Neumin Production Co. v. Tiger Bend, Ltd.

• Court: Louisiana Court of Appeal
• Decided: March 9, 2011
• Docket: CA-0010-1307
• Status: Unknown

Opinion

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

CA 10-1307

NEUMIN PRODUCTION COMPANY, ET AL.

VERSUS

TIGER BEND, LTD., ET AL.

**********

APPEAL FROM THE THIRTEENTH JUDICIAL DISTRICT COURT PARISH OF EVANGELINE, NO. 70481-A HONORABLE JOHN LARRY VIDRINE, DISTRICT JUDGE

BILLY HOWARD EZELL JUDGE

Court composed of Billy Howard Ezell, J. David Painter, and James T. Genovese, Judges.

AFFIRMED.

Frederick Bernard Alexius George I. Fine Provosty, Sadler, deLaunay Fiorenza & Sobel, APC P. O. Drawer 1791 Alexandria, LA 71309-1791 (318) 445-3631 Counsel for Defendant/Appellant: The Mikell Group Marcus L. Fontenot Fontenot and Associates P.O. Box 69 Ville Platte, LA 70568 (337)363-2388 Counsel for Defendant/Appellant: The Mikell Group

Christopher Brent Coreil P. O. Drawer 450 Ville Platte, LA 70586 (337) 363-5596 Counsel for Defendant/Appellee: Tiger Bend, Ltd.

Kyle Patrick Polozola James H. Dupuis, Jr. Dupuis & Polozola, LLC P. O. Box 2698 Lafayette, LA 70502 (337) 235-2232 Counsel for Plaintiffs/Appellees: Neumin Production Company Guardian Oil Gas, Inc. EZELL, JUDGE.

Neumin Production Company and Guardian Oil & Gas, Inc. instituted this

concursus proceeding to determine who is the owner of royalty proceeds of

production from a well located in Evangeline Parish. Two separate leases are at issue

in this proceeding. One lease was executed by Tiger Bend, Ltd., who is the owner of

the surface of the land. The other lease was executed by several individuals referred

to as the Mikell Group,1 who claim to have a mineral servitude affecting the subject

tracts. Both Tiger Bend and the Mikell Group claim to be entitled to the proceeds

deposited in the registry of the court.

FACTS

At issue in this case is the ownership of minerals produced from a well known

as the Foreman No. 1 well located in Evangeline Parish. There is no dispute that

Tiger Bend is owner of the property. The Mikell Group claims that it owns the right

to the minerals through a mineral servitude created by an act of partition and

exchange in 1983.

The Mikell Group’s ownership began with the liquidation of two companies,

the Haas Land Company, Ltd. and the Haas Investment Company, Inc. The

shareholders of the companies at the time of the liquidation became the owners of the

lands formerly owned by the companies. The Haas Land Company was liquidated in

1979, and its shareholders at that time included: Succession of Maccie H. Harrison,

Montez Henning Haas, Montez Haas Constant, Lulu H. Haas, Joseph M. Haas, Nancy

M. Carruth, and Franklin H. Mikell. Later, Franklin H. Mikell and Nancy M. Carruth

inherited the Succession of Maccie H. Harrison’s portion. The Haas Investment

The Mikell Group consists of Nancy Mikell Carruth, Donna Tebow Taylor, William Mikell Tebow, Franklin H. Mikell, Minnie O’Shee, Franklin O. Mikell, Martha Mikell Abshire, and Melinda L. Mikell.

1 Company was liquidated on November 1, 1983. In addition to the same shareholders

as the Haas Land Company, the Haas Investment Company had the following

additional shareholders: William David Constant, Samuel D. Haas, Joseph M. Haas,

Jr., Suzanne Haas McCann, Thomas B. Haas, Katherine L. Haas, Donna Tebow

Taylor, William Mikell Tebow, Minnie O. Mikell, Franklin O. Mikell, Martha E.

Mikell, and Linda Mikell Wilder. Franklin H. Mikell and Nancy M. Carruth were

also individual shareholders in their own right in Haas Investment Company.

On November 1, 1983, an “ACT OF PARTITION, EXCHANGE AND

AGREEMENT” was entered into by all of the above parties for the purpose of

partitioning and exchanging their undivided interests in certain properties. The heirs

of W.D. and Hattie Haas were also included in the partition agreement. The Mikell

group claims that this instrument created a single mineral servitude of multiple

contiguous tracts of land so that production on a well six-and-two-tenths a mile away

in Avoyelles Parish interrupted the running of prescription on the mineral servitude

where the Foreman well is located.

