author: MICHAEL E. KIRBY, Judge.

text:
    Daniel J. DAMRILL and Calvin Kirkland v. IMINORITIES. COM., INC.
    No. 2003-CA-0739.
    Court of Appeal of Louisiana, Fourth Circuit.
    Feb. 18, 2004.

      Gregory A. Dupuy, Clarence O. Dupuy, Jr., Dupuy & Dupuy, Metairie, LA, For Plaintiffs/Appellants.
    Rosa H. Edwards, New Orleans, LA, For Defendant/Appellee.
    (Court composed of Judge JAMES F. McKAY III, Judge MICHAEL E. KIRBY, Judge Pro Tempore MOON LANDRIEU).
   MICHAEL E. KIRBY, Judge.

Daniel J. Damrill and Calvin Kirkland, sue their former employer, Iminorities.com, Inc., to enforce wage claims, specifically defendant’s denial of bonus and severance pay, as well as, meal and travel reimbursement expenses after termination of employment. The trial court ruled in favor of defendant and denied all claims with the exception of Mr. Kirkland’s claim for reimbursement of meal expenses. We reverse on several claims and affirm the remainder.

STATEMENT OF THE FACTS

Plaintiffs allege that in seeking to employ the plaintiffs, Iminorities worked upon the assumption it could secure a second round of financing by acquiring equity investors through a venture capital group. Iminorities’ Business Plan projected the company as becoming an electronic start-up company with potential to generate an Initial Price Offering (IPO) that would take it public. For whatever reason, this capital never arrived and Iminorities experienced a cash shortage. In an attempt to slow their cash burn rate, Mr. Preston Edwards Sr., fiChief Executive Officer, cut salaries, laid off personnel, and implemented other cost cutting measures. Iminorities presented nothing to dispute its cash problem in early 2001.

On August 14, 2000, Mr. Damrill began his employment with defendant pursuant to an offer letter from defendant that stated that he “will report to John Isett, Chief Technology Officer.” The offer letter established his title as Senior Web Developer. Defendant’s bonus package offer to Mr. Damrill stated:

You will participate in the company’s bonus plan. Your targeted bonus is 20% of your salary (prorated for the year 2000). Bonus targets will be based on the objectives developed by you and your manager. The 2000 bo-mis will be payable during the first quarter of 2001. The bonus payment is contingent upon your being employed with iMinorities.com, Inc. at the time of payment and that your performance has been satisfactory.

Dr. John Isett was the Chief Information Technology Officer of Iminorities and Mr. Damrill’s supervisor for all of the year 2000 and for most of his employment in the year 2001. Dr. Isett established goals for Mr. Damrill and referred to Damrill’s performance in very complimentary terms while plaintiff was employed by Iminorities. Dr. Isett informed the defendant and Mr. Edwards, Sr., that Mr. Damrill had earned and was due his bonus for the year 2000. In March of 2001, Dr. Isett was laid off.

Although Iminorities did not have the money to hire another Ph.D., it did hire Mr. David Cook to replace Dr. Isett. His testimony is discussed below.

On May 11, 2001, Mr. Damrill resigned from Iminorities, and attempted to collect his bonus for the year 2000. Mr. Edwards, Sr., contacted Dr. Isett and requested a written document specifying Mr. Damrill’s employment goals and his | ¡^accomplishments. Despite the fact Dr. Isett was no longer employed by the defendant, he complied with the request, and provided a written document describing Mr. Damrill’s goals and accomplishments which Dr. Isett believed entitled him to his bonus for the year 2000.

Nevertheless, the defendant refused to pay the bonus, alleging that he did not perform' well. Plaintiff sues for payment under the terms of the bonus package quoted supra, specifically a prorated bonus for the fiscal year 2000.

Mr. Calvin Kirkland began his employment with defendant as the Vice-President of Sales Operations on or about June 29, 2000. Mr. Kirkland was highly sought after by Iminorities because he was a seasoned veteran in start-up operations, sales and the high technology world. Mr. Kirkland had worked for companies such as Xerox and the world’s largest Executive Search firm. Iminorities negotiated with Mr. Kirkland resulting in a revision of its initial offer. The revised offer is dated June 27, 2000 and stated the following in regards to remuneration:

Your base salary will be $4,615.38 per pay period (if annualized $120,000). You will be paid every other Thursday and will be paid twenty-six pay periods per year.
In addition to your base salary you will be eligible for a bonus up to 60% of your base salary for attaining specific operating objectives. The primary objectives are developing the sales infrastructure and achieving the annual revenue goal.
You will be given 100,000 shares of Iminorities.com, Inc. common shares valued at $.45 per share.

[Emphasis added.]

Sometime after Dr. Isett was released, Mr. Kirkland was fired for cause. The reason given was his alleged “repeated failure to perform the material duties of |4[his] job in accordance with the company’s policies and standards.” As per the contract, by firing the plaintiff for cause, Iminorities claimed it did not owe Mr. Kirkland severance pay.

Mr. Kirkland seeks the stock he was granted in his contract and categorically denies there was any “cause” for his firing other than the need to cut payroll as financing had not been secured. Therefore, he also seeks severance pay.

STATEMENT OF THE LAW

The appellate court reviews factual findings for manifest error, or clear wrongness. Rosell v. ESCO, 549 So.2d 840 (La.1989). Nevertheless, as we recently held in Cadogan v. McClanahan, 2003-0603 (La.App. 4 Cir. 11/12/03), 861 So.2d 250, where one or more trial court legal errors interdict the fact-finding process, the manifest error standard is no longer applicable, and, if the record is otherwise complete, the reviewing court should make its own independent de novo review and assessment of the record.

The issue in these two claims hinges on the interpretation of the two employment contracts. The trial court based its rulings on findings of fact. While the interpretation of Mr. Kirkland’s contract was more fact intensive, the interpretation of Mr. Damrill’s contract required a legal finding, because it was very specific as to the conditions upon which the bonus would be awarded.

In Cook v. Hibernia Nat. Bank, 2002-0151 (La.App. 4 Cir. 3/15/02), 847 So.2d 617, we held the interpretation of a contract is the determination of the common intent of the parties. LSA-C.C. art .2045. When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation | Kmay be made in search of the parties intent. LSA-C.C. art.2046. The words of a contract must be given their generally prevailing meaning. LSA-C.C. art.2047.

Damrill’s Claim

As stated above, the payment of Mr. Damrill’s bonus package was conditioned upon the objectives developed by you and your manager and that performance has been satisfactory. While Iminorities offer letter of July 28, 2000, uses the phrase your manager, it does not identify the individual. However, it does state in the preceding paragraph that Mr. Damrill will report to John Isett, Chief Technology Officer.

La. C.C. article 2056 states:

In case of doubt that cannot be otherwise resolved, a provision in a contract must be interpreted against the party who furnished its text.
* * *

Likewise, La. C.C. article 2057 states:

In case of doubt that cannot be otherwise resolved, a contract must be interpreted against the obligee and in favor of the obligor of a particular obligation.
Yet, if the doubt arises from lack of a necessary explanation that one party should have given, or from negligence or fault of one party, the contract must be interpreted in a manner favorable to the other party whether obligee or obligor.

[Emphasis added.]

Because Iminorities drafted the contract, it cannot take advantage of its failure to provide the necessary explanation as to who the manager would be. We find the language that Damrill would report to John Isett, Chief Technology officer to be clear and unambiguous. Literal application of the language does not lead to absurd consequences. Therefore, we construe this provision in favor of Mr. | fiDamrill, finding Dr. Isett to be the manager referenced in the Offer Letter contract.

A college degree was not a prerequisite for the job or the bonus. Although, Mr. Cook testified that he immediately found problems with the website and had to hire consultants to fix the problems, we cannot characterize his testimony as establishing unsatisfactory performance. Moreover, according to the contract, it was Dr. Isetts evaluation that was determinative of the bonus, not Mr. Cook’s.

Because it is undisputed that Dr. Isett deemed Mr. Damrill to have fulfilled the objectives developed and that plaintiffs performance was satisfactory, it was legal error to find that Iminorities did not owe Mr. Damrill his bonus. Therefore, we find the trial court committed legal error in failing to award Mr. Damrill his bonus for the year 2000 according to the terms in the Offer Letter of July 28, 2000. We award Mr. Damrill Four Thousand Nine Hundred and Forty dollars ($4,940.00). This sum is calculated by taking twenty percent (20) of Mr. Damrill’s annual salary of sixty five thousand ($65,000.00) dollars, which equals thirteen thousand ($13,000.00) dollars. We then took thirty-eight (38) percent of the thirteen thousand dollars because that was the percentage of time Mr. Damrill worked for Iminorities in 2000. The result is four thousand nine hundred and forty ($4,940.00) dollars.

1 tKirkland’s Claim

Iminorities’ termination letter to Mr. Kirkland stated that he was terminated for cause. Iminorities asserted Mr. Kirkland’s “repeated failure to perform the material duties of [his] job in accordance with the company’s policies and standards” as the basis for dismissal.

To support its “cause” for termination, Iminorities presented a Business Plan, an Employee Handbook, and an Investor Rights Agreement. Mr. Kirkland stated that he was not aware that the Employee Handbook was ever issued, and that he never had a copy of the Investor Rights Agreement and never saw the Business Plan. The Business Plan he likened to a prospectus, and its introductory section stated it is “furnished solely for confidential use to assist accredited investors in assessing their interest in an equity investment in Iminorities.com, Inc. (the “Company”) and for no other purpose.” Moreover, the Business Plan was published within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

The trial court made a factual finding, denying Mr. Kirkland his severance pay. The Reasons for Judgment stated:

This court finds that Mr. Kirkland was terminated for cause, and specifically that he did not meet the sales goals outlined for him nor did he increase the sales productivity of the company by providing the necessary ongoing sales training for his team. This Court finds that by December 2000, it was clear that Mr. Kirkland was beginning to receive communications through email that the company was not pleased with the direction of the sales department. Further, this court finds that in the following months the communications by email expressed that defendant was not pleased with Mr. Kirkland’s performance.

