THIBODEAUX, Chief Judge.
The plaintiffs, Carlos and Lori Boone, appeal from a motion for summary judgment and exception of prescription decided adversely to them and filed by EnerQuest Oil & Gas, LLC, lessee of former owners of the plaintiffs' property. Finding that the plaintiffs failed to carry their burden of proving a valid right of action in tort or contract, we affirm the judgment dismissing EnerQuest from the plaintiffs' suit.
We must decide:
In August of 2005 the Boones purchased 18.66 acres of land encumbered by mineral reservations and oil and gas leases; the sale price was $120,000.00. The sellers, Primeaux Properties, Inc., had purchased the encumbered property in 2003 from Aaron Lagneaux and Eric Lagneaux for $105,000.00. Oil and gas operations on the property allegedly date back to 1972. The Lagneaux acquisition was via generational inheritances dating back to 1971, and it apparently included the minerals because Lagneaux specifically reserved "all of the minerals and mineral rights" to the property in its act of sale to Primeaux in 2003.
The defendant oil and gas operator, EnerQuest, had purchased the wells and operating rights from Phillips Petroleum Company in 2000. EnerQuest sold all of its operating rights and interest in the property, along with all of its leases, facilities, wells, and equipment to Petro "E" in 2004. The sale and assignment to Petro "E" included EnerQuest's use of, and obligation to clean and restore, the surface of the property.
In May of 2010, the Boones, asserting contamination and property damage, filed suit against six oil and gas operators, including CONOCOPHILLIPS Company as successor to Phillips, EnerQuest, Petro "E," and three other operators. The Boones asserted that they had within the last year found abandoned debris and equipment and asserted a failure to properly clean and restore the property. In a first amended petition in July of 2012, the Boones identified three of five wells on the property that had been operated by EnerQuest prior to its sale to Petro "E."
EnerQuest filed a motion for summary judgment asserting that the Boones were precluded by law from asserting a tort or contract claim for property damage that pre-dated their 2005 acquisition of the property without a specific assignment of that right from the former owner. Among its exhibits, EnerQuest attached an "Operator
The Boones' opposition to the motion for summary judgment included newly-obtained assignments of rights from the previous owners, Primeaux and Lagneaux. EnerQuest asserted that the assignments were invalid and that any tort claims they sought to transfer were prescribed since Lagneaux sold the property in 2003 and Primeaux sold the property in 2005.
The trial court allowed the Boones permission to file a second supplemental and amending petition asserting their right as assignees to the rights of the previous owners; claims for fraud and conspiracy, as well as the solidary liability of all defendants. The trial court then granted EnerQuest's motion for summary judgment and exception of prescription.
The grant or denial of a motion for summary judgment is reviewed de novo, "using the same criteria that govern the trial court's determination of whether summary judgment is appropriate; i.e. whether there is any genuine issue of material fact, and whether the movant is entitled to judgment as a matter of law." Samaha v. Rau, 07-1726, pp. 3-4 (La.2/26/08), 977 So.2d 880, 882-83 (citations omitted); La.Code Civ.P. art. 966. "When prescription is raised by peremptory exception, with evidence being introduced at the hearing on the exception, the trial court's findings of fact on the issue of prescription are subject to the manifest error-clearly wrong standard of review." Specialized Loan Servicing LLC v. January, 12-2668, pp. 3-4 (La.6/28/13), 119 So.3d 582, 584 (citations omitted).
At issue in this matter is the correctness of the trial court's judgment granting the motion for summary judgment and the exception of prescription filed by the defendant, EnerQuest. The bases of EnerQuest's motion and exception are that the Boones (1) have no valid contract claims against EnerQuest because the subsequent purchaser doctrine invalidates their claims for pre-acquisition property damage; the plaintiffs are not a party to any lease, assignment, or other contract with EnerQuest; and the plaintiffs did not obtain an assignment of any contractual rights from the previous owners. EnerQuest further asserts that the Boones (2) have no claims in tort because any tort claims acquired from the previous owners have prescribed; the claims asserted in the plaintiffs' second supplemental petition do not relate back to the original petition; and EnerQuest is not solidarily liable with Petro E for any actionable tort claims.
