author: McCALLUM, J.

text:
    COMPASS ENERGY OPERATING, LLC, Plaintiff-Appellee v. ROBENA PROPERTY & ROYALTY COMPANY, LTD, et al., Defendants-Appellants
    No. 52,468-CA
    Court of Appeal of Louisiana, Second Circuit.
    Judgment rendered February 27, 2019 Rehearing Denied April 4, 2019
    MAYHALL FONDREN BLAIZE, By: Charles Gary Blaize, Jr., Baton Rouge, Counsel for Defendants-Appellants, Robena Property & Royalty Co., Ltd; Comer Royalty & Property; Gilly Family Trust; Neal Family Trust
    DAVIDSON SUMMERS APLC, By: W. Lake Hearne, Jr., Shreveport, Counsel for Defendants-Appellees, Dynex Royalties "Ruston Joint Venture" and Dynex Royalties LLC, III
    THEUS, GRISHAM, DAVIS & LEIGH, L.L.C., By: Paul Denton Spillers, Monroe, Counsel for Defendants-Appellees, Andrew O. Milstead, Jr. and Florentina R. Milstead
    BRADLEY, MURCHISON, KELLY & SHEA, By: Scott Robison Patton, Baton Rouge, Counsel for Plaintiff-Appellee, Compass Energy Operating, LLC
    Before MOORE, COX, and McCALLUM, JJ.
   McCALLUM, J.

Though somewhat diminished by the passage of time, the tsunami waves generated by an economic earthquake, consequent of an alleged attempt by Texas oil tycoons to corner the world market in silver, are still washing against distant shores. This now almost mythical silver seismic event, that once shook the very foundations of the great financial houses of Wall Street, again demonstrates its continuing effects by precipitating the litigation that currently lies before us.

At issue in this concursus proceeding are mineral interests that were owned by a bankruptcy debtor. These interests were conveyed by the debtor to the bankruptcy trustee. The same interests were later conveyed to third parties outside the trustee's chain of title. The trial judge found that the bankruptcy trust agreement needed to be recorded in order to affect third parties, and that an omnibus property description in the trustee's deed did not give adequate notice to the third parties who later acquired adverse ownership interests. Those parties who trace their ownership of the mineral interests to the trustee's deed appeal the judgment.

FACTS

H.M. Lewis and his daughter Caroline Lewis Hunt were shareholders in Lewis Realty Corporation. When Lewis Realty was liquidated in 1951, H.M. Lewis and Caroline received undivided 93/440 and 5/440 interests respectively in various immovable property, including 20 acres in Jackson Parish described as the E/2 of SE/4 of SW/4 of Section 2 in T-16-N, R-2-W ("the property"). Caroline was married to Nelson Bunker Hunt at the time. Her interest in the property was her separate property.

In an act of acknowledgement executed in 1970, H.M. Lewis, Caroline Hunt, and several others stated that they had conveyed the property to Jaclin Corporation in 1951 while reserving their mineral rights. The act was executed to recognize the ownership of the mineral interests in the property. H.M. Lewis was shown to have an 1860/8800 interest, while Caroline had a 100/8800 interest. An act of correction was executed in 1971 to reflect that H.M. Lewis's undivided mineral interest in the property was actually a 2045/8800, or 0.2323 interest.

In 1977, Caroline received ownership of one-third of her father's 0.2323 mineral interest in the property through his succession. This was subject to a usufruct in favor of her mother, who received the remaining two-thirds ownership of the 0.2323 mineral interest.

On October 1, 1980, Caroline Hunt and other mineral interest owners entered into a mineral lease with Jaclin Corporation regarding the property.

Some eight years later, in the wake of the lingering aftermath of "Silver Thursday," Caroline and Nelson Bunker Hunt filed for Chapter 11 bankruptcy in Texas. In November of 1989, the parties to the bankruptcy proceedings entered into a Joint Plan. This Joint Plan was confirmed by order of the bankruptcy court in December of 1989, with the order approving the NBH Liquidating Trust Agreement ("Agreement") and establishing the NBH Liquidating Trust ("Trust"). The order also provided that on the effective date, all of the property of the debtors' estate except for retained assets would vest in the independent trustee in his capacity as trustee of the Trust.

Effective January 8, 1990, Caroline Lewis Hunt and Nelson Bunker Hunt executed a deed and assignment of leases and bill of sale without warranty in favor of R. Carter Pate as trustee. This is known at the "Pate deed." At the time, Caroline owned a 0.08181 interest in the property comprising her own interest through the liquidation and the interest that she had acquired through her father's succession.

The Pate deed was recorded in Jackson Parish on February 6, 1992. It conveyed (underlining in original):

(1) the wells described on Exhibit "A" attached hereto and incorporated herein by reference for all purposes (collectively, the "Wells" or singularly, a "Well"); and all mineral estates, mineral leases, oil and gas leases, oil, gas, hydrocarbons and mineral leases and other interests of any kind whatsoever in any mineral estate, together with all oil, gas and other minerals produced therefrom, whether known or unknown, metallic or nonmetallic, common or unique (and the proceeds of the sale thereof), including, without limitation, gravel, shale, lignite, sulphur, gold, silver, lead, zinc, copper, iron, coal, gas, oil, casinghead gas, other hydrocarbons, uranium, steam, geothermal energy and all other minerals or substances and all royalty interests, overriding royalty interests, net profits interests, production payments and similar interests described in Exhibit "A", any amendments, renewals, extensions, replacements or modifications thereof, and each and every kind and character of right, title, claim or interest which Grantors have in and to the interests, properties and lands set forth on Exhibit "A", and any other surface estates, in the above-referenced County and State as of the Effective Time (as hereinafter defined)(collectively, the "Leases"). The description of the Wells in Exhibit "A" and the description of the Leases in Exhibit "A" are not intended to limit each other, it being the intent of the Grantor and Grantee that this Deed convey every interest of Grantor in and to the Leases described in Exhibit "A" irrespective of whether the extent to which any Well is located on, includes or is related in any such Lease, and that this Deed convey every interest of Grantor in and to every Well described in Exhibit "A" irrespective of whether or the extent to which any such Well is located on or related to any Lease.
Collectively, all of the foregoing items being conveyed under this paragraph (1) are referred to as the "Lease Interests."
(2) The following properties and rights, or portions thereof, to the extent and only to the extent they relate to or cover the Lease Interests or the Wells:
(a) All unitization, unit operating, commuitization, and pooling agreements and orders directly relating to or appertaining to the Lease Interests or the Wells[.]
.....
All of the rights, lands, and interests described in paragraphs (1) and (2) above are collectively referred to as the "Properties."
.....

The Exhibit "A" referred to in the Pate deed and attached thereto stated:

Exhibit "A" to the certain Assignment from Nelson Bunker Hunt and Caroline Lewis Hunt, Debtors, to be effective January 8, 1990, pertaining to lands located in Jackson Parish, Louisiana.
Davis Brothers A-1 & C-1 E/2 Sec. 21 & W/2 Sec. 22, T-16-N, R-2-W McDowell SW/4 Sec. 2, SE/4 Sec. 3, NE/4 Sec. 10, NW/4 Sec. 11, all T-16-N, R-2-W Breedlove N/2 Sec. 3, T-16-N, R-2-W & S/2 Sec. 34, T-17-N, R-2-W

The Pate deed made reference to the Joint Plan and an August 30, 1990, compromise settlement agreement, stating:

By Order Confirming Joint Plan of Reorganization dated December 18, 1989, in Case No. 388-35726-HCA-11 (Chapter 11)(the "Order") the United States Bankruptcy Court for the Northern District of Texas, Dallas Division, confirmed and modified that certain Joint Plan of Reorganization wherein Nelson Bunker Hunt and Caroline Lewis Hunt (the "Hunts") are the debtors (the "Plan"). Paragraph 10 of the Order and Sections 5.2(a) and 5.2(f) of the Plan provide that title to the Properties was vested in Grantee on January 8, 1990. This Deed Without Warranty is being executed, delivered, accepted and recorded merely to memorialize and to place of record, in conformance with applicable state law, the transfer of the Properties which occurred on January 8, 1990. All rights and interests transferred to the Trustee in the Properties are established by the Plan and by that Compromise Settlement Agreement dated August 30, 1990 (the "Agreement"), and neither the Grantor nor the Trustee by this Deed Without Warranty intend to modify, alter or amend those rights or interests.

As noted above, the Pate deed was recorded in Jackson Parish on February 6, 1992. On that same date, a "Release and Termination of Memorandum of Non-Productive Interests" executed by the Hunts was also recorded in Jackson Parish. It was to have an effective date of January 8, 1990, and it provided that: (1) title to the property in Exhibit A vested in Pate on January 8, 1990; (2) a dispute had arisen between the Hunts, the Trustee, and others over the ownership of the property transferred under the Plan; (3) the Hunts had filed a memorandum of interest in nonproductive interests in Jackson Parish regarding the property; (4) the Hunts, the Trustee, and other parties had entered into a settlement agreement as of August of 1990 regarding ownership of the property; and (5) ownership of the interests in the property was governed by the plan, the order, and the settlement agreement. The Exhibit A attached to the release was identical to the Exhibit A attached to the Pate deed.

