Covey Park Gas, LLC v. Bull Run Acquisitions II, LLC
| Citation | 310 So.3d 777 |
| Decision Date | 13 January 2021 |
| Docket Number | No. 53,670-CA,53,670-CA |
| Parties | COVEY PARK GAS, LLC Plaintiff-Appellant v. BULL RUN ACQUISITIONS II, LLC and Beaver River Resources, et al. Defendant-Appellees |
| Court | Court of Appeal of Louisiana (US) |
310 So.3d 777
COVEY PARK GAS, LLC Plaintiff-Appellant
v.
BULL RUN ACQUISITIONS II, LLC and Beaver River Resources, et al. Defendant-Appellees
No. 53,670-CA
Court of Appeal of Louisiana, Second Circuit.
Judgment rendered January 13, 2021
SHUEY SMITH, LLC, By: Richard E. Hiller, Shreveport, LA, Counsel for Appellant Beaver River Resources
OTTINGER HEBERT, LLC, By: J. Michael Fussell Ryan P. McAlister Counsel for Appellee Bull Run Acquisitions
HARGROVE SMELLEY & STRICKLAND, By: Jonathan J. Rose, Shreveport, LA, Counsel for Appellee Covey Park Gas, LLC
JOHN S. EVANS, Counsel for Appellee James Burdick
CYNTHIA LOUISE BURDICK-BURNS, In Proper Person
CHARLES J. BARLOW, In Proper Person
TAMARA C. BARLOW-RUGGLES, In Proper Person
JACQUELINE K. MACKEY, In Proper Person
Before MOORE, GARRETT, and BLEICH (Pro Tempore), JJ.
MOORE, C.J.
Beaver River Resources ("BRR"), an Oklahoma partnership, appeals a partial summary judgment that dismissed it from a concursus claim involving mineral royalties from two tracts of land in DeSoto Parish.
In 2008, Covey Park Gas became the unit operator of HA RA SU61, a unit in DeSoto Parish. It drilled three wells which are drawing production from three tracts within the unit, and it began paying royalties to BRR, the apparent mineral owner of the tracts. However, in 2019, Covey Park received a demand letter from another entity, Bull Run Acquisitions II LLC ("Bull Run"), claiming that it owned the minerals for two of the tracts. Covey Park suspended royalty payments, filed this concursus against Bull Run, BRR, and various absentee claimants, and began placing royalties in the court registry. Bull Run filed a motion for partial summary judgment to dismiss BRR's claim. The district court granted this, and BRR has appealed.
For the reasons expressed, we affirm.
FACTUAL BACKGROUND
The subject property is an undivided mineral interest (11.4285 mineral acres) in two tracts in DeSoto Parish, described as follows (with emphasis added , here and below):
South Half of the Southwest Quarter (S/2 of SW/4 ) of Sec. 32, T 14 N, R 15 W, DeSoto Parish, La.
South Half of the Northeast Quarter of the Southwest Quarter (S/2 of NE/4 of SW/4 ) of Sec. 32, T 14 N, R 15 W, DeSoto Parish, La.
The common ancestor for these rights was Mrs. Naomi Brewer, of Hot Springs, Arkansas, who bought a 2/7 mineral interest in the subject property in 1946. She also bought a 2/7 mineral interest in a third tract:
South Half of the Southeast Quarter (S/2 of SE/4 ) of Sec. 32, T 14 N, R 15 W, DeSoto Parish, La.
Mrs. Brewer died in 2005; her will gave her Louisiana assets to Bank of America, as trustee for her various nieces, nephews, and other collateral heirs. In the succession proceeding, Bank of America filed a detailed descriptive list that referred to an undivided mineral interest in "319.09 acres more or less in the West one-half (W/2)" of Sec. 32, "including that certain 0.01116100 RI in the LaGrone-Tucker Well." The court rendered judgment to close the succession, transferring the described assets to Bank of America. This judgment was filed in the succession proceeding but not in the conveyance records of DeSoto Parish.
