CLK COMPANY, LLC v. CXY Energy Inc.

719 So. 2d 1098, 98 La.App. 4 Cir. 0802, 140 Oil & Gas Rep. 464, 1998 La. App. LEXIS 2635, 1998 WL 658254
CourtLouisiana Court of Appeal
DecidedSeptember 16, 1998
Docket98-C-0802
StatusPublished
Cited by6 cases

This text of 719 So. 2d 1098 (CLK COMPANY, LLC v. CXY Energy Inc.) 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
CLK COMPANY, LLC v. CXY Energy Inc., 719 So. 2d 1098, 98 La.App. 4 Cir. 0802, 140 Oil & Gas Rep. 464, 1998 La. App. LEXIS 2635, 1998 WL 658254 (La. Ct. App. 1998).

Opinion

719 So.2d 1098 (1998)

CLK COMPANY, L.L.C.
v.
CXY ENERGY INC.

No. 98-C-0802.

Court of Appeal of Louisiana, Fourth Circuit.

September 16, 1998.
Rehearing Denied November 19, 1998.

*1099 M. Hampton Carver, John Anthony Dunlap, John Hobgood Fontham, Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux, L.L.C., New Orleans, for Relator.

John M. McCollam, Jason A.T. Jumonville, C. Peck Hayne, Jr., Gordon, Arata, Mccollam & Duplantis, L.L.P., New Orleans, for Respondent.

Before SCHOTT, C.J., and KLEES, BYRNES, ARMSTRONG and MURRAY, JJ.

BYRNES, Judge.

This action arises out of the alleged breach of a contract to convey a royalty interest. Plaintiff-respondent, CLK Company L.L.C. ("CLK"), a Louisiana limited liability company with its principal place of business in Orleans Parish, entered into a "Confidentiality Agreement" on December 4, 1992 with defendant-relator CXY Energy Inc. ("CXY"), a foreign corporation authorized to and doing business in Louisiana, with its principal business establishment in Lafayette Parish, wherein CLK agreed to provide geophysical and geological services (consisting of information CLK refers to as trade secrets) to relator in exchange for a 3.125% of 8/8ths overriding royalty interest, should relator acquire an interest or the right to acquire an interest in the property that is the subject of the information furnished by CLK pursuant to the Confidentiality Agreement.

CLK filed this suit on February 14, 1997 in Orleans Parish, alleging that relator, CXY, acquired an interest or right to acquire an interest in the property that was the subject of the Confidentiality Agreement, but CXY *1100 failed to give CLK the royalty due under that agreement.[1]

CLK filed a notice of lis pendens in Vermilion Parish, on February 19, 1997, notifying all that it had filed suit relating to rights (operating agreements) recorded in the conveyance records of Vermilion Parish.

Relator filed a declinatory exception of improper venue on January 21, 1998, claiming that venue was proper in Vermilion Parish, where the immovable property subject to the royalty interest at issue is located, or Lafayette Parish, the parish where its principal business establishment is located, but was not proper in Orleans Parish where plaintiff filed these proceedings. The trial court denied the exception on March 6, 1998 without furnishing reasons. Relator timely noticed its intention to seek writs to review the denial of its venue exception.

Relator claims that, pursuant to La. C.C.P. art. 80, CLK's action can only be filed in Vermilion Parish, the parish where the immovable property, (the overriding royalty interest) which is the subject of the suit is situated, or, pursuant to LSA-C.C.P. art. 42, in Lafayette Parish, the parish where relator's principal business establishment is located.

The general rules of venue under LSA-C.C.P. art. 42 provide that suit against a foreign corporation licensed to do business in Louisiana "shall be brought in the parish where its primary place of business in the state is located or in the parish designated as its principal business establishment in its application to do business in the state." CLK contends that CXY is a foreign corporation, but CLK does not contend that CXY's primary place of business is Orleans Parish. Nor does CLK contend that CXY's principal business establishment is in Orleans Parish. Therefore, if this Court were to find that the venue provisions of LSA-C.C.P. art. 42 were controlling, venue in Orleans Parish would not be proper.

