Opinion
NUMBER 2018 CA 0258
09-21-2018
SUSAN RUSSO MARCHAND, ET AL v. TEXAS BRINE COMPANY, LLC, ET AL
Leopold Z. Sher James M. Garner Peter L. Hilbert, Jr. Neal J. Kling Jeffrey D. Kessler Jonathan B. Cerise Martha Y. Curtis New Orleans, LA Robert Ryland Percy III Travis J. Turner Gonzales, LA Katie D. Bell Bradley C. Myers Troy J. Charpentier Baton Rouge, LA Dane S. Ciolino Metairie, LA Eric J. Mayer Houston, TX Counsel for Third-Party Plaintiff/Appellant Texas Brine Company, LLC Roy C. Cheatwood Kent A. Lambert Adam B. Zuckerman Paul C. Thibodeaux Matthew S. Chester Colleen C. Jarrott Matthew C. Juneau Joseph A. Atiyeh Tyler L. Weidlich New Orleans, LA Tony M. Clayton Port Allen, LA Counsel for Third-Party Defendant/Appellee Vulcan Materials Company
On appeal from the Twenty-Third Judicial District Court In and for the Parish of Assumption State of Louisiana
Docket No. 34,270 Honorable Jason Verdigets, Judge Presiding Leopold Z. Sher
James M. Garner
Peter L. Hilbert, Jr.
Neal J. Kling
Jeffrey D. Kessler
Jonathan B. Cerise
Martha Y. Curtis
New Orleans, LA Robert Ryland Percy III
Travis J. Turner
Gonzales, LA Katie D. Bell
Bradley C. Myers
Troy J. Charpentier
Baton Rouge, LA Dane S. Ciolino
Metairie, LA Eric J. Mayer
Houston, TX Counsel for
Third-Party Plaintiff/Appellant
Texas Brine Company, LLC Roy C. Cheatwood
Kent A. Lambert
Adam B. Zuckerman
Paul C. Thibodeaux
Matthew S. Chester
Colleen C. Jarrott
Matthew C. Juneau
Joseph A. Atiyeh
Tyler L. Weidlich
New Orleans, LA Tony M. Clayton
Port Allen, LA Counsel for
Third-Party Defendant/Appellee
Vulcan Materials Company BEFORE: GUIDRY, THERIOT, AND PENZATO, JJ. GUIDRY, J.
This appeal stems from a judgment sustaining an objection of no cause of action to dismiss a third-party demand. For the following reasons, we reverse.
FACTS AND PROCEDURAL HISTORY
In the summer of 2012, a large sinkhole appeared in Assumption Parish, Louisiana. On May 29, 2013, twenty plaintiffs, as owners of land in Assumption Parish, filed a petition for damages against Texas Brine Company, LLC and three other defendants. In the petition, the plaintiffs alleged that Texas Brine mined salt in caverns under land owned by Occidental Chemical Corporation, located near property owned by the plaintiffs. Plaintiffs further alleged that in 1995, the State of Louisiana, through the Department of Natural Resources, gave Texas Brine permission to pump soil contaminated with naturally occurring radioactive materials into a well, which was permitted for the mining of salt water brine. Years later, in 2011, the plaintiffs alleged that after failing a pressure test, the wellbore was plugged with cement, and the well was abandoned. The following year, the sinkhole appeared, and toxic fumes were detected in the area near the abandoned well. The plaintiffs claimed loss of property, loss of business, and personal injuries due to the well and cavern failures, subsidence and subsurface instability, and the chemical release.
The plaintiffs consist of sixteen individuals and four limited liability companies.
The other three defendants named in the initial petition were the State of Louisiana through the Department of Natural Resources, Occidental Chemical Corporation, and Miller Engineering & Associates.
Texas Brine filed an answer to the plaintiffs' petition, generally denying their claims, and also filed various incidental demands, including a third-party demand against Vulcan Materials Company. In the third-party demand, Texas Brine identified Vulcan Materials Company as a New Jersey corporation with its principal place of business in Birmingham, Alabama, and referred to the company throughout the remainder of the pleading as simply "Vulcan."
Texas Brine alleged that in 1975, it acquired a lease to produce salt from a salt dome located under 40 acres of land owned by Occidental in Assumption Parish. Texas Brine assigned its interest in the lease to Vulcan in 1976, but Texas Brine remained the operator of the brine production wells and related facilities pursuant to a separate operating agreement that the parties signed. In its third-party demand, Texas Brine identified certain provisions in the assignment agreement by which it alleged that Vulcan assumed all of Texas Brine's obligations in and under the assigned lease, including the obligation to conduct operations in a prudent manner and in compliance with all applicable governmental regulations. Additionally, Texas Brine attached the following to the third-party demand: (1) the "Salt Lease" dated July 18, 1975 (whereby Texas Brine acquired the right to produce salt from the salt dome located under the 40 acres of Occidental land in Assumption Parish); (2) the "Assignment of Salt Lease, dated October 27, 1976, between Texas Brine and Vulcan; (3) the "Operating and Supply Agreement" dated October 29, 1975, between Texas Brine and Vulcan; and (4) an "Amended and Restated Operating and Supply Agreement dated January 1, 2000, between Texas Brine and Vulcan.
