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Vintage Assets, Inc. v. Tennessee Gas Pipeline Company, L.L.C.

United States District Court, E.D. Louisiana

August 22, 2017

VINTAGE ASSETS, INC.
v.
TENNESSEE GAS PIPELINE COMPANY, L.L.C.

         SECTION: “H”

          ORDER AND REASONS

          JANE TRICHE MILAZZO, UNITED STATES DISTRICT JUDGE

         Before the Court are Defendants Tennessee Gas Pipeline Company, LLC, Southern Natural Gas Company, LLC, High Point Gas Transmission, LLC, and High Point Gas Gathering, LLC's Partial Motion for Summary Judgment on Duty to Maintain Canal and Canal Banks (Doc. 117); Motion for Summary Judgment on Prescription (Doc. 190); Partial Motion for Summary Judgment on Claims for Trespass and Disgorgement of Profits (Doc. 111); and Plaintiffs'[1] Partial Motion for Summary Judgment (Doc. 122). For the following reasons, Defendants' Motion for Summary Judgment on Duty to Maintain Canal and Canal Banks is GRANTED IN PART; Defendants' Motion for Summary Judgment on Prescription is DENIED; Defendants' Partial Motion for Summary Judgment on Claims for Trespass and Disgorgement of Profits is GRANTED; and Plaintiffs' Partial Motion for Summary Judgment is GRANTED IN PART.

         BACKGROUND

         Between 1953 and 1970, Defendants' predecessors received eight right-of-way servitudes crossing various portions of Plaintiffs' property, which authorized the construction and operation of pipelines and dredge canals. Plaintiffs allege that Defendants failed to maintain these canals, resulting in erosion and damage to their property. It is undisputed that the widths of the canals now far exceed that which was contemplated by the servitude agreements. Plaintiffs bring state law claims for trespass, breach of contract, and negligence. There are several motions before the Court, discussing whether Plaintiffs can succeed on their trespass claim, whether Plaintiffs' claims are prescribed, and whether Defendants had a duty to maintain the canals. This Court will address each issue in turn.

         First, however, a discussion of the various servitude agreements at issue is appropriate. From 1953 to 1970, Plaintiffs' grandfather and later their father granted eight rights-of-way on four different parcels of property to Defendants and their predecessors.

         On January 9, 1953, Plaintiffs' predecessors granted a right-of-way to Defendant Southern Natural Gas Company, LLC (“SNG”) on Section 31 and 32 of Township 16 South, Range 15 East (“1953 Contract”). This agreement granted Defendants a right-of-way and easement 100 feet in width within which to operate a pipeline. The agreement allowed the pipeline to lay in “open ditches or canals not to exceed 40 feet in width, which may be filled in or left open at the option of Grantee.” The agreement prevents Plaintiffs from constructing any obstruction or changing the grade over the pipeline.

         On June 15, 1970, Plaintiffs' predecessors granted a right-of-way covering portions of the same parcel to SNG for the purpose of installing a second parallel pipeline (“1970 Contract”). The agreement stated that Plaintiffs granted Defendants a 175-foot pipeline easement, including “the right to lay such pipeline in an open ditch or canal, ” and the right to widen the existing 40-foot canal by an additional 25 feet. In the agreement, Defendants also agreed to dam or bulkhead the canal at the point where the canal enters and leaves the property.

         On January 9, 1953, Plaintiffs' predecessors granted a right-of-way to SNG covering Section 5 of Township 17 South, Range 15 East (“1953 Contract”). That agreement granted Defendants a 100-foot-wide right-of-way “to lay such pipe line or lines in open ditches or canals not to exceed 40 feet in width, which may be filled in or left open at the option of Grantee.” The agreement prevents Plaintiffs from constructing any obstruction or changing the grade over the pipeline.

         On June 15, 1970, Plaintiffs' predecessors granted to SNG a new right-of-way covering the same portion as the 1953 Contract for the purpose of laying a second parallel pipe line (“1970 Contract”). The agreement granted a 175-foot right-of-way, including “the right to lay such pipeline in an open ditch or canal, ” and the right to widen the existing canal by an additional 25 feet The agreement required Defendants to dam or bulkhead the canal where it enters and leaves the property.

         On February 13, 1958, Plaintiffs' predecessors granted a right-of-way covering portions of Section 24 of Township 16 South, Range 15 East, and Sections 19 and 20 in Township 16 South, Range 16 East to SNG (“1958 Contract”). The agreement granted a 100-foot easement and the right to lay pipelines in “open ditches or canals not to exceed 40 feet in width, which may be filled in or left open at the option of Grantee.” The agreement prevents Plaintiffs from constructing any obstruction or changing the grade over the pipeline laid pursuant to the agreement.

