Nitro Energy, L.L.C. v. Nelson Energy, Inc.
2010 La. App. LEXIS 962, 34 So. 3d 524, 177 Oil & Gas Rep. 648 (2010)
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Rule of Law:
A property description in a recorded instrument is sufficient to put third parties on notice if it contains enough information to allow the property to be identified with certainty, even if it contains non-misleading errors, as referencing the vendor's deed of acquisition by date and parties is generally sufficient.
Facts:
- On August 26, 2002, Emmett R. Woodard and others conveyed a 227-acre tract of land, located in both Claiborne and Lincoln Parishes, to Rickey K. Swift and others via the 'Woodard deed,' which was recorded in both parishes.
- On September 30, 2004, Richard Nelson obtained a mineral lease (the 'Nelson Lease') from all owners of the Swift Tract, covering the entire property.
- Nelson recorded his lease in Lincoln Parish on February 4, 2005, but failed to record it in Claiborne Parish at that time.
- On December 21, 2005, Donald Faust obtained a mineral lease (the 'Faust Lease') from two owners for their two-thirds interest in the portion of the Swift Tract located only in Claiborne Parish.
- The Faust Lease's property description correctly identified the section, township, range, and parish, and referenced the 2002 Woodard deed by date and parties, but cited the Lincoln Parish recording information for that deed.
- On December 21, 2005, Faust recorded his lease in the Claiborne Parish public records.
- On January 3, 2006, Nelson recorded his 2004 lease in Claiborne Parish, approximately two weeks after the Faust Lease was recorded there.
Procedural Posture:
- Nitro Energy, L.L.C. and Donald Faust filed suit in the Second Judicial District Court, Claiborne Parish, Louisiana, seeking a declaratory judgment.
- The parties filed cross-motions for summary judgment, agreeing the sole issue was the sufficiency of the property description in the Faust Lease.
- The trial court granted the motion for summary judgment in favor of Nitro Energy and Faust.
- Nelson Energy, Inc. and Richard B. Nelson, the appellants, appealed the trial court's judgment to the Court of Appeal of Louisiana, Second Circuit.
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Issue:
Is a property description in a recorded mineral lease sufficient to provide notice to third parties when it correctly identifies the property's parish, acreage, and the date and parties of the acquisition deed, but incorrectly references the recording information for that deed from an adjacent parish?
Opinions:
Majority - Lolley, J.
Yes, the property description in the recorded lease is sufficient to provide notice. Under Louisiana's public records doctrine, a description is adequate if it allows a third party to identify the property with certainty, and courts liberally construe descriptions to uphold conveyances rather than defeat them. The Faust Lease described the property with sufficient particularity by including three key identifiers: 1) the property's location in Section 14, Township 19 North, Range 5 West; 2) its location within Claiborne Parish; and 3) its identification as the same land conveyed in the Woodard deed, specified by date and parties. Referencing the prior deed of acquisition is a well-settled method of providing a sufficient description. The inclusion of the incorrect Lincoln Parish recording information was superfluous and not 'actually misleading' because a third party could easily use the correct date and party names to locate the Woodard deed in the Claiborne Parish records. Therefore, the description provided legally sufficient notice, making the Faust Lease, which was recorded first in Claiborne Parish, the ranking lease.
Analysis:
This decision reinforces the principle in Louisiana property law that favors upholding instruments against challenges based on minor, technical defects in property descriptions. It clarifies that the key inquiry is whether a description is 'actually misleading,' not whether it is perfectly accurate. By holding that a correct reference to a prior deed's parties and date can cure an incorrect reference to that deed's recordation information, the court provides stability to land titles and places a burden on title examiners to use all available information within a description to locate the subject property. This precedent suggests that future challenges to property descriptions will likely fail unless the errors are so significant that they would prevent a reasonably diligent party from identifying the correct property.
