Dual Drilling Co. v. MILLS EQUIPMENT, INC.
1998 WL 827396, 721 So. 2d 853 (1998)
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Rule of Law:
In Louisiana, the delictual action for conversion is not a strict liability tort as in common law, but is instead predicated on fault under Louisiana Civil Code article 2315. Consequently, liability for conversion must be apportioned among the parties according to their respective degrees of fault.
Facts:
- Dual Drilling Company (Dual) sold an inoperative off-shore oil rig (Rig 16) to a partnership comprised of Travis Vollmering and Atlas Iron and Metal Company (the Partnership).
- The sales contract specified that Dual retained ownership of several items, and Dual also owned an adjacent rig component, Rig 25, which was not part of the sale.
- A Dual employee, James Monnin, marked Rig 25 on three sides with fluorescent orange spray paint and the words 'Do Not Cut'.
- The Partnership hired Southern Scrap Recycling (Southern) to dismantle Rig 16.
- Vollmering, acting for the Partnership, mistakenly identified Rig 25 to a Southern employee as part of the property to be dismantled.
- Southern's employees began cutting Rig 25, despite the 'Do Not Cut' markings.
- A shipyard worker observed Southern's employees cutting Rig 25, told them it was 'not to be cut,' but the employees ignored the warning and continued their work.
- Dual employees later discovered that Rig 25 and associated equipment were missing, having been dismantled and scrapped.
Procedural Posture:
- Dual Drilling Company filed suit in a Louisiana trial court against Mills Equipment Investments, Inc., Travis Vollmering, Atlas Iron and Metal Company (the Partnership), and Southern Scrap of Morgan City, Inc. (Southern) for the tort of conversion.
- The trial court found the defendants solidarily liable for 100% of Dual's loss, awarding damages for the replacement cost of Rig 25 and new associated equipment.
- The defendants (appellants) appealed to the Louisiana Court of Appeal, Fourth Circuit.
- The court of appeal affirmed the trial court's judgment.
- The defendants (applicants) then successfully sought a writ of certiorari from the Supreme Court of Louisiana to review the lower courts' decisions.
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Issue:
Does Louisiana law provide for a common law-style tort of conversion that imposes strict liability, or is the action for wrongful dispossession of movable property a delictual action based on fault?
Opinions:
Majority - Traylor, J.
No. Louisiana law does not impose strict liability for conversion; instead, it is a delictual action rooted in the Civil Code that requires a finding of fault. While Louisiana courts use the common law term 'conversion,' the action is based on civilian principles of offenses and quasi-offenses under La. Civ. Code art. 2315. A conversion occurs through an unlawful interference with the ownership or possession of a movable, but liability rests on the fault of the defendant. In this case, both the Partnership and Southern were at fault for the destruction of Rig 25: the Partnership was at fault for misidentifying the property, and Southern was at fault for ignoring clear warnings that it was not to be cut. The lower courts erred by applying a strict liability standard and holding the defendants solidarily liable without apportioning fault as required by La. Civ. Code art. 2323. Furthermore, the evidence did not show Southern converted the associated equipment, making only the Partnership liable for its loss. The court remanded the case for an apportionment of fault regarding Rig 25 and adjusted the damages for the associated equipment to reflect its value as used property at the time of the conversion.
Analysis:
This decision is significant for clarifying the nature of conversion within Louisiana's mixed legal system, explicitly rejecting the importation of the common law's strict liability doctrine. By firmly grounding the action in the Louisiana Civil Code's fault-based principles (Art. 2315), the court mandates a fault analysis in all conversion cases. This precedent requires future courts to apportion liability according to each party's degree of fault, rather than imposing automatic liability on any party who wrongfully exercises dominion over another's property, regardless of intent or culpability. It solidifies the civilian principle that liability for wrongful dispossession rests on fault.
