Columbia Gas Transmission Corp. v. Ogle, C2-96-839.

• Decision Date: 09 July 1997
• Docket Number: No. C2-96-839.,C2-96-839.
• Citation: 51 F.Supp.2d 866
• Parties: COLUMBIA GAS TRANSMISSION CORP., Plaintiff and Counterclaim Defendants, v. Charles E. OGLE, et al., Defendants and Counterclaim Plaintiffs.
• Court: U.S. District Court — Southern District of Ohio

51 F.Supp.2d 866

COLUMBIA GAS TRANSMISSION CORP., Plaintiff and Counterclaim Defendants, v. Charles E. OGLE, et al., Defendants and Counterclaim Plaintiffs.

No. C2-96-839.

United States District Court, S.D. Ohio, Eastern Division.

July 9, 1997.

COPYRIGHT MATERIAL OMITTED

Brian Lee Buzby, Porter, Wright, Morris & Arthur, Columbus, OH, for plaintiff.

Herbert M. Richardson, III, Dublin, OH, for defendants.

MEMORANDUM OPINION AND ORDER

GRAHAM, District Judge.

Plaintiff Columbia Gas Transmission Corporation ("Columbia Gas") commenced this action on August 23, 1996 seeking damages for breach of contract and declaration of its rights under an oil, gas and storage lease executed by the parties on June 24, 1976. Plaintiff contends that the lease grants it the right to enter defendants' property to conduct feasibility studies in preparation for the drilling of gas storage wells and then, if desirable, to drill such wells. Defendants Donna and Charles Ogle deny that plaintiff possesses the right to drill more than one gas storage well on their property. Although defendants admit that the original lease did give plaintiff the right to test for and drill additional wells, they claim that the terms of that lease were modified in 1978 by a right-of-way agreement. Defendants also assert a counterclaim against plaintiff for fraud in the inducement of the right-of-way agreement, claiming that plaintiff's agent misrepresented to them that only one well would be installed on defendants' property.

The matter is now before the court on plaintiff's motion for summary judgment on all claims and counterclaims pursuant to Federal Rule of Civil Procedure 56.

I.

Under Fed.R.Civ.P. 56(c), summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." See LaPointe v. United Autoworkers Local 600, 8 F.3d 376, 378 (6th Cir.1993); Osborn v. Ashland County Bd. of Alcohol, Drug Addiction and Mental Health Servs., 979 F.2d 1131, 1133 (6th Cir.1992) (per curiam). The party that moves for summary judgment has the burden of showing that there are no genuine issues of material fact in the case at issue, LaPointe, 8 F.3d at 378, which may be accomplished by pointing out to the court that the nonmoving party lacks evidence to support an essential element of its case. Barnhart v. Pickrel, Schaeffer & Ebeling Co., 12 F.3d 1382, 1389 (6th Cir.1993). In response, the nonmoving party must present "significant probative evidence" to demonstrate that "there is [more than] some metaphysical doubt as to the material facts." Moore v. Philip Morris Cos., 8 F.3d 335, 339-40 (6th Cir.1993). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). See generally Booker v. Brown & Williamson Tobacco Co., 879 F.2d 1304, 1310 (6th Cir.1989).

In reviewing a motion for summary judgment, "this Court must determine 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.'" Patton v. Bearden, 8 F.3d 343, 346 (6th Cir.1993) (quoting Anderson, 477 U.S. at 251-53, 106 S.Ct. 2505). The evidence, all facts, and any inferences that may permissibly be drawn from the facts must be viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); see Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992). However, "[t]he mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Anderson, 477 U.S. at 252, 106 S.Ct. 2505; see Gregory v. Hunt, 24 F.3d 781, 784 (6th Cir.1994). Finally, a district court considering a motion for summary judgment may not weigh evidence or make credibility determinations. Adams v. Metiva, 31 F.3d 375, 378 (6th Cir.1994).

II.

