Deshotels Plantation, LLC v. Torrent Gulf Coast, LLC

• Court: Louisiana Court of Appeal
• Decided: April 22, 2020
• Docket: CA-0019-0750
• Status: Unknown

Opinion

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

CA 19-750

DESHOTELS PLANTATION, LLC

VERSUS

TORRENT GULF COAST, LLC AND TORRENT OIL, LLC

**********

APPEAL FROM THE TWELFTH JUDICIAL DISTRICT COURT PARISH OF AVOYELLES, NO. 2019-6751-A HONORABLE KERRY LYNDON SPRUILL, DISTRICT JUDGE

BILLY HOWARD EZELL JUDGE

Court composed of Billy Howard Ezell, Phyllis M. Keaty, and Van H. Kyzar, Judges.

JUDGMENT VACATED AND SET ASIDE; ATTORNEY FEES AWARDED; CASE REMANDED. Samuel E. Masur Paul B. Simon Gordon, Arata, Montgomery, Barnett, McCollam, Duplantis & Eagan, LLC 400 E. Kaliste Saloom, #4200 Lafayette, LA 70508-8517 (337) 237-0132 COUNSEL FOR DEFENDANTS/APPELLANTS: Torrent Gulf Coast, LLC Torrent Oil, LLC

H. Bradford Calvit Provosty, Sadler & deLaunay 934 Third Street, Ste. 800 Alexandria, LA 71315-3530 (318) 445-3631 COUNSEL FOR DEFENDANTS/APPELLANTS: Torrent Gulf Coast, LLC Torrent Oil, LLC

Guy Earl Wall Sara Lewis Wall, Bullington & Cook, LLC 540 Elmwood Park Blvd Harahan, LA 70123 (504) 736-0347 COUNSEL FOR PLAINTIFFS/APPELLEES: Deshotels Plantation, LLC Benjamin Deshotels Patrick Deshotels EZELL, Judge.

The issue in this case is whether a preliminary injunction prohibiting Torrent

Gulf Coast, LLC and Torrent Oil, LLC (collectively referred to as Torrent) from

entering onto two tracts of land is invalid and was improperly issued. Torrent

argues that the injunction deprives it of its property rights concerning its mineral

servitude and lease, which could expire if Torrent is not allowed access, causing

Torrent severe and irreparable harm. On appeal, Torrent complains about several

legal deficiencies with the judgment.

FACTS

The W.A. Moncrief, Jr. Trust previously owned land in Avoyelles Parish. In

1999, Deshotels Plantation, LLC purchased approximately 4,000 acres from

Moncrief. As part of the sale, Moncrief reserved a mineral servitude and a right of

use/servitude of passage. The corporate representative for Deshotels Plantation is

Danny Deshotels. Danny has two sons, Benjamin and Patrick. At that time,

Deshotels Plantation conveyed 745 acres to each son in what is known as the

Deshotels Plantation Tract.

On May 19, 2005, Southern Trace Plantation Partnership sold Danny and his

wife 1,658.30 acres. This land is south of the Deshotels Plantation Tract and is

known as the Southern Trace Tract. Moncrief previously sold this tract, as part of

a larger tract of land, to Southern Trace Plantation Partnership in 1999. Moncrief

also reserved a mineral servitude and a right of use/servitude of passage as part of

this sale. While Moncrief still owned the two tracts of land, it drilled two wells on

the Southern Trace Tract, the Roy O. Martin, Jr. # 1 well and the Roy O. Martin, Jr.

B # 2 well. A third tract of land is involved in this appeal. In 2003, Paul Smith sold 109

acres located north and west of the Deshotels Plantation Tract to Danny. Moncrief

never had an interest in this tract of land.

Torrent is an oil and gas operator which acquired partial ownership of the

Moncrief mineral servitudes and mineral leases within the acreage covered by the

mineral servitudes in 2017. In 2018, Moncrief assigned its right of use/servitude of

passage it previously reserved in the sales of the Deshotels Plantation Tract and the

Southern Trace Tract to Torrent.

The AUS RA SU XX Unit was created pursuant to Louisiana Office of

Conservation Order No. 1042-A-11, effective February 15, 2018. The unit is

located on the Southern Trace Tract where the previous wells were drilled. Torrent

was designated operator of the unit and received a permit to drill from the Office of

Conservation. In early 2019, Torrent went to the location to analyze the well site.

