Oil and Gas Lease: Rescission; Fraud; Mistake; Lesion Beyond Moiety

摘要

After granting a lease on seventeen acres in February 2007, plaintiff lessor files suit in state court seeking to rescind the lease. Defendant removes the dispute to federal court. Plaintiff claims that under the Louisiana Civil Code his consent was vitiated due to fraud by suppression of the truth by the defendant about the value of the Haynesville Shale that underlay the tract. He enters into the lease by mistake and asserts the lease should also be rescinded because the price paid by the defendant is grossly out of all proportion with the value of the minerals. The court dismisses the claim. Under Article 17 of the Mineral Code, a sale of mineral right is not subject to rescission for lesion beyond moiety. In order to find fraud from silence or suppression of the truth, there must exist a duty to speak or disclose information. Here, no such duty exists. The Louisiana Mineral Code in Article 122 provides that a mineral lessee "is not under a fiduciary obligation to his lessor."