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CARL FOSTER v. RONALD BIAS
The plaintiff appeals a trial court judgment sustaining the defendant's peremptory exceptions of prescription, no right of action, and no cause of action and dismissing his suit with prejudice. The defendant answered the appeal, seeking damages for frivolous appeal. For the reasons set forth herein, we reverse the portion of the judgment sustaining the peremptory exception raising the objections of prescription and no right of action, affirm the portion of the trial court judgment sustaining the peremptory exception raising the objection of no cause of action and dismissing plaintiff's suit with prejudice, and deny the answer to the appeal.
FACTS AND PROCEDURAL HISTORY
This case arises from a lengthy dispute between the plaintiff, Carl Foster, and defendant, Ronald Bias, who were at one time both employed at Amite High School in Tangipahoa Parish as Junior Reserve Officer Training Corps (“JROTC”) instructors for the United States Marine Corps and United States Navy. In 2009 and 2010, Bias reported allegations of misconduct by Foster in his role as a JROTC instructor. Thereafter, Bias alleged that Foster harassed him and campaigned to have him transferred to another school in retaliation for his reporting of Foster's alleged misconduct. In 2010, as a result of the allegations of misconduct made by Bias, the Navy and the Marine Corps both decertified Foster as a JROTC instructor, and his employment at Amite High School was terminated.
In November 2011, Foster filed suit in the United States District Court for the District of Columbia, seeking review of his decertification as a JROTC instructor. Bias was not a party to this suit. See Foster v. Mabus, 2011-1931, 895 F.Supp.2d 135, 138 (D.D.C. 9/29/12); Foster v. Mabus, 2011-1931, 103 F.Supp.3d 95 (D.D.C. 5/12/15). On June 23, 2015, Foster and defendant Ray Mabus, Secretary of the Department of the Navy, filed a “Stipulation of Settlement and Dismissal” (“the Stipulation”) in the United States District Court for the District of Columbia. The Stipulation provided that, in exchange for a settlement payment to Foster of $12,000.00 and recertification of Foster as a JROTC instructor,1 Foster's suit would be dismissed with prejudice.2 The Stipulation also included a section entitled “Release,” which provided in pertinent part:
[Foster] agrees not to hereafter assert any claim or institute or prosecute any civil action or other proceeding against [Mabus], the U.S. Department of the Navy, the U.S. Marine Corps, or the United States, its agencies or officials, or its present or former employees or agents, in either their official or individual capacities, with respect to any event complained of [in the suit being dismissed]. [Foster] hereby fully and forever releases and discharges [Mabus], the U.S. Department of the Navy, the U.S. Marine Corps, and the United States, its agencies and officials, and its present and former employees and agents, in their official and individual capacities, from any and all rights and claims of every kind, nature, and description, whether presently known or unknown, which [Foster] now has or may have arising out of or in connection with any event occurring on or before the date on which he has executed this Stipulation, including without limitation any rights or claims. In connection with this release, [Foster] acknowledges he is aware that he may hereafter discover rights or claims presently unknown and unsuspected, or facts in addition to or different from those which he now knows with respect to the rights and claims released herein. Nevertheless, [Foster] agrees, through this Stipulation, to settle and release all such rights and claims against the released parties, the U.S. Department of the Navy, the U.S. Marine Corps, or the United States, its agencies or officials, or its present or former employees or agents, in either their official or individual capacities; provided, however, that nothing in this Stipulation shall affect: (i) any rights or claims that may arise after the date [Foster] signs this Stipulation; and (ii) any right or claims against third parties not covered by this agreement.
On September 5, 2012, Bias filed suit under the False Claims Act (“FCA”), 31 U.S.C. 3729 et seq., in the Eastern District of Louisiana against the Tangipahoa Parish School Board, Foster, and the principal of Amite High School. The allegations in Bias's FCA suit, as later amended, included qui tam claims for false billing of goods and services not rendered and for conspiracy to submit false claims, as well as a retaliation claim. See U.S. ex rel. Bias v. Tangipahoa Parish School Board, 2012-2202, 2014WL1512001 (E.D. La. Mar. 26, 2014); United States ex rel. Bias v. Tangipahoa Parish School Board, 2012-2202, 2014WL12675261, at *2 (E.D. La. May 15, 2014).
Although Bias had filed for Chapter 13 bankruptcy in the Eastern District of Virginia in May 2008, and the bankruptcy proceeding was still pending at the time his FCA suit was filed, Bias did not disclose his FCA suit to the trustee in his bankruptcy proceeding as he was required to do. Bias's bankruptcy was discharged on July 18, 2013. See United States, ex. rel. Ronald Bias v. Tangipahoa Parish School Board, 2012-2202, 2017WL4049596, at *4 (E.D. La. Sept. 13, 2017), aff'd sub nom., United States ex rel. Bias v. Tangipahoa Parish School Board, 766 F. App'x 38 (5th Cir. 2019).
