Midnight Drilling, LLC VS Claude Adam Triche, et al

Annotate this Case

Download PDF

NOT DESIGNATED FOR PUBLICATION STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT NLJMBER 2012 CA 1043 MIDNIGHT DRILLING LLC VERSUS CLAUDE ADAM TRICHE ET AL Judgment Rendered JUN 1 9 2013 On Appeal from the G ThirtY Second Judicial District Court In and for the Parish of Terrebonne State of Louisiana Docket No 160041 Honorable Randall L Bethancourt Judge Counsel for Don R Beard Baton Rouge Appellee Plaintiff Midnight Drilling LLC LA Edmund McCollam Counsel for Houma LA Appellees Defendants Claude Adam Triche and Debbie Himel Triche Counsel for David M Ellison Jr Baton Rouge LA Appellees Defendants Julius Wilson Cole et al J Todd Reeves Madisonville Counsel for LA DefendantlAppellee Main Iron Works Edward D New Wegmann Orleans LA Counsel for Appellees Defendants Jeannie B Dawson s Grandchildren Trust BEFORE GUIDRY CRAIN AND THERIOT JJ i GUIDRY J In this concursus proceeding brought by the current operator of a unit well one group of named defendants appeals the judgment finding that the mineral servitude that would otherwise entitle them to share in the production proceeds of the well was prescribed for nonuse For the following reasons we affirm FACTS AND PROCEDURAL HISTORY On February 17 2009 Midnight Drilling LLC spudded well MIO RA SUA C Triche Et Ux 001 formerly named Claude A Triche Et Ux 001 Subsequently the Office of Conservation issued an order effective August 18 2009 establishing the well as a unit well with Midnight Drilling designated as the well operator As the designated well operator Midnight Drilling executed leases and assignments of leases for production of the minerals contained in the well however a dispute arose among the various lessors regarding rights to the production So on March 9 2010 Midnight Drilling filed a concursus petition to determine who among the various lessors were entitled to royalty payments By the time the matter proceeded to trial most of the named defendants had settled their claims except for the following parties Claude Adam and Debbie Himel Triche the Triches and Julius Wilson Cole Catherine Carmen Cole Petty Kimberly Ann Gill Mauer Gill Petroleum Enterprises Cathline S Cole Terrebonne LLC Landowner Interest Inc the Succession of Mary Elizabeth s Hames Gill Mary E Gill Family LLC and the Succession of Cathline Singleton Cole collecrively referred to as the Cole group Ms Petty was inconectly identified as Katherine Carmen Cole Teddy in the concursus petition 2 Cathline S Cole LLC was misidentified as Catherine S Cole LLC Terrebonne Terrebonne in the concursus petition 2 In their answer to the concursus petition the Triches asserted that they were the owners of two tracts of land one lying north of the north right of the way of Intracoastal Waterway North tract and the second lying south of the Intracoastal Waterway South tract They acknowledged that the title to the minerals and the bed and bottom underlying the Intracoastal Vvaterway right were retained way of by the original seller of the land Hallette Barrow Cole wife of Dr C Grenes Cole from whom the Cole group claims its rights The Triches further asserted that because the Intracoastal Waterway separates the two tracts of land the mineral reservation resulted in the creation of two separate mineral servitudes one servitude far the minerals reserved under the tract lying north of the north right of way of the Intracoastal Waterway and a second servitude for the tract lying south ofthe Intracoastal Waterway Finally the Triches averred that upon information sufficient to justify belief that a period of ten years during elapsed since creation of the original mineral servitudes which no operations for the benefit of the servitude Tract were conducted on or production obtained therefrom said servitude Tract being identified as the property lying North of the Intracoastal Waterway and that as a result the prescription of non has accrued use has in so far as said servitude reserved on the Tract lying North of the North Right line of the Intracoastal Waterway is concerned Way of Conversely in their answer to the concursus petition the Cole group asserted that both of the mineral servitudes have been preserved by production or and drilling operations conducted at all times pertinent to the lawsuit Specifically the Cole group averred that the drilling and production from the Cotton Petroleum Corporation Cole 2 well Cole 2 well and drilling and production from the Midnight Drilling LLC 1 Triche Well constitute two such wells that have effectively prevented the running of liberative prescription of the minerals reserved by the Cole group and further averred that a well or wells have been drilled and produced from a surface location which has effectively prevented the running of liberative prescription of the minerals mineral rights and royalties reserved by the Cole group 3 Thus the matter proceeded to trial on the issue of whether the Cole group s mineral servitude for the North tract had been extinguished pursuant to liberative prescription of nonuse Following a two bench trial the trial court decreed the day following s A a matter of fact and