Through a deed and assignment of leases and bill of sale recorded in Jackson Parish on February 6, 1992, Pate, as trustee, conveyed mineral interests to several parties, including Robena. This was known as the "Robena deed." The Robena deed conveyed the following:

(1) Any and all wells situated on the lands described on Exhibit "A" attached hereto and incorporated herein by reference for all purposes (collectively, the "Wells" or, singularly, a "Well"); and all mineral estates, mineral leases, oil and gas leases, oil, gas, hydrocarbons and mineral leases and other interests of any kind whatsoever in any mineral estate, together with all oil, gas and other minerals produced therefrom, whether known or unknown, metallic or nometallic, common or unique (and the proceeds of the sale thereof), including, without limitation, gravel, shale, lignite, sulphur, gold, silver, lead, zinc, copper, iron, coal, gas, oil, casinghead gas, other hydrocarbons, uranium, steam, geothermal energy and all other minerals or substances and all royalty interests, overriding royalty interests, net profits interests, production payments and similar interests described in Exhibit "A", any amendments, renewals, extensions, replacements or modifications thereof and each and every kind and character of right, title, claim, or interest which Grantor has in and to the interests, properties and lands set forth on Exhibit "A" (collectively, the "Leases").
(2) The following properties, rights and contracts, or portions thereof, to the extent and only to the extent they relate to or cover the Wells and the Leases:
(a) All unitization, unit operating, communization, and pooling agreements and orders directly relating to or appertaining to the Wells and the Leases[.]
.....
All of the rights, lands, and interests described in (1) and (2) above are collectively referred to as the "Properties." Provided, however, that the term "Properties" shall not mean or include, and Grantor hereby expressly reserves and retains, any and all rights, claims, interests and other property which would otherwise constitute a portion of the "Properties" covered hereby, insofar as such rights, claims, interests or other property cover, constitute, relate to or are attributable to any lands that are not included, as of the Effective Time, within an existing proration, production or spacing unit, as prescribed by an applicable governmental authority or as otherwise exists by virtue of an existing contractual arrangement, for an oil and/or gas well or a unit that is specifically described in Exhibit "A" attached hereto.

The bottom of each page of the Robena deed contained the assertion: "THIS IS AN ASSIGNMENT OF PRODUCING PROPERTIES." Exhibit "A" to the Robena deed stated:

Exhibit "A" to that certain Assignment from NBH Liquidating Trust to be effective January 1, 1992, pertaining to lands located in Jackson Parish, Louisiana.
Davis Brothers A-1 & C-1 E/2 Sec. 21 & W/2 Sec. 22, T-16-N, R-2-W McDowell SW/4 Sec. 2, SE/4 Sec. 3, NE/4 Sec. 10, NW/4 Sec. 11, all T-16-N, R-2-W Breedlove N/2 Sec. 3, T-16-N, R-2-W & S/2 Sec. 34, T-17-N, R-2-W Davis Brothers J-1 SE/4 Sec. 10, SW/4 Sec. 11, NW/4 Sec. 14, NE/4 Sec. 15, all T-16-N, R-2-W
This Exhibit "A" and the Deed and Assignment of Leases and Bill of Sale to which this Exhibit "A" is attached (the "Deed") only cover and include royalty interests, overriding royalty interests and fee mineral interests with respect to the lands, wells and other properties described above or otherwise described in the Deed.

On October 1, 1997, a "Certificate of Sale of Personal Property (Acquired by the United States Under Internal Revenue Law)" was recorded in Jackson Parish. It stated that on September 29, 1997, personal property acquired by the United States from Caroline Hunt under the provisions of Section 6.3 of the Joint Plan was sold to Wayne Pender and A.O. Milstead, Jr. A property description including the undivided 0.2323 mineral interest in the property was attached to the certificate.

On January 12, 1998, Caroline and her mother's estate conveyed their mineral interests in the property by quitclaim deed to Wayne Pender, Linda Blaylock Pender, Andrew Ordell Milstead, Jr., and Florentina Rodriguez Milstead. Dynex Royalties would acquire a mineral interest in the property through this chain of title.

On April 26, 2017, Compass Energy Operating, LLC, the operator of a unit that included the disputed property, filed a petition in concursus in Jackson Parish. Compass alleged there was a dispute over an undivided mineral interest in the property. Among the defendants named were Robena Property & Royalty Company, Ltd., Dynex Royalties, and the Milsteads.

Compass contended that because Exhibit A to the Pate deed did not list any mineral leases, unit names, or other assets associated with the property other than the reference to the McDowell well, then the extent of the interest in the property that was intended to be conveyed in the Pate deed was unclear.

The Milsteads filed a pretrial memorandum in which they asserted that: (1) La. R.S. 9:2092 required that the Agreement be recorded in Jackson Parish in order for the Trust to own immovable property there; (2) the omnibus property description in the Pate deed did not provide adequate notice to third parties who acquired an adverse interest; and (3) the Robena deed conveyed only producing wells. Dynex adopted this pretrial memorandum as its own.

At the trial in this matter, the court accepted into evidence various documents in the chain of title. Because the Joint Plan and bankruptcy order were not recorded in Jackson Parish, the trial court allowed them into evidence for the limited purpose of showing that a bankruptcy had been filed. After hearing argument from the parties, the trial court adopted the "argument and memorandum and citations of the law" in the Milsteads' pretrial memorandum. Accordingly, the trial court rendered judgment in favor of the Milsteads and Dynex and against Robena.

Robena has appealed.

DISCUSSION

We note from the outset that the ownership of the undivided mineral interest left to Caroline's mother by her father is not in dispute. Thus, the defendants who assert title through the Robena deed make no claim to this 0.140909 mineral interest which was obtained by Caroline following her mother's death in 1996. At issue is the ownership of the 0.08181 interest that Caroline received at the liquidation of Lewis Realty Corporation and from her father's succession.

Recordation requirement

Robena first argues on appeal that the trial court erred as a matter of law in adopting the Milsteads' argument that the Agreement needed to be recorded in Jackson Parish in order for third parties to be affected by any conveyances of immovable property in Jackson Parish in the Pate deed. Robena contends that because the Trust was created and the Hunts' property transferred to the trustee by operation of law upon the filing of the bankruptcy petition, the requirement that the Agreement be recorded in order to affect third parties was not applicable.

Mineral rights were conveyed in the various deeds. A mineral right is an incorporeal immovable. La. R.S. 31:18. La. R.S. 9:2092(A) mandates the recordation of a trust instrument when the trust includes immovable property:

If at any time the trust property of either an inter vivos trust or a testamentary trust includes immovables or other property the title to which must be recorded in order to affect third persons, a trustee shall file the trust instrument ... for record in each parish in which the property is located....

The Louisiana Trust Code contemplates two types of trusts: an inter vivos trust and a testamentary trust. However, the Trust in this matter is not a Louisiana statutory trust created under the Louisiana Trust Code. Rather, it was created under the authority of a United States bankruptcy court in Texas in order to administer the estate created under 11 U.S.C. § 541(a) when the Chapter 11 bankruptcy petition was filed. As such, the trustee was tasked with liquidating certain assets belonging to the Hunts and paying off creditors.

La. R.S. 9:1761 defines a settlor as the person who created the trust. A settlor may dispose of property in trust to the same extent that he may dispose of that property free of trust. La. R.S. 9:1737. The Trust was not created by the Hunts as settlors, but by order of the bankruptcy court. Upon filing their Chapter 11 bankruptcy petition and prior to the establishment of the Trust, the Hunts' bankruptcy estate was created. The estate included "all legal or equitable interests of the debtor in property as of the commencement of the case." 11 U.S.C. § 541(a)(1). The Joint Plan was signed in November of 1989. The next month, the bankruptcy court confirmed the Joint Plan, approved the Agreement, and established the Trust. The bankruptcy court's order also stated that except for retained assets, all of the property in the Hunts' bankruptcy estate would vest in the trustee.

Finally, we recognize that the Pate deed clearly established from whence Pate's interest in the property originated. The deed contained specific language that it was being executed and recorded "merely to memorialize and to place of record, in conformance with applicable state law, the transfer of the Properties which occurred on January 8, 1990." Thus, this is not a situation where a third party examining the chain of title would be unable to determine how a trustee had obtained an interest in the property.

Under the circumstances of this case, we conclude there was no requirement that the Agreement be recorded in Jackson Parish in order for Pate, as trustee, to acquire immovable property in Jackson Parish through the Pate deed or for that conveyance to affect third parties. Accordingly, the trial court erred in determining otherwise.

Public records doctrine

Robena next argues that that the trial court erred in concluding that the Pate deed contained an omnibus description that did not provide adequate notice to third parties who acquired an adverse interest. Robena maintains that the property description was sufficiently specific to inform third parties of the properties conveyed therein.

As this court stated in Biggs v. Hatter , 46,910, pp. 12-13 (La. App. 2 Cir. 4/11/12), 91 So.3d 1148, 1157, writ denied , 2012-1075 (La. 9/21/12), 98 So.3d 337 :

The public records doctrine is founded upon our public policy and social purpose of assuring the stability of land titles. Camel v. Waller , 526 So.2d 1086 (La.1988). The doctrine does not create rights in a positive sense, but rather has the negative effect of denying the effectiveness of certain rights unless they are recorded. It is essentially a negative doctrine. Third persons are not allowed to rely on what is contained in the public records but can instead rely on the absence from the public record of those interests that are required to be recorded. Camel v. Waller , supra . Simply put, an instrument in writing affecting immovable property which is not recorded is null and void except between the parties. Cimarex Energy Co. v. Mauboules , 2009-1170 (La. 4/9/10), 40 So.3d 931.

The public records doctrine is reflected in La. C.C. art. 3338.

On the basis of the public records doctrine, third persons need only to look to the public records to determine adverse claims. All persons are held to have constructive notice of the existence and contents of recorded instruments affecting immovable property. Thomas v. Lewis , 475 So.2d 52 (La. App. 2 Cir. 1985).

Where a recorded instrument has language that fairly puts a third person on inquiry as to the title and he does not avail himself of the means and facilities at hand to obtain knowledge of the true facts, he is to be considered as having purchased at his own peril. Wells v. Joseph , 234 La. 780, 101 So.2d 667 (1958).

Louisiana jurisprudence has not established precise criteria to determine what description in the public records is sufficient to place third persons on notice, and such determination is to be made on a case-by-case basis. Quality Environmental Processes, Inc. v. I.P. Petroleum Co., Inc. , 2013-1582 (La. 5/7/14), 144 So.3d 1011. Louisiana courts have been liberal in construing the description of property in deeds so as to sustain, rather than defeat, the conveyance. Id.

