GBM, INC. v. Juna Corp.

611 So. 2d 825, 1992 La. App. LEXIS 4086, 1992 WL 382794
CourtLouisiana Court of Appeal
DecidedDecember 22, 1992
Docket91-1022
StatusPublished
Cited by4 cases

This text of 611 So. 2d 825 (GBM, INC. v. Juna Corp.) 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
GBM, INC. v. Juna Corp., 611 So. 2d 825, 1992 La. App. LEXIS 4086, 1992 WL 382794 (La. Ct. App. 1992).

Opinion

611 So.2d 825 (1992)

G.B.M., INC., Plaintiff-Appellant,
v.
JUNA CORPORATION, et al., Defendants-Appellees.

No. 91-1022.

Court of Appeal of Louisiana, Third Circuit.

December 22, 1992.

*826 Strain, Dennis, Ellis, Mayhall & Bates, Thomas C. McKowen, IV, Frederick W. Ellis, Baton Rouge, for plaintiff-appellant.

Young, Richaud, Theard & Myers, George J. Richard, Robert J. Young, New Orleans, for defendant-Koch Oil.

Robert L. Cabes, Lafayette, for defendant Juna/Headington Oil.

Edwards, Stefanski, Barousse, Cunningham, Stefanski & Zaunbrecher, Russell K. Zaunbrecher, James M. Cunningham, Crowley, for Federal Land Bank.

Steeg & O'Connor, Randy Opotowsky, New Orleans, Liskow & Lewis, Patrick W. Gray, Lafayette, for Conoco.

Before DOUCET and KNOLL, JJ., and MARCANTEL,[*] J. Pro Tem.

KNOLL, Judge.

This appeal concerns the propriety of the trial court's granting of defendants' motions for involuntary dismissal of plaintiff's claims pursuant to LSA-C.C.P. Art. 1672(B).

The case was posed to the trial court via G.B.M., Inc.'s (G.B.M.) petition for a declaratory judgment, injunction, damages, and an accounting. G.B.M. was seeking a declaratory judgment decreeing that the oil, gas and mineral lease executed on April 10, 1984, by Will T. Haristy to Prime Energy Group, Inc. (Prime) survived a foreclosure by the Federal Land Bank of Jackson (FLB) on a mortgage recorded on August 26, 1981.

The trial court denied plaintiff's motion for a new trial. G.B.M. devolutively appealed, and defendants, REW Enterprises, Inc. (REW), Headington Oil Company (Headington), and, Juna Corporation (Juna), answered the appeal, seeking damages for a frivolous appeal.

G.B.M. and the defendants' answer to the appeal present the following issues for our determination: 1) whether the defendants' motions for involuntary dismissal were timely; 2) whether the trial court erroneously granted the defendants' motions for involuntary dismissal; 3) whether the trial court erred in concluding that operations from the Haristys' well did not maintain Prime's lease; and, 4) whether this appeal is frivolous, entitling defendants to damages.

FACTS

The plaintiff, G.B.M., and defendants, Juna, Headington, and REW, stipulated the following facts:

