Lejeune Brothers, Inc. v. Goodrich Petroleum Co., LLC.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

06-1557

LEJEUNE BROTHERS, INC.

VERSUS

GOODRICH PETROLEUM CO., L.L.C., ET AL

**********
APPEAL FROM THE
SIXTEENTH JUDICIAL DISTRICT COURT
PARISH OF IBERIA, DOCKET NO. 101228, DIV. H
HONORABLE LORI A. LANDRY, DISTRICT JUDGE
**********

SYLVIA R. COOKS
JUDGE

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Court composed of Sylvia R. Cooks, Oswald A. Decuir and James T. Genovese,
Judges.

Decuir, J., dissents and assigns reasons.

AFFIRMED.

Donald T. Carmouche
Victor L. Marcello
John H. Carmouche
Kenneth Jay DeLouche
William R. Coene, III
Brian T. Carmouche
Talbot, Carmouche & Marcello
214 W. Cornerview
P.O. Box 759
Gonzales, LA 70707-0759
(225) 644-7777
COUNSEL FOR PLAINTIFF/APPELLANT:
LeJeune Brothers, Inc.

M. Bofill Duhe
25 Paradise Woods
New Iberia, LA 70563
(337) 519-1049
COUNSEL FOR PLAINTIFF/APPELLANT:
LeJeune Brothers, Inc.

Patricia E. Weeks
John P. Gonzalez
Weeks & Gonzalez
400 Magazine Street, Suite 200
New Orleans, LA 70130
(504) 799-2888
COUNSEL FOR PLAINTIFF/APPELLANT:
LeJeune Brothers, Inc.

Robert C. Vines
300 Boas Ave.
New Iberia, LA 70563
(337) 365-1729
COUNSEL FOR PLAINTIFF/APPELLANT:
LeJeune Brothers, Inc.

Scott C. Sinclair
Sinclair Law Firm, L.L.C.
P.O. Box 1026
Shreveport, LA 71161-1026
(318) 424-4901
COUNSEL FOR DEFENDANT/APPELLEE:
Goodrich Petroleum Co., L.L.C.

Williams G. Davis
Milling, Benson, Woodward, L.L.P.
339 Florida Street, Suite 300
Baton Rouge, LA 70801
(225) 291-7300
COUNSEL FOR DEFENDANT/APPELLEE:
Tom Brown, Inc.

D. Reardon Stanford
Hoyt & Stanford, L.L.C.
315 S. College Road, Suite 165
Lafayette, LA 70503
(337) 234-1012
COUNSEL FOR DEFENDANT/APPELLEE:
Margaret Viator Estis Saunier

COOKS, Judge.

In this oil and gas contamination case, the Plaintiff appeals the trial court’s

judgment granting the Defendant’s motion for partial summary judgment and

exception of no right of action. For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

The property at issue in this case, a tract of land located in Iberia Parish, was

acquired by David Baez, Jr. through his father’s estate in 1963 and through a transfer

from his mother in 1965. In 1976, an oil well known as the “D. Baez No. 1 Well”

was drilled and completed as a producer. The well was operated by Hawthorne Oil

& Gas Corporation (a predecessor of defendant Goodrich Petroleum) under a mineral

lease that had been granted by Baez in 1970.1 The Baez Well was plugged and

abandoned in 1987. However, the Baez lease continued by virtue of production from

another well, the Boutte Well, which covered a portion of the property. Production

in the Boutte well became sporadic in 1993, lapsed for 180 days in 1998, and ceased

entirely in April 1999.

On September 19, 2000, LeJeune Brothers purchased the property at issue from

Baez. One-half of the mineral rights in the sale were reserved by Baez, but this

reservation was conditioned upon an agreement by Baez not to use the surface for

mineral exploration or development. After the sale, LeJeune Brothers discovered that

the property was contaminated with oilfield exploration and production waste.

LeJeune Brothers maintained it had no knowledge of the contamination when it

purchased the property.

On August 22, 2003, LeJeune Brothers filed suit against Goodrich Petroleum

and several other defendants, alleging its property had been damaged and

1
Hawthorne Oil & Gas operated the Baez Well from 1976 to 1979. Five Star Oil Co.
operated the lease from 1979 to 1981, followed by Ed I. Estis from 1981 to abandonment.

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contaminated as a result of oil and gas activities. LeJeune Brothers dismissed its

claims against all of the original defendants, except for Goodrich Petroleum.

Goodrich Petroleum answered the suit and also filed third party demands against Tom

Brown, Inc., Margaret Ellis Saunier, Sandra Ann Estis Turner, Wendy Marie Estis

Touchet, Jamie Marie Estis Benoit and Edward Ivey Estis, Jr., alleging under various

theories that they were liable for either contribution or indemnity for any possible

judgment that Goodrich Petroleum may owe to LeJeune Brothers. Tom Brown, Inc.

then filed its own cross-claim against the Estis family third-party defendants seeking

indemnity for any amounts which Tom Brown, Inc. may be cast in judgment.

LeJeune Brothers did not file any claims against either Tom Brown, Inc. or the Estis

family.

Goodrich moved for partial summary judgment, claiming that LeJeune Brothers

did not have contract and punitive damage claims against it.2 On June 30, 2006, the

trial court granted Goodrich’s motion, finding LeJeune Brothers did not have contract

claims against Goodrich as it was not a successor or assignee of any rights under the

mineral lease granted by Baez in 1970. The trial court rendered the following written

reasons for judgment:

Since 1996, with the Amendment of Louisiana Code of Civil
Procedure Article 996, summary judgments are favored by Louisiana
Courts. Although the burden begins with the mover on the Motion for
Summary Judgment, once the mover has made a prima facie showing
that its motion should be granted, the burden then shifts to the non-
moving party to present evidence that a material factual issue remains.

