Square Mile Energy, LLC v. Paul Roy Pommier

• Court: Louisiana Court of Appeal
• Decided: June 1, 2016
• Docket: CA-0015-0807
• Status: Unknown

Opinion

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

15-807

SQUARE MILE ENERGY, LLC

VERSUS

PAUL ROY POMMIER, ET AL.

**********

APPEAL FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF VERMILION, NO. 96229 HONORABLE JOHN D. TRAHAN, DISTRICT JUDGE

ULYSSES GENE THIBODEAUX CHIEF JUDGE

Court composed of Ulysses Gene Thibodeaux, Chief Judge, Jimmie C. Peters, and Phyllis M. Keaty, Judges.

AFFIRMED.

John F. Craton Barousse & Craton, LLC P. O. Box 1305 Crowley, LA 70527-1305 Telephone: (337) 785-1000 COUNSEL FOR: Defendant/Appellee - Paul Roy Pommier

Jeremy B. Shealy Ross F. Roubion Onebane Law Firm P. O. Box 3507 Lafayette, LA 70502-3507 Telephone: (337) 237-2660 COUNSEL FOR: Defendant/Appellant - Roxanne Pommier Jamie S. Manuel Mayhall & Blaize, LLC 5800 One Perkins Place Drive, Suite 2-B Baton Rouge, LA 70808 Telephone: (225) 810-4998 COUNSEL FOR: Plaintiff/Appellee - Square Mile Energy, LLC THIBODEAUX, Chief Judge.

This appeal arises from a concursus proceeding initiated by Square

Mile Energy, LLC, (“Square Mile”) against Paul Roy Pommier and Roxanne

“Rox” Pommier. Square Mile operates a drilling unit on property that was the

subject of an agreement entitled “Partition of Community Property” (“Partition

Agreement” or “Agreement”) signed by Paul and Roxanne in 2010 following their

divorce in 2007. One provision of the Partition Agreement grants Roxanne a 9.84

acre piece of land known as “Tract 2” and includes the following clause (“N.B.

Clause”): “N.B.: Included in this transfer are any and all mineral rights, when

available, to Rox G. Pommier and all surface rights.” Paul and Roxanne disagree

on whether the transfer includes an interest in a mineral servitude that Paul

inherited as a co-owner in indivision with his siblings.

When Paul and Roxanne were unable to resolve their disagreement on

ownership of the mineral rights, Square Mile filed this suit. The trial court ruled

that the phrase “when available” rendered the N.B. Clause ambiguous, and then

determined, based on parol evidence, that Roxanne and Paul did not intend to

transfer ownership of Paul’s interest in the mineral servitude to Roxanne. For the

following reasons, we affirm.

I.

ISSUE

We must decide whether, by including a clause stating “N.B.:

Included in this transfer are any and all mineral rights, when available, to Rox G.

Pommier and all surface rights[,]” Paul and Roxanne intended to transfer a portion of the mineral interest co-owned by Paul in indivision with his siblings to

Roxanne.

II.

FACTS AND PROCEDURAL HISTORY

Paul and Roxanne were married from 1986 to 2007. In 2001, a

Judgment of Possession in the Succession of Noelia L. Pommier (“Judgment of

Possession” or “Judgment”) granted Paul and each of his four siblings a tract of

land, with Paul inheriting a 9.84 acre tract known as “Tract 1.” Paul and his

siblings also each inherited a one-fifth interest in a mineral servitude burdening all

five tracts of land.

Tract 2 was initially inherited by Paul’s brother Luby. Ownership of

Tract 2 and Luby’s one-fifth interest in the mineral servitude passed to Luby’s

daughters (Paul’s nieces), Sue and Deborah Menard, when Luby died. Roxanne

and Paul purchased Tract 2 from Sue and Deborah in 2002. However, the sale

agreement included a clause in the property description stating: “N.B. All

minerals and mineral rights are reserved and the same are not sold or conveyed

with the land herein described.”

Three years after Paul and Roxanne divorced in 2007, they executed

the Partition Agreement, the stated purpose of which was to “settle and liquidate

the community which formerly existed between them[.]” Paragraph I of the

Agreement stated, in pertinent part:

ROX G. POMMIER hereby receives and PAUL ROY POMMIER hereby grants, bargains, sells, conveys and delivers . . . unto ROX G. POMMIER all of his rights, title and interest in and to the following described property, to-wit:

2 1. A certain tract or parcel of land, together with all buildings and improvements thereon, and all the rights, ways, privileges, servitudes, appurtenances and advantages thereunto belonging or in anywise appertaining, situated in Section 5, Township 11 South, range 2 East of Vermillion Parish, Louisiana, designated as Tract 2 of the Noelia LeBlanc Pommier Partition and containing 9.84 acres of ground . . . .

