Broussard v. Union Pacific Resources Co.

778 So. 2d 1199, 0 La.App. 3 Cir. 01079, 149 Oil & Gas Rep. 1, 2001 La. App. LEXIS 87, 2001 WL 91545
CourtLouisiana Court of Appeal
DecidedJanuary 31, 2001
Docket00 01079-CA
StatusPublished
Cited by10 cases

This text of 778 So. 2d 1199 (Broussard v. Union Pacific Resources Co.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Broussard v. Union Pacific Resources Co., 778 So. 2d 1199, 0 La.App. 3 Cir. 01079, 149 Oil & Gas Rep. 1, 2001 La. App. LEXIS 87, 2001 WL 91545 (La. Ct. App. 2001).

Opinion

778 So.2d 1199 (2001)

Wayne Hickmon BROUSSARD
v.
UNION PACIFIC RESOURCES COMPANY, et al.

No. 00 01079-CA.

Court of Appeal of Louisiana, Third Circuit.

January 31, 2001.

*1200 Henry A. King, King, Leblanc, & Bland, New Orleans, LA, Counsel for Union Pacific Resources Co., Oxy, USA, Inc.

Gus Aloysius Voltz III, Voltz and Ware, Alexandria, LA, Counsel for Wayne Hickmon Broussard.

Michael L. Vincenzo, Nesser King & Leblanc, New Orleans, LA, Counsel for Union Pacific Resources Co., Oxy, USA, Inc.

Court composed of YELVERTON, DECUIR, and AMY, Judges.

*1201 YELVERTON, J.

Wayne Broussard filed this suit as the lessor of mineral interests in favor of Oxy USA, Inc., who later assigned the lease to Union Pacific Resources Company. Broussard claimed that these two oil companies improperly and unreasonably calculated his royalty payments and that he was entitled to damages, interest, and attorney's fees pursuant to Louisiana Revised Statute 31:140. The trial court agreed, and the oil companies appealed. Broussard answered the appeal seeking additional attorney's fees as damages for a frivolous appeal.

FACTS

Broussard owns a tract of land in Rapides Parish by donation from his mother. His mother had leased it to Oxy. The mineral lease, dated March 30, 1994, correctly and clearly described the property. A well was drilled in 1997, and went into production on May 29, 1998. At that time John Fenstermaker was hired by the oil companies to conduct survey work for the unitization of the Broussard II, # 1 well to determine the royalty interests of the 60 landowners in the unit. Broussard and his neighbors to the east, Brenda and Quinton Ramsey, were two of these owners.

Fenstermaker's survey indicated that Broussard owned 8.473 acres. Curiously, his survey of the Broussard/Ramsey boundary was based entirely on the property description of the tract belonging to Broussard's neighbors, the Ramseys. Broussard refused to sign the division order because the survey shorted him 1.137 acres. (It gave the Ramseys 1.137 acres more than they owned.) The division order survey mislocated Ramsey's northwest corner (and, consequently, Broussard's northeast corner) by 99.85 feet. This accounted for the shortage. When Broussard tried to work out the issue amicably, he was told by the oil companies' representatives that if he did not agree with their survey, he could get his own survey.

Broussard hired Willis Engineering who performed a survey and found that Broussard's tract of land contained 9.610 acres. The Willis survey was based on the property description of Broussard's land in the mineral lease. It showed the correct acreage. Broussard then made written demand dated October 23, 1998, attaching the Willis survey. The oil companies did not respond in writing. They refused to change the amount of acreage in the division order. Broussard was told verbally that the change could not be effectuated because of an "ambiguity" in the Ramsey description. Broussard testified that he was told to get a boundary agreement with Ramsey.

Broussard's attorney prepared a boundary agreement. Broussard and the Ramseys signed it. It described the boundary between the two properties as recognized by these neighbors all along, and as shown on the Willis survey. The boundary agreement referred to the incorrect payment of royalties by the oil companies. This boundary agreement was presented in another written notice to the oil companies dated June 8, 1999. Receiving no response from that notice either, Broussard, on August 9, 1999, filed this suit.

In September 1999, the oil companies brought royalty payments up-to-date based on 9.610 acres, but retroactive only to May 1999, when the boundary agreement was recorded. They refused to pay Broussard royalties based on his correct acreage from the time of first production in May 1998.

The case was tried. One of the defenses at the trial was the public records doctrine. The Defendants contended that until May 1999, when the boundary agreement was recorded, they were not on notice of where the boundary was. The other defense was that even if they had made a surveying error, they had followed the "hierarchy of surveying protocol" and their error was not unreasonable. The trial court rejected both defenses and awarded Broussard $1,955.70 representing double the amount *1202 of the shortage in royalty payments of $916.78 from the date of first production on July 24, 1998 until September 30, 1999, with interest. Broussard was also awarded attorney's fees in the amount of $2,390. Broussard's claim for reimbursement of the cost of the Willis survey was denied.

LAW

The Mineral Code provides the procedure to be utilized for nonpayment of royalties. La.R.S. 31:137-143. Pursuant to Louisiana Revised Statute 31:137, the mineral lessor must give the lessee a 30 day written notice of the lessee's failure to make timely or proper payment of royalties. Then, under Louisiana Revised Statute 31:138, the lessee must pay the royalties due within 30 days or he must respond in writing stating a reasonable cause for nonpayment.[1] If the lessee makes payment within 30 days, the court is given the discretion of awarding damages, interest, and attorney's fees where it is proven that the lessee was fraudulent, unreasonable, or was guilty of withholding royalty payments. La.R.S. 31:139. If the nonpayment of royalties is found to be reasonable, the lessee can be subjected only to the payment of interest from the due date of the royalties. Id.

ASSIGNMENTS OF ERROR

The oil companies assign the following two errors:

1. The trial court erred as a matter of law in determining that they were legally obligated to go beyond what was recorded in the public registry in determining the boundary between the Broussard tract and the Ramsey tract.
2. The trial court erred as a matter of fact in determining that they acted unreasonably in relying on the plat developed by Fenstermaker in accordance with the hierarchy of surveying protocol for resolving conflicts in boundary descriptions.

OPINION

We will discuss assignment of error no. 2, dealing with the facts, first. Our review of factual findings is by the standard of manifest error. Hilliard v. Amoco Production Co., 95-1366, 95-1367 (La.App. 3 Cir. 10/9/96); 688 So.2d 1176.

The trial court found that there had never been a dispute between the Broussard and Ramsey ancestors in title as to the location of their boundary and that property rights, such as the cutting of timber, were exercised accordingly. The court also considered Fenstermaker's testimony that the controlling consideration for surveyors regarding property boundary questions is the intent of the parties. The trial court found that, if that was so, both Broussard and the Ramseys should have been consulted when Fenstermaker encountered a problem figuring out where the boundary was. Fenstermaker contacted neither. The court found that it was obvious that the parties themselves had no differences since they voluntarily signed a boundary agreement to help the oil companies understand what their acreage was. This finding is eminently correct: by the boundary agreement, the Ramseys conceded that they were being overpaid. The trial court found that the oil companies' reliance on the survey was unreasonable *1203 and that Broussard was entitled to damages, interest, and attorney's fees.

We have carefully examined the testimony and the exhibits. We agree with the trial court.

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Bluebook (online)
778 So. 2d 1199, 0 La.App. 3 Cir. 01079, 149 Oil & Gas Rep. 1, 2001 La. App. LEXIS 87, 2001 WL 91545, Counsel Stack Legal Research, https://law.counselstack.com/opinion/broussard-v-union-pacific-resources-co-lactapp-2001.