Court Opinion

ID: 4440158
Source: CourtListenerOpinion
Date Created: 2019-09-20 18:00:19.427026+00
Date Added: 2024-06-11T14:51:46.262503
License: Public Domain

Case: 18-31107      Document: 00515126237         Page: 1    Date Filed: 09/20/2019

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT United States Court of Appeals
                                                   Fifth Circuit

                                                                          FILED
                                                                    September 20, 2019
                                      No. 18-31107
                                                                       Lyle W. Cayce
                                                                            Clerk
CYNTHIA SUE MARY; PAUL’S LAND COMPANY, L.L.C.,

                                Plaintiffs - Appellants,
v.

QEP ENERGY COMPANY, formerly known as Questar Exploration &
Production Company,

                                 Defendant - Appellee.

                   Appeal from the United States District Court
                      for the Western District of Louisiana
                             USDC No. 5:13-CV-2195

Before SOUTHWICK, WILLETT, and OLDHAM, Circuit Judges.
PER CURIAM:*
       Plaintiffs claim that defendant’s oil and gas pipelines unlawfully extend
onto Plaintiffs’ property. They seek the profits derived from those pipelines.
The district court held Plaintiffs had not demonstrated that the energy
company acted in bad faith—a pre-requisite to the right of disgorgement under
Louisiana law—and dismissed the claim.               We conclude the district court
applied the wrong legal standard. So we reverse and remand.

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
     Case: 18-31107      Document: 00515126237        Page: 2     Date Filed: 09/20/2019

                                     No. 18-31107
                                            I.
      Between 2006 and 2011, Defendant QEP Energy Company (“QEP”)
entered into various agreements with Plaintiffs to explore for, extract, and
transport oil and gas on Plaintiffs’ 160-acre property. 1                 One of these
agreements, the October 2011 Pipeline Servitude Agreement, 2 permitted QEP
to connect pipelines beyond Plaintiffs’ property to pipelines on the property.
But one of QEP’s pipelines extended beyond the servitude by 31 feet, and
another by 15 feet.
      Plaintiffs sued QEP in state court, claiming QEP made these deviations
in bad faith. Plaintiffs sought disgorgement of QEP’s profits or an order
permitting them to remove the pipelines. QEP removed the case to the federal
district court, which granted partial summary judgment to QEP. After the
remaining claims were dismissed with prejudice, Plaintiffs appealed the grant
of summary judgment.
                                            II.
      “We review de novo a summary judgment, applying the same standard
as the district court.” Lamb v. Ashford Place Apartments L.L.C., 914 F.3d 940,
943 (5th Cir. 2019) (quotation marks and ellipsis omitted).                Because this
diversity case raises issues of Louisiana law, we make an “Erie guess” as to
how the Louisiana Supreme Court would rule, if it has not already ruled on
the issues. Gulf & Miss. River Transp. Co., Ltd. v. BP Oil Pipeline Co., 730
F.3d 484, 488 (5th Cir. 2013).

      1  The first agreement, in 2006, was signed by Whitmar Exploration Company
(“Whitmar”), rather than QEP. Whitmar assigned its rights under that agreement to QEP
in 2007.
       2 A servitude is the same as a common law easement. Morein v. Acme Land Co., 2016-

95, 2016 WL 10822278, at *4 (La. App. 3 Cir. 7/6/16) (citing Humble Pipe Line Co. v. Wm. T.
Burton Indus., Inc., 217 So. 2d 188 (La. 1968)).
                                            2
    Case: 18-31107      Document: 00515126237    Page: 3   Date Filed: 09/20/2019

                                  No. 18-31107
      Both sides agree that Plaintiffs’ claim turns on Louisiana Civil Code
Article 486. That Article provides:
      A possessor in good faith acquires the ownership of fruits he has
      gathered. If he is evicted by the owner, he is entitled to
      reimbursement of expenses for fruits he was unable to gather.
      A possessor in bad faith is bound to restore to the owner the fruits
      he has gathered, or their value, subject to his claim for
      reimbursement of expenses.
La. Civ. Code art. 486. The parties disagree, however, on the legal standard
for finding “good faith,” as that term is used in Article 486.
      The parties point to two potential statutory solutions to their
disagreement: Article 487 and Article 670 of the Civil Code. The district court
chose the latter. We first explain why that is wrong. Then we explain why
Article 487 is right.
                                        A.
      The district court held that Article 670 supplies the legal rule for finding
good faith in this dispute. Article 670 provides:
      When a landowner constructs in good faith a building that
      encroaches on an adjacent estate and the owner of that estate does
      not complain within a reasonable time after he knew or should
      have known of the encroachment, or in any event complains only
      after the construction is substantially completed the court may
      allow the building to remain.
La. Civ. Code art. 670 (emphasis added). By its terms, the Article applies only
to the construction of a building by a landowner. Under Louisiana law, a
servitude holder (like QEP) is not a “landowner.” See Creel v. S. Nat. Gas Co.,
2003-1761, 917 So. 2d 491, 500 (La. App. 1 Cir. 10/14/05). And a pipeline is not
a “building”—not in the ordinary sense of the word, and not as it is used in
Article 670. See 4 A.N. YIANNOPOULOS & RONALD J. SCALISE, LOUISIANA CIVIL
LAW TREATISE, PREDIAL SERVITUDES § 2:10 (4th ed. 2018) [hereinafter
YIANNOPOULOS ON SERVITUDES]; Serhan v. Jeane, 2016-110, --- So.3d ---, 2016

