IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

 

No. 01-30256

Summary Calendar

 

PENNZENERGY CO.;ET AL.,

Plaintiffs,

PENNZENERGY EXPLORATION AND PRODUCTION, LLC;

DEVON ENERGY CORP., formerly known as Pennzenergy Co.,

Plaintiffs-Counter Defendants-Appellees,

versus

CAROLYN WELLS: ET AL.,

Defendants,

CAROLYN WELLS; SAMUEL WELLS; YULANDER WELLS; RENA WELLS; ANTHONY

WELLS; LESTER WELLS; JESSE WELLS,

Defendants-Counter Claimants-Appellants.

 

No. 01-30264

Summary Calendar

 

CAROLYN IVY,

Plaintiff-Appellant,

versus

PENNZENERGY CO., ET AL.,

Defendants,

PENNZENERGY EXPLORATION AND PRODUCTION, LLC:

DEVON ENERGY CORP., formerly known as Pennzenergy Co.,

Defendants-Appellees.

--------------------

Appeals from the United States District Court

for the Western District of Louisiana

(99-CV-959 & 01-CV-83)

--------------------
* Pursuant to 5TH CIR. R. 47.5, the court has determined

that this opinion should not be published and is not precedent

except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

1 Carolyn Wells, a Defendant-Counter Claimant in the first

above-styled suit, is one and the same person as Carolyn [Wells]

Ivy, the Plaintiff in the second above-styled suit.

2

December 17, 2001

Before HIGGINBOTHAM, WIENER, and BARKSDALE, Circuit Judges.

PER CURIAM:*

In the first of two actions that have been consolidated on

appeal, Defendants-Appellants Carolyn Wells, Samuel Wells, Yulander

Wells, Rena Wells, Anthony Wells, Lester Wells, and Jesse Wells

(collectively, “the Wellses”) seek reversal of the district court’s

grant of summary judgment in favor of Defendants-Appellees Devon

Energy Corporation (successor by merger to PennzEnergy Company) and

Devon Energy Production Company, L.P. (successor by merger to

PennzEnergy Exploration and Production, L.L.C.) (collectively,

“Devon”). In the second of the consolidated actions, PlaintiffAppellant Carolyn [Wells] Ivy1 seeks reversal of the district

court’s sua sponte dismissal of her related lawsuit. Because we

conclude that the district court ruled correctly in granting

summary judgment in favor of Devon, we affirm the summary judgment.

Likewise, the court’s sua sponte dismissal of Carolyn Ivy’s suit

was correct, so we affirm that dismissal as well.
3

I. Facts and Proceedings

The disputes in these cases center on the contractual,

statutory, and legal duties arising between a Lousiana mineral

lessee and its lessors. The facts are not seriously contested.

In December 1947, Mary S. Watson (an ancestor of the

Wellses) and others granted an oil, gas, and mineral lease to

Devon’s predecessor in interest, Union Producing Company; and in

1953, the same parties entered into an Amendment and Ratification

of Pooling Agreement. These documents (collectively, “the Watson

Lease”) affect lands in the Sligo Field, Bossier Parish,

Louisiana —— including the N/2 of the SE/4 of Section 15,

Township 17 North, Range 12 West (“Tract 1"), which the Wellses

own or once owned. The Watson Lease contains a provision

typically found in Louisiana oil and gas leases of that era,

outlining the effect of a transfer of ownership that affects the

interest of the lessor:

If the estate of either party hereto is

assigned, and the privilege of assigning in

whole or in part is hereby expressly allowed,

the covenants hereof shall extend to their

heirs, executors, administrators, successors

or assigns, but no change in the ownership of

the land or assignment of rentals or

royalties shall be binding on the Lessee

until after the Lessee has been furnished

with a certified copy of the recorded

instrument evidencing such transfer.

In 1959, Mary Watson died intestate. According to the

Wellses, Mary Watson’s estate was inherited by Mary G. Wells

(Mary Watson’s granddaughter and the Wellses’ mother). In 1962,
2 The trust to which this excerpt refers was “a longstanding trust fund set aside by [Mary G. Wells]” described by

Yulander Wells, into which “[a] certain percentage of the profits

obtained from the leasing of [Tract 1] was to be placed....”

