LAMBRECHT CONSTRUCTION INC v. LOUISIANA DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT (2026)

Jeff Mercer, LLC, plaintiff-in-intervention, appealed the trial court's judgment sustaining an exception of res judicata in favor of the Louisiana Department of Transportation and Development (“DOTD”), defendant-in-intervention, and dismissing DOTD with prejudice. After review, we affirm.

PERTINENT FACTS AND PROCEDURAL HISTORY

This litigation, referred to as the “Lambrecht suit,” is one of three related suits involving claims by Jeff Mercer, LLC against DOTD. These suits are pertinently summarized as follows:

Ouachita Suit

Diamond B contracted with DOTD to serve as the prime contractor on the “the Louisville Avenue project,” which concerned work to be performed on a section of 1-49 in Ouachita Parish. Diamond B hired Mercer in 2007 as a subcontractor on the Louisville Avenue project.

Mercer filed suit against DOTD and several DOTD employees in September 2007 in Ouachita Parish, alleging that a DOTD inspector on the Louisville Avenue project attempted to solicit bribes from Mercer. Jeff Mercer, the sole member and manager of Mercer, maintained that he rebuffed the inspector and reported him to DOTD officials, which led to retaliation by DOTD and efforts to harm Mercer's business. See Jeff Mercer, LLC v. State through Department of Transportation and Development, 51,371 (La. App. 2 Cir. 6/7/17), 222 So.3d 1017, 1021, writ denied, 2017-1442 (La. 12/5/17), 231 So.3d 625, cert. denied, 548 U.S. 933, 138 S.Ct. 1566, 200 L.Ed.2d 746 (2018). Following trial in December 2015, the jury returned a substantial verdict in favor of Mercer and against DOTD. On appeal, the Second Circuit found jury errors warranted de novo review and subsequently concluded the evidence was insufficient to support Mercer's claims. The jury verdict was reversed, and judgment was rendered in favor of DOTD, dismissing all claims asserted by Mercer. Mercer, 222 So.3d at 1044.

Austin Bridge Suit

Austin Bridge and Road, L.P. contracted with DOTD to serve as the prime contractor on two DOTD projects, including “Segment B” of DOTD's work on I-49 in Caddo Parish. Austin Bridge hired Mercer as a subcontractor on both projects. In 2012, Mercer filed suit against Austin Bridge, its sureties, and DOTD, alleging that DOTD maliciously refused to pay for the work done by Mercer. Mercer asserted that it had a direct claim against DOTD, who withheld funds from Austin Bridge. Mercer maintained that DOTD's refusal to pay stemmed from the Ouachita suit and Mercer's reporting of the DOTD inspector for attempted bribery. See Jeff Mercer, L.L.C. v. Austin Bridge and Road, L.P., 2021-1458 (La. App. 1 Cir. 6/3/22), 343 So.3d 218, 220, writ denied, 2022-01258 (La. 11/8/22), 349 So.3d 573.

In 2021, the trial court sustained DOTD's exception of res judicata and dismissed it from the Austin Bridge suit. See La. C.C.P. art. 927(A)(3). This court affirmed. After reviewing the Second Circuit's opinion and the evidence offered by DOTD in support of its exception, this court concluded that the Second Circuit adjudicated all causes of action between Mercer and DOTD arising out of the same transaction or occurrence central to the Austin Bridge suit. See Jeff Mercer, L.L.C., 343 So.3d at 225. Conversely, Austin Bridge and its sureties were not entitled to dismissal on the basis of res judicata, because they were not parties to the Ouachita suit. See Jeff Mercer, L.L.C. v. Austin Bridge and Road, LP, 2022-0423 (La. App. 1 Cir. 11/4/22), 354 So.3d 710, 714-15.

Lambrecht Suit

T.J. Lambrecht Construction, Inc. contracted with DOTD to serve as the prime contractor on a DOTD project concerning “Segment C” of DOTD's work on 1-49 in Caddo Parish (“Lambrecht project”). Mercer was Lambrecht's subcontractor on this project.

In May 2012, Lambrecht filed suit against DOTD alleging that, during the Lambrecht project, DOTD issued directives to Lambrecht to perform construction work that was not required by the plans, specifications, or bid documents. According to Lambrecht, DOTD refused to execute an amendment or change order to compensate it for the additional time and cost required to comply with the directives. Lambrecht sought actual and compensatory damages from DOTD for this alleged breach of contract.

