DREW, J.
In this matter involving alleged damages to property caused by contamination from mineral operations, the primary issue is the legal effect of the mineral servitude owners' rights to sue for damages that were conveyed to the surface owners. The plaintiffs
• Chevron U.S.A., Inc. ("Chevron"), the original mineral lessee of the Wagoners' property (via a leasing agent);
• Merit Energy Company, LLC; Merit Management Partners I, L.P.; Merit Energy Partners, III, L.P.; and Merit Energy Partners D-III, L.P. (collectively "Merit");
• Devon Energy Production Company, L.P. ("Devon");
• Denbury Onshore, L.L.C. ("Denbury");
• Smith Operating & Management Co. ("Smith");
• LSJ Exploration, L.L.C. ("LSJ");
• Diamond South Operating, L.L.C. ("Diamond"); and
• Oil & Ale LSJ, L.L.C. ("Oil & Ale").
Merit, Devon, Denbury, Smith, LSJ, and Diamond are direct or remote assignees of Chevron.
The Wagoners appeal a judgment from the Sixth Judicial District Court which granted the exceptions of res judicata filed by Chevron, Merit, and Devon and granted exceptions of lis pendens filed by Denbury, Smith, LSJ, Diamond, and Oil & Ale. We reverse, in part, the judgment of the trial court and remand for further proceedings.
The Wagoners' acquisition of the mineral servitude owners' right to sue for damages to the property, which occurred before the Wagoners purchased the surface rights, resulted in plaintiffs appearing in a different capacity than they possessed as plaintiffs in previous litigation against these same defendants. This judgment is strictly limited to that determination. A resolution on whether plaintiffs are entitled to any recovery must be determined by the trial court to which this matter is remanded for further proceedings.
In the previous litigation, Wagoner v. Chevron, 45,507 (La.App.2d Cir.8/18/10), 55 So.3d 12, writ denied, 2010-2773 (La.3/2/12), 83 So.3d 1032 (hereinafter Wagoner I), this court set out the factual background in its opinion on rehearing:
Wagoner I, 55 So.3d at pp. 20-21.
In Wagoner I, the Wagoners sued the same parties named as defendants in this case (Chevron, Merit, Devon, Denbury, Smith, Diamond, LSJ, and Oil & Ale) in this same court. The Wagoners' claims against Chevron, Merit, and Devon in Wagoner I were dismissed on an exception of no right of action. That ruling was based upon the application in Wagoner I of the "subsequent purchaser rule." This court affirmed the judgment sustaining the exception of no right of action. The Louisiana Supreme Court denied writs.
In Walton v. Burns, 47,388 (La.App.2d Cir.1/16/13), ___ So.3d ___, 2013 WL 163739, Judge Moore explained that, although the supreme court's writ denial in Wagoner I is without precedential value, the writ denial allowed this court's application of the subsequent purchaser rule to stand.
The defendants in Wagoner I, who appeared in the mineral chain of title after the Wagoners acquired their surface ownership in 2004, were not dismissed from Wagoner I (namely, Denbury, Smith, Diamond, LSJ, and Oil & Ale), and remain defendants in Wagoner I today.
The "subsequent purchaser rule" was explained by the supreme court in Eagle Pipe & Supply, Inc. v. Amerada Hess Corp., 2010-2267 (La.10/25/11), 79 So.3d 246:
Eagle Pipe, supra at pp. 256-257.
Absent an assignment or subrogation of the right to sue a third party for property damage inflicted before acquisition of the property, the present property owner has no right of action to sue third parties for damages occurring prior to his purchase. Eagle Pipe, supra.
After the district court in Wagoner I granted the exceptions of no right of action filed by the defendants Chevron, Merit, and Devon, the Wagoners obtained an assignment of 99% rights from the owners of the mineral servitudes (who were also successors of former surface owners) to seek recovery for damages to the property caused by oil exploration and production.
The Wagoners attempted to assert these assigned claims amending their pleadings in Wagoner I. Their motion to amend was denied. Subsequently, the Wagoners filed this present litigation, hereinafter denoted as Wagoner II. All defendants responded
The Wagoners have appealed.
The issue is whether either res judicata or lis pendens bars the Wagoners from suing to recover damages which occurred prior to their 2004 acquisition of the property. The Wagoners claim that by virtue of the assignment, they acquired new rights they did not possess at the time of Wagoner I. It is under these newly acquired rights that they bring the current claims. The present suit against the oil and gas companies alleges liability for breach of obligations owed to the mineral servitude owners and lessors — the Pasternacks — under the mineral lease and the Mineral Code.
In Wagoner I, the trial court found, and this court affirmed, that the landowners at the time the contamination occurred possessed the real and actual interests to seek the damages. The right to damages which is conferred by a lease (either mineral or a predial lease) is a personal right, not a property right. Therefore, the right to seek damages does not pass to the new land owners absent a specific conveyance of that right in the instrument of sale.
