Anderson v. Hess Corp.
Decision Date | 25 August 2010 |
Docket Number | Case No. 4:09-cv-00064 |
Citation | 733 F.Supp.2d 1100 |
Parties | Jerome C. ANDERSON, Patricia M. Barstad, Joan M. Barstad, Jane C. Craft, Peggy M. Cowan, Jerome Anderson as Trustee of the Anderson Family Mineral Trust, John C. Anderson, Ray Anderson, Oscar R. Anderson, Beatrice Anderson, Donald Tarczanin, Susan Tarczanin, and Cora Anderson, Plaintiffs, v. HESS CORPORATION, Defendant. Hess Corporation, Counterclaimant, v. Jerome C. Anderson, et al., Counterdefendants. |
Court | U.S. District Court — District of North Dakota |
Sarah M. Vogel, Rudra Tamm, Sarah Vogel Law Firm P.C., Bismarck, ND, for Plaintiffs/Counterdefendants.
John W. Morrison, Jr., Wade C. Mann, Crowley Fleck PLLP, Bismarck, ND, for Defendant/Counterclaimant.
ORDER DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT AND GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Before the Court are the Plaintiffs' and the Defendant's motions for summary judgment filed on June 30, 2010. See Docket Nos. 11 and 14. The parties filed responses on July 26, 2010. See Docket Nos. 21 and 22. The parties filed reply briefs on August 9, 2010. See Docket Nos. 24 and 25. For the reasons set forth below, the Plaintiffs' motion for summary judgment is denied and the Defendant's motion for summary judgment is granted.
The Plaintiffs are residents of North Dakota, Oregon, Connecticut, and Colorado and own real property in Mountrail County, North Dakota. Defendant Hess Corporation is a Delaware corporation with its principal place of business in the State of New York. The Plaintiffs own the real property described as:
See Docket No. 1-1.
In May 2004, the Plaintiffs, or their predecessors in interest, leased their mineral rights in the real property to Diamond Resources, Inc. Axel Anderson, Arvid Anderson, Irene Anderson, Cora Anderson, Oscar Anderson, and Beatrice Anderson signed their leases ("the Anderson leases") on May 3, 2004. Upon Axel Anderson's death, his interest passed to Plaintiffs Jerome Anderson, Patricia Barstad, Joan Barstad, Jane Craft, and Peggy Cowan. Arvid Anderson and Irene Anderson conveyed their interest to Plaintiff Jerome Anderson as Trustee of the Anderson Family Mineral Trust. Plaintiff Cora Anderson conveyed her interest to Plaintiff John Anderson and retained a life interest. Plaintiffs Donald Tarczanin and Susan Tarczanin signed their lease ("the Tarczanin lease") on May 10, 2004. Diamond Resources, Inc., transferred the leases to R.T. Duncan, Inc., who then transferred the leases to Duncan Oil Partners. Duncan Oil Partners transferred theleases to Amerada Hess Corporation, now known as Hess Corporation, on December 30, 2004.
The leases are identical. Each includes the following Pugh clause: 1
In 2008 and 2009, Hess Corporation engaged in activities in preparation of drilling a well on a spacing unit that includes the real property in question. On October 27, 2008, Hess Corporation surveyed and staked a well. On December 28, 2008, it submitted an application for a permit to drill to the Oil and Gas Division of the North Dakota Industrial Commission. The application was approved on January 2, 2009. On January 23, 2009, Hess Corporationmoved equipment to the well location and began to prepare the surface. On February 6, 2009, the pad was leveled and lazered. Hess Corporation finished digging the drilling pit on February 13, 2009. The pit was lined with gravel and clay on March 3, 2009. Hess Corporation widened the access road to the well and drilled the rat hole 3 for the main conductor pipe on April 27, 2009. Tanks used to store drilling fluid were moved to the location on April 30, 2009. Hess Corporation drilled the mouse hole on May 1, 2009. The company planned to move Nabors Rig 460 to the well prior to May 3, 2009, but problems at another well prevented that arrival date. The well was spud 4 on May 11, 2009. The well was continuously drilled until total depth was reached on June 26, 2009. The well was completed on June 30, 2009, and has produced continuously.
On May 7, 2009, Hess Corporation's landman, Michael Allen, contacted Jerome Anderson to negotiate an extension or renewal of the leases. Allen offered to increase the royalty in exchange for an extension of the leases. On May 8, 2009, Jerome Anderson rejected Allen's offer.
The Plaintiffs filed a complaint in state court in Mountrail County, North Dakota on September 22, 2009. See Docket No. 1-1. On October 9, 2009, Hess Corporation removed the action to federal district court and answered and counterclaimed. See Docket Nos. 1 and 2. The Plaintiffs contend the leases expired prior to the date the well was spud. Hess Corporation contends the leases did not expire because it was engaged in drilling operations on the real property prior to the expiration of the leases' primary term. Both parties have submitted excellent briefs which are thorough and well-researched.
Rule 56 of the Federal Rules of Civil Procedure permits parties to file for summary judgment. "Summary judgment is appropriate when the evidence, viewed in a light most favorable to the non-moving party, indicates that no genuine issues of material fact exist and that the moving party is entitled to judgment as a matter of law." Davison v. City of Minneapolis, Minn., 490 F.3d 648, 654 (8th Cir.2007) (quoting Hughes v. Stottlemyre, 454 F.3d 791, 796 (8th Cir.2006)). An issue of material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Neither the Plaintiffs nor the Defendant contend there is a genuine issue of material fact.
