Summary
finding error inexcusable when the complaining party had "the knowledge or expertise to easily rectify or discover" the information underlying the error
Summary of this case from Chalos & Co. v. Marine Managers, Ltd.Opinion
No. 48,021–CA.
2013-08-14
Claudia Simone FRANKLIN, Plaintiff–Appellant v. CAMTERRA RESOURCES PARTNERS, INC., Rodney Arbuckle, and Petrohawk Properties, L.P., Defendants–Appellees.
Blanchard, Walker, O'Quin, & Roberts, Shreveport, LA, by M. Thomas Arceneaux, Drew E. Smith, for Plaintiff/Appellant, Claudia S. Franklin and Intervenor/Appellant, George S. Franklin, Jr. Hargrove, Smelley, Strickland, & Langley, Shreveport, LA, by Joseph L. Hargrove, Jr., B. Lee Carr, for Defendant/Appellee, Camterra Resources Partners, Inc.
Blanchard, Walker, O'Quin, & Roberts, Shreveport, LA, by M. Thomas Arceneaux, Drew E. Smith, for Plaintiff/Appellant, Claudia S. Franklin and Intervenor/Appellant, George S. Franklin, Jr. Hargrove, Smelley, Strickland, & Langley, Shreveport, LA, by Joseph L. Hargrove, Jr., B. Lee Carr, for Defendant/Appellee, Camterra Resources Partners, Inc.
Liskow & Rhymes, by Jamie D. Rhymes, Lafayette, LA, Jason P. Bergeron, Baton Rouge, LA, April L. Rolen–Ogden, Lafayette, LA, for Defendant/Appellee, Petrohawk Properties, L.P.
Weiner, Wiess, & Madison, Shreveport, LA, by John McGinty Frazier, for Defendants/Appellees, Rodney Arbuckle & Carol Arbuckle.
Before BROWN, STEWART, and PITMAN, JJ.
BROWN, Chief Judge.
Plaintiff, Claudia Simone Franklin, and plaintiff-in-intervention, George S. Franklin Jr., appeal from a trial court judgment granting motions for summary judgment filed by defendants, Rodney and Carol Arbuckle, Camterra Resource Partners, Inc., and Petrohawk Properties, L.P. For the reasons set forth herein, we affirm.
Facts and Procedural History
This appeal stems from competing claims to the mineral rights of property located in DeSoto Parish, which is described as:
Northeast Quarter of Northeast Quarter of Section 30, Township 15 North, Range 14 West, DeSoto Parish, Louisiana, LESS AND EXCEPT, the East 13 acres thereof, containing 27 acres, more or less, together with all buildings and improvements located thereon.
The property was the separate property of George S. Franklin Jr. (“Franklin”), and he had full ownership of the property. On July 25, 2000, he transferred the property to the Franklin Educational Trust (“the Trust”) in compliance with certain court orders related to his divorce from Wendy Stuart. The transfer included an express reservation of the property's mineral rights by Franklin. The transfer was recorded in the public records on August 3, 2000. Both Franklin and Ms. Stuart were named as trustees of the Trust.
Franklin also included in the transfer another tract in Claiborne Parish which is not an issue in the present suit.
Rodney and Carol Arbuckle wanted to purchase the property and build a home. On September 14, 2000, the Arbuckles' attorney, Robert Plummer, wrote a letter to Franklin as a trustee of the Franklin Educational Trust with an offer from the Arbuckles to buy the property at $2,500 per acre. The offer was accepted in January 2001. The letter did not mention anything about the minerals. During the examination of title, Attorney Plummer raised questions about whether the Trust was properly executed and thus, whether the Trust could own property. Plummer wrote to the attorney for the Trust, Jerold Knoll, on March 23, 2001, “(that the) trust was signed by George S. Franklin, Jr. before a Notary Public on April 17, 2000 (in Florida) and Wendy Stuart before a Notary Public on April 11, 2000 (in Massachusetts). The problem is that there were no witnesses to the signatures of George S. Franklin or Wendy Stuart ... I am convinced that an inter vivos trust which is not executed in accordance with the required form is not a valid trust under Louisiana law and therefore cannot own real estate.”
To clear up any questions about the Trust, attorney Plummer drafted an Adoption and Ratification of the Trust as well as a cash sale deed. These documents were given to the Trust's attorney as well as Franklin and Ms. Stuart. On June 18 and July 3, 2001, Ms. Stuart and Franklin executed, as an authentic act, the Adoption and Ratification of the Trust, which was recorded on October 9, 2001. At the same times, the parties executed a cash sale deed (“the Arbuckle Deed”) conveying the Trust's interest in the property. Again, all of these instruments were signed separately in Massachusetts and Florida.
