Vintage Assets, Inc. v. Tennessee Gas Pipeline Company, LLC et al

Filing 225

ORDER AND REASONS denying Defendants' 110 , 114 , 115 Motions for Partial Summary Judgment. Signed by Judge Jane Triche Milazzo. (ecm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
VINTAGE ASSETS, INC.

CIVIL ACTION

VERSUS

NO: 16-713

TENNESSEE GAS PIPELINE
COMPANY, L.L.C. ET AL.

SECTION: “H”

ORDER AND REASONS
Before the Court are Defendants Tennessee Gas Pipeline Company,
LLC, Southern Natural Gas Company, LLC, High Point Gas Transmission,
LLC, and High Point Gas Gathering, LLC’s Motion for Partial Summary
Judgment to Limit Remedies for Contract Claims (Doc. 110); Motion for Partial
Summary Judgment Dismissing Claims for Restoration of State-Owned Water
Bottoms (Doc. 115); and Motion for Partial Summary Judgment Dismissing
Claims for Restoration or Damages to Property Within the Rights-of-Way (Doc.
114). For the following reasons, the Motions are DENIED.
BACKGROUND
Between 1953 and 1970, Defendants’ predecessors received eight rightof-way servitudes, ranging from 100 to 175 feet, crossing various portions of
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Plaintiffs’ property, which authorized the construction and operation of
pipelines and dredge canals. The servitude agreements allowed Defendants to
lay the pipelines in canals “not to exceed 40 [or in some cases 65] feet in width.”
Plaintiffs 1 allege that Defendants failed to maintain these canals, resulting in
erosion and damage to their property. It is undisputed that the widths of the
canals now far exceed that which was established by the servitude agreements.
Plaintiffs brought state law claims for trespass, breach of contract, and
negligence. As a result of a series of summary judgment motions, this Court
dismissed Plaintiffs’ tort and trespass claims and granted summary judgment
on some of its breach of contract claims. The Court held that Defendants had
breached their duty to maintain the canals. Plaintiffs seek compensatory
damages and injunctive relief in the form of abatement and restoration. Before
the Court are now a series of summary judgment motions by Defendants
asking this Court to dismiss Plaintiffs’ request for remediation and limit their
damages for a number of reasons. This Court will consider each motion in
turn.
LEGAL STANDARD
Summary judgment is appropriate “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with affidavits, if
any, show that there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law.” 2 A genuine issue
Plaintiffs are Vintage Assets, Inc.; Jacques Perez de La Vergne; Suzanne de La
Vergne McIntosh; Anne Perez Inabnett; Susan Perez Magee; Joan Elizabeth Heather Huey;
John R. Perez, III; Arthur S. Huey, IV; Renee Perez Sachs; and Mercedes Perez Mack Exempt
Trust, and Whitney Bank Successor Trustee.
2 Sherman v. Hallbauer, 455 F.2d 1236, 1241 (5th Cir. 1972).
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of fact exists only “if the evidence is such that a reasonable jury could return a
verdict for the nonmoving party.” 3
In determining whether the movant is entitled to summary judgment,
the Court views facts in the light most favorable to the non-movant and draws
all reasonable inferences in his favor. 4 “If the moving party meets the initial
burden of showing that there is no genuine issue of material fact, the burden
shifts to the non-moving party to produce evidence or designate specific facts
showing the existence of a genuine issue for trial.” 5 Summary judgment is
appropriate if the non-movant “fails to make a showing sufficient to establish
the existence of an element essential to that party’s case.” 6 “In response to a
properly supported motion for summary judgment, the non-movant must
identify specific evidence in the record and articulate the manner in which that
evidence supports that party’s claim, and such evidence must be sufficient to
sustain a finding in favor of the non-movant on all issues as to which the nonmovant would bear the burden of proof at trial.” 7 “We do not . . . in the absence
of any proof, assume that the nonmoving party could or would prove the
necessary facts.” 8 Additionally, “[t]he mere argued existence of a factual
dispute will not defeat an otherwise properly supported motion.” 9

