McLean v. Majestic Mortuary Services Inc.

Citations: 96 So. 3d 571; 11 La.App. 5 Cir. 1166; 2012 La. App. LEXIS 702; 2012 WL 1867614Docket: No. 11-CA-1166

Court: Louisiana Court of Appeal; May 22, 2012; Louisiana; State Appellate Court

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A lawsuit has been initiated against Majestic Mortuary Services, Inc. and Metropolitan Life Insurance Company for breach of contract, negligence, and fraud. The plaintiff, Michelle McLean, appeals a trial court ruling that dismissed her claims against Majestic based on improper venue and against MetLife based on res judicata. The case began on April 6, 2011, when McLean filed a suit in Jefferson Parish, Louisiana, following the unexpected death of her husband, Daniel J. McLean III, on May 14, 2010. As the sole beneficiary of a life insurance policy with MetLife, McLean filed a claim that required her to submit information to her late husband’s former employer, the Orleans Parish School Board (OPSB).

On May 18, 2010, McLean signed a funeral services agreement with Majestic and an incomplete insurance policy assignment form. Following the funeral on May 22, McLean expressed dissatisfaction with Majestic’s services, citing issues such as inadequate transportation, an unprepared funeral director, and improper handling of the funeral process. Although Majestic acknowledged these issues and adjusted the contract amount, McLean believed the adjustment was insufficient and reported her concerns to OPSB.

McLean was advised that she could request the full life insurance proceeds directly from MetLife and pay Majestic herself. After doing so, MetLife processed a partial payment of $12,690.60 to McLean but later indicated uncertainty regarding her revocation of payment authorization to Majestic, threatening an interpleader action if the dispute was not resolved within 30 days.

McLean's counsel communicated her revocation of any payment authorization to Majestic and criticized MetLife's handling of payments as unreasonable, indicating that she would seek legal remedies if necessary. Following this, MetLife did not act until McLean filed a Petition for Damages in the 24th Judicial District Court on April 6, 2011. In response, MetLife invoked a peremptory exception of res judicata, claiming it had initiated a concursus proceeding on April 7, 2011, in which it deposited $7,309.40 of contested life insurance proceeds into the court registry for McLean and Majestic to assert their claims. MetLife contended that it was dismissed with prejudice from the concursus, extinguishing all related lawsuits due to the same transaction or occurrence. McLean subsequently filed an exception of lis pendens and a motion to vacate the Orleans Parish judgment, arguing that her Jefferson Parish suit was filed first and that she had not been notified of the Orleans judgment before it was signed. The Orleans judge denied her motions. MetLife argued that McLean's prior claims indicated she accepted the elements of res judicata. Majestic then raised exceptions of improper venue and no cause of action, asserting the suit against it was incorrectly filed in Jefferson Parish and that McLean's petition lacked factual basis for her claims. After a hearing, the district court upheld MetLife’s res judicata exception and Majestic’s improper venue exception, deeming Majestic’s no cause of action exception moot. McLean appealed, arguing errors in the court's decisions on these exceptions. The appellate courts will review these exceptions de novo as they involve legal questions. Louisiana's res judicata law states that a valid judgment is conclusive between the same parties and extinguishes all causes of action from the same transaction.

A judgment in favor of either party is conclusive in subsequent actions regarding any issue that was actually litigated and essential to that judgment. Under La. R.S. 13:4231, the Louisiana Supreme Court outlines five elements for establishing res judicata: the judgment must be valid and final, the parties must be the same, the causes of action must have existed at the time of the first judgment, and they must arise from the same transaction or occurrence as the first action. Since the 1990 amendment to the res judicata statute, the focus has shifted to whether the second action stems from the same transaction as the first.

There are exceptions to res judicata, including circumstances that warrant relief from its effects. A concursus proceeding involves multiple parties with conflicting claims to money or property, where they are required to assert their claims against one another. Claims can be asserted even if the defendant denies liability, and the claims need not be related or identical. Service of citation and the petition follows the same rules as ordinary proceedings, and each defendant operates as both a plaintiff and a defendant. No exceptions to a defendant's answer may be filed, and failure to answer does not necessitate joining issues by default. Once money is deposited into the court registry, the plaintiff is relieved from liability regarding that amount. Defendants can assert their rights to the funds in their answers, but cannot introduce extraneous issues. The court may issue injunctions to prevent defendants from pursuing related claims elsewhere. Concursus proceedings are governed by ordinary proceeding rules as applicable, limiting the plaintiff's liability to the deposited funds and focusing solely on the defendants' claims to a specific sum.

