JEANERETTE LUMBER SHINGLE COMPANY v. SHELL OIL COMPANY (2025)

Plaintiff, Jeanerette Lumber & Shingle Company, L.L.C., appeals from a trial court judgment enforcing its prior settlements with the predecessors-in-interest of Defendants, Shell USA, Inc. (Shell), and BPX Operating Company (BPX), and ordering the dismissal, with prejudice, of a second suit it had filed against Defendants based on the same claims it had previously settled. For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

Plaintiff is the owner of property in St. Martin Parish that is situated in the West Lake Verret Oil and Gas Field. This property was the subject of a 1934 mineral lease, whereby Plaintiff's predecessor-in-interest, Jeanerette Lumber & Shingle Company, Ltd., leased the property to Shell's predecessor-in-interest, Shell Petroleum Corporation (Shell Petroleum), who conducted oil and gas operations on the property for forty-nine years.

On January 25, 1984, Shell Petroleum assigned the mineral lease to Shell Western E&P, Inc. (Shell Western), who then assigned the lease to The Meridian Resource and Exploration Company (Meridian I) on July 1, 1998. Meridian I assigned the lease to The Meridian Resources and Exploration LLC (Meridian II) on January 1, 2001, who then assigned the lease to Mission Resources Corporation (Mission) on June 1, 2001. On May 21, 2003, a cooperative agreement was entered into with the Louisiana Department of Natural Resources (LDNR), whereby the owner/operator of the lease agreed to either plug and abandon or to restore to active service eight inactive wells per year on the property.

On January 1, 2006, Mission assigned the lease to BPX's predecessor-in-interest, Petrohawk Operating Company (Petrohawk), who then assigned the lease to Milagro Exploration, LLC (Milagro) on December 1, 2007. On November 1, 2015, the lease was assigned for the final time to White Oak Operating Company, LLC (White Oak). Oil and gas operations had ceased on the property by 2019, and White Oak terminated the lease in February 2022, at the request of Plaintiff.

On January 28, 2009, prior to the lease's termination, Plaintiff filed the instant legacy suit ¹ in the Sixteenth Judicial District Court, naming Shell Oil Company (Shell Oil) and SWEPI, LP ² (SWEPI) as defendants and alleging causes of action in negligence, continuing trespass, continuing nuisance, and strict liability under La.Civ.Code arts. 667, 2317, and 2322. It also alleged causes of action for breach of contract, based on Shell Oil's and SWEPI's failure to restore the property to its original condition, and breach of their implied obligation to act as reasonably prudent operators. La.R.S. 31:11; La.R.S. 31:22; and La.R.S. 31:122. Plaintiff further alleged:

To the extent that any ongoing operations are being conducted on any of the leases subject to this lawsuit, the applicable leases impose an ongoing “maintenance” obligation on the Defendants. Further, upon information and belief, the Lease at issue in this lawsuit does not permit the lessee to postpone remediation of contaminated property until the end of the Lease. Further, under applicable Civil Code authority (C.C. arts. 2686 and 2692), Plaintiff has the right to demand that damages to the leased land be repaired and that restoration be performed at the earliest reasonable time.

As a result of Shell Oil's and SWEPI's actions, Plaintiff sought punitive and exemplary damages and damages for diminution in property value, stigma, unjust enrichment, and for “the civil fruits derived from [their] trespass pursuant to” La.Civ.Code art. 486. It also sought a monetary award “equal to the cost of conducting a comprehensive and expedited environmental assessment of all present and yet unidentified pollution and contamination of its property [ ]” and “equal to the cost of remediation of its property.”

On February 26, 2009, Shell Oil and SWEPI notified the trial court that they were removing Plaintiff's suit to federal court. After the matter was returned to the trial court in 2010, Plaintiff filed a first supplemental and amending petition on March 25, 2013, adding Meridian I, Petrohawk, and Milagro as defendants and alleging that Shell Oil and SWEPI were the successors-in-interest of Shell Petroleum.

On January 5, 2015, Plaintiff, Shell Oil, SWEPI, and Meridian I filed a joint motion to approve a settlement and for dismissal of Plaintiff's claims with prejudice. The parties noted that the September 11, 2014 settlement (the Shell settlement) was submitted without objection to the Louisiana Attorney General (AG) and the Louisiana Department of Energy and Natural Resources (LDENR).³ On January 7, 2015, the trial court approved the Shell settlement and ordered “that any and all claims asserted by” Jeanerette Lumber, Shell, SWEPI, and Meridian I “be and hereby are dismissed, with prejudice[.]” The order specifically reserved any “rights and claims” Jeanerette Lumber “may have against all remaining defendants to this litigation and/or third parties.”

Approximately one year later, on February 8, 2016, Plaintiff, Petrohawk, and Milagro jointly moved to approve their settlement and for dismissal of Plaintiff's claims with prejudice. They noted that the settlement (the Petrohawk settlement) was submitted without objection to the AG and LDENR. The Petrohawk settlement was approved by the trial court on February 12, 2016, with the order stating “that any and all claims asserted by” Plaintiff, Petrohawk, and Milagro “be and hereby are dismissed, with prejudice[.]”

Approximately eight years later, on May 8, 2024, Plaintiff and Jeanerette Minerals, L.L.C. (referred to collectively as “Plaintiff II)⁴ filed a second legacy suit against Shell and BPX (referred to collectively as “Defendants”), based on their solidary liability with the final lessee, White Oak, to remediate the property following the mineral lease's termination. Plaintiff II alleged that after presenting it with a nine-year plan for plugging and abandoning forty-five wells located on the property, White Oak had filed for Chapter 7 bankruptcy. It alleged that as Defendants were not expressly discharged from their obligations under the mineral lease, they owed a duty to “restore Plaintiffs’ property to its original condition, which encompasses an obligation to (1) plug and abandon 45 unplugged wells remaining on Plaintiffs’ property and (2) remove all equipment associated therewith.”

