Kowalsky v. S & J Operating Company

539 F. App'x 908
CourtCourt of Appeals for the Tenth Circuit
DecidedOctober 30, 2013
Docket12-3150, 12-3152
StatusUnpublished
Cited by1 cases

This text of 539 F. App'x 908 (Kowalsky v. S & J Operating Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kowalsky v. S & J Operating Company, 539 F. App'x 908 (10th Cir. 2013).

Opinion

ORDER AND JUDGMENT *

SCOTT M. MATHESON, JR., Circuit Judge.

Kristopher and Michelle Kowalsky (“the Kowalskys”), a husband and wife, sued S & J Operating Co. (“S & J”), alleging that S & J’s use and deficient plugging of a *910 saltwater disposal well in the late 1980s damaged the Kowalskys’ property. In 2005, while renting the land from Mr. Kowalsky’s mother, the Kowalskys noticed changes to the property and asked the Kansas Corporation Commission (the “KCC”) to evaluate the land. The KCC found subsidence and told the Kowalskys it was unlikely to get worse. But the subsidence worsened. The hole around the saltwater disposal well dropped eight additional inches by late 2006, and subsided into the water table by 2008. Mr. Kowalsky’s mother deeded the land to the Kowalskys in 2007. They brought this action against S & J in 2010.

S & J moved for summary judgment, which the district court granted, concluding there was no factual dispute that the claim accrued before the Kowalskys owned the property. Because tort claims in Kansas are not assignable, the court held the Kowalskys do not have standing to sue. On appeal, the Kowalskys agree that tort claims are not assignable, but assert their claim did not accrue until 2008, after they owned the property.

We affirm the district court’s grant of summary judgment.

I. BACKGROUND

A. Factual Background 1

In August 1944, a saltwater disposal well was drilled on the Kowalsky family property, Kowalsky 8SWDW (the “Kowalsky property”), in Barton County, Kansas. In April 1985, S & J purchased an oil and gas lease to the Kowalsky property, including the disposal well.

Saltwater disposal wells are part of the oil production process. The porous rocks that contain oil and gas reservoirs also contain saltwater. The saltwater, which is pumped out along with the gas and oh, is discarded using saltwater disposal wells. The saltwater is injected down the disposal well into other underground porous rock, bounded above and below by impermeable strata.

A salt formation lies underneath the Kowalsky property. If undersaturated saltwater brine or fresh water were injected into the disposal well and leak out into the salt formation, the water could dissolve the salt in the formation, causing underground caverns to form. If these caverns cave in, the land would subside or cause a sinkhole to develop on the surface. Apart from the Kowalsky property, there are eight sinkholes in Barton County, Kansas associated with saltwater disposal wells.

After using the saltwater disposal well for four years, S & J found in 1989 that the well failed a mechanical integrity test and sought approval from the KCC to plug the well to prevent or stop leakage. The KCC approved S & J’s plan. S & J ran into problems plugging the well with cement and had to take extra measures using large amounts of gel and cottonseed hulls. One month after it attempted to plug the well, S & J sold its Kowalsky property lease to Davis Petroleum.

In the spring of 2005, Mr. Kowalsky, who was renting the Kowalsky property from his mother, noticed some subtle changes on the horizon of the land and spoke to his neighbor about it. Mr. Kow-alsky could not pinpoint the changes, but it seemed to him that his wood pile in the pasture was lower. He thought there may have been some settling in the area around the well, 1,200 feet away from the Kowal-sky home. The road in front of his neigh *911 bor’s house “was constantly wet and it had never been wet before, and there was a dip in the road that had never been there before.” Appx. at 406. Mr. Kowalsky noticed small cracks in the house, which he described as larger than a hairline but smaller than a quarter-inch. Also, the sidewalk pads around the house changed in elevation by about a quarter-inch so they no longer matched up. Mr. Kowalsky testified in his deposition that he did not know whom to talk to, what was going on, or what to do about it.

The neighbor recommended that Mr. Kowalsky speak with Tim Dickinson, who had worked on the site for the cement company that contracted to plug the well. Mr. Dickinson told Mr. Kowalsky about the problems plugging the well and provided Mr. Kowalsky with a copy of the plugging report. Mr. Dickinson contacted the KCC to report a possible low spot or sink hole on the Kowalsky property. Mr. Kow-alsky then started to notice a rapid change in elevation, noting that “it was getting pretty aggressive about that time.” He stated that he was not really sure what was happening until he talked to Mr. Dickinson, but then he really started noticing changes to the land.

The KCC inspected the Kowalsky property on April 18 and 20, 2005. The KCC report states that Mr. Kowalsky spoke with the KCC agent and told him that he believed his irrigation water well had dropped 12 feet in the last three years and that his house and other buildings were settling toward the hole. 2 Mr. Kowalsky admitted to the KCC agent that he had not brought up the low spot earlier because he (1) did not know who was responsible, (2) wanted to remain on good terms with the current leaseholder, and (3) did not want to falsely accuse anyone. He also told the KCC agent that the hole had fallen another foot in the day between the agent’s visits (although the KCC agent did not notice a difference). The KCC agent told Mr.. Kowalsky that the subsidence was in the precise location of the plugged well. The agent added there was nothing anybody could do about the subsidence, but it was probably as big as it was going to get.

In May 2005, the KCC installed a monitoring point at the site to track subsidence. In late 2006, the stake that the KCC had installed at the monitoring point had disappeared from view, was covered with water, and had sunk two-thirds of a foot since May 2005. The stake has remained under water ever since.

An aerial photograph taken on March 15, 2007, shows no standing water on the property. The land slowly began holding rain water. When asked when standing water first appeared, Mrs. Kowalsky stated that it began just after the Greensburg tornado, which occurred in May 2007. “I realize that after the Greensburg tornado, that was the most significant water we had ever had in a long — in a seven-year span at least, and it’s very evident after that. We’ve always had water after that.” Appx. at 418.

Mr. Kowalsky’s mother deeded the land to Mr. and Mrs. Kowalsky in September 2007. In 2008, the land had sunk so much that it reached the water table. There was significant standing water on the land. An aerial photograph, with “2008” handwritten at the top, shows standing water around the hole. Two more aerial photographs taken in 2009 and 2010 showed the progression of the land subsiding into the *912 water table as water covered increasingly more area.

The Kowalskys claim that, although the house and sidewalk had small cracks as early as 2005, no structural damage occurred to the house before 2008.

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539 F. App'x 908, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kowalsky-v-s-j-operating-company-ca10-2013.