Earl A. Adams, Jr. v. Chevron USA, Inc.; Exxon Mobil Corporation; Sexton Oil & Mineral Corporation; Intracoastal Tubular Services, Inc.; Alpha Technical Services, Inc.; Ofs, Inc.; And Joseph F. Grefer, Camille Grefer, Rose Marie Grefer Haase and Henry Grefer

EARL A. ADAMS, JR., ET AL. * NO. 2022-CA-0814

VERSUS *

COURT OF APPEAL

CHEVRON USA, INC.; EXXON *

MOBIL CORPORATION; FOURTH CIRCUIT

SEXTON OIL & MINERAL *

CORPORATION; STATE OF LOUISIANA

INTRACOASTAL TUBULAR *******

SERVICES, INC,; ALPHA

TECHNICAL SERVICES, INC.;

OFS, INC.; AND JOSEPH F.

GREFER, CAMILLE GREFER,

ROSE MARIE GREFER

HAASE AND HENRY GREFER

APPEAL FROM

CIVIL DISTRICT COURT, ORLEANS PARISH

NO. 2002-19308 C\W 2019-00738, DIVISION “D”

Honorable Nakisha Ervin-Knott, Judge

******

Chief Judge Terri F. Love

******

(Court composed of Chief Judge Terri F. Love, Judge Paula A. Brown, Judge Dale

N. Atkins)

BROWN, J., CONCURS WITH REASONS

ATKINS, J., CONCURS IN THE RESULT

Darleen Marie Jacobs

THE LAW OFFICES OF DARLENE M JACOBS

823 St. Louis Street

New Orleans, LA 70112—3415

AND

Robert G. Harvey, Sr.

LAW OFFICE OF ROBERT G. HARVEY, SR., APLC

600 North Carrollton Avenue

New Orleans, LA 70119

COUNSEL FOR PLAINTIFFS/APPELLANTS, EARL ADAMS, JR., ET

AL.

Kevin E. Huddell

Michael Peter Arata

Lynn Elizabeth Swanson

Lindsay Reeves

JONES SWANSON HUDDELL & GARRISON, LLC

601 Poydras Street, Suite 2655

New Orleans, LA 70130

COUNSEL FOR DEFENDANTS/APPELLEES, JOSEPH GREFER &

SUZANNE H. DELAHOUSSAYE, EXECUTRIX OF THE SUCCESSION

OF CAMILLE CLAIRE GREFER

REVERSED AND REMANDED

TFL

This appeal arises from a dispute over responsibility for contaminating land

in Harvey, Louisiana. Defendants/Appellees, Joseph Grefer and Suzanne H.

Delahoussaye, Executrix of the Succession of Camille Claire Grefer (collectively

“Grefers”), owned land where, pursuant to a lease, numerous oil companies

cleaned oilfield pipes. Plaintiffs, Earl A. Adams, et al. (“Plaintiffs”) contended

that the oilfield pipe cleaning activities released radioactive materials onto their

neighboring property, causing harm. Plaintiffs eventually entered into a 2014

settlement agreement with some defendants responsible for the cleaning activities.

However, Plaintiffs also sought damages from the Grefers for their own

alleged individual negligence for the contamination. The Grefers filed a Motion to

Enforce Settlement, averring the 2014 settlement agreement released the Grefers

from any liability. The trial court agreed, granted the Motion to Enforce

Settlement, and dismissed all of Plaintiffs’ claims against the Grefers. Plaintiffs

appealed. This Court found that the trial court erred by failing to conduct an

evidentiary hearing regarding Plaintiffs’ intent in entering into the 2014 settlement

agreement and remanded the matter to the trial court for the hearing.

On remand, the trial court conducted an evidentiary hearing and allowed the

1

parties to submit evidence and elicit live testimony regarding the intent of the

parties. The trial court concluded that there was no need to consult extrinsic

evidence in order to interpret the 2014 settlement agreement. The trial court found

that the Grefers were included in the released/indemnified parties in the 2014

settlement agreement. Therefore, the trial court granted the Grefers’ Motion to

Enforce Settlement and dismissed Plaintiffs’ claims with prejudice.

On review, we find the trial court erred by disregarding testimony presented

at the evidentiary hearing. Evidence demonstrated that Plaintiffs did not intend to

release third parties for their own negligence. Further, the 2014 settlement

agreement did not explicitly create a stipulation pour autrui. As such, the trial

court committed manifest error by granting the Grefers’ Motion to Enforce

Settlement. We reverse the trial court’s judgment and reinstate Plaintiffs’

dismissed claims. The matter is remanded for further proceedings consistent with

this opinion.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Camille A. Grefer leased the land in question to Intracoastal Terminal, Inc.

