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.