In 2005, Dale Spires of DeRidder was in a car accident that was caused by April Roberts. He sued Ms. Roberts and her insurance company paid out $10,000, which was the limit under her insurance policy. The suit was dismissed in 2006.
In 2007, Spires filed an additional lawsuit against his uninsured motorist carrier, State Farm, and alleged that Ms. Roberts was underinsured and as such he was entitled to additional recovery for the damages he sustained in the accident as well as for his emotional distress. State Farm argued that under Louisiana law, Spires had to assert all causes of action in the first suit against Ms. Roberts and was precluded from collection additional damages from state farm since the action arises from the same accident. As such, Stare Farm argued, because Spires did not bring the claim against State Farm when he sued Ms. Roberts he could no longer do so. The trial court agreed and dismissed the claim, leading to the Spires appeal.
In a 2008 decision, the Court of Appeals reversed the trial court judgment and found that the Spires were entitled to pursue a claim against State Farm for additional damages. The case hinged on the court’s interpretation of La.Code Civ.p. art 425 which states, “A party shall assert all causes of action arising out of the transaction or occurrence that is the subject matter of the litigation.” According to the Court, art. 425 is merely a reference to the broader principle of res judicata.
When the Court of Appeals applied the res judicata principles to the Spires case they found in favor of Spires because res judiciata only applies to actions between the same parties. The first case was between Mr. Spires and Ms. Roberts and the second case was between Mr. Spires and his insurance company. The court also made the practical observation that a plaintiff who files a lawsuit against the party at fault in an auto accident may not know at the time whether his underinsured motorist insurance carrier will be implicated because at the time the extent of the damages, the limits of the at-fault parties insurance, and how the court will determine fault is unknown.
Res judicata is a very important legal principle that is applied to ensure that parties cannot re-litigate issues that have already been fully and properly decided by a court.
Under res judicata a valid and final judgement is conclusive between the same parties (except on appeal) and:
- when a judgment is in favor of the plaintiff, all causes of action arising out of the same occurrence are merged into the judgment.
- when a judgment is in favor of the defendant all causes of action arising out of the occurrence are extinguished and no further action may be taken on them.
- a judgment in favor of either party is conclusive in any subsequent action between them with respect to an issue that has been litigated and determined in the judgment.
Any party that brings a lawsuit should make sure they have the assistance of an attorney who fully understands legal rules and their implications so that their claim will not be barred by the court.
At the Berniard Law Firm our attorneys understand these principles and will not encourage a client to bring a claim that will not be allowed. If you have been injured in an accident and believe you have a claim for damages against the individual who caused the accident, your own insurance company, or both, we would be happy to discuss your case with you.