Larry Davie Meaux v. Hilcorp Energy Company

• Court: Louisiana Court of Appeal
• Decided: December 9, 2009
• Docket: CA-0009-0591
• Status: Unknown

Opinion

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

09-591

LARRY DAVIE MEAUX, ET AL.

VERSUS

HILCORP ENERGY COMPANY, ET AL.

**********

APPEAL FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF VERMILION, NO. 99-72994 HONORABLE HERMAN C. CLAUSE, DISTRICT JUDGE

OSWALD A. DECUIR JUDGE

Court composed of Ulysses Gene Thibodeaux, Chief Judge, Oswald A. Decuir and Billy Howard Ezell, Judges.

AFFIRMED.

Donald W. Price Kirk A. Guidry Dué, Price, Guidry, Piedrahita & Andrews 8201 Jefferson Highway Baton Rouge, LA 70809 (225) 929-7481 Counsel for Plaintiffs/Appellants: Larry Davie Meaux, et al. J. Isaac Funderburk Attorney at Law P. O. Drawer 1030 Abbeville, LA 70511-1030 (337) 893-8140 Counsel for Plaintiffs/Appellants: Larry Davie Meaux, et al.

Kevin R. Rees Attorney at Law P. O. Box 1513 Abbeville, LA 70511-1513 (337) 893-4669 Counsel for Plaintiffs/Appellants: Larry Davie Meaux, et al.

Christopher Hebert Rabalais, Hanna & Hebert 701 Robley Drive, Suite 210 Lafayette, La 70503 (337) 981-0309 Counsel for Plaintiffs/Appellants: Larry Davie Meaux, et al.

Charles C. Garrison Caffery, Oubre, Campbell & Garrison, L.L.P. P. O. Drawer 12410 New Iberia, LA 70562-2410 (337) 364-1816 Counsel for Defendant/Appellee: LLOG Exploration Company, L.L.C.

Loulan J. Pitre, Jr. Aimee W. Hebert Christopher B. Bailey Michelle C. Purchner Gordon, Arata, McCollam, Duplantis & Eagan, L.L.P. 201 St. Charles Avenue, Suite 4000 New Orleans, LA 70170 (504) 582-1111 Counsel for Defendants/Appellees: Hilcorp Energy Company, Hilcorp Energy I L.P., Hilcorp Partners 1992, Ltd. Tiltex Partners, 97A, Ltd. Union Oil Company of California Thomas R. Juneau Joshua K. Trahan Juneau Law Firm P.O. Drawer 51268 Lafayette, LA 70505-1268 (337) 269-0052 Counsel for Defendant/Appellee: Lexington Insurance Company

Noel Edward Warren Jackson & Campbell, P.C. 300 South Tower One Lafayette Center 1120 20th Street, N.W. Washington, D.C 20036 (202) 457-1600 Counsel for Defendant/Appellee: Lexington Insurance Company

Richard Bryan Jackson & Campbell, P.C. 300 South Tower One Lafayette Center 1120 20th Street, N.W. Washington, D.C 20036 (202) 457-1600 Counsel for Defendant/Appellee: Lexington Insurance Company

George H. Robinson Jason P. Bergeron Liskow & Lewis P. O. Box 52008 Lafayette, LA 70502-2008 (337) 232-7424 Counsel for Defendant/Appellee: Forest Oil Corporation DECUIR, Judge.

In 1944, Davie Meaux, Sr. and his co-owners granted a mineral lease to Union

Oil Company of California (Unocal). Some of the lands covered by the lease are now

owned by Meaux’s grandchildren (Appellants). Shortly after the lease was granted,

Unocal began to develop what is known as Tigre Lagoon oil field. This development

involved dredging canals necessary to access drilling sites. Unocal placed gaps in the

canal banks to ensure the hydrological integrity of Meaux’s property. Between 1958

and 1963, someone closed these gaps. The landowners contend that Unocal is

responsible. Unocal counters that for many years the landowners hunted and fished

these canals without complaint. They built levees to keep out poachers and

trespassers and to create a “duck pond.” In the duck pond they controlled water

levels to create favorable hunting conditions. This active management of the water

levels appears to have begun some time prior to 1968. Subsequently, Hurricane Rita

damaged the drainage system created by the landowners, flooded a portion of the

property known as “Central Impoundment,” “Tract A,” and the “duck pond,”

revealing that over time the area had sunk below the level of the surrounding marsh.

In addition, Unocal constructed several unlined pits to hold oil field waste in

another area belonging to the landowners. In 1960, Unocal also obtained a Canal

Usage Agreement and Salt Water Disposal Agreement. In 1988, Unocal closed the

pit in conformity with the Louisiana Department of Natural Resources standards for

submerged wetlands as verified by a site inspection conducted by the Department.

Due to Unocal’s site remediation, the pit area is approximately one foot higher than

the surrounding area which is what brought it to the attention of Appellants. Shortly

after completing the remediation, Unocal transferred the field to Hilcorp Energy

Company. In 1998, an area of the leased land known as the “fish pond” suffered an

unexplained fish kill which Appellants attribute to a nearby pipeline leaking

saltwater. Appellants asked Hilcorp to replace the fish and clean up the mess.

