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Vendors and contractors provided materials and services in connection with an offshore mineral lease. Under the Louisiana Oil Well Lien Act, La. Rev. Stat. 9:4863(A)(1), 9:4864(A)(1), they secured liens on the lessee’s operating interest upon the commencement of labor. They timely recorded the liens. The lessee later sold “term overriding royalty interests” to OHA. In the lessee’s subsequent bankruptcy proceeding, the service providers intervened, seeking to enforce their liens on OHA’s royalty interests. The district court agreed with the bankruptcy court and dismissed their complaints, concluding that the statute that created the liens extinguished them via a safe-harbor provision. The Fifth Circuit affirmed. The safe-harbor question is one of statutory interpretation: Was OHA’s purchase of the overriding royalties a purchase of “hydrocarbons that are sold or otherwise transferred in a bona fide onerous transaction by the lessee or other person who severed or owned them” at severance? The royalties were “sold,” the transaction was “bona fide,” and the seller was a “lessee.” OHA purchased more than an interest in proceeds; it purchased an interest in the to-be-produced hydrocarbons themselves. A purchase of overriding royalties is a purchase of “hydrocarbons” under the statute, so the lienholders’ failure to provide pre-purchase notice renders their liens extinguished. View "OHA Investment Corp. v. Schlumberger Technology Corp." on Justia Law

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At issue in this foreclosure case was whether presentment by a party’s attorney of an original, wet-ink note endorsed in blank is admissible into evidence and enforceable against the borrower without further proof that the holder had possession at the time the foreclosure action was filed. The Supreme Court reversed the court of appeals’ summary disposition reversing the circuit court’s foreclosure judgment against Defendant in favor of Bank. Bank produced a note at trial, and the circuit court concluded it was the original note executed by the borrower. The court of appeals concluded that the issue of possession of the original note had to be proven at trial and that Bank was required to present testimony from a witness with personal knowledge who could verify possession of the note by Bank up to the moment Bank presented the note to the circuit court. The Supreme Court reversed, holding that presentment to the trier of fact in a mortgage foreclosure proceeding of the original, wet-ink note endorsed in blank establishes the holder’s possession and entitles the holder to enforce the note. View "Deutsche Bank National Trust Co. v. Wuensch" on Justia Law

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Gilman filed a voluntary Chapter 7 bankruptcy petition. Phillips was a creditor. Gilman identified properties in Van Nuys and Northridge, describing the Northridge property as “in escrow” and claiming a household exemption for the Van Nuys property, and stating “Debtor has Cancer and has not been able to work.” He did not list any contracts relating to the sale of the Van Nuys property. Gilman would later admit that escrow was open on that property when he filed for bankruptcy. Phillips filed an adversary proceeding, alleging fraud, and objected to Gilman’s homestead exemption. Gilman did not oppose the objection and did not appear at the hearing. The bankruptcy court sustained Phillips’ objections. Gilman filed an amended Schedule C, claiming a reduced exemption and obtained Rule 60(b) relief, based on his counsel’s mistaken failure to oppose Phillips’ objections. The bankruptcy court held that escrow did not eliminate Gilman’s right to a homestead exemption. The Ninth Circuit held that it had jurisdiction to review the district court’s order affirming the grant of the homestead exemption; that the bankruptcy court did not abuse its discretion in granting Rule 60(b) relief from judgment on the ground of excusable neglect; and that the bankruptcy court erred in concluding that the debtor established his claim to a homestead exemption under California law without determining whether the debtor intended to continue to reside in the property. View "Phillips v. Gilman" on Justia Law