On September 13, 2017, Bias's FCA suit was dismissed by the district court based on the doctrine of judicial estoppel arising from Bias's failure to disclose the FCA suit to the bankruptcy court.3 See United States, ex. rel. Ronald Bias v. Tangipahoa Parish School Board, 2012-2202, 2017WL4049596, at *4. In applying the discretionary doctrine of judicial estoppel to dismiss Bias's FCA suit, the district court found that it was “abundantly clear” that Bias was required to disclose his FCA suit to the bankruptcy trustee, since the suit was actually filed during the pendency of the bankruptcy proceedings. Further, the district court noted that the motivation for a debtor/plaintiff failing to disclose “is generally self-evident,” and in this case, “under the terms of his bankruptcy without disclosure of [the FCA suit], Bias was not required to pay interest on his debt and had over $200,000 discharged.” United States, ex. rel. Ronald Bias v. Tangipahoa Parish School Board, 2012-2202, 2017WL4049596, at *4.
After learning that Bias's FCA suit had been dismissed based on the doctrine of judicial estoppel,4 Foster filed the instant suit against Bias on August 30, 2018, in which he sought damages for abuse of process. Foster alleged that Bias did not disclose his FCA suit to the bankruptcy trustee as he was required to do, that Bias willfully withheld this information for an ulterior purpose, and that these unethical and fraudulent actions gave rise to a cause of action for abuse of process. Therefore, Foster requested damages from Bias “in excess of $50,000.00” for his “humiliation, distress, worry, mental anguish, and loss of income.”
Prior to filing an answer, Bias sought to have Foster's abuse of process suit dismissed on a number of grounds, including that it failed to state a cause of action. Bias argued that Foster's petition failed to set forth a cause of action for abuse of process because it did not specify an ulterior purpose for Bias's actions or how Bias's improper use of process injured Foster. After a hearing on the matter, the trial court signed a judgment on February 12, 2019, denying Bias's exception raising the objection of no cause of action with prejudice.
Following the trial court's denial of his exception raising the objection of no cause of action, Bias filed an answer and affirmative defenses, as well as an exception raising the objections of prescription and no right of action. Bias attached a number of exhibits to his exception, including the Stipulation executed by Foster and Mabus in 2015 settling Foster's suit for recertification. In support of his objection that Foster did not have a right of action, Bias alleged that he was a third-party beneficiary of the Stipulation between Foster and Mabus, in which Foster agreed not to sue former employees of the Marine Corps, such as Bias, regarding events complained of in Foster's suit for recertification. On the issue of prescription. Bias argued that the one-year prescriptive period applicable to an abuse of process claim had expired prior to the filing of Foster's petition in 2018 because Foster and his attorney were aware of Bias's bankruptcy in 2011 and, with the exercise of reasonable diligence, could have ascertained that Bias did not disclose his FCA suit to the bankruptcy trustee prior to the 2013 discharge of his bankruptcy.
After a hearing on Bias's exceptions, the trial court sustained the exception of no right of action, overruled the exception of prescription, and dismissed Foster's claims with prejudice. Foster appealed the July 8, 2019 judgment dismissing his suit on the exception of no right of action, and Bias answered the appeal, urging that the trial court erred in denying its exception of prescription and its earlier exception of no cause of action.
On review, this court noted that although Bias had attached a number of exhibits to his exception, he failed to introduce any evidence into the record at the hearing. Although the exhibits were physically placed in the record and were apparently reviewed by the trial court, an appellate court cannot consider such evidence on appeal because it was not formally introduced into evidence; as such, this court found that the trial court erred in sustaining the exception of no right of action. Foster v. Bias, 2019-1674, pp. 6-7 (La.App. 1 Cir. 9/28/21), 2021WL4438758, *3, citing Landis Construction Company, L.L.C. v. State, 2015-1167, pp. 2-4 (La.App. 1 Cir. 2/29/16), 199 So.3d 1, 2-3; and Satterthwaite v. Byais, 2005-0010, p. 6 (La.App. 1 Cir. 7/26/06), 943 So.2d 390, 395. In reversing the judgment on the exception of no right of action, this court noted that its ruling “does not preclude [Bias] from refiling the exception and producing the required evidence.” Foster v. Bias, 2019-1674 at p. 8, n. 7, 2021WL4438758 at *3. Additionally, this court found that the trial court properly denied the exception of prescription because the petition was not prescribed on its face and Bias offered no evidence demonstrating that Foster's cause of action was prescribed or that Foster reasonably knew or should have known of the action more than one year prior to filing his abuse of process suit. Foster v. Bias, 2019-1674 at pp. 8-9, 2021WL4438758 at *4. This court again noted that “our ruling finding that the trial court properly denied [Bias's] peremptory exception raising the objection of prescription does not preclude him from refiling the exception of prescription.” Foster v. Bias, 2019-1674 at p. 9, n. 9, 2021WL4438758 at *4.