When it returned a few weeks later, it found that a hog pen was built on the site

and a ditch was dug across the access road.

On April 2, 2019, counsel for Torrent sent a letter to counsel representing

Danny Deshotels and his wife, owners of the Southern Trace Tract. The letter

explained that Torrent intended to access its mineral servitude and leased acreage

from the east using the assigned right of use/servitude of passage. The letter also

asked if the landowners would like Torrent to backfill the cut or install a culvert.

An inquiry was also made as to whether the landowners were going to remove the

hog pen or would they like Torrent to remove the hog pen.

On May 14, 2019, Deshotels Plantation, Benjamin Deshotels, and Patrick

Deshotels filed a petition for injunction and preliminary injunction. Plaintiffs

claimed that the servitudes of passage no longer existed and asked that Torrent be

2 permanently enjoined from using the servitudes of passage. On May 20, 2019,

Torrent filed a reconventional demand and petition for injunction and damages.

Torrent sought a permanent injunction prohibiting Plaintiffs from interfering with

its use of the servitudes of passage. Torrent also wanted a judgment recognizing

its right to use the servitudes of passage and ordering Plaintiffs to remove any

barriers interfering with its use of the rights-of-way. Torrent also sought damages

and attorney fees. Torrent asked that a hearing on its request for preliminary

injunction be held at the same time as Plaintiffs’ hearing on their request for a

preliminary injunction which was set for May 28, 2019. The trial court denied

Torrent’s request.

A hearing was held on Plaintiffs’ petition for preliminary injunction on May

28, 2019. Following the hearing, a judgment was entered on July 15, 2019,

enjoining Torrent from entering the Deshotels Plantation Tract and the 109-acre

tract. Torrent appealed the judgment to this court. On appeal, Torrent argues that

there are legal deficiencies with the judgment. It first argues that the preliminary

injunction was wrongfully issued without notice and beyond what was requested in

the petition, rule to show cause, and stipulation. Torrent next argues that the

preliminary injunction should not have been issued as to the 109-acre tract since no

Plaintiff owns it. Finally, Torrent argues that the preliminary injunction was

wrongfully issued because it did not require Plaintiffs to post security.

STANDARD OF REVIEW

Torrent does not appeal the factual findings by the trial court. Torrent does

appeal legal deficiencies in the judgment granting the preliminary judgment. A

trial court has broad discretion in its decision to grant or deny a preliminary

injunction and that decision will not be disturbed on review absent an abuse of that

3 discretion. Yokum v. Pat O’Brien’s Bar, Inc., 12-217 (La.App. 4 Cir. 8/15/12), 99

So.3d 74. “That broad standard is, of course, based upon a conclusion that the trial

court committed no error of law and was not manifestly erroneous or clearly wrong

in making a factual finding that was necessary to the proper exercise of its

discretion.” Id. at 80. When errors of law are involved in the granting of a

preliminary injunction, a de novo standard of review is applied. Meredith v. I Am

Music, LLC, 18-659 (La.App. 4 Cir. 2/13/19), 265 So.3d 1143.

109-ACRE TRACT

Torrent argues that the preliminary injunction should not have been issued as

to the 109-acre tract without a showing of irreparable harm, as no Plaintiff owns it.

An injunction is mandated by La.Code Civ.P. art. 3601 when an applicant

establishes that he will suffer irreparable injury, loss, or damage, or in other cases

specifically provided by law. However, when an applicant is seeking injunctive

relief to protect rights in immovable property, a showing of irreparable harm is not

required. La.Code Civ.P. art. 3663. In order to be entitled to a preliminary

injunction under La.Code Civ.P. art. 3663, one must possess a real right to the

property. Meredith v. Tram Invs., Inc., 48,570 (La.App. 2 Cir. 12/30/13), 130

So.3d 469.

No one contests that the 109-acre tract was owned by Danny Deshotels.

While Danny Deshotels is a corporate representative of Deshotels Plantation,

Danny Deshotels the individual is not a named plaintiff seeking injunctive relief in

the case. Therefore, the trial court erred in granting injunctive relief as it regards

the 109-acre tract since no Plaintiff owns a real right in the 109-acre tract.

4 NOTICE

After the hearing, the parties did enter into a joint stipulation that the issue of

non-use of the servitude of passage was tried and submitted to the trial court. We

do agree with Plaintiffs that this did not limit the issues that could be entertained at

the hearing. However, the parties were still limited by the notice requirements of

La.Code Civ.P. art. 3602 and the opportunity to be heard.

