Bear Peak Resources, LLC v. Peak Powder River Resources, LLC, 403 P.3d 1033

Background

Bear Peak Resources (Bear) and Peak Powder River Resources (Peak) entered a June 19, 2012 Purchase and Sale Agreement (PSA) establishing an Area of Mutual Interest (AMI) where Bear would primarily acquire mineral interests and offer them to Peak at $2,350 per net mineral acre.
Section 11.3 of the PSA carved out three discrete circumstances where Peak could acquire interests for its sole account without paying Bear: (1) after good-faith cooperation if the parties cannot agree on terms; (2) after a contractually defined termination of the AMI; and (3) if Peak has “proposed a well” and the interest owner (not identified or not in current talks with Bear) contacts Peak.
Peak acquired multiple interests in the AMI and issued notices accusing Bear of nonperformance, culminating in Peak’s July 2013 termination of AMI rights pursuant to Section 11.3. Bear sued for breach of contract, breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, negligent misrepresentation, unjust enrichment, and sought an accounting and punitive damages.
The district court granted Peak summary judgment on all claims, finding the PSA unambiguous, many acquisitions permissible under Section 11.3, no fiduciary duty, and no need for an accounting. Bear appealed.
The Wyoming Supreme Court affirmed summary judgment on the implied covenant, fiduciary duty, and accounting claims, held the PSA unambiguous, but reversed and remanded as to several specific acquisition disputes and Peak’s asserted termination of the AMI because Peak failed to make a prima facie showing that its termination was reasonable under industry standards.

Issues

Issue	Plaintiff's Argument (Bear)	Defendant's Argument (Peak)	Held
Whether PSA was ambiguous, esp. phrase “proposed a well”	Phrase is industry-specific; ambiguity defeats summary judgment	PSA language is plain; no evidence "proposed a well" has specialized meaning	PSA unambiguous; common meaning applied (court rejects industry-definition claim)
Whether Peak properly terminated the AMI under "reasonable industry standards"	Peak lacked evidence that Bear failed to meet reasonable industry standards; termination was wrongful	Peak asserts it properly followed Section 11.3 and therefore could acquire interests free of obligation	Reversed as to termination: Peak failed to make prima facie showing on reasonable-industry-standards; factual issue remains for trial
Whether specific acquisitions required payment to Bear (e.g., Davis, Dr. Wood trust, Atomic deal, Section 10 third interest)	Many acquisitions occurred outside Section 11.3 exceptions or Bear was in current negotiations	Peak contends acquisitions fit Section 11.3 exceptions (post-termination, proposed-well + owner contacted Peak, or no transaction occurred)	Mixed: summary judgment affirmed for several deals (Myco, WPX, Meagher, some Section 10/Section 3 claims), but reversed/remanded for Davis, Dr. Wood trust, Atomic deal, and one Section 10 interest due to genuine factual disputes
Breach of implied covenant of good faith and fair dealing	Peak’s conduct (forced pooling, termination, acquisitions) frustrated Bear’s expectations and common purpose	Peak acted within explicit PSA rights; no evidence of self-dealing or unfairness beyond contract exercise	Affirmed: no breach where defendant acted within contractual rights and plaintiff produced no evidence of self-dealing or community-standards violations

Key Cases Cited

Rogers v. Wright, 366 P.3d 1264 (Wyo. 2016) (summary judgment standard and appellate review described)
Thornock v. PacifiCorp, 379 P.3d 175 (Wyo. 2016) (contracts are construed from the four corners when unambiguous)
Wolter v. Equitable Resources Energy Co., 979 P.2d 948 (Wyo. 1999) (extrinsic evidence is inappropriate unless contract language is ambiguous)
Scherer Construction, LLC v. Hedquist Construction, Inc., 18 P.3d 645 (Wyo. 2001) (implied covenant of good faith and fair dealing principles)
Claman v. Popp, 279 P.3d 1003 (Wyo. 2012) (contract interpretation and ambiguity principles)
Harper v. Fidelity & Guar. Life Ins. Co., 234 P.3d 1211 (Wyo. 2010) (no implied-covenant claim where party exercises express contractual rights)
Questar Exploration & Production Co. v. Rocky Mountain Res., LLC, 388 P.3d 523 (Wyo. 2017) (burden-shifting in summary judgment and contractual-rights analysis)
Martinez v. Associates Financial Services Co., 891 P.2d 785 (Wyo. 1995) (definition and sources of fiduciary relationships)