N.B.: Included in this transfer are any and all mineral rights, when available, to Rox G. Pommier and all surface rights. Paul and Roxanne disagree on whether the terms of the Partition

Agreement transfer a portion of Paul’s interest in the mineral servitude to Roxanne.

Square Mile, which signed a lease in 2008 to form a drilling unit on the property at

issue, was also unable to determine whether Paul and Roxanne intended to transfer

a portion of the mineral interest to Roxanne or whether they intended for Paul to

retain the whole mineral interest. When Paul and Roxanne were unable to resolve

their differences, Square Mile filed a concursus petition. Both Paul and Roxanne

filed motions for summary judgment at the trial court. After a hearing, the trial

court concluded that the phrase “when available” in paragraph I of the Partition

Agreement rendered the N.B. Clause ambiguous. The trial court then looked to

parol evidence, including an affidavit signed by Paul and deposition testimony

from Paul and Roxanne. Based on this evidence, the trial court concluded that the

parties did not intend to transfer any portion of the interest in the mineral rights

that Paul had inherited to Roxanne. The trial court granted Paul’s motion for

summary judgment and denied Roxanne’s motion. From that trial court judgment,

Roxanne filed a timely appeal.

3 III.

LAW AND DISCUSSION

On appeal, Roxanne argues that since mineral rights were not

expressly excepted in the transfer of Tract 2 in the Partition Agreement, the

Agreement unambiguously transferred a portion of Paul’s mineral rights to

Roxanne. Roxanne interprets the Judgment of Possession as donating to Paul a

one-fifth interest in the minerals underlying each of the five surface tracts the

Judgment donated to Paul and his siblings, including Tract 2. She points to the

“fundamental rule of law that a conveyance of land carries with it all of the

incidents of ownership, including mineral rights, except such rights as may be

expressly reserved.” Roemer v. Caplis, 369 So.2d 1186, 1193 (La.App. 2 Cir.

1979), writ denied, 371 So.2d 620 (La.1979). Roxanne contends that the phrase

“when available” was not an express reservation. Consequently, one-fifth of

Paul’s interest in the mineral servitude transferred to her. Alternatively, if this

court finds that the agreement is ambiguous within its four corners, Roxanne

asserts that there remain genuine issues of material fact regarding the parties’

intent which would preclude a grant of summary judgment in favor of Paul.

We review a trial court’s decision to grant a motion for summary

judgment de novo. Indep. Fire Ins. Co. v. Sunbeam Corp., 99-2181, 99-2257 (La.

2/29/00), 755 So.2d 226. A motion for summary judgment shall be granted if the

evidence shows “that there is no genuine issue as to material fact, and that the

mover is entitled to summary judgment as a matter of law.” La.Code Civ.P. art.

966(B)(2), amended by 2015 La. Acts No. 702, § 1.

Contracts are interpreted to determine the intent of the parties.

La.Civ.Code art. 2045. “When the words of a contract are clear and explicit and

4 lead to no absurd consequences, no further interpretation may be made in search of

the parties’ intent.” La.Civ.Code art. 2046. Moreover, “[e]ach provision in a

contract must be interpreted in light of the other provisions[.]” La.Civ.Code art.

2050. Here, the N.B. Clause reads in full: “Included in this transfer are any and all

mineral rights, when available, to Rox G. Pommier and all surface rights.” Though

the phrase “any and all mineral rights” is broad and general, “it must be interpreted

to cover only those things it appears the parties intended to include.” La.Civ.Code

art. 2051. When read in the context of the transfer of Tract 2, it is clear that the

phrase “any and all mineral rights, when available” refers to ownership of the

minerals underlying Tract 2, whenever they may be available. It happens that

those rights could not be transferred by Paul when he signed the Partition

Agreement. Paul was a co-owner in indivision of a mineral servitude with his

siblings, not the owner of the mineral rights underlying Tract 2, so Paul could not

transfer the mineral rights underlying Tract 2. However, the mineral rights would

transfer to the owner of the surface of Tract 2 after ten years’ nonuse. La.R.S.

