# Supreme Court of Louisiana

FOR IMMEDIATE NEWS RELEASE NEWS RELEASE #051

FROM: CLERK OF SUPREME COURT OF LOUISIANA

The Opinions handed down on the 15th day of October, 2014 , are as follows:

BY WEIMER, J. :

2013

- C

- 2637

C/W

2013

- C

- 2717 O LYMPIA MINERALS, LLC, ET AL. v. HS RESOURCES, INC., ET AL.

(Parish of Beauregard)

We find no error in the conclusion that Olympia did not properly

raise this issue in the district court; and, like the court of

appeal, we decline to reach this issue in the first instance in

this court.

AFFIRMED IN PART; REVERSED IN PART; AMENDED IN PART; AND REMANDED

TO THE COURT OF APPEAL.

### 1 0 / 1 5 / 1 4

S U P R E M E C O U R T O F L O U I S I A N A

N O

. 20 13 -C -2 63 7 c/ w 20 13 -C -2 71 7

O L Y M PI A M IN E R A L S

, L L C

, E T A L

.

V E R S U S

H S R E S O U R C E S

, IN C

. , E T A L

.

ON W RIT OF CERTIORARI

TO THE COURT OF APPEAL, THIRD CIRCUIT,

PARISH O

F BEAUREG

ARD

W E IM E R

, Ju st ic e.

W e gr an te d a w rit to rev ie w th e co rrec tn es s of th e lo w er co ur ts ’ in te rp ret at io n

of po rti on s of a w rit te n mine ral ag reemen t. Th e ag reemen t w as pr ep ared by a mine ral

le as eh ol de r an d os te ns ib ly co nv ey ed to an ex pl or at io n co mpan y an “ ex cl us iv e op ti on

to su bl eas e” at le as t 15 pe rcen t of th e le as eh ol de r’ s mine ral rig ht s. Th e lo w er co ur ts

in te rp ret ed th e ag reemen t as impos in g an ob li ga ti on on th e ex pl or at io n compa ny to

ex ecu te th e su bl eas e rat he r th an si m pl y al lo w in g th e ex pl or at io n co mpan y th e ri gh t to

ex ecu te th e su bl eas e. B ecau se th e ex pl or at io n co mpan y di d no t e x e c u t e su ch a

su bl eas e, th e lo w er co ur ts aw ard ed da mages to th e le as eh ol de r f or br each of co nt ract

.

W he n w e gr an te d th e w rit

, it w as ap pa ren t th at th e lo w er co ur ts ha d aw ard ed to

th e le as eh ol de r ot he r d a mag es

, rel at ed to th e ex pl or at io n co mpan y ’ s ob li ga ti on to

ex ecu te a mine ral su bl eas e. Th us

, th e vi ab il it y of th os e da mage aw ard s al so de pe nd s

on w he ther the lowe r co ur ts’ ru lin gs tha t th ere w as an ob li ga ti on to su bl eas e is co rrec t.

F or th e reas on s th at f

ol lo w

, w e de te rmin e th at th e lo w er co ur ts erre d in ru li ng

th at th e ex pl or at io n co mpan y w a s o b l ig at ed by th e ag reemen t to su bl eas e mine ralrig ht s. In st ead

, w e f in d th e ag reemen t af

f or de d th e e x p l o rat io n co mpan y a

no n- bi nd in g opt ion to subl ea se (fo r whic h the ex plo ra tio n co m pa ny pa id $1.4 m ill ion ),

bu t th at if th e ex pl or at io n co mpan y ex erci se d th e no n

- b i n d i n g op ti on

, it w as th en

ob li ga te d to su bl eas e at lea st 15 pe rcen t o f th e le as eh ol de r’ s rig ht s de sc rib ed in th e

ag reemen t. A cco rd in gl y

, w e rev ers e th e da mage aw ard on th e b r e a c h of co nt ract

cl ai m f or f ai li ng to su bl eas e at lea st 15 pe rcen t o f th e le as eh ol de r’ s mine ral rig ht s.

H ow ev er, w e al so f

in d th e ex pl or at io n co mpan y br each ed it s ob li ga ti on to co mple te

a se is mic su rv ey

, an d w e af f irm th e co rres po nd in g aw ard of da mage.

B ecau se w e f

in d th e reco rd do es no t su pp o r t a f in di ng th at th e ex pl or at io n

com pa ny ac te d in ba d fai th, we ex am ine the effe ct s of a cont ract ua l pr oh ib it io n ag ai ns t

co ns eq ue nt ia l da mages th at th e lo w er co ur ts ref us ed to ap pl y ba se d on th os e co ur ts ’

f in di ng s of ba d f

ai th

. P ret ermit te d by le ga l erro r in th e co ur t of ap pe al

, ho w ev er, w as

an y meani ng f

ul rev ie w of th e merit s of th e ex pl or at io n co mpan y ’ s arg umen t th at it s

reco nv en ti on al d e ma n d f or impr op er us e an d sh ari ng of it s se is mic da ta w as

impr op erl y di smis se d. W e reman d to th e co ur t of ap pe al th e qu es ti on of th e pr op rie ty

of th at di smis sa l an d, as th at co ur t th en de ems ne ces sa ry

, th e qu es ti on of w he th er th e

reco rd su pp or ts th e ex pl or at io n co mpan y ’ s req ue st f or rel ie f

, or w he th er reman di ng

to th e di st ric t co ur t f

or th e ta ki ng of ad di ti on al ev id en ce is req ui red

. F in al ly, w e ag ree

w it h th e co ur t of ap pe al th at th e le as eh ol de r’ s req ue st f or at to rn ey s’ f

ees w as pr op erl y

pr et ermit te d; su ch req ue st w as no t pr op erl y rai se d in th e di st ric t co ur t.

FA C T S A N D PR O C E D U R A L H IS T O R Y

I n 2000

, El Paso Mine ra ls an d El Paso Mine ra ls Le as ing (c oll ec tiv el y “E l Pa s o ” )

he ld mine ral rig ht s in ap pr ox imat el y 42

, 00 0 mine ral acre s lo cat ed in B eau reg ard an d

C al cas ie u P a r i s h e s

. Ef

f ect iv e A ug us t 1, 20 00

, El P as o en te red in to th e “ N O R TH

2S TA R K S P R O JE C T A G R EE M EN T” w it h tw o ot he r bu si ne ss es

, A sp ect R es ou rces

,

LL C

, an d H S R es ou rces

, In c, w hi ch pa id $1

. 4 mill io n as pa rt of th e co nt ract

.

Th e ag reemen t de sc rib ed th ree to pi cs th at are rel ev an t to th is co ur t’ s in qu iry.

F i r st is th e ag reemen t’ s pr ov is io ns f or su bl eas in g mine ral rig ht s he ld by El P as o. 1

S eco nd

, th e ag reemen t d es cri be d s ei smic su rv ey s w it hi n ap pr ox imat el y 13 5 sq ua re

mile s of la nd s in B eau r e g a r d an d C al cas ie u P ari sh es to be un de rta ke n by A sp ect

R es ou rces an d HS R es ou rces

. Th ird

, th e ag reemen t des cri be d ow ne rs hi p det ai ls of

th e se is mic da ta

, as w el l as th e f or m an d co nd it io ns by w hi ch A sp ect R es ou rces an d

H S R es ou rces w ou ld pr ov id e res ul ts to El P as o of th e se is mic su rv ey s. A lt ho ug h th e

agre em en t wil l be co ve re d in gr ea te r de ta il wit

hin thi s opi ni on

, f

or pr es en t ba ck gr ou nd

pu rp os es

, th e se is mic da ta w ou ld be ow ne d by A sp ect R es ou rces an d H S R es ou rces

,

w it h El P as o rece iv in g a lo ng -te rm, no nt ran sf erab le li cen se to us e th e da ta

, in cl ud in g

bo th co mpu te r-p ro ces s e d da ta an d un pr oc es se d “ raw ” or “ f ie ld ” da ta un de r st ric t

co nd it io ns of co nf

id en ti al it y

.

Th e “ N O R TH S TA R K S P R O JE C T A G R EE M EN T” ha d a te rm of on e y ear.

A s of Ju ly 31

, 20 01

, A sp ect R es ou rces an d H S R e s o u r c es ha d on ly su rv ey ed th e

so ut he rn ha lf of th e pr op ert y an d de l i v e r e d n o t th e “ raw ” or “ f ie ld ” da ta

, bu t th e

“ pr oc es se d” se is mic da ta to El P as o. A sp ect R es ou rces an d H S R es ou rces ha d no t

su bl eas ed an y of th e pr op ert y

. H S R es o u r c es

, on be ha lf of it se lf an d A sp ect

R es ou rces

, req ue st ed a si x- mon th ex te ns io n to co mple te th e su rv ey of th e pr op ert y

,

bu t El P as o de cl in ed

. Th e pa rti es w en t th ei r se pa rat e w ay s, se emin gl y w it ho ut

The “NORTH STARKS PROJ ECT AGREEMENT” in d ic a te s th a t s o me o f E l Pa s o ’ s mi n e r al rig hts 1

w e r e n o t le a s e d ; in s te a d

, they wer e acquir ed by other means not descr ibed in the ag ree ment. There a r e

a v a r i e t y o f m e a n s o f a c q u i r i n g m i n e r a l r i g

h t s t h a t a r e t h e o r e t i c a ll y p o s s i b l e

. T h e r e f o r e

, f o r s i m p l i c i t y a n d

g i v e n t h e c e r t a in ty th a t s o me o f E l Pa s o ’ s r ig

h ts w e r e h e ld b y le a s e

, th is o p in io n u s e s t h e t e r m “ s u b l e a s e ”

to ref lect the p otential method of transfe rring mineral rig hts from El Paso to Aspec t Resource s. I n the

ag ree ment at issue, althoug h “lea se” is sometimes employ ed as descr ibing the potential method of

transfe rring mineral rig hts, the term “sublea se” is the ter m most often used.

3co mpla in t. Ev en th ou gh A sp ect R es ou rces ul ti matel y le as ed so me of th e pr op ert y

af te r th e ag reemen t’ s te rm, th e relat ive qui et at te ndi ng the en d of the ag reemen t’ s te rm

di d no t la st lo ng

.

Tw o y ears af

te r th e a g r eemen t ex pi red

, in O ct ob er 20 03

, Te xa s in ve st or s

acq ui red ow ne rs hi p of El P a s o a nd res tru ct ur ed an d ren amed it O lym pi a M in eral s,

LL C

. O th er oi l co mpan ie s be came in te res te d in le as in g po rti on s of th e pr op ert y th at

ha d be en th e su bj ect of th e “ N O R TH S TA R K S P R O JE C T A G R EE M EN T. ”

O lym pi a co nt ra c t e d w it h H ei gh ts En erg y in D al la s to ho us e A sp ect R es ou rce’ s

se is mic da ta

, an d th e f

il es w ere mov ed to a sp eci al ro om f or th e pu rp os e of an al y si s

by O lym pi a’ s po te nt ia l pa rtn ers

. S ev eral co mpan ie s se t up w or k st at io ns to “ w or k”

th e se is mic da ta ; th es e pa rti es ha d vi rtu al ly un f et te red acce ss to th e da ta ro om an d al l

f il es

. In ot he r w or ds

, O lym pi a made th e co nf

id en ti al se is mic d a t a a v ai la bl e to

nu merou s ot he r en ti ti es in ap pa ren t vi ol at io n of th e se is mic da ta li cen se ag reemen t,

w hi ch impo se d res tri ct io ns on th e us e an d di ss emin at io n of th e da ta f or a te rm of 49

y ears

.

One of the en tit ie s, W ise r Oil

, wa nte d m or e se ism ic infor m at ion

. Oly

m pia spe nt

so me ti me tryin g to lo cat e th e f ie ld da ta w it hi n El P as o’ s f il es be f or e real iz in g th e raw

da ta w as no t in cl ud ed

. O lym pi a th en req ue st ed th e raw da ta f ro m A sp ect R es ou rces

an d H S R es ou rces

. F or mont hs

, f ru st rat io n en su ed as pe rs on ne l ne w ly inv ol ve d a s

a res ul t of El P as o’ s res tru ct ur in g as O lym pi a gr ap pl ed w it h w ha t d a ta O lym pi a

po ss es se d an d w ha t da ta it may be en ti tl ed to acq ui re f ro m A sp ect R es ou rces an d H S

R es ou rces

. A pp aren tl y

, th ere w as co nf us io n b y all in vo lv ed as to w hi ch of se ve ral

co nt ract s go ve rn ed

, as th ere w ere se ve ral co nt ract s co ve rin g di f f eren t acre ag es in th e

reg io n. Ev en tu al ly, A sp ect R es ou rces an d H S R es ou rces real iz ed th at th e “ N O R TH

S TA R K S P R O JE C T A G R EE M EN T, ” w hi ch w as more res tr ic ti ve th an an ot he r

4ag re em en t or ig in al ly th ou gh t ap pl ic ab le

, co ve red th e pr op ert y in que sti on. In Oc tob er

20 04

, H S R es ou rces se nt O lym pi a a c e a s e an d de si st le tt er reg ard in g O lym pi a’ s

sh ari ng of th e se is mic da ta

.

S et tl ement ne go ti at io ns en su ed

, bu t on S ep te mber 22

, 20 05

, O lym pi a f il ed su it

ag ai ns t A sp ect R es ou rces an d H S R es ou rces (d ef en da nt s)

. I n i ts su it

, O lym pi a 2

co nt en de d th at th e “ N O R TH S TA R K S P R O JE C T A G R EE M EN T” di d no t merely

af f or d def en da nt s th e rig ht to su bl eas e mine ral in te res ts

, bu t th e ag reemen t actu al ly

ob li ga te d de f

en da nt s to su bl eas e at le as t 15 pe rcen t of O lym pi a’ s (ear li er El P as o’ s)

m ine ra l int er es ts. Oly

m pia soug ht t

h e fo l l o w i n g m o n e t a

ry da m ag es : $1,5 51,9 27.3 8 for

f ai lu re to se le ct an d ex ecu te mine ral su bl eas es ; $8

, 32 5, 00 0 to su rv ey th e 11 1 sq ua re

mi l e s t h a t ha d al le ge dl y no t be en su rv ey ed ; an un sp eci f ie d amou nt f

or de la y i n

de ve lop ment of pr op ert ie s to whic h Oly m pia he ld m ine ra l ri ght s. Oly m pia al so soug ht

a de cl arat io n of di ss ol ut io n of th e “ N O R TH S TA R K S P R O JE C T A G R EE M EN T”

ef f ect iv e on th e da te of th e f irs t majo r br each by de f

en da nt s an d an or de r di rect in g

de f en da nt s t o re li nq ui sh all se is mic da ta to O lym pi a f ree an d cl ear o f

an y li cen si ng

res tri ct io ns

.

De fend an ts an swe re d, de n y i n g l i a b i lit y for da m ag es an d the oth er for m s of re lie f

so ug ht

. D ef

en da nt s al so f

il ed reco nv en ti on al de mand s, se ek in g reco gn it io n th at th e

se is mic su rv ey da ta w as ow ne d by de f en da nt s an d w as su bj ect to a res tri ct iv e li cen se

ag reemen t. In th ei r reco nv en ti on al de mand s, d e f e nd an ts al so al le ge d vi ol at io ns of

Lo ui si an a’ s U ni f

or m T rad e S ecre ts A ct an d U nf ai r Tr ad e P ract ic es A ct

.

B y t h i s t i m e

, H S R e s o u

r c e s h a d b e e n a c q

u ir e d b y K e r

r

- M a g e e O il & G a s O n s h o r e

, L P, w h ic h w a s a ls o 2

n a me d a s a d e f

e n d a n t. B e c a u s e s a l i e n t a s p e c t s o f t

h e r e c o r d r e f

e r to H S Re s o u

r c e s

, n o tw it

h s ta n d in g th a t

e n t i t y ’ s s u b s e q u e n t a c q u is it io n b y K e r

r

- M a g e e

, t h i s o p i n i o n w i l l c o n

t i n u e t o u s e t h e n a m e H S R e s o u

r c e s

.

5Th e D is tri ct C ou rt R ul in gs

In N ov ember 20 07

, O lym pi a f il ed a pa rti al moti on f

or su mm ary ju d g men t,

li mite d to O lym

pi a’ s co nt en ti on th at th e ag reemen t di d no t merely af f or d a rig ht bu t

in st ead impo se d an ob li ga ti on up on H S R es ou rces an d A sp ect R es ou rces to su bl eas e

at le as t 15 pe rcen t of El P as o’ s mine ral ho ld in gs de sc r ib ed in th e ag reemen t. Th e 3

di st ric t co ur t ju dg e f

ou nd th e ag reemen t co nt ai ne d an el ect iv e r i g h t an d no t an

ob li ga ti on to su bl eas e, st at in g:

Th e C ou rt i s o f th e op in io n th at w he n th e [ “ N O R TH S TA R K S

P R O JE C T A G R E E M E N T” ] is read in it s en ti ret y

, th e on ly lo gi cal

co nc lu si on is th at [ de f

en da nt s] ha d a rig ht to ex erci se an op ti on to le as e

an d if el ect ed [ w ere] req ui red to le as e a mini mum of 15 pe rcen t of th e El

P as o la nd s.

Th e read in g of th e do cu ment su gg es te d by th e mov an t [ O lym pi a]

is si mply to o to rtu red to be co nv in ci ng to th e C ou rt an d in de ed req ui res

more rew rit in g an d pa rs in g of th e la ng ua ge [ in th e] ag reemen t th an do es

th e read in g ad va nc ed by t he res po nd en t[ s]

. [ Emp ha si s ad de d. ] [ 4]

Th eref or e, O lym

pi a’ s moti on w as de ni ed

.

F ol lo w in g th e ret ire ment of th e di st ric t co ur t ju dg e ha nd li ng th is matt er,

de f en da nt s, on O ct ob er 14

, 20 08

, f il ed th ei r ow n pa rti al moti on f or su mma ry

ju dg ment

. B ecau se th e ret ire d ju dg e’ s reas on s f or de nyin g rel ie f to O lym pi a w e r e

pr emis ed on hi s f

in di ng th at th e ag re e me nt co nv ey ed a rig ht

, no t an ob li ga ti on

, to

su bl eas e, de f

en da nt s es se nt ia ll y so ug ht a ju dg ment in th ei r f av or to th at ef

f ect

. Th e

di st ric t co ur t, ho w ev er, w hi le te nd in g to ag ree w it h th e ret ire d ju dg e’ s in te rp ret at io n,

de ni ed th e ru li ng so ug ht by d ef en da nt s, H S R es ou rces an d A sp ect R es ou rces

. T he

di st rict co ur

t jud ge ex pl ai ne d th at in hi s in te rp ret at io n of th e ag reemen t an d w he th er it

Oly mpia was joined in the motion for partial summary judgme nt by other parties not rele vant to our 3

discussion.

