Opinion
2022 CA 1234
06-02-2023
FLORIDA GAS TRANSMISSION COMPANY, LLC v. TEXAS BRINE COMPANY, LLC, ET AL.
Leopold Z. Sher, James M. Garner, Peter L. Hilbert, Jr., Darnell Bludworth, Jeffrey D. Kessler, Christopher T. Choeheles, Kevin M. McGlone, Martha Y. Curtis, Neal J. Kling, Stuart D. Kottle, New Orleans, Louisiana and Royce I. Duplessis, New Orleans, Louisiana and Robert R. Percy III Gonzales, Louisiana and Travis J. Turner Gonzales, Louisiana, COUNSEL FOR APPELLANT Texas Brine Company, LLC Mary S. Johnson, Ingrid K. Laurendine, Mandeville, Louisiana and Chadwick J. Mollere, Nichole M. Gray New Orleans, Louisiana, COUNSEL FOR APPELLEES National Union Fire Insurance Company of Pittsburgh, Pa. and AIG Specialty Insurance Company
Appealed from the Twenty-Third Judicial District Court Parish of Assumption • State of Louisiana Docket Number 34,316 • Division B The Honorable Thomas J. Kliebert, Jr., Presiding Ad Hoc Judge
Leopold Z. Sher, James M. Garner, Peter L. Hilbert, Jr., Darnell Bludworth, Jeffrey D. Kessler, Christopher T. Choeheles, Kevin M. McGlone, Martha Y. Curtis, Neal J. Kling, Stuart D. Kottle, New Orleans, Louisiana and Royce I. Duplessis, New Orleans, Louisiana and Robert R. Percy III Gonzales, Louisiana and Travis J. Turner Gonzales, Louisiana, COUNSEL FOR APPELLANT Texas Brine Company, LLC
Mary S. Johnson, Ingrid K. Laurendine, Mandeville, Louisiana and Chadwick J. Mollere, Nichole M. Gray New Orleans, Louisiana, COUNSEL FOR APPELLEES National Union Fire Insurance Company of Pittsburgh, Pa. and AIG Specialty Insurance Company
Before: Guidry, C.J., Welch and Miller, JJ.
WELCH, J.
In this appeal, Texas Brine Company, LLC ("Texas Brine") appeals a trial court judgment rendered on March 25, 2021, in favor of National Union Fire Insurance Company of Pittsburgh, Pa. ("National Union") and AIG Specialty Insurance Company ("AIG"), dismissing Texas Brine's petition to annul an appellate court judgment rendered by this court in Florida Gas Transmission Company, LLC v. Texas Brine Company, LLC, 2018-0062 (La.App. 1st Cir. 1/11/19), 2019 WL 168583 (unpublished), writ denied, 2021-00794 (La. 6/29/21), 319 So.3d 299, with prejudice. In an answer to the appeal, National Union and AIG request that the March 25, 2021 judgment be modified to: (1) sustain their exception of peremption; (2) award reasonable attorney fees and costs under La. C.C.P. art. 2004(C); and (3) award damages against Texas Brine for frivolous appeal. For the following reasons, we affirm in part, vacate in part, and grant the request for attorney fees.
Occidental Chemical Corporation (Oxy) also filed an appellee brief and answer to this appeal. However, the judgments addressed in both of Oxy's filings concern nullification of judgments that are not before this panel in this appeal. Therefore, no discussion will be made in reference to Oxy's arguments. Oxy's answer to the appeal is denied.
BACKGROUND
This dispute is one of many arising out of a sinkhole near Bayou Corne in Assumption Parish, Louisiana that developed on or about August 3, 2012, following the collapse of a salt mine cavern. In this particular case, Florida Gas Transmission Company ("Florida Gas") sued Texas Brine, among other defendants, alleging Texas Brine's salt mining operations caused the collapse of the cavern and the resulting sinkhole, which damaged Florida Gas's nearby storage facilities and pipelines.Florida Gas also sued several of Texas Brine's liability insurers, including National Union and AIG, alleging the insurers issued policies providing coverage for Texas Brine's alleged liability. Texas Brine filed an incidental demand against National Union and AIG, alleging they were obligated to provide Texas Brine with indemnity and a defense in the litigation. Following the trial court's dismissal of Florida Gas's claims against National Union and AIG, while maintaining Texas Brine's claims against the two insurers, the matter came before this court on appeal.
