Pontchartrain Natural Gas System, k/d/s Promix, L.L.C., and Acadian Gas Pipeline System v. Texas Brine Company, LLC ( 2023 )

STATE OF LOUISIAANA
COURT OF APPEAL
FIRST CIRCUIT
2022 CA 0990
PONTCHARTRAIN NATURAL GAS SYSTEM, KCD/ S PROMIX, L.L.C.,
AND ACADIAN GAS PIPELINE SYSTEM
VERSUS
TEXAS BRINE COMPANY, LLC
Judgment Rendered: MAR 16 1023
Appealed from the
23rd Judicial District Court
In and for the Parish of Assumption
State of Louisiana
Docket Number 34,265
Honorable Thomas J. Kliebert, Jr., Judge Presiding
Martin A. Stern Attorneys for Appel] ee/ Defendant
Leigh Ann Schell Occidental Chemical Corporation
Raymond P. Ward
New Orleans, Louisiana
Kathy Patrick
Laura Kissel Cassidy
Samuel W. Cruse, III
Houston, Texas
James M. Garner Attorneys for Appellant/Defendant
Leopold Z. Sher Texas Brine Company, LLC
Peter L. Hilbert, Jr.
Martha Curtis
Jeffrey D. Kessler
New Orleans, Louisiana
Robert Ryland Percy, III
Gonzales, Louisiana
Travis J. Turner
Gonzales, Louisiana
BEFORE: HOLDRIDGE, PENZATO, AND WOLFE, JJ.
WOLFE, J.
Texas Brine Company, LLC, seeks review of a trial court judgment rendered
on March 25, 2021, in favor of Occidental Chemical Corporation (" Oxy"). That
judgment dismisses Texas Brine' s petition to annul an appellate court judgment
rendered by this court on July 1, 2019, in docket number 2018 CA 0241, which
Texas Brine maintains was not randomly allotted as required by Louisiana law. For
the reasons that follow, we vacate in part and affirm in part.
BACKGROUND
Over ten years ago, on August 3, 2012, a sinkhole developed near Bayou
Coyne in Assumption Parish. The litigation that arose out of the sinkhole -related
disputes involved arbitration demands, along with numerous tort and contract claims
in direct actions by companies owning or operating pipelines that were damaged by
the sinkhole, as well as incidental actions, between Texas Brine, which operated a
brine production well, and Oxy, the owner of the land where the sinkhole occurred.
One of the many contested issues was whether one of the contracts ( known as the
salt lease") between Oxy' s predecessor and Texas Brine had been extinguished by
confusion.
This court rendered a judgment regarding the salt lease confusion issue in
three pipeline cases that were consolidated by this court' s order on September 20,
2018, and decided on July 1, 2019, Pontchartrain Natural Gas System v. Texas
Brine Co., LLC, 2018 CA 0241, and Crosstex Energy Services, LP v. Texas
Brine Co., LLC, 2018 CA 0796, consolidated with and into Florida Gas
Transmission Co., LLC v. Texas Brine Co., 2018 CA 0075. See Florida Gas
Transmission Co., LLC v. Texas Brine Co., LLC, 2018- 0075 ( La. App, 1st Cir.
711/ 19), 285 So. 3d 1093, 1101, writs denied, 2019- 01124 ( La. 7117119), 277 So. 3d
1180 and 2019- 01405 ( La. 11112119), 282 So. 3d 225. It is this judgment that Texas
Brine now attacks as a nullity.
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On February 24, 2020, Texas Brine filed a petition to annul various judgments
issued by this court, including the consolidated Pontchartrain pipeline case in docket
number 2018 CA 0241, which had vacated the trial court' s judgment granting Texas
Brine' s motion for partial summary judgment regarding the termination of the salt
lease by confusion.' Texas Brine sought the annulment based on this court' s alleged
failure to randomly allot all appeals in accordance with the amended version of La.
R.S. 13: 319, effective August 1, 2018, arguing that the judgment in docket number
2018 CA 0241 was obtained by an " ill practice." Prior to the amendment of La. R.S.
13: 319, this court' s internal rules provided that the first appeal filed in a trial court
proceeding which generated more than one appeal was randomly allotted, upon the
filing of the appellant' s brief, to a three-judge panel with a primary judge designated
as the writing judge. After that initial allotment, pursuant to a longstanding practice
of allotment used by this court, every other appeal arising out of the same trial court
proceeding was allotted to a three-judge panel that included the primary writing
judge from the first appeal —informally known as the " writingjudge rule."