T h e ju d g e ’ s r e a s o n s g i v e n f r o m t h e b e n c h r e f

e r t o H S R e s o u

r c e s a s a s i n g

u l a r d e f e n d a n t a n d r e s p o n d e n t 4

to O ly mp i a ’ s p a r t i a l m o t i o n f

o r s u m m a r y j u d g m e n t

. H o w e v e r

, t

h e j u d g e ’ s w

ri t t e n j u d g m e n t c l a ri f i e s t h a t

the motion and its denial involved both HS Resources a nd Aspec t Resource s.

6af

f or de d a rig ht or co mpel le d a n ob li ga ti on to su bl eas e, “ I w on ’ t go as f ar as [ th e

ret ire d ju dg e ] d i d ; b ut it se ems more se ns ic al th at th e de f en da nt s’ in te rp ret at io n is

co rrec t. B ut is th at so cl ear an d un ambi gu ou s as to w arra nt

... su mm ary ju dg ment ?

I do n’ t se e it th at cl ear an d un ambi gu ou s. ”

In O ct ob er 20 11

, an ad ho c ju dg e w as ap po in te d to h a n d l e th is matt er.

D ef en da nt s so ug ht reco ns id erat io n of th ei r moti on f or pa rti al su mm ary ju dg ment th at

ha d be en de ni ed

. D ur in g th e he ari ng on th e reco ns id erat io n, th e ad ho c ju dg e in vi te d

O lym pi a to make a moti on to r e c o n s id er th e ret ire d ju dg e’ s de ni al of O lym pi a’ s

moti on

. U po n O lym

pi a’ s or al moti on f

or reco ns id erat io n, th e ad ho c ju dg e f ou nd th e

ag reemen t impo se d an ob li ga ti on on de f en da nt s to su bl eas e; ex pl ai ni ng :

W el l, my read in g of it is t h a t t he us e of th e w or d “ su bj ect to

ex cl us iv e op ti on ” sh ou ld no t be co nf us [ ed w it h ]

... a be li ef th at it ’ s a

pu re op ti on th at w e’ re ta lk in g ab ou t. It’ s n o t, it ’ s a pr ov is io n w hi ch

impo se s cert ai n ob li ga ti on s on pe op le

, an d it ’ s qu it e cl ear th at it w as

ex pe ct ed th at H S R an d A sp ect w ou ld le as e a mini mum of 15 pe rcen t of

th e [ El P as o] la nd s w hi ch w ere id en ti f ie d earl ie r.

N ow

, th at ’ s t r ue

, th ey w ere ex erci si ng an op ti on

, bu t th ere’ s

no th in g in Loui si an a la w th at sa y s a pa rty can ’ t ob li ga te it se lf to ex erci se

a pa rt or ex erci se an op ti on a cert ai n w ay

. A nd I f eel th at th ey ob li ga te d

th emsel ve s to le as e th e 15 pe rcen t.

Th e matt er pr oc eed ed to tri al in th is po st ur e, w it h th e qu es ti on of w he th er th e

ag re em en t affor de d a ri ght or i m p o s e d a n o b l i g a t ion ha vin g be en an swe re d as im posi ng

an ob li ga ti on up on H S R es ou rces an d As pe ct R es ou rces to le as e at le as t 15 pe rcen t

of th e la nd de sc rib ed in th e ag reemen t. B ef or e tri al

, ho w ev er, H S R es ou rces ag reed

to a se tt le ment an d w as di smis se d.

A f te r a be nc h tri al co mm en ced in O ct ob er 20 11

, th e di st ric t co ur t ru le d ag ai ns t

A sp ect R es ou rces i n ma n y r es pe ct s an d as se ss ed da mages of ov er $1 3 mill io n.

Ha vin g al re ad

y dis ce rn ed vi a su mm ary ju dgm en t tha t Aspe ct Reso ur ce s wa s obl iga te d

to su bl eas e at le as t 15 pe rcen t of O lym pi a’ s mine ral ho ld in gs

, th e di st ric t co ur t

7qu an ti f

ie d A sp ect R es ou rces ’ br each of th at ob l i g a t i o n a s merit in g an aw ard to

Oly m pia of $1,5 37,5 00. Findi ng A sp ect R es ou rces br each ed an ob li ga ti on to co nduct

a se is mic su rv ey of al l la nd s de sc rib ed in th e ag reemen t, th e di st ric t co ur t aw ard ed

da mages to O lym

pi a of $4

, 52 5, 00 0. Th e di st ric t co ur t al so reas on ed th at la ck in g a

co mple te se is mic su rv ey

, O lym pi a w as un ab le to at tra ct ot he r su bl es so rs in th e y ear

af te r th e ag reemen t w it h A sp ect R es ou rces ex pi red

, an d th e co ur t aw ard ed $6 15

, 00 0

in da mages

. In a si mila r ve in

, al th ou gh co mple te se is mic su rv ey s ha d be en pe rfo rmed

of th e so ut he r n h a l f of O lym pi a’ s la nd s, th e di st ric t co ur t f ou nd A sp ect R es ou rces

f ai le d to pe rf

or m it s ob li ga ti on to pr ov id e O lym pi a w it h th e raw se is mic da ta

. H av in g

co mpu te r-p ro ces se d da ta

, bu t la ck in g th e raw se is mic da ta

, O lym pi a ag ai n co ul d no t

at tra ct as much in te res t in marke ti ng it s mine ral ho ld in gs an d su f f ered lo st ren ta ls an d

bo nu se s of $4 86

, 87 5 du rin g th e 20 02 -2 00 5 pe rio d reco gn iz ed by th e di st ric t co ur t as

be in g co mpen sa bl e. A no th er res ul t of no t ha vi ng th e raw da ta

, in th e di st ric t co ur t’ s

vi ew

, wa s a l os s o f

mine ral op erat io ns th at wo ul d h av e b een co nd uc te d h ad As pe ct

R es ou rces pr ov id ed th e raw da ta

. F or th e lo st mine ral ro y al ti es f ro m su ch op erat io ns

,

th e di st ric t co ur t aw ard ed $7

, 12 0, 14 0. B ecau se of th e se tt le ment by H S R es ou rces

,

th e di st ric t co ur t ru le d “ A sp ect R es ou rces

, LL C is en ti tl ed t o a f if ty pe rcen t (5 0% )

cred it ” on al l da mage aw ard s.

Th e di st ric t co ur t al so di smis se d w it h pr ej ud ic e al l cl ai ms by A sp ect R es ou rces

in reco nv en ti on f

or O lym pi a’ s di ss emin at io n of t h e s e i smic su rv ey da ta in al le ge d

vi ol at io n of th e co nf

id en ti al it y req ui remen t in th e li cen se ag reemen t. C la ims by oth er

bu si ne ss en ti ti es

, w hi ch w ere no t pa rti es t o t h e ag reemen t, bu t w ere pu rp or te dl y

da maged by A sp ect R es ou rces ’ co nd uc t, w ere al so di smis se d. 5

T h e la tt e r c l a i m s a g a i n s t A s p e c t R e s o u r c e s

, b r o u g

h t b y n o n

- p a

r t i e s t o t h e a g r e e me n t, a

r e n o t b e f o r e th is 5

court.

8Th e A pp el la te C ou rt R ul in gs

Aspe ct Reso ur ce s ap pe al ed th e di st ric t co ur t’ s ju dg ment on al l is sue s. Oly m pia

an sw ered

, se ek in g in te r al ia an aw ard of at to rn ey s’ f ees an d in te res t an d an in crea se

in da mages f

or lo st ro y al ti es

.

Th e ap pe ll at e co ur t ag reed w it h th e di st ric t co ur t “ th at A sp ect f ai le d to pe rf

or m

al l th ree of it s majo r ob li ga ti on s to O lym pi a

... an d br each ed th e co nt ract

. ” O ly m p ia

M in era ls

, L L C v. H S R es ou rces , In c.

, 13 -1 10

, p. 15 (L a. A pp

. 3 C ir. 8/ 21 /1 3)

, 12 3

S o. 3d 28 1, 29 3. Th e f

irs t co nt ract ua l pr ov is io ns an al y zed w ere th os e rel at in g to th e

q u e st io n of w he th er A sp ect R es ou rces ha d a rig ht or ob li ga ti on to su bl eas e. Th e

ap pe ll at e co ur t no te d th e di st ric t c o u r t ’ s “ de te rmin [ at io n] th at th e te rm ‘ su bj ect to

ex cl us iv e op ti on ’ ” in th e ag reemen t “ w as no t a ‘ pu re op ti on ’ ” bu t “ [ i] n s t e a d

. . .

impo se d an ob li ga ti on on A sp ect

... t o l e a se a mini mum of 15 % of th e [ El P as o]

La nd s, ” an d “ Lo ui si an a la w co nt ai ne d no pr ov is io n pr ev en ti ng th e op ti on f ro m be in g

ex erci se d in th is mann er. ” Th e ap pe ll at e co ur t f ou nd “ n o ab us e of di sc ret io n” an d

up he ld th e di st ric t co ur t’ s ru li ng

. Id

. , 13 -1 10 at 15 -1 6, 12 3 S o. 3d at 29 3- 94

.

Th e se co nd co nt ract ua l pr ov is io ns an al y zed w ere th os e rel at in g to se is mic

su rv ey in g. A lt ho ug h th e ag reemen t st at ed at on e ju nc tu re th at “ A S P EC T sh al l no t be

obl iga te d to inc lud e al l [El Pa s o ] L a n ds opt ion ed he re unde r in the fina l sur ve y out lin e, ”

at an ot he r ju nc tu re, th e ag reemen t st at ed th at “ A S P EC T s h al l co mm en ce th e

acq ui si ti on of

3-D sei smic da ta acro ss th e [ El P as o] La nd s. ” Id

. , 13 -1 10 at 1 6, 12 3

S o. 3d at 29 4 (it al ic s omit te d)

. Th e ap pe ll at e co ur t ag reed w it h th e di st ric t co ur t th at

ex tri ns ic ev id en ce ou ts id e th e co nt ract w as req ui red to reco nc il e th e meani ng of th e

se emin gl y co nf

li ct in g qu ot ed pr ov is io ns as a w ay of pu tt in g th e ag reemen t in it s f ul l

co nt ex t. Th e ap pe ll at e co ur t f ou nd no mani f

es t erro r in th e di st ric t co ur t’ s rel ia nc e on

9th e te s t i mo n y o f on e of El P as o’ s of f ic ers

, w ho in di cat ed th at th e “ sh al l no t be

ob li ga te d” la ng ua ge w as a cu st omary w ay of reco gn iz in g in th e ex pl or at io n bu si ne ss

t h a t b e c a u se th ere are cert ai n su rf ace area s, “ su ch as to w ns

, cemete rie s, or tra ct s

la ck in g th e pr op er permit

, ” an d su ch ob st acl es w ou ld pr ecl ud e un de rta ki ng se is mic

su rv ey in g of area s in th e vi c i n i t y. I d

. , 13 -1 10 at 18

, 12 3 S o. 3d at 29 5. Th us

, th e

ap pe lla te co ur t f ou nd A sp ect R es ou rces ha d br each ed it s su rv ey in g ob li ga tio n by onl y

su rv ey in g th e so ut he rn ha lf of th e El P as o la nd s, be cau se A sp ect R es ou rces de ci de d

no t to su rv ey more th an ha lf

, an d A sp ect R es ou rces ’ de ci si on ha d no th in g to do w it h

an y sur ve y ing obstacl es

. Th e ap pe ll at e co ur t af f irmed the aw ar d of “ $4,5 25,0 00 as the

co st to O l ymp i a f

or it s lo ss as so ci at ed w it h th e in co mple te su rv ey co nd uc te d by

A sp ect

. ” Id

. , 13 -1 10 at 25

, 12 3 S o. 3d at 29 9.

Th e ap pe ll at e co ur t al so af f irmed th e di st ric t co ur t’ s da mage aw ard ag ai ns t

A sp ect R es ou rces in th e amou nt s of $6 15

, 00 0, rep res en ti ng a lo ss of b o n u s e s an d

ren ta ls f or th e no rth ern ha lf of th e El P as o la nd s, an d $4 86

, 87 5 f or a lo ss of bo nu se s

an d ren ta ls f

o r t h e s ou th ern ha lf

. Th e ap pe ll at e co ur t ex pl ai ne d th at “ th ere w as

su f f ic ie nt ev id en ce in th e reco rd at th e t i me of tri al to su pp or t th es e cl ai ms. ” Id

. ,

13 -1 10 at 24

, 12 3 S o. 3d at 29 8.

Th e th ird co nt ract ua l pr ov is io ns w ere th os e rel at in g to th e type or f or m of da ta

A sp ect R es ou rces w as req ui red to pr ov id e to El P as o f ol lo w in g th e se is mic su rv ey

.

F or th e la nd s it ha d su rv ey ed

, A sp ect R es ou rces pr ov id ed co mpu te r-p ro ces se d da ta

,

no t th e “ raw ” or “ f

ie ld ” da ta

. Th e di st ric t co ur t ag reed w it h A sp ect R es ou rces th at

,

acco rd in g to i n d u s t r y pr act ic es

, th e raw /f ie ld da ta w ou ld no t be pr ov id ed ab se nt a

r e qu es t. H ow ev er, af

te r El P as o w as acq ui red by O lym pi a, th e la tt er se n t A s p e c t

R es ou rce s a req ue st f

or th e raw /f

ie ld da ta

. Th e di st ric t co ur t th eref or e or de red

10sp eci f

ic pe rf or mance

. Th e ap pe ll at e co ur t ag re ed A sp ect R es ou rces br each ed an

ob li ga ti on to pr ov id e th e raw /f ie ld da ta

. Id

. , 13 -1 10 at 20

, 12 3 S o. 3d at 29 6.

To rei te rat e, th e ap pe ll at e co ur t af f irmed th at A sp ect R es ou rces br each ed th e

ag reemen t in th ree majo r res pe ct s. F irs t, A sp ect R es ou rces ha d th e ob li ga ti on

, no t

me r e l y th e rig ht

, to su bl eas e 15 pe rcen t of El P as o’ s mine ral in te res ts

, bu t A s p e c t

R es ou rces f

ai le d to do so

. S eco nd

, A sp ect R es ou rces f ai le d to co nd uc t se is mic

su rv ey s o f t h e no rth ern ha lf of El -P as o’ s la nd

. Th ird

, f or th e se is mic su rv ey s it

co nd uc te d, A sp ect R es ou rces f ai le d to pr ov id e th e raw /f ie ld da ta

.

Alt houg h the co nt

r a ct co nta ine d a cl au se pr ec lud ing co nse que nti al da m ag es

, the

di st ric t co ur t, ci ti ng La

. C

. C

. art s. 19 97 an d 20 04 (q uo te d in fr a ), f ou nd th e cl au se di d

no t ap pl y be cau se A sp ec t R es ou rces act ed in ba d f ai th

. Th e di st ric t co ur t ha d

in di cat ed th at th e “ f

ai lu re to le as e th e mini mum acre ag e an d fa il ur e to co mple te th e

su rv ey

... w ere no t th e res ul t of ne gl ig en ce, un f or es een ev en ts

, o r e v e n a l a ck of

ab ili ty

. The se we re co nsc iou s an d ca lc ula ted bu si ne ss de ci si on s. ” Th e ap pe ll at e co urt

f ou nd no mani f

es t erro r in th is f

in di ng

. Id

. , 13 -1 10 at 19

, 12 3 S o. 3d at 29 5- 96

.

H av in g ag reed w it h t h e di st ric t co ur t th at th ere w as no ob st acl e to aw ard in g

co ns eq ue nt ia l damag es

, th e ap pe ll at e co ur t tu rn ed to sp eci f ic aw ard s ch al le ng ed by

A sp ect R es ou rces

. Th e di st r ic t co ur t qu an ti f ie d A sp ect R es ou rces ’ br each of th e

ob li ga ti on to su bl eas e 15 pe rcen t of El P as o’ s mine ral in te res ts as merit in g an aw ard

of $1

, 53 7, 50 0. Th e a p p e l la te co ur t af f irmed

, ba se d on ev id en ce th at El P as o ha d

ap pr ox imat el y 41

, 00 0 acre s av ai la bl e f or le as e, an d ta ki ng 15 pe rcen t of th at acre ag e

an d mul ti pl y in g i t by th e $2 50 pe r acr e amou nt de sc rib ed in th e ag reemen t yield ed

$1

, 53 7, 50 0. Id

. , 13 -1 10 at 25

, 12 3 S o. 3d at 29 9.

11Th e ap pe ll at e co ur t si mila rly af f irmed th e di st ric t co ur t’ s aw ard of $4

, 52 5, 00 0

as da mages f

or A sp ect R es ou rces ’ f

ai lu re to su rv ey th e no rth ern ha lf of th e pr op ert y

.

Th e ap pe ll at e co ur t ex pl ai ne d th at th ere w as reco rd ev id en ce sh ow in g O lym pi a pa id

W is er O il th at amou nt to co nd uc t th e su rv ey an d ex pe rt te st imon y su pp or ti ng th at

amou nt

. Id

. , 13 -1 10 at 25 -2 6, 12 3 S o. 3d at 29 9.

H ow ev er, th e ap pe ll at e co ur t rev ers ed th e di st ric t co ur t’ s aw ard of $7

, 12 0, 14 0

f or lo st ro y al ti es si nc e th e di st ric t co ur t arri ve d at th is f ig ur e by re-o pe ni ng ev id en ce

af te r tri al

. Th e ap pe ll at e co ur t f ou nd th e di st ric t co ur t ab us ed it s di sc ret i o n in

re -o pe nin g ev ide nc e, la rg el y be cau se th e di st ric t co ur t sua spon te ch ose to supp le m en t

O lym pi a’ s cl ai m f

or de la y da mages f

or f ai li ng to pr ov id e raw /f

ie ld da ta w it h a cl ai m

f or lo st ro y al ti es

. F ur th er, th e reco rd sh ow s th at El P as o “ w as in di sa rray du rin g th e

pe rio d f ro m 20 01 -2 00 4, th e ro y al ty de f ic it sp an th e [ d is tri ct ] co ur t crea te d. ” Id

. ,

13 -1 10 at 31

, 12 3 S o. 3d at 30 2. Th e ap pe ll at e co ur t f ur th er ex pl ai ne d th at pr io r to

O lym pi a’ s acq ui si ti on

, El P as o “ w as in no po si ti on to try to de ve lo p th e pr os pe ct du e

to it s se rio us un rel at ed eco no mic pr ob le ms du rin g th is sa me ti me pe rio d. ” Id

.

A cco rd in g to th e ap pe ll at e co ur t, th e di st ric t co ur t co mpo un de d it s erro r in re -o pe nin g

th e ta ki ng of tri al ev id en ce w he n it u s e d e v i d e nc e of “ th e pr od uc ti on of f ou r w el ls

arb it rari ly se le ct ed du rin g a much la te r ti me pe rio d. ” Id

. , 13 -1 10 at 32 -3 3, 12 3 S o. 3d

at 30 3.