Following remand to the trial court, Bias refiled his peremptory exceptions of no right of action, prescription, and no cause of action. A hearing was held on the exceptions on December 20, 2021, at which a number of exhibits were admitted into evidence, including an April 22, 2011 report from an investigator hired by Foster's attorney; a PACER report from Bias's bankruptcy proceedings; an excerpt from Bias's deposition taken in the FCA suit; the Second Amended Complaint in Foster's suit for recertification; email correspondence regarding the negotiation of the Stipulation; the Stipulation; an excerpt from Bias's answer filed in this suit; and Bias's affidavits. The trial court granted Bias's exceptions raising the objections of no right of action, prescription, and no cause of action, and dismissed Foster's suit in its entirety, with prejudice. A judgment in accordance with this ruling was signed on January 5, 2022.
Foster appealed, arguing that the trial court erred in granting the exceptions raising the objections of prescription, no right of action, and no cause of action and dismissing his suit. Bias answered the appeal, requesting damages for frivolous appeal.
Foster's abuse of process claim is a delictual action subject to a prescriptive period of one year. See La. C.C. art. 3492; Foster v. Bias, 2019-1674, p. 8 (La.App. 1 Cir. 9/28/21), 2021WL4438758 at *4. The party urging prescription ordinarily bears the burden of proving prescription, unless the petition is prescribed on its face, in which case the burden shifts to the plaintiff. Bailey v. Loewe, 2019-1201, p. 5 (La.App. 1 Cir. 7/23/20), 309 So.3d 355, 360, writ denied, 2020-01146 (La. 11/18/20), 304 So.3d 418.
Foster alleges that his claim against Bias for abuse of process accrued when he discovered that Bias's FCA claim had been dismissed on September 13, 2017 based on judicial estoppel. Foster filed his petition for damages in this case on August 30, 2018. Thus, his claim for abuse of process was not prescribed on the face of the petition, and the burden remained with Bias to prove that Foster's claim was prescribed. Foster v. Bias, 2019-1674 at pp. 8-9, 2021WL4438758 at *4.
Appellate review of a judgment ruling on an exception of prescription depends on the manner in which the exception is heard. Alliance Hospitality, L.L.C. v. Esquivel, 2020-0807, p. 3 (La.App. 1 Cir. 2/24/21), 322 So.3d 253, 255. When evidence is introduced at the hearing on a peremptory exception of prescription, the trial court's findings of fact are subject to the manifest error-clearly wrong standard of review. See Newton v. St. Tammany Fire District No. 12, 2020-0797, p. 4 (La.App. 1 Cir. 2/19/21), 318 So.3d 206, 210. Under the manifest error-clearly wrong standard, the issue before the appellate court is not whether the trier of fact was right or wrong, but whether the trial court's conclusion was a reasonable one. If the trial court's findings are reasonable in light of the record reviewed in its entirety, the appellate court may not reverse, even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Clifford v. OLOL Regional Medical Center, 2018-1483, p. 4 (La.App. 1 Cir. 5/31/19), 277 So.3d 1210, 1213. In this matter, evidence was introduced on the issue of prescription at the December 20, 2021 hearing. Consequently, our review of the trial court's judgment granting Bias's exception of prescription is subject to the manifest error standard of review.
In support of his argument that Foster's claim was prescribed, Bias introduced evidence to show that Foster and his attorney were aware of the bankruptcy proceedings prior to the time the FCA suit was filed 5 and that further inquiry into the bankruptcy proceedings would have alerted Foster that Bias had not reported the FCA suit to the trustee prior to the July 18, 2013 discharge of the bankruptcy,6 which Bias argues would put Foster on notice of a possible cause of action for abuse of process. Foster did not dispute that he had constructive notice of the bankruptcy, but argued that he did not have actual or constructive knowledge of Bias's failure to notify the bankruptcy trustee of his FCA suit until the suit was dismissed on the basis of judicial estoppel, and it was that knowledge that triggered the running of prescription for abuse of process. After considering the evidence presented and the argument of counsel, the trial court found that the cause of action for abuse of process arose when Bias's bankruptcy was discharged on July 18, 2013 without Bias reporting his FCA suit to the bankruptcy trustee.
Prescription commences when a plaintiff obtains actual or constructive knowledge of facts indicating to a reasonable person that he or she is the victim of a tort. Campo v. Correa, 2001-2707, pp. 11-12 (La. 6/21/02), 828 So.2d 502, 510. A prescriptive period will begin to run even if the injured party does not have actual knowledge of facts that would entitle him to bring a suit as long as there is constructive knowledge of same. Constructive knowledge is whatever notice is enough to excite attention and put the injured party on guard and call for inquiry. Such notice is tantamount to knowledge or notice of everything to which a reasonable inquiry may lead. Such information or knowledge as ought to reasonably put the alleged victim on inquiry is sufficient to start running of prescription. Id., 2001-2707 at pp. 12, 828 So.2d at 510-511. The ultimate issue in determining whether a plaintiff had constructive knowledge sufficient to commence the running of prescription is the reasonableness of the plaintiff's action or inaction in light of his education, intelligence, and the nature of the defendant's conduct. Marin v. Exxon Mobil Corp., 2009-2368, p. 15 (La. 10/19/10), 48 So.3d 234, 246.
