David v. Thibodeaux
916 So.2d 214 (2005)
Rule of Law:
Under Louisiana law, a buyer seeking rescission of a sale due to a redhibitory defect must first give a good-faith seller notice of the defect and an opportunity to repair it. Failure to provide such notice precludes the remedy of rescission, although the buyer may still be entitled to a reduction in the purchase price.
Facts:
- On April 26, 2000, Joseph and Pamela David purchased a home from Concepcion St. Romain Thibodeaux for $175,000.
- Prior to the sale, the Davids conducted several inspections of the home.
- A property condition disclosure statement and a Wood Destroying Insect Report (WDIR) revealed that termite damage was discovered and repaired in 1990.
- Thibodeaux showed the Davids the three locations of the old damage noted in the WDIR and assured them that the termite problem had been taken care of and the damages repaired.
- Relying on their inspections and Thibodeaux's assurances, the Davids completed the purchase.
- After moving in, the Davids discovered extensive active termite infestation and significant damage, evidenced by a collapsing deck and a wall that gave way.
Procedural Posture:
- Joseph and Pamela David (plaintiffs) filed a petition against Concepcion Thibodeaux (defendant) in a Louisiana trial court, seeking to rescind the sale of a home or, alternatively, for a reduction in the purchase price.
- Following a bench trial, the trial court rendered judgment in favor of the Davids, ordering the rescission of the Act of Sale.
- Thibodeaux (defendant-appellant) appealed the trial court's judgment to the Court of Appeal of Louisiana, First Circuit.
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Issue:
Under Louisiana law, are buyers entitled to rescission of a home sale due to a redhibitory defect when they did not first give the good-faith seller notice of the defect and an opportunity to repair it?
Opinions:
Majority - Guidry, J.
No. Buyers are not entitled to rescission of a sale from a good-faith seller without first providing notice and an opportunity to repair the defect. Louisiana Civil Code article 2522 requires a buyer to give the seller notice of a redhibitory defect to allow for repairs. This notice is a condition precedent to rescission when the seller is in good faith, as the trial court found Thibodeaux to be. The record contains no evidence that the Davids notified Thibodeaux of the active termite infestation before filing their lawsuit. Therefore, the trial court legally erred in ordering rescission. However, failure to give notice does not prevent a buyer from obtaining a reduction in the purchase price. The court awarded the Davids a price reduction equal to the cost of repairs, based on a credible expert estimate.
Concurring - McClendon, J.
No. The buyers are not entitled to rescission, but the reasoning lies elsewhere. I disagree with the majority's finding that the seller lacked knowledge of the active termites; evidence suggests she failed to disclose known infestations. Rescission is inappropriate not because of a lack of notice, but because the Davids breached their duty as prudent administrators of the property under Louisiana Civil Code article 2532. They made significant alterations to the property (removing a pool, pool house, deck, and fence) and allowed it to deteriorate, making it impossible to return the property in a similar condition as when it was sold. For these reasons, a reduction in price is the more just and appropriate remedy.
Analysis:
This case reinforces a critical procedural requirement in Louisiana redhibition law, distinguishing the remedies available against good-faith versus bad-faith sellers. It establishes that the buyer's right to rescind a sale is conditioned upon first providing a good-faith seller an opportunity to cure the defect. The decision solidifies that a buyer who bypasses this notice requirement forfeits the potent remedy of rescission and is relegated to an action for reduction in price (quanti minoris). This precedent protects good-faith sellers from immediate litigation and encourages pre-suit resolution of disputes over hidden defects.
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