In Count One of the petition, Plaintiff II alleged causes of action in negligence, trespass, continuing nuisance, and strict liability. La.Civ.Code arts. 667, 2317, and 2322. It alleged that Defendants breached the mineral lease and their obligations, as lessees, to act as prudent administrators and to restore the property to its original condition. La.Civ.Code art. 2683. Plaintiff II further alleged that Defendants breached their obligation to act as reasonably prudent operators by failing to remove the unplugged wells, flowlines, and abandoned equipment from the property. La.R.S. 31:122. Under Count Two, it alleged causes of action based on Defendants’ breach of their express and implied end-of-lease obligations. Specifically, it alleged Defendants’ breach of their obligations to act as prudent administrators and to restore the property to its original condition. La.Civ.Code arts. 2683, 2686, 2687, and 2692. Plaintiff further alleged Defendants’ breach of their obligations to act as prudent operators and to restore the property to its original condition. La.R.S. 31:11; La.R.S. 31:22; and La.R.S. 31:122.

As a result of these actions, Plaintiff II sought damages for stigma based on a diminution in the value of its property, civil fruits and/or unjust enrichment, and for the annoyance, discomfort, and inconvenience it had suffered as a result of Defendants’ actions. It also sought a monetary award to cover the cost of “a complete analysis of the extent of unplugged wells, abandoned equipment, flowlines and other oil and gas related facilities and equipment[ ]” on the property;“[t]he cost to restore all well sites, including funds for proper well abandonment and equipment and debris removal;” and “[t]he cost to remediate and restore the property to its original condition.”

In response to Plaintiff II's suit, Defendants moved to enforce the terms of the settlements between Plaintiff and their predecessors-in-interest and to have Plaintiff II's lawsuit dismissed with prejudice. Plaintiff opposed both motions, arguing that its end-of-lease restoration claims were not released because the only restoration claims included in the settlements were those occurring prior to September 11, 2014. It further argued that even if these claims were included in the settlements, the release of such claims is void and unenforceable as being against public policy.

At the August 14, 2024 hearing on the motions, Defendants were granted leave of court to fully disclose all of the settlement terms except those pertaining to the amounts received by Plaintiff in exchange for its release. After hearing argument, the trial court orally granted Defendants’ motions and enforced the terms of the settlements. It further ordered the dismissal, with prejudice, of Plaintiff Il's lawsuit against Defendants. Judgment was rendered in this matter on August 26, 2024. It is from this judgment that Plaintiff appeals.⁵

On appeal, Plaintiff raises one assignment of error:

The District Court erred in holding that the settlement agreements’ “Claims” definitions resolved whether the New Suit was within the scope of the settlement agreements, without analyzing the more restrictive release language in the settlement agreements, and in failing to resolve any doubts as to the release of future obligations in favor of the releasing party, [Plaintiff].

OPINION

“A compromise is a contract whereby the parties, through concessions made by one or more of them, settle a dispute or an uncertainty concerning an obligation or other legal relationship.” La.Civ.Code art. 3071. A compromise is construed pursuant to the general rules of contract interpretation set forth in the Louisiana Civil Code. “Interpretation of a contract is the determination of the common intent of the parties.” La.Civ.Code art. 2045. “When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties’ intent.” La.Civ.Code art. 2046. “Each provision in a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole.” La.Civ.Code art. 2050.

A compromise differs from other contracts in one particular way as it “settles only those differences that the parties clearly intended to settle, including the necessary consequences of what they express.” La.Civ.Code art. 3076. In applying this rule, “courts are guided by the general principle ‘that the contract must be construed as a whole and in light of attending events and circumstances.’ ” Brown v. Drillers, Inc., 630 So.2d 741, 748 (La.1994) (quoting Succession of Teddlie, 385 So.2d 902, 904 (La.App. 2 Cir. 1980)). “Thus, the intent which the words of the compromise instrument express in light of the surrounding circumstances at the time of execution of the agreement is controlling.” Id.

Finally, a compromise has “the effect of law for the parties” and precludes “a subsequent action based upon the matter that was compromised.” La.Civ.Code arts. 1983 and 3080. As noted by the supreme court, Louisiana has a strong public policy in favor of settlements:

The law in its wisdom, and out of a solicitude to end or avert threatened litigation, encourages [the] settlement of disputes by compromise, and does not sanction the solemn acts of contending parties settling their disagreements being lightly brushed aside, unless there be present evidence of bad faith, error, fraud, etc. If such were not the law, there would be little incentive to any one [sic] to part with anything of value in the desire to escape the harassments of litigation. A compromise agreement, when freely entered into, is intended to have the binding effect of the thing adjudged. The law has ordained that such transactions have the dignity and force of a definitive judgment, in so far as definitely and irrevocably fixing the rights and liabilities of the parties thereto, as relates to the subject-matter dealt with. It is simply the act of the parties determining their own liabilities and obligations, instead of the court.

Joseph v. Huntington Ingalls Inc., 18-2061, p. 18 (La. 1/29/20), 347 So.3d 579, 593 (quoting Beck v. Cont'l Cas. Co, 145 So. 810, 811 (La.App. 2 Cir. 1933)).

On appeal, a judgment enforcing a compromise is reviewed pursuant to the manifest error standard of review. Adams v. Chevron USA, Inc., 22-814 (La.App. 4 Cir. 5/3/23), 382 So.3d 229, writ denied, 23-855 (La. 10/10/23), 371 So.3d 454.

This is due in part to the fact that a “judgment regarding the existence, validity and scope of a compromise or settlement agreement hinges on its finding of the parties’ intent,” which is a factual finding. Id.