Tiger Bend filed a motion for summary judgment contending that there are

multiple servitudes and that any mineral rights reserved in the act of partition were

extinguished by prescription. A hearing on the matter was held on April 23, 1010.

Judgment was signed on September 9, 2010, granting Tiger Bend’s motion for

summary judgment and declaring it the owner of the all funds deposited in the

registry of the court in addition to all future royalties. The Mikell Group appealed the

judgment.

SUMMARY JUDGMENT

Appellate courts review motions for summary judgment de novo to determine

whether any genuine issue of material fact exists and whether the mover is entitled

2 to judgment as a matter of law. La.Code Civ.P. art. 966(B). A motion for summary

judgment shall be granted “if the pleadings, depositions, answers to interrogatories,

and admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to material fact, and that mover is entitled to judgment as a matter

of law.” Id. The mover bears the initial burden of proof to show that no genuine

issue of material fact exists. La.Code. Civ.P. art. 966(C)(2).

“Once the motion for summary judgment has been properly supported by the

moving party, the failure of the non-moving party to produce evidence of a material

factual dispute mandates the granting of the motion.” Cheramie Servs., Inc. v. Shell

Deepwater Prod., Inc., 09-1633, pp. 9-10 (La. 4/23/10), 35 So.3d 1053, 1059.

MINERAL SERVITUDE

The Mikell Group contends that they have an existing mineral servitude created

in the 1983 act of partition which covers the property in question entitling them to the

funds deposited in the registry of the court. Specifically, the Mikell Group contends

that they are the owners of single mineral servitude that was created when the lands

were partitioned and formed a contiguous tract of land. The Mikell Group claims that

production on a well in Avoyelles Parish interrupted prescription on the single

mineral servitude which covers the production at issue on the well in Evangeline

Parish. As the owner of the surface of the land, Tiger Bend argues that the servitude

has prescribed, and that it is entitled to the funds.

“[T]o constitute a single tract of land the lands must be so situated that one may

pass from one part to the other without passing over the lands of another.” Lee v.

Giauque, 154 La. 491, 493, 97 So. 669, 670 (1923); Energy Dev. Corp. v. Quality

Envtl. Processes, Inc., 98-1125 (La. App. 5 Cir. 5/19/99), 734 So.2d 965.

3 “[A] mineral servitude is the active right to explore for and produce minerals,

extracting and reducing them to possession and ownership. Horton v. Mobley, 578

So.2d 977, 983 (La.App 2d Cir.), writ denied, 582 So.2d 1310 (La.1991). “[A]

servitude is a dismemberment of title insofar as it creates a secondary right in the

property that is exercised separately from the landowner.” Id. “A mineral servitude

also entails ‘executive’ rights.” Id.

A mineral servitude prescribes in ten years as a result of nonuse. La.R.S.

31:27(1). “Prescription of nonuse of a mineral servitude commences from the date

on which it is created.” La.R.S. 31:28. “The prescription of nonuse running against

a mineral servitude is interrupted by good faith operations for the discovery and

production of minerals.” La.R.S. 31:29.

“A single mineral servitude is created by an act that affects a continuous body

of land although individual tracts or parcels within the whole are separately

described.” La.R.S. 31:63 “An act creating mineral servitudes on noncontiguous

tracts of land creates as many mineral servitudes as there are tracts unless the act

provides for more.” La.R.S. 31:64. “The owners of several contiguous tracts of land

may establish a single mineral servitude in favor of one or more of them or of a third

party.” La.R.S. 31:66. “Co-owners of land constituting a continuous whole may

partition it and reserve a single mineral servitude in favor of one or more of them.”

La.R.S. 31:67. “A single mineral servitude may not be created on two or more

noncontiguous tracts of land.” La.R.S. 31:73.

In the 1983 partition act, the parties combined all the land that they owned.

When Haas Land Company and Haas Investment Company were liquidated, their

shareholders became the owners of the land in proportion to their ownership in the

companies. Therefore, before the 1983 partition, the lands were owned by different

4 owners depending on in what companies they owned shares. In the 1983 act of

partition the lands were brought together and were partitioned and exchanged. Tiger

Bend’s ownership of the land at issue was based on this act of partition.

A conveyance of property includes all incidents of ownership including mineral

rights that are not expressly reserved. Hayden v. Phillips, 94-130 (La.App. 1 Cir.

11/10/94), 646 So.2d 1014, writ denied, 95-244 (La. 3/24/95), 651 So.2d 291.

