Insurance Analysis, Inc. v. XPLO Corp.

398 So. 2d 1214, 1981 La. App. LEXIS 3949
CourtLouisiana Court of Appeal
DecidedMay 5, 1981
DocketNo. 11900
StatusPublished
Cited by1 cases

This text of 398 So. 2d 1214 (Insurance Analysis, Inc. v. XPLO Corp.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Insurance Analysis, Inc. v. XPLO Corp., 398 So. 2d 1214, 1981 La. App. LEXIS 3949 (La. Ct. App. 1981).

Opinion

BOUTALL, Judge.

This appeal arises from a judgment of the trial court awarding to the plaintiff and against the defendant the sum of $4200, as payment due in a contract for personal services.

On or about January 1, 1976, the plaintiff, Insurance Analysis, Inc. (hereinafter referred to as IA) entered into a contract with the defendant XPLO Corporation wherein the former agreed to perform professional insurance consultant services at the rate of $3000 per year. IA allegedly performed the services for not only the one year period during 1976, but also worked for the first two months of 1977. Upon the alleged completion of the services by the plaintiff the defendant failed to make payment in accordance with the terms of the contract. Thereafter, IA filed suit against XPLO for breach of contract, seeking recovery of the fees allegedly due under the terms of the agreement between the two parties. In response thereto, XPLO answered and alleged that the contract was null and void as there was an error as to their primary motive for entering into the contract.

Upon trial of this matter the lower court entered judgment in favor of IA in the sum of $4200 and against XPLO. From this judgment XPLO has appealed suspensively.

On appeal there are several issues for our consideration including: 1.) Whether there was an error as to the principal motive of the contract thereby rendering it null and void; 2.) whether the plaintiff breached the [1216]*1216contact by failing to fulfill all of its obligations under the terms of the contract; 3.) whether the trial court committed error in making an award to the plaintiff for services performed in 1977.

-I-

The Louisiana Civil Code provides several articles concerning the first issue before us. The relevant portions of these articles are as follows:

Errors may exist as to all the circumstances and facts which relate to a contract, but it is not every error which will invalidate it. La.C.C. Art. 1823.
To have that effect, the error must be in some point, which was a principal cause for making the contract, when there are several. This principal cause is called the motive and means that consideration without which the contract would not have been made. La.C.C. Art. 1823, 1825.
No error in the motive can invalidate a contract, unless the other party was apprised that it was the principal cause of the agreement, or unless from the nature of the transaction it must be presumed that he knew it. La.C.C. Art. 1826.

In Hall v. Arkansas-Louisiana Gas Co., 368 So.2d 984 the Louisiana Supreme Court simplified the meaning of these articles as follows:

* * * * “These articles of our Code simply mean that error in the determining motive, or principal cause, of a contract vitiates consent and invalidates the contract. Error as to a subsidiary motive has no effect upon the validity of the contract.”

Also see: Walker v. Don Coleman Const. Co., Inc., 338 So.2d 1183 (La.App. 3rd Cir. 1976).

One of the exhibits entered into the record by the defendant was a letter from IA to XPLO dated October 25, 1975 in which the former was attempting to sell insurance consulting services to the latter. In the course of this letter IA made the following statement: “Our fees are predicated on the size and complexity of the account. We have in every case saved our clients much more in insurance premiums than our fees.” XPLO contends that the insurance premiums it paid under the program established by IA did not save them money above and beyond the fees charged by IA. Accordingly, XPLO contends that the failure by IA to fulfill these terms was an error as to the principal cause or motive for the contract entered into between the parties on January 1, 1976 and therefore, this agreement was null and void.

Upon a review of the record in this matter we find that the evidence is inconsistent as to whether the terms of the letter indicated above were satisfied. Burnett Tappel of IA testified that he made several suggestions to XPLO which would have saved the latter more than enough money in premiums to cover the costs of the fees charged by the former. One of these suggestions involved obtaining insurance for XPLO on a yearly basis instead of on a job to job basis which was the method used by XPLO. Tappel further testified that the insurance they procured for XPLO on a job to job basis was more competitive than they had prior to the time of the agreement. Conversely, John Charpentier of XPLO testified that the proposed insurance package by IA was more expensive than the kind that XPLO had at that time.

Following the conclusion of the trial in this matter the trial court determined that the contract entered into between IA and XPLO was a valid one. Apparently, the court determined that there was no error as to the principal cause or motive for the agreement which would vitiate the consent of the parties and thereby nullify the contract.

On appeal the manifest error doctrine has direct application to the findings made by the lower court. This doctrine states in pertinent part:

“When there is evidence before the trier of fact which, upon its reasonable evaluation of credibility, furnishes a reasonable factual basis for the trial court’s finding, on review the appellate court should [1217]*1217not disturb this factual finding in the absence of manifest error. Stated another way, the reviewing court must give great weight to factual conclusions of the trier of fact; where there is conflict in the testimony, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review, even though the appellate court may feel that its own evaluations and inferences are as reasonable.”

Canter v. Koehring Co., 283 So.2d 716 (La. 1973); Arceneaux v. Domingue, 365 So.2d 1330 (La.1978). Based on the foregoing we find that there has been no showing of any manifest error made by the trial court as to the validity of the contract between the parties. We believe that the lower court properly resolved the conflict in the testimony before it.

-II-

Regarding the second issue before us, XPLO contends that IA failed to fulfill all of the obligations it was required to perform under Section 2 of the contract between them. This provision states:

“2. The CONSULTANT agrees to perform the following services to assist the CLIENT in administering and controlling his insurance programs:
“a. Review of Retrospective Rating Plan; auditing current plan; rechecking computations of past adjustments up to the three past years; verifying open loss reserve credits; recommending proper Plan selection.
“b. Review of Experience Rating; audit of current modification formula and proper loss discounts; recommend methods designed to control and reduce future modifications.
“c. Analyze appropriate records of the loss experience of the CLIENT as well as other records which the Insurance Companies may furnish to the CLIENT and to periodically render to the CLIENT and the Insurance Companies conclusions based on such records. Request status of past and current losses, verify adequacy of reserves, determine closing costs, and assist in the closing of the open cases, which matured.

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398 So. 2d 1214, 1981 La. App. LEXIS 3949, Counsel Stack Legal Research, https://law.counselstack.com/opinion/insurance-analysis-inc-v-xplo-corp-lactapp-1981.