Cloud v. Sanders

677 So. 2d 613, 1996 La. App. LEXIS 1331, 1996 WL 348100
CourtLouisiana Court of Appeal
DecidedJune 26, 1996
DocketNo. 28423-CA
StatusPublished

This text of 677 So. 2d 613 (Cloud v. Sanders) 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
Cloud v. Sanders, 677 So. 2d 613, 1996 La. App. LEXIS 1331, 1996 WL 348100 (La. Ct. App. 1996).

Opinion

11 GASKINS, Judge.

The defendant, attorney Martin S. Sanders, Jr., appeals from a trial court judgment ordering him to pay a total of $111,545.13 in the latest suit arising from a dispute over mineral royalties. For the reasons set forth below, we affirm.

FACTS

The underlying facts of this case are set forth in Succession of Cloud, 508 So.2d 577 (La.App. 2d Cir.1987), reversed in part, 530 So.2d 1146 (La.1988). They are also recited in Louisiana State Bar Association v. Sanders, 568 So.2d 1025 (La.1990), wherein Mr. Sanders received a nine-month suspension from the practice of law for his conduct as described hereinafter. The pertinent facts are as follows.

Noah Cloud had five children: the four plaintiffs in the instant litigation, Dwight Cloud, Carson Cloud, Dalton Cloud and Lessie Cloud Holley, as well as another daughter, Urzula Cloud Hatch. In the early 1960’s, oil was discovered under a tract of land owned by Mr. Cloud, and in 1963 he granted a mineral lease to Placid Oil Company. As Mr. Cloud was elderly, his children became concerned he might “give away” the mineral royalties and arranged to have them taken out of his name. To that end, in 1964, Mr. Cloud executed a deed purporting to transfer the tract of land to his son-in-law, B.M. Hatch, for $250. However, Mr. Cloud received the mineral royalties from the time production was obtained in 1965 until his death in 1966.

Shortly after Mr. Cloud died, his widow Lucy was interdicted, and his daughter Mrs. Hatch became administratrix of his succession. As such, she listed the mineral royalties on numerous pleadings as succession property. She also received the mineral royalties in her capacity as administratrix and deposited them into a succession account.

|2⅛ 1974, Mrs. Hatch and her husband, the record owner of the tract, divorced. Mr. Hatch was represented by Mr. Sanders, the defendant in the present suit. The 1978 community property settlement prepared by Mr. Sanders gave the tract to Mrs. Hatch.

Subsequently, a dispute erupted between Mrs. Hatch and her siblings as to the division of the mineral royalties. On the basis that she had cared for their mother until her death in 1980, Mrs. Hatch felt entitled to a [615]*615larger portion than her siblings. She retained Mr. Sanders to represent her; in payment for legal services of $10,000, she deeded him ⅝ mineral interest in the tract.

The siblings filed a rule to show cause against Mrs. Hatch seeking her removal as administratrix and requesting an audit of the mineral royalties. Mr. Sanders continued to represent Mrs. Hatch in those proceedings, and she thereafter transferred to him another ⅝ mineral interest in the tract for another $10,000 in legal services. These two transfers from Mrs. Hatch therefore purported to give Mr. Sanders a total of ⅜ of the mineral rights in the tract.

The siblings filed suit against Mr. Sanders, Mrs. Hatch, her corporation, her former-husband, and Placid Oil Company, seeking to declare the 1964 sale from their father to Mr. Hatch a simulation and to set aside Mrs. Hatch’s transfers to Mr. Sanders. The trial court upheld the transfer from Mr. Cloud to Mr. Hatch as a valid sale and rejected the plaintiffs’ demands. On appeal, this court reversed the trial court, finding that the sale to Mr. Hatch was a simulation and holding that the tract belonged to the succession. On rehearing, Mr. Sanders urged the Public Records Doctrine, and this court amended its ruling in part to uphold the transfers to Mr. Sanders. However, in September 1988, the Supreme Court reversed that portion of the appellate decision, finding that the transfers to Mr. Sanders were invalid and that Mr. Sanders had violated the Rules of Professional Responsibility 13by accepting an interest in his client’s claim. The Court further held that the heirs could seek recovery of the mineral interest from Mr. Sanders as long as the interest was still in his name or control.

Between the rendering of the original appellate court opinion by this court in January 1987 and our opinion on rehearing in June 1987, Mrs. Hatch aligned herself with her siblings against Mr. Sanders. (She even joined them in applying to the Louisiana Supreme Court for certiorari.) In April 1987, the five siblings entered into a partition and settlement agreement to resolve their family dispute over the mineral rights and royalties. Relevant portions are as follows:

Appearers further declared that:

WHEREAS appearers no longer wish to remain in undivided ownership of the minerals and royalties associated with the above described property; and
WHEREAS they desire to amicably divide the said mineral interests and royalties between them; and
WHEREAS they acknowledge that there is presently litigation concerning alleged mineral transfers to Martin Sanders, Jr. in connection with the East twenty acres described above as Tract Number Two, said transfers involving a possible one-fourth mineral interest and a one-twelfth mineral interest, thus totaling a one-third mineral interest in said Tract Number Two; and
WHEREAS with the exception of the contested one-third 'mineral interest involving the claims of Martin Sanders, Jr., the remainder of the mineral interests and royalties associated with the above tracts of property are owned by appearers; and
WHEREAS appearers, as co-owners of the mineral interests and royalties desire to partition, compromise and settle all of the mineral and royalty interests they may presently have or may receive in the future after conclusion of the litigation, and to accomplish their mutual wishes and desires, the parties have agreed to the following: [the five siblings divide the uncontested % interest in Tract Two equally.]
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I ¿Appearers further declare that with regard to the one-third mineral interests in the said East One Half of the Northwest Quarter of the Southeast Quarter of Section 22, Township 11 North, Range 6 West, which is presently involved in litigation, should they receive all or any part of the contested one-third mineral interests and royalties, by any means, either by settlement, sale, abandonment, or by a decision of the Court, then in that event, appearers do, with regard to all and any part of the contested one-third interest they may acquire, appearers do hereby agree that those mineral interests, royalties and rights shall be divided among appearers as follows, to-wit: [Dalton Cloud, Dwight Cloud, Lessie Cloud Holley, and Urzula Cloud Hatch divide the contested ⅜ portion equally.]
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Related

Louisiana State Bar Ass'n v. Sanders
568 So. 2d 1025 (Supreme Court of Louisiana, 1990)
Succession of Cloud
530 So. 2d 1146 (Supreme Court of Louisiana, 1988)
Succession of Cloud
508 So. 2d 577 (Louisiana Court of Appeal, 1987)

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Bluebook (online)
677 So. 2d 613, 1996 La. App. LEXIS 1331, 1996 WL 348100, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cloud-v-sanders-lactapp-1996.