“[A] reviewing court may not merely decide if it would have found the facts of the case differently.” Hall v. Folger Coffee Co., 03-1734, p. 9 (La. 4/14/04), 874 So. 2d 90, 98. Rather, “one of the basic tenets of the manifest error standard of review is that ‘reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review, even though the court of appeal is convinced that had it been the trier of fact, it would have weighed the evidence differently.’ ” Id., 03-1734, pp. 10-11, 874 So. 2d at 99 (quoting Parish Nat. Bank v. Ott, 02-1562, p. 7 (La. 2/25/03), 841 So. 2d 749, 753). The Louisiana Supreme Court pronounced a two-prong test for reversing factual findings. First, “[t]he appellate court must find from the record that a reasonable factual basis does not exist for the finding of the trial court.” Stobart v. State through Dep't of Transp. & Dev., 617 So. 2d 880, 882 (La. 1993). Second, “the appellate court must further determine that the record establishes that the finding is clearly wrong (manifestly erroneous).” Id.

“The interpretation of the language of a contract is a question of law subject to de novo review, while factual determinations are subject to the manifest error standard of review.” Bodenheimer v. Carrollton Pest Control & Termite Co., 17-0595, p. 7 (La. App. 4 Cir. 2/14/18), 317 So. 3d 351, 357.

“When the issues presented on appeal raise mixed questions of fact and law, the manifest error standard applies.” Lakefront Mgmt. Auth. v. J & J Partners, L.L.C., 21-0102, p. 6 (La. App. 4 Cir. 11/10/21), 331 So. 3d 434, 438, wit denied, 21-01855 (La. 2/15/22), 332 So. 3d 1188. “Questions of law are reviewed under the de novo standard.” Sarpy v. ESAD, Inc., 07-0347, p. 4 (La. App. 4 Cir. 9/19/07), 968 So. 2d 736, 738.

Id. at 234–35 (alterations in original).

In orally granting Shell's and BPX's motions, the trial court stated:

Considering those exhibits, specifically, both of the settlement agreements involving Shell and BPX, also known as Petrohawk, I've reviewed both settlement agreements and considered those in my ruling. In my review of the settlement agreements, the settlement agreements included were in settling all claims, including claims resulting out of any contractual agreement between the parties, which would include the 1934 mineral lease. In reviewing the claims that were brought in the new lawsuit, I do find that the settlement agreement covers those claims. The settlement agreement includes settling all of the claims, and it says that are being conclusively and absolutely extinguished. The settlement agreements do include the term “claims”, meaning any and all liabilities, claims, demands, causes, or rights of action, obligations, or entitlement, or expectations of any kind of character, whether or not, alleged, known, or knowably [sic] relating to, or arising out, or in any way related to the property and the conditions, contamination, materials, or substances that have been or are now, or maybe [sic] in the future, be located on or in, or under, or emanated from the property. Also, any activities, operations, or practices that may have been or may ever be conducted or located on the property. It further states - it includes any and all mitigation costs, costs of abandonment or clean up, costs of damages whatsoever relating to the plugging and abandonment of wells, or decommissioning of equipment and facilities. So, my review of the settlement agreements for both BPX and Shell, that settlement agreement includes all claims that are being brought forth in the new suit that was filed by JLS, which is currently pending in Section G of this Court. Therefore, I am granting the [sic] both parties [sic] motion to enforce this settlement agreement, which would include ordering JLS to dismiss the suit that is pending in Section G.

Plaintiff does not dispute that it entered into settlements with Defendants’ predecessors-in-interest. However, it does dispute that the settlements released those end-of-lease claims arising under La.Civ.Code art. 2683 and La.R.S. 31:129.⁶ Relying on the supreme court's opinion in Brown, Plaintiff argues that language found in the settlements renders it “at least doubtful as to whether the future-arising lease-end obligations would be covered by the compromise.” It further argues that a release of such claims would be absolutely null and unenforceable as being against public policy.

Regarding the release of future claims, the supreme court, in Brown, 630 So.2d at 753-54 (alterations in original) (footnotes omitted), stated:

Even when valid, releases of future actions are narrowly construed to assure that the parties fully understand the rights released and the resulting consequences. As a result, if the release instrument leaves any doubt as to whether a particular future action is covered by the compromise, it should be construed not to cover such future action. In Ritchey v. Azar, 383 So.2d 360 (La. 1980), we recognized that “fail[ure] to use language in the contract which would have clearly provided for waiver of [a] future action” evidences a lack of intent to compromise such future action. Id. at 364; see also Bogalusa Community Medical Center v. Batiste, 603 So.2d 183, 188 (La.App. 1st Cir. 1992); Succession of Magnani, 450 So.2d 972, 977 (La.App. 2d Cir. 1984). By the same token, Defendants’ failure to use language in the release instrument which would have clearly provided for a waiver of a future wrongful death action evidences a lack of intent to compromise such future action.

The underlying rationale for the special treatment accorded releases of future actions is succinctly stated as follows: “[w]herever a bargain is intended to operate in the future as an exemption from liability the courts apply more stringent rules of interpretation, partly because the chances are smaller that the parties have adverted to this very cause of action, and partly because these contracts tend to be against public policy.” 15 W. Jaeger, Williston on Contracts § 1825, pp. 479–80 (3d Ed. 1972).