This action is based on diversity jurisdiction. Therefore, the Court will apply the substantive law of North Dakota. Paracelsus Healthcare Corp. v. Philips Med. Sys., 384 F.3d 492, 495 (8th Cir.2004) (citing Erie R.R. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)).
The parties filed cross-motions for summary judgment. The Plaintiffs and Hess Corporation each seek quiet title as to the interest in the leases. The Plaintiffs also seek damages and attorney's fees for Hess Corporation's failure to release the leases,willful trespass, wrongful extraction of minerals, and under N.D.C.C. § 38-08-08. In addition, the Plaintiffs have asked the Court to certify a question to the North Dakota Supreme Court.
Rule 47 of the North Dakota Rules of Appellate Procedure permits the North Dakota Supreme Court to answer questions of law certified to it by federal courts and appellate courts of other states if the following conditions are met:
Certification of a question of law to a state court "rests in the sound discretion of the federal court." Perkins v. Clark Equip. Co., 823 F.2d 207, 209 (8th Cir.1987) (quoting Lehman Bros. v. Schein, 416 U.S. 386, 391, 94 S.Ct. 1741, 40 L.Ed.2d 215 (1974)). The Eighth Circuit Court of Appeals has explained, "[A]bsent a 'close' question and lack of state sources enabling a nonconjectural determination, a federal court should not avoid its responsibility to determine all issues before it." Id. (quoting Shakopee Mdewakanton Sioux Cmty. v. City of Prior Lake, Minn., 771 F.2d 1153, 1157 n. 2 (8th Cir.1985)). The...
To continue reading
Request your trial-
Anderson v. Hess Corp..
...attached to a drilling rig penetrate the ground before the end of the primary term in order to extend the leases?Anderson v. Hess Corp., 733 F.Supp.2d 1100, 1104 (D.N.D.2010). The district court declined to certify the Andersons' question to the state supreme court because it determined tha......
-
Caltex Oil Venture v. Comm'r of Internal Revenue
...461. 14.Caltex also cites, to the same effect, 2 Walter Lee Summers, Oil and Gas, sec. 349 (1959), cited in Anderson v. Hess Corp., 733 F. Supp. 2d 1100, 1108 (D. N.D. 2010), aff'd, 649 F.3d 891 (8th Cir. 2011). 15.Where several things are to be done under a contract, and the money consider......
-
Cunningham Energy LLC v. Ridgetop Capital Ii, LP
...and good faith intent to drill and complete the well." Anderson v. Hess Corp., 649 F.3d 891, 894 (8th Cir. 2011), affirming 733 F. Supp. 2d 1100 (D. N.D. 2010) (citing Williams & Meyers, Manual of Oil and Gas Terms (2009) ("Drilling is the act of boring a hole through which oil and/or gas m......
-
Kotalik v. A.W. Chesterton Co.
...of this state.Use of a state's certification procedure " ‘rests in the sound discretion of the federal court.’ " Anderson v. Hess Corp., 733 F. Supp. 2d 1100, 1104 (N.D. 2010) (quoting Perkins v. Clark Equip. Co., 823 F.2d 207, 209 (8th Cir. 1987) ). The Eighth Circuit has noted, "As the D.......
-
LEGAL DEVELOPMENTS IN 2011 AFFECTING THE OIL AND GAS EXPLORATION AND PRODUCTION INDUSTRY
...2011 ND 33, 793 N.W.2d 799. [83] 2011 ND 36, 793 N.W.2d 797. [84] 2011 ND 34, 793 N.W.2d 804. [85] 2011 ND 22, 794 N.W.2d 715. [86] 733 F.Supp.2d 1100 (D.N.D. 2010) aff'd 649 F.3d 891 (8th Cir. 2011). [87] 2011 ND 60, 795 N.W.2d 303, 308. [88] 2011 ND 64, 795 N.W.2d 294, 296. [89] Id. at 30......
-
LEASE MAINTENANCE AND TITLE ISSUES ACROSS THE SHALE BASINS: THE BAKKEN FORMATION
...(D.N.D.1984). [52] Id. at 458. [53] Id., citing Humphrys v. Skelly Oil Co, 83 F.2d 989 (5th Cir.1936). [54] Anderson v. Hess Corp, 733 F.Supp2d 1100 (D.N.D.2010), aff'd, 649 F.3d. 891 (8th Cir. 2011). [55] Id. at 1102. [56] Id. [57] Id. [58] Id., citing 2 W.L. Summers, Oil and Gas § 349 (19......
-
LEASE MAINTENANCE AND TITLE ISSUES ACROSS THE SHALE BASINS: NIOBRARA SHALE CHRONICLES OF COLORADO
...hereinafter Stahl. [36] Burke v. GAPCO Energy, LLC, No. 10-1317, 2012 WL 1038849 (W.D. Pa. Mar. 28, 2012), and Anderson v. Hess Corp., 733 F.Supp2d 1100 (D.N.D. 2010), aff'd, 649 F.3d 891 (8th Cir. 2011). [37] Id. [38] Id. [39] Bledsoe Land Co. v. Forest Oil Corp., 277 P.3d 838 (Colo. App. ......