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Furie Petroleum, L.L.C. v. Swepi, LP

Court of Appeals of Louisiana, Second Circuit

November 20, 2019

FURIE PETROLEUM, L.L.C. AND SILVER SPUR ROYALTY COMPANY, L.L.C. Plaintiffs - Appellees
v.
SWEPI, LP, ENCANA OIL & GAS (USA), INC., PRIDE OIL AND GAS PROPERTIES, INC., CLOYCE C. CLARK, JR. AND MARTHA CHAMBERLAIN CLARK Defendants - Appellants CLOYCE C. CLARK, JR., ET UX Defendants - Appellants
v.
EUGENE COPELAND, ET AL Defendants - Appellees

          Appealed from the Forty-Second Judicial District Court for the Parish of DeSoto, Louisiana Trial Court No. 70733 Honorable Charles Blaylock Adams, Judge.

          LISKOW & LEWIS By: Lawrence Paul Simon, Jr. Brian W. Capell Counsel for Appellants, SWEPI, LP and Vine Oil & Gas, LP

          CHRISTOPHER LENTO RYAN M. SEIDEMANN RICHARD LOUIS TRAINA Assistant Attorneys General Counsel for Appellant/ Intervenor, State of Louisiana

          COOK, YANCEY, KING & GALLOWAY By: William Drew Burnham John Tucker Kalmbach Herschel Erskine Richard, Jr. Counsel for Appellants, Encana Oil & Gas (USA) Inc., GEP Haynesville, LLC, Pride Oil & Gas Properties, Inc.

          BETHARD & BETHARD, LLP By: James Guenard Bethard Counsel for Appellants, Cloyce C. Clark, Jr. and Martha Chamberlain Clark

          AYRES, SHELTON, WILLIAMS, BENSON & PAINE, LLC By: Lee H. Ayres Ryan P. Telep Counsel for Appellees, Furie Petroleum Company, LLC, Silver Spur Royalty Company, LLC, Briarwood Finance Co., LLC, and Hydrotek Resources, Inc.

          D. SCOTT BROWN LAW OFFICE By: Daniel Scott Brown Counsel for Appellees/ Intervenors, Annie Laurie Samuels, Harvey H. Samuels, Jr., Karen O. Lanier, Jamma Energy, LLC,

          KEVIN SEVERSON Counsel for Appellees, Lanier Samuels Properties, LLC, and Succession of Eugene Copeland

          Before STONE, COX, and THOMPSON, JJ.

          STONE, J.

         This appeal arises from the Forty-Second Judicial District Court, DeSoto Parish, the Honorable Charles B. Adams presiding. Following a 5-day bench trial on the merits, the trial court granted judgment in favor of the Servitude Group, [1] finding that the Landowner Group[2] failed to show by a preponderance of the evidence that Bayou Dolet was navigable when Louisiana was admitted to the Union in 1812. For the following reasons, we affirm.

         FACTUAL BACKGROUND AND PROCEDURAL HISTORY

         This complex litigation explores the intrinsic nature of Louisiana waterways during the state's annexation to the Union. The ultimate issue is whether a certain mineral servitude[3] in DeSoto Parish, Louisiana has prescribed as a result of 10 years of nonuse. The issues of prescription and navigability are bifurcated for our purposes, and this appeal only concerns whether Bayou Dolet was navigable in 1812.[4]

         The parties in this case are divided into two groups: the Servitude Group, which maintains that the servitude still exists, and the Landowner Group, which argues that the servitude has prescribed. The Landowner Group argues that Bayou Dolet was formerly navigable, all the way through the tract at issue, and therefore, the tract is noncontiguous, and the mineral servitude would be deemed severed into two separate servitudes by virtue of La. R.S. 31:64.[5] Conversely, the Servitude group argues that Bayou Dolet was not formerly navigable, and therefore, the tract at issue remains contiguous and the mineral servitude remains whole.

         A 5-day bench trial commenced on August 20, 2018, before Judge Charles B. Adams. A total of eight witnesses testified and 12 exhibits were admitted into evidence. The Landowner Group called two fact witnesses: Cloyce C. Clark, the owner of the property, and Cheston Hill, a representative with the State Land Office; and five expert witnesses: Michael P. Mayeux, Phillip N. Asprodites, Dr. Johannes L. van Beek, Dr. Gary D. Joiner ("Dr. Joiner"), and Dr. George J. Castille, all of whom spent considerable time investigating Bayou Dolet.