Foster argues on appeal that the trial court erred in finding that prescription commenced to run on July 18, 2013, and expired one year from that date, because it was unreasonable to require Foster's attorney to research Bias's bankruptcy proceedings (in which Foster was not a creditor) in an attempt to determine whether Bias had failed to report a claim, without any reason to suspect that he had done so. We agree. Constructive knowledge of the existence of a bankruptcy proceeding is not sufficient to alert a reasonable person, named as a defendant in a separate proceeding by the bankruptcy debtor, that he may be the victim of the tort of abuse of process, and to call for further inquiry. The trial court's finding that Foster had constructive knowledge sufficient to commence the running of prescription on July 18, 2013, based simply on the existence of the bankruptcy proceedings and the FCA suit, and the perceived ability for Foster, through reasonable inquiry, to discover that Bias had not reported the FCA suit to the bankruptcy trustee, is not reasonable under the facts of this case. The trial court erred in sustaining the exception raising the objection of prescription.
No Right of Action
Foster also argues on appeal that the trial court erred in finding, based on the terms of the “Release” contained in the Stipulation, that he has no right of action to seek damages against Bias for abuse of process. Foster argues that Bias was not a party to the Stipulation, nor was he a third-party beneficiary of the Stipulation, and therefore he lacks standing to assert that Foster's claims against him for abuse of process are barred by the language of the “Release.”
The function of an objection of no right of action is to determine whether the plaintiff belongs to the class of persons to whom the law grants the cause of action asserted. Eagle Pipe and Supply, Inc. v. Amerada Hess Corporation, 2010-2267, 2010-2272, 2010-2275, 2010-2279, 2010-2289, p. 6 (La. 10/25/11), 79 So.3d 246, 255. The objection assumes that the cause of action asserted is valid and tests whether the plaintiff has an interest in judicially enforcing it. The question is simply whether the plaintiff has a right to sue the defendant to enforce the claim. St. Cyr v. St. Cyr, 2016-0896, p. 2 (La.App. 1 Cir. 2/21/17), 215 So.3d 283, 285, writ denied, 2017-0511 (La. 3/31/17), 217 So.3d 357.
The party raising the objection of no right of action bears the burden of proof. St. Cyr, 2016-0896 at p. 3, 215 So.3d at 285. At the hearing, the exception may be submitted on the pleadings, or evidence may be introduced either in support of or to controvert the objection raised when the grounds thereof do not appear from the petition. La. C.C.P. art. 931; Eagle Pipe and Supply, Inc., 2010-2267, 2010-2272, 2010-2275, 2010-2279, 2010-2289 at p. 6, 79 So.3d at 255. The standard of appellate review for the peremptory exception raising the objection of no right of action is de novo. St. Cyr, 2016-0896 at p. 3, 215 So.3d at 285. “An appellate court considering an exception of no right of action should focus on whether the particular plaintiff has a right to bring the suit and is a member of the class of persons that has a legal interest in the subject matter of the litigation, assuming the petition states a valid cause of action for some person.” Rebel Distributors Corp., Inc. v. LUBA Workers’ Comp., 2013-0749, p. 10 (La. 10/15/13), 144 So.3d 825, 833. Where doubt exists as to the appropriateness of an exception of no right of action, this court must resolve that doubt in favor of finding a right of action. Louisiana Environmental Action Network, Inc. v. Brown, 2019-0607, p. 7 (La.App. 1 Cir. 1/9/20), 294 So.3d 1066, 1071, writ denied, 2020-00246 (La. 4/27/20), 295 So.3d 950.
It is undisputed that Bias was not a party to the litigation resolved by the Stipulation, nor was he involved in the negotiation of the Stipulation. Nevertheless, he argues that he was a third-party beneficiary of the Stipulation. Pursuant to La. C.C. art. 1978, a contracting party may stipulate a benefit for a third party who is not named in the contract. In Louisiana, such a contract for the benefit of a third party is called a “stipulation pour autrui.” Maggio v. Parker, 2017-1112, p. 6 (La. 6/27/18), 250 So. 3d 874, 880. A stipulation pour autrui is never presumed. Id. The party claiming the benefit of a stipulation pour autrui bears the burden of proof. See Joseph v. Hospital Service District No. 2 of Parish of St. Mary, 2005-2364, p. 9 (La. 10/15/06), 939 So.2d 1206, 1212; see also La. C.C. art. 1831 (“A party who demands performance of an obligation must prove the existence of the obligation.”). The criteria for determining whether contracting parties have provided a benefit for a third party are: 1) the stipulation is manifestly clear; 2) there is certainty as to the benefit provided to the third party; and 3) the benefit is not a mere incident of the contract between the promisor and the promisee. Maggio, 2017-1112 at p. 7, 250 So.3d at 880. In short, the most basic requirement of a stipulation pour autrui is that the contract manifest a clear intention to benefit the third party; absent such a clear manifestation, a party claiming to be a third-party beneficiary cannot meet his burden of proof Id.
