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.

Louisiana Court of Appeal·Decided October 4, 2022·No. 2022CA0037·Unknown

Opinion

STATE OF LOUISIANA

COURT OF APPEAL

Si w POP k7 FIRST CIRCUIT

2022 CA 0037

CALVIN J. HILL, INDIVIDUALLY AND AS THE EXECUTOR OF THE SUCCESSION OF ELNORA JOHNSON HILL

VERSUS

TMR EXPLORATION, INC., PARK EXPLORATION, INC., AND VITOL RESOURCES, INC.

Judgment Rendered: OCT 0 4 2022

On Appeal from the 18th Judicial District Court In and for the Parish of West Baton Rouge State of Louisiana Trial Court Docket Number 41, 245, Div. "B"

Honorable Tonya S. Lurry, Judge Presiding

Brent K. DeLee Counsel for Plaintiffs/Appellants, Kirby J. Guidry Calvin Hill, et al Baton Rouge, Louisiana

Chad A. Aguillard Counsel for Plaintiffs/Appellants, Ali Zito Shields Roosevelt Hill, et al New Roads, Louisiana and

Thomas A. Nelson New Roads, Louisiana

Monique M. Edwards Counsel for Plaintiff/Appellant, Baton Rouge, Louisiana Felix Hill and

Isaac Jackson, Jr. Plaquemine, Louisiana

Patrick J. McShane, T.A. Counsel for Defendant/ Appellee, Danica Benbow Denny Chaucer Corporate Capital ( No. 2) Kathleen P. Rice Limited New Orleans, Louisiana

CH, PENZATO, AND LANIER, JJ. BEFOG % PENZATO, J.

Calvin J. Hill, et al.,' plaintiffs, and Roosevelt Hill, et al.' and Felix Hill,

intervenors ( collectively, " the Hills"), appeal the trial court' s judgment granting a

motion for summary judgment in favor of defendant, Chaucer Corporate Capital

No.2) Limited, the insurer of Park Exploration, Inc. For reasons that follow, we

reverse.

FACTS AND PROCEDURAL HISTORY

This case, which concerns a claim of subsurface trespass, has a complex

factual and procedural history familiar to this court.' 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

1 The Calvin Hill plaintiffs are: Calvin J. Hill; Charles Edward Hill; Marin Hill Walker a/k/ a Merion Hill Walker; Esquemon Anthony Hill; Rhonda Foster; Dr. Russell Hill; Russell Hill; Dietrich Duane Hill a/ k/ a Duane Dietrich Hill; Dwayne Hill; Pamela Hill; Vincent Hill; Jeffrey Hill; Shawn Hill; Mary Charles; Mary Hill; Kendra Hill; Bernadette Hill; Kenneth Amorio a/ k/ a Kenneth Amario; Monica Walker a/ k/ a Monica Whitaker; Dionne Hill; Duwana Hill; Kimsiana Hill -Lathan a/ k/ a Kimsiana Hill -Latham; Andre Hill; Napoleon Whitaker; Mary Ativie; Merion Jean Johnson; Carnesha Stanton; Annette Whitaker -Woods a/ k/a Annette Woods; Pennell Hill; Eurille Hill; Karen Maze; Amos Lagarde; Ida Mae Hill Johnson; Shirley Lockman; Burnett Grevious; Albert Grevious; Stalette Brown; Emelda Hill; Amanda Harris; Leon Whitaker; Craig Hill; Lacora Whitaker; Monica Whitaker; Lee Whitaker; Rodney Hill; Edward Hill; Oran Hill and his heirs or representatives; Marcus Johnson; and Terrol Sanders.

2 The Roosevelt Hill Intervenors are: Roosevelt Hill; Alven Grevious alk/ a Alvin Grevious; Leo Hill; Demetria Jones a/ k/a Dementia Jones; Kathryn Devezin- Joyner; Irene Sweeney; Douglas Joseph Sweeney; Debbie Marie Sweeney; Jacqueline Amanda Sweeney; Taylor Sweeney; Rachel Sweeney; Jevaughn Smith and Sonya Smith, individually and on behalf of Kristin Marie Charles; Kristina Charles; Ella Johnson; Victor Johnson; Lorenzo Hill; and Lorenzo Johnson.

2 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 TMRIPark and any of the Hills prior to 2012. The Hills allege that

Park produced oil from beneath 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.¢ 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

3 The writs and appeals filed in this matter include an appeal pending before this court ( 2022- 0036) concerning the grant of summary judgment in favor of Gemini Insurance Company, who also insured Park.

4 An umbrella policy was also issued to Park for the same policy period. Pursuant to its terms, the policy " does not apply to any actual or alleged liability" " for any ' Claim' not covered by the underlying insurance( s) policies listed in the Declarations."

3 to the policy period.

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 damage, 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.'

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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., (La. Ct. App. 2022).

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.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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