Pontchartrain Natural Gas System, k/d/s Promix, L.L.C., and Acadian Gas Pipeline System v. Texas Brine Company, LLC

STATE OF LOUISIANA

COURT OF APPEAL

FIRST CIRCUIT

NO. 2018 CA 0254

G%(
PONTCHARTRAIN NATURAL GAS SYSTEM,
K/D/ S PROMIX, L.L. C., AND
ACADIAN GAS PIPELINE SYSTEM

VERSUS

TEXAS BRINE COMPANY, LLC

DEC 12 2019
Judgment Rendered:

On Appeal from the
23rd Judicial District Court
In and for the Parish of Assumption
State of Louisiana
Trial Court No. 34, 265

Honorable Thomas J. Kliebert, Jr., Judge Presiding

Leopold Z. Sher Attorneys for Appellant/Defendant,
James M. Garner Third -Party Plaintiff,
Peter L. Hilbert, Jr. Texas Brine Company, LLC
Jeffrey D. Kessler
Amanda R. Schenck
New Orleans, LA

Travis J. Turner
Gonzales, LA

Robert Ryland Percy, III
Gonzales, LA

Eric J. Mayer
Houston, TX

Mary S. Johnson Attorneys for Appellees/ Defendants,
Mandeville, LA Third -Party Defendants, National
Union Fire Insurance Company of
Nichole M. Gray Pittsburgh, Pa., and AIG Specialty
New Orleans, LA Insurance Company

BEFORE: GUIDRY, McDONALD, WELCH, HIGGINBOTHAM,
AND THERIOT, JJ.

2

HIGGINBOTHAM, J.

This is another appeal related to the many disputes surrounding the Bayou

Coyne sinkhole that developed in Assumption Parish on August 3, 2012. The

issues in this appeal concern potential insurance coverage pursuant to policies that

pre -date the occurrence of the sinkhole and whether the insurers have any

remaining duty to defend.

Defendant and third -party plaintiff, Texas Brine Company, LLC, appeals the

September 13, 2017 summary judgment dismissal of the claims of Pontchartrain

Natural Gas System, K/D/ S Promix, L.L.C., and Acadian Gas Pipeline

collectively referred to as " Pontchartrain"), in the underlying litigation against

some of Texas Brine' s insurers. The insurers, National Union Fire Insurance

Company of Pittsburgh, Pa., and AIG Specialty Insurance Company ( referred to

herein as " National Union and AIG"), answered the appeal, asserting that the

district court erred in denying their motion for summary judgment seeking a

dismissal of Texas Brine' s incidental demand against them. National Union and

AIG also filed a motion to dismiss Texas Brine' s appeal, arguing that the summary

judgment is a partial judgment not designated as final for purposes of appeal

pursuant to La. Code Civ. P. art. 1915. In turn, Texas Brine filed an exception of

lack of subject matter jurisdiction or alternatively, a motion to dismiss National

Union and AIG' s answer to appeal. National Union and AIG filed a motion to

dismiss, or alternatively to strike, Texas Brine' s exception/ motion. All of the

exceptions/motions filed in this court were referred to this merits panel.

For the reasons stated in a previous appeal that is the same in all respects

except for the insurers of Texas Brine, we deny the motion to dismiss. See

Pontchartrain Natural Gas System v. Texas Brine Company, LLC, 2018- 0244

La. App. 1st Cir. 10/ 11/ 18), 264 So. 3d 545, 550, writ denied, 2019- 0080 ( La.

3

3/ 6/ 19), 264 So. 3d 1204 (" when there is an appeal from a final judgment, i.e., a

district court' s grant of summary judgment, an interlocutory ruling may also be

reviewed by the appellate court."). See also Florida Gas Transmission

Company, LLC v. Texas Brine Company, LLC, 2018- 0218 ( La. App. 1st Cir.

1/ 11/ 19), 272 So. 3d 547, 549 n.2, writ denied, 2019- 00510 ( La. 9/ 24/ 19), 279

So. 3d 385 ("[ b] ecause the judgment dismisses all of [ plaintiff' s] claims against

the insurer], it is appealable under Article 1915( A)( 1) and ( 3)"). Furthermore,

while a denial of a motion for summary judgment is a non -appealable,

interlocutory judgment, when an appeal is taken from a partial summary judgment

that is immediately appealable under Article 1915, an appellee may seek review of

the interlocutory judgment involving the same or related issues by filing an answer

to the appeal. See Florida Gas, 272 So. 3d at 549 n.3. Thus, we deny all of the

exceptions/ motions to dismiss.

As for the merits of Texas Brine' s appeal, as well as National Union and

AIG' s answer to appeal, we recognize that this court has previously considered and

decided these same issues, arguments, and evidence in recent appeals connected-
onnected

with this protracted sinkhole litigation. See Crosstex Energy Services, LP v.

