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Salemi v. TMR Exploration, Inc.

Court of Appeals of Louisiana, First Circuit

June 13, 2017


         Appealed from the 18th Judicial District Court In and for the Parish of West Baton Rouge, Louisiana Trial Court Number 41, 553 Honorable James J. Best, Judge

          Brent K. Delee Kirby J. Guidry Baton Rouge, Louisiana Attorneys for Appellant Plaintiff- Charles R. Salemi

          Randall S. Davidson William Lake Hearne, Jr. Shreveport, LA and Scotty E. Chabert, Jr. Baton Rouge, Louisiana Attorneys for Appellee Defendant - Raymond J. Lasseigne


          WELCH, J.

         The plaintiff/appellant, Charles J. Salemi, appeals a trial court judgment sustaining a peremptory exception raising the objection of prescription filed by the defendant/appellee, Raymond J. Lasseigne ("Lasseigne"). The trial court's action resulted in the dismissal of the plaintiffs claims against Lasseigne with prejudice. For the reasons that follow, we reverse the judgment of the trial court.


         Salemi is the owner of a certain tract of immovable property described as being located in the South 2/3 of Lot 5, Section 93, Township 7 South, Range 10 East, Parish of West Baton Rouge ("Salemi property"). Salemi filed suit seeking damages for drainage of minerals sustained as the result of the placement of a bottom hole location of a producing well within 330 feet of his property line, in violation of a state regulation. As set forth in detail below, Salemi has asserted claims in contract against various lessees of his property for failing to take any action to prevent the drainage as required under the leases. Additionally, Salemi has asserted a claim for damages against the initial operator, its corporate president, and two successor operators for their respective roles in the drilling and operation of the well. It is the claims against the corporate president that are the subject of this appeal.

         In his petition, Salemi alleged that between the years of 2005 and 2011, he granted three mineral leases on his property. Salemi executed a mineral lease of his property on December 9, 2005, in favor of TMR Exploration, Inc. ("TMR"), a Texas corporation. The first lease expired on December 9, 2008, and Salemi executed a second lease on the property in favor of TMR, which became effective on December 9, 2008. Later, on October 24, 2011, Salemi executed a third lease in favor of Park Exploration, Inc. ("Park"), formerly known as TMR Energy, LLC. According to the allegations in Salemi's petition, the three lessees were subsequently subject to various partial assignments and/or subleases.

         Salemi alleged that on May 15, 2007, TMR transferred all or part of its interest in the 2005 lease to TMR Energy (now Park Oil & Gas, LLC following a name change). Then, one-day after divesting itself of the lease, on May 16, 2007, TMR filed an application for a permit to drill for minerals in Section 93, Township 7 South, Range 10 East. TMR's permit application is alleged to have erroneously identified "A. Wilbert's Sons, LLC" as the sole owners of all property located in Section 93, Township 7 South, Range 10 East. On May 18, 2007, a permit to drill the well designated as the "A. Wilbert's Sons LLC, 93 No. 1" was issued by the Louisiana Commissioner of Conservation ("Commissioner").

         TMR filed an amended permit with the Commissioner in June of 2007, identifying the proposed bottom hole location of the well at certain proposed coordinates; however, ultimately the bottom hole location of the well was completed at a location underneath property adjacent to the Salemi property and within 330 feet of Salemi's property line. The property adjacent to the Salemi property is owned by various individuals who trace their ownership interests to the Successions of Peter Hill and Elnora Johnson Hill (the "Hill property"). The Hill property owners filed a separate action captioned Calvin J. Hill, et al. v. TMR Exploration, Inc, ("Hill suit") for subsurface trespass, asserting that the bottom hole location was placed underneath their property without their knowledge or permission. See Hill v. TMR Exploration, Inc., 2016-0566 (La.App. 1st Cir. _/_/_), __WL__.[1]

         The well began production on January 3, 2008, with TMR in the role of operator. On July 1, 2010, TMR ceased to be the operator of the well after an amended permit to drill was issued designating Park as the second operator of the well. Park, in turn, assigned its rights to a third operator, Vitol Resources, Inc. ("Vitol"), which was designated as the third operator of the well in an amended permit, effective December 1, 2012. Salemi alleged that he only discovered that the bottom hole location of the well was less than 330 feet from his property line on August 15, 2013, when a surveyor, Cletus Langlois, delivered a plat to Salemi showing the bottom hole location of the well 258 feet north of the north line of the Salemi property.

