Baker v. Conoco Pipeline Co., No. 02-CV-837-H(J).

• Decision Date: 18 August 2003
• Docket Number: No. 02-CV-837-H(J).
• Citation: 280 F.Supp.2d 1285
• Parties: Lawrence BAKER, and Betty Lou Baker, husband and wife, Plaintiff, v. CONOCO PIPELINE COMPANY, a Delaware Corporation, and Randy D. Vaught, d/b/a Vaught Tree Service, and Gale Vaught, d/b/a Vaught Tree Service, Defendant.
• Court: U.S. District Court — Northern District of Oklahoma

280 F.Supp.2d 1285

Lawrence BAKER, and Betty Lou Baker, husband and wife, Plaintiff, v. CONOCO PIPELINE COMPANY, a Delaware Corporation, and Randy D. Vaught, d/b/a Vaught Tree Service, and Gale Vaught, d/b/a Vaught Tree Service, Defendant.

No. 02-CV-837-H(J).

United States District Court, N.D. Oklahoma.

August 18, 2003.

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Leonard Marion Logan, IV, Logan & Lowry, Vinita, Bobby Christopher Ramsey, Tommy Ray Dyer, Jr, Davis & Thompson, Jay, for Lawrence Richard Baker, husband, Betty Lou Baker, wife, plaintiffs.

Gary W Davis, Crowe & Dunlevy, Oklahoma City, Gerald Lee Jackson, Crowe & Dunlevy, Tulsa, Brian Henderson, Stigler, for Conoco Pipeline Company, sued as: Conoco Pipe Line Company, a Delaware Corporation, defendant.

ORDER

HOLMES, District Judge.

This matter comes before the Court pursuant to the Report and Recommendation filed by Magistrate Judge Sam A. Joyner on July 3, 2003 (Docket No. 59) addressing Defendants' Motion For Stay Of Proceedings And For Order Compelling Arbitration (Docket No. 21), filed April 3, 2003.

In their motion, Defendants request that the present action be stayed and all claims submitted to arbitration. Defendants rely on an arbitration clause contained in an easement governing the real property in dispute in this case. Plaintiffs, however, argue that the arbitration provision does not contemplate the present claims and therefore does not compel arbitration of such claims under either the Federal Arbitration Act, 9 U.S.C. §§ 1-16, or the Oklahoma Uniform Arbitration Act, 15 Okla. Stat. §§ 801-18.

In accordance with 28 U.S.C. § 636(b) and Fed.R.Civ.P. 72(b), any objections to the Magistrate Judge's Report and Recommendation must be filed within ten (10) days of the receipt of the report. The time for filing objections to the Report and Recommendation has expired, and no objections have been filed.

Based on a review of the Report and Recommendation of the Magistrate Judge, the Court hereby adopts and affirms the Report and Recommendation. Accordingly, Defendants' Motion For Stay Of Proceedings And For Order Compelling Arbitration is hereby granted in part and denied in part, as specifically set forth in the Report and Recommendation.

The Court directs the parties to file a joint statement on how best to proceed in light of the Court's ruling no later than August 25, 2003.

IT IS SO ORDERED.

