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UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_________________________________________
No. 92-3119
_________________________________________
ILLINOIS CENTRAL GULF RAILROAD COMPANY,
Plaintiff-Appellee,
VERSUS
R. R. LAND, INC. and RICHARD S. BLOSSMAN
FAMILY REVOCABLE TRUST,
Defendants-Appellants.
***********************************************************
R. R. LAND, INC. and RUHL, INC.,
Plaintiffs-Appellants,
VERSUS
ILLINOIS CENTRAL RAILROAD COMPANY,
Defendant-Appellee.
_________________________________________________________________
Appeals from the United States District Court
for the Eastern District of Louisiana
_________________________________________________________________
(April 12, 1993)
Before WILLIAMS, HIGGINBOTHAM, and BARKSDALE, Circuit Judges.
BARKSDALE, Circuit Judge:
The pivotal issue before us concerns the district court's
grant of reformation in favor of Illinois Central Gulf Railroad
Company (IC). Because we conclude that the contractual negligence
defense does not bar reformation where mutual mistake has been
pleaded and proved, and that the district court did not clearly err

in finding both clear proof of an antecedent agreement and clear
and convincing evidence of mutual mistake in reducing that
agreement to writing, we AFFIRM the grant of reformation. We also
AFFIRM the district court's rejection of claims for damages by R.
R. Land, Inc. (Land), and Ruhl, Inc.
I.
In 1983, T. Eugene Timm, real estate sales representative for
IC, and Richard S. Blossman, president of Ruhl and agent for Land1,
entered negotiations for the sale of IC's Shore Line Branch
property, a 200-foot wide tract to the north of Lake Pontchartrain,
running approximately 31 miles from Slidell to Covington,
Louisiana. The railroad operated on the 50-foot center strip of
the property.
During negotiations, IC discussed its obligations, under
federal and state grants, to continue operation of the railroad
line.2 IC stated that it intended to abandon the line, but could
not attempt to do so until its commitment expired in 1986. It
further explained that abandonment of the line required Interstate
1
Ruhl is wholly owned by Blossman; Land, by his children and
in-laws.
2
William C. Douglas, who, at the time of the sales, held the
position of area manager for real estate, testified that he
explained to Blossman the difficulty of selling the ground
underlying the tracks so long as the railroad remained obligated to
continue operation of the line -- "What we were attempting to do is
something that had not been done before and we wanted to point out
to Mr. Blossman that this property would have to have an easement
on it for as long as the railroad operated its trains and as long
as there was service there and until such time as the Interstate
Commerce Commission would allow an abandonment".
2

Commerce Commission approval, pursuant to 49 U.S.C. � 10905, and
that IC could not guarantee that the ICC would grant it.3
In part because of the above limitations, IC and Blossman
arranged for the acquisition of the tract through four separate
sales. The following procedures governed. For each sale, IC
prepared a Real Estate Sale Contract (Contract)4, which was then
executed by the purchaser (either Ruhl or Land). The purchaser
retained a yellow copy of the Contract and made an offer to IC by
returning the original and remaining copies to IC. Before
accepting the offer, IC submitted the Contract to multiple
departments within IC for approval. If accepted, the Vice
President of the Real Estate Department, then R.A. Irvine, executed
the Contract. IC retained a copy coded in green and an original
3
Douglas testified: "I let him know that we were in the process
of looking at abandonments and we had been abandoning a lot of
lines throughout the system, but since there are shippers on these
lines who have a lot of concerns about where they're going to get
their transportation needs met, they sometimes object and the
Interstate Commerce Commission does not always grant abandonment".
4
A contract of sale is perfected when the parties reach an
agreement as to price and object. LSA-C.C. art. 2456. Generally,
where the parties to a sale of land have agreed in writing upon the
price and terms and description of the land sold, it is a sale,
providing either party with the right to specific performance, not
merely an "agreement" or "promise" to sell. LSA-C.C. art. 2462.
But, where, as here, the execution of a later final act of sale is
contemplated by the parties, an agreement to sell is not a
completed sale. Webb v. Young, 338 So. 2d 767, 769 (La. App. 4th
Cir. 1976); see also Noto v. Blasco, 198 So. 429, 432 (La. App. 1st
Cir. 1940) ("an agreement for the sale of real estate, which
contemplates the passing of the property not immediately and by
virtue of the agreement, but by an act to be executed at a later
date ... is merely a promise of sale ....")
3