In the case at bar, Lejeune Brothers L.L.C. (Lejeune Brothers)
concedes that there is no genuine issue of material fact relative to their
punitive damages claim and the claim for mental anguish. The only
issue remaining is whether Lejeune Brothers’ contract claim is
supported by the facts of this case and Louisiana law. As the facts of

2
Concerned that LeJeune Brothers might go back to Baez and obtain a specific assignment
of the claims and refile its complaint, Goodrich approached Baez and entered into a settlement and
compromise of all the claims pending in this litigation.

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this case do not support a finding that Plaintiff has acquired the right to
sue as a party to a contract or assignee, the specific issue is whether
Plaintiff acquired the right to sue, pursuant to the Baez Lease, by virtue
of a stipulation pour autrui.

After review of the pertinent language of the Baez Lease and
jurisprudence, this Court finds the language of the Baez Lease does not
create a stipulation pour autrui in favor of Lejeune Brothers. See
Broussard vs. Northcott Exploration Company, Inc., 481 So. 2d 125,
127 (La. 1986). The language of this contract is distinguishable from
the language and subsequent pronouncements of Andrepont vs. Acadia
Drilling Company, 231 So. 2d 347, 351 (La. 1969); and Hawthorne
Farm, Inc. vs. Liberty Oil and Gas Corp., et al, 790 So. 2d 93 (La. App.
3 Cir. 6/20/01).

Lejeune Brothers further argued that they acquired the right to sue
in contract because of the implied obligation to restore the property to
its original pre-lease condition that is inherent in all mineral leases,
citing Terrebonne Parish School Board vs. Castex Energy, Inc., 893 So.
2d 789, 791-792, 2004-0968 (La. 1/19/05), Mineral Code Article 122,
LSA-R.S. 31:122. While the Terrebonne Court addressed the obligations
owed the lessor and/or assignee inherent in all mineral leases, applying
the jurisprudence and Civil Code articles discussed, the Court held “in
absence of an express lease provision, Mineral Code Article 122 does
not impose a duty to restore the surface to its original, pre-lease
condition absent proof that the lessee has exercised his rights under the
lease unreasonably and excessively.” Id at 801. Additionally, no
evidence was offered that suggest the facts before us fall under the line
of cases that require restoration as a matter of expressed obligations
found in the lease and outside the purview of the mineral code. Thus,
movants are entitled to summary judgment as a matter of law as no
genuine issue of material fact exist on the limited question before the
Court.

Goodrich then filed an exception of no right of action on July 7, 2006, asserting

that LeJeune Brothers had no right of action to maintain their non-contractual claims.

Specifically, Goodrich argued “the claim for damages that is being pursued by

LeJeune Brothers is actually a claim that belonged to Baez and has not been

transferred or conveyed to LeJeune Brothers.” On that same date, LeJeune Brothers

filed a motion for reconsideration of the trial court’s ruling granting partial summary

judgment. The matter was set for hearing on July 25, 2006, after which the trial court

granted the no right of action dismissing “all tort claims alleged by LeJeune Brothers,

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L.L.C., against Goodrich Petroleum, L.L.C., for damage to the subject property.” On

that date, the trial court also denied LeJeune Brothers’ motion for reconsideration of

its earlier ruling granting the partial motion for summary judgment. On August 9,

2006, the trial court signed a comprehensive judgment prepared by Goodrich

dismissing all claims of LeJeune Brothers and dismissing all of the pending third

party demands.

LeJeune Brothers filed a motion for new trial, which was denied by the trial

court. This appeal followed, wherein LeJeune Brothers appealed from the following

rulings and actions of the trial court:

(1) The judgment granting Goodrich’s motion for partial summary
judgment.

(2) The judgment granting Goodrich’s exception of no right of action,
dismissing all of LeJeune Brothers’ tort claims for damage to the subject
property.

(3) The judgment of August 9, 2006, dismissing all claims of LeJeune
Brothers.

As to the three judgments appealed from, LeJeune Brothers asserted the following

assignments of error:

(1) The trial court committed error in granting partial summary judgment
on the contract claims of plaintiff.

(2) The trial court committed error in finding that plaintiff was not a
successor or assign of Baez who is entitled to bring this restoration
action to enforce the express and implied obligations on the mineral
lease.

(3) The trial court committed error in failing to find that plaintiff was a
third party beneficiary of the mineral lease.

(4) The trial court committed error in granting Goodrich’s exception of
no right of action on the tort claims of plaintiff.

(5) The trial court committed error in dismissing all claims of the
plaintiff in its judgment of August 9, 2006.

(6) The trial court committed error in failing to find that plaintiff has a

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right and cause of action for restoration damages under the Mineral
Code, articles 11 and 122.

(7) The trial court committed error in dismissing plaintiff’s claims under
La.Civ.Code art. 667 and claims for unjust enrichment.

ANALYSIS

I. Contract Rights Under the Baez Lease.

LeJeune Brothers contends partial summary judgment should not have been

granted on its contract claims, because it succeeded to the rights in the Baez Lease

because it was a party or assignee of that lease. Goodrich argued to the court below

that LeJeune Brothers “is not a party to the Baez Lease, is not an assignee to the Baez

Lease, and is not a third party beneficiary under the Baez lease.” Thus, Goodrich

argues LeJeune Brothers has no contract claims based on that lease. The trial court

agreed with Goodrich.

The facts are undisputed that LeJeune Brothers acquired the property directly

from David Baez, Jr. The Baez lease provided that “[a]ll provisions hereof shall

extend to and bind the successors and assigns (in whole or in part) of Lessor or

Lessee.” LeJeune Brothers contends this language allows it to claim damages under

the Baez Lease.

We note there is no doubt that LeJeune Brothers acquired the property from

Baez. What is at issue is whether LeJeune Brothers acquired any rights under the

lease from Baez. LeJeune Brothers can have no contract action under the Baez Lease,

unless it acquired rights under the lease.

