Court Opinion

ID: 6329774
Source: CourtListenerOpinion
Date Created: 2022-04-12 22:11:04.768848+00
Date Added: 2024-06-11T09:22:56.629428
License: Public Domain

STATE OF LOUISIANA
                                    COURT OF APPEAL
                                     FIRST CIRCUIT

                                     DOCKET NUMBER
                                        2018 CA 1425

        CROSSTEX ENERGY SERVICES, LP; CROSSTEX LIG, LLC;
           AND, CROSSTEX PROCESSING SERVICES, LLC

                                            VERSUS

  rl
Az-                 TEXAS BRINE COMPANY, LLC, ET AL.

                                                       Decision Rendered:   APR 1 1 2022

                                      On Appeal from the
                                 23rd Judicial District Court
                               Assumption Parish, Louisiana
                                   Docket Number 34, 202

            Honorable Thomas J. Kliebert, Jr.,           Ad HocJudge Presiding

         Martin A. Stern                         Attorneys for Appellant/ Appellee/ Defendant
         Leigh Ann Schell                        Occidental Chemical Corporation
         Raymond P. Ward
         Alexandra Roselli
         Jeffrey E. Richardson
         New Orleans, Louisiana

         Kathy Patrick, pro hac vice
         Laura Kissel Cassidy, pro hac vice
         Samuel W. Cruse, III, pro hac vice
         Angus J. Dodson, pro hac vice
         Caitlin Halpern, pro hac vice
         Houston, Texas

         Richard Hymel
         Lafayette, Louisiana

         Brad D. Brian
         Bethany W. Kristovich
         Grant Davis -Denny
         Daniel B. Levin
         Los Angeles, California

         Christopher Friend
         Meghan Smith
         New Orleans, Louisiana

      IN e. S t e/ )         C o n C. v-, (' S
Martin A. Stern                      Attorneys for Appellant/ Appellee/ Defendant
Leigh Ann Schell                     Oxy USA Inc.
Raymond P. Ward
Alexandra Roselli
New Orleans, Louisiana

Kathy Patrick, pro hac vice
Laura Kissel Cassidy, pro hac vice
Samuel W. Cruse, III, pro hac vice
Caitlin Halpern, pro hac vice
Houston, Texas

Martin A. Stern                      Attorneys for Appellant/ Appellee/ Defendant
Leigh Ann Schell                     Occidental Petroleum Corporation
Raymond P. Ward
Alexandra Roselli
New Orleans, Louisiana

Kathy Patrick, pro hac vice
Laura Kissel Cassidy, pro hac vice
Samuel W. Cruse, III, pro hac vice
Caitlin Halpern, pro hac vice
Houston, Texas

Roy C. Cheatwood                     Attorneys for Appellant/ Appellee/ Defendant
Kent A. Lambert                      Legacy Vulcan, LLC
Tyler Weidlich
Adam B. Zuckerman
Matthew S. Chester
Colleen C. Jarrott
Matthew C. Juneau
Leopoldo J. Yanez
Lauren Brink Adams
Paul C. Thibodeaux
New Orleans, Louisiana

James M. Garner                      Attorneys for Appellant/ Appellee/ Defendant
Leopold Z. Sher                      Texas Brine Company, LLC
Peter L. Hilbert, Jr.
Martha Curtis
Jeffrey D. Kessler
Christopher T. Chocheles
David A. Freedman
Melissa R. Harris
Laurie A. Dearman
Rebekka C. Veith
Darnell Bludworth
New Orleans, Louisiana

Robert Ryland Percy, III
Gonzales, Louisiana

Travis J. Turner
Gonzales, Louisiana
Dane S. Ciolino
Metairie, Louisiana

                                      2
Royce I. Duplessis
New Orleans, Louisiana

James E. Kuhn
Ponchatoula, Louisiana

Leopold Z. Sher                Attorneys for Appellee/ Defendant
James M. Garner                United Brine Services Company, LLC
Peter L. Hilbert, Jr.
Christopher T. Chocheles
Jeffrey D. Kessler
Darnell Bludworth
David A. Freedman
Melissa R. Harris
Laurie A. Dearman
New Orleans, Louisiana

