Diamond McCattle Company, L.L.C. and BWW Holdings, L.L.C. v. Range Louisiana Operating, LLC

Judgment rendered April 14, 2021.
Application for rehearing may be filed
within the delay allowed by Art. 2166,
La. C.C.P.

No. 53,896-CA

COURT OF APPEAL
SECOND CIRCUIT
STATE OF LOUISIANA

*****

DIAMOND MCCATTLE COMPANY, L.L.C. Appellants
AND BWW HOLDINGS, L.L.C.

versus

RANGE LOUISIANA OPERATING, LLC Appellee

*****

Appealed from the
Second Judicial District Court for the
Parish of Jackson, Louisiana
Trial Court No. 35267

Honorable Jimmy C. Teat, Judge

*****

THE PESNELL LAW FIRM, A P.L.C. Counsel for Appellants
By: Billy R. Pesnell
John W. Pesnell

ALAN PESNELL LAWYER, LLC
By: W. Alan Pesnell

COOK, YANCY, KING & GALLOWAY Counsel for Appellees,
By: J. William Fleming Range Louisiana
John T. Kalmbach Operating, LLC and
W. Drew Burnham James Browning

*****

Before PITMAN, STONE, and COX, JJ.

COX, J.

This suit arises out of the Second Judicial District Court, Jackson

Parish, Louisiana. Plaintiffs, Diamond McCattle Company, LLC, and BWW

Holdings, LLC brought suit against Range Louisiana Operating, LLC

(“Range”), and James Browning1 for subsurface trespass. Range filed a

motion for summary judgment (“MSJ”), and Plaintiffs filed a partial MSJ.

The trial court denied Plaintiffs’ partial MSJ, granted Range’s MSJ, and

dismissed Plaintiffs’ suit with prejudice. Plaintiffs now appeal.

FACTS

Plaintiffs are the owners of the following described tract of land

(hereinafter referred to as the “Subject Property”):

A certain piece, parcel or lot of ground, together with all
improvements thereon, rights, ways and privileges thereunto
belonging or in any way appertaining; being, lying and situated
in Section 12, Township 16 North, Range 1 West, Jackson
Parish, Louisiana, and being more particularly described as
follows, to wit:

The East one-half (E 1/2) of the Southwest Quarter (SW 1/4),
Section 12, Township 16 North, Range 1 West, LESS AND
EXCEPT: 4.87 acres in the Southwest corner of Northeast
Quarter (NE 1/4) of Southwest Quarter (SW 1/4), Section 12,
Township 16 North, Range I West, being 267.85 feet East and
West by 792 feet North and South. Containing 75 acres more or
less, situated in Jackson Parish, Louisiana.

On January 12, 2018, Plaintiffs filed a petition for judicial relief from

subsurface trespass against Range. Plaintiffs alleged that Range acted

intentionally and in bad faith by horizontally drilling the Tri Delta 13-12 H

No. 1 well (the “Well”) under the Subject Property. Plaintiffs asserted that

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Mr. Browning was not named in the original petition, but was later added by
Plaintiffs as he was Range’s drill site supervisor for the subject well.

they are entitled to recover damages and be recognized as the owner of the

well bore hole to the extent it is located on the Subject Property.

The Well’s surface location is in the West Half of Section 13,

Township 16 North, Range 1 West, on property owned by Tri-Delta Timber

Group, LLC, on which Range had the right to conduct operations. Range

applied for and obtained a drilling permit dated October 2, 2017, authorizing

the drilling of a lease well to test the non-unitized “L Gray Sand.”

The Well was actually drilled to the Lower Cotton Valley Formation,

Reservoir A, for the Vernon Field, Jackson Parish, Louisiana (referred to as

the “LCV RA Formation”). The LCV RA Formation is defined as being at

the depth of 12,100 feet to 14,920 feet. Range drilled a total vertical depth of

14,243 feet, which correlates with the LCV RA Formation. After drilling to

a total vertical depth of 14,243 feet, Range turned the drill bit and drilled

horizontally (from south to north) for a total measured depth of 19,131 feet.2

At a measured depth of 17,679.31 feet, the horizontal lateral crossed the

underground plane between Sections 12 and 13, such that 1,443 feet of the

wellbore is in the West half of Section 12, on the Subject Property. The Well

is within two pre-existing drilling and production units created by the

Louisiana Commissioner of Conservation—the LCV RA SU148 and LCV

RA SU55.