(“ITCO”) for oil-field supply cleaning activities, which resulted in the

contamination of the land. Plaintiffs contended that the cleaning activities also

contaminated their neighboring land and filed suit against numerous defendants,

including oil companies, cleaning companies, and landowning defendants, like the

Grefers. Plaintiffs entered into a 2014 settlement agreement with a majority of the

defendants. However, Plaintiffs continued to seek damages from the Grefers based

on their own individual negligence.

The present appeal returns to this Court following a previous remand,

wherein we stated:

2

This case arises out of the contamination of a

parcel of land with naturally occurring radioactive

material (NORM), resulting from of oil-field supply

cleaning activities. The neighboring landowners filed suit

against several defendants involved in the oil-field supply

cleaning activities, as well as the landowners of the

contaminated property. Eventually, the plaintiffs entered

into settlement agreements with most of the defendants

with the exception of the landowners. The landowners

did not participate in the settlements, did not contribute

to the settlements, and were not parties to the settlements.

Several years after the plaintiffs had entered into

the settlement agreements with other defendants, the

landowner defendants, on June 20, 2018, filed a motion

to enforce settlement agreement against the plaintiffs. A

hearing on the motion took place on August 30, 2018.

After considering the motions, supporting memoranda,

and the exhibits thereto and opposition, as well as the

oral arguments presented by counsel, the trial court

granted the defendants’ motion and dismissed the

plaintiffs’ claims with prejudice on September 11, 2018.

It is from this judgment that the plaintiffs now appeal.

The issue before this Court is whether the trial

court erred in preventing the plaintiffs from offering

evidence of the intent of the actual settling parties

regarding the scope of the settlement and in dismissing

the plaintiffs’ case.

The issue presented by this appeal is a question of

law. Questions of law are reviewed de novo, with

judgment rendered “ ‘on the record, without deference to

the legal conclusions of the tribunals below.’ ” Holly J.

Smith Architects, Inc. v. St. Helena Congregate Facility,

Inc., 06-0582, p. 9 (La. 11/29/06), 943 So.2d 1037, 1045;

quoting Louisiana Municipal Association v. State, 04-

0227, p. 35 (La. 1/19/05), 893 So.2d 809, 836. “We are

also mindful that when legal error committed by the trial

court interdicts the fact-finding process, the appellate

court must conduct a de novo review of the record.”

Kennedy-Fagan v. Estate of Graves, 07-1062, p. 11

(La.App. 1 Cir. 7/21/08), 993 So.2d 255, 264; citing Levy

v. Bayou Industrial Maintenance Services, Inc., 03-0037,

p. 7 ((La.App. 1 Cir. 9/26/03), 855 So.2d 968, 974.

When a dispute arises as to the scope of a

compromise agreement, extrinsic evidence can be

considered to determine exactly what differences the

parties intended to settle. Maggio v. Parker, 17-1112, p.

4 (La. 6/27/18), 250 So.3d 874, 879 (internal citations

omitted). In Maggio, the Louisiana Supreme Court

explained and affirmed a long history of cases which

3

established, recognized, and applied an exception to the

“four corners” rule when interpreting settlement

agreements. Id. at 879; See Brown v. Drillers, Inc., 93-

1019 (La. 1/14/94), 630 So.2d 741. A compromise settles

only those differences that the parties clearly intended to

settle. Maggio at 879. See La. C.C. art. 3076.

Accordingly, the plaintiffs in the instant case contend that

a clearly established exception to the “four corners” rule

allows them to offer evidence.

In the instant case, it is undisputed that the

landowner defendants are not parties to any settlement

agreement with the plaintiffs. It is also undisputed that

the landowner defendants did not contribute to any

settlement agreement with the plaintiffs. As the

landowner defendants are never mentioned in the four

corners of any of the settlement agreements, the only way

they could have been dismissed is by reference to

something outside the agreements themselves.

Under these circumstances, the trial court should

have considered the evidence of the intent of the actual

parties to the settlement concerning whether the

landowner defendants would or would not be released.

To not do so interdicted the fact-finding process.

Therefore, the district court erred as a matter of law in

refusing to allow the plaintiffs an opportunity to offer

evidence of the intent of the settling parties, i.e., a

contradictory hearing where the parties could have called

witnesses and introduced other extrinsic evidence to

establish the true intent of the parties to the settlement.

For the above and foregoing reasons, the judgment

of the trial court is reversed and this case is remanded to

the trial court for further proceedings consistent with this

opinion.

Adams v. Chevron USA, Inc., 19-0210, 19-0210, 19-0198, 19-0199, 19-0708, 20-

0069, 20-0070, pp. 1-4 (La. App. 4 Cir. 2/24/21), 2021 WL 717778, *1-2, ___ So.