4

Mary G. Wells died intestate. Devon asserts that, in accordance

with the transfer of ownership provision quoted above, it

suspended further royalty payments pending receipt of record

evidence that the interest of Mary G. Wells had devolved to her

heirs. In 1979, Yulander Wells (a son of Mary G. Wells, and a

defendant in this action) contacted Devon seeking release of the

suspended royalty payments. Devon replied to Yulander Wells’s

written request as follows (emphasis ours):

In as much as the information you furnished

is appreciated, we still need the estate

documentation that such a trust was set up.2

We are enclosing our Louisiana requirements

for payment of royalties and our suggested

affidavit of heirship form. Please have this

form completed while following the guideline

of our requirements. Upon receipt of this

information, we will be in a better position

to release accruals.

None dispute that the Wellses did not provide Devon with a

judgment of possession evidencing the Wellses’ inheritance of an

interest in the Watson Lease. Yulander Wells did, however,

return to Devon the completed Transfer Order and Affidavit of

Heirship forms, on the strength of which Devon released the

suspended royalties to the Wellses in 1980. In addition to

disbursing some 18 years’ accumulated back royalties, Devon

commenced paying royalties to the Wellses on subsequent mineral

production, even though the royalties paid to individual family
5

members, based on their purported interests, totaled less than

$3.00 in some months.

In 1999, the Wellses began to send demand letters to Devon,

threatening litigation and alleging that Devon had not paid all

the royalties due on Tract 1, had wrongfully paid royalties for

production on other tracts to other individuals when in fact the

royalties should have been paid to the Wellses, and had committed

trespass, conversion, and other torts. In their “final” demand

letter, the Wellses expressed a willingness to “settle this

matter in good faith quickly and quietly,” proposing that Devon

pay “$46 million to settle all claims, known or unknown, that

[the Wellses] have against [Devon] and its directors and

officers.”

Devon had replied to the previous demand letters, asking for

clarification on some points, correcting errors on others, and

explaining its position on the matters about which the Wellses’

contentions were concrete and intelligible. In response to the

“final” demand letter, however, Devon filed a declaratory

judgment action in May 1999, pursuant to 28 U.S.C. § 2201, in the

United States District Court for the Western District of

Louisiana, designating the Wellses as defendants (the

“Declaratory Action”). In the Declaratory Action, Devon sought,

inter alia, a ruling that the claims stated in the demand letters

were unfounded and that Devon had performed all of its

obligations to the Wellses arising out of its mineral operations

in the Sligo Field in Bossier and Caddo Parishes, Louisiana. The
3 The court expressly declined to address Devon’s

alternative claims that (1) the Wellses’ demand letters failed to

satisfy the requirements of Louisiana’s Mineral Code, (2) Devon’s

responses to the demand letters provided reasonable cause under

the Mineral Code for nonpayment of royalties, and (3) the royalty

6

Wellses filed their counterclaim in June 2000, and in September

2000, Devon filed a motion for summary judgment.

A few days later, also in September 2000, Carolyn Wells Ivy

filed an action in Illinois state court against Devon (the “Ivy

Suit”), grounded in the same set of operable facts as the

Declaratory Action, and alleging a conspiracy to commit fraud,

fraudulent concealment, violation of the Illinois Antitrust Act,

and mail fraud. Devon removed the Ivy Suit to the United States

District Court for the Northern District of Illinois, and in

December 2000, that district court granted Devon’s motion to

transfer the Ivy Suit to the Western District of Louisiana (where

the Declaratory Action’s motion for summary judgment was

pending), on the ground that the Ivy Suit arose out of the same

transaction or occurrence as the Declaratory Action.

The following month, the district court for the Western

District of Louisiana issued two memorandum rulings. In the

first ruling, pertaining to the Declaratory Action, the court

denied the Wellses’ motion to dismiss the suit, and granted

Devon’s motion for summary judgment. As to the Lease-based

claims, the court found that Devon had no obligation to make

royalty payments to the Wellses under the Watson Lease because

the Wellses had failed to provide the necessary instruments to

Devon evidencing their ownership interests in the Watson Lease.3
claims related to periods before March 1996 had prescribed under

Louisiana Civil Code article 3494(5)’s three years liberative

prescription.