However, more recently in Joseph, 347 So.3d 579, the supreme court, as noted by Chief Justice Johnson's dissent, declined to narrowly construe whether the future occupational-lung-disease claims released by the deceased employee included a claim based on mesothelioma, a disease not mentioned in the settlement and which the employee contracted decades after the fact. In rejecting the argument that a settlement must specifically identify a disease or injury in order to establish that the parties’ intended to release that future claim, the supreme court stated:

Indeed, the very decision on which plaintiffs’ rely, Brown, itself acknowledges there is no necessity for direct reference to a particular injury, as long as the intent of the parties is clear. Brown, 630 So.2d at 757 (“[O]ur holding here, together with our holding in Daigle [v. Clemco Indus., 613 So.2d 619 (La. 1993)], permits defendants to conclusively compromise potential wrongful death claims, provided the intent to do so is unequivocally reflected, while not necessarily by express mention of such claims, in the language employed in the release instrument.”) (Emphasis added.) The Civil Code permits a compromise to be “worded in general terms,” as the 1985 Release clearly is. See La. C.C. art. 2051. It further specifies that “[w]hen the parties intend a contract of general scope but, to eliminate doubt, include a provision that describes a specific situation, interpretation must not restrict the scope of the contact to that situation alone.” La. C.C. art. 2052. Thus, plaintiffs’ attempt to limit the scope of the Release to the specific situations described therein, in the face of the otherwise broad language referencing “any and all other personal injury claims” is not sanctioned by the Civil Code.

Id. at 590 (second alteration ours).

In finding that the parties clearly, unambiguously, and unequivocally intended to release the employee's future mesothelioma claim, the supreme court examined “the four corners of the Release, mindful of the obligation to construe it as a whole, in light of attending events and circumstances[.]” Thus, we will apply this principle in determining whether the parties clearly, unambiguously, and unequivocally intended to include Plaintiff's end-of-lease restoration claims in the settlement.

Shell Settlement

Under the terms of the Shell settlement, Plaintiff released its claims against Shell Oil, SWEPI, Meridian I, Louisiana Onshore Properties, Inc., and Alta Mesa Holdings, LP (referred to collectively as “the Released Parties”).

As used in the settlement, “claims” is defined as follows:

The term “Claim” or “Claims” shall mean any and all ․ claims, demands, causes or rights of action, obligations ․ whether or not alleged, known, or knowable relating to or arising out of or in any way related to (i) the Property[;] (ii) any ․ contamination ․ that have been, are now, or may in the future be located on, in, or under or emanate from the Property[;] ․ (iv) any mineral lease ․ claim ․ related to the Property or its use; (v) any and all mitigation costs, costs of abatement or clean-up (including costs of fill, dirt, or caliche), costs or any damages whatsoever relating to or for plugging and abandonment of wells or decommissioning of equipment and/or facilities, costs for any and all costs of replacing the water supply ․; (vii) any other contract․ claim arising out [sic] or in any way related to the Property, any ․ contamination ․ that have been, are now, or may in the future be located on, in, or under or emanate from the Property ․[;] and (ix) ․ any contract․ claim arising out of or in any way related to the use of the Property and/or its surface and subsurface for disposal of produced water, production wastes or other materials of any type. The term “Claim” or “Claims” includes ․ any past, present, future or potential known or unknown claim ․ cause of action ․ whether at law or in equity, whether sounding in tort, contract ․ negligence, strict liability ․ whether for ․ cost of cleanup, remediation expenses, plugging and abandonment of wells, abandonment or decommissioning of facilities ․ unless otherwise set forth herein.

(Emphasis added.)

Plaintiff argues that despite its expansive definition, the settlement qualifies which of the defined claims are actually released through the use of the phrase “unless otherwise set forth herein.” Thus, it argues that its future claims for “cost of cleanup, remediation, plugging and abandonment of wells, and abandonment or decommissioning of facilities” were not released based on language specifically excluding those claims from the settlement.

Plaintiff points to Section III(B) Contingent Potential Activities, wherein the Released Parties agreed “to conduct sufficient restoration to meet minimum regulatory and legal requirements” if all subsequent operators were declared bankrupt and all legal and regulatory remedies against the subsequent operators were exhausted:

The Parties agree that the consideration for this agreement is the cash payment recited herein, and acknowledge that any necessary plugging and abandonment, decommissioning or environmental remediation activities shall be the responsibility of Subsequent Operators, including but not limited to Milagro and/or Petrohawk. In the event that all Subsequent Operators are unable to perform those activities due to the lack of financial capability, as confirmed by Chapter 7 bankruptcy proceedings, and after all legal and regulatory remedies have been exhausted in an effort to compel the Subsequent Operators to accomplish those activities, then the Released Parties agree to conduct sufficient restoration to meet minimum regulatory and legal requirements as can be accomplished through cooperation among the Releasing Parties, the Regulatory Agencies and the Released Parties as detailed in paragraph III (D) below.

(Emphasis added.)

It next points to Section III(D) Release and Cooperation from Releasing Parties, wherein it “agree[d] to release all claims arising from any event, transaction, matter or cause related in any way to the Lawsuit and the Released Parties’ acts, omissions, or contractual obligations relating to the Property prior to the date hereof[.]” (Emphasis added.) Plaintiff argues that when “prior to the date hereof[ ]” is read in conjunction with the following highlighted language, it is clear that the only restoration claims released were those occurring prior to the settlement's September 11, 2014 effective date:

However, in conjunction with (1) claims asserted against Subsequent Operators and/or (2) future facility or equipment decommissioning and/or well plugging and abandonment operations by any Subsequent Operators, the Releasing Parties may conduct testing or sampling at those locations at issue to confirm compliance with any and all applicable government regulations in existence at the time, whether under the authority of the LDNR, the LDEQ, or any other regulatory authority.

Based on our reading of the settlement as a whole, we disagree that Plaintiff's end-of-lease claims were excluded from the settlement.

