James Carinder, Paul and Gwen Gasser, Ronald and Judith Laiche, Vincent J. Liuzza, III, Andy and Isabel Messina, Michael and Cathy Pulaski and Ruth Tufts VS BASF Corporation, Master Wall, Inc., McMath Construction, Inc. Covington Land, L.L.C., Ja-Roy Exterminating Services of St.Tammany, Inc., Mariners Island Condominium Association, Glen Dupuy, Colony Insurance Company, Gemini Services, Inc., Piazza & Associ
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NOT DESIGNATED FOR PUBLICATION STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT 2010 CA 0472 j JAMES CARINDER PAUL AND GWEN GASSER RONALD AND JUDITH LAICHE VINCENT J LIUZZA III ANDY AND ISABEL MESSINA MICHAEL AND CATHY PULASKI AND RUTH TUFTS C VERSUS BASF CORPORATION MASTER WALL INC McMATH CONSTRUCTION INC COVINGTON LAND LLC JAROY EXTERMINATING SERVICES OF ST TAMMANY INC S MARINER ISLAND CONDOMINIUM ASSOCIATION GLEN DUPUY COLONY INSURANCE COMPANY GEMINI SERVICES INC PIAZZA ASSOCIATES INC AMERICAN CASUALTY COMPANY OF READING PA AND ZURICH NORTH AMERICA On Appeal from the 22nd Judicial District Court Parish of St Tammany Louisiana Docket No 2007 11478 Division D Honorable Peter J Garcia Judge Presiding John S Lawrence Jr Attorneys for David P Curlin DefendantCrossClaim PlaintiffAppellant Matthew L Devereaux McMath Construction Inc Mandeville LA Philip E Reso Attorneys for Defendant CrossClaim Defendant Karen C Duncan Appellee Cowan Lemmon L P New Orleans LA Colony Insurance Company Thomas C Cowan BEFORE WHIPPLE PARRO AND GUIDRY JJ Judgment rendered September 10 2010 PARRO J McMath Construction Inc McMath appeals a judgment sustaining an exception raising the objection of res judicata and dismissing its crossclaim against Colony Insurance Company Colony For the following reasons we reverse the judgment and remand FACTUAL AND PROCEDURAL BACKGROUND The plaintiffs in this case are the purchasers of all seven of the condominium units in the Mariner Island Condominium complex in Mandeville on which McMath was s the general contractor during construction They filed suit in March 2007 naming a number of defendants including McMath and Glen Dupuy one of McMath s subcontractors who had applied a synthetic stucco coating to the exterior of the condominiums During the time period when Dupuy was working on the condominiums he was insured by Colony under a commercial general liability policy The plaintiffs in this suit alleged the stucco material was defective and was defectively installed allowing water intrusion that caused severe damage to the interior and exterior structures of their condominium units The plaintiffs claims against Dupuy under the New Home Warranty Act for breach of contract and for general negligence were eventually dismissed on motions for summary judgment However McMath had filed a crossclaim against Dupuy and Colony which remained a part of the lawsuit seeking indemnity from them if the plaintiffs claims resulted in a judgment against McMath In response to that claim Colony filed an exception raising the objection of res judicata based on this court s judgment in McMath Constr Co Inc v Dupuy 031413 La App 1st Cir 11 04 17 897 So 677 McMath I writ denied 043085 La 2 896 So 40 The 2d 05 18 2d district court sustained the exception in a judgment signed November 16 2009 dismissing McMath crossclaim against Colony and this appeal followed s APPLICABLE LAW Louisiana Revised Statute 13 provides the general principles regarding res 4231 judicata as follows 2 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 Thus in order for res judicata to preclude a second action the following elements must be satisfied 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 North American Treatment Systems Inc v Scottsdale Ins Co 05 0081 La App 1st Cir 8 06 23 943 So 429 439 writs denied 062918 and 062803 La 2 949 So 423 2d 07 16 2d and 424 A cause of action that arises after the rendition of the final judgment in the first litigation could not have been asserted earlier and would not be precluded by the judgment See LSAR 13 Comments1990 comment e S 4231 The party raising the objection of res judicata bears the burden of proving the essential facts to support the objection The doctrine cannot be invoked unless all its essential elements are present It is strictly construed and any doubt concerning its applicability is to be resolved against the party raising the objection Avery v CitiMortgage Inc 082052 La App 1st Cir 5 15 So 240 243 09 13 3d ANALYSIS To determine whether the judgment in McMath I is res judicata as to McMath s crossclaim against Dupuy and Colony in this litigation it is necessary to review the factual circumstances and legal conclusions of McMath I That case involved the same 3 condominium complex that is the basis of this litigation In McMath I McMath filed suit against Dupuy and Colony to recover damages for leaks around windows and doors that were allegedly caused by Dupuy failure to properly apply a synthetic stucco material s to the exterior of the condominiums Because McMath had halted the interior buildout of the condominium units until the leaks could be fixed the claims in McMath I did not involve property damage to the interiors of the condominium units as a result of the leaks