Howard v. TOTALFINA E & P USA, INC.

• Decision Date: 03 March 2005
• Docket Number: No. 97-CA-01178-SCT., No. 2003-CA-01600-SCT
• Citation: 899 So.2d 882
• Parties: Stephanie HOWARD, Executrix of the Estate of Gerald Donald v. TOTALFINA E & P USA, INC. (Fina Oil and Chemical Company); Murphy Oil USA, Inc.; Arco Oil and Gas Company; Atlantic Richfield; Amoco Production Company; Vintage Petroleum, Inc.; Anadarko Petroleum Corporation (Champlin Petroleum Company-Union Pacific Resources); Exxonmobil; Oryx Energy Corporation; Union Oil Company of California; Bass Enterprises Production Company; Occidental Chemical; Oxy USA., Inc. (Individually and as Successor in Interest to Cities Service Oil & Gas Corporation); Placid Oil Company; Conocophillips; Marathon Oil Company (Individually and as Successor in Interest to TXO Production Corp.); Tenneco Oil Company; Inexco Oil Company; Moon-Hines-Tigrett Operating Company, Inc.; Texaco Inc.; Four Star Oil and Gas Company (as Successor to Getty Oil Company); Chevron U.S.A., Inc.; Chevron Corporation; Shell Western Exploration & Production, Inc.; and Conquest Exploration Company.
• Court: Mississippi Supreme Court

899 So.2d 882

Stephanie HOWARD, Executrix of the Estate of Gerald Donald v. TOTALFINA E & P USA, INC. (Fina Oil and Chemical Company); Murphy Oil USA, Inc.; Arco Oil and Gas Company; Atlantic Richfield; Amoco Production Company; Vintage Petroleum, Inc.; Anadarko Petroleum Corporation (Champlin Petroleum Company-Union Pacific Resources); Exxonmobil; Oryx Energy Corporation; Union Oil Company of California; Bass Enterprises Production Company; Occidental Chemical; Oxy USA., Inc. (Individually and as Successor in Interest to Cities Service Oil & Gas Corporation); Placid Oil Company; Conocophillips; Marathon Oil Company (Individually and as Successor in Interest to TXO Production Corp.); Tenneco Oil Company; Inexco Oil Company; Moon-Hines-Tigrett Operating Company, Inc.; Texaco Inc.; Four Star Oil and Gas Company (as Successor to Getty Oil Company); Chevron U.S.A., Inc.; Chevron Corporation; Shell Western Exploration & Production, Inc.; and Conquest Exploration Company.

Nos. 2003-CA-01600-SCT, 97-CA-01178-SCT.

Supreme Court of Mississippi.

March 3, 2005.

John W. Boling, Meridian, Michael G. Stag, Stuart H. Smith, New Orleans, LA, attorneys for appellant.

Benjamin Zachary Wise, Julie E. Chaffin, Jackson, Jesse Lee Howell, Steven Craig Panter, Jeffery P. Reynolds, David L. Martindale, Norman Gene Hortman, Jr., Laurel, C. Glen Bush, Thomas R. Hudson, Mark A. Nelson, Hattiesburg, Thomas C. Anderson, Gulfport, attorneys for appellees.

EN BANC.

SMITH, Chief Justice, for the Court.

¶ 1. This is the second time that this case has been before this Court on appeal because of the trial court's dismissal. The owner of the property, Gerald Donald, died, and the property was inherited by his daughter and sole heir, Stephanie Howard. The underlying lawsuit alleged that Fina Oil & Chemical Company, et al. [hereinafter the Fina Group], were responsible for the toxic waste that was dumped on Donald's property. Initially, this case was dismissed on September 3, 1997. Subsequently, this Court reversed the dismissal in part and remanded for further proceedings. Donald v. Amoco Prod. Co., 735 So.2d 161 (Miss.1999). Following remand, the circuit court ordered Fina Group to produce documents and other information relevant to their involvement in the hazardous waste site at issue.

¶ 2. At the time, the case was proceeding in compliance with the mandate of this Court. The parties then conducted mediation and, according to Howard, on August 23, 2003, reached an agreement on the terms of the settlement. This asserted agreement was inclusive of the transfer of the property to the Fina Group for the purpose of facilitating the cleanup. However, before the alleged agreement could be formalized, this Court issued its decision in Chevron U.S.A., Inc. v. Smith, 844 So.2d 1145 (Miss.2003), which required the exhaustion of administrative remedies before filing suit in a case concerning groundwater damages at an oil field site. With this decision in hand, the Fina Group filed another motion to dismiss. In response, Howard filed a motion to enforce the alleged settlement agreement. Accordingly, the trial court declined to enforce the settlement agreement and dismissed the case because it determined that Howard could not assert common law claims of negligence, nuisance, trespass, strict liability, and breach of contract until the available administrative remedies were exhausted before the Mississippi Oil and Gas Board.

FACTS AND PROCEEDINGS BELOW

¶ 3. On August 16, 1991, Gerald Donald bought a 20-acre parcel of land in Wayne County, Mississippi, for the appraised value. Prior to his purchase of the property, Donald leased a small parcel of the property from Davis Brothers for the purpose of operating his wood yard. He was forced to seek purchase of this property from the bank in order to protect his improvements and to continue business at the wood yard. Specifically, he acquired title to the property by quitclaim deed from the Bank of Waynesboro (now Bankplus) which had seized the property at foreclosure. The former owners, the Davis Brothers, were in the business of providing oil well maintenance services to various oil companies. In his complaint, Donald alleged that Davis Brothers transported the oil field waste to the property and disposed of it there. Donald did not discover the waste until 1995. Along with the 20 acres of property he purchased, Donald also unknowingly purchased oil sludge, tar, volatile hydrocarbons, radium scale, and heavy metals — all of which were produced by wells owned or operated by oil companies that contracted with Davis Brothers. Upon his death, Donald's daughter, Stephanie Howard, inherited the property, and the circuit court granted the plaintiff's motion to substitute Howard as plaintiff for her deceased father.