IsSince there is some, albeit sparse, evidence in the record for this finding, we cannot reverse such a finding even though we may have concluded otherwise if we had been the trier of fact.

According to Mr. Kirkland’s contract, the conditions for receiving his bonus were “developing the sales infrastructure and achieving the annual revenue goal.” As concerns receiving his bonus, Mr. Kirkland took the position that no one set an annual revenue goal for him, therefore, Iminorities cannot claim that he did not achieve the goal for the time he was employed.

The trial court found as a fact that Mr. Kirkland did not achieve the annual revenue goals. It found Mr. Kirkland’s statements to be untenable because as Vice President of Sales for Iminorities, he had the responsibility to establish annual revenue goals. Even though another fact finder could have reasonably arrived at a different conclusion, because there is evidence in the record supporting this factual finding, we cannot reverse it.

After Mr. Kirkland had signed his June 27, 2000 contract letter granting him 100,000 shares of stock -and after he was employed by Iminorities, Mr. Kirkland signed another contract with Iminorities that granted him stock options. These stock options are of no value because Imi-norities fired plaintiff prior to the time the rights vested in September of 2001. The trial court found his signature to the stock option contract to supercede his employment contract. We disagree.

As we noted supra, La. C.C. art.2046, concerning the interpretation of contracts, says:

When the words of a contract are clear and explicit and lead to no absurd consequences, no further | ¡¡interpretation may be made in search of the parties’ intent.

Here, the record is clear that Mr. Kirkland found objectionable the fact that after being enticed to accept the position Iminorities was changing the terms. At a mandatory meeting with and under pressure from Messrs. Edwards, Sr., Kataria and Porter, he signed the stock options contract. This illustrates that his intent was vitiated as to the stock options only, but not his intent to own the stock. Mr. Kirkland never signed a waiver or a renunciation of the prior contract letter dated June 27, 2000, which gave him ownership of 100,000 shares of stock. Neither does granting Mr. Kirkland ownership of the shares lead to an absurd consequence.

Therefore, the trial court committed legal error in not awarding Mr. Kirkland forty-five thousand ($45,000.00) dollars, which is the value of his 100,000 shares of Iminorities stock valued at forty-five cents ($0.45) per share, as specified in the June 27, 2000 contract letter.

Mr. Kirkland seeks reimbursement of expenses he incurred to consult with Mr. Manny Fernandez, a member of Imi-norities Board of Directors. Mr. Kirkland visited Mr. Fernandez to discuss concerns he had about the management of the company. The trial court reasoned that Mr. Kirkland did not follow all the rules of the Employee Handbook in verifying this expense with another officer in the company, Mr. Kataria.

Iminorities allegedly delegated the responsibility of establishing and achieving annual revenue goals to Mr. Kirkland. Mr. Kirkland, in an effort to address internal company problems, sought to discuss problems he encountered in achieving those goals with Mr. Fernandez. Nevertheless, defendant now argues that Mr. Kirkland did not have the authority to meet with a member of the board to hndiscuss the company’s direction. However, Mr. Kirkland had express permission from the C.E.O. to take this trip. Mr. Kirkland produced an email with the subject line reading: “RE: Kirkland Request for Meeting with Manny Fernandez” sent to the C.E.O., to which the Chief Executive Officer/Chairman Preston Edwards, Sr. replied:

You can talk to Manny whenever you want and you can meet with him whenever you want....

This language is unequivocal. Iminorities cannot reasonably maintain that express authority from the company’s C.E.O. to its Vice President of Sales is not sufficient to authorize a trip to visit a board member. It was manifest error not to award Mr. Kirkland reimbursement to consult with Mr. Fernandez who was on Iminorities’ Executive Board. Therefore we award Mr. Kirkland nine hundred sixty-three dollars and sixty-six cents ($963.66) for travel reimbursement, which includes fifty ($50) dollars for auto rental, twenty-four ($24) dollars for taxi/tolls/parking, seven hundred and nineteen ($719) dollars for airfare, eighteen ($18) dollars for meals, thirteen ($13.66) dollars and sixty-six cents for mileage expenses and the late fees incurred on his American Express credit card.

In summary, we reverse the Judgment below insofar as it denied Mr. Damrill’s bonus for the fiscal year 2000, and render Judgment in his favor in the amount of Four Thousand Nine Hundred Forty and no/100 ($4,940.00) Dollars. Likewise we reverse the Judgment below insofar as it denied Mr. Kirkland his one hundred thousand shares and travel reimbursement to see Iminorities Board Member Fernandez. We render Judgment in his favor in the amount of $45,000.00 for his stock (100,000 shares of Iminorities valued at $0.45 per share) and in the fyamount of $963.66 for travel reimbursement. We affirm all other parts of the Judgment.

REVERSED IN PART; AFFIRMED IN PART.

      . The rate at which a company in financial trouble exhausts its cash required to maintain solvency.

      . That figure was calculated by taking the number of days worked in 2000, beginning with August 15, 2000 through December 31, 2000, which equals 139 days divided by 365 days in the year, equalling 38%.

      . A condition of the stock options was that plaintiff be employed by the company to vest on a certain date.


source: Caselaw Access Project

license: Public Domain

text:
    Debra Dean COOK, Individually and in Derivative Capacity for St. Elizabeth’s Caring, L.L.C., Plaquemine Manor Nursing Home, Inc., Maison Orleans II, Inc., Maison De’Ville Nursing Home, Inc., Raceland Manor Nursing Home, Inc., et al. v. HIBERNIA NATIONAL BANK, et al.
    No. 2003-CA-0330.
    Court of Appeal of Louisiana, Fourth Circuit.
    Feb. 18, 2004.
    William D. Aaron, Jr., Brian E. Sevin, Sr., Goins Aaron, P.L.C., New Orleans, LA, for Plaintiff/Appellant Frank T. Stewart.
    William D. Treeby, Samantha P. Griffin, Stone Pigman Walther Wittmann L.L.P., New Orleans, LA, for Appellee Bob G. Dean.
    (Court composed of Chief Judge JOAN BERNARD ARMSTRONG, Judge MICHAEL E. KIRBY, Judge MAX N. TOBIAS JR.).
   MICHAEL E. KIRBY, Judge.

Defendant/plaintiff-in-cross-claim, Mr. Frank Stewart, Jr., appeals the October 30, 2002 judgment in which the trial court maintained the exception of no right of action and, alternatively, the exception of lis pendens filed by defendant-in-eross-claim, Mr. Bob Dean, in response to Mr. Stewart’s amended cross-claim filed on August 1, 2002.

An earlier decision of this Court, Cook v. Hibernia National Bank, 2001-0455, pp. 1-4 (La.App. 4 Cir. 4/10/02), 816 So.2d 901, 902-903, sets forth the facts and procedural history of this case as follows:

This case involves the consolidation of eight nursing homes into a single enterprise to be listed on a public stock exchange. Debra Dean Cook (hereinafter “Cook”), plaintiff in the main demand, and her brother, Dean, defendant in the main demand, were both partial owners of each of the eight nursing homes by virtue of being shareholders or partners. Stewart, defendant in the main demand and plaintiff in cross-claim, was an owner in two of the nursing homes by virtue of being a shareholder or a partner. Specifically, Stewart was a shareholder in Maison Orleans II, Inc., and a general partner in Maison Orleans Partnership in Commendam.
The owners sought the services of Hibernia National Bank (hereinafter “Hibernia”) to perform the [ ^consolidation of the nursing home debts and cross-collat-eralization among the eight homes. On October 8, 1997, the nursing homes entered into a loan agreement, in which Hibernia extended the enterprise a $23 million loan. Of that, $14 million went towards the consolidation of the nursing homes’ debt, and $9 million was made available as an additional line of credit. The loan agreement restricted the use of the available funds to purchasing other nursing homes, renovations, and buying out minority shareholders. The loan proceeds were restricted to commercial use. The guarantors of this loan were Dean, Cook, and Billie F. Dean. Stewart was not a guarantor of the loan and he did not sign the loan agreement. Also, Stewart was not a signatory to the September 1998 addendum to the loan agreement, or to the second amendment to the loan agreement of 1999.
Dean, principal manager of the nursing homes, had a relationship with Hibernia, separate from the nursing home enterprise. Hibernia had made unsecured loans to Dean prior to the loan agreement above. Stewart alleged that Hibernia and Dean, notwithstanding the restrictions set forth in the loan agreement, collateralized Dean’s unsecured personal loans with the nursing homes’ assets. These proceeds were allegedly used to finance personal projects of Dean, independent of the nursing home enterprise. Stewart alleged that these personal investments of Dean depleted the nursing homes’ line of credit, wasted the debt resources, encumbered assets, and devalued the enterprise, which never went public.
As these events became apparent, Cook filed a shareholder’s derivative suit on behalf of the nursing homes. Cook named Dean and Stewart as nominal defendants in that action. Cook, in her petition, alleged that Dean conspired with Hibernia to misdirect company funds and misappropriate corporate opportunities for personal gain. Cook further alleged that Hibernia was able to raise itself to the status of secured creditor by allowing Dean to secure his personal loans with the nursing homes’ assets.
Stewart filed a cross-claim against his co-defendants, Hibernia and Dean, in which he alleged many of the same facts as Cook in her petition. Stewart further alleged that he lost the opportunity to sell his interests as other minority owners had, and that he suffered personal financial damage by the devaluation of the nursing home enterprise. Stewart also alleged that as |3a general partner in the partnership in commendam, he undertook the liability of the partnership, which he alleged Dean mismanaged. Stewart claimed that liability imposed on him by Cook’s petition should be imputed to the culpable actors, Hibernia and Dean. Stewart claimed that he suffered damages personally and that Hibernia and Dean were liable to the extent that any liability might fall upon him as a result of Cook’s suit.
Stewart filed a cross claim for damages he sustained personally due to the alleged misdeeds of Hibernia and Dean; those damages, Stewart asserts, are distinct from the damages sustained by the nursing homes.
In response to Stewart’s claim, Hibernia filed Exceptions of Vagueness, Lack of Conformity with La. C.C.P. art. 891, No Right of Action, and No Cause of Action. On November 3, 2000, after a hearing on these exceptions, the trial court sustained the exceptions of No Right of Action and No Cause of Action. The trial court further stated that Hibernia’s other exceptions were rendered moot by its ruling. It is from this judgment that Stewart takes the instant appeal.

