974 F.2d 602 (5th Cir. 1992), 91-3391, Trizec Properties, Inc. v. United States Mineral Products Co.

Docket Nº:91-3391.
Citation:974 F.2d 602
Party Name:TRIZEC PROPERTIES, INC., Plaintiff-Appellant, v. UNITED STATES MINERAL PRODUCTS COMPANY, Defendant-Appellee.
Case Date:October 08, 1992
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 602

974 F.2d 602 (5th Cir. 1992)

TRIZEC PROPERTIES, INC., Plaintiff-Appellant,



No. 91-3391.

United States Court of Appeals, Fifth Circuit

October 8, 1992

Rehearing Denied Nov. 6, 1992.

Page 603

Alfred B. Adams, III, Holly J.W. Huart, Branch, Pike, Ganz & O'Callaghan, Atlanta, Ga., Charles L. Stern, Jr., Steeg & O'Connor, New Orleans, La., for appellant.

Joseph L. McReynolds, Robert Emmett Kerrigan, Jr., A. Wendel Stout, III, Deutsch, Kerrigan & Stiles, New Orleans, La., for U.S. Mineral Products Co.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before POLITZ, Chief Judge, SMITH, Circuit Judge, and FITZWATER, [*] District Judge.

POLITZ, Chief Judge:

Trizec Properties, Inc. appeals a summary judgment in favor of United States Mineral Products Company in an action to recover asbestos abatement costs. Concluding that Trizec's claim is prescribed, i.e., time-barred, we affirm.


In 1965 United States Mineral Products Company (USMPC), a New Jersey corporation with its principal place of business in that state, sold asbestos-laden fireproofing material to a subcontractor for use in the construction of a building in Atlanta, Georgia. Trizec, a Delaware corporation with its principal place of business in Michigan, purchased the building in 1975, became aware in the early 1980s that the building contained asbestos but did not begin asbestos abatement until 1985. In January 1988 Trizec learned that USMPC manufactured the asbestos. Trizec filed the instant complaint against USMPC in the federal district court for the Eastern District of Louisiana in September 1989. Trizec candidly admits to having filed this action in Louisiana because of a 1985 Louisiana statute which purportedly provides a prescriptive period 1 of five years from the date of discovery of the identity of the manufacturer.

USMPC answered Trizec's complaint asserting, inter alia, a limitations defense. USMPC urged in a summary judgment motion that Louisiana's borrowing statute 2 required that the district court apply the general Georgia limitations statute. 3 The district court granted summary judgment on the basis of the Georgia limitations statute and dismissed Trizec's complaint as time-barred. Trizec timely appealed.

Page 604


The standard of review for a summary judgment is well settled: we review the record de novo to ascertain whether any genuine issue exists as to any material fact and, finding none, ascertain whether the moving party is entitled to a judgment as a matter of law. 4 Without weighing the evidence, assessing its probative value, or resolving any factual disputes, we search the summary judgment record for resolution-determinative factual disputes. 5 Finding none, we may determine whether the successful party is entitled to judgment as a matter of law. Because the parties do not dispute the district court's findings of fact we accept same for purposes of this appeal. Our review need only resolve whether USMPC is entitled to judgment as a matter of law.

Subject Matter Jurisdiction

Federal courts are courts of limited jurisdiction, having only the authority endowed by the Constitution and that conferred by Congress. Because we may not proceed without requisite jurisdiction, it is incumbent upon federal courts, trial and appellate, to examine constantly the basis of jurisdiction, doing so on our own motion if necessary. 6

In Trust Co. Bank v. United States Gypsum Co., 7 a case factually indistinguishable from the case at bar, United States Gypsum challenged federal subject matter jurisdiction by invoking the local action doctrine. 8 Relying on circuit precedent we determined that the issue of subject matter jurisdiction turned on whether the law of the forum state characterized the action as local or transitory. 9 The Trust Co. Bank court noted that in Holmes v. Barclay, 10 the Louisiana Supreme Court rejected the local action doctrine in a case of trespass to property in Illinois. Because the disposition in Trust Co. Bank turned on Mississippi law, however, the reference to the Holmes holding was mere dictum. In the case at bar, Louisiana law controls the issue; thus, Holmes precludes a challenge to federal court subject matter jurisdiction on the grounds of the local action doctrine.

