Crosstex Energy Services, LP, Crosstex LIG, LLC and Crosstex Processing Services, LLC v. Texas Brine Company, LLC ( 2023 )

STATE OF LOUISIANA
COURT OF APPEAL
FIRST CIRCUIT
2022 CA 0634
2022 CW 0922
CROSSTEX ENERGY SERVICES, LP, CROSSTEX LIG, LLC, AND
CROSSTEX PROCESSING SERVICES, LLC
VERSUS
TEXAS BRINE COMPANY, LLC, ET AL.
Judgment Rendered: MAR 0 6 2023
Appealed from the
23rd Judicial District Court
In and for the Parish of Assumption
State of Louisiana
Docket Number 34202
Honorable Thomas J. Kliebert, Jr., Ad Hoc Judge Presiding
Leopold Z. Sher Attorneys for Defendant/Third-
James M. Garner Party Plaintiff/Appellant
Peter L. Hilbert, Jr. Texas Brine Company, LLC
Darnell Bludworth
Jeffrey D. Kessler
Christopher T. Chocheles
New Orleans, LA
Robert Percy, III
Travis J Turner
Gonzales, LA
Uylsses Gene Thibodeaux
Lake Charles, LA
Roy C. Cheatwood Attorneys for Defendant/ Appellee
Kent A. Lambert Legacy Vulcan, LLC
Adam B. Zuckerman
Leopoldo J. Yanez
Colleen C. Jarrott
Matthew C. Juneau
Lauren Brink Adams
New Orleans, LA
BEFORE: GUIDRY, C.J., THERIOT AND WOLFE, JJ.
1
GUIDRY, C. J.
This dispute is one of many arising out of the August 2012 sinkhole that
appeared near Bayou Come in Assumption Parish. In this appeal, Texas Brine
Company, LLC (" Texas Brine") challenges the January b, 2022 judgment
dismissing with prejudice its fraud and concealment/ omission claims against
Legacy Vulcan, LLC (" Legacy Vulcan") due to issue preclusion. In a related
request for supervisory review, Texas Brine also challenges the July 19, 2022
judgment denying its motion for partial summary judgment regarding Legacy
Vulcan' s liability as an intentional tortfeasor.)
This court
recently considered and decided these same issues in
Pontchartrain Natural Gas System v. Texas Brine Comppny, LLC, 22- 0594 ( La,
App. 1st Cir. 1/ 20/ 23), _ So. 3d _, 2023 WL 334027, a related appeal of an
identical judgment originating out of a different trial court number ( Docket
Number 34, 265, 23rd Judicial District Court, Assumption Parish), but rendered by
the same trial court judge, on the same date, and concerning the same parties. In
Pontchartrain,
this court affirmed the trial court' s January 6, 2022 judgment
dismissing with prejudice Texas Brine' s fraud and concealment/ omission
contentions and causes of action against Legacy Vulcan. Pontchartrain, 22- 0594 at
p. 19, 2023 WL 334027 at * 9. This court further denied the related application for
supervisory review, declining to exercise supervisory jurisdiction regarding the
trial court' s denial of Texas Brine' s motion for partial summary judgment
regarding Legacy Vulcan' s liability as an intentional tortfeasor for Texas Brine' s
damages. Pontchartrain, 22- 0594 at p. 7, 2023 WL 334027 at * 3, fn. 1.
l Texas Brine filed a writ application, docket number 2022 CW 0922, seeking review of the July
19, 2022 judgment denying its motion for partial summary judgment regarding Legacy Vulcan' s
Iiability as an intentional tortfeasor for Texas Brine' s damages, which was referred to this panel
for review in conjunction with the appeal of the January 6, 2022 judgment. See order dated
October 13, 2022.
2
After a thorough review of the record, we find no material distinctions
between the evidence and arguments in this appeal and those presented in the
Pontchartrain appeal. We find Texas Brine' s arguments, as well as the issues
presented in this appeal are identical to those presented in Pontchartrain, including
whether issue preclusion under res judicata applies when certain contractual claims
have not yet been adjudicated, whether Legacy Vulcan proved all of the elements
of issue preclusion, and whether exceptional circumstances would justify relief
from the effects of res judicata. The Pontchartrain court addressed the same
background, issues, and assignments of error raised by Texas Brine in the instant
appeal. 2 We are bound to follow the Pontchartrain decision under the " law of the
circuit" doctrine.
Crosstex Energy Services LP v. Texas Brine Company, LLC,
22- 0447, p. 3 ( La. App. 1st Cir. 11/ 4/ 22), _ So. 3d ____,
2022 WL 16705744, * 2,
writs denied, 22- 01768, 22- 01769 ( La. 2/ 7123), _ So. 3d _, 2023 WL 1793824,
1793449; Labarre v. Occidental Chemical Company, 19- 0624, p. 3 ( La. App. 1st
Cir. 2/ 19/ 20), 2020 WL 813269, * 1 ( unpublished).
Accordingly, we affirm the trial court' s January 6, 2022 judgment granting
Legacy Vulcan, LLC' s motion for partial summary judgment and dismissing Texas
z As a point of emphasis, the elements of the tort of fraud, similar to contractual fraud, are a
misrepresentation of material facts made with the intent to deceive where there was reasonable
and justifiable reliance by the plaintiff and resulting injury, Pontchartrain, 22- 0594 at p. 16,
So. 3d —, 2023 WL 334027 at * 7, citing, Riedel v. Fenasci, 18- 0539, p. 9 ( La. App. 1st Cir.
