Billingsley v. Bach Energy Corp.

• Decision Date: 30 October 1991
• Docket Number: No. 22852-CA,22852-CA
• Citation: 588 So.2d 786
• Parties: David L. BILLINGSLEY, Jr., Plaintiff-Appellee, v. BACH ENERGY CORPORATION, Defendant-Appellant. 588 So.2d 786
• Court: Court of Appeal of Louisiana — District of US

Page 786

588 So.2d 786

David L. BILLINGSLEY, Jr., Plaintiff-Appellee, v. BACH ENERGY CORPORATION, Defendant-Appellant.

No. 22852-CA.

588 So.2d 786

Court of Appeal of Louisiana Second Circuit.

Oct. 30, 1991.

Comegys, Lawrence, Jones, Odom & Spruiell by J. Marshall Jones, Jr., Shreveport, for defendant-appellant.

Bodenheimer, Jones, Klotz & Simmons by F. John Reeks, Jr., Shreveport, for plaintiff-appellee.

Before SEXTON, NORRIS and LINDSAY, JJ.

SEXTON, Judge.

The defendant, Bach Energy Corporation, appeals the partial summary judgment rendered in favor of the plaintiff, David L. Billingsley, Jr. The judgment awarded the plaintiff $34,000 pursuant to the terms of a contract between the parties. We affirm.

On October 8, 1988, the plaintiff and defendant entered into a written letter agreement, or contract, whereby the defendant agreed to pay the plaintiff a finder's fee of five percent of eight eighths ( 8/8ths) of the total purchase price of certain oil and gas properties and interests in an area designated as the San Patricio project in Sabine Parish in return for the plaintiff's efforts with the owners of those interests to secure for the defendant an exclusive option to purchase such property. The contract further provided that a preexisting obligation of Perkins Oil Properties, Inc. (Perkins) to pay plaintiff a $3,000 per well location fee would become part of the agreement between the plaintiff and defendant and would be assumed by the defendant.

On October 18, 1988, Perkins and the defendant contracted to give the defendant an option to purchase oil and gas wells and undeveloped oil, gas and mineral leases for a $500,000 consideration which would be paid at the closing of the sale. A subsequent agreement between Perkins and the defendant, dated January 9, 1989, apparently increased the consideration to be paid by $100,000, although there was evidence that this additional amount was not part of the purchase price for the property. On January 25, 1989, the San Patricio oil and gas properties and interests were conveyed to the defendant by Perkins.

The plaintiff filed suit seeking to recover the finder's fee, the per well location fee, and additional amounts allegedly due on open account for professional services performed by the plaintiff for the defendant on certain wells. The plaintiff moved for summary judgment on his claims. The trial court partially granted the summary judgment. The trial court found that the assignment of oil and gas properties and interests had been consummated and concluded between the defendant and Perkins. This satisfied the condition contained in the October 8, 1988 contract between the plaintiff and defendant. The trial court therefore rendered judgment in favor of the plaintiff ordering defendant to pay a five percent finder's fee on the purchase price of $500,000 and $3,000 for each of three wells drilled in the area, for a total of $34,000. The motion for summary judgment was denied as to the plaintiff's claim for a finder's fee on the $100,000 alleged to be an additional consideration paid by the defendant to Perkins as per the agreement of January 9, 1989. Additionally, the trial court denied the motion for summary judgment as to the amounts allegedly due on open account for services performed by plaintiff. A judgment to that effect was signed on November 29, 1990. The defendant seeks review of this judgment.

On appeal, the defendant argues that summary judgment was inappropriate because there are genuine issues of material fact regarding the terms of the contract and whether the sums are due. First, defendant argues that its purchase of Perkins' interest was not yet "consummated" as that term was intended to apply in the contract between the plaintiff and the defendant. Defendant cites several affidavits submitted in opposition to the motion for summary judgment. According to these affidavits, pursuant to existing agreements, any sale or assignment by Perkins of the San Patricio property required the written consent of Mobil Exploration and Production, U.S., Inc. (Mobil), Inexco Oil Company (Inexco), and International Paper Company (I.P.). The consent of these three companies has apparently not been obtained. Thus, defendant argues, the sale from Perkins to the defendant has not yet been consummated, and therefore, the defendant does not yet owe plaintiff the finder's fee.

Additionally, the defendant argues that plaintiff violated the spirit of their contract by not endeavoring to negotiate for defendant an exclusive option to purchase the interests of the various other working interests (allegedly eight other entities) in the San Patricio project.