In the earlier appeal, this Court affirmed the trial court judgment maintaining Hibernia’s exceptions of no cause of action and no right of action. This Court found that Mr. Stewart did not have a personal right of action to sue Hibernia because the damages asserted by Mr. Stewart in his cross-claim were not separable from the damages sustained by the corporation and partnership in which Mr. Stewart had interests. Similarly, this Court found that Mr. Stewart did not state a cause of action against Hibernia because the damages alleged by Mr. Stewart belonged to the nursing homes in which he had interests, and not to Mr. Stewart personally. This Court found that even though Mr. Stewart’s claims are totally indirect and/or derivative, he might be able to state a direct cause of action against | JHibernia for fraud. Therefore, this Court remanded the case to allow Mr. Stewart to amend his claim to allege personal fraud if he so chose.

On remand, Mr. Stewart filed an amended cross-claim, again naming Hibernia and Mr. Dean as defendants-in-cross-claim. The amended cross-claim contains 492 paragraphs wherein Mr. Stewart alleges 113 separate transactions in which he claims Hibernia improperly authorized Mr. Dean to divert loan proceeds advanced under the nursing home loan agreement for his personal gain.

Mr. Dean filed exceptions of no right of action and lis pendens to Mr. Stewart’s amended cross-claim. The trial court maintained the exception of no right of action and, alternatively, maintained the exception of lis pendens. Mr. Stewart appeals.

The exception of no right of action states that the damages alleged by Mr. Stewart in the amended cross-claim are not separable from the damages sustained by the corporation and partnership in which Mr. Stewart had interests. Therefore, Mr. Dean argues- that Mr. Stewart has not stated a personal right of action against Mr. Dean. This was the same argument advanced by Hibernia in the earlier appeal involving Mr. Stewart’s original cross-claim. This appeal involves only the claims brought against Mr. Dean in Mr. Stewart’s amended cross-claim. Mr. Stewart argues that he has a personal right of action against Mr. Dean for damages allegedly caused by Mr. Dean’s breach of fiduciary duty.

The function of the exception of no right of action is to determine whether the plaintiff belongs to the class of persons to whom the law grants the cause of | ¡^action asserted in the suit. Louisiana Paddlewheels v. Louisiana Riverboat Gaming Commission, 94-2015, pp. 4-5 (La.11/30/94), 646 So.2d 885, 888, citing Babineaux v. Pernie-Bailey Drilling Co., 261 La. 1080, 262 So.2d 328 (1972). A shareholder of a corporation does not generally have a right to sue personally for alleged -losses sustained by the corporation due to mismanagement and/or a breach of fiduciary duties. Palowsky v. Premier Bancorp, Inc., 597 So.2d 543, 545 (La.App. 1 Cir.1992). Rather, a shareholder may only sue to recover losses to a corporation resulting from mismanagement and breaches of fiduciary duties secondarily through a shareholder’s derivative suit. Id.

In Paloivsky, the First Circuit held that if a shareholder suffers only an indirect loss in the form of a decline in the value of his stock resulting from a loss sustained by the corporation due to mismanagement and/or breaches of fiduciary duty, that shareholder may only bring a derivative action on behalf of the corporation. Id. at 545. However, if the breach of fiduciary duty causes a direct loss to the shareholder, but not to the corporation, that shareholder may have a right to sue individually. Id.

Similarly, a partner in a partnership does not have a personal right of action to allege damages to the partnership. See, Dolby v. U.S. Fidelity & Guaranty Co., 365 So.2d 568, 570 (La.App. 1 Cir.1978). This Court in Cook v. Hibernia National Bank, 2001-0455 at p. 7 (La.App. 4 Cir. 4/10/02), 816 So.2d at 905, stated that as long as a partnership exists, not dissolved or liquidated, the partnership itself is the proper party to maintain an action for damages.

IfiMr. Stewart argues that the case of Talbot v. C & C Millworks, Inc., 97-1489 (La.App. 1 Cir. 6/29/98), 715 So.2d 153, supports his position that he has a personal right of action against Mr. Dean. In Talbot, a minority shareholder filed suit both as an individual and in a derivative capacity. The trial court maintained a partial exception of no right of action as to the individual claim, but the First Circuit reversed, finding that it was procedurally improper for the trial court to maintain the exception because the derivative action and the individual action were based on the same set of operative facts. This Court, in Cook v. Hibernia National Bank, 2001-0455 (La.App. 4 Cir. 4/10/02), 816 So.2d 901, has already held that Mr. Stewart’s reliance on the Talbot case is misplaced because he has asserted only an individual right of action in this matter.

Furthermore, the case of Dutton & Vaughan, Inc. v. Spurney, 496 So.2d 1126 (La.App. 4 Cir.1986), relied upon by Mr. Stewart does not support his position that he has a personal right of action against Mr. Dean. In that case, this Court allowed a private contractor to state a cause of action against the officers and directors of a corporation based on the alleged fraudulent actions of those officers and directors. The Dutton & Vaughan case did not involve a shareholder attempting to assert a personal right of action against an officer or director of a corporation.

In his amended cross-claim, Mr. Stewart has asserted details of transactions that he claims show that Mr. Dean encumbered the assets of the nursing homes for his own benefit, improperly disbursed loan proceeds and caused the nursing homes |7to miss business opportunities. He claims that these actions devalued his interests in the nursing homes and as a result, he has suffered damages individually. He alleges that these damages include the loss of a buyout opportunity of his corporate interest and the risk of liability for the mismanagement of the partnership in commen-dam.

Notwithstanding the exhaustive detail of transactions presented in Mr. Stewart’s amended cross-claim, the fact remains that the damages alleged by Mr. Stewart against Mr. Dean, even if true, are not separable from damages to the nursing home entities. Regardless of Mr. Stewart’s characterization of the nature of the allegations in his amended cross-claim, our review of this pleading leads us to conclude that the personal harm alleged by Mr. Stewart is that Mr. Dean’s breach of fiduciary duty owed to Mr. Stewart resulted in a decline in value of his interests in the two nursing homes at issue. This type of indirect loss would affect all shareholders or partners in these entities and does not entitle Mr. Stewart to assert a personal right of action against Mr. Dean. The claims asserted by Mr. Stewart belong to the entities, and not to Mr. Stewart personally. Therefore, the trial court did not err in maintaining Mr. Dean’s exception of no right of action.

Mr. Stewart also argues that the trial court erred in granting Mr. Dean’s exception of lis pendens filed in response to Mr. Stewart’s amended cross-claim. However, our finding that the trial court correctly maintained Mr. Dean’s exception of no right of action disposes of the lis pendens issue.

|sFor the reasons stated above, the trial court judgment maintaining Mr. Dean’s exception of no right of action is affirmed. Mr. Stewart’s amended cross-claim against Mr. Dean is dismissed with prejudice.

AFFIRMED.

ARMSTRONG, C.J., Concurs in the Result.


author: MARION F. EDWARDS, Judge.

text:
    Pamela and Randy BOUDREAUX v. BRAUN INVESTMENTS, L.L.C., Mary Rose Brown and Jerry Brown, Town of Lutcher, Mayor Troas Poche and Dean Millet, Town of Lutcher, Planning and Zoning Commissioner.
    No. 03-CA-1070.
    Court of Appeal of Louisiana, Fifth Circuit.
    Feb. 23, 2004.

      John Dale Powers, Neil H. Mixon, Baton Rouge, LA, for Appellants.
    Michael K. Heltz, Gramercy, LA, for Appellees, Town of Lutcher, Mayor Troas Poche, and Dean Millet.
    Lloyd J. Leblanc, Jr., Laplace, LA, for Appellees, Braun Investments, L.L.C., Mary Rose Brown and Jerry Brown.
    Panel composed of Judges THOMAS F. DALEY, MARION F. EDWARDS and CLARENCE E. McMANUS.
   MARION F. EDWARDS, Judge.

Plaintiffs Randy and Pamela Boudreaux appeal a judgment of the 23rd Judicial District Court dismissing their petition against the defendants Braun Investments L.L.C., its principal owners Mary Rose Brown and Jerry L. Brown, the Town of Lutcher, Mayor Troas A. Poche, Mayor of Lutcher, and Dean Millet, Lutcher Planning and Zoning Commissioner. We affirm.

The conflict at issue is a dispute between the Boudreauxs, who reside in Acadia Subdivision in the Town of Lutcher, and the Browns, who purchased commercial property next to the Boudreaux residence, at 1870 Cabanose Avenue, and established a funeral home. The tract of land that ultimately developed into the Acadia Subdivision was previously owned by Industrial Cleanup Inc. (I.C.I.) and was annexed by ordinance by the Town of Lutcher in 1978.

