Windsor Energy Group, L.L.C., an Oklahoma Limited Liability Company, and Windsor Beaver Creek L.L.C., a Delaware Limited Liability Company
2014 WY 96
| Wyo. | 2014Background
- In 2000 Huber and Suncor entered a joint operating agreement (JOA) for Beaver Creek oil/gas leases; Huber was operator and Suncor non-operator. The JOA required monthly joint interest bills (JIBs), operator notice, AFEs for certain expenditures, and allowed non-operators two years to contest/audit JIBs; it bound successors and assigns.
- Suncor assigned its interest to Dolphin in 2004; Huber assigned to Windsor the same year. Windsor began billing Dolphin in 2005; Dolphin paid nothing and later declared bankruptcy in 2008.
- Windsor waited nearly two years before demanding payment from Dolphin and did not demand payment from Suncor until December 2009; Windsor sued Suncor in March 2010 for breach of the JOA seeking >$625,000 (later amended to >$900,000).
- On summary judgment the district court held Suncor remained contractually liable as an assignor because it had not been expressly released; genuine issues remained on damages and laches. After a bench trial the court found Windsor’s claim barred by laches and denied recovery.
- The Wyoming Supreme Court affirmed, holding (1) laches can apply in some statutory-limit contract actions, and (2) on these facts Windsor’s long delay, failure to produce underlying documentation, and resulting prejudice to Suncor satisfied laches.
Issues
| Issue | Plaintiff's Argument (Windsor) | Defendant's Argument (Suncor) | Held |
|---|---|---|---|
| Whether laches is available to bar a breach-of-contract claim governed by a statute of limitations | Laches is inapplicable where a statute of limitations applies; Windsor sued within the ten‑year period | Laches may bar the claim because equitable considerations (delay + prejudice) can make enforcement unfair despite an unexpired statute | Court: Laches may, in limited circumstances, be a defense to an action at law governed by a statute of limitations; available but its use is narrow |
| Whether the district court abused its discretion in finding laches (inexcusable delay and prejudice) | Delay was excusable or irrelevant because obligations and audit rights ran to the assignee (Dolphin); Windsor complied with JOA obligations by billing the then-non-operator | Windsor unreasonably delayed (5+ years to notify Suncor; 7 years to produce JIBs); destroyed/failed to produce underlying docs; Suncor was prejudiced (lost audit rights, lost subrogation/indemnity, witnesses/docs) | Court: No abuse of discretion; findings not clearly erroneous — Windsor’s undue delay and prejudice to Suncor satisfy laches and bar recovery |
Key Cases Cited
- Moncrief v. Sohio Petroleum Co., 775 P.2d 1021 (Wyo. 1989) (recognizes laches as especially apt in oil and gas disputes because of volatile values)
- Dorsett v. Moore, 61 P.3d 1221 (Wyo. 2003) (defines laches as delay that disadvantages another)
- Ultra Resources, Inc. v. Hartman, 226 P.3d 889 (Wyo. 2010) (discusses equitable defenses and difficulty of establishing laches)
- Anderson v. Wyoming Development Co., 154 P.2d 318 (Wyo. 1944) (applied laches to bar a breach-of-contract claim)
- Eblen v. Eblen, 234 P.2d 434 (Wyo. 1951) (equity may refuse relief after undue delay; laches complements statutes of limitation)
- Glenrock v. Abadie, 259 P.2d 766 (Wyo. 1953) (statutes of limitation apply broadly after fusion of law and equity)
- Hammond v. Hammond, 14 P.3d 199 (Wyo. 2000) (distinguishes child support enforcement where laches was inapplicable)
- Continental Sheep Co. v. Woodhouse, 256 P.2d 97 (Wyo. 1953) (addresses adverse inference/spoliation when a party fails to preserve original documentation)
