Marin v. Exxon Mobil Corporation, No. 2008 CA 1724 (La. App. 9/30/2009)
| Decision Date | 30 September 2009 |
| Docket Number | No. 2008 CA 1724.,2008 CA 1724. |
| Parties | DONALD MARIN, SR., ENGSFELD F. MARIN, III, CLYDE J. BREAUX AND VERONICA MARIN BREAUX v. EXXON MOBIL CORPORATION, FORMERLY KNOWN AS AND SUCCESSOR IN INTEREST TO EXXON CORPORATION AND HUMBLE OIL & REFINING COMPANY, ATLANTIC RICHFIELD COMPANY, LEGACY RESOURCES CO., L.P., MJF PROPERTY MANAGEMENT, L.L.C. AND MIKE BOURGEOIS |
| Court | Court of Appeal of Louisiana — District of US |
DONALD T. CARMOUCHE, JOHN H. CARMOUCHE, VICTOR L. MARCELLO, and PATRICIA E. WEEKS, JOHN P. GONZALEZ, Counsel for Plaintiffs/Appellees, Donald Marin, Sr., Engsfeld F. Marin, III, Clyde J. Breaux and Veronica Marin Breaux.
ROBERT B. McNEAL, MARK L. McNAMARA, and JAMIE D. RHYMES, and EDWARD F. KOHNKE, IV, Counsel for Defendants/Appellants, ExxonMobil Corporation and Michael Bourgeois.
Before: CARTER, C.J., WHIPPLE and DOWNING, JJ.
This matter is before us on appeal by defendants from a judgment in favor of plaintiffs, Donald Marin, Sr., Engsfeld F. Marin, III, Clyde J. Breaux and Veronica Marin Breaux ("Plaintiffs"), and against defendants, Exxon Mobil Corporation ("Exxon") and Michael Bourgeois ("Bourgeois"). Exxon filed the instant appeal, alleging that the rulings of the trial court are erroneous because they: (1) allowed appellees' claims to survive prescription under the doctrine of contra non valentem; (2) awarded punitive damages under former Civil Code article 2315.3; (3) terminated a surface lease; (4) allowed the Breauxs to sue for property damages that occurred before they bought the land; (5) failed to enforce the terms of the Breauxs' property damage release by relying on inadmissible parol evidence; and (5) awarded excessive, speculative and unsupported damages. Michael Bourgeois separately appealed, asserting the trial court erred in finding him personally liable to plaintiffs for performing administrative duties as an Exxon employee and in assessing damages against him. Plaintiffs filed a cross-appeal, alleging the trial court erred: (1) in not awarding damages for the remediation of "usable groundwater"; (2) in misclassifying the aquifer underlying their property and in determining that it did not require remediation; (3) in failing to award attorneys' fees under the Groundwater Act and in failing to sanction Exxon's discovery abuses and disallowing attorneys' fees related to such; and (4) in awarding inadequate punitive and exemplary damages. For the following reasons, we affirm in part and reverse in part.
The claims and defenses asserted in this litigation arise from several leases affording Exxon, or its predecessor, access to explore and produce minerals upon two separate tracts of land owned separately by two sets of plaintiffs. In 1936, E.F. Marin (father of Donald, Engsfeld F., and Veronica) granted a mineral lease to W.S. Mackey. The lease provided for a payment to plaintiffs of 1/8 of all oil and gas production. In 1937, Canal Bank and Trust Company (CBT) granted a mineral lease to Humble Oil and Refining Company (Humble), Exxon's predecessor.1 By 1939, Humble had acquired the 1936 Marin lease. The Marin lease serves as the basis for the claims of the Marin heirs.2 In 1941, E.F. Marin granted a servitude to Humble over approximately 20 acres of property that was used to build a landing/dock area, terminal and related facilities for the production of oil and gas. With some modifications, this eventually became known as the Marin Surface Lease Agreement, which was novated in 1994 and 2001. Additional claims asserted by Veronica Marin Breaux, together with her husband Clyde Breaux, arise from the property originally covered under the Canal Bank and Trust lease, which property was subsequently acquired by the Breauxs.3
The Marins own approximately 204 acres in Bayou Sale. Donald Marin, Sr. has lived on the property all his life. Clyde and Veronica Marin Breaux own approximately 75 non-contiguous acres of property in Bayou Sale. Although Mr. Breaux testified that he did not inspect the property prior to purchasing it, he was aware that Exxon was "there" and had a working oil well facility on the property. He also knew there was an open pit on the property. The Breauxs built their home there in 1986 and have resided there ever since. In addition to the oil and gas exploration activities, the property has always been in cultivation, primarily for sugarcane.