On October 21, 2002, the Boudreauxs filed their Petition For Declaratory Judgment, Injunctive Relief and Writ of Mandamus, alleging that in 1992, they purchased Lots B, C, and D which land was immediately adjacent to a lot A. On Lot A was a building which formerly housed a Pelican Homestead Savings and 1.¡Loan Company. The Boudreauxs averred that prior to their purchase of the property in 1992, they were informed the entire tract of I.C.I. property, including Lot A, was zoned C-l, and that in order to put a residence on their property, the zoning would have to be changed to R-l. The Boudreauxs claimed that the lots were, in actual fact, already legally classified as R-1.

According to the petition, in January 1992, the Lutcher Board of Alderman, through Ordinance 92-04, “changed” the zoning on Lots B, C, and D to R-l. When the Boudreauxs completed their purchase of the property, the Act of Sale established a right of servitude of passage in their favor from the adjoining Lot A to Lot B. Thereafter, the Boudreauxs built their family residence on their property.

In 1999, the Boudreauxs learned that the defendants, the Browns, intended to purchase Lot A and the Homestead Building at 1870 Cabanose Avenue, and open a funeral home thereon. Pamela Boudreaux circulated a door-to-door petition with names of residents who opposed the placement of a funeral home on the property. The petition was taken to the Lutcher Board of Alderman at the May 24, 1999 meeting. In September 1999, the Browns purchased the building.

On April 2, 2002, the Lutcher Board of Alderman passed Zoning Ordinance 02-02, and a new Zoning Map Ordinance No. 02-OS, depicting the Lot A property as being contained within a C-2 zoning district. The Browns applied for and received a building permit, and renovation work began to convert the Pelican Building to a funeral home. The Boudreauxs allege that at various times, the Browns have blocked the servitude on Lot A.

The Boudreauxs claim that the new ordinances were passed in the absence of proper notice to the public, and that the valid zoning classification for Lot A is C-l. They further urge that the appropriate zoning classification for a funeral home is C-2, and therefore the Rose Lynn Funeral Home was a prohibited use. According to the Boudreauxs, the zoning classification was unconstitutional 14because the new zoning map was created in violation of constitutional and statutory prerequisite procedural and jurisdictional requirements. It is alleged that adequate and timely notice was not given to the public; constitutional and statutory procedures were not followed; the classification of Lot A on the new zoning map constitutes illegal “spot” or “piece-meal” zoning and was unreasonable, arbitrary and discriminatory; and the ordinance was based on misrepresented and erroneous information.

The Boudreauxs allege that the defendants, including the Town of Lutcher, through Mayor Poche and Mr. Millet, violated the laws by: (1) allowing renovation work to be done on the former Pelican Homestead building in the absence of the issuance of a valid building permit; (2) approving an application for a building permit in violation of the zoning ordinances; failing to visibly display any building permit, in violation of the zoning ordinances; (4) failing to issue and/or approve a Certificate of Zoning Compliance.

They sought a declaratory judgment to declare that Lot A is zoned C-l; that April 2, 2002 Lutcher Zoning Ordinance, # 02-02, is unconstitutional, null and void; that the intended use of the property as a funeral home is in violation to the zoning ordinances; and that any certificate of zoning compliance be declared null and void. They sought to enjoin the Browns from operating a funeral home, and from hindering their servitude of passage, and petitioned the court to enjoin the Town of Lutcher defendants from issuing any certificate of zoning compliance to the Browns. The Boudreauxs sought a Writ of Mandamus ordering the Town of Lutcher to vacate the building permit issued to the Browns, to correct any violations of the zoning laws with respect to the property in question, to vacate any Certificate of Zoning Compliance that may have issued to the Browns, and to change the zoning map to show Lot A as being zoned C-l.

| sThe hearing on the Boudreaux petition was held May 29, 2003. At the hearing, Patricia Lemoine testified that she is the town clerk for the Town of Lutcher. She is the custodian of the town records, attends all the Board of Alderman meetings, and it is her responsibility to place notices in the official journal. The property at issue was formerly owned by I.C.I. Property and the building had been an office for Pelican Homestead. No funeral home had previously been operated at that location. A Notice of Public Hearing was published on March 14, 21, and 28, 2002, announcing a hearing set for April 2, 2002, to receive public comments on the proposed amendments to the zoning map Ordinance No. 02-03. The announcement declared that the public would have three days after the meeting, or until April 5, to submit written comments. No comments were received, either prior to or after the public meeting. Immediately after the public hearing was adjourned, on April 2, the Board of Alderman held its meeting and adopted the new map. Mrs. Bou-dreaux had contacted her several times about the prospect of funeral home on Lot A. In 1999, Mrs. Boudreaux had attended a public meeting and discussed her petition about the funeral home, but did not submit it at that time. Ms. Lemoine received complaints from the Boudreauxs about work having begun on the building prior to the issuance of a building permit, at which time she contacted the Browns and told them to stop construction until the building permit was issued. The permit was in fact issued to the Browns in August, 2002, after which Mrs. Boudreaux complained that the permit was not posted in a visible place. A zoning compliance certificate was issued on February 18, 2003, at which time the building had been completed. According to the old town zoning map, the property in question had previously been zoned C-2.

Mrs. Boudreaux testified that in 1992, Mayor Poche told her that the property she wished to buy was part of a larger tract owned by I.C.I., and was 16zoned C-l. The Boudreauxs were able to have the property re-subdivided, and Lots B, C, and D were re-zoned R-l. In May 1999, as soon as she heard of the possibility that a funeral home would be placed, Mrs. Bou-dreaux circulated a petition and requested a public meeting, which was held in May, 1999. After the meeting, she called many times to request information on whether the funeral home would be built, and she was told they would let her know. She did not find out about the April 2 meeting until about April 13.

Work on the funeral home began in July, 2002, prior to the date a building permit issued, and Mrs. Boudreaux never saw a visible copy posted on the building. There was no problem living next door to the Pelican Homestead, but a funeral home would disrupt their lifestyle, as they have a swimming pool and enjoy barbecues in their back yard. The Boudreaux family enjoys music outside, but the funeral home patrons become offended. On numerous occasions, cars at the funeral home have blocked the right-of-way servitude to the Boudreaux property. The family uses the rear entrance to go to the back of the lot to cut grass or sometimes put their cars under the trees. Nevertheless, she has always been able to drive down Cabanose St. unimpeded.

Huey Stein editor of the News Examiner in Lutcher, testified that he ran an article in September 2002 of a second petition being circulated by the Boudreauxs in opposition to the funeral home. On contacting Mayor Poche for comment, the mayor told him that the I.C.I. property had been zoned C-l, the Boudreaux property had formerly been zoned C-2, and that the council reluctantly reclassified it to R-l.

Robber Dolese, an expert in zoning and planning matters, opined that the meeting notice was properly published. However, from a zoning standpoint, it would have been appropriate to recess the hearing and continue it after the expiration of the three day period. It was not proper to adopt the map and |7ordinance on the day of the meeting. Usually, someone can have an R-l use, a home, on C-l property. Responding to the court’s inquiry, Mr. Dolese agreed that property zoned C-l next to C-2 does not usually pose a problem, or affect the purpose of the zoning. However, changing C-l to C-2 opens the door for a number of uses that may be objectionable to adjacent residential property, and there should be a buffer. In 1979, the I.C.I. property was annexed to the Town of Lutcher and zoned R-l. In November 1979, Lutcher passed a resolution to change that zoning, according to the witness, to C-l, but such a change required adoption of an ordinance. Permitting operation of the funeral home introduces a heavy commercial type use into a subdivision, and is not a compatible use. In his opinion, a funeral home is not the proper use of the land, irrespective of the zoning on that lot. Mr. Dolese agreed that such a zoning classification decision was at the discretion of the public officials. The only problem with the ordinances at issue was the failure of the council to wait three days to get written comments before adopting them. He also agreed that if the council had received any written comments after adopting the ordinances, another public hearing could have been held to make changes.

The deposition of Jason Amato, formerly an alderman of the Town of Lutcher, was admitted into evidence. He voted to approve the new zoning map, putting Lot A in a C-2 district, because in looking at an old “colorized” map that hung in the council chambers, he believed the property had previously been zoned C-2. Further, there was “a verbal agreement” that the zoning on that lot was not actually being changed. During the meeting, a question arose about the zoning, and he was assured that the C-2 classification was not a change. He believed the lot had always been C-2. Had he been aware of the actual zoning, he would have voted to table a reclassification because he was aware of the questions and objections of the Boudreauxs. On cross-examination, Mr. Amato was shown a | scopy of a resolution dated in September of 1980, designating the subject property as being zoned C-2.

Following presentation of the plaintiffs’ case, the defendants moved for a dismissal. The court granted the injunction, prohibiting any of the defendants from blocking or otherwise interfering with the servitude right-of-way in favor of the Boudreauxs. The court dismissed the remainder of the case, including the writ of mandamus, finding that the public officials complied with the law. It was determined that the Bou-dreauxs had not come forward with any evidence to show that Ordinance 02-02 or 02-03 were improperly enacted, as no written comments were submitted. The court found no showing of irreparable harm.

The Boudreauxs contend that the court erred in failing to hold the hearing on the preliminary injunction and writ of mandamus within the ten day period mandated in La. C.C.P. arts. 3602 and 3782. The record shows that when the petition was filed in October, the hearing was originally set for December 2. The remedy at that time would have been to apply for writs to this court. Further, the hearing was continued on at least one occasion at the request of counsel for the Boudreauxs. This assignment of error is without merit.