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 Crosstex Energy Services, LP, Crosstex LIG, LLC, and Crosstex Processing Services, LLC v. Texas Brine Company, LLC, 23rd Judicial District Court, Docket No. 34,202. Although the claims asserted in these two cases and the instant "pipeline case" are similar, the parties resisted consolidation, except for purposes of trial, but often relied on similar evidence and the same arguments, resulting in like judgments across all three suits.
This court rendered judgment on January 11, 2019, and dismissed all claims against National Union and AIG asserted under pre-2012 insurance policies with prejudice. See Florida Gas Transmission Company, LLC v. Texas Brine Company, LLC, 2018-0062 (La.App. 1st Cir. 1/11/19), 2019 WL 168583 (unpublished) ("2018 CA 0062"). Therein, this court based its ruling on the allegations in Florida Gas's petitions and the language in the insurance policies, as well as a decision that was previously handed down by this court that addressed the same arguments and evidence in Crosstex Energy Services, LP v. Texas Brine Company, LLC, 2017-0863 (La.App. 1st Cir. 12/21/17), 240 So.3d 1024, writ denied, 2018-0144 (La. 3/23/18), 238 So.3d 962. See Florida Gas Transmission Company, LLC, 2019 WL 1685832 at * 1. It is the 2018 CA 0062 judgment that Texas Brine now seeks to nullify.
On February 24, 2020, Texas Brine filed a petition to annul various judgments issued by this court, including 2018 CA 0062, which it alleged "reversfed] the decision of [the trial court] regarding AIG's duty to defend Texas Brine in this matter." Texas Brine sought the annulment based on this court's alleged failure to randomly allot, or re-allot, all appeals in accordance with the amended version of La. R.S. 13:319, effective August 1, 2018, arguing that the judgment in 2018 CA 0062 was obtained by an "ill practice."
Louisiana Revised Statutes 13:319 provides for the assignment and allotment of cases in courts of appeal. Prior to the legislative amendment discussed in Texas Brine's petition to annul, La. R.S. 13:319 provided: "Each civil and criminal proceeding and each application for writs shall be randomly assigned by the clerk, subject to the direct supervision of the court." By 2018 La. Acts No. 658, §1 (eff. Aug. 1, 2018), the Legislature amended La. R.S. 13:319 to change the word "proceeding" to "appeal," and thus now provides: "Each civil and criminal appeal and each application for writs shall be randomly assigned by the clerk, subject to the direct supervision of the court."
Prior to the amendment of La. R.S. 13:319, this court's internal rules provided that an appeal filed from a trial court proceeding was randomly allotted to a three-judge panel, with a primary judge designated as the writing judge, upon the filing of the appellant's brief. After that initial allotment, pursuant to a longstanding practice utilized by this court, every other appeal arising out of that same trial court proceeding was allotted to a three-judge panel that included the primary writing judge from the initial appeal-informally known as the "writing judge rule," also known as the "subsequent appeal assignment rule." See Texas Brine Co., LLC v. Naquin, 2019-1503, 2019-1508 (La. 1/31/20), 340 So.3d 720, 723 (per curiam), cert, denied, ___U.S.___, 141 S.Ct. 846, 208 L.Ed.2d 422 (2020).
The appeal in 2018 CA 0062 was lodged and assigned its appellate docket number for this court on January 22, 2018. The appellant's brief in 2018 CA 0062 was filed on April 17, 2018. Pursuant to this court's internal rules, 2018 CA 0062 was assigned to a three-judge panel comprised of the same judge that had handled the prior appeal. The parties to 2018 CA 0062 learned the matter had been assigned to the same panel that decided the prior appeal on or around June 29, 2018, when notice of the oral argument date was issued. All of this occurred before the effective date of the amended version of La. R.S. 13:319, Following the effective date of amended La. R.S. 13:319, Texas Brine and its insurers appeared before the panel that was previously noticed for oral argument. That same panel issued the opinion in 2018 CA 0062, which is under consideration in this nullity action. Now, Texas Brine argues that 2018 CA 0062 should have been re-allotted after the amendment of La. R.S. 13:319 became effective in order to adhere to the statute, and that in failing to do so, Texas Brine's right to a randomly allotted panel was denied.