According to Franklin, their divorce was acrimonious and the two only communicate through writing or counsel.
The Arbuckle deed consists of three pages, the first two being relevant to this dispute. On the first page, Franklin and Ms. Stuart appeared as trustees of the Trust and conveyed the Trust's ownership in the property to the Arbuckles. This page included a disclaimer that the transfer was “subject to any and all prior recorded subdivision restrictions, rights-of-way, easements, leases, and mineral reservations.” On the second page of the deed, Franklin appeared in an individual capacity. The deed states that he “herein quitclaims, conveys, and delivers unto Vendees all interest he may have in and to the above described property.”
The parties agree that, at the time of the sale in 2001, the mineral rights were not specifically discussed in the negotiations. This was before the development of the Haynesville Shale. In 2006, there was increased interest in minerals in DeSoto Parish. Arbuckle became concerned over possible drilling operations on the property. Arbuckle contacted attorney Plummer, who reviewed the Arbuckle Deed and concluded that Franklin still held a reservation on the mineral rights. Now, in his deposition, attached to the motions for summary judgment, Plummer stated that at that time he reviewed only the first page of the deed which contained the “subject to” language. Plummer then contacted Franklin, through counsel, Jerold Knoll, and proposed an amendment to the Arbuckle Deed whereby Franklin would agree to prohibit drilling operations on the surface of the property. Franklin agreed; however, the amendment was never executed due to acrimonious issues between Franklin and Ms. Stuart.
In 2008, the Haynesville Shale was in play. On April 4, 2008, the Arbuckles entered into a mineral lease with Camterra Resource Partners, Inc. (“Camterra”), recorded on April 10, 2008. On June 1, 2008, Camterra assigned the lease to Petrohawk Properties, L.P. (“Petrohawk”). Thereafter, on July 21, 2008, Franklin transferred the property's mineral rights to his current wife, Claudia Franklin, through an inter vivos donation.
On January 26, 2009, Claudia Franklin filed suit against defendants, seeking a declaratory judgment that she was owner of the mineral rights. She also asked the court to issue an injunction against mineral operations and to declare the mineral lease between the Arbuckles and Camterra null. Defendants individually filed motions for summary judgment against Claudia Franklin.
While the motions for summary judgment on Claudia Franklin's claims were pending, Franklin intervened in the suit, alleging that the parties' original intent was that he reserve his mineral interests in the property and that the Arbuckle Deed should be so interpreted. Alternatively, he sought reformation or rescission of the deed based on error. On February 28, 2012, the trial court granted the motions for summary judgment as to Claudia Franklin's claim, holding that the Arbuckle Deed clearly and unambiguously transferred both the surface and the mineral rights to the Arbuckles.
On March 9, Claudia Franklin filed a motion for a new trial from the February 28 judgment. The trial court granted the motion on April 16, 2012, “solely for the sake of judicial economy.” Defendants then filed motions for summary judgment against the claims of Franklin. On July 18, 2012, the trial court granted all the motions for summary judgment against plaintiffs.
Discussion
Summary judgment shall be rendered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show there is no genuine issue as to material fact and that the movant is entitled to judgment as a matter of law. La. C.C.P. art. 966(B). A genuine issue of material fact is one as to which reasonable persons could disagree. Argonaut Great Cent. Ins. Co. v. Hammett, 44,308 (La.App.2d Cir.06/03/09), 13 So.3d 1209,writ denied,09–1491 (La.10/02/09), 18 So.3d 122.
Appellate courts review summary judgments de novo, using the same criteria that govern the trial court's consideration of whether summary judgment is appropriate. Argonaut Great Cent. Ins. Co., supra. Summary judgments are favored under Louisiana law; however, factual inferences reasonably drawn from the evidence must be construed in favor of the party opposing the motion and doubt must be resolved in the opponent's favor. La. C.C.P. art. 966(A)(2); Argonaut Great Cent. Ins. Co., supra.
Ambiguity of the Arbuckle Deed
The determination of whether the language of a contract is clear or ambiguous is a question of law. Stephenson v. Petrohawk Properties, L.P., 45,296 (La.App.2d Cir.06/02/10), 37 So.3d 1145. Summary judgments are appropriate for questions of law.
Regarding the interpretation of deeds this court has held that:
The cardinal rule to be followed in construing deeds, uncertain because of ambiguity, is to ascertain the intention of the parties from the entire language of the deed. In the interpretation of deeds, the intentions of the parties must be gathered from an inspection of the instrument itself, without the aid of extrinsic evidence, if their intentions can be thus ascertained. If the description is so ambiguous as to leave doubt as to the parties' intent, the court may resort to extrinsic evidence as an aid in construction.
