Humberston v. Chevron U.S.A., Inc.
75 A.3d 504
| Pa. Super. Ct. | 2013Background
- Humberstons own about 133 acres in Fayette County; April 6, 2006 lease with Keeton Group, LLC; Chief Exploration & Development LLC later became lessee’s successor; Chevron became successor to Chief; Keystone Vacuum, Inc. performed construction for Chevron and is a contractor for the freshwater-storage impoundment on the land; the 11-acre impoundment stores freshwater to develop wells on the Humberstons’ property and in the Humberston Unit; the Humberstons sued on Sept. 16, 2011 seeking to quiet title and trespass, alleging the impoundment was not contemplated by the Lease and that Chevron/Keystone have no right to the surface area; the Lease contains Leasing and Unitization Clauses and there is a Surface Damage Release referenced in the record; the trial court sustained preliminary objections and dismissed with prejudice, which this Court affirms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the exclusive rights clause permits an 11-acre water impoundment | Humberston: exclusive rights are vague; parol evidence should determine intent | Chevron/Keystone: lease grants surface use necessary or convenient to develop gas; impoundment within that scope | Yes, impliedly permits surface impoundment as reasonably necessary |
| Whether interpretation is for court or jury | Language uncertain; needs jury evaluation | Contract interpretation is a question of law for the court | Contract interpretation decided by the court (no jury) |
| Effect of Surface Damage Release on leases rights | Release defines permissible surface activities and payments; it limits rights | Release is separate and does not limit Lease surface rights | Release cannot limit Lease rights; Lease controls |
| Whether implied surface rights are limited to development of leased property | Rights should be confined to the Lease property; no broader implied rights | Mineral rights grant surface rights as necessary for development; no narrowlimitation | Implied surface rights extend to reasonably necessary use for development |
Key Cases Cited
- Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425 (Pa. 2004) (parol evidence rule applies once contract is integrated)
- T.W. Phillips Gas and Oil Co. v. Jedlicka, 42 A.3d 261 (Pa. 2012) (contract interpretation and integration principles in lease disputes)
- Szymanowski v. Brace, 987 A.2d 717 (Pa. Super. 2009) (contract interpretation focuses on the language to ascertain intent)
- Belden and Blake Corp. v. Dept. of Conservation and Natural Resources, 969 A.2d 528 (Pa. 2009) (subsidiary rights to surface use when subsurface rights exist)
- Chartiers Block Coal Co. v. Mellon, 25 A. 597 (Pa. 1893) (subsurface rights include necessary surface use to operate the estate)
- Oberly v. H.C. Frick Coke Co., 104 A. 864 (Pa. 1918) (general rule: grant of mines includes related means and fruits of the grant)
- Jefferson County Gas Co. v. United Natural Gas Co., 93 A. 340 (Pa. 1915) (burden of proof on termination of a lease)
- J.K. Willison v. Consol. Coal Co., 637 A.2d 979 (Pa. 1994) (lease interpreted as contract; plain meaning governs)