In Hazelwood Farm, Inc. v. Liberty Oil and Gas Corp., 02-266 (La.App. 3 Cir.

4/2/03), 844 So.2d 380, writs denied, 03-1585 (La. 10/31/03), 857 So.2d 476 and

03-1624 (La. 10/31/03), 857 So.2d 476, suit was brought by the owner of property

contaminated by years of oil and gas operations through a lease that was established

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in 1926 and was still active at the time of the lawsuit. The plaintiff claimed damages

in contract and tort to both the surface and the underground aquifer. All of the

defendants, at various times since 1926, operated oil and gas wells pursuant to the

1926 lease. The plaintiff acknowledged it was only the owner of the surface of the

property and did not own the minerals beneath the surface, as plaintiff’s ancestor in

title reserved all of the mineral rights. This court held that a plaintiff, who had

purchased the property from an ancestor in title to the lessor, could not maintain an

action for restoration damages as a party to the mineral lease. We specifically held

that plaintiff could not have acquired any rights as assignee under the lease because

the plaintiff’s vendor did not own any rights and, thus, could not convey any rights.

Goodrich contends the same result from Hazelwood Farm is appropriate in this

case. LeJeune Brothers argues the facts in Hazelwood Farm are critically different

from the present case, because in Hazelwood Farm the plaintiff’s ancestor in title had

reserved all of the mineral rights, and thus all rights to exercise the rights of a mineral

lessor. By contrast, the sale to LeJeune Brothers in this case reserved only half of the

mineral rights to the seller Baez, and transferred the other half to LeJeune Brothers.

Had there been no mineral reservation in Hazelwood, LeJeune Brothers argues, the

plaintiff therein could have sued as a party to the lease.

Goodrich argues this distinction is irrelevant, because Baez could not have

transferred any rights in the Baez Lease to LeJeune Brothers because that lease had

terminated over two years prior to LeJeune Brothers acquisition of the property.3

Thus, it was impossible to transfer rights to an assignee under an expired mineral

lease. We agree.

3
The D. Baez No. 1 Well was plugged and abandoned in 1987, but the Baez Lease continued
due to production from the Boutte Well, which covered a portion of the subject property. It is
arguable the Baez Lease terminated in its entirety in 1993, when production from the Boutte Well
became very sporadic. However, in 1998, there was a period of more than ninety consecutive days
with no production at all from the Boutte Well, which effectively terminated the Baez Lease.

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Although LeJeune Brothers argues it acquired the property from the mineral

lessor, since the lease had expired at least two years before Baez sold the property to

LeJeune Brothers, Baez was not a mineral lessor. Therefore, he could not assign any

rights under the expired Baez lease in that sale. Further, we note LeJeune Brothers

at the summary judgment hearing acknowledged it was not an assignee or party under

the lease:

I do agree with him [counsel for Goodrich] that we are not claiming that
LeJeune Brothers were assigned this lease. I agree with him that we
were not, we’re not alleging that the LeJeune Brothers were party to this
lease.

Therefore, we find no error on the trial court’s part in finding LeJeune Brothers was

not a party or assignee to the Baez Lease.

LeJeune Brothers also argues it can still bring claims under the Baez Lease

because it is a third party beneficiary. The trial court found the language of the Baez

Lease does not create a stipulation pour autrui in favor of Lejeune Brothers, relying

on the Louisiana Supreme Court case of Broussard v. Northcott Exploration Co., Inc.,

481 So.2d 125 (La. 1986). In Broussard, the court examined whether a mineral lease

created a stipulation pour autrui in favor of a farming tenant. The Court stated as

follows:

Mr. Broussard argues that the Damage Clause of the mineral lease
contains a stipulation pour autrui enabling him to recover. The clause
states that:

“The Lessee shall be responsible for all surface damages of the Lessor
(emphasis added) caused by the Lessee’s operations.”

A stipulation pour autrui exists when some advantage to a third
person is created as a condition or consideration of a communtative [sic]
contract. LSA-C.C. art. 1890 (West 1973) [Current version at LSA-CC
1978 (West 1985) ]. In order to determine if a stipulation exists, we
must look to the intention of the parties at the time the mineral lease was
negotiated. This can best be accomplished by comparing the standard
damage clause found in the original version of the mineral lease to the
modified version agreed to by the parties. The unmodified version of

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the Damage Clause read as follows:

“The Lessee shall be responsible for all damages to timber and growing
crops of Lessor caused by Lessee’s operations.”

In negotiating the mineral lease the parties modified the phrase
“for all damages to timber and growing crops” to read “for all surface
damages.” However, they did not modify the mineral lease to expand
Northcott’s liability beyond the “damages of the lessor.” For this
reason, we can easily distinguish Andrepont v. Acadia Drilling Co., 255
La. 347, 231 So.2d 347 (1969), and Hargroder v. Columbia Gulf
Transmission Co., 290 So.2d 874 (La.1974).

In Andrepont, supra, the standard clause set forth above was
modified by deleting the phrase “to timber and growing crops of
Lessor.” The resulting clause read: “The Lessee shall be responsible for
all damages (emphasis added) caused by Lessee’s operations.” It did
not restrict liability to the damages suffered by “the Lessor.” The crop
loss suffered by the farmer in Andrepont, supra, was clearly included
within the “all damages” language allowing him to recover under the
mineral lease. In Hargroder, supra, it was specified in the agreement
that the defendant would pay for damages “which may arise to growing
crops.” In both cases the intent to pay for crop damage was beyond
question.

For the reasons set forth above, the Court of Appeal was correct
when it concluded that the mineral lease did not create a stipulation pour
autrui in favor of Minos Broussard.

Broussard, 481 So.2d at 127.

