ELIZABETH ERNY FOOTE, District Judge.
Plaintiffs, Wuellner Oil & Gas, Inc., Marshall Oil & Gas, Inc., Texas Gas Development, L.P., and Jarratt Enterprises L.L.C. (collectively "Plaintiffs"), claim that Defendant EnCana Oil & Gas (USA) Inc.'s ("EnCana") breached obligations owed to them by failing to allow Plaintiffs to participate in leases taken by EnCana within two geographic prospects. Before the Court are EnCana's Motion for Partial Dismissal [Record Document 21]; Plaintiffs' Motion for Leave to File First Supplemental and Amended Petition [Record Document 23]; and EnCana's Motion To Strike [Record Document 32]. Oral argument was held on these motions on December 5, 2011 at 9:30 a.m. in open court. For the reasons stated herein, the Court: 1)
Plaintiffs assert two claims in this suit. First, Plaintiffs seek an accounting, damages, and payment of overriding mineral royalty interests from Defendant EnCana as the assignee of certain mineral leases on land located within defined geographical
Marshall-Wuellner, Inc. (predecessor-in-interest to the current Plaintiffs) and Will-Drill entered into two Letter Agreements in November 2003. [Record Document 1-2, pp. 8-12, 13-17].
Under the Letter Agreements, Will-Drill was solely responsible for acquiring "oil, gas and mineral interests within the Contract Area." Id. at 8-9. The Letter Agreements provided that Marshall-Wuellner "shall receive an assignment of overriding royalty from Will-Drill ... on any lease acquired by Will-Drill within the Contract Area." Id. The Letter Agreements further specify the manner by which Marshall-Wuellner would receive the royalty interest to which they were entitled: "Will-Drill will execute and deliver to M-W the aforementioned assignment within ninety (90) days of M-W's written request therefore." Id. Finally, clause nine of the Letter Agreements provides that the prospects will constitute an "Area of Mutual Interest between the parties hereto." Id. at 11. Clause Nine lays out a scheme that effectively gives each party an option to purchase "its share of the acquired interest" if the other party acquires an interest within the prospect. It creates a series of deadlines for the party acquiring the interest to notify the other party and then for the other party to decide whether to exercise its option to purchase its share of that interest. Id. In summary, the provisions of the Letter Agreements lay out how Marshall-Wuellner and Will-Drill would share in the duties and benefits involved in transforming the two prospects into producing oil fields.
Acting in conformity with its obligations under the Letter Agreements, Will-Drill acquired certain leases within the two prospect areas and assigned overriding
Paragraph Four of the Assignment reads in pertinent part:
Id. at 29 (emphasis added).
As noted above, it is undisputed that when it entered into the Assignment of leases with Will-Drill, Pride was acting as an agent for Defendant EnCana, although at the time of the transaction Pride did not disclose the identity of its principal — making it a partially disclosed mandatary. [Record Document 20, p. 1; Record Document 31, p. 12, Record Document 29, p. 9]. On March 13, 2007, Pride assigned to EnCana the leases it had acquired from Will-Drill. [Record Document 1-3, p. 8]. Later in the year 2007, EnCana assigned a fifty-percent interest in many of the leases to SWEPI LP. [Record Document 23-2, p. 1]. Finally, on January 13, 2010, Marshall-Wuellner assigned to the Plaintiffs in this action the ORRIs it had acquired from Will-Drill on August 22, 2005. [Record Document 1-2, p. 37].
Plaintiffs filed suit on October 1, 2010 in state court. Defendants removed to this Court on November 5, 2010. On March 3, 2011, Defendants moved to dismiss Plaintiffs' claims related to their right to participate in additional leases acquired by EnCana within the defined prospect areas. On March 28, 2011, the deadline for joinder of parties and amendment of the pleadings, Plaintiffs moved for leave to amend their petition in order to add claims against Pride Oil and SWEPI LP.
The Court will address Defendant's Motion for Partial Dismissal first, as the resolution of the question of whether of Plaintiffs' "right to participate" claims against EnCana state a cause of action upon which relief can be granted has consequences for the determination of whether Plaintiffs' motion to amend their complaint to add Pride Oil as a Defendant should be granted.
