Suire v. Lafayette City-Parish Consolidated Government and Detrimental Reliance: Transforming Lightning into a Lightning Bug

• Author: Stuart T. Welch
• Pages: 991-1014

[T]he difference between the almost right word and the right word is really a large matter-'tis the difference between the lightning-bug and the lightning. ¹

I Introduction

Darrell Suire's home was cracked. Specifically, the "front door, the floor, the foundation, the ceiling, and the walls" were cracked.² The mortar on his patio was crumbling, and the roof was leaking.³ Suire had problems, and the City of Lafayette and its general contractor seemed to have caused those problems.⁴ Suire wanted those responsible to repair the damage.

Representatives of the city and its general contractor had come to Suire before they even began work and told him that they had a servitude to enter his land;⁵ they assured him that they would pay for any damage to his property.⁶ After workers pounded steel sheeting into the ground with a backhoe, Suire began noticing the above problems with his house.⁷ He contacted the city and its general contractor in an attempt to obtain compensation for the damage.⁸ When they failed to pay, Suire sued the city, its general Page 992 contractor, and the engineering firm that supplied the plans, though the latter party was later released through unopposed summary judgment.⁹ His theories of recovery included negligence and strict liability, absolute liability, trespass, res ipsa loquitur, breach of contract, expropriation, and detrimental reliance.¹⁰ The parties fought a battle of motions for summary judgment over, among other things, whether each theory of recovery could proceed to trial.¹¹ The trial court dismissed all but the negligence and trespass claims, and the parties appealed to the Louisiana Third Circuit Court of Appeal.¹² The third circuit, in an unpublished opinion, reversed as to the claims of absolute liability, breach of contract, expropriation, and detrimental reliance, holding that the determination of all four claims should be deferred to the merits.¹³ In Suire v. Lafayette City-Parish Consolidated Government,¹⁴ the Louisiana Supreme Court considered which of these four claims, if any, should proceed to trial on the merits.

The supreme court, reversing the third circuit, dismissed both the absolute liability and breach of contract claims,¹⁵ and affirmed the third circuit's decision to allow the expropriation claim to proceed to trial.¹⁶ Significantly, the court also affirmed the third circuit's decision to permit the detrimental reliance claim to proceed to trial.¹⁷ The court found that Suire had at least alleged the three elements of a detrimental reliance claim under Louisiana law: "(1) a representation by conduct or word; (2) justifiable reliance; and (3) a change in position to one's detriment because of Page 993 the reliance" (the "judicial test").¹⁸ After quickly disposing of the city's objections,¹⁹ the court concluded that Suire had alleged the elements necessary to proceed under the theory of detrimental reliance.²⁰ It supplied little rationale for this part of its decision, and the deficiency exposes problems with Louisiana's current treatment of detrimental reliance claims.

The facts in this case superficially appear to satisfy the above three-part judicial test; however, the test itself is flawed. The difference between the current test and an appropriate test is as small and as great as the difference between "the lightning" and "the lightning-bug." This note explores the proper place of detrimental reliance in Louisiana law, explains that Suire was incorrectly decided with respect to the detrimental reliance claim, and proposes a more suitable judicial test for detrimental reliance claims. Part II briefly explores the origins of detrimental reliance at common law and its adoption into Louisiana law. It proposes that the judicial test should not permit recovery under a detrimental reliance theory where the pleaded facts support an appropriate alternative theory of recovery. Part III explores tort law and property law as two alternative theories of recovery available in Suire. Because this exploration reveals a flaw in the way the court applies the current judicial test, Part III argues that the test should not permit recovery where the detriment was inevitable. Part IV sets out the proposed modified judicial test and applies the facts of Suire for demonstration. Part V highlights some problems with the Page 994 supreme court's decision particular to Suire; and, more importantly, it argues that Suire is an inappropriate expansion of the theory of detrimental reliance. Part V then explains the problems with expanding a legal theory and hypothesizes some additional problems with this expansion. Finally, Part VI concludes by advocating that Louisiana courts adopt a more appropriate judicial test for detrimental reliance to properly handle detrimental reliance claims.

II The Origin And Development Of Detrimental Reliance

Though one member of the Louisiana State Law Institute involved in the 1984 revision to Louisiana Civil Code article 1967 asserts that the concept of detrimental reliance stemmed from the Roman law concept venire contra proprium factum ("no one can contradict his own act"),²¹ drafts of the revision to article 1967 explicitly cite the common law as inspiration, particularly Restatement (Second) of Contracts 90 (hereinafter Section 90).²² Arguably, the concept of venire contra propium factum underlay some Code articles before the 1984 revision.²³ However, a Louisiana court in 1981 could not find a single instance of a Louisiana court adopting that concept,²⁴ and in the few years Page 995 preceding the revision, the maxim arose infrequently.²⁵ An alternative civilian-rooted concept, the German maxim culpa in contrahendo ("fault in contracting"), had similarly scant support in Louisiana jurisprudence;²⁶ consequently, it too is unworthy of discussion here. Because the common law concept of detrimental reliance is the primary source of the revision, it is the focus of this exploration.

A Detrimental Reliance at Common Law

At common law, legal scholars essentially equate detrimental reliance with the concept of promissory estoppel, which prevents a party from reneging on a promise he has made.²⁷ The doctrine of detrimental reliance is an equitable remedy for the problem of what Page 996 to do when one party is injured by relying on the other party's broken promise and the injured party may otherwise obtain no legal relief.²⁸ Promissory estoppel developed slowly at common law, primarily in cases outside the commercial arena.²⁹ By the time the American Law Institute crafted the Restatement (Second) of Contracts, courts had sufficiently acknowledged the doctrine to warrant a clear summary of it.³⁰ The result was Section 90, which provides in relevant part:

(1) A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.³¹

Common law courts have, in turn, adopted different judicial tests for detrimental reliance, but all essentially track the language of Section 90.³²

While the doctrine was initially limited to donative gratuitous promises and those with only peripheral business and economic motives,³³ courts eventually broadened the concept to include promises made in a commercial setting that were unsupported by consideration.³⁴ As a result, the doctrine became "applicable to Page 997 any relied-upon promise, whether donative or commercial, fully thought out or preliminary."³⁵ Though a plaintiff may still rely on an underlying promise that is indefinite,³⁶ courts usually do not permit recovery under the theory of detrimental reliance when the underlying promise is illusory.³⁷

The traditional view was that the doctrine of promissory estoppel/detrimental reliance originated essentially as a gap-filler in contract law-a judicial tool that would allow a promisee to recover when consideration was absent but justice required enforcement of a promise.³⁸ The doctrine has more recently been characterized as existing somewhere between contract and tort, though its exact nature is still unclear.³⁹ Promissory estoppel was Page 998 traditionally viewed essentially as a theory of last resort, though some courts now view it as a primary basis for recovery.⁴⁰

B Detrimental Reliance in Louisiana Law

In 1984, the Louisiana State Law Institute took this primarily common law concept with all its attendant uncertainties and attempted to dress it in civilian clothes.⁴¹ The 1984 revision introduced detrimental reliance through Louisiana Civil Code article 1967. After defining cause as "the reason why a party obligates himself," the article continues:

A party may be obligated by a promise when he knew or should have known that the promise would induce the other party to rely on it to his detriment and the other party was reasonable in so relying. Recovery...