for its files. The buyer also retained an original. An Act of
Cash Sale (ACS) followed.5
The first three sales (first two to Ruhl, third to Land) took
place between July 1984 and January 1985, and conveyed the land on
each side of the 50-foot center strip of trackage. These sales
followed the above described procedure and are not in dispute.6 As
discussed in note 6, supra, with slight exception, the terms and
conditions in each Contract coincide with its corresponding ACS.
The fourth sale, transferring the remaining portion (middle 50
5
Under LSA-C.C. art. 1833, an "authentic act" is "a writing
executed before a notary public or other officer authorized to
perform that function, in the presence of two witnesses". All
sales of immovable property "shall be made by authentic act or
under private signature". LSA-C.C. art. 2440. An authentic act of
cash sale establishes transfer of title; Blanchard v. Naquin, 476
So. 2d 520, 523 (La. App. 1st Cir. 1985); it is equivalent to a
deed. See Hollier v. Galtier, 430 So. 2d 376, 377 (La. App. 3d
Cir. 1983) (referring to act of cash sale as a deed).
6
The first sale conveyed two 75-foot wide tracts (each side of
the middle 50 feet), located in Lacombe, Louisiana, to Ruhl. The
terms and conditions in the Contract executed by Ruhl on July 13,
1984, and by IC on October 1, 1984, coincide with those in the ACS,
executed on October 26, 1984.

The second sale conveyed two 75-foot wide tracts
in
Mandeville, Louisiana, to Ruhl. Again, the terms and conditions in
the Contract, executed by Ruhl on October 25, 1984, and by IC on
December 14, 1984, coincide with the ACS, executed on December 18,
1984.
The third sale conveyed to Land the remaining 75 feet on each
side of the middle 50-foot strip over which the railroad line
operated. On January 24, 1985, IC accepted Land's offer of
November 14, 1984, subject to conditions documented in Rider "A",
which includes several covenants and a reservation of its trackage
and easement in its favor. Land conditioned acceptance on the
alteration of language concerning its obligation to maintain sight
zones; accordingly, the parties modified sight zone language in the
ACS. See infra. Otherwise, the terms and conditions in the
Contract coincide with those in the ACS dated January 30, 1985.
4

feet) of the 31 mile long tract to Land, is the subject of IC's
reformation action. At trial, in connection with that fourth sale,
the parties introduced four Contracts.
Blossman executed the first two Contracts on April 23, 19857;
IC rejected both. On August 2, 1985, Blossom executed a third
Contract, reflecting -- as did the first two -- a purchase price of
$160,000 and a deposit of $32,000. Preprinted paragraph three
specifically excludes the seller's tracks, appurtenances, buildings
or other improvements from the sale.8 The third Contract (for the
final/fourth sale) incorporates all of the provisions contained in
Rider A, which -- similar to Rider A for the Contract for the third
sale, see note 6, supra -- reserves the trackage and an easement9
in IC's favor until the tracks are abandoned or removed, and
7
Each reflects a purchase price of $160,000 and a deposit of
$32,000, a reservation of trackage, and an easement in favor of IC,
providing that IC's rights would cease no later than one year from
abandonment. The only difference between the two contracts is that
one requires IC to pay a real estate commission.
8
The parties used language from preprinted paragraph three, but
excluded the latter portion of the provision (lined through below).
Preprinted paragraph three provides that
seller's
tracks
and
appurtenances
thereto,
buildings or other improvements are not included
and may be removed by seller within 90 days
(weather permitting) after written demand by buyer
following delivery of deed. If not so removed
within said period they shall be considered
abandoned by seller and become property of the
buyer in place.
9
We recognize that "easement" is not a civilian term; but, like
the district court, we use it to remain consistent with the
documents.
5

prohibits the buyer from interfering with IC's easement.10 Rider
A also provides notice that, should IC seek an abandonment order
from the appropriate regulatory body, a third party or rail carrier
may have the right to acquire the track and continue railroad
operations.11 In addition, Rider A contains an atypical provision
requiring IC to pay five percent of the purchase price as a real
10
Rider A provides, in part:
Seller reserves for itself, its successors and
assigns its trackage and an easement for its right-
of-way as now located on the subject premises ...
with the right to use, operate over and replace or
remove said railroad tracks and appurtenances
thereto, together with all reasonable right of
access across the premises .... The easement
reserved herein by Seller shall be for the
exclusive use of the property reserved and Buyer
shall have no right to enter upon or use said
property until the tracks have been abandoned and
removed by Seller, its successors or assigns. This
reservation shall continue until the completion of
removal of said railroad facilities, but in no case
greater than one year from date of a final and
effective abandonment order ....
11
Rider A provides in further part:
[T]here may be conditions or stipulations as a
condition to said abandonment, including but not
limited to the right of a third party or rail
carrier to acquire the track and interest of Seller
in order to continue railroad operations over said
track pursuant to 49 USC 10905 or for public use
under 49 USC 10906. Buyer acknowledges that any
abandonment by Seller may contain such conditions
.... Further, buyer acknowledges the fact that
Seller might be required to sell the railroad line
for continued railroad operations pursuant to 49
USC 10910. In view of the foregoing, Seller does
not know when it can deliver possession and does
not represent that it will ever be able to deliver
possession of the land to be conveyed.
6

