IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
No. 01-30256 Summary Calendar
PENNZENERGY CO.;ET AL.,
Plaintiffs,
PENNZENERGY EXPLORATION AND PRODUCTION, LLC; DEVON ENERGY CORP., formerly known as Pennzenergy Co.,
Plaintiffs-Counter Defendants-Appellees,
versus
CAROLYN WELLS: ET AL.,
Defendants,
CAROLYN WELLS; SAMUEL WELLS; YULANDER WELLS; RENA WELLS; ANTHONY WELLS; LESTER WELLS; JESSE WELLS,
Defendants-Counter Claimants-Appellants.
No. 01-30264 Summary Calendar
CAROLYN IVY,
Plaintiff-Appellant,
PENNZENERGY CO., ET AL.,
PENNZENERGY EXPLORATION AND PRODUCTION, LLC: DEVON ENERGY CORP., formerly known as Pennzenergy Co.,
Defendants-Appellees. -------------------- Appeals from the United States District Court for the Western District of Louisiana (99-CV-959 & 01-CV-83) -------------------- December 17, 2001
Before HIGGINBOTHAM, WIENER, and BARKSDALE, Circuit Judges.
PER CURIAM:*
In the first of two actions that have been consolidated on
appeal, Defendants-Appellants Carolyn Wells, Samuel Wells, Yulander
Wells, Rena Wells, Anthony Wells, Lester Wells, and Jesse Wells
(collectively, “the Wellses”) seek reversal of the district court’s
grant of summary judgment in favor of Defendants-Appellees Devon
Energy Corporation (successor by merger to PennzEnergy Company) and
Devon Energy Production Company, L.P. (successor by merger to
PennzEnergy Exploration and Production, L.L.C.) (collectively,
“Devon”). In the second of the consolidated actions, Plaintiff-
Appellant Carolyn [Wells] Ivy1 seeks reversal of the district
court’s sua sponte dismissal of her related lawsuit. Because we
conclude that the district court ruled correctly in granting
summary judgment in favor of Devon, we affirm the summary judgment.
Likewise, the court’s sua sponte dismissal of Carolyn Ivy’s suit
was correct, so we affirm that dismissal as well.
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. 1 Carolyn Wells, a Defendant-Counter Claimant in the first above-styled suit, is one and the same person as Carolyn [Wells] Ivy, the Plaintiff in the second above-styled suit.
2 I. Facts and Proceedings
The disputes in these cases center on the contractual,
statutory, and legal duties arising between a Lousiana mineral
lessee and its lessors. The facts are not seriously contested.
In December 1947, Mary S. Watson (an ancestor of the
Wellses) and others granted an oil, gas, and mineral lease to
Devon’s predecessor in interest, Union Producing Company; and in
1953, the same parties entered into an Amendment and Ratification
of Pooling Agreement. These documents (collectively, “the Watson
Lease”) affect lands in the Sligo Field, Bossier Parish,
Louisiana —— including the N/2 of the SE/4 of Section 15,
Township 17 North, Range 12 West (“Tract 1"), which the Wellses
own or once owned. The Watson Lease contains a provision
typically found in Louisiana oil and gas leases of that era,
outlining the effect of a transfer of ownership that affects the
interest of the lessor:
If the estate of either party hereto is assigned, and the privilege of assigning in whole or in part is hereby expressly allowed, the covenants hereof shall extend to their heirs, executors, administrators, successors or assigns, but no change in the ownership of the land or assignment of rentals or royalties shall be binding on the Lessee until after the Lessee has been furnished with a certified copy of the recorded instrument evidencing such transfer.
In 1959, Mary Watson died intestate. According to the
Wellses, Mary Watson’s estate was inherited by Mary G. Wells
(Mary Watson’s granddaughter and the Wellses’ mother). In 1962,
3 Mary G. Wells died intestate. Devon asserts that, in accordance
with the transfer of ownership provision quoted above, it
suspended further royalty payments pending receipt of record
evidence that the interest of Mary G. Wells had devolved to her
heirs. In 1979, Yulander Wells (a son of Mary G. Wells, and a
defendant in this action) contacted Devon seeking release of the
suspended royalty payments. Devon replied to Yulander Wells’s
written request as follows (emphasis ours):
In as much as the information you furnished is appreciated, we still need the estate documentation that such a trust was set up.2 We are enclosing our Louisiana requirements for payment of royalties and our suggested affidavit of heirship form. Please have this form completed while following the guideline of our requirements. Upon receipt of this information, we will be in a better position to release accruals.
