CHAD AND DIANIA HOLLAND, ET AL., Plаintiffs-Appellees, v. GAS ENTERPRISES CO., ET AL., Defendants-Appellants.
Case No. 14CA35
IN THE COURT OF APPEALS OF OHIO FOURTH APPELLATE DISTRICT WASHINGTON COUNTY
RELEASED: 6/15/2015
[Cite as Holland v. Gas Ents. Co., 2015-Ohio-2527.]
Harsha, J.
APPEARANCES:
John E. Triplett, Jr., Theisen Brock, L.P.A., Marietta, Ohio, for appellants.
Ethan Vessels, Fields, Dehmlow & Vessels, L.L.C., Marietta, Ohio, for appellees.
Harsha, J.
{¶1} The trial court granted summary judgment in favor of the successors in interest to the lessors of a mineral lease; the court orderеd the lease forfeited and declared it void because oil and gas had not been produced in paying quantities. Gas Enterprises, Co. (“Gas Enterprises“), one of the successors in interest to the lessee, appealed.
{¶2} Gas Enterprises claims that the trial court erred in granting summary judgment for several reasons, including that the landowners failed to join all of the required parties under
I. FACTS
{¶3} In March 2014, Chad and Diania Holland and Gregory and Brenda Westbrook filed an аmended complaint in the Washington County Court of Common Pleas against Gas Enterprises, MNW Energy, L.L.C. (“MNW Energy“), and Triad Hunter, L.L.C. (“Triad Hunter“). The complaint and the subsequent discovery indicate the Hollands and the Westbrooks (“landowners“) own approximately 40 aсres of real property located in Ludlow Township in Washington County. In 1930, the predecessors in interest to the landowners leased the oil and gas rights in the property to D.B. Yaw for the term of “One year from the date hereof and as much lоnger as gas or oil is found in paying quantities thereon.” Four wells that were drilled under the lease remain on the property. Gas Enterprises obtained the lessee‘s interest in 1996. Gas Enterprises subleased the deep rights to oil and gas to MNW Energy in July 2013; MNW Energy in turn assigned its interest in the sublease to Triad Hunter in December 2013.
{¶4} In their amended complaint the landowners alleged that the production from the four wells on the property has not been sufficient to hold the lease, resulting in its expiration under its оwn terms. The landowners requested a judgment declaring that the oil and gas lease, sublease, and assignments were forfeited and void because they expired when there was insufficient production of oil or gas. They also claimed Gas Entеrprises, MNW Energy, and Triad Hunter had breached various implied covenants. The named defendants filed answers denying the landowners’ claims. In Triad Hunter‘s
{¶5} The landowners subsequently filed a motion for summary judgment. They attached “Ohio Well Completions Reports“, which showed that the four wells had produced no oil or gas in 2006, 2007, 2008, 2012, and 2013. They also attached Gas Enterprises’ responses to their discovery requests, which indicated that “Gas Enterprises (lease), Upper Fifteen Mile Investment (override) and Triad Hunter (sublease)” claimed interests in the wells. Gas Enterprises further stated that the wells were primarily oil wells, that there was oil in the tanks that could be sold, and that yearly comparisons of oil sales could not be easily obtained because sales are done in lots or loads. The landowners voluntarily dismissed MNW Energy without prejudice becausе it no longer had an interest in the leased property.
{¶6} Gas Enterprises and Triad Hunter filed affidavits and memoranda in opposition to the landowner‘s motion for summary judgment. In its memorandum in opposition Gas Enterprises noted that “[t]he record indicates that at least one party‘s interest that appears in the discovery has not been addressed (royalty interest of Upper Fifteen Mile Investment LLC).”
{¶7} The landowners later supplemented their motion for summary judgment to include аdditional discovery provided to them by Gas Enterprises. These documents were Gas Enterprises’ own forms stating that no oil or gas had been produced by the wells on the property except for 2010 and 2011.