Th e ap pe ll at e co u r t tu rn ed to th e di st ric t co ur t’ s di smis sa l of A sp ect

R es ou rces ’ reco nv en ti on al de mand

. A sp ect R es ou rces ha d clai med tha t Ol y mpia ’ s

di ss emin at io n of the se is mic su rv ey da ta vi ol at ed th e co nf id en ti al it y pr ov is io ns of th e

se is mic da ta li cen se ag reemen t. Th e ap pe ll at e co ur t af f irmed

, ex pl a i n i n g th at th e

di st ric t co ur t pr op erl y de te rmin ed th e ag reemen t sh ou ld be ret ro act iv el y te rmin at ed ;

12the lic en se re str ic tio ns we re

, the re for e, not bin din g be ca use tho se re strict ion s we re pa rt

of th e ag reemen t th at ha d be en ret ro act iv el y te rmin at ed

. Id

. , 1 3

- 1 1 0 at 36 -3 7, 12 3

S o. 3d at 30 5.

F ro m po rti on s of th e ap pe ll at e co ur t’ s rulin gs, both El P as o (n ow O lym pi a) an d

A sp ec t R es ou rces so ug ht rev ie w by th is co ur t. Th is co ur t gr an te d th e pa rti es ’

req ue st s f

or di sc ret io na ry rev ie w

. O ly m p ia M in era ls

, L L C v. H S R es ou rces

,

13 -2 63 7, 13 -2 71 7 (L a. 2/ 28 /1 4)

, 13 4 S o. 3d 11 66

.

L A W A N D A N A L Y S IS

In th e co nt ex t o f

mine ral ex pl or at io n a nd rig ht s, ju st as i n o th er co nt ex ts

, th e

“ [i]nte rp re ta tio n of a co ntr ac t is the de te r m i n a t i o n o f the co m

m on int en t of the pa

rt ie s.”

La

. C

. C

. art

. 20 45 ; se e al so Q u al ity E n vi ro n m en ta l Pr oc e s s e s , In c. v. I. P.

Pe tro le u m C o. , In c.

, 13 -1 58 2, 13 -1 58 8, 13 -1 70 3, p. 12 (L a. 5/7/14)

, 144 So.3d 1011

,

1 0 2 0. “ C on tra ct s ha ve th e ef f ect of la w f

or th e pa rti es an d may be di s s o l v e d o n l y

th r o u g h t he co ns en t of th e pa rti es or on gr ou nd s pr ov id ed by la w

. ” La

. C

. C

. art

.

19 83

.

Th e co nt ract w e are cal le d on to in te rp ret w as c o mm it te d to w rit in g. “ Th e

meani ng an d in te nt of th e pa rti es to a w rit te n in st ru ment

... is or di na ril y de te rmin ed

f ro m t he in st ru ment ’ s f

ou r co rn ers

, an d ex tri ns ic ev id en ce is in ad miss ib le ei th er to

ex pl ai n or to co nt rad ic t th e in st ru ment ’ s te rms. ” O rteg o v. S ta te, D ep t. of T ra n sp

.

an d D ev el op m en t

, 96 -1 32 2, p. 7 (L a. 2/ 25 /9 7)

, 68 9 S o. 2d 13 58

, 13 63

.

In ou r an al y si s, w e f

irs t ex amin e th e te xt of th e ag reemen t, w hi ch to ta le d 62

pa ge s w it h it s ex hi bi ts

. B ecau se th e a p p e l l a te co ur t id en ti f ie d an d rep ro du ced or

su mma r i z ed th e most sa li en t pr ov is io ns of th e “ N O R TH S TA R K S P R O JE C T

13A G R EE M EN T, ” w e li ke w is e rep ro du c e th os e pr ov is io ns al on g w it h th e ap pe ll at e

co ur t’ s pr el imin ary o bs erv at io ns

, as f ol lo w s:

The m ai n co ntr ac t in dis put e is the Nor th Sta rk s Proj ec t Agr ee m en t

(N S P A ), si gn ed Ju ly 19

, 20 00

, ef f ect iv e A ug us t 1, 20 00

. Th e pu rp os e

of th e N S P A is cl earl y st at ed in th e se co nd pa rag rap h of th e do cu ment :

H S R an d AS P EC T des ire to co nd uc t a 3-D se is mic

su rv ey (th e “ S ur ve y ”) co ve rin g ap pr ox imat el y 13 5 sq ua re

mile s ov er an area en co mpas si ng th e N or th S ta rk s P ro je ct

A rea as de scrib ed in Ex hi bi t A -1 (th e “ N or th S ta rk s P ro je ct

A rea” ), lo cat ed in C al cas ie u an d B eau reg ard P ar i sh es

, Lo ui si an a. [ El P as o] de si res to en te r in to th is A gr eemen t to

more f ul ly se t f or th th ei r ag reemen t reg ard in g H S R an d

A S P EC T’ s id en ti f

ic at io n, ex pl or at io n an d de ve lo pmen t of

po te nt ia l hy dr oc ar

bon ac cu m ula tio ns an d the ac qui sit io n by

H S R an d A S P EC T of rig ht s to co nd uc t th e S ur ve y an d dr il l

ex pl or at or y w el ls on [ El P as o] la nd s in cl ud ed in th e N or th

S ta rk s P ro

je ct A rea.

S ect io n 1 of th e N S P A

, en ti tl ed “ [ El P as o] LA N D S

, ” co nt ai ns th e

ex pl an at io n of th e area su bj ect to th e 3- D se is mic sur ve y to be co nd uc te d

by H S R an d A sp ect an d st at es

, in pe rti ne nt pa rt:

1. 1

. . . Ex hi bi t A -1 de sc rib es th e ou tl in e of th e N or th

S ta rk s P ro

je ct A rea. A ll la nd s w it hi n th e N or th S ta rk s

P ro je c t A rea, as of th e ef

f ect iv e da te of th is A gr eemen t,

w hi ch are ow ne d by [ El P a s o ] a s a mine ral ow ne r an d/ or

he ld by [ El P as o] as a le ss ee un de r oi l an d ga s le as es w il l be

ref erre d to in th e A gr eemen t as th e “ [ El P as o] La nd s” an d

are sh ow n on th e pl at at ta ch ed as Ex hi bi t A -2

.

(1 ) A sp ect ’s O bl

ig at io n to Le as e a M

in im u m of 15 % of th e [E l

Pa so ] La n ds

S ect io ns 1. 2 an d 1. 3 are th e f oc us of th e f

irs t di sp ut e be tw een th e

pa rti es

, th e ob li ga ti on of H S R an d A sp ect to le as e a mini mum of 15 % of

th e [ El P as o] La nd s:

1. 2 [ El P a s o ] he reb y gr an ts to H S R an d A S P EC T,

ef f ect iv e A ug us t 1, 20 00

, a 12 -mon th no n- ex cl us iv e

ge op hysic al pe rmit co ve rin g al l in te res ts of [ El P as o] in th e

[ El P as o] La nd s de sc rib ed on Ex hi bi ts A -3 an d A -4

, an d a

12-mon th excl usi ve opt ion to subl ea se co ve ri ng al l int er es ts

of [ El P as o] in th e [ El P as o] La nd s, de sc rib ed on E x h ib it

A -3

. C on si de rat io n f

or th e op ti on to su bl eas e sh al l be $3 5

pe r ne t m ine ra l ac re (t

he “ [El Paso ] Opti on Co n s i d e r a t i o n” ).

Th e [ El P as o] O pt io n C on si de rat io n sh al l be p ai d to [ El

14P as o] w it hi n t w o (2 ) bu si ne ss da y s af te r ex ecu ti on of th is

A gr eemen t by [ E l P as o]

. Imm ed ia te ly up on ex ecu ti on of

th is A gr e e ment

, H S R an d A S P EC T sh al l reco rd a

M emora nd um of th e ge o p h ys ic al pe rmit an d op ti on to

su bl eas e in C al cas ie u an d B eau reg ard P ari sh es in th e f or m

at ta ch ed he ret o as Ex hi bi t B

.

1.3 The ex cl usi ve opt io n to su bl ease sha ll pr ovi de for

a bo n u s co ns id erat io n of $2 50 pe r ne t mine ral acre to [ El

P as o] on w hi ch H S R an d A S P EC T el ect to ex erci se th ei r

op ti on to su bl eas e (th e “ [ El P as o] B on us C on si de rat io n” ),

pr ov id e th at th e su bl eas e w il l co nt ai n a 25 % ov erri di ng

ro y al ty in te res t to [ El Paso ] as le sso r inc lus ive of the roy al ty

in te res t p ro vi de d i n t he Le as e, pr ov id e f or a te rm o f th ree

(3 ) y ears

, an d $ 2 5 0 pe r acre ren ta ls (“ th e f ix ed an nu al

ren ta l” ), al l in su bs t a n t i a ll y th e f or m at ta ch ed to th is

A gr eemen t as Ex hi bi t C. H SR an d AS

PE C T sh al l lea se a

m in im um of 15 % of th e [E l Pa s o] L an ds su bj ect to th e

excl us iv e o

pt io n, an d sh al l wo rk

jo in tl y w it h [ El Pa so ] to

pr io ri t i z e th e [E l Pa so

] L an ds th at m ay be su bj ect to

pr es cr ip ti on an d ac ti vel

y m an ag e th e explor at io n pr og ra m

to m a x i m iz e [E l Pa so

] ’s pr es er va ti on of it

s m in er al

in te re st s

. [ El P as o] s h a l l e x ecu te an d de li ve r a su bl eas e

w it hi n th irt y (3 0) bu si ne ss da y s fr om re cei pt of H SR an d

AS PE C T ’s w r i t te n el ect io n to exer ci se th e op ti on to

su bl ea se

. H S R an d A S P EC T sh al l f ur ni sh t h e [ E l P as o]

B on us C on si de rat io n to [ El P as o] w it hi n f iv e (5 ) bu si ne ss

da y s f ro m rec ei pt of th e ex ecu te d su bl eas e.

(E mph as is ad de d. )

A t t he co nc lu si on of th e or ig in al on e y ear te rm of th e co nt ra c t

, H S R an d A sp ect so ug ht an ad di ti on al th ree- mon th ex t en si on of th e

op ti on

, bu t [ El P as o] ref

us ed to ex te nd th e op ti on pa st th e tw el ve -mon th

op ti on pe rio d en di ng Ju ly 3 1, 20 01

.

(2 ) A sp ect ’s O bl

ig at io n to C on du ct a S ei

sm ic S u rv ey of A ll [E l

Pa so ] La n ds

Th e se co nd is su e is w he th er HS R an d As pe ct ha d th e ob li ga ti on

to co nd uc t a 3- D se is mic su rv ey of al l th e [ El P as o] La nd s. Th e

it al ic i z e d po rti on s of S ect io n 2. 1, w he n co mpare d to th e it al ic iz ed

la ng ua ge of S ect io n 2. 3, il lu st rat e th e te ns io n be tw een th e tw o se ct io ns

of th e co nt ract :

2. 1 H S R an d A S P EC T sh a l l c ommence th e

acq ui si ti on of 3- D se is mic da ta acro ss th e [ El P as o] La nd s

w it hi n si x (6 ) mo nt hs f ro m th e ef

f ect iv e da te of th is

A gr eemen t, an d sh al l co nd uc t th e S ur ve y at th e so le co st

15an d ex pe ns e of H S R an d A S P EC T. H SR an d AS

PE C T

sh al l no ti fy [E l Pa so

] prior to co m m en cem en t of th e su rv ey

of th e fi na l sh oo t ou tl in e, an d sh al l fu rn is h a co py of th e

pr e-p lo t to [E l Pa so

]

. H S R an d AS

PE C T sh al l no t be

ob li ga te d to in c l u de al l [E l Pa so ] L an ds op ti on ed

he re un de r in th e fi na l su rv ey ou tl in e

.

[ 2. 2 H S R

, A S P EC T an d [ El P as o] are pa rti es to th at

ce rt ai n S tar

ks Proj ec t Agr ee m en t, da te d effe ct ive Ja nua ry 4,

19 99

, as amend ed

, th at bo rd ers di rect ly to th e so ut h of th e

N or th S ta rk s P ro

je ct A rea, at ta ch ed he ret o as Ex hi bi t A -1

. H S R an d A S P EC T de si re to crea te a “ zi pp er” be tw een th e

S t ark s P ro

je ct 3- D da ta an d th e N or th S ta rk s P ro je ct 3- D

da ta acq ui red he reu nd er by ov erl ap pi ng th e S ta rk s P ro je ct

sh oo t bo un da ry by 1⁄2 to 1 1⁄2 mile s. In or de r to acco mpli sh

th is pu rp os e f

or th e mutu al be ne f

it of H S R

, A S P EC T and

[ El P as o]

, [ El P as o] he reb y gr an ts to H S R an d A S P EC T

th e rig ht to co nd uc t th e S ur ve y acro ss an y S ta rk s P r o je ct

[ El P as o] La nd s lying w it hi n 1. 5 mile s of th e ou tl in e of th e

N or th S ta rk s P ro

je ct A rea, H S R an d A S P E C T sh al l

de si gn at e the [E l P as o] La nd s lying w it hi n th e N or th S ta rk s

/ S ta rk s “ zi pp er” in w rit in g to [ El P as o]

. U po n rece ip t of

th e f in al pr e-p lo t of th e su rv ey an d th e w rit te n req ue st f ro m

H S R an d A S P EC T, [ El P as o] sh al l ex ecu te a se pa rat e no nex cl us iv e ge op hysic al pe rmit co ve rin g th e [ El P as o] La nd s

ly ing wit hin th e S ta rk s P ro

je ct an d H S R an d A S P EC T sh al l

reco rd a M emora nd um of su ch pe rmit in th e f or m at ta ch ed

he ret o as Ex hi bi t B

. ]

2. 3 H S R an d A S P EC T sh al l pr ov id e to [ El P as o] a

co py of th e 3- D se is mic da ta ac ro ss th e [E l Pa so ] L an ds

, in cl ud in g th e [ El P as o] La nd s co ve red by th e ge op hysic al

pe rmit de sc rib ed in su bp arag rap h 2. 2 he rei na bo ve

, pl us a

on e-mil e “ ha lo ”, f

ree of co st to [ El P as o]

, in 8mm S EG -Y

f or mat w it hi n 12 0 da y s f

ro m H S R an d AS P EC T’ s recei pt

of th e f in al pr oc es se d migr at ed da ta f ro m t he pr oc es so r.

(E mph as is ad de d. )

(3 ) A sp ect ’s O bl

ig at io n to D el

iv er th e F

ie ld D at a to [E l Pa so

]

The thi rd m aj or dis put e inv olv es the obl iga tio n of H S R an d Aspe ct

to de li ve r th e f

ie ld da ta f

ro m t he se is mic su rv ey to [ El P as o]

.

S ect io n 2. 3[ ] st at es in pe rti ne nt pa rt:

[ El P as o] sha ll ex ec ute

, pr ior to rece ip t of th e se is mic

da ta

, an d sh al l remain su bj ect to th e S ei smic D at a Li cen se

A gr eemen t at ta ch ed he ret o as Ex hi bi t D

. T he se is m ic da ta

16fu rn is he d to [E l Pa so ] sh al l in cl ud

e fi el d an d s u

p p o r t

da ta

, fi na l st ac k an d m ig ra te d da ta ov er th e [E l Pa so ]

L an ds pl us th e on e-m il e “ ha lo ”

, if co ll ect ed

.

(E mph as is ad de d. )

Im po rt of E

xh ib it D to th e N

S PA --T h e S ei s m i c D a t

a Li cen se

A gr eem en t

S ect ion 2.3, co upl ed wit

h the obl iga tio n of [El Paso ] to ex ecu te th e

S ei smic D at a Li cen se A gr eemen t, pr ov id es a pa rti al ba si s f or A sp ect ’ s

reco nv en ti on al de mand ag ai ns t O lym pi a f or se ve ral br each e s of th e

ge ne ral pr ov is io ns of th e N S P A an d th e al le ge d vio la tio ns of the Sei smic

D at a Li cen se A gr eemen t by O lym pi a, W is er O il

, an d th e W IO s. Th is [ 6]

se ct io n al so pr ov id es a ba si s f or W is er O il an d th e W IO s ’ r e q u e s t f or

de cl arat or y ju dg ment w it h res pe ct to t h e f ie ld da ta f

ro m A sp ect

, as

req ui red by th is se ct io n of th e N S P A

, an d a req ue st f or de cl arat or y

ju dg ment can cel li ng al l ob li ga ti on s to A sp ect un d e r t h e S ei smic D at a

Li cen se A gr eemen t.

. . . .

M is cel la n eo u s Pr ov is io n s of th e N S PA

The re m ai nin g pe rt ine nt part s of N S P A are co nt ai ne d in S ect io n 5,

w hi ch pr ov id es th e misc el la ne ou s pr ov is io ns go ve rn in g th e A gr eemen t:

5. 1 Th is A gr eemen t sh al l be bi nd in g up on an d sh al l

in ur e to th e be ne f

it of th e pa rti es he ret o an d, e x c e p t as

ot he rw is e pr oh ib it ed

, th ei r res pe ct iv e su cces so rs an d

as si gn s; an d ex cep t as ot he rw is e st at ed h e r ei n, no th in g

co nt ai ne d in th is Ag re em en t, or im pl ie d he re in

, is in te nd ed

to co nf er up on an

y ot he r pe rs on or en ti ty an y be ne fi ts

, ri gh ts or re m ed ie s. T

he pa rt ie s ag re e th at th is Ag re em en t

m ay no t be as si

gn ed

, in w ho l e or in pa rt

, w it ho ut th e

exp re ss w ri tt en co ns en t of th e ot he r pa rt y, w hi ch sh al l no t

be un re as on ab ly w it hh el d

.

(E mph as is ad de d. )

. . . .

Th e M is cel la ne ou s se ct io n of th e N S P A f ur th er pr ov id es :

T h e a p p e l l a t e c o u r t u s e d t h e a c r o n y m W I O t o m e a

n “ w o r k i n g in te r e s t o w n e r s

. ” T h o s e p a

r ti e s a n d th e ir 6

arg uments are not ge rmane to our revie w of this case

.

175. 2 U nl es s so on er te rmin at ed or lo ng er ex te nd ed by

mutu al ag reemen t of th e pa rti es he r et o in w rit in g, th is

A gr eemen t sh al l remain in f or ce an d ef

f ect f or th e te rm of

th e ex cl us iv e op ti on to subl ea se

. The Sei sm ic D at a Li cen se

A gr eemen t

, e x ecu te d by th e pa rti es in th e f or m at ta ch ed

he re to as Exhi bit D

, s ha ll re m ai n in full for ce an d effe ct unt il

su ch ti me as it te rmin at es by i ts ow n te rms.

. . . .

Se c t i o n 5

. 7 p r o v i d e s tha t Loui sia na la w ap pli es t o t

h i s l i t i g a t i o n a n d

w as ap pl ie d by t he [ di st ric t] co ur t in al l of it s ru li ng s.

S ect io n 5. 8 w ai ve s th e rig ht to a ju ry tri al

. . . .