The Boones argue that (1) their contract claims are valid because the subsequent purchaser doctrine does not apply; the relevant contracts give them a right of action to sue for damages and restoration of the property; and the contract claims have not prescribed because EnerQuest operated under mineral leases until 2004, and the surface lease was in effect until 2012. As to the tort claims, the Boones argue that (2) they timely asserted tort claims against solidary and/or joint tortfeasors; they obtained valid assignments of the tort claims at the time of the damage; and their second supplemental petition relates
We begin with a review of the subsequent purchaser rule or doctrine.
Eagle Pipe and Supply, Inc. v. Amerada Hess Corp., 10-2267, p. 8 (La.10/25/11), 79 So.3d 246, 256-57.
In articulating the application and source of the subsequent purchaser doctrine, the Louisiana Supreme Court in Eagle Pipe and Supply, Inc. provided a thorough analysis of the pertinent principles of Louisiana property law and Louisiana's law of obligations in the Louisiana Civil Code. Relevant to our inquiries here, a real right is not defined by the Civil Code but has long been held to be a proprietary interest and a species of ownership, which "defines the relation of man to things and may, therefore, be declared against the world." Eagle Pipe and Supply, Inc., 79 So.3d at 259 (quoting Harwood Oil & Mining Co. v. Black, 240 La. 641, 652, 124 So.2d 764, 767 (1960)). A real right and a real obligation both attach to a thing. Id. at 261; La.Civ.Code art. 1764, Revision Comments-1984, (b).
Eagle Pipe and Supply, Inc., 79 So.3d at 261-62 (footnotes omitted).
Based upon the foregoing, real rights and obligations attach to the thing, while personal rights and obligations attach to the person. Further, and more
As illustrated by Eagle Pipe and Supply, Inc. through its analysis of Clark v. J.L. Warner Co. et al., 6 La.Ann. 408 (1851) and subsequent jurisprudence, the former owner retains the right to recover the damages caused by the former owner's lessee during the former owner's ownership of the property. "This personal right of the property owner arises because his real rights in the ownership of the property have been disturbed-his use, enjoyment or disposal of the property." Eagle Pipe and Supply, Inc., 79 So.3d at 264. The court further stated:
Eagle Pipe and Supply, Inc., 79 So.3d at 264-65 (quoting Clark, 6 La.Ann. at 409).
Here, the act of sale from Primeaux to the Boones on August 26, 2005, provides that, for the consideration of $120,000.00, Primeaux "transfer[s] and deliver[s] with full guarantee of title and free from all encumbrances and with subrogation to all of its rights and actions of warranty against previous owners" the 18.66-acre tract of land in the legal description. Likewise, the previous act of sale from Lagneaux to Primeaux in 2003 contained almost identical language. Under Clark and Eagle Pipe, this language is general language and in the usual form for a conveyance of real estate. It does not assign the seller's personal right to sue the lessee for damage already done to the land.
The 2003 Lagneaux act of sale states that Lagneaux "reserves all of the minerals and mineral rights to the subject property" and that the sale to Primeaux is subject to mineral reservations and leases. The 2005 Primeaux act of sale to the Boones references the prior sale from Lagneaux to Primeaux in 2003 and provides the recordation information. Both acts of sale state that the sale is "subject to the restrictive covenants, easements, mineral reservations, mineral leases and obligations of ownership" affecting the property. Thus, both documents indicate that mineral rights and leases have been reserved and encumber the land, and neither document transfers to the new owner the former owner's right to sue for damages.
