Court Opinion

ID: 34788
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:20:16+00
Date Added: 2024-06-11T14:56:58.496993
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                      FOR THE FIFTH CIRCUIT

                      ____________________

                           No. 97-30170
                      _____________________

In The Matter Of: LANDFINDERS, INC;
EDWARD P. BENJAMIN, JR;
FIRST NATIONAL BANK OF COMMERCE OF
NEW ORLEANS; LANDOWNER’S INTEREST, INC.,

                                                         Debtors.

LANDFINDERS, INC.; LANDOWNER’S
INTEREST, INC.; EDWARD B. BENJAMIN, JR.;
FIRST NATIONAL BANK OF COMMERCE OF
NEW ORLEANS; CATHERINE CARMEN COLE PETTY,

                                                      Appellants,

                             versus

ENERGY INVESTMENT COMPANY; MICHAEL T.
HALBOUTY ENERGY COMPANY; ROWAN
PETROLEUM, INC.; TEXACO, INC.; LEA
EXPLORATION INC.,

                                                        Appellees.
******************************************************************
EDWARD B. BENJAMIN, JR., Co-Trustee for
the Class Trust of the children of
Harris P. Dawson, Jr., under the will of
Jennie P. Dawson; FIRST NATIONAL BANK OF
COMMERCE OF NEW ORLEANS, Co-Trustee for
the Class Trust of the children of
Harris P. Dawson, Jr., under the will of
Jennie P. Dawson,

                                                      Appellants,

                             versus

ENERGY INVESTMENT CO.; MICHAEL T.
HALBOUTY ENERGY COMPANY; ROWAN PETROLEUM,
INC.; TEXACO, INC.; LEA EXPLORATION, INC.,

                                                        Appellees.
******************************************************************
EDWARD B. BENJAMIN, JR.; FIRST NATIONAL
BANK OF COMMERCE OF NEW ORLEANS,
Co-Trustee for the Class Trust of the
children of Harris P. Dawson, Jr.,
under the will of Jennie P. Dawson;
LANDFINDERS, INC.,

                                                      Appellants,

                             versus

TEXACO, INC.; MICHAEL T. HALBOUTY
ENERGY CO.; LEA EXPLORATION, INC.;
ENERGY INVESTMENT CO.; ROWAN PETROLEUM,
INC.,

                                                       Appellees.
_________________________________________________________________

      Appeal from the United States District Court for the
                   Middle District of Louisiana
             (96-CV-257, 96-CV-256 & 96-CV-255-B-M1)
_________________________________________________________________
                         November 14, 1997
Before JOLLY, DAVIS, and BARKSDALE, Circuit Judges.

PER CURIAM:*

     This appeal involves the interpretation of certain mineral

leases.   While we accord the leases an interpretation different

from that of the trial court, we reach the same end result.

Because the trial court committed no reversible error, we affirm.

     *
      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.

                               -2-
                                        I

                                        A

      As did the trial court, we hold that the leases at issue in

this case are unambiguous and we will thus accord the language used

in the leases its commonly prevailing meaning.                Principal Health

Care of Louisiana, Inc. v. Lewer Agency, Inc., 38 F.3d 240, 243

(5th Cir. 1994) (construing Louisiana law); Breland v. Schilling,

550 So. 2d 609, 610 (La. 1989).             The bankruptcy court found that

Lea breached its obligation under Paragraph 47 of the leases to

interrupt the prescription of nonuse running against SSA and that

Paragraphs 48 and 52 were stipulated damages provisions that set

out Landfinders’ sole remedy against Lea for such breach.                    This

interpretation was in error.