The Milsteads and Dynex assert that the Pate deed contained an omnibus property description. An omnibus description does not provide adequate notice to third parties. Williams v. Bowie Lumber Co. , 214 La. 750, 38 So.2d 729 (1948).

The Milsteads and Dynex maintain that the Pate deed failed to adequately describe the property rights that were purportedly conveyed. They further maintain that the deed did not describe any mineral lease, and that nowhere on Exhibit A was there any description of any particular lease, particular mineral interest, or particular interest in future mineral production. They argue that the four wells were the only properties described with detail on Exhibit A.

Robena counters that the property description in the Pate deed did not limit the property conveyed to the wells listed in Exhibit A. Robena further argues that the lands burdened by the mineral servitude were specifically described.

The Pate deed described what was being conveyed from the Hunts to Pate as:

[T]he wells described on Exhibit "A"... and all mineral estates, mineral leases, oil and gas leases, oil, gas, hydrocarbons and mineral leases and other interests of any kind whatsoever in any mineral estate, together with all oil, gas and other minerals produced therefrom, whether known or unknown, ... and all royalty interests, overriding royalty interests, net profits interests, production payments and similar interests described in Exhibit "A", ... and each and every kind and character of right, title, claim, or interest which Grantors have in and to the interests, properties, and lands set forth on Exhibit "A"....

Exhibit A lists wells in one column and then various property descriptions in another column. Thus, to the right of the "McDowell" well is the property description of "SW/4 Sec. 2, SE/4 Sec. 3, NE/4 Sec. 10, NW/4 Sec. 11, all T-16-N, R-2-W." Within the SW/4 of Section 2 is the property at issue in this matter, namely the E/2 of SE/4 of SW/4 of Section 2 in T-16-N, R-2-W. Thus, Exhibit A clearly designates the property in which the Hunts conveyed "every kind and character of right, title, claim, or interest" to Pate, that being the property at issue.

The property description was sufficiently specific to place third parties on notice of what had been conveyed. Accordingly, the trial court was clearly wrong in adopting the Milsteads' argument that characterized the Pate deed as containing an omnibus description which failed to give adequate notice to third parties.

Remand

At the trial, the court considered ordering the case transferred to the bankruptcy court to rule on what had occurred in the bankruptcy proceeding. We remand this matter to the trial court to determine what relevant properties were transferred to the bankruptcy estate upon filing of the bankruptcy petition and subsequently conveyed to the trustee. This is especially prudent in light of the aforementioned "Certificate of Sale of Personal Property (Acquired by the United States Under Internal Revenue Law)" that was recorded in Jackson Parish five years after the Pate deed.

CONCLUSION

With the parties to bear their own costs, the judgment is REVERSED and the matter is REMANDED for further proceedings in accordance herewith.

APPLICATION FOR REHEARING

Before Felicia Toney Williams, Daniel Milton Moore III, Frances Jones Pitman, Jeff Cox, Jay Bowen McCallum - Writing, JJ.

Rehearing denied.


source: Caselaw Access Project

author: BLEICH, J. (Pro Tempore )

license: Public Domain

text:
    Inez Marie Prueitt MADDEN, Plaintiff-Appellant v. Robert CRAWFORD and Cynthia Sandy Crawford, Defendants-Appellees
    No. 52,466-CA
    Court of Appeal of Louisiana, Second Circuit.
    Judgment rendered February 27, 2019
    WALTER D. WHITE, Shreveport, Counsel for Appellant
    DAVID L. WHITE, Bossier City, Counsel for Appellees
    Before PITMAN, STEPHENS, and BLEICH (Pro Tempore ), JJ.
   BLEICH, J. (Pro Tempore )

Plaintiff, Inez Marie Prueitt Madden, filed a petition seeking to annul an inter vivos donation of immovable property she executed in favor of her son and daughter-in-law. She has appealed from the adverse judgment rendered by the trial court. For the reasons set forth below, we affirm.

FACTS/PROCEDURAL HISTORY

Plaintiff, Inez Madden, is a widow in her mid-70s. Her first marriage was to Odell Crawford in 1960. They had a son, Robert Crawford, in 1961, and the marriage ended in divorce shortly thereafter. Plaintiff's second marriage was in 1964 to Donald Ray Madden. Together they had two children: Hope Madden Roussett, who currently lives in Texas, and Kathleen Madden, who predeceased both of her parents in 1976. Mr. Madden died in 2008. Mrs. Madden was placed in possession of a 1/2 interest in the immovable property obtained by the couple during the marriage, and Hope was placed in possession of the other ½ interest, which she thereafter donated to Mrs. Madden.

In 2014, Robert Crawford and his future wife Cynthia ("Sandy") moved to Louisiana from Texas to take care of Mrs. Madden and the property. With Mrs. Madden's consent and permission, Robert and Sandy moved onto the property and lived in the house located on the property with her until they could move into a mobile home on the property. According to Defendants, Robert and Sandy Crawford, since they have lived on the property, they have continuously maintained the grounds. Mrs. Madden testified that Robert and Sandy helped her keep up the property. The Crawfords testified that they have also paid the property taxes, as well as utility bills, and spent money for "home improvements" to the property, all with Mrs. Madden's consent. According to all parties, prior to the instant suit, they and Mrs. Madden made decisions together about the property, and everyone "got along."

Defendants further assert that, in return for their moving onto the property to help and provide support in the care of Mrs. Madden, she agreed to donate the property to them. According to Defendants, they all met with attorney Gray Kitchens for Mrs. Madden to explain what she wanted. Kitchens explained to Mrs. Madden the consequences of the inter vivos donation and suggested that she retain a lifetime usufruct for herself. Plaintiff and Defendants went a second time to Attorney Kitchens' office to execute the donation and other estate planning documents on July 26, 2016. At that time, attorney Richard Ray met with the parties and notarized the donation, which was witnessed by a third attorney, Spencer Hays, and the law firm's secretary, Lindsay Hill.

According to Mrs. Madden, the incident that prompted the instant litigation was her receipt of correspondence from the Bossier Parish Tax Assessor which indicated that her son Robert was the owner of the property. Mrs. Madden consulted with her daughter Hope and her close friend Judy McKenzie. After Hope failed in an attempt to have Robert and Sandy return the property, Mrs. Madden filed a petition to annul the inter vivos donation on December 22, 2016. Defendants filed an answer and reconventional demand to recover the amounts they spent to improve and maintain the property in the event the donation was annulled. Mrs. Madden filed several amending and supplemental petitions, as well as exceptions of prematurity and no cause of action. Mrs. Madden sought annulment of the donation as a donation omnium bonorum ; on the basis of fraud/duress; and, for lack of donative capacity. Defendants amended their answer each time an amending and supplemental petition was filed. Defendants sought recovery under detrimental reliance/unjust enrichment theories.

Trial was held April 17-18, 2018. The trial court rendered judgment in favor of Robert and Sandy Crawford and dismissed Mrs. Madden's action to annul, based upon its findings that Mrs. Madden knew what she was doing at the time the donation inter vivos was executed, and she only filed the action to annul because she regretted signing the donation. Plaintiff has appealed this adverse decision.

DISCUSSION

On appeal, Mrs. Madden has asserted several assignments of error. According to Plaintiff, the trial court committed manifest error in failing to:

(1) properly apply the law regarding usufruct and naked ownership to the facts, pleadings, and actions of the parties following the filing of this suit, which would have revealed the "true intent" of Defendants;
(2) give due "credence" to the parties' stipulations as to the medical records introduced into evidence, as well as to testimony regarding dizzy spells of Plaintiff after the date of the medical findings, as well as failing to properly evaluate the parties' credibility and give "due regard" to the age, physical and mental limitations, disadvantages, and susceptibilities of Plaintiff;
(3) properly evaluate the history, actions, and testimony of Defendants, and to consider their bias, prejudice, self-serving interest, and actions following the donation;
(4) apply a reasonable "clear and convincing" standard of proof to the actions and testimony of Plaintiff and her witnesses, considering the circumstances and the limitations of Plaintiff, as well as the meaning of the donation, considering who prepared it;
(5) consider the conflict of interest of the attorney who prepared the inter vivos donation at issue, as well as his failure to disclose and refer Plaintiff to an attorney without a conflict pursuant to Rule 1.7 of the Rules of Professional Conduct ; and
(6) properly consider Louisiana's Medicaid Rules, which will have a profound impact on Plaintiff if the donation inter vivos is upheld in the event that Plaintiff suffers a serious medical event.

Defendants contend that there is no merit to any of Plaintiff's assignments of error, and urge this Court to affirm the lower court's judgment. According to Defendants, the trial court correctly found that the donation set forth the parties' intent. Furthermore, the trial court did not abuse its discretion in assessing the credibility of the parties. Likewise, there was no conflict of interest on the part of Attorney Kitchens, who prepared the donation as requested by Plaintiff. Finally, the issue of Plaintiff's potential eligibility for Medicaid was properly dismissed by the trial court as premature and irrelevant.

Applicable Legal Principles

A district court's reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed on review unless they are manifestly erroneous or clearly wrong. Wooley v. Lucksinger , 09-0571 (La. 04/01/11), 61 So.3d 507 ; Rosell v. ESCO , 549 So.2d 840 (La. 1989). When findings are based on determinations regarding the credibility of witnesses, the manifest error standard demands great deference to the trial court's findings. Robinson v. Board of Supervisors for University of Louisiana System , 16-2145 (La. 06/29/17), 225 So.3d 424 ; Rosell, supra; Fuller v. Bissell , 51,759 (La. App. 2 Cir. 01/10/18), 245 So.3d 1169.