The pivotal case on the creation of a single servitude as opposed to multiple

servitudes when land is partitioned is Whitehall Oil Co. v. Heard, 197 So.2d 672

(La.App. 3 Cir.), writ refused, 250 La. 924, 199 So.2d 923 (1967). In discussing the

principles of a mineral servitude, Justice Tate, writing for this court, stated:

[A] landowner cannot create a single servitude or mineral royalty right on two or more non-contiguous tracts; and if this is attempted by a single instrument, there are nevertheless as many servitudes or royalty interests as there are non-contiguous tracts of land. On the other hand, there is no limitation in the area or configuration of a contiguous mineral interest.

. . . [O]wners of land may create a single mineral servitude or royalty so long as they own the lands in question and so long as the tracts in question are contiguous and form a single, continuous body of land. Determination of whether a landowner reserving or granting mineral servitude or mineral royalty rights intends to create a single servitude or royalty interest or instead multiple interests is, therefore, dependent upon construction of particular conveyances . For example, it has been held that two separate deeds by the same landowner conveying mineral interests in two contiguous tracts of land create separate mineral servitudes although acquired by the same mineral owner. Thus, whether the landowner intends to reserve a single or multiple interests by a particular reservation must similarly depend upon principles of contractual construction.

Id. at 675-76 (citations omitted) (footnote omitted).

PARTITION

In the 1983 partition agreement, there were three separate conveyances of

property. The first conveyance was a transfer of property from Haas-Constant Group

5 to Mikell-Carruth Group. The second conveyance was a transfer of property from the

Mikell-Carruth Group to Haas-Constant Group. The third, and final conveyance, was

from the Mikell-Carruth Group to Joseph M. Haas and Montez Haas Constant.

One of the initial paragraphs in the partition agreement (emphasis supplied)

provides:

WHEREAS, the said parties do desire to partition and exchange certain of their undivided interests to the end that the Haas-Constant Group (as hereinafter identified) receives certain properties or interests in properties, and the Mikell-Carruth Group (as hereinafter identified) receives certain other properties and interests in properties, in each case subject to complete mineral reservation;

Paragraph VIII further provides:

All parties transferor in this Act declare, and all parties transferee of any interest in property herein recognize, that each conveyance herein effected is made by the transferor with full and complete reservation of all oil, gas and other fugacious or similar mineral, of whatsoever nature, located in, on or under any property transferred. It is not the intention of this mineral reservation to cover or affect any sand, gravel, lignite, ore or other solid minerals.

The usual scenario in the cases that have been before the courts is one in which

property that is co-owned is partitioned with each co-owner receiving a tract in full

ownership. The present situation is different in that the co-owners of the properties

that were partitioned were not all the same co-owners of each contiguous tract of land

that was partitioned. When the Haas Land Company and the Haas Investment

Company were liquidated, their properties were distributed to the shareholders.

Eighteen people owned the properties of the Haas Investment Company, and eight

people owned the properties of the Haas Land Company. The only two parties who

were members of both the Haas Land Company and the Haas Investment Company

properties which were the subject of the partition agreement were Nancy Carruth and

Franklin H. Mikell.

6 It is clear to this court that there would be no necessity to reserve the minerals

if the parties intended that a single servitude be created over all the properties to the

partition. Obviously, the parties intended to reserve the minerals in the same

proportion on any property they owned prior to the partition by inserting the

reservation language in the partition agreement.

With the reservation of the minerals prior to combining the lands for partition,

the owners of the minerals on each piece of property are different from the owners of

the surface of the property after the partition. Different tracts of land had different

owners prior to the partition; therefore, different mineral servitudes were created on

each tract of property that was part of the partition.

Nancy Carruth and Franklin Mikell point out that they each had an undivided

ownership interest in all of the lands when the reservation was made. They argue that

their reservation of the minerals in the properties created a single mineral servitude

over all the property in their favor.

While Ms. Carruth and Mr. Mikell may have an ownership interest in each

mineral servitude on each tract or property, this does not create a single mineral

servitude. They are co-owners in each separate mineral servitude with the different

parties who had an interest in a particular tract before the partition agreement. The

effect of the reservation of the minerals was to create multiple mineral servitudes.

We find that there is no question of material fact that prescription on the

mineral servitude on the tract of land in question had not been interrupted by the

operation of the well in Avoyelles Parish, six-and-two-tenths miles away from the

well in question in Evangeline Parish, since there was no single mineral servitude.

The mineral servitude created in 1983 prescribed in 1993, and Tiger Bend is the

owner of the minerals on the property as the owner of the surface of the property.

7 The granting of the motion for summary judgment filed by Tiger Bend is affirmed.

Costs of this appeal are assessed to the Mikell Group.