Lyons v. Fisher, 89-4039

• Decision Date: 24 November 1989
• Docket Number: No. 89-4039,89-4039
• Citation: 888 F.2d 1071
• Parties: Ida Marie Cutler LYONS, etc., et al., Plaintiffs-Appellees, v. Franklin Lee FISHER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1071

888 F.2d 1071

Ida Marie Cutler LYONS, etc., et al., Plaintiffs-Appellees, v. Franklin Lee FISHER, Defendant-Appellant.

No. 89-4039.

United States Court of Appeals Fifth Circuit.

Nov. 24, 1989.

I.P. Saal, Jr., Gueydan, La., Raymond A. Beyt, Lafayette, La., Harry A. Rosenberg, M. Nan Alessandra, New Orleans, La., for defendant-appellant.

Edwin K. Hunter, Patrick Gallaugher, Jr., J. Michael Veron, Scofield, Bergstedt, Gerard, Mount & Veron, Lake Charles, La., Patrick W. Gray, Lafayette, La., for plaintiffs-appellees.

Appeal from the United States District Court for the Western District of Louisiana.

Before KING, JOLLY and DUHE, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

This case is before us a second time on appeal. In this appeal we address whether the district court erred in concluding that the prior opinion of this court established the law of the case regarding the consideration supporting a 1968 land transaction and thus required it to enter summary judgment for the plaintiffs, thereby recognizing their mineral rights in the property.

I

A.

We adopt the prior panel's statement of the relevant facts and procedural history.

On May 7, 1968, Julie Fisher donated the northwest quarter of section 34, township 11 south, range 3 west, Vermillion Parish, Louisiana ("Northwest Quarter"), to her son, Franklin Fisher, and daughter, Hazel, in indivision. In this donation, Julie Fisher reserved a mineral servitude in the Northwest Quarter. The very next day, May 8, 1968, Franklin and Hazel purportedly sold the usufruct ¹ of the Northwest Quarter's surface to their mother, Julie, for ten dollars ($10.00) and "other good and valuable consideration and services rendered". It is the validity of this transaction that constitutes the core of this litigation.

On November 27, 1972, Hazel Fisher conveyed her interest in the Northwest Quarter to Franklin Fisher, reserving a mineral servitude. Julie Fisher died intestate on January 12, 1975. She was survived only by Hazel and Franklin, so that they inherited her estate in indivision. In November 1978, mineral operations commenced on the Northwest Quarter. On July 28, 1980, Hazel died intestate.

In August 1982, Hazel's heirs and Franklin Fisher jointly leased the Northwest Quarter for mineral exploration to Hunt Oil Co. In March 1985, Franklin and Hunt Oil executed an amendment to the 1982 lease in effect recognizing Franklin as the sole owner of the minerals underlying the Northwest Quarter.

On November 27, 1985, Hazel's heirs commenced an action in Louisiana state court, seeking a declaratory judgment recognizing their ownership of an undivided one-half mineral interest in the Northwest Quarter. The defendants removed the suit to federal court on the basis of diversity jurisdiction. The district court then granted Franklin Fisher's motion for summary judgment, recognized him as the owner of the disputed mineral servitude and dismissed the complaint. The court, however, declined to adjudicate the validity of the 1968 transaction. It noted that, assuming the transaction was valid, Hazel Fisher, the Lyons' mother, could not have legally reserved a mineral servitude in that property in 1972 because the mineral rights were then held by her mother. Since drilling on the land did not commence until after May 1978, Franklin, who had acquired title to the remainder of the surface estate by virtue of Hazel's conveyance in 1972, acquired title to the mineral estate through prescription. The court next assumed that the 1968 transaction was invalid as a disguised usufruct reservation; it noted that in that case, Franklin acquired title to the surface estate in 1975 by virtue of the Louisiana after-acquired-title doctrine and to the mineral estate in 1978 by virtue of prescription. The plaintiffs appealed to this court. Lyons v. Fisher, 847 F.2d 1158, 1158-59 (5th Cir.1988).

B.

