Opinion ID: 2536409
Heading Depth: 1
Heading Rank: 6

Heading: Leases in effect

Text: Regarding the contract claims, the Marin Lease and the Surface Lease, as novated, were still in effect at the time of trial. The CBT Lease, under which the Breaux's purport to sue, was not in effect at the time of trial. Plaintiffs argue that as a lessee, Exxon has continuing obligations under both the mineral and surface lease that cannot prescribe as a matter of law. Exxon argues that any restoration obligations it may have under these leases do not go into effect until the lease is terminated, making any such claims premature. The plaintiffs' position is correct. A lessee's obligations under a mineral lease are governed by the Mineral Code and the Louisiana Civil Code. La. R.S. 31:2 (providing that the provisions of the Mineral Code are supplementary to the Civil Code and when the Mineral Code does not expressly or impliedly provide for a particular situation, the Civil Code or other laws are applicable). La. R.S. 31:122 provides: A mineral lessee is not under a fiduciary obligation to his lessor, but he is bound to perform the contract in good faith and to develop and operate the property leased as a reasonably prudent operator for the mutual benefit of himself and his lessor. Parties may stipulate what shall constitute reasonably prudent conduct on the part of the lessee. The Civil Code lease provisions require the mineral lessee to perform certain restoration obligations during the lease term, and these obligations are governed by Civil Code articles 2683, 2686, 2687, and 2692. [16] La. C.C. art. 2683 [17] defines the lessee's principal obligations as follows: The lessee is bound: (1) To pay the rent in accordance with the agreed terms; (2) To use the thing as a prudent administrator and in accordance with the purpose for which it was leased; and (3) To return the thing at the end of the lease in a condition that is the same as it was when the thing was delivered to him, except for normal wear and tear or as otherwise provided hereafter. La. C.C. art. 2686 provides [i]f the lessee uses the thing for a purpose other than that for which it was leased or in a manner that may cause damage to the thing, the lessor may obtain injunctive relief, dissolution of the lease, and any damages he may have sustained. La. C.C. art. 2687 directs that [t]he lessee is liable for damage to the thing caused by his fault or that of a person who, with his consent, is on the premises or uses the thing. Finally, La. C.C. art. 2692 provides [t]he lessee is bound to repair damage to the thing caused by his fault . . . and to repair any deterioration resulting from his . . . use to the extent it exceeds the normal or agreed use of the thing. While La. C.C. art. 2683 contains obligations that only arise at the end of the lease, i.e., to return the thing at the end of the lease in a condition . . ., there is absolutely no language to suggest that the other obligations imposed by these codal provisions are not operational until termination of the lease. These provisions continue throughout the term of the lease and a lessor need not wait until the end of the lease to sue a lessee for damage to his property. The damage in this case is the contamination of the soil and groundwater caused by Exxon's oil and gas operations on the leased property. Because the Marin Lease and the Surface Lease as novated were still in effect at the time of trial, the Marin plaintiffs' claims for damage to their property have not prescribed. The situation with the Breaux plaintiffs is different. Although it is unclear when the CBT Lease expired, the parties in brief indicate that this lease is no longer in effect and was not in effect at the time the suit was filed. It evidently was in effect at the time the Breauxs purchased their property, but there has been no evidence presented that the Breauxs were third party beneficiaries of the CBT Lease. Further, even assuming the Breauxs had a right to sue Exxon under the lease, this contractual action has prescribed. The prescriptive period on a personal action, such as an action for breach of a lease contract, is 10 years. La. C.C. art. 3499. As this contract claim has prescribed on its face, plaintiffs had the burden of proving it had not prescribed, and they failed to do so. [18]