Ellender v. Goldking Production Co.

775 So. 2d 11, 2000 WL 829356
CourtLouisiana Court of Appeal
DecidedJune 23, 2000
Docket99CA0069
StatusPublished
Cited by3 cases

This text of 775 So. 2d 11 (Ellender v. Goldking Production 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
Ellender v. Goldking Production Co., 775 So. 2d 11, 2000 WL 829356 (La. Ct. App. 2000).

Opinion

775 So.2d 11 (2000)

Dr. Allen J. ELLENDER, Jr., et al.
v.
GOLDKING PRODUCTION COMPANY and Denovo Oil & Gas Company.

No. 99CA0069.

Court of Appeal of Louisiana, First Circuit.

June 23, 2000.
Rehearing Denied August 15, 2000.
Writ Denied February 16, 2001.

*13 Virgil A. Lacy, III, Metairie, James M. Funderburk, Houma, Counsel for Plaintiffs/Appellants, Allen Ellender, et al.

Richard F. Zimmerman, Jr., Baton Rouge, Counsel for Defendant/Appellee, Olin Corp.

Matthew J. Randazzo, III, New Orleans, Counsel for Defendant/Appellee, Concise Oil & Gas.

Bruce Schewe, New Orleans, Counsel for Defendant/Appellee, G S Oil & Gas Co.

John Y. Pearce, New Orleans, Counsel for Defendant/Appellee, DeNovo Oil & Gas.

James M. White, III, New Orleans, T. Brooke Farnsworth, Houston, TX, Counsel for Defendant/Appellee, Austral Exploration.

Scott A. O'Connor, New Orleans, Counsel for Defendant/Appellee, Goldking Oil & Gas.

B. Richard Moore, Jr., New Orleans, Counsel for Defendant/Appellee, La. Intrastate Gas Co.

Before: LeBLANC and FOIL, JJ., and KLINE[1], J. Pro Tem.

LeBLANC, J.

The issues before us in this appeal are whether the lower court erred as a matter of law in applying the three year prescriptive period of La. C.C. art. 3494(5) and whether the defense of contra non valentem is available to plaintiffs to defeat defendants' plea of prescription.

FACTS AND PROCEDURAL HISTORY

The procedural history of this matter is lengthy and complex, involving eight supplemental and amending petitions by plaintiffs, numerous orders for substitution of parties plaintiff, the naming and dismissal of multiple defendants, and the filing of copious motions and exceptions. We will limit our discussion of the facts to those deemed essential to the issues raised in this appeal.

In the 1970s, landowners[2] of property located in the area of Terrebonne Parish known as the Montegut Field negotiated mineral leases for oil and gas exploration and production with various oil producers.[3] Pursuant to the mineral leases, the landowners were due royalty payments on any minerals produced. Gas produced from the Montegut Field was sold under contracts to Louisiana Intrastate Gas Corporation (LIG). In 1983, the contract price to be paid for gas purchased was renegotiated by LIG. LIG was obligated to pay to the defendant-producers "the best price" for the gas it purchased.

The landowners brought suit. In their fifth petition they allege that the defendant-producers allowed LIG to "pay a price for gas ... less than the highest price being paid by LIG in other fields in Terrebonne Parish" and "failed to act prudently in the operation of the Subject Leases". Plaintiffs sought royalties, damages, interest, monetary relief and attorney fees.

Several named defendants filed a motion for summary judgment, arguing the three year prescriptive period set forth in La. C.C. art. 3494(5) governed plaintiffs' *14 claims. In response, plaintiffs asserted this is a breach of contract case subject to the ten year prescriptive period of La. C.C. art. 3499. Plaintiffs claimed their damage is from the breach of the implied obligation to prudently market and sell the gas produced, although admittedly measured as the difference in the amount of royalty paid and the amount of royalty that would have been due if the gas had been prudently marketed. Alternately, plaintiffs urged the application of the doctrine of contra non valentem agere nulla currit praescriptio.

The district court granted defendants' motion for summary judgment, holding that the claims by plaintiffs were claims for underpaid royalties, governed by article 3494(5), and that the running of prescription was not suspended under the doctrine of contra non valentem.[4] Plaintiffs appeal, and two named defendants have answered plaintiffs' appeal.

I.

A motion for summary judgment is a procedural device used to avoid a full scale trial when there is no genuine factual dispute. The motion should be granted only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, show that there is no genuine issue as to material fact and that mover is entitled to judgment as a matter of law. The summary judgment procedure is favored and is designed to secure the just, speedy, and inexpensive determination of every action. La. C.C.P. art. 966; Rambo v. Walker, 96-2538, p. 4-5 (La.App. 1 Cir. 11/7/97), 704 So.2d 30, 32.

The burden is on the mover first to show that there is no genuine issue as to material fact and that the mover is entitled to judgment as a matter of law. Only after the mover has met this initial burden may summary judgment be rendered against an adverse party who fails to make a showing sufficient to establish the existence of proof of an element essential to his claim. La. C.C.P. art. 966 B and C. Once a party seeking a summary judgment properly supports the motion and carries his burden of proof, the law requires the non-moving party who opposes the motion for summary judgment to submit evidence showing the existence of specific facts establishing a genuine issue of material fact, effectively shifting the burden of proof to the non-moving party. The non-moving party is no longer allowed to rely on the allegations of its pleadings in opposition to a properly supported motion for summary judgment. Scott v. McDaniel, 96-1509, p. 5 (La.App. 1 Cir. 5/9/97), 694 So.2d 1189, 1191-92, writ denied, 97-1551 (La.9/26/97), 701 So.2d 991.

Appellate courts are to review summary judgments de novo under the same criteria that govern the district court's consideration of whether summary judgment is appropriate. Because it is the applicable substantive law that determines materiality, whether or not a particular fact in dispute is material can be seen only in light of the substantive law applicable to the case. Rambo, 96-2538 at 5, 704 So.2d at 32-33.

II.

Louisiana Civil Code article 3494(5) provides: "The following actions are subject to a liberative prescription of three years: ... An action to recover underpayments or overpayments of royalties from the production of minerals...." However, article 3499 provides: "Unless otherwise provided by legislation, a personal action is subject to a liberative prescription of ten years." If plaintiffs' claims are for royalties, the controlling prescriptive period is three years; if the claims are for damages relative to a breach of contract, plaintiffs' claims do not prescribe for ten years.

*15 In order to determine whether a claim is one for royalties, the court must look to the petition. Wilson v. Palmer Petroleum, Inc., 97-2386, p. 5 (La.App. 1 Cir. 11/26/97), 706 So.2d 142, 145, writ denied, 97-3204 (La.3/13/98), 712 So.2d 879. Plaintiffs quote extensively in brief to this court from their Fifth Supplemental, Amended and Restated Petition, wherein they assert:

[Defendants] failed to seek and receive from LIG prices in the ..... Montegut Field which were at least as high as the highest price paid by LIG in any other field in Terrebonne Parish ... and [defendants] failed to act prudently in the operation of the Subject Leases ....
The [defendants] acted in their own self-interest, despite the expressed and implied terms of the Subject Leases and the obligations imposed by the Louisiana Mineral Code.

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775 So. 2d 11, 2000 WL 829356, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ellender-v-goldking-production-co-lactapp-2000.