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Weyerhaeuser Co v. Pardee Minerals LLC

United States District Court, W.D. Louisiana, Shreveport Division

June 28, 2018

WEYERHAEUSER CO.
v.
PARDEE MINERALS, LLC, ET AL.

          MARK L. HORNSBY MAG. JUDGE.

          RULING

          TERRY A. DOUGHTY UNITED STATES DISTRICT JUDGE.

         Pending before the Court is a Motion for Judgment on the Pleadings to Dismiss Crossclaims of EP Energy E & P Company, L.P. (“EP”) [Doc. No. 64] filed by Defendants in crossclaim Pardee Minerals, LLC (“Pardee”) and Michael Carnes, Suzanne Carnes, Carnes Oil Corp., Carnes Texas, Ltd., Richard P. deCamara, and James S. Thigpen (“the Carnes Group”). EP filed a memorandum in opposition to the motion. [Doc. No. 72]. Pardee and the Carnes Group filed a reply memorandum in support of the motion. [Doc. No. 78]. For the following reasons, the motion is GRANTED.

         I. ALLEGED FACTS AND PROCEDURAL BACKGROUND

         This is a dispute over mineral servitudes. In 1971, the Pardee Company sold over 8, 000 acres of non-contiguous tracts of property in Bienville Parish to Willamette Industries, Inc. (“Willamette”). Pardee, in the act of sale, reserved all of its mineral rights under the properties, thereby establishing a mineral servitude on each of the several tracts. [Doc. No. 1, Complaint, ¶¶ 9, 12]. One of the tracts contains approximately 1, 260 acres and is at issue in this suit. Id. at ¶ 13.

         Weyerhaeuser Co. (“Weyerhaeuser”) is the successor to Willamette. Id. at ¶ 10. Weyerhaeuser contends that the Pardee mineral servitude was extinguished by the prescription of nonuse in 1999. Despite this alleged extinguishment, Pardee granted a mineral lease on the land in January 2001 to Carnes Oil Corporation. Carnes assigned the lease to EP, which established units that affected the property and began to operate wells within those units. Wildhorse Resources, II LLC (“Wildhorse”) took over EP's role as operator of the units in 2013.

         On July 3, 2017, Weyerhaeuser filed a Complaint in this Court against Pardee, the Carnes Group, and Wildhorse, asserting that the lawsuit was brought pursuant to the federal Declaratory Judgment Act, 28 U.S.C. §§ 2201, et seq., and under state law, including La. Rev. Stat. § 30:10(A)(3) and the Louisiana Civil Code. In its Complaint, Weyerhaeuser seeks a declaration from the Court that the servitude was extinguished by the running of the prescription of nonuse on or before December 21, 1999, an award of damages for unpaid proceeds of production attributable to gas and oil production since that date, an award of damages for bad faith possession, damages for enrichment without cause, and other relief.

         EP filed an answer in which it denied the servitude was extinguished. EP also filed cross claims against Pardee and the Carnes Group and prayed that, if Weyerhaeuser is successful, those Defendants be ordered to return all royalty payments that EP made to them.[1] EP alleges:

5.
On January 23, 2001, Pardee Resources Group, Inc. (predecessor to Defendant-in-Cross Pardee) granted an Oil, Gas and Mineral Lease to Carnes Oil Corporation (“Carnes Lease”), wherein Pardee leased approximately 1, 160 acres in Bienville Parish, Louisiana. Pardee's rights to grant the Carnes Lease derived from its status as a mineral servitude owner on the leased property.
6.
Carnes Oil Corporation assigned all of its interests in the Carnes Lease to El Paso Production Company (predecessor to Plaintiff-in-Cross EP) by January 1, 2003.
7.
Following the assignment of the Carnes Lease, El Paso drilled a series of wells (“El Paso Wells”) on the ...

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