4 Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380

(5th Cir. 1998).

5 Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S.

317, 322 (1986).

7

As to the non-Lease-based allegations in the demand letters, the

court found that claims grounded in those contentions had never

been asserted —— as they had to be —— as compulsory counterclaims

in the Declaratory Action, so that the Wellses were forever

barred from asserting them.

In the second ruling, pertaining to the Ivy Suit, the

district court dismissed the action sua sponte, concluding that

the claims stated in it should have been pled affirmatively as

compulsory counterclaims in the Declaratory Action, which had

been filed first and in which Carolyn Wells Ivy was a named party

defendant; so that Ms. Ivy was barred from asserting them in the

subsequently filed Ivy Suit. The Wellses and Ms. Ivy timely

appealed the grant of summary judgment in favor of Devon and the

dismissal of the Ivy Suit. 

II. Analysis

A. Standard of Review

We review a grant of summary judgment de novo, applying the

same standard as the district court.4 A motion for summary

judgment is properly granted only if there is no genuine issue as

to any material fact.5 An issue is material if its resolution
6 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

7 See Olabisiomotosho v. City of Houston, 185 F.3d 521, 525

(5th Cir. 1999).

8 Celotex Corp., 477 U.S. at 323.

9 Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133,

150 (2000). 

10 Id. at 151.

11 The district court cited Federal Rule of Civil Procedure

13(a), governing compulsory counterclaims, when it dismissed the

Ivy Suit. As explained more fully below, see infra, section

IIC., we treat this dismissal as a dismissal for failure to state

a claim for which relief can be granted, reasoning that there is

no set of facts that Ivy can present that would lead to her

success, because the claim itself is barred. Dismissals for

failure to state a claim are reviewed de novo. Kennedy v.

Tangipahoa Parish Library Bd. of Control, 224 F.3d 359, 365 (5th

8

could affect the outcome of the action.6 In deciding whether a

fact issue has been created, we must view the facts and the

inferences to be drawn therefrom in the light most favorable to

the nonmoving party.7

The standard for summary judgment mirrors that for judgment

as a matter of law.8 Thus, the court must review all of the

evidence in the record, but make no credibility determinations or

weigh any evidence.9 In reviewing all the evidence, the court

must disregard all evidence favorable to the moving party that

the jury is not required to believe, and should give credence to

the evidence favoring the nonmoving party as well as that

evidence supporting the moving party that is uncontradicted and

unimpeached.10

We review de novo the district court’s dismissal of the Ivy

Suit.11
Cir. 2000) (“We apply de novo review to dispositive motions, like

dismissals for failure to state a claim and grants of summary

judgment.”).

12 The Wellses also contend that the district court in

Louisiana lacked personal jurisdiction over them. Setting aside

the fact that they have long since waived any challenge to

personal jurisdiction they might have had, this contention is

scarcely developed in their brief. “[T]here is authority within

this Circuit that a party who inadequately briefs an issue waives

the claim.” Shell Offshore, Inc. v. Office of Worker’s Comp.

Programs, 122 F.3d 312, 317 (5th Cir. 1997) (citing Cinel v.

Connick, 15 F.3d 1338, 1345 (5th Cir.1994); Villanueva v. CNA

Ins. Companies, 868 F.2d 684, 687 n. 5 (5th Cir.1989)). Invoking

that authority, we decline to address this issue further.

9

B. The Declaratory Judgment Action

The Wellses advance four grounds in their appeal of the

grant of summary judgment in favor of Devon: (1) The district

court erroneously chose to apply Louisiana law; (2) the district

court did not have subject matter jurisdiction; (3) “the

appellees’ false statements contained in their motion [for]

summary judgment regarding a material issue in this litigation

constitute grounds for reversal” of the ruling, and (4) Devon

waived strict compliance with the mineral lease’s requirement

that “a certified copy of the recorded instrument

evidencing...[a] transfer” must be provided, when it furnished

the Transfer Order and Affidavit of Heirship forms to the

Wellses, released the suspended royalties on the strength of the

completed forms, and continued to pay subsequent royalties.12

For the reasons set forth below, we discern no merit in the first

three grounds for appeal. Although there is some merit to the

fourth ground, we conclude that the Wellses failed to present
13 La.Civ. Code art. 3515 (emphasis added). The “Book” to

which article 3515 refers is Book IV, Conflict of Laws.

