Jeanerette Lumber & Shingle Co., LLC v. Florida Gas Transmission Company LLC

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

20-249

JEANERETTE LUMBER & SHINGLE

COMPANY, LLC

VERSUS

FLORIDA GAS TRANSMISSION COMPANY

LLC, ET AL.

**********

APPEAL FROM THE
SIXTEENTH JUDICIAL DISTRICT COURT
PARISH OF ST. MARTIN, NO. 87,263
HONORABLE LEWIS H. PITMAN, JR., DISTRICT JUDGE

**********

BILLY HOWARD EZELL
JUDGE

**********

Court composed of Sylvia R. Cooks, Chief Judge, Billy Howard Ezell, Van H. Kyzar,
Candyce G. Perret, and Jonathan W. Perry, Judges.

REVERSED AND REMANDED.

Gladstone N. Jones, III
Peter N. Freiberg
Eberhard Darrow Garrison
Emma Elizabeth Antin Daschbach
H. S. Bartlett, III
John T. Arnold
Kevin E. Huddell
Jones, Swanson, Huddell & Garrison, LLC
601 Poydras Street, Suite 2655
New Orleans, LA 70130
(504) 523-2500
COUNSEL FOR PLAINTIFF/APPLICANT:
Jeanerette Lumber & Shingle Company, L.L.C.

Bernard E. Boudreaux, Jr.
Jones, Swanson, Huddell & Garrison, LLC
301 Main Street, Suite 1920
Baton Rouge, LA 70801
(225) 810-3165
COUNSEL FOR PLAINTIFF/APPLICANT:
Jeanerette Lumber & Shingle Compant, L.L.C.

James R. Swanson
Lance C. McCardle
E. Blair Schilling
Fishman Haygood, L.L.P.
201 St. Charles Avenue, Suite 4600
New Orleans, LA 70170-4600
(504) 586-5252
COUNSEL FOR PLAINTIFF/APPLICANT:
Jeanerette Lumber & Shingle Company, L.L.C.

J. Michael Veron
J. Rock Palermo, III
Alonzo P. Wilson
Turner D. Brumby
Veron, Bice, Palermo & Wilson, L.L.C.
P. O. Box 2125
Lake Charles, LA 70602-2125
(337) 310-1600
COUNSEL FOR PLAINTIFF/APPLICANT:
Jeanerette Lumber & Shingle Company, L.L.C.

Michael R. Phillips
Claire E. Juneau
Kean Miller LLP
909 Poydras Street, Suite 3600
New Orleans, LA 70112
(504) 585-3050
COUNSEL FOR DEFENDANTS/RESPONDENTS:
Chevron U.S.A., Inc.
Chevron U.S.A. Holdings, Inc.

Charles S. McCowan, III
Pamela Roman Mascari
Kean Miller LLP
P. O. Box 3513
Baton Rouge, LA 70821-3513
(225) 387-0999
COUNSEL FOR DEFENDANTS/RESPONDENTS:
Chevron U.S.A., Inc.
Chevron U.S.A. Holdings, Inc.

Eric J. Mayer
Alexandra White
Johnny C. Carter
Laranda Walker
Susman Godfrey, L.L.P.
1000 Louisiana Street, Suite 5100
Houston, TX 77002-5096
(713) 651-9366
COUNSEL FOR DEFENDANTS/RESPONDENTS:
Chevron U.S.A., Inc.
Chevron U.S.A. Holdings, Inc.

Steven W. Usdin
Jamie L. Berger
Chloe M. Chetta
Barrasso, Usdin, Kupperman, Freeman & Sarver, L.L.C.
909 Poydras Street, Suite 2350
New Orleans, LA 70112
(504) 589-9700
COUNSEL FOR DEFENDANT/RESPONDENT:
Florida Gas Transmission Company, LLC

Jamie D. Rhymes
Hunter A. Chauvin
Michael H. Ishee
Liskow & Lewis
P. O. Box 52008
Lafayette, LA 70505-2008
(337) 232-7424
COUNSEL FOR DEFENDANT/RESPONDENT:
ExxonMobil Oil Corporation

Michael P. Cash
Liskow & Lewis
1001 Fannin Street, Suite 1800
Houston, TX 77002
(713) 651-2900
COUNSEL FOR DEFENDANT/RESPONDENT:
ExxonMobil Oil Corporation

Kelly B. Becker
Aubrey A. Denton
Liskow & Lewis
701 Poydras Street, Suite 5000
New Orlean, LA 70139
(504) 581-7979
COUNSEL FOR DEFENDANT/RESPONDENT:
ExxonMobil Oil Corporation

EZELL, Judge.