National Union and AIG, which had been dismissed from this litigation with prejudice, appeared solely to respond to Texas Brine's nullity action by filing peremptory exceptions raising the objections of no cause of action and peremption, and alternatively, a motion for summary judgment. National Union and AIG argued that this court's previous "writing judge rule" did not constitute an "ill practice" because it did not deprive Texas Brine of a legal right, nor was the allotted panel the cause of any adverse judgment. Alternatively, National Union and AIG asserted that Texas Brine could not seek nullification on the basis of the amendment to La. R.S. 13:319 because 2018 CA 0062 was allotted prior to the statute's amendment taking effect.
The trial court rendered a judgment on March 25, 2021, which granted National Union and AIG's motion for summary judgment and sustained National Union and AIG's exception of no cause of action, and dismissed with prejudice Texas Brine's petition to annul the 2018 CA 0062 judgment and all of Texas Brine's claims against National Union and AIG contained therein. The trial court overruled National Union and AIG's exception of peremption and also denied their request for attorney fees and costs pursuant to La. C.C.P. art. 2004(C).
On appeal, Texas Brine argues that the trial court erred in finding that Act 658, amending La. R.S. 13:319 and adding La. C.C.P. art. 2164.1, was to be applied prospectively only, such that the amended statute did not apply to 2018 CA 0062, which was allotted prior to, but decided after the amendment took effect.
Louisiana Code of Civil Procedure article 2164.1 provides as follows, "The provisions of R.S. 13:319 shall be applicable to assignment of appellate panels."
ANALYSIS
According to Louisiana Code of Civil Procedure article 2004(A), any final judgment obtained by fraud or ill practices may be annulled. Belle Pass Terminal, Inc. v. Jolin, Inc., 2001-0149 (La. 10/16/01), 800 So.2d 762, 766. The Article is not limited to cases of actual fraud or intentional wrongdoing, but is sufficiently broad to encompass all situations wherein a judgment is rendered through some improper practice or procedure. Id., citing Kem Search, Inc. v. Sheffield, 434 So.2d 1067, 1070 (La. 1983). However, not every fraud or ill practice constitutes grounds to annul a judgment. Nullity is an appropriate remedy only when the judgment is "obtained by" fraud or ill practice. Ward v. Pennington, 523 So.2d 1286,1289 (La. 1988). There must be a causal relationship between the fraud or ill practice and the obtaining of the judgment. Id.
Louisiana jurisprudence sets forth two criteria to determine whether a judgment has been rendered through fraud or ill practices and is thus subject to nullification: (1) whether circumstances under which the judgment was rendered showed the deprivation of legal rights of the litigant seeking relief; and (2) whether enforcement of the judgment would be unconscionable or inequitable. Belle Pass Terminal, Inc., 800 So.2d at 766; see also Wright v. Louisiana Power & Light, 2006-1181 (La. 3/9/07), 951 So.2d 1058, 1067. The petitioner must satisfy both criteria to succeed in his action for nullification. Riddle v. Premier Plaza of Monroe, L.L.C., 51,173 (La.App. 2nd Cir. 2/15/17), 216 So.3d 170, 173; see also Belle Pass Terminal, Inc., 800 So.2d at 768.
As mentioned previously, National Union and AIG moved for summary judgment asserting that Texas Brine could not prove a deprivation of legal rights or a causal connection between this court's alleged ill practice and the obtaining of the judgment.
A motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show that there is no genuine issue as to material fact and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(A)(3). In reviewing the trial court's decision on a motion for summary judgment, this court applies a de novo standard of review using the same criteria applied by the trial courts to determine whether summary judgment is appropriate. Porche v. Naquin, 2022-0064 (La.App. 1st Cir. 9/26/22), 353 So.3d 796, 800, writ denied, 2022-01603 (La. 2/24/23), 356 So.3d 340.
The burden of proof is on the moving party. Nevertheless, if the mover will not bear the burden of proof at trial on the issue that is before the court on the motion for summary judgment, the mover's burden on the motion does not require him to negate all essential elements of the adverse party's claim, action, or defense, but rather to point out to the court the absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. The burden is on the adverse party to produce factual support sufficient to establish the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law. La. C.C.P. art. 966(D)(1).
National Union and AIG asserted that Texas Brine could not carry its burden to demonstrate that: (1) this court committed an ill practice, or (2) that the alleged ill practice was relevant to the judgment issued by this court considering this court's use of the "law of the circuit" doctrine and the fact that the 2018 CA 0062 judgment was issued based on the judgment issued in the appeal docketed as 2017 CA 0863.
