Zimmerview Dairy Farms, LLC v. Protégé Energy III LLC
| Decision Date | 18 April 2022 |
| Docket Number | 21CA1 |
| Citation | 2022 Ohio 1282 |
| Parties | ZIMMERVIEW DAIRY FARMS, LLC, ET AL., Plaintiffs-Appellees, v. PROTÉGÉ ENERGY III LLC, Defendant-Appellant. |
| Court | Ohio Court of Appeals |
J Kevin West, Dallas F. Kratzer, III, Steptoe & Johnson PLLC, Columbus, Ohio, Robert L. Paddock, Buck Keenan LLP Houston, Texas, Pro Hac Vice, for Appellant.
Matthew C. Carlisle, Adam J. Schwendeman, Thiesen Brock, LPA Marietta, Ohio, for Appellees.
DECISION AND JUDGMENT ENTRY
{¶1} Defendant-Appellant Protégé Energy III LLC "Protégé," appeals the December 18, 2020 Decision and Judgment Entry of the Washington County Court of Common Pleas. Protégé conducted gas and oil operations on property owned by Plaintiffs-Appellees Zimmerview Dairy Farms, LLC and Zimmerview Properties, LLC, collectively "Zimmerview, " in 2015. Later, Zimmerview brought various claims against Protégé, including breach of contract, conversion, and trespass.
{¶2} After a bench trial, the trial court found in favor of Zimmerview and awarded Zimmerview $819, 093.00 on the above claims. Protégé challenges the trial court's findings on Zimmerview's claims and the damage awards. However, based upon basic principles of contract law in Ohio and our review of the evidence presented at trial, we find no merit to the arguments offered in Protégé's five assignments of error. We find there is competent and credible evidence to support the trial court's judgment in this matter. Accordingly, we overrule all assignments of error and affirm the judgment of the trial court.
{¶ 3} The following facts were adduced at a bench trial in the Washington County Court of Common Pleas on September 29, 2020. Dean Zimmer and his brother Brent Zimmer are the members of Zimmerview Dairy Farm, LLC. Zimmerview owns land and maintains a farming operation at 700 Zimmer Road in Washington County. The farm has been in the Zimmer family since 1926. Dean Zimmer has worked the family farm his entire life, and before that, his father and grandfather worked and managed the farm. The farm started out as a dairy farm switched to beef, and currently is a beef-feeding operation. The Zimmers grow corn, soybeans, hay, and alfalfa.
{¶4} In January 2014, Dean Zimmer, on behalf of Zimmerview, and MNW Energy LLC, entered into an Oil and Gas Lease. James Vuksic, who testified at trial, owned shares in MNW Energy LLC. The Oil and Gas Lease was eventually assigned to Protégé.
{¶ 5} Tarah Fagan represented Protégé's interests in the subsequent contract negotiations. Due to difficulty in the negotiations, Dean Zimmer asked James Vuksic to mediate the contract negotiations. Vuksic had assisted Protégé with negotiations in the past. Vuksic has been involved in the oil and gas industry for 30 to 40 years. In addition to the original Oil and Gas Lease, the parties eventually entered into three additional contracts:
The above four contracts were admitted as joint exhibits at trial. Additional information regarding the pertinent contract negotiations will be set forth below.
{¶6} Protégé used 13.5 acres of the Zimmer farm during construction of what became known as the Cay wood well pad, five for the well pad and 8.5 for the hillside. Core drilling began in January 2015. Brush and tree removal began in March 2015. Fences were constructed in April 2015. Topsoil removal began in May 2015. Huge trucks moved the topsoil to a stockpile at an agreed-upon location.
{¶7} In June 2015, there were multiple extremely heavy rains. Dean Zimmer identified a photo exhibit showing the extreme runoff of brown water which took topsoil with it. The topsoil ran into a creek which bordered the Zimmer farm. Dean Zimmer identified several photographs which showed how the hillside looked after every rain with the topsoil stockpile running downhill.
{¶8} Protégé hired Great Lakes Construction Company, "Great Lakes," to re-seed the area. However, the rains washed the seed away and gullies formed. During these efforts, topsoil was not replaced. The topsoil continued to flow downhill. There were three initial attempts to re-seed the hillside.[2] Each time the rains washed the seed away and gullies formed.
{¶9} Mr. Zimmer and his brother spoke to Protégé's CEO about their concerns in August 2015. Great Lakes left the site in early fall 2015, leaving some gullies behind. Within a month or two, Zimmer testified there were four-foot canyons and gullies running through the hillside. Zimmer also testified that large boulders were left behind.
