(Rec. Docs. 19 and 89)
Bеfore the court are a number of motions to dismiss filed by defendant IMC Global Operations, Inc. (“IMC”). 1 Plaintiff, Frank C. Minvielle, L.L.C. filed an opposition and IMC filed a reply. 2 Plaintiff submitted additional affidavits and defendant filed a motion to strike a portion of the affidavits. 3 Oral argument was held on July 22, 2004. 4
Procedural Background
Plaintiff, a limited liability company, filed suit on August 27, 2003, in the 16th Judicial District Court alleging that it owns real property and oil and gas leases in Iberia Parish, Louisiana, which have been “contaminated or otherwise damaged by defendants’ oil and gas exploration and production activities.” 5 Plaintiff named as defendants IMC, Encana Midstream, Inc., Estis Well Service, L.L.C., and Transok, Inc. The case was removed to federal on October 15, 2003 pursuant to diversity jurisdiction under 28 U.S.C. § 1332. Only one defendant remains in the case at this juncture: IMC. 6
Factual Background
The record shows as follows: On September 28, 1961, Juliet Bourgeois Delcam-bre, a previous owner of the land at issue, entered into an Oil, Gas and Mineral Lease (hereinafter referred to as the “1961 lease”) with The Atlantic Refining Company (“ARCO”) for the purposes of exploring and possibly drilling for oil on the property.
7
ARCO subleased the mineral rights to Callery Properties, Inc. on November 26, 1962.
8
Callery Properties, Inc., in turn, conveyed its interest in the lease to Petro-Lewis Funds, Inc. on November 26, 1974.
9
Petro-Lewis conducted operations on the property and on December 24, 1977 filed a “Plug and Abandon Report” related to the Delcambre # 1 Well (well serial no. 105992).
10
Plaintiff alleges that Petro-Lewis breached the contract and contami
Plaintiffs predecessor, Minvielle & Seg-ura, L.L.C. purchased the land in 1998 by Act of Cash Sale. 11 On November 30, 2001, Frank C. Minvielle acquired all ownership of Minvielle & Segura, L.L.C., and shortly thereafter changed its name to Frank C. Minvielle, L.L.C., plaintiff in this action. 12
Motions Presented
IMC filed the following motions:
(A) Rule 12(b)(1) Motion Requesting Deference to the Primary -Concurrent Jurisdiction of the Louisiana Office of Conservation (“LOC”) and the Louisiana Department of Envi-
, ronmental Quality (“DEQ”);
(B) Rule 12(b)(1) and/or 12(b)(6) motion to dismiss premature claims;
(C) Rule 12(e) motion for more definite statement;
(D) Rule 12(b)(3) motion to dismiss for improper venue;
(E) Motion for compliance with Rule 20 and 21 regarding improper joinder';
(F) Rule 12(b)(7) motion dismiss for failure to join indispensable parties;
(G) Rule 12(b)(6) motion to dismiss for failure to state a claim for lack of standing, nonrecoverable damages, and prescription. 13
On June 2, 2004, the 12(b)(6) motions (Paragraph (G) above) were converted to motions for summary judgment since their disposition required rеference to documents outside of the complaint. The parties were allowed ten days to submit additional information to be considered in connection with the motion for summary judgment. 14 On June 14, 2004, plaintiff submitted the affidavit of Frank Minvielle, owner of plaintiff Frank C. Minvielle, L.L.C. Plaintiff subsequently filed the affidavits of Juliet and Finis Cowan, regarding the previous owners’ knowledge of the condition of the land at issue. 15 Defendant filed a motion to strike the affidavits, maintaining that portions of the affidavits were not based on the personal knowledge of the affiants. 16 Plaintiff filed an opposition to the motion to strike and the parties filed supplemental briefs regarding prescription and indispensable parties. 17
Analysis
The' district court, sitting in diversity jurisdiction, must apply the substantive law of Louisiana, while employing Federal procedural rules.
Erie R. Co. v. Tompkins,
(A) Rule 12(b)(1) motion for deference to the primary concurrent jurisdiction
Plaintiff seeks damages for IMC’s disposal, discharge, and storage of highly tox
Louisiana Revised Statute 30:1(D) provides that the LOC has jurisdiction over claims regarding: “the disposal of any waste product into the subsurface by means of a disposal well and the regulation of all surface and storage waste facilities incidental to oil and gas exploration and production, shall be within the jurisdiction of the department.” The LOC also has jurisdiction over issues regarding surface and storage waste facilities incidental to oil and gas exploration and production and abandoned oil and gas wells. La. R.S. 30:4(C). The DEQ has jurisdiction over remedial action plans and has set forth a process by which remediation plans are approved and enforceable. La.R.S. 30:2286.1.
Under Louisiana law, the deference to the commissioner for an initial decision on matters within the expertise of the LOC, which is contemplated by the doctrine of primary jurisdiction, is a matter within the sound discretion of the trial court.
