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10/25/02

SUPREME COURT OF LOUISIANA No. 2002-CQ-0057 JESCO CONSTRUCTION CORPORATION VERSUS NATIONSBANK CORPORATION, ET AL. AMERICAN INTERNATIONAL SPECIALITY LINES INSURANCE COMPANY, CONTINENTAL CASUALTY COMPANY, UNDERWRITERS AT LLOYDS OF LONDON VERSUS BANK OF AMERICA COMMERCIAL FINANCE CORPORATION FORMERLY KNOWN AS NATIONSCREDIT COMMERCIAL FINANCE CORPORATION

ON CERTIFIED QUESTION TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

TRAYLOR, Justice We accepted the certified question presented to this court by the United States Fifth Circuit Court of Appeals in Jesco Construction Corp. v. Nationsbank Corp., 248 F.3d 382, 386 (5th Cir. 2001).1 The question presented is "whether the Louisiana Credit Agreement Statute precludes all actions for damages arising from oral credit agreements, regardless of the legal theory of recovery." For the reasons that follow, we answer that question in the affirmative. FACTS and PROCEDURAL HISTORY2 This matter arises from a failed loan application process in which Jesco
1

Jesco Construction Corp. v. Nationsbank Corp., 2002-0057 (La. 3/28/02), 812

So.2d 638. We set out the facts as delineated by the court of appeals in Jesco Construction Corp. v. NationsBank Corp., 278 F.3d 444 (5th Cir. 2001). 1
2

Construction Corporation ("Jesco") sought a $17.7 million loan from Bank of America Commercial Finance Corporation ("BACF").3 Jesco sought to obtain the loan in order to purchase the stock of King Fisher Marine Services. The parties differ on why Jesco terminated the loan application process prior to its completion. Jesco contends that the appraisals were done; terms negotiated; and closing documents circulated; and that BACF indicated on October 23, 1997, that the loan was approved; that the transaction would be completed by the following Friday; and that the loan was a "done deal." On the other hand, BACF claims that appraisals of King Fisher revealed that it was worth less than BACF's letter of interest required. An unrelated third party eventually bought the King Fisher stock for $2 million more than the Jesco offer. Jesco originally filed the matter in the Civil District Court for the Parish of Orleans in April 1998, alleging breach of contract, detrimental reliance, negligent misrepresentation, unfair trade practices, breach of the duty of good faith and fair dealing, promissory and equitable estoppel, and breach of fiduciary duty. The case was subsequently removed to the United States District Court for the Eastern District of Louisiana on the jurisdictional basis of diversity of citizenship. BACF filed a motion for summary judgment alleging that because there had been no written credit agreement as required by the Louisiana Credit Agreement Act, specifically Article 6:1122 of the Louisiana Revised Statutes, all of Jesco's theories of recovery were barred. The United States District Court expressly found that there had been no written agreement within the meaning of Article 6:1122. The District Court made an "Erie guess" based on this court's dicta in Whitney National Bank v.
3

Bank of America Commercial Finance Corporation is the successor to the only remaining defendant originally sued by Jesco. For the sake of simplicity, and because it does not effect the reasoning behind this decision, we refer to all entities with which Jesco conducted business as BACF. 2

Rockwell, 94-3049 (La. 10/16/94); 661 So.2d 1325, ruling that Article 6:1122 did bar Jesco's breach of contract claim, but that it did not bar Jesco's alternative theories of recovery. BACF appealed the decision to the United States Fifth Circuit Court of Appeals, which, rather than making its own "Erie guess," then certified the above question to this court. DISCUSSION In order to answer the question certified, this court must determine the meaning of the Louisiana Credit Agreement Statute, Article 6,

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Louisiana Law