None dispute that the Wellses did not provide Devon with a
judgment of possession evidencing the Wellses’ inheritance of an
interest in the Watson Lease. Yulander Wells did, however,
return to Devon the completed Transfer Order and Affidavit of
Heirship forms, on the strength of which Devon released the
suspended royalties to the Wellses in 1980. In addition to
disbursing some 18 years’ accumulated back royalties, Devon
commenced paying royalties to the Wellses on subsequent mineral
production, even though the royalties paid to individual family
2 The trust to which this excerpt refers was “a long- standing trust fund set aside by [Mary G. Wells]” described by Yulander Wells, into which “[a] certain percentage of the profits obtained from the leasing of [Tract 1] was to be placed....”
4 members, based on their purported interests, totaled less than
$3.00 in some months.
In 1999, the Wellses began to send demand letters to Devon,
threatening litigation and alleging that Devon had not paid all
the royalties due on Tract 1, had wrongfully paid royalties for
production on other tracts to other individuals when in fact the
royalties should have been paid to the Wellses, and had committed
trespass, conversion, and other torts. In their “final” demand
letter, the Wellses expressed a willingness to “settle this
matter in good faith quickly and quietly,” proposing that Devon
pay “$46 million to settle all claims, known or unknown, that
[the Wellses] have against [Devon] and its directors and
officers.”
Devon had replied to the previous demand letters, asking for
clarification on some points, correcting errors on others, and
explaining its position on the matters about which the Wellses’
contentions were concrete and intelligible. In response to the
“final” demand letter, however, Devon filed a declaratory
judgment action in May 1999, pursuant to 28 U.S.C. § 2201, in the
United States District Court for the Western District of
Louisiana, designating the Wellses as defendants (the
“Declaratory Action”). In the Declaratory Action, Devon sought,
inter alia, a ruling that the claims stated in the demand letters
were unfounded and that Devon had performed all of its
obligations to the Wellses arising out of its mineral operations
in the Sligo Field in Bossier and Caddo Parishes, Louisiana. The
5 Wellses filed their counterclaim in June 2000, and in September
2000, Devon filed a motion for summary judgment.
A few days later, also in September 2000, Carolyn Wells Ivy
filed an action in Illinois state court against Devon (the “Ivy
Suit”), grounded in the same set of operable facts as the
Declaratory Action, and alleging a conspiracy to commit fraud,
fraudulent concealment, violation of the Illinois Antitrust Act,
and mail fraud. Devon removed the Ivy Suit to the United States
District Court for the Northern District of Illinois, and in
December 2000, that district court granted Devon’s motion to
transfer the Ivy Suit to the Western District of Louisiana (where
the Declaratory Action’s motion for summary judgment was
pending), on the ground that the Ivy Suit arose out of the same
transaction or occurrence as the Declaratory Action.
The following month, the district court for the Western
District of Louisiana issued two memorandum rulings. In the
first ruling, pertaining to the Declaratory Action, the court
denied the Wellses’ motion to dismiss the suit, and granted
Devon’s motion for summary judgment. As to the Lease-based
claims, the court found that Devon had no obligation to make
royalty payments to the Wellses under the Watson Lease because
the Wellses had failed to provide the necessary instruments to
Devon evidencing their ownership interests in the Watson Lease.3
3 The court expressly declined to address Devon’s alternative claims that (1) the Wellses’ demand letters failed to satisfy the requirements of Louisiana’s Mineral Code, (2) Devon’s responses to the demand letters provided reasonable cause under the Mineral Code for nonpayment of royalties, and (3) the royalty
6 As to the non-Lease-based allegations in the demand letters, the
court found that claims grounded in those contentions had never
been asserted —— as they had to be —— as compulsory counterclaims
in the Declaratory Action, so that the Wellses were forever
barred from asserting them.