estate commission. The final provision of the third Contract is an
omnibus description of the property, included to assure that the
four sales conveyed all of the Shore Line Branch property without
gaps.
In addition, on August 19, 1985, IC requested by letter that
the Contract be amended to extend IC's time for removal of the
tracks from one year to 18 months. Blossman signed the letter;
and, on September 3, 1985, Irvine executed the third Contract for
IC.
IC contends that this third Contract and amending letter
evidence the mutual intent of the parties. Blossom counters that
the parties modified their agreement, both orally and in writing.
According to Blossman, IC agreed to seek approval to abandon its
operations immediately after its commitment to the federal
government expired in 1986, agreed to lease the property from Land
for operating the railroad until abandonment, and agreed to
transfer the trackage to Land. Blossman testified that the fourth
Contract for this final/fourth sale, which deleted any reference to
Rider A, was executed by his son, as President of Land, on
September 1, 1985, and purportedly executed by Irvine ten days
later on September 11.12
Joyce Lucas, a notary public employed by IC, prepared the ACS
for the fourth sale; and Irvine executed it for IC on September 18,
1985. The ACS conveys to Land "[a]ll that portion of the remaining
12
But, Blossman also testified that the fourth Contract did not
totally govern the fourth sale ACS -- "we made changes all the way
up to the end".
7

right-of-way and property of Illinois Central Gulf Railroad
Company's Shore Line Branch .... " It does not include any of the
reservations contained in Rider A, nor does it obligate IC to all
of the affirmative commitments Blossman contends IC agreed to
following execution of the third Contract.
According to Lucas, approximately three months later, she
reread the ACS and discovered that she failed to include the two
page Rider A reserving the tracks, ties, and an easement. Blossman
refused, however, to change the ACS. Therefore, in January 1986,
IC filed suit in federal court to reform the ACS; but in mid-1987,
the case was removed from the active docket while the parties
attempted to settle.13 Five years later, Land and Ruhl sued IC in
state court, claiming breach of contract and detrimental reliance,
arising from IC's alleged failure to apply for abandonment; unjust
enrichment and trespass, arising from IC's use of the property;
slander of title, caused by an alleged illegal notice of lis
pendens filed in bad faith by IC; and reimbursement for maintenance
costs, including expenses incurred in maintaining sight zones. IC
removed the action to federal court; the two cases were
consolidated; and a two day bench trial was held in December 1991.
In most detailed, comprehensive, and insightful findings of
fact and conclusions of law, the district court carefully reviewed
the evidence and held that the ACS did not reflect the mutual
13
The reformation action was set for trial in June 1987, but
that May, on the parties' joint request, it was removed from the
active docket while they pursued settlement. It was not reopened
until June 1991.
8

intent of the parties. It found Blossman's version of the
agreement, as reflected in the fourth Contract, implausible, and
therefore ordered the ACS reformed to comply with the third
Contract. And, it dismissed all claims against IC.
II.
Land and Ruhl contest the district court's grant of
reformation, its denial of damages for IC's alleged failure to
diligently apply for abandonment, and its denial of reimbursement
for maintenance of sight zones.14 Going for broke, in the hope that
they can keep the clearly erroneous standard of review out of play,
they boldly and confidently state in their Reply Brief that they
are "not asking this Court to review or overturn a single factual
finding made by the district court." But, as discussed infra, that
standard of review is central to this case.
A.
Land contends that the district court erred in reforming the
ACS to reflect the third Contract. We apply Louisiana law in this
diversity action, and cannot give deference to the district court's
interpretation of it. Salve Regina College v. Russell, ___ U.S.
___, 111 S.Ct. 1217, 1221 (1991). Under Louisiana law, a party may
reform a written instrument that does not reflect the true intent
of the contracting parties. Valhi Inc. v. Zapata Corp., 365 So. 2d
14
Land and Ruhl do not contest the district court's disposition
of their claims against IC for breach of an oral lease and unjust
enrichment. And, because we conclude infra that the district court
did not err in granting reformation, we affirm the court's
disposition of appellants' claims against IC for trespass and
slander of title.
9

867, 870 (La. App. 4th Cir. 1978). Reformation is an equitable
remedy designed to correct an error in the contract. Id. The
error "must be mutual", see, e.g., Pat S. Todd Oil Co. v. Wall, 581
So. 2d 333, 336 (La. App. 3d Cir.), writ denied, 585 So. 2d 569
(La. 1991); and it must be "in the drafting of the instrument ...
and not in making the contract which it evidences". Phillips Oil
Co. v. O.K.C. Corp., 812 F.2d 265, 275 (5th Cir.) (internal
quotation omitted), cert. denied, 484 U.S. 851 (1987).
Before an instrument will be reformed, "there must be clear
proof of the antecedent agreement as well as an error in committing
it to writing". Pat S. Todd Oil Co., 581 So. 2d at 336. The party
seeking reformation must prove mutual error by "clear and
convincing evidence", and parol evidence is admissible to show
"that the writing does not express the true intent or agreement of
the parties". First State Bank & Trust Co. v. Seven Gables Inc.,
501 So. 2d 280, 285 (La. App. 1st Cir. 1986), writ denied, 502 So.
2d 103 (La. 1987). We freely review conclusions of law; but,
because the reformation issue turns on a determination of the
parties' intent, we review for clear error. National Union Fire
Ins. Co. v. Circle, Inc., 915 F.2d 986, 989 (5th Cir. 1990); see
also Phillips Oil, 812 F.2d at 275 (stating that the determination
of mutual mistake is a fact question).
Land relies on three separate bases to challenge the
reformation: (1) the district court erred in concluding that the
third Contract reflects the final agreement of the parties; (2) the
court improperly evaluated the parties' intentions at the time they
10