Robert Ryland Percy, III
Gonzales, Louisiana

Royce I. Duplessis
New Orleans, Louisiana

James E. Kuhn
Ponchatoula, Louisiana

Travis J. Turner
Gonzales, Louisiana

Dane S. Ciolino
Metairie, Louisiana

Shawn Carter                   Counsel for Appellees/ Defendants
Matthew Randazzo, III          Browning Oil Company, Colorado Crude
Christopher Bailey             Company, LORCA Corporation
Will Montz
Lafayette, Louisiana

Joseph L. Shea, Jr.            Counsel for Appellee/ Defendant
Katherine Smith Baker          Reliance Petroleum Corporation
Ashley G. Gable
Joshua S. Chevallier
Shreveport, Louisiana

Frank H. Spruiell, Jr.         Counsel for Appellee/ Defendant
Reid A. Jones                  Sol Kirschner
Seth M. Moyers
Anna W. O' Neal
Shreveport, Louisiana

    BEFORE:         McDONALD, THERIOT, and HESTER, 33.

                                3
McDONALD, J.

         Legacy Vulcan, LLC f/k/ a Legacy Vulcan Corp. and/ or Vulcan Materials

Company ( Legacy Vulcan),                Occidental      Chemical    Corporation (   Oxy),    Occidental

Petroleum Corporation (          Oxy Petro), OXY USA Inc. ( Oxy USA), and Texas Brine

Company, LLC ( Texas Brine) appeal a judgment determining causation, liability, and

apportionment of fault for the formation of a sinkhole and the damage it caused in

Assumption Parish, Louisiana.             United Brine Services Company, LLC (             UBS) filed an

answer in response to the appeals filed by Legacy Vulcan, Oxy, Oxy Petro, and Oxy

USA.     For the following reasons, we reverse in part, amend in part, and affirm in

part.   We deny UBS' s answer to the appeals.

                                FACTS AND PROCEDURAL HISTORY

         This appeal relates to one of several lawsuits arising from the August 3, 2012

sinkhole that developed near Bayou Come in Assumption Parish, Louisiana.                              The

plaintiffs in this suit, Crosstex Energy Services, LP, Crosstex LIG, LLC, and Crosstex

Processing Services, LLC, ( collectively Crosstex) operated a natural gas pipeline and

storage facility in the vicinity of the property affected by the sinkhole.                 In its original

petition for damages, Crosstex sought to recover damages for its unusable pipeline

and storage facility from Texas Brine, due to the alleged negligence of Texas Brine's

operation of the Oxy Geismar No. 3 Well ( OG3),                     which collapsed and created the

sinkhole.

         Two additional suits were filed against Texas Brine by affected pipeline

companies, namely Pontchartrain Natural Gas System v. Texas Brine Company, LLC,

23rd    Judicial     District   Court,   docket    no:    34, 265    and   Florida   Gas   Transmission

Company, LLC v. Texas Brine Company, LLC, 23rd Judicial District Court, docket no:

34, 316.       Although the claims asserted in these three pipeline cases are similar, the

parties resisted consolidation, except for purposes of trial.'                 The district court held

the liability trial for the three pipeline cases in the fall of 2017 for the purpose of

 Appeals were filed in each matter following the liability trial: Pontchartrain, 18- 1249 ( La. App. 1 Cir.
12/ 30/ 20),   317 So. 3d 715; Florida Gas, 18- 1391 ( La. App. 1 Cir. 5/ 3/ 21), 324 So. 3d 1090, and the
instant Crosstexappeal under our docket under 2018 CA 1425.
                                                      4
determining what caused the sinkhole and which parties, if any, were at fault under

any theory of law. All other issues were reserved for subsequent trials.

        The district court signed a judgment pertaining to liability on December 21,

2017, finding Oxy, Texas Brine, and Legacy Vulcan liable for the formation of the

sinkhole.   The district court apportioned fault as follows: 50% to Oxy, 35% to Texas

Brine, and 15%    to Legacy Vulcan. In its written reasons, the district court concluded

that the sinkhole was caused, in various degrees, by three factors: (        1) the cavern' s

proximity to the edge of the salt dome resulting in an unreasonably thin cavern wall

and an eventual brine leak; ( 2) the substantial depressurization of the OG3 cavern

caused by brine leaking from the cavern into the AH -1 reservoir ( associated with a

neighboring oil and gas well);   and ( 3) the timing of the plugging and abandoning of

the OG3.

