Quantum Res. Mgmt., L.L.C. v. Pirate Lake Oil Corp.

• Decision Date: 15 April 2015
• Docket Number: No. 14–CA–687.,14–CA–687.
• Citation: 170 So.3d 259
• Parties: QUANTUM RESOURCES MANAGEMENT, L.L.C. and Milagro Producing, L.L.C. v. PIRATE LAKE OIL CORP. et al.
• Court: Court of Appeal of Louisiana — District of US

170 So.3d 259

QUANTUM RESOURCES MANAGEMENT, L.L.C. and Milagro Producing, L.L.C.
v.
PIRATE LAKE OIL CORP. et al.

No. 14–CA–687.

Court of Appeal of Louisiana, Fifth Circuit.

April 15, 2015.

170 So.3d 260

Sidney L. Shushan, Jonathan M. Shushan, Attorneys at Law, New Orleans, LA, for Defendant/Appellant.

Barbara Treuting Casteix, Bruce S. Kingsdorf, John F. Shreves, Donald J. Brannan, Megan S. Peterson, Attorneys at Law, New Orleans, LA, Tommy D. Overton, Jr., Attorney at Law, Houston, TX, for Defendant/Appellee.

Panel composed of Judges JUDE G. GRAVOIS, ROBERT A. CHAISSON, and STEPHEN J. WINDHORST.

Opinion

ROBERT A. CHAISSON, Judge.

In this chain of title dispute, appellants Zodiac Corporation Ltd. and Salzer & Ramos Enterprises Ltd. (collectively, the “Zodiac Group”), appeal the trial court's ruling on a motion for summary judgment declaring a 1925 tax sale of property previously adjudicated to the State absolutely null and void. Upon de novo review, for the following reasons, we affirm the decision of the trial court.

FACTS AND PROCEDURAL HISTORY

Plaintiffs, Quantum Resources Management, LLC and Milagro Producing, LLC, brought this concursus proceeding against the Zodiac Group and the Mayronne Group¹ to determine ownership of several lots located in the Jefferson Third Drainage District and entitlement to the proceeds from oil, gas, and mineral leases executed for those lots. This appeal concerns only the competing claims of ownership by the Zodiac Group and the Mayronne Group to one of these lots, a

certain tract of land designated as “Lot 4” on a 1913 Plat of Survey prepared by Janies Webb for the Jefferson Third Drainage District. At issue is the validity of a 1925 tax sale which purportedly conferred ownership of Lot 4 to the Zodiac Group's ancestor in title.

Both parties have submitted as evidence certified copies of parish records of the conveyances and transfers which establish their respective chains of title. Both parties also concede that they are unable to produce any additional evidence beyond what has been submitted into the record to substantiate their respective claims. The Zodiac Group traces its claim of ownership in Lot 4 to a tax sale on August 22, 1925, by the Sheriff of Jefferson Parish to John A. Saxon for 1924 taxes assessed to an Eric T. White. No evidence has been introduced into the record showing that the validity of this tax sale was challenged at any time until the present proceedings. The Mayronne Group traces its ownership to a 1936 redemption of Lot 4 by Virgil Nobles from a 1920 adjudication to the State for non-payment of 1919 property taxes assessed in the name of Virgil Nobles.

The issue of which party has better title to Lot 4 came before this Court previously on a motion for summary judgment granted by the trial court. Quantum Res. Mgmt., L.L.C. v. Pirate Lake Oil Corp., 11–813 (La.App. 5 Cir. 5/31/12), 98 So.3d 394. At that time, this Court affirmed the

170 So.3d 261

decision of the trial court granting the Mayronne Group's motion for summary judgment dismissing the Zodiac Group's claims to Lot 4 because there was no evidence that the Jefferson Parish Sheriff gave notice of the 1925 tax sale to the record owner of the lot. This Court held that the lack of notice was a violation of constitutional due process notice requirements that would render the 1925 sale an absolute nullity according to the United States Supreme Court's ruling in Mennonite Board of Missions v. Adams, 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983).

The Zodiac Group appealed this ruling, and the Louisiana Supreme Court concluded that Mennonite could not apply retroactively in the present case to have the 1925 tax sale declared an absolute ity. The Court found the decision in Gulotta v. Cutshaw, 283 So.2d 482 (La.1973) to be dispositive of the lack of notice issue. Quantum Res. Mgmt., L.L.C. v. Pirate Lake Oil Corp., 12–1472 (La.3/19/13), 112 So.3d 209. Under Gulotta, lack of notice to the record owner in a tax sale is a relative rather than an absolute ity. A relative ity does not prevent the running of the five-year peremptive period on tax sale attacks established under the 1921 and 1974 Louisiana Constitutions, and therefore could not be a valid basis for summary judgment invalidating the tax sale. Id.

On the same writ, the Mayronne Group also argued that the 1925 tax sale is an absolute nullity because at the time of the sale, the property belonged to the State pursuant to an adjudication in 1920 for unpaid 1919 taxes assessed in the name of Virgil Nobles. The Mayronne Group relied on jurisprudence established in Waterman v. Tidewater Assoc. Oil Co., 213 La. 588, 35 So.2d 225 (1947) that property previously adjudicated to the State and not redeemed in time and manner provided by statute could not be assessed and sold by taxing officers as belonging to the former owner or any other person.

The Supreme Court articulated two reasons for declining, at that time, to accept this argument. First, there existed a “significant gap” in the submitted documentation regarding Lot 4, noting in particular the 1936 certificate of redemption relied on to establish the Mayronne Group's chain of title, which stated that Lot 4 was “returned to Tax Collector's list of land sold [to] the State from the Parish of Jefferson filed in the Land Office, on the 30th day of September 1930. ” Quantum Res. Mgmt., 112 So.3d at 219 (emphasis in original). The Court reasoned that if the property had remained with the State from 1920 through 1936

as claimed by the Mayronne Group, there would be no reason for the property to have been returned to the list of property sold in 1930. Id. at 220. Second, the record was silent as to any actions of possession by the parties. Even though both parties acknowledged that Lot 4 was underwater, there existed the possibility that the property could have been acquired through acquisitive prescription, which would have overcome even an absolutely 1925 tax sale to confer ownership in the property. Id.² Accordingly, the Supreme Court reversed the summary judgment granted to the Mayronne Group and remanded the case to the district court.

Subsequently, the Mayronne Group introduced new evidence into the record consisting of:

170 So.3d 262

1) A quitclaim deed and consent judgment from another concursus codefendant, Pirate Lake Oil Corp., which relinquishes all rights to Lot 4 to the Mayronne Group, thereby establishing the Zodiac Group and the Mayronne Group as the only two claimants to Lot 4.

2) An Act of Correction from the Louisiana Office of State Lands correcting the 1936 Certificate of Redemption by Virgil Nobles to clarify the typographical error and have the certificate state that the property was sold to the State on the “30th day of

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