We granted this writ application to resolve a split among the circuits as to the correct interpretation of Louisiana Civil Code Article 2041, which provides the prescriptive and peremptive periods for bringing a revocatory action. After reviewing the record and the applicable law, we reverse the judgment of the court of appeal and hold that, where the obligee seeks to annul an act of the obligor, the relevant date for prescriptive purposes is the date the obligee knew or should have known of the act, and that the date of recordation of the act does not, standing alone, commence the running of prescription.
FACTS AND PROCEDURAL HISTORY
On August 28, 2001, the London Towne Homeowner's Association (the "Association") filed suit against the London Towne Condominiums (the "LTC") in the 24th Judicial District Court to collect amounts due for association dues and for defects in the condominiums (the "Lawsuit"). On May 24, 2004, the 24th Judicial District Court signed a judgment in favor of the Association and against LTC in the principal amount of $281,899.16, plus legal interest, expert witness fees and attorney's fees. LTC did not appeal the judgment, which has not been satisfied.
On August 19, 2000, LTC acquired Unit 9 of 1201 Chartres Street in New Orleans for $202,000.00. On February 1, 2002, after the Lawsuit was filed, but prior to the entry of judgment against LTC, LTC executed an Act of Sale by which it
The Association alleges that shortly after obtaining its judgment against LTC, the Association learned of the 2002 transfer of the Chartres Street property. Believing that the transfer was part of a scheme to place LTC's assets out of the reach of its creditors, the Association filed a Petition for Declaratory Judgment in Orleans Parish on November 18, 2004, challenging the transfer under both the revocatory action and simulation articles of the Civil Code,
By judgment dated July 13, 2005, the trial court denied Millennium's exceptions. LTC sought supervisory review of the denial of its exception of prescription. The court of appeal granted LTC's writ and reversed the judgment of the trial court, holding that "Millennium met its burden of proof to show that the Association's revocatory action had prescribed, since over a year has passed from the date on which the Association received constructive notice of the sale," which the court of appeal ruled was the date the Act of Sale was recorded. London Towne Condominium Homeowner's Association v. London Towne Company, et al., 05-1243 (La.App. 4 Cir. 1/18/06). We granted this writ application to resolve a split in the circuits as to commencement of prescription of a revocatory action under La. C.C. art.2041. London Towne Condominium Homeowner's Association v. London Towne Company, et al., 06-0401 (La.5/5/06), 927 So.2d 298.
Louisiana Civil Code articles 2036-2043 provide the rules applicable to the revocatory action, pursuant to which "[a]n obligee has a right to annul an act of the obligor, or the result of a failure to act of the obligor, made or effected after the right of the obligee arose, that causes or increases the obligor's insolvency
When prescription is raised by peremptory exception, with evidence being introduced at the hearing on the exception, the trial court's findings of fact on the issue of prescription are subject to the manifest error-clearly wrong standard of review. Carter v. Haygood, 04-0646 (La.1/19/05), 892 So.2d 1261, 1267. Under the manifest error standard of review, a factual finding cannot be set aside unless the appellate courts finds that it is manifestly erroneous or clearly wrong. Smith v. Louisiana Dept. of Corrections, 93-1305 (La.2/28/94), 633 So.2d 129, 132; Stobart v. State through Dept. of Transp. and Development, 617 So.2d 880, 882 (La.1993); Rosell v. ESCO, 549 So.2d 840, 844 (La.1989). In order to reverse a fact finder's determination of fact, an appellate court must review the record in its entirety and (1) find that a reasonable factual basis does not exist for the finding, and (2) further determine that the record establishes that the fact finder is clearly wrong or manifestly erroneous. Id. The appellate court must not re-weigh the evidence or substitute its own factual findings because it would have decided the case differently. Id.; Pinsonneault v. Merchants & Farmers Bank & Trust Co., 01-2217 (La.4/3/02), 816 So.2d 270, 278-79. Where there are two permissible views of the evidence, the fact finder's choice between them cannot be manifestly erroneous or clearly wrong. Id.
In reversing the judgment of the trial court, the court of appeal relied on its prior holding in Allied Shipyard, Inc. v. Edgett, 03-1315 (La.App. 4 Cir. 2/11/04), 868 So.2d 189, writ granted, 04-0503 (La.4/23/04), 870 So.2d 281 (case settled after writ grant). Allied Shipyard held that prescription under La. C.C. art.2041 begins to run when the obligee-creditor knew or should have known of the donation which they alleged created or increased the insolvency of the debtor, which is when the donation sought to be set aside was recorded in the public record. 868 So.2d at 192. Based on Allied Shipyard, the court of appeal held:
London Towne Condominium Homeowner's Ass'n, 95-1243, p. 3.
The court in Allied Shipyard made clear its disagreement with the view of the Third Circuit, which has held that prescription does not begin to run until the creditor has constructive knowledge of the damage caused by the act which increases the insolvency of the debtor, rather than the date of the act itself. First Federal Savings & Loan Ass'n of Lake Charles v. Jones, 620 So.2d 408 (La.App. 3 Cir.), writ denied, 629 So.2d 347 (La.1993); Jeme, Inc. v. Gold Coast Carpets, Inc., 94-182 (La.App. 3 Cir. 10/5/94), 643 So.2d 898. The Third Circuit reasoned in First Federal that "before First Federal could exercise its right to the revocatory action, it first had to be able to prove that it had been damaged by its debtor's actions." 620 So.2d at 411. Thus, "[t]he trial court's reliance on the recordation date of the trust instrument in the public records as the date prescription began to run was clearly misplaced." Id.
