Widdel v. Cont'l Res., Inc.
| Decision Date | 07 May 2021 |
| Docket Number | Case No. 1:20-cv-34 |
| Citation | 551 F.Supp.3d 959 |
| Parties | Lee WIDDEL, Plaintiff, v. CONTINENTAL RESOURCES, INC., Defendant. |
| Court | U.S. District Court — District of North Dakota |
Dennis E. Johnson, Aaron J. Weber, Johnson & Sundeen Law Firm, Watford City, ND, for Plaintiff.
Andrew D. Sims, Harris Finley & Bogle, PC, Fort Worth, TX, Hays Doan, Hugh Q. Gottschalk, Wheeler Trigg O'Donnell LLP, Denver, CO, for Defendant.
ORDER GRANTING CONTINENTAL'S MOTION FOR PARTIAL SUMMARY JUDGMENT AND DENYING WIDDEL'S MOTION FOR PARTIAL SUMMARY JUDGMENT
[¶1] THIS MATTER comes before the Court on Motions for Partial Summary Judgment filed by the Plaintiff Lee Widdel ("Widdel") and Defendant Continental Resources, Inc. ("Continental"). On September 30, 2020, Widdel and Continental each moved for Partial Summary Judgment. Doc. Nos. 14, 16. On October 26, 2020, the Parties filed their respective Responses to the Motions. Doc. Nos. 21, 22. On November 4, 2020, the Parties each filed a Reply in support of their respective Motions. Doc. Nos. 24, 25. For the reasons explained below, the Defendant's Motion for Partial Summary Judgment is GRANTED , and the Plaintiff's Motion for Partial Summary Judgment is DENIED .
[¶2] Continental conducts large-scale oil and gas operations in North Dakota. Doc. No. 15-3, Ex. J. Specific to this case concerns Continental's oil and gas operation in McKenzie County, North Dakota. Doc. No. 15-3, Ex. J. In order to facilitate its operations for oil and gas development, Continental secured from a number of landowners and other interested parties the working interest mineral rights to a number of tracts of land within the area of interest to Continental. Doc. No. 15-3, Ex. J. Continental also entered into Surface Use Agreements ("SUA") with landowners to facilitate the use of the surface estates for its oil and gas operations in the area. Lee Widdel is one such landowner.
[¶3] Widdel holds surface rights to land Continental currently utilizes for its operations in McKenzie County. Doc. No. 15-1, ¶2. The instant dispute, however, specifically involves a large tract of land located in Township 152 North, Range 99 West, McKenzie County, North Dakota ("the Property"). Doc. No. 15-1, ¶2. This includes portions of Sections 7 and 10 and all of Sections 8 and 9. Doc. No. 15-3, ¶3. Continental holds the working interest mineral rights to the E/2 SE/4 of Section 7, Township 152 North, Range 99 West through oil and gas leases and operates a number of oil and gas wells on the Property. Doc. No. 15-1, ¶5. Continental also holds the working interest mineral rights to tracts of land in the vicinity. Doc. No. 15-1, ¶5.
[¶4] Continental is the Unit Operator for the Pittsburgh-Uhlman Unit, which is comprised of Sections 6, 7, 18, and 19 of Township 152 North, Range 99 West. Doc. No. 15-1, ¶6. The E2/SE/4 of Section 7 is included in this Unit. Doc. No. 15-1, ¶6. The Pittsburgh 3, Uhlman Federal 2, and Uhlman Federal 3 wells were drilled from one well location in the SE corner of Section 7 on the Property. Doc. No. 15-1, ¶6. Continental is also the Unit Operator of the Garfield Unit, which is located north of the Property. Doc. No. 15-1, ¶7. The Garfield Federal 4-7 wells in the Garfield Unit were drilled from one well location partially on the Property. Doc. No. 15-1, ¶7. In addition, Continental operates the Jamestown Unit, which is located south of the Property. Doc. No. 15-1, ¶8. The Jamestown 2 and 3 wells were drilled from one well location partially on the Property, and the Jamestown 6 and 7 wells were drilled from a separate well location partially located on the Property. Doc. No. 15-1, ¶8.
[¶5] In 2011, Widdel and Continental executed a SUA to facilitate Continental's oil and gas operations on the Property and others in the vicinity. Doc. No. 15-1, Ex. A. On August 30, 2013, a "Memorandum of Access, Surface Use and Damages Agreement" between Continental and Widdel (the "Memorandum SUA") was recorded in the real property records of McKenzie County, North Dakota. Doc. No. 15-1, Ex. B.
[¶6] In 2018, Continental began the process of installing a freshwater and saltwater pipeline system, known as the "Boulder Gathering System," through part of the Property in order to further facilitate its overall oil and gas operation in the area. Doc. No. 15-1, Ex. C. On June 12, 2018, Continental sent Widdel a "Notice of Entry Drilling, Pipeline(s) and/or Construction Operations," notifying Widdel that Continental would be entering his land to install pipelines for the Boulder Gathering System. Doc. No. 15-1, Ex. C.