McLean's civil suit in Jefferson Parish sought damages for breach of contract, negligence, and fraud, extending beyond just the disputed funds. There is limited case law on whether a defendant in a concursus proceeding can file a reconventional demand against a plaintiff. In *Amoco Production Co. v. Carruth*, the court indicated that reconventional demands may be prohibited in concursus proceedings, as the trial court's exception of no cause of action was reversed on procedural grounds. This suggests that reconventional demands asserting claims beyond the disputed amount may not be permissible. In *Mary Adams and Associates v. Rosenblat*, it was ruled that the maximum award in a concursus cannot exceed the deposited amount, ruling out additional attorney's fees. Therefore, MetLife's res judicata exception against McLean's broader claims should not have been fully granted, as the concursus proceeding is limited in scope. McLean's claims include not only life insurance policy proceeds but also penalties and fees for delayed payment. The judgment in the concursus proceeding, issued before McLean was served, denied her adequate time to respond or file reconventional demands. Exceptional circumstances warrant relief from the res judicata effect of the Orleans Parish judgment concerning claims beyond the concursus scope. Venue rules dictate that actions against individuals must be filed in their domicile parish, while actions against foreign insurers are to be filed in East Baton Rouge. However, exceptions exist, allowing actions against joint obligors in the plaintiff's domicile parish if it is proper venue for any defendant under applicable laws.

An action for damages can be initiated in the parish where the wrongful act occurred or where damages were sustained. For life insurance claims, the action can be brought in the parish of the deceased's death, domicile, or where the beneficiary is domiciled. Contract actions may be filed in the parish where the contract was executed or where services were performed. Majestic claims Orleans Parish is the proper venue due to its domicile and where the contract was executed and services performed. Conversely, McLean argues for venue in Jefferson Parish based on ancillary venue, contract location, and location of wrongful conduct.

1. **Ancillary Venue**: McLean asserts that since her claims against MetLife arise from a life insurance policy related to a decedent domiciled and deceased in Jefferson Parish, venue is appropriate for all claims against MetLife. However, since MetLife and Majestic are not joint obligors and their obligations arise from separate contracts, the concept of ancillary venue does not apply.

2. **Contract**: McLean cites La. C.C.P. art. 76.1, indicating that an action on a contract may be brought in the parish where it was executed or services performed. She argues that work was done in Jefferson Parish, as Majestic transported her and her children from their home in Jefferson Parish and secured the death certificate there. The court finds these actions insufficient to establish Jefferson Parish as a proper venue under the contract.

3. **Location of Wrongful Conduct**: McLean contends that wrongful conduct occurred in Jefferson Parish when Majestic sent a party van to her home for transportation to the funeral, and that damages from negligent conduct were also sustained there. The court disagrees, indicating that McLean's claims do not establish Jefferson Parish as the proper venue for her action.

The funeral and burial occurred in Orleans Parish, where the assignment form was also submitted. The act of sending a van to Jefferson Parish to pick up McLean for the funeral did not meet the requirements of Article 74, indicating that both the wrongful conduct and the damages took place in Orleans Parish. Consequently, venue in Jefferson Parish was deemed improper. Although the district court's ruling on the exception of venue was affirmed, the judgment was amended to transfer the case against Majestic Mortuary Services, Inc. to Orleans Parish under La. C.C.P. Art. 932. 

McLean contended that the district court erred by deeming Majestic’s exception of no cause of action moot after ruling on the venue; however, this issue does not need to be addressed due to the venue ruling. The judgment was affirmed in part regarding the declinatory exception of improper venue but reversed regarding the exception of res judicata, clarifying that it only applies to the allocation of insurance proceeds in the concursus proceeding, while other claims for breach of contract, negligence, and fraud are not affected. The suit is to be transferred to the Civil District Court for Orleans Parish, and the case is remanded for further proceedings. The ruling is affirmed in part, reversed in part, amended, and remanded.