Emerald Land Corp v. Trimont Energy (BL) L L C

District Court, W.D. Louisiana·Decided July 13, 2021·No. 6:17-cv-01655·Unknown

Opinion

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF LOUISIANA LAFAYETTE DIVISION

EMERALD LAND CORP CASE NO. 6:17-CV-01655 VERSUS . JUDGE ROBERT R. SUMMERHAYS TRIMONT ENERGY (BL) LLC ET AL MAGISTRATE JUDGE PEREZ- MONTES

MEMORANDUM RULING The present matters before the Court are the (1) Motion for Partial Summary Judgment on All Claims Related to the Removal, Restoration, or Decommissioning of Equipment and Related Facilities Under the 1990 Surface Lease [ECF No. 164]; (2) Motion for Summary Judgment on Prescription of Tort Claims [ECF No. 166]; (3) Motion for Summary Judgment on Prescription of Surface Leases [ECE No. 168]; and (4) Motion to Strike Declaration of Rudy Sparks and □

Declaration of M. Taylor Darden [ECF No. 216]. Each motion was filed by Chevron U.S.A. Inc. (“Chevron”) and opposed by Emerald Land Corporation (“Emerald”). 1. FACTUAL BACKGROUND Emerald is a Louisiana corporation based in St. Mary Parish, Louisiana, where it owns approximately 8,000 acres of land located along the Atchafalaya River immediately west of Morgan City. The tract includes over 6,000 acres of natural marsh land below the Intracoastal

Waterway in the Atchafalaya Basin (“the Property”).! The Property is within the Bateman Lake Field.” The Property has been the subject of three Mineral Leases (“the Mineral Leases”) entered into by predecessors to Emerald and Defendants.? The Mineral Leases provided Defendants and Chevron’s predecessor, Texaco, with the exclusive right to construct lines, tanks, storage facilities, buildings, stations and other structures necessary “to produce, save, take, care of treat and transport” oil and gas products on over 6,000 acres of Emerald’s Property.’ All three Mineral Leases contain an identical damages provision, requiring the lessees to pay for any damage to the Property: “Lessee shall pay all damages caused by its operations hereunder to the land, buildings and improvements presently existing, and crops now or hereafter planted.” In 1960, Emerald and Chevron entered into a surface lease on a small, .83 acre plot located within the area covered by the Mineral Leases.° The surface lease was made “subject to all valid servitudes, mineral leases, and surface leases or other encumbrance resting upon the property, recorded or unrecorded.”’ Sometime after this surface lease was executed, a large Compressor Station was constructed on the far southern end of the Property.* In 1990, Emerald and Chevron entered into a surface lease containing nearly identical provisions regarding the same .83 acre plot? The 1960 and 1990 leases (collectively, the “Surface Leases”) each provide that:

1 ECF Doc. 177, Ex. A at pp. 51:4-12; 53:7-16 (30(b)(6) Deposition of Emerald Land Corporation); Ex. B, Declaration of M. Taylor Darden at § 3. 2 ECF Doc. 177, Ex. B, Declaration of M. Taylor Darden at { 5. 3 Id. at] 6. . 4 Chevron and Texaco are referred to collectively as “Chevron.” ECF Doc. 177, Ex. A at exhibits 3, 4, and 5, { 1, attached thereto. (30(b)(6) Deposition of Emerald Land Corporation) 5 ECF Doc. 177, Ex. A at pp. 85-88, referring to J 13 of exhibits 3, 4, and 5 attached thereto. (30(b)(6) Deposition of Emerald Land Corporation) , 6 ECF Doc. 177, Ex. B, Declaration of M. Taylor Darden at 4 9. 7 ECF Doc. 164-3 p. 6 at J 2 (1960 surface lease) 8 ECF Doc. 177, Ex. B, Declaration of M. Taylor Darden at J 10; Ex. E, Declaration of Rudy Sparks at { 3. ECF Doce. 164-3 p. 10-11 at 7 3 (1990 surface lease).

Lessee will pay all damages which may be inflicted or caused by it to Lessor, its agents, employees and assigns, in the occupation, use and operation of said premises. ... ok 2 Lessee assumes all responsibility and liability for the condition of the leased premises during the time of this lease or any extension thereof and will indemnify and hold Lessor harmless against any claim, liability or loss on account of injury to (including death of) persons, or damage to property, including in all instances costs, expenses and attorney's fees incidental thereto, arising wholly or in part out of or in anywise connected with its occupation, use and operation of the leased premises. 38 ok The Lessee is hereby given the right to remove any and all improvements placed by it on the leased premises during or within six (6) months after the termination of this lease, but anything contained herein to the contrary notwithstanding, it is understood and agreed that Lessee is without obligation so to do; however, any of said improvements which are not removed within said six (6) months period following the termination of this lease, shall become the property of Lessor without any liability for the payment thereof whatsoever. Lessee shall not assign nor sublease this lease in whole or in part without first obtaining Lessor’s written consent.'° . The 1960 surface lease required annual rent of $25 and the 1990 surface lease required $50 per year.!' The 1990 Surface Lease had a term that ended on March 31, 2000. Chevron ultimately assigned its interest in the Mineral Leases and related contracts, including the Surface Leases, to EnerVest.!? The interests in the Mineral Leases and related contracts changed hands multiple times thereafter.!? Ultimately on May 5, 2020, Trimont Energy BL, the last remaining assignee of

10 Td. 11 Id. 2 See Ex. B-2 to Document 177, Act of Assignment from Texaco to EnerVest at p. 6; Ex. A at p. 116 (0(b)(6) Deposition of Emerald Land Corporation) 3 See Ex. A to Document 177, at pp. 94-95. (30(b)(6) Deposition of Emerald Land Corporation)

lessee interests under the Mineral Leases, “agreed that the Mineral Leases have terminated” and therefore released “all ... right, title and interest in and to the Mineral Leases.”!4 Emerald Land has demanded the removal of the Compressor Station and related improvements from the Property and asserts that the Compressor Station is built on creosote pilings, a known carcinogen and toxic substance that is leaking into the marsh land that is now used for recreational fishing and crawfish farming.!> Chevron has estimated it will cost $2.3 million to remove the Compressor Station.'° Emerald’s estimate to remove the facility is over $6 million.!” On August 15, 1995, Emerald and Chevron entered into a Produced Water Disposal Agreement, which granted permission to drill two wells for saltwater disposal. This agreement had a stated term of five (5) years. IL. LAW AND ANALYSIS A. Motion to Strike. Chevron has filed a motion to strike evidence submitted by Emerald in oppositions to certain of Chevron’s motions for summary judgment. Chevron seeks to strike (1) the Declaration of Rudy Sparks, and (2) the Declaration of M. Taylor Darden. 1. Declaration of Rudy Sparks. . Chevron seeks to strike the Declaration of Rudy Sparks on the basis that Mr. Sparks is not qualified to offer an expert opinion pursuant to Federal Rule of Evidence 702. Mr. Sparks is the

4 Td. at p. 95, Exhibit 10 thereto (30(b)(6) Deposition of Emerald Land Corporation and Release of Mineral Leases) Ex. E to Document 177, Declaration of Rudy Sparks, at § 10; Ex. C to Document 177, Declaration of Wayne Cantrell, at § 7. ‘6 Ex. B-5 to Document 177, Expert Report of Wild Well Control at p. 29. 17 Ex. D to Document 177, Expert Report of Charles Norman at pp. 61-64.

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