruling from the trial court on the issue of coverage under the policies issued by Evanston and National Union Pending the trial court ruling on the coverage issue Evanston s 3 A separate suit regarding the February 27 1997 accident tiled by Gus Hernandez was consolidated with the plaintiffs suit A separate highlow agreement was offered to Hernandez but is not at issue in this appeal 5 and National Union negotiated a highlow agreement with the plaintiffs that is central to the present appeal Evidence of the highlow agreement crafted by Evanston and National Union with the plaintiffs is presented in a series of letters dated October 22 2001 November 7 2001 November 12 2001 and November 26 2001 Essentially the terms of the agreement are outlined in the October 22 2001 letter from Evanston which provided that in exchange for an immediate payment of 350 from 000 Evanston and 200 from National Union the plaintiffs agreed to cap their total 000 recovery at 5 in the event a jury found the insured liable and awarded 000 000 damages in excess of that amount In negotiating the agreement the right to try the case to a jury on the issues of liability and damages was expressly reserved as well as a request that any further litigation of the liability and damage issues be postponed until the issue on coverage is resolved on appellate review In addition to limiting exposure for damages Evanston stated in the letter that the cost savings in discovery is the incentive for payment on the low end Although the October 22 2001 letter stated that the highlow agreement was conditioned upon National Union and AIGWC acceptance the condition that s s AIGWC accept the terms of the agreement was eliminated pursuant to the November 7 2001 acceptance letter from National Union In that letter National Union acknowledged that a teleconference had been conducted by counsel for the plaintiffs Evanston and National Union and pursuant thereto National Union was confirming in writing its agreement to the terms of the highlow agreement as outlined in Evanston October 22 2001 letter however National Union also s confirmed that the terms of the highlow agreement were to be kept confidential between the plaintiffs Evanston and National Union Finally by a letter dated November 12 2001 the plaintiffs confirmed in writing their acceptance of the highlow agreement as outlined in Evanston s C October 22 2001 letter and modified by National Union November 7 2001 letter s By a letter dated November 26 2001 Evanston remitted payment to the plaintiffs in the amount of 350 000 At the time the parties negotiated the highlow agreement La C art 3071 provided in pertinent part A transaction or compromise is an agreement between two or more persons who for preventing or putting an end to a lawsuit adjust their differences by mutual consent in the manner which they agree on and which every one of them prefers to the hope of gaining balanced by the danger of losing 4 AIGWC relies on Lavergne y Quality Fabricators of Eunice Inc 020548 La App 3d Cir 12 832 So 2d 1176 writ denied 03 0127 La 3 02 11 03 21 840 So 2d 540 for the proposition that a highlow agreement constitutes a compromise under the prior version of La C art 3071 We reject the assertion that the holding of that case mandates that all highlow agreements be deemed compromises in accordance with the prior version of La C art 3071 It was expressly noted in the Lav opinion that in exchange for the highlow crgne agreement the parties agreed that there would be no posttrial motions or appeals filed by the parties Lavergne 020548 at 2 832 So 2d at 1178 Consequently the court found that the agreement put an end to the lawsuit between the injured employee and the thirdparty tortfeasor Lavergne 020548 at 3 832 So 2d at 1179 see also Lavergne v Quality Fabricators of Eunice Inc 04 125 pp 45 La App 3d Cir 12 888 So 2d 1147 1151 writ denied 050046 La 3 04 8 05 18 896 So 2d 1007 In the matter before us the plaintiffs Evanston and National Union confected the highlow agreement prior to the parties receiving a ruling by the trial 4 1 Articles 3071 through 3083 of the Louisiana Civil Code under the title Of Transaction or Compromise were amended and reenacted Following amendment and reenactment in 2007 La C art 3071 now provides a compromise is a By 2007 La Acts No 1 38 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 7 court on the issue of insurance coverage and prior to any determination of the liability of the insured Consequently and unlike the agreement in Lavergne the subject highlow agreement expressly reserved to Evanston and National Union the right to try the case to a jury on liability and damages and further indicated that appellate review would not only be allowed but would be sought to resolve the issue of coverage Indeed the June 24 2002 judgment of the trial court declaring coverage for the plaintiffs claims under the Evanston and National Union policies was not only appealed to this court by the insurers but the plaintiffs sought subsequent review of this court decision by the Louisiana Supreme Court s Hence the highlow agreement in