Eagle Pipe and Supply, Inc. v. Amerada Hess Corporation
79 So. 3d 246
| La. | 2011Background
- Eagle Pipe sues former property owners, oil companies, and truckers for contamination damages to property Eagle Pipe acquired in 1988.
- Lower courts sustained peremptory exceptions of no right of action; appellate court reversed on rehearing.
- Issue: whether a subsequent real property purchaser may sue a third party for pre-purchase, non-apparent damages in absence of assignment or subrogation.
- Louisiana property-law framework distinguishes real rights and personal rights; damages to pre-purchase property typically belong to the former owner absent assignment/subrogation.
- Court adopts a de novo assessment, applying the subsequent purchaser rule and its development, and holds no right of action exists absent assignment or statutory remediation remedies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a subsequent purchaser can sue for pre-purchase property damage by a third party | Eagle Pipe seeks damages for latent contamination | Damages predate Eagle Pipe's ownership; no assignment/subrogation | No right of action absent assignment or subrogation |
| Whether damages can be pursued via redhibition or price reduction | Rights exist under obligations law and redhibition | Only remedies are rescission/reduction if latent defects known to seller | Remedies limited to redhibition/reduction; no tort right absent assignment |
| Whether contract-based third-party beneficiary theories apply | Contracts may give Eagle Pipe third-party rights | No clear stipulation for third-party benefit | No third-party beneficiary rights established |
| Whether the sale agreement implicitly assigned the pre-sale personal damages | Subrogation clause parallels Prados logic | No explicit/implicit assignment of pre-sale damages | No assignment; rights do not pass |
Key Cases Cited
- Clark v. J.L. Warner Co., 6 La.Ann. 408 (La. 1851) (purchaser not entitled to pre-sale damages; damages belong to former owner)
- Payne v. James, 42 La.Ann. 230, 7 So. 457 (La. 1890) (damages to tenants/lessor pre-sale belong to lessor; not transferred without subrogation)
- Matthews v. Alsworth, 45 La.Ann. 465, 12 So. 518 (La. 1893) (personal rights not passed absent explicit assignment)
- Bradford v. Richard, 46 La.Ann. 1530, 16 So. 487 (La. 1894) (sale price implies offset for pre-sale damages; not transferred absent assignment)
- McCutchen v. Texas & P. Ry. Co., 118 La. 436, 43 So. 42 (La. 1907) (trespass/entry damages not passed absent assignment)
- Taylor v. New Orleans Terminal Co., 126 La. 420, 52 So. 562 (La. 1910) (servitudes/two-step rights; rights pass with property; personal rights require assignment)
- Gumbel v. New Orleans Terminal Co., 197 La. 439, 1 So. 2d 686 (La. 1941) (accessory rights; personal rights do not pass absent assignment)
- Prados v. South Central Bell Tel. Co., 329 So. 2d 744 (La. 1975) (recognizes limitations of passing personal rights via sale; overt damage)
- St. Jude Medical Office Bldg. Ltd. P’ship v. City Glass & Mirror, Inc., 619 So. 2d 529 (La. 1993) (subsequent purchaser denied rights tied to outdated contract; rights pass with property only if assigned)
- Hopewell, Inc. v. Mobil Oil Co., 784 So. 2d 653 (La. 2001) (latency/latent damage distinctions; Hopewell limited Prados' scope (renounced in plurality))