Prudential Resources Corp. v. Plunkett
| Citation | 583 S.W.2d 97 |
| Parties | PRUDENTIAL RESOURCES CORPORATION, Appellant, v. Mack K. PLUNKETT, Appellee. |
| Decision Date | 08 June 1979 |
| Court | Court of Appeals of Kentucky |
Phillip D. Scott, Greenebaum, Doll & McDonald, Lexington, for appellant.
Paul E. Hieronymus, McKee, for appellee.
Before HOGGE, LESTER and VANCE, JJ.
Prudential Resources Corporation sought a judgment pursuant to KRS 418.005 Et seq. declaring that it had not lost the right to exercise an option to purchase an oil and gas leasehold held by Mack K. Plunkett. The Jackson Circuit Court dismissed the suit when it determined that Prudential was obligated to comply with a forum selection clause in the agreement between Prudential and Plunkett, which designated Dallas County, Texas, as the site for any litigation concerning the contract. Prudential, in this appeal, urges that we permit resolution of the controversy in the Jackson Circuit Court by either invalidating the forum selection clause as against public policy, or by striking down the clause as unreasonable under the circumstances of this case.
Plunkett, a resident of Dallas, Texas, acquired two oil and gas leases in tracts located in Jackson County, Kentucky. Plunkett entered into the first lease dated March 25, 1977, with William Bond of St. Petersburg, Florida. The notary certificates establish that Bond signed the lease on April 11th in Pindlas County, Florida, while Plunkett added his name on May 10th in Dallas County, Texas. Plunkett obtained the second lease dated August 31, 1977, from the Warford Land Company, a West Virginia Corporation. Plunkett executed the lease before a notary on July 21, 1977, in Dallas County, Texas. The Warford Land Company completed the agreement on July 26th in Cobell County, West Virginia.
By an instrument effective August 15, 1977, Plunkett and Prudential Resources Corporation contracted as to Prudential's operating oil wells on both tracts. This agreement granted Prudential an option to purchase the oil and gas leases upon the condition that Prudential "drilled and completed, or abandoned as a dry hole" eight specified test holes on or before April 15, 1978.
Although Prudential did not meet the contract deadline of April 15th, it still wished to maintain the right to buy the leases through an extension of time to comply with the clause. Prudential, in its complaint, grounded its assertion of entitlement to the additional time upon the allegation that Plunkett had falsely represented that the National Park Service would promptly issue permits allowing Prudential to drill in the Daniel Boone National Forest, and upon the allegation that the harsh winter weather of 1977 and 1978, as well as the park service's delay in granting the permits, brought into effect the force majeure provision of the agreement which states:
In the event PRUDENTIAL shall be rendered unable in whole or in part, by force majeure to carry out any covenant, agreement, obligation or undertaking hereunder to be kept or performed by such party, other than to make payment of amounts due hereunder, such covenant, agreement, obligation or undertaking, insofar as the same shall be affected by such force majeure shall be suspended during the continuance of any inability so caused, and such default shall be remedied with all reasonable dispatch. The term "force majeure" as employed in this paragraph shall be acts of God, (excepting normal or average weather conditions) strike, lockouts, or other industrial disturbances, acts of a public enemy, war, blockades, riots, epidemics, earthquakes, explosions, accidents, or repairs to machinery or pipes, or inability by reason of governmental regulation to obtain materials, acts of public authorities, or other causes, whether or not of the same kind as enumerated herein, not within the control of the party claiming suspension and which by the exercise of due diligence or the payment of money such party is unable to overcome.
Plunkett entered a special appearance for the purpose of objecting to the jurisdiction and venue of the Jackson Circuit Court upon the basis of the following clause in the contract:
In the event of any dispute, or disagreement, between the parties hereto with respect to this agreement, it is agreed that venue for any action at law brought by any party to this agreement shall be in Dallas County, Texas.
The trial court determined that public policy would not prevent enforcement of a forum selection clause so long as the clause did not operate to force a party into a nonconvenient forum. The court dismissed Prudential's complaint after concluding that Dallas County, Texas, was a convenient forum for both parties.
Both Prudential and Plunkett have informed us that no reported Kentucky case has answered whether choice of forum agreements can take effect in this Commonwealth. While we agree that this precise issue remains one of first impression, Fite & Warmath Construction...
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