Charles and Donna Ogle own approximately eighty-two acres of land in Hocking County, Ohio. The land is used primarily as pasture to raise cattle. On June 24, 1976, the Ogles executed a lease agreement granting Columbia Gas the exclusive right to enter the property and drill for, store, produce and market oil and gas. (See Oil, Gas & Storage Lease, attachment to Motion for Summary Judgment). Under the lease, Columbia Gas is entitled to conduct geophysical tests on the Ogles' land for the purpose of ascertaining the desirability of drilling additional wells. Id. Further, it is uncontroverted that under the lease, Columbia is not limited in the number of wells it may drill and maintain on defendants' property:

Lessee ... shall pay for each gas well or storage well upon the premises from the time and while gas is being marketed, injected, stored or removed therefrom an annual rental of Two Hundred Dollars[.]

Id. (emphasis added). Columbia Gas provides free gas to service the defendants' home and, in addition, has paid them $200 each year since 1976 for the rights granted by the lease. In further compensation, one provision of the lease states that the "Lessee shall deliver to the Lessor in tanks or pipe lines one-eighth ... of the oil produced and saved from the premises[.]" Id.

Columbia Gas attempted to drill its first well under the terms of the lease in the spring of 1978. At that time, Mr. Ogle refused to allow plaintiff to enter his property for that purpose, in spite of the terms of the lease. Mr. Ogle informed plaintiff that it could not drill a well unless it also installed a pipeline across his property. Under the terms of the original lease, the Ogles were required to assume the expense of running service lines to whatever wells were drilled on their property in order to secure the free gas to service their home. Since the first well was to be drilled some eighteen hundred feet from their house, defendants wanted a pipeline running closer to the house which would be much cheaper to access. (December 3, 1996 Deposition of Donna Ogle at 11, 13; December 3, 1996 Deposition of Charles Ogle at 26-27, 34-35). Plaintiff expressed a willingness to perform this additional work, but in order to do so it was necessary for it to enter into a right-of-way agreement with the Ogles.

For that purpose, Columbia Gas sent its contracting agent, Ralph Hacker, who had negotiated the original lease, to meet with the Ogles.

According to the defendants, it had always been their preference that Columbia Gas be limited to the right to drill and maintain only one well on their property. Mrs. Ogle indicates that she and her husband believed that such a limitation was included in the original lease when they signed it. (December 3, 1996 Deposition of Donna Ogle at 4-5). However, a cursory reading of the one page document reveals that no such limitation is included in the lease. The Ogles state that they learned this some time after signing the original lease but before the time when Columbia Gas agreed to negotiate the laying of a pipeline to run near the Ogles' house. (December 3, 1996 Deposition of Donna Ogle at 10). Defendants claim that they addressed this concern to Mr. Hacker when he came to negotiate the right-of-way agreement. According to defendants, Mr. Hacker responded with the oral representation that the language in the right-of-way agreement would make it clear that Columbia Gas was willing to be limited to only one gas storage well. The right-of-way agreement, signed on July 30, 1978, makes no reference to gas storage wells or to the original lease between the parties, but handwritten in the margin of the agreement is the notation: "One above ground well setting to be installed above ground only."

Soon after the right-of-way agreement was signed, Columbia Gas drilled its first gas storage well under the lease and laid the pipeline that the Ogles desired. That storage well on the Ogles' property is part of Columbia's Crawford Storage Field, which currently spans ninety thousand acres and which upon completion will have the capability of storing ninety billion cubic feet of natural gas for use in peak demand periods.

Approximately eighteen years later, on June 4, 1996, Columbia Gas notified the Ogles that it would be entering the property to conduct tests to evaluate the feasibility of a second gas storage well on that property. On June 7, 1996, the Ogles refused Columbia Gas entry to their property to conduct the studies. They then referred Columbia Gas to the language in the margin of the right-of-way agreement.

It is upon these facts that plaintiff has moved for summary judgment on all claims and counterclaims in this action. Specifically, plaintiff seeks an order declaring the contractual rights and obligations of the parties in this case. Defendants have asserted, in Count II of their counterclaim, a request for similar relief which can be addressed simultaneously herein. Defendants have also asserted a counterclaim against Columbia Gas for fraud, in which they claim that Mr. Hacker misrepresented to them that the language in the right-of-way agreement meant that Columbia Gas would drill only one well, and that Mr. Hacker did this to induce the Ogles to sign the right-of-way agreement. The Ogles maintain that they justifiably relied on this representation in signing the right-of-way agreement and that they have suffered damage as a result.

III.

In its Order of December 11, 1996, the Court determined that parol evidence was inadmissable in order to determine the...