In the second ruling, pertaining to the Ivy Suit, the
district court dismissed the action sua sponte, concluding that
the claims stated in it should have been pled affirmatively as
compulsory counterclaims in the Declaratory Action, which had
been filed first and in which Carolyn Wells Ivy was a named party
defendant; so that Ms. Ivy was barred from asserting them in the
subsequently filed Ivy Suit. The Wellses and Ms. Ivy timely
appealed the grant of summary judgment in favor of Devon and the
dismissal of the Ivy Suit.
II. Analysis
A. Standard of Review
We review a grant of summary judgment de novo, applying the
same standard as the district court.4 A motion for summary
judgment is properly granted only if there is no genuine issue as
to any material fact.5 An issue is material if its resolution
claims related to periods before March 1996 had prescribed under Louisiana Civil Code article 3494(5)’s three years liberative prescription. 4 Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998). 5 Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
7 could affect the outcome of the action.6 In deciding whether a
fact issue has been created, we must view the facts and the
inferences to be drawn therefrom in the light most favorable to
the nonmoving party.7
The standard for summary judgment mirrors that for judgment
as a matter of law.8 Thus, the court must review all of the
evidence in the record, but make no credibility determinations or
weigh any evidence.9 In reviewing all the evidence, the court
must disregard all evidence favorable to the moving party that
the jury is not required to believe, and should give credence to
the evidence favoring the nonmoving party as well as that
evidence supporting the moving party that is uncontradicted and
unimpeached.10
We review de novo the district court’s dismissal of the Ivy
Suit.11
6 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 7 See Olabisiomotosho v. City of Houston, 185 F.3d 521, 525 (5th Cir. 1999). 8 Celotex Corp., 477 U.S. at 323. 9 Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 150 (2000). 10 Id. at 151. 11 The district court cited Federal Rule of Civil Procedure 13(a), governing compulsory counterclaims, when it dismissed the Ivy Suit. As explained more fully below, see infra, section IIC., we treat this dismissal as a dismissal for failure to state a claim for which relief can be granted, reasoning that there is no set of facts that Ivy can present that would lead to her success, because the claim itself is barred. Dismissals for failure to state a claim are reviewed de novo. Kennedy v. Tangipahoa Parish Library Bd. of Control, 224 F.3d 359, 365 (5th
8 B. The Declaratory Judgment Action
The Wellses advance four grounds in their appeal of the
grant of summary judgment in favor of Devon: (1) The district
court erroneously chose to apply Louisiana law; (2) the district
court did not have subject matter jurisdiction; (3) “the
appellees’ false statements contained in their motion [for]
summary judgment regarding a material issue in this litigation
constitute grounds for reversal” of the ruling, and (4) Devon
waived strict compliance with the mineral lease’s requirement
that “a certified copy of the recorded instrument
evidencing...[a] transfer” must be provided, when it furnished
the Transfer Order and Affidavit of Heirship forms to the
Wellses, released the suspended royalties on the strength of the
completed forms, and continued to pay subsequent royalties.12
For the reasons set forth below, we discern no merit in the first
three grounds for appeal. Although there is some merit to the
fourth ground, we conclude that the Wellses failed to present
Cir. 2000) (“We apply de novo review to dispositive motions, like dismissals for failure to state a claim and grants of summary judgment.”). 12 The Wellses also contend that the district court in Louisiana lacked personal jurisdiction over them. Setting aside the fact that they have long since waived any challenge to personal jurisdiction they might have had, this contention is scarcely developed in their brief. “[T]here is authority within this Circuit that a party who inadequately briefs an issue waives the claim.” Shell Offshore, Inc. v. Office of Worker’s Comp. Programs, 122 F.3d 312, 317 (5th Cir. 1997) (citing Cinel v. Connick, 15 F.3d 1338, 1345 (5th Cir.1994); Villanueva v. CNA Ins. Companies, 868 F.2d 684, 687 n. 5 (5th Cir.1989)). Invoking that authority, we decline to address this issue further.
