Hanson v. Hunt Oil Company

Decision Date07 August 1968
Docket NumberNo. 18998.,18998.
Citation398 F.2d 578
PartiesRobert E. HANSON, Appellant, v. HUNT OIL COMPANY, a Foreign Corporation, Appellee.
CourtU.S. Court of Appeals — Eighth Circuit

Morris Chertkov, Washington, D. C., for appellant; Worth Rowley, Washington, D. C., and E. F. Engebretson (of Pearce, Engebretson, Anderson & Schmidt), Bismarck, N. D., on the brief.

Russell R. Mather (of Fleck, Smith, Mather, Strutz & Mayer), Bismarck, N. D., for appellee; Ernest R. Fleck of the same firm, Bismarck, N. D., on the brief.

Before VAN OOSTERHOUT, Chief Judge, BLACKMUN, Circuit Judge, and VAN PELT, District Judge.

VAN OOSTERHOUT, Chief Judge.

Plaintiff Hanson has taken this timely appeal from final judgment of the District Court dismissing his complaint and awarding defendant, Hunt Oil Company (Hunt), judgment for $79,577.35 on its counterclaim. Jurisdiction exists by reason of diversity of citizenship and the requisite amount.

A rather extensive statement of background facts is essential to present the issues in proper perspective. Hanson shared with William Walters a working interest in three producing oil wells in North Dakota, which normally yielded 84-84-54 barrels per day. Hunt, which owned a substantial working interest in the area, was vigorously pushing a unitization project known as the Tioga-Madison Unit. It was necessary to obtain the participation of 95% of the owners of working interest in the field to create the unitization and plaintiff's participation was necessary to reach such percentage. Hunt persistently sought plaintiff's participation. Plaintiff repeatedly refused to participate, stating as grounds therefor (1) he did not believe the predicted yields under the unitized unit would produce as much income for him as his existing operation and he needed the income because of heavy mortgage obligations, (2) he did not have funds to pay the cost of joining the unit, and (3) he did not believe the participation allotted to him in the unit was sufficiently high as his wells were among the best producers in the entire field.

Hanson was ultimately persuaded by Hunt's representative to sign the unit agreement on the basis of a letter agreement prepared by Hunt's counsel and signed by Latimer, an authorized representative, with written acceptance endorsed thereon by Hanson. The letter agreement provides that Hunt will make certain advances required of Hanson by the unit agreement. Then follows the portion here in controversy, reading:

"4. All sums so advanced for your account, plus interest thereon at six per cent (6%) per annum, shall be repaid by you to Hunt Oil Company from and out of the following:
"A. From month to month out of production or proceeds therefrom with respect to certain wells, as follows:
All production of Unitized Substances from the North Tioga-Madison Unit accruing to your account that is in excess of your normal share of total oil production from Investors-State Nos. 1 and 2 Wells and from the Hunt-Johnson State No. 1 Well. For purposes hereof, `normal share of total oil production\' from Investor-State Nos. 1 and 2 Wells means your share of total oil production from said wells under production allowables (up to a maximum of 84 barrels per day per well) which would be assigned to said wells if they had not been included in the Unit. `Normal share of total oil production\' for the Hunt-Johnson State No. 1 Well shall be your share of total oil production from that well up to a maximum of 54 barrels per day total oil production from the well.
"B. All your share of income from said gasoline plant, including income from sales of extracted liquids and other plant products, and sales of gas and residue gas."

Plaintiff's basic contention in this litigation, asserted in paragraph VI of his amended complaint filed May 31, 1966, is:

"That in entering said agreement of August 24, 1961, it was the intent of the parties that the plaintiff was not obligated to repay any part of such advance until the defendant had paid plaintiff for 84 barrels of oil per day in connection with wells F22 and F24, and had paid plaintiff for 54 barrels of oil per day in connection with well D28, after which time plaintiff\'s share of production over such stated amounts was to be applied against the money so advanced by defendant to plaintiff. * * *"

Plaintiff in his prayer among other things prayed:

"(2) That if the Court finds that the agreement of August 24, 1961 is ambiguous that the Court reform said agreement to conform with the intentions of the parties as set forth in this complaint."

Additionally, Hanson asked that defendant be required to account to him for all sums applied to advances made in violation of the agreement as pleaded.

The trial court by letter opinion filed August 29, 1966, determined the letter agreement was not ambiguous and that hence the intention of the parties must be gathered solely from the language used in the letter agreement and that parol evidence would not be admissible.

The case was set for and reached for trial on September 12, 1966. At the opening of the trial, plaintiff tendered an amendment to the complaint which amended the prayer for reformation to read:

"(2) That if the Court finds that the agreement of August 24, 1961, does not conform with the intentions of the parties at the time of making the agreement, that there be held to be a mutual mistake in reducing said agreement to writing, and that the Court reform said agreement to conform with the intention of the parties as set forth in this complaint."

Plaintiff's counsel, in seeking leave to amend, stated: "While we pled for reformation in the original Complaint and in the Amended Complaint perhaps the language wasn't quite as good as it should have been, and we have introduced a little clarifying language in the reformation portion of it."

Defendant objected to the amendment on the ground that it asserted a new cause of action. The court sustained defendant's objection and would not permit the amendment. Plaint...

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    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • March 17, 1980
    ...pled "fraudulent maintenance," and ambiguous pleadings are to be construed liberally in favor of the pleader. Hanson v. Hunt Oil Co., 398 F.2d 578, 581 (8th Cir. 1968). Berkley cites dicta in Norton v. Curtiss, 433 F.2d 779, 794-96, 57 CCPA 1384, 1404-06 (1970), indicating that a patent app......
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    ...protecting the judicial system or other litigants when they deny leave to amend a pleading.” Id. at 1191;see also Hanson v. Hunt Oil Co., 398 F.2d 578, 581–82 (8th Cir.1968). Here, because John Doe's claims are based on July 1, 2013 amendments to Arizona's AOM Rule, and the motion to amend ......
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    ...(1st Cir.1970) (in the absence of prejudice or bad faith, court finds delay alone insufficient to support denial); Hanson v. Hunt Oil Co., 398 F.2d 578, 582 (8th Cir.1968). The proscribed prejudice is that which "outweighs the moving party's right to have the case decided on the merits. Alb......
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    ...appears for denying it." Castellucci v. United States Fid. & Guar. Co., --- Mass. at --- g, 361 N.E.2d at 1265. Hanson v. Hunt Oil Co., 398 F.2d 578, 581-582 (8th Cir. 1968). See generally 6 Wright & Miller, Federal Practice and Procedure § 1488 (1971) (hereinafter Wright & Nor do we see an......
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