816 N.W.2d 80
N.D.2012Background
- CBSH appeals a summary judgment dismissing claims against EOG for withholding well information unless CBSH signed nondisclosure terms.
- EOG sent multiple invitations to CBSH to participate in horizontal wells; CBSH accepted the first invitation and signed a JOA that included confidentiality provisions.
- After 2008, EOG issued 18 more invitations; CBSH agreed to participate but refused to sign any JOAs, and EOG conditioned information on nondisclosure.
- CBSH sued for breach of contract, breach of fiduciary duty, and conversion; district court granted summary judgment and found no viable damages basis.
- Court held there were no contractual rights to unrestricted well information, no joint venture or cotenancy creating fiduciary duties, and no tort conversion arising independently from a contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Contractual breach viability | CBSH argues implied terms should fill gaps to grant information access. | EOG contends no contract language supports unrestricted access without confidentiality. | No contract breach; no implied term to override confidentiality. |
| Fiduciary duties (joint venture/cotenancy) | CBSH asserts joint venture or cotenancy gives fiduciary duties. | No joint venture or cotenancy existed; JOA language negates such relations. | No fiduciary duty; district court correct. |
| Conversion claim viability | CBSH relies on fiduciary duties and statutes for right to information. | Without fiduciary duty or statutory right, no non-contractual tort right to information. | Conversion claim fails; no independent non-contractual right to information. |
| Effect of industry custom/usages | CBSH argues industry custom requires disclosure of well information. | Usage cannot override express contract terms; CBSH knew EOG’s stance. | Custom cannot override explicit confidentiality terms; no basis to imply broader access. |
Key Cases Cited
- Tong v. Borstad, 231 N.W.2d 795 (N.D. 1975) (usage can supplement an otherwise silent agreement)
- Aasmundstad v. Dickinson State Coll., 337 N.W.2d 792 (N.D. 1983) (courts may harmonize terms with usages)
- Hager v. Devils Lake Pub. Sch. Dist., 301 N.W.2d 630 (N.D. 1981) (usage may influence contract interpretation)
- Slawson v. North Dakota Indus. Comm’n, 339 N.W.2d 772 (N.D. 1983) (pooling of separately owned tracts does not create cotenancy)
- Langer v. Bartholomay, 2008 ND 40 (ND 2008) (whether a custom exists is a question of fact)
- VND, LLC v. Leevers Foods, Inc., 2003 ND 198 (ND 2003) (use of evidence to establish usage)
- Grynberg v. Dome Petroleum Corp., 1999 ND 167, 599 N.W.2d 261 (ND 1999) (fiduciary duty depends on contract language)
- Ehrman v. Feist, 1997 ND 180, 568 N.W.2d 747 (ND 1997) (Restatement influence on contract terms)
- Restatement (Second) of Contracts § 221, (1981) (—) (usage supplementing an agreement; intention controls)
- Centurion Oil, Inc. v. Stephens Prod. Co., 857 P.2d 821 (Okla. Ct. App. 1993) (illustrates industry custom supporting disclosure)