Justia Contracts Opinion Summaries

In this contract dispute over an offset provision in an oil and gas lease the Supreme Court reversed the judgment of the court of appeals reversing the trial court’s judgment in the lessee’s favor, holding that the court of appeals read a requirement into the lease that its unambiguous language did not support.In reversing, the court of appeals concluded that the lessee did not conclusively prove that it complied with the offset provision. The Supreme Court reversed the court of appeals’ judgment and reinstated the trial court’s judgment s modified to remove the award of appellate attorney’s fees, holding (1) the offset provision contained specific requirements, and the lessee met those requirements; and (2) the court of appeals’ reading of the offset provision to contain a proximity requirement constituted a significant deviation from the language the parties chose. View "Murphy Exploration & Production Co. v. Adams" on Justia Law

The Supreme court affirmed the judgment of the district court granting summary judgment to NorthWestern Corporation, doing business as NorthWestern Energy (NWE), on Boulder Hydro LP’s (Boulder) complaint, holding that the district court’s decision was not in error or an abuse of discretion.At issue in this contract pricing dispute was how to move forward after the Dow Jones Mid-C price index ceased publication in September 2013 and could no longer serve as the price setting reporting term in the parties’ power purchase agreement (PPA). The district court concluded that the Dow should be replaced with a reasonable market rate reporting substitute and held Boulder to its fifteen-year, market rate PPA. The Supreme Court affirmed, holding that the district court correctly interpreted the PPA between NWE and Boulder, properly granted summary judgment for NWE, and did not err in finding that a reasonable price reporting index should replace the Dow Mid-C index under the parties’ PPA. View "Boulder Hydro Limited Partnership v. NorthWestern Corp." on Justia Law

Robert Post Johnson and A.V.M., Inc. ("Johnson and A.V.M.") appealed the district court's grant of summary judgment in favor of Statoil Oil & Gas LP and others ("Statoil"). Johnson and A.V.M. argued the district court incorrectly determined the primary three-year terms of two oil and gas leases were extended by continuous drilling operations clauses within the lease agreements. The North Dakota Supreme Court concluded the Pugh clauses in the pertinent leases at issue here were irreconcilable with the habendum and continuous drilling operations clauses, and the Pugh clauses controlled: the Pugh clauses terminated the leases with regard to the disputed units at the end of the primary three-year period because of the lack of oil or gas production in paying quantities within those units. The Court therefore found the district court's determination that the leases could be extended by drilling was not correct. The Supreme Court reversed the judgment of the district court. View "Johnson v. Statoil Oil & Gas LP" on Justia Law

Borsheim Builders Supply, Inc., doing business as Borsheim Crane Service, ("Borsheim") appealed a declaratory judgment granting summary judgment to Mid-Continent Casualty Company and dismissing Borsheim's claims for coverage. After review of the facts presented, the North Dakota Supreme Court concluded the district court erred in concluding Construction Services, Inc. ("CSI"), and Whiting Oil and Gas Corporation were not insureds entitled to defense and indemnity under the "additional insured" endorsement in the commercial general liability ("CGL") policy Mid-Continent issued to Borsheim. Furthermore, the Court concluded the court erred in holding Mid-Continent had no duty to defend or indemnify Borsheim, CSI, and Whiting under the CGL policy for the underlying bodily injury lawsuit. View "Borsheim Builders Supply, Inc. v. Manger Insurance, Inc." on Justia Law

The Supreme Court vacated in part the judgment of the Court of Appeals upholding a jury verdict against Appellants in the amount of $1,308,403 in compensatory damages and $2,686,000 in punitive damages, holding that the award of punitive damages, for what was essentially a breach of contract, was improper.The jury verdict arose from an action brought by Appellees asserting that Appellant violated its contractual obligations by fraudulently underpaying royalties owed under leases governing Appellants’ extraction of natural gas from Appellees’ land. Appellees brought its claim for unpaid royalties under breach of contract and fraudulent misrepresentation theories. The Supreme Court held (1) the award of punitive damages was improper; (2) the award of compensatory damages as determined by the trial court and jury was proper; and (3) Appellants’ post-verdict motions were timely made, no errors committed during trial warranted a new trial, and the trial court did not err in denying Appellees’ motion to amend the complaint. View "Nami Resources Co., LLC v. Asher Land & Mineral, Ltd." on Justia Law

