Open‑Court Compromise in a Possessory Action Bars Later Petitory Action: Fifth Circuit Affirms Res Judicata Effect of Settlement Resolving “Possession and Ownership”

Open‑Court Compromise in a Possessory Action Bars Later Petitory Action: Fifth Circuit Affirms Res Judicata Effect of Settlement Resolving “Possession and Ownership”

Introduction

In Coupel v. Kfoury, the United States Court of Appeals for the Fifth Circuit affirmed a district court’s decision upholding a bankruptcy court’s dismissal of an adversary complaint that sought to relitigate ownership of immovable property in Assumption Parish, Louisiana. The dismissal rested on res judicata (claim preclusion) under Louisiana law, based on a 2009 state-court judgment enforcing a settlement (a “compromise” under Louisiana Civil Code) that had been read into the record during the parties’ earlier possessory action. Although a possessory action ordinarily determines possession but not title, the Fifth Circuit clarified that a valid compromise recited in open court that expressly resolves “possession and ownership” and establishes a boundary has full preclusive effect and bars a later petitory action over the same property.

The case arises from a long-running dispute between the Coupels (debtors and appellants) and the Kfourys (appellees) over rural property access and boundaries. After years of state litigation, two bankruptcy filings by the Coupels, and multiple layers of state and federal review, the Fifth Circuit’s per curiam opinion (not designated for publication) consolidates the governing principles: state law controls preclusion; a compromise recited in open court and enforced by judgment satisfies Louisiana’s formal requirements; and where the compromise encompasses “possession and ownership,” it forecloses future title litigation, including in bankruptcy adversary proceedings styled as petitory actions or quiet-title suits.

Summary of the Opinion

  • The court applies Louisiana preclusion law to assess the effect of a 2009 state judgment enforcing a settlement that resolved “possession and ownership” and established the property’s boundary by reference to a surveyor.
  • The appellants’ attempt to challenge the settlement’s validity fails because (i) it was already enforced by a final state judgment affirmed on appeal, and (ii) the bankruptcy court in 2016 gave that judgment “full force and effect,” which the appellants did not timely appeal as to validity (Fed. R. Bankr. P. 8002).
  • While pure possessory judgments do not adjudicate ownership, the court distinguishes compromises: parties may settle both possession and ownership in a possessory context, and such a compromise precludes later petitory actions.
  • Res judicata’s five elements under Louisiana law (Burguieres v. Pollingue) are satisfied: a valid, final judgment; identical parties; ownership claim existed at the time; and the later petitory claim arises out of the same transaction/occurrence as the earlier compromise and judgment.
  • Dismissal under Rule 12(b)(6) is appropriate because the res judicata bar is apparent from the complaint and judicially noticeable public records (Anderson v. Wells Fargo; Test Masters).
  • Holding: The district court’s affirmance of the bankruptcy court’s dismissal is affirmed.

