CARL E. STEWART, Chief Judge:
This consolidated appeal arises from a dispute between Steven G. Haller and Flash Gas & Oil Southwest, Inc. (collectively, "Defendants") and Sundown Energy LP ("Sundown") regarding the terms of a settlement agreement. Sundown sued Defendants in state and federal court, seeking a partition of land they co-owned, return of rental payments, and a right of way over Haller's property. On the day trial was set to begin in federal court, the parties agreed to a settlement. Because the parties had not yet agreed on a written
Sundown owns an oil and gas production facility in Plaquemines Parish, Louisiana. Although Sundown could access its facility via the Mississippi River, it did not have a viable land route. Sundown thus sought permission from landowners with property between its facility and the nearest public highway — Louisiana Highway 39 — to cross their property.
In 2006, Sundown entered into a lease ("Flash Lease") with Flash Gas for the use of a dock facility and canal access on land allegedly owned by Defendants. The lease also permitted Sundown to use a road on the Haller Tract to reach the dock and its facility. In 2010, Haller refused to renew the Flash Lease.
Once it became apparent that Sundown would be unable to reach an agreement with Haller, Sundown filed suit against Haller in federal court, requesting a right of passage over the Haller Tract and return of the rental payments it made to Flash Gas pursuant to the Flash Lease.
In federal court, Defendants filed a motion to dismiss Sundown's suit, which the district court denied, and Sundown filed a motion for summary judgment, which the district court granted in part. The court found that Sundown's facility was an enclosed estate but that there were genuine issues of material facts precluding summary judgment on, inter alia, the location of the right of way for Sundown. Defendants later filed a motion for summary judgment regarding Sundown's claim for return of rental payments. The district court granted the motion, holding that
The parties read the terms of the settlement agreement to the district court. They agreed on the location for the route Sundown would use to access its facility. Sundown was entitled to use this route regardless of which party owned the land in dispute. Sundown was also granted a temporary right of way by Haller to access the dock. In addition, Sundown would obtain bids for the cost of building the road to its facility.
The district court therefore interpreted the provisions of the settlement read into the record and filled in the gaps necessary for enforcement of the settlement. Because the settlement agreement did not specify how the auction proceeds were to be disbursed, the district court held that the magistrate judge ("MJ") would have discretion to resolve that issue. However, the court noted its preference that the MJ use the approach advocated by Haller if the parties did not dispute their respective ownership interests — that is, the winning bidder would pay the portion of the bid corresponding to the party's ownership interest in the auctioned property. As for the duration of the right of way, the court noted that the agreement described it as temporary and thus imposed what it considered to be a reasonable period of time — nine months.
The district court also held that, if it was the losing bidder, Sundown would no longer be entitled to use the dock facility. The court was persuaded by "the absence of any provisions in the settlement agreement addressing Sundown's lease of the dock in the event it is not the high bidder."
The district court then instructed the MJ to conduct the auction.
After the district court approved the auction, Sundown refused to consummate the sale of the auctioned land. Defendants proceeded to file a motion for enforcement of judgment, which the district court granted. Sundown timely appealed the court's judgment. In its order enforcing the parties' settlement agreement, the district court held, inter alia, that "if the platform, lights, and other structures are incorporated into the tract of land, i.e., attached to the property by any means, th[e]n those items are component parts of the land and therefore immovable and are not subject to removal, except by the owner of the property."
Meanwhile, Sundown removed the loading platform located on the auctioned land. Defendants filed a motion for contempt, alleging that Sundown was not entitled to remove the platform. After holding an evidentiary hearing, the district court denied the motion. The district court reasoned that the platform constituted movable property, Sundown retained title to the platform, and the Flash Lease was invalid. Defendants timely appealed.
We will first address Sundown's appeal of the district court's interpretation of the settlement agreement and then proceed to the district court's enforcement of the settlement agreement. Lastly, we will turn to Defendants' appeal of the district court's denial of their motion for contempt.
"Although federal courts possess the inherent power to enforce agreements entered into in settlement of litigation, the construction and enforcement of settlement agreements is governed by the principles of state law applicable to contracts generally." E. Energy, Inc. v. Unico Oil & Gas, Inc., 861 F.2d 1379, 1380 (5th Cir.1988) (citations and internal quotation marks omitted). We therefore apply Louisiana law to interpret the settlement agreement.
The parties dispute the proper standard of review. Sundown argues that the de novo standard applies because settlement agreements are interpreted like contracts and Louisiana law considers issues of contract interpretation and any corresponding ambiguity to be questions of law. Sundown acknowledges that the clear error standard would apply if the district court found the settlement agreement to be ambiguous but argues that the clear error standard is inapplicable because there is no ambiguity. Conversely, Defendants argue that the manifest error standard applies because the district court's decision concerned the validity and extent of the parties' settlement agreement. The manifest error standard is also applicable, Defendants contend, because the settlement agreement was ambiguous.
