Court Opinion

ID: 37816
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:58:44+00
Date Added: 2024-06-11T17:15:48.350840
License: Public Domain

United States Court of Appeals
                                                                                       Fifth Circuit
                                                                                     F I L E D
                           UNITED STATES COURT OF APPEALS
                                                                                    February 24, 2005
                                    FIFTH CIRCUIT
                                                                                 Charles R. Fulbruge III
                                       _________________                                 Clerk
                                           No. 04-30987

                                       (Summary Calendar)
                                       _________________

HARRY BOURG CORPORATION,

                               Plaintiff - Appellant,

versus

DENBURY ONSHORE LLC, formerly Denbury Resources Incorporated,

                               Defendant - Appellee.

                           Appeals from the United States District Court
                              For the Eastern District of Louisiana
                                   USDC No. 2:04-CV-379-L

Before GARZA, DeMOSS, and CLEMENT, Circuit Judges.

PER CURIAM:*

         Appellant, Harry Bourg Corporation (“HBC”), appeals the district court’s grant of summary

judgment for Denbury Onshore LLC (“Denbury”). The case arises out of a dispute concerning the

         *
               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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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.
interpretation of an Oil, Gas, and Mineral Lease (“Lease”) entered into by HBC and Denbury on

December 31, 2002. The Lease included a clause that stipulated that it would terminate on December

31, 2003 unless the lessee, Denbury, had undertaken one of two alternative courses of action: (1)

conducted drilling operations, or (2) paid a delay rental to the lessor. The district court held that the

failure of Denbury to undertake either course of action resulted in the termination of the Lease by its

clear terms.

        We review the district court’s order granting summary judgment de novo. Melton v. Teachers

Inc. & Annuity Ass’n of America, 114 F.3d 557, 559 (5th Cir. 1997). Summary judgment is proper

if the pleadings, depositions, answers to interrogatories, and admissions on file, together with any

affidavits filed in support of the motion, show that there is no genuine issue as to any material fact

and that the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c); Celotex

Corp. v. Catrett, 477 U.S. 317, 322 (1986). In reviewing the record, we do so in the light most

favorable to the non-moving party and the non-moving party is entitled to all reasonable inferences

that may be drawn from the facts. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).

        Louisiana law applies to this case and provides that a contract is the law between the parties

and is read for its plain meaning. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Circle, Inc., 915

F.2d 986, 989 (5th Cir. 1990). “When the words of a contract are clear and explicit and lead to no

absurd consequences, no further interpretation may be made in search of the parties’ intent.” LA CIV.

CODE ANN. art. 2046 (2004). The Lease between HBC and Denbury contained a habendum clause

that stipulated a prescribed term of three years that the Lease would remain in effect, and “for as long

thereafter as oil, gas, or other mineral is produced in paying quantities.” This primary term of the

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contract, however, was modified by several provisions, including the clause in the Lease in question

that states:

        1. This lease shall terminate on the 31st day of December, 2003, unless on or before said date
        the LESSEE (1) has drilled and/or is drilling a sufficient number of wells to maintain . . . the
        entirety of the leased premises, or (2) . . . pays to the LESSOR a rental of $400.00 per acre
        for all or that portion of the land which LESSEE holds hereunder . . .

We agree with the district court that this clause is clear and unambiguous and specifically

contemplated that Denbury had the option at the expiration of the first year of the contract to

maintain the Lease by either conducting drilling operations or paying delay rentals. Because Denbury

failed to undertake either course of action, the Lease terminated. Accordingly, the judgment of the

district court is AFFIRMED.

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