        Several parties then filed motions for new trial, primarily challenging the

apportionment of fault and the language of the judgment.               After a contradictory

hearing on the motions and taking the matter under advisement, the district court

granted the motions in part and denied them in part.       In a judgment signed on April

18, 2018, the district court reapportioned fault as follows: 40% to Oxy, 5% to Oxy

Petro, 5%     to OXY USA, 25% to Texas Brine, 10%          to UBS, and 15%        to Legacy

Vulcan.     From this judgment, Legacy Vulcan, Oxy, Oxy Petro, Oxy USA, and Texas

Brine appeal.   UBS answered the appeals filed by all but Texas Brine.

                     Additional Issues in the Crosstex Appeal

        Unlike in Pontchartrain and Florida Gas, after the instant appeal was lodged,

the Louisiana Supreme Court ordered Texas Brine and Oxy to participate in a

separate trial regarding Texas Brine' s fraud claims against Oxy,          which had been

dismissed via summary judgment prior to the liability trial. Crosstex Energy Services,

LP v.     Texas Brine Company, LLC, 18- 1128 (    La.   10/ 29/ 18),   255 So. 3d 587 (   per

curiam).     Because of the procedural posture of the case at the time Texas Brine

sought to set a date for the fraud trial, a panel of this court found that the district

court had been divested of jurisdiction over liability issues, which included fraud

claims, by virtue of the order of appeal entered by the district court. Accordingly,
                                            5
this court vacated the order setting the trial on the fraud claims until this appeal was

final.   Crosstex Energy Services, LP v, Texas Brine Company, LLC, 19- 0089 ( La. App.

1 Cir. 6/ 13/ 19), 2019 WL 2487494 (          unpublished).       The Louisiana Supreme Court

once again granted writs in part as follows:

         Granted in part.   Considering our order in Crosstex Energy Services, LP
         v. Texas Brine, Co., LLC, 2018- 1128 ( La. 10/ 29/ 18), 255 So. 3d 587, the
         judgment of the court of appeal is vacated insofar as it finds the district
         court is divested of jurisdiction to consider Texas Brine' s fraud -based
         claims in the Crosstex matter.          We hereby grant a limited remand of
         the Crosstex appeal in order to permit the district court to conduct the
         trial, as scheduled, of Texas Brine' s fraud -based claims in the Crosstex
         matter only. In all other respects, the writs are denied.

Florida Gas Transmission Company v. Texas Brine Company, LLC, 19- 0978 (                        La.
6/ 18/ 19), 275 So. 3d 266 ( per curiam).

         It is undisputed that after the above Supreme Court actions, the district court

conducted a fraud trial in the summer of 2019, and that trial remains unconcluded as

the parties have spent over two years in a post -trial discovery debacle.

         Although Texas Brine asserts that this post -liability trial activity affects this

appeal immensely, we disagree.          As this court has noted previously, the Louisiana

Supreme Court made no mention regarding the arbitrability of claims in either per

curiam opinion,    nor did it order a stay of the appeal of the liability trial judgment

pending the fraud trial, or otherwise divest this court's jurisdiction from acting on the

liability trial appeal. Rather, it is this court's view that the second per curiam opinion

split the issue of fraud from the appeal of the liability trial judgment in order for the

district court to complete a separate and distinct trial on the fraud claims, while

jurisdiction   regarding    the   liability   trial    judgment    remained    with   this   court.

Accordingly, we deny Texas            Brine' s    exception   of   res   judicata   regarding   the

arbitrability of tort claims; Texas Brine and UBS' s motions to stay this appeal pending

the outcome of the fraud trial;        Oxy, Oxy Petro, and Oxy USA' s motion to set a

deadline to file an opposition to Texas Brine' s motion to stay; and, Texas Brine' s

motion to remand this appeal due to the fraud trial.

                                                   2
                                       ANALYSIS

       Another panel of this court decided a nearly identical appeal in Pontchartrain

Natural Gas System      v.   Texas Brine Company, LLC, 18- 1249 (          La.   App. 1 Cir.

