Nisbet v. Van Tuyl, 11315.

• Decision Date: 10 June 1955
• Docket Number: No. 11315.,11315.
• Parties: William A. NISBET, Katherine Nisbet, Lanna M. Nisbet, Emma M. Nisbet, and J. C. Nisbet, Plaintiffs-Appellants, v. Ira VAN TUYL and Elsin C. Van Tuyl, doing business as V-T Drilling Company, Ray Ryan and Helen Ryan, doing business as Ryan Oil Company, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

224 F.2d 66 (1955)

William A. NISBET, Katherine Nisbet, Lanna M. Nisbet, Emma M. Nisbet, and J. C. Nisbet, Plaintiffs-Appellants, v. Ira VAN TUYL and Elsin C. Van Tuyl, doing business as V-T Drilling Company, Ray Ryan and Helen Ryan, doing business as Ryan Oil Company, Defendants-Appellees.

No. 11315.

United States Court of Appeals Seventh Circuit.

June 10, 1955.

Nat H. Youngblood, William L. Craig, Herman L. McCray, D. Bailey Merrill, Evansville, Ind., James G. Wheeler, of the firm of Wheeler & Marshall, Paducah, Ky., of counsel, for plaintiffs-appellants.

Joe Vol Butt, Frederick P. Bamberger, Evansville, Ind., Edmund F. Ortmeyer, William P. Foreman, Wesley Bowers, Ellis B. Anderson, Evansville, Ind., for defendants-appellees.

Before FINNEGAN, SWAIM and SCHNACKENBERG, Circuit Judges.

SCHNACKENBERG, Circuit Judge.

This action was brought to recover damages occasioned by the alleged negligence of the defendants in failing to properly plug an abandoned oil well. The district court sustained defendants' motion for a summary judgment and entered a judgment for costs against plaintiffs, from which this appeal is taken. The errors relied on arise out of the granting of defendants' said motion.

The facts before the court, for the purpose of the motion for summary judgment, are those appearing in plaintiffs' amended complaint, defendants' answer thereto and the affidavit of Ira Van Tuyl, a defendant. They are as follows:

On June 23, 1947, plaintiffs Nisbet, as lessors, entered into an oil and gas lease which was later assigned by lessees to defendant Ryan Oil Company. The lease covered certain land in Kentucky. Among other things the lease provided that "Lessee shall pay for damages caused by its operations to growing crops on said land." An oil well was drilled on plaintiffs' lands by defendants Ryan Oil Company and V-T Drilling Company. It was drilled through a workable coal bed. The well was determined to be a dry hole and was improperly sealed by defendants as an abandoned well.

On December 10, 1947, plaintiffs entered into a coal lease with West Kentucky Coal Company covering the same lands that were previously leased for oil. When the coal company commenced to mine the coal, it discovered that water and gas were leaking into the coal mine from the abandoned oil well and it was necessary to stop mining the coal. The coal company lease gave a right to mine coal in vein No. 11 only, but the gas and water leaking from the abandoned oil well also prevented the mining of coal in two lower veins. Plaintiffs, at a cost of $7,500, properly resealed and replugged the abandoned oil well so that the coal could be mined.

The amended complaint asked for judgment in that amount and costs.

During the time when all of the aforementioned incidents occurred there was in effect a Kentucky statute, two sections of which¹ are relief upon by plaintiffs. They are as follows:

"353.110. Abandonment of well drilled through coal strata; plugging of well.

"Prior to the abandonment of a well drilled through a workable coal bed the well operator shall notify, by registered mail, the operator or owner of the coal bed and the department of the intention to plug and abandon the well. The notice shall give the number of the well and its location, and fix the time at which the work of plugging and filling will be commenced, the time not to be less than five days after the day on which the notice is received, or in due course should be received, by the department. The department shall prescribe the form of notice to be used. A representative or representatives of the coal operator or owner and of the department may be present at the plugging and filling of the well. Whether or not such representatives appear, the well operator may proceed, at the time fixed, to plug and fill the well. When the plugging and filling have been completed, an affidavit setting forth the time and manner in which the well was plugged shall be made in triplicate by two experienced men who participated in the work. The affidavit shall be made on forms furnished by the department. One copy of the affidavit shall be retained by the well operator, one mailed to each coal operator and each owner, and one to the department.

"353.120. Method of plugging well drilled through coal-bearing strata.

"When any well drilled through a workable coal bed is abandoned, it shall at that time be plugged to a point forty feet below the lowest workable coal bed, in the following manner: The hole shall be filled with mud, clay or other nonporous material from the bottom to a point twenty feet above the top of the lowest oil, gas or water-bearing strata, or a permanent bridge shall be anchored thirty feet below its lowest oil, gas or water-bearing strata, and from this bridge it shall be filled with mud, clay or other nonporous material to a point twenty feet above the strata, at which point there shall be placed a plug of cement or other suitable material that will completely seal the hole. Between this sealing plug and a point twenty feet above the next higher oil, gas, or water-bearing strata, the hole shall be treated in a like manner and at that point there shall be placed another suitable plug, that will completely seal the hole. In a like manner the hole shall be filled and plugged, or bridged, filled and plugged, with reference to each of its oil, gas, or water-bearing strata. Whenever such strata are not widely separated and are free from water, they may be grouped and treated as a single productive stratum. After plugging all strata, a final plug shall be anchored approximately ten feet below the bottom of the largest casing in the well and from that point to the surface the well shall be filled with mud, clay or other nonporous material."

Plaintiffs also rely on a penalty section² which reads:

"A person injured by the violation of any statute may recover from the offender such damages as he sustained by reason of the violation, although a penalty or forfeiture is imposed for such violation."

Defendants cite another statutory provision³ which reads:

"(1) Any person who willfully violates any of the provisions of KRS 353.050 to 353.130 or KRS 353.200 relating to the manner of drilling and casing or plugging and filling any well, or fixing the distance from wells within which mining operations may not be conducted, or any person who willfully violates any of the terms of an order of the department allowing mining operations within a lesser distance of any well than that prescribed by this chapter shall be fined not more than two hundred dollars or imprisoned in jail for not more than twelve months, or both."

The question presented by this appeal is whether defendants, on the basis of these facts, are entitled to a judgment as a matter of law.

1. Both sides concede that the people of Kentucky have an interest in the conservation of its natural resources which may be protected under the police power of that state. Defendants contend that this protection is afforded to the people by section 353.990, and that the above quoted statutes do not give rise to a civil action for damages in favor of persons who are not "within the class for whose benefit the statutes were enacted." On the other hand, plaintiffs contend that the statutory provisions upon which they rely became a part of the lease under which Ryan Oil Company drilled and plugged the oil well in question, and that they, having been injured by defendants' violation of a statute, may recover such damages as they sustained thereby.

Plaintiffs' amended complaint alleged that the well was drilled by defendants through a workable coal bed and, when abandoned by defendants, was sealed, but that defendants negligently failed to plug the well in the manner required by sections 353.110 and 353.120, supra, for the plugging of abandoned wells drilled through a workable coal bed. Defendants' answer admitted that the well which was drilled by them was determined to be a dry hole and was sealed as an abandoned well, but denied the other allegations.

The amended complaint also charged facts indicating that the failure of defendants to so plug the well was the proximate cause of water and gas entering into the coal bed where mining operations were started, and that plaintiffs requested defendants to plug the well, but that they refused to do so, whereupon, to save the coal leased to West Kentucky Coal Company, and two lower veins, plaintiffs...