Compensation for Nonpecuniary Loss: Revising Louisiana Civil Code Article 1998 to Reflect Litvinoff's Damage-Based Approach

Compensation for Nonpecuniary Loss: Revising Louisiana Civil Code Article 1998 to Reflect Litvinoff’s Damage-Based Approach INTRODUCTION Imagine a collector of fine wines. He acquired this hobby from his father, who also collected wines and passed down his collection to his son upon his death. The collection has now amassed a significant monetary value. One day, the wine owner contracted with a company to make adjustments to the thermostat in his wine cellar. An error on the part of a company employee raised the temperature in the cellar too high, causing all of the wine to spoil. Louisiana law is clear that the wine owner can recover damages for the loss of the wine’s value in a breach of contract action. 1 But the wine owner sustained another loss that day—the loss of a collection that he enjoyed and shared with his deceased father. The collection of wine, although having a significant monetary value, also had a significant “nonpecuniary” value. 2 Under the current state of Louisiana law on obligations, the wine owner would have difficulty convincing a court that nonpecuniary damages are appropriate under Louisiana Civil Code article 1998 and would likely receive no compensation for the nonpecuniary loss that he suffered. 3 Actions for breach of contract most commonly involve injuries easily and appropriately susceptible of pecuniary or monetary valuation. 4 Sometimes though, the loss felt by the obligee is not an exclusively financial injury, such as the loss felt by the wine owner as a result of his emotional attachment to his wine collection. When “the impairment affects an interest beyond the scope of the Copyright 2015, by MOLLY L. CSAKI. 1. See LA. CIV. CODE art. 1995 (2015) (“Damages are measured by the loss sustained by the obligee and the profit of which he has been deprived.”). 2. “Nonpecuniary harm then should be taken to refer to such damages or injury that cannot, strictly speaking, be measured in monetary terms.” Louisiana State Law Institute, Supplemental Memorandum on Damages for Nonpecuniary Losses at 2, Prepared for Meeting of the Obligations Revision Committee (July 25, 1980) (on file with the Louisiana State Law Institute) [hereinafter Supplemental Memorandum on Damages for Nonpecuniary Losses]. 3. SAÚL LITVINOFF, OBLIGATIONS § 6.7, in 6 LOUISIANA CIVIL LAW TREATISE 163 (2d ed. 1999) (contrasting the general acceptance of nonpecuniary damages in delictual actions with those in contractual actions). See also LA. CIV. CODE art. 1998 (2015). 4. Supplemental Memorandum on Damages for Nonpecuniary Losses, supra note 2, at 1. 1276 LOUISIANA LAW REVIEW [Vol. 75 obligee’s patrimony . . . the damage is of a moral nature.” 5 When an obligee suffers such an injury, it can be repaired by nonpecuniary damages. 6 Damages of this type frequently include those for mental anguish, embarrassment, inconvenience, humiliation, 7 and loss of consortium. 8 Other types of nonpecuniary damages that are sought less often include “other encroachments upon the personality such as emotional distress, loss of amenities of life, injury to honor or diminution of a person’s reputation.” 9 Former Louisiana Civil Code article 1934 governed nonpecuniary damages and was interpreted inconsistently by Louisiana courts, leading to confusion for litigants, practitioners, and judges. After a significant period of unpredictability in both the lower courts and the Louisiana Supreme Court, as well as critical commentary in the state law reviews, the Obligations Committee of the Louisiana State Law Institute discussed changes to article 1934. 10 Led by Professor Saúl Litvinoff, the Committee recommended to the Legislature a revision of article 1934 with the intention of providing clarity to this obscure area of the law. 11 The Louisiana Legislature adopted article 1998, effective January 1, 1985. 12 Mainly, the Committee dealt with when and to what extent compensation for nonpecuniary loss should be permitted. 13 Now, the Louisiana Civil Code permits recovery of nonpecuniary damages for the breach of conventional obligations under article 1998. 14 However, the Louisiana Supreme Court has held that such 5. Saúl Litvinoff, Moral Damages , 38 LA. L. REV. 1, 2 (1977) [hereinafter Litvinoff, Moral Damages ]. After recognizing that there are interests worth protecting beyond the financial realm, French writers developed a concept known as “moral patrimony.” See LITVINOFF, supra note 3, § 6.4, at 159. Litvinoff described one’s moral patrimony as a compilation of “intangible assets such as honor, reputation, feelings, and peace of mind.” Id. 6. Litvinoff, Moral Damages , supra note 5, at 1. 7. Gary P. Graphia, Comment, Nonpecuniary Damages: A Guide to Damage Awards Under Louisiana Civil Code Article 1998 , 50 LA. L. REV. 797, 797–98 (1990). 8. LITVINOFF, supra note 3, § 6.1, at 157. 9. Supplemental Memorandum on Damages for Nonpecuniary Losses, supra note 2, at 2. See also LA. CIV. CODE art. 1998 cmt. e (2015) (excluding damages for “mere worry or vexation”). 