Detailed Analysis

1) Precedents and Authorities Cited

  • Choice of Preclusion Law
    • Young v. Equifax Credit Info. Servs., Inc., 294 F.3d 631, 635 (5th Cir. 2002): Federal courts give state-court judgments the same preclusive effect they would receive in the rendering state; state law governs.
    • Vanguard Operating, LLC v. Klein, 624 B.R. 400, 416 (Bankr. S.D. Tex. 2020): Same principle articulated in the bankruptcy context.
  • Louisiana Res Judicata Framework
    • Burguieres v. Pollingue, 843 So. 2d 1049 (La. 2003): Lists the five elements of claim preclusion under La. R.S. 13:4231: (1) valid judgment; (2) final judgment; (3) same parties; (4) cause of action existed at time of prior final judgment; (5) cause of action arises from the same transaction or occurrence.
  • Compromise (Settlement) as a Source of Preclusion
    • La. Civ. Code art. 3080: A compromise precludes subsequent actions based on the matter compromised.
    • La. Civ. Code art. 3072: A compromise can be “recited in open court” and is valid if susceptible of being transcribed.
    • Joseph v. Huntington Ingalls Inc., 347 So. 3d 579, 584, 588 (La. 2020): Res judicata applies to valid compromises; compromises may settle present or future disputes that are or could be in litigation.
    • Brown v. Drillers, Inc., 630 So. 2d 741, 747–48 (La. 1994): Valid compromises can support res judicata; compromises are construed by general contract principles and in light of circumstances; releases of future actions are narrowly construed absent clear intent.
    • La. Civ. Code art. 2046: Clear, explicit contract language controls absent absurdity.
    • La. Civ. Code art. 3073 (as quoted): Compromises regulate only differences intended by the parties, construed by expressed terms and necessary consequences.
  • Possessory vs. Petitory Actions
    • La. Code Civ. Proc. arts. 3651, 3655: Petitory actions determine ownership; possessory actions protect possession.
    • Causeway Land Co. v. Karno, 317 So. 2d 661, 663 (La. App. 4th Cir. 1975): The classic distinction—possessory judgments concern possession, not title.
  • Standards of Review and Procedure
    • Matter of Provider Meds, L.L.C., 907 F.3d 845, 850 (5th Cir. 2018): Appellate review mirrors district court’s review of bankruptcy decisions; legal questions de novo, facts for clear error.
    • In re Barragan-Flores, 984 F.3d 471, 473 (5th Cir. 2021) (per curiam), citing In re Cahill, 428 F.3d 536 (5th Cir. 2005): Reiterates standards of review.
    • Sacks v. Tex. S. Univ., 83 F.4th 340, 344 (5th Cir. 2023): Res judicata is a question of law; Rule 12(b)(6) dismissals reviewed de novo.
    • Anderson v. Wells Fargo Bank, N.A., 953 F.3d 311, 314 (5th Cir. 2020): Res judicata can support a Rule 12(b)(6) dismissal when apparent from the complaint and judicially noticeable facts.
    • Test Masters Educ. Servs., Inc. v. Singh, 428 F.3d 559, 570 n.2 (5th Cir. 2005): Federal courts may take judicial notice of matters of public record on a motion to dismiss.
  • Prior Related Proceedings
    • Kfoury v. Coupel, 2011 WL 766960 (La. App. 1 Cir. 2/11/11), writ denied, 63 So. 3d 1000 (La. 2011): Affirmed 2009 state-court judgment enforcing the settlement and adopting the boundary established by the Kfourys’ surveyor; rejected new-trial attack on compromise.
    • In re Coupel (Bankr. E.D. La. 2016, R. Doc. 184): Bankruptcy court held the automatic stay did not void the state injunctive relief and gave the 2009 judgment “full force and effect.” The district court affirmed. The Coupels appealed the stay issue only, not the validity of the state judgment.
    • Coupel v. Kfoury, 2025 WL 50038 (E.D. La. Jan. 6, 2025): Affirmed the bankruptcy court’s Rule 12(b)(6) dismissal of the adversary petitory action based on res judicata.

2) The Court’s Legal Reasoning

The opinion proceeds in three steps: (i) choose Louisiana law to assess preclusion; (ii) dispose of the appellants’ threshold validity challenge to the compromise; and (iii) apply res judicata’s elements to bar the later petitory action.

a) State law governs preclusion

Following Young and its progeny, the Fifth Circuit applies Louisiana preclusion law to determine the effect of the 2009 state judgment. This includes Louisiana’s doctrine that a compromise itself—independent of a final adjudication on the merits—can serve as the basis for claim preclusion, and that an open-court recital meeting Article 3072’s formal requisites is a valid compromise.

b) The compromise’s validity is no longer open

The appellants argued that the settlement was unenforceable because it was not reduced to a signed writing. The court rejects this for two reasons:

  • The 2009 state judgment enforced the settlement read into the record; the Louisiana appellate courts affirmed; and the bankruptcy court later gave that judgment “full force and effect.”
  • The appellants did not timely appeal the 2016 bankruptcy ruling that gave effect to the 2009 judgment (Fed. R. Bankr. P. 8002 imposes a 14-day appeal deadline), making any attack an impermissible collateral and untimely appeal.