Choice of Law

A federal district court applies the choice of law rules of the forum state. 11 The Supreme Court recently reaffirmed the principle that a state may apply its own statutes of limitations to foreign causes of action brought in its courts. 12 Louisiana courts, and this court under Erie acting as a Louisiana court, have not hesitated to exercise this power. 13

Unlike most other American jurisdictions, Louisiana has always had codified

Page 605

choice of law rules. 14 Civil Code Article 15 (1870), paragraphs 6 and 7, provide the choice of law rule for statutes of limitations. 15 Trizec contends that paragraph 6 provides the correct choice of law rule and that the rule mandates the application of the Louisiana prescriptive period. Article 15, p 6 provides that:

The prescription provided by the laws of this state applies to an obligation arising under the laws of another jurisdiction which is sought to be enforced in this state.

USMPC, on the other hand, contends that the district court correctly determined that the correct choice of law rule is paragraph 7 which mandates that the Georgia statute of limitations be applied. Article 15, p 7 provides that:

When a contract or obligation has been entered into between persons who reside out of this state, which is to be paid or performed out of this state, and such contract or obligation is barred by prescription, or the statute of limitations, of the place where it is to be paid or performed, it shall be considered and held to be barred by prescription in this state, upon the debtor who is thus discharged coming into this state.

As in Kozan, we must first "determin[e] ... the proper Louisiana conflict of laws rule." 16

We agree with the district court's initial conclusion that Trizec's various negligence claims represent obligations within the meaning of the Civil Code. 17 Therefore either paragraph 6 or 7 might be applicable. The district court then assumed sub silentio that Trizec and USMPC "entered into" an obligation and shifted its analysis to paragraph 7 without explaining why paragraph 6 was no longer under consideration. This was an analytical misstep.

A conventional obligation is "an agreement by two or more parties whereby obligations are created, modified, or extinguished." 18 Contracts are nominate or innominate. 19 The nominate contracts, found in Book III, Titles VI-XX of the Civil Code, are: Matrimonial Regimes, Sale, Exchange, Lease, Rents and Annuities, Partnership, Loan, Deposit and Sequestration, Aleatory Contracts, Mandate, Suretyship, Transaction and Compromise, Respite, Arbitration, and Pledge. The sine qua non of all conventional obligations, i.e. contracts, is the consensual nature of the engagement. 20

Quasi-Contracts, Offenses, and Quasi-Offenses, acts which give rise to other than conventional obligations, are found in Book III, Title V, La.Civ.Code art. 1914, comment (c). These are non-consensual obligations which are implied by law or which arise by operation of law as a result of an intentional or negligent act. 21 Furthermore, the general rules governing contracts, including the rules of consent, are inapplicable to obligations arising from

Page 606

quasi-contracts, offenses, or quasi-offenses. 22

Paragraph 7 of Article 15 by its express terms applies only to contracts or obligations "entered into"; these are consensual obligations. Perforce we must conclude that paragraph 7 is not applicable to a non-consensual obligation arising out of a quasi-contract, offense, or quasi-offense. This conclusion is reinforced by the fact that the parties have not cited, nor has our research revealed, any case in which paragraph 7 of Article 15 has been applied by any court to a pure tort case. Furthermore, the conclusion is consistent with the location of Civil Code article 2315, the fountainhead of Louisiana tort law, in Book III, Title V, Chapter 2, outside of the codical provisions for contracts. Thus, as an Erie court we conclude that paragraph 6 of Article 15 provides the correct choice of law rule and that a Louisiana court would apply the applicable Louisiana prescriptive statutes to the case at bar. 23

Selection of the Appropriate Prescriptive Period

Among the possible Louisiana prescriptive periods from which we must select are: (1) the general one-year prescriptive period applicable to torts; 24 (2) the one-year prescriptive period applicable to damage to immovable property; 25 or, as Trizec insists, (3) the five-year "prescriptive" period of R.S. 9:5644. 26

We first conclude that Trizec's contention that R.S. 9:5644(B) creates a prescriptive period is not persuasive. We find this to be nothing more than a statutory suspension of prescription. 27 Section B provides that:

Notwithstanding any other provision of law to the contrary, any time limitation or prescriptive period which may be applicable to any action to recover for asbestos abatement work shall not apply or expire until five years after the date on which the party seeking to recover has completed the abatement work or discovered the identity of the manufacturer of the materials which require abatement, whichever is later. [Emphasis ours.]

This section provides no express or implied prescriptive period. It merely suspends the running of "any time limitation or prescriptive period which may be applicable" until five years after the happening of the later of two events: (1) completion of the asbestos abatement work, or (2) discovery of the identity of the manufacturer of the materials which require abatement. This section...

To continue reading