Lang v. Enervest Energy Institutional Fund XI A LP
2016 Ohio 4844
Ohio Ct. App. 9th2016Background
- Patrick and Amy Lang own ~62 acres subject to a 1978 oil-and-gas lease; lessee successors include McAlester Fuel Co./Holding Co.
- Lease primary term began May 10, 1978 and extends while operations or paying production continue; lease authorizes unitization.
- In 2001, 3.30 acres of the Lang property were consolidated into a 40-acre drilling unit; a producing #3 well sits on the unit but not on the Lang acreage; two on-Lang wells have not produced since 2001.
- Langs sued (Nov. 2013) seeking a declaration that the lease had expired as to the 58.7 non-consolidated acres and alleged breach of implied covenants.
- McAlester was served but did not timely answer; Langs moved for default. McAlester moved for leave to answer (citing alleged verbal extension and excusable neglect); trial court granted leave and denied default.
- McAlester later moved to dismiss under Civ.R. 12(B)(6); after production/royalty evidence was filed in opposition to Langs’ summary-judgment motion, the trial court granted dismissal while relying on that extra-pleading evidence and declined to consider Langs’ summary-judgment motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court erred by denying default judgment and allowing late answer | Lang: McAlester failed to show excusable neglect for missing the Civ.R. 12 deadline | McAlester: counsel misunderstanding/verbal extension and local practice justify excusable neglect under Civ.R. 6(B)(2) | Court: No abuse of discretion in allowing leave to answer; denial of default affirmed |
| Whether trial court properly granted Civ.R. 12(B)(6) dismissal after considering extra-pleading evidence | Lang: Dismissal improper — lease expired for non-consolidated acres; summary-judgment motion should be decided on merits | McAlester: Production from consolidated unit (#3 well) holds the lease on all acres; evidence supports dismissal | Court: Reversed — trial court improperly relied on evidence outside the complaint when ruling on 12(B)(6) and failed to convert to a summary-judgment proceeding with proper notice |
| Whether summary-judgment motion by Langs should be resolved on appeal | Lang: Summary judgment appropriate based on lease language and lack of production on non-consolidated acreage | McAlester: Opposed, relying on production evidence from #3 well; no cross-motion | Court: Declined to decide Langs’ summary-judgment motion because trial court had not ruled on its merits; remanded for further proceedings |
Key Cases Cited
- Miller v. Lint, 62 Ohio St.2d 209 (standards for default/relief and appellate review of trial-court discretion)
- Ohio Valley Radiology Assocs., Inc. v. Ohio Valley Hosp. Assn., 28 Ohio St.3d 118 (default judgment principles)
- State ex rel. Lindenschmidt v. Bd. of Commrs. of Butler Cty., 72 Ohio St.3d 464 (excusable neglect under Civ.R. 6(B)(2) less stringent than Civ.R. 60(B))
- O'Brien v. Univ. Community Tenants Union, Inc., 42 Ohio St.2d 242 (12(B)(6) dismissal standard — plaintiff can recover on some set of facts)
- State ex rel. Fuqua v. Alexander, 79 Ohio St.3d 206 (trial court may not rely on outside evidence when deciding a Civ.R. 12(B)(6) motion)
- Keller v. Columbus, 100 Ohio St.3d 192 (when matters outside the pleadings are considered, court must convert to summary judgment and give notice)