Section III(B) clearly states “that any necessary plugging and abandonment, decommissioning or environmental remediation activities shall be the responsibility of Subsequent Operators[,]” which at the time included Petrohawk and Milagro. While the Released Parties clearly agree to perform future restoration, they only agree to do so if all subsequent operators are declared bankrupt and all legal and regulatory remedies against those operators have been exhausted. If the stated conditions are met, the Released Parties agree “to conduct sufficient restoration to meet minimum regulatory and legal requirements as can be accomplished through cooperation among the Releasing Parties, the Regulatory Agencies and the Released Parties as detailed in paragraph III (D) below.”

The second paragraph of Section III(D) provides that “[t]he Parties hereto acknowledge that the Released Parties may be required by government action to remediate portions of the Property.” In the event remediation is required, the settlement provides that the Released Parties “may perform necessary remedial work, if any is needed, in any manner or means approved by the Government[ ]” and will “have sole discretion in selecting the remedy and the manner of carrying it out[.]” It further provides that Plaintiff “will have no input in, control over, or responsibility for the manner in which such work is undertaken or accomplished[ ]” and is required to cooperate with the Released Parties “in the event of required remedial work, formal or informal, before governmental regulatory authorities[.]” This cooperation extended to the remediation actions chosen by the Released Parties “irrespective of any personal claims, preferences, rights of use or similar considerations[,]” as it was “understood that such personal claims and considerations fall within the scope of the Claim released in accordance with this Agreement.”

Reading this language in conjunction with the terms under which the Released Parties agreed to conduct future remediation, it is clear the parties intended that any future remediation by the Released Parties would be initiated through government action. This finding is substantiated by Section III(F) Regulatory Compliance, wherein Plaintiff and the Released Parties “acknowledge the existence of certain laws and regulations pursuant to which governmental authorities may, under certain circumstances, order or otherwise attempt to require ․ the Released Parties to perform certain remedial work on the Property.” It further provides that in the event it is required, “such remediation shall be conducted only pursuant to governmental authority[ ]” and “that the right to require any such remediation shall lie ․ solely with governmental authorities[.]” This section also provides:

[T]hat the need for such remediation or not, the nature and extent of any remediation, and the standards by which the need for or sufficiency of such remediation is decided, shall be determined by governmental regulators ․ in accordance with properly promulgated law, rules, and regulations. Such governmental regulators alone shall make such determinations, and the Releasing Parties shall not employ regulatory proceedings as a means to seek redress of Claims, which are extinguished under this Agreement. It is expressly agreed that this acknowledgement of continued potential responsibility for governmental compliance on the part of the Released Parties shall not grant the Releasing Parties any personal judicial recourse with respect to the regulatory obligations of the Released parties.

The third paragraph of Section III(D) requires Plaintiff to stop “further testing, sampling, or investigation on the Property, or to generate any further data with respect to the claims asserted against Shell in the Lawsuit.” However, it was agreed that Plaintiff could conduct such activities “in conjunction with (1) claims asserted against Subsequent Operators and/or (2) future facility or equipment decommissioning and/or well plugging and abandonment operations by any Subsequent Operators[.]”

The fourth paragraph of Section III(D) provides:

The Releasing Parties expressly acknowledge the full extent of the damages to the Property alleged in the Lawsuit may be unknown and may progressively worsen over time as a result of future movement of contaminating or polluting substances in, on, or under any portion of the Property, but in consideration of the payment recited herein they nevertheless desire and agree to release all claims arising from any event, transaction, matter or cause related in any way to the Lawsuit and the Released Parties’ acts, omissions, or contractual obligations relating to the Property prior to the date hereof, including any deterioration, aggravation, movement or migration of any known, unknown, hidden or latent damage, risk or harm from any cause, including, but not limited to, any movement of contaminating or polluting substances on the surface or subsurface soil or water. The Releasing Parties further acknowledge that the sum to be paid pursuant hereto has been determined with due regard for such unknowns and is all the money that will ever be paid by the Released Parties for any damages to the Property in any way attributed to the Released Parties.

(Emphasis added.)

The fifth paragraph of Section III(D) provides that “[t]his agreement supersedes and replaces any and all prior and/or existing agreements between the Releasing Parties and the Released Parties insofar as those agreements might have created, or might create in the future, any obligation to perform site restoration or other environmental remedial work on or affecting the Property.” (Emphasis added.) It further states:

It is the express intent of the Releasing Parties and the Released Parties that any and all obligations arising (past, present, and future) under any prior and/or existing agreements between the Releasing Parties and the Released Parties, or at law, are hereby satisfied upon execution hereof, and this Compromise and Settlement Agreement fully and finally discharges, compromises, and releases any and all Claims, including, without limitation, any and all prior and/or existing agreements or obligations between the Releasing Parties and the Released Parties.

(Emphasis added.)

The sixth paragraph of Section III(D) provides, in part:

Should Shell acquire a future lease(s) on the Property or conduct and/or participate in any future operations or activities on the Property, under such future lease, this release shall not include, and the Releasing Parties specifically reserve, any claims or causes of action arising out of or related to any future lease(s) conducted or participated in by Released Parties. Further Releasing Parties expressly reserve all claims or causes of action that may exist against any Subsequent Operators and/or third parties, including but not limited to Petrohawk and Milagro.

Section III(E) Representations, Warranties, and Indemnities from Releasing Parties provides:

It is the purpose and effect of this Agreement that, except for payments and obligations specifically and expressly set forth herein, the Released Parties shall never again be called upon to make any payment or render any performance arising out of in any way related to any Claims, the Property, or the Lawsuit.

Based on the plain language of the settlement, Plaintiff clearly released any past, present, or future contractual or legal obligations owed by the Released Parties under the 1934 mineral lease, including those end-of-lease restoration claims asserted in Plaintiff II's suit. While the Released Parties agreed to conduct future restoration under certain conditions and at the instigation of governmental regulatory authorities, the only future claims reserved by Plaintiff against the Released Parties were related to future mineral leases or mineral operations on the property.