Texas Brine, Company, LLC, 2017- 0863 ( La. App. 1st Cir. 12/ 21/ 17), 240 So. 3d

1024, 1029- 30, writ denied, 2018- 0144 ( La. 3/ 23/ 18), 238 So. 3d 962, and Florida

Gas Transmission Company, LLC v. Texas Brine Company, LLC, 2018- 0062

La. App. 1st Cir. 1/ 11/ 19), 2019 WL 168583, * 1 ( unpublished opinion). See also

Pontchartrain, 264 So. 3d at 552- 53. We are bound to follow the final and

definitive judgments rendered by other panels of this court. Pontchartrain

Natural Gas System v. Texas Brine Company, LLC, 2018- 0001 ( La. App. 1st

Cir. 6/ 4/ 18), 253 So. 3d 156, writ denied, 2018- 1124 ( La. 9/ 28/ 18), 253 So. 3d 147.

The Crosstex case is now a final and definitive judgment since the Louisiana

M

Supreme Court has denied Texas Brine' s application for a writ of certiorari. See

La. Code Civ. P. art. 2167( C).

As in the other appeals concerning summary judgment rulings in favor of

insurers of Texas Brine, the motion for summary judgment filed by National Union

and AIG avowed that their pre -2012 insurance policies, the last of which expired

on March 1, 2009, do not cover Pontchartrain' s claims and, consequently, do not

require the insurers to provide a defense to Texas Brine. National Union and AIG

cite policy language limiting coverage to damage that " occurs during the policy

period" and declaring that they have no duty to defend an insured against " any

suit' seeking damages for ... ` property damage' to which this insurance does not

apply." We agree with the insurers' arguments and find no distinguishing facts for

a different result in this appeal.

After a thorough de novo review of the record in this appeal, we find that

National Union and AIG met their initial burden of pointing to an absence of

factual support for an essential element to Pontchartrain' s claims under the

insurers' pre -2012 policies. Coverage pursuant to the pre -2012 policies was never

triggered since Pontchartrain' s alleged property damage did not occur during the

effective dates of the pre -2012 policies. Pontchartrain did not substantively oppose

the insurers' motion for summary judgment; however, as in the other related cases,

Texas Brine vigorously opposed the motion. Texas Brine' s opposition heavily

relies on the same speculative expert opinions extraneous to Pontchartrain' s

allegations and admissions that plaintiffs are not seeking pre -sinkhole damages and

were never aware of any damages that occurred prior to the emergence of the

sinkhole. For the reasons contained in our previous opinions on these same issues,

we affirm the September 13, 2017 summary judgment dismissing Pontchartrain' s

claims against National Union and AIG.

5

Texas Brine argues in its brief that any clarification of the termination of its

insurers' duties and obligations as related to the duty to defend Texas Brine was

not raised in the district court. Additionally, Texas Brine did not assign error as to

the question of when the duty to defend terminates. Nevertheless, in their answer

to Texas Brine' s appeal National Union and AIG did request clarification as to the

termination of their duty to defend Texas Brine. The record reflects that Texas

Brine definitively raised the duty to defend issue in its opposition to summary

judgment. National Union and AIG cited policy language in their original motion

regarding the lack of a defense duty when coverage does not apply. Further,

National Union and AIG, in a reply brief filed in support of their motion,

specifically requested that the district court grant summary judgment as to Texas

Brine' s third -party claims against them, which are " derivative" of Pontchartrain' s

claims.

Additionally, as the district court' s reasons for judgment and written

judgment clearly indicate, the duty to defend issue was considered and denied at

the August 1, 2017 hearing on the motion for summary judgment. Louisiana Code

of Civil Procedure article 966( F) makes clear that a summary judgment may be

rendered or affirmed only as to those issues set forth in the motion under

consideration by the court at that time." The 2015 Official Revision Comments ( 1)

for article 966( F), offers an extra explanation that, " in deciding a motion for

summary judgment, a court can consider only the issues raised in the motion or

opposition filed by the parties. The court cannot rule on issues not raised by the

parties." [ Emphasis added.] Considering all of these reasons, we find that the duty

to defend issue was raised by the insurers, opposed by Texas Brine, and considered

Ct

by the district court before the ruling was issued. Thus, we find no merit in Texas

Brine' s argument to the contrary.'