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The Supreme Court affirmed the district court’s grant of summary judgment in favor of Bank in this quiet title action. Plaintiff filed suit seeking to quiet title to property he purchased at a tax sale. Bank, the mortgagee on the property and a defendant in the quiet title suit, alleged that Plaintiff’s tax deed was void. The district court granted summary judgment for Bank, concluding that the statutorily-required notice regarding redemption provided by Plaintiff to the property owner and to Bank was deficient and that the tax deed was void. The Supreme Court affirmed, holding (1) Bank had standing to challenge the validity of Plaintiff’s tax deed; (2) because Plaintiff failed to notify Bank of the redemption period, the tax deed was void; (3) the district court’s reference to a document not contained in the record was error, but it was not reversible error because that document was not relevant to the material facts in this case; (4) the doctrine of laches and unclean hands did not bar Bank’s arguments regarding the validity of the tax deed; and (5) Plaintiff’s statutory claims for reimbursement were not ripe for review. View "Montierth v. Deutsche Bank National Trust Co." on Justia Law

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In this case involving competing claims to mineral-lease interests in two tracts of land, the Supreme Court affirmed the judgments of the trial court and court of appeals that the acreage Endeavor Energy Resources, LP and Endeavor Petroleum, LLC (collectively, Endeavor) retained under “retained-acreage clauses” in expired leases did not include the two tracts at issue. Discovery Operating, Inc., which drilled producing wells on the two subject tracts, claimed the mineral-lease interests based on leases acquired directly from the mineral-estate owners. Endeavor based its claim on prior leases with the same owners covering land that included the two subject tracts. Endeavor never drilled on the tracts, and Endeavor’s leases’ terms had expired. However, the leases included “retained-acreage clauses” providing that the leases would continue after they expired as to a certain number of acres associated with each of the wells Endeavor drilled on adjacent tracts. Supreme Court affirmed the judgment of the lower courts, holding that “a governmental proration unit assigned to a well” refers to acreage assigned by the operator, not by field rules. View "Endeavor Energy Resources, LP v. Discovery Operating, Inc." on Justia Law

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The Supreme Court affirmed the judgment of the court of appeals in this case requiring interpretation of retained-acreage provisions in oil-and-gas lease instruments, holding that acreage “included within the proration unit for each well…prescribed by field rules” refers to acreage set by the field rules, not acreage assigned by the operator. XOG Operating, LLC conveyed to Chesapeake Exploration Limited Partnership and Chesapeake Exploration, LLC (collectively, Chesapeake) its rights as lessee under four oil-and-gas leases in three sections of land. Under a retained-acreage provision, the assigned interest would revert to XOG after the primary term. As relevant to appeal, Chesapeake would retain for each well drilled the acreage “included within the proration…unit” “prescribed by field rules.” The acreage not retained by Chesapeake would revert to XOG on termination of the assignment. Chesapeake completed six wells during the primary term of the assignment, five of which were located in an area for which the Railroad Commission had promulgated field rules. The sixth well was located in an area for which there were no field rules. In Chesapeake’s view, it retained all of the assigned acreage. XOG sued Chesapeake to construe the retained-acreage provision. The Supreme Court affirmed the trial court's decision that the none of the land at issue reverted to XOG under the retained-acreage provision. View "XOG Operating, LLC v. Chesapeake Exploration Limited Partnership" on Justia Law

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In this action alleging claims under the West Virginia Surface Coal Mining and Reclamation Act, W. Va. Code 22-31 to 22-3-38, the Supreme Court answered several questions of law certified to it by the federal court. The Court answered, inter alia, that (1) a 1902 deed provision transferring the right to mine coal “without leaving any support for the overlying strata and without liability for any injury which may result to the surface from the breaking of said strata” prohibits a surface owner from pursuing a common law claim for loss of support arising from subsidence caused by the extraction of the coal from below the surface; (2) assuming the surface lands and residence of a landowner have been materially damaged from subsidence that is a natural result of underground mining, the surface owner is limited to the remedies provided for in the West Virginia Code of State Rules 38-2-16.2.c to 38-2-16.2.c.2; and (3) if a surface owner proves that his or her person or property was injured through a coal operator’s violation of a rule, order, or permit, the surface owner can receive monetary compensation for such injury pursuant to W. Va. Code 22-3-25(f). View "McElroy Coal Co. v. Schoene" on Justia Law

