Pontchartrain Natural Gas Sys. v. Tex. Brine Co.

281 So.3d 1

PONTCHARTRAIN NATURAL GAS SYSTEM, k/d/s Promix, L.L.C., and Acadian Gas Pipeline System

v.TEXAS BRINE COMPANY, LLC

NO. 2018 CA 0631

Court of Appeal of Louisiana, First Circuit.

Judgment Rendered: JULY 03, 2019

Rehearing Denied August 7, 2019

Leopold Z. Sher, James M. Gamer, Peter L. Hilbert, Jr., Jeffrey D. Kessler, New Orleans, LA, Travis J. Turner, Gonzales, LA, Robert Ryland Percy, III, Gonzales, LA, Eric J. Mayer, Houston, TX, Attorneys for Appellant/Defendant, Third-Party Plaintiff, Texas Brine Company, LLC

Matthew J. Randazzo, III, Christopher B. Bailey, Will Montz, Lafayette, LA, Attorneys for Appellee/Third-Party Defendant, Browning Oil Company, Inc.

BEFORE: GUIDRY, HIGGINBOTHAM, AND THERIOT, JJ.

HIGGINBOTHAM, J.

This is an appeal from a district court judgment dismissing a third-party defendant on a motion for involuntary dismissal during a bench trial.

FACTS AND PROCEDURAL HISTORY

The pertinent background in this complex litigation has been repeated multiple times in several appeals. This particular appeal relates to the Phase 1 liability trial in one of the numerous lawsuits surrounding the August 3, 2012 Bayou Come sinkhole that developed near the Napoleonville Salt Dome in Assumption Parish.¹ The plaintiffs, Pontchartrain Natural Gas System, K/D/S Promix, L.L.C., and Acadian Gas Pipeline (collectively "Pontchartrain"), own and operate natural gas pipelines and storage facilities in the vicinity of the property affected by the sinkhole. After the sinkhole emerged, Pontchartrain and other pipeline companies, Florida Gas Transmission Company, LLC ("Florida Gas"), and Crosstex Energy Services ("Crosstex"), brought separate lawsuits against Texas Brine. In each of the main demands, the pipeline companies sought recovery for damages to their respective inoperable pipelines due to the alleged negligence of Texas Brine Company, LLC's ("Texas Brine") operation of a brine production well known as the Oxy Geismer #3 Well ("OG3").

Texas Brine responded to each lawsuit by filing identical incidental demands asserting tort and contract claims against various parties, including Browning Oil Company, Inc., which was one of the operators of an adjacent oil and gas well known as the Adams-Hooker #1 Well ("AH1"). Texas Brine sought recovery for its own damages in the form of reimbursement expenses for environmental-response costs that it paid out after the sinkhole appeared, litigation expenses, and lost profits, along with claims for indemnity and/or contribution for the damages allegedly sustained by the pipeline companies. The Phase 1 liability trial was held for the purpose of determining what caused the sinkhole to form and which parties, if any, were at fault under any theory of law for causing the formation of the sinkhole. All other issues were reserved for trial in phases 2 through 4.

Texas Brine began drilling and operating the OG3 brine well on property owned by Occidental Chemical Corporation ("Oxy") in 1982. Texas Brine was the sole operator of the OG3 brine well, which was solution-mined for almost thirty years, including the timeframe when the sinkhole developed in August 2012. Texas Brine's operation of the OG3 well provided brine to a plant owned by Legacy Vulcan Corporation, f/k/a Vulcan Materials Company ("Vulcan").² In 1983, Oxy leased the land adjacent to the OG3 brine well to the Colorado Crude Company, so that Colorado Crude could drill the AH1 well for the commercial production of hydrocarbons. The AH1 well was drilled at the approved location by the initial operator, Adams Resources Exploration Corporation ("Adams"), without incident. It is undisputed that Adams did not drill into the salt dome or the AG3 cavern created by the solution-mining of the AG3 brine well.

Adams began producing hydrocarbons from the AH1 well in 1986, which in turn created the AH1 depletion-drive reservoir. Browning eventually became the operator of the AH1 well in 1991, operating the AH1 well without incident for a decade between 1991 and 2001, when Browning ceased its operations. AHI was ultimately plugged and abandoned in 2010 by another operator, Energy Self-Service Oils, Inc.³ The Colorado Crude lease required the operators of the AH1 well to refrain from damaging any salt formations on Oxy's property. The western wall of the Napoleonville salt dome was located between the OG3 brine well cavern and the AH1 oil well reservoir. Texas Brine contends that Browning's operations caused the pressure in the AH1 reservoir to drop dramatically, which in turn damaged the salt dome's wall and triggered the collapse of the highly pressurized OG3 cavern, thereby contributing to the eventual development of the August 2012 sinkhole.