The First Circuit has reached yet another conclusion as to the interpretation of La. C.C. art.2041. In Parish Nat. Bank v. Wilks, 04-1439 (La.App. 1 Cir. 8/3/05), 923 So.2d 8, 15, a case with essentially the same facts for prescription purposes as the case sub judice, the court "decline[d] to find that the time of the filing of the act of donation in the conveyance records was the date when [the creditor] knew or should have known of the act of donation, so as to commence the prescriptive period on its revocatory action." In so holding, the First Circuit correctly relied on our holding in Phillips v. Parker, 483 So.2d 972 (La.1986), which explained the public records doctrine as follows:
Phillips, 483 So.2d at 975-76 (footnotes and citations omitted). Thus, based on our holding in Phillips, the court of appeal in Parish Nat. Bank held:
Parish Nat. Bank, supra at p. 15. In that case, because the defendant's motion for summary judgment was supported only by the recordation of the donation in the public records on March 4, 2002, and the plaintiff admitted in its petition that it learned of the donation on January 16, 2003, the court held that prescription began to run on January 16, 2003. Id.
We have consistently held that the starting point in interpreting any statute is the language of the statute itself. Touchard v. Williams, 617 So.2d 885, 888 (La. 1993); Theriot v. Midland Risk Ins. Co., 95-2895 (La.5/20/97), 694 So.2d 184, 186. In reading the clear language of La. C.C. art.2041, it is evident that there are two possible prescriptive dates and one peremptive date for bringing a revocatory action. An action must be brought: (1) within one year from the time the obligee learned or should have learned of the act of the obligor that the obligee seeks to annul; (2) within one year from the time the obligee learned or should have learned of the result of the failure to act of the obligor that the obligee seeks to annul; or (3) never after three years from the date of the act or the result of the failure to act.
In this case, what we have is an act, i.e., the sale of Unit 9 of 1201 Chartes Street in New Orleans, that the obligee seeks to annul. La. C.C. art.2041 clearly states that under these circumstances, the relevant date is one year from the time the obligee learned or should have learned of the act. The result of the act, or the harm caused as a result of the act, is not a relevant consideration because a result is only significant when there has been a failure to act.
Therefore, where an obligee is seeking to annul an act of an obligor, the relevant date is when the obligee learned or should have learned of the act. Granted, an obligee only has the right to bring an action to annul an act "that causes or
Thus, the remaining issue is whether the date of recordation in the public records ipso facto constitutes constructive notice to the obligee of the act itself. Based on our explanation of the public records doctrine in Philips v. Parker, supra, we reject that legal conclusion. As we stated in Philips, "[a]ny theory of constructive knowledge which imputes knowledge of the contents of the public records to third persons forms no part of the public records doctrine." 483 So.2d at 975-76. Therefore, recordation in the public records does not constitute constructive notice to third parties under La. C.C. art.2041.
In light of the above, we need to determine if the trial court was manifestly erroneous in denying Millennium's exception of prescription. A party urging an exception of prescription has the burden of proving facts to support the exception unless the petition is prescribed on its face. Cichirillo v. Avondale Indus., Inc., 04-2894 (La.11/29/05), 917 So.2d 424, 428. Although evidence may be introduced to support or controvert any objection pleaded, in the absence of evidence, an objection of prescription must be decided upon facts alleged in the petition with all allegations accepted as true. Id. If prescription is evident on the fact of the pleadings, the burden shifts to the plaintiff to show the action has not prescribed. Campo v. Correa, 01-2707 (La.6/21/02), 828 So.2d 502, 508. As our holding indicates, the date of recordation does not, standing alone, prove actual or constructive knowledge of the act. Constructive knowledge sufficient to trigger the running of prescription exists when a party has sufficient information or notice to excite inquiry regarding a possible claim. Id. at 510-11. Such information or knowledge as ought to reasonably put the victim on notice is sufficient to start the running of prescription. Id. The date upon which an obligee learned or should have learned of the act is a factual determination to be made by the trial court considering all the facts and circumstances of the case.
Under the clear wording of La. C.C. art.2041, prescription on a revocatory action begins to run from (1) the time the obligee learned or should have learned of the act of the obligor that the obligee seeks to annul, or (2) the time the obligee learned or should have learned of the result of the failure to act of the obligor that the obligee seeks to annul. However, in all cases, a revocatory action is perempted three years from the date of the act or the result of the failure to act. The date the obligee learned or should have learned of the act or the result of the failure to act is determined by considering all the relevant facts and circumstances of the particular case. Where the obligee is seeking to annul an act of the obligor, the act of recordation in the public records, does not, standing alone, provide constructive knowledge of the act. In this case, Millennium bore the burden of proving that one year had passed since the Association learned or should have learned of the transfer of the Chartres Street property. Because the only evidence it presented in support of its exception was the date of recordation of the transfer, it did not carry its burden of proof.
For the reasons stated above, the judgment of the court of appeal is reversed and the trial court judgment is reinstated.
La. C.C. art.2039 provides:
La. C.C. art.2040 provides:
La. C.C. art.2042 provides:
La. C.C. art.2043 provides:
La. C.C. art.2041, 1984 Revision Comments (a). In light of the clear wording of the statute, which provides a different commencement date depending on whether the obligee is seeking to annul an act of the obligee or the result of a failure to act on the part of the obligee, we reject the Comment's blanket statement that "the prescriptive period should be one year from the day the obligee learned of the harm." Clearly, this is not true where the obligee is seeking to annul an act of the obligor. As clearly expressed by the legislature, prescription begins to run in that case when the obligee learned or should have learned of the act.