The appeal in docket number 2018 CA 0241 was lodged and assigned its
appellate court number for this court on February 23, 2018. The appellant' s brief in
2018 CA 0241 was filed on April 2, 2018; thus, the appeal in 2018 CA 0241 was
randomly allotted to a three-judge panel on April 2, 2018, before the effective date
of the amended version of La. R.S. 13: 319. Louisiana Revised Statute 13: 319
provides for the assignment and allotment of cases in courts of appeal. Prior to the
legislative amendment by La. Acts 2018, No. 658, § 1, La. R.S. 13: 319 provided that
e] ach civil and criminal proceeding and each application for writs shall be
This court' s July 1, 2019 opinion vacated the trial court' s judgment finding that the salt lease had
been terminated by confusion in all of the consolidated pipeline cases. See Florida Cas
Transmission Co., LLC, 285 So. 3d at 1101. This appeal, however, concerns only one of the
consolidated pipeline cases in Pontchartrain Natural Gas System v. Texas Brine Co., LLC,
2018 CA 0241.
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randomly assigned by the clerk, subject to the direct supervision of the court."
Emphasis added.) By La. Acts 2018, No. 655, § 1, the Legislature amended La.
R.S. 13: 319 to change the word " proceeding" to " appeal," thus now providing that
e] ach civil and criminal appeal and each application for writs shall be randomly
assigned by the clerk, subject to the direct supervision of the court." ( Emphasis
added.)
The Legislature also enacted Section 2 of La. Acts 2018, No. 655, creating
La. Code Civ. P. art. 2164. 1, effective August 1, 2018, specifying that, "[ t] he
provisions of R. S. 13: 319 shall be applicable to assignment of appellate panels."
Following the enactment of Act 658, this court reviewed and amended its internal
rules, effective July 10, 2019, as specifically codified on August 9, 2019, to clarify
that each appeal is randomly allotted and a primary writing judge is designated,
regardless of prior appeals arising from the same trial court proceeding bearing the
same trial court case number. See Louisiana First Circuit Court of Appeal, Internal
Rule 2. 3 d( 1)( c).
Oxy responded to Texas Brine' s nullity action by filing peremptory
exceptions raising the objections of no cause of action and peremption and,
alternatively, a motion for summary judgment.' Oxy argued that the judgment Texas
Brine sought to annul arose from an appeal, docket number 2018 CA 0241, which
was allotted prior to the enactment of the amended version of La. R.S. 13: 319, and
the Legislature did not make the amendment retroactive. Oxy further argued that
allotting subsequent appeals in a case according to the random allotment of the first
appeal from a trial court proceeding is not an " ill practice" because it did not deprive
Louisiana Code of Civil Procedure article 922 recognizes only three exceptions: the declinatory
exception, the dilatory exception, and the peremptory exception. See La. Code Civ. P. arts. 925,
926, and 927. In this case, Oxy filed a peremptory exception pleading the objections of no cause
of action and peremption. See La. Code Civ. P. art. 927.
Herein, for brevity, we refer to those
objections as an " exception of no cause of action" and an " exception of peremption."
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any party of due process or fundamental fairness. The trial court granted Oxy' s
motion for summary judgment and sustained Oxy' s exception of no cause of action,
thereby dismissing all of Texas Brine' s nullity claims in docket number 2018 CA
0241. The trial court overruled Oxy' s exception of peremption and denied Oxy' s
request for attorney fees and costs.
Texas Brine appeals, basically asserting that the trial court erred in finding
that Act 658, amending La. R. S, 13: 319 and adding La. Code Civ. P. art. 2164. 1,
was to be applied prospectively only, such that this court' s allotment of docket
number 2018 CA 0241 was not improper at the time it was made ( prior to the
effective date ofAct 658) or at the time it was decided (a year after the effective date
of Act 658). Oxy answered the appeal, seeking modification of the trial court' s
ruling on peremption and requesting an award for reasonable attorney fees and costs
incurred in the trial court and in this court.
STANDARD OF REVIEW
Trial court rulings sustaining peremptory exceptions raising the objection of
no cause of action are reviewed de novo on appeal. Likewise, summary judgments
are reviewed de novo. Ackel v. Ackel, 2005- 2230 (La. App. 1 st Cir. 6/ 20/ 07), 2007
WL 1765561, * 4 ( unpublished). Thus, we must review the propriety ofthe judgment
using the same standards applicable to the trial court' s determination of the
exceptions and motion. Id. Furthermore, because the relevant facts are not in
dispute, this appeal presents a question of law, which is also subject to de novo
review. FIA Card Services, N.A. v. Weaver, 2010- 1372 ( La. 3115/ 11), 62 So. 3d
709, 712. Appellate review regarding questions of law is simply a review of whether
the trial court was legally correct or legally incorrect. Young v. State, 2022- 0477
La. App. 1st Cir. 11/ 4/ 22), So. 3d , 2022 WL 16707828, * 2, writ not
considered, 2022- 01790 ( La. 2/ 14/ 23), So. 3d , 2023 WL 1987833.