The subsequent purchaser doctrine is not limited to apparent damages; it applies to prohibit suit against the lessee whether the pre-acquisition damage is apparent or not. Eagle Pipe and Supply, Inc., 79 So.3d 246. If damage to the property is apparent, the purchaser is presumed to know its condition and to have negotiated a sale price taking the defects
The subsequent purchaser doctrine is not limited to tort claims, as shown in Clark, 6 La.Ann. 408, and it is not limited to cases involving expired leases, as suggested by the Boones. In its comprehensive analysis of the doctrine, the court in Eagle Pipe and Supply, Inc., 79 So.3d at 266 (emphasis added) (footnote omitted), discussed further jurisprudence that included the relevant issues, as follows:
Thus, even when property is conveyed during the term of a lease, the purchaser cannot recover from the lessee for damages accruing prior to the sale. See also Prados v. South Central Bell Tel. Co., 329 So.2d 744 (La.1975). In Matthews, 12 So. 518, because the deed of sale also conveyed the lease and the seller's
In the present case, the acts of sale fail to transfer any pre-acquisition rights to the new owners for damages caused by the lessee prior to the act of sale and specifically withhold the minerals and all leases from the act of sale. Lagneaux reserved the rights for himself in 2003, and in 2005 Primeaux, who never obtained them from Lagneaux, referenced the mineral and lease reservations in its sale to the Boones and pointed the Boones to the recorded prior act of sale from Lagneaux. Accordingly, the Boones knew that the land was encumbered by reserved mineral rights and leases. Under the subsequent purchaser doctrine, they do not have a right of action to sue the lessee for damages occurring prior to their acquisition of the property.
In September of 2012, the Boones obtained assignments from former owners, Lagneaux and Primeaux, in attempts to obtain the right to sue EnerQuest for damages that the act of sale did not convey. We find that the assignments also fail to provide the plaintiffs with a right of action for pre-acquisition damages against EnerQuest. The Lagneaux assignment attempts to assign all personal and tort causes of action, including inherited rights, to the Boones. Like the act of sale, however, the assignment specifically excludes mineral and contractual rights and leases. The Lagneaux assignment states in the fourteenth paragraph (emphasis added): "Nothing herein shall affect and this Agreement specifically excludes the mineral rights and/or contractual rights, including, but not limited to, leases, of the Parties." Lagneaux sold the property to Primeaux in March of 2003. If Lagneaux had taken a lower price from Primeaux because of damage caused to the land by EnerQuest, Lagneaux would have known this at least by the time of sale. Thus, under La.Civ. Code art. 2315, and under La.Civ.Code art. 3493 specifically governing damage to immovable property, Lagneaux had one year, or until March of 2004 to bring suit against EnerQuest. Therefore, in 2012, Lagneaux had no right of action in tort to assign to the Boones because Lagneaux's tort claims had prescribed eight years earlier.
With regard to the assignment by Primeaux, also in September 2012, Primeaux could not assign contractual rights under the leases because Primeaux did not acquire contractual rights upon its purchase from Lagneaux in 2003. If Primeaux thought it had to take a lower sale price from Boone in August of 2005 because of damage by a lessee, it would have acquired that knowledge at least by the time of sale and would have had a year, or until August of 2006, to bring its tort suit. However, Primeaux did not take a lower price; since it paid only $105,000.00 for the property in 2003 and sold it to the Boones for $120,000.00 in 2005, there had been no diminution of value. In any event, when Primeaux executed the assignment in 2012, it had no right of action to assign to the Boones. Accordingly, the Boones did not obtain any tort or contract rights from the previous owners via the assignments to sue for damages caused prior to the act of sale in 2005.
The Boones signed affidavits stating that Lagneaux and Primeaux intended to assign contractual rights to the Boones in the assignments where they referenced all rights and causes of action. That is not what these assignments, the acts of sale, or any other leases or documents in the record show. "When the words of a contract are clear and explicit and lead to no
La.Code Civ.P. art. 966(C)(2).
The only evidence adduced by the Boones are the eleventh-hour assignments which do not convey any valid tort or contract claims to the Boones. Accordingly, we find that the assignments do not provide the Boones with a right of action in tort or in contract to sue EnerQuest for damages to the property prior to the Boones acquisition of the property.