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Coleman v. Houston Indep. Sch. Dist., 113 F.3d 528, 532 (5th Cir. 1997).
5 Engstrom v. First Nat’l Bank of Eagle Lake, 47 F.3d 1459, 1462 (5th Cir. 1995).
6 Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).
7 John v. Deep E. Tex. Reg. Narcotics Trafficking Task Force, 379 F.3d 293, 301 (5th
Cir. 2004) (internal citations omitted).
8 Badon v. R J R Nabisco, Inc., 224 F.3d 382, 394 (5th Cir. 2000) (quoting Little v.
Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)).
9 Boudreaux v. Banctec, Inc., 366 F. Supp. 2d 425, 430 (E.D. La. 2005).
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LAW AND ANALYSIS
A. Motion for Partial Summary Judgment to Limit Available
Remedies for Contract Claims
In their first Motion, Defendants seek to limit Plaintiffs’ contract claim
remedies in two ways: (1) they argue that the clear terms of the servitude
agreements do not allow the remedy of restoration, and (2) they argue that,
pursuant to Louisiana law, Plaintiffs’ damages are limited to the value of the
land lost.
As to the first argument, Defendants contend that the clear and
unambiguous language of the contracts forestall an award requiring
restoration or backfilling of the canals. They argue that because the servitude
agreements give Defendants the option to leave the canals “open,” the contracts
do not require either remedy. They argue that Plaintiffs cannot obtain specific
performance for an obligation that was never required by the contracts. This
Court has already held that the servitude agreements still at issue are
ambiguous and evince a failure of the parties to contemplate the effects of
erosion. 10 This Court applied suppletive law to hold that Defendants had a
duty to maintain the canals to prevent the aggravation of the servient estate. 11
Because the agreements did not contemplate erosion, they certainly did not
contemplate remediation, and the agreements’ failure to provide for such a
remedy is therefore unsurprising. Defendants do not cite to any provision of
suppletive law forestalling such a remedy.
10
11

Doc. 218.
Id.

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Second, Defendants seek to limit Plaintiffs’ compensatory damages to
the fair market value of the land lost. Under Louisiana law, “[d]amages are
measured by the loss sustained by the obligee and the profit of which he has
been deprived.” 12 Defendants argue that in this matter the “loss sustained by
the obligee” is the land that was eroded by their failure to maintain the canals.
They argue then that Plaintiffs’ damages should be limited to the fair market
value of the land that was eroded. Indeed, the Louisiana Supreme Court has
held that when immovable property is damaged by tortious conduct, “damages
are measured only by the difference between the value of the property before
and after the harm” if “the cost of restoring property in its original condition is
disproportionate to the value of the property or economically wasteful, unless
there is a reason personal to the owner for restoring the original condition or
there is a reason to believe that the plaintiff will, in fact, make the repairs.” 13
The Louisiana Supreme Court has also expressly held, however, that damages
to immovable property under a breach of contract claim are not governed by
this rule. 14 In Corbello v. Iowa Productions, the Louisiana Supreme Court held
that when property is damaged pursuant to a breach of contract, the
measurement of damages is not limited to the value of the property lost but is
instead governed by the contract. 15 Defendants have not cited this Court to
any case that calls into question the Court’s ruling in Corbello. Accordingly,
this Court agrees with Plaintiffs that the law does not limit their recovery to

La. Civ. Code art. 1995.
Roman Catholic Church of Archdiocese of New Orleans v. Louisiana Gas Serv. Co.,
618 So. 2d 874, 879–80 (La. 1993).
12
13
14
15

Corbello v. Iowa Prod., 850 So. 2d 686, 694, (La. 2003).