Plaintiff-Applicant, Jeanerette Lumber & Shingle Company, L.L.C. (JLS),

seeks supervisory writs from the judgment of the Sixteenth Judicial District Court,

Parish of St. Martin, the Honorable Lewis H. Pitman, Jr., presiding, which stayed

the adjudication of JLS’s claims against Defendants, Florida Gas Transmission

Company, LLC (FGT), ExxonMobil Oil Corporation (Exxon), Chevron U.S.A., Inc.,

and Chevron U.S.A. Holdings, Inc. (collectively referred to as Chevron), and

compelled arbitration of all claims against FGT and Chevron. For the following

reasons, we reverse the decision of the trial court and remand for further proceedings.

JLS entered into various right-of-way agreements (ROWs) with Defendants’

predecessors-in-interest, establishing pipeline servitudes across portions of JLS’s

property located in the Buffalo Cove Water Management Unit within the

Atchafalaya Basin. All of the ROWs contained two distinct damage remedy

provisions. As to damage to JLS’s property, the 1967 Chevron ROW provided:

Grantee agrees to fully pay, indemnify and hold harmless the said
Grantor, from, against and in connection with any and all claims or
demands. . . for damages to property, including injuries and damage to
Grantor, and including in both instances court costs and attorneys’ fees
arising from and out of the construction, maintenance, operation,
relocation or removal of said pipeline, and appurtenances, or from or
out of or the result of any other activities of Grantee hereunder.

Under the 1963 FGT and the 1960 Exxon ROWs, the Grantee similarly

Agree[d] to fully indemnify and hold harmless the said Grantor, from
and against any and all claims or demands . . . for damages to property,
including in both instances court costs and attorneys’ fees arising from
and out of the construction, maintenance, operation, relocation or
removal of said ditch and of said pipeline[1], or from or out of or the
result of any other activities of Grantee hereunder.

1
In the FGT ROW, the term “pipeline” is inserted before “ditch,” and the term
“appurtenances” is used rather than the phrase “of said pipeline.”

In all three ROWs, an arbitration clause was included several paragraphs prior

to this general indemnity provision. The FGT ROW provided:

Grantee hereby agrees to pay any damages which may arise to
growing crops, wildlife, timber, fences, or structures as the result of its
operations hereunder, said damages if not mutually agreed upon, to be
ascertained and determined by three disinterested persons, one thereof
to be appointed by said Grantor, one by said Grantee and the third by
the two so appointed as aforesaid, and the written award of such three
persons shall be final and conclusive.

The Chevron and Exxon ROWs had identical arbitration provisions, except

the Chevron ROW omitted the word “timber” and the Exxon ROW omitted the term

“structures.”

On September 27, 2018, JLS filed suit seeking recovery for erosion and

property damages, citing Defendants’ failure to maintain or negligent maintenance

of canals and canal banks upon JLS’s land outside the not-to-exceed bounds of the

ROWs. The petition raised various theories of recovery, including breach of contract,

negligence, nuisance, trespass, unjust enrichment, and unfair trade practices. The

damages related to wildlife, the cypress-tupelo forest, soil, hydrology, ecosystem,

and the land itself.

JLS specifically alleged: “Each Defendant’s pipeline canals, pipelines, and

spoil banks have altered the hydrological and topographical condition on Plaintiff’s

Property, creating an artificial water and sediment delivery system that restricts the

natural flow of water and sediment on and off Plaintiff’s Property.” The petition

further alleged: “Each Defendant’s failure to maintain the canals and banks and/or

negligent operation, inspection, and maintenance activities has resulted in the

widening of the canals, erosion, and land loss on Plaintiff’s Property.” In its petition,

JLS also asserted: “Each Defendant’s conduct complained of herein has negatively

2

impacted the water quality, environment, cypress-tupelo forest, fauna and flora,

sedimentation, oxygen level, and ecosystem on Plaintiff’s property.”

