COHORT ENER. v. CADDO-BOSSIER PARISHES PORT

• Decision Date: 20 August 2003
• Docket Number: No. 37,449-CA.,37,449-CA.
• Citation: 852 So.2d 1174
• Parties: COHORT ENERGY COMPANY, Plaintiff-in-Concursus-Appellee, v. CADDO-BOSSIER PARISHES PORT COMMISSION, The Cowley Corporation, Kathryn Nichols Cowley, Sheri Lynn Cowley Soulie, Susan A. Cowley Bantle, The Kathryn C. Turner Testamentary Trust, The Dorothy Colleen Cowley Trust and Dorothy Colleen Cowley, Defendant-Appellant; Defendants-Appellees.
• Court: Court of Appeal of Louisiana — District of US

852 So.2d 1174

COHORT ENERGY COMPANY, Plaintiff-in-Concursus-Appellee, v. CADDO-BOSSIER PARISHES PORT COMMISSION, The Cowley Corporation, Kathryn Nichols Cowley, Sheri Lynn Cowley Soulie, Susan A. Cowley Bantle, The Kathryn C. Turner Testamentary Trust, The Dorothy Colleen Cowley Trust and Dorothy Colleen Cowley, Defendant-Appellant; Defendants-Appellees.

No. 37,449-CA.

Court of Appeal of Louisiana, Second Circuit.

August 20, 2003.

Tutt, Stroud & Bordelon, LLC, by Charles G. Tutt, Jennifer P. McKay, Shreveport, for Appellant, Caddo-Bossier Parishes Port Commission.

Blanchard, Walker, O'Quin, & Roberts, by William Timothy Allen III, Paul M. Adkins, Shreveport, for Appellees, The Cowley Corporation, Argent Financial Group, Inc. and E.H. Turner, III, as Co-Trustees of The Kathryn C. Turner Testamentary Trust, Kathryn Nichols Cowley, Sheri Lynn Cowley Soulie, Susan A. Cowley Bantle, The Kathryn C. Turner Testamentary Trust, The Dorothy Colleen Cowley Trust and Dorothy Colleen Cowley LeBlanc.

Hargrove, Pesnell & Wyatt, by Paul A. Strickland, Shreveport, for Plaintiff-in-Concursus-Appellee, Cohort Energy Company.

Before STEWART, MOORE and TRAYLOR (Pro Tempore), JJ.

TRAYLOR, Judge Pro Tempore.

This appeal requires us to interpret Article IX, Section 4 of the Louisiana Constitution of 1974 ("1974 Constitution") and La. R.S. 31:149, two provisions in our law dealing with imprescriptible mineral interests. The Caddo-Bossier Parishes Port Commission ("Port Commission") appeals a summary judgment granted in favor of a group of private purchasers, defendants, known as ("the Cowleys"¹), holding that the mineral servitude created by the Port Commission when it sold a 340-acre tract to the Red River Waterway District ("Waterway District") on April 6, 1987, prescribed after ten years' nonuse on April 6, 1997. Consequently, when the Waterway District sold the subject property to the Cowleys six months later on September 5, 1997, no mineral servitude burdened the tract in question, and the Cowleys acquired the land and the minerals in and under the tract. For the following reasons, we reverse and render.

FACTS

On April 6, 1987, the Port Commission conveyed a 340-acre tract of land to the Red River Waterway District ("Waterway District") reserving the minerals "in perpetuity, in accordance with La. R.S. 31:149."² Ten years and six months later, on September 5, 1997, the Waterway District conveyed the property without reservation of the minerals to the Cowleys.

On April 2, 1998, the Cowleys executed a mineral lease ("Cowley Lease") covering the tract in favor of Cohort Energy Company ("Cohort"). The Cowley Lease was granted for a primary term of three years and provides for a one-fifth mineral royalty interest.

On November 18, 1999, the Port Commission executed a mineral lease ("Port Lease") in favor of Cohort covering the tract owned by the Cowleys. The Port Lease was granted for a primary term of two years and provides for a one-fifth mineral royalty interest.

Several unit wells were drilled on parts of the subject property resulting in gas production. When production commenced and revenues accrued, Cohort, on October 12, 2001, initiated this concursus proceeding by petition and placed $66,282.64 in the registry of the court; this sum represented one fifth of all production thus far attributable to the subject property. Cohort named the Port Commission and the Cowleys as defendants in order to determine ownership of the proceeds.

The petition recited the fact that both the Cowleys and the Port Commission executed mineral leases to Cohort covering the property. Cohort's petition further alleged that it was unable to determine to whom the proceeds were owed:

(1) If the Port is the `state' under Article 9, Section 4(B),<sup>3</sup> of the Louisiana Constitution of 1974, the mineral servitude created by the mineral reservation of the Port on April 6, 1987, is imprescriptible, and the Port is the current owner of the minerals underlying the Subject Property (2) If the Port is not the `state' under the Louisiana Constitution of 1974, but the Port is a `person' under the Louisiana Revised Statute 31:149 A, then the ten-year nonuse prescriptive period running against the Port's mineral servitude may have been suspended during the time the Red River Waterway District owned the Subject Property;

(3) If the Port is neither the `state' under Article 9 Section 4(B), of the Louisiana Constitution of 1974 nor a `person' under Louisiana Revised Statute 31:149, the Port's mineral servitude created on April 6, 1987, would have prescribed on April 6, 1997, and the Cowleys would be the current owners of the minerals in and under the Subject Property.