         On May 1, 1964, Plaintiffs' predecessors granted a right-of-way to Defendant Tennessee Gas Pipeline Company, LLC (“TGP”) covering Section 5 in Township 17 South, Range 15 East; Section 32 in Township 16 South, Range 15 East; and Section 17, Township 17 South, Range 15 East (“1964 Contract”). The agreement granted a 40-foot pipeline easement, stating that “the open ditch or canal which Grantee may dig will be dug to a minimum depth of approximately minus six feet (-6') below mean low gulf level and will not exceed forty (40') feet in width at the top.” In addition, Plaintiffs' predecessors granted rights-of-way on August 19, 1957 and July 3, 1958 to TGT that simply granted the right to lay pipelines in open ditches or canals “which may be filled in or left open at the option of Grantee.” These contracts provided no “not to exceed” measurement for the canals or rights-of-way (“No Measurement Contracts”).

         The Court will discuss the parties' motions as they relate to each servitude agreement.

         LEGAL STANDARD

         Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”[2] A genuine issue of fact exists only “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.”[3]

         In determining whether the movant is entitled to summary judgment, the Court views facts in the light most favorable to the non-movant and draws all reasonable inferences in his favor.[4] “If the moving party meets the initial burden of showing that there is no genuine issue of material fact, the burden shifts to the non-moving party to produce evidence or designate specific facts showing the existence of a genuine issue for trial.”[5] Summary judgment is appropriate if the non-movant “fails to make a showing sufficient to establish the existence of an element essential to that party's case.”[6] “In response to a properly supported motion for summary judgment, the non-movant must identify specific evidence in the record and articulate the manner in which that evidence supports that party's claim, and such evidence must be sufficient to sustain a finding in favor of the non-movant on all issues as to which the non-movant would bear the burden of proof at trial.”[7] “We do not . . . in the absence of any proof, assume that the nonmoving party could or would prove the necessary facts.”[8] Additionally, “[t]he mere argued existence of a factual dispute will not defeat an otherwise properly supported motion.”[9]

         LAW & ANALYSIS

         A. Trespass Claims

          First, Plaintiffs argue that the widening of the canals constitutes a trespass on their property. Defendants have filed a Motion for Summary Judgment seeking dismissal of Plaintiffs' claim for trespass and request for disgorgement of profits. In addition, Plaintiffs have filed a Motion for Summary Judgment seeking a finding that Defendants' canals are trespassing on their property. This Court will discuss these motions concurrently in its consideration of the viability of Plaintiffs' trespass claims.

         Plaintiffs argue that the Defendants have committed a trespass by allowing the canals that were dredged on Plaintiffs' property pursuant to the servitude agreements at issue to exceed the width of the rights-of-way granted. Further, Plaintiffs allege that Defendants trespassed in bad faith and that Plaintiffs are therefore entitled to the civil fruits earned by Defendants as a result of their trespass. Defendants argue, however, that trespass requires an affirmative, “physical invasion” of property and that the widening of a canal does not constitute an unauthorized physical act by Defendants. They argue that Plaintiffs cannot identify any affirmative act committed on their property by Defendants and that their trespass claims should therefore be dismissed.

         Under Louisiana law, a trespass is an act of unlawful physical invasion of the property of another.[10] Plaintiffs set forth two arguments to support their claims for trespass. First, they argue that exceeding the rights granted in a right-of-way results in trespasser liability. Second, they argue that a trespass can occur through negligent acts.

         To their first argument, Plaintiffs cite to case law that they argue stands for the proposition that operating outside of a right-of-way constitutes a trespass. This Court, however, finds these cases easily distinguishable. In each of the cases cited by Plaintiffs, the defendants took an affirmative, unauthorized action that constituted a trespass. For example, the cases involved acts of laying a fiber optic cable outside of the area designated by the right-of-way, [11] laying a sewer line without the property owner's consent, [12] or storing construction materials outside of the right-of-way and without a right of storage.[13] Here, Defendants were authorized to (and did) lay their pipelines and dredge canals within the rights-of-way designated by the servitude agreements. Thereafter, through erosion, the canals grew in width to exceed the width of the rights-of-way. Allowing a canal to slowly widen outside of a right-of-way stands in stark contrast to an affirmative act taken without authorization outside the bounds of a right-of-way. Accordingly, this Court finds Plaintiffs' reliance on these cases unconvincing.

