Coffee Bay Investors v. Wogc Co.

878 So. 2d 665, 159 Oil & Gas Rep. 920, 2003 La.App. 1 Cir. 0406, 2004 La. App. LEXIS 756, 2004 WL 691669
CourtLouisiana Court of Appeal
DecidedApril 2, 2004
Docket2003 CA 0406
StatusPublished
Cited by11 cases

This text of 878 So. 2d 665 (Coffee Bay Investors v. Wogc Co.) 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
Coffee Bay Investors v. Wogc Co., 878 So. 2d 665, 159 Oil & Gas Rep. 920, 2003 La.App. 1 Cir. 0406, 2004 La. App. LEXIS 756, 2004 WL 691669 (La. Ct. App. 2004).

Opinion

878 So.2d 665 (2004)

COFFEE BAY INVESTORS, L.L.C.
v.
W.O.G.C. COMPANY.

No. 2003 CA 0406.

Court of Appeal of Louisiana, First Circuit.

April 2, 2004.
Writ Denied June 25, 2004.

*667 T. Kenneth Watkins, Ann M. Barker, Houma, Counsel for Plaintiff/Appellee Coffee Bay Investors, L.L.C.

Jude C. Bursavich, Linton Morgan, Michael P. Fruge, Baton Rouge, Counsel for Defendants/Appellants W.O.G.C. Company.

Before: FOIL, FITZSIMMONS, GAIDRY, McDONALD, and McCLENDON, JJ.

GAIDRY, J.

This matter involves appeals from two partial summary judgments in favor of the plaintiff-appellee, Coffee Bay Investors, L.L.C. (Coffee Bay), brought by the defendants-appellants, W.O.G.C. Company (WOGC), Richard P. Watson (Watson), Watson Energy, Inc. (WEI), and Watson Energy, L.L.C. (WEL), arising from an unsuccessful joint venture to develop an oil and gas prospect. For the following reasons, we reverse the partial summary judgments, and remand this matter to the trial court.

FACTS AND PRIOR PROCEEDINGS

On July 6, 1998, following earlier negotiations, WOGC, a Louisiana corporation, and Coffee Bay, a Louisiana limited liability company, entered into an operating agreement relating to the exploration and development of a mineral rights prospect in Lafourche Parish. Under the terms of the operating agreement, WOGC was designated the "operator" and Coffee Bay the "non-operator." As operator, WOGC agreed to commence the drilling of an initial well by September 1, 1998.

On August 15, 1998, Coffee Bay agreed in a separate written agreement to pay WOGC the sum of $171,185.16, in consideration of which WOGC agreed to assign to Coffee Bay an undivided 50% interest in its oil and gas leases affecting acreage on the Coffee Bay well prospect (the Grandison lease), as well as an undivided 50% interest in WOGC's rights based upon a farmout agreement with Louisiana Land and Exploration Company (the LL & E farmout).

The August 15, 1998 agreement incorporated the terms of the prior operating agreement by reference, and further obligated the parties to share the expenses relating to the development of the prospect. The assignment of the interest in the Grandison lease was to be made within three days of the receipt of Coffee Bay's payment, while the assignment of the interest in the LL & E farmout was to be made "when practical [sic]."

It is undisputed that following Coffee Bay's payment of the specified sum, WOGC failed to deliver the assignments of interests and that Coffee Bay did not make demand upon WOGC or formally put it in default prior to filing suit on the agreement. It is likewise undisputed that the initial well was not drilled, and that the development of the prospect failed. The reasons for the failure, however, are vigorously disputed by the parties.

In its original petition, filed on May 27, 1999, Coffee Bay sued WOGC, alleging that WOGC's failure to deliver the assignment of the 50% interests in the leases at issue constituted a "failure of consideration," entitling it to rescission of the agreement and the return of its initial contribution of $171,085.16.

