Niverth, G. v. Equitrans
400 WDA 2017
| Pa. Super. Ct. | Dec 8, 2017Background
- Gregory and Mary Niverth succeeded to a 1969 Hoge oil-and-gas lease and in 2010 executed a recorded Amendment/Ratification with Equitrans to ratify and modify the lease.
- The Hoge Lease (and the Amendment) set royalties as one-eighth of wholesale market value; the Amendment did not separately recite royalty computation language.
- The Niverths filed an amended complaint (breach of contract, breach of good faith, fraud, declaratory relief); the court dismissed the good-faith and fraud counts on preliminary objections and later trial occurred on remaining claims.
- At the close of the Niverths’ case at a jury trial, the trial court granted Equitrans’ motion for nonsuit; the Niverths’ post-trial motion went undecided and a praecipe for judgment was filed, leading to this appeal.
- The appellate court reviewed whether (1) fraud was adequately pleaded, (2) the Amendment was misinterpreted and summary judgment wrongly denied, (3) trial rulings (evidence exclusion, expert in limine, court construction) deprived the Niverths of a fair trial, and (4) the nonsuit was improper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Sufficiency of fraud claim / preliminary objections | Niverth: representations during Amendment negotiations induced execution; factual disputes preclude dismissal | Equitrans: fraud claim is a disguised breach-of-contract claim; parol evidence barred because written Amendment/Hoge Lease are integration | Court: Affirmed dismissal — fraud-in-inducement barred by parol rule; pleadings contradicted by the integrated writing |
| 2. Interpretation of Amendment / summary judgment | Niverth: Amendment lacks royalty computation language; entitled to summary judgment that post-production deductions were improper | Equitrans: Amendment incorporates Hoge Lease; net-back royalty calculation (one-eighth less allocated post-production costs) governs; parol evidence not admissible | Court: Denied — Amendment and lease read together require consideration of lease terms; no admissible parol evidence to support Niverths’ claim |
| 3. Fair-trial complaints (evidence exclusion, expert, court construction) | Niverth: court misinterpreted Amendment, excluded probative parol evidence, delayed ruling on expert exclusion, failed to issue clear pretrial construction | Equitrans: parol evidence improper; motion in limine objections had to be renewed at trial if deferred; Niverths failed to renew so issue waived | Court: No relief — parol evidence properly excluded; failure to renew in-trial objection waived the in limine claim; expert did not testify so no prejudice |
| 4. Nonsuit at close of plaintiff’s case | Niverth: presented evidence that royalties were reduced by deductions contrary to statutory one-eighth | Equitrans: payments complied with net-back method; no evidence royalties fell below statutory minimum | Court: Affirmed nonsuit — record showed royalties computed at 1/8 of wellhead proceeds (net-back) and no proof of improper deductions |
Key Cases Cited
- Martin v. Rite Aid of Pennsylvania, Inc., 80 A.3d 813 (Pa. Super. 2013) (standard for reviewing preliminary objections)
- Hill v. Slippery Rock Univ., 138 A.3d 673 (Pa. Super. 2016) (scope of review and pleading sufficiency on preliminary objections)
- DeArmitt v. New York Life Ins. Co., 73 A.3d 578 (Pa. Super. 2013) (parol evidence rule principles)
- PNC Bank, Nat. Ass'n v. Bluestream Technology, Inc., 14 A.3d 831 (Pa. Super. 2010) (distinguishing fraud in execution from fraud in inducement re: parol evidence)
- Hovis v. Sunoco, Inc., 64 A.3d 1078 (Pa. Super. 2013) (summary judgment standard)
- Krauss v. Trane U.S. Inc., 104 A.3d 556 (Pa. Super. 2014) (burden when nonmoving party bears proof at summary judgment)
- Southwestern Energy Production Co. v. Forest Resources, LLC, 83 A.3d 177 (Pa. Super. 2013) (contracts that refer to and incorporate other documents construed together)
- Kilmer v. Elexco Land Services, Inc., 990 A.2d 1147 (Pa. 2010) (GMRA and approval of net-back royalty calculation)
- Blumer v. Ford Motor Co., 20 A.3d 1222 (Pa. Super. 2011) (need to renew in-trial objection where motion in limine ruling deferred)