{¶10} The Zimmers also contacted the Ohio Department of Natural Resources, "ODNR." ODNR inspected the well pad area and issued a notice to Protégé that they needed to reclaim the area.[3] On the fourth attempt at reclamation, Protégé used a company called Hydrogreen.
{¶11} Hydrogreen repositioned some of the boulders and moved them into piles. Hydrogreen "tracked" the rough spots in the gullies and sprayed the hillside again. Hydrogreen left in June 2016. After the first rain, the gullies reappeared even deeper. Zimmer testified that gullies create problems in farming because animals can get hurt and because it is dangerous to use farm or heavy equipment near gullies.
{¶12} When Protégé left the jobsite, erosion and landscaping issues still existed.[4] Protégé left parts of fence behind. Both water and telephone lines were exposed. There was unsightly vegetation. Mr. Zimmer described the well pad area as an "inconvenience and an eyesore."
{¶13} Zimmer testified he had to remove a three-strand fence placed by the contractors. When cattle attempted to go through the fence they were injured. Zimmer testified the water line was exposed four to five hundred feet. Prior to the construction, Zimmer never had Marestail, "an invasive weed that spreads extremely fast." He testified the weeds do not hold the topsoil. Zimmer testified the property was not usable for farming.
{¶14} Through their attorney, the Zimmers made Protégé aware of the issues with the condition of the property. Protégé sent Dean Zimmer a check but Zimmer was advised to send it back. Subsequently, Zimmerview filed its complaint against Great Lakes and Protégé for breach of contract, conversion, trespass, additional trespasses, and misappropriation of images and intellectual property on September 20, 2018. Protégé filed an Answer denying all claims.[5] {¶15} Protégé filed a motion for summary judgment which was denied.[6] The parties proceeded to a bench trial on September 29, 2020. Zimmerview presented the in-person testimony of several witnesses: Dean Zimmer, James Vuksic, William "Billy" H. Burkhart II, and Larry Lang. As indicated above, the contracts the parties entered were stipulated as joint exhibits. In addition, Zimmerview offered Exhibits 1-55 into evidence. Protégé did not oppose the admission of these exhibits. The 55 exhibits included letters to Protégé; photographs of invasive weeds after the Hydroseed application in 2016; photographs of the Zimmer property in January and September 2020; estimates provided by Billy Burkhart and Larry Lang; a photograph of the topsoil stockpile; and Dean Zimmer's out of pocket expenses.
{¶16} Protégé did not present witnesses in person at trial, but instead relied on depositions of the following persons: Jason Pugh, Brian Plautz, Benjamin Wright, and Tarah Fagen.[7] Jason Pugh is a petroleum engineer. He was previously employed by Protégé as operations manager. He was responsible for gas production, operations, oil and gas well completion, and any kind of surface construction that was required for oil and gas operations.
{¶17} Pugh testified that when Great Lakes excavated the hillside, boulders "popped out." The workers tried to break them up into smaller pieces and make them part of the material. Some were removed to a particular area on the site at Mr. Zimmer's direction. Protégé also repaired erosions and "slips, "[8] the main issues relating to the well pad. Protégé monitored and fixed these issues as needed. These issues were expected surface and subsurface damages.
{¶ 18} Brian Plautz holds a degree in civil engineering. He was project manager for Great Lakes Construction Company. Plautz's job entailed controlling the documentation and financial aspects of the project. Plautz testified he was familiar with oil and gas operations at Zimmerview. He visited the construction site once every two weeks. He testified that at the end of Great Lakes' work, there were no extraordinary or unusual issues with erosions or slips, re-planting or re-seeding, or rocks and boulders. Furthermore, neither Protégé nor Zimmerview informed Great Lakes that they were not satisfied with Great Lakes' work.
{¶ 19} Benjamin Wright holds degrees in environmental science and watershed management. He is owner and manager of Hydrogreen. Wright testified he was familiar with aspects of the oil and gas operations at Zimmerview. However, he was on the site only twice.
{¶ 20} Tarah Fagen testified she holds a degree in energy management and finance from the University of Oklahoma. Ms. Fagen is vice president of land for Protégé. Fagen testified she manages the leasing negotiations, pre-drilling, and title work. She also handles land owner complaints relating to ongoing operations. Fagen testified she worked with a team which included Jason Pugh. Fagen was familiar with the Zimmer well pad.
{¶ 21} After hearing the evidence presented by the parties, the trial court granted judgment in favor of Zimmerview and against Protégé on the breach of contract, conversion, and trespass claims....
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