Merino v. Levin Oil Ents.

2019 Ohio 205
CourtOhio Court of Appeals
DecidedJanuary 18, 2019
Docket17 CO 0030
StatusPublished
Cited by1 cases

This text of 2019 Ohio 205 (Merino v. Levin Oil Ents.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Merino v. Levin Oil Ents., 2019 Ohio 205 (Ohio Ct. App. 2019).

Opinion

[Cite as Merino v. Levin Oil Ents., 2019-Ohio-205.]

IN THE COURT OF APPEALS OF OHIO SEVENTH APPELLATE DISTRICT COLUMBIANA COUNTY

JOHN M. MERINO, et al.,

Plaintiffs-Appellants,

v.

LEVINE OIL ENTERPRISES, LLC, et al.,

Defendants-Appellees.

OPINION AND JUDGMENT ENTRY Case No. 17 CO 0030

Civil Appeal from the Court of Common Pleas of Mahoning County, Ohio Case No. 2016 CV 381

BEFORE: Kathleen Bartlett, Gene Donofrio, Carol Ann Robb, Judges.

JUDGMENT: AFFIRMED

Attys. Robert Tscholl and James Mathews, 400 South Main Street, North Canton, Ohio 44720, for Appellants and

Attys. Bruce Smith and Brent Barnes, 1844 West State Street, Suite A, Alliance, Ohio 44601, for Appellees.

Dated: January 18, 2019 –2–

BARTLETT, J.

{¶1} Plaintiffs-Appellants, John M. Merino and Kathy L. Merino, appeal the decision of the Columbiana County Common Pleas Court granting summary judgment in favor of Defendant-Appellee, Levine Oil Enterprises, LLC. On appeal, Appellants argue that the trial court erred in granting summary judgment in favor of Defendant- Appellee, where the trial court’s judgment failed to declare the rights and legal relations of the parties, and that genuine issues of fact precluded the entry of summary judgment. {¶2} For the following reasons, Appellants’ first and second assignments of error are without merit. Accordingly, the judgment of the trial court is affirmed. Facts and Procedural History {¶3} Appellants filed the instant case as a declaratory judgment action on July 22, 2016, alleging three counts of breach of lease/declaratory judgment, and one count to quiet title. {¶4} Appellants filed the action against Levine Oil Enterprises, LLC (“Appellee”) and Sierra Buckeye, LLC. The claim against Sierra Buckeye, LLC was based upon an assignment that had occurred during the term of the lease, but based upon the subsequent reassignment of those rights back to Appellee, Sierra was voluntarily dismissed from the lawsuit. {¶5} It is undisputed that the parties entered into the 2010 Lease and subsequent ratification of said Lease in 2012. {¶6} Paragraph 1 of the 2010 lease reads as follows:

That the Lessor * * * for the purpose of drilling, operation for, producing and the covenants and agreements hereinafter contained, does hereby lease exclusively unto the Lessee, for the purpose of drilling, operation for, producing and removing oil and gas and all the constituents thereof, and of injecting air, gas, brine and other substances from any sources and into any subsurface strata, other than potable water strata and workable coal strata, (including but not limited to the right to inject any wells on the leasehold property and to otherwise conduct all such secondary or tertiary

Case No. 17 CO 0030 –3–

operations as may be required in the opinion of the Lessee,) and to transport by pipelines or otherwise across and through said lands oil, gas and other constituents from the subject lands * * * . (2010 Lease at ¶ 1).

{¶7} Paragraph 24 of the 2010 lease reads as follows:

It is agreed upon that we will not travel through the land to transport gas unless a well is drilled first on the leased land. It is also agreed upon that we will not inject the land. A separate deal in the future is possible if injection for disposal of wells is needed. The lessee has the right to purchase the well at salvage value if lessor chooses to abandon it in the future. (2010 Lease at ¶ 24).