Magnolia Coal Terminal v. Phillips Oil Co.,
Landowners in Louisiana have no duty to seek relief from an administrative agency before filing suit against an oil company.
Corbello v. Iowa Production,
Considering the applicable law, and the fact that plaintiff opposes it, the court concludes that preliminary submission of the claims to the LOC and DEQ is not necessary. Accordingly, the Rule 12(b)(1) motion for deference to the primary concurrent jurisdiction of the LOC and DEQ is DENIED.
(B) and (C): Motion to dismiss premature claims, or for more deñ-nite statement
1. Prematurity involving LOC and DEQ
IMC argues that plaintiffs claims are premature because plaintiff has not sought review with the LOC or DEQ, and there
IMC asserts that claims under the Conservation Act for contamination of “usable ground water” must be mаde with the LOC and DEQ, pursuant to La. R.S. 30:1 and 30:2015.1 (requiring notification of DEQ in certain cases). Those statutes are inapplicable. Plaintiff has specifically stated that it does not seek redress for public issues, but instead has limited its claims to private causes of action. Louisiana Revised Statute 30:1 requires exhaustion pri- or to judicial review for claims by “a person aggrieved” by a law, rule, regulation or order made by the assistant secretary of the office of conservation. Plaintiff has not asserted that it has been aggrieved by an order of the LOC or DEQ, and is therefore not limited to a claim under La. R.S. 30:1. 18
Nor is La.R.S. 30:14 applicable. The latter statute authorizes the Commissioner of Conservation to enjoin conduct in violation of state laws when “ongoing or threatened” actions violate conservation laws of the state. Plaintiffs claims are for purely private matters relating solely to the actions of the defendant oil companies. Plaintiff has specifically excluded any claims for contamination of usable ground water and has otherwise avoided claims that trigger involvement by the Commissioner of Conservation. Accordingly, IMC’s attempt to require administrative review by this landowner is without merit, and the motion to dismiss for prematurity is DENIED. 19
2. Prematurity under leases
IMC contends that plaintiff was required to give defendants written notice of the alleged breach of contract and request that defendants correct the breach prior to filing this suit. IMC asserts that plaintiffs complaint is vague and omits specific facts identifying which leases have been allegedly breached by which defendant, the terms of the leases, the parties thereto, and the subject lands. IMC reasons that some of the leases at issue may not have been terminated yet, and therefore the present claims are premature.
A review of Exhibit “C” to plaintiffs opposition memorandum shows that IMC’s predecessor, Petro-Lewis Funds, Inc. was involved with a lease that resulted in work done on plaintiffs land. Although plaintiff failed to specify, in its pleadings, the subject tract of land and whether the lease had expired, plaintiffs counsel addressed the issue at oral argument. The Petro-
(D) Rule 12(b)(3) motion to dismiss for improper venue
IMC maintains that:
To the extent that, the plaintiffs claims must be brought against the LOC pursuant to La. R.S. ,30:12(A)(2) as discussed in the motion to dismiss for prematurity raised above, the 19th Judicial District Court (and therefore the U.S. District Court for the Middle District of Louisiana) is the court of proper venue for the claims raised by plaintiffs Petition.
As discussed above, IMC’s motion to dismiss, for prematurity regarding the necessity to file suit against the Commissioner of Conservation is without merit. Accordingly, the motion.to dismiss for lack of venue based on the same arguments is DENIED.
(E) Motion for compliance with Rule 20 and 21 regarding improper joinder
IMC maintains that plaintiff improperly joined the defendants in this action. Since all other defendants have now been dismissed, this motion is DENIED as moot.
(F) Rule 12(b)(7) motion dismiss for failure to join indispensable parties
IMC argues that there may be other parties which need to be -added, either as defendants or plaintiffs. Plaintiff argues that there are no other parties which need to be joined.
At oral argument, the court noted that the sellers retained a 1/2 percent mineral interest in the land sold to plaintiff. The Act of Cash Sale states:
Sellers reserve and retain unto themselves, their heirs, successors and assigns, an undivided 1/2 [percent] of all oil, gas, and other minerals, including sulphur, in, on and under the aforede-scribed property with the right and authority to exercise all necessary means for the prospecting, exploiting, producing and development- of the minerals, including all rights of access to and use of the surface of the land as may be necessary or incident to this reservation. 20
Rule 19(a) F.R.Civ. P. states that parties are necessary to an action if: “(1) in the person’s absence complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person’s absence may (i) as a practical matter impair or impede the person’s ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest.”
The Cowans do not own the land in question. The record indicates they are aware of this action and have not attempted to state an interest, nor have any other indispensable parties been identified. The motion to dismiss for failure to join necessary parties is therefore DENIED.