10 . Supplemental Memorandum on Damages for Nonpecuniary Losses, supra note 2, at 1. 11 . See discussion infra Part II. 12. Act No. 331, 1984 La. Acts 156 (“To amend and reenact Titles III and IV of Book III of the Civil Code, to comprise Articles 1756 through 2057 . . . .”). 13 . Supplemental Memorandum on Damages for Nonpecuniary Losses, supra note 2, at 1. 14. LA. CIV. CODE art. 1998 (2015). Former article 1934 was repealed in 1985. See Act No. 331, 1984 La. Acts 156. 2015] COMMENT 1277 damages are only available in limited circumstances—where the nonpecuniary elements of a contract are “significant.” 15 Although nonpecuniary damages are rarely awarded in breach of contract actions, it is unquestionable that nonpecuniary, or non-patrimonial interests, can be injured by an obligor’s nonperformance of an obligation. 16 As a result of the Louisiana Supreme Court’s limited grant of nonpecuniary damages, some obligees are left with uncompensated nonpecuniary injuries. 17 This Comment considers whether the 1985 revision that resulted in article 1998 successfully clarified the availability of nonpecuniary damages for the breach of conventional obligations and offers suggestions to better serve litigants seeking damages for nonpecuniary loss. Part I of this Comment discusses former Louisiana Civil Code article 1934, the legislation that governed the availability of nonpecuniary damages in Louisiana, and the effect it had on Louisiana jurisprudence. Part II analyzes the 1985 revision of article 1934, first discussing the drafters’ attempt to clarify the state of the law surrounding nonpecuniary damages, then highlighting the post-revision ambiguities. Part III evaluates why the restrictive interpretation given to current article 1998 by Louisiana courts has hindered its availability to serve litigants and is inconsistent with the original intent of the Obligations Committee. Finally, Part IV offers a model article that attempts to remedy the conflicting jurisprudence and legislation in Louisiana and to finally give Louisiana courts and practitioners guidance on the availability of nonpecuniary damages for the breach of conventional obligations. I. ARTICLE 1934 OF THE 1870 CIVIL CODE: PRE-REVISION NONPECUNIARY DAMAGES IN LOUISIANA Generally, damages in contract are measured by what the parties contemplated during the formation of the obligation, usually the loss sustained, including the profits deprived by the 15 . See, e.g. , Young v. Ford Motor Co., 595 So. 2d 1123 (La. 1992); Lafleur v. John Deere Co., 491 So. 2d 624 (La. 1986); Meador v. Toyota of Jefferson, 332 So. 2d 433 (La. 1976). 16. Litvinoff, Moral Damages , supra note 5, at 1. 17. The focus of this Comment is on a litigant’s ability to recover damages in contractual actions. It is not intended to provide guidance on damage recovery in delictual actions, which may or may not be available depending on the circumstances of the claim. For a discussion of the delictual equivalent of nonpecuniary damages, see WILLIAM CRAWFORD, TORT LAW §§ 28.1–28.5, in 12 LOUISIANA CIVIL LAW TREATISE (2d ed. 1999). 1278 LOUISIANA LAW REVIEW [Vol. 75 obligee. 18 Contrast damages in contract, which are based on foreseeability and the parties’ intentions, with those in tort, which are meant to compensate and make the victim whole again. 19 Whether this distinction has merit remains questionable because “any interest worthy of protection, even if not of a patrimonial nature, may be the object of an obligation.” 20 The vast majority of contracts involve pecuniary interests, but others have mixed interests—both pecuniary and nonpecuniary. 21 Seldom will a contract involve an exclusively nonpecuniary interest. 22 However, “the fact that damage of an exclusively moral nature occurs only seldom is no justification for a denial of recovery where such damage has been proved.” 23 Louisiana’s interest in fully compensating an obligee has wavered in the past, and whether that interest exists now is the subject of this Comment. Whereas Louisiana repairs nonpecuniary losses with nonpecuniary damages, the French repair these injuries with dommage moral . 24 The term dommage moral is more accurate than the Louisiana label because it acknowledges that, although the damage is repaired in money, the loss felt is nonpecuniary or “moral.” 25 This term may be more appropriate because the availability of nonpecuniary damages hinges on a distinction based on the nature of the injured right as well as the actual damage suffered. 26 If the nonperformance of an obligation results in nonpecuniary or nonpatrimonial harm, nonpecuniary damages should be available, although that has not always been the case. 27 In contrast, when the nonperformance of an obligation causes damage to a right that is patrimonial in nature, nonpecuniary damages are not available, but 18. See LA. CIV. CODE art. 1995 (2015); see also LA. CIV. CODE arts. 1996– 1997 (2015) (governing relationship of damages to...