12/ 30/ 20), 317 So. 3d 715, writs denied, 21- 00382, 21- 00386 ( La. 6/ 8/ 21), 317 So. 3d

323.   Although that case involved different plaintiffs, the same April 2018 liability

judgment, evidence, assignments of error, and factual and legal considerations at

issue here were at issue in Pontchartrain. This court thoroughly discussed the

procedural history of the case, the evidence presented at trial,          and analyzed the

applicable legal principles -   all of which we adopt by reference here.            Id.   The

Pontchartrain court affirmed the district court's conclusion that the sinkhole was

caused by a combination of the closeness of the cavern to the edge of the salt dome,

which resulted in an unreasonably thin cavern wall and eventual brine leak, and the

plugging and abandoning of the OG3. Id, at 749- 50. However, this court concluded

that the district court manifestly erred by finding that the presence of the AH -1

reservoir was a cause -in -fact of the collapse of the OG3 cavern.       Id. at 748.   Finally,

this court determined that the milling procedure and pressurization of the OG3 in

2010, performed in anticipation of a mechanical integrity test ( MIT),     exacerbated any

damage or leak already present within the cavern.      Id, at 757- 58.

       The only basis to allocate fault to Oxy Petro and Oxy USA was their

relationship to the AH -1 well and reservoir. Id, at 748- 49, 760. Similarly, a portion

of fault allocated to Oxy also stemmed from the AH -1.      Id. at 760.    Upon finding the

AH -1 reservoir was not a causative factor, the Pontchartrain court concluded that

Oxy Petro and Oxy USA were not liable and that Oxy' s percentage of fault should be

reduced.   Id.

       The Pontchartrain court gave in depth consideration to the remaining parties'

duties and their relationships with each other and the OG3, all of which we adopt by

reference here.   After its analysis, the Pontchartrain court affirmed the district court' s

remaining duty/ breach determinations but also concluded that the district court

manifestly erred to the extent it failed to find that Texas Brine breached its duty to

act as a prudent operator when it milled and pressurized the OG3.           Id. at 759.   The
Pontchartrain court then         reversed      and       amended    the   April    2018 judgment to

reallocate fault, reducing Oxy's fault to 30% and increasing Texas Brine' s fault to

45%.     Id. at 762, 763.      The Pontchartrain court also affirmed the district court's

allocation of 15%     fault to Legacy Vulcan.        Id. at 761.    Finally, because UBS's answer,

wherein it sought a modification of the judgment, was untimely, the Pontchartrain

court affirmed the judgment against UBS without discussion of the merits of the

arguments raised in the answer.            Id. at 759.

        Thereafter,    in   Florida   Gas      Transmission Company,              LLC   v.   Texas Brine

Company, LLC, 18- 1391 ( La. App. 1 Cir. 5/ 3/ 21),           324 So. 3d 1090, writs denied, 21-

00770, 21- 00773 ( La.      10/ 19/ 21),    326 So. 3d 255, 260, while considering a nearly

identical appeal, this court adopted the aforementioned Pontchartrain decision, and

thoroughly reviewed the merits of UBS' s answer which was found to be timely. Id.

at 1094.    After careful consideration, the Florida Gas court found that the record

supported the conclusion that UBS was at fault for causing the sinkhole and affirmed

the allocation of 10% fault for its actions.         Id, at 1097.

        Due to the indistinguishable nature of the appeals taken in the present matter,

Pontchartrain, and Florida Gas, we adopt the Pontchartrain and Florida Gas courts'

factual findings,     legal conclusions and holdings concerning arbitration,                  causation,

duty, and breach, as well as the liability determinations and fault allocations as to

Legacy Vulcan, Oxy, Oxy Petro, Oxy USA, Texas Brine and UBS. 2 See Pontchartrain

Natural Gas System v. Texas Brine Company, LLC, 18- 0001 ( La. App. 1 Cir. 6/ 4/ 18),

253 So. 3d 156, 156, writ denied, 18- 1124 ( La. 9/ 28/ 18), 253 So. 3d 147 ( recognizing

that,   where   a   subsequent     appeal      involves     the   same    background,        issues,   and

assignments of error that this court has already thoroughly discussed, we are bound

by the " law of the circuit doctrine" to follow the prior opinion.)