(G)Rule 12(b)(6) Motion to Dismiss— Converted to Motion for Summarg Judgment
IMC filed a motion to dismiss for failure to state a claim. Since the parties filed
1. Prescription
a. Contra Non Valentum
Plaintiff concedes that the complaint was filed over twenty years after the alleged breach of contract and tortious сonduct by defendants. Considering that tort claims prescribe one year after the date of the alleged tortious conduct, and that contractual claims prescribe ten years after the alleged breach, the claims arising from defendants’ actions on plaintiffs property were prescribed on the face of the petition. Accordingly, the burden to establish an exception to the rule of prescription lies with plaintiff.
Terrebonne Parish School Bd. v. Mobil Oil Corp.,
Plaintiff relies on the theory of
contra non valentum
to avoid prescription barring the claims in this case. According to this theory, prescription does not begin to run until “a plaintiff either knew or should have known of a cause of action, even if that knowledge does not occur until long after the wrongful conduct at issue has occurred.”
Simmons v. Templeton,
Plaintiff submitted the affidavit of Frank Minvielle, owner of plaintiff Frank C. Minvielle, L.L.C., which states that he did not have knowledge of a claim or reason to suspect that a claim existed until August 2003, when a geologist issued a report discussing possible contamination of plaintiffs property.
IMC does not contest that plaintiff did not have knowledge regarding the alleged contamination until just prior to the filing of suit. Plaintiff did not purchase the land until 1998, well after the alleged tortious conduct occurred. However, the claims may be prescribed if the previous owners of the land knew or should have known of the possible claims. If they did not, then under the doctrine of
contra non valen-
In response to the order setting oral argument, рlaintiff submitted the affidavits of Finis E. Cowan, Jr. and Juliet D. Co-wan. The Cowans are married and Mrs. Cowan’s mother, Mrs. Juliet Delcambre, owned the land at issue until her death in 1988, at which time the land passed to Mrs. Cowan and her children. 21 Mr. Co-wan explained that in 1982, PanCanadian Petroleum, Encana’s predecessor, paid Mrs. Delcambre $21,000.00 for possible contamination from its operations. 22 With regard to IMC’s predecessor Petro-Lew-is’s oilfield operations, Mr. Cowan states, “I have never had any information that would lead me to know or believe that there was any contamination problems at the Petro Lewis site.” Mrs. Cowan states, “I have reviewed the above affidavit and discussed it with my husband. To the best of my knowledge the statements contained in his affidavit aré true and correct.” 23
IMC argues that the affidavits of the Cowans are insufficient to defeat the motion for summary judgment. 24 IMC maintains that the Cowans’ affidavits were not based on personal knowledge regarding what the pre-1988 owners knew. Mrs. Cowan inherited the land from her mother in 1988. Additionally, IMC argues that since the Cowans’ affidavits contain language evidencing that they did not know where the Petro Lewis well was located, they could not provide information based upon personal knowledge regarding possible contamination at the site.
The court concludes that the affidavits of the Cowens establish that prior to selling the property to plaintiff, they did not know of any contamination, nor was there any indication that the property may have been contaminated by Petro-Lewis. IMC’s argument that the Cowans did not have personal knowledge regarding the facts relating to the Petro-Lewis well is unpersuasive.- The Cowans attest that they had no information regarding possible contamination or claims against Petro-Lewis, and no reason to believe-that there was any contamination or other problems with the land prior to it being sold to plaintiff. Their lack of knowledge is explained by their further assertions that they were far removed from the operations and did not even know the exact location of the well. The Cowans state that they relied upon the oilfield companies to perform their work according to the leases. Thus, absent some affirmative communication from a company, such as PanCanadian’s statement to the landowners thаt it had contaminated the site, there was no reason to believe that the companies operating on the land were doing so in a deficient manner. Moreover, since the owner of the land prior to 1988, Mrs. Delcambre, is deceased, it would be virtually impossible for plaintiff to establish Mrs: Delcambre’s knowledge regarding the land without relying upon the affidavits of the Cowans, from whom Mrs. Del-cambre sought advice on issues concerning the land. It is clear that the Cowans did not know of contamination, nor do they have reason to believe that Mrs. Delcam-bre had any such knowledge. IMC concedes that the Cowans are testifying truthfully in their affidavits.
Considering the foregoing, the court concludes that no one had reason to believe that there was a problem with the land' prior to the 2003 geologist’s report indicating possible contamination. The doctrine of
contra non valentum
therefore
b. Continuing tort
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,
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,
The case law distinguishes between ongoing causes and tortious conduct that has ceased. In cases such as
Patout,
where landfill waste was deposited onto plaintiffs 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,
In
Mouton v. State of Louisiana,
Here, like Mouton, the tortious conduct was the disposal of waste into plaintiffs property. The operating cause of plaintiffs injury was the actual disposal or storage of the oilfield waste in plaintiffs 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.