The Well was completed on January 10, 2018. Range filed an

application with the Office of Conservation on February 28, 2018, to have

the permit amended from a “lease” well to a “unit” well. The Office of

2
The total measured depth is the sum of both the vertical and horizontal depths.

2

Conservation issued an order designating the Well a unit well, effective

March 27, 2018.

Defendants answered on January 14, 2019.3 They denied the

allegations by Plaintiffs, but admitted to the following: they did not have a

lease with Plaintiffs; they did permit, drill, perforate, fracture, and complete

the Well in the LCV RA Formation; and, they had no obligation to provide

Plaintiffs with pre-entry notice. Defendants stated that Plaintiffs have failed

to state a claim on which relief can be granted. Defendants asserted that the

Well was drilled to depths subject to the LCV RA SU55 and LCV RA SU148

units, which include the Subject Property, and qualifies as a unit well for

these two production units. They state that because of this, Plaintiffs are

categorized as unleased owners and only have a claim for their share of

production payments.

Plaintiffs amended their petition and stated that Range filed an “As

Drilled” plat with the Office of Conservation, which showed that the bottom

hole and lower perforation point of the Well are on Plaintiffs’ property.

Plaintiffs asserted that Range intentionally and knowingly drilled the Well on

their property and Defendants acted in bad faith in drilling the Well. They

also amended their petition to state that Range initially filed its well

application as a “lease” well, but on February 28, 2018, it filed an application

to amend its drilling permit to designate the well as a “unit” well. Plaintiffs

3
On February 26, 2018, Range filed a notice of removal to Federal Court, arguing
the parties were citizens of different states and the amount in controversy was over
$75,000. Range asserted that its sole member is Range Resources Louisiana, Inc., a
Delaware corporation, whose principal place of business is Texas. It stated the remaining
parties are all Louisiana citizens. On April 16, 2018, the federal court found that subject
matter jurisdiction existed pursuant to 28 U.S.C. §1332. Both parties filed multiple
motions in federal court before the federal court granted Plaintiff’s motion to remand to
the 2nd JDC, Jackson Parish, Louisiana.

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requested to be recognized as owners of the profits derived from the Subject

Property, as well as the “works constructed” by Range on the Subject

Property.

Defendants filed their MSJ arguing that their operations were unit

operations; therefoer, Plaintiffs have no cause or right of action. They asked

the court to dismiss Plaintiffs’ claim with prejudice because there are no

genuine issues of material fact and they are entitled to summary judgment as

a matter of law. They asserted the following: The Commissioner of

Conservation had previously included the Subject Property in the compulsory

drilling and production unit for the LCV RA Formation; the Well was drilled

to and completed in the LCV RA Formation; and, their operations in

connection to the Well constituted unit operations for the existing LCV RA

Formation drilling and production unit.

In support of their MSJ, Defendants submitted the affidavit of Philip

N. Asprodites, attorney and former Louisiana Commissioner of

Conservation. He stated it is a “common, normal, accepted practice” for the

Office of Conservation to permit a well to a deeper, non-unitized formation,

although the operator’s main objective is to test a shallower, unitized

formation. He also stated, “Consistent with the Office of Conservation

accepted practices and procedures, all operations in connection with the

[Well] are deemed to be unit operations for the LCV RA SU 148 and LCV

RA SU 55 drilling and production.”

Defendants also attached the affidavit of Jeffrey Klam, former land

manager for Range. His responsibilities included overseeing the Well. He

stated that Range originally sought a permit to test the “non-unitized L-

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Gray,” and from the commencement of operations, it was Range’s intention

that the Well would be drilled to the LCV RA Formation. He stated that

Range then filed the appropriate paperwork with the Office of Conservation

and the Commissioner found that the Well was drilled to the LCV RA

Formation and designated it a unit well for the LCV RA SU55 and LCV RA

SU148 units.