3d ___, ___, writ denied, 21-00446 (La. 5/25/21).

After remand, the trial court conducted an evidentiary hearing wherein the

Grefers and Plaintiffs were permitted to submit evidence and elicit live testimony

regarding the intent of the settling parties. Following the hearing, the trial court

determined that the Grefers were indemnitees and released parties, as defined by

the 2014 settlement agreement. The trial court granted the Grefers’ Motion to

4

Enforce Settlement and dismissed Plaintiffs’ claims with prejudice. Plaintiffs’

appeal followed.

On appeal, Plaintiffs contend the trial court committed legal error by 1)

choosing “to disregard the law of this case regarding the reception and

consideration of extrinsic evidence concerning the compromise instrument’s

intentions and . . . re-interdicted the fact finding process despite Adams’ original

rebuke of the trial court for interdicting intent focused fact-finding concerning the

conjunction of the release and the Grefers;” and 2) misinterpreting “the subject

compromise instrument.”

STANDARD OF REVIEW

“The standard of review of a motion to enforce settlement is the manifest

error/clearly wrong standard.” Eckstein v. Becnel, 17-0868, p. 8 (La. App. 4 Cir.

6/27/18), 250 So. 3d 1046, 1053. This is due in part to the fact that a “judgment

regarding the existence, validity and scope of a compromise or settlement

agreement hinges on its finding of the parties’ intent,” which is a factual finding.

Id.

“[A] reviewing court may not merely decide if it would have found the facts

of the case differently.” Hall v. Folger Coffee Co., 03-1734, p. 9 (La. 4/14/04),

874 So. 2d 90, 98. Rather, “one of the basic tenets of the manifest error standard

of review is that ‘reasonable evaluations of credibility and reasonable inferences of

fact should not be disturbed upon review, even though the court of appeal is

convinced that had it been the trier of fact, it would have weighed the evidence

differently.’” Id., 03-1734, pp. 10-11, 874 So. 2d at 99 (quoting Parish Nat. Bank

v. Ott, 02-1562, p. 7 (La. 2/25/03), 841 So. 2d 749, 753). The Louisiana Supreme

Court pronounced a two-prong test for reversing factual findings. First, “[t]he

5

appellate court must find from the record that a reasonable factual basis does not

exist for the finding of the trial court.” Stobart v. State through Dep't of Transp. &

Dev., 617 So. 2d 880, 882 (La. 1993). Second, “the appellate court must further

determine that the record establishes that the finding is clearly wrong (manifestly

erroneous).” Id.

“The interpretation of the language of a contract is a question of law subject

to de novo review, while factual determinations are subject to the manifest error

standard of review.” Bodenheimer v. Carrollton Pest Control & Termite Co., 17-

0595, p. 7 (La. App. 4 Cir. 2/14/18), 317 So. 3d 351, 357.

“When the issues presented on appeal raise mixed questions of fact and law,

the manifest error standard applies.” Lakefront Mgmt. Auth. v. J & J Partners,

L.L.C., 21-0102, p. 6 (La. App. 4 Cir. 11/10/21), 331 So. 3d 434, 438, writ denied,

21-01855 (La. 2/15/22), 332 So. 3d 1188. “Questions of law are reviewed under

the de novo standard.” Sarpy v. ESAD, Inc., 07-0347, p. 4 (La. App. 4 Cir.

9/19/07), 968 So. 2d 736, 738.

EVIDENTIARY HEARING

Brian David Long

Brian David Long, testified that his mother, Elda Long, passed away from

radiation poisoning, but was a member of the original class action. He and his

brother were substituted in her place after her death. He stated that he reviewed

the 2014 settlement agreement for about two hours, with his attorney going over

the document with him prior to signing. Mr. Long testified that he knew he was

releasing the oil companies. Mr. Long did not believe he was releasing the Grefers

because he believed the Grefers should be held liable. He did not receive money

from the Grefers. He believed he was reserving his right against the Grefers and

6

did not intend to release them. However, he did not ask if a particular party was

excluded from the 2014 settlement agreement. Mr. Long did not request that any

changes to the 2014 settlement agreement prior to signing.

When questioned about the definition of released parties contained in the

2014 settlement agreement, Mr. Long stated, “I mean, this eliminates everybody, if

you think about it.” Mr. Long conceded that he did not read the entire Receipt and

Release document prior to signing or ask for any explanations.

Joseph F. Grefer

Joseph F. Grefer, a retired judge and defendant in the original proceeding,

testified that he is a co-owner of the property in question. His mother, Camille

Grefer, signed the original lease for use of the land by ITCO. Mr. Grefer was not a

signatory to the 2014 settlement agreement. He did not believe he had ever paid

money to settle the lawsuit.

