Brown v. Sutton

356 So. 2d 965
CourtSupreme Court of Louisiana
DecidedMarch 6, 1978
Docket60648
StatusPublished
Cited by12 cases

This text of 356 So. 2d 965 (Brown v. Sutton) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brown v. Sutton, 356 So. 2d 965 (La. 1978).

Opinion

356 So.2d 965 (1978)

Maurice L. BROWN
v.
R. T. SUTTON, Commissioner of Conservation, etc.

No. 60648.

Supreme Court of Louisiana.

March 6, 1978.

*966 Veil David DeVillier, Eunice, for defendant-applicant, R. T. Sutton, etc.

Ray A. Barlow, Joseph L. Hargrove, Jr., David L. Smelley, Hargrove, Guyton, Ramey & Barlow, Shreveport, for intervenor-applicant, Franks Petroleum, Inc.

J. Clayton Johnson, Taylor, Porter, Brooks & Phillips, Baton Rouge, Samuel W. Caverlee, Wilkinson, Carmody & Peatross, Shreveport, for plaintiff-respondent.

Robert T. Jorden, George H. Robinson, Jr., Liskow & Lewis, Lafayette, Lawrence E. Donohoe, Jr., Onebane, Donohoe, Bernard, Torian, Diaz, McNamara & Abell, Lafayette, John M. McCollam, Gordon, Arata & McCollam, New Orleans, Robert Roberts, III, Blanchard, Walker, O'Quin & Roberts, Shreveport, D. R. Sartor, Jr., Snellings, Breard, Sartor, Shafto & Inabnett, Monroe, for amicus curiae.

*967 SUMMERS, Justice.

Franks Petroleum, Inc., applied to the Commissioner of Conservation on May 12, 1976 for a public hearing. The application set forth that Franks would propose to establish and maintain a unitized operation and secondary recovery project for the Cotton Valley reservoir of the Minden Field, Webster Parish, Louisiana, pursuant to Section 5 C of Title 30 of the Revised Statute.[1]

Attached to the application was a plat of the area proposed to be unitized, and a list of the 57 parties at interest and represented owners in the proposed unit area. Maurice L. Brown was not listed.

Upon receipt of the application the Commission notified Franks on June 2, 1976 that a hearing would be held in Baton Rouge on July 13, 1976. At the same time the Commission issued its legal notice to the interested parties and represented owners and on June 3, 1977 caused the notice to be published in the State-Times, a daily newspaper of general circulation, published in Baton Rouge.

*968 When Franks received this notice it applied to the Commission by letter for a continuance of the July 13, 1976 hearing until a later date.

In the interval between the application and the continuance Sharon DeFatta, the coordinator of operations of Maurice L. Brown's company in its Shreveport office, read in the Shreveport Times newspaper on May 25, 1976 that Franks Petroleum, Inc., and Alice-Sidney Oil Co. planned to engage in a secondary recovery unit in the Cotton Valley Formation in the Minden Field. She therefore contacted the Commissioner's District Office in Shreveport and verified the fact that an application had been made to the Commissioner, at which time she was furnished with a copy of the application. The Commissioner's representative in the Shreveport Office could not tell her at that time when the hearing would be held. On occasions thereafter her secretary called the Commissioner's office to obtain the date of the hearing. The record does not indicate how long this effort continued.

In the meantime attorneys for Franks and Maurice L. Brown had been discussing the secondary recovery project and the feasibility of purchasing Brown's override in the property involved in the proposed project. As a result, on June 8, 1976 Franks' attorney addressed a letter to the Kansas City office of Maurice L. Brown, to the attention of its General Counsel, in answer to their request for engineering data relating to the secondary recovery proposal. The letter stated that the engineering data had been furnished to the Shreveport office of Maurice L. Brown several months previously and copies could be obtained there. Frank's attorney also advised that Brown's request for a copy of the operating agreement covering the proposed unit would not be complied with, for overriding royalty interest owners had no interest in that agreement.

Brown's Shreveport attorney thereafter wrote to Franks' attorney on June 15, 1976 advising that they represented Brown in connection with the "Cotton Valley Secondary Recovery Unit, Minden Field, Webster Parish, Louisiana" and referred to Brown's claim of interest in these properties. "It is our understanding," the letter continued, "that a request has been made by Franks Petroleum, Inc., to the Louisiana Department of Conservation for a public hearing to unitize the above property for the purposes of secondary recovery." The letter asserted that Alice-Sidney Oil Company and others represented by the attorney to whom the letter was addressed were claiming interest adverse to the interest of Brown. And that Brown had not been compensated for its interest in the personal property on these leases. In closing, the letter read: "We believe these issues should be met with and resolved before any unitization proposal is made and acted upon." Copies of this letter were sent to counsel for Franks, to Franks' Shreveport office and to the Department of Conservation office in the same office building in which the writer's office was located.

Thereafter, counsel for Franks appeared formally before the Commissioner at the July 13, 1976 hearing and requested on the record that the hearing be continued, to be reset on the next calendar of hearings scheduled for Shreveport. The fact of this continuance is supported by the Commissioner's statement to that effect at the subsequent September 15, 1977 hearing in Shreveport, to which the matter had been continued. The record does not indicate that Brown was represented before the Commissioner on July 13, 1976.

At the hearing held by the Commissioner in Shreveport on September 15, 1977 Brown was represented by his attorney who took the position that the Commissioner was without authority to conduct the hearing because Brown had not received notice and had no opportunity to make a presentation. He then offered to introduce an unconformed copy of an assignment and sale, which he said he would conform later. Stating that the hearing had been continued from some time back, the Commissioner inquired why counsel was not prepared. In reply counsel asserted that he had just gotten into the case the day before because his *969 partner was in court and had been for two weeks.

At the September 15, 1977 hearing Franks established by expert testimony the feasibility of the proposed secondary recovery plan to the satisfaction of the Commissioner. On that occasion counsel for Franks also stated for the record that he had been advised by the attorney for Barnwell Production Company and Barnwell Drilling Co., Inc., that John R. Barnwell, who signed the assignment to Brown upon which Brown based its claim of interest, was without authority to do so and that the assignment was considered null and void. For that reason, he stated, Brown was not a record owner and was not given the usual notice, although Brown did have actual notice as his attorney's letter of June 15 indicated.

Franks also introduced a unit agreement and unit operating agreement executed by in excess of 95 percent of the royalty owners, in excess of 93 percent of the overriding royalty owners and 100 percent of the working interest owners, thus satisfying the requirement that 75% of the interested owners agree in writing to the pool-wide unit. The unit agreement designated Franks as the operator.

Based on this record the Commissioner issued his order 457-EE dated September 23, 1976, effective October 1, 1977 approving the unitization and the proposed secondary recovery plan. In a letter dated October 1, 1977 addressed to the Commissioner, counsel for Brown renewed its protest to the hearing because no notice had been furnished.

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356 So. 2d 965, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brown-v-sutton-la-1978.