Doyal v. Pickett, 628 So.2d 184, 187 (La.App. 2d Cir.1993).
Interpretation of a contract is the determination of the common intent of the parties. La. C.C. art. 2045. Where the words of a contract are clear, explicit and lead to no absurd consequences, the meaning and intent of the parties must be sought within the four corners of the instrument and cannot be explained or contradicted by parole evidence. Horton v. Mobley, 578 So.2d 977 (La.App. 2d Cir.1991), writ denied,582 So.2d 1310 (La.1991); see also, La. C.C. arts. 1848 and 2046.
A provision susceptible of different meanings must be interpreted with a meaning that renders it effective and not with one that renders it ineffective. La. C.C. art. 2049. Each provision in a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole. La. C.C. art. 2050.
Quitclaim is a word of art with a defined legal meaning. The Civil Code explains that what is called quitclaim at common law is an assignment of rights without warranty in the civil law. La. C.C. art. 2502, Comment(c). A quitclaim deed is one which purports to convey, and is understood to convey, nothing more than the interest or estate in the property described of which the grantor is seized or possessed, if any, at the time, rather than the property itself. Waterman v. Tidewater Assoc. Oil Co., 213 La. 588, 35 So.2d 225 (1947). The Supreme Court of Louisiana has held that the title to real property may be as effectually transferred by quitclaim as by any other form of conveyance. Id. But such a deed conveys only such title or interest that the grantor had at the time it is given and excludes any implication that he has any title or interest. Id.
Further, the seller is bound to explain himself clearly respecting the extent of his obligations; any obscure or ambiguous clause is construed against him. La. C.C. art. 2474. In deeds, where the language making an exception or reservation is doubtful, it must construed most favorably to the grantee. Doyal, supra.
The provisions in the Arbuckle deed are not inconsistent or ambiguous. The trustees of the Educational Trust transferred what the Trust owned subject to any recorded mineral reservations. Franklin and Ms. Stuart signed as trustees. In the next section of the deed Franklin appeared in his individual capacity. The deed states that he “quitclaims, conveys and delivers all interest he may have in and to the above described property.”
Plaintiffs attached the affidavits of Franklin and his attorney Jerold Knoll stating that the deed left in place Franklin's prior mineral reservation and that the quitclaim provision was necessary merely to clear up any problems about whether the Trust could own property. This is extrinsic evidence and where the words of a contract are clear, explicit and lead to no absurd consequences, the meaning and intent of the parties must be sought within the four corners of the instrument and cannot be explained or contradicted by parole evidence. Horton, supra.
Error
La. C.C. Art. 1848 provides that:
Testimonial or other evidence may not be admitted to negate or vary the contents of an authentic act or an act under private signature. Nevertheless, in the interest of justice, that evidence may be admitted to prove such circumstances as a vice of consent or to prove that the written act was modified by a subsequent and valid oral agreement.
Though the trial court and the parties reference the concepts of mutual error and unilateral error, this court has recently observed that “our civilian provisions on ‘error’ do not utilize the terms ‘unilateral error’ or ‘mutual error,’ and nowhere in the Civil Code is any distinction between the two expressly addressed.” Peironnet v. Matador Resources Co., 47,190 (La.App.2d Cir.08/01/12), 103 So.3d 445,writs granted,12–2292, 12–2377 (La.01/11/13), 106 So.3d 541, 542.
Consent may be vitiated by error, fraud or duress. La. C.C. art. 1948. Error vitiates consent only when it concerns a cause without which the obligation would not have been incurred and that cause was known or should have been known to the other party. La. C.C. art. 1949.
Error may concern a cause when it bears on the nature of the contract, or the thing that is the contractual object or a substantial quality of that thing, or the person or the qualities of the other party, or the law, or any other circumstance that the parties regarded, or should in good faith have regarded, as a cause of the obligation. La. C.C. art. 1950.
As the supreme court in Reynaud v. Bullock, 195 La. 86, 196 So. 29, 34 (La.1940), stated:
It is an established rule of law in our jurisprudence that “Either party is always permitted, in a suit between the parties to a contract, to correct any error in the instrument purporting to evidence the contract, so as to make it express truly and correctly the intention of the parties,” provided the rights of third parties have not intervened. The error or mistake must be mutual. The burden is on the one seeking the reformation to prove the error and he must carry the burden by clear, and the strongest possible, proof. (Citations omitted).