In opposition, Texas Brine concluded that because this court did not re-allot 2018 CA 0062 after the amendment of La. R.S. 13:319, the 2018 CA 0062 judgment should be annulled because its due process rights for random allotment were denied. However, Texas Brine failed to demonstrate whether enforcement of the judgment would be unconscionable or inequitable in light of the 2017 CA 0863 judgment. Since both criteria are required to succeed in a nullity action, Riddle, 216 So.3d at 173, our de novo review leads us to conclude that Texas Brine failed to carry its burden on summary judgment. Texas Brine did not demonstrate how it was deprived of the fundamental opportunity to fairly present its case to this court in appeal 2018 CA 0062, and more importantly, how this court's allotment system caused or was in any way related to any adverse judgment against Texas Brine. Texas Brine's lack of support for this second requirement is further underscored in this instance by the opinion in 2018 CA 0062, wherein the panel noted that this was one of several similar and/or identical pipeline appeals, one of which had already been handed down by this court and was final. See Florida Gas Transmission Company, LLC, 2019 WL 168583 at *1, citing Crosstex Energy Services, LP, 240 So.3d at 1030-32. We cannot say that the circumstances under which the 2018 CA 0062 judgment was rendered show that adhering to a judgment that is identical to one already in effect would be unconscionable or inequitable. Any analysis of whether the amendment to La. R.S. 13:319 is to be applied retroactively or prospectively is irrelevant to our holding.
Accordingly, we conclude that National Union and AIG's motion for summary judgment was properly granted. We decline to reach the merits of the insurers' exception of no cause of action, finding the exception is moot. See Terry v. Schroder, 2021-1311 (La.App. 1st Cir. 6/3/22), 342 So.3d 1003, 1006.
We note that National Union and AIG's combination of an exception of no cause of action with an "alternative" motion for summary judgment in one filing is procedurally problematic, particularly because no evidence may be considered in support of an exception of no cause of action, but evidence may be introduced to support or oppose a motion for summary judgment. See La. C.C.P. arts. 931 and 966(A)(4); Terry, 342 So.3d at 1007 n.4.
ANSWER TO APPEAL
National Union and AIG filed an answer to Texas Brine's appeal, requesting that this court reverse or vacate the trial court's denial of their peremptory exception of peremption. Because we find that the trial court acted within its discretion and correctly dismissed Texas Brine's nullity petition filed against National Union and AIG, we pretermit discussion of any other exceptions. Additionally, while we recognize that La. C.C.P. art. 2004(C) allows a trial court to award reasonable attorney fees to the prevailing party in a nullity action, the record does not contain any evidence of the amount of National Union and AIG's attorney fees associated with the nullity action. However, National Union and AIG also request attorney fees associated with defending Texas Brine's appeal. We find that National Union and AIG present a compelling argument for an award of attorney fees for successfully defending this appeal. Accordingly, we award National Union and AIG a total of $5,000.00 in attorney fees for work on the defense of this particular appeal.
Louisiana Code of Civil Procedure article 2164 provides for an award of damages, including attorney fees, for frivolous appeal.
CONCLUSION
For the reasons set forth in this opinion, we affirm the portion of the March 25, 2021 judgment granting the motion for summary judgment filed by National Union Fire Insurance Company of Pittsburgh, Pa. and AIG Specialty Insurance Company that dismissed with prejudice Texas Brine Company, LLC's petition to annul this court's January 11, 2019 judgment rendered in 2018 CA 0062. We vacate the portion of the trial court's March 25, 2021 judgment sustaining the peremptory exception of no cause of action filed by National Union Fire Insurance Company of Pittsburgh, Pa. and AIG Specialty Insurance Company as moot. Further, we award National Union Fire Insurance Company of Pittsburgh, Pa. and AIG Specialty Insurance Company $5,000.00 in attorney fees for successfully defending this appeal. All costs of this appeal are assessed to Texas Brine Company, LLC.
AFFIRMED IN PART; VACATED IN PART; NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA. AND AIG SPECIALTY INSURANCE COMPANY'S REQUEST FOR ATTORNEY FEES GRANTED; ANSWER TO APPEAL FILED BY OCCIDENTAL CHEMICAL CORPORATION DENIED.