Under the manifest error standard, the trial court's factual findings can be reversed only if the appellate court finds, based on the entire record, no reasonable factual basis for the factual finding and the fact finder is clearly wrong. Baker v. PHC-Minden, L.P. , 14-2243 (La. 05/05/15), 167 So.3d 528 ; Fuller, supra. Where documents or objective evidence so contradict the witness's story, or the story itself is so internally inconsistent or implausible on its face, that a reasonable fact finder would not credit the witness's story, then the court of appeal may find manifest error even in a finding based on credibility. Robinson, supra. But where no such factors are present, and the fact finder's finding is based on its decision to credit the testimony of one of two or more witnesses, that finding can virtually never be manifestly erroneous or clearly wrong. Id. ; Bellard v. American Central Insurance Co. , 07-1335 (La. 04/18/08), 980 So.2d 654 ; Johnson v. Tucker , 51,723 (La. App. 2 Cir. 11/15/17), 243 So.3d 1237, writs denied , 17-2075, 17-2073 (La. 02/09/18), 236 So.3d 1262, 1266.

A donation inter vivos is a contract by which a person, called the donor, gratuitiously divests himself, at present and irrevocably, of the thing given in favor of another, called the donee, who accepts it. La. C.C. art. 1468. A donation inter vivos shall be made by authentic act under the penalty of absolute nullity, unless otherwise expressly permitted by law. La. C.C. art. 1541. An authentic act is a writing executed before a notary public or other officer authorized to perform that function, in the presence of two witnesses, and signed by each party who executed it, by each witness, and by each notary public before whom it was executed. The typed or hand-printed name of each person shall be placed in a legible form immediately beneath the signature of each person signing the act. La. C.C. art. 1833(A). An authentic act constitutes full proof of the agreement it contains, as against the parties, their heirs, and successors by universal or particular title. La. C.C. art. 1835.

Although the donation may be valid as to form, the substantive requirements of a divestment and donative intent must be fulfilled in order to effect a valid donation. Rose v. Johnson , 06-518 (La. App. 3 Cir. 09/27/06), 940 So.2d 181, writ denied , 06-2428 (La. 12/15/06), 944 So.2d 1273. Donative intent is a factual issue and is reviewed on appeal under the manifest error standard of review. Thomson v. Thomson , 34,353 (La. App. 2 Cir. 01/24/01), 778 So.2d 736.

All persons have capacity to make and receive donations inter vivos and mortis causa , except as expressly provided by law. La. C.C. art. 1470. Capacity to donate inter vivos must exist at the time the donor makes the donation. La. C.C. art. 1471. To have capacity to make a donation inter vivos or mortis causa , a person must also be able to comprehend generally the consequences of the disposition that he is making. La. C.C. art. 1477.

A donation inter vivos or mortis causa shall be declared null upon proof that it is the product of fraud or duress. La. C.C. art. 1478. A donation inter vivos or mortis causa shall be declared null upon proof that it is the product of influence by the donee or another person that so impaired the volition of the donor as to substitute the volition of the donee or other person for the volition of the donor. La. C.C. art. 1479. A person who challenges the capacity of a donor must prove by clear and convincing evidence that the donor lacked capacity at the time the donor made the donation inter vivos . La. C.C. art. 1482(A). A person who challenges a donation because of fraud, duress, or undue influence, must prove it by clear and convincing evidence. La. C.C. art. 1483. Proving a matter by clear and convincing evidence requires establishing that the existence of a disputed fact is highly probable, that is, much more probable than its nonexistence. In re Succession of Dodson , 38,188 (La. App. 2 Cir. 03/03/04), 867 So.2d 921 ; Robertson v. Cubine , 31, 743 (La. App. 2 Cir. 03/31/99), 731 So.2d 931.

If there is no forced heir (and there are none in the case sub judice) , donations inter vivos and mortis causa may be made to the whole amount of the property of the donor, saving the reservation made hereafter. La. C.C. art. 1497. The donation inter vivos shall in no case divest the donor of all of his property; he must reserve to himself enough for subsistence. La. C.C. art. 1498. The determination of whether the donor reserved enough property for his subsistence must be made from the circumstances existing at the time the donation was made. Manichia v. Mahoney , 10-0087 (La. App. 4 Cir. 08/04/10), 45 So.3d 618, writ denied , 10-2259 (La. 11/24/10), 50 So.3d 829 ; LeBourgeois v. Yeutter , 550 So.2d 314, 316, citing Succession of Quaglino , 232 La. 870, 888, 95 So.2d 481, 487 (La. 1957). The current (or future) financial and property status of a donor is not at issue when considering whether a donor left enough for his own subsistence. Manichia, supra .

The person seeking to nullify a donation has the burden of proving that the donation divested the donor of all of his property and that the donor did not reserve enough for his subsistence. Succession of Doll , 593 So.2d 1239 (La. 1992) ; Tatum v. Riley , 49,670 (La. App. 2 Cir. 05/06/15), 166 So.3d 380 ; Holcomb v. Baker , 459 So.2d 158 (La. App. 2 Cir. 1984), writ denied , 462 So.2d 196 (La. 1984).

Excerpts from Trial Court's Reasons for Judgment

The Court finds that Robert Crawford returned to his family ... home with his soon-to-be wife Sandi to take care of his mother [Inez Madden], all by agreement of everyone, and that improvements were made to the property so that all three could live there.... [T]here was no evidence of any dispute[s] among these people for almost two years or actually over two years ... the donation occurred in July of '16. Then Inez said that she was not made aware of the donation until she received a tax notice in November of 2016. The problem really began when ... [Inez's] daughter became aware of the donation and this occurred over the Thanksgiving weekend.... [T]he problem suddenly began shortly thereafter. Everybody was there working together, cooperating, making improvements to the property and living together, but the testimony from Robert was that his sister was upset because she was not included in the decision.... [A]fter Hope became aware of the donation, [Inez seemed to regret] that the donation occurred and has taken action to undo it.
[The first cause of action alleged by Inez] was omnium bonorum , Civil Code article 1498... [T]he basis of the plaintiff's claim is that Inez, if she later moves to a nursing home, this donation will affect her ability to receive long-term health care under the Medicaid rule of uncompensated transfer. That's a lot of ifs. We don't know that. That's speculative ... [I]t is undisputed that her income equals approximately $3,000 a month. She has the usufruct of her property so she has a place to live, and there was no evidence introduced concerning her living expenses.... [A]s it currently stands, it appears as though [Inez] is able to live off of the $3,000 a month.... [S]he donated the naked ownership of the property, reserving the usufruct, which leaves to her the use of the property.... So the claim for omnium bonorum fails.
The second issue is [Plaintiff's] capacity.... So we start off with the fact that Ms. Inez had capacity, and the burden [is on her] to show that she [didn't at the time of the donation]. This donation occurred July 29, 2016.... Inez sat here during cross-examination and was able to clearly answer questions. Sometimes ... she said that she couldn't recall but the things she couldn't recall were things that were not beneficial to her ... And ... the fact that she even bragged about ... the fact she was able to take care of the property herself, and take care of herself ... further shows that she had capacity then ... to make that donation ... The medical evidence that was presented ... the Dr. Grossinger report that was four months after [the donation] ... is a single report by a radiologist that showed that she had ... a stroke at some point in time, but that it was old ... [T]here was no opinion rendered in the Court by a physician that [Plaintiff] was not competent on July 29, 2016, ... that she lacked capacity on July 29, 2016. And there was a lay opinion issued by [Plaintiff's friend Judy] that she saw changes in [Plaintiff's] faculties, but that's basically the extent of an opinion. Further, [Inez] met with [Gray] Kitchens. When she met with him, she brought a sample donation, she had that in her hand ... brought it with her. So, [Plaintiff] did understand generally the nature and consequences of this ... disposition, clearly, she walked in there with that [donation form] in her hand.... [Kitchens] prepared it, met with her, and had Richard Ray ... act as notary and execute it later in his office. So you [have the testimony of] two lawyers, actually three lawyers when you consider the other attorney [who] was involved, as well as the legal secretary [who] was there, all [in support of the conclusion] that [Inez] had capacity and understood what she was doing at the time.
[S]he complains that the attorney did not explain the concept of a usufruct to her. And as I indicated earlier, [Plaintiff's] testimony was interesting in that whenever things were beneficial to Ms. Inez, she could remember those things, when there were things that were not ... her response was that I simply do not remember, as opposed to the testimony of the other witnesses [who] were present [and] indicated that they did clearly know.... Richard Ray indicated that he specifically remembers explaining the donation to all [of] the parties there. That testimony was supported by Lindsey Hill [a former employee of the law firm].... Kitchens said he does not "toss around French or Latin terms" [usufruct and naked ownership] because they tend to confuse people. [T]hat this was clearly explained to her and that she understood that she had the right, despite this donation, to continue to live on her property, ... is what she in fact did ... So that supports that she had an understanding of the usufruct - the use of and the prudence of it.... So the claim for lack of capacity fails ...
On the issue of fraud, duress or undue influence ... a donation must be declared null upon proof that the done impaired the volition of the donor such as to substitute the donee's volition for that of the donor. La. C.C. art. 1479. [It is implicit ... that the influence] must be operative at the time that the donation is executed. [ La. C.C. art. 1479, comment (d) ]. [Inez] clearly was not in distress, was not forced to go [to Attorney Kitchens' office]... [she] brought a copy of .. a previous donation with her. So it actually [shows] the contrary, that there was no undue influence, this [was] Ms. Inez's intention.... Ms. Inez's intent was clear and so therefore there could not be any substitution of the donee's intent for hers... [T]he claim for fraud, duress or undue influence fails as well.

Analysis

The trial court meticulously discussed Plaintiff's claims in conjunction with the evidence before it ruled on each one. In rejecting Plaintiff's claim that this was a donation omnium bonorum, the trial judge correctly noted that not only did Mrs. Madden retain a lifetime usufruct over the immovable property, but she had a monthly income of approximately $3,000. Likewise, the court properly rejected Plaintiff's argument about her future Medicaid eligibility and the effect of the donation thereon as speculative. Next, the trial judge's finding that Mrs. Madden had the capacity to execute the donation on its date of execution is fully supported by the record. Not only was there an absence of any medical evidence to the contrary, there was overwhelming testimony that Mrs. Madden understood the nature and consequences of her dispositive action from witnesses who were present when the donation was executed. Finally, we find no error in the trial court's conclusion that there was no undue influence by exerted by the donee Defendants over the donor Plaintiff in this case. In making this finding, the court specifically relied upon testimony by Attorney Kitchens about a previous donation that Mrs. Madden brought with her to the appointment to show him what she wanted to have done. We cannot say that the trial court was manifestly erroneous or clearly wrong in this case.

