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Grace Ranch, LLC v. BP America Production Co.

Court of Appeals of Louisiana, Third Circuit

July 18, 2018

GRACE RANCH, LLC
v.
BP AMERICA PRODUCTION COMPANY, ET AL.

          APPEAL FROM THE THIRTY-FIRST JUDICIAL DISTRICT COURT PARISH OF JEFFERSON DAVIS, NO. 705-11 HONORABLE J. BYRON HEBERT, DISTRICT JUDGE

          Donald T. Carmouche Victor L. Marcello John H. Carmouche William R. Coenen, III Brian T. Carmouche Todd J. Wimberley Ross J. Donnes D. Adele Owen Leah C. Poole Caroline H. Martin Christopher D. Martin Talbot, Carmouche & Marcello Counsel For Plaintiff/Appellant: Grace Ranch, LLC

          Chad E. Mudd David P. Bruchhaus M. Keith Prudhomme Matthew P. Keating Mudd & Bruchhaus, L.L.C. Counsel for Plaintiff/Appellant: Grace Ranch, LLC

          Carl Duhon Ike Huval Duhon Law Firm COUNSEL FOR DEFENDANTS/APPELLEES: Shirley Poirier Van Way, in her capacity as Independent Testamentary Executor of the Succession of J.P. Van Way

          George Arceneaux, III Penny L. Malbrew Court VanTassell Brittan J. Bush Liskow & Lewis Counsel for Defendant/Appellee: BP America Production Company

          Mark L. McNamara Kelly B. Becker Kathryn Z. Gonski Liskow & Lewis Counsel for Defendant/Appellee: BP America Production Company

          R. Keith Jarrett Kelly T. Scalise Liskow & Lewis Counsel for Defendant/Appellee: BHP Billiton Petroleum (Americas) Inc.

          Court composed of Ulysses Gene Thibodeaux, Chief Judge, Phyllis M. Keaty, and D. Kent Savoie, Judges.

          Thibodeaux, Chief Judge, concurs in the result reached.

          PHYLLIS M. KEATY, JUDGE

         In this oilfield legacy litigation, Plaintiff appeals the trial court's judgment granting motions for summary judgment and an exception of no right of action in favor of Defendants. For the following reasons, the trial court's judgment is affirmed.

         FACTS & PROCEDURAL HISTORY

         This mineral law case involves forty acres of immovable property located in Jefferson Davis Parish of which Grace Ranch, LLC ("Grace Ranch") is the owner. On October 10, 2011, Grace Ranch filed suit in contract and tort for contamination of its property resulting from the historical oil and gas exploration and production activities of multiple defendants, including J.P. Van Way ("JPVW"), BP America Production Company ("BP"), and BHP Billiton Petroleum (Americas), Inc. ("BHP") (collectively "Defendants"), pursuant to valid mineral leases.

         The forty acres at issue was part of an approximate 166-acre tract ("subject tract") of immovable property owned by Ellen M. Davies in 1915. In 1944, Ms. Davies, as the lessor, executed a mineral lease with John J. Doyle, as the lessee ("subject lease"). That same year, Doyle assigned the subject lease to Stanolind Oil and Gas Company ("Stanolind"), BP's predecessor. In 1957, Stanolind merged into Pan American Petroleum Company ("Pan American"). In 1969, Pan American assigned the subject lease to Clinton Oil Company ("Clinton Oil"), BHP's predecessor. In 1972, Clinton Oil released all of its rights in the subject lease except for the forty acres at issue in this matter. In 1976, Clinton Oil changed its name to Energy Reserves Group, Inc. ("Energy"). In 1977, Energy assigned the subject lease to Tommy Littlepage Oil Properties ("Littlepage Oil"). In 1978, Littlepage Oil assigned half of its working interest in the subject lease to Jack Williams Pipe and Supply Company. In 1984, Littlepage Oil assigned the remaining half of its working interest to JPVW. The subject lease expired in 1985 or 1986 due to non-production.