         Next, Plaintiffs argue that the Defendants' negligence in allowing the canals to widen outside of the bounds of the right-of-way constitutes a trespass. They argue that under Louisiana law a trespass can be brought about by a negligent act. Plaintiffs cite to the Louisiana Fourth Circuit Court of Appeal's opinion in Terre Aux Boeufs Land Co. v. J.R. Gray Barge Co., which states that:

[C]ivil trespass is generally considered to be an intentional tort, requiring proof that the defendant took some intentional action that resulted in harm to the plaintiff. . . . Nevertheless, some Louisiana courts have awarded damages for illegal trespass on one's property, even when committed in good faith. . . . Although the trespass itself might be inadvertent, we find that a defendant generally may not be held liable for trespass under Louisiana law in the absence of evidence that the trespass resulted from some intentional act taken by the defendant. Nevertheless, there could be one situation in which a defendant may be held liable for trespass even in the absence of intent-i.e. when the plaintiff offers proof that the defendant was at fault in causing the trespass pursuant to the general tort article, La. C.C. art. 2315.[14]

         The court in Terre Aux Boeufs Land Co. therefore suggests that a party could be liable for the tort of trespass even if it is caused by a negligent act. The Louisiana Supreme Court has, however, cast doubt on such a holding. In Hogg v. Chevron USA Inc., the Court considered a case involving the underground migration of toxic substances from a neighboring property, which plaintiff alleged was a trespass.[15] It stated that:

We note, without deciding the issue, that it is questionable whether the tort of trespass even applies in this situation because civil trespass is generally considered to be an intentional tort, requiring proof that the defendant took some intentional action that resulted in harm to the plaintiff. It has been suggested that the action more properly lies in nuisance.[16]

         Accordingly, the Louisiana Supreme Court has indicated that to succeed on a trespass claim, the plaintiff must show that the trespasser took some intentional, affirmative action. Although it has not explicitly addressed whether Louisiana law recognizes a claim for trespass caused by a negligent, passive act, this Court finds that its best Erie guess is that it does not.[17] Just as in Hogg where the alleged trespass was caused by the passive seeping of toxic substances underground, here the alleged trespass was caused by the passive work of erosion. Neither negligent act is sufficient to support a claim of trespass. Such activity is better addressed by a claim of negligence, and Plaintiffs' claims for trespass are therefore dismissed.

         B. Contract Claims

         Plaintiffs next bring two distinct breach of contract claims: (1) Defendants breached their duty in all of the servitude agreements to maintain the canals and prevent their widening, and (2) Defendants breached the 1970 Contracts by failing to build a dam or bulkhead on the canals at issue in those agreements. Defendants seek dismissal of Plaintiffs' contract claims on two grounds: (1) that the claims are prescribed, and (2) that the servitude agreements do not create a duty to maintain the canals. In addition, Plaintiffs have moved for summary judgment on each of their contract claims. This Court will discuss each argument in regards to both of Plaintiffs' contract claims.

         1. Breach of Duty to Maintain

         a. Prescription

         As to the first breach of contract claim, Defendants argue that because they have never maintained the canals, prescription began to run at the time the servitude agreements were executed-the latest of which was in 1970. Breach of contract claims are subject to a prescriptive period of ten years, and Plaintiffs filed suit on December 18, 2015.[18] Defendants therefore contend that prescription has long since run on each of Plaintiffs' contract claims. Plaintiffs argue, among other things, that their contract claims are not prescribed because Louisiana's suppletive rules on servitudes apply to impose an ongoing duty to maintain the canals. As discussed in detail below, this Court ultimately holds that the suppletive rules do apply to the servitude agreements at issue to impose a duty to maintain the canals. It is well settled that such a duty is a continuing one.[19] “[T]he life of the duty of a servitude owner not to aggravate the condition of the servient estate by allowing a canal to widen is coextensive with the life of the servitude.”[20] Accordingly, Plaintiffs' breach of contract claims as to Defendants' failure to maintain the canals have not prescribed.

         b. Duty to Maintain

         Defendants have filed a Motion for Summary Judgment, arguing that pursuant to the servitude agreements, they have no obligation to maintain the canals. Plaintiffs have likewise filed a Motion for Summary Judgment, seeking a holding that the Defendants breached the servitude agreements by failing to maintain the canals. This Court will consider these arguments concurrently as they relate to each servitude agreement.

         i. 1953 Contracts, 1958 Contract, 1964 Contract and 1970 Contracts

         As outlined in detail above, the 1953 Contracts, the 1958 Contract, the 1964 Contract, and the 1970 Contracts contain substantially similar language. Each allow the canals to be left “open” but contemplate a maximum width of those canals. Both parties argue that these servitude agreements are clear and unambiguous as to whether Defendants have a duty to maintain the canals and canal banks.

         Defendants point to the portions of the agreements that allow the canals to be left “open.” They argue that this language unambiguously evinces the parties understanding that Defendants had no obligation to maintain the canal banks. They argue that while the contracts provide for an obligation to maintain the pipelines, there is no such obligation for the canals. They also argue that although the contracts state that the canals shall not exceed a certain width, this requirement ...


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