Defendants included the affidavit of James Browning. Mr. Browning

stated he was working as a drilling supervisor for the Well beginning in

November 2017. He described his responsibilities as implementing and

overseeing Range’s drilling plans, which put him in direct contact with

Range regarding its plans. He stated that from the first day of drilling,

Range’s target was the “Lower Red,” which is entirely within the LCV RA

Formation.

Plaintiffs opposed Defendants’ MSJ and filed a cross-motion for

partial summary judgment. They claimed that Mr. Klam’s affidavit is an

unsworn declaration and Mr. Asprodites’ affidavit is not based on personal

knowledge, and both are not proper for consideration on MSJ. They argued

that “Range falsely represented to the Commissioner of Conservation in its

Application for a Drilling Permit that it had the consent or permission of all

surface owners upon which ‘drilling operations’ for the [Well] would be

conducted.” Plaintiffs stated that they have been the owners of the Subject

Property at all times relevant and never gave consent or authorization for

Range to conduct any drilling on their property.

Plaintiffs argued that Defendants’ MSJ is not supported by applicable

law. They contrast their suit from that of Nunez v. Wainoco Oil & Gas Co.,

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488 So. 2d 955 (La. 1986). They highlighted that the Nunez drilling permit

stated it was for “any zone” down to a certain a depth. They asserted that the

law of trespass is premised on the “fundamental sanctity of private property

from arbitrary invasion.” They cited case law which states trespass includes

subsurface trespass. Plaintiffs also pointed out that Defendants drilled under

the Subject Property, located the bottom hole under the Subject Property, and

fracked the Well long before it was classified as a unit well. They also

highlighted that Range began producing on January 22, 2018, after this suit

was filed. Therefore, these were not unit operations and Range trespassed

when it drilled on the Subject Property without consent. Plaintiffs claimed

that they are entitled to be recognized as the owners of the Well’s bottom

hole and bore hole, to the extent they are located on the Subject Property.

They also claimed they are entitled to an accounting from Range to

determine their share of the profits both before and after the March 27, 2018

approval date.

Defendants opposed Plaintiffs’ cross-motion for partial summary

judgment, and adopted in extenso their arguments made in their own MSJ.

They argued that Nunez is controlling, and that the intent of the operator

determines if it is a unit operation or lease operation. They asserted that

because it is a unit operation, which was their intent, there can be no claim

for subsurface trespass. Defendants claim that the Plaintiffs’ arguments

relating to the initial permit as a lease well is a red herring because the

Commissioner’s Order, which was attached to the permit approval, stated

that the Well must be completed in compliance with the 798 series of orders,

which encompasses the LCV RA Formation.

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Defendants argued that if the Plaintiffs were to prevail on the lease

well designation, “then all of the other mineral owners in the unit would lose

the right to share in the Well’s production.” Finally, Defendants asserted that

there cannot be a trespass for failure to provide a “pre-entry notice” because

those notices are only for surface operations.

Defendants attached the affidavit of Bob Anderson. Mr. Anderson

stated that the Office of Conservation allows the permitting activity like that

which occurred in this case (lease well amended to unit well) because it

allows unit wells to be permitted to accommodate an operator’s need to drill

the well before a public hearing can be held recognizing the well as a

substitute unit well, an alternate unit well, or a cross-unit horizontal well.

Additionally, he stated that the well is deemed a unit well from the date of

first production, notwithstanding the initial lease well designation.

A hearing on the motions was held on March 12, 2020. Both parties

reiterated the same arguments they made in their filings. On June 23, 2020,

the trial court issued its written reasons for judgment on the MSJ and partial

MSJ. First, the trial court stated that the affidavits were permissible because

they were expert opinions pertaining to the practices and procedures of the

Office of Conservation. As to the affidavit of Mr. Browning, the trial court

stated it established that Range’s intention was always to drill a unit well.

The trial court stated that Range was not required to provide pre-entry notice.

It ordered Defendants to provide Plaintiffs with initial and quarterly reporting

of the Well’s costs and revenues, but overruled the remaining arguments by

Plaintiffs in their partial MSJ. The trial court then cited Nunez and granted

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Defendants’ MSJ and dismissed Plaintiffs’ claims with prejudice. Plaintiffs

were assessed with all costs of the proceedings. Plaintiffs now appeal.