The present case was filed in tandem with four other cases because the

properties are located in distinct water management units of the Atchafalaya Basin.2

However the ROWs in all cases are substantially similar to the above provisions, the

main variation being the inclusion or omission of the words “structures” or “timber”

as items of arbitrable damages. Filings and transcripts in the various cases reveal

that the goal of JLS in the litigation is to halt the loss of land in the cypress-tupelo

swamp subject to the ROWs, the loss of which they attribute to Defendants’

allegedly negligent operations, and to protect and restore the swampland.

On October 17, 2019, the trial court heard exceptions of prematurity filed by

all Defendants, as well as a motion to stay and compel arbitration filed by Chevron,

among others. The trial court granted FGT’s and Chevron’s exceptions of

prematurity outright, Exxon’s in part, and stayed proceedings against all Defendants.

The trial court based its ruling upon a finding that “[u]nder Louisiana property law,

canals are ‘structures[]’” and JLS’s claims were for damages to the canals

themselves, as opposed to the land abutting the canals. The trial court recognized

that Exxon’s ROW did not include language referring to “structures;” thus JLS’s

claims for damages “other than to growing crops, wildlife, timber, or fences” were

2
These cases are Jeanerette Lumber & Shingle Co., LLC. v. Am. Midstream (MIDLA), 19-
273, 19-274 (La.App. 3 Cir. 6/18/19)(unpublished writ rulings), writs denied, 19-1168, 19-1173
(La. 10/15/19), 280 So.3d 601 (American Midstream); Jeanerette Lumber & Shingle Co., LLC v.
S. Natural Gas Co., 19-817 (La.App. 3 Cir. 3/18/20)(unpublished writ ruling)(Southern Natural
Gas); Jeanerette Lumber & Shingle Co., L.L.C. v. Texas Gas Transmission, L.L.C., No. 87262
(16th JDC St. Martin Parish)(Texas Gas); and White Castle Lumber & Shingle Co., L.L.C. and
Jeanerette Lumber & Shingle Co., L.L.C. v. Southern Natural Gas Co., L.L.C., 20-38 (La.App. 1
Cir. 5/12/20)(unpublished writ denial)(White Castle).

3

not subject to arbitration, though JLS’s claims for those damages were stayed

nonetheless.

JLS sought writ review of those decisions, requesting this Court to exercise

its supervisory jurisdiction by granting the current writ application, vacating the stay

issued by the trial court, and reversing the trial court’s holding that JLS’s property-

damage claims against FGT and Chevron are subject to the narrowly tailored

arbitration provision. We find that JLS’s argument has merit.

In Aguillard v. Auction Management Corp., 04-2804, 04-2857, pp. 24 (La.

6/29/05), 908 So.2d 1, 18, our supreme court recognized that Louisiana favors

arbitration, and any doubt concerning the scope of arbitrable issues should be

resolved in favor of arbitration:

[W]e hold that a presumption of arbitrability does exist. Due to the
strong and substantial similarities between our state arbitration
provisions and the federal arbitration law as seen through a 25
comparison of La.Rev.Stat. §§ 9:4201 and 9:4202 and 9 U.S.C. §§ 2
and 3, the federal jurisprudence provides guidance in the interpretation
of our provisions. We, therefore, adopt the United States Supreme
Court’s interpretation of the federal arbitration law.

Accordingly, even when the scope of an arbitration clause is
fairly debatable or reasonably in doubt, the court should decide the
question of construction in favor of arbitration. The weight of this
presumption is heavy and arbitration should not be denied unless it can
be said with positive assurance that an arbitration clause is not
susceptible of an interpretation that could cover the dispute at issue.
Therefore, even if some legitimate doubt could be hypothesized, this
Court, in conjunction with the Supreme Court, requires resolution of
the doubt in favor of arbitration.