In the case sub judice, Attorney Plummer on behalf of the Arbuckles determined that the Trust owned the surface of the property the Arbuckles wanted to buy. Obviously, he also found in the deed to the Trust that Franklin reserved ownership of the minerals, that is, a mineral servitude. Attorney Plummer wrote to Franklin as a Trustee about the purchase of the Trust's property. Plummer asked for a copy of the Trust's instrument. He was given a copy, and he concluded there was a problem in its execution and that the Trust could not own property. Thus, Plummer drafted documents to cure this problem as well as a deed transferring the property. Everything Plummer did was to correct the Trust's problem including having Franklin as the owner who transferred the property to the Trust to also quitclaim any interest he may have to the property as a safeguard. As to the mineral reservation, a cash sale would have been proper because Plummer knew that Franklin owned the mineral servitude. Several years thereafter, Plummer contacted Franklin to obtain an amendment to the deed which recognized Franklin's ownership of a mineral servitude and agreement to prohibit drilling on the property.
Both Knoll and Franklin state in affidavits that Franklin's intent was to keep his mineral servitude. Plummer's acts are somewhat confusing. Certainly there are material issues of facts in this respect.
However, La. C.C. Art 1952 states that:
A party who obtains rescission on grounds of his own error is liable for the loss thereby sustained by the other party unless the latter knew or should have known of the error.
The court may refuse rescission when the effective protection of the other party's interest requires that the contract be upheld. In that case, a reasonable compensation for the loss he has sustained may be granted to the party to whom rescission is refused.
Under the Revision Comments the following is discussed:
(d) In determining whether to grant rescission or, when rescission is granted, whether to allow any recovery to the party not in error, the court may consider whether the error was excusable or inexcusable, a distinction received by modern civilian doctrine. See 6 Planiol et Ripert, Traité pratique de droit civil français 227–229 (2nd ed. Esmein 1952); Litvinoff, “ ‘Error’ in the Civil Law,” in Essays on the Civil Law of Obligations 222, 226–269 (Dainow ed.1969); Ghestin, La notion d'erreur dans le droit positif actuel 146–165 (1963). Louisiana courts have granted relief when error has been found excusable ( see Boehmer Sales Agency v. Russo, 99 So.2d 475 (La.App.Orl.Cir.1958)) and refused it when error has been found inexcusable ( see Watson v. The Planters' Bank of Tennessee, 22 La.Ann. 14 (1870)). The court may also consider whether the other party has changed his position and the importance of such a change. In this context, Louisiana courts have said that in case of doubt as to error in the motive of one of the parties courts will lean heavily in favor of one seeking to avoid loss and against one seeking to obtain a gain. See Dorvin–Huddleston Developments, Inc. v. Connolly, 285 So.2d 359 (La.App. 4th Cir.1973), reversed on other grounds298 So.2d 734 (La.1974), on remand320 So.2d 253 (La.App. 4th Cir.1975).
In Scott v. Bank of Coushatta, 512 So.2d 356 (La.1987), the court held that the contractual negligence defense was acknowledged as early as 1820 in the case of Wikoff v. Townsend, 7 Mart. (o.s.) 451 (La.1820). In Wikoff, the court refused to grant rescission, stating:
We do not think that this is an error which vitiates the contract. The defendants understood they were purchasing a space of two hundred feet in front; they knew, or at least must be supposed to have known, what extent that was. If they wanted to satisfy themselves on that score, they might have had it measured; but, if relying on their own judgment they made any mistake, as to the real extent of the two hundred feet, they cannot plead such a mistake as an excuse.
7 Mart. (o.s.) at 452–53.
Other Louisiana cases have rejected the defense of error where the complaining party, through education or experience, had the knowledge or expertise to easily rectify or discover the error complained of. See, e.g., Swearingen v. Maynard, 9 So.2d 272 (La.App. 2d Cir.1942) (businessman); Tiblier v. Family Real Estate Inc., 195 So.2d 432 (La.App. 4th Cir.1967) (dentist). In Scoggin v. Bagley, 368 So.2d 763, 767 (La.App. 2d Cir.1979), the court found that “[t]he plaintiff is an oil and gas man of some 30 years experience,” and based on that, “plaintiff's unilateral error as to the principal cause cannot serve to invalidate the top lease.”
In the case before this court, Franklin was experienced concerning the reservation of minerals. He admitted to having made other transfers wherein he reserved the minerals. Further, his attorney admitted to examining the deed. Both should have recognized that Franklin was transferring any interest he had which would include his mineral interest.
As to Camterra and Petrohawk, La. C.C. Art. 3342 applies. La. C.C. Art. 3342 provides that:
A party to a recorded instrument may not contradict the terms of the instrument or statements of fact it contains to the prejudice of a third person who after its recordation acquires an interest in or over the immovable to which the instrument relates.
Having found that the Arbuckles deed not to be ambiguous, the principles of recordation protect third parties acquiring an interest in the property.
