Sabella, D. v. Appalachian Development Corp.

103 A.3d 83
CourtSuperior Court of Pennsylvania
DecidedOctober 20, 2014
Docket722 WDA 2013
StatusPublished
Cited by48 cases

This text of 103 A.3d 83 (Sabella, D. v. Appalachian Development Corp.) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sabella, D. v. Appalachian Development Corp., 103 A.3d 83 (Pa. Ct. App. 2014).

Opinion

OPINION BY

WECHT, J.:

In this oil and gas case, Dennis Sabella and the above-captioned Appellants/Cross-Appellees (hereinafter, the “Haners,” except where context requires reference to Brian Haner individually) file cross-appeals challenging generally the judgment' that the trial court entered in Sabella’s favor. Each party challenges aspects of that learned court’s entry of partial summary judgment, as well as that court’s verdict entered after a bench trial addressing the issues not disposed of on summary judgment.

Following careful review, we affirm in part, but we vacate aspects of the trial court’s judgment and remand for further proceedings.

BACKGROUND

The trial court has provided us a thorough' summary of the facts and background of the case: .

[Sabella] ... obtained the oil, gas, and mineral rights (OGMs) to the subject property at a tax sale on September 8, 1997.... The property was ... properly recorded ... in the Warren County Register and Recorder’s Office in 1997. [Sabella] did not own the surface rights to the property. However, there being a public road near the property, Keller Road, [Sabella] did drive the public road looking for any signs of development. Finding none, he operated under the assumption that there was no oil and gas development activity.
The piece of property at issue is a rural, wooded parcel of land, covered by trees and brush. The property is not on a main road. Also, there is just one home nearby the surface of the property at issue. Further, [Sabella] suffered from progressive macular degeneration. Eventually, [Sabella’s] condition prevented him from driving a vehicle.
[Appalachian was] unrepresented in the instant action. Appalachian 4s and was at all times relevant, an oil and gas company operating in and around Warren, Pennsylvania.
Appalachian was owned by Russell C. Southwell, Lee Borger, Jr., and Ted Carrington.
*87 On November 15, 2001, Mark and Virginia Harvey [“the Harveys”] owned the surface rights to 104 acres above the 66 subsurface acres [that Sabella] owned. Appalachian signed an oil and gas lease with Mark and Virginia Harvey in 2001. 1 The lease was for production of the 104 acres of oil and gas rights underneath the Harvey surface tract. Appalachian called this lease the “Harvey lease,” and duly recorded it at the Register and Recorder’s Office.... However, unbeknownst to either party to the Harvey lease, 66 of those 104 subsurface acres were already owned by [Sabella].
Defendants Brian C. Haner and Lisa M. Haner are husband and wife, trading and doing business under the registered fictitious name Pine Ridge Energy (Pine Ridge). Pine Ridge is an unincorporated business association. On June 23, 2003, Appalachian, by and through three of its shareholders, signed a letter of agreement to sell some of its holdings to Defendant Brian Haner ..., operating as Pine Ridge. Pine Ridge then finalized the purchase of Appalachian in August 2003. As part of the agreement of sale, Appalachian warranted good, marketable title. Included in Pine Ridge’s purchase was the Harvey lease, which included [Sabella’s] 66 acres of OGMs.
In effectuating the purchase of Appalachian, Pine Ridge retained the services of local attorney Arthur Stewart. Mr. Stewart advised 2 Brian Haner of his title search options when acquiring the Appalachian leases. Mr. Stewart informed Haner he could either (1) obtain no title search, (2) obtain a “bring-down” title search, [1] or (3) obtain a full title search. Stewart and Haner discussed approximate costs and risks associated with each of the options. Haner opted for the middle option, performing only a “bring-down” title search on the Harvey lease. Pine Ridge also acquired the drilling rights to adjacent properties, and began producing adjacent properties.
When [the Haners] obtained the subject property, there were two existing oil and natural gas wells on the subject property [denominated Wells H-l and H-2].... Subsequently, seven more wells were drilled by [the Haners] from 2004-2008 [denominated Wells H-3 through H-9].... On March 8, 2008, [Sabella] met Brian Haner. Drilling was completed on Well H-7 on August 14, 2008. Drilling was completed on Well H-8 on August 20, 2008. And finally, drilling was completed on Well H-9 on August 26, 2008. In total, nine (9) wells were drilled on the Sabella subsurface property. Those nine wells produced both oil and gas.
*88 The “Harvey wells” (producing from [Sabella’s] OGMs) were not separately metered from surrounding wells. Rather, to collect the oil and gas from the wells, the wells were connected with wells producing [on] nearby properties. Royalty checks were disbursed by tallying the number of wells producing in the area, and dividing the total wells by each OGM lessor’s wells.
As Pine Ridge continued to expand its operations, [the Haners were] considering selling ash timber and leasing more OGMs. In early 2008, [Brian] Haner was attempting to get in touch with a potential business contact who[] he knew used to work for someone of the last name “Sabella.” So, [Brian] Haner began calling “Sabellas” in the phone book. Ultimately, he reached [Sabella] ... and the two individuals planned to meet to discuss business opportunities. On March 8, 2008, [Brian] Haner met Sabel-la at his house and the two drove to McKean County to examine a lease Sa-bella owned. The parties then examined another property that Sabella owned in Frewsburg, New York, had lunch, and returned to Sabella’s house to continue discussing the oil and gas business.
Upon arrival at Sabella’s house, the two parties discussed the 66 acres that Sa-bella owned in Warren County. [Brian] Haner also began discussing with Sabel-la other locations where [the Haners], doing business as Pine Ridge Energy, [were] operating. [Brian] Haner told Sabella he operated “between Irvine Run and Keller Road” in Conewango Township. Sabella responded that he owned [OGMs] there. Sabella then produced a map of the area. [Brian] Haner recognized the map as the area [the Haners were] then currently producing. However, [Brian] Haner did not explicitly tell Sabella that [the Haners were] on the property.
There was conflicting testimony about precisely what was said as the parties examined this map at the meeting of March 8, 2008. This [c]ourt, after observing the witnesses, assessing the witnesses’ credibility, and examining the totality of the circumstances, determines that [Brian] Haner did not tell [Sabella] that Pine Ridge was operating on [Sa-bella’s] property. In fact, [Brian Haner] made statements to [Sabella] that would have indicated to a reasonable person that there was no oil and gas activity occurring on the property but that he was very close to [Sabella’s] property.

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Bluebook (online)
103 A.3d 83, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sabella-d-v-appalachian-development-corp-pasuperct-2014.