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the value of the land lost. Instead, an award of damages shall be governed by
the terms of the agreements and the good or bad faith of Defendants.
Indeed, Plaintiffs argue that Defendants’ breach was in bad faith,
entitling them to greater damages. Louisiana Civil Code article 1996 states
that “[a]n obligor in good faith is liable only for the damages that were
foreseeable at the time the contract was made,” while article 1997 states that
“[a]n obligor in bad faith is liable for all the damages, foreseeable or not, that
are a direct consequence of his failure to perform.” Accordingly, Plaintiffs
contend that they are entitled to all damages that are a direct consequence of
the Defendants’ bad faith breach. Defendants argue, however, that Plaintiffs
have never alleged that Defendants acted in bad faith, and they therefore
cannot raise this argument for the first time in opposition to a motion for
summary judgment.

This Court agrees.

Plaintiffs’ Complaint, Amended

Complaint, and Second Amended Complaint do not contain any allegations of
an “intentional and malicious failure to perform.” 16 Plaintiffs’ allegations are
therefore insufficient to put Defendants on notice of such a claim. 17
Accordingly, Plaintiffs’ damages award will be governed by the good faith
standard of foreseeability.

The foreseeability of damages at the time the

contract was made is an issue of fact, the resolution of which is inappropriate
at the summary judgment stage. Defendants’ Motion is therefore denied.

La. Civ. Code art. 1997(c).
The parties have asserted additional arguments regarding Plaintiffs’ allegation of
bad faith, but because the Court finds such a claim was not plead, it need not address these
arguments.
16
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B. Motion for Partial Summary Judgment Dismissing Claims for
Restoration of State-Owned Water Bottoms
Defendants next argue that Plaintiffs’ claims for restoration should be
dismissed because Plaintiffs no longer own the portions of their property that
have eroded into open water. Defendants argue that when formerly private
land has been encroached upon by erosion such that it now forms part of the
bed of a navigable water body, it becomes a public thing and is the property of
the State. They argue that because the canals at issue have eroded into open
water, that land now belongs to the State, and Plaintiffs have no right to seek
its restoration. Defendants also point out that the State has granted oyster
leases with respect to some of these areas.
At the outset, the parties dispute who has the burden of proof with
respect to this issue. On one hand, Defendants claim that Plaintiffs bear the
burden of proof to show ownership as one of the elements of their claims. On
the other, Plaintiffs allege that the burden lies with Defendants because they
are asserting the State’s ownership through erosion as an affirmative defense.
In this Court’s view, Plaintiffs have submitted title documents that establish
ownership of the land at issue. Defendants would now have Plaintiffs further
prove that ownership has not been lost in their case-in-chief. This Court finds
that Plaintiffs have already carried their burden to show ownership.

If

Defendants claim that Plaintiffs have lost ownership of their land, they must
come forth with competent evidence to establish that fact. Under Louisiana
law, “[a]n affirmative defense raises a new matter, which assuming the

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allegations in the petition are true, constitutes a defense to the action.” 18 As
such, Defendants assert an affirmative defense on which they must carry the
burden. 19 This Court finds that Defendants have failed to do so. 20
First, Defendants fail to present any argument or evidence regarding the
classification of the body of water into which Plaintiffs’ land is alleged to have
eroded. Whether Plaintiffs’ land has eroded into a river, a lake, or the sea
affects the boundary between public and private land and is an issue of fact
inappropriate for summary judgment. 21