The stipulation pour autrui claimed by Bias in this case is that, under the terms of the “Release” in the Stipulation, Foster agreed not to sue former employees of the Marine Corps, such as Bias, regarding events complained of in Foster v. Mabus (Foster's suit for recertification), A compromise, such as the Stipulation at issue herein, settles only those differences that the parties clearly intended to settle, including the necessary consequences of what they express. See La. C.C. art. 3076. A general release will not necessarily bar recovery for those aspects of a claim not intended by the parties to be covered by the release. Since a stipulation pour autrui is never presumed, Bias's position requires a finding that there was a clear intent to benefit Bias in the Stipulation and to bar claims such as the abuse of process claim herein. See Maggio, 2017-1112 at pp. 6-7, 250 So.3d at 880. Therefore, we must review the language of the Stipulation in order to determine whether Foster has a right of action to pursue his abuse of process claim against Bias.
The Stipulation states that Foster agrees to settle all claims that have been or could have been asserted in Foster v. Mabus, and thereafter, not to bring any claim against present or former employees or agents of the Navy and Marine Corps, in either their official or individual capacities, “with respect to any event complained of [in Foster v. Mabus].” The Second Amended Complaint in Foster v. Mabus, which was filed in evidence at the hearing on the exceptions herein, reveals that the “event[s] complained of” in Foster v. Mabus were clearly Foster's decertification as a JROTC instructor and the Navy and Marine Corps’ refusal to recertify him; however, the Second Amended Complaint also includes allegations detailing the history of the dispute between Foster and Bias, Bias's filing of the FCA suit, and Foster's dismissal from the FCA suit. Nevertheless, it is not manifestly clear from the language of the Stipulation that Foster's filing of the FCA suit was intended to be settled by the Stipulation as an “event complained of” in Foster v. Mabus. Further, Bias's failure to notify the bankruptcy trustee about the FCA suit was not an “event complained of” in Foster v. Mabus.
The Stipulation further provides that it encompasses all claims, known or unknown, arising out of or in connection with any event occurring on or before the date on which Foster has executed the Stipulation, but specifically excludes claims arising after that date and “any right or claims against third parties not covered by this agreement.” Bias is undoubtedly a third party to the Stipulation. Whether or not he was “covered by the agreement” is less clear. Extrinsic evidence may be considered in interpretation of a compromise agreement when a dispute arises as to the scope of the agreement, i.e., to determine exactly what differences the parties agreed to settle. Maggio, 2017-1112 at p. 4, 250 So.3d at 879. In support of his argument that he was intended to be covered by the “Release,” Bias filed in evidence emails sent during the negotiation of the Stipulation. In one email, counsel for Foster requested the addition of language to the Stipulation providing that Foster “reserves all rights brought under Louisiana State law in a state court of Louisiana against third parties not specifically covered by this release.” Counsel for Foster explained that there were two reasons for this request: (1) Foster may potentially have a back pay issue against the school board, and (2) “if Mr. Bias gets up to his tricks again we want to be able to get a protective order against him.” Opposing counsel responded: “[T]he third party and State court language is going to be very difficult. It is implied that this agreement is binding only on the parties before this court in this United States action.” Although Bias argues that the email proves that Foster was aware that future claims against Bias would be barred by the Stipulation, considering opposing counsel's response that she considered the agreement binding only on the parties before the court in Foster v. Mabus, the emails are not dispositive of the parties’ intent.
Since the evidence before the court does not manifest a clear intent by the parties to the Stipulation to bar Foster's abuse of process claim against Bias, and since a stipulation pour autrui is never presumed, this court must resolve that doubt in favor of finding a right of action. See Louisiana Environmental Action Network, Inc., 2019-0607 at p. 7, 294 So.3d at 1071. The portion of the trial court judgment that sustained the exception raising the objection of no right of action is reversed.
Exception of No Cause of Action
Foster next argues that Bias's peremptory exception raising the objection of no cause of action was frivolous because “[t]he time for appealing or taking a writ on [the February 12, 2019 judgment denying the exception] is long past.” Foster asserts that because Bias did not seek supervisory review or appeal the trial court's denial of the exception, the ruling is now the law of the case and binding.7
A peremptory exception may be urged at any time, and a party may re-urge a peremptory exception after it has been denied. Louisiana State Bar Ass'n v. Carr & Assocs., Inc., 2008-2114, p. 6 (La.App. 1 Cir. 5/8/09), 15 So.3d 158, 164, writ denied, 2009-1627 (La. 10/30/09), 21 So.3d 292. The overruling of a peremptory exception is merely an interlocutory order, and the court has the right, at any stage of the proceeding at which the objection was made, to set aside that decree and to sustain the exception, upon finding that it erred in overruling it. Id. The law of the case doctrine, which Foster urges precludes reconsideration of the peremptory exception raising the objection of no cause of action, is merely discretionary and “cannot supplant the Code of Civil Procedure provision which clearly permits reconsideration of the overruling of peremptory exceptions.” Wood v. Omni Bancshares, Inc., 2010-216, pp. 6-7 (La.App. 5 Cir. 4/26/11), 69 So.3d 475, 479, quoting Babineciux v. Pernie-Bailey Drilling Co., 261 La. 1080, 1093-94, 262 So.2d 328, 332-33 (1972). Therefore, Bias's re-urging of the exception and the trial court's decision to sustain the exception upon reconsideration and a finding that it erred in overruling it are not error.