CONCLUSION

For the reasons set forth above, the judgment of the trial court is AFFIRMED. Costs of this appeal are assessed to Plaintiff, Inez Marie Prueitt Madden.

AFFIRMED.

      It is this property that is the subject of the donation inter vivos that Mrs. Madden seeks to set aside.

      The trailer was remodeled by Robert and Sandy before they moved into it. According to Robert, he withdrew $30,000 from a retirement account in order to remodel the mobile home.

      According to Mrs. Madden, this first visit was abruptly cancelled when she showed up with a friend, Judy McKenzie.


author: BLEICH, J. (Pro Tempore)

text:
    PRIORITY NURSE STAFFING, INC. d/b/a Priority Medical Staffing and Del Pumphrey, Individually, Plaintiffs-Appellants v. TANSHI, LLC d/b/a DeSoto Behavioral Hospital, Suresh Donepudi and Dhana Donepudi, Defendants-Appellees
    No. 52,463-CA
    Court of Appeal of Louisiana, Second Circuit.
    Judgment rendered February 27, 2019.
    SHUEY SMITH, LLC, By: Richard E. Hiller, Shreveport, Counsel for Appellants
    PETTIETTE, ARMAND, DUNKELMAN, WOODLEY, BYRD & CROMWELL, LLP, By: Joseph S. Woodley, E. Henry Byrd, IV, Shreveport, Counsel for Appellees
    Before PITMAN, McCALLUM, and BLEICH (Pro Tempore), JJ.
   BLEICH, J. (Pro Tempore)

Plaintiffs, Priority Nurse Staffing, Inc. d/b/a Priority Medical Staffing, and Del Pumphrey, have appealed from the trial court's judgment April 12, 2018, judgment in favor of Defendants, Suresh and Dhana Donepudi, which granted an exception of res judicata filed by them and dismissed with prejudice all of Plaintiffs' claims against the Donepudi defendants. For the reasons set forth below, we affirm.

FACTS/PROCEDURAL HISTORY

In July 2014, Del Pumphrey ("Pumphrey"), the president and owner of Priority Nurse Staffing, Inc., d/b/a/ Priority Medical Staffing ("Priority"), was contacted by Dr. Suresh Donepudi, who asked for help in trying to save Dr. Donepudi's psychiatric hospital, DeSoto Behavioral Hospital ("DeSoto Behavioral"), which was rapidly losing patients and governmental funding for the patients. Dr. Donepudi's company, Tanshi, LLC, was the owner and operator of DeSoto Behavioral.

At a meeting on July 17, 2014, in Pumphrey's office, Dr. Donepudi hired Priority and Pumphrey to take over the management and supervision of DeSoto Behavioral. According to Pumphrey, Dr. Donepudi verbally guaranteed that he would be responsible for all of the fees, charges, and expenses incurred by Priority and Pumphrey for the services they rendered on behalf of DeSoto Behavioral.

Over the next six to seven weeks, Priority and Pumphrey took over the management and operation of DeSoto Behavioral, which included hiring a new hospital administrator and staffing the hospital with nursing personnel. Priority and Pumphrey increased the number of patients from one to 13 and stabilized the hospital's financial situation. In early September 2014, when the invoices of Priority and Pumphrey were not being paid by either Tanshi or Dr. Donepudi, Pumphrey and Priority terminated their affiliation with DeSoto Behavioral and refused to provide any further services to Dr. Donepudi and Tanshi.

On July 6, 2015, Plaintiffs, Priority and Pumphrey, filed a petition against Tanshi and Dr. and Mrs. Donepudi. Priority asserted a claim against Tanshi for nurse staffing fees, and against Dr. Donepudi and his wife Dhana for nurse management services. Pumphrey filed individual claims against the Donepudis for management fees and reimbursement of amounts paid on a Toyota lease agreement.

Thereafter, on May 19, 2017, Plaintiffs filed their first amended and supplemental petition in which they added a claim that Dr. Donepudi verbally guaranteed the payment of nurse staffing fees and was therefore personally liable for those fees. They also asserted that Dr. Donepudi personally guaranteed the payment of the Toyota lease agreement and was therefore personally liable for those payments as well.

On July 26, 2017, the Donepudis filed a motion for partial summary judgment on the claims asserted against them. In their motion, the Donepudis asserted that they were not liable for the debts, if any, of Tanshi. Specifically, they urged that Louisiana law does not recognize the existence of "personal guarantee" agreements that would serve to bind the individual defendants personally to the obligations of Tanshi.

On November 13, 2017, a hearing was held on Defendants' motion, and the trial court rendered judgment in open court in favor of the Donepudis. The judgment, the form and content of which was approved by Plaintiffs, was signed by the trial court on November 27, 2017, and reads as follows:

IT IS HEREBY ORDERED, ADJUGED, AND DECREED that the Motion for Partial Summary Judgment filed on behalf of SURESH DONEPUDI and DHANA DONEPUDI, is GRANTED, and the claims of the Plaintiffs, PRIORITY NURSE STAFFING, INC. d/b/a PRIORITY MEDICAL STAFFING, and DEL PUMPHREY, individually, as set forth in the Petition and First Amended Supplemental Petition, against Defendants, SURESH DONEPUDI and DHANA DONEPUDI, are hereby DISMISSED, WITH PREJUDICE, at the cost of Plaintiffs.
The claims of PRIORITY NURSE STAFFING, INC. d/b/a PRIORITY MEDICAL STAFFING and DEL PUMPHREY, individually against all other defendants are hereby reserved unto them.

Plaintiffs did not appeal from this adverse judgment of the trial court. Instead, on November 22, 2017, Plaintiffs filed their second amended and supplemental petition in which they reasserted all of their claims against the Donepudis from the first two petitions and further alleged that the Donepudis had committed fraud due to their failure to disclose the excluded person status of Dr. Donepudi; that Plaintiffs had detrimentally relied upon representations made by Dr. Donepudi as to his prohibited status vis-à-vis the federal health care programs and his promises to pay their invoices, fees and expenses; and, that the Donepudis had been unjustly enriched at the expense of Plaintiffs.

On December 19, 2017, the Donepudis filed exceptions of vagueness, res judicata , no cause of action, and prescription. According to the Donepudis, the new alternative theories of recovery asserted by Plaintiffs were barred by res judicata because the November 2017 judgment dismissing Plaintiffs' claims against them, with prejudice, is a valid, final judgment; the parties are the same; the new causes of action clearly existed at the time of the November 2017 judgment; and, the causes of action asserted in the amended petition, which are quasi-delictual theories of recovery, arose out of the transaction or occurrence that was the subject matter of the first judgment. The Donepudis also argued that the new quasi-delictual claims by Plaintiffs were prescribed on their face as they arose out of alleged conduct that occurred in 2014.

A hearing on the exceptions was held on April 2, 2018. Following arguments of counsel, the trial court granted the Donepudis' exception of res judicata , and decreed to be moot their exceptions of vagueness, no cause of action, and prescription. The court observed:

The two individuals were dismissed completely from the lawsuit. The only remaining claims were against Tanshi. The judgment was final.... There is nothing to amend because, as you stated correctly, your clients had been, your clients had been dismissed. Whether or not this was the same transaction or occurrence, the factual scenario that brought rise to the contract claims that were listed, it's the same transaction or occurrence. There's a ton of case law that says if you could have brought it, you should have brought it.

The trial court also found that the situation did not present an exceptional circumstance sufficient to justify relief from res judicata . A judgment granting the exception of res judicata filed by the Donepudis and dismissing Plaintiffs' claims against them as set forth in the second amended and supplemental petition was signed by the trial court on April 12, 2018. It is from this judgment that Plaintiffs have appealed.

DISCUSSION

According to Plaintiffs, the trial court erred in rendering judgment in favor of the Donepudis dismissing all of Plaintiffs' claims against them based upon the court's determination that the doctrine of res judicata precluded the claims. Plaintiffs contend that a comparison between the claims asserted against the Donepudis in their original and first amended petitions with the claims in the second amended and supplemental petition shows that the causes of action in the second amended petition do not arise out of the same transaction or occurrence that was the subject matter of the original and first amended petitions.

La. R.S. 13:4231 provides:

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.

Under La. R.S. 13:4231, a second action is precluded when the following are satisfied: (1) the judgment is valid; (2) the 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 the final judgment in the first suit; and (5) the cause or causes of action in the second suit arose out of the same transaction or occurrence that was the subject matter of the first litigation. Chauvin v. Exxon Mobil Corp. , 14-0808 (La. 12/09/14), 158 So.3d 761 ; Burguieres v. Pollingue , 02-1385 (La. 02/25/03), 843 So.2d 1049 ; Alpine Meadows, L.C. v. Winkler , 49,490 (La. App. 2 Cir. 12/10/14), 154 So.3d 747, writ denied , 15-0292 (La. 04/24/15), 169 So.3d 357. Whether the cause or causes of action asserted in the second suit arose out of the same transaction or occurrence which was the subject matter of the first suit is the chief inquiry. Burguieres, supra ; Terrebonne Fuel & Lube, Inc. v. Placid Refining Co. , 95-0654 (La. 01/16/96), 666 So.2d 624 ; Alpine Meadows, L.C., supra .

