Walton v. Burns
| Decision Date | 16 January 2013 |
| Docket Number | 47,388–CA,47,428–CW. |
| Citation | 151 So.3d 616 |
| Parties | Robert L. WALTON, et al., Plaintiffs–Appellants, v. Ann Butts BURNS, et al., Defendants–Appellees. Robert L. Walton, Bonnie Trouille Walton, John Keith Lamm and Rebecca Broussard Lamm, Plaintiffs–Applicants, v. Exxon Mobil Corporation, ExxonMobil Oil Corporation, Corporation, BP America Production Company, and Monclova Plantation, L.L.C., Defendants–Respondents. |
| Court | Court of Appeal of Louisiana — District of US |
Talbot, Carmouche, Marcello, Baton Rouge, LA, by Donald T. Carmouche, John H. Carmouche, William R. Coenen, III, Brian T. Carmouche, Ross J. Donnes, Victor L. Marcello, D. Adele Owen, Robert C. Vines, James E. Paxton, Tallulah, LA, Weeks & Gonzalez, New Orleans, LA, by Patricia E. Weeks, John Paul Gonzalez, for Appellants/Applicants.
Liskow & Lewis, New Orleans, LA, by Robert B. McNeal, Jerome W. Matthews, Jr., for Respondents Exxon Mobil Corp. and ExxonMobil Oil Corp.
Kean Miller, LLP., Baton Rouge, LA, by James P. Doré, Pamela R. Mascari, for Respondent BP America Production Co.
Jeansonne & Remondet, Lafayette, LA, by John A. Jeansonne, Jr., John A. Jeansonne, III, for Respondents John W. McGowan and McGowan Working Partners.
Shotwell, Brown & Sperry, Monroe, LA, by George M. Wear, Jr., for Appellees, Ann Butts Burns, et al.
Before CARAWAY, MOORE and HARRISON (Pro Tempore), JJ.
In these consolidated oilfield legacy cases, the plaintiffs, current surface owners, contest judgments that refused to allow them to join the mineral servitude owners as defendants in the first suit and sustained exceptions of lis pendens in favor of the mineral servitude owners in the second suit. For the reasons expressed, we grant the plaintiffs' writ application, make it peremptory, direct the district court to give the plaintiffs leave of court to amend their petition to join the mineral servitude owners as defendants in the first suit, and remand for further proceedings. Because of this ruling, we dismiss the second suit as moot.
These suits are part of an oilfield legacy claim involving a 340–acre tract in the Holly Ridge Oil and Gas Field, Tensas Parish. Plaintiffs Robert and Bonnie Walton bought the tract (surface rights only) in July 2002; they sold it to plaintiffs John and Rebecca Lamm in November 2003. They soon discovered the soil was contaminated by oil and gas exploration and production activities going back several decades, chiefly the storage of oilfield sludge in unlined pits that allowed seepage into groundwater.
In September 2004, the plaintiffs filed Suit # 11 against ExxonMobil Oil Corp., Exxon Mobil Corp. and BP America Production Co. (“the oil company defendants,” entities that conducted oil and gas operations on the tract from the late 1930s until 1975), and Monclova Plantation LLC, the entity that sold them the tract. The plaintiffs listed 71 oil wells by serial number, described “pits, sumps, pipelines, flowlines, tank batteries, wellheads, and measuring facilities,” and alleged the defendants' negligence, strict liability, breach of contract to restore the land, and wanton and reckless disregard for public safety. They demanded compensatory damages, remediation, punitive damages, and a reduction in purchase price.
The defendants removed the case to federal court, but after it was remanded to the 6th Judicial District Court, the plaintiffs added as defendants McGowan Working Partners Inc. (“McGowan”), the company that has operated Holly Ridge Field since 1973.
McGowan filed several exceptions, including “no right or cause of action.” The thrust of the argument was that a 1941 mineral lease covering the tract had no provision for the lessee to pay for damages, and a 1948 salt water disposal contract specifically authorized one of ExxonMobil's predecessors to use the land for disposal of saltwater “and other substances”; hence, there was no contract liability on the part of the lessees or operator.
The oil company defendants adopted these arguments, filing motions for summary judgment. They showed that the mineral rights had been reserved in a 1973 sale, after which the surface rights had been transferred several times; no subsequent sale had any provision for preexisting damages. The thrust of the argument was the “subsequent purchaser doctrine”: the plaintiffs were raising a tort claim, and as to tort claims, a purchaser of property can recover for only those damages that occurred after he acquired the property. LeJeune Bros. Inc. v. Goodrich Petr. Co., 06–1557 (La.App. 3 Cir. 11/28/07), 981 So.2d 23, writ denied,2008–0298 (La.4),3 978 So.2d 327, and jurisprudence dating back to Clark v. Warner & Co., 6 La.Ann. 408 (1851).