In its Motion for Partial Dismissal, EnCana argues that Plaintiffs' claim that EnCana assumed Will-Drill's obligations under the Letter Agreements, "vesting in them the right to demand from EnCana
Federal Rule of Civil Procedure 12(b)(6) provides for dismissal of any claim that fails "to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). In order to survive a Rule 12(b)(6) motion to dismiss, a "complaint must allege sufficient factual matter, accepted as true, to state a claim that is plausible on its face." Hershey v. Energy Transfer Partners, L.P, 610 F.3d 239, 245 (5th Cir.2010). While a complaint attacked by a Rule 12(b)(6) motion need not contain detailed factual allegations, it must at least allege plausible grounds from which one could infer that the elements of the claim can be made out. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); In re Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir.2007). That is, the complaint must allege "enough fact to raise a reasonable expectation that discovery will reveal evidence of [every element of the claim]." Bell Atlantic Corp., 550 U.S. at 556, 127 S.Ct. 1955. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements" will not suffice. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). The Court must not, however, convert this "plausibility" requirement into an analysis of whether the non-moving party is likely to succeed on the merits. Bell Atlantic Corp., 550 U.S. at 556, 127 S.Ct. 1955 ("of course, a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely.") (citations omitted).
As this case is before the Court under diversity jurisdiction, the Court must apply the substantive law of the forum state. Bradley v. Allstate Ins. Co., 620 F.3d 509, 517 n. 2 (5th Cir.2010) (citing Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)). The Fifth Circuit in In re Katrina Canal Breaches Litigation stated the appropriate methodology for a Federal Court sitting in diversity in Louisiana to apply:
In Louisiana, the interpretation of a contract and the determination of whether the language in a written contract is ambiguous are questions of law. Preston Law Firm, L.L.C. v. Mariner Health Care Mgmt. Co., 622 F.3d 384, 391-92 (5th Cir. 2010). Once a written document is found to be ambiguous, however, "the determination of the parties' intent through extrinsic evidence is a question of fact." Prescott v. Northlake Christian Sch., 369 F.3d 491, 495 (5th Cir.2004).
The underlying mineral rights at issue in this matter are real rights. La.Rev. Stat. Ann. § 31:16 (2010) ("Mineral rights are real rights ..."). Obligations correlative and incidental to real rights are "real obligations", and they pass automatically to the successor to the real right to which they are correlative. La. Civ.Code Ann. art. 1763-64 (2010). That is to say, a person who comes to own a real right to which a real obligation is attached is bound by that obligation merely by virtue of owning the real right. Personal obligations that relate to a real right, however, do not run with that real right. La. Civ.Code Ann. art. 1764 (2010). In order to be bound by personal obligations related to a real right, the subsequent owner of a real right must "assume the personal obligations of his transferor with respect to the thing." Id.
Plaintiffs appear to concede that the obligation to allow Marshall-Wuellner to participate in additional leases acquired within the prospects is a personal obligation. [Record Document 25, p. 8]. In any case, the Court is persuaded that these unrecorded Letter Agreements created only personal obligations between Marshall-Wuellner and Will-Drill. Kincade v. Midroc Oil Co., 769 So.2d 813, 817 (La.Ct.App.2000) (holding that letter agreements entitling a geologist to "one-third of any cash profit and one-third of any interest [the other party has] in the oil and gas leases within the area of interest" created only personal obligations). The Letter Agreements do not effectuate the assignment of any real rights, rather they only contemplate the assignment of real rights that Will-Drill is obligated to obtain in the future. [Record Document 1-2, p. 8-9]. The fact that the Letter Agreements do not reference any real rights that Will-Drill already owns confirms that it creates no real obligations, since a real obligation must be "correlative and incidental to a real right" and "[i]t is a fundamental principle that no one can transfer a greater right than he himself has." La. Civ.Code Ann. art. 1763 (2010); Eagle Pipe and Supply, Inc. v. Amerada Hess Corp., 79 So.3d 246, 281-83 (La.2011). As a mere personal obligation relating to the leases at issue, the obligation to allow Plaintiffs to participate in additional leases acquired within the prospect area is not automatically assumed by subsequent owners of the leases. La. Civ.Code Ann. art. 1978 (2010). The only question before the Court is therefore whether these personal obligations were assumed by Defendants.
Article 1978 provides that "[a] contracting party may stipulate a benefit for a third person called a third party beneficiary." La. Civ.Code Ann. art. 1978 (2010). The case law makes clear that in assessing whether a stipulation pour autrui exists, Courts should consider three criteria: "whether 1) the stipulation for a third party is manifestly clear; 2) there is certainty
The Louisiana Civil Code provides that "[a]n obligor and a third person may agree to an assumption by the latter of an obligation of the former." La. Civ.Code Ann. art. 1821 (2010).