Res judicata ensures the finality of judgments and prevents litigation of all grounds for, or defenses to, recovery that were previously available to the parties, regardless of whether they were asserted or determined in the prior proceeding. City of Bastrop v. Harris , 50,727 (La. App. 2 Cir. 06/22/16), 198 So.3d 163 ; Paradise Village Children's Home, Inc. v. Liggins , 38,926 (La. App. 2 Cir. 10/13/04), 886 So.2d 562, writ denied , 05-0118 (La. 02/04/05), 893 So.2d 884. Res judicata forecloses both the relitigation of matters that have not been litigated but should have been raised in the earlier suit (claim preclusion) and matters previously litigated and decided (issue preclusion). Alpine Meadows, L.C., supra ; Hudson v. City of Bossier , 33,620 (La. App. 2 Cir. 08/25/00), 766 So.2d 738, writ denied , 00-2687 (La. 11/27/00), 775 So.2d 450. The res judicata effect of a prior judgment is a question of law that is reviewed de novo on appeal. City of Bastrop, supra ; Alpine Meadows, L.C., supra .

Regarding the first and second requirements for res judicata , that there be a valid and final judgment, the November 13, 2017, judgment of the trial court disposed of a motion for partial summary judgment filed by the Donepudis. In that November 2017 judgment, the trial court granted the motion and dismissed Plaintiffs' claims against the Donepudis with prejudice , reserving unto Plaintiffs their claims against "all other defendants." This is a valid and final judgment on the merits, since it dismissed Plaintiffs' claims against these defendants with prejudice, and Plaintiffs sought no further review of this judgment, but instead chose to file a second amended and supplemental petition against the dismissed Defendants. See, La. C.C.P. art. 1673 ; Tolis v. Board of Supervisors of Louisiana State University , 95-1529 (La. 10/16/95), 660 So.2d 1206 ; Barrasso Usdin Kupperman Freeman & Darver, L.L.C. v. Burch , 14-1020 (La. App. 4 Cir. 03/18/15), 163 So.3d 201, writ denied , 15-0779 (La. 06/01/15), 171 So.3d 931 ; Stogner v. Allbritton , 06-1863 (La. App. 1 Cir. 06/08/07), 965 So.2d 408. Requirement three, that the parties are the same, is met as well. Plaintiffs have likewise not disputed the existence of requirement four, that the cause or causes of action asserted in the second amended and supplemental petition existed at the time of the November 2017 final judgment. In support of their allegedly new claims of fraud, detrimental reliance and unjust enrichment, Plaintiffs asserted that:

At the time the Defendants contacted the Plaintiffs and engaged the services of the Plaintiffs to administer, manage and staff the DeSoto Behavioral Hospital in early July 2014, the Plaintiffs were completely unaware of the fact that Dr. Donepudi had been designated an excluded person, as of October 20, 2011, by the Office of Inspector General ("OIG") of the U.S. Department of Health & Human Services.

While Plaintiffs may not have been aware of Dr. Donepudi's excluded status and the existence of the OIG report in July 2014, they became aware of both this excluded status and the report's existence in August 2014, as evidenced by daily entries in a log kept by Pumphrey, which were disclosed during discovery to Defendants and then included as an attachment to Plaintiffs' opposition to Defendants' motion for partial summary judgment.

Plaintiffs contend that the trial court erred in finding that Defendants established the final requirement for res judicata , that the cause or cause of action asserted in the second action arose out of the transaction or occurrence that was the subject matter of the first litigation. We disagree.

The transaction or occurrence that is the subject matter of the litigation between Plaintiffs and Defendants is their agreement that Plaintiff Priority Nurse Staffing would administer, manage and staff DeSoto Behavioral and Defendant Tanshi would compensate Plaintiffs for said services. All of Plaintiffs' claims against the Donepudis, including those asserted for the first time in their second amended and supplemental petition, allege personal liability on the part of the Donepudis for the debts incurred under the above-mentioned agreement by Defendant Tanshi. Regardless of the theory (i.e., suretyship or a personal guaranty, fraud, detrimental reliance, or unjust enrichment) under which Plaintiffs seek the imposition of personal liability upon the Donepudis for Tanshi's failure to fulfill its contractual obligations, or the evidence upon which the theory of recovery is based, the fact remains that these claims all arise out of the subject matter of the first litigation. See, Alpine Meadows, L.C., supra ; Board of Supervisors of Louisiana State University, Agricultural and Mechanical College v. DixieBrewing Co. , 13-0250 (La. App. 4 Cir. 12/04/13), 131 So.3d 130, writ denied , 14-0007 (La. 02/12/14), 132 So.3d 399 ; Bulot v. Intracoastal Tubular Services, Inc. , 04-0398 (La. App. 4 Cir. 09/29/04), 883 So.2d 1146, writ denied , 04-2971 (La. 03/18/05), 896 So.2d 1003. As noted by Plaintiffs in their brief, the specific issue of the Donepudis' personal liability for Tanshi was addressed and rejected by the trial court in its November 2017 judgment on Defendants' motion for partial summary judgment.

Seeking to avoid a dismissal of their claims against the Donepudis, Plaintiffs argue that exceptional circumstances exist that justify a relief from the application of res judicata in this case. La. R.S. 13:4232(A)(1) provides that a judgment does not bar another action by the plaintiff when exceptional circumstances justify relief from the res judicata effect of the judgment. Citing Kevin Associates, LLC v. Crawford , 04-2227 (La. App. 1 Cir. 11/04/05), 917 So.2d 544, writ denied , 06-0220 (La. 05/05/06), 927 So.2d 311, the Louisiana Supreme Court in Oleszkowicz v. Exxon Mobil Oil Corp. , 14-0256 (La. 12/09/14), 156 So.3d 645, 648, observed that the "exceptional circumstances" exception generally applies to complex procedural situations in which litigants are deprived of the opportunity to present their claims due to unanticipated quirks in the system, factual situations that could not be anticipated by the parties, or decisions that are totally beyond the control of the parties. There are no such exceptional circumstances in this case. The allegations in Plaintiffs' second supplemental and amending petition could have been pled sooner, or Plaintiffs could have sought inclusion of a reservation of rights to bring further claims against the Donepudis in the November 2017 judgment.

CONCLUSION

For the reasons set forth above, the judgment of the trial court is AFFIRMED. Costs of this appeal are assessed to Plaintiffs, Priority Nurse Staffing, Inc. d/b/a Priority Medical Staffing and Del Pumphrey, Individually.

AFFIRMED.

      Neither party has disputed the validity of the judgment. As noted by the supreme court in Burguieres , 843 So.2d at 1053, for purposes of res judicata , a valid judgment is one rendered by a court with jurisdiction over both the subject matter and the parties after proper notice was given.


author: WILLIAMS, C.J.

text:
    Montez POWELL, Individually and on Behalf of His Deceased Wife, Chiquita Thomas, and Their Unborn Child, Montez Powell, Individually and OBO of Their Daughter, La'Mayah Powell, Plaintiffs-Appellants v. ST. FRANCIS MEDICAL CENTER, INC., et al., Defendants-Appellees
    No. 52,462-CA
    Court of Appeal of Louisiana, Second Circuit.
    Judgment rendered February 27, 2019.
    J. GARLAND SMITH & ASSOCIATES, By: J. Garland Smith, Sarah M. Smith, Counsel for Appellants
    NELSON, ZENTNER, SARTOR & SNELLINGS, LLC, By: F. Williams Sartor, Jr., Counsel for Appellee, St. Francis Medical Center, Inc.
    PETTIETTE, ARMAND, DUNKELMAN, WOODLEY, BYRD & CROMWELL, LLP, By: Rendi B. Wiggins, Counsel for Appellees, BRFHH Monroe, LLC D/B/A University Health Conway LSU, William Carter, RN and Ginger Pierce, RN
    Before WILLIAMS, PITMAN, and COX, JJ.
   WILLIAMS, C.J.

The plaintiff, Montez Powell, appeals a judgment granting an exception of prescription filed by the defendant, St. Francis Medical Center, Inc. The district court found that plaintiff failed to file his claim within one year from the date he knew or should have known that medical malpractice may have occurred. For the following reasons, we affirm.

FACTS

On July 19, 2016, Chiquita Thomas presented to the emergency room at St. Francis Medical Center (Downtown) in Monroe, Louisiana, with a complaint of persistent headaches. Thomas, who was approximately 20 weeks pregnant, was given pain medication and released. During the evening of July 22, 2016, Thomas presented to the emergency department of St. Francis Medical Center (North) in Monroe with a complaint that her headaches were continuing and had become extremely severe. After an examination, Thomas was given pain medication and told that her complaints were common during pregnancy. Thomas was released and told to follow-up with her OB/GYN.

On July 24, 2016, Thomas was transported by ambulance to the emergency department of University Health Monroe. Montez Powell, the husband of Thomas, described his wife's headaches as "massive" and said she had been unable to get out of bed. A CT Scan of the head showed that Thomas was suffering from a blood clot in the brain. Thomas was then transferred to Rapides Regional Medical Center in Alexandria, Louisiana, where physicians advised Powell that his wife's severe headaches during the past week had been caused by the blood clots in her brain. Later that same day, Thomas and her unborn child died at the hospital.

In August 2016, Powell went to the office of an attorney seeking review of the case to determine if Thomas had received proper medical treatment. In November 2016, Powell was named as administrator of his wife's estate. In December 2016, the medical records of Thomas were obtained by the attorney, who submitted the records to Rosalind Lloyd, a registered nurse, for review. On January 13, 2017, Nurse Lloyd met with the attorney and expressed her opinion that the records supported a claim of negligence because no tests were done to determine the cause of Thomas' severe headaches during her visits to St. Francis Medical Center.

On July 24, 2017, the plaintiff, Powell, individually and on behalf of his deceased wife and their unborn child, filed a complaint with the Louisiana Patients Compensation Fund ("PCF") requesting the formation of a medical review panel. Plaintiff named eight healthcare providers as defendants, including St. Francis Medical Center, Inc. ("SFMC"). On October 20, 2017, the PCF dismissed this complaint for plaintiff's failure to pay the full statutory filing fee. On October 24, 2017, plaintiff refiled the request for a medical review panel naming the same eight defendants.