2. Lack of standing
Plaintiff seeks damages based on IMC’s breach of the 1961 lease and for IMC’s tortious conduct. IMC argues that since plaintiff was not a party to the contract and the previous owners’ rights under the 1961 lease were not specifically assigned to plaintiff, plaintiff lacks standing to bring the breach of contract claims. Moreover, IMC maintains that since the tortious conduct occurred prior to plaintiff owning the property, it cannot assert tort claims for damages. Plaintiff maintains that it has standing because it is a third party beneficiary of the contract and because tort damages can be brought regardless of the timing of the damages.
a. Contractual claims
Actions arising from a breach of contract or lease of property are classified as invоlving personal rights rather than real rights.
Prados v. South Central Bell Tel. Co.,
There is no dispute that plaintiff has no direct privity of contract with IMC, nor does plaintiff allege that it obtained any assignment of rights in the the Act of Sale from the previous owners, other than warranty of title. The Act of Sale provides:
... Sellers, who, for the price and on the terms and conditions hereafter expressed hereby sell, assign, transfer and deliver with all legal warranties and withfull substitution and subrogation in and to all the rights and actions of warranty which Sellers have or may have against all preceding owners and vendors unto ... Purchaser. 26
Such a subrogation clause applies only to warranty of title and does not assign personal rights for damages arising from previous leases involving the property.
Prados, supra,
Plaintiff argues, rather, that it is a third-party beneficiary of a “stipulation pour autri” contained in the the contract between the earlier landowners and IMC’s predecessor. La.Civ.Code ANN. art 1978 provides as follows:
Art.1978. Stipulation for a third party
A contracting party may stipulate a benefit for a third person called a third party beneficiary.
Once the third party has manifested his intention to avail himself of the benefit, the parties may not dissolve the contract by mutual consent without the beneficiary’s agreement.
Comment (b) to aet.1978 states that “the beneficiary’s intention to accept the benefit may be made known in any manner, even implied.” Thus, by simply filing suit, plaintiff has made known its intention to accept the benefit, if it exists.
The specific language of the contract in question determines whether a stipulation pour autrui has been created. The Fifth Circuit has observed the necessity of clarity in any contractual provision intended to contain a stipulation pour autrui:.
... [S]uch a promise, or a stipulation pour autrui, “is never presumed. Rather, the intent of the contracting parties to stipulate a benefit in favor of a third party must be made manifestly clear.” Homer Nat’l Bank v. Tri-District Dev. Corp.,534 So.2d 154 , 156 (La.App. 3d Cir.1988), writ denied,536 So.2d 1236 (La.1989). As we stated in Neto Orleans Public Service, Inc. v. United Gas Pipe Line Co.,732 F.2d 452 (5th Cir.) (en banc), cert. denied sub nom. Mortal v. United Gas Pipe Line Co.,469 U.S. 1019 ,105 S.Ct. 434 ,83 L.Ed.2d 360 (1984):
Louisiana law is settled that for there to be a stipulation pour autrui there must be not only a third-party advantage, but the benefit derived from the contract by the third party may not merely be incidental to the contract. Rather, the third-party benefit must form the condition or consideration of the contract in order for it to be a stipulation pour autrui. Moreover, a stipulation pour autrui will be found only when the contract clearly contemplates the benefit to the third person as its condition or consideration.
732 F.2d at 467 (internal quotations and citations omitted).
Chevron U.S.A., Inc. v. Traillour Oil Co.,
Plaintiff relies on
Hazelwood Farm, Inc. v. Liberty Oil & Gas Corp.,
In Andrepont supra, the landowner allowed Andrepont to farm soybeans on a 35-acre tract in return for twenty percent of his crop. Later, the land and mineral owners of the tract executed an oil and gas lease allowing the lessee to enter the land to explore and produce oil, gas, and other minerals. The oil company’s operations on the tract were detrimental to Andrepont’s soybean crop:
* * * [D]uring July, the oil and gas lessee entered upon the land, built a board road across Andrepont’s field, dug waste pits and proceeded to drill a well in search of minerals. Construction of the road, the drill sitе and pits destroyed part of the crop and impaired drainage in the remainder of the soybean field. The lack of adequate drainage left water standing in the field and made it impracticable to work the crop. As a result, the remainder of Andre-pont’s crop was damaged by ‘scalding’ and excessive weeds.
Andrepont,
“[Andrepont] is seeking to enforce a benefit stipulated in his favor by the landowner lessor as a condition of a commutative contract between the landowner lessor and the oil and gas lessee. Defendants, as assignees of the oil and gas lessee, are, therefore, parties to the contract in which the stipulation is a condition.... ”
Id.
at 356,
In
Hargroder v. Columbia Gulf Transmission Co.,
Lessee shall promptly pay Lessor and Lessor’s tenants a reasonable sum for any damage resulting to said premises or the crops or improvements thereon which may be caused by or result from the operations of Lessee hereunder. Within ninety (90) days after the cessation of drilling operations on any well located on the leased premises, Lessee, or its successors and assigns, shall fill and level all slush pits and shall remove the drilling equipment and material used in connection therewith from the drill sitе and shall restore said drill site to substantially its prior condition, so far as can reasonably be done, as concerns any material change in the surface of such premises caused by or resulting from operations of Lessee hereunder.
