Case Name: Mrs. Mildred W. INABINET, etc., et al. v. STATE FARM AUTOMOBILE INSURANCE CO. et al.
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 1972-05-29
Citations: 262 So. 2d 920
Docket Number: No. 8817
Parties: Mrs. Mildred W. INABINET, etc., et al. v. STATE FARM AUTOMOBILE INSURANCE CO. et al.
Judges: Before LANDRY, BLANCHE and TUCKER, JJ.
Reporter: Southern Reporter, Second Series
Volume: 262
Pages: 920–927

Head Matter:
Mrs. Mildred W. INABINET, etc., et al. v. STATE FARM AUTOMOBILE INSURANCE CO. et al.
No. 8817.
Court of Appeal of Louisiana, First Circuit.
May 29, 1972.
John D. Lambert, Jr. (Coe, Nowalsky & Lambert), New Orleans, for appellant.
Iddo Pittman, Jr. (Pittman & Matheny), Hammond, for appellee.
Before LANDRY, BLANCHE and TUCKER, JJ.

Opinion:
BLANCHE, Judge.
Judgment was rendered, read and signed on January 7, 1969, in favor of Mrs. Mildred W. Inabinet, individually, and against State Farm Mutual Automobile Insurance Company (hereinafter referred to as "State Farm"), Beverly Cousins and Sandra Ann Cousins, in solido, in the sum of $20,000 with legal interest thereon from date of judicial demand, i. e., August 18, 1964, until paid. In the same suit judgment was rendered in favor of Mrs. Mildred W. Inabinet and her husband, David S. Inabinet, and against the same three defendants, in solido, in the sum of $7,072.-50, with legal interest thereon from the aforementioned date of judicial demand until paid. These judgments against State Farm were limited as to the total principal sum of $10,000, the applicable policy limit of the defendant-insurer. Judgment was also rendered in favor of the plaintiffs and against the aforementioned defendants for all costs of the proceedings. This judgment was affirmed on appeal.
On December 1, 1970, State Farm deposited in the registry of the trial court the sum of $12,761.24, which sum was on that same day withdrawn by the plaintiffs, and which sum purported to represent a tender of the full amount owed by State Farm to the plaintiffs pursuant to the aforementioned judgment, exclusive of court costs, which State Farm expressly agreed to pay in addition thereto. State Farm filed a contradictory motion in the trial court and obtained an order requiring Mr. and Mrs. Inabinet, plaintiffs and defendants in rule, to show cause why the aforementioned sum tendered should not be declared to be the full amount owed by State Farm pursuant to the aforementioned judgment exclusive of court costs, and why the judgment against State Farm should not be erased and cancelled from the Mortgage Records as having been fully paid and satisfied. State Farm did not make its insureds, Beverly Cousins and Sandra Ann Cousins, de fendants in rule. At the trial of this motion, counsel for defendants in rule verbally objected to the nonjoinder of Beverly Cousins and Sandra Ann Cousins as defendants in rule, contending that they were indispensable parties with the result that their nonjoinder required dismissal of the rule. This objection was overruled by the trial court. Judgment was rendered in favor of State Farm and against plaintiffs-defendants in rule decreeing that the amount deposited by State Farm in the registry of the court was the correct amount owed by State Farm pursuant to the aforementioned judgment, exclusive of court costs, and ordering the judicial mortgage against State Farm arising from the recordation of the aforementioned judgment erased and cancelled. From this judgment plaintiffs-defendants in rule have appealed.
Plaintiffs-defendants in rule assign as their first specification of error the failure by the trial judge to sustain their verbal objection or exception urging nonjoinder of indispensable parties. This specification of error is without merit.
Louisiana Code of Civil Procedure Article 643- provides in the second paragraph the following:
"One or more solidary obligees may sue to enforce a solidary right, and one or more solidary obligors may be sued to enforce a solidary obligation, without the necessity of joining all others in the action."
Official Revision Comment (b) to Article 643 provides the following:
"(b) No change in the procedural law is made by the second paragraph of this article. All solidary obligees are not necessary parties to an action to enforce a solidary right, and all solidary obligors are not necessary parties to an action to enforce a solidary obligation. One or more may sue or be sued; and those not joined are not necessary parties. See Breedlove v. Nicolet, 7 Pet. 413, 8 L.Ed. 731 (1833)."