DISCUSSION

Plaintiffs seek review of the trial court’s denial of their partial MSJ

and granting of Defendants’ MSJ. A de novo standard of review is required

when an appellate court considers rulings on summary judgment motions,

and the appellate court must use the same criteria that governed the trial

court’s determination of whether summary judgment was appropriate. Bank

of New York Mellon v. Smith, 15-0530 (La. 10/14/15), 180 So. 3d 1238;

Davis v. Heniff Transp., LLC, 52,048 (La. App. 2 Cir. 5/23/18), 249 So. 3d

183.

A court must grant a motion for summary judgment if the motion,

memorandum, and supporting documents show that there is no genuine issue

as to material fact and that the mover is entitled to judgment as a matter of

law, pursuant to La. C.C.P. art. 966(A)(3). Davis v. Heniff Transp., LLC,

supra. A fact is material if it potentially ensures or precludes recovery,

affects a litigant’s ultimate success, or determines the outcome of the legal

dispute. Green v. Brookshire Grocery Co., 53,066 (La. App. 2 Cir. 9/25/19),

280 So. 3d 1256. A genuine issue of material fact is one as to which

reasonable persons could disagree; if reasonable persons could reach only

one conclusion, there is no need for trial on that issue and summary judgment

is appropriate. Jackson v. City of New Orleans, 12-2742 (La. 1/28/14), 144

So. 3d 876, cert. denied, 574 U.S. 869, 135 S. Ct. 197, 190 L. Ed. 2d 130

(2014); Green v. Brookshire Grocery Co., supra. In determining whether an

issue is genuine, a court should not consider the merits, make credibility

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determinations, evaluate testimony, or weigh evidence. Green v. Brookshire

Grocery Co., supra.

Plaintiffs argue that the trial court erred in granting Defendants’ MSJ

because the affidavits submitted in support of the MSJ were not admissible

and there exist genuine issues of material fact, which preclude summary

judgment. Specifically, they argue that the affidavits of Mr. Asprodites, Mr.

Mr. Anderson, and Mr. Browning do not controvert or deny any of Range’s

filings with the Office of Conservation. They assert that Mr. Browning’s

affidavit stating that Range’s intention was to drill to the LCV RA Formation

is hearsay and directly contradicts Range’s representation to the Office of

Conservation in its permit to drill to the deeper, L-Gray Sand.

Our jurisprudence indicates that it is the intent of the operator and the

operations conducted which determine whether drilling operations constitute

unit operations or merely lease operations. See Nunez v. Wainoco Oil & Gas

Co., supra. In the case before us, Mr. Browning, the drilling supervisor,

stated it was Range’s intention all along to drill within the LCV RA

Formation, specifically the Lower Red. Mr. Klam, Range’s land manager,

stated that Range drilled to its intended vertical depth of 14,243 feet. This is

the vertical depth listed on Range’s drilling permit. This depth correlates

with the LCV RA Formation, not the deeper, L-Gray Sand.

Plaintiffs argue that Mr. Browning’s affidavit is irrelevant and

immaterial because it purports to vary or contradict Range’s drilling

application. Supporting and opposing affidavits shall be made on personal

knowledge, shall set forth such facts as would be admissible in evidence, and

shall show affirmatively that the affiant is competent to testify to the matters

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stated therein. La. C.C.P. art. 967. It is insufficient for an affiant to merely

declare that he has personal knowledge of a fact. The affidavit must

affirmatively establish that the affiant is competent to testify as to the matter

by a factual averment showing how he came by the knowledge. Chanler v.

Jamestown Ins. Co., 51,320 (La. App. 2 Cir. 5/17/17), 223 So. 3d 614, writ

denied, 2017-01251 (La. 10/27/17), 228 So. 3d 1230. The court must first

determine whether the supporting affidavits and documents presented by the

moving party are sufficient to resolve all material issues of fact. If they are

not sufficient, summary judgment is not appropriate. Id.

Mr. Browning’s affidavit is based on his personal knowledge as the

drilling supervisor for the Well. He stated that he knew Range’s intentions in

drilling because it was his responsibility to implement and oversee Range’s

drilling plans with respect to the Well. He stated that from the beginning of

drilling, the target formation was the Lower Red, within the LCV RA

Formation. This affidavit was properly considered by the trial court in

determining Range’s intentions during well operations.