         With respect to the surface and mineral ownership of the subject tract, it was acquired by Ms. Davies' heirs in 1971. In 1972, Ms. Davies' heirs sold the same to Donald J. Leblanc and Janet Sue Cagle Leblanc ("the Leblancs"), reserving for themselves "all of the oil, gas and other mineral in, on or under said property, together with the right of ingress and egress for the purpose of exercising this mineral servitude." In 1973 and 1974, the Leblancs sold the subject tract to General Farms, Inc. ("General Farms"), subject to any outstanding servitudes and reservations of minerals and leases. In 1995, General Farms acquired one hundred percent of the minerals arising from the termination of the Davies servitude. In 1999, General Farms and the Leblancs transferred the subject tract to Daniel and Jeralyn Ewing ("the Ewings"), reserving an undivided one-half interest in the minerals. The Ewings subsequently sold the subject tract to Grace Ranch in 2006, subject to their one-half interest in the minerals. Grace Ranch acquired one half of the minerals in 2009 as a result of the expiration of General Farms' one-half mineral servitude. Grace Ranch acquired the other half of the minerals in 2016 as a result of the expiration of the Ewings' one-half mineral servitude.

         In 2013, approximately two years after filing suit, Grace Ranch sought and obtained assignments of rights in tort and contract from General Farms and the Leblancs, or their heirs and assigns. On January 13, 2017, approximately four years after obtaining the assignments, Grace Ranch filed its First Amended Petition for Damages to assert its assigned claims. Defendants subsequently filed motions for summary judgment, seeking dismissal of Grace Ranch's suit. Additionally, JPVW filed an Exception of No Right of Action, seeking dismissal on similar grounds. The trial court heard the motions and exception on June 14, 2017, and took them under advisement. Pursuant to the trial court's written reasons for judgment dated July 12, 2017, and its subsequent judgment dated September 16, 2017, the trial court granted the motions and exception and dismissed Grace Ranch's case with prejudice. Grace Ranch appealed.

         On appeal, Grace Ranch asserts the following assignments of error:

1. The trial court committed error in dismissing the plaintiff's claims on the basis of the subsequent purchaser rule.
2. The trial court committed error in failing to find that plaintiff has a right of action based on its assignments from prior owners of the surface and minerals.
3. The trial court committed error in finding that the assignment from General Farms to plaintiff was invalid based on General Farms' affidavit of dissolution.
4. The trial court committed error in relying in part on prescription in dismissing the claims of the plaintiff because prescription was not at issue.
5. The trial court committed error in applying the jurisprudential subsequent purchaser rule under circumstances where the Civil Code and Mineral Code provide statutory support for plaintiff's right of action.

         STANDARD OF REVIEW

         An appellate court utilizes the de novo standard of review when reviewing a trial court's judgment on a motion for summary judgment. Gray v. Am. Nat'l Prop. & Cas. Co., 07-1670 (La. 2/26/08), 977 So.2d 839. The appellate court uses "the same criteria that govern the trial court's consideration of whether summary judgment is appropriate, i.e., whether there is a genuine issue of material fact and whether the mover is entitled to a judgment as a matter of law." Id. at 844 (quoting Supreme Servs. & Specialty Co., Inc. v. Greer, 06-1827, p. 4 (La. 5/22/07), 958 So.2d 634, 638). An appellate court must be mindful of the movant's burdens of proof required in a motion for summary judgment, which is found in La.Code Civ.P. art. 966(D)(1) and provides:

The burden of proof rests with the mover. Nevertheless, if the mover will not bear the burden of proof at trial on the issue that is before the court on the motion for summary judgment, the mover's burden on the motion does not require him to negate all essential elements of the adverse party's claim, action, or defense, but rather to point out to the court the absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. The burden is on the adverse party to produce factual support sufficient to establish the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law.

         Additionally, "[t]he only documents that may be filed in support of or in opposition to the motion are pleadings, memoranda, affidavits, depositions, answers to interrogatories, certified medical records, written stipulations, and admissions." La.Code Civ.P. art. 966(A)(4).

         Similarly, the standard of review regarding a "peremptory exception of no cause of action is de novo because it raises a question of law." Hebert v. Shelton, 08-1275, p. 3 (La.App. 3 Cir. 6/3/09), 11 So.3d 1197, 1201.

The function of the peremptory exception of no cause of action is to question whether the law extends a remedy to anyone under the factual allegations of the petition. The peremptory exception of no cause of action is designed to test the legal sufficiency of the petition by determining whether [the] plaintiff is afforded a remedy in law based on the facts alleged in the pleading. No evidence may be introduced to support or controvert the objection that the petition fails to state a cause of action. The exception is triable on the face of the ...

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