Torrent argues that the judgment does not simply respond to Plaintiffs’

request that Torrent be enjoined from using the servitudes of passage on the

Deshotels Plantation Tract. Torrent argues that the preliminary injunction goes

beyond Plaintiffs’ request and enjoins Torrent “from entering on” the Deshotels

Plantation Tract. Torrent takes the position that it has mineral rights in the

Deshotels Plantation Tract and in the neighboring Southern Trace Tract, and the

preliminary injunction prevents it from exercising these property rights without

notice that the rights could be affected. Torrent argues that the issue of non-use of

the mineral servitudes was not an issue to be tried at this preliminary injunction

hearing.

Plaintiffs claim that Torrent consented to the issue of non-use of the mineral

servitude by allowing evidence of mineral servitudes and mineral leases which

permitted them to go on the Deshotels Plantation Tract. They also claimed that the

issue was raised in the reconventional demand.

“A preliminary injunction shall not issue unless notice is given to the

adverse party and an opportunity had for a hearing.” La.Code Civ.P. art. 3602. A

judgment which goes beyond the request for injunctive relief, including the fact

that the parties did not agree to try the issue, is invalid. Farmer’s Seafood Co., Inc.

v. State ex rel. Dept. of Pub. Safety, 10-1534 (La. 9/3/10), 44 So.3d 676.

5 Regarding the evidence of the mineral servitudes, both parties introduced

testimony and evidence of the mineral rights. A review of the testimony and

evidence at the hearing clearly indicates that the parties discussed mineral rights

for the purpose of showing how and when the servitudes of passage were used to

access the mineral rights. Evidence and testimony regarding the mineral servitudes

and what work was performed on the oil wells was introduced to establish the

timetable of the use of the servitudes of passage on the Deshotels Plantation Tract

and the Southern Trace Tract.

Additionally, the trial court denied Torrent’s request that its reconventional

demand be heard at the same time as the hearing on Plaintiffs’ request for a

preliminary injunction. At the start of the hearing, Plaintiffs’ counsel and the trial

court agreed that the reconventional demand would not be considered at that

hearing indicating that it was scheduled to be heard on another date. Furthermore,

the trial court acknowledged it was only addressing the right of Torrent to use the

servitudes of passage in its reasons for judgment:

The sole issue remaining for consideration by this Court is whether defendant, Torrent, has proved use of the right of use/servitude of passage on Deshotels (Tract 2) [Deshotels Plantation Tract] from May 28, 2009 until present. As the hearing in this case was held May 28, 2019, defendant had the burden to prove that W. A. Moncrief, Jr. Trust used Moncrief Plantation Road on or after May 28, 2009. This Court finds that after a thorough and careful review of the evidence presented at hearing, defendants failed in this burden of proof for the following reasons.

While disagreeing with the trial court’s final ruling, Torrent acknowledges

that it is not appealing the trial court’s ruling which is entitled to considerable

discretion. Torrent appealed the trial court’s judgment contending that it goes

beyond Plaintiffs’ request for a preliminary injunction. We agree. The judgment

does not simply deny Torrent the right to use the servitudes of passage, it denies

6 Torrent any access to the tract of land where its mineral servitudes and leases are

located. The only issue to be decided at this preliminary injunction hearing was

Torrent’s right to access the servitudes of passage assigned to it. We find the

preliminary injunction was overly broad by enjoining Torrent access to the

Deshotels Plantation Tract. The trial court erred in not limiting the preliminary

injunction to the servitudes of passage.

SECURITY

Torrent also assigns as error the trial court’s failure to require Plaintiffs to

post security. Plaintiffs argue that security was not required.

Louisiana Code of Civil Procedure Article 3610 (emphasis ours) provides

for security for the issuing of a preliminary injunction as follows:

A temporary restraining order or preliminary injunction shall not issue unless the applicant furnishes security in the amount fixed by the court, except where security is dispensed with by law. The security shall indemnify the person wrongfully restrained or enjoined for the payment of costs incurred and damages sustained. However, no security is required when the applicant for a temporary restraining order or preliminary or permanent injunction is seeking protection from domestic abuse, dating violence, stalking, or sexual assault.

Plaintiffs argue that security is not required because La.Code Civ.P. art.