14 Id. art. 3535.

10

evidence sufficient to survive Devon’s motion for summary

judgment, and therefore affirm the district court’s grant of

summary judgment.

1. Choice of Law

The Wellses first contend that the district court was

required to conduct the choice of law analysis specified in

Louisiana Civil Code article 3515, that the court failed to do

so, and that it erroneously applied Louisiana law. Civil Code

article 3515, appearing in Book IV, states that “[e]xcept as

otherwise provided in this Book, an issue in a case having

contacts with other states is governed by the law of the state

whose policies would be most seriously impaired if its law were

not applied to that issue.”13 It then lists particular factors

to be weighed in determining which state’s law should be applied. 

The Wellses advance several reasons why they believe that the

laws of other states, especially the laws of Illinois, should be

applied. They fail, however, to account for the initial caveat

in article 3515, “[e]xcept as otherwise provided in this Book”;

and it is “otherwise provided” in Book IV that “[r]eal rights in

immovables situated in this state are governed by the law of this

state,”14 and that “[w]hether a thing is an immovable is

determined according to the substantive law of the state in which
15 Id.

16 La. Rev. Stat. 31:18.

17 In fact, the Wellses themselves asserted in their

Counterclaim that “[t]he substantive laws of the State of Louisiana

(mineral and otherwise) control the controversy between the

parties.” This, coupled with the fact that the Wellses did not

reference choice of law as a contested issue in the pretrial order

or otherwise preserve the matter for appeal, strengthens the

already-dispositive statutory mandate to apply Louisiana law in

this action.

18 Diversity of citizenship between the parties is not

contested.

11

the thing is situated.”15 In addition, Louisiana’s Mineral Code

clarifies that “[a] mineral right is an incorporeal immovable.”16

As the entire controversy in this action concerns obligations and

entitlements created by the Watson Lease, and that lease pertains

to minerals that are located entirely in Louisiana, the district

court correctly chose to apply Louisiana law.17

2. Subject Matter Jurisdiction

The Wellses next contend that the federal court sitting in

diversity lacked subject matter jurisdiction because the

requisite amount was not in controversy.18 This position is

simply untenable given the Wellses’ express affirmation in their

Counterclaim that “[j]urisdiction is proper in this

Court...pursuant to 28 U.S.C. § 1332..., in that this is a case

between citizens of different states..., and the matter in

controversy exceeds $75,000.000, exclusive of interest and

costs.” The Pretrial Order, drafted pursuant to a telephone

conference between the parties, asserts the same, and affirms

that jurisdiction is uncontested. The Wellses cannot now advance
19 Devon correctly points out that, even if the plaintiff’s

complaint —— like Devon’s —— asserts that the amount in

controversy requirement is met, the claim may still be dismissed

if it appears to a legal certainty, from the face of the

complaint or other evidence, that the claim is actually for less

than the jurisdictional amount. De Aguilar v. Boeing Co., 47

F.3d 1404, 1409 (5th Cir. 1995). Devon also correctly notes,

however, that it did not appear to a legal certainty that less

than $75,000 was at issue here, especially considering the

serious nature of the allegations raised in the Wellses’ demand

letters, and the proposed “settlement” amount in those same

letters of $46 million. This alternative method of defeating

diversity jurisdiction therefore fails as well.

12

deficiencies of the amount in controversy to defeat

jurisdiction.19

3. Material Misrepresentation

The Wellses’ third argument on appeal appears to run as

follows: When the district court ruled that Devon had no

obligation to make royalty payments to the Wellses because Devon

was never provided with the type of document evidencing a

transfer of ownership that the Watson Lease expressly required,

the court was relying on material factual misrepresentations by

Devon. Accepting arguendo that the Watson Lease requires a

judicial decree, the Wellses contend that Devon in fact had a

judicial decree resulting from a 1979-1980 action entitled A.C.