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After our de nova review of the record, we conclude that Oxy' s motion for
summary judgment was properly granted and, thus, we decline to reach the merits
of Oxy' s exception of no cause of action, finding the exception is moot. See Terry
v. Schroder, 2021- 1311 ( La. App. 1st Cir. 613122), 342 So. 3d 1003, 1006. In
particular we note that Oxy' s combination of an exception of no cause of action with
an " alternative"
motion for summary judgment in one filing is procedurally
problematic, particularly because no evidence may be considered in support of an
exception of no cause of action, but evidence may be introduced to support or oppose
a motion for summary judgment. See La. Code Civ. P. arts. 930 and 966( A)(4);
Terry, 342 So.3d at 1007, n. 4.
DISCUSSION ON THE MERITS OF NULLITY ACTION
According to La. Code Civ. P. art. 2004( A), any final judgment obtained by
fraud or ill practices may be annulled. The concepts of fraud and ill practices have
been developed by our jurisprudence. Power Marketing Direct, Inc. v. Foster,
2005- 2023 ( La. 9/ 6106), 938 So. 2d 662, 670. Trial courts are permitted discretion
in deciding when a judgment should be annulled because of fraud or ill practices, to
which discretion reviewing courts will defer. Wright v. Louisiana Power & Light,
2006- 1181 ( La. 319107), 951 So. 2d 1058, 1067, Two criteria for an action in nullity
have historically been set forth in the jurisprudence: ( 1) the circumstances under
which the judgment was rendered showed the deprivation of legal rights of the
litigant seeking relief, and ( 2) the enforcement of the judgment would have been
unconscionable and inequitable. Power Marketing Direct, Inc., 938 So.2d at 670.
The Louisiana Supreme Court has held that Article 2004 is not limited to cases of
actual fraud or intentional wrongdoing, but is sufficiently broad to encompass all
situations where a judgment is rendered through some improper practice or
procedure that operates, even innocently, to deprive the party cast in judgment of
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some legal right, and where the enforcement of the judgment would be
unconscionable and inequitable. Wright, 951 So. 2d at 1067.
In Kern Search, Inc. v. Sheffield, 434 So. 2d 1067, 1070 ( La. 1983), the Court
defined the required " deprivation of legal rights" in the context of ill practice
allegations as "[
c] onduct which prevents an opposing party from having an
opportunity to appear or to assert a defense." The Court expanded this definition
further in Belle Pass Terminal, Inc. v. John, Inc., 2001- 0149 ( La. 10116101), 800
So. 2d 762, 767, holding that " a right to a fair and impartial trial is a legal right
entitled to all participants in a legal proceeding." It is imperative that courts review
a petition for nullity closely, because an action for nullity based on fraud or ill
practices is not intended as a substitute for an appeal or as a second chance to prove
a claim that was previously denied for failure of proof. Id. at 766. The purpose of
an action for nullity is to prevent injustice which cannot be corrected through new
trials and appeals. Id. Additionally, a judgment will not be annulled on account of
fraud or ill practice in the course of a legal proceeding if the fraud or ill practice
pertained to a matter irrelevant to the basis of the decision. Id. at 767.
With these precepts of Article 2004 in mind, we now turn to the legal issue of
whether this court' s internal rules are consistent with the statutory and
jurisprudential requirements for random assignment of cases or whether the
allotment of docket number 2018 CA 0241 amounted to an ill practice such that the
judgment should be annulled. Fortunately, this court' s internal rules for assignment
of cases were reviewed by our supreme court, in light of the amended version of La.
R. S. 13: 319 and the enactment of La. Code Civ. P. art. 2164. 1, in Texas Brine Co.,
LLC v. Naquin, 2019- 1503 ( La. 1131120), 340 So.3d 720, 727- 728, cert. denied,
141 S. Ct. 846, 208 L.Ed.2d 422 ( 2020). In that opinion, the Court recognized that
fundamental due process requires assignments of appellate panels to be done on a
random or rotating basis, which is what the Legislature codified in La. Code Civ. P.
