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Florida Gas Transmission Company, LLC v. Texas Brine Company, LLC

Court of Appeals of Louisiana, First Circuit

August 29, 2019

FLORIDA GAS TRANSMISSION COMPANY, LLC
v.
TEXAS BRINE COMPANY, LLC, ET AL.

          On Appeal from The 23rd Judicial District Court, Parish of Assumption, State of Louisiana Trial Court No. 34316 The Honorable Thomas J. Kliebert Jr., Judge Presiding

          Leopold Z. Sher, James M. Garner, Peter L. Hilbert Jr., Jeffrey D. Kessler, New Orleans, Louisiana Robert Ryland Percy III, Gonzales, Louisiana, Travis J. Turner, Gonzales, Louisiana Attorneys for Appellant/Defendant, Texas Brine Company, LLC

          Glen E. Mercer Kourtney Twenhafel New Orleans, Louisiana Attorneys for Appellee/ Third-Party Defendant, Steadfast Insurance Company

          Mary S. Johnson Chad J. Mollere Mandeville, Louisiana Attorneys for Appellees/Third-Party Defendants, AIG Specialty Insurance Company, Lexington Insurance Company, and National Union Fire Insurance Company of Pittsburgh, PA.

          BEFORE: McDONALD, CRAIN, AND LANIER, JJ.

          CRAIN, J.

         Texas Brine Company, LLC, appeals a judgment dismissing its claims against Steadfast Insurance Company, AIG Specialty Insurance Company, Lexington Insurance Company, and National Union Fire Insurance Company of Pittsburgh, PA., in their respective capacities as insurers of Adams Resources Exploration Company (collectively "insurers"). We affirm.

         FACTS AND PROCEDURAL HISTORY

         This is one of several lawsuits arising out of a sinkhole in Assumption Parish that developed on or about August 3, 2012, following the collapse of the Oxy-Geismer #3 (OG3), a pressurized salt cavern in the Napoleonville Salt Dome. The OG3 was drilled by Texas Brine in 1982 on property owned by Occidental Chemical Corporation, then known as Hooker Chemical Corporation. Texas Brine operated the OG3 until 2011, when the cavern was plugged and abandoned.

         Occidental owned an adjacent piece of property that was subject to an oil and gas lease granted to Colorado Crude (Colorado Crude lease). In 1986, Adams Resources, an assignee of the Colorado Crude lease, drilled an oil and gas well on that property, the Adams-Hooker No. 1 (AH1 well). Before it was drilled, Texas Brine approved the surface and bottom hole locations for the AH1 well. When completed, the well did not penetrate or otherwise contact the Napoleonville Salt Dome or the OG3 cavern. In May 1986, before any actual production from the AH1 reservoir, Adams Resources assigned its operating interest in the AH1 well to HECI Exploration Company, LLC. The well produced until it was permanently shut-in in 2001, approximately 11 years before the development of the sinkhole.

         After the sinkhole appeared, Florida Gas Transmission Company sued Texas Brine, among other defendants, alleging Texas Brine's operation of the OG3 caused the collapse of the cavern and the resulting sinkhole, which damaged two of Florida Gas's pipelines. Texas Brine filed incidental demands against several parties associated with the AH1 well, including Adams Resources and its insurers, alleging the drilling and operation of the well decreased the pressure in the AH1 reservoir, which purportedly damaged the adjacent salt dome wall, "encouraged" the leakage of brine from the OG3 cavern, and ultimately contributed to the collapse of the cavern and formation of the sinkhole. Asserting tort and contract claims, Texas Brine cited the following provision in the Colorado Crude lease: "Lessee shall 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 premises."

         The litigation proceeded to a "Phase 1: Liability" trial limited to the following issues: (1) the duties owed by the non-insurer parties, (2) whether any non-insurer parties breached the duty or duties owed, and (3) if one or more non-insurer parties breached a duty or duties, whether the actions or inactions of that party caused any legally cognizable damages to any claimant.[1] After Texas Brine rested its case, Adams Resources' insurers moved for an involuntary dismissal of Texas Brine's claims. The trial court deferred ruling on the motion until the completion of the trial, at which time the motion was re-urged and granted by the trial court. In a judgment signed on November 11, 2017, the trial court dismissed Texas Brine's claims against Adams Resources' insurers with prejudice. Texas Brine appeals.

         DISCUSSION

         In an action tried by the court without a jury, any party may move for involuntary dismissal at the close of the plaintiffs case on the ground that upon the facts and law, the plaintiff has shown no right to relief. See La. Code Civ. Pro. art. 1672B.[2] The trial court may then determine the facts and render judgment against the plaintiff and in favor of the moving party or may decline to render any judgment until the close of all the evidence. Id. Unlike a motion for directed verdict in a jury trial, a motion for involuntary dismissal requires a judge to weigh and evaluate the evidence up to that point, without any special inferences in favor of the opponent to the motion, and ascertain whether the plaintiff has presented sufficient evidence to establish his claim by a preponderance of the evidence. See Taylor v. Tommie's Gaming, 04-2254 (La. 5/24/05), 902 So.2d 380, 384; Kennedy v. Louisiana Maintenance Specialties, Inc., 07-0506, 2007WL4555444, p. 3 (La.App. 1 Cir. 12/28/07); Ross v. Premier Imports, 96-2577 (La.App. 1 Cir. 11/7/97), 704 So.2d 17, 20, writ denied, 97-3035 (La. 2/13/98), 709 ...


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