Waveland Drilling Partners Iii-B, LP v. New Dominion, LLC
| Decision Date | 13 February 2019 |
| Docket Number | Case Number: 115629 |
| Citation | 2019 OK CIV APP 8 |
| Parties | WAVELAND DRILLING PARTNERS III-B, LP, WAVELAND RESOURCE PARTNERS II, LP, WAVELAND DRILLING PARTNERS 2011-B, LP, AND WAVELAND DRILLING PARTNERS III-A, LP, Plaintiffs/Appellees, v. NEW DOMINION, LLC, Defendant/Appellant. |
| Court | United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma |
APPEAL FROM THE DISTRICT COURT OF
OKLAHOMA COUNTY, OKLAHOMA
AFFIRMED
Jayne Jarnigan Robertson, JAYNE JARNIGAN ROBERTSON, P.C., Oklahoma City, Oklahoma, for Plaintiffs/Appellees,
Stephen Q. Peters, TOMLINS & PETERS, PLLC, Tulsa, Oklahoma, for Defendant/Appellant.
Barbara G. Swinton, Presiding Judge:
¶1 Defendant/Appellant New Dominion, LLC (NDL) appeals from a temporary injunction granted in favor of Plaintiffs/Appellees Waveland Drilling Partners 2011-B, LP, Waveland Drilling Partners III-A, LP, Waveland Drilling Partners III-B, LP, and Waveland Resource Partners II, LP (Waveland) in the District Court for Oklahoma County on December 9, 2016. NDL asserts that it was denied due process by the entry of a temporary injunction without an evidentiary hearing, and that the temporary injunction was improperly granted under the facts presented. We affirm.
¶2 Waveland instituted an action against NDL seeking a money judgment and declaratory judgment related to the Restated and Amended Eight East Participation Agreement (Participation Agreement) between the parties. Under the Participation Agreement, the Eight East Participants, who include Waveland, sell gas from wells to the first purchaser of gas, who then remits payment to NDL as contract operator of the wells. NDL is required to remit the gas sales payments to the Eight East Participants, including Waveland, their royalty owners, and the State of Oklahoma for gross production taxes. In July of 2014, NDL was removed as operator of the gathering system by a majority vote of the participants. NDL continues to serve as contract operator of wells under the Participation Agreement, but was notified in January 2016 that its right "to market, collect the revenues from the Gas (including natural gas liquid hydrocarbons and oil separated at the wellhead or collected along the Gathering System) and to distribute the net proceeds therefrom" was terminated by the agreement of a majority of the Participants. NDL was also notified that the parties had agreed that Hunton would take over its obligations. Hunton then began selling condensate collected from the Gathering System to Enerfin. When NDL learned of the agreement with Enerfin, it demanded that Hunton deliver the proceeds received on condensate sales to NDL so that the proceeds could be disbursed to the participants and royalty owners.
¶3 NDL withheld from natural gas proceeds which were held in trust for Waveland $70,000.00, the amount that it estimated due for condensate sales in the month of September 2016. Waveland claimed that NDL then threatened to distribute the $70,000.00 to third parties, including other working interest owners, royalty owners, and the Oklahoma Tax Commission.
¶4 Waveland sought and obtained an emergency ex parte restraining order (TRO) on November 20, 2016, precluding NDL from distributing the amount "offset" from Waveland proceeds and from making further offsets. NDL filed an objection and motion to vacate the TRO, and issued a notice of hearing for November 28, 2016. Hearings were held on November 28, December 2, and December 6, 2016. A temporary injunction was issued in favor of Waveland on December 10, 2016. NDL appeals from this order.
¶5 An action involving the grant or denial of injunctive relief is equitable in nature. An order granting an injunction will not be reversed unless the trial court abused its discretion or the decision is clearly against the weight of the evidence. Dowell v. Pletcher, 2013 OK 50, ¶ 5, 304 P.3d 457.
¶6 NDL argues that it was denied due process below because Waveland failed to give NDL adequate notice of their emergency ex parte motion for temporary restraining order; Waveland's reason for failing to give notice was "contrived"; and the TRO changed the status quo. NDL also argues that it was deprived of due process by entry of the temporary injunction, and that the temporary injunction is unsupported by law or evidence.