Mary Johnson

In lieu of live testimony, Mary Johnson’s deposition was offered into

evidence. She represented the original Shell/Kerr-McGee entities in the original

litigation and drafted the 2014 settlement agreement. Ms. Johnson testified that the

Grefers were not settling defendants included in the 2014 settlement agreement,

and that the Grefers did not contribute to the settlement.

In regards to whether the 2014 settlement agreement included releasing third

parties, Ms. Johnson stated: “[w]e have a release to the extent that any of the

settling defendants owed indemnity to anyone else, but there was not an intent to

release any third party’s own negligence or fault.” Ms. Johnson further explained

that it was not intended to include the Grefers’ interests in the settlement. The

Grefers were also not intended to be included as a released party because only

7

parties that contributed to and signed the settlement were to be considered released.

Ms. Johnson conceded that generally settlement agreements/releases include

all claims and parties. Ms. Johnson also admitted that the section in the 2014

settlement agreement concerning released parties was more broad than the section

entitled settling defendants. However, she reiterated that the 2014 settlement

agreement was not intended to release the separate negligence or liability of third

parties. Ms. Johnson emphasized again that the Grefers were only released as to

the extent of ITCO’s indemnity obligation.

Joint Motion for Final Dismissal

Based on the 2014 settlement agreement, 356 original Plaintiffs, in June

2014, submitted a Joint Motion for Final Dismissal to dismiss:

claims and any and all cross-claims, third-party demands,

or petitions in intervention in this litigation against the

following Defendants: Alpha Technical Services, Inc.,

Amoco Production Company, n/k/a BP America

Production Company; ARCO Oil & Gas Company, BP

Exploration & Oil Inc. and /or Amoco Oil Company,

Atlantic Richfield Company, Chevron U.SA. Inc.,

individually and as successor to Gulf Oil Corporation,

and/or Gulf Oil Exploration & Production Company;

ConocoPhillips Company, successor by merger to

Conoco, Inc., Transco Exploration Company as successor

to Exchange Oil & Gas Corporation; Exxon Mobil

Corporation, individually and as successor to Exxon

Corporation and Mobil Oil Corporation; Intracoastal

Tubular Services, Inc., individually and as the successor

corporation to Intracoastal Truck Line, Inc., Intracoastal

Pipe Repair and Supply Co., and Intracoastal Terminal,

Inc.; Anadarko US Offshore Corporation f/k/a Kerr-

McGee Oil & Gas Corporation; Kerr-McGee Oil & Gas

Company f/k/a Kerr-McGee Corporation; Marathon Oil

Company; Mobil Exploration & Producing U.S., Inc.;

OFS, Inc., individually and as successor corporation to

Oil Field Sales and Service, Inc.; Shell Offshore Inc.;

Shell Oil Company; SWEPILP, individually and as

successor to Shell Western E&P. Inc.; and Texaco Inc.

The Joint Motion for Final Dismissal was granted by the trial court on June 23,

8

2014. The Grefers were not included in the Joint Motion for Final Dismissal.

Notably, the judgment signed by the trial court “expressly reserved” Plaintiffs’

claims against all other defendants.

TRIAL COURT’S FINDINGS AFTER EVIDENTIARY HEARING

After listening to the testimony, the trial court issued reasons for judgment,

which provided:

This Court believed that the four corners of the

Agreement evidenced the intent of the parties. However,

following the directive of the Louisiana Fourth Circuit

Court of Appeal in Earl A. Adams Jr., et al, v. Chevron

USA, Inc., 2019-0210 (La. App. 4 Cir. 2/24/21), writ

denied, 2021-00446 (La. 5/25/21), on July 19, 2022, the

Court conducted an evidentiary hearing in order to

consider extrinsic evidence of the intent of the actual

settling parties regarding the scope of the Agreement. As

stated above, in 2014, the “Settling Plaintiffs” settled

their claims with the Pipe Contractor Defendants, Oil

Company Defendants, and two Landowner Defendants.

In their Motion to Enforce Settlement Agreement, The

Grefer Defendants assert that they are included in the

definition of “Released Parties” in the Agreement as an

“indemnitee” of the Released Parties identified in Exhibit

C (of the Agreement) and as a party for whom one or

more of the named “Settling Defendants” “are or may be

liable.” Because they are included in the definition of

Released Parties, the Grefer Defendants believe all

claims asserted against them by Plaintiffs should be

dismissed with prejudice. Plaintiffs assert that the Grefer

Defendants cannot enforce the Agreement because they

were not parties to the Agreement, and the evidence

demonstrates they did not intend to settle their claims

against the Grefer Defendants with the Agreement.