O ne ad di ti on al pr ov is io n of th e N S P A pl ay ed a cru ci al ro le in th e

[ di st ric t] co ur t’ s de ci si on :

5. 9 N O P A R TY S H A LL B E R EQ U IR ED TO P A Y

O R B E L I A B L E F O R I N C I D E N T A L

, C O N S EQ U EN TI A L, EX EM P LA R Y

, P U N IT IV E O R

IN D IR EC T DAMAGES (W HETHER OR NOT ARIS IN G

F R O M IT S N EG LI G EN C E) TO A N Y O TH ER P A R TY

.

O ly m p ia M in era ls

, 13 -1 10 at 9- 16

, 12 3 S o. 3d at 29 0- 93

.

W he th er th e A gr eemen t Impo se s an O bl ig at io n or A f f or ds a R ig ht to S ub le as e

A s we no te d fr om th e ou ts et

, ou r in it ia l f oc us in th is cas e is th e lo w er cou rts ’

ru li ng th at th ere w as an ob li ga ti on –n ot a mere rig ht -f or A sp ect R es ou rces to ex ecu te

a mine ral su bl eas e. Th e di st ric t cou rt m ad e th at ru li ng no t at tri al

, bu t on a pr e-t ria l

moti on f or su mm ary ju dg ment

.

This co ur t unde rt ak es a de no vo st an da rd of rev ie w w he n ev al ua tin g lowe r co ur t

ru li ng s on su mm ary ju dg ment moti on s. G reemon v. C ity of B os si er C ity

, 10 -2 82 8, 7

11 -0 03 9, p. 6 (L a. 7/ 1/ 11 ), 65 S o. 3d 12 63

, 1267

. Ac co rd ing ly

, our revi ew is go ve rn ed

by th e sa me cri te ria th at go ve rn th e di st ric t co ur t’ s co ns id erat io n of w he th er su mm ary

P e r h a p s o v e r lo o k in g th a

t th e is s u e o f w h e th e r th e a g r e e m e n t g r a n t e d a r i g h t o r i m p o s e d a n o b l i g a t i o n t o 7

s u b le a s e w a s d e c id e d b y th e d is tr ic t c o u r t b e f o r e tr ia l on a motion for summary judgme nt, th e a p p e ll a te

c o u r t e r r o n e o u s l y a

p p l i e d a n a b u s e o f d i s c r e t i o n s t a

n d a r d o f r e v ie w to th is c e n tr a ll y im p o r ta n t is s u e

. Se e

Olym pia Minerals , 13-110 at 16, 123 So.3d at 294.

18ju dg ment is ap pr op ria te

. P ur su an t to La

. C

. C

. P

. art

. 96 6( B ), “ [ a] co ur t must gr an t a

m oti on for sum

m ar y jud gm en t if the ple ad ing s, de posi tio ns, an swe rs to int er ro g a t o r i e s,

an d ad miss io ns

, to ge th er wit h the affid av its

, if an y

, show th at th ere is no ge nu in e is su e

as to materi al f

act

, an d th at [ th e] mov er is ent it le d to ju dg ment as a matt er of la w

. ”

Ja cks on v. C ity of N ew O rl ea n s

, 12 -2 74 2, p. 5 (L a. 1/ 28 /1 4)

, 14 4 S o. 3d 87 6, 88 2.

“ A ge nu in e is su e of materi al f act is on e as to whic h re as ona ble pe rs ons co uld dis ag ree;

if reas on ab le pe rs on s co ul d reac h on ly on e co nc lu si on

, th ere is no ne ed f or tri al on

th at is su e an d su mm ary ju dg ment is ap pr op ria te

. ” Id

. , 12 -2 74 2 at 5- 6, 14 4 S o. 3d at

88 2. “ M or eo ve r, w he n a co nt r a c t c a n be co ns tru ed f ro m th e f ou r co rn ers of th e

in st ru ment w it ho ut lo ok in g to ex tri ns ic ev id en c e

, th e qu es ti on of co nt ract ua l

in te rp ret at io n is an sw ered as a matt er of la w an d su mm ary ju dg ment is ap pr op ria te

. ”

S ims v. M u lh ea rn Fu n era l H ome, In c.

, 07 -0 05 4, p. 11 (L a. 5/ 22 /0 7)

, 95 6 S o. 2d

58 3, 59 0.

The re ar e two pa

ra gr ap hs of the agreemen t tha t ar e ce ntr al to dis ce rn ing whe the r

Aspe ct Reso ur ce s had a rig ht –o r an ob li ga ti on –t o su bl eas e mine ral in te res ts

. To m or e

cl os el y sc ru ti ni ze th os e pa rag rap hs

, w e rep ro du ce th em h ere:

1. 2 [ El P as o] he reb y gr a n t s to H S R an d A S P EC T, ef f ect iv e

A ug us t 1, 20 00

, a 12 -mon th no n- ex cl us iv e ge op hysic al pe rmit co ve rin g

al l int eres ts of [ El P as o] in th e [ El P as o] La nds de sc ri be d on Exhi bit s A- 3

an d A -4

, an d a 12 -m on th e x c l u si ve op ti on to su bl ea se co ve rin g al l

in te res ts of [ El P as o] in th e [ El P as o] La nd s, de sc rib ed on Ex hi bi t A -3

. C on si de rat io n f

or th e op ti on to subl ea se sha ll be $35 pe r ne t mine ral acre

(th e “ [ El P as o] O

pt io n C on si de rat io n” ). Th e [ El P as o] O pt io n

C on si de rat io n sh al l be p a i d t o [ El P as o] w it hi n tw o (2 ) bu si ne ss da y s

a f t e r ex ecu ti on of th is A gr eemen t by [ El P as o]

. Imm ed ia te ly up on

ex ecu ti on of th i s A gr eemen t, H S R an d A S P EC T sh al l reco rd a

M e mo ran du m of th e ge op hysic al pe rmit an d op ti on to su bl eas e in

Calc as ie u an d Bea ur eg ard P ari sh es in th e for m at ta ch ed he re to as Exhi bit

B

.

1. 3 T h e e x cl us iv e op ti on to su bl eas e sh al l pr ov id e f or a bo nu s

co ns id erat io n of $2 50 pe r ne t mine ral acre to EP M I on w hi ch H S R an d

19A S P EC T el ect to ex erci se th ei r op ti on to su bl eas e (th e “ [ El P as o] B on us

C on si de rat io n” ), pr ov id e th at the subl ea se wil l co nt ai n a 25 % ov erri di ng

r oyalt y in te res t to [ El P as o] as le ss or in cl us iv e of th e ro y al ty i n t e r e s t

pr ov id ed in t he Le as e, pr ov id e f or a te rm of th re e (3

) yea rs

, an d $2 50

pe r ac re re nt al

s (“ th e f ix ed an nu al ren ta l” ), al l in su bs ta nt ia ll y th e f or m

at ta ch ed to th is A gr eemen t as Ex hi bi t C

. H S R an d AS PE C T sh al l le as e

a m in im um of 15 % of th e [E l Pa so ] L an ds su bj ect t o th e excl us iv e

op ti on

, an d sh al l wo rk jo in tl y w it h [ El P as o] to pr io rit iz e th e [ El P as o]

La nd s th at may be su b

j e c t t o pr es cri pt io n an d act iv el y manag e th e

ex pl or at io n pr og ram to maxi mize [ El P as o] ’ s pr es erv at io n of it s mine ral

int er es ts. [ El P as o] sh al l ex ecu te an d de li ve r a su ble as e wit hin thi rt y (3 0)

bu si ne ss da y s f

ro m rece ip t of H S R an d A S P EC T’ s w ri tt en el ec t i on to

exer ci se th e op ti on to su bl eas e. H S R an d A S P EC T sh al l f ur ni sh th e [ El

P as o] B on us C on si de rat io n to [ E l P as o] w it hi n f iv e (5 ) bu si ne ss da y s

f ro m rec ei pt of th e ex ecu te d su bl eas e. [ Emp ha si s ad de d. ]

In pa rag rap h 1. 2, th e ag reemen t de sc rib es El P as o gr an ti ng “ a 12 -mon th

ex cl us iv e op ti on to su bl eas e” an d al so de sc rib es a pr ic e f or “ th e op ti on to su bl eas e. ”

Th e w or d “ op ti on ” is us ed mult ip le ti mes in pa rag rap h 1. 2. To in te rp ret th e meani ng

of th is rep eat ed ly us ed w or d, “ op ti on

, ” acco rd in g to ou r ci vi l la w tra di ti on

, w e be gi n

a s w e must w it h le gi sl at iv e di rect io n. Lo ui si an a C

. C

. art

. 20 47 pr ov id es ex pl ic i t

di rect io n on th is po in t: “ Th e w or ds of a co nt ract must be gi v e n t h e i r ge ne ral ly

pr ev ai li ng meani ng

. W or ds of art an d te ch ni cal te rms must be gi ve n th ei r te ch ni cal

meani ng w he n th e co nt ract in vo lv es a te ch ni cal matt er. ”

Th ere is a “ ge ne ral ly pr ev ai li ng meani ng ” of th e w or d “ op ti on ” an d, ag ai n, it is

le gi sl at iv el y pr ov id ed in th e C iv il C od e. S pe ci f ic al ly, La

. C

. C

. art

. 19 3 3 de f in es

“ op ti on ” as f

ol lo w s: “ A n op ti on is a co nt ract w he reb y th e pa rties ag re e tha t the offer or

is bo un d by hi s of

f er f or a sp eci f

ie d pe rio d of ti me an d th at th e of f eree may acce pt

w it hi n th at ti me.” A s so de f in ed

, an of

f eree ha s th e rig ht

, no t th e ob li ga ti on

, to acce pt

w ha t is be in g of

f ered

. H ere, th e of

f eree is A sp ect R es ou rces

, w hi ch un d e r th e

de f in it io n ju st qu ot ed ha d th e rig ht

, no t th e ob li ga ti on

, to ex erci se th e “ op ti on ” by

su bl eas in g El P as o mine ral rig ht s.

20H ow ev er, ta ci tl y in vo ki ng th e se co nd se nt en ce of La

. C

. C

. art

. 20 47

, O lym pi a

su gg es ts th at in th e c o n t e x t of mine ral rig ht s, th e w or d “ op ti on ” ha s a te ch ni cal

meani ng amon g “ la nd men, ” f or w ho m th e w or d “ op ti on ” ha s a de f in it io n di f

f eren t

f ro m th e on e pr ov id ed by La

. C

. C

. art

. 19 33

. A cco rd in g to O lym pi a, f or “ la nd men, ”

w ho os te ns ib ly ne go ti at ed th e ag reemen t at is su e, th e w or d “ op ti on ” do es no t in an y

w ay mean “ a co nt ract w he reb y th e pa rti es ag ree th at th e of f ero r is bo un d by hi s of

f er

f or a sp eci f

ie d pe rio d of ti me an d th at th e of f eree may acce pt w it hi n th at ti me.” S ee

La

. C

. C

. art

. 19 33

. In st ead

, po in ti ng to a le ga l di ct io na ry

, Oly mpia co nt en ds “ op ti on ”

merely means “ [ t] he rig ht or po w er to ch oo se ; so meth in g th at may be ch os en

. ”

B L ACK’S L AW D I CTI ONARY 11 21 (7 ed

. 19 99 ). th

Oly m pia’ s arg umen t co nt in ue s w it h th e pr op os it io n th at unde r pa ra gr ap h 1.2 of

th e ag reemen t, A sp ect R e s o u r c e s w as gi ve n th e po w er to ch oo se amon g El P as o’ s

la nd s, bu t un de r pa

ra gr ap h 1. 3, A sp ect R es ou rces ha d th e ob li ga ti on to ch oo se at le as t

15 pe rcen t of El P as o’ s la nd s. A s O lym pi a w ou ld ha ve it

, “ op ti on ” es se nt ia ll y means

“ mand at or y op ti on

, ” w hi ch is an ox y moro n. W e w il l ad dr es s pa rag rap h 1. 3 sh or tl y

.

W e f irs t, ho w ev er, de cl in e O lym pi a’ s in vi ta ti on to su pp la nt th e de f in ition of “ opt io n”

pr ov id ed by La

. C

. C

. a r t

. 1 9 3 3 w it h a more ge ne ric de f in it io n su pp li ed by a la w

di ct io na ry

. “ Le gi sl at io n is a so le mn ex pr es si on of le gi sl at iv e w il l. ” La

. C

. C

. art

. 2.

Th eref or e, it f ol lo w s th at a de f

in it io n pr ov id ed by le gi sl at io n sh ou ld no t be so eas il y

rep la ced w it h a de f

in it io n cu ll ed f

ro m a di ct i o n a r y, ev en if “ la nd men” cu st omari ly

un de rs ta nd th e w or d “ op ti on ” di f f eren tl y

, as O lym

pi a su gg es ts

. S ee al so La

. C

. C

. art

.

3 (“ C us to m ma y no t ab ro ga te le gi sl at io n. ”). Th e f act th at th e pa rti es ag reed to be 8

A l t h o u g h o u r a n a l y s i s o f t h e a g r e e m en t i s c o n f i n e d to a p p l y i n g c o n t r o l l i n g l a w t o t h e a g r e e m e n t i t s e l f

, w e 8

n o t e t h a t

, i n t h e r e c o r d

, E l P a s o ’ s “ l a

n d m a n

, ” w h o t o o k t h e l e a d i n n e g o t i a

t i n g t h e a g r e e m e n t

, t e s t i f i e d t h a t

a n i n v i t a t i o n t o n e g o t i a

t e r e c e i v e d f

r o m a n A s p e c t Re s o u

r c e s ’ c o mp e ti to r

, th e te r

m “ o p ti o n ” w a s u s e d b y

t h e c o m p e t i t o r

. T h e E l P a s o l a

n d m a n f u r t h er t e s t i f i e d t h a t E l P a s o i n s t e a d w a

n t e d t o i n s i s t u p o n “ o b l i g a

t o r y

acr eag e.” This testimony ref utes Oly mpi a ’ s c o n te n ti o n th a

t “ la n d me n ” u n derstood the word “option”

21g o v er

ne d by Loui sia

na la w in pa ra gr ap h 5.7 of the ag re em en t fur the r re fute s O l y

m p i a ’s

arg umen t th at we shou ld supp lant a le gi sl at iv el y -p ro vi de d de f in it io n of “ op ti on ” w it h

a de f in it io n pr ov id ed by a di ct io na ry of O lym pi a’ s ch oo si ng

.

C ert ai nl y

, as de f

in ed by La

. C

. C

. art

. 19 33

, th ere is an ob li ga ti on impo se d by

an op ti on

. H ow ev er, th at ob li ga ti on i s no t, as O lym pi a arg ue s, bi nd in g on A sp ect

R es ou rces

. In st ead

, up on th e gr an ti ng of an op ti on

, it is th e gr an to r of th e op ti on

, he re

El P as o, th at al on e w as ob li g a t e d

. M u c h co mm en ta ry ex pl ai ns th e ef f ect of an

“ op ti on ” as de f

in ed by La

. C

. C

. art

. 19 33

. F or ex ampl e, as P ro f es so r Le va ss eu r

ex pla ins

, Ar

tic le 1933 im

pos es “ a un il at eral pr omis e to co nt ract

... . W e can an al ogi ze

su ch a un il at eral co nt ract to a ‘ on e-w ay stree t, ’ th e ob li ga ti on mov in g in on e di rect io n

on ly.” A L AI

N L EVASSEUR

, L OUI SI ANA L AW OF C ONVEN TI ONAL O BL I GATI ONS

, A

P RECI S

, pp

. 4, 26 (2 00 9)

. F ur th ermore

, as P ro f es so r Li tv in of

f earl ie r ex pl ai ne d, th e

pr emis e of an op ti on is th at it is “ [ a] un il at eral pr omis e to co nt ract

. ” S au l Li tv in of f

,

O f th e P ro mise of S al e an d C on tra ct to S el l, 34 La

. L. R ev

. 10 17

, 20 20 (1 97 3- 19 74 ).

P ro f es so r Li tv in of

f th en f ur th er ex pl ai ne d an op ti on ’ s op erat iv e pr in ci pl es :

[ O ] ne pa rty ob li

ga te s hi m se lf to w ar d

s a no th er to co nc lu de a co nt ra ct

on th e te rm s se t fo rt h, up on th e ot he r pa rt y’s co ns en t to en te r in to th e

co nt em pl at ed co nt ra ct

. Th ro ug h s uc h a n a gr eemen t, on ly one pa rty i s

bo un d; th e ot he r, al th ou gh he ha s acce pt ed th e f or mer’ s ob li ga ti on

, ha s

n ot y et co ns en te d to bi nd hi msel f by an y f in al co nt ract

, bu t he ha s t h e

ch oi ce to do so b y s i mply ex pr es si ng hi s co ns en t. In F ren ch an d

A ng lo -A merica n la w

, su ch an ag reemen t is cal le d an op ti on

. F ro m th e

vie wpoi nt of ci vil ia

n co ntr act cat eg or ie s it is a typic al un il at eral contr ac t,

as on ly o ne pa rty i s bo un d. [ Emp ha si s ad de d. ]

Id

.

indicated a

n obliga tion, not merely

a rig ht, to sublease minera l rig hts.

The ag ree ment at issue never employ s the term “oblig atory acr eag e.” Had the parties so intended,

s u b s t i t u t i n g t h e t e r m “ o b l i g a t o r y a c r e a g e ” f

o r “ o p ti o n ” in th e a g r e e me n t, a lo n g w it h r e la te d g r a m m a t i c a l

c h a n g e s

, mi g h

t h a v e b e e n o n e w a

y t o i m p o s e a n o b l i g a t i o n t o s u b l e a s e

. I n s t e a d

, t h e a g r e e m e n t r e p e a t e d l y

u s e s “ o p t i o n

, ” w

h i c h h a s a l e g i s l a

t i v e l y

- p r o v i d e d d e f

i n i t i o n t h a t i n t h e in s ta n t a g r e e m e n t a f f o r d s t h e ri g h t

, but does not impose the obliga tion, for Aspec t Resource s to ex ecute a sublea se.

22F ro m th e co mm en ta ry ju st qu ot ed

, th e pr in ci pl e co nt ai ne d in th e f irs t se nt en ce

is es se nt ia l f

or di sc ern in g th e meani ng of pa rag rap h 1. 3 of th e ag reemen t, to whic h we

no w tu rn

. Th at pr in ci pl e is th at th e gr an to r of th e op ti on “ ob li ga te s hi msel f to w ard s

an ot he r to co nc lu de a co nt ract on th e te rms se t f or th

, up on th e ot he r pa rty’s co ns en t

to en te r in to th e co nt empl at ed co nt ract

. ” Id

. F or a mine ral le as e or su bl eas e, “ as in

th e cas e of sa le s, [ th e] th in g, pr ic e, an d co ns en t are es se nt ia l” el ement s. S ee La

. M in

.

C od e art

. 11 4 (L a. R

. S

. 31 :1 14

, cmt. ). A no th er es se nt ia l el ement f or a mine ral le as e 9

o r s ub le as e is th at it “ must ha ve a te rm.” S ee La

. M in

. C od e art

. 11 5( A ) (L a

. R

. S

.

31 :1 15 (A )).