DISCUSSION

I. DID THE TRIAL COURT ERR BY DISREGARDING THE MANDATE OF THIS COURT IN DONALD v. AMOCO?

¶ 4. The standard of review of questions of law is de novo. Miss. Transp. Comm'n v. Fires, 693 So.2d 917, 920 (Miss. 1997). Further, "[t]his Court must reverse for erroneous interpretations or applications of law." Id. This Court has also stated that it "cannot overturn the decree of a chancellor unless it finds with reasonable certainty that the decree is manifestly wrong on a question of law or interpretation of facts pertaining to legal questions." In re City of Oak Grove, 684 So.2d 1274, 1276 (Miss.1996) (citations omitted). The findings of the circuit court are accorded the same deference as a chancellor's fact findings. Kight v. Sheppard Bldg. Supply, Inc., 537 So.2d 1355, 1358 (Miss.1989) (citing Hardy v. First Nat'l Bank, 505 So.2d 1021, 1023 (Miss.1987)).

¶ 5. The trial judge erred in dismissing Howard's common law claims of negligence, nuisance, trespass, strict liability, and breach of contract, but he did not intentionally disregard a mandate of this Court. Howard alleged that in Donald, this Court, in addition to reversing a prior judgment of dismissal, stated her claims were actionable. Donald v. Amoco Prod. Co., 735 So.2d 161 (Miss.1999). However, this Court stated that these claims were improperly dismissed under the Rule 12(b)(6) standard of review. Id. This Court did not state that Howard's claims were actionable, but simply inferred that the claims were facially sufficient enough to survive a Rule 12(b)(6) motion. In other words, the facts as Donald alleged them are true, then he did state a claim upon which relief could be granted. M.R.C.P. 12(b)(6).

¶ 6. The circuit judge dismissed Howard's claims because the intervening decision in Chevron U.S.A. Inc. v. Smith, 844 So.2d 1145 (Miss.2002), was handed down by this Court during the course of pre-trial proceedings and attempted mediation. The Fina Group then filed a motion to dismiss Howard's claims on the basis that her action was premature because she had failed to exhaust her administrative remedies, as enumerated in Chevron. Id. When the circuit judge granted the Fina Group's motion to dismiss, he did so based on an erroneous interpretation of the law. The circuit judge misapplied this Court's ruling in the Chevron case to the facts in the case sub judice. Id. Since Howard raised this assertion as a separate issue on appeal, a subsequent discussion of said issue ensues.

¶ 7. Accordingly, this Court finds that the dismissal of Howard's claims was erroneous. However, the circuit judge's basis for dismissal was not due to a disregard of this Court's mandate, but instead, an error in misinterpreting Chevron. Id. Nevertheless, this Court finds that the circuit judge was manifestly wrong by dismissing Howard's claims.

II. DID THE TRIAL COURT ERR IN APPLYING CHEVRON v. SMITH TO HOLD THAT HOWARD MUST EXHAUST ALL ADMINISTRATIVE REMEDIES BEFORE THE MISSISSIPPI OIL & GAS BOARD PRIOR TO FILING A PRIVATE ACTION?

Oil and Gas Board jurisdiction

¶ 8. Howard asserts that since the Mississippi Oil and Gas Board [hereinafter the Board] lacks jurisdiction over the claims she raised, she is thereby not required to exhaust potential administrative remedies before filing suit. The jurisdictional issue must be addressed before enumerating upon whether Howard must first exhaust administrative remedies.

¶ 9. The Fina Group claimed that the Board had jurisdiction over this case because the Board purportedly issued a permit to the Davis Brothers. The only evidence that the Fina Group offered that related to the purported permit was taken from Phil Davis' deposition. The permit in question, if it ever existed, could not be located. Counsel for one of the companies within the Fina Group stated "Judge, I have looked for — it's been a long time ago, apparently they don't still have a record going back that far of the permits. I haven't seen the actual permit. I just know it existed because of what Phil Davis said." (emphasis added). In response, Howard's counsel said:

[t]hey can't produce you a permit, Judge, because first of all, I don't think it existed; secondly, Phil Davis testified in that same deposition that he was in Alabama when this was going on. And by the way, Phil Davis testified that he invented a perpetual motion machine too, Your Honor. I'm serious, Judge. Now this is the man that Mr. Reynolds wants you to decide this case on. He's invented a machine that makes more energy than it uses. There is no permit for them to dump this radioactive waste on this property. And even assuming argumentatively there was a permit, the permit would only cover the tip, it wouldn't cover these other areas that were contaminated from the illegal dumping.

(Emphasis added). The Fina Group's reliance upon this witness is misplaced as well as insufficient by way of proof that a permit was actually issued.

¶ 10. Howard maintained that the Board lacks jurisdiction for several reasons. First of all, she distinguished the case sub judice from the Chevron case, relied upon by the circuit judge. Chevron v. Smith, 844 So.2d 1145. Howard claimed that the...