Our previous decisions in the related sinkhole appeals clearly set out the

well- established rule of law that an insurer' s duty to defend terminates once the

undisputed facts establish, or a judicial determination is made, that the claims

asserted are not covered under the policy. See Florida Gas, 272 So. 3d at 551;

Pontchartrain, 264 So. 3d at 553- 54; Crosstex, 240 So. 3d at 1032. See also

Maldonado v. Kiewit La. Co., 2013- 0756 ( La. App. 1st Cir. 3/ 24/ 14), 146 So. 3d

210, 219; Allstate Ins. Co. v. Roy, 94- 1072 ( La. App. 1st Cir. 4/ 7/ 95), 653 So. 2d

1327, 1333, writ denied, 95- 1121 ( La. 6/ 16/ 95), 655 So. 2d 339 ( holding that an

insurer' s duty to defend terminates once the undisputed facts establish that claims

asserted are not covered under the policy); West v. Bd. of Comm' rs of Port of

New Orleans, 591 So. 2d 1358, 1360 ( La. App. 4th Cir. 1991) ("[ e] ven though the

duty to defend is broader than the question of liability, when in a summary

judgment the trial court decides as a matter of law the exclusion is applicable,

meaning there is no coverage, then of course there is no duty to defend.")

Consequently, we reverse the district court' s denial of the motion for summary

judgment relevant to Texas Brine' s third -party claims for indemnity and defense,

and render summary judgment in favor of National Union and AIG, dismissing

Texas Brine' s claims against them under the pre -2012 policies.

In summary, the allegations of Pontchartrain' s original and amending

petitions did not trigger coverage on the part of National Union and AIG where the

uncontroverted admissions of Pontchartrain establish that no pre -2012 damage has

Because the duty to defend issue was not raised for the first time in the insurers' reply
memorandum, but rather in Texas Brine' s opposition memorandum, this case is distinguishable
from two recent cases decided by this court: Smith v. Moreau, 2017- 0003 ( La. App. 1st Cir.
6/ 2/ 17), 222 So. 3d 761, 765- 66; Wilson v. Two SD, LLC, 2015- 0477 ( La. App. 1st Cir.
12/ 23/ 15), 186 So. 3d 159, 162, writ denied, 2016- 0306 ( La. 4/ 8/ 16), 191 So. 3d 588.
7

ever been definitively identified and no claim for pre -2012 damages is sought.

Furthermore, having made the judicial determination that National Union and

AIG' s pre -2012 policies do not provide coverage for Pontchartrain' s alleged

damages, the insurers' duty to defend Texas Brine terminated as of this date of our

judicial determination that the claims asserted pursuant to the pre -2012 policies are

not covered. Claims for Texas Brine' s defense costs incurred prior to this judicial

determination are to be decided at another time, according to the district court' s

outline of the phases of trial. All costs of this appeal are assessed to Texas Brine

Company, LLC.

ALL EXCEPTIONS AND MOTIONS TO DISMISS DENIED;
JUDGMENT AFFIRMED IN PART, REVERSED IN PART, AND
RENDERED.

STATE OF LOUISIANA

COURT OF APPEAL

FIRST CIRCUIT

NUMBER 2018 CA 0254

PONTCHARTRAIN NATURAL GAS SYSTEM,
K/D/ S PROMIX, L. L. C., AND
ACADIAN GAS PIPELINE SYSTEM

VERSUS

TEXAS BRINE COMPANY, LLC

GUIDRY, J., dissents in part and assigns reasons.

GUIDRY, J., dissenting in part.

I disagree with the portion of the majority opinion reversing the district court' s

denial of the motion for summary judgment relevant to Texas Brine' s third -party

claims for indemnity and defense and rendering judgment in favor ofNational Union

and AIG, dismissing Texas Brine' s claims against them under the pre -2012 policies.

Louisiana Code of Civil Procedure article 966( F) expressly states that "[ a]

summary judgment may be rendered or affirmed only as to those issues set forth in

the motion under consideration by the court at that time." The 2015 comments to

that article further explain that the court may consider and even rule on issues raised

by the parties in either the motion or opposition. Recent decisions of this court have

held, however, that based on La. C. C. P. art. 966( F), it is improper for the trial court

to consider and rule on an issue first raised in a reply memorandum. See Smith v.

Moreau, 17- 0003, p. 5 ( La. App. 1st Cir. 6/ 2/ 17), 222 So. 3d 761, 765- 66; Wilson v.

Two SD, LLC, 15- 0477, pp. 5- 6 ( La. App. 1st Cir. 12/ 23/ 15), 186 So. 3d 159, 162,

writ denied, 16- 0306 ( La. 4/ 8/ 16), 191 So. 3d 588.

In their motion for summary judgment, the insurers requested summary

judgment dismissing the plaintiffs' claims. In opposition, Texas Brine requested that

the court deny the motion for summary judgment. In neither the motion nor in the

opposition did any party request the trial court to rule on whether a duty to defend

was owed or the extent of that duty. Furthermore, while Texas Brine did raise the

issue of the duty to defend in opposing the insurers' motion for summary judgment,

it did not request the trial court to decide that issue in its opposition. Accordingly,

it was not until the reply memorandum that National Union and AIG asserted that

b] ecause the Third -Party Demand filed by Texas Brine Company, LLC ... is

derivative of Plaintiffs' claims, summary judgment in favor of National Union and

AIG Specialty is mandated on that claim as well." To the extent that this one

statement in their reply memorandum attempts to expand the scope of their motion

for summary judgment to also seek dismissal of Texas Brine' s third -party claims, I

believe that La. C. C. P. art. 966( F) and the law of this circuit prohibit such an

expansion.