As in Broussard, the damage clause in the Baez Lease was similarly modified. The

original damage clause in the Baez Lease read, “The Lessee shall be responsible for

all damages to timber and growing crops of Lessor caused by Lessee’s operations.”

However, in the final version the words “timber and growing crops of” were struck

out, and the clause read “The Lessee shall be responsible for all damages to Lessor

caused by Lessee’s operations.” Thus, just as in Broussard, the damages permitted

by the Baez Lease were limited to the damages suffered by the Lessor, Mr. Baez. The

trial court did not err in finding LeJeune Brothers was not a third party beneficiary

of the Baez Lease.

Hazelwood Farm, as was Andrepont v. Acadia Drilling Co., 255 La. 347, 231

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So.2d 347 (1969), is distinguishable from the present case. We found a stipulation

pour autrui to exist there because the clause made the lessee responsible for all

damages, not just the damages caused to the lessor. The Baez Lease clearly only

provides rights under the lease to the lessor. Since LeJeune Brothers did not occupy

that status, it cannot be a third party beneficiary.

II. Exception of No Right of Action to Bring Tort Claims.

The trial court granted Goodrich’s exception of no right of action, dismissing

all tort claims alleged by LeJeune Brothers against Goodrich for damage to the

subject property. The record established that Goodrich’s activities (through its

predecessor in title Hawthorne Oil & Gas) ceased in July, 1979. Under Louisiana

law, generally a claim for damages to property belongs to the person who owns the

property at the time it was damaged. Goodrich contends this is a personal right, not

a real right, and does not automatically transfer to the succeeding owner of the

property. It is established that this right can be transferred to the succeeding property

owner, but a specific assignment of this right is required to accomplish such a

transfer.

In St. Martin v. Mobil Exploration & Producing U.S. Inc., 224 F.3d 402, 404

(5th Cir.2000), the United States Fifth Circuit Court of Appeal discussed whether a

purchaser can recover from a third party for damages to the property that occurred

prior to the sale:

[T]he general Louisiana rule is that a purchaser cannot recover from a
third party for property damage inflicted prior to the sale. St. Jude
Medical Office Bldg. Ltd. Part. v. City Glass and Mirror, Inc., 619
So.2d 529, 530 (La.1993). Instead, courts have held that it is the
landowner at the time of the alleged damages who has the real and
actual interest to assert a claim. Dorvin Land Corp. v. Parish of
Jefferson, 469 So.2d 1011, 1013 (La.App. 5 Cir.1985). The right to
assert a claim for damages to land is a personal right, not a real right
and, consequently, it is not transferred by a mere transfer of title to the
land; “[r]ather, for the subsequent owner of the land to be in a position

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to assert the claim, there must be a specific assignment of the right to
him.” Id., citing Prados v. South Central Bell Telephone Co., 329 So.2d
744 (La.1975). The reasoning behind these principles is that the buyer
is presumed to know the overt condition of the property and to take that
condition into account in agreeing to a sales price. Prados, 329 So.2d
at 751.

A review of the cash sale from Baez to LeJeune Brothers establishes there was no

specific assignment of any claims for damages to the subject property. Further, the

cash sale between Baez and LeJeune Brothers specifically acknowledged that the

purchase price of the property was negotiated with reference to the condition of the

property:

The parties acknowledge that before executing this transfer the
Purchaser had ample opportunity to examine and inspect the premises
herein transferred, and the consideration of this transfer was determined
and agreed upon only after Purchaser has fully and completely inspected
same to determine fitness, soundness and environmental quality.

Despite the general rule of law that the right to assert a claim for damages to

land is personal, and is not transferred by a mere transfer of title to the land, LeJeune

Brothers argues the right to sue for damages to the land is a real, rather than personal,

right that “runs” with the property. In support of its argument, LeJeune Brothers cites

the Louisiana Supreme Court’s decision in Hopewell, Inc. v. Mobil Oil Co., 00-3280

(La. 2/9/01), 784 So.2d 653. The plaintiff in Hopewell purchased property which the

vendor’s ancestors had previously leased to a company for oil and gas operations. The

plaintiff cleared the property of structures built by that prior lessee and sued its

successor, Mobil Oil, for pollution caused by the oil and gas operations. The claim

was premised upon a statutory requirement that an owner of a mineral servitude is

“obligated, insofar as practicable, to restore the surface to its original condition”

pursuant to La.R.S. 31:22 and the conveyance of a sale which conveyed all of the

vendor’s rights. The Second Circuit Court of Appeal held the claim against the prior

lessee was a personal right of the owner of the property when the lessee failed to

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restore it, and there was no assignment of that personal right to plaintiff through the

conveyance. See Hopewell, Inc. v. Mobil Oil Co., 33,774 (La.App. 2 Cir. 11/1/00),

770 So.2d 874. In holding the right personal, the court of appeal relied on Prados v.

South Central Bell Telephone Co., 329 So.2d 744 (La.1975) (on rehearing). In

Prados, a non-mineral lease required the lessee to remove any improvements it made

on the property. When the lease ended, however, the owner did not require the lessee

to do so. The owner sold the property; then the purchaser sued the lessee. The

Louisiana Supreme Court held the claim against the lessee involved a personal, rather

than real, right.

In a nine-line opinion, however, the Louisiana Supreme Court reversed the

second circuit’s decision in Hopewell and remanded the action for further

proceedings. The court’s entire opinion stated:

Granted. Judgment of the Court of Appeal is reversed. Judgment
of the trial court denying defendant’s exception of no right of action is
reinstated. Prados v. South Central Bell Telephone Company, 329
So.2d 744 (La.1975) (on rehearing), which the Court of Appeal relied
upon, involves rights arising under a lease and is distinguishable from
the instant facts. Case remanded to the trial court for further
proceedings.

Hopewell, 784 So.2d 653.