*668 WOGC answered the petition, denying liability and asserting a reconventional demand for the balance of Coffee Bay's share of the unpaid costs claimed to be due under the agreement.

On January 21, 2000, Coffee Bay filed an amended petition, adding Watson, WEI, and WEL as new defendants. It also added allegations supporting alternate theories of recovery based upon negligence, willful misconduct, and fraud, as well as violations of the Louisiana Unfair Trade Practices and Consumer Protection Law, La. R.S. 51:1401, et seq., and the Louisiana Blue Sky Law, La. R.S. 51:701, et seq.

WOGC answered the amended petition, denying all allegations, and the new defendants, Watson, WEI, and WEL, jointly filed a separate answer, likewise denying all allegations.

On July 27, 2000, Coffee Bay filed its first motion for partial summary judgment, with an "incorporated memorandum" in the body of the motion itself. In that motion, Coffee Bay expressly limited its claim for relief to "the issue of whether or not the failure of WOGC to deliver assignment of certain leasehold and farmout interests ... constitutes a failure of consideration which entitles plaintiff to judgment against WOGC." It further expressly stated that for purposes of that motion, "motivation is not at issue," and that its fraud claims were not before the trial court for determination.[1]

The motion was heard on August 25, 2000, and the trial court rendered summary judgment in Coffee Bay's favor on September 28, 2000, awarding it recovery of its monetary contribution of $178,185.16, with legal interest and court costs. In its written reasons for judgment, the trial court based its judgment on the finding that WOGC's failure to deliver the assignments of interests was a material breach of the agreement.

On February 27, 2002, Coffee Bay filed its second motion for partial summary judgment and "incorporated memorandum," seeking judgment against Watson, WEI, and WEL as "alter egos" of WOGC for purposes of imposing liability upon them for the prior judgment against WOGC.

The second motion for summary judgment was heard on April 26, 2002. On June 21, 2002, the trial court granted the motion, rendering judgment against Watson, WEI, and WEL, holding them liable for the same debt represented by the first summary judgment in favor of Coffee Bay.

Through two "revised judgments," the trial court certified both partial summary judgments as final and appealable on July 29, 2002.[2] The defendants cast in judgment now appeal both judgments.

*669 STANDARD OF REVIEW

The judgments from which this appeal is taken are partial summary judgments. Accordingly, our review must be a de novo review based upon the evidence presented in the trial court, using the same criteria used by the trial court in deciding whether summary judgment is appropriate. Simmons v. Berry, 98-0660, p. 4 (La.App. 1st Cir.12/22/00), 779 So.2d 910, 913-14.

LAW AND ANALYSIS

The summary judgment procedure is expressly favored in the law, and is designed to secure the just, speedy, and inexpensive determination of non-domestic civil actions. La. C.C.P. art. 966(A). Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, admissions, and affidavits in the record show that there is no genuine issue as to material fact, and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(B).

The mover has the burden of proof that he is entitled to summary judgment. If the mover will not bear the burden of proof at trial on the subject matter of the motion, he need only demonstrate the absence of one or more essential elements of his opponent's claim, action, or defense. La. C.C.P. art. 966(C)(2). If the moving party points out that there is an absence of factual support for one or more elements essential to the adverse party's claim, action, or defense, then the nonmoving party must produce factual support sufficient to satisfy his evidentiary burden at trial. La. C.C.P. art. 966(C)(2); Simmons, 98-0660 at p. 4, 779 So.2d at 914. It is implicit from the codal language, however, that if the mover would also bear the burden of proof at trial on the matter at issue in his motion, he must negate all essential elements of the adverse party's claim, action, or defense, and the burden does not shift to the adverse party.

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878 So. 2d 665, 159 Oil & Gas Rep. 920, 2003 La.App. 1 Cir. 0406, 2004 La. App. LEXIS 756, 2004 WL 691669, Counsel Stack Legal Research, https://law.counselstack.com/opinion/coffee-bay-investors-v-wogc-co-lactapp-2004.