H.L. HAWKINS III AND JOHN C. LOVELL, JR. AS SUCCESSION REPRESENTATIVES OF THE SUCCESSION OF H.L. HAWKINS, JR., HAWKEYE ENERGY, INC., AND H.L. HAWKINS, JR., INC.
THE MERIDIAN RESOURCE AND EXPLORATION LLC AND THE MERIDIAN RESOURCE CORPORATION F/K/A TEXAS MERIDIAN RESOURCES EXPLORATION, INC.
appeal from the Nineteenth Judicial District Court In and for
the Parish of East Baton Rouge State of Louisiana Docket
Number 526, 922 Honorable Donald R. Johnson, Judge Presiding
Norman, Kelly B. Becker, Joseph I. Giarrusso III Katherine
Seegers, Roth Jonathan, Andrew Hunter, Tyler D. Trew Counsel
for Plaintiffs/ Appellants H.L. Hawkins III and John C.
Lovell, Jr., as succession representatives of the Succession
of H.L. Hawkins, Jr., Hawkeye Energy, Inc., and H.L. Hawkins,
Deborah B. Rouen, Francis V. Liantonio, Jr., Raymond P. Ward
Counsel for Defendant/ Appellee The Meridian Resource and
BEFORE: WHIPPLE, C.J., GUIDRY, McDONALD, WELCH, AND
appeal a judgment dismissing a portion of their claims
against the defendants pursuant to the defendants'
invocation of a choice of law provision, which the defendants
first raised twelve years after the commencement of
litigation between the parties. For the following reasons, we
AND PROCEDURAL HISTORY
December 1, 2004, Hawkeye Energy, Inc., H.L. Hawkins, Jr.,
Inc., and H.L. Hawkins, III and John C. Lovell Jr., as
co-executors of the Succession of H.L. Hawkins, Jr.
(collectively "plaintiffs"), filed a petition for
damages against The Meridian Resource and Exploration LLC and
The Meridian Resource Corporation(collectively
"Meridian") based on an agreement between H.L.
Hawkins, Jr. and Texas Meridian Resources Exploration, Inc.
(also hereinafter referred to simply as "Meridian")
that was executed in 1993. According to the petition, the
1993 agreement between Hawkins, Jr. and Meridian
"established a framework for Mr. Hawkins to invest as a
non-operator in drilling, exploration and production
operations undertaken by Meridian." Among the provisions
of the 1993 agreement was a master participation agreement
and a joint operating agreement.
1994 to 1998, Hawkins, Jr. agreed to participate with
Meridian in several drilling prospects, including the
Holmwood Prospect located in Calcasieu Parish, on lands owned
in fee by Amoco Production Company. A separate mineral lease
and joint exploration agreement existed between Meridian and
Amoco relative to the Holmwood Prospect. An initial well, the
Amoco Ben Todd No. 2 well, drilled by Amoco, proved
productive, and according to the petition, Meridian and
Hawkins, Jr. participated in the cost of the drilling
operations for that well and shared in the revenue of the
then desired to drill a second well on the property, the
TMRX-Ben Todd No. 1 well, in an area where Amoco did not
consent to drilling operations. Upon learning of
Meridian's intent to drill the well without its consent,
Amoco filed a declaratory judgment action against Meridian in
federal district court in Texas. Later, when Amoco discovered
that Meridian had begun surface operations for the disputed
well, Amoco amended its suit against Meridian to assert
breach of contract and damages. The federal district court
eventually rendered judgment in favor of Amoco: dissolving
its lease agreement with Meridian, terminating Meridian's
interests in the disputed well and in the previously drilled
producing wells, and awarded damages. Except for the award of
legal interest on the damages award, the district court's
judgment was affirmed on appeal. See Amoco Production
Company v. Texas Meridian Resources Exploration Inc.,
180 F.3d 664 (5th Cir. 1999).
the Amoco litigation was finally concluded, Meridian sent an
invoice for what it calculated as Hawkins, Jr.'s
"pro rata portion of the judgment and post judgment
interest" from the Amoco litigation in a letter to
Hawkins, Jr. dated August 30, 1999. By a letter dated September
17, 1999, Hawkins III and Lovell Jr., as co-executors of the
Succession of H.L. Hawkins, Jr.,  issued payment from the
estate of Hawkins, Jr. for the sum demanded with "full
reservation of any and all rights and remedies that the
Estate may have, including (without limitation) the right to
contest all or a portion of [the] payment, the right to audit
and contest prior invoices and statements, and the right to
assert a claim for any and all damages."
five years later, the plaintiffs instituted the present
action. In the lawsuit, the plaintiffs claimed that
Meridian's action of drilling the well without
Amoco's consent, and falsely representing to Hawkins, Jr.
that Amoco had consented to the drilling, constituted fraud
and violated duties that Meridian owed to Hawkins, Jr. under
the 1993 agreement, which caused the plaintiffs to sustain
millions of dollars in lost investments, realized and future
revenues and profits, and other out-of-pocket expenses. The
plaintiffs also asserted accounting claims based on various
audits that were conducted of Meridian's operations
pursuant to the 1993 agreement. Plaintiffs later amended
their petition to add James T. Bond as a defendant and
expanded the allegations supporting their breach of contract
claim. Meridian filed answers generally denying
liability for all the claims asserted by the plaintiffs in
the original and amended petitions.