Plaintiffs contend the Louisiana Supreme Court’s brief Hopewell decision

overturned consistently held jurisprudence that the right to assert a claim for damages

to land is a personal right, not a real right, and can only be transferred through a

specific assignment of that right. We disagree.

There have been no state decisions which have specifically addressed the effect

of the Hopewell decision on this issue. However, this court in Hazelwood Farm, 844

So.2d 380, decided after the Hopewell decision, cited the longstanding rule of Prados

with approval in the context of a claim for contamination of property due to oil and

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gas operations. We stated:

The Prados decision held that the right to damages conferred by a lease
was a personal right, not a property right, and as a personal
right/obligation, it did not pass to the new owners of the land because
there was no specific conveyance of it in the instrument of sale.

Id. at 386-87.

Two federal cases have expounded on the affect of the Hopewell decision upon

Louisiana’s longstanding rule that the right to damages conferred by a lease is a

personal right that must be specifically assigned at the time of sale. In May v. Texaco,

Inc., 73 Fed.App. 78 (5th Cir. 2003), the plaintiff attempted to give the same

interpretation of Hopewell in this area as LeJeune Brothers. The U.S. Fifth Circuit

Court of Appeal stated:

Plaintiffs contend the Louisiana Supreme Court’s extremely brief
Hopewell decision held the right to sue for damages to the land is a real
(as opposed to personal) right that “runs with the land.” Needless to say,
such a rule of Louisiana property law is not ascertainable from that
opinion.

Similarly, the U.S. District Court for the Western District of Louisiana in Frank

C. Minvielle, L.L.C. v. IMC Global Operations, Inc., 380 F.Supp.2d 755, 771 (W.D.

La. 2004), discussed the effect of Hopewell as follows:

The only thing clear about the decision is that the court did not, by its
brief reversal, establish a new legal principle. If that had been the
court’s intent, it easily could have said so in plain terms – i.e., that it was
conferring standing upon subsequent landowners to assert tort claims for
property damage occurring prior to their acquisition of the land. Nor did
the decision alter the rule in Louisiana that the landowner at the time of
the alleged damages is the person with the real and actual interest to
assert a tort claim involving the property under Gumbel and Dorvin.

LeJeune Brothers argues a “fair reading of the Supreme Courts’ summary writ

decision in Hopewell requires the conclusion that claims for breach of a mineral lease

and tort claims can be asserted by a successor or assign of the original mineral

lessor.” LeJeune Brothers argues Prados is different from the present case in that it

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involved a claim for property damages arising from the breach of a predial lease,

whereas Hopewell and this case involve a breach of a mineral lease. LeJeune

Brothers notes a mineral lease is classified in the Mineral Code as a real right, and

that a predial lease is classified as a personal right. Thus, LeJeune Brothers argues

that since a mineral lease is classified as a real right under the Mineral Code, then by

law it acquired its benefits when it purchased the property. We disagree. The

Supreme Court in Prados specifically stated that “[u]nder no sound theory can [a

claim for damages] be considered as attached to or accessory to the immovable

property.” Prados, 329 So.2d at 751. Thus, a claim for damages, whether it arises

under a predial lease or a mineral lease, is a personal right which must be specifically

assigned to run with the property.

III. Restoration Damages Under the Mineral Code.

Lejeune Brothers correctly argues that the Mineral Code provides that a

mineral lessee may have tort liability if it unreasonably exercises its rights under a

mineral lease. See Article 11 of the Mineral Code (La.R.S. 31:11). Article 122 of the

Mineral Code (La.R.S. 31:122) and Article 22 of the Mineral Code (La.R.S. 31:22)

set out the restoration duties of the mineral servitude owner and mineral lessee. As

Goodrich points out, there was never a mineral servitude because Baez was both the

landowner and the lessor from the time the Baez Lease was executed until its

complete termination in 1998. Thus, Article 22 and 122 do not provide relief for

LeJeune Brothers. Baez possessed a tort claim, however, as set forth earlier, it was

never assigned to LeJeune Brothers.

LeJeune Brothers also argues “Goodrich’s tortious breach of its obligations

under the mineral lease is in the nature of a continuing tort.” Under Louisiana law,

to have a continuing tort there must be both “continuous conduct” that causes

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“continuing damages.” Bustamento v. Tucker, 607 So.2d 532.

LeJeune Brothers cites Grefer v. Alpha Technical, 02-1237 (La.App. 4 Cir.

3/31/05), 901 So.2d 1117, writ denied, 05-1590 (La.3/31/06), 925 So.2d 1248, in

support of its argument that a continuing tort exists in the present case. In Grefer,

naturally occurring radioactive material (NORM) built up on the surface of the

property through years of cleaning pipes. Exxon eventually discovered the presence

of the NORM in 1987 and ceased cleaning the contaminated pipe. The court noted

it was “well settled that when a tort involves continuing injury, the cause of action

accrues at the time the tortious conduct ceases.” Grefer, 901 So.2d at 1185, quoting

In re Med. Rev. Panel of Moses, 00-2643 (La. 5/25/01), 788 So.2d 1173. However,

it also held that because “no single incident in the continuous chain of tortious

activity can be identified as the cause of significant harm, courts have held it proper

to regard the cumulative effect of the conduct as actionable.” Grefer, 901 So.2d at

1185. Goodrich notes that the court also concluded the continuing tort ended in 1987,

when Exxon learned of the NORM and stopped cleaning the pipe. In the present

case, the well site was plugged and abandoned in 1987, thus, any alleged tortious

conduct ended on that date.