Although the second sentence requiring restoration of the property seems to impose a general obligation of restoration, the provision must be read as a whole. The only provision which discusses a right to damages is limited to damages payable to “Lessor and Lessor’s tenants.” Under Louisiana case law, such language does not create a stipulation
pour autrui
in favor of plaintiff. In
Broussard v. Northcott Exploration Co., Inc.,
Even viewing the clause as a possible stipulation pour autrui (stipulation for benefit of a third party), the result would be the same. Broussard v. Northcott Exploration Company, Inc.,481 So.2d 125 (La.1986); Hargroder v. Columbia Gulf Transmission Co.,290 So.2d 874 (La.1974); Andrepont v. Acadia Drilling Co.,255 La. 347 ,231 So.2d 347 (1969). The test annunciated in Broussard states that “[i]n order to determine if a stipulatiоn [pour autrui] exists, we must look to the intention of the parties at the time the mineral lease was negotiated.” Since the foregoing analysis indicates no such intention to benefit future surface owners, there was no stipulation pour autrui in favor of plaintiffs in this case.
Ashby v. IMC Exploration Co.,
In
Prados, supra,
... she (Mrs. Ester Binford Prados) does by these presents, grant, bargain, sell, convey, transfer, assign and set over with full guarantee against all mortgages, liens, claims, evictions, or other encumbrances or alienations whatsoever, and with subrogations to all her rights and actions of warranty against all previous owners, and with full guarantee of title, unto JAMES L. PRADOS.
The court found that the act of sale made no reference to the expired lease, nor to the right of the seller to a restoration of the property to its original state, nor to the right of damages. The subrogation clause was directed only to actions of warranty against previous owners and did not include an assignment of the right to damages.
The court next determined that no right to damages from breach of contract could attach to the property itself, relying on the rule that “a purchаser cannot recover from a third party for damage to the property incurred prior to the sale.”
Id.
at 750,
citing Gumbel v. New Orleans Terminal Co.,
Considering the foregoing, the court concludes that plaintiff did not receive an assignment of rights from the previous owner, nor did the 1961 lease create a stipulation pour autrui in favor of plaintiff. Thus, plaintiff does not have standing to bring contractual claims arising from the 1961 lease. Accordingly, the motion for summary judgment based on lack of standing to bring contractual claims is GRANTED.
b. Tort claims
Under Louisiana jurisprudence, the owner of land at the time of the alleged damages is the person with the real and actual interest to assert a claim for damages to the land; thus, a subsequent landowner does not have standing to assert tort claims for damage to property occurring prior to the landowner’s acquisition of the land.
Gumbel v. New Orleans Terminal Co.,
Plaintiff argues that “Louisiana law is now well settled that with regard to claims
The third case relied upon by plaintiff is not instructive on the issue presented here. In
Hopewell, Inc. v. Mobil Oil Co.,
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, Inc. v. Mobil Oil Co.,
Although plaintiff characterizes the Hopewell decision as one of “brevity and clarity,” the court agrees only with the “brevity” part. 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 pri- or to their acquisition оf 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 Gmnbel and Dorvin.
The law in Louisiana remains that the owner of land at the time of the alleged damages is the person with the real and actual interest to assert the claim for dam
It is undisputed that plaintiff is seeking damages arising from operations which occurred prior to plaintiffs acquisition of the land. For the foregoing reasons, the court concludes that plaintiff does not have standing to bring tort claims against IMC. Accordingly, the motion for summary judgment based on lack of standing to bring tort claims is GRANTED.
3. Nonrecoverable damages
IMC asserts that plaintiff has no right to recover damages for mental anguish, punitive damages, or attorney’s fees.
A business entity is incapable of experiencing loss of enjoyment, mental anguish, and inconvenience.
Whitehead v. American Coachworks, Inc.,
Plaintiff asserts a claim for punitive damages under La. Civil Code Article 2315.3. Article 2315.3 was enacted in 1984 and was repealed in 1996. IMC argues that plaintiffs claims for punitive damages for activities occurring outside the 1984 to 1996 time-frame should be dismissed. Plaintiff does not oppose the motion, but argues only that the claim for punitive damages during this period should not be dismissed Accordingly, the motion to dismiss plaintiffs claim for punitive damages outside оf the period of 1984 to 1996 is GRANTED.
The Complaint included a claim for attorney’s fees,-however, on September 7, 2004, plaintiffs counsel advised that this claim was being withdrawn. 31 This letter effectively provides notice that the motion to dismiss plaintiffs attorney’s fees claim is unopposed. Accordingly, the motion to dismiss is GRANTED as unopposed.