signed the ACS; and (3) IC's alleged negligence precludes
reformation.
1.
The district court found that the third Contract for the
fourth sale represents the antecedent and final agreement between
the parties. In so doing, it rejected Blossman's testimony
regarding subsequent modifications; it also rejected Blossman's
characterization of the third Contract as a non-binding
"negotiating tool". We conclude that these findings are amply
supported by the evidence; in sum, there is no clear error.
Moreover, as noted, appellants state that they are not contesting
any findings of fact.
Evidence of IC's review process and prior negotiations
between the parties provide adequate support for the district
court's characterization of the Contract. With respect to the
preceding three sales, all substantial negotiations occurred prior
to final execution of the Contract, as evidenced by the fact that
in the first three sales, the Contracts, for the most part,
mirrored their respective ACS's. See supra note 6.
In addition, given the difficulty of the transaction and the
expressed concern about the inclusion of a reservation of rights
until abandonment, it is reasonable to conclude that subsequent
material modifications, especially those involving IC's legal
obligations under ICC jurisdiction, would require the initiation of
a new Contract, or, at least, would be subject to a formal review
11

process.15 Although Land maintains that the parties modified the
third Contract both orally and in writing, there is substantial
evidence to support the district court's rejection of Blossman's
testimony and the fourth Contract.
First, evidence supports the district court's determination
that IC did not agree to enter into a lease. According to
Blossman, IC employees Timm and Bob Wiley negotiated a lease
whereby IC would pay Land $10,000 per month if IC did not abandon
the property upon expiration of its grant. However, testimony at
trial established that Wiley was no longer employed by IC during
the alleged negotiations. Moreover, Blossman testified that he
knew that Timm and Wiley lacked authority to bind IC.16 We also
note in passing that, given IC's uncertainty regarding the
attainment of abandonment, it is most difficult to believe that IC
would agree to such a lease.
In addition, there are significant substantive and procedural
inconsistencies throughout the fourth Contract that serve to
discredit Blossman's testimony. The fourth Contract includes
trackage in the sale; however, the parties did not increase the
purchase price to reflect the value of the tracks, estimated to be
between $175,000 and $300,000. We agree with the district court
that, "[i]t is inconceivable that the parties agreed to include
15
Timm testified that the deletion of Rider A would have
required a new proposal and a new submission for approval to
various departments.
16
Wiley denied knowledge of a lease agreement, and Timm denied
telling Blossman that IC would lease the property.
12

trackage of such significant value without in turn increasing the
purchase price, particularly where the trackage value alone exceeds
the price agreed to for the purchase of the land alone."17
Moreover, procedural inconsistencies appear throughout the
fourth Contract: (1) a typewritten provision conveying all leases
and licenses to the buyer (IC had already assigned all of its
rights in the leases to Land); (2) execution by Blossman's son
(Blossman signed all previous documents); (3) the yellow copy
signed by Irvine (for all other sales, the yellow copy contains
only Blossman's signature, which is consistent with the earlier
described IC procedures); (4) the initials "BW" and "RSB" next to
each modification of the standard terms (Bob Wiley ("BW") drafted
the first three ACS's, but terminated his employment with IC prior
to the alleged execution of the fourth Contract); (5) an execution
date of September 1, 1985 (IC did not even accept or execute the
third Contract until September 3, 1985); (6) IC's alleged
acceptance of the offer in ten days (in prior sales, it took IC one
month or more to accept Blossman's offer); and (7) Land's failure
to produce a pink or white original (it was standard procedure for
IC to send the buyer an original upon final execution).
Based on our review of the record, and as reflected in part by
the inconsistencies of the fourth Contract and the questions
17
There are two additional substantive inconsistencies worth
noting. First, the fourth Contract reflects a deposit of $16,000,
which is inconsistent with the $32,000 deposit reflected in prior
Contracts, and the fact that a $32,000 deposit was made. And,
second, the fourth Contract deletes payment of a broker's
commission; yet a broker's commission was paid in accordance with
Rider A of the third Contract.
13