Plaintiffs argue, in effect, that since the referent of the words "other contracts burdening the same" is unclear, parol evidence will be required in order to interpret the contract in order to determine exactly what obligations were assumed by EnCana. [Record Document 25, pp. 8, 10]. Plaintiffs argue that this ambiguity entitles them to introduce evidence at trial that would "confirm that not only was Pride/EnCana aware of the Letter Agreements, but they reviewed the Letter Agreements prior to the Will-Drill/EnCana Assignment and they intentionally, knowingly and clearly evidenced their intent to be bound by the Letter Agreements through the inclusion of the `other contract' language." [Record Document 25, p. 10]. Thus, Plaintiffs' argument is that since the contract language is referentially ambiguous, it is impossible to interpret it without parol evidence and therefore a motion to dismiss is inappropriate. In order to determine whether this case may be disposed of on a motion to dismiss, therefore, the Court must determine whether the Contract is subject to interpretation from only its four corners as a matter of law, or whether factual findings based on parol evidence are required in order to determine the common intent of the parties. Investors Assocs. Ltd. v. B.F. Trappey's Sons Inc., 500 So.2d 909, 912 (La.Ct.App.1987) ("Contracts, subject to interpretation from the instrument's four corners without the necessity of extrinsic evidence, are to be interpreted as a matter of law. The use of extrinsic evidence is proper only where the contract is ambiguous after an examination of the four corners of the agreement."); Rodriguez v. Olin Corp., 780 F.2d 491, 497 (5th Cir. 1986) ("Under Louisiana law, where uncertainty or ambiguity exist as to the provisions of a contract, or where the intent of the parties cannot be ascertained from the language employed, resolution of the ambiguity is a question of fact for the jury, and parol evidence regarding the parties' intent
As a threshold matter, the Court must determine whether parol evidence is ever admissible to interpret a contract through which a third party assumes the obligations of the original obligor to an obligee. Article 1821 provides that:
La. Civ.Code Ann. art. 1821 (2010).
Article 1832 provides that:
La. Civ.Code Ann. art. 1832 (2010).
Although the "contract may not be proved" language of Article 1832 could be read broadly to disallow the introduction of parol evidence to prove both the existence of a contract and the content of that contract's terms, the Court is persuaded that Louisiana courts routinely apply normal parol evidence principles to determine whether to admit parol evidence to interpret contracts that are required by law to be in writing. Marsh Cattle Farms v. Vining, 707 So.2d 111, 116 (La.Ct.App.1998) ("In interpreting deeds, the intention of the parties must be gathered from an inspection of the instrument itself, without the aid of extrinsic evidence, if the intentions can be thus ascertained. If the description is so ambiguous as to leave doubt as to the parties intent, the court may resort to extrinsic evidence as an aid in construction.") (citations omitted); Housing Authority of the City of Lafayette v. Fidelity & Deposit Co. of Maryland, 309 So.2d 920, 926 (La.Ct.App.1975) (applying the "unambiguous" test to determine whether to admit parol evidence to aid in interpreting an Act of Sale). Accordingly, the Court reads Article 1832 to only prohibit parol evidence offered to prove the existence of a contract required by law to be in writing. Chevron U.S.A., Inc. v. Traillour Oil Co., 987 F.2d 1138, 1159 (5th Cir.1993) (finding that because the agreements between the party allegedly assuming the obligation and the obligor were in writing, Article 1821 was satisfied and only the interpretative question of whether the new obligor actually assumed the obligation remained). Thus, the principles that govern the admissibility of parol evidence to interpret a written contract govern the interpretation of assumptions of obligations. In the instant case, Plaintiffs allege that Pride/EnCana assumed Will-Drill's obligations in writing through the "other contracts burdening the same" language in the Assignment. Accordingly, Articles 1821 and 1832 do not, in and of themselves, bar the admission of parol evidence to interpret this language.