        Therefore,    we find the district court was manifestly erroneous in its fault

allocation to Oxy, Oxy Petro, Oxy USA, and Texas Brine.                    We reallocate fault such

that Oxy shall bear 30%        fault, Texas Brine shall bear 45%            fault, and Oxy USA and

z We likewise adopt the Pontchartrain court's conclusion that the district court was not manifestly
erroneous in declining to allocate fault to Dr. Joseph Ratigan, a geological engineer who frequently
provided opinions and analysis concerning the OG3. Pontchartrain, 317 So. 3d at 763, n. 34.

                                                     0
Oxy Petro shall bear no fault.                Finally, we find no error in the district court's

allocation of 15%       fault to Legacy Vulcan and 10% fault to UBS. 3

          We further dispose of all pending motions and exceptions filed with this court

by adopting the rulings made in Pontchartrain, 317 So. 3d 715, and Florida Gas, 324

So. 3d     1090,   as the motions and exceptions filed in this appeal are materially

indistinguishable from those considered in those appeals.4

                                             CONCLUSION

           For the reasons fully set forth in this opinion, in Pontchartrain, 317 So. 3d 715,

and in Florida Gas, 324 So. 3d 1090, we reverse in part, amend in part, and affirm in

part the district court's April 18, 2018 judgment.                We reverse that portion of the

judgment allocating 5% fault to Occidental Petroleum Corporation. We reverse that

portion of the judgment allocating 5% fault to Oxy USA Inc.

          We amend that portion of the judgment that allocated 40% fault to Occidental

Chemical Corporation to reflect the allocation of 30% fault to Occidental Chemical

Corporation.       We further amend that portion of the judgment that allocated 25%

fault to Texas Brine Company, LLC to reflect the allocation of 45%                      fault to Texas

Brine Company, LLC.

          We affirm the remainder of the district court's judgment, allocating 15% fault

to Legacy Vulcan, LLC f/k/ a Legacy Vulcan Corp. and/ or Vulcan Materials Company

3 We therefore deny as moot, Oxy, Oxy Petro and Oxy USA' s exception of res judicata regarding UBS's
answer; Oxy's exception of res judicata regarding the issue of arbitration; Legacy Vulcan' s exception
of res judicata, Legacy Vulcan' s motion to supplement the appellate record in connection with its
exception of res judicata, and Legacy Vulcan' s motion to set deadline to file opposition to its exception
of res judicata.

4
    Specifically, we adopt the disposition set forth in Florida Gas, 324 So. 3d at 1098, n. 7, denying, as
moot, Texas Brine's February 12, 2021 and March 22, 2021 motions to strike the letters filed by the
three Oxy entities pursuant to Uniform Rules of Louisiana Courts of Appeal, Rule 2- 12. 6. 1.

We further adopt the dispositions set forth in Pontchartrain, 317 So. 3d 715, denying the following:
 1) Oxy, Oxy Petro, Oxy USA, and Legacy Vulcan' s motion to consolidate the three liability appeals
appearing in docket numbers 2018 CA 1249, 2018 CA 1391 and 2018 CA 1425. Id. at 724, n. 3.
 2) Oxy, Oxy Petro, and Oxy USA' s motion to consolidate the Phase I liability appeals. Id.
    3) Texas Brine' s motion to strike Oxy's response to per curiam. Id. at 744, n. 28.
    4) Texas Brine's motion to stay Phase I appeal considering supplemental production of documents by
Legacy Vulcan. Id. at 763, n. 35.
 5) Texas Brine' s motion for limited remand regarding reallocation of fault due to newly produced
documents by Legacy Vulcan. Id.

We likewise adopt the disposition in Pontchartrain, 317 So. 3d at 763, n. 35, granting Oxy's motion to
supplement illustrations for its original brief.
                                                     9
and 10%     fault to United Brine Services Company,    LLC.    We deny United Brine

Services Company, LLC' s answer to the appeals.

      We issue this memorandum opinion in accordance with Uniform Rules of

Louisiana Courts of Appeal, Rule 2- 16. 1B.   Each party shall bear its own costs on

appeal.

          REVERSED   IN   PART;   AMENDED      IN   PART;     AFFIRMED   IN   PART;
ANSWER TO APPEALS DENIED.

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