surrounding the formation of an oral lease, the district court did
not clearly err in rejecting Land's version of the agreement and,
thus, reaching the conclusion that the third Contract represents
the final agreement of the parties.
2.
Even assuming the parties did not agree to modify the third
Contract, Land asserts that the reformation order was improper.
According to Land, the evidence reflects, at most, a unilateral
mistake, as the ACS (deed) correctly reflected Blossman's stated
desire to purchase the tracks and the land. Land contends that the
district court erred by failing to make a factual finding regarding
Land's intention at the time it executed the ACS. Additionally,
Land maintains that our decision in Phillips Oil precludes a
finding of mistake on the part of IC.
First, we disagree with Land's interpretation of the district
court's findings of fact and conclusions of law. Although the
district court did not make an express finding regarding Land's
intent on execution of the ACS, it concluded that Blossman's
version of the agreement was "implausible", and went into great
detail in support of that conclusion. The court also explained the
bases for its reliance on the third Contract. Accordingly, we can
easily infer that the court implicitly found that, at the time of
signing the ACS, Land intended the ACS to include Rider A (as
reflected in the third Contract).
We recognize, of course, that Land vehemently asserts that it
intended for the ACS to exclude Rider A; however, at the same
14

time, we are most cognizant of "the paradoxical truism that every
defendant in a case alleging mutual error denies the error;
otherwise he would have consented to an extrajudicial act of
correction and there would have been no lawsuit". Collins v.
Whittington, 322 So. 2d 847, 850 (La. App. 4th Cir.) (internal
quotation omitted), writ denied, 323 So. 2d 480 (La. 1975). As is
often the case when resolving reformation disputes based on alleged
mutual error, the trial court is left with a credibility
determination.18 The district court considered two days of
testimony and resolved this issue against Land. Given the evidence
in the record that calls Blossman's credibility into question, we
do not find clear error.
We also hold that the district court did not err in concluding
that IC did not intend to execute the ACS as written for the fourth
sale. We agree with it that our decision in Phillips Oil is
distinguishable. There, officials experienced in oil and gas
transactions reviewed the proposed agreement over a period of
almost five weeks, focusing their attention and giving their
approval to the very provision at issue. 812 F.2d at 276.
18
Compare Succession of Jones v. Jones, 486 So. 2d 1124, 1128
(La. App. 2d Cir.) (upholding trial court's finding of mutual error
based on determination that buyer's key witness lacked
credibility), writ denied, 489 So. 2d 249 (La. 1986) with Collins,
322 So. 2d at 852 (denying reformation based on credibility of
defendant's testimony that he intended to purchase all of the
disputed property). Additionally, there is evidence in the record
indicating that Land was not aware of the omission of Rider A prior
to signing the document. Gerald E. Schilling, manager of title and
closing for IC, testified that subsequent to the execution of the
ACS, Blossman prodded IC to remove the rails, bridges, and ties in
a shorter time frame that what had been specified in Rider A.
15

References to the disputed language, which was central to the
agreement, continued throughout the eight-page document. Id. at
277. In the light of this evidence, this court refused to find
that a mistake had been made, stating that it was "inconceivable,
particularly in view of the review process employed here and the
expertise of those involved in that process, that a `mistake' as
clear and significant as the one alleged by OKC could have `slipped
by'". Id. at 277.
IC's review of the ACS was significantly less thorough. As
the district court noted, IC reviews purchase agreements (Real
Estate Sale Contracts) with great detail, whereas the ACS receives
a far more cursory review. Lucas, the in-house notary who prepared
the ACS, is not an attorney, and according to testimony, received
little training. Lucas initialed the form approved signature line
and the document approved line on the assumption that she had
incorporated the terms contained in the third Contract approved by
the legal department and by the engineering department. Robert
Fowler, manager of the law department, who was actively involved in
the approval of the third Contract, did not prepare or review the
ACS prior to execution. Although the document was also signed by
Irvine, W.H. Sanders (assistant secretary), and two witnesses
(Schilling and Arthur Spiros), Lucas, the notary who obtained the
signatures, testified that Irvine did not read the ACS before
signing it, and, likewise, Irvine and Schilling testified that they
did not recall reading it before signing.
16

In addition, we, like the district court, place significance
on the fact that the error here is simply an omission of terms,
rather than choice of language that repeatedly appears throughout
the document. In preparing the ACS, Lucas followed the usual
property description language, yet failed to add the special terms
contained in Rider A. Based on these facts, it was not clear error
for the district court to conclude that IC did not intend to
execute the ACS as written.
In sum, we are not left with a "definite and firm conviction"
that the district court erred in concluding that there was clear
and convincing evidence of an antecedent agreement (third Contract)
and mistake in reducing that agreement to writing (ACS). The
parties agreed to the terms of the third Contract; and there is
strong evidence indicating both that they did not reach a
subsequent agreement, and that neither Blossman nor IC intended to
execute the ACS as written. Accordingly, the district court did
not clearly err in finding mutual mistake. See Lynal, Inc. v.
Patrick Petroleum Co., 593 F. Supp. 1325, 1327 (W.D. La. 1984)
(holding that evidence that parties originally intended to delete
provision, that they never negotiated a change from that position,
and that the provision did not appear in table of contents, is
clear and convincing evidence that the inclusion of the provision
does not reflect the true intent of the parties).
3.
Finally, Land contends that Louisiana law precludes
reformation where there was negligence on the part of the party
17