Vulcan Materials Company initially answered Texas Brine's third-party demand on November 27, 2013, denying the allegations asserted, as well as denying the authenticity of the Salt Lease, Assignment of Salt Lease, and the Operating and Supply Agreement attached to Texas Brine's third-party demand. Nine months later, the trial court granted leave for Legacy Vulcan Corporation to file an amended answer to Texas Brine's third-party demand. In the amended answer, Legacy Vulcan Corporation indicated that it was formerly known as Vulcan Materials Company, but otherwise similarly denied the allegations of Texas Brine's third-party demand, including denying the authenticity of the Salt Lease, Assignment of Salt Lease, and the Operating and Supply Agreement attached to the third-party demand, as has been pled in the prior answer filed by Vulcan Materials Company.
On November 11, 2014, Texas Brine filed amended incidental demands wherein it added 26 additional defendants, including Legacy Vulcan Corporation, to its third-party demand, while amending and maintaining as amended its claims against Vulcan Materials Company. Legacy Vulcan Corporation filed an answer to Texas Brine's amended incidental demand, asserting that Texas Brine had improperly named both Legacy Vulcan Corporation and Vulcan Materials Company in their separate capacities in the amended incidental demands.
On May 11, 2017, Vulcan Materials Company filed a peremptory exception raising the objection of no cause of action as to all claims, demands, and allegations asserted against it by Texas Brine in its third-party demand. In the exception, Vulcan Materials Company asserted that while Texas Brine "has made vague references to [Vulcan Materials Company] in some of its pleadings, all of its factual and legal allegations in this case pertain solely to the activities and business dealings of Legacy Vulcan, LLC (f/k/a Legacy Vulcan Corp.)...as opposed to [Vulcan Materials Company], a separate and distinct entity not even formed until 2007 - years after all of the factual conduct encompassed within [Texas Brine's] allegations in this matter (and the related sinkhole cases)." (Emphasis in original.)
Following a hearing on Vulcan Materials Company's objection of no cause of action, the trial court sustained the peremptory exception raising the objection in a judgment signed July 26, 2017. Texas Brine has filed the instant appeal of that judgment.
DISCUSSION
The peremptory exception raising the objection of no cause of action questions whether the law extends a remedy against the defendant to anyone under the factual allegations of the petition. Jefferson v. International Marine, LLC, 16-0472, p. 8 n.4 (La. App. 1st Cir. 7/5/17), 224 So. 3d 50, 55 n.4, writ denied, 17-1369 (La. 11/6/17), 229 So. 3d 475. The objection refers to the operative facts that give rise to the plaintiff's right to judicially assert the action against the defendant. Tobin v. Jindal, 11-1004, p. 5 (La. App. 1st Cir. 2/10/12), 91 So.3d 329, 333. Reference to a cause of action focuses not on whether a remedy is afforded to the plaintiff in the pending action, but whether the law affords a remedy to anyone under the accepted factual allegations. Richard v. Richard, 09-539, p. 5 (La. App. 3d Cir. 11/4/09), 24 So. 3d 292, 296.
In its third-party demand, Texas Brine alleged that in 1975, it had entered into a lease to produce salt from an underground salt dome located under land owned by Occidental, and it assigned its interest in the lease to Vulcan Materials Company the following year. Additionally, Texas Brine alleged that the parties to the assignment executed an Operating and Supply Agreement. Based on the Operating and Supply Agreement, Texas Brine alleged that it drilled a third brine production well, "which would be owned by Vulcan [Materials Company] and operated by [Texas Brine] pursuant to the Operating [and Supply] Agreement." According to Texas Brine's third-party demand, the sinkhole developed near that third brine well. Consequently, Texas Brine alleged that from 1975 to 2005 (when Basic Chemical Company acquired all of the chloralkali assets of Vulcan Materials Company), Vulcan Materials Company "knew or should have known of all the risks related to the brine solution mining of Well #3 and the other brine production wells located on the [Occidental land]; and, as owner of Well #3 and lessee of the other wells on the [Occidental land], was responsible for all major decisions related to solution mining of those wells." Texas Brine also alleged that Vulcan Materials Company breached the obligations it owed under the lease assignment and Operating and Supply Agreements, and that it was entitled full indemnity and/or contribution from Vulcan Materials Company for the plaintiffs' claims based on those agreements.
Texas Brine alleged that in January 2000, the parties executed an amended and restated Operating and Supply Agreement.
In support of its objection of no cause of action, Vulcan Materials Company argued:
Subsequent to 2005, as part of a stock merger that combined Legacy Vulcan and another corporation, Florida Rock Industries, Inc. ("Florida Rock") as subsidiary corporations under a newly organized parent holding company, a new company was formed under New Jersey law to act as the holding company for the stock of both Legacy Vulcan and Florida Rock. That newly-created company, organized in 2007, took the name "Vulcan Materials Company" - - a name that Legacy Vulcan had previously used (before being renamed Legacy Vulcan Corp. and later, Legacy Vulcan, LLC). [Emphasis in original.]