As they were not parties to the original lease from the Pasternacks to Chevron, the Wagoners' deed contained no express assignment of the right to sue mineral lessees for damages. Additionally, those leases contain no language allowing the Wagoners to sue for damages as third party beneficiaries (via a stipulation pour autri). As current surface owners, the Wagoners had no right to bring suit against companies that conducted exploration and production on the property prior to the plaintiffs' purchase in 2004. Wagoner I, 55 So.3d at p. 23.
In addition to suing the mineral lessees for damages resulting from oil exploration and production, current surface owners of contaminated property have other legal remedies available to them. Among those avenues noted in Eagle Pipe, supra, were an action in redhibition, a suit to rescind the sale, and/or an action to reduce the purchase price. Further, an action for remediation of the property exists. Eagle Pipe, supra.
In Walton v. Burns, supra, Judge Moore also noted legal remedies for surface owners of contaminated property. La. R.S. 31:11(A) provides that the landowner, the owner of the mineral rights and the lessees of minerals must conduct their activities with "due regard" for the rights of others. La. R.S. 31:22 directs that the owner of a mineral servitude is obligated to restore the surface to its original condition. In La. R.S. 31:122, the mineral lessee is directed to conduct his activities as a "reasonably prudent operator." La. R.S. 30:29 sets out a special procedure for resolving environmental damages from oilfield operations. Walton, supra.
Under the foregoing reasoning, the Wagoners (surface owners) could have brought an action against the Pasternacks (mineral servitude owners) to obtain remediation. The Wagoners noted at oral argument that they did not want to sue the Pasternacks and that, in exchange for the Wagoners' promise not to file suit against them, the Pasternacks assigned the Wagoners 99% of their rights to seek damages caused by oilfield contamination. Whether that assignment has transformed the status of the parties, causes of action, and the transactions and occurrences, as the Wagoners allege, is the determinative issue in this case.
Eagle Pipe, supra at p. 258
The foregoing analysis by Justice Clark reflects Comment (d) of La. C.C. art. 476 which notes individuals have contractual freedom to create new real rights by dismembering their ownership as they see fit. An example of this dismemberment of ownership is the Pasternacks' transfer to the Wagoners of their rights to seek damages for oil activity contamination.
The Wagoners claim that the trial court erred when it granted defendants' (Denbury, Smith, LSJ, Diamond, Oil & Ale) exception of lis pendens. When two or more suits are pending in a Louisiana court or courts on the same transaction or occurrence, between the same parties in the same capacities, the defendant may have all but the first suit dismissed by filing the declinatory exception of lis pendens. La. C.C.P. arts. 531, 925 A(3). A fair test to decide whether an exception of lis pendens should be granted is to determine whether the first suit would be res judicata to the second suit. Walton, supra.
The Wagoners claim that the trial court erred when it granted defendants Chevron, Devon, and Merit's exceptions of res judicata. The following analysis will be used to determine whether the trial court erred in granting the exceptions of both res judicata and lis pendens.
La. R.S. 13:4231, as amended in 1990, defines res judicata in Louisiana:
Citing the supreme court's opinion in Kelty v. Brumfield, 93-1142 (La.2/25/94), 633 So.2d 1210, this court observed that the principle of res judicata is stricti juris; any doubt concerning application of res judicata must be resolved against its application. Flanigan v. City of Shreveport, 45,459 (La.App.2d Cir.10/27/10), 50 So.3d 938.
In the present case, the first two elements for application of res judicata are satisfied. The parties agree that judgment in Wagoner I is both final and valid.
The third requirement of res judicata is that the parties in both suits are the same. In Burguieres, supra, the supreme court explained that, although not explicitly stated, the requirement in La. R.S. 13:4231 that the parties be the same means the identical parties must appear in the same capacities in both suits.
In re Succession of Burguieres, 00-147 (La.App.5th Cir.10/18/00), 802 So.2d 660, the decedents' three children alleged their father's lack of capacity to make a testament which they asserted was made pursuant to undue influence. They sued their aunt, Mrs. Pollingue in her capacity as executrix of the succession, and sought to annul the testament and remove her as executrix. After the children prevailed and the judgment was final, the children again sued Mrs. Pollingue in her capacity as curatrix of the decedent and her husband, as under curator, seeking damages for breach of their fiduciary duty. On any claims associated with Mrs. Pollingue's actions as executrix, the supreme court affirmed the grant of the exception of res judicata. The grant of the exception of res judicata as to any claims related to her actions as curatrix (and not arising out of her actions as executrix) was reversed. Mrs. Pollingue was sued in a different capacity, a curatrix, in the second suit as opposed to her status as the succession executrix in the first suit. Likewise the granting of the exception of res judicata as to Dr. Pollingue was reversed, since there was a lack of identity of parties. He had not been not a party to the first suit. Burguieres, supra.