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In this action alleging claims under the West Virginia Surface Coal Mining and Reclamation Act, W. Va. Code 22-31 to 22-3-38, the Supreme Court answered several questions of law certified to it by the federal court. The Court answered, inter alia, that (1) a 1902 deed provision transferring the right to mine coal “without leaving any support for the overlying strata and without liability for any injury which may result to the surface from the breaking of said strata” prohibits a surface owner from pursuing a common law claim for loss of support arising from subsidence caused by the extraction of the coal from below the surface; (2) assuming the surface lands and residence of a landowner have been materially damaged from subsidence that is a natural result of underground mining, the surface owner is limited to the remedies provided for in the West Virginia Code of State Rules 38-2-16.2.c to 38-2-16.2.c.2; and (3) if a surface owner proves that his or her person or property was injured through a coal operator’s violation of a rule, order, or permit, the surface owner can receive monetary compensation for such injury pursuant to W. Va. Code 22-3-25(f). View "McElroy Coal Co. v. Schoene" on Justia Law

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First Presbyterian Church PCUSA of Starkville, Mississippi, (“FPC”) sought declaratory relief, a temporary restraining order, and injunctive relief against the Presbytery of St. Andrew Presbyterian Church U.S.A., Inc. (“Presbytery”), after the Presbytery claimed FPC’s property was held in trust for the Presbyterian Church in the United States of America (“PCUSA”). FPC has transitioned into and out of multiple Presbyterian denominations, including the Old School Presbyterian Church; the Presbyterian Church, Confederate States of America; and the Presbyterian Church in the United States (“PCUS”). In 1983, the PCUS merged with another Presbyterian denomination to create the Presbyterian Church in the United States of America (“PCUSA”). FPC has been affiliated with the PCUSA since its inception. FPC claimed that, although it was affiliated with several different Presbyterian denominations, it existed as an “independent, unincorporated religious association from its founding until 2003.” Following its incorporation, FPC conveyed to the corporation its main property and facility in Starkville. The titleholder of record was then identified as FPC’s corporate entity. Any property duly transferred to the corporation remains held by and titled in the name of First Presbyterian Church, Starkville, Mississippi. Prior to 1982, no official documents of the PCUS included trust language. After the PCUSA was formed, the Book of Order contained a trust clause, and local churches then were required to “obtain permission before selling, mortgaging, or otherwise encumbering the property of that particular church.” Because this new trust clause was a departure from prior practice, the PCUSA’s constitution allowed for a “property exception.” Due to increasing disagreement with the PCUSA, FPC voted to cease monetary contributions to the Presbytery and look at the possibility of joining another Presbyterian denomination. In response to schism in the membership of FPC, the Presbytery notified FPC that it had appointed a Presbytery committee, called an Administrative Commission, to “inquire into and settle difficulties” at FPC. FPC’s session passed a resolution authorizing the filing of a legal action to determine the property rights of FPC, the Presbytery, and the PCUSA. FPC sought a declaratory judgment recognizing FPC’s exclusive ownership of all property held by it or in its name, free of any trust claimed by the PCUSA. FPC also requested a temporary restraining order prohibiting the Presbytery from taking control or possession of FPC’s property or from interfering with FPC’s property ownership. The chancery court granted summary judgment in favor of FPC, finding no evidence of any trust, express or implied. After review, the Mississippi Supreme Court agreed and affirmed the finding of the chancery court. View "Presbytery of St. Andrew, Presbyterian Church U.S.A., Inc. v. First Presbyterian Church PCUSA of Starkville" on Justia Law

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In this construction defect action brought by Homeowners, the Supreme Court reversed the order of the district court denying Defendant’s motion to compel arbitration, holding that the Federal Arbitration Act (FAA) did not govern the arbitration agreement contained in the common-interest community’s covenants, conditions, and restrictions (CC&Rs) because, contrary to the conclusion of the district court, the underlying transaction involved interstate commerce. Further, to the extent that Nevada case law concerning procedural unconscionability disfavors arbitration of disputes over transactions involving interstate commerce, that case law is preempted by the FAA. The Court remanded this case for entry of an order directing the parties to arbitration. View "U.S. Home Corp. v. Michael Ballesteros Trust" on Justia Law