Mercer intervened in the Lambrecht suit in June 2013, asserting that it performed the work required by its subcontract with Lambrecht and was owed an unpaid balance of $587,518.93 for that work. Mercer's petition for intervention echoed Lambrecht's allegation that DOTD issued directives to Lambrecht, including Mercer as its subcontractor, to perform work not required by DOTD's original plans, specifications, and bid documents. Mercer named DOTD, Lambrecht, and Continental Casualty Company, Lambrecht's surety, as defendants-in-intervention.

In July 2020, Lambrecht and Continental filed an ex parte motion to substitute counsel of record, seeking to withdraw their then counsel and to enroll the same attorneys and firm representing DOTD as their counsel of record. The motion pertinently stated that DOTD and Lambrecht entered a settlement agreement in September 2016 wherein DOTD agreed to defend, indemnify, and hold harmless Lambrecht and Continental from and against all pass-through claims asserted by Mercer against Lambrecht, Continental, and/or DOTD as a result of or in connection with Mercer's subcontracts for the Caddo Parish projects. The motion further stated that Mercer's claims against Lambrecht and Continental for $587,518.93 plus interest fell within the scope of the indemnity agreement. Finally, the motion was signed by both the withdrawing and enrolling attorneys.

In June 2025, DOTD urged the trial court to follow this court's res judicata decision in the Austin Bridge suit and to dismiss it from the Lambrecht suit for the same reasons - the Ouachita suit barred relitigation of Mercer's claims against DOTD arising out of the same transaction or occurrence.¹ See Jeff Mercer, L.L.C., 343 So.3d at 220. The trial court agreed with DOTD and sustained its exception of res judicata in a judgment signed on July 28, 2025, and dismissed DOTD from the Lambrecht suit with prejudice. Mercer timely filed this appeal.

ISSUES ON APPEAL

In a single assignment of error, Mercer asserts the trial court erred by sustaining DOTD's exception of res judicata, because the identity of the parties in the same capacity element required by La. R.S. 13:4231 was not satisfied. Mercer argues that DOTD took complete control of the defense of this case through the indemnity agreement with Lambrecht and Continental, thereby changing the nature and capacity of DOTD's identity in the case. According to Mercer, DOTD is no longer just the owner of the project but is also responsible for and appears in the capacity of contractor and surety. Mercer further asserts DOTD's capacity was changed when its counsel began representing Lambrecht and Continental.

Reviewing a decision on an exception of res judicata, the court must determine whether the trial court's decision was legally correct. Richard v. David, 2025-30 (La. App. 3 Cir. 5/14/25), 416 So.3d 669, 671. Whether a prior judgment has the effect of res judicata in later litigation is a question of law, thus, requiring a de novo review. Manifest error only applies to the trial court's ruling on the issue of res judicata when evidence is received by the trial court. Richard, 416 So.3d at 671.

Evidence offered by Mercer and DOTD was admitted during the hearing on the exception but did not include the indemnity agreement.² The portion of the agreement quoted in the ex parte motion to substitute counsel, relied on by the parties, states that DOTD agreed to indemnify Lambrecht and Continental for Mercer's claim of $587,518.93. These pertinent facts are undisputed. Therefore, the issue before the court, whether the indemnity agreement and the identity of counsel changed DOTD's capacity for res judicata purposes, requires a legal determination.

Mercer's Argument is Properly Before this Court

DOTD maintains that Mercer did not raise the “identity of parties” issue before the trial court, and the argument should not be considered on appeal. See Chavez v. Metso Minerals Industries, Inc., 2023-01029 (La. 10/24/24), 395 So.3d 771, 786 (The general rule is that appellate courts will not consider issues raised for the first time on appeal.) After review, we find the issue is properly before this court.

Mercer urged the trial court to deny DOTD's exception of res judicata in part by relying on the obligations assumed by DOTD in the indemnity agreement. Although Mercer's argument on appeal has been “fine-tuned” and perhaps further developed, we find the issue of whether the indemnity agreement bars the application of res judicata was sufficiently before the trial court to warrant our consideration of Mercer's sole argument on appeal. We reach this conclusion mindful that appeals are favored in the law. See Bazile v. GSS Holdings LA, LLC, 2025-00666 (La. 6/12/25), 411 So.3d 619.

Res Judicata and the Effect of the Indemnity Agreement

Under La. R.S. 13:4231,³ all of the following criteria must be satisfied for res Judicata to preclude a second action: (1) the first judgment is valid; (2) the first 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 final judgment in the first litigation; and (5) the cause or causes of action asserted in the second suit arose out of the transaction or occurrence that was the subject matter of the first litigation. Slaughter v. Louisiana State Employees’ Retirement System, 2023-1168 (La. App. 1 Cir. 10/11/24), 405 So.3d 879, 884. Mercer only challenges DOTD's ability to satisfy the third element - the parties are the same. Finding that Mercer concedes the remaining elements are satisfied, we limit our focus to the third res judicata requirement.

