Dart v. Leavell

341 Ill. App. 3d 1091
CourtAppellate Court of Illinois
DecidedJune 11, 2003
DocketNo. 5—02—0441
StatusPublished

This text of 341 Ill. App. 3d 1091 (Dart v. Leavell) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dart v. Leavell, 341 Ill. App. 3d 1091 (Ill. Ct. App. 2003).

Opinion

JUSTICE MAAG

delivered the opinion of the court:

The plaintiffs, Herbert Eugene Dart and Mary Jane Dart, filed an action to cancel an oil and gas lease granted to the defendants, Stanley Leavell and Eva Lovene Leavell, alleging that the lease had been forfeited due to nonproduction and inoperable equipment. Following a bench trial, the circuit court of Crawford County entered a judgment for the plaintiffs. The court found that the lease had terminated due to nonproduction and that the defendants had not exercised due diligence in producing and marketing product from the lease. On appeal, the defendants claim that the court’s decision was against the manifest weight of the evidence.

The following evidence was adduced at the trial. The plaintiffs acquired a 40-acre tract of land in Crawford County, Illinois, in May 1964. They have resided in a house on the southeast corner of the property since that time. In 1983, the plaintiffs entered into an oil and gas lease with a company affiliated with the Leavell family. The defendants, also members of the Leavell family, obtained ownership of the lease in 1996. Under the terms of the lease, the defendants had the right to prospect, drill, and produce oil on the 40-acre tract. Four production wells and an injection well, all powered by electricity, were drilled on the property. The wells are surrounded by fields that the plaintiffs farm. There are unimproved roads throughout the farm fields that lead to the wells.

Herbert Dart testified that the wells were productive from 1983 through the mid-1990s and that he and his wife received royalty checks regularly during that period. Dart stated that production began to fall off about the time the defendants obtained the lease. He testified that they received two royalty checks in 1997 and one in April 1998. He stated that the April 1998 payment was for oil produced in March 1998. Dart testified that he did not see any of the wells pumping after March 1998. He presented pictures he had taken in September 1999, around the time that this suit was filed, showing that vegetation had grown up around the wells. He said that he did not know whether any of the wells were functional at that time because they had been shut down for 18 months. Dart testified that he farmed the ground surrounding the wells. Each spring, he disced and planted through the access roads on the property. He stated that discing smoothed the ruts and made the roads passable. Dart stated that the defendants had never complained about the road conditions and that they continued to use the lease roads after the discing work. Dart admitted that he put up “no trespass” signs and a barricade near two of the lease roads at the time the lawsuit was filed. He also admitted that during the leasehold period he made complaints to the Illinois Office of Mines and Minerals of the Department of Natural Resources (Office of Mines) about the defendants’ lack of maintenance of some of the wells.

Rhonda Huddleston, an accounts supervisor at the Norris Electric Cooperative, testified in the plaintiffs’ case. Huddleston testified that her company supplied electricity for the wells. She testified that she had reviewed monthly records regarding the electricity used to operate the wells and the cost of that usage. Her records showed that from April 1998 through December 1998, the defendants were charged $25 in each monthly billing period. The records reflected a minimal usage of 200 to 250 kilowatt hours per month. She compared the electricity used during this period to that used during the first three months of 1998. During the first part of 1998, the usage resulted in charges of more than $300 per month. She also noted that with the exception of a 30-day period from December 17, 1998, through January 18, 1999, the records reflected minimum usage throughout 1999. During that December-January period, the defendants were charged $61.91, and 180 kilowatt hours were used. Huddleston stated that an operating pump jack would use more than the minimum amount of electricity during a one-month period. She explained that she could not state whether the minimum amount of electricity would be sufficient to operate a well pump for one week because the watt usage depends on the horsepower of the motor. She testified that the defendants’ service was cut for nonpayment in July 1999.

Stanley Leavell testified that he did not abandon the wells and that he engaged in activities directed toward oil production on the wells from April 1998 through the date the lawsuit was filed. Leavell testified that he had expenditures for operations of the wells in 1998 and 1999. He did not produce records documenting the expenditures. Leavell also stated that he paid the well fees and the property taxes during this period. Leavell admitted that he did not pay the electric bill in July 1999. He stated that he did not pay the bill because he intended to install a new pump house and he wanted to be sure that the electricity to the wells would be cut off. Leavell testified that oil production suffered because oil prices were depressed in 1998 and 1999.

Leavell testified that the wells on the Dart property produced about 3.5 barrels a day. He admitted that he did not keep a daily gauge or any other record of the quantity of oil produced by any of the wells on the lease. Leavell testified that he sold oil on March 5 and March 10, 1998. After that oil was sold, his reserve tank was empty. He stated that there is a residual amount of oil that is not removed from the tank. Leavell stated that he ran the wells from March 10, 1998, through April 20, 1998. He did not have any record of the quantity of oil produced during this period. Leavell also stated that he ran one well in December 1998. He stated that he turned that well on, ran it for a few days, and then turned it off. Again, he had no record of the quantity of oil produced during this period. He said that he did not run the well throughout January 1999 because he was concerned that the well might freeze due to the very cold temperatures. Leavell testified that he sold 72.65 barrels of oil in August 1999. He stated that the lease had produced approximately 72.65 barrels between March 1998 and December 1998 because he sold all of his reserves in March 1998. Leavell stated that the oil produced in December 1998 was a part of the 72.65 barrels sold in August 1999, but he could not identify what portion was produced in April 1998 and what portion was produced in December 1998.

The plaintiffs filed a complaint to cancel the lease in September 1999. In the complaint, the plaintiffs allege that “no production of oil has been obtained from said leases” since about March 1998, that subsequent to that time the equipment has become inoperable, and that by the express terms of the leases, the leases have been forfeited and are of no further force and effect. In their answer, the defendants denied that they abandoned the leases and alleged that the plaintiffs had interfered with their access to the wells by planting on the lease roads, by placing “no trespass” signs on the property, and by filing complaints with the Office of Mines.

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Bluebook (online)
341 Ill. App. 3d 1091, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dart-v-leavell-illappct-2003.