Substantively, Article 3072 allows a compromise to be formed by an open-court recital susceptible of transcription. The record showed the judge warned the parties they would be “bound,” the settlement terms were read aloud, and the court later enforced those terms, including the boundary based on survey. The district court transcript also captured counsel’s explicit statement that the settlement foreclosed any petitory action, with the judge confirming the point (despite the transcript’s “pedatory” malapropism).

c) Compromise in a possessory action can bar a later petitory action

Louisiana law prohibits adjudicating ownership in a possessory action; ownership is the province of a petitory action. However, the court emphasizes that the case did not end with a possessory judgment. It ended with a compromise that expressly resolved both “possession and ownership” and was enforced by judgment. The Civil Code allows parties to compromise “any differences they may have in the present or in the future” that are or could be in litigation (Joseph; arts. 3071, 3076, 3082). Thus, the limitation inherent in a possessory judgment does not constrain the scope of a compromise that the parties voluntarily enter and the court enforces.

The court further reasons that, under Louisiana contract principles (art. 2046) and compromise interpretation (art. 3073; Brown), clear and explicit settlement terms control. Here, the open-court settlement expressly resolved “possession and ownership” and directed surveyors to establish an eastern boundary line that would mark the extent of ownership. When the Coupels refused to participate, the state court deemed conditions fulfilled and adopted the boundary produced by the Kfourys’ surveyor—an approach approved on appeal. The transcript statements by counsel and the trial judge that “there’ll be no [petitory] action” confirm intent to preclude future title litigation.

d) Res judicata’s elements are satisfied

The court applies Burguieres’s five-part test and finds:

  • Valid, final judgment: The 2009 judgment enforcing the settlement is valid and final; it was affirmed by the Louisiana First Circuit and survived writ denial by the Louisiana Supreme Court.
  • Same parties: The same parties participated in the prior litigation and the later adversary petitory action.
  • Cause existed at time of first judgment: The ownership controversy existed during the initial litigation; the settlement expressly addressed it.
  • Same transaction or occurrence: The later petitory claim arises from the same property dispute and boundary determination compromised and adjudicated in 2009.

The court reiterates that it is not holding that every possessory judgment precludes a later petitory action; rather, where a valid compromise resolving ownership is reached and enforced in the possessory case, that compromise has preclusive effect under Article 3080 and Brown.

e) Procedural posture: Rule 12(b)(6), judicial notice, and standards of review

Although res judicata is typically an affirmative defense, a Rule 12(b)(6) dismissal is appropriate where the bar is apparent from the complaint and public records (Anderson). The court acknowledges that federal courts may take judicial notice of matters of public record—here, the 2009 state judgment and other docketed rulings (Test Masters). The appellate court reviews legal issues de novo and factual determinations for clear error, mirroring the district court’s review of the bankruptcy court (Provider Meds; Barragan-Flores; Cahill).

3) Impact and Practical Implications

  • Substance over form in property settlements: Parties litigating possession in Louisiana can validly settle and conclusively resolve title if the compromise clearly covers “possession and ownership,” even though the underlying cause of action is possessory. Courts will enforce such settlements and give them preclusive effect.
  • Open-court settlements are enough: An open-court recital transcribed into the record satisfies Article 3072’s formalities. Parties should assume they will be “bound” if the court warns them and the terms are clear. Later challenges premised on the lack of a signed writing will likely fail.
  • Surveyor-based boundary determinations stick: Where a settlement delegates boundary establishment to surveyors and one party refuses to cooperate, courts may deem conditions fulfilled and adopt the cooperating party’s survey, which can then serve as the basis for res judicata.
  • Bankruptcy is not a do-over: Debtors cannot use bankruptcy adversary proceedings to re-litigate title that was settled and reduced to judgment prepetition; res judicata applies with full force in bankruptcy. Untimely appeals (e.g., of a bankruptcy court’s order recognizing a state judgment) will bar later collateral attacks (Fed. R. Bankr. P. 8002).
  • Litigation strategy and drafting: Lawyers should draft (or recite) compromises with explicit language addressing both possession and ownership, with clear boundary descriptions and explicit waivers of future petitory actions. The court’s reliance on transcript statements here shows that clarity on the record matters.
  • Limits preserved: The court carefully preserves the doctrinal line: a mere possessory judgment does not adjudicate title and does not itself bar a later petitory action. The preclusion here stems from the compromise’s scope, not the nature of the underlying cause of action.
  • 12(b)(6) as an efficient gatekeeper: Where a prior judgment and settlement are matters of public record, defendants can successfully move to dismiss on res judicata grounds at the pleadings stage, reducing litigation costs and delay.