The Wagoner II defendants here claim that the assignment does not alter anything from Wagoner I and is nothing more than an attempt to manufacture claims. The defendants support this assertion by describing the petitions in Wagoner I and Wagoner II as "identical." However, the petition in Wagoner II includes an additional paragraph asserting new rights the Wagoners obtained as a result of the Pasternacks' assignment. The first sentences in paragraph 3 of the petitions in Wagoner I and Wagoner II are identical:
In Wagoner II this paragraph is expanded to contain the claims under the
In Wagoner I, the Wagoners were barred by the subsequent purchaser rule from seeking damages for harm to the property occurring prior to their 2004 purchase. The purpose of res judicata is to bar relitigation of claims that have been previously adjudged. This doctrine serves public policy interests by promoting judicial efficiency and fairness between the parties. La. R.S. 13:4231 Comment (a). Res judicata does not bar a subsequent claim between the same parties if the parties appear in a different capacity. Burguieres, supra. Only the Wagoners' rights as the present surface owners were at issue in Wagoner I. Via the assignment, the Wagoners have essentially stepped into the shoes of the Pasternacks, the prior mineral servitude owners/lessors.
The rights of the servitude owners/lessors were not litigated in Wagoner I. Since the Pasternacks' claims were not previously litigated, neither res judicata nor lis pendens applies to the Wagoners' current claims arising from the Pasternacks' assignments. Barring these claims would not serve judicial efficiency or fairness between the parties and would unfairly and improperly preclude the claims of the mineral servitude owners and their assignees, the Wagoners. In Wagoner I, the plaintiffs filed suit in their capacity as present surface owners who acquired the property in 2004. In Wagoner II, the plaintiffs are also suing in their capacity as assignees of the rights of the mineral servitude owners/lessors as well as prior surface owners.
Wagoner I and Wagoner II do not include the "same parties," because the Wagoners are appearing in a different capacity in Wagoner II than they did in Wagoner I. They could not have previously appeared in their current capacity, as
The defendants rely on Minvielle v. Atlantic Refining Co., 05-1312, 2007 WL 2668715 (W.D.La.2007), in support of their exceptions of res judicata and lis pendens. Minvielle, however, is distinguishable from the present case. The initial Minvielle litigation was to recover damages for contamination arising out of oil and gas activities:
The Minvielle plaintiff asserted the same rights in both actions and never claimed to be appearing in a different capacity or asserting different rights. After dismissal of the first suit, the plaintiff filed a second suit and attempted to use an "Amendment to Act of Cash Sale" to show that their vendors had assigned their personal right to sue for damages at the time of the original sale. Minvielle attempted to cure the lack of standing with the amended sale which purported to confer standing. The claims in both suits were identical, the parties were the same and the judgment of lack of jurisdiction was final. The court found that the second suit was barred by res judicata. Minvielle, supra.
In Wagoner I, the plaintiffs asserted only those rights they believed they possessed as present surface owners. In the present action, the Wagoners are appearing as holders of the mineral servitude owner's rights to damages from oilfield contamination — rights they only acquired after the final judgment in Wagoner I.
This court in Wagoner I
A person appearing in different legal capacities may bring multiple actions involving the same transaction or occurrence without being barred by res judicata. Burguieres, supra. We find that the Wagoners do not appear in the second suit in the same capacity in which they appeared in the first. Because of this difference in capacities, there is a lack of identity of the parties between the two suits.
For the foregoing reasons, we conclude that the trial court erred in finding that the plaintiffs appeared in the same capacities in Wagoner I and this litigation, Wagoner II. The claims of the Wagoners arising from their status as surface owners since 2004 were dismissed in Wagoner I. The grant of the exception of res judicata as to Chevron, Merit, and Devon as to the Wagoners' claims as surface owners is affirmed along with the dismissal of those claims with prejudice. For the Wagoners' claims made as assignees of the Pasternacks right to sue for damages as mineral servitude owners, the exceptions of res judicata as to Chevron, Merit, and Devon are reversed, and the matter is remanded for further proceedings on those claims.
As previously noted, the Wagoners' actions as surface owners since 2004 against Denbury, Smith, LSJ, Diamond, and Oil & Ale are pending in Wagoner I. The sustaining of the exceptions of lis pendens as to those claims against those defendants are affirmed. The granting of any exception dismissing the Wagoners' claims against Denbury, Smith, LSJ, Diamond, and Oil & Ale arising from the Wagoners' status as assignees of the Pasternacks' right to sue for damages as mineral servitude owners is reversed, and the matter is remanded for further proceedings.
The trial court is directed to consolidate these matters for trial. All costs of the appeal are assessed to the defendants.
AFFIRMED IN PART, REVERSED IN PART AND REMANDED WITH INSTRUCTIONS FOR FURTHER PROCEEDINGS.
CARAWAY, J., concurs.
APPLICATION FOR REHEARING
Before WILLIAMS, CARAWAY, DREW, MOORE and GARRETT, JJ.
Rehearing denied.
WILLIAMS, J., would grant rehearing.