Calvin J. Hill, Individually and as the of the Succession of Elnora Johnson Hill v. TMR Exploration, Inc., Park Exploration, Inc., and Vitol Resources, Inc.Calvin J. Hill, Individually and as the of the Succession of Elnora Johnson Hill v. TMR Exploration, Inc., Park Exploration, Inc., and Vitol Resources, Inc.
Brent K. DeLee
Kirby J. Guidry
Baton Rouge, Louisiana
Counsel for Plaintiffs/Appellants, Calvin Hill, et al
Chad A. Aguillard
Ali Zito Shields
New Roads, Louisiana
and
Thomas A. Nelson
New Roads, Louisiana
Counsel for Plaintiffs/Appellants, Roosevelt Hill, et al
Monique M. Edwards
Baton Rouge, Louisiana
and
Isaac Jackson, Jr.
Plaquemine, Louisiana
Counsel for Plaintiff/Appellant, Felix Hill
Patrick J. McShane, T.A.
Danica Benbow Denny
Kathleen P. Rice
New Orleans, Louisiana
Counsel for Defendant/Appellee, Chaucer Corporate Capital (No. 2) Limited
BEFORE: WELCH, PENZATO, AND LANIER, JJ.
Welch J. concurs without
PENZATO, J.
Calvin J. Hill, et al.,1 plaintiffs, and
FACTS AND PROCEDURAL HISTORY
This case, which concerns a claim of subsurface trespass, has a complex faсtual and procedural history familiar to this court.3 Pertinently, the Hills own various undivided interests in a 22.768-acre tract of immovable property, more particularly described as the North 1/3 of Lot 5, Section 93, Township 7 South, Range 10 East (abbreviated as “Section 93, T7S, R10E“), Parish of West Baton Rouge. The Hills assert that TMR Exploration, Inc. entered an oil and gas mineral lease with A. Wilbert‘s Sons, LLC in 2006 to drill a well on the Wilbert property in Section 93. The lease covered the North 1/2 of Section 93, Township 7 South, Range 10 East, Parish of West Baton Rouge. Although TMR initially obtained a permit to directionally drill the well on the Wilbert property, the well was horizontally drilled, causing the bottom hole of the well to trespass beneath the Hills’ property. Thus, the Hills contend that oil was illegally produced and sold from beneath their property beginning in 2008.
TMR operated the well until July 1, 2010. At that time, the Wilbert lease was assigned to Park, and Park became operator of the well. Although Park eventually obtained leases from some of the Hills, it is undisputed that no leases existed between TMR/Park and any of the Hills prior to 2012. The Hills allege that Park produced oil from benеath their property in violation of their right to remove oil, resulting in damages to their property. Chaucer issued a commercial general liability policy to Park for the policy period June 1, 2010 to June 1, 2011.4 The Hills allege that Chaucer‘s policy provides coverage for their property damage purportedly caused by Park.
Chaucer filed a motion for summary judgment in May 2021, asserting three grounds for summary dismissal of the Hills’ claims. First, Chaucer asserts that the insuring agreement does not afford coverage because Park had knowledge of the alleged property damage prior to the start of the policy period. The policy‘s coverage terms pertinently state:
SECTION I — COVERAGES
COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY
1. Insuring Agreement ***
b. This insurance applies to...“property damages” only if:
***
(3) Prior to the policy period, no insured...knew that the...“property damage” had occurred, in whole or in part. If such a listed insured...knew, prior to the policy period, that the...“property damage” occurred, then any continuation, changes or resumption of such...“property damage” during or after the policy period will be deemed to have been known prior to the policy periоd.
***
d. ...“property damage” will be deemed to have been known to have occurred at the earliest time when any insured...
***
(3) Becomes aware by any other means that...“property damage” has occurred or has begun to occur.