"Of course, we, not the parties, determine our standard of review." See United States v. Clark, 89 Fed.Appx. 453, 456 (5th Cir.2004) (per curiam) (unpublished) (citing United States v. Herrera, 313 F.3d 882, 885 n. * (5th Cir.2002) (en
Contracts are interpreted based on the parties' intent. Prejean v. Guillory, 2010-0740, p. 6 (La.7/2/10); 38 So.3d 274, 279. "The reasonable intention of the parties to a contract is to be sought by examining the words of the contract itself, and not assumed." Id. at 279. If the contract is unambiguous and does not have absurd consequences, we apply the ordinary meaning of the contractual language. Id. Moreover, we may not ignore an unambiguous contractual provision simply because, in our view, it does not align with the parties' intent. Id. Rather, we must interpret "[e]ach provision in a contract... in light of the other provisions so that each is given the meaning suggested by the contract as a whole." La. Civ.Code art. 2050. If the contract is ambiguous, however, we may resort to parol evidence to interpret the contract. Doyal v. Pickett, 628 So.2d 184, 187 (La.Ct.App.2d Cir. 1993). "Any doubtful provisions must be interpreted in light of the nature of the contract, equity, usages, the conduct of the parties before and after the formation of the contract, and other contracts of a like nature between the same parties." Id.
On appeal, both parties advance conflicting interpretations of the settlement agreement. Indeed, their disagreement is such that it calls into question the validity of the settlement agreement. See Crawford v. United Serv. Auto. Ass'n, 2003-2117, p. 5 (La.App. 1 Cir. 3/24/05); 899 So.2d 668, 671 ("A compromise is valid only if there is a meeting of minds between the parties as to exactly what they intended at the time the compromise was reached."). Nonetheless, upon reviewing the record, we are convinced that the parties agreed to a settlement, albeit not the version ultimately enforced by the district court.
Although Sundown raises a number of arguments contesting the district court's interpretation of the settlement agreement, Sundown's arguments largely revolve around two alleged errors. First, Sundown contends that the district court erred by ignoring the clear and unambiguous terms of the settlement agreement. Second, Sundown argues that the district court's interpretation contravened the parties' intent. We agree that the version of the settlement interpreted by the district court conflicts with the terms read into the record by the parties.
Because the terms of the settlement agreement are controlled by the parties' intent, see Prejean, 38 So.3d at 279, we will first examine the agreement read into the record. It is clear that the parties
The parties agreed that they "would bid against each other in a mandatory buy/sell to purchase the other's co-ownership interest in [the auctioned property] with the high bidder paying its bid price to purchase the other's interest in both tracts." This auction was to occur within thirty days of the parties executing the settlement documents. Although the parties had not agreed on all of the details of the auction, they agreed that the "mandatory buy/sell" would operate like an open auction and the high bidder would own the land. If Haller won the auction, Sundown agreed to use a right-of-way to reach its facility and would not own the dock. Conversely, if Sundown was the highest bidder, it would use the agreed-to-route to access its facility and the dock. In addition, Sundown would give Haller a ninety-nine year recreational lease for a specified area. Lastly, the parties agreed to dismiss the state suit and other pending claims and pay their respective costs.
Here, the district court erred by imposing several terms which either conflicted with or added to the agreement read into the record by the parties. Although the parties gave the district court the authority to enforce and interpret the settlement agreement, the district court did not have the power to change the terms of the settlement agreed to by the parties. In addition to the above terms, the district court imposed a nine-month time limit on Sundown's use of the right-of-way
Although the district court did an admirable job of resolving the disputes between the parties, the court overstepped its authority when it added provisions to the settlement agreement. See Prejean, 38 So.3d at 279 ("Accordingly, when a clause in a contract is clear and unambiguous, the letter of that clause should not be disregarded under the pretext of pursuing its spirit...."). "A compromise settles only those differences that the parties clearly intended to settle...." Klebanoff, 978 So.2d at 605. When limited to the terms recited to the district court, it is apparent that the settlement agreement does not resolve every dispute which could
Sundown's arguments challenging the district court's enforcement of the settlement agreement mirror its arguments regarding the district court's interpretation of the agreement. Essentially, Sundown argues that the district court abused its discretion by enforcing a settlement agreement that did not conform to the parties' agreement.
We review a district court's decision to enforce a settlement agreement for an abuse of discretion. Quesada v. Napolitano, 701 F.3d 1080, 1083 (5th Cir. 2012). "A district court abuses its discretion if it (1) relies on clearly erroneous factual findings; (2) relies on erroneous conclusions of law; or (3) misapplies the law to the facts." Del Bosque v. AT & T Adver., LP, 441 Fed.Appx. 258, 260 (5th Cir.2011) (unpublished) (per curiam) (citation and internal quotation marks omitted). Any factual determinations the district court makes when deciding whether to enforce a settlement agreement are subject to the clear error standard. Deville v. U.S. ex rel. Dep't of Veterans Affairs, 202 Fed.Appx. 761, 762 (5th Cir.2006) (unpublished) (per curiam).