The question then becomes whether the normal rules that govern admissibility of parol evidence to interpret a contract apply when the question of interpretation is whether the contract creates a stipulation
Defendant's more aggressive approach would appear to never allow parol evidence to aid in the interpretation of a written contract alleged to create a stipulation pour autrui. At first glance, this line of reasoning appears to be in keeping with the heightened jurisprudential requirement that the parties must "clearly manifest" their intention to create a stipulation pour autrui in order to render it enforceable. If a contract is memorialized in writing and parol evidence would normally only be admissible to clarify an ambiguity in that writing, it would seem that by the fact that the writing was ambiguous the parties would have failed to satisfy the "manifestly clear" criteria for proving a stipulation pour autrui. A number of cases appear to support Defendant's argument that the assumption of Will-Drill's obligations must be apparent on the face of the Assignment. Pinnacle Operating Co. v. Ettco Enterprises, 914 So.2d 1144, 1149 (La.Ct.App.2005) ("the intent to assume the obligation must be clearly expressed on the face of the documents."); SPE FO Holdings, LLC v. Retif Oil & Fuel, LLC, 2008 WL 3285907, at *5 (E.D.La. Aug. 6, 2008) ("Such an assumption must be apparent on the face of the document.") (internal quotations omitted) (citing Chevron U.S.A., Inc. v. Traillour Oil Co., 987 F.2d 1138, 1159 (5th Cir.1993) ("We decline to read into the investors' subleases an express assumption of Traillour's personal obligations to Chevron, where no such assumption is apparent from the face of the documents.")).
Still, the Court is not persuaded that Louisiana law departs from the normal rules governing the admissibility of parol evidence in interpretation of contracts when the question is whether the contract contains a stipulation pour autrui. The two major Fifth Circuit cases addressing the standard for proving a stipulation pour autrui, Chevron v. Traillour and NOPSI v. United Gas Pipe Line, both hold that either an "express declaration or an extremely strong implication" is necessary to prove a stipulation pour autrui. NOPSI, 732 F.2d at 467-68; Chevron U.S.A., Inc. v. Traillour Oil Co., 987 F.2d 1138, 1152 (5th Cir.1993).
It must be remembered that sitting in diversity, this Court's task is to make an "Erie guess" as to what the state's highest court would most likely decide. Herrmann Holdings Ltd. v. Lucent Techs. Inc., 302 F.3d 552, 558 (5th Cir.2002). The Louisiana Supreme Court has not decided whether Article 2046 applies when the question is whether the contract creates a stipulation pour autrui. The Louisiana Supreme Court's most recent holding regarding the standard for proving a stipulation pour autrui does, however, shed some light on how it would likely decide the question before the Court. In Joseph, the Louisiana Supreme Court held that, its earlier decisions and earlier decisions of Louisiana Appellate Courts notwithstanding, there is no statutory or general requirement that a stipulation pour autrui be in writing. Joseph, 939 So.2d at 1215.
The same analysis is appropriate in this case. The Court must first determine whether any ambiguity exists in the language of the written Assignment regarding whether EnCana assumed Will-Drill's obligations to allow Plaintiffs to participate in additional leases. If ambiguity does exist, then parol evidence is necessary in order for the Court to determine the common intent of the parties on this question. However, once it has been determined what evidence is admissible to interpret the terms of the contract, Plaintiffs have the heightened burden of showing that contract, as evidenced by the appropriate materials, "clearly manifests" the parties' intent to create a stipulation pour autrui.
The Court finds the language of the Will-Drill/Pride Assignment unambiguous. The words of the Will-Drill/Pride Assignment, when read as a whole, clearly and explicitly show that EnCana/Pride did not intend to assume any of Will-Drill's personal obligations relating to leases that were not transferred in the Assignment. La Civ.Code Ann. art. 2050 (2010) ("Each provision in a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole."). The Assignment begins by defining the interests that are being assigned:
Plaintiffs focus on the following language from Paragraph Four: "Assignee takes the Subject Properties subject to and agrees faithfully and timely perform the terms, conditions and provisions of the Leases and any other contract burdening the same." Id.; [Record Document 1-2, p. 4]. Plaintiffs argue that since the Letter Agreements are "other contract[s] burdening the [Leases or Subject Properties]," when Pride accepted the leases assigned in the Will-Drill/Pride Assignment, they agreed to assume the "terms, conditions and provisions" of the Letter Agreements.
Even assuming, for the sake of argument, that Pride agreed to assume any of the personal obligations of Will-Drill, Plaintiffs' argument lacks merit because the language of the contract clearly and explicitly limits any personal obligations Pride assumes to those obligations that relate to the "Subject Properties" and "Leases". The Assignment never mentions the "prospects" or "areas of interest" defined in the Letter Agreements between Will-Drill and Wuellner-Marshall. The Assignment's initial definitions make clear that the subject matter of the Assignments is the mineral leases listed in Exhibit A of the Assignment [Record Document 1-2, pp. 32-36], not the geographical areas covered by the two Letter Agreements. Thus, when the Assignment refers to "any other contract burdening the same" it is clearly referring to obligations created by other contracts, where those obligations, real or personal, relate to the mineral leases listed in Exhibit A of the Assignment.