Second, Defendants make no effort

to show that the body of water into which Plaintiffs’ land eroded is a “natural
navigable water body” such that its bottom is owned by the State. 22 This too
is an issue of fact inappropriate for resolution at the summary judgment stage.
Third, the parties dispute the effect of the State’s grant of oyster leases on the
property, however, neither has presented any evidence regarding what, if any,
investigation took place regarding ownership of the land prior to the issuance
LSREF2 Baron, L.L.C. v. Tauch, 751 F.3d 394, 398 (5th Cir. 2014). “In a diversity
case, substantive state law determines what constitutes an affirmative defense.” Id.
19 See Fin & Feather, LLC v. Plaquemines Par. Gov’t, 202 So. 3d 1028, 1034 (La. App.
4 Cir. 2016) (“A party defendant who asserts an affirmative defense bears the burden of proof
thereof.”).
20 See Moreland v. United States, No. 3:11-CV-358-L, 2013 WL 3283700, at *2 (N.D.
Tex. June 28, 2013) (“[I]f the movant bears the burden of proof on an issue, either because he
is the plaintiff or as a defendant he is asserting an affirmative defense, he must establish
beyond peradventure all of the essential elements of the claim or defense to warrant
judgment in his favor.”); A. N. YIANNOPOULOS, LOUISIANA CIVIL LAW TREATISE § 4:19 (5th
ed.) (“Since different rules of law apply to rivers and lakes with respect to the ownership of
banks or shores and of accretions thereto, it is frequently important to determine whether a
particular body of water is a river or a lake.”).
21 See State v. Placid Oil Co., 300 So. 2d 154, 175 (La. 1973) (holding that when
determining whether a body of water is a lake or stream the court should consider “the size,
especially its width as compared to the streams that enter it; its depth; its banks; its channel;
its current, especially as compared to that of streams that enter it; and its historical
designation in official documents, especially on official maps.”)
22 La. Civ. Code art. 450.
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of those leases. Accordingly, this Court holds that material issues of fact and
the absence of pertinent information preclude summary judgment on this
issue.
As an aside, however, this Court notes its distaste for Defendants’
argument.

Defendants argue that, even if they breached their duty to

maintain the canals so severely that parts of Plaintiffs’ property have eroded
into open water, they should not now be required to repair that damage
because Plaintiffs have lost ownership of their land (thanks to the erosion
allegedly caused by Defendants’ actions). 23 Defendants’ argument, whether
legally sound or not, is inequitable at best and offensive at worst. Indeed, “no
court was ever organized which would knowingly permit a litigant to profit by
his own wrong.” 24 Luckily for Defendants, however, “[t]he existence of positive
law on the subject precludes the application of equitable concepts.” 25
C. Motion for Partial Summary Judgment Dismissing Claims for
Restoration or Damages to Property Within the Rights-of-Way
Finally, Defendants argue that Plaintiffs should not be permitted to
recover damages or remediation for the portions of damaged land within the
boundaries of the rights-of-way. Defendants argue that as the dominant estate
holder, they have the “right to use the servitude in favor of [their] estate along
with any rights which may be accessory to the use of the servitude.” 26 They

Indeed, this Court is reminded of the school yard goading “Na-na na-na boo boo!
Catch me if you can!”
24 Hyman v. Hibernia Bank & Tr. Co., 139 La. 411, 425, 71 So. 598, 606 (1916); Aegis
Ins. Co. v. Delta Fire & Cas. Co., 99 So. 2d 767, 780 (La. Ct. App. 1957).
25 H&E Equip. Servs., Inc. v. Sugar & Power Int’l, LLC, 215 So. 3d 446, 450 (La. App.
1 Cir. 2017).
26 Doc. 114-1, p.5.
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argue that an award of restoration or damages for property within the rightsof-way would interfere with Defendants’ use of the servitudes.
Defendants also correctly point out, however, that the “use and extent”
of the property inside the rights-of-way are “regulated by the title by which
they are created.” 27 This Court has already held that the servitude agreements
still at issue contain a duty to maintain the canals by function of suppletive
law. 28 It must now determine the practical effect of that holding. A duty to
maintain the canals practically requires Defendants to maintain the canals at
the width of their initial construction. All of the parties agree that the “not to
exceed” widths provided for in the servitude agreements—which call for
“canals not to exceed 40 [or in some cases 65] feet in width”—govern at least
the width of the canals at construction. Therefore, because suppletive law
imposes upon Defendants a duty to maintain the canals and the servitude
agreements provide for the width of their initial construction, Defendants have
a duty to maintain the canals at the “not to exceed” widths provided for in each
servitude agreement. Defendants do not point to any contract provision or
suppletive law that would prevent Plaintiffs from seeking damages for the
breach of this duty simply because some of the damage occurred within the
rights-of-way. Indeed, the case law relied on by Defendants does little to
persuade this Court.
Defendants cite to a string of easily distinguishable cases, which they
assert stand for the proposition that Plaintiffs cannot interfere with their use
La. Civ. Code art. 697.
This Court has already dismissed Plaintiffs’ claims for breach of contract of some
of the servitude agreements, and those agreements are therefore no longer at issue here.
Doc. 218.
27
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of the rights-of-way. First in Jackson v. Jackson, a landowner alleged that her
neighbors had trespassed on her land when they dug a new ditch. 29 The
Louisiana First Circuit Court of Appeal found that no trespass had occurred
because the ditch had been built within an existing right-of-way. A dedication
had created the right-of-way “for the perpetual use of the public for street
purposes, including rights-of-way for the installation of water mains . . . and
other public utilities over, through, upon, under and across same.” 30 The court
found that “[t]he wording of this dedication is broad enough to encompass the
drainage ditch and culverts installed by the developers.” 31