Skannal v. Jack Watson et al., and that the judicial decree from

A.C. Skannal touched on the Wellses’ surface rights in Louisiana

property. The Wellses therefore conclude that Devon’s assertion

that it was never provided with the requisite judicial decree
20 The Wellses contend that Devon’s denial that it “refines,

markets or sells products in the State of Illinois” is also a

misrepresentation, but they do not develop this allegation

further in their brief. As with their challenge to personal

jurisdiction, we therefore consider the issue waived, and decline

to address it further. See supra note 12.

21 See FED.R. APP. P. 10(a). The clerk of court therefore

ordered the Wellses to remove the copy of the A.C. Skannal

judgment from their brief.

13

constitutes a material representation, such that the district

court’s ruling (which relied on it) must be reversed.20

It is by no means clear that a document evidencing the sale

of surface rights is even relevant to a dispute centering on

mineral rights. Even if it is relevant, however, Devon answers

the Wellses’ argument conclusively by observing that we are

precluded from considering the A.C. Skannal judgment because that

document was not presented to the district court and is thus not

part of the record on appeal.21 The Wellses’ argument that they

did not learn of the 1979 A.C. Skannal action until November 2000

is unavailing. Because the 1979-1980 documents were discovered

in 2000, they presumably could have been discovered, with

diligent investigation, in time to present them to the district

court. We therefore decline to address further this argument by

the Wellses.

4. Waiver

The Wellses’ last signficant argument on appeal is that

Devon “actually waived [its] rights under the Watson Lease by

failing to require and request a judicial decree before paying

royalties.” Although they cite inapplicable Illinois law in
22 Community Convalescent Ctr. of Naperville v. First

Interstate Mortgage Co. of Ill., 537 N.E.2d 1162 (Ill. App. 2d

1989).

14

support of this argument,22 the thrust of their reasoning, which

they expressed as follows, is well taken: A waiver of a

contractual provision may be established by conduct indicating

that strict compliance with the provision will not be required. 

We would clarify the Wellses’ argument further by suggesting

that, in furnishing the affidavit of heirship form to Yulander

Wells in response to his inquiry, in accepting the completed form

from him, in releasing some 18 years’ worth of accumulated

royalty payments on the strength of that form and the completed

transfer order, and in continuing thereafter to pay royalties to

the Wellses for production on Tract 1, Devon may well have waived

strict compliance with the lease term that otherwise requires “a

certified copy of a recorded instrument evidencing...[a]

transfer.”

Even if we grant that this argument has merit, however, only

a narrow segment of the Wellses’ claim would be preserved. 

First, as to the Wellses’ claims pertaining to tracts other than

Tract 1, we agree with the district court that the Wellses failed

to provide the types of documentation required by the Watson

Lease, and the argument of waiver does not reach those tracts

because Devon did not pay accumulated or continuing royalties on

them based on the strength of the completed forms returned by

Yulander Wells. Second, to the extent that the Wellses may

contend that their fractional royalty interest in Tract 1 is
15

greater than the transfer order reflects because past conveyances

gave their ancestors a larger share, we again agree with the

district court’s grant of Devon’s motion for summary judgment. 

Proof of a larger fractional share would have to include the

prescribed “certified copy of a recorded instrument evidencing”

past transfers, which the Wellses have not furnished to Devon;

and the waiver argument, again, does not alter this conclusion. 

Obviously, Devon did not pay royalties on the larger fractional

shares in Tract 1, whether on the strength of the forms completed

and returned by Yulander Wells or on the strength of anything

else. Last, as to the Wellses’ non-lease-based claims, we agree

with the district court that they were never affirmatively

pleaded as compulsory counterclaims, as required, and thus we

affirm the grant of summary judgment as to those claims. Again,

the waiver argument does not alter this analysis: Because the

waiver argument would operate only to relax the express terms of

the lease contract, the argument is inapplicable to non-leasebased claims.

The only possible aspect of the Wellses’ claim that the

waiver argument could save, then, is their contention that Devon

underpaid royalties on the Wellses’ fractional interest —— as

reflected in the transfer order —— on Tract 1. Yet even as to

this narrow segment of the Wellses’ claim, they failed to come

forward with summary judgment evidence sufficient to create a

genuine issue of material fact to survive Devon’s motion for

summary judgment. Except for bare, conclusional statements of
16

underpayment, the Wellses have presented no factual basis that

would put at issue the question of the monetary amount of the

royalties paid on Tract 1.