         The Servitude Group called, as its only witness, a hydrologist, Dr. Charles D. Morris ("Dr. Morris"), who had previously examined the property. Following the trial, the Court visited the site and examined the property at issue with all counsel and parties present. At the conclusion of the site visit, the trial court took the matter under advisement. On November 30, 2018, the trial court's "Written Reasons for Ruling on Issue of Navigability" held that the Landowner Group failed to prove by a preponderance of the evidence that there was, more likely than not, a navigable body of water through the subject property in 1812. The Landowner Group filed this timely suspensive appeal asserting the following as its assignments of error:

(1) The trial court erred, as a matter of law, by requiring physical evidence of a channel through the Property, including through Lake Dolet, for Bayou Dolet to be navigable in 1812.
(2) The trial court erred, as a matter of law, by requiring that Bayou Dolet be capable of use in transportation or commerce through the entire year.
(3) The trial court erred, as a matter of law, by requiring evidence that Bayou Dolet was actually used for transportation or commerce.
(4) The trial court erred by precluding the Landowner Group from presenting rebuttal expert testimony.
(5) The trial court committed manifest error by ignoring ample historical and physical evidence of Bayou Dolet's navigability in 1812.

         DISCUSSION

         Standard of Review

         At the outset of this appeal, we address the applicable standard of review. The Landowner Group maintains that the trial court committed legal errors which interdicted the fact-finding process, and thus requires de novo review by this Court. We disagree.

         An appellate court may not set aside a trial court's finding of fact in the absence of manifest error or unless it is clearly wrong. Where two permissible views of the evidence exist, the fact-finder's choice between them cannot be manifestly erroneous or clearly wrong. Cole v. State Dept. of Public Safety & Corr., 2001-2123 (La. 9/4/02), 825 So.2d 1134; Stobart v. State through Dept. of Transp. & Dev., 617 So.2d 880 (La. 1993); Jewitt v. Alvarez, 50, 083 (La.App. 2 Cir. 9/30/15), 179 So.3d 645. To reverse a fact-finder's determination, the appellate court must find from the record that a reasonable factual basis does not exist for the finding of the trial court and that the record establishes that the finding is clearly wrong. Stobart, supra; Jewitt, supra.

         Even if an appellate court may believe its own evaluations and inferences are more reasonable than that of the fact-finder, the reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review where conflict exists in the testimony. Cole, supra; Rosell v. ESCO, 549 So.2d 840 (La. 1989). Moreover, where the fact-finder's conclusions are based on determinations regarding credibility of the witnesses, the manifest error standard demands great deference to the trier of fact because only the trier of fact can be aware of the variations in demeanor and tone of voice that bear so heavily on the listener's understanding and belief in what is said. Rosell, supra; Jewitt, supra; Jones v. Fin. Indem. Co., 52, 421 (La.App. 2 Cir. 1/16/19), 264 So.3d 660.

         However, where one or more trial court legal errors interdict the fact-finding process, the manifest error standard is no longer applicable, and, if the record is otherwise complete, the appellate court should make its own independent de novo review of the record and determine a preponderance of the evidence. Ferrell v. Fireman's Fund Ins. Co., 94-1252 (La. 2/20/95), 650 So.2d 747. A legal error occurs when a trial court applies incorrect principles of law and such errors are prejudicial. Lasha v. Olin Corp., 625 So.2d 1006 (La. 1993). Legal errors are prejudicial when they materially affect the outcome and deprive a party of substantial rights. Lasha, supra; Evans v. Lungrin, 97-0541 (La. 2/6/98), 708 So.2d 731.

         In the matter sub judice, the Landowner Group's arguments for reversal of the judgment and de novo review are identical, and appear to be a thinly-veiled attempt to argue the merits of this appeal twice. The Landowner Group has failed to cite any alleged errors which would necessitate conducting de novo review. Thus, the central issue before this Court is whether the trial court committed manifest error in finding that the Landowner Group failed to prove, by a preponderance of the evidence, that Bayou Dolet was navigable in 1812 when Louisiana was admitted to the Union.

         Applicable Law

         Public things are owned by the state or its political subdivisions in their capacity as public persons. La. C.C. art. 450. Public things that belong to the state are such as running waters, the waters and bottoms of natural navigable water bodies, the territorial sea, and the seashore. Id. Louisiana's ownership of the beds and waters of the navigable waterways within the state is by virtue of the Equal Footing Doctrine, [6] later codified in La. R.S. 9:1101, which states in pertinent part:

The waters of and in all bayous, rivers, streams, lagoons, lakes and bays, and the beds thereof, not under the direct ownership of any person on August 12, 1910, are declared to be the property of the state. There shall never be any charge assessed against any person for the use of the waters of the state for municipal, industrial, agricultural or domestic purposes.
While acknowledging the absolute supremacy of the United States of America over the navigation on the navigable waters within the borders of the state, it is hereby declared that the ownership of the water itself and the beds thereof in the said navigable waters is vested in the state and that the state has the right to enter into possession of these waters when not ...

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