Matlow v. Rosenfeld

614 N.E.2d 520, 245 Ill. App. 3d 448, 185 Ill. Dec. 386, 127 Oil & Gas Rep. 485, 1993 Ill. App. LEXIS 726
CourtAppellate Court of Illinois
DecidedMay 21, 1993
Docket5-91-0716
StatusPublished
Cited by3 cases

This text of 614 N.E.2d 520 (Matlow v. Rosenfeld) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Matlow v. Rosenfeld, 614 N.E.2d 520, 245 Ill. App. 3d 448, 185 Ill. Dec. 386, 127 Oil & Gas Rep. 485, 1993 Ill. App. LEXIS 726 (Ill. Ct. App. 1993).

Opinion

JUSTICE GOLDENHERSH

delivered the opinion of the court:

Plaintiff, Bernice Matlow, is the operator of a certain oil lease in Marion County known as the “Kagy lease.” Plaintiff owns 65% of the working interest in the Kagy lease. Defendant, Vicki Rosenfeld, owns a 5% working interest in the lease, which she acquired in a negotiated settlement of the estate of her father. Plaintiff and defendant are mother and daughter, and both are California residents. Plaintiff filed suit against defendant seeking to recover 5% of the operating expenses of the lease, which defendant has refused to pay since August 31, 1985. Both parties filed cross-motions for summary judgment and stipulated to the facts. Defendant appeals from an order of the circuit court of Marion County granting plaintiff’s motion for summary judgment in favor of plaintiff on counts I and II and against defendant in the amount of $63,415.67. The trial court determined defendant’s unpaid share of operating expenses as $54,620.21 and ordered defendant to pay $8,795.45 in interest. Defendant contends the trial court erred in granting summary judgment for plaintiff on counts I and II. We affirm.

I

The facts in this case are not in dispute. On March 9, 1988, plaintiff filed a one-count complaint against defendant seeking to recover $23,501.77 for defendant’s proportionate share of operating expenses from August 31, 1985, through January 31, 1988, on the Kagy lease. The complaint also sought a lien against defendant’s interest in the leasehold. Subsequently, plaintiff filed a second and third amended complaint. The third amended complaint, filed on October 18, 1990, consisted of three counts. Count I sought a judgment against defendant for $43,184 plus any other sums advanced by plaintiff on behalf of defendant prior to the date of judgment plus interest and reasonable attorney fees. Plaintiff also requested that the amount found to be due her be declared a lien upon defendant’s working interest in the leasehold. Count II alleged defendant owed plaintiff $25,923.96 for defendant’s share of operating expenses. Plaintiff sought judgment against defendant in that amount, plus any additional operating costs attributable to defendant after June 30, 1988, along with costs of the suit. Count III alleged that a mining partnership existed between plaintiff and defendant and that defendant failed to pay her proportionate share of expenses, namely, $25,923.96. Count III sought a money judgment against defendant for that amount plus imposition of a lien against defendant’s share of the partnership.

On December 17, 1990, the parties filed a joint cross-motion for summary judgment and stipulated to the facts. The pertinent stipulated facts are as follows:

“From prior to the time Defendant acquired her interest, the lease has been a producing lease. During the time Defendant has had her working interest, monthly payments have been made on or to her account by the purchasing pipeline, Union Oil Company of California, except for certain months when one or more of the wells located on the lease were shut down because of system failures. *** Defendant’s account has, since she acquired her interest in the lease, been credited the sum of $90,138.74 as of Sept. 30,1990.
Since Defendant acquired her interest in the Kagy Lease, there have been expenses of operating the leasehold, and she has been billed monthly for her proportionate share of the expenses. *** Plaintiff has advanced payments to creditors of the leasehold and to leasehold employees and for purchase of supplies and materials and then invoiced co-tenants, including Defendant, each for his/her proportionate share of the monthly operating expenses. ***
From the time defendant acquired her interest in the Kagy Lease, until about October, 1985, Defendant remitted her proportionate share of expenses to Plaintiff, but claims to have no record of such payment. Commencing in October, 1985, Defendant has failed to or refused to remit to Plaintiff for the expenses of operating the leasehold, although her account was credited in April, 1986 the sum of $2,000.00 at the direction of Plaintiff. Demand has been made for payment of the balance of the assessments for services to the leasehold. Defendant has not participated in the operation of the lease. *** Plaintiff asserts that the Defendant is indebted to her in the amount of $47,987.90 as of Sept. 30, 1990. The sum of $42,130.39 is being withheld by the pipeline as of Sept. 30, 1990, pursuant to liens filed by Plaintiff against Defendant’s interest.”

The stipulation also consisted of exhibits, including the monthly billing statements from plaintiff to defendant for the period from August 1985 through August 1990. Defendant marked the charges she objected to, a total of $445,095.80. Defendant’s 5% proportionate share was $22,254.79. Additionally, each party filed an affidavit of an expert setting forth what each expert would testify to if called as a witness at trial.

Plaintiff’s expert, W.C. Jenneman, became familiar with the Kagy lease in 1966 when he was retained by plaintiff’s predecessor to render petroleum engineering services for the lease in question. Jenneman still is retained by plaintiff in this capacity. Jenneman reviewed the operating statements since 1985 and concluded that “with the possible exception of certain items amounting to not more than $2500.00 in total,” all expenditures were “within the legitimate scope of and necessary for the proper operation of the lease.” He stated, “They were essentially expenditures of the kinds and types made in the usual and ordinary course in which oil and gas lease operations are carried on in this area.” Jenneman further opined:

“The Kagy lease oil production history is very unusual in that there was a normal expectation that the lease would be economically depleted by about the late 1950’s, whereas it is still a significantly profitable operation some forty years later. The lease is presently producing about 20,000 barrels per year.
One of the factors that makes this record of production uncharacteristic is that the operation of the lease has always been administered by the majority absentee owner.
This consistently profitable operation did not come about by accident. In my opinion, it is the result of careful attention by the operator and the consequent employment of exceptionally competent people to do the site work on an around the clock basis.
Chief of these people is the ‘pumper’ who had the required ability to make immediate repairs when there was any sort of mechanical or electrical breakdown of the pumping equipment; the ability to recognize immediately when a pump was not functioning; the ability to keep meticulous records of production on each well; the ability to do required gauging, testing and treating.
In addition to all of these skills, the pumper had to have a great deal of specialized knowledge and experience in oil field operation in order to handle this lease. The lease was originally developed with 30 completed wells, of which, fifteen are in operation today. For many years the pumper was Cecil Bookhout, who is now retired.

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Bluebook (online)
614 N.E.2d 520, 245 Ill. App. 3d 448, 185 Ill. Dec. 386, 127 Oil & Gas Rep. 485, 1993 Ill. App. LEXIS 726, Counsel Stack Legal Research, https://law.counselstack.com/opinion/matlow-v-rosenfeld-illappct-1993.