Turner v. Systems Fuel, Inc.

• Decision Date: 23 August 1985
• Citation: 475 So.2d 539
• Parties: Thomas W. TURNER, Jr. v. SYSTEMS FUEL, INC. 84-88.
• Court: Alabama Supreme Court

Page 539

475 So.2d 539

Thomas W. TURNER, Jr. v. SYSTEMS FUEL, INC.

84-88.

Supreme Court of Alabama.

Aug. 23, 1985.

Marc E. Bradley of Bradley & Montgomery, Fairhope, for appellant.

Edward B. McDonough, Jr. of McDonough & Broome, Mobile, for appellee.

MADDOX, Justice.

This is an appeal from an order granting summary judgment in favor of the plaintiff in a breach of contract case. We reverse.

Plaintiff/appellee Systems Fuel, Inc. entered into a written contract with Thomas W. Turner whereby Systems Fuel was to drill a well, known as the Bertha Donaldson well, in Jefferson Davis County, Mississippi, for the purpose of searching for oil. Under the terms of the contract, Turner, along with several other investors, was to pay a proportionate share of the drilling costs. The contract also provided as follows:

"Each party shall have access to the Contract Area at all reasonable times, at its sole risk to inspect or observe operations, and shall have access at reasonable times to information pertaining to the development or operation thereof, including Operator's books and records relating thereto. Operator, upon request, shall furnish each of the other parties with copies of all forms or reports filed with governmental agencies, daily drilling reports, well logs, tank tables, daily gauge and run tickets and reports of stock on hand at the first of each month, and shall make available samples of any cores or cuttings taken from any well drilled on the Contract Area. The cost of gathering and furnishing information to Non-Operator, other than that specified above, shall be charged to the Non-Operator that requests the information.

"If, in Operator's judgment, the well will not produce oil or gas in paying quantities, and it wishes to plug and abandon the well as a dry hole, it shall first secure the consent of all parties and shall plug and abandon same as provided in Article VI.E.1. hereof." (Emphasis added.)

Article VI.E.1, referred to above, provided as follows:

"Abandonment of Dry Holes: Except for any well drilled pursuant to Article VI.B.2., any well which has been drilled under the terms of this agreement and is proposed to be completed as a dry hole shall not be plugged and abandoned without the consent of all parties. Should Operator, after diligent effort, be unable to contact any party, or should any party fail to reply within forty-eight (48) hours (exclusive of Saturday, Sunday or legal holidays) after receipt of notice of the proposal to plug and abandon such well, such party shall be deemed to have consented to the proposed abandonment. All such wells shall be plugged and abandoned in accordance with applicable regulations and at the cost, risk and expense of the parties who participated in the cost of drilling of such well. Any party who objects to the plugging and abandoning such well shall have the right to take over the well and conduct further operations in search of oil and/or gas subject to the provisions of Article VI.B." (Emphasis added.)

On September 21, 1983, Systems Fuel filed an amended complaint in the Circuit Court of Mobile County, alleging the existence of the contract between it and Turner, that it had "duly performed all the terms and conditions" of the contract, but that Turner had failed to pay his proportionate share of the costs incurred, $12,473.01. Turner answered, and Systems Fuel moved for summary judgment, supported by a copy of the contract and the affidavit of Joseph O. Meade, the manager of drilling and production for Systems Fuel. The affidavit again averred the existence of the contract, that Systems Fuel had "duly performed all the terms and conditions" of that contract, that Turner had failed to pay the $12,473.01 he owed under the contract, and that Turner was liable to Systems Fuel for payment of that amount, plus interest at the agreed upon rate, 10% per annum, and reasonable attorney's fees.

In opposition to Systems Fuel's motion, Turner submitted the following affidavit:

"AFFIDAVIT IN OPPOSITION TO MOTION FOR SUMMARY JUDGMENT FILED BY PLAINTIFF

"STATE OF ALABAMA COUNTY OF BALDWIN

"Thomas W. Turner, Jr., who being first duly sworn deposes and says the following:

"1. I am the Defendant in the above-entitled action. I am fully competent to make this affidavit.

"2. In July 1983, I was served with a complaint in the above entitled action which has been commenced in the Circuit Court of Mobile County, Alabama. In September, 1983, the Plaintiff amended its complaint alleging that I owed monies for my proportionate share of the drilling and completion costs of the Bertha Donaldson Well located in Section 36, Township 8 North, Range 20 West, Jefferson Davis County, Mississippi.

"3. By the complaint, Plaintiff alleges that it has duly performed its obligations under the Operating Agreement. I was never contacted concerning the plugging and abandonment of the well nor was my consent to such plugging ever obtained as required by Article VI A. and Article VI E.1. of said Operating Agreement.

"4. I was never provided with any geological information or well test data which would have allowed me to make an intelligent decision regarding the completion attempt on said well. Systems Fuels, Inc., [sic] breached its obligations to me under the Operating Agreement by not providing me such information to allow me to make an informed decision regarding the completion of said well and thereby breached the Operating Agreement.

"5. I do not owe any monies to Plaintiff for it has failed to fulfill its obligations under the Operating Agreement in drilling and completion of the Bertha Donaldson Well.

"6. All of the statements made herein...