Sabella, D. v. Appalachian Development Corp.
103 A.3d 83
| Pa. Super. Ct. | 2014Background
- Dennis Sabella purchased and recorded the oil, gas, and mineral rights (66 subsurface acres) in 1997; he did not own the surface estate.
- Appalachian Development Corporation held and recorded a 2001 oil-and-gas lease (the "Harvey lease") covering the surface tract; 66 subsurface acres turned out to belong to Sabella.
- Pine Ridge Energy (Brian and Lisa Haner) purchased Appalachian’s leases in 2003, elected to perform only a "bring‑down" title search rather than a full search, and thereafter produced oil and gas from wells on Sabella’s subsurface estate (9 wells total, 2003–2011).
- Sabella learned of possible production affecting his estate after a March 8, 2008 meeting with Brian Haner and filed suit in March 2010 asserting ejectment, conversion, and trespass.
- Trial court granted partial summary judgment to Sabella on ejectment, later found the Haners liable for trespass and conversion, awarded damages but allowed offsets for production costs for the pre‑March 2008 period (good‑faith trespass) and denied pre‑judgment interest; both sides appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject‑matter jurisdiction / indispensable party (Harveys) | Sabella: Harveys not indispensable; Haners were in possession, ejectment is possessory. | Haners: Harveys (surface owners and lessors) were indispensable because they asserted an interest. | Court: Harveys not indispensable; ejectment proper against party in possession (Haners). |
| Statute of limitations (discovery rule / fraudulent concealment) | Sabella: Tolling applies because he lacked actual or constructive notice until 2008; exercised reasonable diligence. | Haners: Claims time‑barred (trespass/conversion two‑year statutes); burden on Sabella to prove discovery rule. | Court: Discovery rule tolled limitations until ~2008; Sabella exercised reasonable diligence. |
| Summary judgment on ejectment (procedural fairness / discovery) | Sabella: Summary judgment proper; ejectment is possessory and record supports his title. | Haners: Premature summary judgment denied time for discovery after close of pleadings. | Court: No reversible error; Haners failed to preserve/raise adequate record objections and had time to seek discovery. |
| Good‑faith vs. bad‑faith trespass; damages and pre‑judgment interest | Sabella: Haners had constructive notice from recorded deed; therefore trespass was bad faith throughout and no offsets allowed; entitles him to full proceeds and reconsideration of pre‑judgment interest. | Haners: Acted in good faith before March 2008 (no notice); bad faith only after March 2008; offsets for production costs should apply for pre‑2008 period. | Court (appellate): Haners had constructive notice via Sabella’s recorded interest and thus were bad‑faith trespassers for entire period; trial court’s allowance of offsets reversed and remanded for recalculation; trial court's denial of pre‑judgment interest vacated for reconsideration. |
Key Cases Cited
- Bannard v. N.Y. State Natural Gas Co., 172 A.2d 306 (Pa. 1961) (ejectment is possessory; action may proceed against possessor without joining all who claim title)
- Kingston Coal Co. v. Felton Min. Co., Inc., 690 A.2d 284 (Pa. Super. 1997) (open, obvious surface mining put owner on inquiry notice such that statute of limitations ran)
- Lewey v. Fricke Coke Co., 31 A. 261 (Pa. 1895) (discovery rule explained for accrual of tort claims)
- T.W. Phillips Gas & Oil Co. v. Jedlicka, 42 A.3d 261 (Pa. 2012) (characterization of oil and gas interests and effect of production on vesting)
- Marrazzo v. Scranton Nehi Bottling Co., 263 A.2d 336 (Pa. 1970) (pre‑judgment interest in tort: not automatic; award rests within fact‑finder’s discretion)