Ward Petroleum Corp. v. Stewart

2003 OK 11, 64 P.3d 1113, 74 O.B.A.J. 636, 158 Oil & Gas Rep. 69, 2003 Okla. LEXIS 13, 2003 WL 289597

• Court: Supreme Court of Oklahoma
• Decided: February 11, 2003
• Docket: 97,881
• Status: Published

Opinions

BOUDREAU, Justice.

¶ 1 This case is before us on a certified interlocutory order entered in case No. CJ-2001-87 pending in the district court of Grady County, State of Oklahoma, the Honorable Judge Richard G. Van Dyck, presiding. The certified order granted respondent’s motion to amend an answer to include a related tort claim¹ in a proceeding originating under the Surface Damages Act. Our power to review certified orders is limited to those involving issues which affect a substantial part of the merits of a controversy. 12 O.S.1991, § 952(b)(3); Pierson v. Canupp, 1988 OK 47, ¶ 11, 754 P.2d 548, 551. Because the issue as certified cannot be considered to be “on the merits of the controversy”, we hereby recast the petition for certiorari into a proceeding for a writ of prohibition. We now assume original jurisdiction and deny the writ for the reasons expressed herein.

I. FACTS AND PROCEDURAL HISTORY

¶2 Petitioner, Ward Petroleum Corporation (“Ward”), the holder of leasehold interests on property owned by Ed and Vicki Stewart (“Stewarts”), proposed to drill and complete an oil and gas well on a section of the Stewarts’ property. Ward served the Stewarts with notice of its intent to commence drilling operations on the land and attempted to negotiate a surface damages agreement for any damage that may occur to the land. After negotiations failed, Ward initiated proceedings under the Surface Damages Act (“Act”) seeking the appointment of appraisers to determine the amount of surface damages, if any, the Stewarts sustained or would sustain as a result of Ward’s operations. The Stewarts filed an answer also seeking the appointment of appraisers. Appraisers were appointed and a majority of the appraisers returned a report which found the diminution in value of the surface estate to be $8,600.00.

¶ 3 The Stewarts promptly filed a demand for a jury trial. Thereafter, the Stewarts filed a motion to amend their answer to set forth a separate tort claim for pollution. Ward objected on the ground that Oklahoma law requires a surface owner to bring a separate civil action apart from that brought under the Act. The trial court disagreed and granted the Stewarts’ motion to amend. The trial court certified this order for immediate review pursuant to 12 O.S.2001, § 952(b)(3). The trial court also entered an order staying the trial court proceedings during the pen-dency of review proceedings before the Supreme Court. We granted certiorari to review the certified interlocutory order entered by the trial judge.

II. STANDARD OF REVIEW

¶ 4 We must decide whether the district court properly construed the provisions of 52 O.S.2001, §§ 318.2 et seq., when it granted the Stewarts’ motion to amend then-answer to include a separate tort claim. Statutory construction presents a question of law. Arrow Tool & Gauge v. Mead, 2000 OK 86, ¶ 20, 16 P.3d 1120, 1122-23. Questions of law are reviewable by a de novo standard. Neil Acquisition v. Wingrod Investment Corp., 1996 OK 125, ¶ 5, 932 P.2d 1100, 1103. Under this standard, we have plenary, independent and nondeferential authority to determine whether the trial court erred in its legal ruling. Id.

III. ANALYSIS

¶ 5 The Oklahoma Legislature enacted the Surface Damages Act on July 1, 1982, to provide a mechanism to balance the conflicting interests of the owners of two of our State’s important natural resources: the mineral interest holder and the surface owner. See Davis Oil Co. v. Cloud, 1986 OK 73, 766 P.2d 1347. The Act’s purpose is to promote the prompt payment of compensation to a surface owner whose land is taken for oil and gas exploration. Tower Oil & Gas Co., Inc. v. Paulk, 1989 OK 105, ¶ 6, 776 P.2d 1279, 1281. The Act modified the common law rule that an oil and gas lessee was not liable to the surface owner for damages unless such damages were caused by wanton or negligent operations or if the operations affected more than a reasonable area of the surface. See Davis Oil Co., supra.

¶ 6 The Act limits the damages recoverable to those which the surface owner has sustained or will sustain by reason of entry upon the subject land and by reason of drilling or maintenance of oil or gas production on the subject tract of land. 52 O.S.2001, § 318.5(C). On several occasions we have held the damage standard intended by the Legislature under the Act is the diminution in the fair market value of the surface property resulting from the drilling and maintenance operations. See Andress v. Bowlby, et al, 1989 OK 78, 773 P.2d 1265; Davis Oil Co., supra. This measure of damages was found to be appropriate since the Act partakes of the nature of a condemnation action by virtue of 52 O.S.2001, § 318.5(F), which provides that a trial under the Act shall be conducted and judgment entered in the same manner as railroad condemnation cases.

¶ 7 Since the legislature has directed that proceedings under the Act are to be tried in the same manner as condemnation proceedings, it is appropriate to look to condemnation law for guidance in determining whether a related tort claim may be properly joined in a proceeding originating under the Act. Condemnation proceedings do not, ordinarily, involve a tort and are not civil actions at law or suits in equity, but rather are special statutory proceedings for the purpose of ascertaining the compensation to be paid for the property to be appropriated. See Curtis v. WFEC R.R. Co., 2000 OK 26,1 P.3d 996; State Dept. of Highways v. O’Dea, 1976 OK 133, 555 P.2d 587. “ ‘Special proceedings’ is a term by which we continue to distinguish that litigation which is not governed by the general regime of pleadings.” City of Tahlequah v. Lake Region Elec., Coop., Inc., 2002 OK 2, 47 P.3d 467, 474 (Opala, J., dissenting). See also 12 O.S.2001, § 2001 (the Oklahoma Pleading Code governs the procedure in the district court of Oklahoma in all suits of a civil nature whether cognizable as cases at law or in equity except where a statute specifies a different procedure). Special proceedings may be distinguished from other civil actions by the manner of pleading, practice and procedure prescribed by the law.

