Armstrong v. High Crest Oils, Inc.
| Decision Date | 24 April 1974 |
| Docket Number | No. 12677,12677 |
| Citation | 520 P.2d 1081,164 Mont. 187 |
| Parties | JoAnn ARMSTRONG and R. V. Bottomly, Plaintiffs and Respondents, v. HIGH CREST OILS, INC., a corporation, Defendant and Appellant. |
| Court | Montana Supreme Court |
Crowley, Kilbourne, Haughey, Hanson & Gallagher, Billings, Cale Crowley (argued), Billings, for defendant and appellant.
Hoyt & Bottomly, Great Falls, John C. Hoyt (argued), Great Falls, for plaintiffs and respondents.
This appeal is from an order of the district court of Hill County granting plaintiffs' motion to alter or amend the court's previous order granting summary judgment for defendant. From this special order after judgment, defendant appeals.
Respondents, JoAnn Armstrong and R. V. Bottomly, are successors in interest to Lewis H. Armstrong as lessor in an oil and gas lease wherein appellant, High Crest Oils, Inc., is lessee.
On November 24, 1972, pursuant to Montana's Oil and Gas Conservation Act, appellant applied for an order creating the Bullhook Gas Unit in Hill County, Montana. The lands described in the Armstrong lease were included in said unit area. The Commission conducted a public hearing on December 14, 1972. John Hoyt, representing the respondent royalty owners, announced his presence at the hearing as a protestant to the proposed pooling unit. Subsequent to the hearing the Commission rendered its report, made findings of fact, conclusions of law, and issued its order creating the Bullhook Gas Unit effective as of the date of the hearing. On December 21, 1972, respondent Armstrong filed a petition for rehearing with the Commission. Said petition was denied by the Commission on January 29, 1973.
On May 14, 1973, pursuant to section 60-135, R.C.M.1947, respondent Armstrong filed a complaint in the district court of Lewis and Clark County for a judicial review of the order of the Montana Board of Oil and Gas Conservation Commission creating the Bullhook Gas Unit. Subsequently, on June 4, 1973, an amended complaint was filed by both respondents as parties in the action.
On May 16, 1973, respondents filed the instant action in the district court of Hill County against appellant lessee. Respondents requested a decree cancelling the Armstrong lease and declaring that appellants had no claim of any kind upon the property covered by the subject oil and gas lease and for an accounting of all gas produced and sold from the subject land located in Hill County, Montana.
Paragraphs IV and V of the Hill County complaint set forth the essence of respondents' contentions:
'IV
'That by the terms of the lease set forth and marked as Exhibit 'A' executed by the predecessor in interest of plaintiffs and assigned by the lessee therein to defendant herein the lessee is granted the right and power to pool and combine the acreage covered by said lease with other land, lease or leases in the vicinity thereof of at any time, when in lessee's judgment it is necessary or advisable to do so for the prevention of waste and the conservation and greatest ultimate recovery of oil or gas. Such pooling to be in a unit or units not exceeding in area the acreage prescribed or required in any federal or state law order, rule or regulation . . . and the royalties shall accrue and be paid to lessor on pooled substances produced from any unit in the proportion, but only in the proportion, that lessor's acreage interest in the land covered hereby and placed in the unit bears to the total acreage in the land placed in such unit.
'V
'That over the objections and protestations of plaintiffs defendant made application to the Montana Oil & Gas Conservation Commission for the creation of a pooling unit which included plaintiffs land known as the Bull Hook Gas Unit and through a high powered, hasty presentation induced the Commission to create such unit even though the gas unit requested by defendant violated the express terms of its oil and gas lease with plaintiffs by providing that royalties thereafter accruing to plaintiffs should be paid to them as lessors not in the proportion that lessors acreage in the land placed in the gas unit bears to the total acreage of the land placed in such unit but on the contrary defendant placed thousands of acres of unproductive land in said gas unit and has and is converting plaintiffs share of the gas produced to itself and other persons all in an unlawful and fraudulent manner under the guise of a 'gas in place' formula directly contrary to the express terms and conditions of the attached Oil and Gas Lease as set forth in paragraph IV above.'
The order of Montana's Oil and Gas Conservation Commission creating the Bull Hook Gas Unit and the complaints for judicial review of this order filed in Lewis and Clark County pursuant to section 60-135, R.C.M.1947, are included in the Hill County court record.
On August 22, 1973, appellant filed a motion for summary judgment in the Hill County action. This motion was argued before the district court. One month after the hearing on the motion the court granted the summary judgment. Said order of summary judgment was filed on November 15, 1973.
After the order for summary judgment was entered the following actions transpired:
November 16, 1973, respondents' motion to alter or amend the judgment was served on the appellant together with supporting brief.
November 19, 1973, notice of entry of summary judgment was mailed by appellant to respondent.
November 28, 1973, appellant's brief in opposition to the motion to alter or amend judgment was served by mail.
December 3, 1973, the district court issued its order granting respondents' motion and revoking the court's previous order granting appellant's summary judgment. The special order after judgment was filed December 10, 1973.
No notice calling the motion to alter or amend judgment up for hearing was ever served or filed; no order setting the motion for hearing was ever made, served or filed; no order continuing the date for hearing the motion was ever made; no hearing on the motion was ever held. Eighteen days after summary judgment was filed the district court granted the motion to alter or amend judgment. From this special order after judgment, this appeals arises.
Two issues are presented for review:
(1) Should the summary judgment granted to appellant by the district court be reinstated?
(2) Is the order granting respondents' motion to alter or amend judgment null and void for failure of the district court to hold a hearing within ten days after said motion is served as required by Rule 59, M.R.Civ.P.?
On the first issue respondents argue that the hearing in the district court of Lewis and Clark County to review the findings and conclusions of the Oil and Gas Commission will not determine the question of whether there has been a violation of the terms of the oil and gas lease which is the subject matter of the instant action. Respondents contend that the suit against the Oil and Gas Commission has nothing to do with whether or not the lease between Armstrong and High Crest has been violated so as to cause a forfeiture of the leasehold interest in that lease by High Crest.
We agree with respondents' argument that the cancellation of the oil and gas lease may be a separate issue upon which another court may have jurisdiction. In the case before us, however, we cannot subscribe to respondents' distinction of the issues before the two courts. Their arguments present a distinction without a difference. The reasons advanced before the Hill County district court for the alleged breach of lease are the alleged illegalities in applying for, and the wrongful creation of, the Bull Hook Gas Unit, Coupled with the alleged wrongful act of including the lease of respondents within the Bull Hook Gas Unit. These are the same reasons given to the Lewis and Clark County district court for reversal of the order creating the unit, and the same factual arguments in the brief of respondents in this case are also the same presented to the Lewis and Clark County district court.
The respondents' arguments here are predicated upon the invalidity of the Commission's order. The court having jurisdiction over that question is the district court in Lewis and Clark County where the challenge to the Commission's order was first filed. Any consideration by the ...
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