Bank of America listed Mrs. Brewer's property on EnergyNet.com. BRR bought it at auction, receiving an "Oil and Gas Deed" from Bank of America, effective September 1, 2008. However, the Oil and Gas Deed described the subject property as follows:
DESOTO PARISH, LOUISIANA 2/7THS MI 11.4285 ACS NW4 SE4 SEC 32-14N-15W 1/8 RI LAGRONE-TUCKER
The Oil and Gas Deed was filed in the conveyance records, and notably omitted describing anything in the Southwest Quarter .
Around this same time, at the height of the Haynesville Shale play, Covey Park became the unit operator and drilled three wells that have been producing since 2008. Covey Park began paying royalties to BRR.
In September 2018, Bank of America sued to reopen Mrs. Brewer's succession. It alleged that it "recently [came] to the petitioner's attention" that the Oil and Gas Deed described only the tract in the Southeast Quarter , whereas Mrs. Brewer's deeds also described the subject property, two tracts in the Southwest Quarter . Bank of America sought judgment to distribute these "remaining trust assets" to 16 named beneficiaries. The court rendered judgment to this effect on September 20, 2018, and the judgment was filed in the conveyance records.
At this point, Bull Run entered the scene, approaching the dispersed (seven different states) beneficiaries and negotiating with them to buy all their interest in the subject property, without warranty. Between October and December 2018, Bull Run executed identical mineral deeds describing the two tracts in the Southwest Quarter . Citing these mineral deeds, Bull Run sent a demand letter, R.S. 31:137, to Covey Park in February 2019. Covey Park responded that it was already paying BRR, but something was wrong. It filed this concursus in May 2019.
PROCEDURAL HISTORY
Bull Run immediately answered and alleged that BRR's Oil and Gas Deed did not
describe the subject property, only the adjacent tract in the Southeast Quarter . By contrast, Bull Run's mineral deeds did describe the subject property, the two tracts in the Southwest Quarter .
BRR answered, asserting that it "acquired, and believes it acquired," the subject property.
Bull Run filed this motion for partial summary judgment seeking to dismiss BRR on grounds that (1) the Oil and Gas Deed did not transfer any interest in the subject property to BRR, and (2) the property description in the Oil and Gas Deed did not describe the subject property sufficiently to place third parties on notice. In support, it attached the affidavit of its registered agent, Russell Busby; copies of the title documents (Mrs. Brewer's 1946 mineral deeds, BRR's Oil and Gas Deed, the 2018 judgment of possession); the letters between Bull Run and Covey Park; and the petition for concursus and BRR's answer.
BRR opposed the motion. It conceded that its Oil and Gas Deed conveyed only one of Mrs. Brewer's three tracts and omitted the subject property; the succession had been reopened to distribute the subject property to the beneficiaries; and those beneficiaries sold their interest to Bull Run. It argued, however, that both BRR and Bank of America had intended to convey all three tracts to BRR, and the error was discovered only in 2018. In support, it showed that its petition to close Mrs. Brewer's succession, and the judgment of possession, both described all three tracts; it contended that the discrepancy between these documents and the Oil and Gas Deed should have placed any third person on notice that the latter was in error. BRR also argued that the Oil and Gas Deed was "subject to reformation," in light of the evidence; that Bull Run would be bound by the reformed Oil and Gas Deed; and that Bull Run was in bad faith because it "took advantage" of the mistake in the Oil and Gas Deed. In support, it offered the affidavit of its principals, Dan Janzen and Mike Reddick, asserting their intent to acquire the subject property by auction in 2008, and several documents already offered by Bull Run.
After a hearing in January 2020, the court granted Bull Run's motion and rendered judgment dismissing BRR as a claimant, with findings that the Oil and Gas Deed (1) did not convey any mineral interests in the Southwest Quarter, and (2) did not sufficiently describe the subject property. The court designated this a final judgment, immediately appealable, La. C.C.P. art. 1915 B(1).
BRR appealed suspensively.
APPLICABLE LAW
The motion for summary judgment is a procedural device used when there is no genuine issue of material fact for all or part of the relief prayed for by a litigant. Peironnet v. Matador Res. Co. , 12-2292 (La. 6/28/13), 144 So. 3d 791 ; Bank of America NA v. Green , 52,044 (La. App. 2 Cir. 5/23/18), 249 So. 3d 219. The motion shall be granted if the motion, memorandum, and supporting documents show that there is no genuine issue of material fact and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966 A(3). The summary judgment procedure is...
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