Insurance Dispute Lawyer Blog
Owning property can be fulfilling for individuals but, with this sense of accomplishment comes extensive legal responsibilities. Owning non-residential property, in particular, can be stressful, particularly when a landowner is seeking compensation for property damage. In a recent case, the Court of Appeals for the state of Louisiana evaluated potential benefits of landowners suing for property damage. More specifically, the court evaluated whether landowners had a right to sue for damages caused by a party who obtained a mineral lease from prior landowners. The Court of Appeals agreed with the findings of the lower court and held that the plaintiffs could not recover because they were either: not the party who was entitled to compensation or that too much time passed and it was too late to sue.
In 1945, Chevron obtained three mineral leases from the Pasternack family for a 193-acre tract of land located in the Lake St. John Oil and Gas Field in Concordia Parish, Louisiana. Operations on the property were commenced by Chevron in 1945 pursuant to three mineral leases obtained from the previous owners, the Pasternack family. The Pasternack family sold the property in June 1999 and, after several conveyances, the property was owned by the Wagoners when the lawsuit was commenced. Still, the Pasternacks reserved their mineral interests in the land. Eventually, the Wagoners discovered that the subsurface of their property was contaminated with exploration and production waste, particularly through the use of unlined pits. As a result, they filed suit in August 2008, claiming that their property was contaminated by the oil and gas exploration and production activities of Defendants.
Through a complex timeline, Chevron leased and conducted oil and gas operations on the property from 1945 to 1992. Throughout the years, the lease was assigned to several entities including Devon, Merit, LSJ Exploration and Oil & Ale LSJ, Smith Operating and Management Company. Beginning in 2004, McGowan Working Partners leased and operated the shallow oil–producing subsurfaces beneath the property while the deeper subsurfaces were leased and operated by Denbury Onshore after 2004. Numerous exceptions were filed by various Defendants and the trial judge sustained the following exceptions filed or adopted by all Defendants: (A) Vagueness; (B) No Cause of Action for Strict Liability for Nuisance; (C) No Cause of Action for Strict Liability for Garde or Custody; (D) No Cause of Action for Abnormally Dangerous or Ultrahazardous Activity; (E) No Cause of Action for Breach of Contract or Warranty; (F) No Cause of Action for Punitive Damages; (G) No Cause of Action for Unjust Enrichment; and (H) No Cause of Action for Civil Fruits.
When analyzing the exceptions, the Court of Appeals discussed the requirements for bringing a cause of action against a party as well as what is required to successfully assert a cause of action for trespass, nuisance and continuing tort. The Court noted that exceptions of no cause of action and no right of action function “to have the plaintiff’s action declared legally nonexistent, or barred by effect of law; this exception tends to dismiss or defeat the action.” The Wagoners were unable to bring a cause of action for damages because the subsequent purchaser doctrine prevents a purchaser from recovering from a third party for property damage inflicted prior to the sale. The landowner at the time of the alleged damages has the real and actual interest to assert a claim. Since the right to damages conferred by a lease is a personal right, not a property right, a specific assignment of the right to sue for property damages that may have occurred prior to the sale of the property should have been included in the land sale contract.
In the circumstances of a continuing tort, there must be “continuous conduct” that causes “continuous damages.” However, Chevron’s failure to fix the leakage from the pits was not a continuing wrong because the failure to fix the leak was not the cause of the damage – the leakage was. Given that the Plaintiffs could not benefit from the continuing tort doctrine and it was too late to bring claims for nuisance, trespass or independent right of action in tort, the Plaintiffs were not entitled to damages.
This case highlights the complexity of cases involving damages caused by land contamination. It is important to consult experienced attorneys to investigate the feasibility of bringing a successful claim, the kinds of claims that can be filed and to determine the parties that should be involved in the lawsuit.