law the mineral servitude created by the reservation of minerals in the Ac of Sale by Mrs Hallette Barrow Cole et al dated April 9 1973 been extinguished for lack of use has for a consecutive ten year period immediately preceding the drilling of the Midnight Drilling LLC C Triche et al No 1 Well in so far A and only in so far as said servitude pertains to the following tract of land belonging to Claude Adam Triche and Debbie Himel Triche to wit A certain tract of land containing 76 acres described 505 as beginning at the northeastern most property corner of Main Iron Works Inc being on the southern line of a 100 Right of Way from Bayou Blue Road Said point designated as the point of beginning Thence S 0 04 37 E for a distance of 1feet to a 49 275 point Thence northwesterly along an arc for a distance of 00133 3 feet Radius 58 5579 feet to a point Thence N 0 02 16 W for a distance of 682 feet to a 49 point Thence S 89 29 S4 E for a distance 2 feet to a 11 643 point Thence S 0 04 37 W For a distance of 00 feet to a point Thence S 89 45 40 E for a distance of 232 feet to 90 the point of beginning Said tract is bounded on the south by the Intracoastal Waterway on the west by Delta Securities or assigns on the north by Delta Securities or assigns and a 100 Right of Way on the east by Main Iron Works Inc All of the above is mare fully shown on a map prepared by Charles L McDonald Land Surveyor Ine entitled MAP SHOWING PROPERTY BELONGING TO HALLETTE BARROW COLE ET AL LOCATED IN SECTIONS 37 42 T17S TERREBONNE R18E PARISH LOLTISIANA and dated 27 May 1993 It is from this judgment that the Cole group now appeals 3 3 While the appeal was pending before this court the Triches filed a motion to supplement the appellate record with certain exhibits however as legible and complete copies of the exhibits already exist in the record before us the Triches motion is denied 4 ASSIGNMENTS OF ERROR In this appeal tYAe Coi gr ualleges tY ir court erred in holding that at i no operations were conducted on Yhe N cxaci s s to interrupt the accrual of h Y prescription for nonuse The C91e grou fiarkhec alleges thai the trial court erred in s failing to recognize that alI roc nd c of the Cc 2 well were staon 7 perations le acted cond on a unit b ir connectic sis nwith tne R S and the lower P Sand nd DISCtiSSION We will commence our review of this matter by considering the Cole group s second assignment of error In support of this ass of error tl Cole group ignment e contends that a voluntary unit was established covering the area of the North tract such that any and all operations served to interrqpt the running of prescription on their mineral servitude A mineral servitude can be extinguished by prescription resulting from nonuse of the 1 A 27 31 operations servitude far an uninterrupYed ten period year See La S I The prescription of nonuse can be interrupted by good faith for the discovery and oduction pr of minerais Such good faith operations are defined as being 1 commenced witih reasonable expectation of discovering and producing mir in paying quantities at a erais artacular point or depth 2 continued at the site chosen to that point or depth and 3 conducted in such a manner that they constitute a single operation although actual drilling or mining is not conduct all times dat La R 31 Moreover operations or production within a can also S 29 unit interrupt the running of the prescription for nonuse as to a minerai servitude See La R 31 and 37 A is defined in the Louisiana Mineral Code as S 33 unit an area of land deposit r deposits of minerals stratum or strata er pool or pools or a part or parts thereof as to which pat7ties with anterests therein axe bound to share minerals produced on a specified basis and as to which thosz having the right to conduct drilling or operations mining therein are bound to share inve perating tmentand costs on a speeifred basis A unit may be formed by convention or by 5 order of an agency of the state or federal government empowered to do so A unit formed by order of a goverr agency is termed a rnental compulsory unit Emphasis added La R 31 S 213 6 In this case the Cole group alleges that a unit was formed that encompassed the land burdened b their mineral ser because the parties to the lease of itude the Cole 2 well namely the operators and lessors acted in such a manner that the Cole 2 well was produced on a unit basis The Cole group relies on a comment to La R 31 stating that the definition of unit contained in the statute S 213 includes conventional units of all kinds whether established by declaration under a pooling power by a contract executed by all parties affected or otherwise emphasis added as authority for its proposition that a unit can be formed based merely on the conduct of interested parties We disagree Mineral interests are incorporeal immovables La C art 470 La R S 18 31 A transfer of immovable properiy must be made by authentic act ar by act under private signature La C art 1839 Operating agreements must be in writing to affect title to a real right such as land a mineral servitude or a mineral lease See Guy E Wall Joint Oil and Gas Operations in Louisiana 53 La L Rev 79 101 Sept 1992 Further it