Conclusion
For the reasons set forth above, the judgment of the trial court is affirmed. Costs of appeal are assessed equally against appellants and appellees.
AFFIRMED. STEWART, J., dissents with written reasons.
STEWART, J., dissenting.
Upon review of the record, I respectfully disagree with the majority opinion affirming the trial court's granting of the defendants' motions for summary judgment. Summary judgment shall be rendered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show there is no genuine issue as to material fact and that the movant is entitled to judgment as a matter of law. La. C.C.P. art. 966(B). A genuine issue of material fact is one as to which reasonable persons could disagree. Argonaut Great Cent. Ins. Co. v. Hammett, 44,308 (La.App.2d Cir.06/03/09), 13 So.3d 1209,writ denied,09–1491 (La.10/02/09), 18 So.3d 122.
Moreover, summary judgment is seldom appropriate for determinations based on subjective facts of motive, intent, good faith, knowledge, or malice. Jones v. Estate of Santiago, 2003–1424 (La.4/14/04), 970 So.2d 1002; Hooker v. Wal–Mart Stores, Inc., 38,350 (La.App.2d Cir.4/07/04), 870 So.2d 1131,writ denied,2004–1420 (La.9/24/04), 882 So.2d 1142. One reason is that these subjective facts call for credibility evaluations and the weighing of testimony. Hooker, supra; Oaks v. Dupuy, 32,070 (La.App.2d Cir.8/18/99), 740 So.2d 263,writ not considered,99–2729 (La.11/24/99), 750 So.2d 993. Furthermore, the circumstantial evidence usually necessary for proof of motive or intent requires the trier-of-fact to choose from competing inferences, a task not appropriate for a summary judgment ruling. Hooker, supra.
In the present case, genuine issues of material fact remain as to whether the parties intended to transfer the mineral rights. First, the Arbuckle Deed appears to be ambiguous. A contract is ambiguous when either: (1) it lacks a provision bearing on an issue, (2) the terms of the contract are susceptible to more than one interpretation, (3) there is uncertainty or ambiguity as to its provisions, or (4) the intent of the parties cannot be ascertained from the language employed. Dixie Campers, Inc. v. Vesely Company, 398 So.2d 1087 (La.1981).
Here, uncertainty or ambiguity results from the first page “subject to” language and the second page “quitclaim” language of the deed. The former purports to be subject to prior mineral reservations, while the latter does not mention minerals or mineral reservations. As such, the clauses are mutually inconsistent, or, at the least, confusing.
In addition, Plummer's statements are likewise inconsistent and confusing. In 2006, he concluded that Franklin had reserved mineral rights to the property in question, whereas, at his deposition in 2011, Plummer claimed to have only reviewed the first page of the deed. Plummer's alleged failure to review the second page of the deed containing the quitclaim language resulted in his request for an amendment of the contract, though the amendment was never executed. It is also possible that Plummer did review the second page of the deed but did not believe it transferred Franklin's mineral rights, as mineral rights were never discussed in negotiations.
The majority acknowledges that the proposed amendment of the contract recognized Franklin's ownership of the mineral rights and agreement to prohibit drilling on the property. Furthermore, Plummer's initial concern at the time of the Arbuckle Deed stemmed from whether the trust conveyance complied with Louisiana formality requirements, not whether Franklin intended to transfer his mineral rights. This inconsistency between Plummer's actions preceding this suit and his deposition warrants a credibility determination that cannot be made on summary judgment.
Second, there is error as to the unintentional transfer of mineral rights. Error vitiates consent only when it concerns a cause without which the obligation would not have been incurred and that cause was known or should have been known to the other party. La. C.C. art. 1949. Error may concern a cause when it bears on the nature of the contract, or the thing that is the contractual object or a substantial quality of that thing, or the person or the qualities of the other party, or the law, or any other circumstance that the parties regarded, or should in good faith have regarded, as a cause of the obligation. La. C.C. art. 1950.
Cause is the reason why a party obligates himself. La. C.C. 1967. Here, Franklin's reason for obligating himself was to confirm the conveyance of the land held by the trust. Both parties knew or should have known of this principal cause because Plummer's correspondence with Franklin raised issues concerning whether the trust was properly conveyed. This constituted a mutual error.
In cases of mutual error, the error might be said to consist of a wrong belief shared by both parties. Peironnet v. Matador, 47,190 (La.App.2d Cir.8/1/12), 103 So.3d 445. With such mutual mistake, the cause of each of the reciprocal obligations of the parties is in error and the contract is a nullity. Id. Here, Franklin and his attorney were under the impression that the quitclaim language sufficed to reserve the mineral rights as well as clear up ambiguity about whether the trust owned the land. Arbuckle stated in his deposition that mineral reservations were never mentioned in negotiations and his conduct following the sale demonstrates he believed Franklin still owned the minerals. It was only after Arbuckle sought to lease the minerals that he claimed he intended to purchase “whatever they owned” in the original transaction. However, this negates Arbuckle's reasoning for buying the property, that being to build a house.