The Boones assert that their contract claims are still valid because, while not actual parties, they are third party beneficiaries to the surface lease that Lagneaux granted to EnerQuest in 2002, pursuant to La.Civ.Code art. 1978.
More specifically, in Hazelwood Farm, Inc. v. Liberty Oil & Gas Corp., 01-345 (La.App. 3 Cir. 6/20/01), 790 So.2d 93, writ denied, 01-2115 (La.7/26/01), 794 So.2d 834, the plaintiff was found to have no right of action as a party to, or as an assignee of, a mineral lease because, as here, the vendor before the plaintiff's vendor had reserved the mineral rights to himself. The court did, however, find that the language of the original lease, obligating the grantee/lessee to pay for all damages caused by its operations, conferred a benefit on the current owner, Hazelwood:
Hazelwood Farm, Inc., 790 So.2d at 100.
The Hazelwood court did not specifically apply the individual factors above, but rather focused upon language of the lease in Andrepont, and the almost identical language in the lease in Hazelwood. In Andrepont, a share crop tenant and the landowner entered into a verbal lease wherein the landowner allowed the tenant to farm soybeans on the land in return for twenty percent of his crop. Later, the owner also granted the oil and gas defendant a lease; but the owner negotiated broader language so that the final version of the lease protected not just the owner/lessor but also protected the farmer/lessee, Mr. Andrepont:
Hazelwood Farm, Inc., 790 So.2d at 100-01.
Because the language in the lease was strikingly similar to that in Andrepont, the Hazelwood court interpreted the lease as providing a stipulation pour autrui in favor of Hazelwood. Likewise, in Magnolia Coal Terminal v. Phillips Oil Company, 576 So.2d 475, 477 (La.1991) (emphasis added), also cited by the Boones, the lease stated, "Lessee shall pay for all damages caused by Lessee's operations...."
Magnolia Coal, 576 So.2d 475, a highly distinguishable case, did not discuss stipulation pour autrui but did allow the new landowner, Magnolia, to recover against the current lessee, Phillips Oil, quoting the above language from the mineral lease retained by the original owners. The suit was for continuing damage caused by the improper plugging of a well that was leaking a gallon of oil per hour. During Magnolia's purchase negotiations, Phillips' predecessor, Aminoil, which later merged with Phillips, took responsibility for plugging the well and cleaning the property; and it agreed in writing to take care of the problem. Two years after Magnolia spent almost $12 million to purchase and begin developing the 2,200-acre tract, Aminoil
In discussing jurisdictional conflicts, where the commissioner of conservation had wrongly found the well to have been properly plugged, the court characterized Magnolia's action for property damages as a private and contractual cause of action not in the purview of the mineral code. The court then stated: "Magnolia's right to recover damages is a property right arising out of the original lease and attached to the property." Id. at 483. The court cited Andrepont, 231 So.2d 347, for this proposition. Since Andrepont does not contain this language, we surmise that it is a reference to the landowner's right to receive its part of the damages before or separately from the damages paid to the share cropper, Andrepont, by the oil and gas lessee, pursuant to La.R.S. 9:3204. In spite of the contextual dissimilarities, it is this quote from Magnolia Coal that the plaintiffs have cryptically and improvidently pulled from the case without further analysis and without reconciling it with Eagle Pipe twenty years later.
Here, the defendant EnerQuest, predecessor of the defendant Petro "E," did not agree to do anything on the property, but rather, completely vacated the property and sold all of its assets and obligations a year before the Boones purchased the property, as discussed fully below. Moreover, the Boones did not introduce the mineral lease for a comparison of the language. And here, there was no continuing damage by EnerQuest, as a continuing tort is one in which the tortfeasor "perpetuates the injury through overt, persistent, and ongoing acts." Eagle Pipe, 79 So.3d at 279. We find no support for the plaintiffs' position in the Magnolia Coal case.
