St. Mary Operating Co. v. Champagne

945 So. 2d 846, 6 La.App. 3 Cir. 984, 164 Oil & Gas Rep. 874, 2006 La. App. LEXIS 2750, 2006 WL 3498587
CourtLouisiana Court of Appeal
DecidedDecember 6, 2006
Docket06-984
StatusPublished
Cited by3 cases

This text of 945 So. 2d 846 (St. Mary Operating Co. v. Champagne) 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
St. Mary Operating Co. v. Champagne, 945 So. 2d 846, 6 La.App. 3 Cir. 984, 164 Oil & Gas Rep. 874, 2006 La. App. LEXIS 2750, 2006 WL 3498587 (La. Ct. App. 2006).

Opinion

945 So.2d 846 (2006)

ST. MARY OPERATING COMPANY
v.
Lester Joseph CHAMPAGNE, et al.

No. 06-984.

Court of Appeal of Louisiana, Third Circuit.

December 6, 2006.
Rehearing Denied January 10, 2007.

*847 John Weir Grant, Lafayette, LA, Ted L. Ayo, Abbeville, LA, for Defendants/Appellees—Lester Joseph Champagne, Irene Marie, Romero Champagne, Mary Frederick Luquette, and Ricky D. Luquette.

Larry Charles Hebert, Ottinger, Hebert, Lafayette, LA, for Plaintiff/Appellee—St. Mary Operating Company.

Charles Randall Loewen, Youngsville, LA, for Defendants/Appellants—Servitude Owners.

Brad Andrew Adams, New Orleans, LA, for Defendants/Appellees—Carolyn L. Doiron, Cornelieus J. Doiron, and Mary Doiron Phillips.

Court composed of ULYSSES GENE THIBODEAUX, Chief Judge, JOHN D. SAUNDERS, and BILLY HOWARD EZELL, Judges.

THIBODEAUX, Chief Judge.

St. Mary Operating Company filed a concursus proceeding with the trial court in order to determine to whom the royalty proceeds of an oil well on land in Vermillion Parish belongs. A group of the defendants, Carl Doumit, et al. (Servitude Owners), who are the owners of a mineral rights servitude that was reserved in a cash sale deed, appeal the trial court judgment granting the motion for summary judgment submitted by the other group of defendants, who are the current owners of the land, Lester Champagne, et al. (Landowners). In granting the Landowners' motion for summary judgment, the trial court ruled that the language in the cash sale deed created a ten-year fixed term mineral servitude, as opposed to a mineral servitude subject to the rules of prescription.

The Servitude Owners had also filed their own motion for summary judgment, which was denied by the trial court. The Servitude Owners appeal the denial of their motion for summary judgment as well. Because all mineral servitudes created in Louisiana are subject to the rules of prescription, and because the parties did not specifically state in the cash sale deed that the reserved ten-year period was for a fixed term, and was not subject to the rules of prescription, we reverse the trial *848 court's judgment granting the motion for summary judgment submitted by the Landowners, and we grant the motion for summary judgment submitted by the Servitude Owners.

I.

ISSUE

Under the Louisiana Mineral Code, does the phrase in a cash sale document, "for a period of 10 years," create a fixed, ten-year term, not subject to prescription, or is this phrase a reaffirmation of the parties' adoption of the regular ten-year prescriptive period, making it subject to interruption?

II.

FACTS

On June 22, 1993, the Servitude Owners parceled together tracts of land totaling roughly thirty-seven acres and sold it to the Landowners. The Landowners drew up a cash sale deed, which included the following clause: "Vendors reserve unto themselves all of the minerals underlying or which may be produced from the above described tracts for a period of ten years, this being a reservation of royalties, executive rights, bonuses, delay rentals, and all other mineral rights whatsoever."

St. Mary Operating Company drilled an oil well on the land pursuant to a lease between itself and the Servitude Owners and began drilling operations at the well on or about March 5, 2003. Oil has been, and is still, being produced from that well. St. Mary Operating Company is the operator of the well. A dispute arose as to whom the royalty payments belonged. Instead of deciding this issue on its own, St. Mary Operating Company filed this concursus proceeding with the district court asking the court to interpret the clause in the cash sale document and decide who owns the royalty payments.

The trial judge determined that the reservation clause in the cash sale deed reserved a servitude for a fixed term that was not subject to the rules of prescription. Therefore, it could not be perpetuated beyond ten years by the good-faith exploration for minerals within the ten-year period beginning on the date the servitude was established.

The Servitude Owners argue that unless a contract for mineral rights clearly provides statements to the contrary, a mineral servitude of any duration will be subject to prescription. Since it is subject to prescription, it will not terminate at the end of the stated period if prescription is interrupted by use. They argue that when the oil well was drilled within the ten-year period, prescription was interrupted.

III.

LAW AND DISCUSSION

The Louisiana Mineral Code defines a mineral servitude as, "the right of enjoyment of land belonging to another for the purpose of exploring for and producing minerals and reducing them to possession and ownership." La.R.S. 31:21. A mineral royalty is defined as, "the right to participate in production of minerals from land owned by another or land subject to a mineral servitude owned by another. Unless expressly qualified by the parties, a royalty is a right to share in gross production free of mining or drilling and production costs." La.R.S. 31:80.

The language in the cash sale deed at first seems to create a mineral royalty. This is because it does not specifically state that the Servitude Owners would have the right to go onto the land for the purposes of exploring for, and exploiting minerals found there. However, the record *849 contains a copy of a lease between the Servitude Owners and an oil company which was the predecessor in interest to St. Mary Operating Company allowing the oil company to have access to the land and set up drilling operations on that land. Only the owners of a mineral servitude would have the right to create and enter into such a lease agreement. Therefore, we find that the right created by the parties in the cash sale deed was a mineral servitude. The rules of prescription are the same for both a mineral servitude and a mineral royalty. La.R.S. 31:103.

Standard of Review

We review an appeal of the granting or denial of a motion for summary judgment de novo, using the same standards and criteria as the trial court.

An appellate court will apply the de novo standard of review when reviewing a summary judgment and will use the same criteria that govern the trial court's consideration of whether summary judgment is appropriate. Goins v. Wal-Mart Stores, Inc., 01-1136 (La.11/28/01), 800 So.2d 783. Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact, and that [the] mover is entitled to [a] judgment as a matter of law." La.Code Civ.P. art. 966(B). In this case, there is no genuine issue of material fact.

Lamoco, Inc. v. Hughes, 02-1498, p. 4 (La.App. 3 Cir. 7/9/03), 850 So.2d 67, 70, writ denied, 03-2603, 860 So.2d 1156 (La.12/12/03).

In this case, there is no dispute over any material facts. The parties' dispute revolves solely around the legal interpretation and effect of the mineral servitude reserved in the cash sale deed. Therefore, our task is to determine whether the phrase in the cash sale deed, "for a period of ten years," was intended to create a ten-year term, or to merely restate that the parties adopted the standard ten-year prescriptive period imposed by law.

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945 So. 2d 846, 6 La.App. 3 Cir. 984, 164 Oil & Gas Rep. 874, 2006 La. App. LEXIS 2750, 2006 WL 3498587, Counsel Stack Legal Research, https://law.counselstack.com/opinion/st-mary-operating-co-v-champagne-lactapp-2006.