In the alternative, genuine issues of material fact exist with respect to unilateral error. Error can result in the annulment of a contract, or its partial rescission in a reformation action, when the consent of either one or both of the parties is vitiated by mistake. La. C.C. art. 1949. Here, the error is a result of the ambiguous language in the Arbuckle Deed. As mentioned above, Franklin and his attorney believed the language on the second page of the deed sufficed to reserve the mineral rights, not realizing the quitclaim language was insufficient. Again, the mineral rights were never discussed in negotiations and as such, Franklin's reliance on the conveyance of the trust resulted in error.
Testimonial or other evidence may, in the interest of justice, be admitted to prove such circumstances as a vice of consent or to prove that the written act was modified by a subsequent and valid oral agreement. La. C.C. art. 1848. Here, the allegations of the lack of discussion of mineral rights in negotiations, the deposition testimony and the correspondence between the parties all suggest that Franklin intended to preserve his mineral reservations, not transfer them with the trust property.
Moreover, the defendants' reliance on Scoggin v. Bagley, 368 So.2d 763, (La.App. 2d Cir.1979) in support of Franklin's experience with mineral reservations, raising the defense of contractual negligence, is improper. The confusion lies with the quitclaim language, not Franklin's experience with mineral reservations.
The burden, here, only requires that the defendants should have known plaintiff's cause or reason. Peironnet, supra. Thus, the above reasons preclude summary judgment. Therefore, I dissent.
ON REHEARING
Before BROWN, C.J., STEWART, LOLLEY, MOORE & PITMAN, JJ.
PITMAN, J.
In the original opinion, this Court affirmed the trial court's judgment granting motions for summary judgment in favor of Defendants, Rodney Arbuckle and Carol Arbuckle (land purchasers), Camterra Resources Partners, Inc., and Petrohawk Properties, L.P., and against Plaintiff, Claudia Franklin, and Intervener, George Franklin. This Court originally found that a deed of the surface rights signed by Plaintiff in Intervention, George Franklin as Trustee of the Franklin Educational Trust, coupled with a quitclaim deed signed by Franklin in his individual capacity, conveyed to the Arbuckles mineral interests he had previously reserved. The Franklins applied for rehearing, which was granted. Upon further consideration, we reverse and remand.
On appeal, summary judgments are reviewed de novo; thus, appellate courts ask the same questions the trial court does in determining whether summary judgment is appropriate, i.e. whether there is any genuine issue of material fact and whether the mover is entitled to judgment as a matter of law. Summary judgment is seldom appropriate for determinations based on subjective facts of motive, intent, good faith, knowledge or malice. Jones v. Estate of Santiago, 03–1424 (La.4/14/04), 870 So.2d 1002;Hooker v. Wal–Mart Stores, Inc., 38,350 (La.App.2d Cir.4/07/04), 870 So.2d 1131,writ denied,04–1420 (La.9/24/04), 882 So.2d 1142. One reason is that these subjective facts call for credibility evaluations and the weighing of testimony. Hooker, supra; Oaks v. Dupuy, 32,070 (La.App.2d Cir.8/18/99), 740 So.2d 263. Furthermore, the circumstantial evidence usually necessary for proof of motive or intent requires the trier of fact to choose from competing inferences, a task not appropriate for a summary judgment ruling. Hooker, supra.
Courts are bound to give legal effect to all written contracts according to the true intent of the parties, and this intent is to be determined by the words of the contract when these are clear, explicit and lead to no absurd consequences. La. C.C. art. 2046. Although a contract is worded in general terms, it must be interpreted to cover only those things it appears the parties intended to include. La. C.C. art. 2051. A doubtful provision must be interpreted in light of the nature of the contract, equity, usages, the conduct of the parties before and after the formation of the contract and of other contracts of a like nature between the same parties. La. C.C. art. 2053.
Parol or extrinsic evidence is generally inadmissible to vary the terms of a written contract unless the written expression of the common intention of the parties is ambiguous. A contract is considered ambiguous on the issue of intent, and parol evidence is admissible, when either it lacks a provision on that issue, the terms of the written contract are susceptible to more than one interpretation, there is uncertainty or ambiguity as to its provisions or the intent of the parties cannot be ascertained from the language employed. Whether a contract is ambiguous, for purposes of determining whether parol evidence is admissible, is a question of law. Hendrick v. Patterson, 47,668 (La.App.2d Cir.1/16/13), 109 So.3d 475,writ denied,13–0670 (La.4/26/13), 112 So.3d 849.