Next, Chaucer asserts that coverage is barred by the policy‘s expected/intended injury exclusion. Pursuant to this exclusion, no coverage was provided for “‘property damage’ expected or intended from the standpoint of the insured.” Finally, Chaucer contends that coverage is precluded by the policy provision, which states that the policy does not apply to “actual or alleged liability arising out of or contributing to by the dishonesty or infidelity of the insured.”
Chaucer relies on the same evidence and arguments to support each contention and, specifically, to establish Park‘s knowledge of the property damage prior to the inception of the policy. According to Chaucer, the Hills “judicially confessed” in a prior motion for partial summary judgment that Park had knowledge of their property damagе, at least in part, in February 2010, months before the start of its policy period. In their prior motion, filed in August 2015, the Hills sought to rescind and cancel lease agreements they entered into with Park in 2012, alleging that Park knew the bottom hole of the well was located beneath their property but failed to disclose this information at the time the leases were entered.5 To establish Park‘s knowledge, the Hills propounded requests for admission to Park in July 2015, requesting that Park admit, among other things, “You possessed information and knowledge that the toe of the well was located beneath Plaintiffs’ property prior to being designated as Operator of the well.” Park failed to respond to the requests for admission; thus, the Hills sought to have the requests “deemed admitted” in connection with their motion for partial summary judgment to cancel the leases. The Hills’ motion was granted in January 2016, cancelling the leases due to Park‘s fraud. The judgment is silent as to whether Park‘s unanswered requests for admission were deem admitted by the trial court.
Chaucer also attached excerpts from the depositions of Jerome Collins and Richard Cаmpbell, Jr., a purported geologist.6 Mr. Collins, who is allegedly employed by Fenstermaker & Associates, created a map of Section 93 in February 2010 at Park‘s request.7 It appears that the February
Mr. Campbell offered similаr testimony, purportedly concerning the February 2010 map, and confirmed that markings on the map presented to him reflected the area where “somebody thought the bottom hole location was.” Based on these markings, Mr. Campbell opined that “somebody knew” that the bottom hole of the well was under the Hill property.
Finally, Chaucer asserts that the Hills’ allegations against Park made in their third supplemental and amended petition triggered the dishonesty/infidelity exclusion. The Hills alleged that Park willfully or intentionally trespassed, converted and produced minerals from the well beneath their property in bad faith, and violated and interfered with their rights. They further alleged that, by June 2010, Park “discovered information” sufficient to determine that the Hills owned property in Section 93 and that the toe of the well penetrated beneath their property.
The Hills opposed Chaucer‘s motion, arguing that Park‘s unanswered requests for admission were not deemed admitted by the trial court in connection with their prior motion for partial summary judgment to cancel the leases and were not deemed admitted by oрeration of law.9 See
The Hills assert that, to the extent Park‘s unanswered requests for admission are deemed admitted, the requests and Park‘s interrogatory responses are “competing admissions,” which create a genuine issue of material fact as to when Park knew that the well was located beneath their property.
A hearing on Chaucer‘s motion was held on July 6, 2021. After hearing argument of counsel, the trial court granted Chaucer‘s motion, noting that “but for” Park‘s unanswered requests for admissions, the motion would be denied. The court concluded that the expected/intended injury exclusion in Chaucer‘s policy barred coverage for the Hills’ claims because, pursuаnt to the requests for admission, Park had knowledge of the property damage before taking its first action as operator on July 1, 2010. A judgment in conformity with this ruling was signed on August 3, 2021. Pursuant to this court‘s interim order, an amended judgment, properly naming all plaintiffs and intervenors affected by the trial court‘s ruling, was subsequently signed on September 21, 2022.10
The Hills filed the instant appeal and identified several assignments of error, primarily concerning Park‘s unanswered requests for admission. First, the Hills assert that the trial court erred in finding that the requests for admission were previously deemed admitted. Next, the Hills mаintain that, based on this erroneous conclusion, the trial court further erred by giving preference to the unanswered requests for admission over Park‘s interrogatory responses and by finding that the expected/intended injury exclusion precluded coverage based on Park‘s knowledge of the property damage prior to becoming operator.11
LAW AND ANALYSIS
Standard of Review and Burden of Proof
A motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show there is no genuine issue as to material fact and the mover is entitled to judgment as a matter of law.