      Paragraph 47 does not impose an unconditional obligation upon

Lea   to    interrupt     prescription.       Indeed,   the     contract   itself

recognized that Lea might not accomplish the goal of prescription

interruption. Paragraph 48 specifically provided that “[i]f, on or

before November 24, 1986, Lessee has determined that it is not

possible for him to comply with the performance obligations [of

Paragraph 47],” then the lessee could elect between executing a

total      release   or   continuing    the    lease    under    the   different

circumstances set out in Paragraph 52.                  When the leases are

construed as a whole, it is clear that Paragraphs 48 and 52 set out

                                       -3-
alternatives to performance under Paragraph 47.                         Lea thus did not

“breach” Paragraph 47 when it failed to drill a Commitment Well on

SSA before November 24, 1986.

                                                B

       Our holding that Lea did not breach Paragraph 47 when it

failed to interrupt prescription and elected to continue the leases

under Paragraphs 48 and 52 moots Landfinders’ argument that the

bankruptcy court erred in construing Paragraphs 48 and 52 as

stipulated damages provisions.                  The performance duties set out in

the leases are not severable.                        Paragraphs 48 and 52 are not

stipulated damages provisions; they merely set out alternatives to

performance under Paragraph 47.

                                                C

       Landfinders also maintains that the bankruptcy court erred

when   it   concluded     that          Lea    did     not    breach    its   performance

obligation under Paragraph 52 because the court found it was

unfeasible    to    drill       a       well    with     the    requisite      geological

specifications.      The contract effectively forgave the failure to

drill the Commitment Well if “prevailing circumstances [made] a

bottom hole location under the leased premises unfeasible.”                              The

substance    of    Landfinders’           argument       is    that     the   trial   court

erroneously defined “unfeasible” to mean “cost prohibitive” instead

of   according     the   term       a    more       narrow    meaning    closer   akin    to

                                               -4-
“impossible.”1      We disagree.    In everyday parlance, unfeasibility

does not connote impossibility.       Webster’s Third New International

Dictionary 2495 (1993) (defining unfeasible as “not feasible” or

“impracticable”).      There is no suggestion that the word was a term

of art contradicting its usual meaning.

      Although Lea drilled a well only 200 feet away from the leased

premises, the trial court found that it would have been unfeasible

to attempt to sidetrack the well so that it would have a bottom

hole location under the leased premises.           The evidence indicated

and   the   trial   court   found   that   Lea   drilled   at    the   optimum

geological location and still drilled a dry hole.               It would have

been senseless to continue the operation in the face of the

information gleaned from that well.              The trial court did not

clearly err by finding that it was unfeasible to drill a well with

a bottom hole location under the leased premises.

                                     II

      In conclusion, we hold that the bankruptcy court erroneously

construed the leases, but that such error does not mandate reversal

      1
      Contained within this argument is the companion contention
that the court erroneously utilized parol evidence to broadly
define “unfeasible.” As set out in the opinion, we hold the term
to be unambiguous. Further, even if the term were ambiguous, the
evidence is clear that the parties did not contemplate a narrow
construction. That the parties redacted the term “impossible” and
instead employed “unfeasible,” even though the change was at Lea’s
urging, evidences an intent consistent with the definition
enunciated by the trial court and adopted by this court.

                                     -5-
in this instance.    Reading the leases as a whole, which we must

under   Louisiana   law,      we    hold      that    Lea       was    not   under    an

unconditional obligation to interrupt the prescription of nonuse

running against SSA.       Paragraphs 48 and 52 provided alternative

performance obligations to those set out in Paragraph 47, thus, Lea

effected   no   breach   of    the      leases       by    failing      to   meet    the

interruption    requirement        in   Paragraph         47.     Furthermore,       the

bankruptcy court did not commit clear error when it found that Lea

fulfilled its drilling obligations under the alternative provisions

because it was unfeasible to drill a well with a bottom hole

location under the leased premises.2

     For the reasons set out in this opinion, the ruling of the

district court is

                                                                      A F F I R M E D.

    2
     Appellant Petty’s claim for attorneys’ fees and costs of the
litigation is mooted because she did not “prevail” in this action
on the contract.

                                        -6-