In Minvielle, 380 F.Supp.2d 755, which is very similar factually to the present

case, the federal court addressed a similar argument that contamination from oil and

gas exploration and production activities amounted to a continuing tort.4 In

Minvielle, a previous owner of the land in question in 1961 entered into an oil and gas

lease to explore and possibly drill for oil on the property. Operations were conducted

until 1977, when the well site was plugged and abandoned. The plaintiff in Minvielle

4
We note that the attorneys who represented the plaintiff in Minvielle are largely the same
attorneys who represent LeJeune Brothers in this case. Not surprisingly, many of the arguments
advanced to the federal court in Minvielle are also advanced again by LeJeune Brothers.

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purchased the property in 1998, and sued for damages for the contamination of the

property. In regard to the argument that the contamination of the property amounted

to a continuing tort, the federal court stated:

The doctrine of continuing tort presents an exception to the one-
year prescriptive period. “A continuing tort is occasioned by [the
continual] unlawful acts, not the continuation of the ill effects of an
original, wrongful act.” Crump v. Sabine River Authority, 737 So.2d
720, 728 (1999). Addressing the requirement that there be continuous
conduct by the defendant, the Louisiana Supreme Court stated that
“[t]he continuous conduct contemplated in a continuing tort must be
tortious and must be the operating cause of the injury.” Id. at 729 n. 7.
In Crump, the Louisiana Supreme Court rejected the contention that a
continuing breach of duty could consist of a defendant’s failure to
remedy the harm caused by the initial tortious conduct, stating that “the
breach of the duty to right the wrong and make the plaintiff whole
simply cannot be a continuing wrong which suspends the running of
prescription, as that is the purpose of any lawsuit and the obligation of
every tortfeasor.” Id. at 729.

The Louisiana Supreme Court summarized the doctrine of
continuing tort as it applies in Louisiana property law cases as follows:

When a defendant’s damage-causing act is completed, the
existence of continuing damages to the plaintiff, even
progressively worsening damages, does not present
successive causes of action accruing because of a
continuing tort. Derbofen v. T.L. James & Co., 355 So.2d
963 (1977), writs denied, 357 So.2d 1168, cert. denied, 439
U.S. 911, 99 S.Ct. 280, 58 L.Ed.2d 257 (1978).

In re Moses, 788 So.2d 1173, 1183 (La.2001). The practical rule
adopted by Louisiana courts in property damage cases is that
prescription begins to run when the continuous tortious conduct is
abated.

The case law distinguishes between ongoing causes and tortious
conduct that has ceased. In cases such as Patout, where landfill waste
was deposited onto plaintiff’s property via trespass, and South Central
Bell, where gas tanks continued to leak, the ongoing cause was the
failure of the defendants to remove the damage causing structure. Estate
of Patout v. City of New Iberia, 708 So.2d 526 (1998); South Central
Bell Telephone Co. V. Texaco, Inc., 418 So.2d 531 (La.1982). In South
Central Bell, leaking underground storage tanks caused continuous
damages to plaintiff’s underground telephone wires. Because both the
conduct-the leaking-and the damages continued, the tort was held to be
a continuous.

-15-

In Mouton v. State of Louisiana, 525 So.2d 1136 (La.App. 1st Cir.
1988), however, disposal of waste in the ground was not a continuing
tort. The court held that the tortious conduct was the dumping of waste
onto plaintiff's property and, since it occurred beyond the one year
prescriptive period, the action had prescribed. Similarly, in Badalamenti
v. Chevron Chemical Co., 1995 WL 386868, (E.D.La.1995), the court
found that the tortious conduct at issue was the disposal of waste onto
plaintiff’s property. The operating cause of plaintiff's injury did not
continue beyond the placement of the waste in the ground, and therefore,
defendant’s alleged conduct did not constitute a continuing tort because
there was no ongoing cause. Likewise in Terrebonne Parish School Bd.
v. Mobil Oil Corp., 310 F.3d 870, 885-886 (5th Cir.2002), the Fifth
Circuit upheld the district court’s finding that the continuing tort
doctrine was inapplicable. In Terrebonne v. Mobil, pursuant to a
mineral lease, the defendant dredged a canal during its oil operations.
After completion of the operations, the defendant left the canal intact.
Plaintiff sued, 40 years later, arguing that the existence of the canal
contributed to erosion of its land and the demise of the marshland
habitat. The Fifth Circuit found that the unlawful conduct was not
continuing because the completed well was abandoned with the canal
left intact in 1959. Thus, even though the damage, i.e. the erosion, may
have been continuing, the continuing tort doctrine was inapplicable
because there was no continuing cause.

Here, like Mouton, the tortious conduct was the disposal of waste
into plaintiff’s property. The operating cause of plaintiff’s injury was
the actual disposal or storage of the oilfield waste in plaintiff’s property.
The conduct abated when the defendant’s ceased operations, which was
in excess of 20 years ago. Simply because the damages brought about
by such conduct may have continued, that is insufficient to support
application of the continuing tort doctrine. Accordingly, the continuing
tort doctrine is inapplicable to the case at bar.

Minvielle, 380 F.Supp.2d at 765-66.

In Crump v. Sabine River Authority, 98-2326 (La. 6/29/99), 737 So.2d 720, it

was alleged the plaintiff negligently dug a canal and that the continued presence of

the canal and consequent diversion of water met the requirements of a continuous

tort. The Louisiana Supreme Court found this did not amount to a continuing tort and

stated:

In the instant case, the plaintiff similarly argues that the mere existence
of the canal is the operating cause of daily injury because the effect of
its presence is the continuous diversion of the flow of water away from
the ox-bow. Relying on our prior decision in Griffin [v. Drainage
Commission of New Orleans, 110 La. 840, 34 So. 799 (1903)], however,

-16-

we find that the actual digging of the canal was the operating cause of
the injury. The continued presence of the canal and the consequent
continuous diversion of water from the ox-bow are simply the
continuing ill effects arising from a single tortious act. A continuing tort
is occasioned by unlawful acts, not the continuation of the ill effects of
an original, wrongful act. Ward v. Caulk, 650 F.2d 1144, 1147 (9th
Cir.1981), abrogated on other grounds by, Agency Holding Corp. v.
Malley Duff & Assocs. Inc., 483 U.S. 143, 107 S.Ct. 2759, 97 L.Ed.2d
121 (1987); Maslauskas v. U.S., 583 F.Supp. 349, 351 (D.Mass.1984).