claiming mutual error, and that, accordingly, even if the district
court did not err in finding mutual mistake, it erred by not
imposing IC's alleged negligence as a bar to reformation.19 We
reject this contention, because we conclude that the contractual
negligence defense (bar) does not apply to reformation actions
where mutual mistake has been pleaded and proved.
The contractual negligence defense is grounded in rescission
actions based on unilateral error. Louisiana civil law allows
unilateral error to vitiate consent "when it concerns a cause
without which the obligation would not have been incurred and that
cause was known or should have been known to the other party".
LSA-C.C. art. 1949. But, on the other hand, the contractual
negligence defense provides that "unilateral error does not vitiate
consent if the cause of the error was the complaining party's
inexcusable neglect in discovering the error". Woods v. Morgan
City Lions Club, 588 So. 2d 1196, 1201 (La. App. 1st Cir. 1991).20
19
Land asserts that "[t]he district court admitted ICGR's
negligence in its opinion". We disagree. The court simply
contrasted the elaborate review process at issue in Phillips Oil
with IC's cursory review of the ACS to support its conclusion that
IC did not intend to execute the ACS as written.
20
As stated by the Louisiana Supreme Court, there are "two
prominent factors in the evolution of the contractual negligence
defense":
(a)
Solemn agreements between contracting parties
should not be upset when the error at issue is
unilateral, easily detectable, and could have been
rectified by a minimal amount of care.
(b)
Louisiana courts appear reluctant to vitiate
agreements when the complaining party is, either
through education or experience, in a position
which renders his claim of error particularly
18

Most often, this defense bars rescission for error resulting from
a party's failure to read the document in issue. See, e.g., First
Financial Bank, FSB v. Austin, 514 So. 2d 281 (La. App. 5th Cir.),
writ denied, 515 So. 2d 1112 (La. 1987).
The contractual negligence defense has largely been developed
by the courts, and is only tangentially incorporated into the
comments to the Louisiana Civil Code. The commentary to article
1952 provides: "In determining whether to grant rescission or, when
rescission is granted, whether to allow any recovery to the party
not in error, the court may consider whether the error is excusable
or inexcusable, a distinction received by modern civilian
doctrine." LSA-C.C. art. 1952 (comment d). As an example of an
"inexcusable" error, the drafters cite Watson v. Planters Bank of
Tennessee, 22 La. Ann. 14 (1870), in which the court applied the
contractual negligence bar to a party who had signed a written
contract without either reading it or knowing its contents.
Despite the entrenchment of the contractual negligence defense
in actions for rescission based on unilateral error, there is no
indication that the defense also applies to reformation actions
based on mutual error. The above-cited code commentary refers only
to rescission. Similarly, we have not found Louisiana case law
that applies contractual negligence as a bar to reformation where
mutual mistake has been pleaded and proved. Land cites many cases
that refer to contractual negligence, including cases involving
difficult to rationalize, accept, or condone.
Scott v. Bank of Coushatta, 512 So. 2d 356, 362 (La. 1987).
19