For the purposes of the Motion to Enforce, the

issue before the Court is whether Plaintiffs intended to

release the indemnitees of the Settling Defendants or

persons to whom the Settling Defendants were liable or

were potentially liable. At the evidentiary hearing.

Plaintiffs presented the live testimony of Brian Long and

Joseph Grefer and submitted the deposition testimony of

Mary Johnson.

* * *

As it relates to the Motion to Enforce, the issue is

whether the 2014 Agreement provides means for the

9

dismissal of Plaintiffs’ claims against the Grefer

Defendants. In order to analyze this issue, the Court must

determine whether the Grefer Defendants are considered

parties to the Agreement, thereby granting them

enforcement rights, and whether the Agreement

unequivocally absolve the Grefer Defendants of liability

to the Plaintiffs.

* * *

Following the directive of the Fourth Circuit, this

Court conducted a contradictory hearing in order to allow

the plaintiffs an opportunity to offer evidence of the

intent of the settling parties. Plaintiffs called witnesses

(Mr. Long, Mr. Grefer, and Ms. Johnson via deposition)

and introduced other extrinsic evidence, such as the Joint

Motion to Dismiss, to demonstrate their intent was not to

include the Grefer Defendants as a party to the

Agreement. However, Plaintiffs failed to present

evidence of any mistake or misunderstanding sufficient

to contradict the terms of the Agreement. Plaintiffs

failed to provide any evidence of their state of mind or

intent (as the releasors) that demonstrated at the time the

Agreement was executed, they were either (1) mistaken

as to what they were signing, or (2) did not fully

understand the nature of the rights being released or that

they did not intend to release certain aspects of their

claims. As such, adopting the Maggio Court’s limited

application of extrinsic evidence exception approach, this

Court finds that the intent of the parties is best expressed

by the four comers of the Release.

* * *

Based on the language used in the Agreement, the

scope of all the released claims is comprehensive and

releases the Released Parties, which includes the Grefer

Defendants, from all of Settling Plaintiffs’ claims. The

Agreement does not distinguish which of Plaintiffs’

claims against the Grefer Defendants are included or

excluded from the settlement. In their post-hearing

memorandum, Plaintiffs state, “Brown defeats the present

Motion because ‘if the release instrument leaves any

doubt as to whether a particular future action is covered

by the compromise, it should be construed not to cover

such future action.'’ Brown, supra, at 753-54 (emphasis

added).”10 In Brown v. Drillers, Inc., 93-CC-1019 (La.

1/14/94), 630 So.2d 741, the case cited by Plaintiffs, the

Louisiana Supreme Court “…recognized that ‘fail[ure] to

use language in the contract which would have clearly

provided for waiver of [a] future action’ evidences a lack

of intent to compromise such future action.” Brown at

754. An examination of the Release language clearly

10

demonstrates an intent to release the Released Parties …

from any and all liability, rights, demands, claims...

which Settling Plaintiffs had in the past, may have now

or which they may hereafter acquire, arising out of, or

in any way related to the Litigation…” (emphasis added).

This language clearly refers to future actions and

evidences an intent to compromise these future actions.

Consequently, the Agreement unequivocally absolves the

Grefer Defendants, as Released Parties, of liability to the

Plaintiffs.

As such, based on the evidence and the law

presented, the Court finds that the Grefer Defendants are

“Released Parties” under the Agreement, and the

Agreement absolves the Grefer Defendants, as “Released

Parties”, of liability to the Plaintiffs. Therefore, the Court

grants the Motion to Enforce Settlement.

Accordingly, we must determine if the trial court, on remand, erred by granting the

Motion to Enforce Settlement.

MOTION TO ENFORCE SETTLEMENT

When interpreting a settlement agreement, the Louisiana Supreme Court

provided guidelines as follows:

“A compromise is a contract whereby the parties,

through concessions made by one or more of them, settle

a dispute or an uncertainty concerning an obligation or

other legal relationship.” La. Civ. Code art. 3071. The

compromise instrument is governed by the same general

rules of construction applicable to contracts. Brown v.

Drillers, Inc., 93-1019 (La. 1/14/94), 630 So.2d 741, 748.

Therefore, in interpreting a contract, the analysis must

start with the premise that legal agreements have the

effect of law upon the parties and that the courts are

bound to give legal effect to all such contracts according

to the true intent of the parties. Leenerts Farms, Inc. v.

Rogers, 421 So.2d 216 (La. 1982). See also Brown, 630

So.2d at 748 (a compromise “must be interpreted

according to the parties' true intent”). This principle is

enshrined in the Civil Code, which states: “A

compromise settles only those differences that the parties

clearly intended to settle, including the necessary

consequences of what they express.” La. C.C. art. 3076.