It is urged that the court erred in finding that the Lutcher Zoning Map and Ordinance 02-02 were properly enacted. The Boudreauxs cite La. R.S. 33:4724 which requires, in pertinent part:

The legislative body of a municipality which has provided for a comprehensive zoning plan shall provide for the manner in which the regulations and restrictions and the boundaries of the districts shall be determined, established, and enforced and from time to time amended. No regulations or restrictions shall become effective until after a public hearing at which parties in interest have an opportunity to be heard. A public hearing in relation to the regulations may be held by the legislative body of a municipality which has provided for a comprehensive zoning plan. In such a case, notice of the time and place of the hearing shall be published once a week in three different weeks in the official journal of the municipality or, if there be none, in a paper of general circulation therein; at least fifteen days shall elapse between the first publication and the date of the hearing.

|9It is alleged that the published notices were deceptive and misleading because the Board of Alderman voted immediately after the meeting to adopt the ordinance, rather than waiting three days for written comments, and because no notice of the agenda for the meeting was published. The notice introduced into evidence read:

You are hereby notified of the following Public hearing of the Town of Lutcher Board of Alderman, to be held on Tuesday, April 2, 2002, at 6:30 p.m. at the Lutcher Town Hall, located at 2500 Louisiana Avenue, Lutcher, Louisiana. The purpose of the public hearing is to receive public comments on the proposed amendments to the Town of Lutcher Zoning Map, Ordinance No. 02-02.
A copy of the proposed map is available for public inspection at the Lutcher Town Hall during normal working hours, Monday through Friday, from 7:30 a.m. to 4:00 p.m.
Written comments will be considered if submitted no later than three working days after the close of the public hearing (4:00 p.m.) on April 5, 2002). Written comments should be addressed to Town of Lutcher, P.O. Box 456, Lutcher, LA 70071.

Zoning laws are in derogation of the rights of private ownership. As a result, our courts have consistently required strict compliance with the statutory procedures regulating enactment of zoning laws. Failure to comply with such procedures is fatal to the validity of the zoning ordinance. R.S. 33:4724 and the Lutcher Zoning Plan require a public hearing be held prior to adoption or amendment of zoning regulations, and the meeting duly noticed. There is no requirement to hold open adoption of the amendments for three days, and we do not find that the notice so implies. Further, there was evidence at the trial that receipt of any such comments in the three day period could have brought the matter back before the board. Finally, there were no written comments or objections within the time frame allowed. Strict compliance with the zoning laws did not require the Town of Lutcher to wait until the three day period had passed | inbefore adopting the ordinances. The Town complied with the statutory law requiring notice and the opportunity for a public hearing.

The Boudreauxs argue that the 1979 zoning change of the I.C.I. property from R-l to C-l was null because it was adopted by resolution rather than by ordinance. Section 407(e) of the 1977 zoning ordinance stated that “All vacant territory which may hereafter be annexed to the town shall be considered to be in the R-l Single Family residential District until otherwise classified.” However, according to Section 314 of the Lutcher Comprehensive Zoning Plan, that plan may be amended, supplemented, changed or appealed upon notice to the public and after a public hearing is held on the issue. In this instance, the I.C.I. property annexation was the subject of an ordinance and a public hearing was advertised and held, accomplishing the annexation without protest. A resolution was immediately offered and adopted “to amend the Official Zoning Map of the Town of Lutcher concerning the new annexation to Commercial zone 1. All new property being annexed is zoned Residential 1.” The resolution declared that the Lutcher Zoning Commission had conducted a public hearing on the reclassification of the I.C.I. property from R-l to C-l, and recommended that re-zoning. The Mayor and Board approved the change and the Mayor was authorized to make the entry on the Town Map. Section 403 of the Zoning Plan provides for such changes to be made on the official zoning map. The Board approved the amendment.

Regarding the 1987 map which the Boudreauxs also claim was .null because adopted by resolution, Section 405 of the Lutcher Zoning Plan provides that in the event the Official Zoning Map becomes damaged, destroyed, lost or difficult to interpret because of the nature and number of changes and additions, the Town Council may by resolution adopt a new Official Zoning Map. Since, according to the 1987 resolution, the previous map was destroyed by fire, the Council properly In adopted the 1987 zoning map. We find that in these instances, the Town acted in accordance with its own legislative regulation as well as statutory requirements.

We note that the 1980 resolution which purported to re-zone the parcel C-2 was the result of a recommendation by the Planning Commission; however, we are unable to determine whether a public hearing on the matter took place. In any case, the issues for our consideration are whether Lutcher Ordinances 02-02 and 02-03 were properly enacted, whatever the prior zoning.

Zoning ordinances are presumed to be valid, and parties attacking their validity have the burden of proof. Specifically, the exercise of the governing body’s police power to deny an amendment of these zoning regulations will be upheld unless it is shown that there has been an abuse of discretion or excessive use of power, or that the action taken was arbitrary or unreasonable or that it bears no relation to the health, safety, or general welfare of the public.

The Louisiana Supreme Court has held that a challenge to a zoning decision in Louisiana is a de novo proceeding in which the issue is whether the result of the existing zoning legislation is arbitrary and capricious. The Court went on to explain that reviewing courts cannot substitute their judgment for that of the legislative authority. A landowner challenging an existing zoning classification must show that it bears no relation to health, safety or the public’s general welfare, such that the classification is arbitrary and capricious.

At trial, the Boudreauxs failed to show that the adoption of the ordinances was arbitrary or unreasonable, or bore no relation to the health, safety, or general welfare of the public. The evidence showed that the I.C.I. tract of land was | ^originally a large parcel of undeveloped property, which was zoned for commercial use prior to the Boudreauxs purchase of Lots B, C, and D. They built their residence next to a large commercial building, the Pelican Homestead, an established business. Later, the Browns established a funeral home on the adjacent property. It is true that the Boudreauxs were inconvenienced by having access to their servitude impinged upon, a fact which the trial court corrected in its partial injunction.

At trial, there were copies submitted of the petition to prevent the use of the property as a funeral home, but the document contained only the names of the complainants, and not the reasons for their objections. The only other evidence produced was the testimony of Mrs. Boudreaux to the effect that she did not wish to live next door to a funeral home. She testified that she could not enjoy an outdoor barbecue, and that people get upset (presumably during funeral services) when she plays music outdoors. She does not think she will be able to sell the property in back of her home because no one would want to pass through the parking lot. Although we understand the problem, we do not find the Boudreauxs carried their burden of proving that the council abused its discretion, or was arbitrary or unreasonable in rezoning the property, which is adjacent to a state highway, to C-2 commercial use.

Because we find that Ordinances 02-02 and 02-08 were properly adopted, the court appropriately denied the requested relief. It follows that the court was also correct in denying the Boudreauxs request for costs.

For the foregoing reasons, the judgment is affirmed. Appellants are taxed costs of this appeal.

AFFIRMED.

      . Schmitt v. City of New Orleans, 461 So.2d 574 (La.App. 4 Cir.1984)

      . Id.

      . Southside Civic Ass’n, Inc. v. Guaranty Sav. Assur. Co., 339 So.2d 323 (La.1976).

      . Terrytown Properties, Inc. v. Jefferson Parish, 416 So.2d 323 (La.App. 5 Cir.1982).

      . Palermo Land Co., Inc. v. Planning Commission of Calcasieu Parish, 561 So.2d 482 (La.1990).

      . Palermo, 561 So.2d at 493; Cerruti v. Parish of Jefferson, 94-608 (La.App. 5 Cir. 1/18/95), 650 So.2d 315; Maynard Batture Venture v. Parish of Jefferson, 00-1669 (La.App. 5 Cir. 4/11/01), 786 So.2d 757, writ denied 2001-1386 (La.6/29/01), 794 So.2d 815.


text:
    Linda Porche Knight, Wife of the Late John F. KNIGHT, Sr., Suzanne Knight McCormack, Lynda Knight Rodrigue and John F. Knight, Jr. v. Curtis OWENS, Geico Indemnity and Canal Indemnity Company.
    No. 03-CA-1064.
    Court of Appeal of Louisiana, Fifth Circuit.
    Feb. 23, 2004.

      Steven T. Richard, William M. Doyle, Metairie, LA, for Appellants.
    Andre’ C. Gaudin, Meredith M. Miceli, Metairie, LA, for Appellee.
    Panel composed of Judges THOMAS F. DALEY, MARION F. EDWARDS and CLARENCE E. McMANUS.
   MARION F. EDWARDS, Judge.

Plaintiffs appeal from the trial court’s ruling that granted summary judgment in favor of defendant on the issue of whether uninsured motorist coverage was validly waived. For the foregoing reasons, the judgment of the trial court is affirmed.

FACTS AND PROCEDURAL HISTORY

On December 8, 1997, John Knight, Sr. was killed when a vehicle driven by Curtis Owens (“Owens”) collided with the car in which Knight was a passenger. At the time of his death, Knight, an owner of John’s Auto Sales, Inc. (“John’s Auto Sales”), bad in effect a commercial garage liability policy with Canal Indemnity Company (“Canal”).

On August 11, 1998, Knight’s wife and three children (“plaintiffs”) filed a Surviv- or’s Action and Petition For Wrongful Death, naming Owens and his insurer, GEICO Indemnity as defendants. In a Second and Supplemental Petition, plaintiffs further added Canal as an additional |sdefendant, claiming that it had procured uninsured motorist coverage through the Canal policy.

Canal thereafter filed a Motion for Summary Judgment, which was denied by the trial court. On March 31, 2003, Canal filed a second Motion for Summary Judgment, arguing that the policy issued to John’s Auto Sales contained a valid waiver of UM coverage. The trial court granted Canal’s Motion for Summary Judgment on May 6, 2003, and plaintiffs timely filed the present appeal.

LAW AND ANALYSIS

On appeal, plaintiffs raise three assignments of error: 1) That the trial court erred in finding that the UM waiver was valid, since the plaintiffs were not advised of the lower limits that Canal allegedly placed on available UM coverage; 2) The trial court erred in finding that material changes in the subject policy did not require the execution of a new UM form, and; 3) The trial court erred in finding that the UM selection form on the 1997-1998 application was properly executed.