A mere reading of the foregoing statute indicates a legislative intent to negate expressly the contention that solidary obligors are either indispensable or necessary parties defendant in a judicial proceeding. Solidary obligors are proper parties defendant, but the joinder of all of them is not compulsory and the failure to join all solidary obligors does not require dismissal of the judicial proceeding for nonjoinder of indispensable parties. Obviously, State Farm and its insureds are solidary obligors under the facts of this case.
Appellants' second specification of error concerns the refusal by the trial court to oblige State Farm to pay legal interest on the full amount of the judgment computed from date of judicial demand until date of tender, which was the position indicated by State Farm's attorney in a letter addressed to counsel for plaintiffs-defendants in rule on October 28, 1970. (Record, p. 28) Counsel for appellants contends that State Farm is bound by this position, notwithstanding the fact that it fails to accord with existing Louisiana jurisprudence to the effect that the defendant-insurer is liable for legal interest only on the amount of its applicable policy limits from date of judicial demand until date of signing of the judgment, although thereafter the insurer is liable for all interest on the amount of the judgment, including that which exceeds its applicable policy limits, until the insurer pays or tenders the full amount which it owes, Doty v. Central Mutual Insurance Company, 186 So.2d 328 (La.App. 3rd Cir. 1966), writ refused, 249 La. 486, 187 So.2d 451.
This specification of error is likewise without merit. Appellants should not be permitted to capitalize on an admitted mistake made by counsel for State Farm, especially since appellants have demonstrated no prejudice or detrimental reliance thereon so as to warrant application of any theory of estoppel.
Appellants' third specification of error concerns the refusal by the trial court to apply legal interest at the rate of seven percent per annum from July 29, 1970, the date on which Act 315 of 1970 amended Louisiana Civil Code Articles 1938 and 2924 by increasing legal interest from five percent per annum to seven percent per annum. This specification of error is likewise without merit, for the reason that the Louisiana cases have consistently held this amendment not to be retroactive, with the result that where a' debt became due prior to July 29, 1970, the five percent per annum legal interest rate, rather than the seven percent per annum legal interest rate, applies. Inasmuch as an obligation arising out of a delictual action becomes due or bears legal interest from date of judicial demand, where judicial demand was made before the effective date of the increase in the legal interest rate, the legal interest rate in existence at the time of the making of judicial demand applies, Winzer v. Lewis, 251 So.2d 650 (La.App. 2nd Cir. 1971), writ refused, 259 La. 934, 253 So.2d 379; Hebert v. Travelers Insurance Company, 245 So.2d 563 (La.App. 3rd Cir. 1971), writ refused, 258 La. 903, 248 So.2d 332.
The final complaint by appellants is that the amount computed by State Farm to be owed pursuant to the judgment rendered in favor of plaintiffs is inadequate. The record shows that State Farm agreed with this contention and on March 14, 1972, counsel for State Farm forwarded to counsel for plaintiffs State Farm's check in the sum of $1,998.53 in supplementation of the $12,761.24 previously deposited in the registry of the court on December 1, 1970. The record further reflects that this tender was rejected and the draft returned to counsel for State Farm by counsel for appellants on March 15, 1972, as still being inadequate.
In order to resolve finally the dispute between the parties, we have computed the amount of interest for which State Farm is liable to plaintiffs in the following manner and for the following reasons.
In order for State Farm to be relieved of the obligation of paying additional interest on the judgment in favor of appellants, it was incumbent upon State Farm to tender the actual amount owed, and any error in the computation thereof must be imputed to State Farm with State Farm to bear the consequences thereof.
We subscribe to the formulation utilized by the Third Circuit Court of Appeal in Doty v. Central Mutual Insurance Company, 186 So.2d 328, 336 (La.App. 3rd Cir. 1966), writ refused, 249 La. 486, 187 So.2d 451, wherein a judgment of $25,000, with insurance limits of $10,000, was recast in the following manner:
"[W]ith the company's liability being limited (a) to its policy limits of $10,000.00 with all costs and legal interest thereupon from date of judicial demand until paid, and (b) to legal interest upon the excess award of $15,000.00 over policy limits from October 14, 1965 [date of judgment], until such time as (a) is paid or tendered."
