Windsor Energy Group, L.L.C., an Oklahoma Limited Liability Company, and Windsor Beaver Creek L.L.C., a Delaware Limited Liability Company

2014 WY 96, 330 P.3d 285
CourtWyoming Supreme Court
DecidedJuly 30, 2014
Dockets-13-0214
StatusPublished
Cited by16 cases

This text of 2014 WY 96 (Windsor Energy Group, L.L.C., an Oklahoma Limited Liability Company, and Windsor Beaver Creek L.L.C., a Delaware Limited Liability Company) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Windsor Energy Group, L.L.C., an Oklahoma Limited Liability Company, and Windsor Beaver Creek L.L.C., a Delaware Limited Liability Company, 2014 WY 96, 330 P.3d 285 (Wyo. 2014).

Opinion

KITE, Justice.

[11] The predecessors in interest to Windsor Energy Group, LLC and Windsor Beaver Creek LLC (Windsor) and Noble Energy, Inc. (Noble) entered into a joint operating agreement (JOA) for Wyoming oil and gas interests in 2000. In 2010, Windsor filed suit against Noble's predecessor claiming it was obligated for costs under the JOA even though it had assigned its interest to another party in 2004. The district court granted summary judgment in favor of Windsor holding an assignor of an interest who was not formally released was still obligated under the JOA. After a bench trial, however, the district court ruled that Windsor's claim against Noble for breach of the JOA was barred by laches.

[12] We conclude, based on the unique cireumstances of this case, the equitable doe-trine of laches applies to Windsor's breach of contract claim and Noble proved the defense. The rulings are conclusive; consequently, we affirm the district court's judgment without addressing the contract issue.

ISSUES

[13] The dispositive issues in these consolidated cases are:

1. Did the district court err in ruling the equitable doctrine of laches was a defense to Windsor's claim for breach of an oil and gas contract even though the statute of limitations had not expired?

2. Did the district court abuse its discretion by finding the elements of laches were satisfied in this case?

FACTS

[14] On June 30, 2000, J.M. Huber Corporation (Huber) and Suncor Energy (Natural Gas) America, Inc. (Suncor) entered into a JOA for development of oil and gas interests in the Beaver Creek Prospect in Sheridan County, Wyoming. Huber was designated as the operator, and Suncor was the sole non-operator. 1 The JOA generally allocated assets and liabilities in accordance with the proportionate interests of the parties. It required the operator to notify the non-operator of lease development activities and obtain non-operator consent for certain expenditures through Authorizations for Expenditures (AFEs). The operator was obligated to bill the non-operator for its share of the expenses on a monthly basis. These bills were called Joint Interest Bills (JIBs). The non-operator had the right to contest and/or audit the JIBs within two years. The JOA also specifically applied to successors and assigns.

[15] On May 1, 2004, Suncor assigned its interest to Dolphin Energy Corporation (Dolphin). A few months later, on September 1, 2004, Huber assigned its interest to Windsor. Windsor began sending JIBs to Dolphin in January 2005. The JIBs included various lease expenses, including plugging and abandoning (P & A) expenses. Dolphin did not pay any JIBs and Windsor eventually filed suit in 2007. In 2008, Dolphin declared bankruptcy and never paid Windsor.

[16] On December 4, 2009, Windsor sent a demand letter to Suncor asserting that it was obligated to pay the JIBs. Suncor did not pay, and Windsor filed a complaint in district court on March 22, 2010, alleging that, as assignor, Suncor remained liable for the costs because it had not been expressly released under the terms of the JOA or the assignment. Windsor initially sought breach of contract damages of over $625,000. The district court later allowed Windsor to amend its complaint to include on-going damages, bringing the total to more than $900,000.

[17] Each party filed a motion for summary judgment. Windsor alleged that the relevant documents and case law established, *288 as a matter of law, that Suncor was liable for the costs even though it had assigned its interest. Suncor asserted it was not liable for the expenses incurred after its assignment to Dolphin and, in any event, Windsor's claim should be barred by the defense of laches. The district court granted summary judgment in favor of Windsor, holding "Sun-cor remained liable to Windsor because it did not obtain a release from either Huber or Windsor, and the JOA did not contain a provision releasing Suncor from continued liability after the assignment." The court ruled, however, that genuine issues of material fact existed concerning the amount of damages and whether the doctrine of laches barred Windsor's claim.

[18] Noble acquired Suncor's interest and was substituted as the defendant in this case. We will, however, follow the district court's example and continue to refer to the defendant as Suncor since the relevant doeu-ments use that name. The district court held a bench trial in June 2013 and ruled Windsor's claim was barred by laches. Windsor appealed the district court's laches ruling, and Suncor appealed the ruling that the assignor remained liable under the JOA unless expressly released. We consolidated the cases for argument and decision.

STANDARD OF REVIEW

[19] In general, we apply the following standard when reviewing a district court's decision after a bench trial:

"The factual findings of a judge are not entitled to the limited review afforded a jury verdict. While the findings are presumptively correct, the appellate court may examine all of the properly admissible evidence in the record. Due regard is given to the opportunity of the trial judge to assess the credibility of the witnesses, and our review does not entail re-weighing disputed evidence. Findings of fact will not be set aside unless they are clearly erroneous. A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed."
With regard to the trial court's findings of fact,
"we assume that the evidence of the prevailing party below is true and give that party every reasonable inference that can fairly and reasonably be drawn from it. We do not substitute ourselves for the trial court as a finder of facts; instead, we defer to those findings unless they are unsupported by the record or erroneous as a matter of law."
The district court's conclusions of law, however, are subject to our de novo standard of review.

Morris v. CMS Oil & Gas Co., 2010 WY 37, ¶ 12, 227 P.3d 325, 330 (Wyo.2010), quoting Lieberman v. Mossbrook, 2009 WY 65, ¶ 40, 208 P.3d 1296, 1308 (Wyo.2009) (citations omitted).

DISCUSSION

A. Does the Equitable Doctrine of Laches Apply to Breach of Contract Claims?

[110] The district court ruled as a matter of law that the equitable doctrine of laches may bar an oil and gas breach of contract claim even though the statutory limitations period has not expired. We review this conclusion of law de novo.

[4111] Windsor claimed that Suncor breached its contractual responsibilities under the JOA. Actions on written contracts are governed by the ten year statute of limitations at Wyo. Stat. Ann. § 1-8-105(a)(i) (LexisNexis 2018). There is no question in this case that the statute of limitations had not expired when Windsor commenced its action in 2010 for payment of the JIBs dating from 2005 to the date of trial. Suncor asserted, however, that Windsor's claim was barred by laches.

[112] Laches bars a claim when a party has delayed in enforcing its rights to the disadvantage of another. Dorsett v.

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Cite This Page — Counsel Stack

Bluebook (online)
2014 WY 96, 330 P.3d 285, Counsel Stack Legal Research, https://law.counselstack.com/opinion/windsor-energy-group-llc-an-oklahoma-limited-liability-company-and-wyo-2014.