As we stated earlier, the district court erred in its interpretation of the parties' settlement agreement. The district court thus enforced a settlement agreement which differed from the actual agreement read into the record by the parties. We therefore hold that the district court abused its discretion when it enforced the settlement agreement. See Middlebrooks v. Int'l Indem., 95-1364, p. 8 (La.App. 3 Cir. 3/6/96); 670 So.2d 740, 744 (holding that trial court erred when it imposed a requirement on a party not aligning with the settlement agreement).
Lastly, Defendants challenge the district court's denial of their motion for contempt. In its order enforcing the parties' settlement agreement, the district court held, inter alia, that "if the platform, lights, and other structures are incorporated into the tract of land, i.e., attached to the property by any means, th[e]n those items are component parts of the land and therefore immovable and are not subject to removal, except by the owner of the property." Relying on testimony by Mr. McGuire, the vice-president and general counsel for Sundown, the district court found that the "platform was simply placed over two pilings and could be removed by lifting the pilings." The court also found that "[t]he pediments or pedestals simply rested on the ground and did make a hole but there were no steel pilings." Moreover, the court held that Sundown retained title to
Defendants claim that because the platform was immovable, Sundown violated the district court's order when it removed the loading platform from the dock. Defendants also argue that Sundown no longer possessed a right to the loading platform under the Flash Lease. In addition, the district court erred, Defendants contend, by holding that they lacked title to the loading platform and that the Flash Lease was invalid. Defendants allege that these rulings contradicted the district court's prior finding that the lease was binding irrespective of whether Defendants had title to the property. Defendants also argue that Sundown's status as a co-owner of the disputed land did not give it permission to remove the platform.
A district court's decision to deny a motion for contempt is reviewed for abuse of discretion. Piggly Wiggly Clarksville, Inc. v. Mrs. Baird's Bakeries, 177 F.3d 380, 382 (5th Cir.1999). We review the district court's factual findings for clear error and its legal conclusions de novo. Am. Airlines, Inc. v. Allied Pilots Ass'n, 228 F.3d 574, 578 (5th Cir.2000). The classification of an item as movable or immovable is reviewed de novo. Bayou Fleet P'ship v. Dravo Basic Materials Co., 106 F.3d 691, 693 (5th Cir.1997).
To establish civil contempt, the moving party must prove by clear and convincing evidence that a party violated "a definite and specific order of the court requiring him to perform or refrain from performing a particular act or acts with knowledge of the court's order." Travelhost, Inc. v. Blandford, 68 F.3d 958, 961 (5th Cir.1995) (citation and internal quotation marks omitted). The moving party has presented sufficient evidence if it "produces in the mind of the trier of fact a firm belief or conviction ... so clear, direct and weighty and convincing as to enable the fact finder to come to a clear conviction, without hesitancy, of the truth of precise facts of the case." Hornbeck Offshore Servs. v. Salazar, 713 F.3d 787, 792 (5th Cir.2013) (citation and internal quotation marks omitted).
"Tracts of land, with their component parts, are immovables." La. Civ. Code art. 462. Under Louisiana Civil Code article 463, "Buildings, other constructions permanently attached to the ground, standing timber, and unharvested crops or ungathered fruits of trees, are component parts of a tract of land when they belong to the owner of the ground." When determining whether an item falls within the scope of article 463, "Louisiana courts generally rely on three criteria: the size of the structure, the degree of its integration or attachment to the soil, and its permanency." Bayou Fleet P'ship, 106 F.3d at 693-94.
As an initial matter, we disagree with Sundown's argument that Defendants' notice of appeal is insufficient. In the notice, Defendants challenge the district court's denial of their motion for contempt.
The district court correctly found that the loading platform at issue is not immovable. Although the platform is substantial in size and was only moved after litigation commenced between the parties, the platform was not permanently attached to the property. Rather, it "was simply placed over two pilings." Moreover, Sundown was able to remove it by lifting the platform from the pilings. In fact, the platform did not lose any of its utility after Sundown moved it; Sundown used the platform at another location. The pilings were dug into the ground; however, that fact does not demonstrate sufficient attachment to classify the platform as immovable. Ultimately, Defendants have failed to demonstrate that the district court clearly erred in its factual findings.
Contrary to Defendants' argument otherwise, the district court's denial of the motion for contempt did not contradict an earlier ruling. The district court's earlier ruling did not state that the Flash Lease was valid. Rather, the district court merely stated that, under Louisiana law, Sundown could not recover the rent it paid under the lease regardless of whether Defendants actually owned the leased property. This ruling hinged on Sundown's uninterrupted possession of the leased property, not the validity of the lease.
