Lay v. ConocoPhillips Co.
| Decision Date | 10 May 2019 |
| Docket Number | Case No. 117,257 |
| Citation | 453 P.3d 1267 |
| Parties | John LAY and Connie Lay, husband and wife, Plaintiffs, and Clifford Farms Homeowners' Association, Inc., Intervenor, v. CONOCOPHILLIPS COMPANY; and Waterloo Road Pump and Supply, LLC, Defendants, and Pump & Supply, LLC, Third-Party Plaintiff, v. Dennis Miller, Third-Party Defendant, and ConocoPhillips Company, Third-Party Plaintiff/Appellant, v. Clifford Farms, LLC ; Gary L. Olson, individually and as Trustee of the Olson Family Trust, dated March 31, 1998; Clifford's Second One, LLC; Build One Development, L.P.; and G2, LLC, Third-Party Defendants/Appellees, and John Nail ; Brandon Baker a/k/a Aqua Well Drilling, Inc.; Dennis Miller and Mr. Miller d/b/a King Drilling ; James A. Nelson d/b/a Nelson Pump and Drilling a/k/a Nelson Pump Company ; Yuanshui Zheng and Fang Liu; Larry and Diane Burch; and Doug and Carrie Dannaway, Third-Party Defendants. |
| Court | United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma |
Amy M. Stipe, Rob F. Robertson, Ellen A. Adams, John M. "Jake" Krattiger, GABLEGOTWALS, Oklahoma City, Oklahoma, and Terry D. Ragsdale, GABLEGOTWALS, Tulsa, Oklahoma, for Third-Party Plaintiff/Appellant,
Dennis S. Boxeur, Rollin Nash, Jr., James L. Scott, NASH, COHENOUR, KELLEY, & GIESSMANN, P.C., Oklahoma City, Oklahoma, for Third-Party Defendants/Appellees.
Opinion by Bay Mitchell, Presiding Judge:
¶1 Third-Party Plaintiff/Appellant ConocoPhillips Company (Conoco) appeals from the trial court's order granting summary judgment to Third-Party Defendants/Appellees Clifford Farms, LLC; Gary L. Olson, individually and as Trustee of the Olson Family Trust, Dated March 31, 1998; Clifford's Second One, LLC; Build One Development, LP; and G2, LLC (collectively, Olson Defendants). After de novo review, we find a third-party contribution claim pursuant to 12 O.S. § 832 is subject to the 12 O.S. § 109 statute of repose, and Conoco's claims against Olson Defendants are barred. Olson Defendants are entitled to judgment as a matter of law. We affirm.
¶2 Gary Olson and his wife owned an 80 acre tract of undeveloped land. The Olson family lived on and farmed the land. They transferred the property to the Olson Family Trust in 1998. The property was sold to Clifford Farms, LLC, a company then partially owned by Gary Olson, in 1999. Mr. Olson and Clifford Farms, LLC began developing the 80 acres into the Clifford Farms Addition. On June 2, 2000, they filed a Final Plat subdividing the property into 49 residential lots. On June 29, 2001, Clifford Farms, LLC sold a lot at 17736 Clifford Farms Road to home builder ZCT, LLC. That lot would later become Plaintiffs John and Connie Lays' residence and is the subject property in this lawsuit.1 ZCT built a home on the lot. At the time, the Clifford Farms Addition was not on city water and each home required a water well. A water well was drilled in 2002 and then plugged in 2003, and a second well was drilled soon thereafter. ZCT sold the home in 2003. The Lays purchased the home in 2005.
