Guy Scroggins, Inc. v. Emerald Exploration

401 So. 2d 680, 1981 La. App. LEXIS 4249
CourtLouisiana Court of Appeal
DecidedJune 30, 1981
Docket8333
StatusPublished
Cited by16 cases

This text of 401 So. 2d 680 (Guy Scroggins, Inc. v. Emerald Exploration) 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
Guy Scroggins, Inc. v. Emerald Exploration, 401 So. 2d 680, 1981 La. App. LEXIS 4249 (La. Ct. App. 1981).

Opinion

401 So.2d 680 (1981)

GUY SCROGGINS, INC., Plaintiff and Appellant,
v.
EMERALD EXPLORATION, et al., Defendants and Appellees.

No. 8333.

Court of Appeal of Louisiana, Third Circuit.

June 30, 1981.

Mouton & Jeansonne, Patrick J. Briney, Lafayette, for plaintiff appellant.

Adcock, Horne, Caldwell, Coleman & Duncan, Jack C. Caldwell, Franklin, Plauche, Hartley, Lapeyre & Ottinger, Patrick S. Ottinger, Voorhies & Labbe, Richard D. Chappuis, Onebane & Associates, Robert L. Cabes, Lafayette, for defendants-appellees.

Before CULPEPPER, FORET and LABORDE, JJ.

CULPEPPER, Judge.

Plaintiff seeks specific performance of a June 6, 1973 agreement and a Joint Operating Agreement which would entitle him to share in production from all leases covered thereby. He also seeks an accounting for production from the leases. In the alternative, plaintiff prays for 15 million dollars in damages for loss of past, present and future income from the leases. Made defendants are Emerald Exploration, a partnership (now dissolved) consisting of Alfred Lamson, *681 Sam Bennett and Frank Danna, and the said partners individually, and Edwin L. Cox and Dow Chemical USA. All defendants filed exceptions of no cause or right of action on the grounds that plaintiff had failed to allege any written contracts under which he is entitled to the relief sought. The district court found that plaintiff's petition, together with the annexed documents, failed to state a cause or right of action. However, as discovery had previously been denied by the court, plaintiff was allowed thirty days in which to amend his petition so as to state a cause or right of action. Plaintiff then filed his second supplemental and amending petition, to which exceptions of no right or cause of action were also filed by all defendants. From a judgment of the district court sustaining the exceptions of no cause or right of action, plaintiff appeals.

The decisive issue is whether plaintiff has alleged a cause of action against the defendants for specific performance or, in the alternative, damages for loss of income.

Plaintiff endeavors, through a complex exchange of letter-agreements and documents, to establish a working interest in the leases and the right to become a signatory party to a joint operating agreement signed on August 27, 1973 by the defendants, Emerald, Dow and Cox. The sequence of events are set forth chronologically in plaintiff's second supplemental and amending petition as follows:

"3.

"By instrument dated October 1, 1971, J. Hus Hawkins acquired an oil, gas and mineral lease from Lignum Oil Company covering acreage in Section 37, Township 9 South, Range 9 East, with other lands.

"4.

"By separate instrument of the same date, Hawkins acquired an oil, gas and mineral lease from Bayou Bouillion Corporation, covering substantially the same acreage as that affected by the Lignum lease.

"5.

"By letter agreement dated August 29, 1972, Hawkins transferred a portion of his rights under these leases to Guy Scroggins. A copy of that letter agreement is attached hereto as Exhibit `A'; it, and all subsequent exhibits to which reference is made in this pleading are made a part hereof by way of reference, as though set forth herein in extenso.

"6.

"By letter dated June 28, 1973, Scroggins made `Emerald Oil Corporation' and its officer, Alfred Lamson, aware of the agreement of August 29, 1972. A copy of this letter is attached as Exhibit `B'.

"7.

"On the same date, Scroggins, individually transferred his rights under the August 29, 1972 agreement with Hawkins to Guy Scroggins, Inc. A copy of the instrument of transfer is attached hereto as Exhibit `C'.

"8.

"By letter agreement dated June 6, 1973, Hawkins and Emerald agreed:

(a) That Emerald would obtain new leases from the Bayou Bouillion Corporation and Lignum Oil Company, affecting a portion of the lands covered by the October 1, 1971 leases by Lignum and Bayou Bouillion in favor of Hawkins;
(b) That Hawkins would release and relinquish his rights under the October 1, 1971 leases as to the lands covered by the new leases in favor of Emerald;
(c) That Hawkins would receive an overriding royalty interest, affecting the lands covered by the new leases to Emerald, convertible to a working interest after payout;
(d) That, in the event of conversion, Hawkins should `execute the same joint operating agreement as that executed by the other working interest participants'.

"A copy of the June 6, 1973 agreement is attached hereto as Exhibit `D'.

*682 "9.

"On June 7, 1973, Emerald obtained a new lease from the Bayou Bouillion Corporation. A copy of that lease is attached as Exhibit `E'.

"10.

"On the same date, Emerald obtained a new lease from Lignum Oil Company. A copy is attached as Exhibit `F'.

"11.

"On June 7, 1973, Hawkins and Scroggins were requested to execute a document prepared by Emerald, in which both Hawkins and Scroggins partially released rights held by them under the October 1, 1971 lease by Lignum to Hawkins. Both Hawkins and Scroggins did execute this document, a copy of which is attached as Exhibit `G'.

"12.

"On the same date, Hawkins and Scroggins were requested (by Emerald) to execute, and did execute, a similar partial release covering their rights under the October 1, 1971 lease by the Bayou Bouillion Corporation to Hawkins. A copy of this document is attached as Exhibit `H'.

"13.

"On July 16, 1973, Emerald and Hawkins executed a letter agreement providing in part as follows:

"`You and we executed letter agreement dated June 6, 1973, wherein we agree to assign to you 4% of 8/8ths overriding royalty with a conversion factor. Since this date you have agreed for us to assign Guy Scroggins 1/8th of your Interest, which has been done under date of July 2, 1973. In return, Scroggins is to execute the partial release covering the acreage in Section 37, which Partial Release is executed by you to Bayou Bouillon Corporation and you to Lignum Oil Company.'

"A copy of the July 16, 1973 agreement between Emerald and Hawkins is attached as Exhibit `I'.

"14.

"On July 2, 1973, Emerald executed assignments of overriding royalty to both Hawkins and Scroggins. Copies of these assignments are attached as Exhibits `J' and `K'.

"15.

"On August 27, 1973, Emerald, Cox and Dow executed a `Operating Agreement', a copy of which is attached as Exhibit `L'.

"16.

"Numerical Paragraph `i' on Page 15 of the Joint Operating Agreement provides in part as follows:

`(i) The plat attached hereto as Exhibit `E' designates the unit area of interest between the parties hereto as outlined in green. The area within the red outline is subject to letter agreement with Robert E. Eggerton, wherein he is to receive certain overrides, as further set forth in said letter agreement attached hereto as Exhibit `E'.
In the event any party hereto (`acquiring party') acquires any leasehold or unleased mineral interest within the unit area, the other party (`offeree') shall be entitled to acquire `an interest in such an interest in the same proporation as his or its ownership of the leases covered hereby, upon payment of his or its proportionate part of the actual costs of acquisition.

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401 So. 2d 680, 1981 La. App. LEXIS 4249, Counsel Stack Legal Research, https://law.counselstack.com/opinion/guy-scroggins-inc-v-emerald-exploration-lactapp-1981.