We additionally find no manifest error in the trial court's judgment enforcing the terms of the settlement. When construed as a whole and in light of the attending events and circumstances, it is clear that the settlement included Plaintiff's end-of-lease restoration claims against the Released Parties. Plaintiff's original suit sought damages for the restoration of the property to its original condition based on the Released Parties’ breach of their contractual obligation to conduct “ongoing ‘maintenance’ ” of the property. Thus, Plaintiff claimed that rather than waiting for the termination of the lease, it had the right to seek restoration “at the earliest reasonable time.”⁷

As noted in the settlement, Plaintiff participated in the drafting of and executed the agreement upon the advice of counsel. The amount Plaintiff received from the Released Parties, while confidential, was not a nominal sum. Moreover, Plaintiff expressly reserved its claims against Milagro, Petrohawk, and any other subsequent operator of the lease. Thus, notwithstanding this settlement, it had multiple parties against whom it could pursue its restoration claims. The fact that Plaintiff has now reassessed its prior settlement decision nine years after the fact in light of White Oak's bankruptcy is not grounds for reinterpreting the extent to which the settlement released its future claims against Shell. “It is not the province of the court to relieve a party of a bad bargain, no matter how harsh.” Joseph, 347 So.3d at 591.

Accordingly, we find no manifest error in the trial court's finding that Plaintiff's future end-of-lease restoration claims against Shell were released by the September 11, 2014 settlement.

Petrohawk Settlement

Here, Plaintiff again argues that the inclusion of the following language raises doubt as to whether its future end-of-lease claims against Petrohawk's successor-in-interest were released: “unless otherwise set forth herein[;]” “prior to the date hereof[;]” and “future Facilities decommissioning and/or well plugging and abandonment operations[.]” After reading the settlement as a whole, we again disagree that the parties intended to exclude these claims from the settlement.

Under the terms of the settlement, the parties released by Plaintiff were BHP Billiton Petroleum Company, Petrohawk Energy Corporation, and Milagro (referred to collectively as “the Released Parties”). The settlement included the caveat that in the event Milagro successfully assigned its mineral interests to White Oak, Plaintiff's claims against White Oak would also be released.⁸ The settlement contains much of the same language as the Shell settlement, with the definition of “claims” being virtually identical to that found in the Shell settlement.

The main difference between this settlement and the Shell settlement is found in Section III(A) Site Work, Cooperation from Releasing Party, and Regulatory Compliance, which provides:

There exist on the Property certain un-plugged wells and abandoned Facilities that the Releasing Parties desire to have removed or addressed under applicable laws and regulations and pursuant to contract. The Released Parties (excluding BPHB and Petrohawk), whichever are the owners and operators of the Lease, shall continue to fulfill the obligation to either plug and abandon or restore to active service eight (8) inactive wells per year in the West Lake Verret Field pursuant to the May 21, 2003, agreement [sic] (“2003 Agreement”) with the Louisiana Department of Natural Resources (“LDNR”). The Released Parties (excluding BHPB and Petrohawk), whichever are the owners and operators of the Lease, shall also evaluate all work previously performed under the 2003 Agreement.

The Releasing Parties agree that the Released Parties are not required to remove Facilities[9] from the Property unless required by the LDNR pursuant to the 2003 Agreement or otherwise required by any agreements affecting the tracts of land identified in the Lawsuit, and the Releasing Parties will make no demand for same. The provisions of this Agreement relating to regulatory matters shall not be deemed an acknowledgement by any party hereto that such obligations exist on the part of the Released Parties.

Similar to the Shell settlement, this settlement allows Plaintiff no say in any remediation work approved by the LDNR agreement “or other government entity[.]” It further provides that “in the event of required remedial work, formal or informal, before governmental regulatory authorities,” Plaintiff is required to cooperate “irrespective of any personal claims, preferences, rights of use or similar considerations of the Releasing Parties, it being understood that such personal claims and considerations fall within the scope of the Claims released in accordance with this Agreement.” This language is similar to Section III(E) Regulatory Compliance, which is identical to that found in the Shell settlement. Thus, the Released Parties are clearly required to conduct future remediation only if ordered by and to the extent determined by governmental regulators.

Section III(A) also contains the following nearly identical language to the Shell settlement:

The Releasing Parties agree not to conduct any further testing ․ or to generate any further data with respect to the claims asserted against Released Parties in the Lawsuit. However, in conjunction with future Facilities decommissioning and/or well plugging and abandonment operations by the Released Parties or any Subsequent Operators, the Releasing Parties may, at their discretion, conduct testing or sampling to confirm compliance with any and all applicable government regulations ․

Under Section III(C) Release from Releasing Parties, the settlement provides:

For the consideration recited herein, and subject to the reservations and limitations in favor of the Releasing Parties expressly provided herein, the Releasing Parties and each of them does hereby release, remise, and forever discharge and acquit the Released Parties from and of all liability for Claims, and all such Claims against the Released Parties are hereby absolutely and forever compromised, settled, waived, discharged, released, extinguished and terminated.

The Releasing Parties expressly acknowledge the full extent of the damages to the Property alleged in the Lawsuit may be unknown; nevertheless, they desire and agree to release all claims arising from any event, transaction, matter or cause related in any way to the Lawsuit and the Released Parties’ acts, omissions, or contractual obligations relating to the Property prior to the date hereof, including any deterioration, aggravation, movement or migration of any known, unknown, hidden or latent damage, risk or harm from any cause, including, but not limited to, any movement of contaminating or polluting substances on the surface or subsurface soil or water.

(Emphasis added.)

While the Petrohawk settlement does not contain the same release language as the Shell settlement, the only rights clearly reserved by Plaintiff against the Released Parties were those arising if the Released Parties “acquire a future lease(s) on the Property or conduct and/or participate in any future operations or activities on the Property, occurring after the effective date of this Agreement[.]” (Emphasis added.) Plaintiff further “expressly reserve[d] all claims or causes of action that may exist against any Subsequent Operators and/or Third Parties.”

