Cline v. Southern Star Cent. Gas Pipeline, Inc.

• Citation: 356 F.Supp.2d 1203
• Decision Date: 18 February 2005
• Docket Number: No. CIV.A.03-2655-GTV.,CIV.A.03-2655-GTV.
• Parties: Phillip G. CLINE, Plaintiff, v. SOUTHERN STAR CENTRAL GAS PIPELINE, INC., formerly Williams Gas Pipelines Southcentral, Inc., Defendant.
• Court: U.S. District Court — District of Kansas

356 F.Supp.2d 1203

Phillip G. CLINE, Plaintiff, v. SOUTHERN STAR CENTRAL GAS PIPELINE, INC., formerly Williams Gas Pipelines Southcentral, Inc., Defendant.

No. CIV.A.03-2655-GTV.

United States District Court, D. Kansas.

February 18, 2005.

COPYRIGHT MATERIAL OMITTED

Ira Dennis Hawver, Ozawkie, KS, for Plaintiff.

Teresa J. James, Martin, Pringle, Oliver, Wallace & Bauer, LLP, Overland Park, KS, Teresa L. Mah, Martin, Pringle, Oliver, Wallace & Bauer, LLP, Wichita, KS, for Defendant.

MEMORANDUM AND ORDER

VANBEBBER, Senior District Judge.

Plaintiff Phillip G. Cline brings this action pursuant to the court's diversity jurisdiction, 28 U.S.C. § 1332, against Defendant Southern Star Central Gas Pipeline, Inc. ("Southern Star"), formerly Williams Gas Pipelines Southcentral, Inc. Plaintiff's claims relate to his efforts over the past twenty-six years to obtain free gas from Defendant and its predecessors pursuant to a gas storage lease and an acknowledgment of payment agreement. Specifically, Plaintiff alleges that Defendant: breached an agreement to provide him free gas for domestic purposes; prevented him from receiving free gas based on fraudulent reasons; converted natural gas produced by the petroleum deposits underneath his property; and intentionally inflicted emotional distress on him, aggravating his preexisting post-traumatic stress disorder.

Defendant denies Plaintiff's allegations and asserts two counterclaims. First, Defendant requests a judgment quieting title to the following: all natural gas it injected underneath Plaintiff's property; any other natural gas, oil or other minerals under specified areas of Plaintiff's property; and any wells, pipelines or other property it has placed on Plaintiff's property. Second, Defendant requests a declaratory judgment stating that its gas storage lease remains valid and that it has not breached its agreement to provide free gas to Plaintiff. Defendant also asks the court to declare the terms and conditions Plaintiff must satisfy in order to receive free gas in the future.

This action is before the court on Defendant's motion for summary judgment (Doc. 46). For the following reasons, Defendant's motion is granted in part and denied in part. The court grants Defendant summary judgment as to all of Plaintiff's claims and as well as its own declaratory judgment counterclaim, but denies Defendant summary judgment on its quiet title counterclaim.

I. STANDARD OF REVIEW

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Lack of a genuine issue of material fact means that the evidence is such that no 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). Essentially, the inquiry is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Id. at 251-52, 106 S.Ct. 2505.

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. This burden may be met by showing that there is a lack of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has properly supported its motion for summary judgment, the burden shifts to the nonmoving party to show that there is a genuine issue of material fact left for trial. Anderson, 477 U.S. at 256, 106 S.Ct. 2505. "[A] party opposing a properly supported motion for summary judgment may not rest on mere allegations or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial." Id. Therefore, the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. Id. The court must consider the record in the light most favorable to the nonmoving party. Bee v. Greaves, 744 F.2d 1387, 1396 (10th Cir.1984).

As an initial matter, the court observes that Plaintiff's response to Defendant's motion for summary judgment failed to comply with D. Kan. Rule 56.1. Defendant's motion for summary judgment contained forty-two numbered statements of material fact citing specific portions of the summary judgment record upon which it relied. See D. Kan. Rule 56.1(a). In response, Plaintiff filed twenty separately numbered statements of material fact of his own, addressing only one of Defendant's statements of fact by number. Moreover, most of Plaintiff's statements of fact refer the court to the pre-trial order for support, or cite to a deposition without providing a page or line reference. See D. Kan. Rule 56.1(b)(1) ("Each fact in dispute shall be numbered by paragraph, shall refer with particularity to those portions of the record upon which the opposing party relies, and, if applicable, shall state the number of movant's fact that is disputed."). Accordingly, those facts not properly controverted by Plaintiff are deemed admitted for the purposes of Defendant's summary judgment motion.

