Replies to This Discussion

Permalink Reply by Steve P on October 8, 2012 at 9:52

The $25K is shocking for a 40 acre estate, even if it includes a title opinion.

 

The only "easy" way to solve this is for one of the heirs to petition the court to have themselves appointed as Administrator of the estate.  There would not be an "Executor" since that means there was a will to be probated.  At a minimum, the court-appointed administrator could send copies of the court appointment to the relevant oil and gas producers and collect any royalties held in suspense, get a court order to pay the expenses of the estate (attorneys fees) out of the funds in hand, to the extent that they are sufficient, and then petition for the heirs to be placed in possession.  Assuming the 40 acres is in a producing unit, you could keep the administration open long enough to collect the funds necessary to pay the attorney.

 

But I really question the $25K.  forget the title opinion and try and knock off the last zero. 

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Permalink Reply by Skip Peel - Mineral Consultant on October 8, 2012 at 10:27

Louisiana Civil Code Art. 3494(5)

SECTION 2.  THREE YEAR PRESCRIPTION

Art. 3494.  Actions subject to a three-year prescription

The following actions are subject to a liberative prescription of three years:

(1)  An action for the recovery of compensation for services rendered, including payment of salaries, wages, commissions, tuition fees, professional fees, fees and emoluments of public officials, freight, passage, money, lodging, and board;

(2)  An action for arrearages of rent and annuities;

(3)  An action on money lent;

(4)  An action on an open account; and

(5)  An action to recover underpayments or overpayments of royalties from the production of minerals, provided that nothing herein applies to any payments, rent, or royalties derived from state-owned properties.

Acts 1986, No. 1031, §1.

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Permalink Reply by GoshDarn on October 8, 2012 at 14:10

Methinks you're not properly parsing the wording, Mr. Peel.  Yet since I'm not a lawyer, I'll let the legal eagles explain why the operators (which I've dealt with in the past for many years) . . . don't apply what appears to be your thinking (however well intentioned) or apply your advice to others via this particular topic.  (Cringe, indeed.)

Ergo, let me give it a shade-tree shot.

Now, it seems to me, if there is a mineral estate without a legally defined heirship, then there can not be any "actual" payments, per se.  Note the words "underpayments" and "over-payments."  In other others, when there's lost relatives who have not been confirmed as legit heirs to a mineral estate, then there is no legal payee, i.e., the judicial intent hasn't ruled on who should be paid.  In other words, parking money in an escrow account is not actually "paying" a person (i.e., an heir).  No, it's simply putting a hold on payout until the legalities of whom to properly pay are sorted out.

Ergo, suspension, escrow, or even an unclaimed-properties account with the state . . . is not the fulfillment of a lease obligation/contract.  So until such is confirmed, until the name of the payee/s are legally defined, there would be no actual legal "payment" to fulfill the lease.  Indeed, an operator might sorta know who signed whatever lease (many decades ago) and who at one time should've been paid the royalties, but per the passage of time and per folks passing away and per the timeline of lost heirship without the specific substantiated determination of legal ownership of minerals, then there can be no three-year clock in this case, in my layman's opinion.  Of course, I could be wrong.  So I'll let the legit O&G lawyers or the "real-deal" insider pros wade in with clarifying truth.

That said, if I am proven wrong, then this means that those operators who held such monies for members of my family in suspension and escrow and who then turned such monies over to the state per the unclaimed proper mechanism . . . i.e., this means that there are actually some saintly operators (i.e., this means that there are goodhearted land offices functioning per the antithesis of Chesapeake) . . . land offices which possibly are wasting probably millions of dollars of monies paying out royalties that they don't need to pay out per using escrow and going way, way beyond this three-year interpretation via turning the monies over to the state.

Again, think about it.

Hey, who would've thought, huh?

It would appear to be such a contrarian application of common sense, would it not?

GD

 

 

 

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Permalink Reply by Skip Peel - Mineral Consultant on October 8, 2012 at 14:27

I'm not parsing anything nor is my post a "shade tree shot".  It is a cut-and-paste of the Civil Code as it pertains to the subject under discussion.  Confirmed by my O&G attorney.

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Permalink Reply by Ken Boone on October 8, 2012 at 15:02

No monies have ever been turned over to the state. We checked already.

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Permalink Reply by Ken Boone on October 8, 2012 at 12:52

What about an complete preliminary stand-up examination? this fee is about $3,500

run sheet $2100

title opinion $5000 etc......

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Permalink Reply by Ken Boone on October 8, 2012 at 13:02

Has there been any cases where a lawyer put his fees against the estate and he was not paid his money.

How does the lawyer ensure that he receives payment for doing an estate.

This person says that he has gotten burned in the past. Is this true?

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Permalink Reply by Two Dogs, Pirate on October 8, 2012 at 13:29

$25,000.00 sounds like a rip off to me but who knows. Maybe there are holes in the title that go back to 1864. Try to find someone that could sign off on an Affidavit of Death and Heirship on a soldier that died in the Civil War.

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Permalink Reply by P.G. on October 8, 2012 at 14:49

Wouldn't attorney fees be between him/her and the Administrator of the estate if hired as an attorney for the estate?

If you spent your own money for an attorney..how would you get re-reimbursed?

What authority would it give him other than to represent you?

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Permalink Reply by Dion Warr, CPL on October 9, 2012 at 3:01

Ken:

Before I get too involved and step off in something, here:

You speak of a "line of descendants" that disappears. When does that branch of the family leave the chain of title? Fifty years? Eighty years?

Second, the comment about the appointment of an "administrator" is a good one. I have seen this approach used on occasion where the family lines are vast, descendants leave the chain of title (or at least no longer show up in the indices) and successions and/or probates have not been opened for a number of years or generations.

Administrations of an estate usually run a higher legal cost due to the extra steps that must be performed (ie, genealogical searches, public notices being filed in order to seek out possible heirs, etc.). However, if the amount of stray interest is large or involves a number of family members which disappear from the title chain, sometimes this the best way to accomplish the goals which you seek. Sometimes if there is resistance from other dissident family members, there can be a "fight" over the appointment of an administrator, which translates into higher legal costs. Once the administrator is appointed, however, just because other family members "don't like it" is not a valid reason for challenge. The administrator must account for incomes and outflows and expenses connected with the ongoing administration of the estate; valid legal expenses would be one of these, I suspect.

Another method would be to open a succession (or successions) for those family members that are "known", clear the title for those present descendants, and allow the stray interests to be reported (but not pursued), and let the company(ies) suspense the missing interest. This would provide "closure" as to those interests not in dispute
without the need of ongoing cost of administration.

$25k does seem a bit high, but if the title issues are of longstanding, may be at least justifiable. Can you elaborate a little on some of the issues that you face in this regard?

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Permalink Reply by Ken Boone on October 9, 2012 at 4:08

Some of the issues are that there has not been a succession done in over 70 yrs. So that is one of the problems. Then the heirs that have disappeared hasn't been seen or known of since the 1960s. People have searched high and low. And no one can be found on that side of the family.

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Permalink Reply by Steve P on October 9, 2012 at 6:59

what is your share in the 40 acres (good at fractions?)?  how is the land being used today?  Any of the heirs living on the 40? 

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