¶ 8 The Legislature has passed special statutes for the just and orderly functioning of the court when hearing special proceedings. See Board of County Comm’r of Creek County v. Casteel, 1974 OK 31, ¶ 15, 522 P.2d 608, 610. The procedural requirements set forth in the statutes are mandatory. The legislatively prescribed procedures set forth in the Act authorize the filing of three pleadings: petition seeking the appointment of appraisers, objection to the report of appraisers, and demand for jury trial. 52 O.S.2001, § 318.5. The Act contains no provision authorizing an answer or counterclaim.

¶ 9 The Stewarts contend a surface owner may include a related tort claim in a proceeding originating under the Act despite the absence of a legislatively proscribed procedure. We acknowledge that our existing case law on this issue is less than clear. Some cases state that a surface owner may include a tort theory, so long as the tort theory is a “separate claim,” a “separate cause of action,” or a “separate action.” See e.g., Vastar Resources, Inc. v. Howard, 2002 OK CIV APP 13, 38 P.3d 236; Dyco Petroleum v. Smith, 1989 OK 51, 771 P.2d 1006, 1009 (Wilson, J., special concurrence); Root v. Kamo Elect. Co-op, 1985 OK 8, 699 P.2d 1083; Allen v. Transok Pipe Line Co., 1976 OK 53, 552 P.2d 375. Conversely, other cases have stated the surface owner may not include a tort theory; the tort theory must be brought as a “separate civil action.” See e.g., Vastar Resources, Inc. v. Howard, supra; Curtis v. WFEC R.R. Co., 2000 OK 26, 1 P.3d 996; Western Farmers Elec. Co-op. v. Willard, 1986 OK CIV APP 5, 726 P.2d 361; Young v. Seaway Pipeline, Inc., 1977 OK 249, 576 P.2d 1148; Oklahoma Gas & Elec. Co. v. Miller Bros. 101 Ranch Trust, 173 Okla. 101, 1935 OK 669, 46 P,2d 570.

¶ 10 In addition, some cases have recognized answers filed in special proceedings. See Casteel, supra. Other cases have expressly disapproved the filing of answers. See City of Marlow v. Booker, 2002 OK CIV APP 51, 46 P.3d 173 (stating landowner’s counter-petition, like an answer, is of no effect); Western Farmers Elec. Co-op. v. Willard, 1986 OK CIV APP 5, 726 P.2d 361 (stating only three pleadings are authorized by statute). Today we clarify these issues.

¶ 11 For purposes of judicial convenience and efficiency, a surface owner may file a related tort claim in the same case in which a party has initiated a proceeding under the Surface Damages Act.² However, the trial judge assigned to the case must assure that the statutory proceeding and the related tort claim are kept on two distinct procedural tracks, one track governed by the Act itself, the other governed by the Oklahoma Pleading Code.³ The procedural tracks must remain distinct throughout the entire case, including the trial phase. The trial judge should try the proceeding under the Act separately from the related tort claim so that resolution of the tort claim never impedes the primary goal of the Act, providing prompt compensation to the surface owner. Tower Oil & Gas Co., Inc. v. Paulk, supra. A trial judge is authorized to conduct separate trials of any number of claims in a lawsuit by 12 O.S.2001, § 2018(D) of the Oklahoma Pleading Code.

IV. CONCLUSION

¶ 12 We recast the petition for certiorari to an application to assume original jurisdiction and petition for writ of prohibition. We assume original jurisdiction, deny the writ and hold a surface owner may file a related tort claim in the same case in which a party has initiated a proceeding under the Surface Damages Act.

PETITION FOR CERTIORARI RECAST AS PETITION FOR WRIT OF PROHIBITION; ORIGINAL JURISDICTION ASSUMED; WRIT DENIED.

WATT, C.J., OPALA, V.C.J., and HODGES, KAUGER, SUMMERS, JJ., concur. WINCHESTER, J., with whom LAVENDER and HARGRAVE, JJ., join, dissent.

1 . A related tort claim is one connected with the subject matter of the proceeding under the Surface Damages Act (i.e., the property which Plaintiff seeks to commence and maintain drilling operations). Our courts have declined to hold that all of a surface owner's potential damages are covered by the Act. In Dyco Petroleum v. Smith, 1989 OK 51, 771 P.2d 1006, 1008, this Court determined that the Act did not afford a remedy for nuisance. See also Schneberger v. Apache Corp., 1994 OK 117, 890 P.2d 847 (stating the surface owner’s pollution damages were not covered under the Act).

2 . See 12 O.S.2001, 2018(A) (a party asserting a claim to relief as an original claim, counterclaim, cross-claim, or third-party claim, may join, either as independent or as alternate claims, as many claims, legal or equitable, as he has against an opposing party).

3 . The Surface Damages Act contains no provision authorizing an answer and counter-claim. Accordingly, a related tort claim may only be asserted in the same case by a petition under 12 O.S.2001, § 2007(A). While the Defendants in the case in controversy improperly filed an answer and counter-claim, we leave it to the trial judge in this instance to separate the statutory proceeding and the related tort claim into distinct procedural tracks.