Real Rights Require Real Acts – And Recordation
Louisiana
The United States District Court for the Western District of Louisiana recently examined whether a real right in property could be enforced against third parties, absent a formal recorded instrument evidencing the same.The Court determined that, in the absence of a recorded instrument, an oral or written agreement creates only a personal obligation (here, a limited wellbore interest), and not a real right in the underlying immovable property interests, enforceable solely against the grantor/obligor for a ten-year prescriptive period. In Donald Zadeck Succession v. Treme , 1 Zadeck Energy, Inc. (“Zadeck Energy”) owned a fifty percent working interest in certain Mineral Leases (the “Zadeck Leases”), all containing pooling and unitization provisions. Some of the Zadeck Leases were forced pooled into a unit, and Zadeck Energy, as operator, completed a unit well for the unit (the “Brown well”). By 1992, production from the Brown well had ceased. In May 1993, Zadeck Energy allegedly conveyed to Douglas Vandiver, and his heirs (collectively, the “Vandivers” or “Defendants”), as its operations manager, a five percent working interest in the Zadeck Leases as partial compensation for his participation in the recompletion of the Brown Well; however, no assignment of this instrument was drafted or recorded in the public records.Vandiver was added to the paydeck of the Brown well and began receiving his five percent interest, less his proportionate share of the costs.
In 1994, Zadeck Energy conveyed its fifty percent working interest to Comstock Oil & Gas Louisiana, LLC (“Comstock”), reserving an overriding royalty interest in the transfer. After 1994, Comstock drilled several wells on the land covered by the Zadeck Leases and paid Zadeck Interests, (formerly known as Zadeck Energy) their overriding royalty interest. Neither Comstock nor Zadeck Interests paid the Vandivers any further compensation. In 2009, Douglas Vandiver consulted an attorney on this matter but elected not to file suit. On October 1, 2019, the Brown well was plugged and abandoned, and the issue was not raised again until the following year. On June 4, 2020, the Vandivers’ heirs sent Donald Zadeck a letter, regarding the 1993 conveyance of what they asserted was a five percent working interest in the Zadeck Leases. Unfortunately, Mr. Zadeck died shortly thereafter in 2020. Defendants filed a proof of claim in Donald Zadeck’s succession on January 26, 2021, asserting recognition as working interest owners in the Zadeck Leases, demanding a formal assignment of their five percent alleged working interest by the estate and remuneration of all past-due sums since 2007.The Donald Zadeck Succession filed a counterclaim, seeking a judgment that the Vandivers had no valid interests in the estate. ________________ (1) 2022 U.S. Dist. LEXIS 167122, 2022 WL 4280296.
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N at i onal A ssociation of D i v i s i on O rder A nalys t s
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