{¶8} Appellants argue that paragraph 24 modified paragraph 1 of the lease. {¶9} The 2010 lease, as well as the 2012 ratification restate the same language for paragraphs 1 and 24. In fact, Appellant had previously executed a lease in 2004 with Vanguard which contained the same provisions in paragraphs 1 and 24 as in the 2010 and 2012 documents. {¶10} It is undisputed that as part of the drilling and completion process for the well on Appellants’ property in 2012, Appellee hydraulically fractured the producing rock formation in order to stimulate production of oil and gas. {¶11} Appellants claim the hydraulic fracturing constituted a violation of paragraph 24 of the Levine lease and as a result the court should declare the lease terminated. (Levine Response to MSJ, at 7). {¶12} Appellee states that hydraulic fracturing during the completion of a well and injecting a well for disposal of oilfield wastes are totally disparate procedures and hence paragraphs 1 and 24 apply to separate procedures. (Levine MSJ at 8, citing Greg New Affidavit, Ex. F). {¶13} On June 22, 2017, Appellee filed a Motion for Summary Judgment alleging that no genuine issue of material fact existed and that Appellee was entitled to judgment, and attached the following in support: the July 19, 2010 lease; the March 22, 2012 Ratification of Oil & Gas Lease; the September 6, 2012 partial assignment

Case No. 17 CO 0030 –4–

between Levine and Sierra Buckeye LLC; Affidavit of Shari Rose notifying Appellee that Sierra intended to assign back the lease interest; portions of the deposition transcript of Heather Pittman and Affidavit of Heather Pittman; Affidavit of Greg New, petroleum engineer; and Affidavit of Russell Miller. {¶14} The affidavit of Greg New, an independent petroleum engineer, stated that the “hydraulic fracturing process is a part of the well drilling and completion procedure and involves pumping under pressure large amounts of water and sand and a very small amount of chemicals into a rock formation. . . .” (New Affidavit at ¶ 6). The New Affidavit further states that “injection of disposal wells is a different procedure whereby brine and other well effluents from many other locations are transported to and injected into a well. . . .” (New Affidavit at ¶ 8). {¶15} The deposition transcript of Heather Pittman was filed with the trial court, and was relied upon by both parties. The affidavit of Ms. Pittman was also submitted in support of Appellee’s summary judgment motion. Ms. Pittman discussed the inclusion of paragraph 24 in the subject lease, stating “that pertained to discussing disposal wells, the water disposal wells, as Mr. Merino stated he did not want a water disposal well on his property. And we were okay with including that because we are not in the business of putting in disposal wells.” (Pittman Depo. Trans. at 15-16). Ms. Pittman stated “it’s my understanding this whole paragraph [24] was – pertains to the disposal wells.” (Pittman Depo. Trans. at 16). Ms. Pittman responded to the following regarding injecting on the property:

Q. Did Mr. Merino ever tell you that he did not want any form of liquids injected into the land in the drilling process?

A. No. He was only – did not want a disposal well. We had conversations about getting a well drilled. He wanted to be higher on our list because he had several leases in process because he wanted to get a well in production. (Pittman Depo. Trans. at 36).

{¶16} Ms. Pittman further stated that “Mr. Merino made it very clear in the lease negotiations that he did not want brine or other waste products from other lands brought

Case No. 17 CO 0030 –5–

to his land for injection and disposal purposes, and to alleviate those concerns, paragraph 24 was included in the lease. (Pittman Affidavit at ¶¶ 3-4). Ms. Pittman further testified that the recorded version of the lease was “the final copy that they signed.” (Pittman Depo. Trans. at 60). {¶17} The Affidavit of Russell Miller attested that he served as the manager of field operations for Appellee. During the drilling and completion operation, Mr. Merino “appeared at the well site on several occasions questioned me concerning when the well would be completed and placed into production.” (Miller Affidavit at ¶ 3). Mr. Miller “indicated to Mr.

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Bluebook (online)
2019 Ohio 205, Counsel Stack Legal Research, https://law.counselstack.com/opinion/merino-v-levin-oil-ents-ohioctapp-2019.