{¶8} In October 2014, the trial court entered summary judgment in favor of the landowners. The trial court found that oil or gas had not been produced in paying
II. ASSIGNMENT OF ERROR
{¶9} Gas Enterprises assigns the following error:
THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT TO THE PLAINTIFF-APPELLEE ON THE RECORD BEFORE THE COURT.
III. STANDARD OF REVIEW
{¶10} Appellate review of summary judgment decisions is de novo, governed by the standards of
{¶11} The moving party has the initial burden of informing the trial court of the basis for the motion and identifying the parts of the record that demonstrate the absence of a genuine issue of material fact on the pertinent claims. Dresher v. Burt, 75 Ohio St.3d 280, 293, 662 N.E.2d 264 (1996). Once the moving party meets this initial burden, the non-moving party has the reciprocal burdеn under
IV. LAW AND ANALYSIS
{¶12} In its sole assignment of error Gas Enterprises asserts that the trial court erred in granting summary judgment in favor of the landowners and declaring the oil and gas lease forfeited and void. Its first сontention is that the judgment was erroneous because the landowners did not comply with
{¶13}
The plaintiff in an action to cancel a lease or license mentioned in section 5301.09 of the Revised Code, or in any way involving it, in order to finally adjudicate and determine all questions involving suсh lease or license in such action, need only make those persons defendants, so far as such lease or license is involved, who claim thereunder and are in actual and open possession, and those who then appear of record, or by the files in such office, to own or have an interest in such lease or license. If there is no claimant in actual and open possession, and no persons whose interest appears of record or file, then so far as such lease or liсense is involved, it will only be necessary to make the original lessee or licensee defendant in order to finally adjudicate and determine all questions concerning such lease or license.
(Emphasis added.)
{¶14} “Our paramount concern in construing a statute is legislative intent.” Ohio Neighborhood Finance, Inc. v. Scott, 139 Ohio St.3d 536, 2014-Ohio-2440, 13 N.E.3d 1115, ¶ 22. “To discern legislative intent, we first consider the statutory language, reading all words and phrases in context and in accordance with rules of grammar and common usage.” Id. citing
{¶15} The language of
{¶16} The landowners argue that
{¶17} And Gas Enterprises did raise this issue below when it specified in its memorandum in opposition to the landowners’ motion for summary judgment that “[t]he record indicates that at least one party‘s interest that appears in the discovery has not been addressed (royalty interest of Upper Fifteen Mile Investment LLC).” See
{¶18} Therefore, the trial court erred in granting summary judgment in favor of the landowners when based upon current summary judgment evidence, Upper Fifteen Mile Investment may have an interest that required it to be named or joined as a defendant. See Horvat v. Integrated Petroleum Co., Inc., 11th Dist. Trumbull No. 3642, 1986 WL 10004, *4 (Sept. 12, 1986) (“Equitable claims of investors in oil and gas wells must be considered before an order of total forfeiture can be made“); POI Energy, Inc. v. James Drilling Corp., 782 F.2d 1043 (6th Cir.1985) (under
{¶19} We sustain Gas Enterprises’ assignment of error,
V. CONCLUSION
{¶20} Having sustained Gas Enterprises’ sole assignment of error, we reverse the judgment of the trial court, and remand the cause for further proceedings, including a determination of the status of the Upper Fifteen Mile Investment. Gas Enterprisеs’ additional contentions are moot and we need not address them.
JUDGMENT REVERSED AND CAUSE REMANDED.
JUDGMENT ENTRY
The Court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this Court directing the Washington County Court of Common Pleas to carry this judgment into execution.
Any stay previously granted by this Court is hereby tеrminated as of the date of this entry.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
Abele, J. & McFarland, J.: Concur in Judgment and Opinion.
For the Court
BY: ________________________________
William H. Harsha, Judge
NOTICE TO COUNSEL
Pursuant to Local Rule No. 14, this document constitutes a final judgment entry and the time pеriod for further appeal commences from the date of filing with the clerk.