The only lease in the record between a former owner and EnerQuest, is the 2002 surface lease granted by Lagneaux before its sale of the property to Primeaux in 2003. The surface lease that Lagneaux granted to EnerQuest did not contain language similar to the above language or address damages in any manner. It allowed EnerQuest to use the surface of the land for constructing and accessing its facilities and obligated EnerQuest to remove its fixtures and restore the land as nearly as practicable to its original condition within six months after the lease expired. It acknowledged the receipt of adequate and sufficient consideration for this access, presumably the lease payments and any other income from the minerals by which Lagneaux would profit when EnerQuest brought the product to the surface. It extended the provisions of the lease to the heirs, devisees, executors, administrators, representatives, successors, and assigns of the lessor and the lessee. However, the provisions it extended did not include money damages or property damages.
Nor could the parties have intended in 2002 for a benefit to inure to a future purchaser who owned no mineral rights and who stood to gain nothing by an oil and gas lessee's presence on the land. There could not be an acknowledgment of consideration received in such scenario. Moreover, under the Andrepont factors, there was no legal or factual relationship between EnerQuest and the Boones. Mr. Boone admitted in his deposition that he had never met Lagneaux.
The intention of the parties and the language regarding damages is paramount in the jurisprudence on stipulations pour autrui. In Broussard v. Northcott Exploration Co., Inc., 481 So.2d 125, 127 (La. 1986), the Louisiana Supreme Court found
Likewise, in LeJeune Bros., Inc. v. Goodrich Petroleum Co., 06-1557, p. 8 (La. App. 3 Cir. 11/28/07), 981 So.2d 23, 29, writ denied, 08-298 (La.4/4/08), 978 So.2d 327, the court compared the lease at issue to the lease in Broussard and found no stipulation pour autrui in favor of the plaintiffs:
In Wagoner v. Chevron USA Inc., 45,507 (La.App. 2 Cir. 8/18/10) 55 So.3d 12, writ denied, 10-2773 (La.3/2/12), 83 So.3d 1032, which we find particularly illustrative due to the factual similarities involving the same legal issues as those herein, the second circuit found no stipulation pour autrui in favor of the current owner pursuant to a former lessee's mineral lease with a former owner. Based upon the subsequent purchaser doctrine, finding no conveyance of rights in the acts of sale, and finding no language conferring third party rights such as the language in Magnolia Coal Terminal, the Wagoner court found that the plaintiff had no right to sue for pre-acquisition damages under the mineral leases obtained by three former oil and gas lessees. The assignees/lessees who were still operating on the land after the plaintiff's purchase of the property were not dismissed in the judgment affirmed.
More recently than Andrepont, the Louisiana Supreme Court has identified three criteria for determining whether contracting parties have provided a benefit for a third party:
Joseph v. Hospital Service Dist. No. 2 of Parish of St. Mary, 05-2364, pp. 8-9 (La.10/15/06), 939 So.2d 1206, 1212 (citations omitted) (footnote omitted); La.Civ. Code art. 1978; La.Civ.Code art. 1831; see also Eagle Pipe and Supply, Inc., 79 So.3d 246. For the reasons sated, we find that the plaintiffs have not met their burden of proving that they are third party beneficiaries under the contracts as asserted.
The Boones argue that the 2002 surface lease between Lagneaux and EnerQuest had a ten-year term; that it was effective until 2012 which included the ownership of the Boones who purchased the property in August, 2005; and that there was no evidence that it was assigned to another operator. We disagree. As previously discussed, Lagneaux withheld its leases and contractual rights from the assignment to the Boones, and in any event the surface lease did not provide for damages. It only provided for restoration which was not due until six months after the lease expired. Also as discussed, the Boones were not parties to the lease, and the lease did not provide a stipulation pour autrui in favor of the Boones. Moreover, the lease had an effective date of August 1, 2002, meaning that it would have expired as of August 1, 2012, and the Boones did not obtain the assignments until late September, 2012. Accordingly, "it was impossible to transfer rights to an assignee under an expired ... lease." See LeJeune Bros., Inc., 981 So.2d at 28.