In February 2018, SFMC filed an exception of prescription and plaintiff later filed an opposition. After a hearing, the district court found that plaintiff was placed on notice that malpractice may have been involved by the date of July 24, 2016, when he was advised that the blood clots were the cause of his wife's severe headaches for which she previously sought treatment at SFMC. The district court rendered judgment granting SFMC's exception of prescription and dismissing plaintiff's complaint. The plaintiff appeals the judgment.

DISCUSSION

The plaintiff contends the district court erred in granting the defendant's exception of prescription. Plaintiff argues that his second complaint was timely because it was filed within one year of the discovery of his medical malpractice claim in January 2017.

An action for damages for injury or death against a hospital arising out of patient care shall be filed within one year from the date of the alleged act, omission or neglect or within one year from the date of discovery of the alleged negligence. La. R.S. 9:5628. Prescription begins when a person obtains actual or constructive knowledge of the facts indicating to a reasonable person that he is the victim of a tort. Campo v. Correa , 2001-2707 (La. 6/21/02), 828 So.2d 502. When a party has sufficient information to excite attention or put a reasonably-minded person on guard and call for inquiry, he has the constructive knowledge necessary to start the running of prescription.

Abbott v. LSU Medical Center-Shreveport , 35,693 (La. App. 2 Cir. 2/27/02), 811 So.2d 1107, writ denied , 2002-0952 (La. 5/31/02), 817 So.2d 104.

The law of prescription does not require that the patient be informed by a medical practitioner or an attorney of possible malpractice before the limitation period begins to run. LaGrange v. Schumpert Medical Center , 33,541 (La. App. 2 Cir. 6/21/00), 765 So.2d 473. Prescription does not run as long as it is reasonable for a plaintiff not to recognize that the injury may be related to treatment. LaGrange, supra . When a plaintiff has knowledge of facts strongly suggestive that the untoward condition or outcome may be the result of improper treatment and there is no effort by the health care provider to mislead or cover up information which is available to plaintiff through inquiry, then the cause of action is reasonably knowable to plaintiff. Inaction by a plaintiff for more than one year under such circumstances is not reasonable. Abbott, supra .

When the district court's ruling is based on factual conclusions after receiving evidence, the standard of review is manifest error. These findings are reviewed based on the record as a whole. Abbott, supra .

In the present case, plaintiff testified that his wife sought treatment for severe headaches at SFMC on two occasions and was told each time that such headaches were normal during pregnancy and was given pain medication. Plaintiff stated that when his wife was taken to University Health, he was told the CT scan showed that his wife had a blood clot in her brain and needed to be transferred. Plaintiff testified that after his wife was transported to Rapides Regional, he was told by a physician that the blood clot was the cause of the severe headaches suffered by his wife during the prior weeks. Plaintiff stated that he went to an attorney's office the following month because he wanted to look into the matter to determine whether his wife had received proper treatment.

In his brief, plaintiff asserts that he did not know any facts suggesting that SFMC was at fault in failing to treat his wife until January 2017. Contrary to plaintiff's assertion, the record shows that as of July 2016, plaintiff was aware of the persistence and increasing severity of his wife's headaches, that she was required to return to the hospital to seek treatment for the headaches, that SFMC had not done any tests even after his wife returned to the hospital complaining that her headaches were worse, that a CT scan performed soon after those visits to SFMC showed a blood clot in her brain and that the blood clot was the cause of his wife's symptoms.

Based on the evidence presented, there was a reasonable basis for the plaintiff to suspect that more could have been done to diagnose his wife's condition at SFMC as of July 24, 2016. At that time, he possessed knowledge of facts strongly suggestive that his wife's death may have been the result of improper treatment. The record demonstrates that in July 2016, plaintiff was aware of sufficient information to excite his attention that malpractice might have been involved in the treatment of his wife. Thus, the plaintiff's complaint filed in October 2017 was untimely because it was filed more than one year after plaintiff knew or should have known of the medical malpractice claim. Consequently, although the result appears harsh, we cannot say the trial court erred in granting SFMC's exception of prescription and dismissing plaintiff's complaint.

CONCLUSION

For the foregoing reasons, the trial court's judgment is affirmed. Costs of this appeal are assessed to the appellant, Montez Powell.

AFFIRMED.


author: PITMAN, J.

text:
    Kailash K. DHALIWAL and the Succession of Manmohan S. Dhaliwal, Plaintiffs-Appellees v. Karminderdal S. DHALIWAL and Dhillon Sookham, Defendants-Appellees
    Succession of Manmohan Singh Dhaliwal, Plaintiff-Appellee
    Robert A. Lee and Sedric E. Banks, Plaintiffs-Appellees v. Kailash Dhaliwal, Karl Dhaliwal and Sookham Dhaliwal, Defendants-Appellees
    52,507-CA 52,508-CA 52,509-CA
    Court of Appeal of Louisiana, Second Circuit.
    Judgment rendered February 27, 2019. Rehearing Denied April 4, 2019
    NEAL LAW FIRM, By: Mark J. Neal, JAY NOLEN, Monroe, Counsel for Intervenor/ Appellant, Mahinderpal S. Dhaliwal
    HUDSON, POTTS & BERNSTEIN, L.L.P., By: Margaret H. Pruitt, Monroe, Counsel for Appellees, Succession of Manmohan Singh Dhaliwal and Kailash K. Dhaliwal
    DIMOS ERSKINE, LLP, By: Robert L. Garner, Monroe, Counsel for Appellees, Karminderdal S. Dhaliwal and Dhillon Sookham Dhaliwal
    SEDRIC E. BANKS, In Proper Person
    ROBERT A. LEE, In Proper Person
    Before WILLIAMS, PITMAN, and COX, JJ.
   PITMAN, J.

Appellant Mahinderpal Singh Dhaliwal appeals the trial court's granting of a motion to dismiss filed by the Succession of Manmohan Dhaliwal. For the following reasons, we affirm the judgment of the trial court.

FACTS

This is the third time this matter has been before this court. See Dhaliwal v. Dhaliwal , 48,034 (La. App. 2 Cir. 9/11/13), 124 So.3d 470, writ denied , 13-2931 (La. 2/21/14), 134 So.3d 1165 (" Dhaliwal I "), and Dhaliwal v. Dhaliwal , 49,973 (La. App. 2 Cir. 11/25/15), 184 So.3d 773, writ denied , 16-0236 (La. 4/4/16), 190 So.3d 1204 (" Dhaliwal II ").

The instant consolidated cases involve members of the Dhaliwal family. Manmohan S. Dhaliwal ("Manmohan") and his wife Kailash K. Dhaliwal ("Kailash") had two sons, Mahinderpal S. Dhaliwal ("Paul") and Karminderdal S. Dhaliwal ("Karl"). Karl is married to Dhillon Sookham Dhaliwal ("Sookham"), and their daughter is Simran Dhaliwal Emaus ("Simran"). Manmohan died intestate on June 21, 2010, and Kailash was made the administratrix of his succession (the "Succession").

On February 9, 2011, Kailash and the Succession filed a petition against Karl and Sookham in which they claimed that Manmohan, Kailash and Karl were equal partners in a joint venture that owned multiple convenience stores. The parties filed cross-motions for summary judgment, and Karl and Sookham also filed a peremptory exception of prescription or peremption. The trial court sustained the exception, finding that the suit claiming a share of profits was not timely filed; denied Kailash and the Succession's motion for summary judgment; sustained Karl and Sookham's motion for summary judgment; and dismissed with prejudice Kailash and the Succession's claims. Kailash and the Succession appealed.

In a September 11, 2013 opinion, this court found that this matter involved genuine issues of material fact regarding whether a joint venture existed between Manmohan, Kailash and Karl and, therefore, that summary judgment was inappropriate. See Dhaliwal I . This court reversed the judgments of the trial court regarding summary judgment and prescription and remanded for further proceedings. Id.

On May 13, 2014, Kailash, in her individual capacity, filed a motion to dismiss her claims against Karl and Sookham, and the trial court granted this motion. The trial court also denied the Succession's former attorney's motion to prohibit Kailash from dismissing the Succession's claims against Karl and Sookham. See Dhaliwal II .

Kailash died on April 16, 2015. On June 4, 2015, the trial court appointed Simran as administratrix of the Succession.

On September 19, 2016, the Succession, through its administratrix Simran, filed a motion to dismiss with prejudice the February 9, 2011 lawsuit filed against Karl and Sookham. The Succession contended that it was Simran's fiduciary duty to preserve the property and assets of the Succession and that she determined it was proper to dismiss its claims against them. She reasoned that there was insufficient evidence to support a claim that Manmohan was a partner in an oral joint venture with Karl and Sookham that would entitle the Succession to any award and, therefore, that continued prosecution of the lawsuit would squander the assets of the Succession and breach her fiduciary duty owed to the heirs of the Succession.

On March 17, 2017, Paul, in his capacity as an heir to the Succession, filed an opposition to the motion to dismiss. He argued that Simran breached her duty to act as a prudent administratrix. He alleged that she did not enforce all of the obligations in favor of the Succession; did not preserve, repair, maintain and protect the property of the Succession; failed to produce and file an accounting; paid the Succession's attorney without authorization from the trial court; and was in collusion with the Succession's attorney, Karl and Sookham. He also alleged that Simran and the Succession's attorney were in possession of documents that showed viable claims and that she and the Succession's attorney had taken no affirmative steps to pursue these claims against Karl and Sookham.

The hearing on the motion to dismiss took place in several parts. On March 20, 2017, the Succession introduced into evidence a deposition of Kailash taken on October 27, 2011. Counsel for the Succession noted portions of Kailash's testimony that supported its argument that there was no evidence that a joint venture existed between Manmohan, Kailash and Karl. In her deposition, Kailash testified that it was a family business; that she and her husband gave Karl the money to open the first convenience store; that she and Manmohan were not involved in the purchase of any stores after the first two stores and did not know how they were financed; that she and Manmohan had no input in how the stores operated; and that she and Manmohan never declared any of the stores on their income taxes. Counsel contended that the lawsuit should be dismissed because there was no evidence to meet the burden of proof and it would be a squandering of assets to pursue an unsuccessful lawsuit.

