Nitro Energy, L.L.C. v. Nelson Energy, Inc. - 45201 ( La. App. 2 Cir 04/14/10), 34 So. 3d 524

Rule:

Louisiana jurisprudence has not established precise criteria to determine what description in the public records is sufficient to place third persons on notice, and such determination is to be made on a case by case basis. Notably, however, courts are liberal in construing the description of property in deeds, so as to sustain, rather than defeat, the conveyance. The same standard should hold true for the construction of property descriptions in other acts affecting immovable property as well. 

Facts:

Nelson Energy, Inc. and Richard B. Nelson ("appellants") first obtained a mineral lease purporting to cover an entire tract of property located in two parishes. However, the lease was only recorded in one parish. Subsequently, Donald Faust obtained a mineral lease covering the portions of the tract only in the second parish. That lease was recorded in the parish public records. Nelson then recorded his lease in that parish. In 2008, Nitro Energy and Faust filed suit seeking (among other claims) a declaration from the trial court that the Faust Lease was the ranking and valid lease on the portion of the Swift Tract located in Claiborne Parish, Louisiana, as to the two-thirds ownership interest described in the Faust Lease. The parties filed cross motions for summary judgment, agreeing ultimately that there was no dispute regarding the material facts of the case. They also agreed that the sole issue in dispute was the sufficiency of the description contained in the Faust Lease. After a hearing on the matter, the trial court ruled in favor of Nitro Energy and Faust, and this appeal by Nelson Energy and Nelson ensued.

Issue:

Was the property description in Nitro Energy and Faust’s lease sufficient to put third parties on notice?

Answer:

Yes.

Conclusion:

The court held that the trial court properly granted summary judgment for Nitro Energy and Faust because the property description in their lease was sufficient to put third parties on notice and, therefore, Nitro Energy and Faust’s lease was the ranking and valid lease pertaining to that part of the tract located in the second parish. The property description at issue made reference to another recorded document that contained a metes and bounds description of the property. The fact that it gave recorded information for the first parish rather than the second was immaterial because the description contained sufficient information for a third person to easily find the mentioned deed in the public records of the second parish.