Wilcox Operating Corp. v. Gemini Explorations, Inc.

56 So. 3d 316, 2010 La. App. LEXIS 1738, 2010 WL 5099688
CourtLouisiana Court of Appeal
DecidedDecember 15, 2010
DocketNo. 45,785-CA
StatusPublished

This text of 56 So. 3d 316 (Wilcox Operating Corp. v. Gemini Explorations, Inc.) 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
Wilcox Operating Corp. v. Gemini Explorations, Inc., 56 So. 3d 316, 2010 La. App. LEXIS 1738, 2010 WL 5099688 (La. Ct. App. 2010).

Opinion

PEATROSS, J.

|2Wilcox Operating Corporation (“Wilcox”) appeals a summary judgment in favor of Gemini Explorations, Inc. (“Gemini”). The trial judge found there to be no facts in dispute and that, as a matter of law, Wilcox had failed to comply with a previous settlement agreement between the parties. The summary judgment terminated the settlement agreement and an assignment of mineral interest executed pursuant to that settlement agreement and cancelled a lis pendens filed by Wilcox. The trial judge further ruled that the Department of Conservation (“DOC”) has jurisdiction over the determination of whether the Bossier Shale is included in the Cotton Valley Formation. As stated, Wilcox appeals and, for the reasons stated herein, we reverse the summary judgment in favor of Gemini and remand for further proceedings.

FACTS

This appeal concerns mineral interests in the bed of Caddo Lake in North Caddo Parish, Louisiana. Gemini and Wilcox entered into a letter agreement regarding those interests on September 14, 2004. A dispute as to the interpretation of that letter agreement was tried in court and resulted in a settlement agreement that was stipulated to and dictated into the record on December 13, 2006. Briefly stated, Gemini was lessee by assignment of State Lease No. 173, covering the bed beneath Caddo Lake. The settlement agreement provided that Gemini was to sublease one-half of the acreage, from 3,000 feet subsurface to 100 feet below the base of the Cotton Valley Formation, to Wilcox. Wilcox paid $123,000 for geophysical information and the first 640 acres of the sublease. It also held an option to sublease all of Gemini’s remaining acreage for $175 per acre “within six months of delivery of gas to a pipeline on the unit that they purchased today, or one year after perforation and testing of the well, whichever is earlier.” Wilcox had nine months from the date of the settlement to procure a signed drilling contract; and, if no rig was available, it had an additional [318]*318three months to begin drilling. Following the recitation of the settlement agreement into the record, it was agreed by the parties that the $123,000 would be paid by Wilcox to Gemini that day and that the Exploration Agreement would be drafted by Gemini and provided to Wilcox by week’s end. The parties apparently disputed certain items in the Exploration Agreement and both |sWilcox and Gemini sought court enforcement of the settlement agreement. The court ordered Wilcox to sign the Exploration Agreement. Thereafter, Wilcox requested Gemini make several changes in the draft agreement, which Gemini did, yet the agreement was never executed by the parties. There is a dispute as to which party, Wilcox or Gemini, refused to execute an Exploration Agreement. Wilcox argues that it presented a signed agreement to Gemini and Gemini argues that the opposite is true.

Mark Preddy, President of Wilcox, testified by affidavit that, immediately following the settlement agreement, Wilcox began efforts to drill an initial well and had obtained a contract to drill within nine months; however, no drilling rig was available within those nine months. Preddy further testified that a well was drilled within the one-year period. Drilling began on October 26, 2007, on Hall-Hargraves # 1, which was a unit well for two units, both of which contain a portion of the subleased property. Five zones in the Cotton Valley Formation were tested for production with Wilcox spending more than $8 million on this venture. According to Preddy’s affidavit, a pipeline was constructed to deliver production and the first perforation of the well was on November 5, 2008. Despite perforation at five levels, however, none of the levels were productive.