Thus, based on a plain reading of the settlement, we find that Plaintiff clearly released BPX's predecessor-in-interest from all contractual and end-of-lease obligations arising under the lease. The only future claims reserved were those arising from a future mineral lease or mineral operations on the property.

After considering the settlement as a whole and in light of the attending events and circumstances, we find no manifest error in the trial court's finding that Plaintiff's end-of-lease restoration claims against Petrohawk were included in the settlement. The settlement clearly provides that any well plugging and oilfield equipment/facility removal was to be performed by Milagro or White Oak, whichever was the owner/operator of the lease. Also, as stated above, Plaintiff alleged that contractually, it could sue for the restoration of its property prior to the mineral lease's termination. It also participated in the drafting of and executed the agreement upon the advice of its counsel. Although the amount Plaintiff received under the settlement has remained confidential, it is obvious that Plaintiff received remuneration from the Released Parties. Again, Plaintiff's reassessment of its settlement decision following White Oak's filing for bankruptcy does not present grounds for the reinterpretation of that settlement. Accordingly, we find no manifest error in the trial court's finding that Plaintiff's end-of-lease claims against BPX were released by the February 8, 2016 settlement.

Public Policy

As a last resort, Plaintiff argues that construing the settlements to include its end-of-lease restoration claims is against Louisiana's public policy, rendering those releases absolutely null and unenforceable. As support for its argument, it relies on the supreme court's opinion in State ex rel. Tureau v. BEPCO, L.P., 21-856 (La. 10/21/22), 351 So.3d 297, and La.R.S. 30:29. We disagree that the release of such claims are against public policy.

“A compromise may be rescinded for error, fraud, and other grounds for the annulment of contracts. Nevertheless, a compromise cannot be rescinded on grounds of error of law or lesion.” La.Civ.Code art. 3082. “An obligation cannot exist without a lawful cause.” La.Civ.Code art. 1966. “The cause of an obligation is unlawful when the enforcement of the obligation would produce a result prohibited by law or against public policy.” La.Civ.Code art. 1968. The nullity of one contract provision will not render the entire contract null “unless, from the nature of the provision or the intention of the parties, it can be presumed that the contract would not have been made without the null provision.” La.Civ.Code art. 2034.

In State ex rel. Tureau, a property owner filed a citizen suit under La.R.S. 30:16,¹⁰ seeking injunctive relief to enforce the defendant oil and gas companies’ compliance with Statewide Order 29-B, La.Admin.Code.tit. 43, Pt. XIX, § 101 et seq., in regard to the unlined earthen pits located on his property. In finding that the citizen suit was not subject to a one-year liberative prescription, the supreme court examined the policy considerations for allowing such suits:

The public policy of environmental protection is enshrined in Louisiana's Constitution. It directs that the “natural resources of the state” are to “be protected, conserved, and replenished insofar as possible and consistent with the health, safety, and welfare of the people,” and mandates that the legislature “enact laws to implement this policy.” LSA-Const. art. IX, § 1. In light of this constitutional mandate, the Louisiana legislature has acknowledged its “duty to set forth procedures to ensure that damage to the environment is remediated to a standard that protects the public interest,” creating an extensive body of law to address every phase of the oil and gas exploration process, from the initial exploration and drilling phases to cleanup and disposal of wastes. See LSA-R.S. 30:29(A). The Office of Conservation, directed and controlled by the Commissioner of Conservation, was established to oversee and enforce these conservation laws. LSA-R.S. 30:1 et seq.

Id. at 300.

As noted by the supreme court, the legislature complied with this constitutional mandate by enacting La.R.S. 30:29, effective June 8, 2006, which states, in part:

The legislature hereby finds and declares that Article IX, Section 1 of the Constitution of Louisiana mandates that the natural resources and the environment of the state, including ground water, are to be protected, conserved, and replenished insofar as possible and consistent with the health, safety, and welfare of the people and further mandates that the legislature enact laws to implement this policy. It is the duty of the legislature to set forth procedures to ensure that damage to the environment is remediated to a standard that protects the public interest. To this end, this Section provides the procedure for judicial resolution of claims for environmental damage to property arising from activities subject to the jurisdiction of the Department of Energy and Natural Resources, office of conservation. The provisions of this Section shall be implemented upon receipt of timely notice as required by Paragraph (B)(1) of this Section.

La.R.S. 30:29(A) (emphasis added).

These procedures include the requirement that LDENR and the AG be notified whenever environmental damage claims are filed or amended; before any relief is granted or a suit dismissed; and when the parties reach a settlement.¹¹ La.R.S. 30:29(B)(1), (4), (J)(1). In regard to settlements, La.R.S. 30:29(J)(1) provides:

In the event that any settlement is reached in a case subject to the provisions of this Section, the settlement shall be subject to approval by the court. The department and the attorney general shall be given notice once the parties have reached a settlement in principle. The department shall then have no less than thirty days to review that settlement and comment to the court before the court certifies the settlement. If after a contradictory hearing the court requires remediation, the court shall not certify or approve any settlement until an amount of money sufficient to fund such remediation is deposited into the registry of the court. No funding of a settlement shall occur until the requirements of this Section have been satisfied. However, the court shall have the discretion to waive the requirements of this Section if the settlement reached is for a minimal amount and is not dispositive of the entire litigation.

The record reveals that LDENR and the AG were notified regarding and voiced no objection to either settlement. The January 7, 2015 order approving the Shell settlement provides that the settlement “be and is hereby approved pursuant to La. R.S. 30:29(J)(1) without a requirement of a contradictory hearing and without a deposit of money into the registry of the Court.” The February 12, 2016 order approving the Petrohawk settlement states that the settlement was “approved pursuant to La. R.S. 30:29(J)(1)[.]”