                TABLE OF CONTENTS
                I. PROCEDURAL HISTORY ........................................ 1291
                 II. FACTUAL BACKGROUND ........................................ 1291
                III. ANALYSIS .................................................. 1292
                     A. THE FEDERAL ARBITRATION ACT AND THE OKLAHOMA
                UNIFORM ARBITRATION ACT ............................... 1292
                     B. THE EXISTENCE OF AN AGREEMENT TO ARBITRATE ............. 1294
                     C. THE ENFORCEABILITY OF THE ARBITRATION AGREEMENT ........ 1295
                        1. ASSIGNABILITY UNDER CONTRACT LAW .................... 1295
                        2. PROPERTY LAW ANALYSIS: COVENANT RUNNING WITH
                THE LAND ........................................... 1296
                     D. DEFENDANT DID NOT WAIVE ITS RIGHT TO ENFORCE THE
                ARBITRATION AGREEMENT ................................. 1298
                        1. SIX-FACTOR TEST FOR DETERMINING WHETHER
                DEFENDANT'S AFFIRMATIVE ACTS CONSTITUTED A
                WAIVER OF ITS RIGHT TO ENFORCE THE ARBITRATION
                AGREEMENT .......................................... 1298
                            (A) WHETHER CONOCO'S ACTIONS WERE INCONSISTENT
                WITH THE RIGHT TO ARBITRATE .................... 1299
                            (B) WHETHER ARBITRATION WAS RAISED ONLY AFTER
                SIGNIFICANT PREPARATION FOR LITIGATION ......... 1299
                            (C) WHETHER THE TRIAL DATE IS NEAR OR CONOCO HAS
                DELAYED RAISING THE ISSUE OF ARBITRATION ....... 1300
                            (D) WHETHER CONOCO HAS FILED PLEADINGS IN
                THE LITIGATION WITHOUT SEEKING A STAY OF
                PROCEEDINGS .................................... 1301
                            (E) WHETHER CONOCO HAS ENGAGED IN DISCOVERY
                PROCEEDINGS UNAVAILABLE IN ARBITRATION OR
                PARTICIPATED IN OTHER IMPORTANT INTERVENING
                STEPS .......................................... 1301
                            (F) WHETHER PLAINTIFFS HAVE BEEN PREJUDICED BY
                CONOCO'S DELAY IN ASSERTING A RIGHT TO
                ARBITRATE ...................................... 1302
                        2. CONOCO DID NOT FAIL TO SATISFY THE CONDITION
                PRECEDENT TO ENFORCE THE ARBITRATION
                AGREEMENT ......................................... 1302
                     E. MOTION TO STAY SHOULD NOT BE DENIED ON THE GROUNDS
                IT WOULD RESULT IN "PIECEMEAL" LITIGATION OF
                CLAIMS AGAINST DEFENDANTS GALE AND RANDY VAUGHT ....... 1303
                     F. WHETHER THE ARBITRATION AGREEMENT GOVERNS ALL
                OF PLAINTIFFS' CLAIMS ................................. 1304
                        1. WHETHER "EASEMENT CLEARING" IS COVERED BY THE
                ARBITRATION PROVISION .............................. 1304
                        2. NARROW VERSUS BROAD ARBITRATION PROVISION: GEOGRAPHIC
                BOUNDARY AND TYPE OF DAMAGES ISSUES ................ 1305
                            (A) TRESPASS CLAIM ................................. 1307
                            (B) INVERSE CONDEMNATION CLAIM ..................... 1307
                  V. RECOMMENDATION ............................................ 1308
                

                VI. OBJECTIONS ...................................... 1309
                

REPORT AND RECOMMENDATION

JOYNER, United States Magistrate Judge.

Plaintiffs Lawrence Richard Baker and Betty Lou Baker ("Plaintiffs" or "Bakers") brought an action against Conoco for trespass, inverse condemnation, and wrongful removal of trees resulting from damages sustained to trees and vegetation on their land after Conoco, through a contractor Vaught Tree Service, performed "easement clearing activities" to maintain its right-of-way. Plaintiffs subsequently amended their complaint to add Randy D. Vaught and Gale Vaught, d/b/a Vaught Tree Service ("Vaughts"). Defendant Conoco Pipeline Company ("Conoco") filed a Motion for a Stay of Proceedings and for Order Compelling Arbitration on April 3, 2003. [Doc. No. 21-1, 21-2].