All of the Wellses’ arguments thus fail, and we affirm the

district court’s grant of summary judgment accordingly.

C. The Ivy Suit

After the district court granted summary judgment in favor

of Devon in the Declaratory Action, it then dismissed the Ivy

Suit sua sponte, reasoning that the “causes of action underlying

Ivy’s petition should have been [pled] as compulsory

counterclaims in the [Declaratory Action] pursuant to Federal

Rule of Civil Procedure 13(a).” Ivy contends that this dismissal

was improper and should be reversed for the following reasons:

(1) The district court failed to apply the proper choice of law

rules in its ruling; (2) the claims asserted in the Ivy Suit were

not compulsory counterclaims that should have been pled in the

Declaratory Action because Ivy was not aware of the underlying

actions from which the Ivy Suit arose when the counterclaim had

to be pleaded; (3) the district court in Louisiana had no

personal jurisdiction over the plaintiff; (4) the district court

had no subject matter jurisdiction over this suit which “only

involved cause[s] of action[] under Illinois law”; and (5) the

district court relied on Devon’s false material statements in

reaching its decision. Discerning no merit in Ivy’s arguments,

we affirm the district court’s sua sponte dismissal, as well as
17

the underlying denial of remand by the district court for the

Northern District of Illinois.

Ivy’s challenges to the choice of law and to the

categorization of her claims as compulsory counterclaims may be

disposed of simultaneously. As Devon correctly points out, the

district court was not faced with a choice of law issue when it

dismissed Ivy’s suit, because the suit was dismissed on federal

procedural grounds when the district court determined that the

suit comprised only claims that should have been pleaded as

compulsory counterclaims under Federal Rule of Civil Procedure

13(a) in Devon’s Declaratory Action. The court therefore did not

err in its choice of law.

Neither did the district court err in concluding that Ivy’s

claims were compulsory counterclaims when it applied the federal

procedural rules. The Wellses’ mineral interest in the Sligo

Field lies at the core of the Ivy Suit; all of Ivy’s claims are

premised on the understanding that “[p]laintiff is an heir

descendant of Mary Lee Griffin Wells and Sammie Ree Wells, who

owned certain [immovable] properties and had an interest in the

mineral and natural gas production from those properties located

in the Bossier and Caddo Parishes in the state of Louisiana,” and

that Devon “operate[s] over 50% of the oil and gas production” in

the same parishes. The fact that all of Ivy’s claims derive from

the same mineral interests and lessor-lessee relationship as do

those underlying the Declaratory Action certainly qualifies them

as claims that “arise[] out of the transaction or occurrence that
23 FED. R. CIV. P. 13(a).

24 104 F.3d 83 (5th Cir. 1997).

25 Id. at 85-86.

26 See id. at 86.

27 FED. R. CIV. P. 13(a) (emphasis added).

18

is the subject matter of the opposing party’s claim.”23 In Tank

Insulation International, Inc. v. Insultherm, Inc.,

24 we

reiterated the questions that a court should address to determine

whether a claim was compulsory under Rule 13(a):

(1) whether the issues of fact and law raised

by the claim and counterclaim largely are the

same; (2) whether res judicata would bar a

subsequent suit on defendant’s claim absent

the compulsory counterclaim rule; (3) whether

substantially the same evidence will support

or refute plaintiff’s claim as well as

defendant’s counterclaim; and (4) whether

there is any logical relationship between the

claim and the counterclaim.25

The fourth question in that rule is undoubtedly answered in the

affirmative, and as Tank Insulation makes clear, if any of the

four questions is answered affirmatively, the counterclaim is

compulsory.26 The district court therefore correctly concluded

that Ivy’s claims were compulsory counterclaims.

More responsive to Ivy’s contention of error with respect to

the compulsory counterclaim determination, however, we deem her

attempt to invoke one of Rule 13(a)’s exceptions unavailing. 