Foster also argues that the trial court erred in finding that his petition failed to state a cause of action. A trial court's ruling on an exception of no cause of action is subject to de novo review, since the exception raises a question of law. Adams v. Owens-Corning Fiberglas Corporation, 2004-1296, p. 4 (La.App. 1 Cir. 9/23/05), 921 So.2d 972, 976, writ denied, 2005-2501 (La. 4/17/06), 926 So.2d 514.
The purpose of an exception raising the objection of no cause of action is to determine the sufficiency in law of the petition by determining whether the law affords a remedy on the facts alleged in the pleading. Calloway v. Lobrano, 2016-1170, p. 4 (La.App 1 Cir. 4/12/17), 218 So.3d 644, 648. For purposes of the exception, the well-pleaded facts in the petition must be accepted as true. Dodson & Hooks, APLC v. Louisiana Community Development Capital Fund, Inc. “Capfund,” 2019-1516, p. 7 (La.App. 1 Cir. 12/30/20), 318 So.3d 939, 944; see La. C.C.P. arts. 927 and 931. The burden of demonstrating that no cause of action has been stated is on the party raising the objection. Dodson & Hooks, 2019-1516 at p. 7, 318 So.3d at 944.
In ruling on an exception of no cause of action, the trial court must determine whether the law affords any relief to the claimant if he were to prove the factual allegations in the petition at a trial. Adams, 2004-1296 at p. 3, 921 So.2d at 975. An exception of no cause of action is triable solely on the face of the petition. See La. C.C.P. art. 931; Dodson & Hooks, 2019-1516 at p. 8, 318 So.3d at 945. The only documentary evidence that may be considered on an exception of no cause of action is that annexed to the petition, unless the evidence is admitted without objection to enlarge the petition. Calloway, 2016-1170 at pp. 4-5, 218 So.3d at 648.
In reading a petition to determine whether a cause of action has been stated, it must be interpreted, if possible, to maintain the cause of action instead of dismissing the petition. Adams, 2004-1296 at p. 3, 921 So.2d at 975-76. Any reasonable doubt concerning the sufficiency of the petition must be resolved in favor of finding that a cause of action has been stated. Adams, 2004-1296 at p. 3, 921 So.2d at 976. The petition must set forth material facts upon which the cause of action is based. La. C.C.P. art. 891(A); Lambert v. Riverboat Gaming Enforcement Div., 96-1856, p. 4 (La.App. 1 Cir. 12/29/97), 706 So.2d 172, 175. The correctness of conclusions of law is not conceded for the purposes of a ruling on an exception of no cause of action. CamSoft Data Systems, Inc. v. Southern Electronics Supply, Inc., 2015-1260, p. 12 (La.App. 1 Cir. 9/23/15), 182 So.3d 1009, 1016.
When the grounds of the objection pleaded by the peremptory exception may be removed by amendment of the petition, the judgment sustaining the exception shall order such amendment within the delay allowed by the court. If the grounds of the objection raised through the exception cannot be so removed, or if the plaintiff fails to comply with the order to amend, the action, claim, demand, issue, or theory shall be dismissed. La. C.C.P. art. 934.
The sole claim set forth in Foster's petition is abuse of process. Abuse of process is a cause of action originating from the common law and recognized under our jurisprudence as a compensable tort under La. C.C. art. 2315. Waguespack, Seago & Carmichael (A PLC) v. Lincoln, 99-2016, p. 5 (La.App. 1 Cir. 9/22/00), 768 So.2d 287, 290. The tort of abuse of process involves the misuse of a process whereby a party attempts to obtain a result that is not proper under the law. No Drama, LLC v. Caluda, 2015-211, p. 5 (La.App. 5 Cir. 10/14/15), 177 So.3d 747, 751. The essential elements of an abuse of process claim are: (1) the existence of an ulterior purpose; and (2) a willful act in the use of the process not proper in the regular prosecution of the proceeding. Waguespack, 99-2016 at p. 5, 768 So.2d at 290-91. In order to set forth a cause of action for abuse of process, a plaintiff must allege irregularity in the process itself. Delcambre v. Mancuso, 2018-833, pp. 7-8 (La.App. 3 Cir. 4/10/19), 268 So.3d 325, 331. More specifically, an abuse of process occurs when the actor employs a legal process in a manner that although technically correct, is for a wrongful and malicious purpose to obtain an unjustifiable end or an object that it was not the purpose of the particular process employed to effect. Id., 2018-833 at p. 8, 268 So.3d at 331. The tort involves the misuse of a process already legally issued whereby a party attempts to obtain a result not proper under the law; at issue in such actions is the intent to use a legal process for an improper reason. Goldstein v. Serio, 496 So.2d 412, 415 (La.App. 4 Cir. 1986). Therefore, if the process is used to redress a legal wrong, the person who invoked the legal process cannot be said to have committed any tort, regardless of whether his motive was vicious or vindictive; on the other hand, when the person who invoked the legal process seeks by the use of such process to attain some collateral objective, outside the scope of the operation of the process employed, a tort arises. Hebert v. Louisiana Licensed Professional Vocational Rehabilitation Counselors, 2007-610, p. 9 (La.App. 3 Cir. 3/4/09), 4 So.3d 1002, 1009, writ denied, 2009-0750 (La. 5/22/09), 9 So.3d 144, and writ denied, 2009-0753 (La. 5/22/09), 9 So.3d 144; See also Waguespack, 99-2016 at p. 6, 768 So.2d at 291 (“A legal and legitimate use of process, to effect the result which such process is designed by law to accomplish, is not an abuse thereof. Regular use of process cannot constitute abuse, even though the user was actuated by a wrongful motive, purpose, or intent, or by malice.”). Finally, the acts alleged to constitute the abuse or perversion of the process must result in damage. Mini-Togs, Inc. v. Young, 354 So.2d 1389, 1391 (La.App. 2 Cir. 1978), citing Italian Star Line v. U.S. Shipping Bd. Emergency Fleet Corp., 53 F.2d 359, 362 (2 Cir. 1931).
