Bilbaran Farm, Inc. v. Bakerwell, Inc.
2013 Ohio 2487
Ohio Ct. App.2013Background
- Bilbaran Farm, Inc. entered an oil and gas lease with Professional Petroleum Services, Inc. on May 12, 2003, covering 275.67 acres in Knox County, Ohio.
- The lease granted broad rights to explore, drill, produce, transport, and operate oil and gas, and related infrastructure.
- The lease contained a termination/deferral provision allowing termination if no well was commenced within 12 months unless a rental payment was made.
- On December 4, 2007, Professional Petroleum Services assigned its interest to Bakerwell, Inc.; Bakerwell later assigned a portion of its interest to Crescent Oil & Gas, LLC.
- On August 9, 2012, Bilbaran filed a complaint in Knox County Court seeking quiet title, declaratory judgment, and partial cancellation of the lease, alleging undeveloped portions and breach of duty to develop.
- The Knox County Court of Common Pleas dismissed Bilbaran’s complaint under Civ.R. 12(B)(6); Bilbaran appeals the dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an implied covenant to develop the land exists. | Bilbaran argues the lease requires further development beyond existing wells. | Defendants rely on express terms and disclaimer of implied covenants to defeat development duties. | Dismissal upheld; implied covenant barred by express waiver in the lease. |
Key Cases Cited
- Harris v. Ohio Oil Co., 57 Ohio St. 118 (1897) (rights and remedies depend on written lease terms; implied covenants may be limited by contract)
- Ionno v. Glen-Gery Corp., 2 Ohio St.3d 131 (1983) (implied covenant to develop exists absent express contrary terms)
- Lake v. Ohio Fuel Gas Co., 2 Ohio App.2d 227 (1965) (illustrates application of written terms to govern rights and implied covenants)