For a second suit to be barred by the doctrine of res judicata, the parties must appear in the same capacities in both suits. Burguieres v. Pollingue, 2002-1385 (La. 2/25/03), 843 So.2d 1049, 1054-55 (finding succession executrix appeared in different capacity in second suit, wherein she was named in her capacity as the decedent's trustee and curator). The application of res judicata does not require that the parties are actually the same physical parties, but only that they are the same parties in the legal sense of the word. United General Title Ins. Co. v. Casey Title, Ltd, 01-600 (La. App. 5 Cir. 10/30/01), 800 So.2d 1061, 1067.

Mercer cites no legal authority to support its assertion that the indemnity agreement changed DOTD's capacity for res judicata purposes, and we have found none. Mercer's argument ignores the nature and effect of an indemnity agreement, which is a contract wherein a party (the indemnitor) agrees to protect another (the indemnitee) against damages incurred by the latter as a result of his breach of a duty owed to a third party. Bennett v. DEMCO Energy Services, LLC, 2023-01358 (La. 5/10/24), 3 86 So.3d 270, 273. An injured third person's (Mercer) right to recover is neither affected nor diminished by an indemnity agreement between the liable party (potentially, Lambrecht and/or Continental) and some other person (DOTD). Contractual indemnitees, like Lambrecht and Continental, are not relieved of their legal duty to respond in damages to those third persons as a result of their delictual fault. The injured party's right to recover damages is not waived or otherwise extinguished by the indemnity agreement. For the most part, indemnity agreements contemplate that the indemnitee should first be cast in judgment as a prerequisite to the enforcement of an indemnity provision. Ronald Scalise, § 11.27. Indemnity or hold harmless agreements, 6 La. Civ. L. Treatise, Law Of Obligations § 11.27 (2d ed. 2025).

As noted, the DOTD/Lambrecht/Continental indemnity agreement is not part of the appeal record, but it is undisputed that DOTD agreed to indemnify Lambrecht and Continental for Mercer's claim of $587,518.93. Lambrecht and Continental have not been dismissed as defendants-in-intervention, and the trier of fact may still find these parties are liable to Mercer for all or part of its $587,518.93 claim. If Mercer is owed damages from Lambrecht and Continental, DOTD's obligation, owed to Lambrecht and Continental, pursuant to the indemnity agreement will be triggered. No evidence suggests that Mercer's rights against Lambrecht and Continental have been affected or diminished by the indemnity agreement. Mercer does not argue as much. Similarly, the indemnity agreement did not merge the identities of Lambrecht, Continental, and DOTD or alter the separate and distinct legal character of these juridical entities.⁴ See La. C.C. art. 24 and La. R.S. 48:22.⁵

There is likewise no legal support for Mercer's assertion that the identity of counsel changes the identity of a party for res judicata purposes. By taking over the defense of Lambrecht and Continental, counsel for DOTD did not affect, diminish, or in any way interfere with Mercer's ability to seek and/or obtain a liability judgment against Lambrecht and Continental. Mercer's assignment of error lacks merit.

CONCLUSION

For the foregoing reasons, the July 28, 2025 judgment sustaining the exception of res judicata in favor of the Louisiana Department of Transportation and Development and against Jeff Mercer, LLC is affirmed. All costs of this appeal are assessed against Jeff Mercer, LLC.

AFFIRMED.

FOOTNOTES

1.   DOTD first raised an exception of res judicata in July 2020. However, the matter was not heard by the trial court until July 2025, after the original trial judge left the bench and was replaced.

2.   Both parties admitted various pleadings from this suit and the Ouachita suit as well as the Second Circuit's opinion in that case.

3.   Louisiana Revised Statutes 13:4231 states,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.

4.   In contrast, see United General Title Ins. Co., 800 So.2d at 1067, recognizing that an insured and insurer share the same quality as parties and, in essence, their identities are virtually merged into one to the extent of the policy limits.

5.   Louisiana Civil Code art. 24 pertinently states that a “juridical person is an entity to which the law attributes personality, such as a corporation or a partnership.” Louisiana Revised Statutes 48:22 pertinently states that DOTD has all of the rights, powers, and immunities incident to corporations and may sue and be sued.

PENZATO, J.