Accordingly, when the words of the settlement

agreement are clear and explicit and lead to no absurd

consequences, no further interpretation may be made in

11

search of the parties’ intent. C.C. art 2046. However,

Louisiana courts have crafted a jurisprudential exception

to the extrinsic evidence rule for compromise

agreements. When a dispute arises as to the scope of a

compromise agreement, “extrinsic evidence can be

considered to determine exactly what differences the

parties intended to settle.” Brown, 630 So.2d at 749. As

this Court unanimously remarked in Brown, an opinion

authored by Justice Pike Hall, a “long line of

jurisprudence holds that 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.” Id.

Intent is determined by reading the compromise

instrument “in light of the surrounding circumstances at

the time of execution of the agreement.” Id. at 748–49.

The parties to a release instrument are therefore

“permitted to raise a factual issue as to whether

unequivocal language in the instrument was intended to

be unequivocal.” Id.

In interpreting this jurisprudential rule, courts have

cautioned that, absent some substantiating evidence of

mistaken intent, no reason exists to look beyond the four

comers of the instrument to ascertain intent. Brown, 630

So.2d at 749. Therefore, utilizing a case-by-case analysis,

Louisiana courts have limited the application of the

extrinsic evidence exception to cases in which

substantiating evidence is presented establishing either

(1) that the releasor was mistaken as to what he or she

was signing, even though fraud was not present; or (2)

that the releasor did not fully understand the nature of the

rights being released or that the releasor did not intend to

release certain aspects of his or her claim. Id. When the

factual circumstances surrounding the execution of the

release instrument do not fall within either of the above

categories, Louisiana courts have applied the general rule

of construction in La. Civ. Code art. 2046 and have not

hesitated to confine their analysis to the four corners of

the instrument. Brown, 630 So.2d at 749.

Maggio v. Parker, 2017-1112, pp. 4-5 (La. 6/27/18), 250 So. 3d 874, 878-79.

Furthermore, this Court outlined the interpretation of contracts as follows:

In interpreting contracts, we are guided by the general

rules contained in La. C.C. arts. 2045-2057. La. C.C. art.

2045 states that the interpretation of a contract is the

determination of the common intent of the parties. To

ascertain the parties’ intent, the court must first look to

the words and provisions of the contract. Amend v.

12

McCabe, 95-0316, p. 7 (La. 12/1/95), 664 So.2d 1183,

1187. When the words of a contract are clear and explicit

and lead to no absurd consequences, no further

interpretation may be made in search of the parties’

intent. La. C.C. art. 2046. When the language of the

contract is unambiguous, the letter of the clause should

not be disregarded under the pretext of pursuing its spirit.

La. C.C. art. 2046, comment (b). Moreover, to determine

the meaning of words used in a contract, a court should

give them their general prevailing meaning. If a word is

susceptible to different meanings, it must be interpreted

as having the meaning that best conforms to the object of

the contract. La. C.C. art. 2048. A provision susceptible

to different meanings must be interpreted with a meaning

that renders the provision effective, and not with one that

renders it ineffective. La. C.C. art. 2049. The meaning

and intent of the parties to a written instrument is

ordinarily determined from the four corners of the

instrument, and extrinsic (parol) evidence is inadmissible

either to explain or to contradict the terms thereof.

Ortego v. State, Dept. of Transp. and Development, 96-

1322, p. 7 (La. 2/25/97), 689 So.2d 1358, 1363.

Contracts, subject to interpretation from the instrument’s

four corners without the necessity of extrinsic evidence,

are to be interpreted as a matter of law, and the use of

extrinsic evidence is proper only where a contract is

ambiguous after examination of the four corners of the

agreement. Richard A. Tonry, P.L.C. ex rel. Tonry v.

Constitution State Service, L.L.C., 2002-0536, p. 3 (La.

App. 4 Cir. 7/17/02), 822 So.2d 879, 881. Therefore,

each provision of a contract must be interpreted in light

of the other provisions so that each is given the meaning

suggested by the contract as a whole. La. C.C. art. 2050.

Doubtful provisions must be interpreted in light of the

nature of the contract, equity, usages, the conduct of the

parties before and after the formation of the contract, and

other contracts of a like nature between the same parties.

La. C.C. art. 2053.

Bd. of Supervisors of Louisiana State Univ. v. 2226 Canal St., L.L.C., 18-0254, pp.

4-5 (La. App. 4 Cir. 12/19/18), 262 So. 3d 909, 914-15 (quoting French Quarter

Realty v. Gambel, 05-0933, pp. 6-8 (La. App. 4 Cir. 12/28/05), 921 So. 2d 1025,

1029-30).

