Opinion ID: 1108486
Heading Depth: 1
Heading Rank: 4

Heading: Remaining Genuine Factual Issues

Text: Chevron and PPG claim that no genuine issues of material fact exist regarding PPG's entitlement to receive all of the royalties derived from Unit Tract 1. According to Chevron and PPG, the mineral rights on all of the property that constitutes Unit Tract 1 are owned by PPG. Ownership of all that property was conveyed to BLD by the State in 1938, Chevron and PPG assert. Further, they claim, the conveyance from the State to BLD, PPG's predecessor, did not except any mineral rights, so that the mineral rights were indeed conveyed along with the property. When BLD was consolidated with and merged into PPG in 1975, PPG became the owner of the property and the mineral rights, Chevron and PPG claim. The State disputes the assertions of Chevron and PPG by making two arguments. First, the State claims that, assuming that the property was dry land in 1938 when it was transferred to the BLD, the property, at the time of this suit, included water bottoms inundated by the open waters of the Gulf of Mexico. Such water bottoms, the State argues, belong to the State, as a matter of law. La.Rev. Stat. 9:1101; Miami Corp. v. State, 186 La. 784, 173 So. 315, 322 (1936). Thus, the State claims, the portions of Unit Tract 1 that were dry land at the time of 1938 conveyance and thus were properly conveyed to BLD, reverted to the State's ownership when they became inundated by water. Alternatively, the State contends that several water bottoms were present in Unit Tract 1 in 1938, and that those water bottoms, at least, were never conveyed to BLD. [12] In support of this argument, the State points to the fact that the 1954 conveyance, which corrected and superseded the 1938 conveyance, [e]xcepted therefrom. . . the bayous, lagoons, lakes, and bays and the beds thereof, under authority of R.S. 9:1101. The State further asserts that the portions of Unit Tract 1 that consisted of water bottoms at the time of the 1938 conveyance could not have been transferred to BLD because the State was and is constitutionally prohibited from alienating water bottoms by La. Const. art. IX, § 3. [13] In the Tract 87 litigation, the State made an argument similar to its first argument herein. The State asserted in the Tract 87 litigation that it had the authority to grant a mineral lease on Tract 87 because, although the State conceded that Tract 87 was dry land in 1938, that tract had since become inundated by the waters of the Gulf of Mexico, at which time ownership of the property reverted to the State. The court of appeal disposed of that argument in the Tract 87 litigation by noting that [o]wnership of `land' and ownership of mineral rights in such land are not necessarily one and the same. Plaquemines Parish Gov't, 01-1027 at ___, 826 So.2d at 20. The court of appeal found as follows: La. R.S. 9:1152 clearly applies to the circumstances of the instant case. The BLD granted a mineral lease on land that later became water bottoms. While the State is now the owner of the water bottoms (due to the fact that somehow Tract 87 is now under the open waters of the Gulf of Mexico), the mineral rights are retained by PPG (successor to the BLD) as long as its lease granted in 1938 is in effect. Id. at 9-10, 826 So.2d at 22. We find that the court of appeal correctly concluded in the Tract 87 litigation that the reversion of ownership to the State of dry land in 1938 that is now inundated by water does not control the issue of entitlement to the royalties from the Chevron lease. Under La.Rev.Stat. 9:1152(A), [14] property that reverts to the State's ownership is subject to an imprescriptible and inalienable mineral servitude in favor of the agency or political subdivision that granted a mineral lease when it had the right to do so. For the same reason that the court of appeal found in the Tract 87 litigation that the State did not own the mineral rights to any part of Tract 87 that was dry land in 1938, any part of Unit Tract 1 that was dry land in 1938 was property conveyed to BLD, and BLD therefore had the right to grant the mineral lease affecting that property to Chevron. The ownership of the water bottoms on any part of the Unit Tract 1 that later became inundated by the waters of the Gulf of Mexico did in fact revert to the State. However, BLD continued to enjoy the imprescriptible and inalienable servitude granted by La.Rev.Stat. 9:1152, and BLD is entitled to the royalties