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Marchand v. Texas Brine Company, LLC

Court of Appeals of Louisiana, First Circuit

January 28, 2019

SUSAN RUSSO MARCHAND, ET AL
v.
TEXAS BRINE COMPANY, LLC, ET AL

          On appeal and application for supervisory review from the Twenty-Third Judicial District Court In and for the Parish of Assumption State of Louisiana Docket No. 34, 270, Honorable Jason Verdigets, Judge Presiding

          Leopold Z. Sher James M. Garner Peter L. Hilbert, Jr. Neal J. Kling Jeffrey D. Kessler Jonathan B. Cerise Martha Y. Curtis Christopher T. Chocheles New Orleans, LA, Robert Ryland Percy III Travis J. Turner Gonzales, LA Katie D. Bell Bradley C. Myers Troy J. Charpentier Baton Rouge, LA Dane S. Ciolino Metairie, LA Eric J. Mayer Houston, TX, Counsel for Third -Party Plaintiff/Appellant Texas Brine Company, LLC

          Roy C. Cheatwood Kent A. Lambert Adam B. Zuckerman Paul C. Thibodeaux Matthew S. Chester Colleen C. Jarrott Matthew C. Juneau Joseph A. Atiyeh Tyler L. Weidlich New Orleans, LA, Tony M. Clayton Port Allen, LA, Counsel for Third -Party Defendant/Appellee Vulcan Materials Company

          BEFORE: GUIDRY, THERIOT, AND PENZATO, JJ.

          GUIDRY, J.

         This appeal, and related supervisory writ application, stem from a judgment denying a request for the issuance of a preliminary injunction. For the following reasons, we affirm.

         FACTS AND PROCEDURAL HISTORY

         In 1975, Texas Brine Company, LLC acquired a lease to produce salt from a salt dome located under 40 acres of land in Assumption Parish ("Salt lease"), which land belongs to Occidental Chemical Corporation ("Oxy Chem").[1] Texas Brine later assigned its interest in the Salt lease to Vulcan Materials Company in 1976, but remained the operator of the brine production wells and related facilities pursuant to certain operating and supply agreements executed by Texas Brine and Vulcan Materials Company in 1975 and 2000.

         In 2004, Basic Chemicals Company purchased the assets, properties, rights, contracts, and claims of Vulcan Materials Company. Then in 2005, Vulcan Materials Company assigned to Basic Chemicals Company all of its legal and beneficial rights, title, and interest of any kind or character in all business contracts. At the time of the acquisitions from Vulcan Materials Company, Oxy Chem held all of the outstanding equity interest in Basic Chemicals Company.[2]

         In 2012, a large sinkhole appeared on the aforementioned Oxy Chem land in Assumption Parish following the collapse of a portion of the salt dome beneath the land. Several persons and entities claiming personal injuries and loss of property and business due to the sinkhole filed a petition for damages on May 29, 2013, naming as defendants Texas Brine, Oxy Chem, the State of Louisiana through the Department of Natural Resources, and Miller Engineering & Associates, Inc. Texas Brine and Oxy Chem filed separate answers to the petition, generally denying liability and raising various affirmative defenses to the plaintiffs' claims. Oxy Chem additionally filed a separate cross claim against Texas Brine for damages sustained to its property, for breach of contract, and for contribution and indemnification to the extent it is found liable to the plaintiffs. Texas Brine, in turn, filed a demand to arbitrate certain disputes between it and Oxy Chem pursuant to the provisions of the 2000 Amended and Restated Operating and Supply Agreement that Texas Brine had executed with Vulcan Materials Company.[3] Years later, however, Texas Brine sought to terminate the arbitration.

         On July 5, 2017, Texas Brine filed a request for injunctive relief[4] in the instant action, seeking the issuance of preliminary and permanent injunctions, after due proceedings, to enjoin Oxy Chem from proceeding with the arbitration. Texas Brine then filed a motion for preliminary injunction on July 7, 2017, again requesting that Oxy Chem be enjoined from proceeding with arbitration. The basis for both pleadings is Texas Brine's assertion that Oxy Chem is not a valid assignee of the 2000 Amended and Restated Operating and Supply Agreement between Texas Brine and Vulcan Materials Company, which contains the provision for arbitration.

         A hearing on the request for a preliminary injunction was held October 23, 2017. After taking the matter under advisement, the trial court issued written reasons and signed a judgment on November 15, 2017, denying Texas Brine's motion for preliminary injunction. Pursuant to La. C.C.P. art. 3612, Texas Brine devolutively appeals the November 15, 2017 judgment denying its motion for preliminary injunction. Texas Brine also filed an application for supervisory writs challenging the judgment, which application was referred to this panel to decide in conjunction with the related appeal. See Marchand v. Texas Brine Company, LLC, 17-1713 (La.App. 1st Cir. 5/14/2018) (unpublished writ action).

         DISCUSSION

         A preliminary injunction is essentially an interlocutory order issued in summary proceedings incidental to the main demand for permanent injunctive relief. It is designed to and serves the purpose of preventing irreparable harm by preserving the status quo between the parties pending a determination on the merits of a controversy. Farmer's Seafood Co., Inc. ...


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