Bayou Fleet Partnership v. Dravo Basic Materials Co.
106 F. 3d 691, 1997 WL 66090 (1997)
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Rule of Law:
Under Louisiana law, a structure built on land is considered an 'other construction' and a component part of that immovable property if it is massive in size, integrated with the soil, and permanent. Ownership of such a construction transfers with the sale of the land unless the builder has recorded a document preserving their separate ownership.
Facts:
- From 1989 to 1993, Dravo operated an aggregate yard on property it leased from Neal Clulee.
- To store limestone, Dravo constructed three massive 'working bases' by placing a fabric liner on the ground and compacting large quantities of loose limestone until it hardened and compressed the underlying soil.
- These bases were substantial enough to support tons of loose limestone stockpiles and heavy equipment, and Dravo only sold limestone from the stockpiles, not the bases themselves.
- On January 27, 1993, Bayou Fleet Partnership acquired ownership of the property at a sheriff's sale.
- Dravo and Bayou Fleet failed to reach a new lease agreement.
- Over the weekend of March 6-8, 1993, Dravo used heavy machinery to excavate and remove not only its loose limestone stockpiles but also the three compacted working bases from the property.
Procedural Posture:
- Dravo filed a declaratory judgment action in state court seeking to be declared the owner of the removed limestone.
- Bayou Fleet filed a separate action for damages in federal court and removed Dravo's state court action to federal court.
- The two actions were consolidated and tried to the bench in the federal district court.
- The district court (trial court) found that Dravo was entitled to remove a majority of the limestone but held Dravo liable for $25,000 in damages for trespass and for excavating the portion that had become part of the property.
- Both Bayou Fleet and Dravo appealed the district court's judgment to the U.S. Court of Appeals for the Fifth Circuit.
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Issue:
Do large, compacted limestone working bases, constructed by a lessee on leased property, qualify as 'other constructions' that become a component part of the immovable property under Louisiana Civil Code Article 463, thereby transferring ownership to a new purchaser of the land?
Opinions:
Majority - Politz, Chief Judge
Yes. The limestone working bases qualify as 'other constructions' that became a component part of the immovable property. The court determined this by applying a three-part test analyzing the bases' size, degree of attachment to the soil, and permanency. The bases were massive, were so integrated that they compressed the soil and formed the surface level, and had been in place for years without being depleted. Under the principle of accession, such constructions are presumed to belong to the owner of the ground. Because Dravo failed to record its lease or any other document evidencing its separate ownership of the bases, ownership transferred to Bayou Fleet when it purchased the property at the sheriff's sale, making Dravo's removal of the bases unlawful.
Analysis:
This decision clarifies the application of Louisiana's 'other constructions' doctrine under Civil Code Article 463, particularly for large, functional structures made from the same material sold on the property. It strongly reinforces the public records doctrine, establishing that failure to record an instrument preserving ownership of an otherwise immovable construction results in the forfeiture of that ownership upon the sale of the land to a third party. The case serves as a crucial precedent for commercial lessees who make substantial improvements to leased property, emphasizing the necessity of formal, recorded agreements to protect their assets from being legally subsumed by the real estate.
