Opinion ID: 811311
Heading Depth: 2
Heading Rank: 2

Heading: Implied breach of contract.

Text: For the same reasons, LSED fails to state a viable claim for a breach of an implied obligation. Article 2054 of Louisiana’s Civil Code provides: When the parties made no provision for a particular situation, it must be assumed that they intended to bind themselves not only to the express provisions of the contract, but also to whatever the law, equity, or usage regards as implied in a contract of that kind or necessary for the contract to achieve its purpose. 12 By its very nature, Article 2054 is a gapfiller, used to infer obligations into a contract only “[w]hen the parties made no provision for a particular situation.” No such gapfiller is necessary here. The one obligation FGIC assumed was the obligation to pay on the bonds in the event of a default by LSED. In the absence of a default, that obligation does not come due. Moreover, the failure to pay on a properly presented bond would be a breach of an explicit obligation, not an implied obligation. The Third Amended Complaint cannot be fairly read as creating an issue as to whether “the need to maintain a credit rating of any kind” was an implied contractual obligation. LSED pleaded that “to fulfill its obligation to provide credit enhancement, FGIC needed to issue LSED an insurance policy . . . and maintain its ‘triple-A’ rating over the 30-year life of the Bonds.” See A290, ¶ 293; see also A153, ¶ 78 (“[i]f FGIC’s credit rating fell below triple-A at any time after the Bonds were issued, LSED - not investors holding the Bonds - would bear the cost in the form of higher interest rates”); A230, ¶ 294 (“LSED was paying for FGIC’s triple-A rating”); id. at ¶ 296 (“FGIC knew that LSED was relying on FGIC’s credit enhancement - accomplished through FGIC’s maintaining its ‘triple-A’ rating . . . for the life of the Bonds”); A231, ¶ 297 (“FGIC’s loss of its ‘triple-A’ rating . . .”). While LSED argues that “[t]his case is not simply about FGIC’s credit rating,” that argument loses its force when one reads the pleadings. The pleadings identify FGIC’s breach as the loss of “its ‘triple-A’ credit rating.” The Commitment Letters explicitly disclaim any obligation to maintain a credit rating, and no reading of Louisiana law allows us to imply into a contract an obligation that the parties explicitly rejected.