Fleetwood v. CHEVRON USA PRODUCTION CO.

2010 OK CIV APP 63, 239 P.3d 960
Procedural entryThis page is a short order in Fleetwood v. CHEVRON USA PRODUCTION CO.. Read the opinion of the Court — 2010 Okla. Civ. App. LEXIS 46
Court of Civil Appeals of Oklahoma·Decided March 25, 2010·No. 106,849. Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 1·Published

Opinion

239 P.3d 960 (2010)
2010 OK CIV APP 63

K. Phil FLEETWOOD, Plaintiff/Appellant,
v.
CHEVRON U.S.A. PRODUCTION COMPANY, and Chevron U.S.A. Inc., Defendants/Appellees,
Chesapeake Operating, Inc.; Linda Goldenstern; Joe Marko Goldenstern; Amerada Hess Corporation; Jay Allen Stolper; Scott Stolper, Trustee of the Stolper Family Trust dated January 11, 1990; Andrew Stolper, Trustee of the Stolper Family Trust dated January 22, 1992; and Jordan Stolper, Trustee of the Stolper Family Trust dated October 25, 1996, Defendants.

No. 106,849. Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 1.

Court of Civil Appeals of Oklahoma, Division No. 1.

March 25, 2010.
Certiorari Denied June 1, 2010.

*961 Kent P. Sullivan, Leach, Sullivan, Sullivan & Watkins, L.L.P., Duncan, OK, for Plaintiff/Appellant.

Richard B. Noulles, Gable Gotwals, Tulsa, OK, for Defendant/Appellees.

WM. C. HETHERINGTON, JR., Judge.

¶ 1 K. Phil Fleetwood (Fleetwood) appeals the denial of judgment in his favor as to all Defendants[1] and the entry of judgment in favor of Chevron U.S.A. Production Company and Chevron U.S.A. Inc. (Chevron) on his claim attacking the validity of a Receiver Oil and Gas Lease (Receiver Lease). Fleetwood's challenge of the receivership is untimely. Consequently, the trial court order finding his interest is subject to the leasehold rights of Chevron is AFFIRMED.

FACTS

¶ 2 There is no dispute Bokma Oil Company was established as a Delaware corporation in 1919, or how, through various mineral conveyances, an undivided one-fourth interest in and to all oil, gas and other minerals in and under and produced from the N/E/4 of the S/W/4 of Section 33, Township 3 North, Range 5 West, I.M. Grady County, Oklahoma, (the Section 33 property) was transferred to Bokma by April 7, 1924. Bokma's Delaware corporate charter status became void and suspended on April 1, 1932, by that state due to non-payment of franchise taxes, and in conformity with Delaware's requirements January 1933.[2]

¶ 3 At the time of the suspension, Bokma had 140,000 shares of issued and outstanding stock. In the 1920s, Bokma was a Delaware Corporation primarily operated by B. Weis.[3]*962 According to his will, he died leaving two sons, LeRoy Weis and Richard Weis, who are the individuals through whom Fleetwood claims he obtained title by way of a 1998 Delaware corporate reinstatement proceeding and subsequent conveyances. The record before us indicates the original Bokma corporation had 250 shareholders, with LeRoy Weis owning approximately 1/10 of 1% of Bokma stock. Fleetwood later claims the surviving Weis brothers recalled that their father may have bought out all of the shareholders and obtained 100% of the stock prior to the corporation losing its corporate status.

¶ 4 In pooling proceedings before the Oklahoma Corporation Commission, LeRoy Weis filed an "Appearance and Answer Of LeRoy Weis on Behalf of Himself and All Stockholders of Bokma Oil Company, A Delaware Corporation, and Other Persons Claiming By, Through or Under Said Corporation" (1957 Appearance) on February 20, 1957. He asserts Bokma was no longer an existing corporation, Bokma had no officers or directors authorized to transact its business, and if there were still other shareholders alive, they are scattered in various locations. He described the difficulty and expense of reinstating the corporate status in Delaware in compliance with the necessary reinstatement legal requirements and identified Bokma's principal stockholders as "B. Weis, R. Reich, M. Sabath and Rudolph Lederer, all of whom are deceased."[4]

¶ 5 The Receiver Lease was the result of a "Petition For Determination That Mineral Owner is Unlocatable, Authorization Of Sale Of Oil and Gas Lease and Appointment Of Receiver" filed against Bokma on July 22, 1994, by an individual with an interest in mineral acres underlying those held by Bokma (the Lease Suit). The Lease Suit petition sought an order determining Bokma was unlocatable, authorizing the sale of an oil and gas lease, and appointing a receiver for Bokma. The petition includes an assertion a third party is willing to purchase an oil and gas lease covering Bokma's interest "in the Subject Premises, less and except the Second and Third Bromide Sands," for a three year term with a 3/16ths royalty and $150.00 per acre bonus payment, which is "consistent with other leasing activity in the area."

¶ 6 An August 18, 1994 Order in the Lease Suit, quieted title in the minerals and allowed for the leasing of the acreage by receiver for three years with a minimum bonus of $152.00 per acre and a 3/16th royalty. The receiver leased the Bokma interest to Chesapeake Operating, Inc., which thereafter assigned a portion of its interest in one well and its interest to the base of the Viola formation to Chevron. Chevron was not a party to the receivership proceedings and its interest was acquired approximately two years before Fleetwood filed the instant action.

¶ 7 The record shows this litigation was filed by Fleetwood after Chevron had obtained interests and drilled wells and after LeRoy Weis's March 25, 1998 filing in Delaware of a "Certificate Of Renewal, Restoration Or Revival Of Certificate Of Incorporation" for Bokma and a "Written Consent of Stockholders of Bokma Oil Company" in which he alleged he and his brother Richard were the record owners of a majority of the Bokma stock. LeRoy Weis was able to obtain a reinstatement order based upon these representations.[5]

*963 ¶ 8 In an April 17, 1998 letter, Fleetwood confirms an agreement with LeRoy Weis pursuant to which, among other things, LeRoy Weis as Bokma's president will sell Fleetwood its mineral interests in the Section 33 property which is leased to Chevron, and Fleetwood will re-convey a half interest in the Section 33 property mineral interests back to LeRoy Weis or his designate. Fleetwood agreed to attempt to negotiate "a more favorable oil and gas lease" for the minerals in the Section 33 property "and also attempt to release any deep mineral rights." Fleetwood then obtained a quit-claim deed for the acreage from Bokma through LeRoy Weis, acting as its president.[6]

¶ 9 Fleetwood filed the quit claim deed from Bokma of record in Grady County on April 27, 1998. He claims an ownership interest in one-half of all net royalties, bonuses, rentals and other benefits obtained from Bokma's former interest. This action by Fleetwood was filed December 15, 1998.

¶ 10 In his motion for summary judgment, Fleetwood argues the Receiver Lease conveyed no interest to Chevron, claiming the Lease Suit Order under which the receiver was appointed and the lease interest sold to Chevron were void. He argues publication notice was insufficient, failed to meet minimum due process, and was void for lack of subject matter jurisdiction because the Lease Suit plaintiff had failed to plead and prove a necessary element required by 52 O.S.2001 § 521, et seq.

¶ 11 Chevron's response and counter motion for summary judgment argues the receivership is not void because the judgment roll for that proceeding establishes the trial court had jurisdiction over Bokma and due process requirements were met. Chevron also argues Fleetwood's action was filed outside of the time allowed under 12 O.S.2001 §§ 1031 and 1038 and he may not collaterally attack the Lease Suit Order.

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