PennEnergy Resources v. Armstrong Cement
970 WDA 2020
Pa. Super. Ct.Nov 4, 2021Background
- PennEnergy acquired oil-and-gas lease interests (and related development rights) in Butler and Armstrong Counties and entered a Joint Development Agreement with Winfield (an affiliate of defendants) to develop Marcellus Shale wells; PennEnergy drilled multiple producing wells and invested over $100 million.
- In October 2018 defendants sent notices that PennEnergy interpreted as election to take royalty gas in-kind; Winfield then took and sold the royalty gas under a 2018 Gas Balancing Agreement and paid royalties to defendants.
- In December 2019 defendants served notices alleging breaches and unpaid royalties and later posted no-trespassing signs and threatened PennEnergy’s access for timber/road work.
- PennEnergy filed suit in Allegheny County seeking injunctive relief, a declaratory judgment (including that PennEnergy holds a fee simple determinable in the Marcellus gas under the leased properties), and defamation damages.
- Defendants filed preliminary objections to venue, arguing the suit was effectively an in rem/quiet-title action that must be venued in the counties where the properties sit; the trial court overruled the objections and the Superior Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Allegheny County action is in rem (requiring venue at the property situs) | PennEnergy framed claims as in personam: injunctive relief, declaratory judgment about contractual rights, and defamation; venue proper in Allegheny | The complaint seeks a declaration of title (fee simple determinable) and thus is in rem/quiet-title, so venue must be the counties where the properties are located | Court: Claims are in personam (based on Leases/agreements); not in rem; venue not restricted to property situs — affirmed trial court |
| Whether PennEnergy’s declaratory relief is substantively a quiet-title action (forum-shopping) | Declaratory relief addresses contractual rights under the Leases/Agreements and dispute resolution of royalty covenants, not a direct quiet-title proceeding | Defendants contend PennEnergy’s pleadings are de facto quiet-title and an attempt to circumvent rules governing venue for property actions | Court: Substance governs — here dispute arises from contractual relationships and conduct, not a pure quiet-title action; declaratory relief is permissible and does not convert action into in rem |
| Whether defendants showed grounds to transfer venue under Pa.R.C.P. 1006(d)(1) | PennEnergy chose Allegheny County; plaintiff's forum choice entitled to deference | Defendants argued forum oppressive/vexatious because properties are elsewhere and related ejectment actions are pending in Butler/Armstrong counties | Court: Plaintiff’s forum choice carries great weight; defendants failed to show oppressive or vexatious forum or abuse of discretion by trial court |
| Whether plaintiff is judicially estopped by prior statements in other actions (about title) | PennEnergy maintained the Allegheny suit is different in substance and seeks relief based on agreements and torts | Defendants say PennEnergy previously characterized its claims as title disputes in other county actions and cannot disclaim that here | Held: Court did not adopt estoppel argument as venue ruling rests on nature of pleaded claims (in personam) rather than prior litigation statements |
Key Cases Cited
- Bratic v. Rubendall, 99 A.3d 1 (Pa. 2014) (trial court has broad discretion to transfer venue; plaintiff’s choice deserves deference)
- Wood v. E.I. du Pont de Nemours & Co., 829 A.2d 707 (Pa. Super. 2003) (en banc) (plaintiff’s forum choice is entitled to great weight but not absolute)
- Powers v. Verizon Pa., LLC, 230 A.3d 492 (Pa. Super. 2020) (same principle regarding deference to plaintiff’s chosen forum)
- Stefanick v. Munucci, 333 A.2d 920 (Pa. 1975) (distinguishes in personam contractual actions from in rem quiet-title actions)
- Moody v. Lehigh Valley Hosp.-Cedar Crest, 179 A.3d 496 (Pa. Super. 2018) (factors for assessing transfer convenience and oppressiveness)