12/ 28/ 18), 270 So. 3d 795, 801. In its tortious fraud claims, Texas Brine attempted to shift
liability for the causation of the sinkhole from itself to Legacy Vulcan by asserting that Legacy
Vulcan withheld or failed to disclose reports and critical information to its operator, Texas Brine,
both prior to the drilling of the brine well known as the Oxy Geismar 3 ( OG3), which concerns
placement of the well, and expansion of brine mining, which concerns thinning the salt web.
After the Phase 1 liability trial, without specifically mentioning fraud, both the trial court and
this court' s factual findings demonstrated that despite any withholding of information by Legacy
Vulcan, Texas Brine was clearly aware of all risks involved at these two critical junctures.
Pontchartrain Natural Gas System v. Texas Brine Company, LLC, 18- 1249, pp. 7- 16 ( La. App.
1st Cir. 12/ 30/ 20), 317 So, 3d 715, 725- 31 writs denied, 21- 00382, 2021- 00386 ( La. 618121), 317
So. 3d 323. Thus, the claim of fraud failed and fault was allocated based on the parties' actions.
In its contractual fraud claims, Texas Brine asserts that Legacy Vulcan' s contractual claims are
barred and certain contracts entered into between the parties are void due to Legacy Vulcan' s
withholding of or failure to disclose the same reports and critical information to Texas Brine
both prior to the drilling of the OG3 and expansion of brine mining. Because the facts of the
issue of fraud were previously litigated and adjudicated, and were essential to the prior judgment,
it is clear that Texas Brine' s contractual fraud claims are precluded from re -litigation by issue
preclusion.
3
Brine Company, LLC' s fraud and concealment/ omission claims and contentions
against Legacy Vulcan, LLC. We further deny Texas Brine Company, LLC' s writ
application.
We issue this summary disposition in accordance with Uniform Rules
Courts of Appeal, Rule 2- 16. 2( A)(2) and ( 6). All costs of this appeal are
assessed against Texas Brine Company, LLC.
JUDGMENT AFFIRMED. WRIT DENIED.
4
STATE OF LOUISIANA
COURT OF APPEAL
FIRST CIRCUIT
2022 CA 0634
2022 CW 0922
CROSSTEX ENERGY SERVICES, LP, CROSSTEX LIG, LLC AND
CROSSTEX PROCESSING SERVICES, LLC
VERSUS
TEXAS BRINE COMPANY, LLC, ET AL.
WOLFE, J., concurring.
Bound by the law of the circuit doctrine to follow this court' s decision in
Pontchartrain Natural Gas System v. Texas Brine Company, LLC, 2022-0594
La. App. 1 Cir. 1120123), So. 3d ( 2023 WL 334027), 1 am constrained to
concur in the result reached by the majority. 1 write separately to express that I
respectfully disagree with the statements ofthe majority in footnote 2, as well as the
legal analysis and determination in Pontchartrain that res judicata bars litigation
of Texas Brine' s contractual fraud claims against Legacy Vulcan.
Texas Brine concedes that Legacy Vulcan' s tortious fraud and withholding of
information was addressed during Phase One; however, I find that those claims were
addressed only to the extent that they affected the tortious allocation of fault between
the parties, which was the stated scope of Phase One—" determining what caused
the sinkhole to form and which parties, ifany, were at fault under any theory of law
for causing the formation of the sinkhole." Those claims were not essential to the
determination of the Phase One liability judgment and were considered only in
relation to an affirmative defense. Thus, I would find that Texas Brine' s claims
against Legacy Vulcan for contractual fraud and intentional omission/concealment
regarding inducement into and performance of various contracts and operating
1
agreements were not conclusively adjudicatedby the district court during the Phase
One liability trial. At the very least, I would find that there is some doubt as to
whether or not these contractual fraud claims were conclusively adjudicated during
Phase One, which precludes summary judgment.
With regard to Texas Brine' s writ application, which was referred to this
panel for review in conjunction with this appeal, I find that the district court was
correct in its denial of Texas Brine' s motion for partial summary judgment . Based
on three isolated references to Legacy Vulcan' s " intentional" withholding ofvarious
emails,
documents, and reports that appear in this court' s Phase One liability
opinion, Texas Brine claims Legacy Vulcan was adjudicated an intentional
tortfeasor. See Pontchartrain Natural Gas System v. Texas Brine Company,
LLC, 2018- 1249 (". App. 1 st Cir. 12130120), 317 So. 3d 715, writs denied, 2021-
00382, 2021- 00386 (La. 618121), 317 So. 3d 323, Thus, Texas Brine moved for
summary judgment, arguing that Legacy Vulcan' s " intentional" actions preclude
application of the comparative fault principles set forth in La. Civ. Code art. 2323,
and that Texas Brine is entitled to judgment holding Legacy Vulcan resp onsible for
100% of Texas Brine' s damages.
Intent" rcfers to the consequences of an act rather than to the act itself
meaning that a person ( 1) consciously desires the physical result of his act, whatever
the likelihood of that result happening from his conduct; or (2) knows that result is
substantially certain to follow from his conduct, whatever his desire may be as to
that result. See Bazley v. Tortorich, 397 So. 2d 475, 481 ( La. 1981). While in the
Phase One liability opinion this court referenced Legacy Vulcan' s withholding of
certain documentation and omission ofemail paragraphs as " intentional," this court
did not adjudicate Legacy Vulcan an intentional tortfeasor as Texas Brine suggests.
This court made no finding that Legacy Vulcan consciously desired the formation
of the sinkhole or knew to a substantial certainty that the sinkhole would occur.
2
Rather, this court affirmed the district court' s allocation of 15% comparative fault
to Legacy Vulcan, which establishes the fallacy of Texas Brine' s current argument.
Texas Brine is not entitled to summary judgment holding Legacy Vulcan liable as
an intentional tortfeasor for Texas Brine' s damages; therefore, I believe the district
court' s July 19, 2022 ruling was correct.
3