Quality Environmental Processes, Inc. v. IP Petroleum Co.

219 So. 3d 349, 2016 La.App. 1 Cir. 0230, 2017 La. App. LEXIS 635
CourtLouisiana Court of Appeal
DecidedApril 12, 2017
Docket2016 CA 0230
StatusPublished
Cited by19 cases

This text of 219 So. 3d 349 (Quality Environmental Processes, Inc. v. IP Petroleum Co.) 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. IP Petroleum Co., 219 So. 3d 349, 2016 La.App. 1 Cir. 0230, 2017 La. App. LEXIS 635 (La. Ct. App. 2017).

Opinions

CALLOWAY, J.

| ¡/The protracted litigation in this case involves mineral rights and royalties associated with a production well, IP Pet. PPCQ 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 defendants IP Petroleum Company, Inc. (hereinafter “IP Petroleum”) and International Paper Company challenge a trial court judgment on remand that awarded the plaintiffs, Quality Environmental Processes, Inc. (hereinafter “Quality”), Michael X. St. Martin, and Virginia Rayne St: Martin: (A) $107,612.67 in unpaid mineral royalties; (B) $215,225.34 in statutory penalties pursuant to La. R.S. 31:139; (C) $230,563.83 in interest from October 31, 2002, on the unpaid royalties and penalties; (D) $138,350.46 in statutory attorney’s fees pursuant to La. R.S. 31:139; and (E) $691,752.30 in intentional tort damages. The plaintiffs assert their own appeal of the judgment on remand insofar as the judgment: (F) dismissed their claim for $817,464.29 in mineral royalties. In this appeal, we amend, in part, the judgment of the trial court, and affirm as amended.

In a related appeal, also rendered this date, 2016 CA 0171 consolidated with 2016 CA 0172, the plaintiffs appeal a judgment granting partial summary judgment in favor of the defendant, IP Petroleum, and dismissing with prejudice the plaintiffs’ claims for mineral royalties attributable to production on the IP Pet. PPCO No. 1 well prior to April 1,2001.'

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”).2 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.3 That suit bears [360]*360trial court docket number 129,412 and was ^assigned to Division D of the 32nd JDC in Terrebonne Parish, presided over by Judge David W. Arceneaux. It is referred to by the parties as the “Blue Line I” litigation. See Quality I, 144 So.3d at 1018. The Blue Line I litigation is the subject of the related appeal before this court, 2016 CA 0171 consolidated with 2016 CA 0172.

In the Blue Line I suit, 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 (September 2002), in the amount of $817,464.29.4 The trial court later granted the plaintiffs leave to amend their suit to add Noble Energy, Inc. (hereinafter “Noble. Energy”), as the successor to EDC, as a defendant.

At the time the Blue Line I 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 (hereinafter “previously-paid royalties”), while the remaining $106,977.66 in royalties (derived from production on the well between April 1, 2001, and September 1, 2002) were placed in escrow by the law firm of Montgomery, Barnett, Brown, Read, Hammond & Mintz, L.L.P. (hereinafter “escrowed royalties”). See Quality I, 144 So.3d at 1018.

Ultimately, Mobil was dismissed from the Blue Line I 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. See Quality I, 144 So.3d at 1018. IP Petroleum is the sole remaining defendant in the Blue Line I suit.5

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, L.L.P. See Quality 7, 144 So.3d at 1018. The 4trial 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 the instant suit on December 1, 2006, against IP Petroleum, International Paper Company, Montgomery Barnett, L.L.P., and Mr. Pearce, which is the subject of this appeal. The plaintiffs again asserted a claim for unpaid royalties for production from the IP Pet. PPCO No. 1 well against IP Petroleum and International Paper, specifically, the previously-paid royalties in the amount of $817,464,29. The plaintiffs also asserted a claim against IP Petroleum and International Paper Company for double the amount of royalties due, interest, [361]*361and attorney’s fees pursuant to La. R.S. 31:137, et seq. The plaintiffs asserted a claim against Mr. Pearce and Montgomery Barnett, L.L.P. for the escrowed royalties, in the amount of $106,977.66, as well as damages and attorney’s fees. Further, the plaintiffs sought damages against all,the defendants for certain alleged “willful and deliberate acts” under the Louisiana Unfair Trade Practices Act (hereinafter “LUTPA”), La. R.S. 51:1401, et seq. See Quality I, 144 So.3d at 1018. Additionally, under LUTPA, the plaintiffs sought three times the actual damages shown at the trial of this matter for the defendants’ knowing commitment of the alleged unfair and deceptive acts. The instant suit bears trial court docket number 149,973 and was assigned to a different division of the 32nd JDC in Terrebonne Parish—Division B— which is presided over by Judge John R. Walker. This suit is referred to by the parties, as the “Blue Line II” litigation.6 See Quality I, 144 So.3d at 1018.

The case came before the trial court for trial on May 11,12, and 13, and September 14 and 15, 2009. Thereafter, the trial court signed a judgment on October 28, 2011, in favor of the plaintiffs and against the defendants, decreeing 100% ownership of the mineral rights in the plaintiffs, and ordering IP Petroleum to pay a total of $6,725,375.98 for unpaid royalties, penalties (twice the royalties due), interest on unpaid royalties and penalties from July 1, 1997, through October 28, 2011, and 25% attorney’s fees. As to the LUTPA claim, the judgment ordered IP Petroleum, International Paper Company, Mr. Pearce, and Montgomery Barnett, L.L.P. to pay a total of $4,549,227.91 in penalties (triple urtpaid royalties), interest on treble damages from the date of demand, and 25% attorney’s fees. See Quality I, 144 So.3d at 1019.

IfiThe defendants suspensively appealed the October 28, 2011 judgment of the trial court. The plaintiffs did not appeal any portion of the trial court’s judgment. On appeal, this court vacated the judgment of the trial court in an unpublished, summary opinion.

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Cite This Page — Counsel Stack

Bluebook (online)
219 So. 3d 349, 2016 La.App. 1 Cir. 0230, 2017 La. App. LEXIS 635, Counsel Stack Legal Research, https://law.counselstack.com/opinion/quality-environmental-processes-inc-v-ip-petroleum-co-lactapp-2017.