9 evidence sufficient to survive Devon’s motion for summary
judgment, and therefore affirm the district court’s grant of
summary judgment.
1. Choice of Law
The Wellses first contend that the district court was
required to conduct the choice of law analysis specified in
Louisiana Civil Code article 3515, that the court failed to do
so, and that it erroneously applied Louisiana law. Civil Code
article 3515, appearing in Book IV, states that “[e]xcept as
otherwise provided in this Book, an issue in a case having
contacts with other states is governed by the law of the state
whose policies would be most seriously impaired if its law were
not applied to that issue.”13 It then lists particular factors
to be weighed in determining which state’s law should be applied.
The Wellses advance several reasons why they believe that the
laws of other states, especially the laws of Illinois, should be
applied. They fail, however, to account for the initial caveat
in article 3515, “[e]xcept as otherwise provided in this Book”;
and it is “otherwise provided” in Book IV that “[r]eal rights in
immovables situated in this state are governed by the law of this
state,”14 and that “[w]hether a thing is an immovable is
determined according to the substantive law of the state in which
13 La.Civ. Code art. 3515 (emphasis added). The “Book” to which article 3515 refers is Book IV, Conflict of Laws. 14 Id. art. 3535.
10 the thing is situated.”15 In addition, Louisiana’s Mineral Code
clarifies that “[a] mineral right is an incorporeal immovable.”16
As the entire controversy in this action concerns obligations and
entitlements created by the Watson Lease, and that lease pertains
to minerals that are located entirely in Louisiana, the district
court correctly chose to apply Louisiana law.17
2. Subject Matter Jurisdiction
The Wellses next contend that the federal court sitting in
diversity lacked subject matter jurisdiction because the
requisite amount was not in controversy.18 This position is
simply untenable given the Wellses’ express affirmation in their
Counterclaim that “[j]urisdiction is proper in this
Court...pursuant to 28 U.S.C. § 1332..., in that this is a case
between citizens of different states..., and the matter in
controversy exceeds $75,000.000, exclusive of interest and
costs.” The Pretrial Order, drafted pursuant to a telephone
conference between the parties, asserts the same, and affirms
that jurisdiction is uncontested. The Wellses cannot now advance
15 Id. 16 La. Rev. Stat. 31:18. 17 In fact, the Wellses themselves asserted in their Counterclaim that “[t]he substantive laws of the State of Louisiana (mineral and otherwise) control the controversy between the parties.” This, coupled with the fact that the Wellses did not reference choice of law as a contested issue in the pretrial order or otherwise preserve the matter for appeal, strengthens the already-dispositive statutory mandate to apply Louisiana law in this action. 18 Diversity of citizenship between the parties is not contested.
11 deficiencies of the amount in controversy to defeat
jurisdiction.19
3. Material Misrepresentation
The Wellses’ third argument on appeal appears to run as
follows: When the district court ruled that Devon had no
obligation to make royalty payments to the Wellses because Devon
was never provided with the type of document evidencing a
transfer of ownership that the Watson Lease expressly required,
the court was relying on material factual misrepresentations by
Devon. Accepting arguendo that the Watson Lease requires a
judicial decree, the Wellses contend that Devon in fact had a
judicial decree resulting from a 1979-1980 action entitled A.C.
Skannal v. Jack Watson et al., and that the judicial decree from
A.C. Skannal touched on the Wellses’ surface rights in Louisiana
property. The Wellses therefore conclude that Devon’s assertion
that it was never provided with the requisite judicial decree
19 Devon correctly points out that, even if the plaintiff’s complaint —— like Devon’s —— asserts that the amount in controversy requirement is met, the claim may still be dismissed if it appears to a legal certainty, from the face of the complaint or other evidence, that the claim is actually for less than the jurisdictional amount. De Aguilar v. Boeing Co., 47 F.3d 1404, 1409 (5th Cir. 1995). Devon also correctly notes, however, that it did not appear to a legal certainty that less than $75,000 was at issue here, especially considering the serious nature of the allegations raised in the Wellses’ demand letters, and the proposed “settlement” amount in those same letters of $46 million. This alternative method of defeating diversity jurisdiction therefore fails as well.