The trial court stated:

13

Plaintiffs failed to present evidence of any mistake or

misunderstanding sufficient to contradict the terms of the

Agreement. Plaintiffs failed to provide any evidence of

their state of mind or intent (as the releasors) that

demonstrated at the time the Agreement was executed,

they were either (1) mistaken as to what they were

signing, or (2) did not fully understand the nature of the

rights being released or that they did not intend to release

certain aspects of their claims.

The fact-finding process was not completed. As, we previously found:

the trial court should have considered the evidence of the

intent of the actual parties to the settlement concerning

whether the landowner defendants would or would not be

released. To not do so interdicted the fact-finding

process. Therefore, the district court erred as a matter of

law in refusing to allow the plaintiffs an opportunity to

offer evidence of the intent of the settling parties, i.e., a

contradictory hearing where the parties could have called

witnesses and introduced other extrinsic evidence to

establish the true intent of the parties to the settlement.

Adams, 19-0210, 19-0210, 19-0198, 19-0199, 19-0708, 20-0069, 20-0070, p. 3,

2021 WL 717778, *2, ___ So. 3d at ___. However, the trial court dismissed the

evidence presented.

Specifically, Mr. Long, as a settling plaintiff and signatory to the 2014

settlement agreement, testified that he did not believe he was releasing the Grefers,

in that they needed to be held liable. Further, he had not received any money from

the Grefers. Likewise, Ms. Johnson, as the drafter of the 2014 settlement

agreement, testified that the parties never intended to release third parties for their

own negligence. Furthermore, the Joint Motion for Final Dismissal did not include

the Grefers as a settling party and the judgment of dismissal “expressly reserved”

Plaintiffs’ claims against other defendants. In fact, Plaintiffs litigation against the

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Grefers continued post-dismissal.1 This testimony and documentary evidence, if

considered, substantiated the assertion that Plaintiffs did not intend to release

certain aspects of their claims, i.e., releasing the Grefers for their own negligence.

As such, the trial court erred by excluding all testimony and confining the analysis

to the four corners of the 2014 settlement agreement.

Turning to the 2014 settlement agreement entered into by Plaintiffs and

settling defendants, we note the following rights and benefits were conferred:

This Agreement is intended to confer rights and

benefits only on the Parties hereto and the Released

Parties and is not intended to confer any right or benefit

upon any other Person and/or entity. No Person, other

than Settling Plaintiffs/Claimants and the Released

Parties shall have an enforceable right under this

Agreement. The Parties do not intend, by this Agreement,

to make any Person a “third party beneficiary” nor to

create any “stipulation por autrui” in favor of any third

party. All rights and/or causes of action for any breach of

this Agreement are reserved to Settling Plaintiffs and the

Released Parties. (emphasis added).

The term “Released Parties” was defined thusly:

H. The term “Released Parties” shall mean, collectively,

all parties identified on Exhibit “C”. In addition to the

entities identified in Exhibit C, the term “Released

Parties” shall also include each entity’s current and

former agents, servants, brokers, contractors,

subcontractors, employees, employers, officers, directors,

managers, shareholders, stockholders, administrators,

managers, attorneys, representatives, insurers, reinsurers,

excess insurers, and underwriters, as well as each of their

respective predecessors, successors, parents, owners,

joint owners, subsidiaries, divisions, operating

companies, unincorporated divisions, assigns,

indemnitees, indemnitors, co-owners, joint owners,

partners, general partners, joint venture partners, limited

partners, and affiliates, and all of their respective

1 Plaintiffs filed amending and supplemental petitions after signing the 2014 settlement

agreement. Specifically, the request for leave to file the Fourth Amending and Supplemental

Petition occurred in May 2014. A few days after, the Grefers filed their initial Motion to Enforce

Settlement.

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employees, officers, directors, managers, shareholders,

agents, and representatives, even though they were not

named in the Petition for Damages and all supplements

and amendments thereto. The term “Released Parties'’

shall also include the named Settling Defendants in this

Litigation as defined in Paragraph G, and any other

Person for which these named Settling Defendants are

or may be liable, whether in contract, tort or equity,

in connection with, relating to, or arising from the

claims asserted in the Litigation. It is expressly agreed

that the release of insurers, reinsurers, excess insurers,

and underwriters herein is solely to the extent that they

provided services or insurance to the Settling Defendants,

and the term “Released Parties” does not include any

non-settling insurers, reinsurers, excess insurers or

underwriters whose liability is not derived from

providing services or insurance to the Released Parties.

(emphasis added).