In addition to there being no valid assignment from Lagneaux, the record is clear that EnerQuest ceased its operations on the property as of April 30, 2004, and sold all of its physical and contractual rights, including its leases, to Petro "E." On April 17, 2004, EnerQuest executed an "Assignment and Bill of Sale" to Petro "E" of all of its rights, title and interest in the subject property. The sale also included all personal property, fixtures, facilities, tanks, pumps, equipment, machinery, wells, wellheads, licenses, permits, easements, rights of way, leases, contracts, operating and other agreements, "whether of record or not," relating to the properties. This sale was effective on May 1, 2004.
The EnerQuest conveyance to Petro "E" included (emphasis added) "[a]ll rights incident to the Properties, including without limitation, all rights with respect to the use and occupation of the surface of and the subsurface depths under the Properties." The sale and assignment obligated Petro "E" to plug and abandon all wells as required by regulatory authorities, to level all dumps, fill in all pits, remove all debris, and otherwise restore the surface of the land as required in the mineral servitude or leases, and to comply with all applicable orders and regulations. Thus, the surface lease rights and obligations were sold and assigned to Petro "E," and EnerQuest had no presence on the property and no interest in the property, physical, contractual, or otherwise, after April 30, 2004, over a year before the plaintiffs purchased the property on August 26, 2005.
The Boones argue that EnerQuest operated on the property until 2004, and that a personal action has a liberative prescription of ten years under La.Civ.Code art. 3499. That article states: "Unless otherwise provided by legislation, a personal action is subject to a liberative prescription
In September 2012, two and a half years after filing suit in May 2010, the Boones filed a second supplemental petition. The petition attached the newly obtained assignments, attempted to create rights in the Boones as assignees of the former owners, reiterated the earlier causes of action, and added causes of action for fraud, conspiracy, concerted action, and concealment. For the first time, it alleged a cause of action under the Louisiana Environmental Quality Act, La.R.S. 30:2271-2281. The Boones assert that the new petition related back to the original petition in 2010. We must disagree.
Even if the September 2012 assignments from the previous owners had conferred valid and timely rights, the assignments arose two and a half years after the original petition was filed in May of 2010. As discussed, the tort rights had prescribed before the original petition was filed, and the assignments did not confer a right of action in contract. The rights sought to be bestowed in the assignments were not exigible at the time of suit in 2010. Therefore, the claims in the new petition were supplemental, not amending, no matter how the caption of the petition reads, and the relation back of La.Code Civ.P. art. 1153 applies only to amending petitions. Smith v. Cutter Biological, 99-2068 (La. App. 4 Cir. 9/6/00), 770 So.2d 392.
An "untimely filed original petition does not support the relation-back of a new cause of action[.]" Allen v. State, Dept. of Public Safety & Corrections, 12-430, p. 6 (La.App. 3 Cir.11/7/12), 107 So.3d 106, 110 (quoting Cutter Biological, 770 So.2d at 413). Nor does an original petition filed by a party without a right of action to file it. See Naghi v. Brener, 08-2527 (La.6/26/09), 17 So.3d 919.
In TCC Contractors, Inc. v. Hospital Service Dist. No. 3 of Parish of Lafourche, 10-685, p. 22-23 (La.App. 1 Cir.12/8/10), 52 So.3d 1103, 1116-17, the first circuit found that claims arising via an assignment did not become exigible prior to the date of the assignment:
Accordingly, the claims asserted in the Boones' second supplemental petition do not relate back to the original petition.
Based upon the foregoing, we affirm the trial court's judgment granting the motion for summary judgment and exception of prescription in favor of EnerQuest Oil & Gas, LLC. Costs of this appeal are assessed to the plaintiffs, Carlos and Lori Boone.
But a particular successor is not personally bound, unless he assumes the personal obligations of his transferor with respect to the thing, and he may liberate himself of the real obligation by abandoning the thing. La.Civ. Code art. 1764.