The Arbuckle Deed is ambiguous. Uncertainty or ambiguity results from the first page “subject to” language and the second page “quitclaim” language of the deed. The former purports to be subject to the prior recorded mineral reservation, while the latter does not mention minerals or mineral reservations. As such, the clauses are mutually inconsistent, or, at the least, confusing.
According to the evidence present in the record, there was no discussion in negotiations between the parties about the conveyance of mineral rights, nor was any explanation given as to why Mr. Franklin was asked to execute the Arbuckle Deed in his individual capacity. However, the lack of negotiations about the mineral rights does not imply that they were to be conveyed. No one raised any question about Franklin's mineral ownership. In fact, the initial concern dealt only with whether the trust conveyance complied with Louisiana formality requirements after the Arbuckles' attorney reviewed only the first page of the deed.
The evidence shows that there was confusion with the quitclaim language regarding the effect of the Arbuckle Deed, which continued to exist as late as 2006, coincidentally, when there was an increased interest in minerals per the development of the Haynesville Shale. In 2006, the Arbuckles' attorney contacted Mr. Franklin to express Mr. Arbuckle's worries about the possible disruption of use of the surface property if Mr. Franklin leased the mineral rights. The implication of this communication was that, even at that time, the Arbuckles believed Mr. Franklin owned the mineral rights to the property.
Clearly, genuine issues of material fact remain regarding proof of motive or intent in the contract, which requires the trier of fact to choose from competing inferences, and the genuine issues of material fact make this case inappropriate for summary judgment.
CONCLUSION
For the foregoing reasons, rehearing is granted in favor of Plaintiff, Claudia Simone Franklin, and Intervener, George S. Franklin, Jr., and against Defendants, Rodney and Carol Arbuckle, Camterra Resources Partners, Inc. and Petrohawk Properties, L.P. The judgment of the trial court is hereby reversed, and this matter is remanded to the trial court for further proceedings consistent with this opinion. Costs are assessed against Defendants, Rodney and Carol Arbuckle, Camterra Resources Partners, Inc. and Petrohawk Properties, L.P.
REVERSED AND REMANDED. BROWN, C.J., dissents with written reasons.
LOLLEY, J., dissents for the reasons assigned by BROWN, C.J.
BROWN, Chief Judge, dissents on rehearing.
On rehearing, the majority has with sleight of hand changed the dispositive analysis of this case from one of “cause or a vice of consent” to “ambiguity.” They have also ignored the recent unanimous Louisiana Supreme Court's decision of Peironnet v. Matador Resources Co., 12–2292 (La.06/28/13), ––– So.3d ––––, 2013 WL 3752474.
The majority now states that “[t]he Arbuckle Deed is ambiguous” in that the two “clauses are mutually inconsistent, or, at least, confusing.” In fact, the two clauses transferring property are clearly consistent and definitive. The Trust transferred what it owned to the Arbuckles. All the parties and their attorneys knew that Franklin had previously transferred the property to the Trust with a mineral reservation. The Trust did not own the minerals. Franklin as one of the two trustees signed the deed with the “subject to” language. Thereafter, the holder of the mineral reservation, Franklin, signed a second time in his personal capacity specifically transferring his mineral interest. There is nothing inconsistent or unclear about this.
The Arbuckle Deed was drafted to transfer ownership, including the minerals, to the Arbuckles for the purpose of building a home. The parties and their attorneys stated that they read the contents of the writing to which they all affixed their signatures. Neither Franklin nor his attorney questioned, sought any clarification or discussed the clear language that transferred his mineral rights. The Arbuckles built their home on the land and now, some seven years later with the discovery of the Haynesville Shale, Franklin claims that he did not intend to transfer his mineral rights. The majority writes that Franklin's alleged intent to keep the minerals makes the deed ambiguous and confusing.This is fallacious reasoning. While Franklin's motive or cause may be questionable, the clarity of the deed is not.
I further note that before this action was lodged, the property was leased from the Arbuckles, and a producing well was drilled in the unit. Agents for Camterra and Petrohawk found the deed to be clear as to the ownership of the land and minerals. La. C.C. art. 3342 provides that “[A] party to a recorded instrument may not contradict the terms of the instrument or statements of fact it contains to the prejudice of a third person who after its recordation acquires an interest in or over the immovable to which the instrument relates.” By finding the deed to be ambiguous, the majority has now prejudiced these oil and gas companies.