The Port Commission filed a motion for summary judgment alleging that it, and not the Cowleys, is the current owner of the minerals. The Port Commission argued that it had reserved the rights in the minerals on the property and that it was the "state" under La. Const. art. IX, § 4(B) (1974) which provides that state-owned mineral interests cannot be lost by prescription. The Port Commission also argued that it was a "person" for purposes of La. R.S. 31:149, which suspends the running of prescription against persons who have sold land to the state, its political subdivisions, agencies or any legal entity with expropriation authority. Accordingly, the Port Commission claimed that the ten-year prescriptive period did not run against its mineral servitude while the property was in the hands of the Waterway District, and it remains the owner of the minerals in and under the subject property.

The Cowleys opposed the motion arguing that the Port Commission is neither the "state" nor a "person" for purposes of the question presented. The trial court denied the Port Commission's motion for summary judgment and issued an Assignment of Reasons for Judgment ("Reasons for Judgment") concluding that the Port Commission was not the "state" under La. Const. art. IX, § 4(B) (1974), and it was not a "person" under La. R.S. 31:149. A final judgment was not signed or filed in the record.

Subsequently, the Cowleys moved for summary judgment, which the trial court granted for the reasons stated in the Reasons for Judgment. A final judgment was signed, and this appeal followed.

DISCUSSION

Appellate courts review summary judgments de novo under the same criteria that govern the district courts' consideration of whether summary judgment is appropriate. Clark v. City of Shreveport, 31,407 (La.App.2d Cir.01/20/99), 726 So.2d 1042, writ denied, 99-0502 (La.04/01/99), 742 So.2d 872. A motion for summary judgment should be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, show that there exists no genuine issue as to any material fact and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966.

Interpretation of a statute is a question of law that may be decided by summary judgment. In reviewing questions of law, the appellate court gives no special weight to the findings of the trial court, but exercises its constitutional duty to review questions of law and renders judgment on the record. Gardner v. State ex rel. Dept. of Educ., XXXX-XXXX (La.App. 1st Cir.03/28/03), 844 So.2d 311, writ denied, XXXX-XXXX (La.06/27/03), 847 So.2d 1280.

The question presented in this case by motion for summary judgment is whether the mineral servitude created on April 6, 1987 by the Port Commission prescribed ten years later on April 6, 1997 for nonuse. The Port Commission claims that its mineral servitude is imprescriptible because it is both the "state" under La. Const. art. IX, § 4(B) (1974) and because it is a "person" under La. R.S. 31:149.

A reservation of minerals is extinguished by prescription of nonuse if not exercised within ten years, and a mineral servitude owner then loses his rights unless some event or condition intervened during that time to interrupt the running of prescription. Horton v. Mobley, 578 So.2d 977 (La.App. 2d Cir.1991), writ denied, 582 So.2d 1310 (La.1991); Haynes v. King, 219 La. 160, 52 So.2d 531 (1951); Standard Oil Co. of Louisiana v. Futral, 204 La. 215, 15 So.2d 65 (1943); Palmer Corp. of Louisiana v. Moore, 171 La. 774, 132 So. 229 (1930); Frost-Johnson Lumber Co. v. Salling's Heirs, 150 La. 756, 91 So. 207, 239 (1920); see La. R.S. 31:27. The ten-year prescriptive period begins to run from the date the mineral rights are acquired or created. Ober v. Williams, 213 La. 568, 35 So.2d 219 1948); Chicago Mill & Lumber Co. v. Ayer Timber Co., 131 So.2d 635 (La.App. 2d Cir.1961); see La. R.S. 31:28.

The law of Louisiana regarding prescription of mineral interests reflects a historically strong policy against separate ownership of minerals and a policy of keeping land and minerals in commerce. Ultramar Oil & Gas Ltd. v. Fournet, 598 So.2d 645 (La.App. 3d Cir.1992), writ denied, 605 So.2d 1122 (La.1992); Kalmn, Inc. v. Walker Louisiana Properties, 488 So.2d 340 (La.App. 3d Cir.1986).⁴ In this instance, all the parties agree that ownership of the mineral interests at stake in this case turns upon whether the Port Commission's mineral servitude prescribed for nonuse, and that question turns upon whether the Port Commission is either the "state" under La. Const. art. IX, § 4 (1974) or a "person" under La. R.S. 31:149.

Is the Port Commission the "State" Under La. Const. art. IX, § 4 (1974)?

Louisiana Const. art. IX, § 4 (1974) provides, in pertinent part:

(A) Reservation of Mineral Rights. The mineral rights on property sold by the state shall be reserved, ...

(B) Prescription. Lands and mineral interests of the state, of a school board, or of a levee district shall not be lost by prescription....

....

(Emphasis added).

Our interpretation is guided by the following established principles of constitutional construction expressed by the supreme court in Succession of Lauga, 624 So.2d 1156 (La.1993):

In

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