On appeal, a panel of this court reversed the district court's order granting the defendant Franklin Fisher summary judgment. The panel reasoned that the lower court had "erroneously assumed" that regardless of the validity of the 1965 transaction, Franklin acquired title by liberative prescription in May 1978. 847 F.2d at 1160. On the contrary, the panel concluded, when prescription occurred is "wholly dependent upon the validity of the 1968 transaction." Id. The panel, then, proceeded to evaluate the transaction and concluded that it did not involve a sale at all. Instead, it was a "disguised usufruct reservation" prohibited under section 1533 of the Louisiana Civil Code, which provides: "The donor is permitted to dispose, for the advantage of any other person, of the enjoyment or usufruct of the immovable property given, but cannot reserve it for himself." The court, therefore, held that the 1968 transaction was an "absolute nullity" and, under the Louisiana after-acquired-title doctrine, the mineral servitude Hazel Fisher reserved to herself as part of her conveyance of her interest in the Northwest Quarter in 1972 became effective upon the death of her mother in 1975. The court, then, remanded the case to the district court for "further proceedings consistent with this opinion."

On remand, the plaintiffs Lyons moved for summary judgment, citing the panel's opinion. In response, Fisher filed an affidavit asserting that his mother had paid him and his sister $450 for the usufruct in 1968 and contended, therefore, that the transaction was not, as the opinion of this court had held, a disguised usufruct reservation. The district court, however, refused to consider the evidence, holding that the decision of this court that the 1968 transaction was an "absolute nullity" precluded the district court from further considering the case. Accordingly, the district court entered summary judgment for the plaintiffs Lyons. Fisher appeals.

II

In this appeal, Fisher argues that the district court erred in concluding that the prior panel decision established the law of the case regarding the sufficiency of the consideration for the 1968 usufruct sale; second, that, assuming the law of the case applies, the district court erred in refusing to apply the "substantially different evidence" and the "manifest injustice" exceptions to the doctrine. Specifically, he argues that his affidavit, in which he stated that his mother paid $450 for the usufruct constituted "substantially different evidence," which should have been considered by the district court on remand; he asserts that the prior panel's conclusion that the consideration paid by Julie Fisher for the 1968 usufruct was "not fixed and determined" as required by article 2464 of the Louisiana Civil Code was "clearly erroneous" and its refusal to consider his evidence to the contrary would work "manifest injustice." Finally, Fisher argues that because there remained a genuine issue of material fact concerning the consideration supporting the 1968 usufruct, the district court erred in granting summary judgment.

III

A.

We first consider whether the prior panel opinion established the law of the case with respect to the adequacy of the consideration in the 1968 transaction. The "law of the case" doctrine provides that "a decision of a factual or legal issue by an appellate court establishes the 'law of the case' and must be followed in all subsequent proceedings in the same case in the trial court or on a later appeal in the appellate court...." Goodpasture, Inc. v. M/V Pollux, 688 F.2d 1003, 1005 (5th Cir.1982) (quoting White v. Murtha, 377 F.2d 428, 431-32 (5th Cir.1967)). This rule is "based on the salutary and sound public policy that litigation should come to an end." Carpa, Inc. v. Ward Foods, Inc., 567 F.2d 1316, 1319 (5th Cir.1978) (quoting White v. Murtha, 377 F.2d at 443).

After an examination of the previous proceedings and appeal in this case, we must conclude that the validity of the 1968 usufruct transaction was before the prior panel of this court and that the panel clearly and expressly decided the question in favor of the Lyons. In the initial proceedings before the district court, both parties briefed the sufficiency of the consideration supporting the 1968 transaction. Indeed, throughout the litigation, the Lyons urged the lack of consideration for the 1968 usufruct sale as the cornerstone of their argument that they owned a one-half mineral interest in the Northwest Quarter. In their memorandum in opposition to Fisher's motion for summary judgment, the Lyons contended that "the nominal consideration of $10 is not considered serious consideration and the so-called 'sale' of the usufruct was in truth a donation." In their motion to supplement the exhibits in opposition to Fisher's motion for summary judgment, the Lyons attached Fisher's deposition in which he essentially conceded that the usufruct transaction was a gift, not a sale.

For his part, in the previous proceedings Fisher pled the validity of the 1968 transaction in his motion for summary judgment. He rebutted the Lyons' assertion that the usufruct transaction was not a sale by adverting to the language of the conveyance ("$10 and other good and valuable consideration and services rendered") and attempting to thrust the burden of proof regarding the "other good and valuable consideration" onto the appellees.

Although in the previous proceedings the district court did not decide whether the 1968 usufruct sale was valid, concluding that Fisher nonetheless acquired title to the mineral rights by prescription in 1978, on appeal this issue was squarely briefed and argued before the prior panel. There can be no doubt that the panel grounded its reversal of summary judgment on its finding that there was insufficient consideration to support the 1968 transfer of the usufruct. The court noted, "Ten dollars is insufficient consideration for the lifetime usufruct of almost any property, except perhaps a square foot of swampland in the Atchefalaya Basin.... Clearly this transaction...