VASCOCU v. PRIVILEGE UNDERWRITERS RECIPROCAL EXCHANGE (2026)

Following an automobile accident, plaintiff filed suit against the tortfeasor, Katherine Boyce, and her insurer, Privilege Underwriters Reciprocal Exchange (“Pure”). Plaintiff's petition alleged that Ms. Boyce was insolvent, stating:

Upon information and belief, Defendant, KATHERINE CLARK BOYCE'S total liabilities exceed the total of her fairly appraised assets and BOYCE is unable to pay debts, including those owed to Petitioner as a result of this crash, as they become due.

Pure filed exceptions of no right of action and no cause of action, arguing that plaintiff failed to allege sufficient facts to establish Ms. Boyce, Pure's insured, was insolvent and therefore failed to state a direct action against Pure under La. R.S. 22:1269(B)(1).¹

After a hearing, the district court granted Pure's exceptions and dismissed plaintiff's claims against Pure. The court found that plaintiff failed to show that Ms. Boyce is insolvent.

Plaintiff appealed, and the court of appeal reversed. Vascocu v. Privilege Underwriters Reciprocal Exch., 2025-1141 (La. App. 1 Cir. 4/24/26), ––– So. 3d ––––. In its opinion, the court of appeal reasoned that because neither party submitted evidence to support or controvert the exception, it must accept the allegations of the petition as true. Therefore, the court of appeal found that plaintiff stated a right of direct action against Pure based on the allegation that Ms. Boyce was insolvent.

Pure now seeks review in this court. The narrow question presented for our consideration is whether plaintiff has established a direct right of action against Pure.²

The function of an exception of no right of action is to determine whether plaintiff belongs to the class of persons to whom the law grants the cause of action asserted in the petition. Badeaux v. Sw. Computer Bureau, Inc., 2005-0612, p. 6 (La. 3/17/06), 929 So. 2d 1211, 1217. Unlike the trial of an exception of no cause of action, evidence is admissible on the trial of an exception of no right of action to “support or controvert any of the objections pleaded, when the grounds therefore do not appear from the petition.” La. Code Civ. P. art. 931; Industrial Companies, Inc. v. Durbin, 2002-0665, p. 12 (La. 1/28/03), 837 So. 2d 1207, 1216. However, if evidence is not introduced, all well pleaded facts in the petition must be taken as true. Eagle Pipe & Supply, Inc. v. Amerada Hess Corp., 2010-2267, p. 2 (La. 10/25/11), 79 So. 3d 246, 252–53.

In this case, neither party submitted evidence to support or controvert the exception. Therefore, the question before this court is whether the petition contains sufficient well pleaded facts to establish a right of action.

Louisiana has a system of fact pleading, and the mere conclusion of the pleader unsupported by facts does not set forth a right of action. Montalvo v. Sondes, 93-2813 (La. 5/23/94), 637 So. 2d 127, 131. A petition may not state legal or factual conclusions without setting forth facts that support the conclusions. Bibbins v. City of New Orleans, 2002–1510, p. 5 (La. App. 4th Cir. 5/21/03), 848 So.2d 686, 691, writ denied, 2003-1802 (La. 10/10/03), 855 So. 2d 357. Material facts must be pled with reasonable specificity. Badeaux, 2005-0612 at p. 10, 929 So. 2d at 1218.

The petition in the instant case alleges that upon “information and belief,” Ms Boyce's “total liabilities exceed the total of her fairly appraised assets and BOYCE is unable to pay debts․” These allegations are conclusory in nature and lack any factual support. Simply alleging a dictionary definition of “insolvency” without alleging specific supporting facts does not meet the requirements under the Louisiana system of fact pleading. Therefore, we conclude plaintiff failed to plead facts with reasonable specificity to support her claim that Ms. Boyce is insolvent.

Accordingly, we find the district court properly granted Pure's exception of no right of action. However, the court erred in dismissing the plaintiff's claims without giving plaintiff an opportunity to amend her petition. See La. Code Civ. P. art. 934 (“[w]hen the grounds of the objection pleaded by the peremptory exception may be removed by amendment of the petition, the judgment sustaining the exception shall order such amendment within the delay allowed by the court”). Because it is possible plaintiff could allege facts to establish Ms. Boyce was insolvent, we will remand the case to the district court to set an appropriate delay for amendment of the petition.

DECREE

For the reasons assigned, the writ is granted and made peremptory. The judgment of the court of appeal is reversed, and the judgment of the district court is reinstated. The case is remanded to the district court for further proceedings consistent with this opinion.

FOOTNOTES

1.   As amended in 2024, the statute provides in pertinent part:B. (1) The injured person or, if deceased, the persons identified in Civil Code Articles 2315.1 and 2315.2, shall have no right of direct action against the insurer unless at least one of the following applies:***(b) The insured is insolvent.

2.   Although Pure filed exceptions of no cause of action and no right of action, we observe that a liability insurer challenging a plaintiff's right to proceed under the Direct Action Statute should do so via an exception of no right of action. See Riley v. Acadian Companies, 2025-0308, p. 7 (La. App. 5 Cir. 9/3/25), 424 So. 3d 141, 146, writ denied, 2025-1253 (La. 12/9/25), 422 So. 3d 298. Therefore, we will focus on the exception of no right of action.

PER CURIAM