Max Oil Co. v. Range Production Co.
681 F. App'x 710
| 10th Cir. | 2017Background
- Max Oil and the Hawkins family owned/operated three producing wells in Kay County, OK; production dropped and wells began producing large volumes of water after nearby Range completed hydraulic fracturing on two "Tower" wells (completed Dec 10, 2013 and Mar 6, 2014).
- Max Oil alleged the timing and correlation (including increased watering when Tower pumps were off) indicated Range’s fracking encroached into the Hawkins formations and permanently damaged the wells.
- Max Oil attempted settlement and, after informal efforts failed, retained counsel and tested the well plugs/cement (dec. 15, 2015) to rule out those alternate causes.
- Max Oil filed suit in state court on April 25, 2016 asserting negligence, trespass, nuisance, and conversion; Range removed and moved to dismiss as time-barred under Oklahoma’s two-year statute of limitations.
- The district court dismissed with prejudice, holding Max Oil knew or should have known of Range’s allegedly tortious conduct by March 6, 2014, tolling arguments failed, and Max Oil’s cursory request to amend was insufficient.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When did trespass claim accrue? | Accrual tolled until plaintiff eliminated other causes (plug/cement) and knew Range caused damage (Dec 15, 2015). | Accrued when wells began watering out coincident with Range completions (Dec 10, 2013 / Mar 6, 2014); suit filed after two-year limit. | Accrued by Mar 6, 2014; trespass claim time-barred. |
| Tolling for settlement efforts or later confirmation | Informal settlement negotiations and later testing justify tolling until cause confirmed. | Statute of limitations not tolled by settlement attempts; plaintiff had knowledge to file earlier. | Settlement efforts do not toll limitations; dismissal proper. |
| Pleading on information and belief vs. Rule 11 concerns | Could not file before definitively ruling out plug/cement without risking Rule 11 sanctions. | Plaintiff could plead on "information and belief" and investigate later; Rule 11 does not bar reasonable pre-suit filing. | Plaintiff should have filed timely and pled on information and belief; Rule 11 argument rejected. |
| Motion for leave to amend after dismissal | Court should have allowed amendment to assert continuing/abatable nuisance (invoking longer limitations). | Plaintiff failed to make a proper, particularized written motion to amend. | Denial of leave appropriate; cursory request in opposition insufficient; dismissal with prejudice affirmed. |
Key Cases Cited
- Aldrich v. McCulloch Props., Inc., 627 F.2d 1036 (10th Cir. 1980) (Rule 12(b)(6) dismissal appropriate when complaint’s dates show claim is time-barred)
- Elm Ridge Expl. Co., LLC v. Engle, 721 F.3d 1199 (10th Cir. 2013) (de novo review of Rule 12(b)(6) dismissal; apply state limitations in diversity)
- Gabelli v. S.E.C., 133 S. Ct. 1216 (U.S. 2013) (policies underlying statutes of limitations: prevent prejudice from delay)
- Williamson v. Fowler Toyota, Inc., 956 P.2d 858 (Okla. 1998) (definition of trespass as physical invasion)
- Okla. Brick Corp. v. McCall, 497 P.2d 215 (Okla. 1972) (cause of action accrues when plaintiff could first maintain a successful action)
- Calderon v. Kan. Dep’t of Soc. & Rehab. Servs., 181 F.3d 1180 (10th Cir. 1999) (requirements for a motion for leave to amend when opposing a motion to dismiss)
- Russell v. Williams, 964 P.2d 231 (Okla. Ct. App. 1998) (trespass damages vs. removal of encroachment; different limitations periods)
- Moneypenny v. Dawson, 141 P.3d 549 (Okla. 2006) (temporary vs. permanent nuisance: accrual when damage is apparent for permanent injury)