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State v. Motiva Enterprises, LLC

Court of Appeals of Louisiana, Fifth Circuit

October 2, 2019

STATE OF LOUISIANA, DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT
v.
MOTIVA ENTERPRISES, LLC STATE OF LOUISIANA, DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT
v.
DR. COLDWELL DANIEL, III, ET AL

          ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NOS. 643-350, 636-170, DIVISION "J" HONORABLE STEPHEN C. GREFER, JUDGE PRESIDING

          COUNSEL FOR PLAINTIFF/APPELLEE, STATE OF LOUISIANA, DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT James L. Bradford, III D. Stephen Brouillette, Jr.

          COUNSEL FOR DEFENDANT/APPELLANT, MOTIVA ENTERPRISES, LLC Kelly B. Becker Matthew D. Simone Kathryn Z. Gonski Trinity A. Brown

          Panel composed of Judges Fredericka Homberg Wicker, Marc E. Johnson, and John J. Molaison, Jr.

          MARC E. JOHNSON JUDGE.

         In this expropriation case, Plaintiff-in-reconvention, Motiva Enterprises, LLC, appeals the trial court's judgment granting a directed verdict in favor of the State of Louisiana, Department of Transportation and Development ("DOTD"), dismissing all of Motiva's reconventional claims with prejudice. Because we find Motiva failed to offer sufficient evidence to satisfy its burden of proving damages, we affirm the judgment.

         FACTS & PROCEDURAL HISTORY

         This lawsuit arises out of a construction project involving the intersection of Causeway Blvd. and Veterans Blvd. in Metairie that began in 2009 and ended in 2012. In connection with the project, the DOTD filed suit in 2006 to expropriate land for purposes of the construction project. Specifically, it sought to permanently take four feet of land for the project and to use an additional ten feet of the land for a temporary servitude during construction.

         The land at issue was owned by Dr. Coldwell Daniel, III, who leased it to Shell Oil Company in 1957, which later, in 1998, assigned the lease to Motiva Enterprises, LLC (a company formed from a partnership between Shell and Texaco). At the time of trial, the lease was still in existence and contained several five-year option periods to extend the lease through 2025. The lease gave Shell - and then Motiva by assignment - the exclusive right to build on the site and to use the site for a gas station.[1]

         After the expropriation at issue and prior to the beginning of the construction project, Shell decided to exit the retail business and move strictly to a wholesale supply business. To accomplish this, Shell sought to divest itself of all the gas stations it owned and operated, as well as those it leased to third parties, across the country by packaging up each of its markets into a series of bulk sales to third parties, whereby Shell would maintain the supply relationship to the buyer. The New Orleans area bulk sale included the Shell station at issue, which was located at the intersection of Causeway Blvd. and Veterans Blvd. and situated on the land involved in the expropriation. Shell solicited bids for the bulk sale by first generating an information memorandum describing the market and the assets, and selecting certain bidders. Shell then made available to the selected bidders a template of the purchase and sale agreement and an electronic data room where the bidders could review information regarding the sites - such as environmental reports and existing leases, and invited the bidders to submit a bid.

         The winning bid for the New Orleans area bulk sale came from LavigneBaker Petroleum, LLC, a Shell wholesaler, in the amount of $37 million. In December 2007, Shell and LavigneBaker entered into an Asset Purchase and Sale Agreement for 52 Shell branded retail service stations in the New Orleans area, including the site involved in the expropriation. In the Asset Purchase and Sale Agreement, LavigneBaker acknowledged that the agreed upon purchase price reflected the fact that the site at issue was subject to a public taking. As part of the sale, LavigneBaker was required to enter into a separate Branding and Product Purchase Commitment Agreement, wherein it agreed to purchase a minimum volume of gasoline from Shell for the purchased sites, which it signed in February 2008.

         Prior to the sale, in August 2006, the DOTD filed an expropriation lawsuit against Dr. Daniel, as owner of the land sought to be expropriated, and Shell Oil Company, as lessee of the land at issue. The DOTD estimated just compensation for the taking to be $28, 255, which it sought to deposit into the registry of the court. An order of expropriation was signed by the trial court on August 30, 2006. Thereafter, the parties stipulated that Motiva Enterprises, LLC ("Motiva") was the proper lessee of the land at issue and that Motiva would be named in place of Shell Oil Company.

         In a separate lawsuit, filed in April 2007 and amended in May 2007, the DOTD filed an expropriation petition against Motiva seeking to acquire certain improvements, including a self-illuminated sign, concrete paving and curbing, and landscaping, allegedly owned by Motiva that were located within a certain right of way needed for the construction project. The DOTD estimated the just compensation for these improvements to be $29, 510. An order of expropriation was signed by the trial court on April 4, 2007. On motion of Motiva, the two lawsuits were consolidated.

         On April 13, 2007, the DOTD and Dr. Daniel filed a joint petition indicating they had reached a settlement in connection with the expropriation, with Dr. Daniel agreeing to accept $25, 350 as a final award of just and adequate compensation for the expropriated property. A judgment confirming the settlement was signed on April 19, 2007.

         Motiva subsequently filed an answer and reconventional demand. In its reconventional demand, Motiva alleged it operated a gas station/convenience store on a portion of the expropriated property. Motiva asserted that it would not be able to conduct its business from this location in its post-taking condition. Specifically, Motiva alleged it would not be able to safely operate its dispensing units on the Causeway Blvd. side of the business, which would greatly impact the continued operation of the station. Motiva averred it was entitled to be compensated to the full extent of its economic loss, including lost profits.

         Approximately two and one half years later, in March 2010, Motiva amended its reconventional demand to indicate that it had assigned its interests in the subject property and improvements to LavigneBaker in February 2008. Motiva claimed that it assigned its rights at a greatly reduced price due to the diminution in value of the property caused by the expropriation and the anticipated loss of economic revenue during the construction. As such, Motiva sought damages for diminution of property value and lost profits caused by the expropriation. In November 2017, Motiva supplemented its ...


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