MEMORANDUM OPINION-RULING ON MOTION
(.Rec.Doc. 108)
Before the court is plaintiffs Memorandum in Support of the Motion for Reconsideration and/or for New Trial seeking reconsideration of the undersigned’s October 19, 2004 ruling dismissing plaintiffs claims based on lack of standing. On November 4, 2004, the Motion for Reconsideration was granted and additional briefing was ordered. Plaintiff filed a supplemental memorandum in support and defendant filed an opposition. 1
Plaintiff seeks an order vacating the Court’s judgment dismissing plaintiffs claims for lack of standing to bring contractual and tort claims arising from defendant’s alleged contamination of property. Plaintiff alleges it has standing to bring the claims because actions for restoration of property once burdened by a mineral lease are real rights which attach to the property, and that to the extent that the Act of Cash Sale was dеficient, it is being amended to include the transfer of property rights to plaintiff.
Background 2
On October 19, 2004, defendant’s motions to dismiss and for summary judgment were granted and judgment was entered dismissing plaintiffs claims against defendant. 3 As it relates to plaintiffs lack of standing to bring contractual and tort claims, the Memorandum Opinion states:
Plaintiff seeks damages based on IMC’s breach of the 1961 lease and for IMC’s tortious conduct. IMC argues that since plaintiff was not a party to the contract and the previous owners’ rights under the 1961 lease were not specifically assigned to plaintiff, plaintiff lacks standing to bring the breach of contract claims. Moreover, IMC maintains that since the tortious conduct occurred prior to plaintiff owning the property, it cannot assert tort claims for damages. Plaintiff maintains that it has standing because it is a third party beneficiary of the contract and because tort damages can be brought regardless of the timing of the damages.
sH ífc % ifc %
There is no dispute that plaintiff has no direct privity of contract with IMC, nor does plaintiff allege that it obtained any assignment of rights in the the Act of Sale from the previous owners, other than warranty of title.
After аn exhaustive review of the law regarding stipulations pour autri and standing to bring tort claims arising from damage to property, the Court found that plaintiff did not have standing to bring contractual or tort claims.
Legal Analysis
The Federal Rules of Civil Procedure do not recognize a motion to reconsider
in haec verba. See Lavespere v. Niagara Mach. & Tool Works, Inc.,
The district court has considerable discretion to grant or deny a motion under Rule 59(e).
Edward H. Bohlin Co.,
Standing to enforce restoration obligation
Plaintiff asserts that defendant had an obligation under the Mineral Code, La. R.S. 31:1 et seq, to restore the property, and that plaintiff has standing to enforce that obligation. In the original ruling, the court found that since plaintiff was not assigned the right to enforce the obligations of the mineral,lease, plaintiff did not have standing to bring the claims. Plaintiff maintains that since mineral leases are classified as real rights, they attach to the land and there was no need for a particular assignment of rights to plaintiff in order for plaintiff to have standing to bring suit.
Plaintiff is correct that the Mineral Code imposes an obligation on a mineral lessee to restore the leased property. The Louisiana Supreme Court and the Third Circuit Court of Appeals of Louisiana have recognized the contractual duty of a mineral lessee to restore the surface upon completion of operations.
See Caskey v. Kelly Oil Company,
This, however, is not dispositive of the issue before this court. Regardless of whether or not an obligation existed, plaintiff must have standing to bring the action to enforce the obligation. Plaintiff maintains that since a mineral lease is' a real right, the obligations attach to the land, and therefore, the owner of the land has standing to bring action against the mineral lessee, despite the lack of privity of contract between plaintiff and defendant. 5
The original ruling characterized plaintiffs action in the case at bar as a personal right, which did not attach to the property. Although, Louisiana R.S. 31:16 provides that a mineral lease, as a mineral right, is a real right, a review of the Mineral Code and the jurisprudence shows that it is not purely a real right that automatically attaches to the property, and therefore, the result of the original ruling was correсt. In
Sketoe v. Exxon Co.,
The Louisiana mineral lease includes features that are characteristic of both contracts and rights in property. See id. § 31:16 cmt. (noting that the mineral lease is “a hybrid institution”); see generally 1A W.L. SUMMERS, THE LAW OF OIL AND GAS § 167 (2d ed. 1954 & Supp.1999); Martin & Yeates, supra, at 823-26. For instance, we interpretthe terms of the lease agreement as we would any other lease. See La.Rev.Stat. Ann. § 31:2; Massie v. Inexco Oil Co., 798 F.2d 777 , 779 (5th Cir.1986). Indeed, the lease itself is a “contract.” La.Rev. Stat. Ann. § 31:114. As such, it does not create an unlimited mineral servitude, and Louisiana’s liberative prescription for ten years nonuse therefore does not apply. See Reagan v. Murphy,235 La. 529 ,105 So.2d 210 , 215 (La.1968). On the other hand, as an “incorporeal immovable” *601 a mineral lease carries “real rights” and is “subject to the laws of registry.” See La.Rev.Stat. Ann. §§ 31:16,:18; St. Charles Land Trust v. St. Amant,253 La. 243 ,217 So.2d 385 , 390 (La.1968) (“Under Louisiana law, the mineral leases and servitudes held by the trustees are immovable property.”). Strictly speaking, the mineral lease creates a kind of servitude called a “limited personal servitude.” See 3 a.N. Yiannopoulis, Louisiana Civil Law Treatise: Personal Servitudes § 223, at 450 (3d ed.1989). “Limited personal servi-tudes are real rights that confer on a person limited advantages of use or enjoyment over an immоvable[, ie., realty,] belonging to another person.” Id. at 448-49.