The allegations of Foster's petition are: Bias filed the FCA suit against Foster and other defendants during the pendency of his bankruptcy proceedings; Bias failed to notify the bankruptcy trustee of his FCA suit as required by the Bankruptcy Code; Bias's FCA suit was dismissed based on the doctrine of judicial estoppel due to his failure to disclose the FCA suit to the bankruptcy trustee; Bias's “unethical and fraudulent actions give rise to a cause of action for abuse of process;” Bias “withheld knowledge of the Bankruptcy for an ulterior purpose;” Bias “acted [willfully] in the use of process not proper while engage[d] in the regular prosecution of the proceeding;” and Foster “suffered humiliation, distress, worry, mental anguish[,] and loss of income.”
Although the court accepts well-pleaded allegations of fact as true when reviewing a petition to determine whether it states a cause of action, it is only well-pleaded allegations of fact that are accepted as true. The adjective “well-pleaded” refers to properly pleaded allegations conforming to the system of fact pleading embodied in the Louisiana Code of Civil Procedure. It does not include allegations deficient in material detail, conclusory factual allegations, or allegations of law. Hamilton v. Baton Rouge Health Care, 2009-0849, p. 4 (La.App. 1 Cir. 12/8/10), 52 So.3d 330, 333. Conclusions of law asserted as facts are not considered well-pleaded allegations of fact, and the correctness of these conclusions is not conceded for purposes of the exception. Tate v. Johnson, 2019-1541, p. 6 (La.App. 1 Cir. 12/2/20), 316 So.3d 502, 506. The allegations of Foster's petition that Bias's “unethical and fraudulent actions” give rise to a cause of action for abuse of process, that Bias had an ulterior purpose for not disclosing his bankruptcy, and that he acted willfully in misusing the legal process are not well-pleaded facts. As such, they are not accepted as true for purposes of determining whether his petition states a cause of action.
Foster's petition does not allege that Bias misused the FCA suit to attain some collateral objective outside the scope of the operation of the process employed. Foster's petition also does not allege what “ulterior purpose” Bias possessed for misusing the process. Finally, the petition does not allege how Foster was damaged by Bias's failure to report the FCA suit to the bankruptcy trustee. Although Foster's petition must be interpreted, if possible, to maintain the cause of action instead of dismissing the petition, the well-pleaded facts of the petition simply do not set forth a cause of action for abuse of process. See Adams, 2004-1296 at p. 3, 921 So.2d at 975-76. As such, the exception raising the objection of no cause of action was properly granted.
Although Foster has not argued that the trial court erred in dismissing his suit without allowing him an opportunity to amend his petition in order to state a cause of action, we note that La. C.C.P. art. 934 provides that a plaintiff should be provided an opportunity to amend his petition if, by doing so, he can set forth a cause of action. However, the trial court is not required to allow an amendment of the pleadings where the grounds for the objection of no cause of action cannot be removed by the amendment. Berigodt v. Town of Golden Meadow, 2020-0752, p. 15 (La.App. 1 Cir. 2/22/21), 321 So.3d 1004, 1015, writ denied, 2021-00880 (La. 10/12/21), 325 So.3d 1070. The decision to allow amendment is within the sound discretion of the court. Id.
Foster argues on appeal that although he could amend his petition for more specificity as to the ulterior motive alleged, he believes that Bias's ulterior motive, i.e., to potentially obtain damages outside the bankruptcy, is “facially evident.” Nevertheless, even if Foster is able to amend his petition to properly allege an ulterior motive, he does not provide any explanation as to how his petition could be amended to include well-pleaded allegations of fact that Bias misused the FCA suit to obtain some collateral objective that was outside the scope of the FCA suit and how that misuse resulted in damage to Foster. Obtaining damages in the FCA suit (the ulterior motive urged by Foster in his appellate brief) is not a collateral objective outside the scope of the process employed; rather, obtaining damages is an intended result of the FCA suit. The fact that Bias may have had an ulterior motive in not reporting his FCA suit to his bankruptcy trustee so that he could keep the money from his creditors does not render the FCA suit irregular. See Mini-Togs, Inc, 354 So.2d at 1391. As it does not appear that Foster's petition can possibly be amended to remove the grounds for the objection, his petition was properly dismissed for failure to state a cause of action.
