Pifer v. McDermott
2012 ND 90
| N.D. | 2012Background
- CBSH and EOG hold mineral interests in North Dakota and entered JOAs for horizontal wells; CBSH signed an initial JOA with a confidentiality clause tied to well information; EOG offered 18 additional participation invitations with similar terms but CBSH refused to sign subsequent JOAs; EOG conditioned access to well information on nondisclosure agreements; CBSH sued for damages claiming failure to provide information and seeking broader access; district court granted summary judgment dismissing all claims and CBSH appeals.
- CBSH argued there was an implied contract to provide information based on industry custom; district court found no implied term due to explicit confidentiality stance in the JOA and prior knowledge by CBSH.
- CBSH asserted fiduciary duties due to joint venture or cotenancy; court found no joint venture or cotenancy as a matter of law given control language and statutes on pooling.
- CBSH claimed conversion due to withholding information; court held no non-contractual right to information, thus no conversion.
- Court affirmed summary judgment, concluding CBSH cannot establish breach of contract, fiduciary duty, or conversion; damages issue and discovery matters not reached.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether EOG breached the contract by withholding information | CBSH relied on industry custom to access information | No implied term; confidentiality allowed by JOA and CBSH knew of EOG’s stance | No breach; no implied term to provide unrestricted information |
| Whether EOG owed fiduciary duties to CBSH | Joint venture/cotenancy implied fiduciary duties | No joint venture or cotenancy under law and contract | No fiduciary duty; district court affirmed |
| Whether CBSH has a non-contractual right to well information supporting a conversion claim | Access to information is tort-based right independent of contract | No non-contractual right; conversion requires independent tort liability | No conversion; dismissal proper |
Key Cases Cited
- Tong v. Borstad, 231 N.W.2d 795 (N.D. 1975) (customs may supplement an otherwise silent contract term)
- Schank v. North Am. Royalties, Inc., 201 N.W.2d 419 (N.D. 1972) (mineral cotenants rule; pooling does not create cotenancy)
- Slawson v. North Dakota Indus. Comm’n, 339 N.W.2d 772 (N.D. 1983) (statutory pooling not creating cotenants; distinctions with Schank)
- Grynberg v. Dome Petroleum Corp., 1999 ND 167, 599 N.W.2d 261 (ND 1999) (fiduciary duty language depends on contract terms; no implied duties found here)
- Centurion Oil, Inc. v. Stephens Prod. Co., 857 P.2d 821 (Okla. Ct. App. 1993) (industry custom not controlling when counterparties’ intent differs)