II. FACTUAL BACKGROUND

The following facts are taken from the summary judgment record and are either uncontroverted or viewed in a light most favorable to Plaintiff's case. Immaterial facts and facts not properly supported by the record are omitted. When necessary, additional facts are included in the discussion section of this memorandum and order.

A. The Parties

Phillip Cline is a landowner within the boundaries of an underground natural gas storage field located in Jefferson County, Kansas ("the McLouth Storage Field"). Southern Star is an interstate natural gas pipeline company that owns the McLouth Storage Field.

Mr. Cline began living on the property at issue in 1978.¹ At the time he acquired the property, it was subject to an Oil and Gas Lease, a Gas Storage Lease, and an Acknowledgment of Payment, all of which Mr. Cline's predecessor and Southern Star's predecessor executed on June 16, 1951. Southern Star is the current owner of the gas storage and oil and gas interests at issue in this case, as it is the successor-in-interest to Williams Gas Pipeline Southcentral, Inc. ("Williams Gas"), Williams Natural Gas Company ("Williams Natural"), and Cities Service Gas Company ("Cities Service").

B. The Contracts

1. Oil and Gas Lease²

The Oil and Gas Lease granted Southern Star and its predecessors the exclusive right on Mr. Cline's property to carry "on geological, geophysical and other exploratory work, including core drilling, and the drilling, mining and operating for, producing, and saving all of the oil, gas, casinghead gas, casinghead gasoline and all other gases and their respective constituent vapors...." The Oil and Gas Lease was for a primary term of ten years, and so long thereafter "as oil, gas, casinghead gas, casinghead gasoline or any of the products covered by ... [the] lease is or can be produced."

2. Gas Storage Lease

The Gas Storage Lease granted Southern Star and its predecessors the exclusive right to use Mr. Cline's property to introduce, store, and remove gas from specified sands and formations below the surface of his property. The lessor possesses all oil rights below the surface and all gas rights found below the designated sands and formations, but the lessor must protect the storage formations if the lessor pursues development of those reserved rights. The Gas Storage Lease was for a primary term of ten years, and so long thereafter as the lessee used the designated sands and formations for gas storage purposes. Moreover, the lessee may continue the lease from year to year by making annual rental payments to the lessor. Other provisions of the Gas Storage Lease relevant to this action state:

7. There now exists on the land described in this lease no producing gas well and for the purpose of this contract the parties have taken measures to ascertain and calculate the amount of gas underlying the premises involved and do hereby agree that there was on June 23, 1944 no cubic feet there....

. . . .

14. It is mutually understood that production under an oil and gas lease and storage and extraction of storage gas under a storage lease cannot be successfully carried on from the same sands at the same time and it is agreed that at any time when this storage lease is in good standing by reason of rental payments any valid oil or gas lease now upon said lands shall not be subject to attack on the ground of lack of production or of proper development as to the sands and depths involved herein but that proper operations under this lease or under such oil and gas lease shall keep such oil and gas lease in good standing and prevent lapse, abandonment charge or forfeiture.

14A. It is mutually understood that payment of rentals under this lease shall relieve the Lessee of paying rentals under the oil and gas lease.

It is uncontroverted that Southern Star and its predecessors have tendered all annual rental payments owed under the Gas Storage Lease and that Southern Star is currently storing gas and conducting gas storage operations underneath Mr. Cline's property.

3. Acknowledgment of Payment

The Acknowledgment of Payment ("the Acknowledgment") was executed to compensate Mr. Cline's predecessor for prematurely ending the production of a well that was drilled on the property pursuant to the Oil and Gas Lease. The recitals section states that the owner of the well intended to abandon and plug the well in the near future because it only produced a small amount of oil, but that Cities Service, Southern Star's predecessor, wanted the well to cease production before it began storing gas under the Gas Storage Lease. Thus, as...