has been held that parol evidence cannot be used to prove title to any mineral right nor to prove any claim far or interest in the revenues from a mineral right Haves v Muller 245 La 356 158 So 2d 191 1963 In Hayes the court found that the plaintiffs were seekang to verbally prove a joint venture to establish their right to share in the profits from a mineral lease however the court held that t parol evidence rule has been applied by this he court not only in cases involving contracts which directly affect title to realty but 4 The Cole group further cites Banner v Geo Consultants International Inc 593 So 2d 934 La App 4th Cir 1992 in support of its argument however we observe that the court in Banner found that a unit was established in a written reof a lease and not based assignment merely on the conduct of interested parties See Banner 593 So 2d at 935 6 also in others where the litigants merely sought to derive benefits growing out of verbal agreements relating to the sales of immavable property Hayes 245 La at 376 158 So 2d at 198 Thus the court held that applicable to the mineral leases and contracts is the same requirement ofwritten testimonial proof that governs that transfer of immovable property In other words the parol evidence rule applies to transactions involving mineral leases just as it does to those affecting real estate Hayes 245 La at 375 158 So 2d at 198 76 Therefore the court held that the plaintiffs had no cause of action to assert such a claim Ha 245 La at 385 158 So 2d at 201 Similarly we fmd that to s the extent the establishment of a affects the rights of parties to derive unit benefits from the operation and production of a minzral interest parol evidence cannot be used to establish the existence of such a but instead a writing unit must exist recognizing the parties agreement to establish such a unit Therefore having determined that the trial court did not err in failing to find a unit was established for the operations and production of the Cole 2 well such that activities within the unit would interrupt the running of prescription on the Cole group mineral servitude for the 1orth tract we will now consider the Cole s s group first assignment of error alleging that the trial court erred in holding that no operations occurred for an uninterrupted ten period to toll the running of year prescription on their mineral servitude The record reveals that up until 1989 the Cole 2 well was operated as a compulsory unit we11 and thereafter it was c as a lease we1L Thus as a perated unit non well any operations and production that occuxred had to occur on the actual land burdened with the servitude in order to interrupt the running of 5 As a unit well operarions and production by the Cole 2 well interrupted prescription on the Cole group mineral servitude for the North tract until 1998 However the record establishes s and the parties acknowledge that operations and production of the Cole 1 well interrupted prescription on the mineral servitude until 2003 Thus at issue is whether any operations or production of the Cole 2 well occurred between 1999 ten years prior to the spudding of the Midnight Drilling well and 2003 the end of the interruption resulting from the Co1e 1 well that interrupted the prescription of nonuse of the mineral servitude for the North tract 7 prescription The Cole 2 we11 was drilled as a directional weli meaning that the bottom of the well deviated from the point where drilling was commenced from the surface In this case it is undisputed that the surface location where drilling was commenced for the Cole 2 well was located on the North tract However given that the Cole 2 well is a directional well the surfaee location is not determinative of whether the operations or production associated with the well constituted an exercise of the mineral servitude Rather the focus of the inquiry is the area that those operations were intended to develop by the discovery and production of minerals See La R 31 S 29 As set forth in Article 29 good faith operations for the discovery and production of minerals must be commenced with reasonable expectation of discovering and producing minerals in paying quantities at a particular point or depth and must be continued at he site chosen to that point or depth La R S 1 29 31 and 2 emphasis added Similarly La R 31 addressing the S 36 interruption of prescription by production provides that prescription is interrupted by the production of any mineral covered by the act creating the servitude Although La R 3130 sets forth that an interruption takes place on the date that S actual drilling operations are commenced on the land burdened by the servitude that language must be construed in pari materia with Articles 29 and 36 La C art 13 Construing the articles together we find that good faith operations for the discovery and production of mineralsfrom the property that is encumbered by the mineral servitude is necessary to interrupt the prescription of nonuse Accordingly drilling and production operations conducted at the surface of a well do not interrupt prescription of a mineral servitude encumbering the surface location if the operations are far the sole and