321 P.3d 985
Okla. Civ. App.2013Background
- Gaskins sold 642 barrels of oil in June–July 2008 to SemCrude, which commingled the oil in interstate pipelines; SemCrude later sold downstream to purchasers including Texon.
- SemCrude filed bankruptcy July 22, 2008 and Gaskins was unpaid for his production; he sued Texon seeking a declaratory judgment that Texon holds proceeds in trust under the Oklahoma Production Revenue Standards Act (PRSA), 52 O.S. § 570.10(A).
- Gaskins argued § 570.10(A) creates an implied statutory trust or duty on any person holding proceeds to hold them for the owners; he relied in part on an Oklahoma Attorney General opinion concluding the statute imposes an implied trust.
- Texon argued the PRSA regulates operator-owner relations at the wellhead, does not impose an implied trust, and does not apply to downstream purchasers after oil enters interstate commerce.
- The trial court dismissed Gaskins’ declaratory-judgment claim for failure to state a PRSA claim; the Court of Civil Appeals reviewed de novo and affirmed dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 52 O.S. § 570.10(A) creates an implied trust obligating downstream purchasers to hold proceeds for owners | § 570.10(A) uses trust-like language and thus creates an implied (resulting or constructive) trust in favor of owners | PRSA is a regulatory statute governing wellhead/operator-owner relationships; it disclaims an express trust and does not apply to downstream purchasers after interstate commerce | The statute does not create an implied trust or impose duties on downstream purchasers; PRSA governs wellhead relations and does not reach Texon |
| Whether § 570.10(A)’s plain language imposes trustee-like duties or segregation requirements | Language requiring holders to "hold such revenue or proceeds for the benefit of the owners" shows intent to create trust duties | The statute expressly states it does not create an express trust and lacks typical trust indicia (named trustee, required segregation, trustee duties) | Court finds no statutory intent to create a trust; plain language and context do not support imposition of trustee duties |
| Whether Oklahoma Attorney General opinion controls interpretation | AG opinion supports implied trust construction and is persuasive | Legislative and judicial precedent disagree; statutes and related lien scheme counsel against implied trust | AG opinions are persuasive but not controlling; courts may decline to follow AG when statute and context indicate otherwise |
| Effect of lien statutes on PRSA interpretation | PRSA should be read to protect producers’ proceeds irrespective of lien framework | Prior Lien Act and subsequent 2010 Lien Act show statutory framework for producers’ remedies and suggest PRSA is regulatory, not trust-creating | Existence and evolution of lien statutes supports view that PRSA does not itself create a trust; producers have separate statutory lien remedies |
Key Cases Cited
- Gens v. Casady Sch., 177 P.3d 565 (Okla. 2008) (standard for motion to dismiss review)
- Williams v. Smith & Nephew, Inc., 212 P.3d 484 (Okla. 2009) (statutory interpretation reviewed de novo)
- Barnes v. Oklahoma Farm Bureau Mut. Ins. Co., 11 P.3d 162 (Okla. 2000) (appellate plenary review of legal rulings)
- Cacy v. Cacy, 619 P.2d 200 (Okla. 1980) (law on implied trusts; constructive and resulting trusts)
- Robison v. Graham, 799 P.2d 610 (Okla. 1990) (constructive trust to prevent unjust enrichment requires active wrongdoing)
- In re SemCrude, L.P. (Samson Res. Co. v. SemCrude, L.P.), 407 B.R. 140 (D. Del. 2009) (bankruptcy court construing Oklahoma law: PRSA does not create an implied trust; PRSA is regulatory)
- In the Matter of the Estate of Ingram, 874 P.2d 1282 (Okla. 1994) (requiring clear, decisive intent to create a resulting trust)