2016 Historic Flood

In response to Hurricane Ida, the Louisiana Supreme Court issued three Orders which affect litigation in Louisiana:

Proceeding before the Supreme Court

• The Supreme Court Clerk of Court’s office will be closed until September 19, 2021. All filings due during this period of closure shall be deemed timely filed if filed on or before Monday, September 20, 2021.
• Cases scheduled to be heard on the September docket (September 7-9) are postponed to the October docket, the week of October 18, 2021.

Civil Cases Statewide

• All prescriptive and peremptive periods are hereby suspended statewide for a period of thirty days commencing from August 26, 2021.
• All periods of abandonment are hereby suspended statewide for thirty days commencing from August 26, 2021.

Criminal Matters

• The Court also extended time periods in criminal matters but limited the order to parishes most impacted by the storm.

Individual District Courts and Courts of Appeal may take additional actions because of the damage and loss of power experienced in multiple areas of the state.

As the old adage goes, it’s always safest to get an agreement in writing. In Louisiana, when an agreement is about the sale of real estate, the adage is law. A contract for sale must be in writing as provided in Louisiana Civil Code articles 1839 and 2440.

This long-standing rule was at issue in the recent case of Holmes v. Paul, 19-130 (La. App. 5 Cir. 10/2/19), 279 So. 3d 1068. In Holmes, the plaintiff/seller and defendants/purchasers entered into a purchase agreement for a Metairie home which required a closing by no later than April 29, 2016. The contract was a standard form Louisiana purchase agreement which required that any change in the closing deadline be written and signed by both parties. The parties later entered a written extension of the closing deadline to May 6, 2016.

Three days before the closing, the home appraised for $14,000 below the purchase price, leading the seller’s agent to encourage the purchasers’ agent to pursue an appraisal review. However, the parties did not sign a written extension of the May 6, 2016 closing deadline. Thereafter, the seller agreed to decrease the purchase price to the appraised value, but on the same day the purchasers sent a signed cancellation. The seller sued the purchasers for breach of contract, arguing that the parties verbally agreed to extend the closing deadline and intended to execute a written extension as soon as they determined a feasible closing date.

The purchasers moved for summary judgment on the ground that the purchase agreement had expired and was unenforceable. The Court agreed. The purchase agreement expressly required that extensions be made in writing signed by both parties. Upon the expiration of the May 6, 2016 closing deadline, the contract was unenforceable.

The seller also asserted a detrimental reliance claim, arguing she was lulled into not insisting on a written extension because the purchasers’ agent agreed to it orally. However, the seller conceded her awareness that an extension had to be in writing. As such, her reliance was not reasonable. The court further noted the absence of evidence that the purchasers themselves agreed to orally extend the contract or to waive the writing requirement.

Unfortunately, business deals in the modern world cannot be finalized by a handshake. Remember that when you buy and sell property in Louisiana -- get it in writing.

Marty Golden has been practicing law based in Baton Rouge, Louisiana for over thirty years, concentrating in civil litigation primarily involving injuries, property damage, insurance coverage, and contract disputes. Much of his practice is defending and advising real estate agents in suits by property buyers and sellers, but Marty also defends other professionals, insurance companies, manufacturers, and business owners. Marty has a special interest in all things procedural, because they are the rules of the road for litigators and knowing them better than his opponent gives him a leg up in court.

Under Louisiana law, uninsured/underinsured insurance coverage is implied in any automobile policy of insurance, and UM coverage will be read into the policy unless it is validly rejected. This rejection of UM coverage must be “clear and unmistakable.” The Louisiana Supreme Court recently addressed the issue of what qualifies as a valid rejection of UM coverage in Baack v. McIntosh, 2021-01054 (La. 6/30/21), --- So.3d ---.

The Louisiana Commissioner of Insurance provides a form which must be completed to reject UM coverage. This form allows the insured to initial one of four selections regarding UM coverage: (1) UM coverage at lower limits than liability coverage; (2) economic-only coverage with same limits; (3) economic-only UM coverage at lower limits; or (4) no UM coverage. A representative of the insured must initial one of these options for that option to apply to the policy at issue. This list does not include an option to select UM coverage. Therefore, the Baack Court held that “the only way to ‘select’ UM coverage on the form is to not initial any of the provided choices.”

The insured in Baack properly rejected UM coverage through the UM form in 2002. A proper rejection of UM coverage remains valid for the life of the policy, and a new form is not required when a policy is renewed. However, the Court found that, under La. R.S. 22:1295, an insured may change its rejection of UM coverage at any time by submitting a new UM form to the insurer.

In 2011, the insured increased its liability limits under the policy, which required completion of a new form. UM coverage again was properly rejected. Even though not legally required, the insurer sent new UM waiver forms to the insured in 2012, 2013, and 2014 when the policy was renewed. However, the insured completed each of these forms without initialing any of the four selections related to UM coverage. The insurer later issued the insurance policies without objection. The court found that the insured changed its rejection of UM coverage when it submitted the new forms in 2012, 2013, and 2014.

Because the insurer did not initial these forms when they were resubmitted, the insured “selected” UM coverage under Baack’s analysis, and UM coverage was afforded under the policy. Importantly, the Court held that, if the insurer believed the failure to make a selection on the forms was a mistake, it was the insurer’s responsibility to follow-up with the insured to make any necessary corrections. Three justices dissented and argued that the majority opinion negates other law which provides that an insured must make a “written request” to add UM on a policy where UM is rejected. UM cases are often fact-intensive and each case should therefore be assessed under their own specific facts.