February 15, 2008, the plaintiffs filed a motion seeking a
partial summary judgment on the issue of Meridian's
liability. In the motion, the plaintiffs argued that
"[b]ased on Meridian's judicially established
malfeasance, " they were entitled to partial summary
judgment against Meridian on liability. Meridian filed an
opposition to the motion for partial summary judgment
asserting, in part, that the plaintiffs' claims had a
"prescription problem, " particularly to the extent
that the plaintiffs' claims were premised on allegations
7, 2008, the trial court signed a judgment granting the
plaintiffs' motion for partial summary judgment,
based in pertinent part on the following findings:
Meridian, as operator or manager of the parties' jointly
owned property, specifically the Amoco lease, represented
Hawkins' interest in the Amoco litigation pursuant to the
parties' contract, the Joint Operating Agreement attached
as Exhibit A to the petition. The judgment rendered in
Amoco Production Company v. Texas Meridian found
that Meridian acted in bad faith and therefore the Amoco
lease should be cancelled. It is undisputed that this
judgment resulted in a loss to Hawkins of its entire interest
in the lease as well as its pro-rata share of mineral
revenues awarded to Amoco. ...
This Court finds that Hawkins was in direct contractual
privity with Meridian. The parties' contract, the Joint
Operating Agreement, not only obligated Meridian to prudently
and responsibly represent the interests of its investors,
including Hawkins, but it also obligated Meridian to defend
Hawkins' interests in the lawsuit with Amoco. ...
In the end, this Court finds that there is no basis to allow
Meridian to relitigate those issues already decided by the
federal court in Amoco. The purpose of both federal
and state law on res judicata is essentially the
same, which is to promote judicial efficiency and final
resolution of disputes by preventing needless relitigation.
For these reasons, this Court finds that there are no genuine
issues of material fact in this case regarding the liability
of [Meridian] as that matter has been judicially established
in federal court as a matter of law. Thus, this Court will
grant the Motion for Partial Summary Judgment filed by the
Plaintiffs against Meridian on liability for breach
of contract. Judgment to be signed accordingly.
meantime, Meridian continued to seek dismissal of the
plaintiffs' non-accounting claims based on prescription.
First, Meridian filed a motion for partial summary judgment,
asserting that the plaintiffs' claims of fraud and
misrepresentation were prescribed pursuant to either La. C.C.
art. 2032 or 3492, which the trial court denied in a judgment
signed August 6, 2008. Later, Meridian filed a peremptory
exception, again asserting that the plaintiffs'
non-accounting claims were prescribed, but this time based on
the assertion that the "claims against Meridian [arose]
from a joint venture, " and that as such, La. R.S.
12:1502 applied to bar the plaintiffs' non-accounting
the trial court held a hearing on the peremptory exception,
Meridian filed an "Amended and Superseding Peremptory
Exception of Prescription" on May 12, 2016, wherein Meridian
amended its earlier exception to completely replace the
original exception and to instead plead the applicability of
Texas's statute of limitations to all but the
plaintiffs' non-accounting claims. In its amended
exception, Meridian asserted that the sole basis for its
"alleged liability ... is breach of contract, " and
it pointed out that the July 7, 2008 partial summary judgment
only held it liable for breach of contract The master
participation agreement included in the parties' 1993
THIS PARTICIPATION AGREEMENT SHALL BE INTERPRETED AND
CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF
TEXAS. IN THE EVENT THERE IS A CONTRACTUAL DISPUTE WHICH
CANNOT BE RESOLVED AMONG YOU AND [MERIDIAN], ANY LAWSUIT
BROUGHT FORTH RELATIVE TO SUCH DISPUTE SHALL BE TRIED IN THE
APPROPRIATE COURT OF LAW IN THE STATE OF TEXAS.
citing Tex. Civ. Prac. & Rem. Code § 16.051 and
Stine v. Stewart, 80 S.W.3d 586, 592 (Tex. 2002)
(holding that under Texas law a claim of breach of contract
is subject to a four-year statute of limitations), Meridian
urged the trial court to find the plaintiffs'
non-accounting claims to be prescribed.
plaintiffs opposed Meridian's amended and superseding
peremptory exception, arguing that application of Louisiana
choice of law rules dictated that Louisiana's
prescriptive statutes apply, or alternatively, that: (1)
Meridian should be found to have waived its right to assert
the choice of law provision considering that the matter had
been in litigation for over ten years and that until it filed
the amended exception, Meridian had presented its defense
solely under Louisiana law; or (2) judicial estoppel should
apply to bar Meridian from presenting a defense under Texas
law. Despite these arguments, following a hearing held on
June 13, 2016, the trial court sustained Meridian's
peremptory exception raising prescription based on Texas law
and accordingly dismissed all of the plaintiffs'
non-accounting claims with prejudice in a judgment signed on
August 19, 2016. The trial court further designated the
judgment as a final judgment under La. C.C.P. art. 1915(B),
finding that because "the claims dismissed by this
judgment are a completely separate cause of action from
plaintiffs' remaining claims, " there was no just
reason to delay an appeal of the matter. The
plaintiffs filed a motion for devolutive appeal on September