Ultra Resources, Inc., a Wyoming Corporation
2015 WY 40
| Wyo. | 2015Background
- Plaintiffs (Hartman et al.) hold a 4.98% net profits interest (NPI) under a 1954 Net Profits Contract (NPC) covering Pinedale-area oil & gas leases; defendants (Ultra, SWEPI, Lance Oil) are working-interest owners/operators.
- District court in 2007 (affirmed in Ultra I) entered declaratory judgment recognizing the NPI, set accounting rules per the NPC/Exhibits, and awarded monetary net-profits for March–December 2006; defendants paid the money but continued post-judgment accounting disputes.
- Plaintiffs filed a post-judgment motion to enforce the judgment and NPC, alleging defendants improperly included expenses invoiced before 2007 in the 2007 NPI accounting and failed to timely report expenses per the NPC.
- District court (post-judgment) ruled it had jurisdiction to interpret/enforce its declaratory judgment, held the 2007 trial accounting was final through 12/31/2006, and adopted an "invoice date" rule: an expense is "incurred" for NPC reporting when a third-party invoice is dated, and must be reported within one month after that calendar month.
- Court disallowed most pre-2007 invoiced expenses from the 2007 accounting, rejected defendants’ argument that JIB (joint interest billing) posting date is the date of incurrence, and awarded plaintiffs attorney fees under the Wyoming Royalty Payment Act (WRPA) with a minor reduction ordered on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction to entertain motion to enforce declaratory judgment/NPC | Court retains inherent authority and §1-37-110 "further relief" power to interpret/enforce prior declaratory judgment | After amended judgment and satisfaction, court lost jurisdiction; new action required | Court had jurisdiction under inherent powers and Declaratory Judgments Act to grant further relief limited to issues within original declaration |
| Inclusion of pre-2007 expenses in 2007 NPI accounting | Trial fixed NPI through 12/31/2006; defendants waived/failed to present pre-2007 expenses at trial so cannot include them in 2007 accounting | Pre-2007 expenses were excluded at trial as accruals/accumulators and should be allowed in subsequent cumulative accounting | Court found trial accounting final through 2006; defendants waived the right to reintroduce those expenses and many pre-2007 invoices were excluded |
| When an expense is "incurred" for NPC reporting (timing) | "Incurred" means when third-party vendor invoices operator; operator must furnish monthly statement within one month after calendar month close | Expense is "incurred" when operator posts it to joint interest billing (JIB) and bills co-owners; thus later posting is timely | Court adopted invoice-date rule (invoice = date incurred) and one-month reporting deadline after month of invoice; JIB posting not controlling |
| Entitlement to attorney fees and need to segregate claims | Plaintiffs prevailed under WRPA and were entitled to fees for the enforcement proceedings; segregation not required because claims/duties were intertwined | Defendants: plaintiffs must segregate fees to award only those attributable to discrete WRPA claims | Court awarded plaintiffs fees under WRPA; denied segregation requirement given common nexus, but reduced award to reflect plaintiffs’ agreed clerical/filing fee deduction |
Key Cases Cited
- Hurd v. Nelson, 714 P.2d 767 (Wyo. 1986) (trial courts have inherent power to enforce and clarify their judgments)
- Ultra Resources, Inc. v. Hartman, 226 P.3d 889 (Wyo. 2010) (Ultra I) (prior appellate decision affirming existence of NPI and related judgments)
- In re General Adjudication of All Rights to Use Water in the Big Horn River System, 835 P.2d 273 (Wyo. 1992) (Declaratory judgment "further relief" supports post-judgment clarification/enforcement)
- Zaloudek v. Zaloudek, 245 P.3d 336 (Wyo. 2010) (post-judgment motions to clarify/enforce fall within court's inherent authority)
- Horn & Hardart Co. v. Nat’l Rail Passenger Corp., 843 F.2d 546 (D.C. Cir. 1988) (federal court may grant "further relief" to make declaratory judgment effective despite appeal/delay)
- Triton Coal Co. v. Husman, Inc., 846 P.2d 664 (Wyo. 1993) (discussion of preclusion/waiver when issues not appealed)
- Sagebrush Dev., Inc. v. Moehrke, 604 P.2d 198 (Wyo. 1979) (installment/divisible contract principles limiting prospective damage awards)