exclusive purpose of discovering and producing minerals from other immovable property that is not subject to the servitude 8 This interpretation is onsistent with the r retainad b a res ot a rght y rvatfor mineral servitude which our suprenne cc has described as giving the owner urt thereof the right o and egress for the purpose of expluring for and reducing ress in to possession Co 224 the La d iurde Horn v Sl Oil ell ra1 a ndei mi rhe prope ty 7G9 19 70 o d 657 64y 1954 Se also La R S defining 21 31 a mineral servitude as he rbght of enjayment ofland belonging to another for the purpose of exploring for arad producing rninerals and reducing henn to possession and ownership Esso Standard Oil COmpanv v Jones 233 La 9I5 98 So Zd 236 1957 on aring reh involved a concursus proceeding to determine the righrs to oil royalties from directional wells that had bottom holes in areas that had formerly been part of the bed of the l RiveY Tn determining to whom the royalties should iississippi be paid the court specifically cc the ocation of the bottom holes of the nsidered respective weils to deteimine to whorl tk royalties were owed Esso Standard OiI e ompany C 233 La at 53 948 8 So d at 24 49 Thus critical to the datermination of whather production operations of the Colo 2 w as a lease well ll interrupted prescription ori the C group mineral servzta is idera of t c s de tification the bottom hole of this dire wel l tion At the concursus trial the Tri presented the te of Eric G Ryals ches tinnony as an expert witness in registered Ianci survey iti1r Ryais testified that the ing drilling activitie fUr the Co1e 2 w t depths vf 1 L6Q6 to 11 feet in tha P Tl 610 sands resulted in bottom holes that were so of t nor right of the ith e h of way Intracoastal Wacerway and outside of the boundary of the North tract The Cole group ogz the c ther hand presented the testimony of Mbchael J eazey an expert witness in petr engineering who opined that data was insufficient to leum 6 Because driflling activities in the Q and R sands erided in 1992 resultang i prescriptzon being n saspended until 2002 we are limiting oua discussian to the drilling activities ocourriag in the P sands which produced unti12001 and would result in a suspension of prescription un if ri12017 applicable 9 conclude where the bottom haDe for the Cole 2 we11 was located for the drilling that was conducted in P sands Instead according to Mr Veazey report which s was admitted into evidence the bottom holes could have beer located anywhere from 150 feet south of the north right of the Intracoastal Waterway outside way of the boundary of the North tractj to 0 feet nor of the north right of the h way of Intracoastal Waterway inside the boundary of the North tract In ruling in favor of the Triches the trial court obviously credited the testimony of Mr Ryals over that of Mr Veazey In considering expert testimony the trier of fact may aecept or reject in whole or in part the opinion expressed by an expert The effect and weight to be given expert testimony is within the broad discretion of the trier of fact The trier of fact may accept or reject any expert view even to the point of substituting its s own common sense and judgtnent for that of an expert witness where in the trier of fact opinion such substitution appears warranted by the evidence as a whole s an Mor v State Farm Fire and Casualtv Companv Inc 07 pp 8 La 0334 9 App lst Cir 11 97 So 2d 941 The law is well settled that where the 07 2 946 testimony of expert witnesses differs the trier of fact has great even vast discretion in detenminin the credibility of the evidence and a finding of fact in this regard will not be overturned unless clearly wrerng otton C v Farm Mutual Autom Insurance C 10 pp 7 La App lst Cir bile mpany 1609 8 65 11 6 5 Sa 3d 213 220 writ danied 11 La 9 6 So 3d 522 1084 ll 2 Based on the record before us we cannot say that the irial court abused its discretion in crediting the testimony of Mr Rya1s over that of Mr Veazey to find that the drilling activities for the Cole 2 wel conducted in the P sands resulted in a bottom hole located south of the north right of the Intracoastal Waterway way of As such the trial court did not err in finding that there had been a lack of use of the 10 Cole group mineral servitude for the North tract for a consecutive ten period s year such that the ser was extinguished by prescription for nonuse itude CONCLUSION Based on the foregoing review we conclude that the trial court properly found that a voluntary unit was not established for the North tract nor were there production operations of the Cole 2 well after 1998 such that prescription was suspended from accruing on the Cole group mineral servitude for the North tract s Accordingly we affirm the judgment of the trial court and assess all costs of this appeal against the Cole group defendants Julius Wilson Cole Catherine Carmen Cole Petty Kimberly Ann Gill Mauer Gill Petroleum Enterprises Cathline S Cole Terrebonne LLC Landowner Interest Inc the Succession of Mary Elizabeth s Hames Gill Mary E Gill Family LLC and the Succession of Cathline Singleton Cole I AFFIRMED 11

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.