Id. at 727-28 (footnote omitted).

Thus, under Crump, the digging of the canal was the tortious conduct, not the failure

to remove it. Similarly, in Minvielle, as in the present case, the tortious conduct was

the disposal of waste into plaintiff’s property, not the failure to remove it. Therefore,

we find the continuing tort doctrine is inapplicable here.

IV. Act 1166 of 2003.

LeJeune Brothers argues 2003 La. Acts No. 1166, which added La.R.S.

30:2015.1 to Title 30 of the Louisiana Revised Statutes, “empowers landowners to

sue for damages to ‘usable ground water.’” The statute also required such damages

be paid into the registry of the court, thus, insuring they would be specifically used

for remediation costs. Subsection I of the statute, which is quoted in part by LeJeune

Brothers, provides:

This Section shall not preclude an owner of land from an award
for personal injury or damage suffered as a result of contamination that
impacts or threatens usable ground water. This Section shall not
preclude an owner of land from an award for damages to or for
remediation of any other part of the surface or subsurface of his property
and any award granted in connection therewith shall not be paid into the
registry of the court, but shall be made directly to the owner of the land.
This Section shall not preclude a judgment ordering damages for or
implementation of additional remediation in excess of the requirements
of the Department of Environmental Quality as may be required in
accordance with the terms of an expressed or implied contractual
provision. This Section shall not be interpreted to create any cause of
action.

The statute clearly states it “shall not be interpreted to create any cause of action” and

-17-

“shall not preclude” other remedies for personal injury or for remediation of things

other than usable ground water. LeJeune Brothers’ argument that this statute was

intended to “clarify the rights of landowners who assert claims under private law for

remediation damages” is incorrect. The statute applies to the rights of a landowner

to collect money for damage to usable ground water. We note LeJeune Brothers in

its original petition specifically denied it was making a claim under La.R.S.

30:2015.1, stating “[T]he provisions of La.R.S. 30:2015.1 do not apply to this

action.” Therefore, this assignment of error lacks merit.5

V. Judgment Decided Issues not Raised by Goodrich’s Motions.

LeJeune Brothers states it asserted claims for unjust enrichment, claims under

La.Civ.Code art. 667, and claims under the Mineral Code. It argues the trial court

erroneously dismissed these claims because they were not the subject of any motion

for summary judgment or exception filed by Goodrich. We disagree.

Initially, we note claims arising under La.Civ.Code art. 667 and the Mineral

Code are tort claims. In a decision holding that actions under La.Civ.Code art. 667

are subject to the one year prescriptive period, the Louisiana Supreme Court stated

“a violation of [La.Civ.Code] article 667 constitutes fault within the meaning of

[La.Civ.Code] article 2315.” Dean v. Hercules, Inc., 328 So.2d 69, 72. In Ashby v.

IMC Exploration Co., 496 So.2d 1334 (La.App. 3 Cir. 1986), affirmed, 506 So.2d

1193 (La. 1987), this court noted that claims arising under Articles 11, 22 and 122 of

the Mineral Code are ex delicto claims (torts).

As to unjust enrichment, the law is clear that “[u]njust enrichment principles

are only applicable to fill a gap in the law where no express remedy is provided.”

5
In the event that LeJeune Brothers was to claim damages for contamination
or remediation costs of usable ground water, La.R.S. 30:2015.1 requires notification
of the Department of Environmental Quality prior to assertion of any such claims.
-18-

Mouton v.State, 525 So.2d 1136, 1142 (La.App. 1 Cir.), writ denied, 526 So.2d 1112

(La.1988); see also Sadler v. Midboe, 97-2120 (La.App. 1 Cir. 12/28/98), 723 So.2d

1076. As Goodrich acknowledges, it has never been contended that a remedy for any

alleged oil and gas contamination is not provided by law; but, that these remedies

were not provided to or acquired by LeJeune Brothers. Therefore, LeJeune Brothers

has no unjust enrichment claim.

Further, the exception of no right of action filed by Goodrich specifically stated

that “LeJeune Brothers has no right of action to institute or maintain this suit.” The

memorandum filed by Goodrich in support of the exception sought “the dismissal of

all remaining claims of the LeJeune Brothers with prejudice at their cost.”

IV. Third Party Demands and Cross Claims.

When LeJeune Brothers’ claims against Goodrich were dismissed with

prejudice, the third party claims and cross claims were rendered moot and dismissed.

Tom Brown, Inc. and the Estis family filed a brief arguing that because Goodrich did

not appeal the judgment dismissing the third-party demands, that dismissal is final.

Thus, they argue, were this court to reverse the dismissal of LeJeune Brothers’ claims

against Goodrich, the third-party demands cannot be reinstated. As we are affirming

the trial court’s dismissal of LeJeune Brothers’ claims against Goodrich, this

argument is rendered moot.

DECREE

For the foregoing reasons, the judgment of the trial court is affirmed. All costs

of this appeal are assessed against plaintiff-appellant, LeJeune Brothers, Inc.

AFFIRMED.

-19-

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

06-1557

LEJEUNE BROTHERS, INC.

VERSUS

GOODRICH PETROLEUM CO., L.L.C., ET AL.

DECUIR, J., dissenting.