In the 1980s, much of Exxon's production on the Marin and Breaux properties began to dwindle. As such, some of its operations were shut down. Then, in approximately 1986, many of the pits located on the Marin and Breaux properties were closed, at least in part in response to regulations promulgated by the State of Louisiana.4
On November 26, 2003, the plaintiffs filed the instant suit, naming several entities, along with Exxon, as defendants.5 In their petition, plaintiffs asserted claims for remediation of the soil and groundwater and other damages arising out of Exxon's oil and gas exploration, production and transportation activities on plaintiffs' properties. The petition also included claims that Exxon knowingly disposed of oilfield wastes in unlined earthen pits and/or released the waste directly into waterways, inevitably resulting in seepage, thus contaminating both the soil and groundwater. Plaintiffs alleged that the oilfield wastes deposited into these pits and water bodies contained naturally occurring radioactive material ("NORM"), "produced water,"6 drilling fluids, chlorides, hydrocarbons, heavy metals and other toxic substances.7
For many years, defendant Michael Bourgeois served as supervisor of production for the operators who conducted production activities in the subject oilfield. Plaintiffs alleged that by virtue of his position, Bourgeois directly supervised the activities performed on their property and knew, as did Exxon, that the activities complained of caused or contributed to the pollution at issue. Plaintiffs alleged that despite this knowledge, Exxon and Bourgeois failed to warn, and actively concealed, that their operations were hazardous to persons and property.
A five-day judge trial was held,8 during which conflicting testimony was elicited concerning: (1) whether the property had been contaminated; (2) whether the pit closures had been appropriately accomplished; (3) how the underlying aquifer should be classified; and (4) whether the proposed remediation for soil and groundwater was required and, if so, whether the plan for remediation was appropriate.
After taking the matter under advisement, the trial court rendered judgment on September 19, 2007,9 in favor of "plaintiffs" and against defendants, Exxon and Bourgeois, in solido, awarding the amount of $14,000,891.00 in compensatory damages, and terminating the Marin surface lease agreement. The judgment further awarded punitive damages, solely against Exxon, in the amount of $14,000,891.00. Plaintiffs filed a motion for new trial, assigning as error that the trial court made incorrect calculations concerning soil remediation. The plaintiffs also challenged the trial court's groundwater classification and refusal to apply the Groundwater Act.
The motion for new trial was granted, in part, and a new judgment was rendered on December 21, 2007, in favor of the Breaux plaintiffs and against Exxon and Bourgeois, in solido, awarding them: (1) compensatory damages in the amount of $276,498.35 for remediation of the soil and $63,682.38 for handling groundwater intrusion during soil remediation operations; and (2) punitive damages against Exxon in "an amount equal to compensatory damages," or $340,180.73.
Judgment was further granted in favor of the Marin plaintiffs, Le, Veronica M. Breaux, Donald Marin, Sr. and E.F. Marin, and against Exxon and Bourgeois, awarding these plaintiffs compensatory damages in the amount of $15,115,390.65 for remediation of the soil, $3,481,317.62 for handling groundwater intrusion during soil remediation operations, and $2,408,868.00 for remediation of contaminated soil and sediments in the canal. The judgment further awarded the Marin plaintiffs punitive damages against Exxon in "an amount equal to the compensatory damages," or $21,005,576.27. Additionally, the judgment denied the defendants' exception of prescription and ordered that the surface lease agreement between the Marin plaintiffs and Exxon was terminated. These appeals followed.
In this voluminous appeal record, a myriad of assignments of error are asserted for review. For convenience and completeness, we address the assignments of error beginning with those of Exxon and therein elaborate on the facts of the case, as established by the testimony and exhibits.
Exxon's threshold defense in this matter is prescription.10 The plaintiffs filed suit on November 26, 2003. Exxon contends that the claims of plaintiffs, whether delictual or contractual, prescribed before suit was filed as the plaintiffs had knowledge of a cause of action at least as far back as the 1980s.11 In this assignment, Exxon asserts that the trial judge erred in failing to sustain the plea of prescription and, in particular, in finding that the running of prescription was suspended under the doctrine of contra non valentem.
The judicially created doctrine of contra non valentem is an exception to the general rule of prescription and is based on the civilian concept that prescription does not run against a party who is unable to act. American Casualty Company v. Security Industrial Insurance Company, 1998-2075 (La. App. 1st Cir. 11/5/99), 745 So. 2d 832, 834. The doctrine is applied in four general situations:
(1) where there was some legal cause which prevented the courts or their officers from taking cognizance of or acting on the plaintiffs a...
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