Matthews v. Sun Exploration and Production

521 So. 2d 1192, 99 Oil & Gas Rep. 289, 1988 La. App. LEXIS 560, 1988 WL 16409
CourtLouisiana Court of Appeal
DecidedFebruary 24, 1988
Docket19334-CA
StatusPublished
Cited by22 cases

This text of 521 So. 2d 1192 (Matthews v. Sun Exploration and Production) 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
Matthews v. Sun Exploration and Production, 521 So. 2d 1192, 99 Oil & Gas Rep. 289, 1988 La. App. LEXIS 560, 1988 WL 16409 (La. Ct. App. 1988).

Opinion

521 So.2d 1192 (1988)

Frank W. MATTHEWS, Plaintiff-Appellee,
v.
SUN EXPLORATION AND PRODUCTION COMPANY, Defendant-Appellant.

No. 19334-CA.

Court of Appeal of Louisiana, Second Circuit.

February 24, 1988.

John W. Wilson, Shreveport, for defendant-appellant Sun Exploration & Production Co.

Stephen A. Glassell, Shreveport, for third party defendant-appellant, Patricia Laffitte Chamberlin.

D. Scott Brown, Mansfield, for plaintiff-appellee.

Before FRED W. JONES, Jr., NORRIS and LINDSAY, JJ.

LINDSAY, Judge.

This case involves a dispute over the amount of royalty payments due from Sun Exploration & Production Co. to the plaintiff, Frank W. Matthews, under an oil, gas and mineral lease covering property located in DeSoto Parish. The case was submitted to the trial court on a joint stipulation of facts. The trial court found in favor of the plaintiff and ordered the defendant to pay *1193 the plaintiff double the royalties, interest and attorney fees. The defendant's third-party demand against another royalty interest owner, Patricia Laffitte Chamberlin, was dismissed. The defendant appealed and the plaintiff answered the appeal.

FACTS

The property covered by the lease was originally owned by Roy Albert Laffitte and his wife, Palma Coody Laffitte. Palma Laffitte died prior to July 16, 1964, but her succession was not opened. On July 16, 1964, Roy Laffitte and his children, James Albert Laffitte and Patricia Laffitte Chamberlin, executed an oil, gas and mineral lease on the property to in favor of W.C. Nabors. The Laffittes were to receive a one-eighth royalty interest (RI) on any production from the property. The royalties were divided between Roy Laffitte and his children to reflect that the children were to receive their deceased mother's portion of the royalty. The minerals were then owned in the following proportions: Roy Laffitte, 194/256; James Albert Laffitte, 31/256; Patricia Chamberlin Laffitte, 31/256.

On July 22, 1964, James Albert Laffitte conveyed his 31/256 portion of the royalty to his father, Roy Laffitte. At the same time, counter-letters were executed specifying that the conveyance was made only for the convenience of James Albert Laffitte and that Roy A. Laffitte was only holding the property for the convenience of his son, James Albert Laffitte. These counter-letters were not recorded in the public records of DeSoto Parish until February 18, 1976. Production was obtained on the property and, based upon the transactions referred to above, with the exception of the information contained in the counter-letters,.109863 RI was paid to Roy Laffitte and .015137 RI was paid to Patricia Laffitte Chamberlin.

On January 17, 1976, Roy Laffitte died. On January 20, 1976, his succession was opened and Patricia Laffitte Chamberlin was named executrix of the estate. On February 25, 1976, Mrs. Chamberlin filed a motion to send the heirs, being herself and her brother, into possession of a portion of the estate, including this piece of property. The motion stated that James had conveyed his royalty interest in the property to his father, but that a counter-letter was also executed which recognized that the conveyance was merely for the convenience of James Albert Laffitte. Copies of the counter-letter were attached to the motion. A partial judgment of possession was signed and filed on February 25, 1976. The judgment simply put the heirs into possession of an undivided one-half interest each in and to the property of the deceased.