However, CLK maintains that its action is based on a contract. LSA-C.C.P. art. 76.1 permits contract actions to be brought where the contract was executed or where work under the contract is performed. It is not contested that the contract was entered into in Orleans Parish where this suit was filed.

CXY counters that CLK's suit is pervaded by its claim for the overriding mineral royalty.

In its petition, CLK seeks recovery under three categories it denominates "Counts." "Count 1" entitled "MISAPPROPRIATION OF TRADE SECRETS" purports to seek damages for misappropriation of trade secrets, i.e., the geophysical and geological information furnished in exchange for the overriding royalty. "Count 2" entitled "CLAIM FOR DAMAGES FOR BREACH OF CONTRACT AND/OR UNJUST ENRICHMENT OR IN THE ALTERNATIVE FOR SPECIFIC PERFORMANCE" purports to seek damages for breach of contract and/or unjust enrichment or, in the alternative, specific performance. "Count 3" entitled "DECEPTIVE TRADE PRACTICES" purports to seek damages for deceptive trade practices.

CLK's case is basically one for the alleged failure of CXY to convey this overriding royalty interest to CLK. Not only would the conveyance of the overriding royalty have satisfied CLK's claim for breach of contract and/or unjust enrichment or, in the alternative, specific performance ("Count 2"), but it would also have obviated CLK's "Count 1" claims for misappropriation of trade secrets (the geophysical and geological information). In other words, CLK does not complain that CXY stole it trade secrets. CLK acknowledges that it furnished the trade secrets (geological information) voluntarily. In essence, CLK's only complaint in "Count 1" is that it was not paid the agreed upon overriding royalty in exchange for the "trade secrets"—the same overriding royalty that is the subject of "Count 2."

Likewise, "Count 3" of CLK's petition asserting a claim for unfair and deceptive trade *1101 practices alleges no additional facts. "Count 3" merely seeks to characterize as deceptive trade practices the previously pled facts, i.e., the use of CLK's "trade secrets" without the allegedly agreed upon payment by CXY of the overriding royalty interest.

Thus, although CLK's petition purports to seek different remedies under different theories of recovery, it really complains of only one thing—the failure to convey the overriding royalty to CLK. CLK alleges no facts upon which to base its claim for recovery other than the fact that it furnished technical information for which it did not receive the allegedly agreed upon compensation in the form of the overriding royalty. Had CXY conveyed the overriding royalty, CLK would have had no claim under any of its various theories of recovery. Thus, one way of looking at CLK's claim is to characterize it as essentially one for the overriding royalty, and the overriding royalty should govern the venue. This fact aids in the disposition of this case because neither the legislation providing for recovery for misappropriation of trade secrets (LSA-R.S. 51:1431 et. seq.) nor the legislation providing for recovery for unfair trade practices (LSA-R.S. 51:1401 et seq.) contain any special venue provisions.

"A mineral right is an incorporeal immovable.... The situs of a mineral right is the parish or parishes in which the land burdened is located." LSA-R.S. 31:18. A mineral royalty is a mineral right. LSA-R.S. 31:16. Overriding royalties are classified as incorporeal immovables. Terry v. Terry, 565 So.2d 997, 1000 (La.App. 1 Cir. 1990). Consequently, CXY contends that CLK's claim should be treated for venue purposes as a claim for an immovable. LSA-C.C.P. art. 80 provides in pertinent part:

A. The following actions may be brought in the parish where the immovable property is situated or in the parish where the defendant in the action is domiciled:

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719 So. 2d 1098, 98 La.App. 4 Cir. 0802, 140 Oil & Gas Rep. 464, 1998 La. App. LEXIS 2635, 1998 WL 658254, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clk-company-llc-v-cxy-energy-inc-lactapp-1998.