Antero Res. Corp. v. L&D Invs.
| Decision Date | 26 April 2022 |
| Docket Number | 20-0964,20-0967 |
| Parties | Antero Resources Corporation, Petitioner, v. L&D Investments, Inc.; Richard Snowden Andrews, Jr.; Marion A. Young Trust; Charles A. Young, David L. Young, and Lavinia Young Davis, successors of Marion A. Young; Charles Lee Andrews, IV; Elisa S. Andrews; Frances L. Andrews; and Mike Ross, Inc., Respondents. AND Mike Ross, Inc., Petitioner, v. Antero Resources Corporation, Respondent. |
| Court | West Virginia Supreme Court |
Antero Resources Corporation ("Antero") appeals the November 2, 2020, order of the Circuit Court of Harrison County, which granted, in part, and denied, in part, its motion for summary judgment on its cross claim for indemnity against Mike Ross, Inc., ("MRI") pertaining to gas royalties paid to MRI pursuant to a 2014 written agreement during the pendency of this case, which originated in 2013 when the plaintiffs, L&D Investments Inc., and others[1] (hereinafter collectively "plaintiffs"), sought to quiet title to a 1 041-acre mineral parcel located in Harrison County.[2] Antero contends that the circuit court erred by giving MRI a four-million-dollar offset from the amount due under the 2014 agreement and by not awarding interest on its $2, 914, 943.75 judgment against MRI. Alternatively, Antero argues that if MRI receives the offset from the amount due under the 2014 agreement, then Antero should be refunded the four million dollars currently being held in escrow in accordance with its separate settlement agreement with the plaintiffs.
MRI appeals the same order[3] contending that the circuit court erred by not entering summary judgment in its favor. MRI asserts that the 2014 agreement is unenforceable and, furthermore Antero's indemnity claim was extinguished as a result of MRI's four-million-dollar offer of judgment, which was accepted by the plaintiffs.[4]
Having carefully considered the parties' briefs and arguments, the submitted record, and the applicable authorities, we find no error in the circuit court's rulings with one exception. For the reasons set forth below, we find that Antero is entitled to recover interest on its $2, 914, 943.75 judgment against MRI pursuant to the parties' 2014 agreement. Because this case presents no substantial question of law or fact, a memorandum decision is appropriate under Rule 21 of the West Virginia Rules of Appellate Procedure.
As previously noted, this case began in 2013 as an action by the plaintiffs to quiet title to an approximately 1, 041-acre mineral parcel. At that time, Antero and other gas developers were extracting oil and gas from the subject property pursuant to a lease agreement[5] and were making royalty payments to MRI, who claimed to be the owner of eighty percent of the mineral interests[6] pursuant to a 2003 tax deed that it received after purchasing the subject property at a delinquent tax sale. In their complaint, the plaintiffs alleged that they collectively owned a 36.44% undivided interest in the property; that they had continuously paid their real property taxes on their oil and gas interests before and after the delinquent tax sale; and that their payment of the taxes rendered the tax deed issued to MRI void. In addition to seeking a declaration that they had an ownership interest in the mineral estate, the plaintiffs also named Antero and the other gas developers as defendants[7]and asserted a multitude of claims against them and MRI including claims for misappropriation, trespass, fraud, deceit, conversion, slander of title, unauthorized pooling of mineral interests, and punitive damages, as well as the unpaid gas royalties.
The case was litigated for the next four years with the parties engaging in extensive discovery and filing multiple motions for summary judgment. Then, by order entered February 21, 2017, the circuit court entered summary judgment in favor of MRI, finding that the plaintiffs had failed to do what was necessary to have their mineral interests properly assessed; that plaintiffs' mineral interests were properly sold because of their delinquent taxes; and, furthermore, the plaintiffs' claims were barred by the three-year statute of limitations on challenges to tax deeds. Accordingly, the circuit court declared MRI to be the owner of eighty percent of the mineral interests pursuant to its tax deed.
Thereafter, the plaintiffs appealed to this Court, and the circuit court's decision was reversed in L&D Investments, Inc. v. Mike Ross, Inc., 241 W.Va. 46, 818 S.E.2d 872 (2018) (hereinafter L&D Investments I). In that decision, this Court found that the Harrison County Assessor had issued double tax assessments on the subject property, that the tax tickets paid by the plaintiffs were the real property tax assessments, and therefore, the taxes on their mineral interests were never delinquent. Id. at 55, 818 S.E.2d at 881. This Court further found that because MRI's tax deed was void, the plaintiffs' claims were not barred by the applicable statute of limitations. Id. Accordingly, the case was remanded to the circuit court for further proceedings.
When the case was returned to the circuit court, a trial date was set for November 18, 2019, on the plaintiffs' various tort and contract claims against MRI, Antero, and the other gas developers. A few weeks prior to the scheduled trial, the circuit court ordered Antero to comply with the plaintiffs' discovery request for copies of any title examinations with respect to the 1902 mineral lease. Antero produced records of two title exams conducted in February 2007 and September 2013. The plaintiffs maintain that these two title exams showed that MRI's 2003 tax deed was void and, therefore, Antero knew that it should have been making royalty payments to the plaintiffs. Yet, Antero had continued to make royalty payments to MRI after the plaintiffs filed their complaint. In that regard, the record shows that when the plaintiffs filed their complaint in 2013, Antero temporarily suspended its royalty payments to MRI. However, in 2014, Antero and MRI entered into an agreement, unbeknownst to the plaintiffs or the circuit court, whereby Antero agreed to resume making royalty payments to MRI and MRI agreed that it would reimburse Antero for the royalty payments with interest, to the extent it was determined that MRI did not own the mineral rights.
The written agreement executed by Antero and MRI on July 14, 2014, provided, in relevant part, as follows:
Although the agreement provided for the payment of interest on any overpayment, no interest rate was specified therein. Pursuant to the agreement, Antero paid royalties to MRI from 2014 until 2018, when this Court issued its decision in L&D Investments I. The total amount of royalties Antero paid to MRI was $6, 914, 943.75.[8]
After the case was remanded to the circuit court, MRI argued that this Court's decision only applied to the plaintiffs' 36.44% ownership interest in the oil and gas and that it owned the remaining portion of the 80% interest set forth in the tax deed. Accordingly, MRI moved for summary judgment, asking the circuit court to declare that it owned the remaining interest in the oil and gas as set forth in the 2003 tax deed. By order entered October 29, 2019, the circuit court denied MRI's motion and ruled that the entirety of the 2003 tax sale was void pursuant to this Court's decision; that MRI had no ownership interest in the mineral rights; and that MRI was not entitled to any of the royalty payments.
Two days after the circuit court ruled that MRI had no ownership interest in the mineral rights, MRI made an offer of judgment[9] to the plaintiffs in the amount of four million dollars in exchange for "a full release of all claims asserted by Plaintiffs against MRI and, similarly, an agreement by MRI to forego any further claims in this case." The plaintiffs accepted the offer.
On November 12, 2019, Antero filed an amended cross claim against MRI seeking indemnification pursuant to their 2014 agreement plus interest. Antero then reached a settlement with the plaintiffs just three days later, on the eve of trial. The settlement between Antero and the plaintiffs was memorialized in a written agreement executed on December 9, 2019. The agreement provided that the Plaintiffs and Antero agreed:
1. Antero will pay Plaintiffs the sum of $7, 000, 000.00, as per counsel's emails attached hereto as "Exhibit No. 1."
The referenced emails included an email sent at 11:16 a.m. on November 15, 2019, by Antero's counsel to the plaintiffs' counsel stating: The plaintiffs' counsel then responded by...
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