Finally, defendant argues that the $3,000 per well location fee was improperly awarded. Defendant argues that implicit in this provision of the contract was an agreement that plaintiff, for the $3,000, would provide all necessary field and engineering supervisory services on the wells. Defendant argues these services were not performed and thus this fee is not owed.

A summary judgment is appropriate only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the mover is entitled to judgment as a matter of law. LSA-C.C.P. Art. 966; Dixie Campers, Inc. v. Vesely Company, 398 So.2d 1087 (La.1981). The burden of proof in a motion for summary judgment is on the mover to establish that there are no genuine issues of material fact. This burden is a great one as only when reasonable minds must inevitably concur is summary judgment warranted and any doubts should be resolved in favor of a trial on the merits. Ouachita National Bank (Premier Bank, N.A.) v. Palowsky, 570 So.2d 114 (La.App. 2d Cir.1990); Swindle v. Haughton Wood Company, Inc., 458 So.2d 992 (La.App. 2d Cir.1984).

If the supporting documents presented by a party moving for summary judgment are sufficient to resolve all genuine issues of material fact, the burden then shifts to the opposing party to present evidence beyond the allegations and denials contained in the pleadings, showing that material facts are still at issue. Sanders v. Hercules Sheet Metal, Inc., 385 So.2d 772 (La.1980); Dement v. Red River Valley Bank, 506 So.2d 1329 (La.App. 2d Cir.1987).

In support of the motion for summary judgment, the plaintiff submitted the contract between him and the defendant and the option and sales contracts between defendant and Perkins. The plaintiff also provided evidence that three oil wells had been drilled on the San Patricio property, but no money had been forthcoming from defendant. The plaintiff therefore satisfied his burden of proof, showing he had satisfied his obligation under the contract, but defendant had not yet paid the sums due. The burden then shifted to defendant to show that material facts were still at issue.

We note first that defendant's allegations that plaintiff violated the spirit of their contract is unsupported by any evidence presented either in support of or in opposition to the motion for summary judgment. There is thus nothing in the record which purports to show, as defendant now argues on appeal, that plaintiff failed to attempt negotiations for an exclusive option to purchase in favor of the defendant with the other owners of interests in the San Patricio project. Even assuming that such negotiations were envisioned and required by the spirit of the contract, the unsupported allegations in defendant's appellate brief fail to present a genuine issue of material fact that the plaintiff breached the spirit of the contract.

The defendant's two remaining arguments both rely upon parol evidence. The crucial inquiry is whether parol evidence would be admissible, first to determine the parties' intent in using the term "consummated" in the contract and, second, whether the parties implicitly intended that plaintiff would render services in return for the per well location fee.

Mineral rights are incorporeal immovables. LSA-C.C. Art. 470; LSA-R.S. 31:18. As such, they are subject to the general rules found in the Louisiana Civil Code regarding immovables. LSA-R.S. 31:2; Guy Scroggins, Inc. v. Emerald Exploration, 401 So.2d 680 (La.App. 3rd Cir.1981), writ denied, 404 So.2d 1257 (La.1981). Accordingly, the transfer of ownership or an interest in a mineral right cannot be the subject of a verbal agreement; it must be evidenced by a written contract and cannot be proved by parol evidence. LSA-C.C. Arts. 1832, 1839, 1848, and 2440; Bice v. Maxwell, 516 So.2d 1189 (La.App. 2d Cir.1987); Wilkins v. Hogan Drilling Company, Inc., 424 So.2d 420 (La.App. 2d Cir.1982).

The parol evidence rule provides that testimonial or other evidence may not be admitted to negate or vary the contents of an authentic act or an act under private signature. Nevertheless, in the interest of justice, such evidence may be admitted to prove such circumstances as a vice of consent, or a simulation, or to prove that the written act was modified by a subsequent and valid oral agreement. LSA-C.C. Art. 1848; Shreveport Plaza Associates Limited Partnership v. L.R. Resources II, 557 So.2d 1067 (La.App. 2d Cir.1990). Parol evidence may be admissible where there are allegations that the contract was executed through fraud, error, or mistake. Mitchell v. Clark, 448 So.2d 681 (La.1984); Bank of Coushatta v. Patrick, 503 So.2d 1061 (La.App. 2d Cir.1987), writ denied, 506 So.2d 1231 (La.1987).

Generally, where the words of a contract are clear, explicit, and lead to no absurd consequences, the meaning and intent of the parties must be sought within the four corners of the document and...