This formulation, stated otherwise, means that until the principal amount of the applicable policy limits is paid or tendered, together with the legal interest thereon which has accrued from date of judicial demand to the date of such payment or tender, as well as all court costs, the insurer is liable, in addition to the foregoing, for legal interest on the amount of the judgment in excess of the applicable policy limits, commencing from the date of judgment. Application of this formulation to the instant case results in the conclusion that inasmuch as State Farm's tender on December 1, 1970, of the sum of $12,761.24 was insufficient to cover both its $10,000 policy limits and the legal interest owed thereon from date of judicial demand until date of tender, or the sum of $3,143.06, State Farm remained liable for legal interest on the excess judgment until State Farm tendered an additional sum of money sufficient to cover the previously accrued but unpaid balance of legal interest owed on its applicable policy limits, or the sum of $381.82. Such tender occurred on March 14, 1972, with the result that State Farm's legal interest liability on the excess judgment is fixed for the period from the date of judgment, January 7, 1969, through March 14, 1972.
State Farm's liability, exclusive of court costs, can, therefore, be recapitulated as follows:
(1) State Farm's policy limits of $10,000— $10,000.00
(2) Legal interest at the rate of 5 percent per annum on the policy limits of $10,000, from date of judicial demand, August 18, 1964, until date of tender of the policy limits and purported tender of legal interest due thereon, on December 1, 1970— 3,143.06
(3) Legal interest at the rate of 5 percent per annum on the excess judgment in the sum of $17,072.50 from date of rendition and signing of judgment on January 7, 1969, through date of tender of balance of accrued legal interest owed on policy limits, March 14, 1972— 2,719.73
TOTAL $15,862.79
Less payment on December 1, 1970 12,761.24
BALANCE OWED $ 3,101.55
For the foregoing reasons, the judgment appealed from is recast so as to read as follows:
"IT IS ORDERED, ADJUDGED AND DECREED that the liability of State Farm Mutual Automobile Insurance Company to Mrs. Mildred W. Ina-binet and Mr. David S. Inabinet is $10,-000, the applicable policy limits, plus five percent per annum legal interest thereon from date of judicial demand, August 18, 1964, until December 1, 1970, date of tender of the $10,000 policy limits and $2,761.24 of the $3,143.06, legal interest owed thereon and deposited in the registry of the court; plus legal interest at the rate of five percent per annum on the amount of the judgment in excess of the applicable policy limits or the sum of $17,072.57, from date of signing of the judgment of the trial court, January 7, 1969, through March 14, 1972, the date of Completion of the tender of the balance of legal interest owed on the $10,-000 policy limits, or the sum of $2,719.-73; or the total sum of $15,862.79, subject to a credit of $12,761.24, leaving a balance owed by State Farm Mutual Automobile Insurance Company to Mrs. Mildred W. Inabinet and" Mr. David S. Inabinet of the sum of $3,101.55.
"IT IS FURTHER ORDERED, ADJUDGED AND DECREED that upon payment or tender of the additional sum of $3,101.55 owed by State Farm Mutual Automobile Insurance Company to Mrs. Mildred W. Inabinet and Mr. David S. Inabinet, the judgment against State Farm Mutual Automobile Insurance Company dated January 7, 1969, be can-celled and erased from the Mortgage Records of the Parish of St. Tammany, the Parish of Orleans and any other parish where the judgment may have been recorded, insofar as State Farm Mutual Automobile Insurance Company is concerned.
"IT IS FURTHER ORDERED, ADJUDGED AND DECREED that State Farm Mutual Automobile Insurance Company pay all costs of these proceedings, both in the trial court and in the Court of Appeal."
Affirmed in part, reversed in part and rendered.
LANDRY, J., dissents ánd will hand down written reasons.
. Inabinet v. State Farm Mutual Automobile Insurance Company, 234 So.2d 827 (La.App.1st Cir. 1970), writ refused, 256 La. 791, 239 So.2d 172.
. Inasmuch as State Farm agreed to pay all court costs in connection with its tender of December 1, 1970, this particular factor presents no controversy.
. Of course, once State Farm paid or tendered its policy limits, it no longer remained liable for legal interest thereon. State Farm cannot be charged with interest on the unpaid balance of the accrued legal interest in the sum of $381.82, as such would amount to charging interest on interest which under these circumstances is reprobated by Louisiana Civil Code Article 1939.