this case did not terminate the litigation between Evanston National Union and the plaintiffs Nor could it be said to restrict or limit any of the issues presented in the lawsuit rather the agreement simply provided that in exchange for receiving a guaranteed minimum recovery the plaintiffs agreed to waive their right to receive any money in excess of the maximum amount allowed There was no waiver or restriction on the plaintiffs right to seek a judicial determination of what amount of compensation if any may be owed to them Instead the highlow agreement at issue in this case is best characterized as a sale of the plaintiffs right to take full advantage of a potentially favorable judgment or to fully enforce any rights potentially to be conferred by judgment In either case the litigation is maintained and as such would not constitute a valid compromise under the law as it existed at the time the highlow agreement was confected See Reinecke v Pelham 199 So 521 523 24 La App Orleans 1941 that an agreement purporting to be a compromise holding but not meeting the technical requirements of a compromise should be regarded as a sale if made for consideration and a donation if made without consideration 5 While we are troubled by this conclusion we observe that under the current version of La C art 3071 such a result would now be precluded Nor do we find that the mere negotiation of the check issued by Evanston was sufficient to convert the agreement into a compromise for which the provisions of La R 23 would attach For there to be a valid accord S 1102 1 C and satisfaction of a debt or claim there must be a disputed claim a tender of a check for less than the amount of the claim by the debtor and an acceptance of the tender by the creditor Essential to a valid accord and satisfaction is that the creditor understands that the payment is tendered in full settlement of the dispute Harrington v Aetna Life and Casualty Company 441 So 2d 1255 1256 La App 1st Cir 1983 McClelland v Security Industrial Insurance Company 426 So 2d 665 669 70 La App 1st Cir 1982 writ denied 430 So 2d 94 La 1983 The check negotiated in this case referenced a claim number the date of loss and simply stated settlement on the payment stub attached to the check Notations on the back of the check indicate that the check was deposited on November 28 2001 A creditor must fully understand and be aware that if payment is accepted the claim will be deemed to have been paid in full and if the written notation is insufficient to put the creditor on notice of the nature of the compromise being offered there can be no accord and satisfaction See Cowley Corporation v Shreveport Packing Company Inc of Kansas 440 So 2d 1345 1352 La App 2d Cir 1983 writ denied 444 So 2d 122 La 1984 In the subject case the use of the word settlement alone does not unequivocally convey that the payment was tendered in full payment of any debt or claim that may be owed But more importantly no accord and satisfaction can be premised on the subject negotiated check because the accompanying letter by which the check was tendered to the plaintiffs plainly stated that the check was being offered pursuant to the high low agreement As provided in La C art 3073 prior to the 2007 amendment Transactions regulate only the differences which appear clearly to be comprehended in them by the intention of the parties whether it be explained in a general or particular manner unless it be the I necessary consequence of what is expressed and they do not extend to differences which the parties never intended to include in them The letter accompanying the check in this case plus the preceding letters of October 22 2001 November 7 2001 and November 12 2001 all clearly indicate that the check was issued in fulfillment of the highlow agreement and not as full payment of the plaintiffs claim Also we note that prior to 2007 while it has been held that an accord and satisfaction is similar to a compromise it was not strictly speaking a compromise Prior to 2007 accord and satisfaction was solely a jurisprudentially recognized method by which an obligation could be extinguished whereas the law of compromise has always been established by statute to prevent or put an end to a lawsuit See Aufrichtig v Aufrichtig 34 pp 12 13 La App 2d Cir 909 01 22 8 796 So 2d 57 65 Harrington 441 So 2d at 1256 McClelland 426 So 2d at 670 n See also La C art 3079 comment a 2 CONCLUSION Having carefully considered the applicable facts and law governing this matter we find that the highlow agreement confected by Evanston National Union and the plaintiffs did not constitute a compromise under the applicable version of La C art 3071 Thus neither the agreement nor the cashing of the check issued pursuant thereto can be construed as being confected in violation of La R 23 Therefore finding the judgment of the trial court to be S 1102 1 C correct under the applicable law we affirm All costs of this appeal are assessed to the appellant American Home Assurance Company also known as AIG Worker s Compensation AFFIRMED III

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