KEATY, Judge.
Property owner appeals the trial court's judgment granting motions for summary judgment and exceptions of no cause of action and no right of action in favor of the defendants. For the following reasons, we reverse and remand.
The facts are not in dispute. John C. Duck acquired a half interest in a 5.2 acre tract of property located in Concordia Parish, Louisiana, on July 1, 2004.
At the close of the hearing, the trial court granted the motions and exceptions in open court and dismissed Duck's claims against those defendants with prejudice and at his costs.
Indus. Cos., Inc. v. Durbin, 02-665, pp. 11-12 (La.1/28/03), 837 So.2d 1207, 1216 (citations omitted).
Summary judgment "is designed to secure the just, speedy, and inexpensive determination of every action." La.Code Civ.P. art. 966(A)(2). "The procedure is favored and shall be construed to accomplish these ends." Id. Summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions, together with the affidavits, if any, ... show that there is no genuine issue as to material fact, and that mover is entitled to judgment as a matter of law." La.Code Civ.P. art. 966(B)(2).
"The standard of review for both the motion for summary judgment and the exception of no right of action/no cause of action is de novo." Richard v. Apache Corp., 12-441, p. 3 (La.App. 3 Cir. 3/20/13), 111 So.3d 1156, 1158, writs denied, 13-865, 13-869 (La.6/21/13), 118 So.3d 416.
At the start of the January 10, 2013 hearing, the parties agreed that through the exceptions and motions set for hearing that day, the defendants were asserting the subsequent purchaser defense to all of Duck's claims, whether they sounded in tort, contract/lease, or in the nature of violation of the mineral code. Likewise, when the trial court granted the exceptions and motions at the close of the hearing, it did so as to all of them without specifically referring to any individual exception, motion, or defendant.
Duck contends that the defendants are liable to him because their oilfield operations resulted in contamination to the property that he now owns, notwithstanding the fact that he did not own the property when the damage was incurred and/or the fact that he was not assigned any rights to recover for any pre-existing property damage claims in the act of sale in which he acquired the property. In support
In Eagle Pipe, the plaintiff, a purchaser of land who discovered radioactive material on property it had acquired two decades earlier, filed suit against the former landowners and the oil and trucking companies that had leased the property and were allegedly responsible for the contamination. According to the petition, during a seven-year period before the plaintiff bought the land, the former landowners leased the property to Union Pipe and Supply, Inc., which operated a pipe yard/ pipe cleaning facility on the property. The petition further alleged that Union Pipe purchased used oilfield tubing from the oil company defendants which it then cleaned and sold. The tubing was allegedly transported by the trucking company defendants from the oil companies to Union Pipe's pipe yard. The plaintiff asserted a claim for redhibition against the former landowners. It asserted causes of action for breach of contract, negligence, strict liability, fraud, and conspiracy against the remaining defendants.
The defendants filed peremptory exceptions of no right of action asserting that the plaintiff had no right to assert claims for damages to the property which occurred before it acquired the land. The trial court sustained the exceptions and dismissed the plaintiff's claims, and it denied the plaintiff's motion for new trial. On appeal, the fourth circuit initially affirmed the trial court's ruling, but on rehearing, a five-judge panel reversed the trial court's sustaining of the exceptions of no right of action. See Eagle Pipe and Supply, Inc. v. Amerada Hess Corp., 09-298 (La.App. 4 Cir. 2/10/10), 47 So.3d 428.
The Louisiana Supreme Court granted certiorari and reversed, explaining:
Eagle Pipe, 79 So.3d at 279. After examining the act of sale in which the plaintiff acquired the property, the supreme court found "no express assignment or subrogation of the former property owners' personal right to sue for damage." Id. at 281. The supreme court was careful to note, however, that it "express[ed] no opinion as to the applicability of [its] holding to fact situations involving mineral leases or obligations arising out of the Mineral Code." Id. at n. 80.
The lease at issue in Eagle Pipe was a surface lease whereas the leases at issue in the matter before us are mineral leases. By its own terms, Eagle Pipe does not apply to situations involving mineral leases. Thus, the trial court erred in applying the subsequent purchaser theory recognized in Eagle Pipe to bar the claims that Duck asserts in this matter as those claims arise under mineral leases.
Article 16 of the Mineral Code provides that:
Citing Article 16, Duck maintains that because mineral leases are classified as real rights, those rights, along with their correlative real obligations, automatically attached to the land that he now owns without the need for any assignment of those rights to him. We disagree.
"Although, Louisiana R.S. 31:16 provides that a mineral lease, as a mineral right, is a real right, a review of the Mineral Code and the jurisprudence shows that it is not purely a real right that automatically attaches to the property." Frank C. Minvielle, L.L.C. v. IMC Global Operations, Inc., 380 F.Supp.2d 755, 774 (W.D.La.2004).
Id. at 774-75 (quoting Sketoe v. Exxon Co., 188 F.3d 596, 601 (5th Cir.1999)). "Thus, it is in the nature of a limited personal servitude that the mineral lease is a real right." Id. at 775. "Although a right of use, i.e., a personal servitude, is a real right, it is one granted in favor of a person rather than an estate, and therefore it does not pass with the property upon sale of the property." Id. Given the foregoing, the Minvielle court concluded that in order to file suit based upon an expired mineral lease, the subsequent landowner needed to have either "privity of contract, assignment of rights, or be the beneficiary of a stipulation pour autrui." Id. at 776.