12 constitutes a material representation, such that the district
court’s ruling (which relied on it) must be reversed.20
It is by no means clear that a document evidencing the sale
of surface rights is even relevant to a dispute centering on
mineral rights. Even if it is relevant, however, Devon answers
the Wellses’ argument conclusively by observing that we are
precluded from considering the A.C. Skannal judgment because that
document was not presented to the district court and is thus not
part of the record on appeal.21 The Wellses’ argument that they
did not learn of the 1979 A.C. Skannal action until November 2000
is unavailing. Because the 1979-1980 documents were discovered
in 2000, they presumably could have been discovered, with
diligent investigation, in time to present them to the district
court. We therefore decline to address further this argument by
the Wellses.
4. Waiver
The Wellses’ last signficant argument on appeal is that
Devon “actually waived [its] rights under the Watson Lease by
failing to require and request a judicial decree before paying
royalties.” Although they cite inapplicable Illinois law in
20 The Wellses contend that Devon’s denial that it “refines, markets or sells products in the State of Illinois” is also a misrepresentation, but they do not develop this allegation further in their brief. As with their challenge to personal jurisdiction, we therefore consider the issue waived, and decline to address it further. See supra note 12. 21 See FED.R. APP. P. 10(a). The clerk of court therefore ordered the Wellses to remove the copy of the A.C. Skannal judgment from their brief.
13 support of this argument,22 the thrust of their reasoning, which
they expressed as follows, is well taken: A waiver of a
contractual provision may be established by conduct indicating
that strict compliance with the provision will not be required.
We would clarify the Wellses’ argument further by suggesting
that, in furnishing the affidavit of heirship form to Yulander
Wells in response to his inquiry, in accepting the completed form
from him, in releasing some 18 years’ worth of accumulated
royalty payments on the strength of that form and the completed
transfer order, and in continuing thereafter to pay royalties to
the Wellses for production on Tract 1, Devon may well have waived
strict compliance with the lease term that otherwise requires “a
certified copy of a recorded instrument evidencing...[a]
transfer.”
Even if we grant that this argument has merit, however, only
a narrow segment of the Wellses’ claim would be preserved.
First, as to the Wellses’ claims pertaining to tracts other than
Tract 1, we agree with the district court that the Wellses failed
to provide the types of documentation required by the Watson
Lease, and the argument of waiver does not reach those tracts
because Devon did not pay accumulated or continuing royalties on
them based on the strength of the completed forms returned by
Yulander Wells. Second, to the extent that the Wellses may
contend that their fractional royalty interest in Tract 1 is
22 Community Convalescent Ctr. of Naperville v. First Interstate Mortgage Co. of Ill., 537 N.E.2d 1162 (Ill. App. 2d 1989).
14 greater than the transfer order reflects because past conveyances
gave their ancestors a larger share, we again agree with the
district court’s grant of Devon’s motion for summary judgment.
Proof of a larger fractional share would have to include the
prescribed “certified copy of a recorded instrument evidencing”
past transfers, which the Wellses have not furnished to Devon;
and the waiver argument, again, does not alter this conclusion.
Obviously, Devon did not pay royalties on the larger fractional
shares in Tract 1, whether on the strength of the forms completed
and returned by Yulander Wells or on the strength of anything
else. Last, as to the Wellses’ non-lease-based claims, we agree
with the district court that they were never affirmatively
pleaded as compulsory counterclaims, as required, and thus we
affirm the grant of summary judgment as to those claims. Again,
the waiver argument does not alter this analysis: Because the
waiver argument would operate only to relax the express terms of
the lease contract, the argument is inapplicable to non-lease-
based claims.