*827 "1. Will Haristy, Jr. and his wife, Gloria Thibodeaux ("Haristy") owned several tracts of land in the Bayou Mallet area of Acadia Parish, including a 35 acre tract acquired in 1974 from the Richard family, which tract was contiguous to other tracts making up a total of 168 acres, more or less.
2. In June of 1981, Haristy leased the entire 168 acres to Flynn Energy. This instrument is sometimes referred to as the "Flynn Lease." This lease was negotiated for Flynn by Michael F. Miley ("Miley") and Miley received an overriding royalty in one of his companies, Michael F. Miley Oil Properties.
3. In August of 1981 Haristy mortgaged the entire 168 acres to the Federal Land Bank ("FLB").
4. Flynn elected not to maintain the Lease, and assigned it to Michael F. Miley Oil Properties and Condis, Inc., who in turn sold portions of the working interest to TXO Production. Various other parties acquired interests in the lease and a well was drilled by TXO for its account and its partners. This well is generally referred to as the "Haristy Well" or the "TXO Well" in the testimony.
5. In December of 1983, the Haristy Well ceased producing and TXO and its partners elected not to attempt reworking or other operation to maintain the lease. After negotiation with Haristy, an agreement was reached to release the lease and convey the well, including the surface and downhole equipment, to Haristy. Mr. Haristy is a graduate petroleum engineer and had, in fact, served as the "pumper" for TXO on the Haristy Well. Apparently the deal resulted from his claims as to surface restoration provisions in the lease.
6. TXO and its partners, including Miley, executed a Release and Bill of Sale which was recorded on April 12, 1984. As a result of these acts, Haristy was the owner of the Haristy Well and all related equipment, and had the exclusive right to operate the well and attempt to restore production.
7. In 1984, Haristy was in default under the FLB Mortgage, which required annual payments of approximately $33,000.00 and such default had existed since the previous May. Miley secured a lease to Prime Energy Group, Inc. from Haristy, giving him a 30-day draft for $33,694.00 which Haristy endorsed over to FLB on April 10, 1984, along with the Haristys' personal check for $1,255.00, to pay the note that had been due since May of 1983.
8. Haristy executed a lease to Prime, another company of which Miley was principal owner, effective April 10, 1984, providing for a ¼th royalty, a three year primary term and a rental obligation of $33,694.00 per year if the lease were not otherwise maintained. This instrument is generally referred to as the "Prime Lease." It was recorded in July of 1984. Subsequently, Prime restored production from the Haristy well.
9. After December 18, 1984, Prime did not make any rental payments under the lease, including specifically the rental payment on April 10, 1985. Therefore, unless the operation of the Haristy Well and royalty payments by Koch Oil Company to the Haristys and the Federal Land Bank maintained the Prime Lease, it expired on April 10, 1985, six months before the Sheriff Sale to FLB. Prime made an attempt to negotiate a "farmout" of the lease to JUNA. This negotiation did not result in any agreements between Prime and JUNA.
10. FLB had filed its foreclosure suit in Acadia Parish on December 17, 1984. Haristy stayed those proceedings by the filing of a Chapter *828 11 Petition on January 16, 1985. The bankruptcy proceedings reveal that Prime made an appearance in the bankruptcy, filing a proof of claim and lien affidavit to recover costs incurred on Haristy's behalf in the operation of the Haristy Well. Anyone reviewing the bankruptcy record would be made aware of a threatened foreclosure, but not the sale itself. Notice of Seizure was filed in December of 1984.
11. Without notice to Prime, FLB eventually secured an order lifting the automatic stay, and prosecuted its foreclosure to conclusion. A new Notice of Seizure was filed of record September 5, 1985 and a Sheriff Sale was held on October 17, 1985, at which FLB was the successful bidder for a price of $223,354.00.
12. Prime's address, or that of its counsel, was known or readily available to FLB, but no notice of the foreclosure seizure and sale was sent to Prime by FLB.
13. At the time of the Sheriff Sale, Prime was in the process of being dissolved, the initial dissolution proceedings having been begun in June of 1985.
14. On November 4, 1985 FLB executed a lease to JUNA, which sold interests to various parties, including Headington. The other working interest partners are not parties hereto. Headington, JUNA and those parties drilled the JUNA Corp.— Federal Land Bank # 1 Well ("FLB Well") on the same 35-acre tract as the existing Haristy Well. The FLB Well was completed as a producer and has continuously produced. The well is produced under a Unit established by the Office of Conservation of the State of Louisiana in Order 219-A-7.
15.

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Bluebook (online)
611 So. 2d 825, 1992 La. App. LEXIS 4086, 1992 WL 382794, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gbm-inc-v-juna-corp-lactapp-1992.