Numerous motions for summary judgment were decided by the district court before the Phase 1 liability trial was held on September 18, 2017, through October 11, 2017. Among the many summary judgments rendered by the district court, two are pertinent to this particular appeal: the dismissal of all of Pontchartrain's claims against Browning and the dismissal of all of Texas Brine's pre-1996 tort claims against Browning. Two days before the end of the Phase 1 liability trial, and after the pipeline companies and Texas Brine had rested their cases in chief, Browning moved for an involuntary dismissal of all of Texas Brine's incidental demands against Browning. Asserting that Texas Brine had failed to produce any evidence of negligent conduct or wrongdoing by Browning during its ten years of operating the AH1 well or any evidence that the operations of the AH1 well caused the OG3 cavern to leak or collapse, Browning maintained that no liability could be attributed to it. The district court ruled in favor of Browning, dismissing all of Texas Brine's claims against Browning with prejudice. A judgment was signed in accord with that ruling on October 31, 2017.

Texas Brine appealed, urging two assignments of error: (1) the district court manifestly erred in determining that Browning had no liability; and (2) the district court erred in the pretrial summary judgment ruling where it concluded that pre-1996 law did not govern Texas Brine's tort claims against Browning. Browning counters that because there was no evidence introduced of any wrongdoing on the part of Browning during the limited ten-year period that Browning operated the AH1 well, the district court's dismissal of Browning on its motion for involuntary dismissal was reasonable, clearly not manifestly erroneous, and should be affirmed. Additionally, Browning contends that consideration of the summary judgment ruling is mooted by their dismissal at trial.

LAW AND ANALYSIS

Louisiana Code of Civil Procedure article 1672(B) provides the basis for an involuntary dismissal at the close of a plaintiff's case in a bench trial, when the plaintiff has not shown a right to relief based on the facts and law. Lakeshore Chrysler Dodge Jeep, Inc. v. Windstream Communications, Inc., 2017-0841 (La. App. 1st Cir. 12/21/17), 240 So.3d 939, 942. In a non-jury case, the appropriate standard for the district court's determination of a motion to dismiss is whether the plaintiff has presented sufficient evidence on its case-in-chief to establish its claim by a preponderance of the evidence. Hutzler v. Cole, 633 So.2d 1319, 1323 (La. App. 1st Cir.), writ denied, 637 So.2d 1070 (La. 1994). Simply put, the district court examines the evidence as a whole, without any special inferences in favor of the opponent to the motion, to determine whether the fact or cause sought to be proved is more probable than not. Lakeshore Chrysler Dodge Jeep, Inc., 240 So.3d at 943. However, absent circumstances in the record that cast suspicion on the reliability of the testimony and sound reasons for its rejection, uncontroverted evidence should be taken as true to establish a fact for which it is offered. Id.

The district court's grant of an involuntary dismissal is subject to the manifest error standard of review. Broussard v. Voorhies, 2006-2306 (La. App. 1st Cir. 9/19/07), 970 So.2d 1038, 1041-42, writ denied, 2007-2052 (La. 12/14/07), 970 So.2d 535. Therefore, in order to reverse a grant of involuntary dismissal, we must find that there is no factual basis for the district court's finding or that the finding is clearly wrong. Id., 970 So.2d at 1042. See also Stobart v. State through Dept. of Transp. and Development, 617 So.2d 880, 882 (La. 1993). The issue to be resolved is not whether the district court was right or wrong, but whether its conclusion was a reasonable one. See Stobart, 617 So.2d at 882. Even though an appellate court may feel its own evaluations and inferences are more reasonable than the district court's, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review where conflict exists in the testimony. Id. Moreover, where two permissible views of the evidence exist, the fact finder's choice between them cannot be clearly wrong. Id., 617 So.2d at 883. Additionally, the principle that questions of credibility are for the trier of fact applies to the evaluation of expert testimony as well, unless the stated reasons of the expert are patently unsound. Hutzler, 633 So.2d at 1324.

Because an involuntary dismissal of an action pursuant to La. Code Civ. P. art. 1672(B) is based on the "facts and law," a review of the substantive law applicable to the plaintiff's case is necessary.

Lakeshore Chrysler Dodge Jeep, Inc., 240 So.3d at 943. At trial, Texas Brine's incidental demands against Browning were based on negligence. Most negligence cases are resolved by employing the duty-risk analysis, entailing five separate elements: (1) whether the defendant had a duty to conform its conduct to a specific standard (the duty element); (2) whether the defendant's conduct failed to conform to the appropriate standard (the breach element); (3) whether the defendant's substandard conduct was a cause-in-fact of the plaintiff's injuries (the...