Richardson v. Louisiana Farm Bureau Mut. Ins. Co.

• Decision Date: 10 November 1980
• Docket Number: No. 13702,13702
• Citation: 393 So.2d 200
• Parties: Lydia RICHARDSON v. LOUISIANA FARM BUREAU MUTUAL INSURANCE COMPANY et al.
• Court: Court of Appeal of Louisiana — District of US

Page 200

393 So.2d 200

Lydia RICHARDSON v. LOUISIANA FARM BUREAU MUTUAL INSURANCE COMPANY et al.

No. 13702.

Court of Appeal of Louisiana, First Circuit.

Nov. 10, 1980.

Rehearing Denied Jan. 26, 1981.

Writ Refused April 6, 1981.

Guy Holdridge, Gonzales, for plaintiff and appellee.

Robert J. Vandaworker, Baton Rouge, for defendant and appellant.

Before COVINGTON, CHIASSON and LEAR, JJ.

COVINGTON, Judge.

This is an appeal by defendants, Louisiana Farm Bureau Mutual Insurance Company and Harold Marchand, from a judgment of the Parish Court, Parish of Ascension, State of Louisiana, in favor of the plaintiff, Lydia Richardson, the insured, in the sum of $500, interest and costs. We affirm in part and reverse in part.

The suit arose out of an alleged insurance contract and compromise agreement between the insurer and the insured. On May 17, 1979, the insured, Lydia Richardson, filed this petition for breach of contract against the insurer and Harold Marchand, the insurance agent. The suit alleged that the insurer had insured the plaintiff's mobile home against damage caused by fire, that a fire loss occurred on February 13, 1978 (more than one year prior to the institution of the suit), that prior to February 13, 1979, she received from the insurer an offer to settle her claim for the fire loss for $500. She further asserts that Ray Robbins, acting as her agent, accepted the offer and notified the defendants of her acceptance before February 13, 1979, and before the withdrawal of the offer by the defendants.

To the petition, the defendants filed an answer denying any indebtedness to Mrs. Richardson. The defendants contend that the insurer has paid the loss in full, that plaintiff's action has prescribed, that there never was a compromise settlement in writing as required by law. The plaintiff admitted in interrogatories that there was no written compromise settlement agreement between her and the defendants. Thereupon, the defendants moved for a summary judgment, which was denied.

Thereafter, the suit was tried on the merits. At the conclusion of the plaintiff's evidence, the defendant Marchand moved for a directed verdict, which was granted. The case, after the trial, was taken under advisement, with judgment later rendered in favor of the plaintiff against both defendants. In his reasons for judgment, the trial judge stated:

"The Court finds that an oral compromise agreement was entered into between plaintiff and defendant to settle plaintiff's claim for the sum of Five Hundred and No/100 Dollars ($500.00). Roy Robbins, who testified on plaintiff's behalf, stated that he acted as Mrs. Richardson's agent in this matter, and that he advised Mr. Harold Marchand, agent for Louisiana Farm Bureau Mutual Insurance Company, that Mrs. Richardson would accept the Five Hundred and No/100 Dollars ($500.00) offered by the company.

"Finding that an oral compromise was reached between those parties, the question is whether or not such a compromise agreement is enforceable in view of Article 3071, which apparently imposes the requirement that said agreement be reduced to writing.

"The Court feels that this codal article does not invalidate an otherwise valid agreement, and has, as its objective, evidentiary purposes. Obviously, a written agreement of compromise is more susceptible of proof than one which has not been reduced to writing. The Court feels that Article 3071 was never intended to invalidate an otherwise valid compromise agreement, simply because it has not been reduced to writing. To so hold, would, in the Court's view allow persons to escape otherwise valid agreements by contending that such agreements were not in writing."

There was, of course, no basis for judgment against Harold Marchand. The trial judge had granted a directed verdict in Marchand's favor, because there was no evidence to show any personal liability on his part. LSA-C.C.P. art. 1810. The record reflects that Mr. Marchand was the insurance agent who sold the policy to Mrs. Richardson; he was not the adjuster involved in the negotiations for payment of the fire loss under the policy. Mrs. Richardson admitted that Mr. Marchand never made any offers to her relative to her claim, and none of the witnesses testified to any personal liability on Marchand's part. The trial court erred in rendering judgment against him.

Turning now to the question of whether there was an enforceable compromise settlement between the insurer and the plaintiff, we hold that the trial court erred in finding that there was an enforceable compromise despite the fact that there was no written agreement between the parties. LSA-C.C. art. 3071 specifically insists that an agreement of compromise "must be reduced into writing." The jurisprudence is to the effect that an oral compromise agreement is unenforceable; in order to be effective, a compromise agreement must be in writing. Carter v. Mule, 346 So.2d 882 (La.App. 4 Cir. 1977), writ denied, 349 So.2d 870 (La.1977); Senegal v. Delahoussaye, 311 So.2d 58 (La.App. 3 Cir. 1975). ¹

The plaintiff argues that if the Court finds there was no enforceable compromise agreement between the parties, the doctrine of equitable estoppel allows the...