The plaintiffs responded, inter alia, that the Mineral Code, La. R.S. 31:11, requires the owner of a mineral right to exercise his rights “with reasonable regard for those” of the surface owner, regardless of contracts and jurisprudential rules.
In early November 2009, the plaintiffs sought leave to file a second supplemental and amending petition to add Cleada N. Butts, et al. (“the Butts defendants”), the current mineral servitude owners, as defendants.
One week later, the district court held a hearing on the exceptions and motions for summary judgment only. The plaintiffs argued that two other circuits had recently rejected the subsequent purchaser doctrine. Marin v. Exxon Mobil Corp., 2008–1724 (La.App. 1 Cir. 9/30/09), 2009 WL 7004332 (unpub.); Eagle Pipe & Supply Co. v. Amerada Hess Corp., 2009–0298 (La.App. 4 Cir. 2/10/10), 47 So.2d 428, 174 Oil & Gas Rep. 19. The defendants countered that LeJeune was still the prevailing law, as another judge of the 6th Judicial District Court had recently rejected an identical oilfield legacy claim in a case called Wagoner v. Chevron. Perhaps because Marin, Eagle Pipe and Wagoner were all on appeal, the district court deferred ruling on the motions for summary judgment, and gave the parties 30 days for additional briefing on the exceptions. To date, however, the court has not ruled on any of these filings.
About a year later, the supreme court rendered an opinion in Marin v. Exxon Mobil Corp., 2009–2368 (La.10/19/10), 48 So.3d 234, reversing the award of damages on grounds of prescription but expressly reserving (in footnote 18) any analysis of the subsequent purchaser doctrine. Around the same time, this court affirmed (on rehearing) the district court's application of the subsequent purchaser doctrine in Wagoner v. Chevron USA, 45,507 (La.App. 2 Cir. 8/18/10), 55 So.3d 12, but the property owners in Wagoner applied for writs to the supreme court. The district court therefore held all pending motions in Suit # 1 under advisement.
After waiting over a year with no rulings on anything, the plaintiffs filed Suit # 22 in May 2011. They named only the Butts defendants, the current mineral servitude owners, as defendants. The factual allegations and claims for relief were almost identical to those in Suit # 1. They added, however, the legal theory that under the Mineral Code, R.S. 31:22, the owner of the mineral servitude is obligated, “insofar as practicable, to restore the surface to its original condition[.]”
The Butts defendants responded with an exception of lis pendens, arguing that the factual allegations and relief sought were identical to Suit # 1, and thus there was merger of the defendants' identities in both actions. Louisiana Cotton Ass'n v. Tri–Parish Gin Co., 624 So.2d 461 (La.App. 2 Cir.1993).
The court held a hearing in October 2011. The plaintiffs conceded that the “remedy might ultimately be the same,” but argued that the cause of action against the Butts defendants was based on Art. 22's obligation of the mineral servitude owner to “restore the surface” while that against the oil company defendants was based on Art. 122's obligation of the lessee to act as a “reasonably prudent operator,” two distinct legal theories. The district court stated that it was still waiting on guidance from the supreme court in Eagle Pipe, but ruled orally that in both Suit # 1 and Suit # 2, there was an identity of the parties and the claims arose from the same transaction or occurrence; hence, the court sustained the exception of lis pendens and dismissed the suit without prejudice. The plaintiffs took this appeal in 47,388–CA.
A few weeks later, the supreme court rendered judgment in Eagle Pipe & Supply Inc. v. Amerada Hess Corp., 2010–2267 (La.10/25/11), 79 So.3d 246, 174 Oil & Gas Rep. 32. A plurality of the court reversed the fourth circuit and reinstated the defendants' exception of no cause of action, stating: “In the absence of an assignment or subrogation * * *, a subsequent purchaser of the property cannot recover from a third party for property damage inflicted prior to the sale.” However, the plurality carefully limited its holding (in footnote 80): “Moreover, because not factually relevant, we express no opinion as to the applicability of our holding to situations involving mineral leases or obligations arising out of the Mineral Code.”
The district court finally held, in February 2012, a hearing on the plaintiffs' motion to amend their petition in Suit # 1. The plaintiffs argued that once the court sustained the exception of lis pendens in Suit # 2, it should be automatic that they could join the Butts defendants in Suit # 1. The Butts defendants countered that joining them at this late date would be unduly prejudicial; the other defendants urged that under Eagle Pipe and this court's Wagoner v. Chevron USA, the plaintiffs as subsequent purchasers simply had no cause of action against anybody.
The district court orally adopted the latter argument and denied the motion to amend. The plaintiffs took this writ in 47,428–CW.
About a month later, the supreme court denied writs in Wagoner v. Chevron USA, 2010–2773 (La.3/2/13), 83 So.3d 1032. Although without precedential value, it allowed this court's application...
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