Shedden, L., Aplts. v. Anadarko E&P Co.
136 A.3d 485
| Pa. | 2016Background
- Leo and Sandra Shedden owned a 62-acre parcel; an 1894 deed reservation by predecessors (the Baxters) reserved one-half of the oil and gas rights, of which the Sheddens were unaware when they bought the land.
- In May 2006 the Sheddens executed an oil-and-gas lease with Anadarko that warranted they had full title to all oil and gas on the 62 acres and provided an $80/acre bonus (total $4,960).
- After discovery of the 1894 reservation, Anadarko revised its payment to reflect 31 net acres (half interest) and paid the Sheddens $2,480; the Sheddens accepted that payment but did not sign the revised order.
- Two years after the lease, the Sheddens quieted title and obtained full title to the previously reserved one-half mineral interest.
- Anadarko extended the lease by timely exercising an option and tendering an extension payment computed on all 62 acres; the Sheddens refused to cash the check and sued for a declaration that the lease covers only 31 acres.
- Trial court granted summary judgment to Anadarko; Superior Court affirmed, applying the doctrine of estoppel by deed to hold the Sheddens cannot deny the lease covers all 62 acres. The Supreme Court of Pennsylvania affirmed.
Issues
| Issue | Shedden's Argument | Anadarko's Argument | Held |
|---|---|---|---|
| Whether Anadarko’s reduced bonus payment modified the lease’s scope so lease covers only 31 acres | The reduced payment (and revised payment order) constituted an implied modification limiting the lease to one-half interest | The lease’s Paragraph C.3 expressly provides reduced payment if less than full title is conveyed; reduced payment merely followed lease terms, not a modification | No modification; payment comported with lease terms (Paragraph C.3) |
| Whether estoppel by deed bars Sheddens from denying the lease covers all 62 acres after they later acquired full title | Estoppel by deed should require proof of detrimental reliance; Anadarko paid less, so no detrimental reliance occurred | Estoppel by deed is distinct from equitable estoppel and does not require detrimental reliance; Sheddens warranted title and later perfected title, so estoppel applies | Estoppel by deed applies without a detrimental-reliance requirement; Sheddens are estopped from denying lease covers all 62 acres |
| Whether Anadarko’s extension payment validly extended the lease as to all 62 acres | Extension should apply only to the interest actually leased (one-half) | Because estoppel by deed treats the original conveyance as effective once Sheddens acquired full title, the extension covers all 62 acres | Extension was timely and covers all 62 acres |
| Whether summary judgment was appropriate | Genuine issue argued about scope/modification and estoppel elements | No genuine factual dispute; legal questions resolved as matter of law in Anadarko’s favor | Summary judgment for Anadarko affirmed |
Key Cases Cited
- Dixon v. Fuller, 46 A. 553 (Pa. 1900) (estoppel by deed recognized in Pennsylvania)
- Jordan v. Chambers, 75 A. 956 (Pa. 1910) (describing estoppel by deed where grantor later acquires title)
- Bowen v. A.R. Boyd Enters., Inc., 191 A. 137 (Pa. 1937) (vendor who conveys and later acquires title cannot defeat prior grant)
- Phillips v. Tetzner, 53 A.2d 129 (Pa. 1947) (application of estoppel by deed despite purchaser’s failure to tender consideration)
- Hennebont Co. v. Kroger Co., 289 A.2d 229 (Pa. Super. 1972) (Superior Court application of estoppel by deed to similar disputes)
- Daley v. Hornbaker, 472 A.2d 703 (Pa. Super. 1984) (grantor estopped to assert anything in derogation of deed)
- Novelty Knitting Mills, Inc. v. Siskind, 457 A.2d 502 (Pa. 1983) (describing equitable estoppel and its detrimental-reliance requirement)