Ankor Energy, LLC, and Ankor E&P Holdings Corporation (collectively, "Ankor") appealed a circuit court's grant of a motion for a new trial in favor of Jerry Kelly, Kandace Kelly McDaniel, Kelly Properties, LLP, and K&L Resources, LLP (collectively, "the Kellys"). In 2010, Renaissance Petroleum Company, LLC, drilled two oil wells in Escambia County, Alabama. The Kellys owned property in Escambia County and entered into two leases with Renaissance. The leases included property near the two wells. In December 2010, Ankor acquired an interest in Renaissance's project and leases in Escambia County. In January 2011, Renaissance and Ankor petitioned the Oil and Gas Board ("the Board") to establish production units for the two wells. In February 2011, the Board held a hearing to determine what property to include in the production units. The Kellys were represented by counsel at the hearing and argued that their property should be included in the production units. The Board established the production units for the two wells but did not include the Kellys' property. Renaissance continued to operate the project until May 2011, when Ankor took over operations. In December 2011, Ankor offered to request that the Board include the Kellys' property in the production units. Ankor took the position that it had not drained any oil from the Kellys' property, and Ankor offered to pay royalties to the Kellys but only after the date the Board included the Kellys' property in the production units. The Kellys did not accept the offer, and later sued, listing multiple causes of action and alleging Ankor failed to include their property in the production units presented to the Board, knowing that their property should have been included. After review, the Alabama Supreme Court reversed the trial court's order granting the Kellys' motion for a new trial based on juror misconduct; the matter was remanded for the trial court to reinstate the original judgment entered on the jury's verdict in favor of Ankor. View "Kelly v. Ankor Energy, LLC" on Justia Law

The common law rule against perpetuities does not invalidate a grantee’s future interest in the grantor’s reserved non-participating royalty interest (NPRI).Lorene Koopmann and her two children sought declaratory judgment against Burlington Resources Oil & Gas Company, L.P. and Lois Strieber to construe a warranty deed by which Strieber conveyed fee simple title to a tract of land to Lorene and her late husband. Under the deed, Strieber reserved a fifteen-year, one-half NPRI. The Koopmans claimed that they were the sole owners of an NPRI as of December 27, 2011. They also asserted claims against Burlington, which leased the tract from the Koopmanns, for breach of contract and other claims. The trial court granted summary judgment for the Koopmans as to the declaratory action and granted summary judgment for Burlington on the negligence and negligence per se claims. The court of appeals affirmed in part and reversed in part. The Supreme Court held (1) the rule against perpetuities does not invalidate the Koopmann’s future interest in the NPRI; (2) Tex. Nat. Res. Code 91.402 does not preclude a lessor’s common law claim for breach of contract; and (3) the court of appeals properly entered judgment as to attorney’s fees pursuant to Tex. R. Civ. P. 91a. View "ConocoPhillips Co. v. Koopmann" on Justia Law

In this dispute over an offset provision in an oil and gas lease the Supreme Court reversed the judgment of the court of appeals reversing the trial court’s summary judgment in the lessee’s favor on the grounds that the lessee did not conclusively demonstrate compliance with the provision.On appeal, the court of appeals determined that the lessee did not conclusively prove that it complied with the offset provision and thus was not entitled to summary judgment. In reversing, the Supreme Court held (1) the offset provision contained specific requirements, and the lessee met those requirements; and (2) the court of appeals read a requirement into the lease that its unambiguous language did not support. View "Murphy Exploration & Production Co. v. Adams" on Justia Law

The Supreme Court affirmed the judgment of the court of appeals reversing the trial court’s ruling that TRO-X, LP was entitled to a back-in percentage of the working interest in five mineral leases under which Anadarko Petroleum was lessee.TRO-X sued Anadarko, asserting claims for breach of contract and trespass to try title and seeking a declaratory judgment that the leases were top leases and therefore subject to TRO-X’s back-in interest. The trial court concluded that the leases were top leases, in which TRO-X retained a back-in interest, rather than new leases, which washed out TRO-X’s interest. In reversing, the court of appeals concluded that the leases were not top leases. The Supreme Court agreed, holding that the leases at issue were not top leases subject to TRO-X’s back-in interest. View "TRO-X, L.P. v. Anadarko Petroleum Corp." on Justia Law

Smoky II filed a breach of contract suit against the city when it did not receive payment from the city on invoices related to curtailed energy (wind energy that was not actually produced because the producer was directed to reduce production). The Eighth Circuit affirmed the district court's judgment and held that the parties' contract provided that the city could be billed for economic curtailments; the district court did not err in holding the city liable for certain charges that it found to be "timely-billed;" the plain language of the Renewable Energy Purchase Agreement (REPA) supported the district court's interpretation of the meaning of "Emergency Curtailment;" the trial evidence clearly supported the district court's rejection of the city's theory regarding over-allocation of energy; and Smoky II waived the issue of substantial performance. View "Smoky Hills Wind Project II v. Independence, Missouri" on Justia Law