We can only conclude, based on LDENR's lack of objection, that the release of Plaintiff's end-of-lease restoration claims is not against public policy. As the administrative agency tasked with overseeing Louisiana's environmental public policy, LDENR's lack of objection carries great weight. Moreover, it seems disingenuous for Plaintiff to rail against Defendants for trying to avoid their end-of-lease obligations as it consciously allowed their predecessors-in-interest to disavow liability for the alleged environmental damage. This allowed Plaintiff to bypass the statutory requirement that all settlement amounts be deposited into the registry of the court, to be used solely for evaluation or remediation of the environmental damage to its property. La.R.S. 30:29(C), (D), (J)(1). Instead, these amounts were paid directly to Plaintiff in exchange for the release of its private claims. See La.R.S. 30:29(H)(1); State v. La. Land & Expl. Co., 20-685 (La. 6/1/22), 339 So.3d 1163.

Thus, instead of pursuing its restoration claims against Defendants’ predecessors-in-interest, Plaintiff rolled the dice and decided to rely on Milagro or White Oak for the restoration of its property. The fact that this decision has backfired is not grounds for nullifying Plaintiff's release of these claims ten years after the fact. In consideration of Louisiana's strong public policy in favor of settlements and the proper function of this court, we find no merit in Plaintiff's public policy argument.

DECREE

For the foregoing reasons, the judgment of trial court, enforcing the settlements between Shell USA, Inc.’s and BPX Operating Company's predecessors-in-interest and Jeanerette Lumber & Shingle Company, L.L.C. and ordering the dismissal, with prejudice, of the lawsuit (Docket Number 93960) filed by Jeanerette Lumber & Shingle Company, L.L.C. and Jeanerette Minerals, L.L.C. against Shell USA, Inc. and BPX Operating Company, is affirmed. The costs of this appeal are assessed to Jeanerette Lumber & Shingle Company, L.L.C.

AFFIRMED.

FOOTNOTES

1.   Legacy suits are “Louisiana lawsuits with property claims of environmental damages from oilfield site operations subject to the provisions of LSA-R.S. 30:29 (ACT 312 of 2006, or ACT 312). Property with oilfield sites covered by the provisions of ACT 312 are commonly referred to as Legacy Sites.” State of Louisiana Department of Energy and Natural Resources, Office of Conservation, Environmental Division, Legacy Site Remediation Program. https://www.dnr.louisiana.gov/page/env-legacy-program (last visited August 25, 2025).

2.   SWEPI is the successor-in-interest of Shell Western.

3.   Effective January 10, 2024, the Louisiana Department of Natural Resources (LDNR) was renamed the Louisiana Department of Energy and Natural Resources (LDENR). 2023 La. Acts No. 150, § 10.

4.   Pursuant to Plaintiff II's suit in Docket Number 93960, Plaintiff owns the surface rights to the property at issue, whereas Jeanerette Minerals, by assignment, owns the mineral rights.

5.   Based on the record, we note that Plaintiff II filed a third lawsuit, Docket Number 94426, against Shell on September 10, 2024, seeking specific performance based on Shell's breach of Section III(B), Contingent Potential Activities, of the September 11, 2014 settlement. Alternatively, it sought money damages in an amount sufficient to conduct a complete analysis of its property, restoration costs, and other consequential damages. In response, Shell filed a second motion to enforce the Shell settlement. It claimed that at the time the August 26, 2024 judgment was rendered, it and BPX both had dilatory exceptions of lis pendens pending under Docket Number 93960, which they agreed to continue pending Plaintiff's dismissal of that lawsuit or the outcome of its appeal.

6.   Louisiana Civil Code Article 2683(3) provides that once the lease is terminated, the lessee is required “[t]o return the thing” “in a condition that is the same as it was when the thing was delivered to him, except for normal wear and tear[.]” Pursuant to La.R.S. 31:129, an assignor of “is not relieved of his obligations or liabilities under a mineral lease unless the lessor has discharged him expressly in writing.”

7.   Pursuant to La.R.S. 30:82(14) of the Louisiana Oilfield Site Restoration Law, “site restoration” is defined as “any and all oilfield site restoration activities required of a responsible party of an oil or gas property by regulations adopted by the office of conservation pursuant to this Subtitle, including without limitation plugging of oil and gas wells, pit closure, site remediation, and removal of oilfield equipment.” Under La.Civ.Code art. 2683(3), the lessee is bound to return the property’ at the end of the lease “in a condition that is the same as it was when the thing was delivered” to the lessor, “except for normal wear and tear or as otherwise provided hereafter.”

8.   The settlement identifies White Oak as White Oak Resources VI, LLC and White Oak Operating Company, LLC.

9.   “Facilities” is defined by the settlement as:[A]ny and/or all equipment and facilities of any kind and/or nature whatsoever, including, but not limited to, plants, gas plants, collection facilities, docks, piers, platforms, wells, pits, vessels, containers, structures, well casing, pipe, pipe lines [sic], injection wells/lines, flow lines, tanks, tank batteries, valves, canals, spoil, dredge material, valves and/or gauges.

10.   Louisiana Revised Statutes 30:16 allows a party in interest, such as a property owner, to sue a party for violation of oil and gas conservation laws in the event that the Commissioner of Conservation fails to bring suit after the receipt of written notice regarding the violation.

11.   “Environmental damage” is defined as “any actual or potential impact, damage, or injury to environmental media caused by contamination resulting from activities associated with oilfield sites or exploration and production sites. Environmental media shall include but not be limited to soil, surface water, ground water, or sediment.” La.R.S. 30:29(I)(2).

KYZAR, Judge.