Plaintiffs have not submitted any evidence to contradict Range’s stated

intent. Plaintiffs’ arguments all center around the original permit, which lists

the zone or reservoir of proposed completion as the L-Gray Sand. However,

directly under the L-Gray designation, the permit states the true vertical

depth is 14,243 feet, which is shallower than the L-Gray. Additionally,

Defendants submitted the affidavits of experts to clarify the permitting

process and why the L-Gray designation is not controlling.

Mr. Asprodites, a former Commissioner of the Office of Conservation,

stated that it is a “common, normal, accepted practice” to permit a well to a

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deeper, non-unitized formation, although the operator’s main objective is to

test a shallower, unitized formation. Plaintiffs did not present any evidence

or their own expert to controvert Mr. Asprodites’ statements.

Mr. Anderson, a petroleum engineer and 20-year employee of the

Office of Conservation, stated that the Well was a cross-unit well, requiring a

public hearing. He explained that it is common practice in the Office of

Conservation for cross-unit wells to be first named as lease wells in order to

accommodate the operator’s need to drill before a hearing can be held

recognizing the well as cross-unit well.

We disagree with Plaintiffs’ arguments and find these expert affidavits

to be admissible. An affidavit of an expert may set forth opinions “as would

be admissible in evidence under Louisiana Code of Evidence Article 702,”

and shall show affirmatively the affiant is competent to testify to the matters

stated therein. See La. C.C.P. art. 967(A). Article 702 permits an expert

witness to testify in the form of an opinion if (1) the witness’s expertise will

help the trier of fact to understand the evidence or to determine a fact in

issue, (2) the testimony is based on sufficient facts or data, (3) the testimony

is the product of reliable principles and methods, and (4) the expert has

reliably applied the principles and methods to the facts of the case. La C.C.P.

art. 967(B) states the following:

When a motion for summary judgment is made and supported as
provided [in section A], an adverse party may not rest on the
mere allegations or denials of his pleading, but his response, by
affidavits or as otherwise provided above, must set forth specific
facts showing that there is a genuine issue for trial. If he does
not so respond, summary judgment, if appropriate, shall be
rendered against him.

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Mr. Asprodites has been accepted in both state and federal courts as an

expert in the Louisiana Office of Conservation’s practices, procedures, and

the application of their rules, regulations, and governing statutes. His

affidavit is helpful in understanding the Office of Conservation’s procedures

and practices. His affidavit is based on sufficient facts, i.e. Range’s filings

with the Office of Conservation. Mr. Asprodites’ affidavit is based on the

principles governing the operation of the Office of Conservation and applied

those principles. For these reasons, we see no issue in the trial court allowing

the affidavit of Mr. Asprodites.

Mr. Anderson also relied on Range’s filings with the Office of

Conservation. He then explained the procedure within the Office of

Conservation for a cross-unit well to be recognized. Mr. Anderson’s

knowledge was based on 20 years of employment with the Office of

Conservation, as well as employment as a petroleum engineer. He has

handled hundreds of drilling applications and hearings before the Office of

Conservation, making him very familiar with the policies and procedures of

that office. We find no error in the trial court allowing the affidavit of Mr.

Anderson.

Defendants’ supporting affidavits are sufficient to resolve all issues of

material fact. Plaintiffs did not counter these affidavits with their own

evidence of Range’s intent or that these were not the procedures of the Office

of Conservation. After our de novo review of this record, we find that there

are no genuine issues of material fact which render summary judgment in

favor of Defendants improper at this time. Because the facts show the Well

to be a unit well, we also find that the Plaintiffs have not shown that Range

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committed a subsurface trespass, and therefore, their partial MSJ was

properly denied.4

CONCLUSION

For the reasons stated above, we affirm the trial court’s granting of

Defendants’ MSJ, dismissal of Plaintiffs’ suit with prejudice, and denial of

Plaintiffs’ partial MSJ. The costs of this Court are assessed to the Plaintiffs,

Diamond McCattle Company, LLC, and BWW Holdings, LLC.

AFFIRMED.

4
Any challenge to the Office of Conservation’s policies and procedures regarding
lease wells being amended to unit wells is not properly before this Court.

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