but only McMath repair costs and delay damages due to Dupuy work and or s s product McMath I 897 So at 679 Colony filed a motion for summary judgment 2d claiming its policy did not cover the problems alleged by McMath After examining the policy in light of the uncontested facts this court found that McMath claims alleged an s occurrence under the Colony policy and fell within the productscompleted operations hazard PCOH coverage purchased by Dupuy because PCOH coverage included property damage arising out of Dupuy work when all of the work called for in his s contract had been completed even if the work needed some correction repair or replacement McMath I 897 So at 681 82 However we also found that the plain 2d meaning of Exclusion K which eliminated coverage for property damage to your s Dupuy product applied to exclude coverage for the claimed damages Therefore we affirmed summary judgment in favor of Colony on the coverage issue In reaching that decision this court observed that hile W damage to property other than the insured work or product may s not be unambiguously excluded under Exclusions K and t the evidence in this case shows there was no physical damage to the condominium units only to Dupuy work or product s Therefore the work and product exceptions would eliminate the coverage that would otherwise be provided under the policy Footnote omitted McMath I 897 So at 683 2d The plaintiffs claims in this litigation involve damage to property other than the s s insured Dupuy work or product The plaintiffs allege physical damage to their condominium units as well as severe emotional distress to them personally McMath contends that since the plaintiffs claims relate to personal injuries and property damage to their condominium units that occurred after the units were sold to them these causes of action against McMath which form the basis of its crossclaim against Dupuy 4 and Colony did not exist in February 2005 when the supreme court denied writs in McMath I and that judgment became final Therefore McMath argues that the district court erred in granting the exception of res judicata in this case Colony argues that there is no new cause of action asserted in this litigation but merely a different type of damages arising out of the same transaction and occurrence that was the subject matter of the previous suit It also asserts that those damages were not due to Dupuy work or product but were the fault of the ineffective repair s efforts of Gemini Services Inc and poor supervision by McMath Finally Colony claims McMath should have asserted those damages in McMath I because they either existed or could reasonably have been anticipated by McMath before the judgment in that case became final McMath responds that had it made any attempt to amend the previous suit to include potential liabilities to future condominium owners for damages they might have in the future as a result of Dupuy work such causes of action would have been s dismissed as purely speculative and premature Therefore McMath contends the preclusive effect of LSAR 13 is not applicable to its crossclaim against Dupuy S 4231 and Colony in this litigation In particular McMath cites comment e to the statute which states that a cause of action which arises after the rendition of the final judgment could not have been asserted earlier and would not be precluded by the judgment We note that McMath crossclaim against Dupuy and Colony in this suit was s brought because the plaintiffs in this suit asserted claims against McMath arising out of allegedly defective construction of their condominium units arose after the judgment in McMath I became final These causes of action s McMath crossclaim against Dupuy and Colony is in the nature of a claim for indemnity should the plaintiffs succeed in obtaining an award against McMath for their personal injuries and property damages Based on our examination of McMath I and a comparison of the claims in that suit with With reference to the other elements of a res judicata claim McMath does not contest that the judgment in McMath I is a valid and final judgment that the parties are the same or that the cause or causes of action asserted in this suit arose out of the transaction or occurrence that was the subject matter of McMath I See LSA R 13 S 4231 2 2 Gemini Services Inc was a subcontractor hired by McMath to correct the problems caused by Dupuy s work 5 the claims involved in this case we conclude that Colony did not satisfy its burden of proving that the causes of action asserted in this suit by the plaintiffs which serve as the basis of McMath cross claim existed at the time of final judgment in McMath I s The causes of action alleged by the plaintiffs in this case are precisely the type of claims that this court stated were not included in McMath I Therefore the district court erred in sustaining the exception raising the objection of resjudicata in this matter CONCLUSION The judgment of November 16 2009 sustaining the exception of res judicata and dismissing McMath crossclaim against Colony is reversed and this matter is s remanded All costs of this appeal are assessed against Colony REVERSED AND REMANDED 9
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