Perrine v. Mert Development, Inc.

355 S.E.2d 53, 177 W. Va. 560, 94 Oil & Gas Rep. 627, 1987 W. Va. LEXIS 477
CourtWest Virginia Supreme Court
DecidedMarch 12, 1987
DocketNo. 16927
StatusPublished
Cited by3 cases

This text of 355 S.E.2d 53 (Perrine v. Mert Development, Inc.) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Perrine v. Mert Development, Inc., 355 S.E.2d 53, 177 W. Va. 560, 94 Oil & Gas Rep. 627, 1987 W. Va. LEXIS 477 (W. Va. 1987).

Opinion

PER CURIAM:

This is an appeal by Mert Development, Inc., and others, from a summary judgment order entered by the Circuit Court of Roane County on February 6, 1985. That order, in effect, held that a certain oil and gas lease entered into by Hazel E. Perrine and the other appellees had expired and was of no legal effect. On appeal the appellants contend that there were substantial issues of material fact pending at the time of the entry of the summary judgment order and that summary judgment was improper. We agree, and we reverse the decision of the Circuit Court of Roane County.

The record in this case shows that on or about August 22, 1979, Hazel E. Perrine, and others, who were the owners of a 283-acre tract of land in Roane County, executed and delivered an oil and gas lease to Mert Development, Inc., which granted Mert Development the exclusive right to drill for, produce and market oil and gas from the 283-acre tract.

The lease contained the relatively standard clause providing that it would- remain in force for a primary term of two years and for “as long thereafter as operations for oil or gas are being conducted on the premises, or oil or gas is found in paying quantities thereon, or any formation underlying the ... leased land is used for storage of gas ...” There was also a provision for the payment of shut-in royalties if gas was found, but through lack of market was not sold.

In May, 1980, during the primary term of the lease, Mert Development commenced drilling operations on the leased premises. Those operations, which produced neither oil nor gas, were completed on May 9,1980. However, Mert Development, believing that the property was promising, requested that the appellees extend the primary term, and on August 21, 1981, the appellees, by an “extension of lease”, acceded to Mert’s request and agreed to extend the original lease with slight modifications for an additional six months after August 22, 1981.

During the six-month extension, Mert Development deepened the original wéll to 5,900 feet, and according to Mert, its employees, during the deepening operations, detected the presence of natural gas in sufficient quantities to merit the completion of the well. The drilling operations connected with the deepening process were completed on December 19, 1981, prior to the expiration of the six-month extension of the primary term of the lease.

According to Mert, work was suspended at the end of December, 1981, due to weather conditions. However, it was resumed in April, 1982, and efforts were made to complete the well for production. Additionally, certain documents were filed and agreements were negotiated so that the well could be placed into production.

On or about August 22, 1983, the appel-lees, by their attorney, notified Mert Development that they considered the lease to have expired by its own terms on February 22, 1982, and also notified the company that an action would be instituted to have [562]*562the lease cancelled. After receiving the letter Mert Development, on September 8, 1983, tendered to William J. Perrine, agent for the appellees, the sum of $100.00, representing the shut-in royalties specified in the 1979 lease. Mr. Perrine refused to accept the check and returned it. Mert Development also notified the appellees that, given current market conditions, it considered the lease to be in full force and effect and that it had no intention of abandoning the leasehold estate. Subsequently, Mert Development again attempted to tender shut-in royalty payments, but the subsequent payment was also refused.

On or about January 20, 1984, the appel-lees instituted the present action for the cancellation of the lease. In response to the appellees’ complaint, Mert Development and the other appellants asserted that they had complied with the terms of the original lease and the extension of it and that they had drilled a well and had conducted diligent operations for the purpose of preparing the well for production. They indicated that shut in royalty payments had been tendered, and claimed that the appellees were estopped from bringing suit since the appellees had permitted them to conduct drilling and completion operations without protesting.

Subsequently, various discovery proceedings were conducted in the case. Responses were made to requests for admissions, interrogatories, and requests for the production of documents. Then, on May 11, 1984, the appellees filed a motion for summary judgment, contending that there was no genuine issue of material fact in the case and that as a matter of law the court should declare the 1979 lease and 1981 extension of it forfeited' and cancelled. Mert Development and the other appellants opposed the motion. All parties later briefed the issues involved.

After taking the issues under advisement, the Circuit Court, by order entered February 6, 1985, granted the motion for summary judgment. Mert Development subsequently filed a motion for reconsideration, and the circuit court denied that motion of March 25, 1985.

In syllabus point 3 of Aetna Casualty & Surety Co. v. Federal Insurance Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963), this Court announced a rule concerning summary judgment which has since been consistently followed: “A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law.” See Lowery v. Raptis, 174 W.Va. 736, 329 S.E.2d 102 (1985); Consolidated Gas Supply Corp. v. Riley, 161 W.Va. 782, 247 S.E.2d 712 (1978); Anderson v. Turner, 155 W.Va. 283, 184 S.E.2d 304 (1971).

Furthermore, in applying this rule it is incumbent upon a trial court to view the facts in the case in a light most favorable to the party against whom judgment is to be rendered. Board of Education v. VanBuren and Firestone Architects, Inc., 165 W.Va. 140, 267 S.E.2d 440 (1980).

In Berry Energy Consultants v. Bennett, 175 W.Va. 92, 331 S.E.2d 823 (1985), this Court considered circumstances which would extend the ordinary oil and gas lease and, in syllabus point 1, concluded that:

“The discovery of oil or gas under a lease giving right of exploration and production, unless there is something in the lease manifesting a contrary intention, is sufficient to create vested estate in the lessee in the exclusive right to produce oil or gas provided for therein — a right, however, which may be lost by abandonment, by failure to produce oil or gas, or pursue the work of production, or development of the property.” Syl. pt. 4, Eastern Oil Co. v. Coulehan, 65 W.Va. 531, 64 S.E. 836 (1909).

In South Penn Oil Company v. Snodgrass, 71 W.Va. 438, 76 S.E.

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355 S.E.2d 53, 177 W. Va. 560, 94 Oil & Gas Rep. 627, 1987 W. Va. LEXIS 477, Counsel Stack Legal Research, https://law.counselstack.com/opinion/perrine-v-mert-development-inc-wva-1987.