Louisiana Record

Friday, December 6, 2019

$11 million awarded in oil royalties lawsuit, report says

By Alejandro de los Rios | Nov 10, 2011

St. Martin

A Terrebonne Parish judge has awarded more than $11 million to a couple in an oil royalties lawsuit.

Houma attorney Michael St. Martin had sued in Terrebonne Parish Civil District Court in 2006 on behalf of himself and his wife, Virginia, against I.P. Petroleum of Houston for failing to play nearly $1 million in oil royalties, according to a report in The Courier of Houma.

The St. Martins family owned the well through their Delaware-based company, Quality Environmental Processes. The Courier reported that I.P. Petroleum ceased royalty payments on the well in July 1997.

The lawsuit alleged that I.P. Petroleum "conspired and developed a plan by which (I.P.) retained for itself 'suspended royalty payments'" of $107,000. The suit alleged that International Paper Company of Bastrop, attorney John Pearce and the New Orleans-based firm of Montgomery, Barnett, Brown, Read, Hammond & Mintz aided in the conspiracy.

The alleged conspiracy came about after the true owner of the well was questioned in a separate lawsuit and the royalty payments were suspended. After that suit was settled, I.P. Petroleum allegedly failed to reinstate the royalties.

Terrebonne District Judge Johnny Walker issued two judgements last Friday, after a five-day bench trial that took place in 2009, the Courier reported.

I.P. Petroleum and International Paper were ordered to pay $6.7 million in penalties, interest, damages, attorney fees and royalties due.

Pearce and Hammond & Mintz were ordered to pay around $4.5 million in royalties, damages and attorney fees.

The Courier reported that Walker found that I.P. Petroleum withheld royalty payments without "legal justification or reasonable grounds, willfully and deliberately refused to pay Michael St. Martin and Virginia Rayne St. Martin, and Quality Environmental Processes Inc."

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