The only possible aspect of the Wellses’ claim that the
waiver argument could save, then, is their contention that Devon
underpaid royalties on the Wellses’ fractional interest —— as
reflected in the transfer order —— on Tract 1. Yet even as to
this narrow segment of the Wellses’ claim, they failed to come
forward with summary judgment evidence sufficient to create a
genuine issue of material fact to survive Devon’s motion for
summary judgment. Except for bare, conclusional statements of
15 underpayment, the Wellses have presented no factual basis that
would put at issue the question of the monetary amount of the
royalties paid on Tract 1.
All of the Wellses’ arguments thus fail, and we affirm the
district court’s grant of summary judgment accordingly.
C. The Ivy Suit
After the district court granted summary judgment in favor
of Devon in the Declaratory Action, it then dismissed the Ivy
Suit sua sponte, reasoning that the “causes of action underlying
Ivy’s petition should have been [pled] as compulsory
counterclaims in the [Declaratory Action] pursuant to Federal
Rule of Civil Procedure 13(a).” Ivy contends that this dismissal
was improper and should be reversed for the following reasons:
(1) The district court failed to apply the proper choice of law
rules in its ruling; (2) the claims asserted in the Ivy Suit were
not compulsory counterclaims that should have been pled in the
Declaratory Action because Ivy was not aware of the underlying
actions from which the Ivy Suit arose when the counterclaim had
to be pleaded; (3) the district court in Louisiana had no
personal jurisdiction over the plaintiff; (4) the district court
had no subject matter jurisdiction over this suit which “only
involved cause[s] of action[] under Illinois law”; and (5) the
district court relied on Devon’s false material statements in
reaching its decision. Discerning no merit in Ivy’s arguments,
we affirm the district court’s sua sponte dismissal, as well as
16 the underlying denial of remand by the district court for the
Northern District of Illinois.
Ivy’s challenges to the choice of law and to the
categorization of her claims as compulsory counterclaims may be
disposed of simultaneously. As Devon correctly points out, the
district court was not faced with a choice of law issue when it
dismissed Ivy’s suit, because the suit was dismissed on federal
procedural grounds when the district court determined that the
suit comprised only claims that should have been pleaded as
compulsory counterclaims under Federal Rule of Civil Procedure
13(a) in Devon’s Declaratory Action. The court therefore did not
err in its choice of law.
Neither did the district court err in concluding that Ivy’s
claims were compulsory counterclaims when it applied the federal
procedural rules. The Wellses’ mineral interest in the Sligo
Field lies at the core of the Ivy Suit; all of Ivy’s claims are
premised on the understanding that “[p]laintiff is an heir
descendant of Mary Lee Griffin Wells and Sammie Ree Wells, who
owned certain [immovable] properties and had an interest in the
mineral and natural gas production from those properties located
in the Bossier and Caddo Parishes in the state of Louisiana,” and
that Devon “operate[s] over 50% of the oil and gas production” in
the same parishes. The fact that all of Ivy’s claims derive from
the same mineral interests and lessor-lessee relationship as do
those underlying the Declaratory Action certainly qualifies them
as claims that “arise[] out of the transaction or occurrence that
17 is the subject matter of the opposing party’s claim.”23 In Tank
Insulation International, Inc. v. Insultherm, Inc.,24 we
reiterated the questions that a court should address to determine
whether a claim was compulsory under Rule 13(a):
(1) whether the issues of fact and law raised by the claim and counterclaim largely are the same; (2) whether res judicata would bar a subsequent suit on defendant’s claim absent the compulsory counterclaim rule; (3) whether substantially the same evidence will support or refute plaintiff’s claim as well as defendant’s counterclaim; and (4) whether there is any logical relationship between the claim and the counterclaim.25
The fourth question in that rule is undoubtedly answered in the
affirmative, and as Tank Insulation makes clear, if any of the
four questions is answered affirmatively, the counterclaim is
compulsory.26 The district court therefore correctly concluded
that Ivy’s claims were compulsory counterclaims.
More responsive to Ivy’s contention of error with respect to
the compulsory counterclaim determination, however, we deem her
attempt to invoke one of Rule 13(a)’s exceptions unavailing.
Rule 13(a) provides, in pertinent part:
A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party....27
23 FED. R. CIV. P. 13(a). 24 104 F.3d 83 (5th Cir. 1997). 25 Id. at 85-86. 26 See id. at 86. 27 FED. R. CIV. P. 13(a) (emphasis added).
