Corbello v. Iowa Production
| Decision Date | 26 December 2001 |
| Docket Number | No. 01-567.,01-567. |
| Parties | William G. CORBELLO, et al. v. IOWA PRODUCTION, Shell Oil Company, Shell Western E & P, Inc., et al. |
| Court | Court of Appeal of Louisiana — District of US |
John Michael Veron, Richard E. Gerard, Jr., Scofield, Gerard, Veron, Singletary & Pohorelsky, Lake Charles, LA, Counsel for Plaintiffs/Appellees: The Rosa Heyd Corbello Family Trust, Maisie Johnson Heyd, Alverdy Heyd Veron, Lawrence Heyd, Mary Heyd Fontenot, Bernice Heyd Hymes, William G. Corbello.
Thomas M. McNamara, Patrick W. Gray, Liskow & Lewis, Lafayette, LA, James E. Blazek, Adams and Reese, New Orleans, LA, Marie Roach Yeates, Vinson & Elkins, Houston, TX, Counsel for Defendants/Appellants: Shell Oil Company, Shell Western E & P, Inc.
Thomas A. Harrell, J. Lanier Yeates, P.C., Baton Rouge, LA, Counsel for Defendants/Appellants: Shell Western E & P, Inc., Shell Oil Company.
Matthew Joseph Randazzo, III, Gordon, Arata, McCollam, New Orleans, LA, Counsel for: Rosewood Resources, Inc.
Court composed of ULYSSES GENE THIBODEAUX, JIMMIE C. PETERS, and MICHAEL G. SULLIVAN, Judges.
This is an appeal from a judgment in favor of the heirs of Ferdinand Heyd (Plaintiffs) and against Shell Oil Company (Shell). Plaintiffs and Shell appeal the judgment. For the following reasons, we affirm in part, reverse in part, and remand for further proceedings.
The basis of this litigation is a surface lease granted by Ferdinand Heyd on May 10, 1961, in favor of Shell. In 1929, Mr. Heyd and others granted Shell an oil and gas mineral lease that covered 320 acres; 160 of the 320 acres were owned by Mr. Heyd. Shell operated the mineral lease until 1985, when it transferred its interest in the lease to Rosewood Resources, Inc. (Rosewood). After granting Shell the oil and gas lease in 1929, Mr. Heyd granted Shell surface leases on various small parcels of his property. The 1961 lease encompassed all of the previously leased parcels and additional acreage, covering 120 acres of Mr. Heyd's property that was subject to the oil and gas lease. After Shell obtained the 1961 surface lease, it built an oil terminal on a five acre parcel within the leased acreage which it operated until March 1993.
The surface lease expired May 10, 1991. On May 9, 1991, Plaintiffs sent Shell a letter regarding the lease's termination date. In that letter, Plaintiffs also notified Shell that it had breached the lease agreement by disposing of saltwater on the property and by failing to maintain the property as provided in the lease. For approximately sixteen or seventeen months, Plaintiffs and Shell attempted to resolve these issues.
In May 1992, Plaintiffs filed suit against various parties to recover damages for trespass on the leased premises after expiration of Shell's lease, for the unauthorized disposal of saltwater on the leased premises, and for the poor condition of the leased premises. They also sought exemplary damages pursuant to La.Civ.Code art. 2315.3. Shell was named as a defendant in October 1992. It filed a third party demand against Rosewood. Plaintiffs named Rosewood as a defendant on its main demand, but settled with it on September 1, 1999. As part of the settlement, Plaintiffs agreed to defend and indemnify Rosewood with regard to Shell's claims against it. Shortly before trial, Shell's third party claim against Rosewood was dismissed on a motion to recuse its counsel on the basis of a conflict of interest. Shell appealed the dismissal. This court reversed the trial court's dismissal of Rosewood. Corbello v. Iowa Prod. Co., 00-1403 (La.App. 3 Cir. 6/6/01); 787 So.2d 596, writ denied, 01-2334 (11/16/01); 802 So.2d 615.
In May 2000, Plaintiffs tried their claims to a jury. At the conclusion of the two and one-half week trial, the jury awarded Plaintiffs damages in the amounts of $927,000.00 for Shell's failure to vacate the leased premises after the surface lease expired; 833 million to restore the leased premises to its 1961 condition; and $16,679,100.00 for Shell's illegal disposal of saltwater on the leased premises. Pursuant to post-trial motions, Plaintiffs were awarded $689,510.00 in attorney fees and expert fees were set at $65,000.00; the trial court reduced the jury's award of $927,000.00 for failure to vacate the leased premises to $32,500.00. This appeal followed.
