GLORIA'S RANCH, L.L.C. Plaintiff-Appellee
TAUREN EXPLORATION, INC., CUBIC ENERGY, INC., WELLS FARGO ENERGY CAPITAL, INC., AND EXCO USA ASSET, INC. Defendants-Appellants
Appealed from the First Judicial District Court for the
Parish of Caddo, Louisiana Lower Court Case No. 541768
Honorable Ramon Lafitte, Judge
W. HAMMOND, APLC By: Kevin W. Hammond, Counsel for
Appellant(s) Tauren Exploration, Inc. & Cubic Louisiana,
& LEWIS By: Kelly B. Becker Kathryn Z. Gonski Michael D.
Rubenstein Counsel for Appellant Cubic Louisiana, LLC
MILLER, LLP By: Linda S. Akchin Richard D. McConnell, Samuel
O. Lumpkin Richard S. Pabst Scott L. Zimmer William R. Huguet
Counsel for Appellant Wells Fargo Energy Capital, Inc.
BULLINGTON & COOK, L.L.C. By: Guy E. Wall Paul E.
Bullington Philip M. Wood Jonathan R. Cook Counsel for
Appellee Gloria's Ranch, L.L.C. WEINER, WEISS &
MADISON, A PROFESSIONAL CORPORATION By: Jeffrey W. Weiss
BROWN, MOORE, STONE, COX, and BLEICH (Pro Tempore), JJ.
C.J., dissents from the denial of rehearing and strongly
agrees with the written reasons assigned by J. Bleich.
BLEICH, J. (Pro Tempore)
economic repercussions might possibly develop throughout the
lending industry if the original opinion of this court is
maintained. Serious and harmful impact on the oil and gas
industry is foreseeable. At a minimum, confusion will develop
inside the legal community, as well as to other advisors to
the respective companies within those industries if the
original pronouncement of this court is maintained.
Notwithstanding a generally well written and analyzed
original opinion and the instructive language therein that
this is a somewhat isolated fact setting, cautious managers
and decision makers within those industries will incur a most
chilling effect on their businesses. All of these
developments can be potentially harmful in a broader sense;
e.g. the potential impact on the financial condition
of this state resulting from lost revenue. Additionally, the
excessive awards of attorney fees in the original opinion
could produce inappropriate precedent for other cases.
therefore, with the highest degree of respect, dissent from
the decision to deny rehearing. This dissent is not only
based upon public policy but also because of legal error.
majority imposes solidary liability on the
mortgagee Wells Fargo Energy Capital, Inc.
("Wells Fargo"), in its capacity as a mortgage
lender which had only a security interest in a mineral lease.
The majority finds Wells Fargo solidarily liable with its
borrowers, Tauren Exploration, Inc. ("Tauren") and
Cubic Energy, Inc. ("Cubic") (the "mineral
lessees"), for a breach of the mineral lessees'
contractual and statutory obligations to produce in paying
quantities, pay royalties, and respond to the mineral
lessor's demands relating to those obligations. Relying
on the proposition stated in La. C.C. art. 1797 ("[a]n
obligation may be solidary though it derives from a different
source for each obligor"), Wells Fargo was determined to
be solidarily liable with Tauren and Cubic arising out of
their actions as to the landowner, Gloria's Ranch.
believe this determination was legal error. Solidary
liability is never presumed and arises only from a clear
expression of the parties' intent or from law. La. C.C.
art. 1796; Berlier v. A.P. Green Indus., Inc.,
2001-1530 (La. 04/03/02), 815 So.2d 39.
majority opinion has far-reaching implications on the banking
industry as well as the oil and gas industry. It is wholly
reasonable for a lender to impose certain safeguards to
ensure that its collateral is protected, and the
responsibilities of an owner should not be imposed on a
lender for taking such measures. Solidary liability between a
lender and its borrower/owner for its actions will have a
calamitous effect in Louisiana on banking and the
relationship between creditors and debtors. I agree with
Wells Fargo's assertion that the opinion will have a most
chilling effect on the financing of oil and gas operations,
which in turn will have an adverse economic effect on
government and business in our state.
further would grant rehearing concerning the issue of the
award of attorney fees, both at the trial level ...