18 Construing Ivy’s argument generously, she appears to contend that
the claims she asserted in the Ivy Suit were not known to her
when the Wellses pleaded their counterclaim against Devon, and
that those claims arose, in fact, not from the mineral lease but
rather from the discovery of the A.C. Skannal action alluded to
above —— which discovery cast Devon’s actions toward her and her
relatives in a new light. Thus, she argues, she does come under
the exception to Rule 13(a), because she did not have the claims
alleged in the Ivy Suit “at the time of serving the pleading” of
the counterclaim in the Declaratory Action.
Ivy’s argument rings hollow for several reasons. First, as
a procedural matter, Federal Rule of Civil Procedure 13(e)
provides:
Counterclaim Maturing or Acquired After Pleading. A claim which either matured or was acquired by the pleader after serving a pleading may, with the permission of the court, be presented as a counterclaim by supplemental pleading.
If, as Ivy contends, the allegations in the Ivy suit arose from
her late discovery of “the Skannal action,” nothing prevented her
from seeking the district court’s permission to include the new
claims in a supplemental pleading in the Declaratory Action.
Second, the complaint in the Ivy Suit makes absolutely no
reference to her discovery of the A.C. Skannal action, but
instead refers simply to Ivy’s mineral interest inherited from
her parents and to Devon’s attempts to devalue, or “render
unmarketable,” that same mineral interest. On the face of the
complaint, therefore, it appears to a certainty that the
19 allegations derive, at least in substantial part, from the
mineral interest described in the Watson Lease and the resulting
lessor-lessee relationship between Ivy and Devon.
Last, Devon is convincing when it points out that the
Wellses’ Demand Letters reflect that they had complaints very
similar to those alleged in the Ivy Suit, as early as 1999. For
example, the Ivy Suit complaint alleges fraudulent concealment,
conspiracy to commit fraud, and mail fraud. The May 17l, 1999
Demand Letter, in turn, asserts the following:
At the outset, I note that you misrepresented various land transactions in an effort to deceptively give the appearance that my clients do not hold mineral interests in Tract 5.....I have discovered that [Devon] began drilling operation [sic] on this land without legal authority in 1950 and in trespass of my clients’ undivided mineral interest.... [Devon] possesses full knowledge of this fact and began a conspiracy in 1978 by soliciting the Lewis family to sign off on leases dated April 15, 1978, which were retroactive to July 5, 1950. [T]his illegal complicity continues today.... ... I have commissioned a fifty-year study of leased market rate natural Gas prices and compared the records that [Devon] submitted to my clients in 1980. I noted a vast difference in the actual prices of the market and the prices stated by [Devon]. Clearly, this is prima facie evidence of [Devon’s] effort to defraud my clients of the true royalties and circumvent their mineral rights without consideration. .. ... In summation, my Clients have suffered grievous injuries as a direct results [sic] of [Devon’s] material breach of various leases [sic] agreements, participation in conspiracy to defraud the Wells family of correct royalty payment in violation of both federal and state laws, and failure to comply with federal and state regulations regarding
20 record keeping and contracts, deceptive business practice, mail fraud, and securities fraud.
The inference from these excerpts is that, as early as May 1999,
the entire Wells family had claims essentially identical to those
asserted by Ivy in her Illinois complaint. For all of these
reasons (Ivy’s failure to seek leave of the district court to
file a supplemental pleading in the Declaratory Action under
Federal Rule of Civil Procedure 13(e); failure of her complaint
in the Illinois action even to allude to the A.C. Skannal action;
and the highly similar allegations in the May 1999 Demand
Letter), we reject Ivy’s argument that she did not have the
claims alleged in the Ivy Suit “at the time of serving the
pleading” of the counterclaim in the Declaratory Action.