The undersigned United States Magistrate Judge held a hearing on the motion on June 10, 2003. Plaintiffs appear by and through their attorney Leonard M. Logan IV. Defendant Conoco appears by and through its attorneys Gary W. Davis and Brian C. Henderson. Defendants Gale and Randy Vaught appear by and through their attorney Douglas E. Stall. Having heard the arguments of counsel, having reviewed the pleadings in the case, and having reviewed the parties' briefs and exhibits, the undersigned United States Magistrate Judge recommends that Defendant Conoco's Motion for Stay of Proceedings and for Order Compelling Arbitration be GRANTED IN PART AND DENIED IN PART. [Doc. No. 21-1, 21-2].

I. PROCEDURAL HISTORY

Plaintiffs filed their Petition on October 8, 2002, in Craig County District Court. [Doc. No. 1]. Defendant Conoco subsequently removed the case to the District Court for the Northern District of Oklahoma on November 4, 2002. [Doc. No. 1]. Conoco submitted its Answer on November 8, 2002. [Doc. No. 4]. Plaintiffs filed a First Amended Complaint on February 4, 2003, adding Vaught Tree Service as a defendant in the action. [Doc. No. 15]. Conoco submitted its Answer to Plaintiffs' First Amended Complaint February 14, 2003. [Doc. No. 15]. Plaintiffs thereafter filed a Second Amended Complaint terminating Defendant Vaught Tree Service and adding Randy D. Vaught, d/b/a Vaught Tree Service, as a defendant March 24, 2003. [Doc. No. 20]. Conoco filed a Motion to Stay the Proceedings and for an Order Compelling Arbitration on April 3, 2003. [Doc. No. 21-1, 21-2]. Conoco filed an Answer to Plaintiffs' Second Amended Complaint April 4, 2003. [Doc. No. 22]. Plaintiffs filed a response in opposition to Conoco's motion to stay and to compel arbitration on April 15, 2003. [Doc. No. 27]. Conoco submitted its reply May 5, 2003. [Doc. No. 34]. Plaintiffs filed a Third Amended Complaint on June 11, 2003, adding Gale Vaught, d/b/a Vaught Tree Service, as a defendant. [Doc. No. 51]. Gale Vaught filed her Answer to Plaintiffs' Third Amended Complaint June 13, 2003. [Doc. No. 52]. Conoco submitted its Answer to Plaintiffs' Third Amended Complaint June 23, 2003. [Doc. No. 54]. By minute order dated April 18, 2003, the District Court referred Defendant Conoco's Motion to Stay Proceedings and for an Order Compelling Arbitration to the undersigned United States Magistrate Judge for Report and Recommendation. [Doc. No. 29]. The undersigned held a hearing on the motion June 10, 2003.

II. FACTUAL BACKGROUND

Plaintiffs Richard Lawrence Baker and Betty Lou Baker ("Plaintiffs" or "Bakers") are the owners in fee simple title of two tracts of land located in the SE/4 NW/4 of S30-T24N-R21E (containing approximately forty (40) acres) and the NW/4 NE/4 SW/4 of S30-T24N-R21E (containing approximately ten (10) acres) in Craig County, Oklahoma ("Subject Property").¹ Defendant Conoco is a successor to the rights under an easement dated May 12, 1930 for the laying of petroleum pipelines across the Subject Property. Pursuant to the easement, Conoco's predecessor, Ajax Pipe Line Company ("Ajax"), laid two ten-inch pipelines. Conoco presently operates the pipelines, utilizing one to transport crude oil and the second to transport petroleum products.

On August 29, 2002, Conoco notified the Bakers in writing that it would be performing "right of way clearing/mowing" scheduled for the week of September 2, 2002. Conoco noted it would be clearing/mowing "approximately 50 feet centered over the pipeline." [Doc. No. 34, Ex. A, Letter from Jeff Bute, Conoco Right of Way Agent, to Lawrence Richard Baker]. Conoco contends the easement clearing activities were necessary to maintain the operation of its pipelines and to provide for more visibility for fly-over inspections, protection from tree root interference, and create sufficient space for necessary maintenance or repair activities. [Doc. No. 21]. Conoco contracted with Vaught Tree Service to perform the easement clearing activities. As a result of the clearing activities, Plaint...