Wyoming Resources Corp. v. T-Chair Land Co.

2002 WY 104, 49 P.3d 999, 163 Oil & Gas Rep. 1140, 2002 Wyo. LEXIS 110, 2002 WL 1467531
CourtWyoming Supreme Court
DecidedJuly 10, 2002
Docket00-333
StatusPublished
Cited by5 cases

This text of 2002 WY 104 (Wyoming Resources Corp. v. T-Chair Land Co.) 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
Wyoming Resources Corp. v. T-Chair Land Co., 2002 WY 104, 49 P.3d 999, 163 Oil & Gas Rep. 1140, 2002 Wyo. LEXIS 110, 2002 WL 1467531 (Wyo. 2002).

Opinion

GOLDEN, Justice.

[11] Appellant Wyoming Resources Corporation (WRC) and Appellee T-Chair Land Company (T-Chair) entered into contractual agreements providing WRC access to oil and coalbed methane production wells by roads on T-Chair's ranch property. A dispute arose after T-Chair contended that improperly controlled water produced from WRC's coalbed methane production wells was damaging the surface of its ranch property. When WRC began to operate more wells without resolving this dispute, T-Chair blocked WRC's access to the roads on its property, denying WRC access to its wells. Wyoming statute permits a gas production company to obtain an access easement through a condemnation action when necessary. After determining that WRC had access by contract, the district court decided that the casement was not necessary and dismissed the condemnation action. The primary issue in this appeal is the meaning of the statutory language, "the property sought to be acquired is necessary for the project," found in Wyo. Stat. Ann. § 1-26-504(a)(ii) (LexisNexis 2001). Addressing the limited question whether contractual rights preclude condemnation proceedings, we hold that the district court's conclusion on this question is in error as a matter of law and reverse its determination. The issue of public use and necessity has many components, and because the trial court did not determine those issues or others as required under W.R.C.P. 71.1, we reverse and remand for further proceedings.

ISSUES

[T2] WRC presents the following issues for our review:

I. Whether the district court erred as a matter of law by dismissing the plaintiff's complaint and motion to file a supplemental complaint
A. Whether the district court disregarded settled case law and statutory provisions regarding necessity for easements when it held that the plaintiff failed to prove necessity
B. Whether the district court erred in forcing the plaintiff to make an election of remedies
II. Whether the district court erred by pérmitting the defendant to deny that the plaintiff needs an easement when the defendant has repeatedly refused to permit the plaintiff to use the road

T-Chair rephrases the issues as follows:

A. Was there sufficient evidence to support the trial court's finding that Plaintiff/Appellant had a contractual right of access to Defendant/Appellee's lands?
B. Is the trial court's determination that Plaintiff/Appellant failed to meet its burden of demonstrating that condemnation was "necessary" clearly erroneous?
C. Did the trial court correctly rule that Plaintiff/ Appellant may not invoke condemnation proceedings to avoid the obligations contained in existing contracts between it and Defendant/Appellee? ,

FACTS

[T3] T-Chair Land Company is the owner of a family ranch in southern Campbell County, Wyoming. WRC filed an amended complaint for condemnation seeking to condemn a right-of-way, thirty feet in width, for access across T-Chair's lands for the purpose of operating oil and gas exploration, drilling, production and transportation facilities and related improvements. The district court found that WRC operates and owns interests in existing oil wells on lands owned by T-Chair and on lands adjacent to the ranch that are accessed by roads on T-Chair land. WRC plans to drill additional oil and coalbed methane wells and conduct additional development of both types of wells on T-Chair lands and on lands adjacent to the ranch that are accessed by crossing the ranch's lands. At the time that WRC acquired operating rights in ten existing oil wells located with the T-Chair Ranch, these ten oil wells were subject to eleven annually renewable access *1001 agreements between the parties. Under these existing access agreements, WRC paid T-Chair $22,400 in 1999 for access to ten oil wells by fifteen miles of private roadway.

[14] On June 26, 1999, WRC and T-Chair executed a surface use agreement for additional access and surface use rights for the purpose of developing coalbed methane gas and oil wells on the T-Chair Ranch. T-Chair claims that the surface use agreement required WRC to prevent produced coalbed methane water from overflowing the existing Brown Reservoir. WRC made initial payments under this agreement and drilled eight coalbed methane wells on T-Chair Ranch. On December 7, 1999, T-Chair notified WRC that it had breached the agreement by the unauthorized discharge of produced water and demanded that WRC honor its contractual commitment to curtail the water production; however, WRC had not curtailed it as of September 7, 2000. In March of 2000, T-Chair learned that WRC planned to drill fourteen additional coalbed methane wells on the ranch, and, at that time, T-Chair prevented access. The parties disputed whether T-Chair suspended access pending remedy of the default or terminated the access agreement.

[T5] -On June 14, 2000, WRC filed a complaint in condemnation and sought to condemn a road it already accessed pursuant to the eleven oil well access agreements between the parties As required by statute, WRC offered to purchase the easement it sought to condemn. It proposed a one-time payment of $6,000 although at the time it was contractually obligated to pay $22,400 for the year.

[16] The district court determined that T-Chair had suspended, not terminated, access and WRC had not established necessity for condemnation as required by Wyoming's Eminent Domain Act because it had existing contractual access to T-Chair lands. The district court dismissed the complaint, and this appeal followed.

STANDARD OF REVIEW

[17] Eminent domain proceedings are authorized by constitutional and statutory provisions and governed by W.R.C.P. 71.1. The district court determines all issues arising on the complaint for condemnation including notice, the plaintiff's right to make the appropriation, plaintiff's inability to agree with the owner, the necessity for the appropriation, and the regularity of the proceedings. W.R.C.P. 71.1(¢)@)(A). Only the issue of compensation may be tried before a jury. W.R.C.P. 71.1().

[18] When we review the district court's determination of issues required by Rule 71.1(e)(2), "we uphold the judgment if there is evidence to support it, and in doing so we look only to the evidence submitted by the prevailing party and give to it every favorable inference which may be drawn therefrom, without considering any contrary evidence." Town of Wheatland v. Bellis Farms, Inc., 806 P.2d 281, 284 (Wyo.1991). Where the district court's ultimate conclusions decide questions of law, we afford no deference to its decision. See Coronado Oil Co. v. Grieves, 603 P.2d 406, 410 (Wyo.1979); see also Homesite Co. v. Board of County Comm'rs of Laramie, 69 Wyo. 236, 240 P.2d 885, 889 (1952).

DISCUSSION

[19] Article 1, Section 82 of the Wyoming Constitution provides:

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2002 WY 104, 49 P.3d 999, 163 Oil & Gas Rep. 1140, 2002 Wyo. LEXIS 110, 2002 WL 1467531, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wyoming-resources-corp-v-t-chair-land-co-wyo-2002.