from that property. Thus, there is no merit to the State's argument that it is entitled to receive the royalties from any part of Unit Tract 1 that has, since 1938, become inundated by the waters of the Gulf of Mexico. However, La.Rev.Stat. 9:1152 does not address the State's alternative argument that it is entitled to receive the royalties derived from portions of Unit Tract 1 that were water bottoms at the time of the 1938 conveyance such that the mineral rights were never transferred to BLD because those portions of the property were not included in the 1938 conveyance. The Tract 87 litigation did not address this issue, nor have the parties pointed to any cases in which a Louisiana court has addressed this issue. Thus, the State's alternative argument regarding its entitlement to royalties on portions of Unit Tract 1 that were water bottoms in 1938 raises an unanswered question that may have merit. Chevron and PPG assert however that the attachments to their motions for summary judgment are sufficient to show that no genuine issue of material fact remains regarding whether there existed water bottoms in Unit Tract 1 at the time of the 1938 conveyance. In support of this argument, they point primarily to the affidavit of George J. Castille III. After setting forth his qualifications and his methodology, Mr. Castille's affidavit states as follows: I concluded from my review and analysis of these data that as of the time of transfer of this Tract 1 area into the Buras Levee District in September of 1938, the entirety of the area, which is now designated as Tract 1 in Exhibit 1, was land at the time of the transfer. On this issue, the State attached to its opposition to the motions for summary judgment filed by Chevron and PPG, the affidavit of John P. Evans, Jr., P.L.S., Chief of Titles, Surveys and GIS with the State of Louisiana, Division of Administration  Office of State Lands. Mr. Evans stated, in pertinent part, as follows: As to the search and examination conducted, Appearer attests that the maps attached hereto as Exhibit 1 though 6 are the most significant of the United States Geological Survey quadrangle maps on file with the Office of State Lands which are pertinent to Unit Tract 1 and which depict Little Pass de Wharf, as well as other small lakes and lagoons, as traversing and/or situated upon Unit Tract 1. The court of appeal in this case gave only scant attention, that was hardly persuasive, to this issue, stating as follows: [T]o the extent that Tract 1 may have contained certain bodies of water, we note that the 1938 transfer specifically excluded the bayous, lagoons, lakes, and bays and beds thereof under authority of La. R.S. 9:1101. Therefore, the fact that these types of water bodies may have been present in Tract 1 at the time of the initial transfer is of no moment. Chevron U.S.A., Inc., 07-0673 at 5, 972 So.2d at 368 (emphasis added). As indicated by the above highlighted statement, the court of appeal apparently found that a factual issue remains in this case regarding the possible existence of water bottoms on Unit Tract 1 in 1938, but nevertheless concluded that that remaining factual issue was not genuine because the existence of such water bottoms is of no moment, whatever that was intended to mean. Thus, the court of appeal concluded that the existence of this conceded factual issue did not prevent the granting of summary judgment. Although we agree with the court of appeal's apparent finding that a factual issue remains, we disagree with its conclusion that the remaining factual issue is not genuine because the possible existence of water bodies in 1938 is of no moment. In fact, that remaining factual issue is perhaps the most important issue in the case. The existence of water bottoms in Unit Tract 1 at the time of the 1938 conveyance is certainly of serious consequence regarding the State's entitlement to any part of the royalties being derived from that tract because any water bottoms that existed on Unit Tract 1 at the time of the 1938 transfer were excepted from the transfer by the 1954 supplemental conveyance, such that ownership of the water bottoms has always been vested in the State. We find that a genuine issue of material fact remains in this case regarding the existence of water bottoms in Unit Tract 1 at the time of the 1938 transfer and that summary judgment is therefore not appropriate. And that is so for the reasons more fully stated in the immediately preceding paragraph of this opinion.