Cabot Oil & Gas Corp. v. Pocahontas Land Corp.

376 S.E.2d 94, 180 W. Va. 200, 103 Oil & Gas Rep. 393, 1988 W. Va. LEXIS 225
CourtWest Virginia Supreme Court
DecidedNovember 4, 1988
Docket17707
StatusPublished
Cited by5 cases

This text of 376 S.E.2d 94 (Cabot Oil & Gas Corp. v. Pocahontas Land Corp.) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cabot Oil & Gas Corp. v. Pocahontas Land Corp., 376 S.E.2d 94, 180 W. Va. 200, 103 Oil & Gas Rep. 393, 1988 W. Va. LEXIS 225 (W. Va. 1988).

Opinion

PER CURIAM:

This is a declaratory judgment proceeding involving the rights of parties under an oil and gas lease. The Circuit Court of McDowell County found that the lease agreement was unambiguous and refused to construed it in the manner urged by the appellants, Cabot Oil & Gas Corporation of West Virginia and its subsidiary, Cranberry Pipeline Corporation. On appeal the appellants contend that the lease is ambiguous and that the trial court should have construed it in accordance with the circumstances prevailing at the time it was executed. After reviewing the questions presented, this Court concludes that the appellants’ assertions are without merit, and accordingly the Court affirms the judgment of the circuit court.

The Ford Motor Company, as lessor, and Godfrey L. Cabot, Inc., as lessee, entered into the lease in question on April 1, 1945. The lease granted Cabot the sole and exclusive right to drill and operate for oil and gas on 5,537.88 acres owned by Ford in Wyoming and McDowell Counties, West Virginia. It recognized that Ford was *201 holding the property principally for coal-mining purposes, that the coal estate was the dominant estate, and that the oil and gas interests granted were subservient to the coal estate. The lease also required Cabot to conduct its oil and gas operations so as not to interfere unnecessarily with coal operations which might be conducted on the premises, and it stipulated that Cabot would relocate any facilities, other than oil or gas wells, which might be placed on the premises, if such relocation was required by Ford for any other use of the premises.

Relevant portions of the lease provided: THERE IS EXCEPTED AND RESERVED to Lessor the entire ownership and control of the lands and interests in the lands included herein and the oil, gas, coal, stone, sand, water, timber and other minerals and products therein and thereon with the right to use and dispose of the same, for all purposes other than those for which this lease is made; IT BEING DISTINCTLY UNDERSTOOD AND AGREED that parts or all of the lands herein may be included by Lessor in coal mining leases; that the mining and shipping of coal is of prime importance to Lessor, that the coal measures under said lands are the dominant estate therein, and that the oil and gas estates therein are made servient thereto.
* * * * * *
Where substantial reason exists therefor, the Lessor may require the Lessee to change the location of any of its facilities, other than wells, to some other reasonable location, and the cost of making such change shall be borne by the Lessee.

Pocahontas Land Corporation, the appel-lee in the present proceeding, has acquired the interests of the Ford Motor Company in the 5,537.88 acre tract. The appellants, Cabot Oil & Gas Corporation of West Virginia and Cranberry Pipeline Corporation, are the successors in interest to the lessee in the 1945 lease, Godfrey L. Cabot, Inc.

On August 1, 1960, the appellee in the present proceeding, Pocahontas Land Corporation, as successor to the Ford Motor Company, leased the coal under certain of the lands covered by the 1945 lease to the Robinson-Phillips Coal Company. That lease was subsequently modified by a supplemental coal agreement. The two coal agreements authorized the Robinson-Phillips Coal Company to engage in both the deep mining and surface mining of coal in the tract covered by the 1945 oil and gas lease.

In 1983, the Robinson-Phillips Coal Company proposed to surface mine the coal near the location of a pipeline belonging to the appellants, the successors to Godfrey L. Cabot, Inc. under the 1945 lease. In preparation for the mining, the Robinson-Phillips Coal Company requested that the appellants relocate the gas line. They likewise contacted the appellee, Pocahontas Land Corporation, the successor to the Ford Motor Company under the 1945 lease, and by letter dated April 14,1983, Pocahontas Land Corporation, requested that the appellants relocate the line at their expense.

The appellant, Cranberry Pipeline Corporation, the party specifically responsible for maintenance of Cabot Oil & Gas Corporation’s pipelines, examined the 1945 lease and concluded that it was not obligated to bear the expense of relocating a pipeline. It noted that the Robinson-Phillips Coal Company proposed to employ the mountaintop removal method to mine the coal, a mining method not employed in 1945. Because the method was not employed in 1945, it reasoned that the parties in 1945 could not have contemplated removal by that method and thus did not cover it by the lease.

After some negotiation, the parties entered into a written agreement dated August 15, 1983, whereby Pocahontas Land Corporation advanced Cranberry Pipeline Corporation $19,315.00 for the cost of relocating the pipeline in question. The agreement provided that a civil action would be instituted by Pocahontas to adjudicate whether it or Cranberry was obligated to relocate the line at its sole expense.

*202 Pursuant to the agreement, Cranberry relocated the line and refunded to Pocahontas $3,279.05, and Pocahontas instituted the present proceeding requesting a declaratory judgment as to the rights and obligations of the parties as to the cost of relocating the pipeline and asking for damages in the amount of $16,035.95, the amount which it had actually paid for relocating the line.

A trial without a jury was conducted by the Circuit Court of McDowell County on May 5, 1986. At the conclusion of that trial the circuit judge concluded that the April 1, 1945 lease was clear and unambiguous and was, therefore, not subject to judicial interpretation or construction. The court also ruled that under the lease Cranberry was obligated to relocate the pipeline at its sole expense. It is from that ruling that the appellants now appeal.

This Court has indicated that plain and unambiguous language in an oil and gas lease should be applied and enforced according to its plain intent and should not be construed: The rule is set forth in syllabus point 1 of Cotiga Development Co. v. United Fuel Gas Co., 147 W.Va. 484, 128 S.E.2d 626 (1962), as follows:

A valid written instrument which expresses the intent of the parties in plain and unambiguous language is not subject to judicial construction or interpretation but will be applied and enforced according to such intent.

The Court has also recognized that the successor to a party under an oil and gas lease succeeds to the rights of his predecessor and is bound by the obligations of his predecessor. Again, that rule was set forth in the Cotiga case:

An assignee of an oil and gas lease who has assumed the obligations of the lessee thereunder succeeds only to such rights as the lessee had against the lessor, and the covenants of the lease for the benefit of the lessor become binding upon the assignee in the same manner and degree as originally upon the lessee.

Syllabus point 2, Cotiga Development Co. v. United Fuel Gas Co., Id.

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Bluebook (online)
376 S.E.2d 94, 180 W. Va. 200, 103 Oil & Gas Rep. 393, 1988 W. Va. LEXIS 225, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cabot-oil-gas-corp-v-pocahontas-land-corp-wva-1988.