Ivy next contends that the federal district court in
Louisiana lacked subject matter jurisdiction over the case, and
personal jurisdiction over her. Neither of these contentions is
adequately briefed. We note nevertheless that, as to subject
matter jurisdiction, the parties are of diverse citizenship, and
Ivy’s complaint —— even though it was filed in Illinois state
court originally —— explicitly states that the amount in
controversy exceeds the sum of $75,000; and that, as to personal
jurisdiction, her complaint is premised on her mineral interest
in Louisiana, an immovable, thus establishing a nexus between her
and the state sufficient, for purposes of this action, to support
personal jurisdiction. Both challenges to jurisdiction therefore
fail.
21 Ivy’s next argument mirrors the Wellses’ argument discussed
in section II(B)(3), supra —— that the district court erred when
it relied on Devon’s purported material misrepresentation that it
had received no requisite judicial decree, when in fact, Devon
knew of the judgment from the A.C. Skannal judgment. For the
same reasons given above, we reject this argument. Ivy adds to
that claim the further allegation that the district court relied
on a second material misrepresentation by Devon: that Devon
denied that it refines, markets or sells products in the State of
Illinois. This allegation is wholly unsupported and inadequately
briefed. We therefore decline to address it.28
Thus, all of Ivy’s arguments fail. We consider last,
however, whether the district court nevertheless erred in
dismissing the Ivy Suit sua sponte; and we conclude that it did
not.
The U.S. Supreme Court has recognized that
[Federal Rule of Civil Procedure] 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law. This procedure, operating on the assumption that the factual allegations in the complaint are true, streamlines litigation by dispensing with needless discovery and factfinding. Nothing in Rule 12(b)(6) confines its sweep to claims of law which are obviously unsupportable. On the contrary, if as a matter of law it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations, a claim must be dismissed, without regard to whether it is based on an
28 See Cinel v. Connick, 15 F.3d 1338, 1345 (5th Cir. 1994) (stating that “[a] party who inadequately briefs an issue is considered to have abandoned the claim”).
22 outlandish legal theory or on a close but ultimately unavailing one.29
Generally, however, a court that exercises its power sua sponte
to dismiss a complaint under Rule 12(b)(6) must give the
plaintiff notice before doing so, although failure to do so is
not necessarily reversible error. As we stated in Bazrowx v.
Scott,30
Generally a district court errs in dismissing a pro se complaint for failure to state a claim under Rule 12(b)(6) without giving the plaintiff an opportunity to amend. The district court may dismiss an action on its own motion under Rule 12(b)(6) as long as the procedure employed is fair. True, the district court erred in failing to give Appellant notice of the court’s intention to dismiss his suit or an opportunity to amend his complaint. Such error may be ameliorated, however, if the plaintiff has alleged his best case, or if the dismissal was without prejudice.31
As shown above, Ivy was required to assert her claims as
compulsory counterclaims in the Declaratory Action if she wished
to assert them at all. Having failed to do so, she was forever
barred from asserting those claims, from which the district court
could correctly conclude that, “as a matter of law[,] it is clear
that no relief could be granted under any set of facts that could
29 Neitzke v. Williams, 490 U.S. 319, 326-27 (1989) (superseded by statute on other grounds) (internal quotation marks and citations omitted) (emphasis added). 30 136 F.3d 1053 (5th Cir. 1998). 31 Id. at 1054 (internal quotation marks and citations omitted) (emphasis added).
23 be proved consistent with the allegations,”32 and could conclude
further that Ivy had “alleged [her] best case,”33 thus warranting
dismissal of the claims without prior notice to Ivy. We
therefore echo our earlier conclusion from Bazrowx:
[O]ur careful and thorough de novo review satisfies us that, as it stands, [Ivy’s] complaint does fail to state a claim for which relief could be granted. Given that conclusion..., any error in failing to give notice and allow amendment is harmless.34
The district court’s sua sponte dismissal of the Ivy Suit is
therefore affirmed.
III. Conclusion
For the foregoing reasons, the district court’s grant of
summary judgment in the Declaratory Action and dismissal sua
sponte of the Ivy Suit are
AFFIRMED.
32 Neitzke, 490 U.S. at 327. 33 Bazrowx, 136 F.3d at 1054. 34 Id. at 1054-55.