CITIES SERVICE OIL AND GAS v. State

574 So. 2d 455, 114 Oil & Gas Rep. 306, 1991 La. App. LEXIS 169, 1991 WL 6431
CourtLouisiana Court of Appeal
DecidedJanuary 23, 1991
Docket21998-CA
StatusPublished
Cited by8 cases

This text of 574 So. 2d 455 (CITIES SERVICE OIL AND GAS v. State) 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
CITIES SERVICE OIL AND GAS v. State, 574 So. 2d 455, 114 Oil & Gas Rep. 306, 1991 La. App. LEXIS 169, 1991 WL 6431 (La. Ct. App. 1991).

Opinion

574 So.2d 455 (1991)

CITIES SERVICE OIL AND GAS CORPORATION, et al., Plaintiff/Appellant,
v.
The STATE of Louisiana, et al., Defendant/Appellant.

No. 21998-CA.

Court of Appeal of Louisiana, Second Circuit.

January 23, 1991.
Rehearings Denied February 21, 1991.
Writs Denied April 26, 1991.

*456 Blanchard, Walker, O'Quin & Roberts by J. Jay Caraway and Reginald W. Abrams, for OXY USA, Inc. & Crystal Oil Co. (Formerly Cities Service).

Smith, Taliaferro, Seibert, Booth & Purvis by J.W. Seibert, III, for Dauphin Group.

Comegys, Lawrence, Jones, Odom and Spruiell by William Paul Lawrence, II, for Clements Group.

Walker, Tooke, Perlman, Lyons and Greer by J. Broocks Greer, III, for Greer Group.

Wallace and Southerland by James D. Southerland, for Gore Group.

S. Dewayne Broussard Asst. Atty. Gen., for State of La.

Shuey and Smith by John M. Shuey, Jr., for Mobley Group.

Before MARVIN, LINDSAY and HIGHTOWER, JJ.

LINDSAY, Judge.

This appeal arises from the rendition of a partial summary judgment in a concursus proceeding invoked to determine ownership of about $15,000,000 in mineral revenues from a 160-acre unit in Caddo and Bossier Parishes. Three groups of litigants appeal. Three other groups of litigants answer the appeals. For the reasons expressed herein, we affirm the trial court judgment.

FACTS

In 1981, the Louisiana Office of Conservation unitized an area which it designated as Unit CV RA SU 32. This unit is located in the south-east quarter (SE/4) of Section 8, T23N, R14W. Furthermore, it lies within the flood plain of the Red River near the boundaries between Caddo and Bossier Parishes. In 1982, the Operators jointly drilled the Clements "B" No. 1 Well as the unit well.

In 1985, the Operators filed this concursus proceeding to determine ownership of the revenues produced from Unit CV RA SU 32. Distribution of these proceeds is complicated by the westward movement of the river between 1966 and 1978, which changed the ownership of the surface of the land. The river moved west from Section 9, T23N, R14W into the southeast quarter of Section 8, T23N, R14W. This movement was halted by revetment work done by the Army Corps of Engineers in 1979.

Seven different groups of litigants claim various interests in the mineral revenues at issue. These litigants are the State, the Operators, the Greer Group, the Clements Group, the Gore Group, the Dauphin Group and the Mobley Group.

The schematic drawing below, which is based upon Joint Exhibit # 15, generally illustrates the movement of the river from east to west. Reference to this illustration may also be somewhat helpful in appreciating the general positions of the respective parties. The area claimed by the Clements Group is marked with diagonal (/) lines. *457 The area claimed by the Gore Group is marked with horizontal (—) area claimed by the Dauphin Group is deslines, while the designated with vertical (l) lines.

The claims of the State of Louisiana are based upon its ownership of the bed of the Red River. The Greer Group's interest arises from a lease granted to it by the State in 1972 which covered the river bed.

The Clements Group owned property which was west of the river as it existed in 1972. The Gore Group and the Dauphin Group claim ownership of contiguous riparian land east of the 1972 river bed. (The Gore Group owns the northern section of this land while the Dauphin Group owns the southern section.) The Mobley Group claims interests derived from members of the Clements Group and the Gore Group.

Additionally, the Operators, the companies who invoked the concursus proceeding (Cities Services Oil & Gas Corporation, now OXY USA, Inc., and Crystal Oil Company), also claim mineral interests obtained from members of several of the other groups.

During the time the river moved westward, the lands claimed by the Clements Group were subject to two different mineral leases. One of these leases was granted *458 in 1963 and expired in 1973. The other was granted in 1974 and expired in 1978. Both were recorded in Caddo Parish. In March of 1980, during the drilling of the unit well, four mineral leases were executed by members of the Clements Group. These leases covered all of the SE/4 of Section 8 lying west of the river and were recorded in both Bossier and Caddo Parishes. In December, 1980, Mission Plantation, Inc., a faction of the Clements Group which was the record owner of land lying west of the river since 1978, executed a mineral lease which purported to cover all of the SE/4 of Section 8. It was recorded in both parishes.

At all times, the State owned the river bed below the ordinary low water mark in Sections 8 and 9. On November 8, 1972, the State granted State Lease 6002 to the Greer Group. This lease covered the riverbed.[1]

On June 26, 1989, the parties filed a joint motion for partial summary judgment, seeking resolution of the basic liability issue under LSA-R.S. 9:1151, the so-called "Freeze Statute". They specifically reserved for trial all disputed issues and the issue of quantum. In furtherance of the joint motion for partial summary judgment, the parties entered into detailed stipulations of fact.

After the case had been submitted for decision, the trial court handed down written reasons for judgment. In its written opinion, the trial court found that the State Lease did not move westward with the river. The court held that the State Lease continued to affect the old riverbed. In so holding, the court relied upon the language of the State Lease itself:

"All the lands now or formerly constituting the beds and bottoms of all water bodies of every nature and description and all islands and other lands formed by accretion or reliction, except tax lands, owned by and not under mineral lease from the State of Louisiana on September 1, 1972, situated in Bossier and Caddo Parishes ..." [Emphasis added by the trial court]

As to the Clements Group, the trial court found that since its leases were only recorded in Caddo Parish, they did not affect Bossier Parish property as to third persons. As a consequence of this application of the public records doctrine, when the Gore and Dauphin Groups acquired the property east of the river as the river moved westward, their acquisitions were in full ownership up to the Bossier Parish line (except for the former riverbed which was covered by State Lease 6002).

The trial court found that the Freeze Statute only applied where: (1) ownership of the land changed as a result of the movement of the river; and (2) an oil and gas lease existed on the newly acquired land, under the terms of which the former owners, lessors, lessees, royalty owners and mineral owners had already acquired rights. In the absence of a lease, the land acquired by accretion came to the new owner in full ownership. However, if the land was acquired subject to a lease, the rights of the lessees and lessors were protected only for as long as the lease continued to be in effect. Upon expiration of the lease, all mineral rights reverted to the new owner who had acquired the surface of the property by accretion.

Applying this interpretation to the facts before it, the trial court determined that, upon the expiration of the 1974 Clements lease in 1978, the mineral rights of the Clements Group in the new riverbed expired. Since that time, the State has owned the new riverbed free of the Clements lease.

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Bluebook (online)
574 So. 2d 455, 114 Oil & Gas Rep. 306, 1991 La. App. LEXIS 169, 1991 WL 6431, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cities-service-oil-and-gas-v-state-lactapp-1991.