Also on that date, the lawyer handling Roy Laffitte's succession wrote to Scurlock Oil Company, the company which was then receiving production from the lease, requesting that a new division order be issued and specifying that the order should reflect that Patricia and James were each entitled to one-half of the one-eighth royalty interest in the lease. Attached to the letter was a certified copy of the partial judgment of possession. No reference to the counter-letters was made in either the letter or the judgment.

At that time, Scurlock divided Roy Laffitte's interest in the lease equally between his two children, and also credited Mrs. Chamberlin with the interest she had previously acquired from her mother. Thereafter, Scurlock paid the royalty interest in the following proportions: Mrs. Chamberlin,.07006800; and James Albert Laffitte,.05493200. This division of the royalty interests clearly reflected that Mrs. Chamberlin's interest was greater than that of her brother.

On April 6, 1977, James Laffitte conveyed his interest in the property to Lawrence Rex Rambin.

By an act of assignment dated August 4, 1977, and effective on August 1, 1977, the defendant, Sun Oil, acquired numerous mineral leases from W.C. Nabors, including the Laffitte lease. On January 1, 1978, Sun took over from Scurlock Oil the obligation of making royalty payments on the property.

Sun prepared a new division order which went into effect January 1, 1978. This *1194 division order substituted Lawrence Rambin for James Albert Laffitte and reflected that Sun was to pay Lawrence Rambin the .05493200 RI previously paid to James Laffitte. Mrs. Chamberlin's interest remained at .07006800 RI.

On September 29, 1977, Lawrence Rambin conveyed his interest in the property to the plaintiff, Frank W. Matthews. Through error, the deed omitted reference to the mineral interest. A corrective instrument dated March 8, 1979, acknowledged that plaintiff received whatever mineral interest Rambin had acquired from James Laffitte.

A new division order was executed effective June 1, 1978, substituting the plaintiff for Rambin and specifying that the plaintiff was to receive the .05493200 RI previously paid to Rambin. This division order was executed by Rambin and the plaintiff. No reference was made in this document to Mrs. Chamberlin's royalty interest. Nevertheless, plaintiff's RI was clearly reflected as being less than one-half of the landowners' one-eighth royalty specified in the original lease. Royalties were paid in these proportions from June 1, 1978 until May 17, 1985.

Effective April 1, 1985, a portion of this property was unitized. Following this unitization, another division order was prepared and issued by Sun. The division order, which provided for royalty payments as before, was sent to plaintiff and to Mrs. Chamberlin. The division order was signed by Mrs. Chamberlin, but not by the plaintiff.

On July 8, 1985, the plaintiff made demand upon the defendant for a new division order reflecting that he and Mrs. Chamberlin each owned one-half of the one-eighth royalty interest (.0625 RI each) and requested an accounting, with interest, of the royalty payments erroneously made to Mrs. Chamberlin. In the alternative, the plaintiff sought cancellation of the lease.

On July 22, 1985, Sun responded to the plaintiff's letter, acknowledging its receipt and informing him that Sun would review the matter as soon as possible. Sun found that their records reflected that the royalty interest paid to the plaintiff was correct and informed the plaintiff of this conclusion in a letter dated July 29, 1985. However, Sun requested additional documentation of plaintiff's claim in order to resolve the matter.

The plaintiff's attorney told Sun that the plaintiff had instructed him not to release the title opinion on the property, but the attorney indicated that Sun should make an examination of the public records of DeSoto Parish, Louisiana. Sun hired a landman to check the records, but the counter-letters were not discovered.

On September 13, 1985, the plaintiff filed suit against Sun.

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521 So. 2d 1192, 99 Oil & Gas Rep. 289, 1988 La. App. LEXIS 560, 1988 WL 16409, Counsel Stack Legal Research, https://law.counselstack.com/opinion/matthews-v-sun-exploration-and-production-lactapp-1988.