A transfer of immovable property must be made by authentic act or by act under private signature. La. C.C. art. 1839. A mineral right is an incorporeal immovable. La. R.S. 31:18. When the law requires a contract to be in written form, the contract may not be proved by testimony or by presumption, unless the written instrument has been destroyed, lost, or stolen. La. C.C. art. 1832. Generally, parol (testimonial) evidence is not admissible to contradict, vary or modify a written instrument. Notwithstanding, while “[t]estimonial or other evidence may not be admitted to negate or vary the contents of [a writing], ... in the interest of justice, that evidence may be admitted to prove such circumstances as a vice of consent....” La. C.C. art. 1848; Harnischfeger Sale Corp. v. Sternberg Co., 179 La. 317, 327, 154 So. 10, 13 (1934).
Consent may be vitiated by error, fraud, or duress. La. C.C. art. 1948. However, error vitiates consent only when it concerns a cause without which the obligation would not have been incurred and that cause was known or should have been known to the other party. La. C.C. art. 1949.
A similar case out of this court was Peironnet v. Matador Resources Co., 47,190 (La.App.2d Cir.08/01/12), 103 So.3d 445. This case, written by Judge Stewart, was reversed by an unanimous supreme court. See Peironnet v. Matador Resources Co., 12–2292 (La.06/28/13), ––– So.3d ––––, 2013 WL 3752474.
Peironnet arose out of a one and one-half year extension of a three-year primary term oil and gas lease covering 1805.34 acres in the southern part of Caddo Parish. Plaintiffs sued the lessee, Matador Resources Company, to rescind or reform the extension agreement making it applicable only to 168.95 nonproducing acres. The supreme court concluded that plaintiffs were precluded by law from advancing their claim of unilateral error given their inexcusable failure to read and question the unambiguous extension agreements and that summary judgment on this issue was appropriate as a matter of law. The court reversed the judgment of the court of appeal, finding:
In the present case, plaintiffs alleged their agent, Moore, was mistaken on the cause of the agreement—in essence he did not understand the Extension Agreement extended the entirety of the Lease—and the defendants knew or should have known of his misunderstanding. In response, defendants raised the defense of contractual negligence, demonstrating through affidavits and documentary evidence: (1) the plaintiffs could show no excuse for failing to read and understand the clear terms of the Extension Agreement, which was written “in plain English, without technical language or terms of art,” explicitly extending the primary term of the Lease from three to four and one-half years; (2) plaintiffs' agents, particularly Moore and Hand, were self-proclaimed experts in dealing with oil and gas matters, including oil and gas leases; and (3) the original lease between the parties was executed on Regions's own lease form and undisputably extended to all depths during the primary term.
Applying the modern civilian concept of inexcusable error as advanced in our contractual negligence defense to these undisputed facts, we find, as did the District Court, reasonable persons could not disagree the alleged error on the part of the plaintiffs' agents in this case was easily detectable and could have been rectified by a minimal amount of care, i.e., by simply reading the document and/or by requesting simple changes to the written offer before acceptance. See Scott, 512 So.2d at 362–63;see also Tweedel v. Brasseaux, 433 So.2d 133, 137 (La.1983)(“The presumption is that parties are aware of the contents of writings to which they have affixed their signatures ... The burden of proof is upon them to establish with reasonable certainty that they have been deceived.... If a party can read, it behooves him to examine an instrument before signing it; and if he cannot read, it behooves him to have the instrument read to him and listen attentatively whilst this is being done.”). Moreover, it is undisputable the agents of the complaining party, Regions's petroleum landmen, were both “through education and experience in a position which renders [their] claim of error particularly difficult to rationalize, accept, or condone.” Scott, 512 So.2d at 362–63.
...
It follows, therefore, the plaintiffs' failure to question the extension, to seek clarification of the acreage covered, or to even discuss the Deep Rights demonstrates an inexcusable lack of “elementary prudence” or simple diligence that now precludes their rescission of the agreement.
In light of these undisputed facts, we find the plaintiffs were precluded by law from advancing a unilateral theory of error due to their own inexcusable error, and defendants were entitled to summary judgment as a matter of law. (Emphasis added).
Peironnet, No. 2012–C–2377, ––– So.3d at –––– – ––––, 2013 WL 3752474, at *18–20 (La.06/28/13).
This is exactly the factual scenario in the case at hand. The language in the Arbuckle Deed transferred Franklin's mineral interest to the Arbuckles. Franklin had experience and knowledge concerning mineral rights, as he had reserved the minerals on a number of occasions, including 5when he transferred the property at issue to the Educational Trust. Franklin's attorney, through education and experience, was in a position to understand the effect of the language in the deed. As the supreme court did in Peironnet, supra, I find the claim now of error “particularly difficult to rationalize, accept, or condone.”