250 P.3d 328
Okla.2011Background
- Newell oil and gas lease (320 acres, Roger Mills County) executed 1956; 2002 assignment to Clydesdale Energy, LLC described as conveyance of the wellbore and all leasehold to the base of Tonkawa, with no legal description of the leased premises.
- In 2003 the 2002 assignment was filed; dispute arises over whether it conveyed only the Newell #1 wellbore or the entire Newell Lease.
- 2008: Clydesdale assigns its interest to Plano using the same language but adds a full legal description of the Newell Lease as an exhibit.
- 2008 Eldridge and Weems (Eldridge/Weems) assign their interest in the Newell Lease to GHK, providing a full lease description and excepting the 2002 wellbore-only assignment.
- Trial court granted summary judgment quieting title to the entire 320-acre Newell Lease in Plano; Court of Civil Appeals split; Supreme Court granted certiorari to resolve ambiguity and extrinsic-evidence issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of 2002 Assignment: wellbore vs. entire lease | Plano contends the 2002 assignment conveyed the entire Newell Lease. | GHK contends the 2002 assignment was solely a wellbore-only transfer. | Ambiguity; extrinsic evidence required to determine true intent. |
| Effect of lack of a legal description in 2002 assignment | Language 'all leasehold' lacks clear description; intends broad conveyance. | Ambiguity persists; cannot determine scope from four corners alone. | Invalid to resolve without extrinsic evidence; vouched for remand. |
| Lower court’s reformation of the instrument | Courts should not infer broader rights beyond the instrument’s language. | Courts can interpret 'all leasehold' to cover the lease. | Reformation by inference error; remand for extrinsic evidence. |
| Adequacy of the conveyance description for recording and marketability | The instrument’s lack of explicit description impairs chain of title. | Ambiguity permissible; not fatal without extrinsic evidence. | Conveyance description insufficient; must remand for intent proof. |
Key Cases Cited
- Messner v. Moorehead, 1990 OK 17 (OK 1990) (duty to ascertain true intent from instrument and surrounding circumstances)
- Crockett v. McKenzie, 1994 OK 3 (OK 1994) (ambiguity may be resolved with parol/extrinsic evidence)
- Arbuckle Realty Trust v. Southern Rock Asphalt Co., 1941 OK 237 (OK 1941) (premises description must be definite and certain for marketability)
- Coley v. Williams, 1924 OK 323 (OK 1924) (lack of adequate description renders title unmarketable and conveyance void on its face)
- In re Assessment of Real Prop. of Integris Realty Corp., 2002 OK 85 (OK 2002) (summary judgment when no genuine factual disputes and issue is legal)