Appellate courts review summary judgments de novo under the same criteria that govern the district court’s consideration of whether summary judgment is appropriate. An appellate court must ask the same questions as does the trial court in determining whether summary judgment is appropriate: whether there is a genuine issue of material fact remaining to be decided, and whether the appellant is entitled to judgment as a matter of law. The appellate court must consider whether the summary judgment is Inappropriate under the circumstances of the case. There must be a “genuine” or “triable” issue on which reasonable persons could disagree. Under the amended version of LSA-C.C.P. art. 966, the burden of proof remains on the mover to show “that there is no genuine issue as to material fact and that the mover is entitled to judgment as a matter of law.” A material fact is one that would matter on the trial of the merits.

In Daigle v. Authement, the Louisiana Supreme Court discussed at length what is needed to constitute a valid waiver of UM coverage.

We have held that the UM statute is to be liberally construed and that a rejection of the coverage provided by law •must be clear and unmistakable. Roger, 513 So.2d at 1131. The insurer bears the burden of proof that a rejection of coverage or a selection of lower limits has been legally perfected. Henson [v. Safeco Ins. Companies], 585 So.2d [534] at 539[ (La.1991)]. A valid rejection must be expressly set forth in writing and signed by the insured or his authorized representative. Tugwell v. State Farm Ins. Co., 609 So.2d 195 (La.1992); Henson, 585 So.2d at 538.
In 1987, La.R.S. 22:1406 D was amended to require that any rejection or selection of lower limits shall be made only “on a form designed by each insurer.” Implicit in the legislature’s direction to insurers to design a form, was the responsibility to design a form that would fairly effectuate the intent of the law. The legislature did not mandate that the form be designed in any particular way, nor did it indicate that any particular language was sacrosanct. The legislature had to have anticipated that various insurers might go about the design of the necessary form in different ways ...
In Tugwell, we held that a rejection form used by an insurance company must inform the applicant of the available options regarding UM coverage so that the applicant can make a meaningful selection from among the options provided by the statute. A form does not meet the statutory requirements if it fails to inform the applicant of an available option or forecloses an available option. We recognized in Tugiuell that the statute normally provides three options: UM coverage equal to bodily | ^injury limits in the policy, UM coverage lower that those limits, or no UM coverage.

In this case, the following language was contained in the UM selection form at issue:

UNINSURED MOTORIST COVERAGE REJECTION OF SPECIFICATION
In accordance with the provisions of Louisiana Statutes, uninsured motorist coverage automatically equals the bodily injury liability limits of the policy; however, the uninsured motorist coverage may be rejected entirely or written in any limit desired from 10/20 to bodily injury liability policy limits. The applicant does hereby:
[X] Entirely reject uninsured motorist coverage.
OR
[ ] Request uninsured motorist limits of $_ for each person $_ for each accident

We first find that, on its face, the form itself meets the requirements for validity, as the plaintiffs were provided with all options required by statute. Plaintiffs first argue, however, that the UM selection form executed on the 1997-1998 policy was invalid because they allegedly were not advised of lower limits that Canal Indemnity placed on available UM coverage. Specifically, plaintiffs assert that since Canal “apparently did not write UM/UIM coverage up to the $300,000.00 limit on their policy,” and that since they were not informed of an alleged lower limit, the UM/UIM rejection form is invalid.

The record shows that Matthew deBlanc was the agent from Continental Insurance who renewed the Canal policy with the Knights for the years 1997-1998. In his deposition testimony, deBlanc testified that the Knights had a “garage policy” in effect that, in general, would provide “premises liability, garage liability, completed operations coverage ... along with ... uninsured motorist coverage.” deBlanc stated that the 1996-19971 ^policy issued to the Knights did not provide UM coverage, even though he had discussed that type of coverage with John and Linda Knight, de-Blanc further stated that at the time the initial coverage was procured for the 1996-1997 period, and in subsequent renewals, the Knights indicated that the only coverage they wanted to purchase was what was required by the state and the property owner for their lease, and that UM coverage was specifically excluded by the Knights.

deBlanc testified that the 1997-1998 policy issued to the Knights was strictly a renewal of the 1996-1997 coverage as Canal Indemnity required that, every year, an insured select or reject coverage, including UM coverage. When it came time to renew the policy, deBlanc recalled that he had spoken to the Knights about renewing the UM coverage specifically, and that, once again, John Knight indicated that he only wanted to purchase coverage required by the state and his landlord. Linda Knight testified that she had no reason to dispute deBlanc’s testimony that he checked off the box that rejected coverage after the Knights had indicated to him that they did not want UM coverage.

The basis of plaintiffs’ assignment of error is a portion of deBlanc’s deposition testimony wherein he states his belief that Canal would only offer $30,000.00 of UM coverage. deBlanc also went on to state, however, that he declined to pass along this information to the plaintiffs, because the Knights had indicated to him that they did not want to obtain UM coverage.

Canal disputes what they consider to be a misconception on deBlanc’s part- regarding the potential limits of their UM coverage. The record further shows that Canal had admitted in discovery that uninsured motorists coverage up to $300,000.00 was available to John’s Auto Sales, Inc. for the |7period May 29, 1997 to May 29, 1998 prior to the time that Linda Knight had rejected UM coverage on the 1997-1998 application.

Other than deBlanc’s testimony regarding his subjective belief, after a review of the record, we find that the record contains no direct evidence to substantiate the plaintiffs claim that the limit of Canal’s UM coverage was, in fact, less than $300,000.00. As defendant points out, however, even if deBlanc had communicate his impression to the Knights, an insured’s understanding or misunderstanding of how UM/UIM coverage operates does not invalidate a facially valid rejection of coverage, as is the case here. Accordingly, we find this assignment of error to be without merit.

Plaintiffs next argue that material changes were made to the subject policy after the 1996/1997 application, specifically the deletion of two insureds from the policy, requiring the execution of a new UM form.

The general rule regarding rejection of UM coverage is that the initial rejection of UM coverage by an insured is good for renewal, reinstatement, or substitute policies. In this case, the record shows that Linda Knight, in her deposition testimony, expressed her understanding that the policy in effect at the time of her husbands accident was a renewal of the 1996-1997 policy. The fact that the policy at issue was a renewal was also expressed by deBlanc in his deposition testimony as well.

Other than the deletion of two insureds from the policy, plaintiffs have not asserted that any other material changes were made. Louisiana courts have previously found that the deletion of an insured from a policy is not a material change that requires a policy to be considered new, thereby | ¿requiring the execution of another UM waiver. Accordingly, we find this assignment to be without merit.

In their third assignment of error, plaintiffs allege several “defects” in the application form and the UM/UIM Selection Form, which they assert make their apparently valid rejection of UM coverage invalid.

Plaintiffs first argue that the form was invalid because the box that rejected UM coverage was pre-selected, and no explanation of UM/IUM insurance was provided to Linda Knight at the time that she signed the application.

In regard to the issue of a form being pre-selected for a rejection of UM coverage, Louisiana courts have held that the fact that an “X” is placed in the rejection box by someone at the insurance agency does not result in invalidation of the rejection. It is sufficient that the insured or his legal representative check the rejection box or initials next to a mark placed there by the insurer. In this case, the record shows that Linda Knight, who had the authority to sign this kind of document on behalf of John’s Auto Sales, signed immediately below the checked box which clearly indicated an entire rejection of UM coverage.

In addressing plaintiffs second argument, we note that the courts have previously found valid rejections of UM coverage even in light of contentions that an insured was handed a completed application to sign rejecting uninsured motorist coverage without any prior discussion of a | ¡^ejection of UM coverage. In this case, however, where the policy was simply a renewal, we find that even if, contrary to deBlane’s testimony, the issue of UM coverage was not previously discussed, the form provided was sufficient to give the plaintiffs all of their legally available options. Further, a person who signs a written document is presumed to have knowledge and understanding of that which he signs.

Plaintiffs next assert that the form was invalid because it does not make a type-written reference to the policy to which the form applies.

As the Louisiana Supreme court noted in Roger v. Estate of Moulton:

Accordingly, to effect a valid rejection of the UM coverage under La.R.S. 22:1406(D)(l)(a), the insured or his authorized representative must expressly set forth in a single document that UM coverage is rejected in the State of Louisiana as of a specific date in a particular policy issued or to be issued by the insurer. A writing, regardless of the intention of the insured, of a less precise nature is insufficient to effect a valid rejection. This narrow reading of La. R.S. 22:1406(D)(l)(a) is in accord with the liberal construction afforded the uninsured motorist statute in order to carry out its objective of protecting an innocent insured who becomes the victim of the negligent uninsured or under-insured motorist.

In Duhon v. Baquet, however, the Third Circuit addressed a similar issue of interpreting whether the above cited language from Roger mandated that the absence of a type-written reference to the policy in an application was a fatal flaw to a UM rejection form. The Duhon court reasoned:

While it is true that the supreme court mentioned that the rejection form should refer to “a particular policy issued or to|inbe issued,” this requirement is not fatal to the rejection form in this case. The “particular policy” language in Roger was dicta. See Schwoch v. Sutor, 559 So.2d 552 (La.App. 2 Cir. 1990). The UM statute requires only a writing, setting forth the three options discussed in Tugwell, signed by the insured or his representative.

The Third Circuit concluded that where an authorized representative of the insured had signed a document that both provided the necessary options and expressly stated that UM coverage was rejected, the fact that the rejection form failed to list a policy number did not invalidate the rejection. Similarly, in this case, Linda Knight, an insured under the policy, was provided with all three legal options regarding UM coverage and clearly indicated that she rejected it entirely.