F ro m pa rag rap h 1. 3 of th e ag reemen t, O lym pi a hi tc he s it s arg umen t th at th ere

is an ob li ga ti on (n ot a me r e rig ht ) req ui rin g a su bl eas e of mine ral in te res ts to th e

f ol lo w in g la ng ua ge : “ A S P EC T sh al l le as e a mini mum of 15 % of th e [ El P as o] La nd s

su bj ect to th e ex cl us iv e op ti on

. ” Ev en if on e w ere to f oc us on th is cl au se al on e,

O lym pi a’ s arg umen t to impo se an ob li ga ti on is un pe rs ua si ve

, be cau se th ere ag ai n at

th e en d of th at cl au se ap pe ars th e w or d O lympi a ha s un su cces sf ul ly at te mpte d to

red ef in e: “ op ti on

. ” To in te rp ret th is on e cl au se as O lym pi a pr op os es w ou ld req ui re

us to gi ve meani ng to th e w or ds “ sh al l le as e” w hi le ig no rin g th e w or d “ op ti on

. ” Th e

st an da rd s f

or in te rp ret in g co nt ract s co un se l ag ai ns t su ch a na rro w f oc us up on th is on e

cl au se an d al so req ui re th at “ [ e] ach pr ov is io n in a co nt ract must be in te rp ret ed in li gh t

of th e ot he r pr ov is io ns so th at each is gi ve n th e meani ng su gg es te d by th e co nt ract as

a w ho le

. ” S ee La

. C

. C

. art

. 20 50

.

B e c a u s e t h e e l e m e n t s f o r a l e a s e / s u

b l e a s e u n d e r th e M in e r a l Co d e c o in c id e w it h e le m e n t s f o r a s a l e

, w e 9

n o te th a t L a

. C. C. a

r t. 1 9 3 3 is n o t th e o n ly p la c e in th e Ci v il Co d e th a t d e s c r ib e s th e u

n il a te r a l o b li g a

ti o n

of the g rantor of an option. I n L a. C.C. art. 2620, there is y et another explanation that the g rantor of an

option has the obliga tion to d e li v e r th e s u b je c t o f th e o p ti o n

, b u t th e g rante e has a discretionar y rig ht to

enter into such a contra ct: “An option to buy

, or an option to sell, is a contra ct wher eby a party g ives to

another the rig ht to acce pt an offe r to sell, or to buy , a thing within a stipulated time.”

23R ecal li ng th at a mine ral su bl eas e req ui res a de sc rip ti on of th e “ th i n g ” to be

su bl eas ed (L a. M in

. C od e art

. 11 4, La

. R

. S

. 31 :1 14

, cmt. ), w e f in d th at th e cl a u se

r e l i e d o n b y O lym

pi a so f un ct io ns

. Th at is

, in pa rag rap h 1. 3 th e cl au se “ A S P EC T

sh al l le as e a mini mum of 15 % of th e [ El P as o] La nd s su bj ect to th e ex cl us iv e op ti on ”

de sc rib es th e th in g th at A sp ect R es ou rces may su bl eas e if it ch oo se s to su bl eas e at

al l. S ee, e. g.

, O tter O il C o. v. E x x on C o. , U S A

, 83 4 F

. 2d 53 1, 53 2 (5 C ir. 19 87 ) th

( I n a mine ral rig ht s se tt in g, an of f ero r id en ti f

ie d th e “ th in g” to be le as e d v i a

mini mum-sel ect io n la ng ua ge : “ Th at op ti on in tu rn co nt ai ne d an ex pr es s req ui remen t

th at if [ th e of

f eree ] ch os e to ex erci se th i s o p t i o n, [ th e of f eree ] ha d to le as e at le as t

10

, 00 0 of th e 42

, 00 0 acre s. ”).

P arag rap h 1. 3 of th e ag reemen t al so co nt ai ns ot he r la ng ua ge be si de s “ op ti on ”

th at in di cat es a ch oi ce to ei th er su bl eas e or no t su bl eas e. Th at is

, pa rag rap h 1. 3 ref ers

to Aspe ct Reso ur ce s de liv er ing a “ wr itt en el ect io n to ex erci se ” it s “ ex cl us iv e op ti on

. ”

Th e w or d “ el ect io n” ha s a le gi sl at iv el y -p ro vi de d meani ng w hi ch in di cat es no t an

ob li ga ti on

, bu t a ch oi c e

. S e e

, e. g.

, La

. C

. C

. art

. 25 91 (d es cri bi ng an “ [ o] pt io n of

bu y er to su pp le ment pr ic e, ” in th e si tu at io n “ [ w ] he n a sa le is su bj ect to res ci ss io n f or

le si on th e bu y er may el ect ei th er to ret ur n th e immov ab le to th e se ll er, or to ke ep th e

immov ab le by gi vi ng to th e se ll er a su pp le ment eq ua l to th e di f f eren ce bet w een th e

pr ic e pa id by th e bu y er an d th e f ai r marke t va lu e of th e immov ab le

. ”) (E mph as is

ad de d. ) 10

I t is a p p r o p r i a t e t o d r a w a d e f i n i t i o n f r o m L a

. C

. C

. a

r t

. 2 5 9 1

, w h i c h i s c o n t a i n e d w i t h i n t h e C i v i l C o d e ’ s 10

Book I I I

, Title VI I

, the topic of which is sale, beca use the Mineral Code descr ibes the elements of a

l e a s e / s u b l e a s e a s c o i n c i d i n g w i t

h c e r ta in e le me n ts o f s a le s

. Se e L a

. M in

. Co d e a r t. 1 1 4 ( L a

. R. S. 3 1 : 1 1 4

, cmt.): “[A]s i n the ca se of sa les, [the] thing, pr ice, a nd consent a

re e ssential.”

Be cause the Mineral Code direc ts us to the civil law principles of sale as being compar able to the

p ri n c i p l e s o f l e a s i n g

/ s u b l e a s i n g m i n e r a l r i g

h t s

, w e n o t e t

h a t l o n g

- r e s p e c t e d c o m

m e n t a r y a l s o s u p p o r t s t h e

p r o p o s i t i o n t

h a t t h e p a r ty to w h o m a n o p ti o n is ma d e is n o t o b li g a te d to e xe r c is e th e o p ti o n

. Re f e r r in g t o

t h e “ p r o m i s e o f s a l e

, ” P l a

n i o l in d ic a

te s : “ I t i s n o t y e t a s a l e

, b u

t t h e s a l e w i l l p e r

h a p s o n e d a y b e c o m p l e t e d

b y th e a d h e r e n c e o f th e b u

y e r

, if h e d e s ir e s

. ” 2 M

. P L A N I O L

, T R E A T I S E O N T H E C I V I L L A W § 1 4 0 1 a

t 7 8 9

24M or eo ve r, in te rp ret in g t he cl au se f ro m pa rag rap h 1. 3 on w hi ch O lym pi a so

he av il y rel ie s in th is mann er, i. e

. , as de sc rib in g th e “ th in g” th at is su bj ect to mine ral

su bl eas e, av oi ds th e pr ob le m of cas ti ng th e te rm “ sh a l l le as e” in to co nf li ct w it h

“ op ti on

. ” S ee La

. C

. C

. art

. 20 50 ; se e al so La

. C

. C

. art

. 20 46 (“ W he n th e w or ds of

a co nt ract are cl ear an d ex pl ic it an d le ad to no ab su rd co ns eq ue nc es

, n o f u r t h e r

in te rp ret at io n may be made in se arch of th e pa rti es ’ in te nt

. ”). F ur th ermore

, th e te rm

“ op ti on ” ap pe ars no t on ly at th e en d of th e “ sh al l le as e” cl au se rel ie d on by O lym pi a

in pa rag rap h 1. 3, bu t al so th e te rm “ op ti on ” ap pe ars se ve ral ot he r ti mes in pa rag rap h

1. 3. A s pr ev io us ly no te d, th e te rm “ op ti on ” ap pe ars mult ip le ti mes in th e pr eced in g

pa rag rap h, 1. 2. Th eref

or e, in te rp ret in g th e “ sh al l le as e” cl au se in pa rag rap h 1. 3 as

de sc ri bi ng th e th in g to be su bl eas ed is an in te rp ret at ion tha t ap pr opr ia te ly ha rm oni ze s,

rat he r th an co nf

li ct s, w it h th e us e of th e te rm “ op ti on ” in bo th pa rag rap hs 1. 2 an d 1. 3.

In pa rag rap h 1. 3, w e al so f in d ot he r es se nt ia l el ement s of a su bl eas e be si de s a

de sc rip ti on of th e th in g to be su bl eas ed

. P arag rap h 1. 3 de sc rib es th e pr ic e as “ $2 50

pe r acr e ren ta ls ” an d d es cri be s “ a te rm of th ree ( 3) y ears

. ” Th us

, ou r in te rp ret at io n

th at th e ag reemen t de sc rib es A sp ect R es ou rces ’ rig ht

, no t th e ob li ga ti on

, to su bl eas e

mine ral in te res ts d raw s f ur th er su pp or t f

ro m an or ga ni zat io na l or dr af ts mans hi p

st an dp oi nt

. Th at is

, pa rag rap h 1. 2 is dr af te d to in it ia ll y de sc rib e th e ex is te nc e of an

“ op ti on to su bl eas e” an d w ha t A sp ect R es ou rces w il l pa y f or th at op ti on

. Th en

,

pa rag rap h 1. 3 is dr af

te d w it h a de sc rip ti on of w ha t A sp ect R es ou rces ha s th e rig ht to

su bl eas e. C on si s t en t w it h th e req ui remen ts of La

. M in

. C od e art s. 11 4 an d 11 5,

pa rag rap h 1. 3 is dr afted su ch th at it co nt ai ns th es e el ement s: th e th in g to be su bl eas ed

,

w hi ch is “ a mini mum of 15 % of th e [El Paso ] La nd s” (th e w ho le of th e [ El P as o] la nd s

(L a.St.L .I nst.Trans. 1959).

25are de sc rib ed el se w he re in th e ag reemen t); the pr ic e, w hi ch is “ $2 50 pe r acre ren ta ls ;”

an d th e te rm, w hi ch is “ th ree (3 ) y ears

. ”

To br ie f ly su mm ari ze ou r an al y si s to th is po in t, w e f in d th a t th e ag reemen t

co nf erre d up on A sp ect R es ou rces an “ op ti on ” to su bl eas e mine ral in te res ts f ro m El

P as o. A n “ op ti on ” is leg is la ti ve ly def in ed an d i mpo se s on th e gr an to r, El P as o, th e

obl iga tio n to m ak e the m ine ra l int er es ts av ai la ble f or su bl eas e, bu t do es no t impo se the

ob li ga ti on up on A sp ect R es ou rces to su bl eas e an y of th os e in te res ts

. H ow ev er, as th e

ag reemen t is f

ur th er dr af

te d, if A sp ect R es ou rces el ect ed to ex erci se it s op ti on

, it w as

th en ob li ga te d to su bl eas e a mini mum of 15 pe rcen t of El P as o’ s in te res ts at a co st of

$2 50 pe r acre an d f

or a te rm o f th ree y ears

.

R ecal li ng th at th e qu es ti on of w he th er A sp ect R e s o ur ces w as ob li ga te d to

subl ea se wa s de ci de d on a pr e-tri al moti on f or su mm ary ju dg ment

, at th is ju nc tu re, the

ex te nt of ou r rev ie w of th is cas e merit s ex amin at io n. F ol l o w i n g o u r lo ng st an di ng

pr act ic e, w e ha ve rev ie w ed th e co rrec tn es s of th e su mm ary ju dg ment ru li ng de no vo

.

W e ru le d th at th e lo w er co ur ts erre d as a mat t e r o f l a w in co nc lu di ng th at A sp ect

R es ou rces w as ob li ga te d to su bl eas e mine ral in te res ts

.

Th e f in di ng of an ob li ga ti on to su bl eas e si gn if ic an tl y impa ct ed th e su bs eq ue nt

co ur se of th is li ti ga t i o n

, in cl ud in g th e is su es su bmit te d f or tri al

. O n th e on e ha nd

,

gi ve n th at su ch a pi vo ta l ru li ng w as de ci de d erro ne ou sl y migh t ju st if y reman di ng f

or

a ne w tri al

. O n th e ot he r ha nd

, w e reca ll an ot he r lo ng st an di ng pr act ic e ta ke n by th is

co ur t in th e in te res ts of ju di ci al eco no my : “ w h e n a mist ak e of la w

, su ch as a

co ns eq ue nt i a l b u t e rro ne ou s ru li ng on th e ex cl us io n or ad miss io n of ev id en ce,

f or ecl os es an y f

in di ng of f

act

, an d th e rec o r d i s ot he rw is e co mple te

, th e ap pe ll at e

co ur t sh ou ld

, if it can

, ren de r ju dg ment on th e reco rd

. ” Fo le y v. E n terg y L ou is ia n a,

In c.

, 06 -0 98 3, pp

. 28 -2 9 (L a. 11 /2 9/ 06 ), 9 4 6 S o. 2d 14 4, 16 4, ci ti ng R ag as v.

26A rg on au t S ou th w es t In su ra n ce C o mp a n y

, 38 8 S o. 2d 70 7, 70 8 (L a. 19 80 ), an d

G on za le s v. Xero x C or p or at io n

, 25 4 La

. 18 2, 32 0 S o. 2d 16 3 (1 97 5)

.

W i t h so me ex cep ti on s to th is ru le la te r no te d, w e f in d th at th e re c o r d i s

su f f ic ie nt ly co mple te f

or th is co ur t to ren de r ju dg ment on th e is su es su bmit te d f or ou r

co ns id erat io n by t he pa rti es

. Th eref or e, ou r an al y si s of th os e is su es

, in li gh t of th e

reco rd ev id en ce, co nt in ue s.

D amage s f

or B reac h of O bl ig at io n to S ub le as e

Th e reco rd is cl ear th at A sp ect R es ou rces did not subl ea se an y mine ral in te res ts

f ro m El P as o. B ecau se th e di st ric t co ur t de te rmin ed A sp ect R es ou rces w as ob li ga te d

to le as e at le as t 15 pe rcen t of El P as o’ s in te res ts

, th e di st ric t co ur t qu an ti f ie d A sp ect

R es ou rces ’ br each of th at ob li ga ti on as merit in g an aw ard to O lym pi a of $1

, 53 7, 50 0.

H ow ev er, f

ro m ou r de no vo rev ie w of th e ag reemen t, w e f in d th e di st ric t co ur t erre d.

A sp ect R es ou rces

, as w e ha ve f ou nd

, ha d th e rig ht to su bl eas e; th ere w as no

ob li ga ti on to su bl eas e impo se d up on A sp e c t R es ou rces un de r th e ag reemen t.

A cco rd in gl y

, w e rev ers e th e di st ric t co ur t’ s da mage aw ard of $1

, 53 7, 50 0, w hi ch w as

pr ed ic at ed on a no n- ex is te nt ob li ga ti on to su bl eas e.

A dd it io na l O bl ig at io ns an d th e P ro hi bi ti on A ga in st C on se qu en ti al D amage s

Th e ag reemen t, on it s f

ace, pr oh ib it s th e pa rti es f ro m reco ve rin g co ns eq ue nt ia l

d a mages

. S pe ci f

ic al ly, pa rag rap h 5. 9 pr ov id es : “ N O P A R TY S H A LL B E

R EQ U IR ED TO P A Y O R B E LI A B LE F O R IN C ID EN TA L, C O N S EQ U EN TI A L,

EX EM P LA R Y

, P U N IT IV E, O R IN D IR EC T D A M A G E S ( W H ET H ER O R N O T

A R IS IN G F R O M IT S N EG LI G EN C E) TO A N Y O TH ER P A R TY

. ”

D es pi te th is pr ov is io n, th e di st ric t c o u r t f o un d A sp ect R es ou rces to ha ve

br each ed th e ag reemen t in ba d f ai th an d aw ard ed O lym

pi a ad di ti on al da mages

, ci ti ng

La

. C

. C

. art

. 20 04 (“ A ny cl au se is nu ll th at

, in ad va nc e, ex cl ud es or li mits th e li ab il it y

27of on e pa rty f or in te nt io na l or gr os s f

au lt th at cau se s da mage to th e ot he r pa rty.”) an d

La

. C

. C

. art

. 19 97 (“ A n ob li go r in ba d f ai th is li ab le f

or al l th e da mages

, f

or es eeab le

or no t, th at are a di rect co ns eq ue nc e of hi s f ai lu re to pe rf

or m.”). Th e di st ric t co ur t

ci te d two re as ons for tr igg er ing Ar tic le s 2004 an d 1997

. Specif ic al ly, th e di st ric t co ur t

ci te d “ th e tw o m aj or br each es of th e [ ag reemen t] by de f en da nt s (f ai lu re to le as e th e

mini mum acre ag e an d f

ai lu re to co mple te th e [ se is mic] su rv ey ) w ere no t th e res ul t of

ne gl ig en ce, un f

or es een ev en ts

, or ev en a la ck of ab il it y

. Th es e w ere c on sc io us an d

cal cu la te d bu si ne ss de ci si on s

. ” A dd it io na ll y

, th e di st ric t co ur t ci te d A sp ect

R es ou rces ’ “ f

ai lu re to make th e f

ie ld ta pe s [ w it h th e un pr oc es se d/ raw da ta ] av ai la bl e

to the mine ral ow ne r. ” Th e ap pe ll at e co ur t af f irmed th e di st ric t co ur t’ s ru li ng th at ba d

f a i t h de f eat ed A sp ect R es ou rces ’ cl ai m th at pa rag rap h 5. 9 ba rred co ns eq ue nt ia l

da mages

.

W e f ou nd th at A sp ect R es ou rces di d n o t b r e a c h on e of th e th ree ob li ga ti on s

ci te d by th e di st ric t co ur t. Th ere w as no ob li ga ti on f or A sp ect R es ou rces to su bl eas e

El P as o’ s mine ral in te res ts

. Th eref or e, th is si tu at io n be gs th e qu es ti on of w he th er th e

f ai lu re of A sp ect R es ou rces to di sc lo se th e un pr oc es se d/ raw su rv ey da ta an d th e

f ai lu re to su rv ey th e remain in g ha lf of th e El P as o acre ag e can ju st if y a f in di ng of ba d

f ai th

, su f f ic ie nt to nu ll if

y th e pr oh ib it io n ag ai ns t co ns eq ue nt ia l da mages co nt ai ne d in

pa rag rap h 5. 9 of th e ag reemen t.

O ur rev ie w of th is is su e b e g i n s w it h an ot he r qu es ti on : w he th er th e di st ric t

c o u r t’ s f in di ng s rel at ed to ba d f

ai th are ow ed de f

eren ce un de r th e mani f

es t erro r

st an da rd

. U nd er lo ng st an di ng pr eced en t, th os e f in di ng s are no t ow ed su ch de f eren ce

gi ve n th e di st ric t co ur t’ s signific an t le ga l er ro r of ru lin g tha t the ag re em en t im pose d an

ob li ga ti on f

or A sp ect R es ou rces to su bl eas e mine ral in te res ts

.

