The new Austin Chalk play in central Louisiana is creating a resurgence of exploration activity in several rural areas.  Exploration companies have already begun leasing hundreds of thousands of acres in order to develop and produce minerals.

A key component in developing the Austin Chalk is securing passage to the drill-sites.  Drill-sites are often located far from a public road and accessible only by traversing long stretches of private roads off the leased lands.  In these cases, it is imperative for the exploration company to secure rights of passage over the private roads.  The exploration company has two options: it may secure a right of passage either from the current landowner over which the private road sits or from another person who has the right to assign such right of passage over the private road.

A right of passage generally comes in two forms: a personal or predial servitude.  Simply stated, a personal servitude of passage, referred to legally as a “right of use” is a charge on an estate for the benefit of a person, whereas a predial servitude is a charge on a servient estate for the benefit of a dominant estate.  In this context “estate” simply refers to “land.”  The distinction between the two types of servitudes is important to understand, as the rights associated with each differ.  The most important distinction is that a predial servitude “runs with the land” in that whoever has title to the dominant estate may exercise the predial servitude of passage, even if that person or entity did not have title to the dominant estate when the servitude was created.  By contrast, the ownership of a personal servitude may devolve independently of the ownership of any parcel of land.  This distinction is important as it informs an exploration company who it may secure access from.

Louisiana Civil Code articles 732 through 734 provide the framework for determining whether a servitude is personal or predial.  First, no analysis is needed if the act clearly and expressly declares that the right granted is for the benefit of a person but not an estate, or vice versa.  However, when the act does not expressly declare one way or another, the act must be analyzed as to its intent.

If the right granted was intended to benefit an estate, then the act is presumed to create a predial servitude.  Louisiana Civil Code art. 733.  But if the right granted in the act is merely for the convenience of a person, then it is not considered to be a predial servitude unless it was acquired by a person as owner of an estate for himself, his heirs and assigns.  Louisiana Civil Code art. 734.

The following three recent decisions show how courts use Civil Code articles 732 through 734 to determine whether an act creates a personal or predial servitude.

Franks Inv. Co. v. Union Pac. R. Co., 772 F.3d 1037 (5th Cir. 2014):

It is understood and agreed that the said Texas & Pacific Railway Company shall fence said strip of ground and shall maintain said fence at its own expense and shall provide three crossings across said strip at the points indicated on said Blue Print hereto attached and made part hereof, and the said Texas & Pacific Railway hereby binds itself, its successors and assigns, to furnish proper drainage out-lets across the land hereinabove conveyed.

Applying Louisiana law, the federal Fifth Circuit held that this language created only a personal servitude for the three crossings.  The court reasoned that the original parties failed to utilize “the successors and assigns language” in the granting clause and thus that these rights of crossing were not automatically acquired by Franks when it later acquired its property adjacent to the railroad property and thus could not now be enforced by Franks.  However, the original parties did include such language for the drainage obligation.  Thus, the court further held that the latter clause concerning proper drainage created a predial servitude that could be enforced by Franks against the railroad.

Ritter v. Commonwealth Land Title Ins. Co., 2012-1654 (La. App. 1 Cir. 8/12/13), writ denied, 2013-2462 (La. 1/17/14), 130 So.3d 945:

THIS ACT IS MADE AND ACCEPTED SUBJECT TO THE FOLLOWING:

1. Timber deed dated June 3, 1993, COB 1554, folio 830.
2. Seller to reserve fifty foot right of egress and ingress on east property line.
3. Seller to have one (1) year to remove timber (select cut).
4. Timber to be cut same as balance of tract.
5. Seller agrees not to harvest timber in weather conditions that would cause excess damage to property. (Emphasis added)

The Louisiana First Circuit held that the act created only a personal servitude of right of use.  The court held the act did not create a predial servitude because it failed to even mention a dominant estate.  Further, the act did not state that the servitude was being reserved “by the seller as owner of an estate for itself or its assigns.”

Scrantz v. Smith, 2015-214 (La. App. 3 Cir. 10/14/15), 177 So.3d 130:

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that a servitude of passage is hereby granted across the nineteen (19) acres allocated to the wife to provide the husband access to the eighty (80) acres that were allocated to him. This servitude will be located in an area which is least burdensome and inconvenient to the servient estate.

The Louisiana Third Circuit held that this language created only a personal servitude.  Although the purchasers of the 80-acre tract from the ex-husband argued that the language “to provide … access to eighty (80) acres” indicated that the right was being granted to the ex-husband as the owner of an estate, the Third Circuit disagreed holding that the right of passage was being granted to the ex-husband only as a matter of convenience.  In addition, the court noted that the judgment identified only a specific person, “the husband” and the judgment did not describe the dominant estate.

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Determining whether a recorded servitude is personal or predial is often critical to determining what rights, if any, may be assigned to an exploration company.  Although it is often preferable to acquire a right of passage from the current landowner, that may not always be feasible.  If landowners become hostile and demand an exorbitant amount of value for the right of passage, or if landowners flat out refuse to negotiate a right of passage with the exploration company, then the company needs to explore all possibilities of acquiring access to the drill-site.  If a right of passage has been earlier granted to another person, then the company may be able to acquire rights from that other person.  But if ownership has changed since that other person acquired that earlier right of passage, then it becomes crucial to figure out whether that earlier right of passage granted a predial servitude or instead a personal servitude.  The answer to this question will then dictate those additional persons—beyond the current, obstinate landowner—from whom the oil company may want to seek rights to use the road at issue.

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