For the above-stated reasons, we REVERSE in part and AFFIRM in part the judgment of the district court.
JAMES L. DENNIS, Circuit Judge, concurring in part, dissenting in part:
I respectfully concur in part in, and dissent in part from, the majority opinion.
Like the majority, I conclude that the parties entered into a valid settlement and compromise, but I disagree with the majority's conclusion that the district court erred in interpreting and enforcing the parties' agreement with respect to the partition of the lands that they co-owned.
In my view, the district court ultimately and correctly concluded that the parties entered a compromise in open court by which they agreed to partition Tracts 1 and 2, which they owned in indivision, by sale to the highest bidder at a nonpublic auction between only the co-owners. The parties thereby implicitly agreed that the sale proceeds would be divided between
The parties' conduct and the very language of their compromise reveal that they intended to conduct the auction and distribute the proceeds of the sale as ordered by the district court. Before their compromise, Sundown was suing Haller for a partition by licitation of Tract 1 in state court because Sundown believed that Tract 1 was not susceptible to partition "in kind." The parties' compromise recited in open court expressly contained all of the elements of a partition by licitation of Tracts 1 and 2 as provided for by La. Civ.Code art. 811, except for the proviso that "the proceeds shall be distributed to the co-owners in proportion to their shares." However, the parties did not explicitly state how the proceeds would be divided or that they would not be divided proportionately as per La. Civ.Code art. 811. Subsequently, the parties participated in an auction between themselves, and they expressed at the auction their mutual understanding that (1) their co-ownership of Tracts 1 and 2 was divided as follows: Haller 57% and Sundown 43%; (2) they were bidding on the total purchase price to be paid in; and (3) the highest bid amount would be distributed according to the proportionate share owned by each co-owner.
Furthermore, Sundown does not anywhere in its briefs set forth or explain any other reasonable interpretation of the parties' compromise that they recited in open court and that they carried out by their conduct towards each other at the auction. Sundown seems to suggest that the parties agreed to a different auction scenario by which each party would bid only for the other party's interest in the two tracts. Even if each party had tried to restrict its bid to what it would pay for the other party's interest, however, each bid would have had to be translated into the total purchase price for the entirety of the two tracts in order to determine who had made the highest bid at the end of the auction, and to give the winning bidder credit for the value of the percentage of the property it already owned. Conducting the auction in the roundabout fashion suggested by Sundown therefore would not have changed the result.
Because an extrajudicial or non-judicial partition agreement is a nominate contract,
Furthermore, even if we were to conclude that the compromise entered by Sundown and Haller did not implicitly call for the auction sale proceeds to be divided between them in proportion to each co-owner's share, that open or doubtful provision should be interpreted as provided for by the Civil Code in such a situation. La. Civ.Code art.2053 provides: "A doubtful provision must be interpreted in light of the nature of the contract, equity, usages, the conduct of the parties before and after the formation of the contract, and of other contracts of a like nature between the same parties." Article 2054 provides: "When the parties made no provision for a particular situation, it must be assumed that they intended to bind themselves not only to the express provisions of the contract, but also to whatever the law, equity, or usage regards as implied in a contract of that kind or necessary for the contract to achieve its purpose." Article 2055 provides: "Equity, as intended in the preceding articles, is based on the principles that no one is allowed to take unfair advantage of another and that no one is allowed to enrich himself unjustly at the expense of another. Usage, as intended in the preceding articles, is a practice regularly observed
Although the district court may have erred in initially giving the magistrate judge a choice as to how to proceed with the auction, the magistrate judge, and ultimately the district court, correctly perceived and followed the intention of the parties and applied the legally correct interpretation of Louisiana law in the auction, partition, sale, and division of the sale proceeds so that any error in respect to those matters was harmless. Consequently, I would affirm the district court's judgment ordering Sundown to transfer its interest in Tracts 1 and 2 to Haller upon distribution of the net sale proceeds due Sundown for its proportionate share in the co-owned properties.
Haller is entitled to acquire full ownership of the co-owned properties upon making the payment due, the issues with respect to Haller's 99 year recreational lease and Sundown's mineral rights on those properties appear to be moot, but in an abundance of precaution I would remand them for further consideration by the district court.
On the other hand, I agree with and concur in other parts of the majority opinion, viz., its affirmance of the district court's denial of the Defendants' motion to hold Sundown in contempt; its interpretation and declaration of the parties' agreement with respect to the right of way and road construction giving Sundown access to its property; and its vacating of the district court's imposition of terms as to a nine-month time limit on Sundown's use of a temporary right of way during road construction, Haller's right to review road construction cost estimates, and the requirement that Haller pay his portion of construction costs within ten days of receiving the bill.