Finally, Bias filed an answer to the appeal requesting that this court award damages for frivolous appeal as authorized by La. C.C.P. art. 2164.
Appeals are favored, and we will not award frivolous appeal damages unless they are clearly due. Whitney Bank v. Rayford, 2021-0407, p. 7 (La.App. 1 Cir. 4/5/22), 341 So.3d 741, 746. Damages for a frivolous appeal are only allowed when it is obvious that the appeal was taken solely for delay or that counsel is not sincere in the view of the law he advocates. Id. The slightest justification for an appeal precludes damages for frivolous appeal. Dukes v. Sherwood Acres Apartments, 2004-0405, p. 4 (La.App. 1 Cir. 12/30/04), 898 So.2d 416, 418.
In the instant matter, we decline to assess damages for a frivolous appeal. We have found a justification for the appeal herein, as well as a sincere view in the law advocated by the appellant. Bias's answer to the appeal is denied.
For the reasons set forth herein, the trial court judgment is reversed insofar as it sustains the peremptory exception raising the objections of prescription and no right of action. The judgment is affirmed insofar as it sustains the peremptory exception raising the objection of no cause of action and dismisses Foster's suit with prejudice. Further, the answer to the appeal is denied. Each party is to bear his own costs of this appeal.
REVERSED IN PART; AFFIRMED IN PART; ANSWER TO APPEAL DENIED.
1. The Stipulation only provided for recertification of Foster as a Marine Corps JROTC instructor, as the Navy had previously recertified Foster on December 20, 2013. See Foster, 103 F.Supp.3d at 98, n. 1.
2. The Stipulation also provided that it would operate as a dismissal of Foster's “Administrative Complaint(s).”
3. Judicial estoppel is an equitable doctrine invoked by a court at its discretion to protect the integrity of the judicial process by precluding a party from asserting a legal position that is plainly inconsistent with a prior position. U.S. ex rel. Long v. GSDMIdea City, L.L.C., 798 F.3d 265, 271 (5th Cir. 2015). Judicial estoppel is applied in the context of the bankruptcy system to deter dishonest debtors, whose failure to fully and honestly disclose all their assets undermines the integrity of the bankruptcy system. Id. When a debtor/plaintiff fails to disclose a potential legal claim in bankruptcy, but then subsequently pursues that claim in a separate tribunal, he has asserted a plainly inconsistent legal position that may be precluded by application of the doctrine of judicial estoppel. Id. at 272 n. 4. Although discretionary, the doctrine is applied where the court determines that allowing a party to take seemingly inconsistent positions in separate actions would enable the party to gain an unfair advantage, or to impose an unfair disadvantage on its new adversary. Id at 271.
4. Foster was no longer a defendant in Bias's FCA suit at the time it was dismissed based on judicial estoppel. All claims against Foster in that suit had been dismissed in 2014. See U.S. ex ret Bias v. Tangipahoa Parish School Board, 816 F.3d 315, 328 (5th Cir. 2016).
5. Bias introduced the April 22, 2011 investigator's report prepared for Foster's attorney that referred to Bias's bankruptcy proceedings.
6. Bias introduced the PACER Docket Report for his bankruptcy proceedings, which he alleges reveals that the FCA suit was not reported to the bankruptcy trustee.
7. Bias did seek review of the interlocutory ruling denying his exception raising the objection of no cause of action in an answer to Foster's appeal of the July 8, 2019 judgment dismissing Foster's suit for failure to state a right of action. Initially, this court pretermitted discussion of Bias's answer to the appeal because the matter had to be remanded to the trial court due to inadequacies of the record preventing review. Foster v. Bias, 2019-1674 at pp. 5-6, 2021WL1686435 at *2-3. Following supplementation of the record, this court reversed the portion of the July 8, 2019 judgment dismissing Foster's petition for failure to state a right of action, affirmed the portion of the judgment denying the exception raising the objection of prescription, and remanded the matter for further proceedings. The answer to appeal was denied without addressing the peremptory exception raising the objection of no cause of action. Foster v. Bias, 2019-1674 at p. 10, 2021WL4438758 at *5. The rule that silence of a judgment as to relief sought is deemed to be a denial of that relief is applicable only to an appellate court's interpretation of a trial court judgment. Where an appellate court does not address an issue that a party presents for review, it does not mean that the appellate court rejected the argument or denied the relief sought. It means simply that the appellate court, for whatever reason, refused or failed to address the issue or has found it unnecessary to review the issue. Cotton v. First Fleet, 2008-1363, pp. 4-5, (La.App, 3 Cir. 4/1/09), 7 So.3d 155, 158, writ denied, 2009-0978 (La. 6/19/09), 10 So.3d 741).
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Docket No: NO. 2022 CA 0329
Decided: December 22, 2022
Court: Court of Appeal of Louisiana, First Circuit.
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