28I t is w el l-s et tl ed th at a co ur t of ap pe al may no t se t as id e a tri a l

c o u r t ’ s o r a ju ry ’ s f

in di ng of f

act in th e ab se nc e of ‘ mani f es t erro r’ or

un le ss it is “ cl earl y w ro ng

. ” R os el l v. E S C O

, 5 4 9 S o. 2d 84 0, 84 4

(L a. 19 89 ). H ow ev er, w he re on e or more tri al co ur t le ga l erro rs in te rd ic t

th e f act -f in di ng pr oc es s, th e mani f es t erro r st an da rd is no lo ng er

ap pl ic ab le

, an d, if th e reco rd is ot he rw is e co mple te

, th e ap pe ll at e co ur t

sh ou ld make it s ow n in de pe nd en t de no vo rev ie w of th e r e c o rd an d

de te rmin e a pr ep on de ran ce of th e ev id en ce.

E va n s v. L u n gr in

, 97 -0 54 1, 97 -0 57 7, pp

. 6- 7 (L a. 2/ 6/ 98 ), 70 8 S o. 2d 73 1, 73 5.

W e tu rn th en to th e reco rd to de te rmin e w he th er O lym pi a pr ov e d by a

pr ep on de ran ce of th e ev id en ce th at th e f ai lu re of A sp ect R e s o u rces to su rv ey th e

remain in g ha lf o f th e El P as o acre ag e an d f ai lu re to pr ov id e th e un pr oc es se d/ raw

se is mic da ta can ju st if

y a f in di ng of ba d f

ai th

. A pp aren tl y

, th is co ur t ha s ne ve r st at ed

w ha t co ns ti tu te s ba d f

ai th un de r La

. C

. C

. art

. 19 97

, so ou r r e v i ew is gu id ed by

rev is io n co mm en t (b ) to art ic le 19 97

, w hi ch in di cat es th at “ [ a] n ob li go r is in ba d f ai th

if he int en tio na lly an d mali ci ou sl y f ai ls to pe rf

or m hi s ob li ga ti on

. ” Th us

, acco rd ing to

th is co mm en t, th ere are bo th in te nt io na l an d mali ci ou s co mpo ne nt s to ba d f ai th

.

A s to th e ex te nt of th e su r ve y th at A sp ect R es ou rces w as ob li ga te d to make,

th ou gh w e are no t bo un d to gi ve di sc ret io n in ou r de no vo rev ie w

, w e ag ree w it h th e

di st ric t co ur t on on e si gn if ic an t po in t. Th at is

, as to “ t h e amou nt of acre ag e

co nt empl at ed ” by th e s u r v e y

, “ [ a] si mple read in g of th e ag reemen t do es rev eal an

ambi gu it y on th is po in t, ari si ng f ro m an ap pa ren t co nf

li ct in it s pr ov is io ns

. ”

Th e f ol lo w in g p ro vi si on s o f

th e ag reemen t, bo th co nt ai ne d in pa rag rap h 2. 1,

co nf li ct

. O ne se nt en ce pr ov id es : “ A S P EC T sh al l commence th e acq ui si ti on of 3- D

se i s mi c da ta acro ss th e [ El P as o] La nd s

. . . . ” Th is se nt en ce co ul d reas on ab ly be

in te rp ret ed to mean al l El P as o la nd s must be su rv ey ed

. H ow ev er, an ot he r se nt en ce

a p p ears to ne ga te an ob li ga ti on to su rv ey al l El P as o la nd s, in di cat in g in s t e a d :

29“ A S P EC T sh al l no t be ob li ga te d to in cl ud e al l [ El P as o] La nd s op ti on ed he reu nd er in

th e f in al su rv ey ou tl in e. ”

To di sp el th e do ub t su rro un di ng th e ex te nt of th e su rv ey un de r th e ag reemen t,

th e C iv il C od e ag ai n pr ov id es gu id an ce. “ A do ub tf ul pr ov is io n must be in te rp ret ed

in li gh t of th e na tu re of th e co nt ract

, eq ui ty, us ag es

, th e co nd uc t of th e pa rti es be f or e

an d af te r th e f or mati on of th e co nt ract

, an d of ot he r co nt ract s of a li ke na tu re be tw een

th e sa me p art ie s. ” La

. C

. C

. art

. 20 53

.

Th e di st ric t co ur t di d no t ap pl y th is st an da rd

, in st ea d re ly ing on the self -s erv in g

te st imon y of El P as o ex ecu ti ve s to th e ef f e c t t ha t th e ag reemen t co nt empl at ed

su rv ey in g al l El P as o la nd s. B y co nt ras t, an ex ecu ti ve f or on e of th e w or ki ng in te res t

ow ne rs

, W is er O il

, te st if

ie d th at it w as cu st omary, es pe ci al ly ba ck at th e ti me of th e

su rv ey

, to sp li t a su rv ey in to tw o ph as es

. Th e ex ecu ti ve f ur th er te st if

ie d th at it w ou ld

be impo ss ib le to co nd uc t th e w ho le su rv ey in on e y ear. W e al so no te th at

, un de r th e

ag reemen t, A sp ect R es ou rces w as no t req ui red to b eg in th e su rv ey immedi at el y

.

In st ead

, as de sc rib ed by pa rag rap h 2. 1, w it hi n th e on e-year t erm of th e ag reemen t,

“ A S P EC T sh al l commence th e acq ui si ti on of 3- D se is mic d at a acr os s t he [ El P as o]

La nd s w it hi n si x (6 ) mon th s f ro m t he ef

f ect iv e da te of th is A gr eemen t. ”

N o t w i t h s t a n d i n g a n y a m b i g uit y in the ag re em en t, aft er spl itt in g t h e E l Pa s o l a

n d s

in to a no rth ern an d so ut he rn ha lf an d co m ple tin g a sur

ve y on th e so ut he rn ha lf

, A sp ect

R es ou rces co nv ey ed as su ran ces to El P as o th at it w ou ld be gi n su rv ey in g th e no rth ern

ha lf

. Ev en so

, A sp ect R es ou rces ne ve r be ga n a su rv ey of th e no rth ern ha lf

. A sp ect

R es ou rces ’ op erat io na l pa rtn er, H S R es ou rces

, di d req ue st a si x- mon th ex te ns io n to

su rv ey th e no rth ern ha lf. El Paso de cl ined th e req ue st ed ex te ns io n, y et El P as o di d no t

de mand th at th e su rv ey be co mple te d.

30F r om th is co ur se of co nd uc t, w e ag ree th at A sp ect R es ou rces un de rto ok th e

ob li ga ti on to su rv ey th e en ti ret y of El P as o la nd s. A t tri al

, th ere w as te st imon y by an

El P as o rep res en ta ti ve to th e ef f ect th at th e cl au se in pa rag rap h 2. 1 se emin gl y

ex empt in g A sp ect R es ou rces f ro m th is re qui re m en t (“ A S P EC T sh al l no t be ob li ga te d

to in cl ud e al l [E l P as o] La nd s o pt io ne d her eu nd er in th e f in al su rv ey ou tl in e”), w as

si mply meant to ex empt su rf ace ob st acl es

, su ch as to w ns

, cemeteri es

, or tr ac ts la ck in g

th e pr op er pe rmit. Th e di st ric t co ur t acce pt ed th is ex pl an at io n.

In res ol vi ng th e ambi gu it y in he ren t in th e ph ras e “ acro ss th e [ El P as o] la nd s”

an d th e cl au se “ no t ob li ga t[ in g]

... in cl ud [ i n g ] al l [ El P as o] La nd s

... in th e f in al

su rv ey ou tl in e, ” it is un ne ces sa ry f or us to acce pt th e ex p l an at io n ab ou t th e la tt er

cl au se ex empt in g su rf

ace ob st acl es

. In st ead

, pu rs ua nt to La

. C

. C

. art

. 20 53 an d th e

rec o r d e v i de nc e av ai la bl e to us

, w e f in d “ th e co nd uc t of th e pa rti es

... af te r th e

f or mati on of th e co nt ract ” s u f f i c i e nt ly in f

or ms us of th e pa rti es ’ co mm on

un de rs ta nding tha t th e su rv ey w ou ld in cl ud e more th an th e so ut he rn ha lf

. Th e req ue st

f or an ex te ns io n to su rv ey th e no rth ern ha lf impl ie s an ack no w le dg ment of th e

ob li ga ti on to co nd uc t su ch a su rv ey

. Th e ex te ns io n de sc r ib ed th e ag reemen t’ s 11

pr ov is io ns f

or a se is mic su rv ey th us : “ A mon g th e pu rp os es of th e A gr eemen t w as to

pe rmit H S R an d A sp ect to sh oo t a 3- D se is mic su rv ey co ve rin g a pp ro xi matel y 13 5

sq ua re mile s an d en co mpas si ng la nd s ow ne d an d/ or le as ed to [ El P as o]

. ” R el at ed ly,

th e ag reemen t its el f de sc rib es : “ H S R an d AS P EC T des ire to co nd uc t a 3- D se is mic

su rv ey (th e “ S ur ve y ”) c o v e r i ng ap pr ox imat el y 13 5 sq ua re mile s ov er an area

A l t h o u g h w e u l ti m a t e l y r e l y o n t h e r e q u e s t e d e x t e

n s i o n a s e v i d en c i n g a

n o b l i g a ti o n t o s u r v ey t h e n o r t h er n 1 1

and southern halves of El Paso’s mineral holdings, the fac t that Aspec t Resource s acknow ledg ed the

obliga tion le n d s s u

p p o r t to th e d is tr ic t c o u

r t’ s in te r p r e ta ti o n o f p a r a g r a p h 2

. 1 o f th e a g r e e me n t. That is,

th e a c k n o w le d g me n t o f th e o b li g a ti o n to s u r v e y b o th h a lv e s s u

p p o r ts th e d is tr ic t c o u

r t’ s f in d in g th a t th e

e xc lu s io n a

r y la n g u a g e in p a r a g r a p h 2

. 1 w a s inte n d e d to r e li e v e A s p e c t Re s o u r c e s f r o m s u r v e y in g a r e a s

wher e surf

ace obstacles made it impractical or impossible.

31en co mpas si ng th e N or th S ta rk s P ro je ct A rea

... lo cat ed in C al cas ie u an d B eu reg ard

P ari sh es

, Lo ui si an a. ”

H av in g f ou nd A sp ect R es ou rces ha d an ob li ga ti on to co nd uc t a su rv ey be y on d

th e s o ut he rn ha lf of th e El P as o la nd s, w e no te th at it is un di sp ut ed th at A sp ect

R es ou rces di d no t un de rta ke a su rv ey of an y of th e no rth ern ha lf

. Th eref or e, A sp ect

R es ou rces br each ed it s su rv ey ob li ga ti on

.

O ur ne xt in qu iry is to d e t e r mi n e w he th er A sp ect R es ou rces ’ br each of th e

su rv ey ob li ga ti on w as do ne “ in ba d fa it h. ” C on se qu en ti al da mages are avai la bl e to

O lym pi a on ly if th e ag reemen t’ s cl au se pr oh ib it in g co ns eq ue nt ia l da mages is vi ti at ed

by A sp ect R es ou rces ’ ba d fa it h. S ee La. C

. C

. art

. 19 97 (“ A n ob li go r in ba d fa it h is

li ab le f or al l th e da mages

, f

or es eeab le or no t, th at are a di rect co ns eq ue nc e of hi s

f ai lu re to pe rf

or m.”). O ur rev ie w is gu id ed by A rti cl e 19 97

, cmt. (b ), w hi ch in di cat es

th at “ [ a] n ob li go r is in ba d f ai th if he in te nt io na ll y an d mali ci ou sl y f ai ls to pe rf

or m hi s

ob li ga ti on

. ”

W hi le no t ex cu si ng A sp ect R es ou rces ’ f ai lu re to pe rf

or m it s su rv ey ob li ga ti on

,

w e do no t f

in d th at f ai lu re w as mali ci ou sl y made. Th e f ol lo w in g re c or d ev id en ce

co ntr ad ic ts the not ion of m al ic e. Fir st, the re is th e in he ren t ambi gu it y in th e agre em en t

as to the ex te nt of th e su rv ey

. A lt ho ug h w e ul ti ma te ly found tha t a re que ste d ex te nsi on

on be ha lf of A sp ect Reso ur ce s re ve al ed an ac know le dgm en t of an obl igati on to su rv ey

bo th th e so ut he rn an d no rth ern El P as o lan ds

, th at ack no w le dg ment w as da te d Ju ne

28

, 20 01

, w el l af

te r th e ag reemen t w as ex ecu te d on or ab ou t A ug us t 1, 20 00

.

Emerg in g f

ro m th e ba ck dr op of ambi gu it y in th e ag reem e n t

, t h is be la te d

ac know le dgm en t do es no t, in ou r vi ew

, in di cat e th at A sp ect R es ou rc es ac know le dge d

th is ob li ga ti on f

ro m th e ou ts et

, su ch as on e w ou ld ex pe ct un de r th es e ci rcu msta nc es

as a pr ed ic at e f

or act in g w it h mali ce to w ard El P a s o. N ex t, th e f act th at A sp ect

32R es ou rces as ke d f or an ex te ns io n in di cat es a w il li ng ne ss to pe rf or m t h e s u r v e y

, a

w il li ng ne ss w hi ch ru ns co nt rary to th e no ti on of mali ce. A dd it io na ll y

, th e te st imon y

f ro m t h e W i s er O il ex ecu ti ve

, w ho se co mpan y w as no t a pa rty to th e ag reemen t,

su gg e s t ed th at th e si x- mon th pe rio d de sc rib ed in th e ag reemen t f or co nd uc ti ng th e

su rv ey w as an in su f

f ic ie nt amou nt of ti me gi ve n the ex te nsi ve ac re ag e to be su rv ey ed

.

F in al ly, w e no te th at El P as o la te r en te red in to a su bl eas e ag reemen t w i t h A s p e ct

R es ou rces an d El P as o’ s ch oi ce to en te r in to su ch a si gn if ic an t bu si ne ss rel at io ns hi p

un de rcu ts th e n o ti on th at El P as o co ns id ered A sp ect R es ou rces to ha ve act ed

mali ci ou sl y in th e pa rti es ’ pr io r de al in gs

. V ie w ed ei th er in di vi du al ly or co ll ect iv el y

,

th es e f acet s of th is cas e pr ecl ud e us

, in ou r de no vo rev ie w

, f ro m f in di ng th at A sp ect

R es ou rces act ed w it h mali ce reg ard in g th e ex te nt of it s se is mic su rv ey ob li ga ti on

.

W e tu rn ne xt to th e f

in al ob li ga ti on f

ou nd by th e di st ric t co ur t as vi ti at in g th e

ag reemen t’ s pr oh ib it io n of co ns eq ue nt ia l da mages

. S pe ci f ic al ly, th e di st ric t co ur t

f ou nd A sp ect R es ou rces w as ob li ga te d to pr ov id e to El P as o th e “ raw ” or “ f ie ld ” da ta

f ro m t he se is mic su rv ey

, to th e ex te nt A sp ect R es ou rces ha d co nd uc te d th e su rv ey

.

Th ere is no ambi gu it y in th e ag reemen t reg ard in g th is ob li ga ti on

. In it ia ll y

, as

pr es en te d at tri al

, A sp ect R es ou rces di d no t pr ov id e th e se is mic da ta be cau se it ne ve r

rece iv ed a req ue st ; su ch a req ue st is st an da rd in th e in du st ry

. H ow ev er, ev en tu al ly

A sp ect R es ou rce s r e c e i v e d a req ue st f or th e da ta bu t ref

us ed to di sc lo se it

. In

de f en se of no t pr ov id in g th e da ta

, A sp ect R es ou rces f ur th er cl ai med th at it le arn ed

f ro m a mine ral un it iz at io n pr oc es s th at O lym pi a (n ow th e su cces so r to El P as o) ha d

be en sh ari ng th e pr oc es se d da ta A sp ect R es ou rces ha d pr ov id e d w it h ot he r

ex pl or at io n co mp a n i e s. Th e da ta

, A sp ect R es ou rces f ur th er po si te d, be lo ng ed to

A sp ect R es ou rces

, an d O lym pi a merely h el d a li cen se to us e th e da ta

, bu t O lym pi a

w as bo un d no t to sh are th e da ta un de r th ei r se is mic da ta li cen se ag reemen t.

33It is un ne ces sa ry f or us to de ci de w he th er th e di st ric t co ur t erre d in rej ect in g

A sp ect R es ou rces ’ de f

en se to pr ov i d i n g th e se is mic da ta

. W e can reac h th e

im m ed ia te iss ue of w he th er A sp ect R es ou rces act ed in ba d f ai th by as su ming

, w it ho ut

pr es en tl y de ci di ng

, th at th e cl ai ms ju st reci te d di d no t ex cu se A sp ect R es ou rces f ro m

pr ov id in g th e da ta

. A s in ou r earl ie r an al y si s, w e ex amin e th e reco rd f or ev id en ce of

mali ce. S ee La

. C

. C

. art

. 19 97

, cmt. (b ).

I n o u r d e no vo rev ie w

, w e f in d O lym pi a f ai le d to pr ov e mali ce in A sp e c t

R es ou rces ’ f

ai lu re to pro vi de th e se is mic da ta

. In de ed

, as rece nt ly as A ug us t 20 11

,

Oly m pia too k the posi tio n tha

t, be ca use the lic en se ag reem en t w as un si gn ed

, the re wa s

no en f or ceab le li cen se ag reemen t or co nf id en ti al it y ow ed reg ard in g th e se is mic da ta

.

Th e di st ric t co ur t rej ect ed th is po si ti on

, w it h go od reas on

, f in di ng th at “ th e ab se nc e

of si gn at ur es di d no t vi ti at e th e li cen se

. ” Th e li cen se ag reemen t, w e f ur th er f in d, w as

pa rt of th e N O R TH S TA R K S P R O JE C T A G R EE M EN T a n d w a s e nf or ceab le as

su ch

. A cco rd in gl y

, O lym pi a w as bo un d by th e li cen se ’ s co nf id en ti al it y req ui remen t,

bu t w as ne ve rth el es s sh ari ng se i smic da ta w it h ot he rs

. Th e reco rd ref le ct s th at

O lym pi a ev en made av ai la bl e to ot he r en ti ti es co mpu te r eq ui pmen t to rev ie w th e

se is mic da ta an d h a d a ro om w it h eq ui pmen t de vo te d to sh ari ng th e da ta in th is

mann er. U nd er su ch ci rcu msta nc es

, w e can no t sa y th at A sp ect R es ou rces act ed w it h

mali ce in ref

us in g to tu rn ov er m or e se is mic da ta

, w he n it w as read il y ap pa ren t th at

O lym pi a w ou ld no t ke ep co nf

id en ti al da ta th at

, acco rd in g to th e ag reemen t, be lo ng ed

to A sp ect R es ou rces

.

To reca p, th e di st ric t co ur t ci te d th ree reas on s to f in d A sp ect R es ou rces in ba d

fa i t h a n d, the re by

, nul li fi e d t

h e a g r e e m e n t ’s p r o h i b i t i o n a g a i n s t c o n s e q u e n t i a l d a m a g e s

.