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art. 2164. 1. The Court found nothing in this court' s rules for selection of panels that
ran counter to the principles of random assignment from a statutory or due process
standpoint. See Naquin, 340 So. 3d at 727. The Court also noted that while the
amended version of La. R. S. 13: 319 requires appeals and writ applications to be
randomly assigned," the statute " does not provide any specific procedures or
requirements for such random assignments." Id. Additionally, the Court noted that
Ii]n the absence of any specific rules or procedures for random assignments, a
system which results in random assignments is not invalid simply because it is
possible to conceive of a more random system." Id. at 727- 728. The Court went on
to explain that our jurisprudence has never required an allotment system to be
purely random." Id. at 728, quoting State v. Cooper, 2010- 2344 ( La. 11116110),
50 So. 3d 115, 126.
We note, as did the supreme court, that cases discussing random allotment
have focused on whether assignments of cases are subject to intentional
manipulation by either the courts or litigants. Naquin, 340 So. 3d at 728. There is
no need to invalidate an assignment system for " merely being susceptible to
manipulation." Id., quoting State v. Nunez, 2015- 1473 ( La. 1127116), 187 So. 3d
964, 973. The supreme court went on to find that this court' s assignment system
comports with statutory and jurisprudential requirements for random assignment in
that it is " reasonably designed to select judges for panels in a random fashion which
does not permit intentional manipulation by either the judges or the litigants."
Naquin, 340 So. 3d at 728.
We further point out that in this case, Texas Brine has failed to show any
factual support of actual manipulation or prejudice that was a direct result of the
manner in which this court allotted docket number 2018 CA 0241, which was
consolidated with the other pipeline cases into docket number 2018 CA 0075 by
order dated September 20, 2018, all in accordance with the pre -amendment version
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of La. R.S. 13: 319. Our de novo review leads us to conclude that Texas Brine' s
allegations of "ill practices" on the part of this court' s random allotment of appeals
are merely conclusory. There is absolutely no showing of a deprivation of Texas
Brine' s or any other parties' legal rights. Texas Brine failed to demonstrate how it
was deprived of the fundamental opportunity to fairly present its case to this court
in the appeal of docket number 2018 CA 0241 or how this court' s allotment system
caused or was in any way related to any adverse judgment. The record reveals that
Texas Brine fully litigated docket number 2018 CA 0241 up and until the supreme
court denied writs on November 12, 2019. Texas Brine is not entitled to keep
retrying" the same issues until it obtains a favorable result. The action for nullity
was never intended for such a purpose. See Johnson v. Cain, 2008- 0936 ( La. App.
1st Cir. 11114108), 999 So. 2d 51, 53, writ denied, 2009- 0295 ( La. 413109), 6 So. 3d
773. Accordingly, we find no error or abuse of discretion in the trial court' s
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dismissal of Texas Brine' s nullity action against Oxy.
ANSWER TO APPEAL
Oxy filed an answer to Texas Brine' s appeal, requesting that this court reverse
or vacate the trial court' s denial of Oxy' s peremptory exception raising the objection
of peremption. Because we find that the trial court acted within its discretion and
correctly dismissed Texas Brine' s nullity petition filed against Oxy, we pretermit
discussion of any other exceptions. Additionally, while we recognize that La. Code
Civ. P. art. 2004( 0) allows a trial court to award reasonable attorney fees to the party
who prevails in a nullity action, the record does not contain any evidence of the
amount of Oxy' s attorney fees and costs associated with the nullity action. However,
3 Because we cannot say that the circumstances under which the July 1, 2019 judgment was
rendered show that Texas Brine was deprived of any legal rights or that the enforcement of the
judgment would be unconscionable or inequitable, any further analysis of whether La. Acts 2018,
No. 658 is to be applied retroactively or prospectively is irrelevant to our holding. Thus, we
pretermit any classification of Act 658 as substantive, procedural, or interpretive pursuant to La.
Civ. Code art. 6.
M
Oxy also requests attorney fees associated with defending Texas Brine' s appeal. We
find that Oxy presents a compelling argument for an award of reasonable attorney
fees for successfully defending this appeal, which is duplicated in numerous other
appeals currently pending before this court. Accordingly, we award Oxy $ 5, 000. 00
in attorney fees for its work on the defense of this particular appeal.
CONCLUSION
For the reasons expressed, we vacate the portion of the trial court' s March 25,
2021 judgment sustaining the peremptory exception raising the objection of no cause
of action filed by Occidental Chemical Corporation as moot, and we affirm the
portion of the judgment granting the motion for summary judgment filed by
Occidental Chemical Corporation that dismissed Texas Brine Company, LLC' s
petition to annul this court' s July 1, 2019 judgment rendered in docket number 2018
CA 0241 and all of its claims against Occidental Chemical Corporation. Further, we
award Occidental Chemical Corporation $ 5, 000. 00 in attorney fees for successfully
defending this appeal. All costs of this appeal are assessed to Texas Brine Company,
LLC.
VACATED IN PART; AFFIRMED IN PART; REQUEST FOR
ATTORNEY FEES GRANTED.
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