Quality Environmental Processes, Inc. v. I.P. Petroleum Co.
144 So. 3d 1011
La. Ct. App.2014Background
- 1966 mineral deed conveyed minerals in blue-outlined product areas and referenced Exhibits A–H, with Exhibit D Tobin map; 1992 cash sale to St. Martin property acknowledged prior conveyance of minerals; plaintiffs allege no valid mineral servitude and that 1992 deed conveyed 100% of mineral rights; 1994 and later transfers and settlements affected after-acquired rights; royalties were paid 1997–2001 and later settlements with Phillips (2001) and Noble Energy (2005) addressed interests; trial court found 1966 deed valid and LUTPA violation, appellate court reversed, remanding for after-acquired rights issues; court ultimately held 1966 deed valid, 1992 sale did not convey mineral rights, LUTPA claim insufficient, remand for royalty issues on after-acquired rights; this opinion affirms the appellate decision and remands for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the 1966 mineral deed create a valid mineral servitude? | St. Martin(s) contended insufficient description. | Deed sufficiently described via blue Tobin map and related exhibits. | Yes, the deed created a valid mineral servitude and placed third parties on notice. |
| Did the 1992 cash sale convey mineral rights? | Said to convey all minerals; no such conveyance occurred. | Sale expressly reserved minerals and did not convey them. | No, the 1992 sale did not convey mineral rights to the St. Martins. |
| Did LUTPA apply to the defendants’ conduct? | Defendants’ actions violated LUTPA by withholding royalties and related conduct. | Discovery-related and not a LUTPA violation; governed by discovery rules and contract procedures. | No LUTPA violation; LUTPA claims dismissed. |
| Should the case be remanded for after-acquired rights royalty issues? | Settlements with Noble/Phillips create after-acquired title claims. | Remand appropriate to resolve post-2001/2005 royalty issues. | Remanded for trial court to consider royalty payments stemming from after-acquired rights. |
Key Cases Cited
- White v. Ouachita Natural Gas Co., Inc., 177 La. 1052 (La. 1933) (sufficiency of description to put third parties on notice; extrinsic evidence allowed to identify property)
- Emerson v. Cotton, 209 La. 1003 (La. 1946) (liberal approach to property descriptions to sustain conveyances)
- Daigle v. Calcasieu Nat’l Bank in Lake Charles, 200 La. 1006 (La. 1942) (description must enable identification within the four corners or via referenced map)
- Nitro Energy, LLC v. Nelson Energy, Inc., 34 So.3d 524 (La.App. 2 Cir. 2010) (description sufficiency case for mineral rights notices)
- Consolidated Ass’n of Planters of Louisiana v. Mason, 24 La. Ann. 518 (La. 1872) (early notice/description doctrine limits for real property descriptions)
- First National Bank, USA v. DDS Construction, LLC, 91 So.3d 944 (La. 2012) (de novo review for legal questions involving servitudes)
- White v. Ouachita Natural Gas, Co., Inc., 150 So. 15 (La. 1933) (noted for description sufficiency principles (same as above))
- Energy Development Corp. v. Quality Environmental Processes, Inc., 777 So.2d 481 (La. App. 5th Cir. 2000) (case on mineral rights descriptions and public records)
- Cheramie Services, Inc. v. Shell Deepwater Prod., 35 So.3d 1053 (La. 2010) (LUTPA scope and limits; egregious conduct required)