Clerk of Court For the Court Gloria's Ranch, L.L.C. v. Tauren Exploration, Inc.; Cubic Energy, Inc.; Wells Fargo Energy Capital, Inc.; And Exco Usa Asset, L.L.C.

The Supreme Court of the State of Louisiana
Clerk of Court
For the Court
GLORIA'S RANCH, L.L.C.
VS.
TAUREN EXPLORATION, INC.; CUBIC
ENERGY, INC.; WELLS FARGO ENERGY
CAPITAL, INC.; AND EXCO USA ASSET,
L.L.C.
No.2020-C-00780
_ _ _ _ _ _
IN RE: Tauren Exploration, Inc. - Applicant Defendant; Applying For Writ Of
Certiorari, Parish of Caddo, 1st Judicial District Court Number(s) 541,768, Court of
Appeal, Second Circuit, Number(s) 53,226-CA;
_ _ _ _ _ _
November 04, 2020
Writ application granted. See per curiam.
WJC
BJJ
JDH
JTG
JHB
Weimer, J., would grant and docket.
Crichton, J., recused.
Supreme Court of Louisiana
November 04, 2020
11/04/2020 "See News Release 042 for any Concurrences and/or Dissents."

11/04/20
SUPREME COURT OF LOUISIANA
No. 2020-C-00780
GLORIA'S RANCH, L.L.C.
VS.
TAUREN EXPLORATION, INC.; CUBIC ENERGY, INC.; WELLS FARGO
ENERGY CAPITAL, INC.; AND EXCO USA ASSET, L.L.C.
On Writ of Certiorari to the Court of Appeal, Second Circuit, Parish of Caddo
PER CURIAM∗
Gloria’s Ranch sued Tauren, Cubic, EXCO, and the lender, Wells Fargo, for
failure to release a mineral lease when it stopped producing in paying quantities. In
2018, this court held Wells Fargo, as the lend er, could not be liable as a lessee but
affirmed the solidary liability of Tauren, Cubic, and EXCO. Gloria’s Ranch LLC v.
Tauren Expl. Inc., 17-1518 (La. 9/7/18), 251 So.3d 392.
The case was ultimately remanded “for the trial cou rt to consider the effect
the reversal of Wells Fargo ’s liability has on the award, particularly as it relates to
the virile share accounted for in the EXCO settlement.” 1 In the interim, Cubic
declared bankruptcy, and its liability to Gloria’s Ranch was discharged. Tauren is
the sole remaining defendant. We now must determine who bears the loss of Cubic’s
insolvency.
L
a. C.C. art. 1803 states:
Remission of debt by the obligee in favor of one obligor, or a
transaction or compromise between the obligee and one obligor,
benefits the other solidary obligors in the amount of the portion of that
obligor.
∗ Retired Judge James Boddie , Jr., appointed Justice pro tempore , sitting for the vacancy in
Louisiana Supreme Court District 4.
1 Gloria’s Ranch reached a settlement with EXCO on August 13, 2014, thereby releasing EXCO
as a defendant in this matter.

Gloria’s Ranch entered into a compromise with EXCO. By settling, Gloria’s Ranch
extinguished EXCO’s debt. Thus, the obligation owed to Gloria’s Ranch was
reduced by EXCO’s virile portion. When Cubic became insolvent, the issue arose
as to whether Tauren should wholly bear Cubic’s portion or whether Cubic’s virile
share should be split equally amongst Tauren and EXCO, with Gloria’s Ranch
absorbing the liability of the latter. This is a res nova issue.
Louisiana Civil Code Article 1803, Revision Comment (d), states, “In case of
insolvency of a solidary obligor after the obligee has remitted the debt in favor of
another, the loss must be borne by the obligee.” A treatise on the subject states:
The obligee w ho remits[ 2] the debt in favor of one of his solidary
obligors shares in the loss resulting from the insolvency of another by
losing the amount the remitted obligor would have had to contribute
had he not been favored by a remission of the debt.

Litvinoff and Scalise, 5 La. Civ. Law Treatise, The Law of Obligations, 2 ed. (2001),
§7.83.
These secondary sources are instructive. We expressly hold that when an
obligee remits (or compromises) the debt of one solidary obligor, he absorbs that
obligor’s portion of the loss caused by another solidary obligor’s insolvency .
Because Gloria’s Ranch discharged the debt of EXCO, thus impairing the legal
rights of the other solidary obligors, it should bear EXCO’s portion of the loss caused
by Cubic’s insolvency.
REVERSED and RENDERED.

2 While they are separate legal concepts, remission, compromise, and transactions are given
equal effect for purposes of Louisiana Civil Code article 1803. See La. Civ. Code art. 1803,
Revision Comment (a).