In Lasyone v. Kansas City Southern Railroad, 00-2628, pp. 5-6 (La.4/3/01); 786 So.2d 682, 688-689, the supreme court reviewed the standard of review applicable to findings of fact:
A trial court's finding of fact may not be reversed absent manifest error or unless clearly wrong. Stobart v. State of Louisiana, Through Department of Transportation and Development, 92-1328 (La.4/12/93), 617 So.2d 880. The reviewing court must do more than just simply review the record for some evidence which supports or controverts the trial court's findings; it must instead review the record in its entirety to determine whether the trial court's finding was clearly wrong or manifestly erroneous. Stobart, 617 So.2d at 882. The issue to be resolved by a reviewing court is not whether the trier of fact was right or wrong, but whether the factfinder's conclusion was a reasonable one. Id. The reviewing court must always keep in mind that "if the trial court or jury's findings are reasonable in light of the record reviewed in its entirety, the court of appeal may not reverse, even if convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently." Stobart, 617 So.2d at 882-83, citing Housley v. Cerise, 579 So.2d 973 (La.1991) (quoting Sistler v. Liberty Mutual Ins. Co., 558 So.2d 1106, 1112 (La.1990)).
These standards for manifest error review are not new. They are the guiding principles that aid our courts of appeal, which are our error correcting courts, when reviewing a trial court's factual determinations. A manifest error review is applicable to the fact-driven determinations of the present case.
The assessment of damages by a jury is a determination of fact. On appeal, we "review the exercise of discretion by the trier of fact." Youn v. Maritime Overseas Corp., 623 So.2d 1257, 1260 (La.1993), cert. denied, 510 U.S. 1114, 114 S.Ct. 1059, 127 L.Ed.2d 379 (1994). We cannot disturb an award of damages by a jury unless the trier of fact abused its discretion in making the award.
Plaintiffs assign as error the trial court's reduction of the jury's $927,000.00 award to $32,500.00. The surface lease terminated May 10, 1991. Plaintiffs' letter dated May 9, 1991, notified Shell of the expiration date of the lease. For a period of time following its expiration, plaintiffs discussed with Shell the possibility of renewing the lease. Shell remained on the premises during that time. In October 1992, Plaintiffs named Shell as a defendant in their lawsuit. In February 1993, Shell closed the oil terminal and moved from the premises, having remained twenty-two months after the lease terminated. Plaintiffs contend they would not agree to re-lease the property to Shell without knowing the profits Shell derived from the oil terminal during the course of the lease. Shell would not provide that information.
Plaintiffs presented evidence of Shell's profits from its operation of the oil terminal after the lease expired, i.e., the $927,000.00 awarded by the jury. Shell presented evidence of the annual rental value of the three acres on which the terminal was situated, $265.50, as well as the annual rental value of the access road to the terminal, $168.00. No other evidence regarding rental was presented.
Post-trial, Shell filed a motion for judgment notwithstanding the verdict for new trial and/or for remittitur, alleging in part that the jury's award for its remaining on the leased premises after termination of the lease was improper. After a hearing on the motion, the trial court denied the motion for JNOV and the motion for new trial. It also denied the motion for remittitur, except as to the claim for trespass, reducing the $927,000.00 award to $32,500.00. Plaintiffs argue that the trial court committed error when it granted the remittitur without giving them the option to choose a new trial on the issue.
Article 1814 of the Code of Civil Procedure provides that a "remittitur ... is to be entered only with the consent of the plaintiff ..., as an alternative to a new trial, and is to be entered only if the issue of quantum is clearly and fairly separable from other issues in the case." In Miller v. Chicago Insurance Co., 320 So.2d 134, 136 (La.1975), the supreme court addressed the issue of consent with regard to a request for an additur or remittitur, stating:
The Louisiana statutory scheme requires the consent of the party adversely affected by an additur or remittitur. The party is offered an opportunity, when asked by the trial judge, to agree to a change in the judgment, thereby avoiding the expense and delay of a new trial. The order of an additur or remittitur is therefore contingent; if the party does not agree to the change, he elects to submit to a new trial.
There is no transcript of the hearing on the motions for JNOV, new trial, or remittitur in the record. Nothing in the record indicates that Plaintiffs were given the opportunity to choose a new trial on the issue, rather than the remittitur. Accordingly, we conclude that the trial court committed error when it granted the remittitur.
Plaintiffs next argue the jury's award of $927,000.00 should be affirmed because they are entitled to the profits earned by Shell while it remained on the property without a lease. The basis of their argument is the holding in Rosenthal-Brown Fur Co. v. Jones-Frere Fur Co., 162 La. 403, 410, 110 So. 630, 632 (1926), where the court stated:
[O]ne who unlawfully, and against the will of the owner of...
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