The omission of any reference to the geographic prospects is not simply a topic on which the Assignment is silent and where parol evidence would be admissible to fill in the gaps in the writing. The paragraph that Plaintiffs contend effects Pride/EnCana's assumption of Will-Drill's obligations relating to the acquisition of additional leases begins with the phrase: "Assignee takes the Subject Properties subject to ..." [Record Document 1-2, p. 29]. This introductory phrase makes clear that the rest of the sentence specifies the obligations related to the "Subject Properties," not prospects, that Pride/EnCana agrees to assume. Similarly, the paragraph concludes with the assignee's promise to assume a number of enumerated obligations "accruing or relating to the owning, developing, exploring, operating or maintaining of the Subject Properties ..." Id. These two book ends make clear that Paragraph Four specifies obligations relating to the "Subject Properties" assigned, and not the areas of mutual interest identified by Wuellner-Marshall and Will-Drill in their Letter Agreements.
Finally, the fact that the Assignment states explicitly that Pride is taking the "Subject Properties" subject to Marshall-Wuellner's ORRIs confirms that the entirety of Paragraph Four deals only with obligations attached to the "Subject Properties" assigned. Pride and Will-Drill clearly knew how to specifically reference the ORRIs assigned by Will-Drill to Marshall-Wuellner and therefore in the absence of any specific reference to the personal obligation of Will-Drill, it is implausible that Pride and Will-Drill would have used the phrase "any other contract burdening the same" to refer to the obligations created by the Letter Agreements between Wuellner-Marshall and Will-Drill.
In sum, because the language of the Assignment is unambiguous, the Court may not consider any parol evidence offered by Plaintiffs to further investigate the parties' intent. La. Civ.Code Ann. art. 2046 (2010). The unambiguous language of the Assignment limits the obligations assumed by EnCana/Pride to obligations attached to the assigned leases. Thus, the Assignment does not clearly manifest the intent to create a stipulation pour autrui through Pride/EnCana's assumption of Will-Drill's obligations under the Letter Agreements. Plaintiffs, therefore, have failed to state a claim upon which relief can be granted, since the Assignment that they have quoted and referenced in their state court petition does not, as a matter of law, effect an assumption of Will-Drill's obligation to allow them to participate in or demand an overriding royalty interest in additional leases acquired within the prospects. For these reasons, the Court
Plaintiffs seek to amend their complaint to join SWEPI LP and Pride Oil & Gas Properties, Inc. as defendants. [Record Document 23, p. 1]. As EnCana consents to Plaintiffs' motion to join SWEPI LP, the Court
Plaintiffs' attempt to join Pride is troubling as it would divest this Court of diversity jurisdiction. Id. Plaintiffs make the following four claims against Pride:
This Court has discretion to either permit Plaintiffs to add Pride and remand the case or to deny joinder and retain jurisdiction. 28 U.S.C. § 1447(e) (2011) ("If after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court.").
In Hensgens v. Deere & Co., the Fifth Circuit laid out the following four factors that should guide district courts in balancing the original defendant's interest in maintaining a federal forum against the interest in avoiding parallel lawsuits: "1) the extent to which the purpose of the amendment is to defeat federal jurisdiction; 2) whether plaintiff has been dilatory in asking for amendment; 3) whether plaintiff will be significantly injured if amendment is not allowed; and 4) any other factors bearing on the equities." 833 F.2d 1179, 1182 (5th Cir.1987). In Cobb v. Delta Exports, Inc., the Fifth Circuit further explained that in considering a motion to join a non-diverse dispensable party a district court would properly deny joinder if "there is no colorable claim against the party the plaintiff seeks to join". 186 F.3d 675, 678 (5th Cir.1999). The Court must, then, carefully examine the nature of Plaintiffs' claims against Pride, the effect a remand will have on the parties, and any
The question of whether Plaintiffs' claims against Pride are colorable informs the Court's application of the Hensgens balancing test. See Wilson v. Bruk-Klockner, Inc., 602 F.3d 363, 366-68 (5th Cir.2010). For the reasons given in Section II supra, the Court finds that any claims against Pride or EnCana grounded in the alleged right of Plaintiffs to demand participation in any additional leases acquired within the two prospect areas fail to state a cause of action upon which relief can be granted. Plaintiffs' claims that Pride failed to allow them to participate in additional leases and failed to notify EnCana of Plaintiffs' right to participate in additional leases are therefore not colorable because Plaintiffs have no right to participate in additional leases. In addition, the Court is persuaded that none of Plaintiffs' claims against Pride, whether grounded in Plaintiffs' alleged "right to participate" or in Pride's failure to pay Plaintiffs' overriding royalty interests, are colorable for the reasons explained below. Each of Plaintiffs' four claims against Pride will be addressed in turn.
