Camp Ne'er Too Late, LP v. Swepi, LP
185 F. Supp. 3d 517
M.D. Penn.2016Background
- In 2008 Ne’er Too Late Lodge (later Camp Ne’er Too Late, LP) signed a paid-up oil & gas lease with East Resources giving rights to explore, drill and to construct pipelines, but an addendum (¶12) limited pipelines on the leased premises to carrying gas produced from the leased wells ("native" gas).
- In 2009 and 2010 the parties negotiated separate right-of-way agreements to build a pipeline; those later agreements did not expressly include ¶12 and paid additional consideration to the landowner ($59,610 for 2010; $99,220 in 2011 amendment).
- Camp Ne’er Too Late (formed in 2010) signed the 2010 right-of-way addendum whose introductory paragraph stated conditional incorporation language referencing the original lease and addendum if “the following provisions conflict.” David Schwoyer, a landowner representative, drafted that language and did not expressly cite ¶12.
- Defendant (successor to East Resources) constructed a pipeline completed in 2012 that carried non-native gas; the well on the property was not connected and remained shut-in. Landowner waited years and received some shut-in payments; litigation followed in 2014.
- District court granted summary judgment for Defendant: plaintiff had standing to sue as a signatory to the 2010 right-of-way, but the court held ¶12 was not incorporated into the 2010 agreement, no breach occurred, and plaintiff had waived/was estopped from asserting the native-gas restriction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue | Landowner signed the 2010 right-of-way addendum which references the original lease; that gives derivative standing to enforce ¶12 | Landowner was not signatory to original lease and earlier assignments mean Camp lacked lease rights | Court: Plaintiff has standing as signatory to 2010 agreement that conditionally referenced the lease/addendum (standing narrow but sufficient) |
| Incorporation by reference | The 2010 addendum’s introductory sentence incorporated ¶12 of the 2008 lease addendum into the right-of-way | The 2010 addendum is a separate, integrated contract; the conditional language does not plainly incorporate ¶12 and there is no clear conflict triggering incorporation | Court: No. The conditional language is unambiguous and does not incorporate ¶12; 2008 lease and 2010 right-of-way are separate integrated agreements |
| Breach (transport of non-native gas) | Transporting non-native gas violated the lease addendum’s native-gas-only restriction as incorporated | Absent incorporation, right-of-way permitted the pipeline built; no contract term was breached | Court: No breach — ¶12 not incorporated, so carrying non-native gas did not violate the 2010 agreement |
| Waiver / Estoppel | Landowner preserved rights and may enforce native-gas limitation now | By accepting separate payments, negotiating and signing maps/amendments, and failing to timely object, landowner impliedly waived the restriction and is estopped | Court: Landowner’s conduct (accepting extra consideration, long delay, participation in negotiations and map approvals) supports waiver and equitable estoppel; plaintiff cannot now enforce the limitation |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment standard and burdens on movant/nonmovant)
- Anderson v. Liberty Lobby, 477 U.S. 242 (1986) (standard for genuine issue of material fact at summary judgment)
- LJL Transp., Inc. v. Pilot Air Freight Corp., 962 A.2d 639 (Pa. 2009) (contract interpretation and integration principles)
- T.W. Phillips Gas & Oil Co. v. Jedlicka, 42 A.3d 261 (Pa. 2012) (leases governed by contract law; interpret plain language of oil and gas agreements)
- Zivari v. Willis, 611 A.2d 293 (Pa. Super. 1992) (waiver and equitable estoppel in property-access context)
- Southwestern Energy Production Co. v. Forest Resources, LLC, 83 A.3d 180 (Pa. Super. 2013) (when later documents expressly identify themselves as amendments, they may be read together as one agreement)