Rather than

support Defendants’ position, the court’s reasoning confirms that the use and
extent of a servitude is governed by the title by which it was created. The
right-of-way at issue in Jackson provided for the installation of public utilities
and therefore the developers were not liable for installing such. Here, the
servitude agreements provide for canals of a certain width. Jackson does not
support a holding that Defendants cannot be liable for the full damage caused
by the breach of that obligation.
In Accardo v. Chenier Property Partners, LLC, the court considered
whether St. Tammany Parish had committed a taking when it expanded a
drainage ditch and removed some trees located within a drainage servitude. 32
The Parish had the authority under state law to construct and maintain
drainage ditches as it “may deem necessary.” 33 The Louisiana First Circuit
Jackson v. Jackson, 818 So. 2d 192, 204 (La. App. 1 Cir. 2002).
Id.
31 Id.
32 Accardo v. Chenier Prop. Partners, LLC, 2011 WL 2420183, at *4 (La. App. 1 Cir.
29
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2011).

33

Id.

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Court of Appeal held that no taking had occurred because the widening of the
drainage ditch and tree removal occurred within the boundaries of the
servitude and therefore the plaintiffs could not show a substantial interference
with the free use and enjoyment of their property. 34 Setting aside the fact that
no taking is at issue here, the facts of this case are equally distinguishable.
Here, Defendants do not have authority under the law or servitude agreements
to widen the canals as they deem necessary. Indeed, the servitude agreements
require the canals to be constructed and maintained at a certain width.
Accardo too supports the idea that the dominant estate’s rights within a rightof-way are governed by the title by which it was created.
Accordingly, even the cases cited by Defendants support the premise that
the extent and use of the servitudes are governed by the servitude
agreements. 35 By operation of suppletive law, those agreements impose on
Defendants the duty to maintain the canals at the “not to exceed” widths
designated therein. Defendants’ right to use the servitudes does not trump the
obligations created by the servitude agreements and certainly does not give
Defendants the right to act with impunity as long as their actions occur within
the bounds of the rights-of-way. Defendants have not given this Court any
reason to restrict Plaintiffs’ damages to those that occurred outside of the
rights-of-way or to prevent Plaintiffs from recovering for the full extent of the
damage caused by Defendants’ breach. A holding in Defendants’ favor would
lead to an absurd result in which Defendants could breach the servitude
Id. at *7.
See also Keeley v. Schexnailder, 708 So. 2d 838, 842 (La. App. 3 Cir. 1998) (holding
that the trial court erred in restricting the servitude and stating that the title should govern
because “[t]he extent of the servitude was carefully surveyed, laid out, and described by the
grantor”).
34
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agreements with limited consequence, and Plaintiffs would be powerless to
enforce the obligation to maintain the canals at the “not to exceed” widths.
Accordingly, Defendants’ Motion is denied.
CONCLUSION
For the foregoing reasons, Defendants’ Motions for Partial Summary
Judgment are DENIED.
New Orleans, Louisiana this 28th day of August, 2017.

____________________________________
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE

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