Plaintiffs' first two claims against Pride, which mirror their claims against EnCana, seek to hold Pride liable for EnCana's alleged obligations to Plaintiffs under the theory that at the time of the transaction between Pride and Will-Drill, Pride was acting on behalf of an undisclosed principle. [Record Document 31 pp. 8-9]. Therefore, Plaintiffs conclude, Pride is bound by the same obligations it assumed on behalf of EnCana. This theory of liability, however, must contend with the language of Louisiana Civil Code Article 3018, which reads:
This language would seem to clearly relieve Pride of any liability it had incurred under the Assignment as soon as it disclosed the identity of EnCana, its principle, which it did on or before October 12, 2005. [Record Document 29-1, p. 23].
The Court has found no Louisiana jurisprudence interpreting Article 3018. Professors Wendell H. Holmes and Symeon C. Symeonides, however, appear to share Plaintiffs' worries concerning Article 3018. They worry that Article 3018 encourages opportunistic behavior on the part of the partially disclosed mandatary, enabling him to keep the benefits of lucrative contracts for himself while unloading the burdens
Plaintiffs also argue that the comments to Article 3018 evince no intent on the part of the legislature to alter the jurisprudence. However, if the plain language of a legislative enactment does in fact alter the jurisprudence, there is no additional need for the legislature to state that it intends to change the jurisprudence. In fact, the Louisiana Civil Code precludes further investigation into the intent of the legislature if the text is clear and unambiguous and does not lead to absurd consequences. La. Civ.Code Ann. art. 9 (2010). The text of the article clearly is not amenable to Plaintiffs' reading, and although there may be doubts as to the wisdom of the policy it enacts, the Court is not persuaded that the consequences rise to the level of absurdity.
Furthermore, Plaintiffs' reading of Article 3018 is vulnerable to attack through reductio ad absurdum. Article 3018 clearly contemplates a situation where a partially disclosed mandatary is held liable for the period of time before he discloses his principal. If the Court were to hold that disclosure after the transaction through which the partially disclosed mandatary incurred liability did not eliminate liability for the mandatary, then the scenario contemplated by Article 3018 could never occur. If "after the fact" disclosure never relieved a mandatary of liability, in order for a partially disclosed mandatary to ever be relieved of liability, the liability relieving act would have to take place before the liability imposing act, which is impossible. Article 3018 would then be effectively read out of the Civil Code.
In summary, the unambiguous language of Article 3018, the weight of the persuasive authority, and the maxim that legislation must be interpreted in order to give meaning to the legislative text point the Court to the unavoidable conclusion that Plaintiffs' first two claims against Pride are not colorable. By disclosing the identity of its principal, Pride relieved itself of any liability it incurred from the Assignment.
Neither are Plaintiffs' claims stemming from the alleged failure of Pride to notify EnCana and SWEPI, that is, claims 3 and 4, colorable. The legal basis of the "failure to notify" claims is not clear from the proposed amended complaint and Plaintiffs' Reply does not shed any more light on this point.
The Court has no direct evidence that the purpose of Plaintiffs' motion to amend is to destroy the Courts' diversity jurisdiction. Accordingly, the first Hensgens factor is neutral. While Plaintiffs filed their motion to add Pride after EnCana had filed a potentially dispositive motion and after substantial activity beyond the pleading stage had occurred in this case, the motion was filed within the deadline to amend their claim and join parties. The second Hensgens factor is therefore also neutral.
The third Hensgens factor, however, weighs heavily against Plaintiffs. The fact that none of Plaintiffs' claims against Pride are colorable compels the Court to conclude that Plaintiffs are not significantly injured by remaining in Federal Court. For this reason and because the joinder of Pride would destroy the Court's diversity jurisdiction, the Court
For the reasons given above, the Court makes the following rulings: