G.H.K. Co. v. Janco Investments, Inc.

1987 OK CIV APP 68, 748 P.2d 45, 97 Oil & Gas Rep. 343, 1987 Okla. Civ. App. LEXIS 174, 1987 WL 34281
CourtCourt of Civil Appeals of Oklahoma
DecidedSeptember 15, 1987
Docket64613
StatusPublished
Cited by2 cases

This text of 1987 OK CIV APP 68 (G.H.K. Co. v. Janco Investments, Inc.) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
G.H.K. Co. v. Janco Investments, Inc., 1987 OK CIV APP 68, 748 P.2d 45, 97 Oil & Gas Rep. 343, 1987 Okla. Civ. App. LEXIS 174, 1987 WL 34281 (Okla. Ct. App. 1987).

Opinion

HUNTER, Judge:

Appellee, G.H.K. Company, brought suit against Appellant, Janeo Investments, Inc., seeking damages representing the unpaid balance of Appellant’s proportionate share of the cost of drilling and completion of a certain deep gas well, Hestand No. 1-11. Appellee alleged that Appellant had elected to participate in the drilling of the well by its execution of an authority for expenditure, commonly referred to as an “AFE”; a written request for “blowout” insurance coverage and its timely payment of the first invoice representing payment of the initial drilling costs. Appellant denied any liability alleging that its execution of the “AFE” and payment of the first invoice did not represent an election to participate in the development of the well. Further, Appellant did not execute the joint operating agreement prepared by the Appellee for its signature. Appellant counterclaimed seeking judgment in the amount of $29,462.73, representing the amount it had paid on the initial invoice and also prayed for punitive damages.

The case was tried to a jury which rendered its verdict in favor of Appellee and *47 against Appellant in the amount of $18,000. The jury also found in favor of Appellee and against Appellant on Appellant’s counterclaim. Subsequently, Appellant filed its motion for judgment notwithstanding the verdict, which was denied by the trial court. The Appellee also filed its motion for judgment notwithstanding the verdict, or in the alternative, for additur or partial new trial on the issue of damages, based on the jury’s failure to award Appellee the entire amount of Appellant’s unpaid proportionate share of drilling and completion costs. Appellee’s motions were denied by the trial court, and judgment was entered on the jury verdict. From the trial court’s order denying its motion for judgment notwithstanding the verdict, the Appellant has timely perfected this appeal. From the trial court’s order denying its motions for judgment notwithstanding the verdict, or in the alternative additur or partial new trial, the Appellee has timely perfected its cross appeal.

Appellant contends the trial court erred in failing to grant its motion for judgment notwithstanding the verdict. Appellant alleges that its execution of an “AFE” is not sufficient to bind the parties to an agreement to participate. This specific question has not previously been addressed in Oklahoma. Authorities from other jurisdictions have been cited by both parties in support of their respective positions. However, we do not find the cited authorities persuasive. The record reflects that Appellant did execute an “AFE” as well as a request for “blowout” insurance, and did pay the first invoice from Appellee. The record also reflects the Appellant did not sign a written joint operating agreement. Conflicting expert testimony was presented to the jury as to the effect of the execution of an “AFE”, within the use and custom of the oil and gas industry in the State of Oklahoma. At the close of all of the testimony, the trial court denied the parties’ motions for directed verdict and the case was submitted to the jury.

After the jury has returned its verdict, the trial court is without authority to enter a judgment notwithstanding the verdict unless the party in whose favor such judgment is rendered would be entitled to judgment on the pleadings. Further, just as in the case of a motion for directed verdict, in passing on a motion for judgment notwithstanding the verdict, conflicting evidence favorable to the movant is disregarded, and so long as there is any reasonable inference which reasonable people could choose to accept or reject, the question then becomes one within the sole province of the jury. Moses v. Haney, 725 P.2d 866 (Okla.1986). The record reflects the question of the effect of Appellant’s actions in executing the “AFE”, the written request for “blowout” insurance coverage and timely payment of the first invoice for its proportionate share of drilling costs, was a fact question, and properly submitted to the jury. The trial court was correct in denying Appellant’s motion for judgment notwithstanding the verdict.

Appellant contends the trial court erred in submitting Instruction No. 8 which provides in part:

“If you find ... that under the custom and usage of the oil business in Oklahoma that the signing of an authorization for expenditure did constitute an election to participate as a nonoperating, working interest owner, then you will find in favor of the Plaintiff ...”

Appellant objected to the instruction and orally moved that the court add an additional paragraph as follows:

“That in order for a custom or usage to be available against a person it must be so notorious as to affect him with the knowledge of it and raise the presumption that he dealt with reference to it or he must be shown to have had actual knowledge to it.”

The trial court declined to make that addition noting that everyone involved in the lawsuit was in the oil business, thus presuming that all parties were aware of the custom and usage within the industry. The trial court’s refusal to give the requested addition to Instruction No. 8 did not constitute reversible error. A judgment will not disturbed on appeal because of allegedly erroneous instructions unless *48 it clearly appears that the instruction given or refused either caused a miscarriage of justice or led to a different verdict than would have been rendered but for this alleged error. Nail v. Oklahoma Children’s Memorial Hospital, 710 P.2d 755 (Okla.1985). The record reflects that the instructions taken as a whole fairly present the law applicable to the issues raised by the pleadings and evidence. We cannot say that it clearly appears the trial court’s refusal to make the addition to Instruction No. 8 caused a miscarriage of justice.

Appellant contends the trial court did not have subject matter jurisdiction over this dispute. Appellant argues that because of the issuance of a pooling order by the Corporation Commission concerning the parties and the well in question, the exclusive jurisdiction for this dispute lies with the Corporation Commission. This proposition is without merit. The record reflects that a pooling order was ultimately issued by the Corporation Commission and the Appellant elected to participate by farming out its interest. However, the forced pooling order was issued several months after the execution of the “AFE” by Appellant, and the question of Appellant’s participation as a result of the execution of the “AFE” preceded the issuance of the pooling order. This dispute is a private dispute between the parties as to Appellant’s liability because of its alleged participation as a non-operating working interest owner. This is a private contract and it is clearly beyond the Corporation Commission’s conferred jurisdiction, as it concerns a dispute between private parties in which the public interest and correlative rights are not involved. Samson Resources Company v. Corporation Commission, 702 P.2d 19 (Okla.1985). The District Court was the proper forum for this dispute.

CROSS-APPEAL

Appellee contends the trial court erred in denying its motion for judgment notwithstanding the verdict or, in the alternative, motion for additur or partial new trial. Ap-pellee’s request was based solely on the jury verdict.

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1987 OK CIV APP 68, 748 P.2d 45, 97 Oil & Gas Rep. 343, 1987 Okla. Civ. App. LEXIS 174, 1987 WL 34281, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ghk-co-v-janco-investments-inc-oklacivapp-1987.