Hilcorp declined, and this litigation ensued against Hilcorp, and its partners, assigns,

and insurer (Forest Oil Corporation, LLOG Exploration Company, LLC., Tiltex

Partners, 97A, Ltd., and Lexington Insurance Company). Appellants alleged breach

of the Oil, Gas, and Mineral Lease as well as tort claims. Several years later

Appellants amended the suit seeking $25,000,000.00 in remediation damages for

alleged contamination of the “duck pond” and “pit” areas.

After a trial on the merits, the jury found that there was no environmental

damage to Appellants’ property attributable to the defendants. The trial judge

accepted the jury’s verdict and signed a judgment dismissing all of Appellants’ claims

with prejudice. Appellants lodged this appeal.

2006 LA. ACT 312 STANDARD OF REVIEW

Appellants rely on Louisiana Revised Statutes 30:29 C(6)(b), which is part of

2006 La. Act 312, to support their contention that this matter should be reviewed de

novo. This reliance is misplaced.

La.R.S. 30:29 G provides:

G. The provisions of this Section are intended to ensure evaluation or remediation of environmental damage. If the court finds that no environmental damage exists, the court may dismiss the department or attorney general from the litigation without prejudice.

Thus, it is clear from the statute that absent a finding of environmental damage, Act

312 does not apply. Act 312 does not address the standard by which the

determination of the finder of fact is reviewed. Whether environmental damage exists

in a particular case is a question of fact. Questions of fact are reviewed by the

2 appellate court under the manifest error standard of review. Bellard v. American

Cent. Ins. Co., 07-1335 (La. 4/18/08), 980 So.2d 654.

The provision cited by Appellants is found in the part of Act 312 addressing

the environmental remediation plan developed after a “finder of fact determines that

environmental damage exists.” La.R.S. 30:29 C(1).

La.R.S. 30:29 C(6) provides in pertinent part:

(a) Any judgment adopting a plan of evaluation or remediation pursuant to this Section and ordering the party or parties admitting responsibility or the party or parties found legally responsible by the court to deposit funds for the implementation thereof into the registry of the court pursuant to this Section shall be considered a final judgment pursuant to the Code of Civil Procedure Article 2081 et seq., for purposes of appeal.

(b) Any appeal under this Section shall be a de novo review and shall be heard with preference and on an expedited basis.

If the finder of fact finds no environmental damage exists, the Act 312 remediation

procedure is not triggered. See M.J. Farms, Ltd. v. Exxon Mobil Corp., 07-2371 (La.

7/1/08), 998 So.2d 16. Only judgments under Act 312 are subject to de novo review.

Accordingly, the jury’s finding that there was no environmental damage must

be reviewed under the more deferential manifest error standard.

ENVIRONMENTAL DAMAGE

The jury in this matter found that no “environmental damage” exists on the

property. What constitutes “environmental damage” under Act 312 is a res nova

issue. Act 312 provides:

A. The legislature hereby finds and declares that Article IX, Section 1 of the Constitution of Louisiana mandates that the natural resources and the environment of the state, including ground water, are to be protected, conserved, and replenished insofar as possible and consistent with the health, safety, and welfare of the people and further mandates that the legislature enact laws to implement this policy. It is the duty of the legislature to set forth procedures to ensure that damage

3 to the environment is remediated to a standard that protects the public interest.

La.R.S. 30:29 I(1).

“Environmental damage” is defined by the Act as:

. . . any actual or potential impact, damage, or injury to environmental media caused by contamination resulting from activities associated with oilfield sites or exploration and production sites. Environmental media shall include but not be limited to soil, surface water, ground water, or sediment.

Id.

Accordingly, to fall within Act 312, “environmental damage” must pose some risk

to the health, safety, or welfare of the people of the state or be damaging to the public

interest.

In this case, the jury found that there was no environmental damage to

Appellants’ property. Defendants’ experts testified that there was nothing

unreasonable or excessive about how the pit was used in this case and that the pit

area was a submerged wetland. The experts also testified that Unocal’s pit closure

was reasonable and consistent with the DNR’s regulations and the DNR approved the

pit closure.

The only evidence submitted by Appellants relating to the fish pond is that

there was a fish kill and that there was a nearby pipeline that was leaking salt water.

Appellants’ own witness testified that there was an earlier fish kill at that same site

resulting from natural causes. Appellants’ witness further conceded that the pipeline

was repaired and has since been removed.

Appellants had no evidence tending to show that the “duck pond” suffered

“environmental damage.” Appellants presented no evidence that any contaminants

threaten the health, safety or welfare of the public. Rather, the focus of their evidence

4 was on the damage to the marsh caused by the constriction of tidal influx and the

impoundment of water which, according to Appellants’ experts, allegedly damaged

the marsh. The defendants presented an alternative view of the status of the “duck

pond,” which apparently was accepted by the jury. The defendants offered expert

testimony comparing the property with neighboring property with similar drainage

but with healthy marsh. The only real factor separating Appellants’ property from

that of its neighbors was the water control program implemented by Appellants

themselves.