3663 provides for injunctive relief to a possessor of immovable property without a

showing of irreparable harm. While La.Code Civ.P. art. 3663 lessens the burden

of proof, there is no language that dispenses with the posting of security required

by La.Code Civ.P. art. 3610. Furthermore, La.Code Civ.P. art. 3663 specifically

refers to the availability of injunctive relief under Chapter 2 of Title I of Book VII

which includes La.Code Civ.P. art. 3610.

When a preliminary injunction is issued without the posting of security as

required by law, the preliminary injunction is invalid and should be vacated.

7 Lambert v. Lambert, 480 So.2d 784 (La.App. 3 Cir. 1985); Zeta-Caiman, LTD. v.

Naik, 566 So.2d 1016 (La.App. 3 Cir. 1990); Licfro, Inc. v. State, ex rel Dept. of

Revenue, Office of Alcohol and Tobacco Control, 03-737 (La.App. 4 Cir. 10/1/03),

859 So.2d 739. We recognize that the fourth circuit has remanded cases to the trial

court to post bond when the plaintiff’s right to the injunction seems beyond

question. Ard v. GrrlSpot, LLC, 19-312 (La.App 4 Cir. 10/23/19), ___ So.3d ___.

However, such is not the case here as we have already found the preliminary

injunction was issued on land not owned by Plaintiffs and was overly broad

regarding the Deshotels Plantation Tract.

The trial court was mandated to require security, and we find it was error not

to do so. Therefore, we find the judgment of the trial court is invalid and should be

vacated.

DAMAGES AND ATTORNEY FEES

Torrent seeks damages and attorney fees for the wrongfully issued

preliminary injunction. They acknowledge that they have not yet proven damages,

but ask that this court recognize their entitlement to damages. As for attorney fees,

Torrent argues that this court can still award attorney fees for work performed by

the appeal.

Louisiana Code of Civil Procedure Article 3608 provides, in pertinent part:

The court may allow damages for the wrongful issuance of a temporary restraining order or preliminary injunction on a motion to dissolve or on a reconventional demand. Attorney’s fees for the services rendered in connection with the dissolution of a restraining order or preliminary injunction may be included as an element of damages whether the restraining order or preliminary injunction is dissolved on motion or after trial on the merits.

Torrent requested damages and attorney fees in its reconventional demand.

As previously stated, the hearing on Torrent’s reconventional demand was set for

8 another day. This issue has yet to be decided by the trial court which has

discretion in deciding an award of damages and attorney fees under La.Code Civ.P.

art. 3608. Jennings Guest House v. Gibson, 07-912 (La.App. 3 Cir. 12/5/07), 971

So.2d 506. Therefore, we remand the case to the trial court for consideration of the

damages and attorney fees when it considers the reconventional demand. See

Denta-Max v. Maxicare Louisiana, Inc., 95-2128 (La.App. 4 Cir. 3/14/96), 671

So.2d 995.

However, La.Code Civ.P. art. 3608 does allow an award of attorney fees for

services rendered on appeal in connection with the dissolution of the preliminary

injunction. Scheyd, Inc. v. Jefferson Parish Sch. Bd., 412 So.2d 567 (La.1982);

Fontenot v. Petmecky, 386 So.2d 702 (La.App. 3 Cir. 1980), overruled on other

grounds by Arco Oil & Gas Co., Div. of Atl. Richfield Co. v. Deshazer, 96-1344

(La.App. 3 Cir. 5/6/98), 714 So.2d 806. “The basis for awarding . . . attorney’s

fees for work performed on appeal is that the litigant incurred additional expenses

to protect rights . . . established at the trial level.” Vander v. Safeway Ins. Co. of

LA., 08-888, p. 12 (La.App. 3 Cir. 2/25/09), 5 So.3d 968, 976. Therefore, we find

that $5,000 is an appropriate amount for work performed on this appeal

considering the arguments presented and the successful dissolution of the

preliminary injunction.

For the reasons set forth in this opinion, the judgment of the trial court

granting Plaintiffs’ preliminary injunction is vacated and set aside. We award

$5,000 in attorney fees for work performed on appeal. The case is remanded to the

trial court for further proceedings consistent with this opinion. Costs of this appeal

are assessed equally to Deshotels Plantation, LLC, Benjamin Deshotels, and

Patrick Deshotels.

9 JUDGMENT VACATED AND SET ASIDE; ATTORNEY FEES AWARDED; CASE REMANDED.