reformation that refer to the defense in dicta, but none stand for
this proposition.21 By contrast, in Myers v. College Manor, 587 So.
2d 820 (La. App. 3d Cir. 1991), the court refused to apply the
defense to preclude reformation for mutual mistake.22
21
See Hope v. Barham, 28 F. Supp. 561, 562 (W.D. La. 1939)
(stating that plaintiff who allegedly signed documents without
reading contents and thus was ignorant of provisions inserted by
defendant cannot seek reformation; this case involved unilateral
mistake and fraud, not mutual mistake); Scott v. Bank of Coushatta,
512 So. 2d 356 (La. 1987) (applying contractual negligence bar to
request for rescission based on unilateral error); Tweedel v.
Brasseaux, 433 So. 2d 133, 138 (La. 1983) (holding that plaintiffs
failed to show mutual error, fraud, or misrepresentation); Ker v.
Evershed, 41 La. Ann. 15, 6 So. 566, 567 (1889) (refusing to reform
based on insufficient evidence of antecedent agreement); Cheek v.
Uptown Square Wine Merchants W.F., Inc., 538 So. 2d 663, 665 (La.
App. 4th Cir. 1989) (mutual mistake not proved); First National
Bank v. Campo, 537 So. 2d 268, 271 (La. App. 4th Cir. 1988)
(rejecting appellant's allegation of "lack of consent due to
misrepresentations" based on his failure to read the document;
mutual mistake not at issue), writ denied, 538 So. 2d 578 (La.
1989); First Financial Bank, FSB v. Austin, 514 So. 2d 281 (La.
App. 5th Cir. 1987) (holding that appellant is liable on guaranty
because he failed to prove a misrepresentation vitiated consent;
court refers to contractual negligence to bolster its conclusion;
appellant did not plead mutual mistake), writ denied, 515 So. 2d
1112 (La. 1987); Brabham v. Harper, 485 So. 2d 231, 234 (La. App.
3d Cir. 1986) (holding that reformation is improper because
appellant failed to prove mutual error); Campo v. La Nasa, 173 So.
2d 365, 370 (La. App. 4th Cir. 1964) (failed to prove mutual
error), writ denied, 175 So. 2d 109 (La. 1965); Price v. Taylor,
139 So. 2d 230, 235 (La. App. 1st Cir. 1962) (concluding that
plaintiff failed to prove mutual error and mistake by clear and
convincing evidence); Bennett v. Robinson, 25 So. 2d 641, 644 (La.
App. 2d Cir. 1946) (holding that plaintiff failed to support his
action based on unilateral error allegedly resulting from
misrepresentation and fraud); Fontenot v. Coreil, 2 So. 2d 97, 98
(La. App. 1941) (refusing to reform a document signed by appellant
who alleged that her nephew deceived her as to its contents; mutual
mistake not pleaded).
22
The court held that although "a party cannot ordinarily obtain
relief from an obligation in writing which he signs without reading
it ... if both sides agree on a certain provision which is omitted
from their written contract, the error is bilateral and it can be
corrected". Myers, 587 So. 2d at 822-23.
20

Without clear direction from the Louisiana legislature or
courts, we refrain from applying the defense to cases where, as
here, mutual mistake has been pleaded and proved. As the district
court noted, to do so would be inconsistent with the creation of a
remedy for documents signed in error. See RESTATEMENT (SECOND) OF
CONTRACTS � 157 (comment b) (stating that "a party's negligence in
failing to read the writing does not preclude reformation if the
writing does not correctly express the prior agreement"). Because
the district court properly concluded that IC proved mutual
mistake, the contractual negligence defense is inapplicable.
Therefore, we uphold the grant of reformation.23
B.
Land contends next that the district court erred in refusing
to award damages for IC's failure to diligently pursue abandonment.
In negotiating the sale of the Shore Line Branch, IC and Blossman
contemplated that IC would attempt to abandon the property. IC
representatives understood that abandonment was necessary for Land
23
In so doing, we also reject Land's contention that the
district court erred in reforming the ACS to the prejudice of the
Richard S. Blossman Revocable Family Trust, which possesses a
mortgage for the property at issue. Under Louisiana law, "an
instrument may not be reformed or corrected to the prejudice of
third parties who are authorized to rely on the integrity of the
instrument, or who have relied on the public records". First State
Bank & Trust Co., 501 So. 2d at 289. The Trust was a named
defendant in the reformation action; however, it failed to argue or
produce testimony as to prejudice or reliance. Accordingly, we
decline to address a claim of prejudice when it has not been
considered by the district court. Independent Fire Insurance Co.
v. Lea, 979 F.2d 377, 379 (5th Cir. 1992).
21

and Ruhl to obtain full benefit from their purchase.24 At the same
time, Blossman understood that abandonment required ICC approval,
which could not be guaranteed. He was advised of the possibility
that a third party might be asked to take over the line, and that
the railroad might have a servitude in perpetuity. On September 19,
1986, one year after the fourth and final sale, IC filed for
abandonment; this application was withdrawn on November 12, 1986.
IC reapplied for abandonment in January 1991 (almost a year before
trial), which the ICC subsequently granted.
1.
Land and Ruhl sued for reliance damages, based on IC's delay
in applying for abandonment. In issue at trial was whether IC made
representations as to when it would seek abandonment. Land argued
that IC representatives told Blossman that IC would seek
abandonment immediately after its commitment expired in 1986, and
as assurance, agreed to enter into a lease of the property.
The district court simply did not believe Blossman and found
that IC employees "did not make any representations as to when
Illinois Central would seek ICC approval of its abandonment".
Given the support for the court's credibility assessment discussed
supra, and its unique role in making credibility choices, and based
upon our independent review of the record, we do not find the
district court's finding to be clearly erroneous.
24
Timm testified that, "[a]bandonment would be contingent for
(Blossman's) contract to come to fruition and his idea of owning
all portions of the property".
22