When determining whether a policy affords coverage for an incident, the party seeking coverage bears the burden of proving the incident falls within the policy‘s terms. Ellis, 340 So. 3d at 989. Thus, the Hills will bear the burden of proof at trial on the issue of whether coverage exists under the primary terms of Chaucer‘s policy. Consequently, to succeed on this portion of its motion for summary judgment, Chaucer is not required to negate all essential elements of the Hills’ claim but, instead, must point out to the court the absence of factual support for one or more elements essential to their claim that coverage exists. If this is done, the burden shifts to the Hills to produce factual support sufficient to establish the existence of a genuine issue of material fact or that Chaucer is not entitled to judgment as a matter of law.
Conversely, an insurer bears the burden of proving that a loss falls within a policy exclusion. Ellis, 340 So. 3d at 989. Therefore, Chaucer will bear the burden of proving at trial that the dishonesty/infidelity exclusion and/or the expected/intended injury exclusion apрlies to bar coverage for the Hills’ claims. Since Chaucer will bear the burden on this issue, the burden of showing that no genuine issue of material fact exists and that summary judgment should be granted remains with Chaucer.
Park‘s Knowledge: Unanswered Requests for Admissions & Interrogatory Responses
Louisiana Code of Civil Procedure article 1467(A), which sets forth the procedure concerning requests for admission, states, in pаrt, “Each matter of which an admission is requested shall be separately set forth. The matter is admitted unless, within thirty days after service of the request, or within such shorter or longer time as the court may allow, the party to whom the request is directed serves upon the party requesting the admission a written answer or objection addressed to the matter, signed by the party or by his attorney.” Similarly,
As noted, Park‘s unanswered requests for admission affirmatively establish that Park “possessed information and knowledge that the toe of the well was located beneath Plaintiffs’ property prior to being designated as Operator of the well.” The parties do not dispute that Park became operator of the well effective July 1, 2010, one month after the inception of Chaucer‘s policy. Conversely, Park‘s interrоgatory responses establish that it first became aware that the bottom hole of the well was located beneath the Hill property after receiving an updated map in the fall of 2011, after the Chaucer policy expired. Since evidence may not be weighed and such conflicts may not be resolved on summary judgment, we agree with the Hills that the trial court erred by giving “preference” to Park‘s unanswered requests for admissions. Park‘s interrogatory responses and the requests for admission create a genuine issue of material fact concerning when Park became aware that the bottom hole of the well was beneath the Hill property.
On appeal, Chaucer maintains that its legal arguments do not hinge on Park‘s unanswered requests for admission. Since our review is de novo, we will consider Chaucer‘s remaining arguments and evidence to determine whether summary judgment is appropriate, despite the genuine issue of material fact created by the above-mentioned evidence.
Park‘s Knowledge: Maps, Other Evidence
Chaucer asserts that, in its interrogatory responses, Park acknowledged that, by June 2010, it was awarе that others owned property within Section 93, in addition to Wilbert‘s Sons. Furthermore, the February 2010 map was drawn using the 1963 Tobin map, which identifies the Hills as owners. According to Chaucer, this evidence combined “demonstrates Park‘s knowledge of the existence and location of the Hill property, before it elected to become Operator of this Well.” (Emphasis original.)
While Park may have generally been aware that there were other landowners in Section 93 prior to July 1, 2010, we agree with the trial court‘s observation that there is no evidence to demоnstrate that Park knew the contents of the Tobin map, which purportedly showed the location of the Hill property. The fact that Park hired Fenstermaker and/or Mr. Collins to create an updated map does not necessarily establish that Park received any information other than the “finished product,” i.e., the February 2010 map, which does not identify the Hill property.