LeJeune Brothers, Inc. purchased land in September of 2000 from David Baez,

Jr. and months later discovered the property was contaminated with oilfield

exploration and production waste. LeJeune Brothers, an owner of one-half of the

mineral rights attached to the property, sued the oil and gas producers who

contaminated the land. As a basis for its claims, LeJeune Brothers relied in part on

a provision of the mineral lease which had given rise to over twenty years of oil

production on the subject property: “All provisions hereof shall extend to and bind

the successors and assigns (in whole or in part) of Lessor or Lessee.” In preliminary

proceedings before all of the evidence had been gathered, the trial court granted

summary judgment in favor of Goodrich Petroleum, the only remaining defendant,

on LeJeune Brothers’ contract claim. The trial court also granted the defendant’s

exception of no right of action on LeJeune Brothers’ tort claim and dismissed all

other claims asserted. I disagree with the majority’s decision to affirm the trial court.

Accordingly, I respectfully dissent.

The majority begins with LeJeune’s assertion that it succeeded to Baez’s rights

under the lease and should prevail under the terms of the lease. LeJeune distinguishes

Hazelwood Farm, Inc. v. Liberty Oil & Gas Corp., 02-266 (La.App. 3 Cir. 4/2/03),

844 So.2d 380, writs denied, 03-1585, 03-1624 (La. 10/31/03), 857 So.2d 476,

wherein this court found that a vendee had no rights under a mineral lease because

the predecessor in title had reserved all of the mineral rights. In this case LeJeune

emphasizes a critical difference: Baez owned the mineral rights and reserved only half

of them in the sale. Hazelwood’s ancestor in title had reserved all of the mineral

rights. By contrast, the sale to LeJeune in the present case reserved only half of the

mineral rights to the seller Baez, who was the sole mineral lessor when the lease was

granted, and transferred the other half to the buyer, LeJeune Brothers. The mineral

lease in Hazelwood contained almost identical language to the lease at issue here,

which transferred all provisions to the successors of the lessor and the lessee. Had

there been no mineral reservation in Hazelwood, Hazelwood could have sued as a

party to the lease. Likewise, I believe LeJeune Brothers has a valid cause of action

in this matter.

Further, I find Goodrich’s contention that the lease had terminated to be an

irrelevant argument. The mineral lessee had restoration duties during the lease and

at its expiration, and the breach of those duties gives rise to LeJeune Brothers’ cause

of action. LeJeune Brothers can assert its cause of action within ten years of the

breach, or within ten years of the expiration of the lease, whichever is later, as

contract actions prescribe in ten years. Louisiana Civil Code Article 3499.

Alternatively, LeJeune argues that if this court finds that plaintiff is not a

successor or assign of Baez who is entitled to sue under the mineral lease, then

plaintiff is a third party beneficiary of the mineral lease as we found in Hazelwood.

The majority, however, disagrees, relying on the very narrow language of Broussard

v. Northcott Exploration Co., Inc., 481 So.2d 125 (La. 1986) to exclude LeJeune’s

claim. LeJeune Brothers distinguishes Broussard, pointing out why it is not

applicable. The Broussard plaintiff was a tenant farmer, not the mineral lessor or his

2

successor, as in the present case.

The mineral lease in Hazelwood contained almost identical language to the

lease in the present case: “All the provisions hereof shall extend to and bind the

successors and assigns (in whole or, to that extent, in part) of the parties hereto,

respectively...” Hazelwood, 790 So.2d at 99. Paragraph 9 of the present mineral

lease provides identical language and has the same impact as the lease provision in

Hazelwood. Thus, as in Hazelwood, the present lease contains a stipulation pour

autrui in favor the plaintiff, LeJeune Brothers, the transferee of the property. Hence,

LeJeune Brothers is a third party beneficiary under the mineral lease.

The majority then examines the law regarding continuing torts and ultimately

determines that LeJeune can find no relief in that doctrine. I disagree. Goodrich’s

tortious breach of its obligations under the mineral lease is in the nature of a

continuing tort. The conduct that forms the basis of the tort in this action is not only

the initial contamination, but contamination that continues until this very day. The

conduct is also a failure to act or to correct a problem. Risin v. D.N.C. Investments,

L.L.C., 05-0415 (La.App. 4 Cir. 2005), 921 So.2d 133, 138.

In Estate of Patout v. City of New Iberia, 97-1097 (La.App. 3 Cir. 3/6/98), 708

So.2d 526, writ granted, 98-961 (La. 7/2/98), 721 So.2d 897, affirmed by, 98-961

(La. 7/7/99), 738 So.2d 544, the third circuit held: “Where the defendant erects a

structure or dumps rubbish on the land of the plaintiff, the invasion is continued by

a failure to remove it. In such a case, there is a continuing wrong so long as the

offending object remains.” Id. at 543, quoting W. Page Keaton, et al., PROSSER

AND KEATON ON THE LAW OF TORTS, § 13, at 83 (5th ed. 1984). See also

Grefer v. Alpha Technical, 02-1237 (La.App. 4 Cir. 3/31/05), 901 So.2d 1117;

Second Restatement of Torts, § 161.

3

Under Patout and Grefer, the tortious conduct does not cease until the

contamination is removed. In this case, not only is it alleged that the contamination

has not been removed, it is further alleged that the contamination continues to spread

and expand throughout the subsurface and has ever since the toxic contamination was

deposited. The alleged tortious conduct that constitutes fault in this matter continues

at this very moment. Likewise, Goodrich’s alleged failure to stop the spreading and

expansion of the contamination also constitutes a continuing tort. LeJeune Brothers

has asserted both continuous conduct and continuing damages in its tort action.

Accordingly, I believe LeJeune Brothers has a cause of action for a continuing tort.

This is a very complex case and there are many other issues involved. Some

of the issues are legal and some involve the development of facts. This is not the type

of case in which a partial summary judgment and exception of no right of action

should have been granted. LeJeune Brothers, an innocent and unsuspecting

landowner, should have its day in court. Therefore, I dissent.

4