Quality Environmental Processes, Inc. v. Energy Development Corp.

218 So. 3d 1045, 2016 La.App. 1 Cir. 0171, 2017 La. App. LEXIS 627
CourtLouisiana Court of Appeal
DecidedApril 12, 2017
Docket2016 CA 0171, 2016 CA 0172
StatusPublished
Cited by26 cases

This text of 218 So. 3d 1045 (Quality Environmental Processes, Inc. v. Energy Development Corp.) 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
Quality Environmental Processes, Inc. v. Energy Development Corp., 218 So. 3d 1045, 2016 La.App. 1 Cir. 0171, 2017 La. App. LEXIS 627 (La. Ct. App. 2017).

Opinion

CALLOWAY, J.

|aThe protracted litigation in this case involves mineral rights and royalties associated. with a production well, IP Pet. PPCO No. 1 well, located on a certain tract of land owned by the plaintiffs in Terre-bonne Parish (hereinafter “St. Martin property”). In this appeal, the plaintiffs, Quality Environmental Processes, Inc. (hereinafter “Quality”), Michael X. St. Martin, and Virginia Rayne St. Martin, [1050]*1050appeal a trial court judgment granting partial summary judgment in favor of the defendant, IP Petroleum Company, Inc. (hereinafter “IP Petroleum”), and dismissing with prejudice the claims of the plaintiffs for mineral royalties attributable to production on the IP Pet. PPCO No. 1 well prior to April 1, 2001. In this appeal, we affirm the partial summary judgment in favor of IP Petroleum.

■ In a related appeal, also rendered this date, 2016 CA 0280,- IP Petroleum and International1 Paper Company challenge a trial court judgment on remand which awarded the plaintiffs: (A) $107,612.67 in unpaid mineral royalties; (B) $216,225.34 in statutory penalties pursuant to La. R.S. 31:139; (C)‘ $230,563.83 in .interest from October 31, 2Ó02, on the unpaid royalties and penalties; (D) $138,350.46 representing 25% statutory attorney fees on unpaid royalties, penalties, and interest; and (E) $691,752.30 in damages for intentional tort. The plaintiffs assert their own appeal of the judgment on remand which: (F) dismissed their claim for $817,464,29 in mineral royalties.-

FACTS AND PROCEDURAL HISTORY

The background facts and procedural history of this case are more detailed and fully set forth in the Louisiana Supreme Court’s opinion in Quality Environmental Processes, Inc. v. I.P. Petroleum Co., Inc., 2013-1582 (La. 5/7/14), 144 So.3d 1011 (rehearing denied July 1, 2014) (hereinafter “Quality I"). For additional background facts, see Quality Environmental Processes, Inc. v. I.P. Petroleum Co., Inc., 2012-0776, 2013 WL 690535 (La. App. 1 Cm. Feb. 25, 2013). For efficiency, we discuss only the facts and procedural history relevant to the current appeal.

On June 29, 2000, Quality and the St. Martins filed a petition for declaratory judgment and damages against Energy Development Corporation (hereinafter “EDC”), Phillips Petroleum Corporation (hereinafter “Phillips”), Mobil Exploration & Producing U.S., Inc. (hereinafter^ “Mobil”), and IP Petroleum.2 The plaintiffs alleged they were entitled to receive from the defendants all mineral royalties on production from the IP Pet. PPCO No. 1 well attributable to the St. Martin property from June 29, 1997, through the date the well was plugged and abandoned,3 The petition sought: (1) a declaratory judgment that the 1966 mineral deed did not create a mineral servitude; (2) an accounting of all pre-1992 royalties from Mobil, Phillips, and IP Petroleum; (3) an accounting of all post-1992 royalties from IP Petroleum and Phillips; (4) payment by Mobil and Phillips to plaintiffs “as damages” double the amount of royalties due and unpaid; (5) cancellation of described mineral leases; and (6) unspecified damages for non-payment of royalties. The trial court granted the plaintiffs leave to amend their suit to add Noble Energy, Inc. (hereinafter “Noble Energy”), as the successor to EDC, as a defendant.