In addressing several other alleged technical errors in the renewal application form, after a review of the record and applicable case law, we further find that the remaining issues raised by plaintiffs fail to constitute a genuine issue of material fact sufficient to defeat summary judgment on the issue of whether the plaintiffs’ UM waiver was valid. Accordingly, we find those issues to be without merit as well.

For the foregoing reasons, the judgment of the trial court, granting defendant’s summary judgment, is affirmed.

AFFIRMED.

      . Bua v. Dressel, 96-79 (La.App. 5 th Cir.5/28/96), 675 So.2d 1191; writ denied, 96-1598 (La.9/27/96), 679 So.2d 1348; citing Reynolds v. Select Properties, Ltd., 93-1480 (La.4/11/94), 634 So.2d 1180.

      . Tassin v. City of Westwego, 95-307 (La.App. 5th Cir. 12/13/95), 665 So.2d 1272.

      . Rowley v. Loupe, 96-918 (La.App. 5th Cir.4/9/97), 694 So.2d 1006.

      . Id. at 1008.

      . J.W. Rombach, Inc. v. Parish of Jefferson, 95-829 (La.App. 5th Cir.2/14/96), 670 So.2d 1305.

      . 96-1662 (La.4/8/97), 691 So.2d 1213.

      . Autin v. Wilson, 98-19 (La.App. 5 Cir. 5/27/98), 714 So.2d 257.

      . Bryant v. Viking Ins. Co. of Wisconsin, 579 So.2d 1241 (La.App. 3rd Cir.1991).

      . Lewis v. Lenard, 29,529 (La.App. 2 Cir. 5/7/97), 694 So.2d 574.

      . Odom v. Johnson, 97-546 (La.App. 3 Cir. 12/10/97), 704 So.2d 1254; Writ denied, 1998-0778 (La.5/1/98), 718 So.2d 419.

      . Id.

      . Thomas v. Goodson, 26,356 (La.App. 2 Cir. 12/7/94), 647 So.2d 1192.

      . Oncale v. Aetna Casualty and Surety Co., 417 So.2d 471 (La.App. 1st Cir.1982).

      . 513 So.2d 1126 (La.1987).

      . Duhon v. Baquet, 2001-913 (La.App. 3 Cir. 12/19/01), 815 So.2d 889; Writ denied, 2002-0078 (La.3/15/02), 811 So.2d 914.

      . Id.


author: MARION F. EDWARDS, Judge. CHEHARDY, J.,

text:
    VIRTOCOM FINANCIAL, INC. v. PALO VERDE TRADING COMPANY, INC.
    No. 03-CA-621.
    Court of Appeal of Louisiana, Fifth Circuit.
    Feb. 23, 2004.

      David L. Neeb, Metairie, LA, for Appellant.
    John A.E. Davidson, Mark M. Bonura, Metairie, LA, for Appellee.
    Panel composed of Judges SOL GOTHARD, MARION F. EDWARDS and SUSAN M. CHEHARDY.
   MARION F. EDWARDS, Judge.

The plaintiff, Virtocom Financial Inc., appeals a judgment that dismissed as premature its suit to confirm title to immovable property acquired through a tax sale. We affirm.

On January 21, 2003 Virtocom filed a Petition for Monition Judgment, amended on January 24, 2003 by an Amended Petition for Confirmation on Monition and/or for a Quiet Title Judgment. The suit (as amended) named as defendants Shirley M. Bellard, wife of/and Fred Bellard; Laprop, Inc.; and Palo Verde Trading Co., L.L.C. Pursuant to La.R.S. 13:4941, et seq., Virto-com sought to confirm or homologate its tax sale purchase of two lots on N. Elm Street in Metairie.

Virtocom alleged the Bellards acquired the property by act of sale on May 3, 1989, but that they failed to pay taxes owed to Jefferson Parish. - As a result, the subject property was sold to Laprop in a 1998 tax sale, and upon Laprop’s failure to pay the taxes due, Palo Verde purchased it at yet another tax sale in 1999. Palo |-Verde likewise defaulted on the tax, and on June 5, 2002, Virtocom acquired the property at the final tax sale.

Virtocom alleged further that the Bel-lards had not redeemed the property from Laprop and/or Palo Verde within the three-year redemptive period provided by law. As a result, Virtocom sought a judgment to confirm or homologate the sale, to show that the Palo Verde et al have no ground to annul the sale, and to quiet title to the property.

Palo Verde filed an exception of prematurity, asserting that the suit to confirm the tax sale was premature because it was filed prior to the three-year redemptive period provided in the Louisiana Constitution.

After a hearing, the trial court rendered judgment granting the exception. The court found that Palo Verde lost its interest in the property by tax sale on June 5, 2002, but that the protection afforded by the three-year redemptive period guaranteed in La. Const. Art. 7, § 25(B) applied to the subsequent purchaser, Palo Verde. The court held that the three-year redemptive period did not commence until recordation of the June 5, 2002 tax sale, and, thus, that the suit was premature.

Virtocom appeals, contending the trial court erred in concluding that the three-year redemptive period applied to Palo Verde, because Palo Verde had never confirmed its tax title. Virtocom urges that the holding of the district court concerning the redemptive rights of a tax purchaser is contrary to basic principles of statutory interpretation, legislative intent, and the public policy of the State of Louisiana.

La. Const. Art. 7, § 25 provides in pertinent part:

(A) Tax Sales. (1) There shall be no forfeiture of property for nonpayment of taxes. However, at the expiration of the year in which the taxes are due, the collector, without suit, and after giving notice to the delinquent in the manner provided by law, shall advertise for sale the property on which the taxes are due.... A |4tax deed by a tax collector shall be prima facie evidence that a valid sale was made.
(B) Redemption. (1) The property sold shall be redeemable for three years after the date of recordation of the tax sale, by paying the price given, including costs, five percent penalty thereon, and interest at the rate of one percent per month until redemption.
* * *
(D) Quieting Tax Title. The manner of notice and form of proceeding to quiet tax titles shall be provided by law.

La.R.S. 47:2228 sets out the procedure to quiet tax titles:

After the lapse of three years from the date of recording the tax deed in the conveyance records of the parish where such property is situated, the purchaser, his heirs or assigns, may institute suit by petition and citation as in ordinary actions against the former proprietor or proprietors of the property, in which petition must appear a description of the property, mention of the time and place of the sale and name of officer who made same, reference to page of record book and date of recording tax deed, notice that petitioner is owner of the said property by virtue of said tax sale, and notice that the title will be confirmed unless a proceeding to annul is instituted within six months from date of service of the petition and citation.... After the lapse of six months from the date of service of petition and citation, if no proceeding to annul the sale has been instituted, judgment shall be rendered quieting and confirming the title.
In all cases where tax titles have been quieted by prescription of five years under the provisions of Section 25 of Article VII of the Constitution of 1974, the purchaser or his heirs or assigns may, if he or they so desire, either obtain a judgment of the court confirming the title by suit in the manner and form as hereinabove set out, ... or the purchaser or his heirs or assigns may, at his or their option, quiet the title by monition proceeding, as provided by law relative to sheriffs’ sales and tax sales; provided that the failure to bring suit shall in no manner affect such prescriptive titles.

La.R.S. 47:2183 directs that the deeds of sale issued to purchasers at tax sales shall sell the property to the purchaser, with the right to be placed in actual possession thereof; the deed shall conclude with the statement that the property shall be redeemable at any time for the space of three years beginning on the day when the deed is filed for record in the conveyance office in the parish in which the property is situated. Further, La.R.S. 47:2184 provides in pertinent part, “The tax sale shall convey and the purchaser shall take the entirety of the property intended to be assessed and sold as it was owned by the delinquent taxpayer....”

| sVirtocom defines the issue for review as whether the protection of the three-year redemptive period under La. Const. Art. 7 § 25(B) applies to a tax sale purchaser who possesses only an incorporeal right connected to the immovable (Laprop and/or Palo Verde), or whether it applies only to the tax debtor-owner of the immovable (the Bellards). Virtocom argues that Palo Verde had an inchoate right to have its tax sale confirmed under La.R.S. 47:2228, and to become the “owner-proprietor” after the three (3) year redemptive period afforded to the owner (Bellard) had elapsed. It is asserted that Palo Verde had a “right in” the property and not the property itself. Virtocom avers that because Palo Verde “chose not to exercise that inchoate right and allowed that right to be sold at a sheriffs sale,” the tax sale was “assigned,” but the immovable property itself was not sold at the 2002 tax sale to Virtocom. Hence, Virtocom contends, the redemption period must be measured from the date of the tax sale to Laprop rather than the date of the tax sale to Virtocom. Using the calculation propounded by Virto-com, the redemption period expired three years from the date in 1998 when Laprop purchased the property, in 2001.

Palo Verde’s position is, in effect, that the redemptive period begins to run anew after each successive tax sale transfer between tax sale purchasers. Virtocom argues such an interpretation would hinder the state from effectively collecting unpaid taxes, keep property out of commerce under a potentially never-ending tax sales cloud on titles, and extend the five-year prescriptive period to annul the tax sale.

We disagree. Despite the repeated transfers of the property through successive tax sales within the unexpired redemption period following the first tax sale in 1998, the transfer of the property to each tax purchaser must be considered 1 Ras a transfer of ownership. Tax sales are presumed valid, and a tax deed shall be prima facie evidence of validity of the tax sale.

When the law regulating the manner and method of divesting ownership because of non-payment of taxes has been complied with, and all legal conditions precedent to a tax sale have been met by officials charged with such duties, ... .the purchaser of the property acquires a good and valid title thereto, subject to the right to redeem within three years. He need not call to the aid of his title any statutory or constitutional prescription or peremption in order to give it legal vitality or imbue it with the qualities needful to a complete transition of title.