Therefore, because the issue of the duty to defend Texas Brine was not

properly before the trial court pursuant to the summary judgment filed by National

Union and AIG, I would vacate the portion of the trial court' s judgment denying

National Union and AIG' s motion for summary judgment with respect to Texas

Brine.

2

PONTCHARTRAIN NATURAL GAS SYSTEM, 2018 CA 0254
K/D/ S PROMIX, L.L.C, AND ACADIAN GAS
PIPELINE SYSTEM FIRST CIRCUIT

VERSUS COURT OF APPEAL

TEXAS BRINE COMPANY, LLC STATE OF LOUISIANA

WELCH, J., concurs in part, dissents in part, and assigns reasons.

WELCH, J., dissenting in part.
J C,
I agree that the grant of summary judgment dismissing the claims of

Pontchartrain Natural Gas System, K/D/ S Promix, L.L.C. and Acadian Gas

Pipeline in the underlying litigation against some of Texas Brine' s insurers was

correct. I disagree, however, with the portion of the majority opinion that reverses

the trial court' s denial of the motion for summary judgment relevant to Texas

Brine' s third -party claims for indemnity and defense and rendering judgment in

favor of those insurers, National Union Fire Insurance Company of Pittsburgh, Pa.

and AIG Specialty Insurance Company, dismissing Texas Brine' s claims against

them. I respectfully dissent for the reasons assigned by Judge Guidry but write

separately because I believe this decision sets forth a dangerous precedent which

directly conflicts with La. C. C. P. art. 966.

First, and most importantly, Texas Brine was not listed in the motion for

summary judgment as a party against whom the movers sought judgment.

National Union and AIG moved for summary judgment against Pontchartrain

Natural Gas System, K/D/ S Promix, L.L.C. and Acadian Gas Pipeline National

Union Fire Insurance Company of Pittsburgh, Pa., seeking dismissal of all claims

asserted by those parties against the movers. No where is Texas Brine mentioned

in the motion for summary judgment. Texas Brine made an appearance at the

hearing to oppose the insurers' motion for summary judgment. Then, based on the

1

arguments made by Texas Brine in opposition to the insurers' motion, and based

on arguments made by the insurers' in their reply memorandum, the trial court

denied summary judgment on the insurers' motion that their pre -2012 polices do

not provide coverage for plaintiffs' claims as to Texas Brine.

The majority correctly notes that La. C. C. P. art. 966( F) provides that "[ a]

summary judgment may be rendered or affirmed only as to those issues set forth in

the motion under consideration by the court at that time." My major concern, like

Judge Guidry, however, is the majority' s reliance on the 2015 Official Revision

Comment ( 1) to La. C. C. P. art. 966, which provides, in part, " that, in deciding a

motion for summary judgment, a court can consider only the issues raised in the

motion or opposition filed by the parties." ( Emphasis added.). Here, the majority

reasons that since Texas Brine raised its third -party claims regarding indemnity

and defense against the insurers in its opposition to the insurers' motion for

summary judgment against Pontchartrain, K/D1S Promix, and Acadian Gas, and

the insurers then argued they had no duty to indemnify or defend in their reply

memorandum, that the trial court was correct to consider Texas Brine' s third -party

claims against the insurers on indemnity and defense in deciding the motion for

summary judgment. In doing so, the majority reverses the trial court' s judgment

denying the insurers' motion for summary judgment relevant to Texas Brine' s

third -party claims for indemnity and defense, and dismissing Texas Brine' s claims

against the insurers, with prejudice. This holding is clearly wrong.

It is axiomatic that the comments to a statute are not law. Ramirez v. Fair

Grounds Corp., 575 So. 2d 811, 813 ( La. 1991) ( statements contained in the

official comments are not part of the statute, have no legislative effect and are not

binding on courts.). Furthermore, 2015 Official Revision Comment ( 1) to La.

C. C. P. art. 966 is in direct conflict with the plain, unambiguous language of La.

C. C. P. art. 966( F). The language of Article 966( F) prevails over the comment.

2

Allowing this precedent to stand would throw the prior jurisprudence regarding the
interpretation of La. C. C. P. art. 966( F) into chaos. For these reasons, I respectfully

dissent. I would reverse the trial court and this court' s rulings on the issue of the

dismissal of Texas Brine' s third -party indemnity and defense claims with prejudice

because Texas Brine was never a party to the original summary judgment, and a

summary judgment adding an additional party and/or a new claim cannot be raised

in an opposition memorandum nor a reply memorandum.

3