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Price v. K.A. Brown Oil and Gas, L.L.C.
2014 Ohio 2298
Ohio Ct. App.
2014
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Background

  • Maienknecht property in Monroe County leased in 1988 to Cappadona (Austin Enterprises) to develop two wells; lease term required both wells to be put into production by Nov 1, 1989 or lease would terminate or shift to shut-in royalties.
  • Well #1 achieved nominal production by the six-month primary term; Well #2 did not go into production until 1995.
  • The 1988 lease allowed 200,000 cubic feet of free gas for domestic use; other gas beyond that amount had to be paid for.
  • In 1999 the Price family acquired the property and became lessors under the 1988 lease; in 2012 they filed suit seeking termination of the lease due to nonproduction and lack of royalties.
  • Trial court granted summary judgment for termination based on the 1989 deadline and lack of production; Appellant (K.A. Brown) appeals, arguing ratification/waiver; court affirms the termination.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether the lease automatically terminated under paragraph 14 for failure to produce both wells by the deadline. Prices contend nonproduction by 1989 terminated the lease. Brown argues potential ratification/waiver could save the lease. Lease terminated; ratification/waiver not applicable; summary judgment affirmed.

Key Cases Cited

  • Litton v. Geisler, 80 Ohio App.2d 491, 76 N.E.2d 741 (4th Dist.1945) (acceptance of benefits does not necessarily waive termination rights (contextual precedent))
  • Harding v. Viking Internatl. Resources Co., Inc., 2013-Ohio-5236, 1 N.E.3d 872 (4th Dist.) (supports rejecting waiver/estoppel as controlling in lease termination)
  • Campbell v. Hospitality Motor Inns, Inc., 24 Ohio St.3d 54, 493 N.E.2d 239 (1986) (corporate ratification framework; distinguishes non-corporate parties)
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Case Details

Case Name: Price v. K.A. Brown Oil and Gas, L.L.C.
Court Name: Ohio Court of Appeals
Date Published: May 27, 2014
Citation: 2014 Ohio 2298
Docket Number: 13 MO 13
Court Abbreviation: Ohio Ct. App.