Thus, it is in the nature of a limited personal servitude that the mineral lease is a real right. The limited personal servitude is explained in the Comments to La. C.C. Art. 639 as constituting “an intermediary category between personal and predial servitudes. Like usufruct and habitation, they are charges on things in favor of a person rather than an estate; like predial servitudes, they are necessarily charges on an immovable belonging to another person and are confined to certain advantages of use or enjoyment.” Although a right of use, i.e., a personal servitude, is a real right, it is one granted in favor of a person rather than an estate, and therefore it does not pass with the property upon sale of the property.
Sustainable Forests, L.L.C. v. Harrison,
In the case of a mineral lease, the Mineral Code designates the right as a real one in order to protect the mineral lessee from losing his rights if the land is sold during the existence of the lease. This conclusion is apparent in the reasoning behind La.R.S. 31:16, which are illustrated in the Comments stating:
All things considered, the lease has the major characteristics of a real right: the mineral lessee may follow the land, regardless of transfers of ownership; the mineral lessee may assert his rights against the world just as the proprietor of any other real right; he may enjoy directly and draw from the land a part of its economic advantages by appropriating a wasting asset; he has certain rights of preference; and he holds a right that is in reality susceptible of a type of possession through exercise.
The fact that the real right created is the right held by the lessee, is specifically noted in the Comments to La.R.S. 31:154, “The mineral lease, though it creates a real right in the hands of the lessee is still an elaborate contractual relationship.” Accordingly, the mineral lease gives real rights to the lessee, but the Mineral Code is void of any indication that it creates real rights in favor of the lessor. This is accounted for in the Comments to La.R.S. 31:16, which note:
It is true that there are certain distinctions from the normal real right which give the mineral lease markings of kinship. to personal rights. Not all obligations creatеd by the lease are binding on a subsequent owner of the land.However, these distinguishing marks are susceptible of recognition and are dealt with appropriately in the articles of this code governing mineral leases. The basic purpose of this article is to recognize that insofar as the mineral lease transfers both operating rights and rights to production it is a real right and not a mere personal contract.
Further, the jurisprudence does not indicate that a subsequent landowner has standing to sue a former mineral lessee based on the status of the mineral lease as a mineral right.
6
Moreover, the cases which do involve the issue presented herein, i.e., whether a subsequent landowner has standing to bring suit based on the expired mineral lease, require the subsequent landowner to some form of privity of contract, assignment of rights, or be the beneficiary of a stipulation
pour autri. Hazelwood Farm, Inc. v. Liberty Oil and Gas Corp.,
Considering the foregoing, the Court’s finding that plaintiff does not have standing to bring contractual or tort claims will not be altered. Accordingly,
IT IS ORDERED plaintiffs request to vacate the October 19, 2004 ruling in favor of defendant is DENIED.
Notes
. The motion is styled as if mover were McMoRan Exploration Company rather than defendant IMC. As the court observed in its ruling on the motion to remand, McMoRan has undertaken the defense of IMC in this suit, and its motion will be deemed on behalf of IMC. Encana also filed a motion to dismiss (Rec.Doc. 16), however, at oral argument held July 22, 2004, plaintiff’s counsel advised that plaintiff was going to voluntarily dismiss Encana with prejudice, rendering Encana’s motion moot. An order dismissing Encanca was issued August 16, 2004. Rec. Doc. 94.
. Rec. Doc. 69, 72, and 73.
. Rec. Doc. 89.
. At oral argument, the court deferred ruling on the motion for summary judgment based on prescription; and on the Rule 12(b)(7) motion to dismiss for failure to join parties who retained a 1/2 % mineral interest in the property; for lack of standing, and for failure to state a claim for attorney’s fees.
. See Petition for Damages, Rec. Doc. 1, Paragraphs 1 and 3.
. On February 2, 2002, Estis Well Service, L.L.C. was dismissed based on fraudulent joinder (Rec.Doc. 55). Defendant Transok, Inc., was dismissed on February 20, 2004 for plaintiff’s failure to prosecute (Rec.Doc. 65). Finally, Encana was dismissed with prejudice on plaintiff's motion (Rec.Doc. 94).