The objection of no cause of action is triable only on the face of the petition and, to determine the issues raised by the exception, each well-pleaded fact in the petition must be accepted as true. Jefferson, 16-0472 at p. 8 n.4, 224 So. 3d at 55 n.4. Further, the facts shown in any annexed documents must also be accepted as true. Spinks Construction, Inc. v. Quad States Construction, LLC, 17-0580, p. 6 (La. App. 1st Cir. 12/21/17), 240 So. 3d 215, 220. The only documentary evidence that may be considered on an exception raising the objection of no cause of action is that which has been annexed to the petition, unless the evidence is admitted without objection to enlarge the petition. Calloway v. Lobrano, 16-1170, pp. 4-5 (La. App. 1 Cir. 4/12/17), 218 So. 3d 644, 648: see also La. C.C.P. art. 931.
The court's inquiry on an objection of no cause of action is limited to determining whether the law provides a remedy to anyone if the facts alleged in the petition are true; if the law does not grant anyone the remedy sought under the facts alleged, the objection should be sustained and the action dismissed. The legal question is whether a cause of action exists; it is not who may assert the cause of action, whether the cause of action has accrued, or whether the cause of action be asserted in, or extinguished or defeated by, an affirmative defense. Wooley v. Lucksinger, 06-1140, p. 203 (La. App. 1st Cir. 12/30/08), 14 So. 3d 311, 452-53, aff'd in part, rev'd in part, on other grounds, 09-0571 (La. 4/1/11), 61 So. 3d 507.
The factual allegations of the third-party demand filed by Texas Brine support a cause of action against Vulcan Materials Company. The operative facts upon which Texas Brine's claims are premised are based on the contracts executed with an entity named Vulcan Materials Company. While mere conclusions unsupported by facts are not sufficient to set forth a cause of action, Texas Brine's third-party demand sets forth the material facts upon which its claims are based, and therefore, its allegations must be accepted as true for purposes of the objection of no cause of action. See Ramey v. DeCaire, 03-1299, p. 7 (La. 3/19/04), 869 So. 2d 114, 118. Additionally, the documentary evidence Texas Brine attached to its third-party demand supports the factual allegations made.
Vulcan Materials Company denies the truth of these allegations and asserts the objection of no cause of action because Texas Brine failed to allege any facts indicating privity of contract between Texas Brine and the current incarnation Vulcan Materials Company. In support of the objection, however, Vulcan Materials does not point out how Texas Brine's third-party demand alone fails to establish a cause of action, but instead Vulcan Materials Company alleges facts and information outside of the third-party demand filed by Texas Brine to support its objection.
As recognized by Professor Frank L. Maraist in 1 La. Civ. L. Treatise, Civil Procedure § 6:7 (2d ed.):
One classic case for summary judgment is when the plaintiff sues the wrong defendant, but alleges facts which, if proved, would entitle the plaintiff to judgment. The defendant cannot obtain relief through an exception of no cause of action, since the defendant cannot introduce evidence to controvert the allegations that he or she is the proper defendant. However, the defendant may avoid trial or other prolongation of the proceeding by establishing through a motion for summary judgment that he or she is not the proper defendant.
In Milburn v. Emanuele, 12-0235, pp. 3-4 (La. App. 4th Cir. 6/13/12), 96 So. 3d 638, 640-41, the appellate court reversed a judgment of the trial court that sustained a peremptory exception raising the objection of no cause of action. Despite the defendant contractor's contention that there was no privity of contract with him individually, the appellate court found the plaintiff homeowner stated a cause of action against the contractor, as the homeowner had alleged in his petition that he had entered into a contract with contractor in the contractor's individual capacity, rather than with the business entity under which contractor worked. The court held that even if the contract for home renovations evinced an agreement between homeowner and the business entity rather than the contractor, the contract could not be introduced to support the objection of no cause of action.
While the court in Milburn acknowledged that "[a]n exception of no cause of action is reviewed based upon the four corners of the petition together with the attachments to the petition," the court nevertheless determined that the contract that was attached to homeowner's petition should not be considered, holding that "[e]ven if the parties had properly offered the contract into evidence, no evidence may be introduced in support of the exception of no cause of action." Milburn, 12-0235 at pp. 4, 96 So. 3d at 640-41. --------
Likewise, Vulcan Materials Company refers to various facts and evidence outside of the four corners of Texas Brine's third-party demand and the attachments thereto, but as such facts and evidence cannot be considered for purposes of deciding the objection of no cause of action, we are constrained to find that the trial court erred in sustaining the exception raising that objection.
CONCLUSION
Having found that the trial court erred in sustaining the peremptory exception raising the objection of no cause of action filed by Vulcan Materials Company, and in dismissing Texas Brine's third-party demand pursuant thereto, we reverse the trial court's July 26, 2017 judgment containing those rulings. All costs of this appeal are cast to the appellee, Vulcan Materials Company.
REVERSED.