Th e f irs t reas on w as th e di st ric t co ur t’ s f in di ng th at A sp ect R es ou rces br each ed an

ob li ga ti on to su bl eas e mine ral rig ht s. H ow ev er, as w e ha ve f ou nd

, th e a g r e e me n t

34merely pr ov i d ed A sp ect R es ou rces th e rig ht to su bl eas e an d di d no t impo se an

ob li ga ti on to do so

. B ecau se A sp ect R es ou rces di d no t br ea c h a n o n

- e xi st en t

ob li ga ti on

, th ere is no ba d f ai th as so ci at ed w it h A sp ect R es ou rces ’ de cl in in g t o

ex erci se th e rig ht to su bl eas e. Th e se co nd reas on ci te d f or A sp ect R es ou rces ha vi ng

act ed in ba d f

ai th w as it s f

ai lu re to su rv ey th e en ti re la nd f or w hi ch El P as o he ld

m ine ra l ri ght s. Alt

houg h we found A sp ect R es ourc es br ea ch ed an obl iga tio n to sur ve y

more th an th e so ut he rn ha lf of th os e la nd s, w e al so f ou nd se ve ral f

act or s pr ecl ud in g

a findi ng of ba d f

ai th in th at br each : ambi gu it y in th e ag reemen t; a que sti ona ble ab ili ty

t o co mple te th e en ti re su rv ey w it hi n a sh or t av ai la bl e ti me f rame; an d, A s p e c t

R es ou rces ’ req ue st f

or an ex te ns io n of ti me to co mple te th e se is mic su rv ey

. Th e f in al

in st an ce of ba d f

ai th ci te d by th e di st ric t co ur t w as A sp ect R es ou rces ’ f ai lu re to

de li ve r raw /f

ie ld se is mic d at a. F or reas on s rel at in g to th e on go in g vi ab il it y of

reco nv en ti on al de mand s by A sp ect R es ou rces to be di sc us se d la te r in th is op in io n,

w e ha ve as su med– w it ho ut f in di ng –t ha t A sp ect R es ou rces br each ed an ob li ga ti on to

pr ov id e su c h d at a. Y et

, ev en as su ming a br each

, th e reco rd do es no t su pp or t a

f in di ng of ba d f

ai th

. El P as o ha d ag reed to be bo un d by a li cen se ag reemen t, w hi ch 12

req ui red th at th e se is mic da ta pr ov id ed by A sp ect R es ou rces co ul d no t be sh ared w it h

ot he r en ti ti es

. Ev en so

, th e reco rd ref le ct s su ch sh ari ng oc cu rred

. F ro m th is reco rd

,

w e f ou nd it w as no t mali ce th at pr ep on de rat es as a reas on f or no t pr ov id in g raw /f

ie ld

se is mic da ta

.

P ermis si bl e D amage s

B ecau se w e ha ve f

ou nd th at A sp ect R es ou rces di d no t act in ba d f ai th

, La

. C

. C

.

art

. 19 97 pr es en ts no impe di ment to en f or ci ng th e ag reemen t’ s pr o h i b i ti on ag ai ns t

I t is unnece ssary for us to rea ch Aspec t Resource s’ arg ume n t th a t th e lo w e r c o u

r ts e r r e d in d e clar ing 1 2

t h e l i c en s e a

g r e e m en t u n en f o r c e a b l e b e c a u s e t h e l o w er c o u

r t s f o u n d t h e c o n t r a c t w a s j u d i c i a l l y t e r

m i n a t e d

.

35co ns eq ue nt ia l da mages

. Li ke ot he r sa li en t pr ov is io ns of th e co nt ract

, w e w il l an al y ze

th e en f or ceab il it y of th at pr oh ib it io n, w hi ch w e rep ro du ce he re f or eas e of ref

eren ce:

“ 5. 9 N O P A R TY S H A L L B E R EQ U IR ED TO P A Y O R B E LI A B LE F O R

IN C ID EN TA L, C O N S EQ U EN TI A L, EX EM P LA R Y

, P U N IT IV E OR IN D IR EC T

D A MA GES (W HETHER OR NOT ARISI NG FROM IT S NEGLI GENCE) TO A N Y

O TH ER P A R TY

. ”

B ef or e ad dr es si ng en f

or ceab il it y

, ho w ev er, w e no te th at A sp ect R es ou rces in

it s b rie f co nt en ds th at all da mages aw ard ed by the di st ric t co ur t fo r an y amou nt no t

sp eci f ic al ly de sc rib ed in th e co nt ract are con se qu en ti al da mages

, are th us ba rred by

th e ag reemen t’ s pr oh ib it io n ag ai ns t co ns eq ue nt ia l da mages an d mu s t t he ref or e be

rev ers ed

. A sp ect R es ou rces main ly f o cu se s on th e $4

, 52 5, 00 0 aw ard ed f or th e

in co mple te su rv ey

. In co nt ras t to th e op ti on to le as e (w hi ch ha s a pr ic e st at ed in th e

ag reemen t), acco rd in g t o A sp ect R es ou rces

, th e aw ard f or th e in co mple te su rv ey

is

a co nse que nti al da m ag e va lue d at an amou nt ne ve r de sc ri be d wit hin the ag re em en t an d

is

, th eref or e, ba rred by t he ag reemen t’ s pr oh ib it io n ag ai ns t co ns eq ue nt ia l da mages

.

A sp ect R es ou rces gr eat ly ov ers ta te s t he reac h of th e ag reemen t’ s pro hi bi ti on

ag ai ns t co ns eq ue nt ia l da mages

. It is w el l-r eco gn iz ed th at by s ti pu la ti on w it hi n th e

co ntr ac t, the “ pa

rt ie s ar e at li be rty to ex cl ud e so me ob li ga ti on s f ro m th e cl us te r ari si ng

f ro m th ei r co nt ract

, ” bu t ev en by st ip ul at io n “ th e pa rti es are no t at li be rty to ex cl ud e

th e p ert in en t o bl ig at io n b ecau se th e ex cl us io n w ou ld ne ga te th e co nt ract

. ” 6 S AUL

L I TI NOF F

, L OUI SI ANA C I VI L L AW T REATI SE: T HE L AW OF O BL I GAT I ONS § 11

. 8,

(p p. 31 6- 17

, 19 99 ). N ot hi ng in th e w or di ng of th e co nt ract ’ s pr oh ib it io n pu rp or ts to

ren de r di rect da mages for br ea ch of co nt ract un av ai la bl e. Th e pr oh ib it io n, on it s f ace,

ap pl ie s to “ co ns eq ue nt ia l ” d amage s. A lt ho ug h th is te rm is no t de f in ed in th e

ag reemen t, it is co mm on ly un de rs to od to pr oh ib it da mages ch arac te riz ed by th ei r

36“ unfor es ee ab ili ty or re m ote ne ss” to a br ea ch an d is sy no nym ou s w it h th e te rm “ spe ci al

da mages

. ” 6 L OUI SI ANA C I VI L L AW TR EA TI S E: T HE L AW OF O BL I GATI ONS §

5. 17

, p. 12 7 (d es cri bi ng th e te rm “ co ns eq ue nt ia l” as empl oyed in th e co mm on la w );

se e id

. § 5. 18 at p. 13 0 (n ot in g “ [ t] he co mm on -la w di st in ct io n bet w een ge ne ral an d

sp eci al da mages ha s be en rece iv ed by t he Lo ui si an a ju ris pr ud en ce. ”).

H av in g de te rmin ed t h e w o r d in g rel ie d on by A sp ect R es ou rces do es no t

ex cl ud e da mages f

or es eeab le f

ro m a br each of co nt ract

, w e ne xt e x amin e w ha t

da mages are av ai la bl e he re. In di sc e r ni ng w ha t da mages are di rect ly av ai la bl e f or

br each

, w e ag ai n be gi n w it h th e pr in ci pl es se t f or th in th e C iv il C od e an d ap pl y th os e

pr in ci pl es to th e br each w e ha ve f o u n d o f th e ob li ga ti on to su rv ey more th an th e

so ut he rn ha lf of th e El P as o la nd s.

F or br each of co nt ract

, sp eci f ic pe rf or mance is th e pr ef

erre d remed y

. S ee La

.

C

. C

. art

. 19 86

. Howe ve r, whe re

, as he re

, “ [i]f spec if ic pe rf or mance is impr act ic al

, th e

co ur t may al lo w da mages to th e ob li ge e. ” Id

. “ D amage s are measu red by th e lo ss 13

su st ai ne d by th e ob li ge e an d th e pr of it of w hi ch he ha s be en de pr iv ed

. ” La

. C

. C

. art

.

19 95

. “ A n ob li go r in go od f ai th is li ab le on ly f

or th e da mages th at w ere f or es eeab le

at th e ti me t he co nt ract w as made. ” La

. C

. C

. art

. 19 96

.

A lt ho ug h a mon et ary va lu e f or th e su rv ey is no t de sc rib ed in th e ag reemen t, by

th e te rms o f t h e a g reemen t, co nd uc ti ng th e su rv ey is ne ve rth el es s on e of th e

pe rf or mance s ow ed by A sp ect R es ou rces to El P a s o i n ex ch an ge f or pe rf or mance s

ren de red by El P a s o

. P ract ic al ly sp eak in g, th is type of arra ng ement is qu it e

co mm on

. Th e C iv il C od e de sc rib es th is arra ng ement in th es e te rms: “ A co nt ract is

14

T h e im p r a c ti c a lity of order ing Aspec t Resource s to conduct the surv e y o f th e n o r th e r n E l Pa s o la

n d s 1 3

lies in the fac t that Oly

mpia has alre ady

obtained a sur

vey from anothe r sourc e.

B e c ause the obliga tion to conduct a survey is descr ibed in th e a g r e e me n t, w e r e je c t th e lo w e r c o u

r ts ’ 1 4

d e s c r ip ti o n o f t

h e d a m a g e s f o r f a i l u r e t o c o m p l e t e t h e s u r v e y a s “ c o n s e q

u e n ti a l d a ma g e s

. ” Se e Ol y m pi a

37bi la te ral

, or synal la gmat ic

, w he n th e pa rti es ob li ga te th emsel ve s reci pr oc al ly, so th at

th e ob li ga ti on of each pa rty is co rrel at iv e to th e ob li ga ti on of th e ot he r. ” La

. C

. C

. art

.

19 08

.

C on tra ry

to As pe ct R es ou rces ’ arg umen t t ha t t he su rv ey w as no t a b en ef it of

an y ba rg ai n, w e f

in d th e op ti on pr ev io us ly di sc us se d, w he re b y E l P a s o ow ed th e

ob li ga ti on to make av ai la bl e it s la nd s to A sp ec t R e s o ur ces f or th e la tt er’ s rig ht to

su bl eas e min eral rig ht s, is on e o bl ig at io n i mpo se d o n E l P as o co rrel at iv e to As pe ct

R es ou rces un de rta ki n g co rrel at iv e ob li ga ti on s de sc rib ed in th e ag reemen t. U nd er

pa rag rap h 1. 2, A sp ect R es ou rces ha d th e co rrel at iv e ob li ga ti on to pa y “ $3 5 pe r ne t

mine ral acre

, ” an d un de r pa rag rap hs 2

. 1

, 2

. 2

, an d 2. 3, A sp ect R es ou rces ha d an

ad di ti on al co rrel at iv e ob li ga ti on of un de rta ki ng a se is mic su rv ey of th e El P as o la nd s.

S ta te d di f f eren tl y

, a su rv ey in cl ud in g th e no rth ern El P as o la nd s w as on e of th e

be ne f it s El P as o w as to rece iv e of th e b a r g a i n st ru ck be tw een El P as o an d A sp ect

R es ou rces

. Th e ag reemen t had a te rm of tw el ve mon th s, du rin g w hi ch ti me A sp ect

R es ou rces w as pe rmitt ed to co nd uc t th e op erat io ns ne ces sa ry f or th e se is mic su rv ey

.

A lt ho ug h A sp ect R es ou rces is co rrec t th at El P as o w ou ld on ly ha ve a li cen se f or us e

of th e se is mic su rv ey da ta an d no t ha ve f ul l ow ne rs hi p, th e te rms of th e ag reemen t

ne ve rth el es s es ta bl is h th at th e se is mic su rv ey w as a sig nific an t be ne fit to El Pas o f ro m

th e ag reemen t. F o r in st an ce, pu rs ua nt to pa rag rap h 2. 3 of th e ag reemen t, af te r

pr ov id in g th e pr oc es se d da ta

, A sp ect R es ou rces w as ob li ga te d to pr ov id e al l se is mic

da ta to El P as o “ f

ree of co st

. ” P ur su an t to th e se is mic da ta li cen se it se lf

, El P as o ha d

rig ht s to th e seism ic da ta for 49 y ea rs

, a co nsi de ra

ble le ngth of ti me, du rin g w hi ch ti me

i t c ou ld us e th e da ta f

or it s ow n pu rp os es

. U nd er th e li cen se

, El P as o al so w a s

M in e r a ls

, 1 3

- 1 1 0 a

t 2 5

, 1 2 3 So

. 3 d a

t 2 9 9

. A s d i s c u s s e d f

u r t h e r i n t h i s o p i n i o n

, d a

ma g e s a r e r e c o v e r a

b le

beca use the surve y

was one of the pe rfor

mance s specific ally

require d in the contra ct.

38al lo w ed to us e th e da ta to make pr es en ta ti on s to th ird pa rti es “ to ex pl or e, de ve lo p[

, ]

pr od uc e, or f

in an ce an y ap pr op ria te pr op ert y f or th e pu rp os e s o f i de nt if y in g

su bs ur f ace oi l an d ga s de po si ts

, ” su bj ect to th e co nd it io n th at “ no co pi es of th e D at a

are f ur ni sh ed to su ch th ird pa rty an d th at su ch th ird pa rty ag rees to tre at al l su ch D at a

as co nf id en ti al

. ”

A sp ect R es ou rces arg ue s th at El P as o’ s du ty to miti ga te da mages pr e c l u d es

a w ard in g th e co st of th e su rv ey

. Th e du ty to miti ga te is de sc rib ed in L a

. C

. C

. a r t

.

20 02 an d req ui res tha t an ag gr ie ve d “ obl ige e

... m ak e re as ona ble effor ts to miti ga te th e

da mage cau se d by an ob li go r’ s f ai lu re to pe rf

or m.” W he n th e du ty to miti ga te ex is ts

bu t is un met, “ the obl igo r m ay de m an d th at th e da mages be acco rd in gl y red uc ed

. ” Id

.

A cco rd in g to A sp ect R es ou rces

, th e di st ric t co ur t aw ard ed th e co st s of th e su rv ey in

a misg ui de d at te mpt to miti ga te lo st ro y al ti es El P as o suffe re d in th e w ak e of br each es

by A sp ect R es ou rces

. H ow ev er, be cau se w e ha ve ru le d th e su rv ey w as it se lf on e of

th e be ne f it s El P as o w as to rece iv e un de r th e co nt ract

, w e rej ect th e arg umen t th at th e

dut y to m iti ga te pr ec lud es a da m age aw ard f or th e co st s of th e su rv ey

, no tw ithsta ndi ng

w he th er th ere ex is te d an y co nn ect io n to lo st ro y al ti es

.

A s to th e measu re of da mages f or th e su rv ey, t h e d i s t r ic t co ur t acce pt ed th e

te st imon y of “ G eo rg e H it e, a pe tro le um en gi neer an d an ex pe rt in th e ev al ua ti on of oi l

an d ga s in te res ts

, ” w ho se cal cu la ti on s w ere us ed to arri ve at a da mage aw ard

rep res en ti ng th e co st to co mple te th e su rv ey of $4

, 52 5, 00 0. S ee O ly m p ia M in era ls

,

13 -1 10 at 25

, 12 3 S o. 3d at 29 9. As we no te d e arl ie r, un de r L a. C

. C

. art

. 19 95

, on e

co mpo ne nt of da mages is th e “ lo ss su st ai ne d by t h e ob li ge e. ” C on tra ry to th e

arg umen t of A sp ect R es ou rces

, it is of no moment th a t n o mo n et ary va lu e f or th e

su rv ey is de sc rib ed in th e ag reemen t. U nd er La

. C

. C

. art

. 19 99

, “ [ w ] he n da mages are

39in su sc ep ti bl e of pr eci se m ea sur em en t, much di sc ret io n sh al l be le f t to th e co ur t f

or th e

reas on ab le as se ss ment of th es e da mages

. ” S ee Y ou n v. M ar iti m e O ve rs ea s C or p

. ,

62 3 S o. 2d 12 57

, 12 61 (L a. 19 93 ) (n ot in g “ th e di sc ret io n ve st ed in th e tri er of f act is

‘ gr eat

, ’ an d e v e n v as t, so th at an ap pe ll at e co ur t sh ou ld rare ly di st ur b an aw ard of

ge ne ra l da m ag es .” ); 6 L O U I SI A N A C IV I L L A W T RE A T I SE : T H E L A W O F O B L I G A T I O N S

§ 8. 9 at p. 24 4 (“ A lt ho ug h

... ju di ci al di sc ret io n f or th e as se ss ment of da mages an d

ap pe ll at e rev ie w of th e ex erci se of th at di sc ret io n ha ve be en more ex te ns iv el y tre at ed

by th e Lo ui si an a ju ris pr ud en ce i n c o n n e ct io n w it h qu as i-d el ic tu al da mages

, ... th e

st an da rd f

or th at rev ie w is no t di f

f eren t w he re da mages f

o r br each of co nt ract are

co nc ern ed

. ”).

W e si mila rly rej ect th e arg umen t of A sp ect R es ou rces th at th e aw ard f or th e

in co mple te su rv ey sh ou ld be rev ers ed be cau se El P as o su f f ered no lo ss by no t ha vi ng

th e co mple te su rv ey

. W e rej ect th is arg umen t no t on ly be cau se w e ha ve f ou nd th e

su rv ey w as sp eci f

ic al ly de sc rib ed as on e of th e be ne f it s of th e ba rg ai n, bu t al so

be cau se

, as pa rt of th at ve ry sa me ba rg ai n, El P as o, in an ef f or t to ob ta in a f

ul l su rv ey

,

ke pt it s m in eral in te res ts co ve rin g app ro xi matel y 42

, 00 0 acre s ou t of co mm erce f or

on e y ear pu rs ua nt to th e ag reemen t’ s “ ex c lu si ve op ti on ” in f av or of A sp ect

R es ou rces

. B ecau se th e amou nt of th e di st ric t co ur t’ s aw ard f or th e co st of

co mple ti ng th e su rv ey is su pp or te d b y c omp et en t te st imon y

, w e f in d no ab us e of

dis cret io n in th e aw ard to O lym pi a of $4

, 52 5, 00 0; ho w ev er, the pa rt ie s ac know le dge d

at or al arg umen t th at th e w rit te n ju dg ment co nt ai ne d a typo gr ap hi cal erro r, th us

, w e

amend th e ju dg ment to ref le ct th e amou nt of th e aw ard is $4

, 12 5, 00 0. 15

Desc ribing a

v a il a b le p r o c e d u r e s in a p p e ll a te c o u r ts

, L a

. C. C. P. art. 2164 indicates, in pertinent part: 1 5

“ T h e a p p e l l a t e c o u r t s h a l l r e n d er a

n y j u d g m e n t w h i c h i s j u s t

, l e g a l

, a

n d p ro p e r u

p o n t h e r e c o r d o n a p p e a l

. ”

40A s earl ie r no te d, in it s br ie f

, A sp ect R es ou rces ta ke s a ve ry br oa d vi ew of w ha t

mon et ary da mages are pr ecl ud ed by th e w ai ve r of co ns eq ue nt i a l da mages

. M or e

sp eci f ic al ly, A sp ect R es ou rces no w arg ue s “ rei ns ta ti ng th e w ai ve r [ of co ns eq ue nt ia l

da mages ] req ui res rev ers al of al l da mages

. ” H ow ev er, in it s req ue st f or th is co ur t’ s

di sc ret io na ry rev ie w

, A sp e c t R es ou rces di d no t ch al le ng e ev ery it em of mon et ary

da mages

. To th is po in t i n t h i s op in io n, w e ha ve rev ie w ed th e mon et ary da mages

pr es en te d to th is co ur t in A sp ect R es ou rces ’ w rit ap pl ic at io n. W e de cl in e th e 16

in vi ta ti on to ad dr es s da mages th at w ere no t pr es en te d i n t he w rit ap pl ic at io n. S ee

S en se b e v. C an al In d em. C o.