. Attachment to Rec. Doc. 69. On January 10, 1963, Juliet Delcambre Cowan, daughter of Juliet Bourgeois Delcambre, ratified the 1961 lease. See "Act of Ratification,” attachment to Rec. Doc. 69.
. "Sublease of Oil, Gas, and Mineral Leases,” attachment to Rec. Doc. 69.
. "Conveyance,” attachment to Rec. Doc. 69.
. "Plug and Abandon Report,” attachment to Rec. Doc. 41.
. Exhibit 8 to Rec. Doc. 41.
. Rec. Doc. 77
. Rec. Doc. 19.
. On June 14, 2004, plaintiff submitted the affidavit of Frank Minvielle, owner of plaintiff Frank C. Minvielle, L.L.C. Plaintiff subsequently filed the affidavits of Juliet and Finis Cowan, regarding the previous owners' knowledge of the condition of the land at issue. The parties filed supplemental briefs regarding prescription.
. Rec. Doc. 86.
. Rec. Doc. 89.
. Rec. Docs. 90, 92, 93, 96.
. La R.S. 30:1 provides:
A person who is aggrieved by any law of this state with respect to conservation of oil or gas, or both, or by a provision of this Chapter, or by a rule, regulation, or order made by the assistant secretary of the office of conservation hereunder, or by an act done or threatened hereunder, and who has exhausted his administrative remedy, may obtain court review by a suit for injunction or judicial review against the assistant secretary as defendant.
. To the extent that plaintiff's complaint does mention in paragraphs 13, 16, 25, and 26 that defendant's activities have resulted in contamination of ’ ground water, the court deems these references merely factual allegations. Since plaintiff specifically, in paragraph 31, asserts that it is not seeking damages for contamination or remediation costs for usable ground water, no such damages are recoverable due to the exclusion thereof by the complaint. In the event that plaintiff were to claim damages for contamination or remediation costs of usable ground water, La. R.S. 30:2015.1, requiring notification of DEQ, must be followed prior to assertion of any such claims.
. Exhibit 8 to Rec. Doc. 41.
. Rec. Doc. 86.
. Rec. Doc. 86.
. Rec. Doc. 86
. Rec. Doc. 89.
. Although the decision regarding contra non valentum defeats the motion for summary judgment on prescription at this time, the argument concerning the continuing tort doctrine will be addressed since there is a possibility that a fact finder will find that the doctrine of contra non valentum is inapplicable to the case.
. Exhibit 8 to Rec. Doc. 41.
. The factors are: "(1) The existence of a legal relationship between the promisee and the third person involving an obligation owed by the promisee to the beneficiary which performance of the promise will discharge; (2) the existence of a factual relationship between • the promisee and the third person, where (a) there is a possibility of future liability either personal or real on the part of the promisee to the beneficiary against which performance of the promisee (sic) will protect the former; (b) securing an advantage for the third person may beneficially affect the promisee in a material way; (c) there are ties of kinship or other circumstances indicating that a benefit by way of gratuity was intended.”
Andrepont,
. Louisiana civil law uses the terms "predial and personal servitude” instead of the term "easement” when classifying lands.
. Rec. Doc. 69 atp. 10.
. "In 1921, the Pugh family ancestors gave Fortuna Oil Company (Fortuna) the right to construct a casing bead gas plant on the property. Fortuna already held a mineral lease on this tract. In 1922, the Pugh ancestors sold surface rights on the property to Fortuna. Oil and gas operations were conducted on the property by Fortuna. Magnolia Oil Company (Magnolia) latеr acquired the property from Fortuna. The casing head gas plant and several oil and gas wells were operated on the property. The tract was then conveyed back to the Pugh family in 1945 in settlement of a lawsuit with Magnolia... The surface rights were leased to Magnolia. The gas plant later ceased production, possibly in the 1950s.”
Hopewell,
. Rec. Doc. 97.
. Rec. Doc. Ill and 112.
. For a detailed review of the procedural and factual background, see Rec. Doc. 105.
. Rec. Doc. 105.
. Judgment was entered October 19, 2004 (Rec.Doc. 105). According to Fed. R. Civ. Proc. Rule 6, the day of the judgment and weekends are not included in computing time delays that are less than ten days. Accordingly, the motion filed on November 2, 2004 was filed within ten days of judgment.
. Real rights and obligations transfer from the seller to the buyer without any special provision. La.Civ.Code art. 1763. Personal rights, however, do not transfer in the absence of a special assignment of rights to the buyer. La.Civ.Code art. 1764.
. The lone case cited by plaintiff is factually distinguishable in that in
Magnolia Coal Terminal v. Phillips Oil Co.,
. Rec. Doc. 105 atp. 17.