This court in Abshire v. Belmont Homes, Inc., 04-1200, pp. 7-8 (La.App. 3

Cir. 3/2/05), 896 So.2d 277, 283, writ denied, 05-862 (La. 6/3/05), 903 So.2d 458

(first and third alterations in original), set forth the proper standard for reviewing a

trial court’s judgment sustaining an exception of prematurity based on an arbitration

provision, explaining:

4

The dilatory exception of prematurity is provided for in La.Code
Civ.P. art. 926(A)(1), and its function is to raise the issue that a judicial
cause of action does not yet exist because of some unmet prerequisite
condition. Blount v. Smith Barney Shearson, Inc., 96-0207 (La.App. 4
Cir. 2/12/97), 695 So.2d 1001, writs denied, 97-0952, 97-0970
(La.5/30/97), 694 So.2d 246, 247. “It usually is utilized in cases where
the law or a contract has provided a procedure for one aggrieved of a
decision to seek relief before resorting to judicial action,” and “[t]he
exceptor has the initial burden of showing that an administrative
remedy was available, thus making the judicial action premature.” Id.
at 1003. Thus, the burden is upon [the defendant] to establish that a
valid and enforceable arbitration agreement exists. See id. In
determining whether a party is bound by an arbitration agreement, we
apply ordinary contract principles, and a party cannot be required to
submit to arbitration a dispute that he has not agreed to submit. Tresch
v. Kilgore, 03-0035 (La.App. 1 Cir. 11/7/03), 868 So.2d 91. Whether a
court should compel arbitration is a question of law. Dufrene v. HBOS
Mfg., 03-2201 (La.App. 4 Cir. 4/7/04), 872 So.2d 1206. Therefore,
“[a]ppellate review of questions of law is simply to determine whether
the trial court was legally correct or incorrect.” Id. at 1209.

Louisiana Revised Statutes 9:4202 provides:

If any suit or proceedings be brought upon any issue referable to
arbitration under an agreement in writing for arbitration, the court in
which suit is pending, upon being satisfied that the issue involved in the
suit or proceedings is referable to arbitration under such an agreement,
shall on application of one of the parties stay the trial of the action until
an arbitration has been had in accordance with the terms of the
agreement, providing the applicant for the stay is not in default in
proceeding with the arbitration.

Appellate courts will not disturb a trial court’s ruling on a motion to stay

absent an abuse of discretion. Interdiction of Zimmer, 17-900 (La.App. 4 Cir.

3/14/18), 242 So.3d 669. We find that the trial court has abused its discretion in

this matter.

JLS first argues that, even if the trial court had correctly interpreted the scope

of the relevant arbitration provisions to include some portion of its claims against

Chevron and FGT, the court still abused its discretion in staying all claims against

all Defendants because “[c]ourts routinely allow non-arbitrable claims to proceed in

court concurrently with arbitration proceedings.” It further contends that a stay of

5

proceedings in such circumstances is only warranted when resolution of the

arbitrable claims will have preclusive effect on the non-arbitrable claims, but such

is not the case herein as JLS’s claims against Exxon are predominantly for damage

to its land and for restoration, not the arbitrable damages to crops, wildlife, timber,

or fences. We agree.

“The preeminent concern of Congress in passing the [Arbitration] Act was to

enforce private agreements into which parties had entered, and that concern requires

that we rigorously enforce agreements to arbitrate, even if the result is ‘piecemeal’

litigation[.]” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 221, 105 S.Ct. 1238,

1242-43 (1985). In fact, federal law “requires piecemeal resolution when necessary

to give effect to an arbitration agreement.” Moses H. Cone Mem’l Hosp. v. Mercury

Constr. Corp., 460 U.S. 1, 20, 103 S.Ct. 927, 939 (1983) (emphasis added).

“[C]ourts generally refuse to stay proceedings of nonarbitrable claims when it is

feasible to proceed with the litigation.” Klay v. All Defendants, 389 F.3d 1191, 1204

(11th Cir. 2004).

The arbitration clause of Exxon’s ROW did not include any language referring

to “structures” as did the FGT and Chevron arbitration provisions. Thus, even under

the trial court’s finding regarding “structures” as pertains to the FGT and Chevron

claims, JLS’s claims against Exxon for damages “other than to growing crops,

wildlife, timber, or fences” were clearly not subject to arbitration and should be

allowed to proceed in court. The trial court nevertheless stayed all proceedings

against Exxon, even those for damages that were clearly not subject to its arbitration

clause. We find this to be error, reverse that decision, vacate the stay, and remand

for proceedings for all claims by JLS for damages “other than to growing crops,

wildlife, timber, or fences” against Exxon.

