King v. Estate of Gilbreath

215 F. Supp. 3d 1180, 2016 U.S. Dist. LEXIS 184405, 2016 WL 7496098
Procedural entryThis page is a short order in King v. Estate of Gilbreath. Read the opinion of the Court — 215 F. Supp. 3d 1149
District Court, D. New Mexico·Decided March 30, 2016·No. Civ. No. 13-862 JCH/LAM·Published

Opinion

MEMORANDUM OPINION AND ORDER

JUDITH C. HERRERA, UNITED STATES DISTRICT JUDGE

This matter is before the Court on the following motion: Defendants Robert L. Bayless, Producer LLC and Animas En[1182]*1182ergy Group LLC’s Motion for Partial Summary Judgment. [Doc. 191] Defendants Robert L. Bayless, Producer LLC and Animas Energy Group, LLC (“Bayless and Animas”) move for partial summary judgment providing that neither Plaintiffs nor the Gilbreath Defendants take anything against them for any portion of claims regarding production or breaches of supposed duties occurring prior to December 31, 2004. [Doc. 191] Plaintiffs filed a response. [Doc. 223] The Gilbreath Defendants filed a response. [Doc. 227] Bayless and Animas filed a reply. [Doc. 252]

Plaintiffs assert five claims against Bay-less and Animas: Count One — Declaratory Relief; Count Two — Quiet Title; Count Three — Accounting; Count Four — Breach of NMSA 1978, § 70-2-18 (claim of improper pooling); and Count Ten — Negligence. The Gilbreath Defendants assert seven crossclaims against Bayless (and some other co-Defendants). [Doc. 67]

Having reviewed the motion, briefs, evidence, and relevant law, the Court concludes that the motion should be granted.

In this Memorandum Opinion and Order, the “Gilbreath Defendants” refers to: Loretta E. Gilbreath, Personal Representative of the Estate of Norman L. Gil-breath, Deceased; Loretta E. Gilbreath; and Gilbreath Energy, LLC.1 The “Ener-gen Defendants” refers to: Energen Resources Corporation (“ERC”); James M. Martin; San Juan Basin Properties, LLC a/k/a San Juan Basin Operating a/k/a San Juan Basin Resources; TOP Operating Company; and Maralex Resources, Inc. “Bayless and Animas” refers to: Robert L. Bayless, Producer LLC, and Animas Energy Group LLC.

FACTUAL BACKGROUND2

Plaintiffs filed suit seeking a determination that the Oil and Gas Lease (“Lease”) they executed to Rodney P. Calvin, which was later assigned to Defendants Loretta and Norman Gilbreath, terminated.3 Plaintiffs seek damages for revenues owed from wells attributable to Plaintiffs’ mineral interest.

Pursuant to a March 2, 1973 “Mineral Deed” from A.L. and Reba Duff, Plaintiff Frank King acquired the minerals underlying the following lands in San Juan County, New Mexico:

Township 30 North, Range 11 West, NMPM
Section 19: W/2NW/4SE/4, except 1.63 acres, more or less
Containing 18.37 acres, more or less

[Doc. 184-2] Before this deed was executed, Plaintiffs 4 had entered into the Oil and Gas Lease dated August 4, 1972 (“Lease”), conveying an interest in part of these minerals to Rodney P. Calvin. [Doc. 184-1] The Lease conveyed an interest in the [1183]*1183minerals “from the surface of the earth to the base of the Pictured Cliffs Formation only” — referred to herein as the “Subject Minerals.” [Doc. 182-1, p. 1, ¶ 21] The lessee agreed to pay a royalty of 1/8.

The primary term of the Lease was three years; the Lease would continue “as long thereafter as oh or gas or casinghead gas or either or any of them, is produced therefrom; or as much longer thereafter as the lessee in good faith shall conduct drilling operations thereon and should production result from such operations, this lease shall remain in full force and effect as long as oil or gas or casinghead gas, shall be produced therefrom.” The Lease further provides:

16. If within the primary term of this lease production on the leased premises shall cease from any cause, this lease shall not terminate provided operations for the drilling of a well shall be commenced before or on the next ensuing rental paying date; or, provided lessee begins or resumes the payment of rentals in the manner and amount hereinbe-fore provided. If, after the expiration of the primary term of this lease, production on the leased premises shall cease from any cause, this lease shall not terminate provided lessee resumes operations for drilling a well within sixty (60) days from such cessation, and this lease shall remain in force during the prosecution of such operations and, if production results therefrom, then as long as production continues.
17. It is agreed that this lease shall never be forfeited or cancelled for failure to perform in whole or in part any of its implied covenants, conditions, or stipulations until it shall have first been finally judicially determined that such failure exists, and after such final determination, lessee is given a reasonable time therefrom to comply with any such covenants, conditions, or stipulations.

Under this Lease, Calvin drilled the Wright # 1 Well in the Pictured Cliffs Formation. The lessee’s interests were assigned to Norman and Loretta Gilbreath on March 1, 1985. Norman and Loretta Gilbreath, and later their assignee Gil-breath Energy, LLC, were operator of the Wright # 1 Well.

In July 1994, the New Mexico Oil Conservation Division issued an order stating that it pooled all mineral interests in the Basin-Fruitland Coal Gas Pool, including the Subject Minerals, for the drilling of the Flora Vista # 2 Well. [Doc. 189-3] Plaintiffs were not given notice of this proceeding. The Flora Vista # 2 Well was drilled in 1994. The Flora Vista # 3 Well was drilled in 2004.

LEGAL STANDARDS

Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A fact is material if it could have an effect on the outcome of the suit. Smothers v. Solvay Chems., Inc., 740 F.3d 530, 538 (10th Cir. 2014). A dispute over a material fact is genuine if the evidence presented could allow a rational jury to find in favor of the non-moving party. EEOC v. Horizon/CMS Healthcare Corp., 220 F.3d 1184, 1190 (10th Cir. 2000). The court views the facts in the light most favorable to the non-moving party and draws all reasonable inferences in favor of that party. Shero v. City of Grove, 510 F.3d 1196, 1200 (10th Cir. 2007). The court cannot weigh the evidence and determine the truth of the matter, but instead determines whether there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 243, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

[1184]*1184A party seeking summary judgment bears the initial burden of showing that there is no genuine dispute as to a material fact. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998). When that party does not have the burden of persuasion at trial, it can satisfy its burden at the summary judgment stage by identifying a lack of evidence on an essential element of the claim. Id. at 671.

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King v. Estate of Gilbreath, 215 F. Supp. 3d 1180, 2016 U.S. Dist. LEXIS 184405, 2016 WL 7496098 (D.N.M. 2016).

215 F. Supp. 3d 1180 (King v. Estate of Gilbreath) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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