Cunard Line Ltd. Co. v. Datrex, Inc.
2006 La. App. LEXIS 739, 2006 WL 861631, 926 So.2d 109 (2006)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A claim based on a product's alleged defects falls under Louisiana's one-year prescriptive period for redhibition, even if the defects also render the product unfit for its ordinary or particular use; the ten-year prescriptive period for conventional obligations applies only when the product is free from redhibitory defects but is otherwise unfit.
Facts:
- Cunard Line Limited Co. (Cunard) owned cruise ships and sought to purchase low-location lighting (LLL) systems to comply with International Maritime Organization safety regulations.
- Datrex, Inc. (Datrex) sold and marketed LLL systems to the cruise industry.
- Between 1996 and early 1997, Cunard issued purchase orders to Datrex for LLL systems for four of its ships.
- Datrex delivered the systems to Cunard before the end of 1997.
- Cunard opted to install the LLL systems on the four ships without any training or assistance from Datrex.
- Immediately following installation, Cunard discovered numerous problems with the systems, including 'shorting out', and was aware of these issues by late 1997.
- The U.S. Coast Guard later determined the LLL systems were non-compliant with safety standards.
- Datrex attempted to repair the systems but ceased efforts in May 1999, asserting that the problems stemmed from improper installation by Cunard.
Procedural Posture:
- On March 14, 2002, Cunard filed a petition for damages and attorney fees against Datrex in a Louisiana trial court.
- Datrex filed an exception of prescription, arguing Cunard's claims were barred by the one-year prescriptive period for redhibition.
- Cunard opposed the exception, asserting that the ten-year prescriptive period for contract claims was applicable.
- The trial court granted Datrex's exception of prescription and dismissed Cunard's claims.
- Cunard filed a motion for a new trial, which the trial court denied.
- Cunard, as appellant, appealed the trial court's judgment to the Court of Appeal of Louisiana, Third Circuit, with Datrex as appellee.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does the ten-year prescriptive period for conventional obligations under Louisiana Civil Code Article 2524 apply to a claim where a product's unfitness for its intended purpose is caused by alleged redhibitory defects, or does the one-year prescriptive period for redhibition under Article 2534 apply?
Opinions:
Majority - Peters, J.
No. The one-year prescriptive period for redhibition applies. A claim arising from a product's alleged defects is governed by the rules of redhibition, not the general rules of conventional obligations. Cunard’s claim is fundamentally based on the allegedly defective condition of the LLL systems, as it alleged the systems were 'shorting out' and had a 'defective design.' Louisiana Civil Code Article 2524, which provides for a ten-year prescriptive period, was intended by the legislature to address situations where a product is free from redhibitory defects but is nonetheless unfit for its ordinary or particular purpose. The Revision Comments to Article 2524 explicitly state that an action for fitness applies 'even though [the thing] is free from redhibitory defects.' To allow a defect-based claim to proceed under the ten-year period would render the specific one-year period for redhibition superfluous, which violates principles of statutory interpretation. Because Cunard's petition is based on the defective nature of the LLL systems, it is limited to the one-year prescriptive period for redhibition.
Analysis:
This decision clarifies a critical distinction in Louisiana sales law between the warranty against redhibitory defects and the warranty of fitness for a particular purpose. It prevents litigants from circumventing the short one-year prescriptive period for defective product claims by re-characterizing them as breaches of the warranty of fitness, which has a ten-year period. The ruling reinforces the legislative intent to maintain separate legal remedies for products that are inherently flawed versus products that are functional but unsuitable for a specific need. Future product liability cases in Louisiana must carefully plead whether the cause of action is based on a defect or on unfitness to avoid being dismissed as time-barred.