[¶7] On July 11, 2018, Widdel's previous counsel sent Continental an objection to the installation of the water pipelines. Doc. No. 18-3. Counsel stated the SUA did not grant Continental the authority to lay the pipelines, further noting "had the parties contracted for pipelines this would have been something clearly laid out within the agreement." Doc. No. 18-3, p. 1. Continental responded to Widdel on July 26, 2018, explaining why it believed it had the authority to lay the water pipelines for the Boulder Gathering System. Doc. No. 18-4. Specifically, Continental asserted it had the right to go upon Widdel's property "as Continental may reasonably require for well locations, roads, and associated facilities" further asserting, "[p]ipelines are associated facilities.’ " Doc. No. 18-4, p. 1. Continental also argued that ¶13(h) of the SUA specifically referenced compensation for pipelines. Doc. No. 18-4, p. 1. Continental stated it would move forward with the project. Doc. No. 18-4, p. 2. On August 2, 2018, Widdel responded to Continental, again objecting to the installation of the water pipelines. Doc. No. 18-5. On April 8, 2019, Continental again notified Widdel it would be moving forward with the water pipelines, notifying him Continental would compensate him for the installation of the pipelines. Doc. No. 15-1, Ex. D.
[¶8] Continental tendered payment to Widdel on September 26, 2018 in the amount of $55,290, at $75 per rod, as compensation for partial installation of the water pipelines for the Boulder Gathering System. Doc. No. 15-1, Ex. E. The letter accompanying the payment included a breakdown of how the amount was calculated pursuant to the SUA. Doc. No. 15-1, Ex. E. Continental tendered payment again on October 16, 2018 in the amount of $55,762.50, calculated at $75 per rod. Doc. No. 15-1, Ex. F. Continental then tendered payment to Widdel on November 19, 2018 in the amount of $185,087.50, calculated at $250 per rod. Doc. No. 15-1, Ex. G. Widdel did not accept any of the payments.
[¶9] The Boulder Gathering System was completed in June of 2019. Doc. No. 15-2, ¶11. Continental has drilled and completed eleven (11) total wells on the Property. Doc. No. 15, p. 13. Each of Continental's wells on the Property is located on a drillsite connected to the Boulder Gathering System. Doc. No. 15, p. 13. The saltwater pipelines transport saltwater and freshwater from and to the wells Continental operates on the Property and in the vicinity. Doc. No. 15, p. 13. These pipelines service not only oil and gas wells on Widdel's Property but also other spacing units in the vicinity owned by unrelated third parties.
[¶10] On March 2, 2020, Widdel filed a Complaint against Continental in McKenzie County District Court, North Dakota, asserting eight counts: Count 1-Breach of Contract – Installation of Pipelines, Count 2 – Trespass – Installation of Pipelines, Count 3 – Breach of Contract – Failure to Compensate – Pipelines, Count 4 – Breach of Contract – Failure to Compensate – Roads and Well Sites, Count 5 – Breach of Contract – Failure to Reclaim, Count 6 – Breach of Contract – Failure to Consult, Count 7 – Breach of Contract – Failure to Make Reasonable Efforts, and Count 8 – Injunction. Doc. No. 1-1. On March 3, 2020, Continental removed the case to this Court, invoking this Court's Diversity and Removal Jurisdiction under 28 U.S.C. § 1332, 1441. Doc. No. 1. Continental thereafter filed an Answer and Counterclaim. Doc. No. 2. Widdel answered the Counterclaim on March 23, 2020. Doc. No. 4. The instant Motions followed and only concern Counts 1, 2, and 8.
[¶11] Summary judgment is required "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) ; see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "An issue is ‘genuine’ if the evidence is sufficient to persuade a reasonable jury to return a verdict for the nonmoving party." Schilf v. Eli Lilly & Co., 687 F.3d 947, 948 (8th Cir. 2012) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). "A fact is material if it ‘might affect the outcome of the suit.’ " Dick v. Dickinson State Univ., 826 F.3d 1054, 1061 (8th Cir. 2016) (quoting Anderson, 477 U.S. at 248, 106 S.Ct. 2505 ). Courts must afford "the nonmoving party the benefit of all reasonable inferences which may be drawn without resorting to speculation." TCF Nat'l Bank v. Mkt. Intelligence, Inc., 812 F.3d 701, 707 (8th Cir. 2016) (quoting Johnson v. Securitas Sec. Servs. USA, Inc., 769 F.3d 605, 611 (8th Cir. 2014) ). "At summary judgment, the court's function is not to weigh the evidence and determine the truth of the matter itself, but to determine whether there is a genuine issue for trial." Nunn v. Noodles & Co., 674 F.3d 910, 914 (8th Cir. 2012) (citing Anderson, 477 U.S. at 249, 106 S.Ct. 2505 ).
[¶12] If the movant demonstrates the absence of a genuine issue of material fact, "[t]he nonmovant ‘must do more than simply show that there is some metaphysical doubt as to the material facts,’ and must come forward with ‘specific facts showing that there is a genuine issue for trial.’ " Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc)...
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