6

Finally, JLS challenges the trial court’s conclusory statement that canals are

“structures” under Louisiana property law, claiming there are no provisions in our

Civil Code or statutes defining canals or ditches as “structures,” and canals do not

fall within the generally prevailing meaning of the word “structures.” Again, we

agree and find that the trial court incorrectly created its own definition of the term

“structures” to include the canals at issue with regard to the FGT and Chevron

clauses.

Black’s Law Dictionary 1424 (6th ed. 1996) defines “structure” as:

[A]ny construction, or any production or piece of work artificially built
up or composed of parts joined together in some definite manner. That
which is built or constructed; an edifice or building of any kind. A
combination of materials to form a construction for occupancy, use or
ornamentation whether installed on, above, or below the surface of a
parcel of land.

A canal as at issue here is not created by joining parts together, does not combine

materials of any sort in a construction, but is simply an artificial waterway dug from

the earth, with the spoil dirt piled along the edge. Prior to the trial court’s ruling,

neither FGT nor Chevron suggested that canals were structures. None of the cases

cited by Defendants establish that canals and spoil banks are structures under

Louisiana property law. 3 The inclusion of dug-out canals and the deposits of

dredged soil in the definition of the term “structures” was made by the trial court sua

sponte. We can find nothing in the jurisprudence which supports this finding.

Accordingly, claims for damages to the canals would not fall under the definitions

3
Defendants cite Crooks v. Department of Natural Resources, 19-160, p. 2, n.2 (La.
1/29/20), __ So.3d __, wherein the supreme court described in a footnote the various structures in
and around the Catahoula Basin as including “the Jonesville Lock and Dam, Archie Weir on Little
River, and the Catahoula Diversion Canal. However, this statement does not represent a legal
conclusion that canals are in fact structures under our property law, as the issue of whether a canal
is a structure as a matter of law was not decided or even analyzed by the court. The above dicta
mentioned in passing in a footnote alone cannot support Defendants’ position.

7

of “structures” under Louisiana law, and would not be subject to arbitration under

the contracts at issue.

Further, JLS is not seeking damages for injuries to the canals, even if the

canals were considered to be “structures.” Rather, JLS seeks damages for injuries

to the land surrounding the canals which was caused by Defendants’ failure to

maintain those canals. All of the ROWs at issue contain a general indemnity

provision for property damage allowing for court costs and attorneys’ fees for any

and all claims or demands for damages to property arising from Defendants’

operations. The ROWs’ arbitration clauses exempt from the general provision any

damages to growing crops, wildlife, timber (where included), fences, or structures

(where included). Damages to the wildlife and trees clearly fall under the specific

arbitrable provisions as timber and wildlife. However, the damages JLS seeks for

restoration of the hydrology, sedimentology, and ecology of the land itself should

proceed without arbitration under the general indemnity for property damage

provisions of the ROWs recited above, as these damages are not to “growing crops,”

“wildlife,” “timber,” “fences,” or “structures.”

Under the clear and unambiguous provisions of the ROWs at issue, and the

generally prevailing and technical meanings of the words and terms utilized therein,

the claims of JLS, against FGT, Exxon, and Chevron, for damages to the cypress-

tupelo forest as well as to the wildlife, all flora and fauna, fall within the parameters

of the arbitration clauses of the applicable ROWs and, therefore, must be arbitrated

pursuant thereto. All other claims sought by JLS for damages to the hydrology,

sedimentology, and ecology of the land itself fall outside the arbitration provisions

and must proceed without arbitration. Accordingly, we reverse the judgment of the

8

trial court sustaining the exceptions of prematurity filed by FGT and Chevron as to

those claims.

For the above reasons, we hereby reverse the judgment of the trial court

staying the non-arbitrable claims of JLS against Defendants and remand for

proceedings on those claims. We further reverse the decision of the trial court

sustaining the exceptions of prematurity filed by FGT and Chevron as to those

claims for damages to the hydrology, sedimentology, and ecology of the land itself,

and any other claims not to crops, wildlife, timber, fences, or structures, as discussed

herein, as those claims fall outside the parameters of the arbitration clauses of the

applicable ROWs. This matter is hereby remanded for further proceedings

consistent with this ruling. Costs of this writ application are to be split by

Defendants.

REVERSED AND REMANDED.

9