Paul introduced into evidence a deposition of Kailash taken on May 9, 2011. Counsel for Paul noted portions of Kailash's testimony in support of his argument. In this deposition, Kailash testified that it was a combined joint venture of her and Manmohan's money with Karl's hard work and that she thought they each owned one-third of the business.

Paul called Simran as a witness. On cross-examination, Simran testified that she is the vice president of operations with Now Save stores. She explained that Now Save is owned by several corporations and that her father's interest in Now Save depends on the corporations. She stated that as administratrix, her duties are to oversee the Succession and to file an annual accounting and that she has a fiduciary duty to the Succession and its heirs. She testified that the assets of the Succession include a piece of property in the Monroe area; a piece of property in the Jackson, Mississippi, area; a bank account; and a car. She further testified that she discussed the merits of the case with the Succession's attorney and that she requested to dismiss the case because she has a fiduciary duty to preserve the assets "that are wasting away because of frivolous litigation." She stated that she had seen no physical evidence that there was an oral joint venture.

The testimony of Simran continued on October 10, 2017. She agreed that she makes the decisions regarding the Succession, including whether to dismiss or move forward with the claim against her parents. She stated that it caused her no concern to sue her parents because she has a fiduciary duty to the Succession. She noted her concern that the lawsuit was squandering the Succession's time and assets.

On November 14, 2017, the trial court filed a ruling granting the motion to dismiss. It agreed with Simran that there was not enough evidence to support the Succession's claim that an oral joint venture exists, that the lawsuit was doomed to fail at trial and that to proceed with the lawsuit would waste the Succession's assets. It found that Paul did not produce sufficient evidence to show that dismissing the lawsuit was improper. Therefore, it found that the evidence before it did not demonstrate the existence of an oral joint venture under the law and that the required burden at trial could not be met. It also found that to proceed further with such a claim would waste the assets of the Succession. On November 29, 2017, it filed an order dismissing the lawsuit.

Paul appeals.

DISCUSSION

Motion to Dismiss

In his first assignment of error, Paul argues that the trial court erred in granting the motion to dismiss. He contends that Simran's dismissal of the Succession's claims benefits her personally; benefits her immediate family, i.e., her parents Karl and Sookham; and benefits the family business, i.e., Now Save. He states that by filing the motion to dismiss, Simran acted in a manner contrary to the best interest of the Succession.

The Succession argues that the trial court properly ruled on the motion to dismiss. It states that the trial court was correct that Paul did not submit any evidence to show that the suit to prove an oral joint venture would be successful. It contends that Kailash's deposition testimony proves that there was no clear understanding of the joint venture so as to create a contract. It emphasizes that this appeal is not about whether Simran has a conflict of interest in serving as administratrix.

Karl and Sookham argue that the determination of the trial court that dismissal was proper should not be disturbed. They contend that Simran exercised her duty to preserve and manage the property of the Succession by dismissing the claim and ending the costly litigation. They note that Karl adamantly denies that the parties formed an oral joint venture.

A court of appeal may not set aside a trial court's finding of fact in the absence of manifest error or unless it is clearly wrong or has no reasonable factual basis. Rosell v. ESCO , 549 So.2d 840 (La. 1989).

The essential elements of a joint venture and a partnership are the same, and joint ventures are generally governed by partnership law. Broadmoor, L.L.C. v. Ernest N. Morial New Orleans Exhibition Hall Auth. , 04-0211 (La. 3/18/04), 867 So.2d 651 ; Riddle v. Simmons , 40,000 (La. App. 2 Cir. 2/16/06), 922 So.2d 1267, writ denied , 06-0793 (La. 6/2/06), 929 So.2d 1259. A partnership is a juridical person, distinct from its partners, created by a contract between two or more persons to combine their efforts or resources in determined proportions and to collaborate at mutual risk for their common profit or commercial benefit. La. C.C. art. 2801.

In Riddle v. Simmons , 589 So.2d 89 (La. App. 2 Cir. 1991), writ denied , 592 So.2d 1316 (La. 1992), this court defined a "joint venture" as follows:

A joint venture results from the undertaking by two or more persons to combine their efforts, knowledge, property or labor to engage in and carry out a single business venture for joint profit. A joint venture is analogous to a partnership and controlled largely by the rules applicable to partnerships. There must be a sharing of the profits and losses with each party having some right of control over the business. The existence or non-existence of a joint venture is a question of fact and each case must be considered according to its circumstances. The principal difference between a partnership and a joint venture is that while a partnership is ordinarily formed for the transaction of a general business of a particular kind, a joint venture is usually, but not necessarily, limited to a single transaction, although the business of conducting it to a successful termination may continue for a number of years. No formal or specific agreement is required. Generally the relationship may be formed by an oral agreement and the existence of a joint venture may be inferred from the conduct of the parties and other circumstances.

A succession representative is a fiduciary with respect to the succession and shall have the duty of collecting, preserving and managing the property of the succession in accordance with law. La. C.C.P. art. 3191(A). He shall act at all times as a prudent administrator and shall be personally responsible for all damages resulting from his failure so to act. Id. A succession representative shall preserve, repair, maintain and protect the property of the succession. La. C.C.P. art. 3221.

A judgment dismissing an action without prejudice shall be rendered upon application of the plaintiff and upon his payment of all costs, if the application is made prior to any appearance of record by the defendant. La. C.C.P. art. 1671. If the application is made after such appearance, the court may refuse to grant the judgment of dismissal except with prejudice. Id. After an appearance, the plaintiff's right to dismiss rests within the sound discretion of the court. Id. , cmt. (b) (1960). If it appears the plaintiff will not be able to substantiate his claim, a judgment of absolute dismissal must be rendered. Id.

The trial court considered the deposition testimony of Kailash and determined that based on this evidence, the Succession's claim that a joint venture existed between Manmohan, Kailash and Karl would fail at trial. In the October 27, 2011 deposition transcript introduced by the Succession, Kailash testified that she thought there was a joint venture in two convenience stores because she and Manmohan contributed the money and Karl contributed the labor. She and her husband purchased a convenience store in Monroe for Karl, and they purchased a second store approximately one year later. Karl was the administrator of the stores, and Kailash and Manmohan worked the cash registers on the weekends and holidays. She and Manmohan did not receive compensation for working in the stores, but they saw it as an investment in their retirement. They never received an accounting from Karl on the stores' profits and losses. She and Manmohan did not list the stores on their tax returns. Karl purchased additional stores, but Kailash and Manmohan were not involved in the acquisition of these stores and did not work in these stores. She described the first two stores as "a family business" and stated that she and her husband "might have [an] interest" in the first two stores, but had no interest in Karl's other stores. She noted that she filed the lawsuit against Karl and Sookham because Karl would not help her financially during her retirement.

In the May 9, 2011 deposition transcript introduced by Paul, Kailash testified that she, Manmohan and Karl had a "combined venture" of her and Manmohan's money and Karl's hard work. She thought they each owned a one-third interest. She noted that the agreement was orally made, and it was "understood from our [i.e., her and Manmohan's] side." She and Manmohan saw their contribution as an investment for their retirements. Karl worked day and night during the week, and she and Manmohan worked on weekends, holidays and summer vacations. She stated that it was up to Karl to advance the business and that she and Manmohan did not discuss with him how he spent their investment.

Considering the testimony reviewed by the trial court, it did not err in determining that the evidence did not demonstrate that a joint venture existed between Manmohan, Kailash and Karl. Kailash's testimony suggests that she believed there was a joint venture as to the first two convenience stores, which resulted from the combination of her and Manmohan's funds and Karl's labor, but she did not consider Karl's many other stores as part of the joint venture. She stated that the equal one-third ownership was understood from her and Manmohan's point of view; but, in his brief, Karl denies that the parties formed a joint venture. Kailash's testimony does not demonstrate that there was a sharing of the profits and losses-she and Manmohan made financial contributions, but they were unaware of the stores' profits and losses and did not include the stores on their tax returns. Karl controlled the business, and Kailash and Manmohan trusted him to make decisions to grow the business. Further, Kailash's action of dismissing her individual lawsuit against Karl and Sookham suggests that she did not believe that a joint venture existed. She also allegedly discussed her desire, as administratrix, to dismiss the Succession's claims against Karl and Sookham, but she did not accomplish this during her lifetime. See Dhaliwal II .

Because the trial court did not err in determining that a joint venture could not be proven at trial, it also did not err in granting the motion to dismiss filed by Simran on behalf of the Succession. It was Simran's duty as administratrix to act prudently and preserve the property of the Succession. She determined that pursuing a "frivolous" lawsuit that would fail at trial would squander the assets of the Succession, and the trial court agreed.

Accordingly, this assignment of error lacks merit.

Burden of Proof

In his second assignment of error, Paul argues that the trial court erred in shifting the burden of proof. He states that the trial court required him to prove that a dismissal was improper. He argues that Simran should have been required to prove her case by a preponderance of the evidence. He contends that Simran did not prove the merits of her motion; and, therefore, the trial court erred in granting it.

The Succession argues that Simran proved by Kailash's deposition testimony that there was no proof of an oral joint venture; and, therefore, she proved the merits of the motion to dismiss.

The trial court did not shift the burden of proof to Paul. It considered evidence produced by both parties, i.e., the depositions of Kailash and Simran's testimony. It determined that the evidence did not demonstrate the existence of a joint venture and, therefore, that Simran proved her argument that the lawsuit would fail at trial and should be dismissed.

Accordingly, this assignment of error lacks merit.

CONCLUSION

For the foregoing reasons, we affirm the trial court's granting of the motion to dismiss filed by the Succession of Manmohan Singh Dhaliwal. Costs of this appeal are assessed to Appellant Mahinderpal S. Dhaliwal.

AFFIRMED.

APPLICATION FOR REHEARING

Before Felicia Toney Williams, Frances Jones Pitman - Writing, Shonda D. Stone, Jeff Cox, and Jay Bowen McCallum, JJ.

Rehearing denied.