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Pontchartrain Natural Gas System v. Texas Brine Company, LLC

Court of Appeals of Louisiana, First Circuit

November 15, 2019

PONTCHARTRAIN NATURAL GAS SYSTEM, K/D/S PROMIX, L.L.C, AND ACADIAN GAS PIPELINE SYSTEM
v.
TEXAS BRINE COMPANY, LLC

          On Appeal from the Twenty -Third Judicial District Court In and for the Parish of Assumption State of Louisiana Docket No. 34, 265 Honorable Thomas J. Kliebert, Jr., Judge Presiding

          Leopold Z. Sher James M. Garner Peter L. Hilbert, Jr. Jeffrey D. Kessler New Orleans, Louisiana Attorneys for Appellant/Defendant/ Third -Party Plaintiff, Texas Brine Company, LLC

          Robert Ryland Percy, III Gonzales, Louisiana Travis J. Turner Gonzales, Louisiana Glen E. Mercer Kourtney Twenhafel New Orleans, Louisiana Attorneys for Appellee/Third-Party Defendant, Steadfast Insurance Company, as alleged insurer of Adams Resources Exploration 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, as alleged insurers of Adams Resources Exploration Company

          Matthew J. Randazzo, III Christopher B. Bailey Will Montz Lafayette, Louisiana Attorneys for Appellee/Defendant/ Third -Party Defendant, Browning Oil Company, Inc.

          Martin A. Stern Leigh Ann Schell Raymond P. Ward Jeffrey E. Richardson Sara C. Valentine New Orleans, Louisiana Attorneys for Appellees/Defendants, Occidental Chemical Corporation Occidental Petroleum Corporation, and Oxy USA, Inc.

          Roy C. Cheatwood Kent A. Lambert Adam B. Zuckerman Paul C. Thibodeaux Colleen C. Jarrott Matthew S. Chester Matthew C. Juneau New Orleans, Louisiana Tony M. Clayton Port Allen, Louisiana Attorneys for Appellee/ Third-Party Defendant/Third-Party Plaintiff, Legacy Vulcan, LLC

          BEFORE: HIGGINBOTHAM, [1] PENZATO, AND LANIER, JJ.

          PENZATO, 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[2] (collectively "Adams Resources' insurers"), on a motion for involuntary dismissal. For the reasons that follow, we affirm.

         FACTS AND PROCEDURAL HISTORY

         The underlying litigation in this matter involves the sinkhole in Assumption Parish that resulted when the site of a former brine cavern, known as the Oxy Geismar No. 3 well (OG3) collapsed. Numerous plaintiffs filed suit against several defendants, including Texas Brine, for damages to their property. Texas Brine drilled a brine well known as OG3 on land owned by Occidental Chemical Corporation (Oxy) in 1982. In 1983, Oxy leased a portion of the land to Colorado Crude Company (Colorado Crude Lease) for the purpose of drilling an oil well thereon. In 1986, Adams Resources, an assignee of the Colorado Crude Lease, drilled an oil and gas well on the property that became known as Adams-Hooker No. 1 well (AH1 well).[3] In May 1986, before any actual production from the AH1 well, Adams Resources assigned its operating interest in the well to HECI Exploration Company, LLC. The ALU well produced until it was permanently shut-in in 2001, approximately 11 years before the development of the sinkhole on or about August 3, 2012.

         Various plaintiffs filed suit against Texas Brine and other defendants for alleged damages arising from the sinkhole. Texas Brine asserted third-party demands against Adams Resources and its insurers, pursuant to the Louisiana Direct Action Statute, La R.S. 22:1269. On October 9, 2017, at the close of Texas Brine's case on the bifurcated liability trial, the Adams Resources' insurers moved for an involuntary dismissal, which the district court originally deferred. On November 11, 2017, the district court granted the involuntary dismissal and signed a judgment in accordance therewith. It is from this judgment that Texas Brine appeals.

         LAW ...


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