Littell Family Trust v. Merit Energy Co.

Court of Appeals of Kansas·Decided August 28, 2026·No. 127221·Published

Opinion

No. 127,221

IN THE COURT OF APPEALS OF THE STATE OF KANSAS

OPAL LITTELL and CHERRY RIDER, Co-trustees of the Opal Littell Family Trust, et al., Appellants,

v.

MERIT ENERGY COMPANY, LLC, (Successor in Interest to OXY USA, INC.),

Appellee.

SYLLABUS BY THE COURT

All laws are to be given a sensible construction. A literal application of a statute, which would lead to unreasonable or absurd consequences, should be avoided whenever a reasonable application can be given to it, consistent with the legislative purpose.

Appeal from Stevens District Court; BRADLEY AMBROSIER, judge. Oral argument held May 12, 2026. Opinion filed August 28, 2026. Reversed and remanded with directions.

David G. Seely, Ryan K. Meyer, and Emily K. Arida, of Fleeson, Gooing, Coulson & Kitch, L.L.C., of Wichita, and Erick E. Nordling, of Kramer, Nordling & Nordling, LLC, of Hugoton, for appellants.

Daniel M. McClure, pro hac vice, of Norton Rose Fulbright US LLP, of Houston, Texas, James V. Leito IV, pro hac vice, of the same firm, and Will B. Wohlford, Robert W. Coykendall, and Jonathan A. Schlatter, of Morris, Laing, Evans, Brock & Kennedy, Chtd., of Wichita, for appellee.

Before HILL, P.J., ARNOLD-BURGER, J., and ANDREA PURVIS, District Judge, assigned.

HILL, J.: This appeal arises from a district court order declaring that a 2008 judgment approving a class-action settlement had become dormant and then unenforceable two years after dormancy. That class action lawsuit focused on expenses that were regularly deducted from monthly royalty payments due the landowners from natural gas production in the Kansas Hugoton Gas Field.

We find that the district court erred in its interpretation and in its application of the dormancy statute, K.S.A. 60-2403, to this settlement judgment. Also, the court erroneously ignored the continuing supervisory nature of the court's judgment approving the class action settlement. Gas is still being produced, and royalty payments are still being made. The parties to the settlement, on behalf of the class, agreed to continuing court supervision of the payments to ensure compliance with the agreement, and the court incorporated that provision into its judgment. We fail to see how that judgment has become unenforceable merely by the passage of time. We, therefore, reverse and remand.

This lawsuit involves many interests.

This case began in 1998, when three people sued Oxy USA, Inc., seeking damages for the alleged ongoing underpayment of royalties due them from their ownership of mineral interests in lands located in the Kansas Hugoton Gas Field. In 2001, the district court certified the class under K.S.A. 60-223, and defined the class as:

"All persons or concerns owning mineral interests in lands located in the areal confines of the Kansas Hugoton Gas Field, burdened by oil and gas leases owned in whole or in part by defendant with respect to gas production from above the base of the Panoma-Council Grove Field, whose royalty payments have been reduced by a 'gathering/compression' deduction or 'marketing deduct' identified on the monthly gas revenue detail sent by defendant to each such member."

The district court designated Opal Littell and Cherry Rider, the co-trustees of the Opal Littell Family Trust, as well as Bonnie Beelman in her individual capacity, as the representative plaintiffs. Extensive litigation followed.

In 2008, the district court approved a Stipulation of Settlement in the class action.

Under the Stipulation approved and incorporated into the court's judgment, Oxy agreed to pay $16.7 million into a settlement fund in exchange for dismissal of the underlying claims. Oxy also agreed not to reduce future royalty payments by more than a specified amount.

As time passed, natural gas flowed and royalties were paid, first by Oxy and then, in 2014, by Merit Energy Company, LLC, a company that purchased the leases from Oxy. Expense deductions from the royalty payments continued.

A concern arose about deductions from the royalties.

In 2023, Cherry Rider (as the sole trustee of the Cherry Rider Family Trust, a successor-in-interest to the Opal Littell Family Trust) and R.W. and Cathy Lucas (as co- trustees of the R.W. Lucas and Cathy Lucas Living Trust, which was a class member) moved to enforce the 2008 Judgment and Stipulation against Merit as Oxy's successor-ininterest . They alleged Merit had been improperly reducing the royalty payments since its acquisition of the leases.

The 2023 order comprehensively nullifies the 2008 judgment.

In its written findings of fact and conclusions of law, the district court carefully staked out its holding: "The Kansas dormant judgment statute [K.S.A. 60-2403] applies broadly to 'any judgment.'" The court went on to say:

"40. The plain text of the statute evidences a clear intent of the legislature to apply the Dormant Judgment Statute to 'any judgment.' If the legislature had intended a narrower application, it would have modified the words 'any judgment.'"

Following up on this interpretation, the court specifically ruled that, since there was no execution attempted nor had a renewal affidavit been filed, the judgment became dormant March 5, 2013, and unenforceable two years later, March 5, 2015. The district court granted Merit's motion to release the judgment and to dismiss the motion to enforce the judgment approving the settlement matter. The court concluded that, because the judgment became dormant in 2013 and had not been revived within two years of dormancy, it was therefore extinguished and ordered it released from the records.

The controlling law is densely worded.

The statute at the center of this controversy is K.S.A. 60-2403(a). It deals with civil judgment dormancy and renewal affidavits. Using a host of commas, subsection (a)(1) identifies what judgments are covered and then sets the judgment dormancy period of five years followed by a two-year period in judgment purgatory then judgment extinction. It provides:

"[I]f a renewal affidavit is not filed or if execution, including any garnishment proceeding, support enforcement proceeding or proceeding in aid of execution, is not issued, within five years of the date of the entry of any judgment in any court of record of this state, including judgments in favor to the state or any municipality in the state, or within five years from the date of any order reviving the judgment or, if five years have intervened between the date of the last renewal affidavit or execution filed proceedings undertaken on the judgment and the time of filing another renewal affidavit or undertaking execution proceedings on it, the judgment, including court costs and fees therein shall become dormant, and shall cease to operate as a lien on the real estate of the judgment debtor. When a judgment becomes and remains dormant for a period of two years, it shall be the duty of the judge to release the judgment of record when requested

to do so. Undisputed payments made prior to a request for a release of judgment are voluntary and not subject to refund or recoupment." (Emphases added.)

After that, subsection (a)(2) defines a renewal affidavit as "a statement under oath, signed by a judgment creditor or the judgment creditor's attorney, filed in the proceedings in which the judgment was entered and stating the remaining balance due and unpaid on the judgment."

We see no need for a renewal affidavit here because of the nature of the judgment.

Even though the money portions of this judgment have been paid, serious obligations remain outstanding. This wording alone shows that this statute does not apply. The district court erroneously nullified a judgment that was still alive. Basically, this law deals with the release of liens, and the district court stretched its application too far.

It helps to consider a statute's companions.

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Littell Family Trust v. Merit Energy Co., (kanctapp 2026).

Littell Family Trust v. Merit Energy Co. (Littell Family Trust v. Merit Energy Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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