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                                       No. 18-31107
WL 6301281, at *5 (La. App. 3 Cir. 9/28/16) (refusing to apply Article 670 to an
encroaching driveway “as it was not a building”); Lakeside Nat’l Bank of Lake
Charles v. Moreaux, 576 So. 2d 1094, 1096 (La. App. 3d Cir. 1991) (forms of
construction other than buildings only fall within the scope of Article 670 if
they are “component parts of [a] building”).
       In reaching the contrary conclusion, the district court relied primarily on
one of its own earlier decisions—SGC Land, LLC v. La. Midstream Gas Servs.,
939 F. Supp. 2d 612 (W.D. La. 2013). SGC held that a pipeline was a building.
See id. at 620. That erroneous holding currently binds only the parties to that
case. It should stay that way. See YIANNOPOULOS ON SERVITUDES § 2:10 n.40
(citing the decision below and SGC as “clear examples of unwarranted
extensions of article 670”). 3
                                             B.
       In our view, the meaning of “good faith” in Article 486 comes from the
Article that immediately succeeds it—namely, Article 487. The latter provides:
       For purposes of accession, a possessor is in good faith when he
       possesses by virtue of an act translative of ownership and does not
       know of any defects in his ownership. He ceases to be in good faith
       when these defects are made known to him or an action is
       instituted against him by the owner for the recovery of the thing.
La. Civ. Code. art. 487.
       In our view, this dispute involves an “accession” under Article 487. For
the most part, Louisiana law designates “material or intangible objects that
are susceptible of appropriation” as “things.” 2 A.N. YIANNOPOULOS & RONALD
J. SCALISE, LOUISIANA CIVIL LAW TREATISE, PROPERTY §§ 2:1, 2:4 (5th ed. 2019)
[hereinafter YIANNOPOULOS ON PROPERTY].                     Land is a “thing.”           See

       3 The district court also relied on the equitable power afforded courts under Louisiana
Civil Code Article 4. But Article 4 is engaged only “[w]hen no rule for a particular situation
can be derived from legislation or custom.” La. Civ. Code art. 4. As explained in the next
section, Article 487 provides the rule in this case, so Article 4 does not apply.
                                              4
     Case: 18-31107        Document: 00515126237       Page: 5   Date Filed: 09/20/2019

                                    No. 18-31107
YIANNOPOULOS ON PROPERTY § 7:8. And ownership of a “thing” confers on the
owner “the ownership of everything that [the thing] produces or is united with
it, either naturally or artificially.” La. Civ. Code art. 482. These secondary
“things” are known as “accessories.” Id. at cmt. (b). And the right of ownership
over a thing by virtue of it being an accessory is known as “accession.” See La.
Civ. Code art. 482. An owner is entitled to profits from a “thing” because profits
are a type of accessory known as “fruits.” See Aertker v. Placid Holding Co.,
No. 07-473, 2012 WL 4472002, at *6 (M.D. La. Sept. 27, 2012) (citing
Rosenthal-Brown Fur Co. v. Jones-Frere Fur Co., 110 So. 630, 633 (La. 1926));
YIANNOPOULOS ON PROPERTY § 2:26.           To put it another way, “fruits derived
from a thing . . . belong to the owner of the thing by accession.” YIANNOPOULOS
ON PROPERTY §     11:17.
       Here, the parties are fighting over the fruits (profits) of a thing (land) in
which the pipelines are located. These profits accrue to the owner of the land
because they are accessories of the land itself. In other words, they accrue by
accession. Article 486 tells us that those profits belong to “[a] possessor in good
faith.” And, because accession is involved, Article 487 supplies the relevant
definition of good faith. See Aertker, 2012 WL 4472002, at *3 (applying Article
487 to assess the good faith of the owner of a pipeline that extended onto
plaintiff ’s land).
                                    *     *        *
       The district court’s grant of summary judgment to QEP is REVERSED,
and the case is REMANDED for further proceedings consistent with this
opinion.

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