We find it is the clear intent and purpose of the laws governing tax sales that the tax purchaser becomes the owner of the property, subject to the right of the tax debtor to redeem the property within three years or to file suit to have the tax sale declared null within five years.

Further, we find nothing in the law to support Virtocom’s assertion that consecutive purchasers at a tax sale and the original owner share the single initial redemptive period. The redemptive period was carved out and exists in order to afford the former proprietor an opportunity to retain his property by payment of the taxes and costs. When the tax sale purchaser becomes the owner, he is entitled to the same protection afforded a proprietor.

Virtocom cites cases stating that the interest conveyed at a tax sale is only that which is owned by the delinquent taxpayer and that the title acquired by an adju-dicatee at a tax sale is an inchoate one during the period for redemption and is defeated by the exercise of the right of redemption.

LSA-R.S. 33:2876 states:

The owner of the property advertised under R.S. 33:2861 through R.S. 33:2876 or any other person interested in having it kept from sale, may, up to the day of sale, redeem the property upon paying the amount fixed by law for the redemption together with all additional costs incurred by the parish or municipality. (Emphasis supplied.)

|7We find no modern cases discussing successive tax sales with similar facts as the ones before us. However, in an old case, the Supreme Court considered the issue of redemption, and who was entitled to exercise that option. While not precisely on point, the case is instructive. The court had before it Acts 1871, No. 42, § 69:

‘That if any person interested in any lot of ground or lands forfeited to the state shall, after the date of the collector’s return, pay to the treasurer of the state, or to the tax collector charged with the collection of the tax for which said property was forfeited, the taxes for which the same were returned, and all taxes subsequently accrued on such land, and 25 per cent, damages thereon, and 25 per cent additional for every year or part of year after one year, the auditor, upon proof thereof, shall execute and deliver to such person a certificate of redemption of the same. * * *’

The court found that under that law, the privilege of redemption is extended to any person interested, including the purchaser at the tax sale. The privilege of redemption necessarily includes the time period granted by law. We therefore hold that as applied to the successive tax purchasers here, La. Const. Art. 7, § 25 and LSA-R.S. 33:2876 gives each the right to redeem their title to the property within three years after each respective tax sale. Hence, Virtoeom is required to wait until three years after the date it purchased the property at the 2002 tax sale to file suit to confirm the tax title.

For the foregoing reasons, the judgment is affirmed. Costs of this appeal are assessed against the Virtocom-appellant, Vir-toeom, Inc.

AFFIRMED.

CHEHARDY, J., dissents.

CHEHARDY, J.,

Dissents.

I disagree with the finding of the majority that the successive tax sales each transferred full ownership to each successive tax purchaser. I agree with Virtocom’s contention that the trial court erred in concluding that the three-year redemptive period applied to Palo Verde, because Palo Verde had never confirmed its tax title.

In my view a tax sale purchaser such as Palo Verde/Laprop under the circumstances here possesses only an incorporeal right connected to the immovable, such that the three-year redemptive period under La. Const. Art. 7 § 25(B) applies only to the original tax-debtor/owner of the immovable (in this case, the Bellards). I would find the district court’s holding concerning the redemptive rights of a tax purchaser contrary to basic principles of statutory interpretation, legislative intent, and the public policy of the State of Louisiana.

Pursuant to La.R.S. 47:2183, deeds of sale issued to purchasers at tax sales shall sell the property to the purchaser, with the right to be placed in actual possession thereof, and the deed shall conclude with the statement that the property shall be redeemable at any time for the space of three years beginning on the day when the deed is filed for record in the conveyance office in the parish in which the property is situated. La.R.S. 47:2184 provides in pertinent part, “The tax saleJ^shall convey and the purchaser shall take the entirety of the property intended to be assessed and sold as it was owned by the delinquent taxpayer.... ”

A tax sale does not warrant the title to the property conveyed. Hubbs v. Canova, 427 So.2d 875, 877 (La.App. 1 Cir.1982). No such warranty can be given because tax sales are subject to redemption and to annulment. Id. A title acquired by tax sale is not confirmed until there is a judgment in a monition proceeding, and even such a judgment can be annulled. Id. Redemption of a tax sale property is accomplished by payment of statutorily-prescribed amounts — unlike property purchasers who sell their property, the tax sale purchaser cannot make the tax debtor pay the market value of the property, but is forced to give it up to the tax debtor as long as the tax debtor redeems it within the statutory time period and for the statutory amounts.

I agree with Virtocom’s argument that Palo Verde had only an “inchoate right” to have its tax sale confirmed under La.R.S. 47:2228 and to become the “owner-proprietor” after the three year redemptive period afforded to the tax-debtor/owner (Bel-lard) elapsed. Palo Verde had a right in or a choice of action connected to the property, but not the property itself.

Virtocom asserts that because Palo Verde “chose not to exercise that inchoate right and allowed that right to be sold at a sheriffs sale,” so that the tax sale was “assigned,” but the immovable property itself was not sold at the 2002 tax sale to Virtocom. Hence, Virtocom contends, the redemption period must be measured from the date of the tax sale to Laprop rather than the date of the tax sale to Virtocom. Using the calculation propounded by Virto-com, the redemption 13period expired three years from the date in 1998 when Laprop purchased the property (e.g., some time in 2001).

In opposition, defendant Palo Verde asserts that Virtocom is not entitled to confirm its tax sale because its title is inchoate or incomplete until the three year redemption period has elapsed. Palo Verde asserts the redemption period will not expire until July 16, 2005, three years from the recordation of Virtocom’s tax sale. In effect, Palo Verde’s position is that the redemptive period begins to run anew after each successive tax sale transfer between tax sale purchasers.

I agree with Virtocom that such an interpretation would hinder the state from effectively collecting unpaid taxes, keep property out of commerce under a potentially never-ending tax sales cloud on titles, and extend the five-year prescriptive period to annul the tax sale. I conclude that the repeated transfers of the property through successive tax sales within the unexpired redemption period following the first tax sale in 1998 did not operate as transfers of full ownership to each tax purchaser.

The interest conveyed at a tax sale is only that which is owned by the delinquent taxpayer. Whitfield v. Jones, 270 So.2d 153, 154 (La.App. 1 Cir.1972), writ denied 272 So.2d 376 (La.1973). The title acquired by an adjudieatee at a tax sale is an inchoate one during the period for redemption and is defeated by the exercise of the right of redemption. Kelso v. Caffery, 221 La. 1, 58 So.2d 402, 406 (1952).

The three-year redemptive period afford to the Bellards as owner/tax-debtors following the 1998 tax sale to Laprop expired in 2001. Under Palo Verde’s interpretation of the law, Palo Verde would have until 2005 to redeem the property from Virtocom (three years from the 2002 tax sale to Virtocom). That would mean |4the title to the property was uncertain for a total of seven years from the initial tax sale following the Bellards’ default in payment of their taxes.

I conclude that the right to redeem title to the property within three years after a tax sale does not accrue to a subsequent purchaser of a tax sale title that is still subject to the three-year redemption period accruing to a prior tax debtor. Hence, Virtocom should not be required to wait until three years after the date it purchased the property at the 2002 tax sale to file suit to confirm its tax title, because more than three years have passed since the original property owner/tax debtor lost the property through the 1998 tax sale.

The long-standing public policy in this state is to make certain and protect the title to immovable property. Harris v. Estate of Fuller, 532 So.2d 1367, 1370 (La.1988). Such certainty and protection of property titles contributes to the goal of maintaining the flow of property in commerce. If the redemptive period begins to run anew after each successive tax sale transfer between tax sale purchasers, the state is hindered from effectively collecting unpaid taxes and the property is kept out of commerce under a potentially never-ending tax sales cloud on titles. The historical public interest in identity and marketability of land titles is deserving of protection and underlies the purpose of a peremptive period following tax sales. Harris, 532 So.2d at 1370.

For the foregoing reasons, I would reverse the judgment and remand the matter for further proceedings.

      . La. Const. Art. 7, § 25(A); Constance v. Sudwischer, 502 So.2d 609 (La.App. 3d Cir.1987), writ denied, 503 So.2d 1019 (La.1987); Koeppen v. Raz, 29,880 (La.App. 2 Cir. 10/29/97), 702 So.2d 337.

      . Reed v. Stinson 188 So. 509, (La.App. 2 Cir.1939).

      . Whitfield v. Jones, 270 So.2d 153, 154 (La.App. 1 Cir.1972), writ denied 272 So.2d 376 (La.1973).

      . Kelso v. Caffery, 221 La. 1, 58 So.2d 402, 406 (1952).

      . McDougall v. Montlezun, 3 So. 273, 39 La. Ann. 1005, (1887).

      . That three-year period is peremptive rather than prescriptive and, thus, cannot be interrupted or suspended by the tax debtor’s continued possession of the property. Harris v. Estate of Fuller, 532 So.2d 1367, 1369 (La.1988). In contrast, the five-year period within which the tax debtor can file suit to annul the tax sale is prescriptive and can be suspended by the tax debtor's continued possession of the property. Securities Mortgage Company, Inc. v. Triplett, 374 So.2d 1226, 1230 (La.1979).

      . These are “the price given,” including costs, five percent penalty thereon, and interest (La. Const. Art. 7, § 25(B)(1), La.R.S. 47:2193), as well as "all taxes assessed ... subsequent to the tax sale” and the value of any improvements made by the tax sale purchaser (La. R.S. 47:2222(A) and (D)), plus the cost of any repairs, maintenance, etc., required by a political subdivision (La.R.S. 47:2222.1).

      . Virtocom's pleadings do not designate the exact dates of either the 1998 tax sale to Laprop or the 1999 tax sale to Palo Verde.