In light of the foregoing, we find no manifest error in the jury’s determination

that there was no environmental damage to Appellants’ property.

INCONSISTENT VERDICT

By these assignments, Appellants contend the trial court erred in entering

judgment based on the jury’s allegedly inconsistent verdict and in failing to grant

their motion for Judgment Notwithstanding the Verdict or Motion for New Trial.

Reviewing a JNOV on appeal is a two-step process. Martin v. Heritage

Manor S., 00-1023 (La. 4/3/01), 784 So.2d 627. First, the appellate court must

determine whether the trial court’s grant or denial of a JNOV was proper using the

same criteria as the trial judge in ruling on the motion. Id. A motion for JNOV

should only have been granted if the facts and inferences from the case point so

strongly and overwhelmingly in favor of the moving party that no reasonable person

could arrive at the jury’s verdict. Egle v. Egle, 06-1550 (La.App. 3 Cir. 6/27/07), 963

So.2d 454, writ denied, 07-1596 (La. 10/26/07), 966 So.2d 579. After determining

that the trial court correctly applied its standard of review as to the jury verdict, the

appellate court reviews the JNOV using the manifest error standard. Martin, 784

5 So.2d at 627. The applicable standard of review in ruling on a motion for new trial

is whether the trial court abused its discretion. Id. at 632.

Appellants also contend that there are inconsistencies in the jury verdict

requiring that it be set aside and the case reviewed de novo. “[A] reviewing court

must exercise great restraint before disregarding a jury verdict and turning to de novo

review,” Adams v. Rhodia, Inc., 07-2110 ( La. 5/21/08), 983 So.2d 798, 805.

The jury verdict form was divided into sections dealing with the various causes

of action. The first section dealt with Act 312 issues and the jury clearly found that

there was no environmental damage. There is no inconsistency in the jury’s verdict

with respect to that issue and we have found that there was no manifest error in the

jury’s determination. Likewise, we find no error or abuse of discretion in the trial

court’s denial of Appellants’ motions for JNOV and New Trial.

The jury form next addresses the contract claims asserted by Appellants. The

jury found that no defendant exercised its rights under the “Oil, Gas, and Mineral

Lease” in an unreasonable or excessive way causing damage to Appellants’ property.

Again, there is no inconsistency in the jury’s response. We find no error or abuse of

discretion in the trial court’s denial of Appellants’ motions for JNOV and New Trial.

The jury form next addresses the tort claims asserted by Appellants. Here the

jury found that the defendants acted negligently but that their negligence was not the

legal cause of Appellants’ alleged damages. Appellants argue that this is inconsistent

with the jury’s response to the next sections of the jury form allocating fault and

making findings regarding “the amount of money necessary” to bring Appellants’

property back to its original condition. We disagree.

6 In support of their position Appellants cite Ferrell v. Fireman’s Fund Ins. Co.,

94-1252 (La. 2/20/05), 650 So.2d 742. Ferrell is distinguishable.

The Ferrell verdict resulted in a situation where a negligent defendant was not

assessed any percentage of fault, while another party who was determined to have

been negligent, but not a proximate or legal cause of the accident, was apportioned

with thirty percent of the fault. This is the inconsistency that interdicted the fact

finding process in Ferrell.

It is clearly a different issue in this case. Here, the jury concluded repeatedly

with respect to Act 312, tort, and contract claims that none of the defendants were the

legal cause of any defect in Appellants’ property. The jury also concluded that

Appellants had knowledge of possible damage to their property at a date that would

preclude recovery. The jury then completed the jury form filling in allocations of

fault and damages. These sections of the form instructed the jury to complete the

section if they had answered yes to “any” of a series of numbered sets of two

questions. The jury answered yes to one of the questions in the set of questions on

negligence but no to the legal cause question. Thus, the jury was not required to

answer the questions on allocation of fault and damages because they found that the

defendants were not the legal cause of Appellants’ alleged damages. By answering

these questions, the jury created no inconsistency with its determination that the

defendants were not the legal cause of the alleged damage to the property. It is

apparent from reviewing the form that it was confusing and led the jury to complete

portions of the form that their other answers did not require. The additional answers

were not required, but did not undermine the validity of the judgment. The answer

of the jury that the Defendants were not the legal cause of Appellants’ damages

7 required that judgment be entered in favor of the defendants. There is no

inconsistency in the jury’s answers on the verdict form - La.Code Civ.P art. 1812

(C)(1) recognizes that “fault” may exist even if such fault was not the legal cause of

damages. Accordingly, the trial court did not err in entering judgment, or denying the

motions for JNOV and New Trial.

As noted by Appellants, this issue is dispositive and our finding renders the

remaining assignments of error moot.

DECREE

For the foregoing reasons, the judgment of the trial court is affirmed. All costs

of these proceedings are taxed to Appellants.