Cardinale v. R.E. Gas Development LLC
74 A.3d 136
| Pa. Super. Ct. | 2013Background
- Appellants Cardinale and Hugney, on behalf of themselves and similarly situated, sued R.E. Gas Development and Rex Energy in a class action for breach of contract, tortious interference, and civil conspiracy.
- R.E. Gas is a Rex Energy subsidiary; in 2008 it entered into Marcellus Shale leases with landowners, including Cardinale and Hugney, promising a $2,500 per acre bonus.
- R.E. Gas allegedly refused to pay rents/bonuses due under the leases.
- Appellees moved to dismiss via preliminary objections in the nature of a demurrer, arguing no binding contracts were formed.
- The trial court granted the demurrer, dismissing the complaint with prejudice, and the appellate court reversed and remanded for further proceedings.
- The court held that the lease documents and related addenda evidenced an intent to be bound and that the Order for Payment did not render the contracts invalid or give unilateral termination power over the leases.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether binding leases/contracts were formed despite the Orders for Payment. | Cardinale argues the documents, read together, created binding leases. | R.E. Gas contends the Orders for Payment and related language show no formation of contracts. | Yes; contracts formed; orders did not negate formation. |
| Whether the Order for Payment created a condition precedent or termination right rendering the contracts invalid. | Cardinale contends the Order for Payment does not negate the leases or create termination power. | R.E. Gas argues the Order grants termination control over the agreements. | No; Order for Payment does not defeat contract formation or grant unbounded termination rights. |
| Whether the trial court erred in sustaining Appellees' demurrer and dismissing with prejudice. | Appellants contend facts show binding contracts and valid claims beyond mere forms. | Appellees assert lack of binding contracts justifies demurrer. | Yes; the trial court erred; demurrer reversed and remand granted. |
Key Cases Cited
- Village Beer and Beverage, Inc. v. Vernon D. Cox and Co., Inc., 327 Pa.Super. 99 (Pa.Super.1984) (conditions may relate to existence of contracts; duties of performance)
- Johnston the Florist, Inc. v. TEDCO Const. Corp., 657 A.2d 511 (Pa.Super.1995) (essential elements: intent, definiteness, and consideration)
- DeMary v. Latrobe Printing and Pub. Co., 762 A.2d 758 (Pa.Super.2000) (standard for reviewing demurrers and whether law permits recovery)