[1051]*1051At the time the instant suit was filed, some $817,464.29 in royalties had been paid by IP Petroleum to Noble Energy and Phillips between June 29, 1997, and April 1, 2001, while the remaining $106,977.66 in royalties (derived from production between April 1, 2001, and September 1, 2001) had been placed in escrow. See Quality I, 144 So.3d at 1018. The instant suit bears trial court docket number 129,412 and was assigned to Division D of the 32nd JDC in Terrebonne Parish, presided over by Judge David W. Areen-eaux. This suit is referred to by the parties as the “Blue Line I” litigation. See Quality I, 144 So.3d at 1018.

Ultimately, Mobil was dismissed from the instant suit. The plaintiffs settled their claims with Phillips in 2001 and with Noble Energy in 2005, who were also dismissed from the suit. See Quality I, 144 So.3d at 1018. In the 2001 and 2005 settlement agreements with Phillips and Noble Energy, the plaintiffs obtained all of the mineral interests in the St. Martin property that had belonged to Phillips and Noble Energy respectively, i.e., the “after-acquired mineral rights.” See Quality I, 144 So.3d at 1018. IP Petroleum is the sole remaining defendant in this suit.

In 2006, the plaintiffs attempted to amend their petition to add as a defendant International Paper Company (the parent company of IP Petroleum) and to assert a claim for tortious conspiracy against the defendants, as well as the attorneys for IP Petroleum, John Y. Pearce and the law firm of Montgomery, Barnett, Brown, Read, Hammond & Mintz, L.L.C. ¿⅛⅛ Quality I, 144 So.3d at 1018. By judgment rendered February 27, 2007, the trial court denied the plaintiffs’ motion to amend their pleadings to add the above-described defendants. See Quality I, 144 So.3d at 1018.

Thereafter, Quality and the St. Martins filed a second suit against IP Petroleum and International Paper, asserting their claim for unpaid royalties from June 29, 1997, through the date the well was plugged and abandoned. The plaintiffs also sought damages under the Louisiana Unfair Trade Practices Act (hereinafter “LUTPA”) against IP Petroleum, International Paper, and IP Petroleum’s attorneys, Mr. Pearce and the law firm of Montgomery Barnett. See Quality I, 144 So.3d at 1018. The second suit bears trial court docket number 149,973 and was assigned to Division B of the 32nd JDC in Terrebonne Parish, presided over" by Judge John R. Walker. The second suit is referred to by the parties as the “Blue Line II” litigation. See Quality I, 144 So.3d at 1018. The Blue Line II suit is the subject of the related appeal pending- before this court, 2016 CA 0230.4

In August 2007, the .plaintiffs filed a motion for partial summary judgment, seeking judgment against IP Petroleum for royalties due since June 29, 1997,5 IP Petroleum opposed the motion. Following a hearing, the trial court denied the plaintiffs’ motion.

. On November 13, 2008, IP Petroleum filed a motion for partial summary judg[1052]*1052ment, seeking dismissal of the plaintiffs’ claims. Following a hearing, the trial court denied IP Petroleum’s motion in a judgment signed May 8,2009.6

On August 29, 2014, IP Petroleum filed a motion for partial summary judgment, seeking dismissal of “all of the claims of the plaintiffs herein to any and all mineral royalties from production prior to April 1, 2001 from the IP Pet. PPCO No. 1 well,” that is, the $817,464.29 in previously-paid royalties by IP Petroleum to Noble Energy and Phillips between the stipulated dates of June 29, 1997, and April 1, 2001. Royalties derived from production between April 1, 2001, and September 1, 2001, in the amount of $106,977.66 and placed in escrow, were not at issue in IP Petroleum’s motion. IP Petroleum prayed for partial summary judgment in its favor and “that plaintiffs’ claims for the sum of $817,464.29 in royalties paid to Phillips and [Noble ^Energy] prior to April 1, 2001 be dismissed, with prejudice and at their costs.” The plaintiffs opposed the motion.

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Bluebook (online)
218 So. 3d 1045, 2016 La.App. 1 Cir. 0171, 2017 La. App. LEXIS 627, Counsel Stack Legal Research, https://law.counselstack.com/opinion/quality-environmental-processes-inc-v-energy-development-corp-lactapp-2017.