Rule 13(a) provides, in pertinent part:

A pleading shall state as a counterclaim any

claim which at the time of serving the

pleading the pleader has against any opposing

party....27
19

Construing Ivy’s argument generously, she appears to contend that

the claims she asserted in the Ivy Suit were not known to her

when the Wellses pleaded their counterclaim against Devon, and

that those claims arose, in fact, not from the mineral lease but

rather from the discovery of the A.C. Skannal action alluded to

above —— which discovery cast Devon’s actions toward her and her

relatives in a new light. Thus, she argues, she does come under

the exception to Rule 13(a), because she did not have the claims

alleged in the Ivy Suit “at the time of serving the pleading” of

the counterclaim in the Declaratory Action.

Ivy’s argument rings hollow for several reasons. First, as

a procedural matter, Federal Rule of Civil Procedure 13(e)

provides:

Counterclaim Maturing or Acquired After

Pleading. A claim which either matured or

was acquired by the pleader after serving a

pleading may, with the permission of the

court, be presented as a counterclaim by

supplemental pleading.

If, as Ivy contends, the allegations in the Ivy suit arose from

her late discovery of “the Skannal action,” nothing prevented her

from seeking the district court’s permission to include the new

claims in a supplemental pleading in the Declaratory Action.

Second, the complaint in the Ivy Suit makes absolutely no

reference to her discovery of the A.C. Skannal action, but

instead refers simply to Ivy’s mineral interest inherited from

her parents and to Devon’s attempts to devalue, or “render

unmarketable,” that same mineral interest. On the face of the

complaint, therefore, it appears to a certainty that the
20

allegations derive, at least in substantial part, from the

mineral interest described in the Watson Lease and the resulting

lessor-lessee relationship between Ivy and Devon.

Last, Devon is convincing when it points out that the

Wellses’ Demand Letters reflect that they had complaints very

similar to those alleged in the Ivy Suit, as early as 1999. For

example, the Ivy Suit complaint alleges fraudulent concealment,

conspiracy to commit fraud, and mail fraud. The May 17l, 1999

Demand Letter, in turn, asserts the following:

At the outset, I note that you misrepresented

various land transactions in an effort to

deceptively give the appearance that my

clients do not hold mineral interests in

Tract 5.....I have discovered that [Devon]

began drilling operation [sic] on this land

without legal authority in 1950 and in

trespass of my clients’ undivided mineral

interest.... [Devon] possesses full knowledge

of this fact and began a conspiracy in 1978

by soliciting the Lewis family to sign off on

leases dated April 15, 1978, which were

retroactive to July 5, 1950. [T]his illegal

complicity continues today....

...

I have commissioned a fifty-year study of

leased market rate natural Gas prices and

compared the records that [Devon] submitted

to my clients in 1980. I noted a vast

difference in the actual prices of the market

and the prices stated by [Devon]. Clearly,

this is prima facie evidence of [Devon’s]

effort to defraud my clients of the true

royalties and circumvent their mineral rights

without consideration. ..

...

In summation, my Clients have suffered

grievous injuries as a direct results [sic]

of [Devon’s] material breach of various

leases [sic] agreements, participation in

conspiracy to defraud the Wells family of

correct royalty payment in violation of both

federal and state laws, and failure to comply

with federal and state regulations regarding
21

record keeping and contracts, deceptive

business practice, mail fraud, and securities

fraud.

The inference from these excerpts is that, as early as May 1999,

the entire Wells family had claims essentially identical to those

asserted by Ivy in her Illinois complaint. For all of these

reasons (Ivy’s failure to seek leave of the district court to

file a supplemental pleading in the Declaratory Action under

Federal Rule of Civil Procedure 13(e); failure of her complaint

in the Illinois action even to allude to the A.C. Skannal action;

and the highly similar allegations in the May 1999 Demand

Letter), we reject Ivy’s argument that she did not have the

claims alleged in the Ivy Suit “at the time of serving the

pleading” of the counterclaim in the Declaratory Action.