While the trial court considered the Grefers as released parties and/or indemnitees,

it is undisputed that the Grefers were neither a party to nor assisted with drafting

the language for the 2014 settlement agreement, and did not contribute to the

monetary settlement. Hence, there was a lack of reciprocal concessions between

the Grefers and Plaintiffs. Reading the 2014 settlement agreement in conjunction

with the testimony presented at the evidentiary hearing and undisputed facts

demonstrates that Plaintiffs did not intend to settle claims against the Grefers for

their own negligence. As stated by Ms. Johnson, “[w]e have a release to the extent

that any of the settling defendants owed indemnity to anyone else, but there was

not an intent to release any third party’s own negligence or fault.”

Further, as described by the Maggio Court, the Grefers did not present

evidence that the settling parties intended to convey a third-party benefit upon

them.

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.” See

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Joseph v. Hosp. Serv. Dist. No. 2 of Parish of St. Mary,

05-2364, p.9 (La. 10/15/06), 939 So.2d 1206, 1212. A

stipulation pour autrui is never presumed. Id. There are

three criteria for determining whether contracting parties

have provided a benefit for a third party: 1) the

stipulation is “manifestly clear”; 2) there is certainty as to

the benefit provided the third party; and 3) the benefit is

not a “mere incident of the contract between the promisor

and the promisee.” Id. 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. (citations omitted).

Maggio, 17-1112, pp. 6-7, 250 So. 3d at 880.

Firstly, as the procedural history of this Motion to Enforce Settlement has

highlighted, there is no “manifestly clear” benefit conveyed to a third party. In

fact, the 2014 settlement agreement contained the following language to

specifically exclude the release of third parties:

IX. NO RELEASE OF THIRD PARTIES

It is expressly understood and agreed that nothing stated

or contained in this Agreement shall be taken, or

construed, to release any Settling Plaintiff/Claimant’s

claims against any other non-settling party/parties, be

they in the Litigation or otherwise, except as otherwise

provided herein.

Secondly, as a corollary to the first requirement and for similar reasoning, there is

no certainty as to the alleged benefit bestowed upon a third party. Thirdly, any

benefit upon a third party that could possibly be “otherwise provided herein,” such

as being considered a “released party” or indemnitee, was created as a “mere

incident” of the settlement confected between the settling defendants and Plaintiffs.

The Grefers were not included in the 2014 settlement agreement, were not

involved in the drafting of the 2014 settlement agreement, and did not contribute to

the monetary compensation provided to Plaintiffs as a result of the 2014 settlement

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agreement. In addition, the section of the 2014 settlement agreement on rights and

benefits conferred provided specifically that “[t]he Parties do not intend, by this

Agreement, to make any Person a ‘third party beneficiary’ nor to create any

‘stipulation por autrui’ in favor of any third party.” Thus, there was no clear

manifestation of a stipulation pour autrui.

As this Court and the Louisiana Supreme Court stated, “a stipulation pour

autrui is never presumed.” Albe v. City of New Orleans, 12-0073, p. 5 (La. App. 4

Cir. 7/5/12), 97 So. 3d 583, 587. “Not every promise, performance of which may

be advantageous to a third person, will create in him an actionable right.” Id., 12-

0073, p. 6, 97 So. 3d at 588 (quoting Joseph v. Hosp. Serv. Dist. No. 2 of Par. of

St. Mary, 05-2364, p. 9 (La. 10/15/06), 939 So. 2d 1206, 1212). The terms of the

2014 settlement agreement have been debated for years in the present litigation.

The absence of a manifestly clear stipulation lends to the finding that any benefit

the Grefers might have gained were simply a mere incident to the 2014 settlement

agreement. See Albe, 12-0073, p. 8, 97 So. 3d at 589. “Each case must be decided

on a case-by-case basis.” Scarberry v. Entergy Corp., 14-1256, p. 7 (La. App. 4

Cir. 5/6/15), 172 So. 3d 51, 57 (quoting Dugas v. Thompson, 11-0178, p. 11 (La.

App. 4 Cir. 6/29/11), 71 So. 3d 1059, 1066). Accordingly, based on the facts and

circumstances presented, evidence of a stipulation pour autrui is lacking.

DECREE

For the above-mentioned reasons, we find that the trial court interdicted the

fact-finding process and erred by disregarding the testimony presented at the

evidentiary hearing. Upon conducting our review combining our interpretation of

the 2014 settlement agreement with the testimony presented and applying

applicable law, we find that Plaintiffs did not intend to release third parties for their

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own negligence. The 2014 settlement agreement did not create a stipulation pour

autrui for the Grefers such that they were released from their own negligence.

Accordingly, we reverse the judgment of the trial court that granted the Grefers’

Motion to Enforce Settlement, reinstate Plaintiffs’ claims against the Grefers, and

remand for further proceedings consistent with this opinion.

REVERSED AND REMANDED

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