Complex Concepts Simplified

  • Possessory action: A lawsuit to protect the right to possess property (who has physical control/possession), without deciding who ultimately owns it.
  • Petitory action: A lawsuit to determine ownership (title) of immovable property.
  • Compromise (settlement): An agreement to resolve a dispute. In Louisiana, it can be valid if stated in open court on the record, even without a signed written contract (La. Civ. Code art. 3072).
  • Res judicata (claim preclusion): A rule that prevents relitigation of claims that were, or could have been, raised in prior litigation between the same parties when a valid, final judgment exists. In Louisiana, a valid compromise also triggers res judicata (art. 3080).
  • “Transaction or occurrence” test: Louisiana asks whether the second suit arises from the same event(s) or factual grouping as the first; if so, and other elements are met, the second suit is barred.
  • Judicial notice: Courts may rely on public records (e.g., prior judgments, filings) without converting a motion to dismiss into summary judgment.
  • Automatic stay (bankruptcy): A statutory pause on most actions against the debtor (11 U.S.C. § 362). It did not void the state court’s earlier boundary and access rulings here, and a 2016 bankruptcy order gave “full force and effect” to the 2009 judgment—an order the debtors did not timely appeal as to validity.

Case Timeline (At a Glance)

  • 2008: Kfourys file a possessory action in Louisiana state court.
  • 2009: Settlement terms are read into the record; state court enforces the compromise and adopts the Kfourys’ survey boundary.
  • 2011: Louisiana First Circuit affirms enforcement; Louisiana Supreme Court denies writ.
  • 2010–2016: Bankruptcy proceedings begin; bankruptcy court holds the automatic stay does not void state court orders and gives “full force and effect” to the 2009 judgment; district court affirms; the Coupels do not appeal the validity portion.
  • 2022: Second bankruptcy petition; the Coupels file an adversary complaint styled as a petitory/quiet title action; the bankruptcy court dismisses under res judicata; district court affirms.
  • 2025: Fifth Circuit affirms the district court; compromise precludes the petitory action.

Conclusion

Coupel v. Kfoury clarifies a significant intersection of Louisiana property law and res judicata: while a possessory action alone cannot adjudicate ownership, a valid compromise entered in the context of a possessory action can, if it explicitly resolves “possession and ownership” and is enforced by judgment. Such a compromise—recited in open court and transcribed—meets Article 3072’s requirements and, under Article 3080 and Brown, carries full claim-preclusive force. The Fifth Circuit’s decision underscores that litigants who settle boundary and title disputes on the record will be “bound” to those terms, and future petitory actions over the same property will be barred. The opinion also demonstrates that bankruptcy is not a vehicle to unwind state-court settlements or judgments: untimely appeals and res judicata foreclose relitigation. For practitioners, the lesson is straightforward—when settling immovable property disputes in Louisiana, clarity and completeness on the record are critical, and compromises expressly addressing ownership will close the door to future title litigation.

Key Takeaways

  • An open-court compromise that expressly resolves “possession and ownership” and sets a boundary is enforceable and preclusive under Louisiana law.
  • Res judicata can support Rule 12(b)(6) dismissal when the bar is apparent from the complaint and public records.
  • Possessory judgments do not adjudicate title, but compromises reached in possessory cases can, and will bar later petitory actions if the parties so intended.
  • Bankruptcy proceedings cannot be used to relitigate settled property rights or to collaterally attack final state judgments.

Case Details

Year: 2025
Court: Court of Appeals for the Fifth Circuit

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