Based on the reasoning in Minvielle, we conclude that the right to sue the defendants for damages under the Burrill and Farrar Leases did not automatically
Louisiana Civil Code Article 1978 provides that "[a] contracting party may stipulate a benefit for a third person called a third party beneficiary." Duck claims that the two mineral leases under which the defendants historically conducted oilfield operations on the property he now owns, i.e., the Burrill Lease, or property adjacent to the property that he now owns, i.e., the Farrar Lease, each contained damage clauses intended for the benefit of third parties such as himself who later acquire the property after the expiration of the lease and thereafter discover underground contamination that has destroyed his fresh water supply. The damage clauses contained in section eight of the Burrill and Farrar Leases provided, in pertinent part, as follows (emphasis added):
The Eagle Pipe court recognized that a subsequent purchaser could recover for damages done to the property if the contract between the former landowner and the oil and trucking companies, who allegedly damaged the property that they leased, contained a stipulation to benefit a third party, or a stipulation pour autrui, in his favor. After noting that such a stipulation pour autrui cannot be presumed, the supreme court directed that a party claiming the benefit of such a contract had the burden of proving that: "1) the stipulation for a third party is manifestly clear; 2) there is certainty as to the benefit provided the third party; and 3) the benefit is not a mere incident of the contract between the promisor and the promisee." Eagle Pipe, 79 So.3d at 283 (quoting Joseph v. Hosp. Serv. Dist. No. 2 of Parish of St. Mary, 05-2364 (La.10/15/06), 939 So.2d 1206). Since the issue arose in the context of an exception of no right of action, the supreme court accepted as true the allegations made in the plaintiff's petition as to elements one and two. As to element three, however, the supreme court found that any third-party benefit contained in the contract was intended "for the employees and subcontractors of the pipeyards entering into these contracts with the oil companies, and not for a subsequent purchaser of the property." Id. Moreover, the supreme court found that "any benefit that [the subsequent purchaser] derived from these provisions of the contracts ... would be incidental to the contracts themselves, inasmuch as any person coming into contact with land has an interest in the land not being contaminated." Id. Thus, the supreme court found that the contracts between Union Pipe and its customers did not include provisions for third-party beneficiaries such as the plaintiff.
In LeJeune Brothers, Inc. v. Goodrich Petroleum Co., L.L.C., 06-1557 (La.App. 3 Cir. 11/28/07), 981 So.2d 23, writ denied, 08-298 (La.4/4/08), 978 So.2d 327, a case that was decided before Eagle Pipe, this court considered whether a property owner was a third-party beneficiary to a mineral lease entered into between his predecessor
In Hazelwood Farm, Inc. v. Liberty Oil and Gas Corp., 01-345 (La.App. 3 Cir. 6/20/01), 790 So.2d 93, the owner of a property which had been the location of oil and gas operations under a 1926 lease and which was still active at the time suit was filed in 1997 sought tort and contract damages from the alleged contamination to both the surface of the property and the underground aquifer. The 1926 lease provided that "Grantee shall be responsible for all damages caused by his operations." Id. at 101. All of the defendants had, at some point, operated wells pursuant to the 1926 lease. When the plaintiff bought the property, his ancestor in title reserved the mineral rights. As a result, this court held that the plaintiff did "not have a right of action as a party to or assignee of the mineral lease." Id. at 100. Nevertheless, we went on to interpret the 1926 as providing a stipulation pour autrui in favor of the plaintiff. In doing so, we noted that "[t]he fact that Hazelwood was not specifically named as a third-party beneficiary in the mineral lease is of no consequence" because "[o]ur jurisprudence recognizes that stipulations may be made in favor of undetermined persons." Id. at 101. Based on the stipulation pour autrui, we concluded that the trial court erred in using a motion to strike to dispose of the plaintiff's contract claims. After the case was remanded to the trial court on other grounds, the matter went to trial and the defendants were cast in judgment. On appeal to this court, the defendants challenged our prior ruling that the 1926 lease created a stipulation pour autrui in favor of the plaintiff. We declined to revisit the issue on the basis that our earlier ruling was the law of the case and not clearly erroneous. Hazelwood, 844 So.2d 380.
Andrepont was a suit by a share crop tenant farmer who had entered into a verbal surface lease with the landowner, who later executed an oil and gas lease on the property. The named defendants were the mineral lessees whom the plaintiff alleged had damaged his crops through their operations.
Andrepont, 231 So.2d at 348. In our original opinion, we failed to consider the farmer's argument that the mineral lease created a stipulation pour autrui in his favor, and instead held that the farmer could not recover from the defendants since his oral lease with the property owner was unrecorded and the defendants were third persons. On rehearing, however, we recognized that the mineral lease did create a stipulation pour autrui and that as a beneficiary of that stipulation, the farmer had "a direct right of action against the oil and gas lessee to recover for his damages." Id. at 350.
The trial court in the instant matter found that the language in the Burrill and Farrar Leases does not provide Duck with a third-party beneficiary claim. After comparing the damage clause language in the Burrill and Farrar Leases, i.e., "Lessee shall be responsible for all damages caused by Lessee's operations," to the damages clause of the leases in LeJeune, Hazelwood, and Andrepont, we conclude that the Burrill and Farrar Leases do contain a stipulation pour autrui for the benefit of third parties. Like the damage clauses in Hazelwood and Andrepont, the damage clauses at issue herein do not restrict liability to only the damages suffered by the lessors. Thus, the trial court erred in finding that Duck is not a third-party beneficiary of the Burrill and Farrar Leases. Accordingly, this matter is remanded to the trial court for further proceedings.
For the foregoing reasons, the judgment of the trial court is reversed, and the matter is remanded for further proceedings consistent with this opinion. All costs of this appeal are assessed against the defendants.