31:27(1). The parties were aware of the state of ownership of the minerals

underneath Tract 2, and it is not absurd to conclude that Paul and Roxanne

intended Roxanne to become owner of the mineral rights underlying Tract 2 should

the servitude ever expire. Accordingly, the plain language of the Partition

Agreement compels the conclusion that the parties intended to transfer the minerals

underlying Tract 2, not Paul’s present interest in the mineral servitude, to Roxanne.

This conclusion is further supported by other provisions in the

contract. The contract is entitled “Partition of Community Property” and the stated

intent of the parties is “to settle and liquidate the community which formerly

existed between them” (emphasis added). Clearly, the parties intended for the

5 agreement to deal with community property. Paul’s interest in mineral rights, on

the other hand, is his separate property. See La.Civ.Code art. 2341 (separate

property of a spouse includes property acquired by individual inheritance).

Nowhere does the Partition Agreement mention either party’s separate property.

The plain language of the agreement does not support a reading that would transfer

one party’s separate property to the other party, and, therefore, does not support

Paul transferring his mineral interest to Roxanne.

Furthermore, the interpretation urged by Roxanne would render the

language in the N.B. Clause superfluous. Paragraph I of the Partition Agreement

requires Paul to transfer “all of his rights, title and interest in” Tract 2. This alone

would be sufficient to transfer mineral rights that were immediately available,

which would make the N.B. Clause redundant and without effect. This is an

outcome that ought to be avoided when interpreting contracts under Louisiana law.

See La.Civ.Code art. 2049. To give effect to the N.B. clause, and to interpret the

contract according to its plain language, we must read the Partition Agreement as

transferring the minerals underlying Tract 2 to Roxanne, whenever they become

available.

Finally, we note that even if there were any lack of clarity regarding

the meaning of the N.B. Clause, that ambiguity would not require us to reach a

different result. Rather, any ambiguity in the N.B. clause could be resolved by

looking to parol evidence to determine the parties’ intent regarding that Clause.

See Dixie Campers, Inc. v. Vesely Co., 398 So.2d 1087 (La.1981). The parol

evidence in this case consists of an affidavit signed by Paul and deposition

testimony from Paul and Roxanne. In his sworn affidavit, Paul stated that “[i]t was

never my intention to convey any of my separate property to my former wife” and

6 that he “intended for Rox to get the minerals to the 9.84 acres that we purchased

from my nieces . . . which they reserved in the sale.” Similarly, in his deposition,

Paul said the following:

Q: When you signed [the Partition of Community Property] document, did you read . . . this phrase here that starts NB? Do you have a memory of that?

A: Yes.

Q: What’s your understanding of what that means?

A: When – when available, my understanding was when the profit – when the mineral rights were no longer being paid, after ten years, then she gets all mineral rights off of this section here. Not this one. Q: What – explain to me what your understanding – I think you just said when all the mineral rights were not being paid. When would that be? How does that work?

A: After ten years of production ceasing.

In her deposition, Roxanne explained the meaning of the N.B. Clause as follows:

Q: In the Partition of Community Property, it says included in this transfer are any and all mineral rights when available to Rox G. Pommier and all surface rights. What’s your understanding of what that language means? A: That if it were available, then I would get it. Q: And when would it come available?

A: Whenever it’s there.

Q: Okay. When Sue and Debra reserved their interest in the minerals, did you have any understanding of how that would work according to the law, when minerals are reserved? Was that explained to you during the sale or –

A: Whenever it was available. Q: Did you have any expectation as to when it would become available?

A: No.

....

7 Q: Okay. Then when the sale took place, Sue and Debra reserved their interest in those minerals that they –

A: That’s correct.

Q: -- inherited? But you and [Paul] as community property acquired the surface with the expectation that at some point in the future, Sue and Debra’s minerals would become available to you? A: Well, after ten years of no productivity, it goes back to the surface owner.

Q: So you understand that concept?

Q: Is that what it means when it says when available?

A: It was just whenever – whenever whatever was available.

From both parties’ statements we can easily conclude that they

intended the phrase “any and all mineral rights, when available” to refer to the

minerals underlying Tract 2, should the servitude expire. There is no genuine issue

of material fact on this question. We, therefore, find that the trial court properly

granted Paul’s motion for summary judgment and properly denied Roxanne’s

motion for summary judgment. Thus, we affirm the trial court’s judgment.

IV.

CONCLUSION

The judgment of the trial court is affirmed. Costs are assessed to the

appellant, Roxanne G. Pommier.