Ivy next contends that the federal district court in

Louisiana lacked subject matter jurisdiction over the case, and

personal jurisdiction over her. Neither of these contentions is

adequately briefed. We note nevertheless that, as to subject

matter jurisdiction, the parties are of diverse citizenship, and

Ivy’s complaint —— even though it was filed in Illinois state

court originally —— explicitly states that the amount in

controversy exceeds the sum of $75,000; and that, as to personal

jurisdiction, her complaint is premised on her mineral interest

in Louisiana, an immovable, thus establishing a nexus between her

and the state sufficient, for purposes of this action, to support

personal jurisdiction. Both challenges to jurisdiction therefore

fail.
28 See Cinel v. Connick, 15 F.3d 1338, 1345 (5th Cir. 1994)

(stating that “[a] party who inadequately briefs an issue is

considered to have abandoned the claim”).

22

Ivy’s next argument mirrors the Wellses’ argument discussed

in section II(B)(3), supra —— that the district court erred when

it relied on Devon’s purported material misrepresentation that it

had received no requisite judicial decree, when in fact, Devon

knew of the judgment from the A.C. Skannal judgment. For the

same reasons given above, we reject this argument. Ivy adds to

that claim the further allegation that the district court relied

on a second material misrepresentation by Devon: that Devon

denied that it refines, markets or sells products in the State of

Illinois. This allegation is wholly unsupported and inadequately

briefed. We therefore decline to address it.28

Thus, all of Ivy’s arguments fail. We consider last,

however, whether the district court nevertheless erred in

dismissing the Ivy Suit sua sponte; and we conclude that it did

not.

The U.S. Supreme Court has recognized that

[Federal Rule of Civil Procedure] 12(b)(6)

authorizes a court to dismiss a claim on the

basis of a dispositive issue of law. This

procedure, operating on the assumption that

the factual allegations in the complaint are

true, streamlines litigation by dispensing

with needless discovery and factfinding. 

Nothing in Rule 12(b)(6) confines its sweep

to claims of law which are obviously

unsupportable. On the contrary, if as a

matter of law it is clear that no relief

could be granted under any set of facts that

could be proved consistent with the

allegations, a claim must be dismissed,

without regard to whether it is based on an
29 Neitzke v. Williams, 490 U.S. 319, 326-27 (1989)

(superseded by statute on other grounds) (internal quotation

marks and citations omitted) (emphasis added).

30 136 F.3d 1053 (5th Cir. 1998).

31 Id. at 1054 (internal quotation marks and citations

omitted) (emphasis added).

23

outlandish legal theory or on a close but

ultimately unavailing one.29

Generally, however, a court that exercises its power sua sponte

to dismiss a complaint under Rule 12(b)(6) must give the

plaintiff notice before doing so, although failure to do so is

not necessarily reversible error. As we stated in Bazrowx v.

Scott,

30

Generally a district court errs in dismissing

a pro se complaint for failure to state a

claim under Rule 12(b)(6) without giving the

plaintiff an opportunity to amend. The

district court may dismiss an action on its

own motion under Rule 12(b)(6) as long as the

procedure employed is fair. True, the

district court erred in failing to give

Appellant notice of the court’s intention to

dismiss his suit or an opportunity to amend

his complaint. Such error may be

ameliorated, however, if the plaintiff has

alleged his best case, or if the dismissal

was without prejudice.31

As shown above, Ivy was required to assert her claims as

compulsory counterclaims in the Declaratory Action if she wished

to assert them at all. Having failed to do so, she was forever

barred from asserting those claims, from which the district court

could correctly conclude that, “as a matter of law[,] it is clear

that no relief could be granted under any set of facts that could
32 Neitzke, 490 U.S. at 327.

33 Bazrowx, 136 F.3d at 1054.

34 Id. at 1054-55.

24

be proved consistent with the allegations,”32 and could conclude

further that Ivy had “alleged [her] best case,”33 thus warranting

dismissal of the claims without prior notice to Ivy. We

therefore echo our earlier conclusion from Bazrowx:

[O]ur careful and thorough de novo review

satisfies us that, as it stands, [Ivy’s]

complaint does fail to state a claim for

which relief could be granted. Given that

conclusion..., any error in failing to give

notice and allow amendment is harmless.34

The district court’s sua sponte dismissal of the Ivy Suit is

therefore affirmed.

III. Conclusion

For the foregoing reasons, the district court’s grant of

summary judgment in the Declaratory Action and dismissal sua

sponte of the Ivy Suit are

AFFIRMED.