, 10 -0 70 3, p. 17 (L a. 1 / 2 8 / 1 1 )

, 58 S o. 3d 44 1, 45 1,

ci ti n g A g i l u s H ea lth (T ay lo r) v. A cco r L od gi n g N or th A m eri ca

, 10 -0 80 0, p. 11

n. 4 (La

. 11 /3 0/ 10 ), 52 S o. 3d 68

, 76 n. 4. Th us

, w e le av e un di st ur be d and af f irm th e

aw ard “ [ f ] or th e 20 01 -2 00 2 lo st bo nu se s an d ren ta ls

, $6 15

, 00 0, ” an d th e aw ard “ [ f ] or

th e 20 02 -2 00 5 lo st bo nu se s an d ren ta ls

, $4 86

, 87 5[

. ] ” A ls o un ch al le ng ed w as th e

di st ric t co ur t’ s ru li ng th at “ [ b] y vi rtu e of a pr io r s e t t l e me nt of co de f en da nt s H S

R es ou rces

, In c. an d K e r r

- M c G ee O il & G as O ns ho re, LP

, A sp ect R es ou rces

, LL C

is en ti tl ed to a f

if ty pe rcen t (5 0% ) cred it on th e f or eg oi ng amou nt s an d in te res t. ” W e

th eref or e af f irm th e cred it of 50 pe rcen t on al l af f irmed aw ard s.

R eco nv en ti on al D emand s

A sp ect R es ou rces ha s so ug ht rev ie w of th e di st ric t co ur t’ s di smis sa l of

reco nv en ti on al de mand s br ou gh t ag ai n s t El P as o, no w O lym pi a, an d ag ai ns t th e

I n d e e d

, w e w e r e in f

o r me d in th e w r it appli c a

ti o n th a t th e o n ly d a

ma g e s f o r “ lo s t b o n

u s e s a n d r e n ta ls ” 1 6

b e i n g c h a l l e n g e d w e r e t

h o s e c o n n e c te d w it h A s p e c t Re s o u

r c e s ’ f a il u r e to c o m p l e t e t h e s e i s m i c s u

r v e y o f

the northern half. Specifica lly

, Aspec t Resource s focuse d on the $4,525,000 awa rd, asking in its writ

a p p li c a ti o n th a t w e “ r e v e r s e [] a

n d r e p la c e []” th a

t a mo u n t “ w it h $ 2 3 0

, 6 2 5

, w h ic h c o n s ti tu te s O ly m p i a ’ s

maxi mum loss due to its d el ay ed re ce i p t of the phase two data.” Yet, having ruled here that the

$4

, 5 2 5

, 0 0 0 a

w a r d

, a s a me n d e d

, w a s p r o p e r

, w e n e e d n o t a d d r e s s th e o r ig in a l a

r g u ment that such awa

rd

s h o u l d b e r e p l a c e d w i t

h a l e s s e r a m o u n t

, o r t h e n e w l y p r e s e n

t e d a r g u m e n t t h a t a l l d a m a g e s m u s t f a l l a l o n g

with the $4,525,000 awa

rd.

41w or ki ng i n te res t ow ne rs

, no t pa rti es to th e co nt ract bu t se ek in g da mages ag ai ns t

A sp ect R e s o u rces un de r a th eo ry of be in g th ird pa rty be ne f ic ia rie s. A sp ect

R es ou rces ’ reco nv en ti on al de mand s are pr emis ed on th e al le ge d misa pp ro pr ia ti on of

se is mic da ta co nt rary to th e t e r ms of th e li cen se ag reemen t an d in vi ol at io n of th e

L o u i s i an a Unifor

m Tr ad e Sec re ts Ac t an d/o r the Loui sia na Unfa ir Tr ad e Pra ct i c e s A c t

.

Th e di st ric t co ur t ex pl ai ne d th at it ha d de cl ared th e co nt ract ju di ci al ly di ss ol ve d du e

to A sp ect R es ou rces ’ br each

, th eref or e “ O lym

pi a can n o t b r each a di ss ol ve d

co nt ract

. ”

Th e co ur t of ap pe al ag reed

, ef f ect iv el y pr e te rmitt in g rev ie w of th e merit s of

A sp ect R es o u r c es ’ arg umen ts

. H ow ev er, w e ha ve f ou nd le ga l erro r in th e lo w er

c o u r t s ’ r u l in gs th at th ere w as an ob li ga ti on

, no t an op ti on to su bl eas e. B ot h lo w e r

co u r t s r e l i e d o n t

h a t r u l i n g i n fi n d i n g t

h a t j u d i c i a l l y d i s s o l v ing the ag re em en t wa s pr ope r

an d th at El P as o/ O lym

pi a co ul d no t, th eref

or e, ha ve vi ol at ed th e se is mic da ta li cen se

ag re ement

. B ecau se w e ha ve rev ers ed th at “ ob li ga ti on ” ru li ng

, w e remand thi s m at te r

to th e co ur t of ap pe al f

or a re-e va lu at io n of th e reco nv en ti on al de mand s. S ee, e. g.

,

S n id er v. L ou is ia n a M ed ic al M u t. In s. C o.

, 13 -0 57 9, p. 2 2 ( L a

. 1 2 /1 0/ 13 ), 13 0

S o. 3d 92 2, 93 9 (A f

te r f in di ng th e co ur t of ap pe al a p p li ed an in co rrec t st an da rd of

rev ie w

, w e “ reman d[ ed ] th is matt er to th e ap pe lla te co ur t wit h ins tr uc tio ns to co ns id er

an d rul e up on pl ai nt if

f s’ ass ig nmen ts of

erro r, in cl ud in g t ho se as si gn ment s of erro r

pr et ermit te d by th e ap pe ll at e co ur t, in acco rd an ce w it h th e vi ew s ex pr es se d he re in. ”).

A cco rd in gl y

, th e co ur t of ap pe al is di rect ed to rev ie w th e co rrec tn es s of th e di smis sa l

of th e reco nv en ti on al de mand s an d, as th at c ou rt th en de ems ne ces sa ry an d

ap pr op ria te

, th e co ur t may reac h th e merit s of th e reco nv en ti on al de mand s, co ns is te nt

42w it h th e ru l i n g s in th is op in io n, or el se reman d to th e di st ric t co ur t if ad di ti on al

ev id en ce is req ui red

. 17

A tt or ne y s’ F ees

O lym pi a arg ue s th at th e lo w er co ur ts erre d in no t aw ard in g th e at to rn ey s’ f ees

it in cu rred in de f

en se of th e al le ga ti on s O lym pi a vi ol at ed th e se is mic da ta li cen se an d

vi ol at ed Lo uis ia

na ’s Unifor

m Tr ad e Sec re ts Ac t (L a. R.S. 51: 14 31

, et se q

. ) an d U nf ai r

Tr ad e P ract ic es A ct (L a. R

. S

. 51 :1 40 1, et se q

. ). Th e co ur t of a p p e a l r ul ed th at

O lym pi a f ai le d to pr op erl y rai se th e is su e in th e di st ric t co ur t. C on cl ud in g, th en

, th at

O lym pi a rai se d th e is su e f

or th e f irs t time on app eal

, th e ap pe ll at e co ur t decl in ed to

co ns id er th e merit s of th e is su e. W e f in d no erro r in th is co nc lu si on

.

O lym pi a po in ts to a de mand f or at to rn ey s’ f

ees i n o n e o f it s ow n amend ed

pe ti ti on s to ref

ut e th e co nt en ti o n th at it di d no t se ek at to rn ey s’ f ees in th e di st ric t

co ur t. H ow ev er, Oly

m pia ac know le dge s tha

t it did not inc lud e a req ue st f or at to rn ey s’

f ees in its an swe r subm itt ed in re spon se to Aspe ct Reso ur ce s’ re co nve nti on al de mand

.

S eek in g at to rn ey s’ fee s in it s ow n pe ti ti on

, rat he r th an in an sw er to th e reco nv en ti on al

de mand

, i s i n s uf

f ic ie nt to rai se th e is su e th at O lym pi a so ug ht at to rn ey s’ f

ees f or

de f en di ng ag ai ns t th e reco nv en ti on al de mand

. S ee La

. C

. C

. P

. art

. 10 03 (req ui rin g an

an sw er to “ co nt ai n a pr ay er f or th e rel ie f so ug ht ”). Th eref or e, be cau se O lym

pi a w as 18

ba rred on di rect ap pe al f

ro m ob ta in in g rel ie f in th e f or m of at to rn ey s’ f

ees

, reg ard le ss

of th e co ur t of ap pe al ’ s de te rmin at io n on reman d as to th e vi ab il it y or mer its of Aspe ct

Pa r e n th e ti c a ll y

, w e n o te th a

t li ti g a n ts w h o w e r e n o t p a

r t y t o t h e a g r e e m e n t a r e a l s o p o t e n

t i a l l y l ia b le a s 1 7

targ ets of Aspec t Resource s’ rec onventional demands. Those litigants ha v e b e e n p ut on notice of this

c o u r t ’ s g r a n ti n g o f d i s c r e t i o n a r y r e v i e w

, b u

t n o n e o f t h o s e l i t i g a n t s h a s f i l e d a b ri e f i n o p p o s i t i o n t o A s p e c t

Resource s’ re quest for r einstatement of the rec onventional demands.

E v e n p r e

- d a

ti n g th e Co d e o f C i v i l P r o c e d u r e

, t h e j u r i s p r u d e n c e r e c o g

n i z e d t h a t “ t h e n a t u r e o f t h e r e l i e f 18

soug ht by the defe ndant is deter mined by the pray er of the answe r.” Rainey v. McC rocklin

, 185 So.

705, 706 (L a. Ct.App. 1939), citing Rudd v. Land Co. , 188 L a. 490, 177 So. 583, 585 (1937).

43R e s o u rces ’ reco nv en ti on al de mand s, O lym pi a remain s ba rred f

ro m reco ve rin g

at to rn ey s’ f

ees

.

C O N C L U S IO N

Th e lo w er co ur ts le ga ll y erre d in ru li ng th at be y on d a mere r i gh t to su bl eas e

mine ral in te res ts

, th ere w as an act ua l co nt ract ua l ob li ga ti on f or A sp ect R es ou rces to

su bl eas e. A s th e pa rti es ’ ag reemen t is co ns tru ct ed

, w e f in d tha t unde r the le gis la tiv el y

pr ov id ed de f

in it io n of th e te rm “ op ti on

, ” th e ag reemen t impo se d th e ob li ga ti on on El

P a so to make av ai la bl e it s mine ral ho ld in gs to A sp ect R es ou rces

. Th e ag ree me n t

f ur th er pr ov id ed th at if A sp ect R es ou rces pr ov id ed a “ w rit te n el ect io n to ex erci se th e

op ti on to su bl eas e, ” th en A sp ect R es ou rces w as bo un d to su bl eas e at le as t 15 pe rcen t

of the av ai la

ble m ine ra l int er es ts. Howe ve r, A sp ect R es ou rces di d not el ec t to ex er ci se

th e op ti on

, a ch oi ce it w as en ti tl ed by th e ag reemen t to make. W e rev ers e, th eref or e,

th e di st ric t co ur t’ s da mage aw ard of $1

, 53 7, 50 0, w hi ch w as pr ed ic at ed up on a

no n- ex is te nt ob li ga ti on to su bl eas e.

W e al so f

in d th e l ow er co ur ts erre d in co nc lu di ng th at A sp ect R es ou rces

br each ed th e ag reemen t in ba d f ai th

. Th e lo w er co ur ts ju st if ie d a f in di ng of ba d f

ai th

in la rg e measu re on A sp ect R es ou rces br each in g an ob li ga ti on to su bl eas e. S uc h an

ob li ga ti on

, w e ha ve ru le d, w as no n- ex is te nt as a matt er of la w

. Th e re mai ni ng

ju st if ic at io ns f or f in di ng A sp ect R es ou rces to ha ve act ed in ba d f ai th do no t su rv iv e

de no vo re v i e w o f th e reco rd

. A cco rd in gl y

, an d co nt rary to th e lo w er co ur ts ’

ho ld in gs

, th e ag reemen t’ s pr oh ib it io n ag ai ns t co ns eq ue nt ia l da mages is en f or ceab le

.

The a g r e e m e nt’s pr ohi bit ion ag ai nst co nse que nti al da m ag es is not

, howe ve r, the

al l-e nc omp as si ng sh ie ld f ro m ev ery amou nt of da mages impo se d by th e lo w er co ur ts

,

as A sp ect R e s o u r c e s ur ge s. U nd er th e ag reemen t, A sp ect R es ou rces un de rto ok an

ob li ga ti on to co nd uc t a se is mic su rv ey of El P as o’ s mine ral in te res ts

, bu t A sp ect

44R es ou rc e s o n l y c o nd uc te d th e su rv ey on th e so ut he rn ha lf of El P as o’ s ho ld in gs

.

B ecau se a co mple te su rv ey w as on e of th e be ne f it s of a ba rg ai n, un de r w hi ch El P as o

ag reed to ke ep it s min eral in te res ts of f th e marke t f

or a y ear, da mages f

or f ai lu re t o

co nd uc t th e su rv ey can no t f ai rly be ch arac te riz ed as co ns eq ue nt ia l. Th e $4

, 52 5, 00 0

in da mages aw ard ed by th e di st ric t co ur t f or th e f ai lu re to co nd uc t a co mple te se is mic

su rv ey is co ns is te nt w it h th e f or es eeab le res ul ts of A sp ect R es ou rces ’ f a i l ur e to

co mple te th e su rv ey

. Th us

, th is aw ard w as pr op er; ho w ev er, be cau se th e pa rti es ha ve

ac know le dge d t

h a t t h e w r i tte n jud gm en t co nta ine d a ty pogr ap hic al er

ro r, we am en d the

ju dg ment to ref

le ct th e amou nt of th e aw ard is $4

, 12 5, 00 0.

W e al so le av e un di st ur be d an d af f irm th e aw ard “ [ f

] or th e 2 0 0 1

- 2 0 02 lo st

bo nu se s an d ren ta ls

, $6 15

, 00 0, ” an d th e aw ard “ [ f ] or th e 20 02 -2 00 5 lo st bo nu se s an d

ren ta ls

, $4 86

, 87 5[

. ] ” Th es e amou nt s w ere no t chal le ng ed in th e ap pl ic at io n f or ou r

su pe rv is or y rev ie w ; w e th us de cl in e to reac h the m er its of the se aw ards an d th e rel at ed

qu es ti on of w he th er th ey su rv iv e th e pr oh ib it io n ag ai ns t co ns eq ue nt ia l da mag e s.

S imil arl y un ch al le ng ed w as th e di st ric t co ur t’ s gr an ti ng of a 50 pe rcen t cred it f or al l

da mage aw ard s du e to a co -d ef en da nt ’ s se tt le ment

. W e

, t h e ref or e, af f irm th is

pe rcen ta ge cred it to A sp ect R es ou rces f or al l da mage aw ard s.

A sp ect R es ou rces br ought re co nve nti on al de mand s ag ai ns t O lym pi a (f or merly

El P as o)

, al le gi ng th at be cau se th e ag reemen t main ta in ed ow ne rs hi p of se is mic da ta

w it h A sp ect R es ou rces

, El P as o/ O lym pi a an d ot he rs no t pa rty t o th e ag reemen t are

li ab le f or ex ceed in g th e pe rmis si bl e us e of th at da ta un de r a li cen se in co rp or at ed in to

th e la rg er ag reemen t. Th e di st r i ct co ur t ru le d th at be cau se of A sp ect R es ou rces ’

f ai lu re to f ul f il l th e ter m s of the ag re em en t, the ag re em en t wa s jud ic ia lly dis so lv ed an d

th ere w as no li cen se res tri ct io n impo se d on El P as o/ O lym pi a an d th e ot he rs w ho

al le ge dl y us ed th e da ta

. Th e co ur t of ap pe al af f irmed f or th e sa me reas on s. C en tra l

45to th e r e a s o n i ng of bo th lo w er co ur ts w as th ei r ru li ng th at A sp ect R es ou rces ha d

br each ed an ob li ga ti on to su bl eas e mine ral in te res ts

. Ho w ev er, we ha ve f ou nd th at

A sp ect R es ou rces w as no t req ui red by th e ag reemen t to su bl eas e. Th eref or e, be cau se

th e co ur t of ap pe al

, w he n ad op ti ng th e reas on in g of th e d i s t r i c t co ur t es se nt ia ll y

pr et ermit te d reac hi ng th e me r i ts of A sp ect R es ou rces ’ arg umen ts

, w e reman d th is

matt er to th e co ur t of ap pe al to rev ie w th e co rrec tn es s of th e d i s mi s s a l of th e

reco nv en ti on al de mand s, an d as th at co ur t th en de ems ne ces sa ry an d ap pr op ria te

, th e

co ur t may reac h th e merit s of th e reco nv en ti on al de mand s, co ns is te nt w it h th e ru li ng s

in th is op in io n.

W e ag ree w it h th e co ur t of ap pe al

, ho w ev er, in pr et ermit ti ng co ns id erat io n of

th e merit s of O lym

pi a’ s cl ai ms f

or at to rn ey s’ f

ees

. W e f in d no erro r in th e co nc lu si on

th at O lym

pi a di d no t pr op erl y rai se th is is su e in th e di st ric t co ur t; an d, li ke th e co ur t

of ap pe al

, w e de cl in e to reac h th is is su e in th e f irs t in st an ce in th is co ur t.

A FF IR M E D IN PA R T ; R E V E R S E D IN PA R T ; A M E N D E D IN PA R T ;

A N D R E M A N D E D T O T H E C O U R T O F A PP E A L

.

46