Based on the finding that IC did not make representations as
to when it would seek abandonment, we reject the claim for reliance
damages on the basis of IC's delay in applying for abandonment.
See LSA-C.C. art. 1967.25
2.
Of course, to say that IC did not make any representations as
to when it would apply for abandonment is not to say that IC was
free from the obligation to apply for abandonment. Under Louisiana
law, IC had a good faith obligation to carry out the purposes of
its contract. See National Safe Corp. v. Benedict & Myrick, Inc.,
371 So. 2d 792 (La. 1979);26 see also LSA-C.C. art. 1768 (stating
contractual conditions may be implied). The parties were well
aware that abandonment was necessary for Land and Ruhl to fulfill
their purpose for purchasing the real estate; therefore, IC was
obligated to attempt to abandon the property within a reasonable
25
Pursuant to LSA-C.C. art. 1967, there are three factors that
establish detrimental reliance: (1) a representation to another
party by conduct or words; (2) justifiable reliance on a
representation by the other party; and (3) a change in position to
the detriment of the other party. Breaux v. Schlumberger Offshore
Services, Inc., 817 F.2d 1226, 1230-31 (5th Cir. 1987) opinion
reinstated, 836 F.2d 1481 (5th Cir. 1988). Obviously, where, as
here, there is no representation, there can be no detrimental
reliance.
26
In National Safe, 371 So. 2d at 795, the court stated,
[W]e are reminded that not all obligations arising
out of contract need be explicitly stated. Into
all contracts, therefore, good faith performance is
implied. Furthermore, everything that by equity is
considered incidental to the particular contract,
or necessary to carry it into effect, is also a
part of all agreements.
23

period of time. Whether IC adhered to its obligation is not a
question we will address on appeal, because Land did not raise this
issue before the district court; we therefore consider it waived.
See Independent Fire Ins., 979 F.2d at 379.27
C.
We turn now to the final contention -- that the district court
erred in denying Land and Ruhl reimbursement for expenses they
incurred in maintaining IC's sight zones. The language at issue is
contained in the ACS for the third sale, dated January 30, 1985,
which transferred the outer 75 feet for most of the line, see supra
note 6:
VENDEE shall not do, or allow to be done, any act
or omission that will, from and after the date of
this Conveyance, create an obstruction of the sight
zones, over and across all portions of the premises
herein above conveyed that are situated adjacent to
all public and private grade crossings .... Such
sight zones are to provide a clear view between
rail, pedestrian and vehicular traffic approaching
the above mentioned existing grade crossings.
(Emphasis added.) The district court held that appellants are not
entitled to recoup expenses from IC, because this provision
obligates Land to clear and maintain the sight zones.28
27
Land based its claim solely on a theory of detrimental
reliance arising from specific representations allegedly made by
IC. It did not present the legal argument now raised on appeal
that IC violated an implied duty to act in good faith. In any
event, even if we were to consider this issue, we would conclude
that IC did not violate its implied duty to apply for abandonment
within a reasonable period of time. IC's implied duty stemmed from
its contract with Land, the very basis of which was in dispute. IC
also presented a valid reason for withdrawing its initial
application for abandonment.
28
The district court stated,
24

Land asserts that the district court erred by reading the
language to mean that Land has an affirmative obligation to
maintain unobstructed sight zones: "[t]he proper reading of this
section is that R. R. Land agreed not to do anything `that would
create an obstruction of the sight zones.' Any obstruction that
occurred as a result of factors not of its creation are not the
subject of the clause". Alternatively, it contends that the phrase
is ambiguous and therefore justifies a further search for the
parties' intent. See LSA-C.C. art. 2053 ("A doubtful provision
must be interpreted in light of the nature of the contract, equity,
usages, the conduct of the parties before and after the formation
of the contract, and of other contracts of a like nature between
the same parties").
We agree with the district court that the language
unambiguously imposes an affirmative obligation on Land to maintain
unobstructed sight zones. Although the provision may be poorly
worded, this does not constitute ambiguity or render the provision
unclear. The language includes active language ("shall not do ...
any act ... that will ... create an obstruction of the sight
zones"), as well as passive language ("shall not ... allow to be
done, any ... omission that will ... create an obstruction of the
sight zone"), and therefore includes in clear and explicit terms
Contrary to R. R. Land's contention, this language
in fact obligates R. R. Land, vendee, to clear and
maintain the sight zones. It prohibits R. R. Land
from placing or permitting to be placed, or failing
to remove, any obstruction that arises by nature or
otherwise, on the land and requires that it remove
any that may be found there.
25

both an obligation to refrain from obstructing the sight zones, as
well as an obligation to prevent external factors that result in
obstruction of the zones. Accordingly, we conclude that the
district court did not err in its interpretation of the provision.
Nor did the district court err in failing to consider
extrinsic evidence. Pursuant to LSA-C.C. art. 2046, "[w]hen the
words of a contract are clear and explicit and lead to no absurd
consequences, no further interpretation may be made in search of
the parties' intent". Because we conclude that the language of the
provision is clear and explicit and does not lead to absurd
consequences, we, like the district court, may not consider
extrinsic evidence to discern intent. The district court did not
err in rejecting this claim for damages.
III.
For the foregoing reasons, the judgment of the district court
is
AFFIRMED.
26