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Crosstex Energy Services, LP v. Texas Brine Co., LLC

Court of Appeals of Louisiana, First Circuit

April 25, 2018

CROSSTEX ENERGY SERVICES, LP; CROSSTEX LIG, LLC; AND CROSSTEX PROCESSING SERVICES, LLC
v.
TEXAS BRINE COMPANY, LLC; ZURICH AMERICAN INSURANCE COMPANY; AND AMERICAN GUARANTEE AND LIABILITY INSURANCE COMPANY

          APPEALED FROM THE 23rd JUDICIAL DISTRICT COURT ASSUMPTION PARISH, LOUISIANA DOCKET NUMBER 34, 202, HONORABLE THOMAS J. KLIEBERT, JR., JUDGE PRESIDING.

          Leopold Z. Sher James M. Garner Peter L. Hilbert, Jr. Neal J. Kling Jeffrey D. Kessler Kevin M. McGlone New Orleans, Louisiana and Robert Ryland Percy, III Gonzales, Louisiana and Travis J. Turner Gonzales, Louisiana and Eric J. Mayer Houston, Texas, Attorneys for 3rd Party Plaintiff/ Appellant Texas Brine Company, LLC.

          Arthur N. Bagwell White Castle, Louisiana, Attorney for 3r6 Party Defendant/ Appellee Averille Browning Dawson.

          BEFORE: McDONALD, CHUTZ, and PENZATO, JJ.

          McDONALD, J.

         In this appeal, a defendant challenges a judgment dismissing its third-party demand against a Texas resident, in her personal capacity and as trustee of a Texas trust, based on a lack of personal jurisdiction. We affirm.

         FACTUAL AND PROCEDURAL BACKGROUND

         This suit is one of several arising from the August 2012 appearance of a sinkhole near Bayou Corne in Assumption Parish, Louisiana. EnLink f/k/a Crosstex[1], the plaintiffs in the underlying litigation, own and operate a natural gas pipeline that traverses the edge of a salt dome. Texas Brine[2] operates brine production wells, including the Oxy Geismar #3 well, on property above the salt dome. For many years before the appearance of the sinkhole, Colorado Crude Company and several of its assignees had an oil/gas/mineral lease, the Colorado Crude Lease (CCL), on land next to where the Oxy Geismar #3 well was located. In 1986, one of the CCL assignees drilled and began to operate the Hooker #1 well, an oil and gas well, on that adjacent land. The Hooker #1 well reservoir and the Oxy Geismar #3 salt cavern allegedly shared a common underground wall. Under the CCL, all assignees were bound to "diligently endeavor not to damage any salt formations which may exist upon the leased premises and shall pay for any actual damages which may occur from operations upon said leased premises."

         In June 1986, HECI Exploration Company (HECI), the then current CCL assignee, became the operator of the Hooker #1 well. On December 31, 1990, HECI assigned its CCL interest to Jane H. Browning and Michael G. Starnes, co-trustees of the Browning Children's Trust (BCT), a Texas trust governed by Texas law.[3] Three days later, on January 2, 1991, the BCT co-trustees assigned the CCL interest to Browning Oil Company. Under these assignments, the BCT co-trustees and Browning Oil Company, respectively, agreed to "assume and be subject to the proportionate share of all obligations" under the CCL. On February 13, 2001, over 10 years later, Mr. Starnes resigned as BCT co-trustee, and on that date, Averille Browning Dawson became BCT trustee.

         After the sinkhole appeared in 2012, Crosstex filed suit against Texas Brine, among others, alleging the sinkhole was caused, in whole or part, by the failure of the Oxy Geismar #3 salt cavern and that the sinkhole damaged Crosstex's pipeline. In response, Texas Brine filed incidental demands against several parties, including Mr. Starnes, BCT co-trustee, as a past CCL assignee.[4] Texas Brine alleged, among other things, that the CCL assignees caused the sinkhole, in whole or part, and were liable to Texas Brine due to negligence, strict liability, breach of contract, breach of duties under the Louisiana Mineral Code, and for contribution and indemnification. Later, pursuant to Texas Brine's motion, the trial court signed an order substituting Ms. Dawson for Mr. Starnes as third-party defendant, in her capacity as "current trustee of the Lessee Trust [the BCT]."

         Ms. Dawson then filed a declinatory exception pleading the objection of lack of personal jurisdiction, and Texas Brine filed an opposition. After a hearing, the trial court signed a judgment on July 6, 2017, granting the exception and dismissing Texas Brine's claims without prejudice against Ms. Dawson, individually and as BCT trustee.

         Texas Brine first sought review of the July 6, 2017 judgment via a supervisory writ application to this Court. Under docket number 2017 CW 1079, we refused to consider the writ because the judgment dismissing Ms. Dawson is an appealable judgment under LSA-C.C.P. art. 1915A. Texas Brine now appeals from the adverse judgment, contending the trial court erred in concluding it did not have personal jurisdiction over Ms. Dawson. On appeal, Texas Brine does not argue that Ms. Dawson herself had sufficient minimum contacts with Louisiana to support personal jurisdiction over her. Rather, in two assignments of error, Texas Brine argues the trial court should have found that Mr. Starnes, Ms. Dawson's predecessor as BCT trustee, had sufficient minimum contacts with Louisiana to support the exercise of personal jurisdiction over him and that his contacts should be imputed to Ms. Dawson.

         PERSONAL JURISDICTION

         The Louisiana Long Arm Statute provides for the exercise of personal jurisdiction over a nonresident defendant, who acts directly or by an agent, as to a cause of action arising from having an interest in, using, or possessing a real right on immovable property in this state. LSA-R.S. 13:3201A(5). Additionally, the Long Arm Statute provides for the exercise of personal jurisdiction over a nonresident on any basis consistent with the United States and Louisiana Constitutions. LSA-R.S. 13:3201B; Southeast Wireless Network, Inc. v. U.S. Telemetry Corp., 06-1736 (La. 4/11/07), 954 So.2d 120, 124. The addition of Subsection B to the Long Arm Statute ensures that the long-arm process extends to the limits allowed by Due Process. Id. Thus, rather than focusing on the examples set forth in Section A, the sole inquiry into jurisdiction over a nonresident is an analysis of the constitutional Due Process requirements. See Ruckstuhl v. Owens Corning Fiberglas Corp., 98-1126 (La. 4/13/99), 731 So.2d 881, 885, cert, denied,528 U.S. ...


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