Phillips and Jordan, Inc. et al v. Coffey et al

Filing 93

ORDER denying 61 Motion to Dismiss; denying 77 Motion for Sanctions. Signed by Judge Susie Morgan on 9/23/13. (cbn)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
PHILLIPS AND JORDAN, INC., et
al.,
Plaintiffs

CIVIL ACTION

VERSUS

No. 11-1922

PATRICK COFFEY, et al.,
Defendants

SECTION “E”

ORDER & REASONS
Before the Court are a motion to dismiss and motion for sanctions by Defendants
BEM Enterprises, Inc., BPW Construction, Inc., Terry Carter, Michael L. Shumock, and
Paul Zygmunt.1 At the heart of the motions is Defendants’ assertion that Plaintiffs’ claims
are barred by the doctrine of res judicata and that indemnification is not required by the
contracts pleaded by Plaintiffs.2 But neither of these issues is susceptible to resolution on
the pleadings in this case.
Generally, res judicata is an affirmative defense that Federal Rule of Civil Procedure
8(c) requires be pleaded in an answer, i.e., after the motion to dismiss stage. Mowbray v.
Cameron County, Tex., 274 F.3d 269, 281–82 (5th Cir. 2001); American Realty Trust, Inc.
v. Hamilton Lane Advisors, Inc., 115 Fed. App’x 662, 664 n.1 (5th Cir. 2004) (“Res judicata
is an affirmative defense that should not be raised as part of a 12(b)(6) motion, but should
instead be addressed at summary judgment or at trial.”). The Fifth Circuit “recognize[s]
two limited exceptions to this rule.” Id. at 281. “The first exception allows ‘[d]ismissal by

1

R. Docs. Nos. 61, 64, 77, 78, 81, 88.

2

R. Doc. No. 61, pp. 1–4 (res judicata); id. pp. 4–11 (contract interpretation
arguments); R. Doc. No. 72, pp.
1

the court sua sponte on res judicata grounds . . . in the interest of judicial economy where
both actions were brought before the same court.’” Id. (quoting Boone v. Kurtz, 617 F.2d
435, 436 (5th Cir. 1980). “The second exception holds that ‘where all of the relevant facts
are contained in the record before us and all are uncontroverted, we may not ignore their
legal effect.’” Id. (quoting Am. Furniture Co. v. Int'l Accommodations Supply, 721 F.2d
478, 482 (5th Cir. Unit A Mar. 1981)).
Neither exception to the rule that res judicata must be pleaded applies. The
judgment that Defendants assert has preclusive effect was entered by an Alabama state
court, not this Court. And all of the relevant facts concerning that prior judgment are not
before the Court. While it would appear that the judgment itself has been submitted, the
Court from that alone cannot determine the scope of its preclusive effect. To take one
example, Plaintiffs assert the preclusive effect of the prior judgment is limited to an oral
contract, not the contracts at issue in this case.3 Without, for example, the complaint filed
in Alabama state court, the Court cannot resolve this issue. Without the ability to
determine the preclusive effect of the prior judgment, the Court similarly cannot resolve
Defendants’ motion for sanctions, which depends entirely on what matters the Alabama
state court resolved.4
It is also not possible to resolve Plaintiffs’ contractual indemnification claim on the
3

R. Doc. No. 64, p. 3.

4

R. Doc. No. 77, p. 2 (arguing for sanctions based on an alleged violation of
the Court’s order that “[t]he amending and superseding complaint is to
urge only claims not previously adjudicated by the Alabama state court”).
Because the Court cannot determine the scope and contents of the prior
judgment, it is also not possible to resolve Defendants’ argument that the
Rooker-Feldman doctrine, which prohibits federal courts from reviewing
as an appellate court a state court decision, bars this case. R. Doc. No. 81.
2

pleadings. It would appear that crucial to this determination is whether Defendants were
third-party beneficiaries of the contract between Metro Disposal, Inc. and Tidewater, LLC.5
While Plaintiffs have alleged that Defendants were intended beneficiaries, under Louisiana
law “a stipulation pour autrui [third-party beneficiary arrangement] is not presumed” and
the party asserting its “existence has the burden of proof.” Olympia Minerals, LLC v. HS
Resources, Inc., __ So.3d __, 2013 WL 4436218, at *21 (La. Ct. App. Aug. 21, 2013).
Where a party “claims the [] agreement was obtained to protect the [third party’s] interests”
but “the intent to benefit the [third party] is not manifested in the [] agreement itself” and
a contracting party “specifically den[ies] that they were informed” the agreement was
“intended to protect the [third party’s] interests,” then “[t]hese opposing claims cannot be
resolved on summary judgment.” Denbury Onshore, L.L.C. v. Pucheu, 6 So.3d 386, 397
(La. Ct. App. 2009). What cannot be resolved on summary judgment obviously cannot be
resolved by a motion to dismiss.6
Accordingly,
5

R. Doc. No. 61, pp. 7–9; R. Doc. No. 64, pp. 5–6. Defendants make several
versions of this argument, including the absence of execution of the
relevant agreements and a lack of connection between the claim and the
allegedly applicable indemnification provision, but they all boil down to
the same essential factual question about the intended coverage of the
provision. And although Defendants also assert that Plaintiffs have not
alleged facts sufficient to support a claim for indemnification under
Louisiana law, R. Doc. No. 61-1, pp. 13–16, they clearly have. R. Doc. No.
60, ¶¶ 22, 29 (requesting “indemnification for their expenses, costs, legal
fees and other obligations as required by the acceptance of the USACE
funds”).

6

In Denbury, there was competent summary judgment evidence of the
intent to benefit a third party and the other elements of a stipulation pour
autrui. If Plaintiffs, after discovery, are unable to adduce the same to
support their allegations, Denbury obviously does not preclude the entry
of summary judgment.
3

IT IS ORDERED that Defendants’ motion to dismiss is DENIED.7
IT IS FURTHER ORDERED that Defendants’ motion for sanctions is DENIED.8

New Orleans, Louisiana, this 23rd day of September, 2013.

_____________________________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE

7

R. Doc. No. 61.

8

R. Doc. No. 77.
4