Lierly v. Tidewater Petroleum Corp.

2006 OK 47, 139 P.3d 897, 164 Oil & Gas Rep. 809, 2006 Okla. LEXIS 48, 2006 WL 1756023
CourtSupreme Court of Oklahoma
DecidedJune 27, 2006
Docket100,844
StatusPublished
Cited by59 cases

This text of 2006 OK 47 (Lierly v. Tidewater Petroleum Corp.) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lierly v. Tidewater Petroleum Corp., 2006 OK 47, 139 P.3d 897, 164 Oil & Gas Rep. 809, 2006 Okla. LEXIS 48, 2006 WL 1756023 (Okla. 2006).

Opinion

TAYLOR, J.

¶ 1 Appellant presents two questions of law for certiorari review: 1) Is an oil and gas lessee subject to liability for malicious prosecution for seeking an injunction against the surface owner who interferes with lessee’s entry upon the land at a specific location? and 2) Is a defendant entitled to present closing argument on the amount of punitive damages in the second stage of a jury trial even though the plaintiff waives closing argument? We answer both questions in the affirmative. We hold the district court erred in refusing to allow defendant/appellant to make closing argument to the jury regarding the amount of punitive damages in the second stage of the jury trial. Accordingly, we reverse the district court’s order denying defendant/appellant a new trial and that part of the district court’s judgment awarding plaintiffs/appellees $11,000.00 for punitive damages. We remand this cause to the district court for a new second stage trial on the amount of punitive damages to be awarded plaintiffs/appellees.

I. Facts and Proceedings Below

¶ 2 The evidence in the appellate record reveals the following pertinent facts. In May, 1994, Bobby G. Roberts (Roberts) purchased some thirteen oil leases and the surface rights to four tracts of land in Creek County from the L.B. Jackson Production Company under the terms of an Amended Plan for Reorganization confirmed in January, 1990, by the United States Bankruptcy Court for the Northern District of Oklahoma. The Emma Hengst tract and lease were included in the purchase. In June, 1994, Roberts assigned these surface rights and oil leases to his corporation, Tidewater Petroleum Corporation, appellant (Tidewater). Roberts is the principal owner, officer and manager of Tidewater.

¶ 3 This litigation involves the Emma Hengst tract and oil lease. The eighty-acre Emma Hengst tract is divided by Polecat Creek. The Emma Hengst lease has two producing oil wells. One well and tank battery are located on the west side of Polecat Creek and one well is on the east side. The L.B. Jackson Production Company owned the surface and operated the oil wells on the Emma Hengst tract for more than thirty years. The Jackson company accessed the oil wells through the gate and road on the neighboring Robbins’ property on the east side of the Emma Hengst tract. While Tidewater owned the surface and operated the oil wells, it continued to access the Emma Hengst tract from the east side using the gate and road on the Robbins’ property.

¶ 4 In April, 1997, Tidewater sold the surface rights to the Emma Hengst tract to Phillip Roger Lierly and Reesa Kay Lierly, husband and wife, and Joe Bill Lierly and Kerry Dawn Lierly, husband and wife, except a right-of-way on the west side of the tract. Tidewater continued to access the well on the east side of the Emma Hengst tract through the gate and road on the Robbins’ property.

¶ 5 State Highway 117 borders the south edge of the Emma Hengst tract. Sometime earlier, the Oklahoma Highway Department constructed a driveway across the highway right of way and a gate for entry onto the Emma Hengst tract. However, the tract was not accessible from Highway 117 because the land dropped off some fifteen feet just inside the gate. Neither the Jackson company nor Tidewater improved the land for entry off Highway 117.

¶ 6 Shortly after purchasing the Emma Hengst tract, Phillip Roger Lierly and Joe Bill Lierly, appellees (Lierlys), started to improve the land for access off Highway 117. Tidewater asked the Lierlys’ permission to access the wells off Highway 117. The Lier-lys asked Tidewater to share in the cost of constructing the new road. Tidewater refused to pay any of the road construction costs.

¶ 7 In July, 1997, Tidewater filed suit in the district court alleging that entry off *901 Highway 117 is the only reasonable way to enter and exit the east side of the Emma Hengst tract and asking that the Lierlys be temporarily and permanently enjoined from interfering with Tidewater’s access to the Emma Hengst lease off Highway 117. 1 Upon a bench trial, the district judge, the Honorable John Maley, found Tidewater had access to its wells through the Robbins’ property and should not be at liberty to enter the Lierlys’ property at will from the south entrance nor use the road built by the Lierlys. The district court denied Tidewater’s request for a temporary injunction and barred it from using the roadway built by the Lierlys. 2 The district court also denied the Lierlys’ motion for attorney fees.

¶ 8 In June, 1999, the Lierlys filed a petition in the district court alleging that Tidewater filed the suit for injunctive relief with malicious and total disregard of their rights. The Lierlys sought actual and punitive damages. Tidewater counterclaimed, alleging the Lierlys’ claim was a sham and nothing more than a thinly veiled attempt to wire around the denial of Lierlys’ motion for attorney fees in the suit for injunction. Tidewater sought damages for the expense of defending against this malicious prosecution claim and punitive damages. As affirmative defenses, Tidewater asserted that Lierlys’ malicious prosecution claim is barred by the statute of limitations and by the doctrines of res judicata, issue preclusion and laches because the Lierlys did not appeal the trial court’s denial of their motion for attorney fees in the suit for injunction.

¶ 9 This case was tried to a jury in September, 2003. Roberts testified that he has access to operate the Emma Hengst lease through the Robbins’ property although Mr. Robbins did not want to execute an easement; the Lierlys would not allow Roberts to access the wells off Highway 117; the Lier-lys asked him to pay half of the costs of a roadway needed for access off Highway 117; he did not attempt to negotiate with the Lierlys for access off Highway 117; he refused to pay any money toward the cost of the new roadway for access off Highway 117; he knows that Tidewater, as the oil and gas well operator, is responsible for constructing a lease road across the property to the wells; the Lierlys blocked the gate so he could not exit the property onto Highway 117; he has no malice toward the Lierlys; he filed , the suit for injunctive relief to secure access to the wells from Highway 117; and the allegations in the injunction petition — that the Li-erlys denied him access to the property to operate the wells and denied him ingress or egress by blocking the lease road block— were not truthful. The Lierlys gave testimony regarding the facts that gave rise to their malicious prosecution claim and their damages for loss of work, embarrassment and personal suffering.

¶ 10 At the conclusion of the first stage of the trial, the jury returned a unanimous verdict in favor of the Lierlys. The jury found: 1) the dollar amount of Lierlys’ actual damages is the sum of $11,000.00; 2) the evidence that Tidewater acted in reckless disregard of the rights of others is clear and convincing; and 3) the evidence that Tidewater acted intentionally and with malice toward others is not clear and convincing.

¶ 11 The trial court opened the second stage of the trial by instructing the jury on the factors to be considered in fixing the amount of punitive damages, if any, to punish *902

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Bluebook (online)
2006 OK 47, 139 P.3d 897, 164 Oil & Gas Rep. 809, 2006 Okla. LEXIS 48, 2006 WL 1756023, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lierly-v-tidewater-petroleum-corp-okla-2006.