Phillips Petroleum Co. v. OKC Ltd. Partnership

582 So. 2d 351, 117 Oil & Gas Rep. 269, 1991 La. App. LEXIS 1800, 1991 WL 101038
CourtLouisiana Court of Appeal
DecidedJune 13, 1991
DocketNo. 91-CA-0125
StatusPublished
Cited by2 cases

This text of 582 So. 2d 351 (Phillips Petroleum Co. v. OKC Ltd. Partnership) 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
Phillips Petroleum Co. v. OKC Ltd. Partnership, 582 So. 2d 351, 117 Oil & Gas Rep. 269, 1991 La. App. LEXIS 1800, 1991 WL 101038 (La. Ct. App. 1991).

Opinion

WILLIAMS, Judge.

Plaintiff, Phillips Petroleum Company, filed suit in Plaquemines Parish, the coastal parish nearest the offshore area in the Gulf of Mexico subject to the oil and gas sublease which it seeks to cancel and remove from the conveyance records of Plaquemines Parish. Through this appeal, defendant OKC Limited Partnership1 contends that the trial court erred in overruling its declinatory exception raising the objection of improper venue because the immovable property subject to the sublease is in federal waters, beyond the coastal boundaries of the State of Louisiana. As we agree with defendant, we find the venue provision governing actions involving immovable property, LSA-C.C.P. art. 80, inapplicable to this suit. We, therefore, reverse the judgment of the trial court, sustain the exception and transfer this action to Orleans Parish, the parish in which defendant’s agent for service of process is located.

FACTUAL AND PROCEDURAL HISTORY

Phillips’ petition asserts that, on July 1, 1967, the United States of America (lessor) granted an oil and gas lease to Signal Oil and Gas Company, The Louisiana Land and Exploration Company, Amerada Petroleum Corporation and Marathon Oil Company (lessees), covering all of Block 89, South Pass Area, Offshore Louisiana. The petition avers the property subject to the lease is located off the shore of Louisiana, closest in physical proximity to the Parish of Plaquemines. It asserts that venue is, [353]*353therefore, proper in Plaquemines Parish under LSA-C.C.P. art. 80.

The petition further asserts that Aminoil USA Inc. became the successor in interest under the lease to Signal Oil and Gas Company. By a letter agreement known as a farmout agreement2 (“Agreement”), dated May 26, 1977, effective June 14, 1977, Ami-noil contracted to sublease all of its undivided ¾ working interest in the lease to OKC Corp. Pursuant to the Agreement, by a document captioned Assignment of Interest in Oil and Gas Lease (“Assignment”), dated May 26, 1977, executed July 11, 1977, Aminoil subleased all of its undivided ¼ working interest in the lease to OKC Corp., subject to the terms and conditions of the Agreement, which included Aminoil’s reservation of an overriding royalty interest and net profits interest. Phillips is the successor in interest to Aminoil under both the Agreement and the Assignment.

The petition claims OKC breached the Agreement by reinterpreting the calculation of net profits interest and overriding royalty from a month-to-month basis to a basis of cumulating the balance in the net profits account. Thus, Phillips seeks an accounting in accordance with the net profits accounting provisions of the Agreement; an award for overriding royalty and net profits interest due and owing; an award for double damages and attorneys’ fees; a dissolution of the Agreement; and a cancellation of the Assignment.3

In response, OKC filed a declinatory exception raising the objection of improper venue. The exception states that OKC is a foreign partnership which does not have a business office, an establishment, or an agent for service of process4 in Plaque-mines Parish. The exception asserts that venue is improper under LSA-C.C.P. art. 80 because this action does not assert an interest or right in any immovable property owned by OKC in Plaquemines Parish. It claims the immovable property related to this action, Block 89 in the South Pass Area, is located on the Outer Conntinental Shelf. It further asserts venue is improper under LSA-C.C.P. art. 80 because Phillips’ action for an accounting under and rescission of the Agreement has only an indirect connection to immovable property.

In its opposition to the exception, Phillips claims that, for venue purposes, the property affected by the sublease is situated in Plaquemines Parish because the Assignment burdens Block 89 as a matter of public record in Plaquemines Parish and because an object of this suit is to cancel the Assignment and its inscription on those records.

The trial court heard the exception on October 18, 1990. The written judgment overruling the exception was rendered on October 23, 1990, without written reasons. From that judgment, OKC has devolutively appealed.

MERITS OF OKC’S APPEAL

Venue means the parish where an action or proceeding may properly be brought and tried under the rules regulating the sub[354]*354ject. LSA-C.C.P. art. 41. One of the general rules of venue is that an action against,

(6) A nonresident, other than a foreign corporation or a foreign or alien insurer, who has appointed an agent for the service of process in the manner provided by law, shall be brought in the parish of the designated post office address of an agent for the service of process. LSA-C. C.P. art. 42(6).

This general rule of venue, however, is subject to exceptions. LSA-C.C.P. art. 43. See LSA-C.C.P. arts. 71-85. The exception pertinent to actions involving immovable property, is contained in LSA-C.C.P. art. 80. That article provides in pertinent part:

A. The following actions may be brought in the parish where the immovable property is situated or in the parish where the defendant in the action is domiciled:
(1)An action to assert an interest in immovable property, or a right in, to, or against immovable property, except as otherwise provided in Article 72;
* * * * * *
(3) An action arising from the breach of a lease of immovable property, including the enforcing of a lessor’s privilege or seeking the payment of rent. The venue authorized by this Sub-paragraph shall be in addition to any other venue provided by the law for such action.

Thus, venue for an action involving immovable property, such as a suit to cancel an immovable right and to seek statutory penalties and damages for violation of an immovable right, may be brought in the parish where the immovable is situated. LSA-C.C.P. art. 80.5 Bailey v. Franks Petroleum, Inc., 417 So.2d 503 (La.App. 1st Cir.1982). Distinguish, Hawthorne Oil & Gas Corp. v. Continental Oil Co., 377 So.2d 285 (La.1979) [plaintiff sought rescission of a gas purchase agreement, a contract with a movable for its object], Nevertheless, as venue exceptions are in derogation of a common right, they must be strictly construed and the party claiming the benefit of an exception must bring itself clearly within the exception. Hawthorne Oil & Gas Corp. v. Continental Oil Co., supra.

Applying these precepts, we find the venue exception contained in LSA-C. C.P. art. 80 is inapplicable to this suit.

The gulfward boundaries of Louisiana’s coastal parishes west of the Mississippi River extend from the outer terminous of their common boundaries due south, true bearing, to the outer gulfward boundary of the state, and the gulfward boundary of said coastal parishes extend coextensively with the gulfward boundary of the state. LSA-R.S. 49:6. The gulfward boundary of the state extends a distance into the Gulf of Mexico three marine leagues from the coast. LSA-R.S. 49:1. See also 43 U.S.C. § 1312. Therefore, strictly construing the venue exception contained in LSA-C.C.P. art.

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Bluebook (online)
582 So. 2d 351, 117 Oil & Gas Rep. 269, 1991 La. App. LEXIS 1800, 1991 WL 101038, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phillips-petroleum-co-v-okc-ltd-partnership-lactapp-1991.