         Salemi filed his original petition on July 3, 2014. The petition asserts an action sounding in contract against the lessees, and an action sounding in tort against TMR, Park, and Vitol in their capacities as operators of the well.[2] Salemi maintained that the well's location within 330 feet of his property creates a presumption that the well was draining minerals from beneath the property. He further asserted that under Louisiana Department of Natural Resources, Office of Conservation Statewide Order No. 29-E, no permit can be issued for the drilling of a well whenever a well is located within 330 feet of a property owner's property line without the formation of a compulsory unit. In this instance, such a compulsory unit would include the Salemi property.

         Salemi's petition asserted that TMR, Park, and/or Vitol were liable for intentionally and/or negligently placing the bottom hole location of the well within 330 feet from his property line. The petition specifically alleges that TMR should have known or is presumed to know the location of the Salemi property because TMR had entered into the lease with Salemi as early as 2005 for the same property. With regard to his claims against the lessees, Salemi contended that the leases imposed a contractual obligation on the lessees to protect Salemi from drainage caused by a well located on the adjacent property, and sought cancellation of said leases.

         At issue in the instant appeal are allegations in the petition against defendant, Raymond J. Lasseigne, the president of TMR, the entity that drilled the well and was the first operator thereof. Relevant to the issues under consideration is TMR's status as a Texas corporation authorized to transact business in Louisiana. In particular, Salemi alleged that Lasseigne directed and/or coordinated the operations of TMR. Further, Salemi alleged that Lasseigne, a petroleum engineer experienced in the oil and gas industry, knew, should have known, or is presumed to have known the requirements of Statewide Order No. 29-E. Salemi asserted that Lasseigne's negligent failure to require TMR to apply to the Commissioner for formation of a unit for the well resulted in Salemi not receiving his fair and equitable share of production from the well.

         On August 25, 2014, TMR and Lasseigne filed various exceptions to Salemi's petition, including the initial exceptions was a peremptory exception of no cause of action as to the claims against Lasseigne. TMR and Lasseigne contended that because Lasseigne had no personal duty to or contractual relationship with Salemi, there was no basis for personal liability to third parties for his actions as a corporate officer. TMR and Lasseigne also asserted an exception of no cause of action, which maintained that there is no private cause of action for a violation of Statewide Order No. 29-E. The trial court overruled the exceptions in a judgment signed on April 21, 2015. Neither TMR nor Lasseigne has not sought review of either of these rulings.

          On June 9, 2015, Lasseigne filed an exception of prescription as to the individual claims asserted against him. Lasseigne averred that the trial court had already sustained the exception of prescription against Lasseigne in the Hill suit following a hearing on June 3, 2015.[3] Lasseigne argued that Salemi alleged only acts of negligence by Lasseigne and a violation of Statewide Order No. 29-E. Despite the trial court's previous overruling Lasseigne's exception of no cause of action on the issue of corporate officer liability as to claims by a third party, Lasseigne reasserted his argument that third parties do not have a cause of action in negligence against a corporate officer. Then, Lasseigne asserted that Salemi's only other allegation, the assertion that Lasseigne violated Statewide Order No. 29-E, was prescribed under the provisions of La. R.S. 12:1502(D). Lasseigne asserted that under La. R.S. 12:1502(D), a tort action against a corporate officer cannot be brought "more than three years from the date of the alleged act or omission, " and no claims under the statute are subject to suspension or interruption on any ground except by the timely filing of suit in a court of competent jurisdiction. Lasseigne averred that the unlawful action ceased when TMR ceased operating the well in June of 2010, or when the 2008 lease terminated in December of 2010. According to Lasseigne, Salemi's claims against him filed in July 2014 were prescribed under La. R.S. 12:1502(D), regardless of which date applied to begin the tolling of prescription.

         Lasseigne's exception was set for hearing on September 2, 2015, the same day as the hearing on the motion for new trial filed by the Hill plaintiffs in the Hill suit. The Hill plaintiffs sought a new trial following the trial court's sustaining of the defendants' exception of prescription as to the claims against Lasseigne under La. R.S. 12:1502(D). Counsel for Salemi and Lasseigne agreed that the legal issue on the question of prescription as to Lasseigne in the Hill suit and the instant matter was identical; therefore, the Salemi exception was submitted on the briefs. In a judgment signed ...

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