¶3 In April 2013, the Lays filed a lawsuit against Conoco to recover for harm to their property from oilfield operations in the 1940s. The Lays claim when their water well was drilled, buried oil and salt pits were pierced and contaminated the aquifer and their potable water. On November 9, 2015, Conoco filed third-party claims for contribution against Olson Defendants2 pursuant to 12 O.S. § 832. Conoco asserts Olson Defendants are liable for the same injuries upon which the Lays base their claims against Conoco. Conoco alleges (1) Mr. Olson failed to disclose his knowledge of historic oil and gas activity on the subject property; (2) Mr. Olson and Clifford Farms, LLC failed to properly evaluate the environmental suitability of the property prior to developing the Clifford Farms Addition, specifically, whether there would be a fresh water supply for residential wells; (3) Olson Defendants had knowledge of "bad" water wells drilled on the subject property and failed to warn or disclose that information to buyers, builders, water well drillers, and/or homeowners; and (4) Mr. Olson, Build One, and G2, LLC failed to properly plug "bad" water wells on neighboring properties.3
¶4 Olson Defendants filed a motion for summary judgment based on the statute of repose, 12 O.S. § 109. Olsen Defendants contend it is undisputed their involvement with the subject property ended when Clifford Farms, LLC sold the property to ZCT in 2001, and Conoco filed its third-party contribution claims more than 10 years later. Conoco responds that the statute of repose does not apply to third-party contribution claims, because contribution is not a tort. Conoco contends that even if the statute of repose does apply to contribution claims, its allegations have nothing to do with the construction of an improvement to real property. Rather, their claims are based on Olson Defendants' role in the pre-construction development of the neighborhood and their "lack of improvement, lack of investigation, and complete failure to disclose pertinent information about the property to the Clifford Farms homebuilders and homeowners."
¶5 The trial court granted summary judgment to Olson Defendants. In its order, the trial court found "the act of subdividing the property in question constituted an ‘improvement to real property’ for purposes of the statute of repose." The trial court also determined the statute of repose applied to a claim for contribution. Conoco filed a motion to reconsider. After two hearings and supplemental briefing, the trial court determined the undisputed facts demonstrated that Olson Defendants did not perform any development activities within ten (10) years of the date Conoco filed its third-party claims against the Olson Defendants. The trial court entered an Order Denying Third-Party Plaintiff ConocoPhillips' Motion to Reconsider and Granting Third-Party Defendants Final Summary Judgment. The trial court certified its order for appeal, pursuant to 12 O.S. § 994 and Oklahoma Supreme Court Rule 1.36(A).4
¶6 This Court reviews summary judgment de novo , viewing all facts and inferences presented by the evidence in the light most favorable to the nonmoving party. See Miller v. David Grace, Inc. , 2009 OK 49, ¶10, 212 P.3d 1223. Summary judgment is appropriate when there is no genuine controversy as to any material fact, and the moving party is entitled to judgment as a matter of law. Id. This appeal requires us to construe 12 O.S. § 109 and 12 O.S. § 832. Statutory construction also presents a question of law which we review de novo . See Fanning v. Brown , 2004 OK 7, ¶8, 85 P.3d 841. We have plenary, independent and nondeferential authority to determine whether the trial court erred in its legal rulings. Id. ¶7 Two questions of law are presented in this appeal. First, whether a third-party contribution claim pursuant to 12 O.S. § 832 is subject to the 12 O.S. § 109 statute of repose. Second, if it is, whether the statute of repose bars Conoco's action against Olson Defendants.
¶8 Conoco seeks contribution from Olson Defendants pursuant to 12 O.S. § 832, which provides, in pertinent part:
12 O.S. 2011 § 832(A)-(B). Olson Defendants argue the 12 O.S. § 109 statute of repose bars Conoco's contribution claims against them. That statute provides:
12 O.S. 2011 § 109. No reported decision in Oklahoma has examined the interplay between the right of contribution pursuant to 12 O.S. § 832 and the 12 O.S. § 109 statute of repose.
¶9 While many states expressly address in their statutes of repose whether they apply to contribution claims,5 the Oklahoma Statutes do not. Only a few appellate courts in other states have considered whether a statute of repose applies to third-party contribution claims when such claims are not expressly addressed in the statute, and all of these courts have determined contribution claims are subject to the statute of repose. See Hayes v. Mercy Hosp. & Med. Ctr. , 136 Ill.2d 450, 145 Ill.Dec. 894, 557 N.E.2d 873, 875-77 (1990) (); Dighton v. Fed. Pac. Elec. Co. , 399 Mass. 687, 506 N.E.2d 509, 512-13 (1987) (); Dep't of Transp. v. Echeverri , 736 So. 2d 791, 791-92 (Fla. Dist. Ct. App. 1999) (); Krasaeath v. Parker , 212 Ga.App. 525, 441 S.E.2d 868, 869-70 (1994) (...
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