¶7 NDL first asserts that it was not given adequate notice of the emergency ex parte temporary restraining order, and that Waveland's reason for failing to give notice was insufficient. Waveland argues that NDL's propositions of error relative to the TRO are improperly raised because a TRO is not an appealable order. In its brief, NDL argues that the TRO should be vacated. However, Waveland is correct in its assertion that a temporary restraining order loses its force once a temporary injunction is acted upon by the court. Jennings v. Elliot, 1939 OK 554, 97 P.2d 67. Further, a refusal to vacate a temporary restraining order is not an appealable order. Clonts v. State ex rel., Dept. of Health, 2005 OK 66, ¶ 3 fn. 2, 124 P.3d 224. Accordingly, to the extent that NDL challenges the TRO, or the court's refusal to vacate the TRO, the arguments will not be considered on appeal. 12 O.S. § 993 (A) (2).
¶8 NDL argues that it was deprived of due process by the entry of the temporary injunction because the only matter pending before the court at the hearing on November 28, 2016 was NDL's motion to vacate. NDL also argues that the court's consideration and entry of a temporary injunction was improper because Waveland never filed a motion for temporary injunction; Waveland argues that its amended petition sought injunctive relief, and that it was not required to file a separate motion for temporary injunction.
¶9 Okla. Stat. Ann. tit. 12, § 1382 provides that when it appears from the petition "that the plaintiff is entitled to the relief demanded, . . . or when, during the litigation, it appears that the defendant is doing, or threatens, or is about to do or is procuring or suffering to be done, some act in violation of the plaintiff's rights respecting the subject of the action, and tending to render judgment ineffectual, a temporary injunction may be granted to restrain such act." Section 1383 of the same title provides that the injunction "may be granted at the time of commencing the action, or any time afterwards . . . upon its appearing satisfactorily to the court or judge, by the affidavit of the plaintiff or his agent, that the plaintiff is entitled thereto." Although 12 O.S. § 1384.1 (D) provides the procedure for the award of an injunction following the entry of a temporary restraining order, it does not explicitly require that a separate motion be filed. Rather, it sets forth the requirement that a hearing be set at the earliest possible time. Furthermore, the Oklahoma statutes regarding injunctions, 12 O.S. § 1381 et seq., do not contain any provision mandating an evidentiary hearing. It is within the trial court's discretion to determine whether a temporary injunction will be decided on pleadings and affidavits. A hearing on a temporary injunction is not intended to be a full scale hearing on the merits, and the kind of evidence allowed is within the discretion of the court. See Jennings v. Elliot, 1939 OK 554, 97 P.2d 67.
¶10 Waveland requested injunctive relief on its claims in its amended petition. The TRO was issued on November 10, 2016. Following the issuance of the TRO, NDL filed an objection to the emergency TRO, a motion to vacate the TRO, and a notice of hearing on that response was issued by NDL on November 10, 2016 for a November 28 hearing. In its objection, NDL stated that Waveland was not "entitled to the equitable relief of a preliminary injunction," and requested that Waveland's "request for injunctive relief" be denied. At the November 28 hearing, the court announced that the parties were present on the "show cause as to whether a temporary injunction should be entered," as well as NDL's motion to vacate the TRO. No objection was made regarding the type of proceeding or issues before the court on November 28, 2016. The parties returned on December 2, 2016 to discuss whether they had reached an agreed order, and to determine whether the court would make a ruling at that time. Likewise, no objection was made at this hearing. Finally, the parties came before the court for a third time on December 6, 2016 to finalize the issues. The parties indicated that they did not reach an agreement, and the court indicated that it would enter an injunction. NDL objected to the court's procedure at that time. A temporary injunction was entered on December 9, 2016.
¶11 A party who appears and participates in a hearing will not be heard to complain on appeal about the sufficiency of notice. Adoption of D.M.J., 1985 OK 92, 741 P.2d 1386 (overruled on other grounds byMatter of Baby Boy L., 2004 OK 93, 103 P.3d 1099). Further, the function of notice is to state the time, place, and purpose of the hearing to persons entitled to notice so they may attend the hearing and express their views. It must be shown that the person complaining that there was not adequate time to prepare exercised due diligence during the period which he had to prepare. First Nat. Bank v. Oklahoma Sav. and Loan Bd., 1977 OK 171, 569 P.2d 993, 997. NDL issued notice for the November 28, 2016 hearing. The transcript reflects the fact that the court was considering issuing a temporary injunction following the hearing. Although it was not issued at that time, there were two additional hearings on the matter over the span of a week. It was not until the conclusion of the third hearing that NDL raised the issue of adequate notice.
¶12 The trial...
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