For the same reason, Mr. Campbell‘s testimony is also insufficient. He simply testified that “somebody” knew the location of the bottom hole of the well in 2010 based on his interpretation of variоus markings on a map, which he had difficulty deciphering due to its poor quality. We cannot say this testimony conclusively establishes what Park knew and when, and its knowledge may not be inferred on summary judgment. Additionally, during his deposition, Mr. Campbell was unable to read the date on the map presented to him, identified as “Hill 46,” until counsel advised it was dated February 10, 2010. The map attached as Exhibit O to Chaucer‘s motion, which is marked as “Hill 46,” does not appear to be the same map that Mr. Collins identified as the February
Park‘s Knowledge and Dishonesty: the Hills’ Alleged Judicial Confessions
Finally, Chaucer maintains that the Hills judicially confessed in their third supplemental and amended petition that their claims against Park arise out of Park‘s dishonesty, fraud, trespass, deceit, and concealment. Chaucer further asserts that the Hills judicially confessed that Park knew about their ownership interest in Section 93 by February 2010, citing arguments made by the Hills in their motion for summary judgment to cancel leases. We disagree.
Louisiana Civil Code article 1853 states that, “A judicial confession is a declaration made by a party in a judicial proceeding. That confession constitutes full proof against the party who made it.” A judicial admission or confession is a party‘s express acknowledgment of the correctness of the fact or the act charged against him by his adversary. Such a confession is designed to dispense with evidence and has the effect of withdrawing the subject matter of the confession from issue. Scoggins v. Frederick, 98-1814 (La. App. 1st Cir. 9/24/99), 744 So. 2d 676, 682, n.12, writ denied, 1999-3557 (La. 3/17/00), 756 So. 2d 1141. The Hills’ allegations against Park concerning Park‘s conduct and the date of its knowledge — which Park‘s interrogatory responses сontradict — are not judicial confessions but, instead, are factual allegations that must be proven.14
The present situation is distinguishable from the cases cited by Chaucer, wherein this court concluded that the plaintiff was bound by the assertions made in its petition. In each of those cases, the plaintiff conceded a fact known to it, based on its personal knowledge. For instance, in Siegen Lane Investments, L.L.C. v. Corp. Lodging Consultants, Inc., 2015-1426 (La. App. 1st Cir. 4/15/16), 2016 WL 1546104, *2 (unpublished), the plaintiff‘s petition stated that it entered a contract with the defendant, and this court rejected the plaintiff‘s later argument that it was unaware that a contract existed. Similarly, see J4H, L.L.C. v. Derouen, 2010-0319 (La. App. 1st Cir. 9/10/10), 49 So. 3d 10, 12-13, wherein the plaintiffs, limited liability companies, filed a petition for injunctive relief
Additionally, in their motion for partial summary judgment to cancel the leases, the Hills made general assertions that Park received information in February 2010 that showed the bottom hole of the well was located in the Southwest 1/4 of Section 93, and, in June 2010, Park discovered that Wilbert‘s Sons did not own all of the property within Section 93. Most importantly, the Hills specifically alleged that, “no later than September 26, 2011,” Park “possessed actual knowledge” that the bottom hole of the well was located beneath the Hill property.16 These allegations further undercut Chaucer‘s argument that the Hills unequivocally “confessеd” that Park knew, at least in part, that the Hills sustained property damage in February 2010.17
The trier of fact may ultimately conclude, after weighing all evidence concerning Park‘s knowledge and conduct, that Chaucer‘s coverage position has merit. However, we are not permitted to weigh evidence at the summary judgment stage. The evidence before us fails to establish, as a matter of law, that coverage is barred by either exclusion cited by Chaucer or by the primary coverage terms of its insuring agreement. Consequently, we agree with thе Hills that the trial court erred by granting Chaucer‘s motion for summary judgment.
CONCLUSION
For the forgoing reasons, the August 3, 2021 judgment, as amended on September 21, 2022, granting the motion for summary judgment filed by Chaucer Corporate Capital (No. 2) Limited is reversed. All costs of
REVERSED.