Coffin v. Medina Revenue Co. LLC

11 Pa. D. & C.5th 368
CourtPennsylvania Court of Common Pleas, Crawford County
DecidedMarch 12, 2010
Docketno. A.D. 2008-526
StatusPublished

This text of 11 Pa. D. & C.5th 368 (Coffin v. Medina Revenue Co. LLC) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Crawford County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Coffin v. Medina Revenue Co. LLC, 11 Pa. D. & C.5th 368 (Pa. Super. Ct. 2010).

Opinion

SPATARO, J,

Plaintiff, George W. Coffin, has filed this declaratory judgment action against three entities, Medina Revenue Company LLC, Medina [370]*370Resource Development Company LLC and estate of Alec W. Styborski. The parties have tacitly acknowledged that Medina is the actual party in interest because the other named defendants have no ownership interest in the lands at issue. Medina has filed a motion for partial summary judgment as to Count II of the second amended complaint that we now address.

Count I of the second amended complaint seeks declaratory judgment, having the effect of terminating the defendants’ interest, if any, in a certain document referred to as the “ratification agreement” that relates to an oil and gas well, referred to as the “Styborski no. 1 well” and termination of any interest the defendants have in the oil and gas rights affecting this land. The second count seeks declaratory judgment, having the effect of terminating a certain right-of-way agreement between Coffin and Troyer Gas & Oil, dated November 11,1985 and recorded in Crawford County agreement book 128, page 870.

On July 19,1972, Otto and Opal Schultz conveyed to Consolidated Gas Supply Corporation an oil and gas lease (Schultz lease). The lease covered 54 acres of land in Rockdale Township now owned by Coffin. A “declaration of pooling”, dated May 6, 1982, was filed by Consolidated Gas that pooled together various leases, including the Schulz lease, with a certain lease by Alex W. Styborski and Marion L. Styborski, along with other lessors. The Styborski no. 1 well was then drilled upon the land owned by the Styborskis. The operator of the oil and gas well was a company called Kaltsas Oil Company Inc. Subsequently, on or about October 29, 1982, Mr. and Mrs. Schultz sold their property to Coffin. On August 25,1983, Coffin entered into an oil and gas lease [371]*371with C & C Troyer Brothers (Troyer lease), which over lapped the Schultz lease which had been placed in the pool that included the Styborski no. 1 well.

Coffin and the Kaltsas Oil Company executed a document entitled a ratification agreement dated November 5,1985. The ratification agreement refers to the Schultz lease of July 19,1972 and represents Coffin’s agreement to be legally bound and governed by the terms of the Shultz lease and to ratify those terms. This conflicts with the Troyer lease and we assume that the lessee of the Troyer lease acknowledged the primacy of the Schultz lease because nothing was ever done to enforce the Troyer lease that has now expired. The ratification agreement refers to an assignment of “certain rights” to Kaltsas under the Schultz lease by Consolidated Gas while indicating that the Schultz lease is actually “owned” by CNG Development Company. The ratification agreement expressly nullified the pooling declaration of May 6, 1982, except to the extent that the Styborski no. 1 well, already in existence, was permitted to remain. The apparent intent was to prevent Kaltsas and its principals from drilling any other wells under the pooling declaration. The ratification agreement provides a formula by which Coffin was to receive 35 percent of the one-eighth royalty received from the production of gas and/or oil from the Styborski no. 1 well. The term of the lease was to continue for “so long thereafter as oil and gas is produced by Kaltsas Oil Company or its assignee, in commercially reasonable quantities from said premises from a new well to be drilled hereinafter by Kaltsas Oil Company or its assignees.” (emphasis added)

The ratification areement states that if no well is completed on or before January 1,1987 then the lease would [372]*372terminate as to all parties, including CNG Development Company and/or any assignees, although it is unclear as to who these other parties are. As an alternative to the automatic termination, Kaltsas Oil Company or its assignees were permitted, on or before that date, to pay or tender to Coffin the sum of $ 1,000, which would operate as a delay rental and extend the term for 12 months for the drilling of a well. The agreement describes how the Kaltsas Oil Company will lay a pipeline from any well drilled on the leased premises to the Coffin house to provide for free gas, along with other connection provisions. Paragraph 7 of the ratification agreement states that “[IJnsofar as the well contemplated herein shall be tied into a certain gas transmission line owned by C & C Troyer Brothers for which no valid right-of-way agreement has been made, the lessor agrees to enter into a right-of-way agreement with C&C Troyer Brothers for the purpose of allowing the continued existence of said transmission pipeline provided that the consideration paid for said right-of-way agreement is in the amount of $1.50 per running foot.” (emphasis added)

Subsequently, the right-of-way agreement was entered into between Coffin and Troyer Gas & Oil, (not C&C Troyer Brothers) dated November 11, 1985, six days after the date appearing on the ratification agreement. It is this right-of-way agreement that Medina contends is not assailable by Coffin’s declaratory judgment action because of the parol evidence rule. Both the right-of-way agreement and the ratification agreement were recorded on the same day, November 15, 1985. The right-of-way agreement makes no reference to the ratification agreement. In endeavoring to analyze the ratification agreement and the right-of-way agreement together, it appears [373]*373that Kaltsas became the assignee of “certain rights” of the Consolidated Gas Supply Corporation to the Schultz lease and then agreed to modify the declaration of pooling, effectively eliminating any future pooling, in order to recognize the continuing existence of the Styborski no. 1 well. Apparently, the intent was for Kaltsas to drill a well on property owned by Coffin, which was not to be included in the declaration of pooling. Coffin obligated himself to enter into the right-of-way agreement with C & C Troyer Brothers, however, C & C Troyer Brothers is not a party to either the ratification agreement or the right-of-way agreement, so it would appear, on its face, that Coffin’s efforts to have the right-of-way agreement declared void would be problematic because the right-of-way agreement contains no conditions that would, if unfulfilled, result in a termination of the right-of-way agreement.

From 1985 forward, these leases changed hands many times, including, Kenco Oil and Gas, Puma Energy, D.L. Schoen & Associates, TQI Oilfield Service Inc. and Troyer Gas and Oil (different from C & C Troyer Brothers). Medina did not enter the chain of title involving Troyer until around 1995. (Defendant’s new matter, averment 94.)

Sometime in 1986, Kenco Oil and Gas Company, a successor to Kaltsas, and a predecessor in interest to Medina, drilled an oil and gas well on Coffin’s property, referred to as the “Coffin no. 1” well. In April of 1986, the Coffin no. 1 well was connected to the gas transmission line referred to in the right-of-way agreement with Troyer Gas & Oil. Around April 9, 1999, an agent of Puma Energy disconnected the Coffin no. 1 well from the gas transmission line, according to Coffin’s allega[374]*374tions, and this well has never been put back into production.

Coffin claims that he entered into the right-of-way agreement with Troyer Gas & Oil on the condition that the Coffin no. 1 well was tied into that transmission line.

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Cite This Page — Counsel Stack

Bluebook (online)
11 Pa. D. & C.5th 368, Counsel Stack Legal Research, https://law.counselstack.com/opinion/coffin-v-medina-revenue-co-llc-pactcomplcrawfo-2010.