This litigation ensued during the building of the pipeline by Wilcox. On August 19, 2008, Gemini filed a “Petition for Contempt, Damages, Injunctive Relief, Termination of Settlement Agreement and to Declare Option Terminated or Alternatively, for Specific Performance” alleging that the one-year time period from settlement had run with no well drilled by Wilcox on the subleased property. Various pleadings were filed by the parties in the matter; specifically, Wilcox filed a rule to show cause why Gemini should not have to execute an exploration agreement. At that point, no exploration or operating agreement had been signed by both parties.

In addition, a dispute arose as to whether the Bossier Shale was part of the Cotton Valley Formation, which was of interest to Wilcox in determining whether to exercise its option on the additional acreage. It is the position of Wilcox that it had until November 5, 2009, to exercise that option, which is one year from the first perforation of Hall-Hargraves # 1 on November 5, 2008. This issue prompted Wilcox to then file a |4Reconventional Demand requesting a declaratory judgment that the Bossier Shale is a part of the Cotton Valley Formation.

Ultimately, Gemini filed the instant Motion for Summary Judgment on July 14, 2009, which was heard on August 17, 2009. The trial court granted summary judgment in favor of Gemini, finding there to be no facts in dispute and that Wilcox had not complied with the terms of the settlement agreement. Following a hearing on a Motion to Reconsider the ruling, at the suggestion of the trial judge, the ruling was amended to specifically provide that the settlement agreement was terminated, the lis pendens cancelled, the assignment of the leasehold interest in the 640 acres dissolved and that Gemini retain the $123,000 purchase price for the sublease. In addition, the trial judge dismissed Wilcox’s request for declaratory judgment, [319]*319concluding that the DOC has jurisdiction over the question of whether the Bossier Shale is included in the Cotton Valley Formation and has already made that determination. This appeal ensued.

DISCUSSION

The appellate court’s review of a grant or denial of summary judgment is de novo. Independent Fire Ins. Co. v. Sunbeam Corp., 99-2181, 99-2257 (La.2/29/00), 755 So.2d 226; Schroeder v. Board of Sup’rs of Louisiana State University, 591 So.2d 342 (La.1991). A motion for summary judgment is a procedural device used when there is no genuine issue of material fact. King v. Illinois Nat. Ins. Co., 08-1491 (La.4/3/09), 9 So.3d 780. The summary judgment procedure is designed to secure the just, speedy and inexpensive determination of every action allowed by law. La. C.C.P. art. 966(A)(2). A motion for summary judgment shall be granted if the pleadings, depositions, answers to interrogatories and admissions on file, together with any affidavits, show that there is no genuine issue of material fact and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(B); Cutsinger v. Redfem, 08-2607 (La.5/22/09), 12 So.3d 945.

The burden of proof remains with the movant. La. C.C.P. art.'966(C)(2). If the movant will not bear the burden of proof at trial on the matter that is before the court on the motion for summary judgment, the movant’s burden on the motion does not require him to negate all essential elements of the adverse party’s claim, action or defense, but, rather, to point j sout to the court that there is an absence of factual support for one or more elements essential to the adverse party’s claim, action or defense. Thereafter, if the adverse party fails to produce factual support sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial, there is no genuine issue of material fact. Wall v. Kelly Oil & Gas Company, Inc.,

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Related

Schroeder v. Board of Sup'rs
591 So. 2d 342 (Supreme Court of Louisiana, 1991)
Cutsinger v. Redfern
12 So. 3d 945 (Supreme Court of Louisiana, 2009)
Wall v. Kelly Oil & Gas Company, Inc.
27 So. 3d 1071 (Louisiana Court of Appeal, 2009)
King v. Illinois National Insurance
9 So. 3d 780 (Supreme Court of Louisiana, 2009)
Hines v. Garrett
876 So. 2d 764 (Supreme Court of Louisiana, 2004)
Independent Fire Ins. Co. v. Sunbeam Corp.
755 So. 2d 226 (Supreme Court of Louisiana, 2000)

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Bluebook (online)
56 So. 3d 316, 2010 La. App. LEXIS 1738, 2010 WL 5099688, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wilcox-operating-corp-v-gemini-explorations-inc-lactapp-2010.