St. Mary Operating Co. v. Guidry

954 So. 2d 397, 164 Oil & Gas Rep. 885, 6 La.App. 3 Cir. 1495, 2007 La. App. LEXIS 654, 2007 WL 983291
CourtLouisiana Court of Appeal
DecidedApril 4, 2007
Docket2006-1495
StatusPublished
Cited by7 cases

This text of 954 So. 2d 397 (St. Mary Operating Co. v. Guidry) 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. Guidry, 954 So. 2d 397, 164 Oil & Gas Rep. 885, 6 La.App. 3 Cir. 1495, 2007 La. App. LEXIS 654, 2007 WL 983291 (La. Ct. App. 2007).

Opinion

954 So.2d 397 (2007)

ST. MARY OPERATING COMPANY
v.
Matthew Joel GUIDRY, et al.

No. 2006-1495.

Court of Appeal of Louisiana, Third Circuit.

April 4, 2007.

*398 Charles R. Sonnier, Abbeville, LA, Counsel for Defendants/Appellants, The Guidry Living Trust of 1996, Mark B. Guidry, Phyllis B. Guidry, Matthew Joel Guidry.

Paul G. Moresi III, Abbeville, LA, Counsel for Defendants/Appellees, Thomas Guidry, Edith Gaspard Guidry.

Court composed of OSWALD A. DECUIR, ELIZABETH A. PICKETT, and J. DAVID PAINTER, Judges.

PICKETT, Judge.

The defendants, Matthew, Phyllis, and Mark Guidry, appeal a judgment of the trial court finding that an act of co-mingling executed by the defendants and the remaining Guidry heirs and recorded at entry number 9704329 in the Conveyance Records of Vermilion Parish created a mineral servitude subject to a prescriptive period of seven years and not a servitude for a fixed term of seven years. We affirm the judgment of the trial court.

PROCEEDINGS IN THE DISTRICT COURT

The facts in this case and the proceeding in the trial court were explained by the trial court in a document entitled "RULING":

This concursus proceeding was instituted by St. Mary Operating Company seeking instructions relating to distribution of royalties to the Thomas Guidry heirs, all listed defendant's [sic] in this suit.
Many facts are not in dispute. The parties executed an act of "Co-Mingling and Exchange" recorded April 4, 1997 which contained the following paragraph:
"All of the parties hereto agree that this exchange of minerals, which creates a mineral servitude, will last a period of seven (7) years from the date of recordation of this instrument in the public records of Vermilion Parish, Louisiana".
At that time, there was no production or mineral operations on the tract in question; however, subsequent operations produced oil and gas from the property prior to April 2004. [The Guidry well, located in Section 41, Township 13 south, Range 4 East of Vermilion Parish and bearing Office of Conservation number 24688.]
The question submitted to the Court is whether the mineral servitude ended April 4, 2004 (7 years from recordation of the co-mingling instrument) or has it *399 been extended by the clear provisions of the mineral code [i.e., was the seven year period a fixed term after which the mineral rights would revert to the land owners or was this simply a shortening of the ten year prescriptive period provided for in R.S. 31:27].
There is little dispute among the parties relating to the reasons for the co-mingling agreement. All acknowledge their belief that their mother wanted the minerals on all properties donated to remain in indivision.
Mark and Matthew Guidry take the position that the servitude was for a fixed term and not subject to interruption as defined in the mineral code.
They further argue that the language of the instrument is clear and unambiguous and no parole evidence should be admitted to alter the agreement. The Court disagrees. Since there is no indication in the instrument as to whether the laws relating to mineral servitudes were to be avoided, it is both proper, and necessary, to attempt to determine the intent of the parties through parole evidence.
After review of the testimony, I am convinced that at the time the co-mingling instrument was executed no agreement existed on the question presented to the Court. Some parties never read the instrument and had little or no knowledge of mineral law at the time. No party testified that they discussed with other siblings what would happen should production occur within 7 years, but most assumed they would continue to receive a proportionate interest in revenue as long as production continued. Only Matthew and Mark testified they thought their siblings' mineral rights would revert to them in seven years regardless of events in the interim.
The Court was particularly impressed with the testimony of Edith Gaspard. After notice of the impending termination of her mineral interest, she confronted her brother Mark. She testified Mark was surprised by the position taken by St. Mary Operating (favoring his position) but was not going to object since it was "going his way". She also testified he acknowledged the family's original intent to continue to share in this production equally. This testimony was never refuted by Mark when he testified.
As stated earlier, there was no express agreement at the time the instrument was executed relating to the interruption issue. I do not believe it was even considered. At the same time, I find there was no intent on the part of the parties to alter the law relating to mineral servitudes, except to shorten the period to coincide with what they believed was their mother's wishes at the time she donated the properties to her children. The only logical position is that unless the parties intend the contrary, the law applies.
Having so found, the Court is of the opinion that unless there is an agreement to the contrary, the laws specifically relating to minerals must apply and the servitude created in the co-mingling instrument continues to exist as a result of the interruption.
Finally it should be noted that Mark contacted an Attorney and had the instrument drafted. One could apply the general law that any ambiguity is to be construed against his interest. However, a better approach is to hold that in interpreting mineral contracts, the special laws applicable to minerals should be enforced absent a clear intent to avoid them.

*400 LAW AND DISCUSSION

Louisiana Revised Statutes, Title 31, contains the state's Mineral Code. The section of the Mineral Code at issue in this suit is R.S. 31:74, which states: "Parties may either fix the term of a mineral servitude or shorten the applicable period of prescription of nonuse or both. If a period of prescription greater than ten years is stipulated, the period is reduced to ten years." In McDermott, Inc. v. M-Electric & Construction Co., 496 So.2d 1105 (La.App. 4th Cir.1986) our colleagues of the fourth circuit reminded us of the following:

The Louisiana Supreme Court has recognized the right of parties to agree to a shorter prescriptive period than that provided by statute provided certain conditions are met. Leiter Minerals, Inc. v. California Co., 241 La. 915, 132 So.2d 845 (1961). In Leiter Minerals, supra at 853, the Louisiana Supreme Court set forth the requirements:
Parties to a contract are free to stipulate as they please so long as their stipulations are not contrary to good morals or public policy or do not violate some law. La.Civ.Code Arts. 1764, 1895, 1901; American Cotton Co-op. Ass'n v. New Orleans & Vicksburg Packet Co., 180 La. 836, 157 So. 733 (1935); Mente & Co. v. Roane Sugars, Inc., 199 La. 686, 6 So.2d 731 (1942); Givens v. Washington Nat. Ins. Co., La.App.1936, 170 So. 810; Morris Buick Co. v. Ray, La.App. 1949, 43 So.2d 83.

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954 So. 2d 397, 164 Oil & Gas Rep. 885, 6 La.App. 3 Cir. 1495, 2007 La. App. LEXIS 654, 2007 WL 983291, Counsel Stack Legal Research, https://law.counselstack.com/opinion/st-mary-operating-co-v-guidry-lactapp-2007.