Title: COMET ENERGY SERVICES, LLC, a Nevada limited liability company V. POWDER RIVER OIL & GAS VENTURES, LLC, a Colorado limited liability company

State: wyoming

Issuer: Wyoming Supreme Court

Document:

COMET ENERGY SERVICES, LLC, a Nevada limited liability company V. POWDER RIVER OIL & GAS VENTURES, LLC,  a Colorado limited liability company2010 WY 82239 P.3d 382Case Number: S-09-0225Decided: 06/23/2010
APRIL 
TERM, A.D. 2010

 
 

COMET 
ENERGY SERVICES, LLC, a Nevada limited liability 
company,Appellant(Defendant),v.POWDER RIVER OIL 
& GAS VENTURES, LLC,  a Colorado 
limited liability company,Appellee(Plaintiff).

 
 

Appeal 
from the District Court of Campbell  County

The 
Honorable Dan R. Price, II, Judge

 
 
Representing 
Appellant:

Thomas 
F. Reese of Beatty, Wozniak & Reese, Casper, Wyoming.

 
 
Representing 
Appellee:

Blake 
M. Pickett of Welborn Sullivan Meck & Tooley, P.C., Denver, Colorado.  

 
 
Before 
VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, 
JJ.

 
 
KITE, 
Justice.

 
 
[¶1]  This matter is before this Court for a 
second time.  In Comet Energy Servs., LLC v. Powder River Oil 
& Gas Ventures, LLC, 2008 WY 
69, 185 P.3d 1259 (Wyo. 
2008) (Comet I), we reversed the 
district court's order granting summary judgment for Powder River Oil & Gas 
Ventures, LLC (Powder River) and remanded the matter for trial, concluding that 
the term "leasehold estate" as used in the oil and gas assignment at issue was 
ambiguous, and a question of fact existed as to the extent of Powder River's 
ownership interest in the well and/or lease it had purchased from Forcenergy 
Onshore, Inc. (Forcenergy).  On 
remand, the district court concluded after a bench trial that Powder River owned 
the lease at issue in full and Comet Energy Services, LLC (Comet) had no 
interest in the lease.  Comet 
appealed.  We 
affirm.

 
 
ISSUES

 
 
[¶2]  Comet presents two issues for this 
Court's determination:

 
 
            
A.        Does 
the District Court's admission of and reliance on testimony of the parties' own 
extrinsic expression of intent as to the meaning of a contract constitute 
reversible error?

 
 
            
B.        Is 
the District Court's holding that the Assignment, Bill of Sale and Conveyance 
from Forcenergy to Appellee satisfies the Statute of Frauds reversible 
error?

 
 
Powder 
River asserts the district court correctly found the intent of the assignment 
was to convey all of the assignor's interest in the well and associated lease to 
Powder River and that the assignment does not fall within the statute of 
frauds.

 
 
FACTS

 
 
[¶3]  In August of 1998, Powder River 
purchased Forcenergy's interest in an oil and gas well located on a federal oil 
and gas lease in Wyoming.  The 
granting clause of the assignment from Forcenergy to Powder River (1998 
Assignment) stated as follows:

 
 
Assignor 
hereby transfers, grants, conveys and assigns to Assignee all of Assignor's 
right, title and interest in and to the following (all of which are herein 
called the "Interests"):

 
 
            
1.  The oil and gas well(s) 
described on Exhibit "A" attached hereto ("Wells"), together with all equipment 
and machinery associated therewith;

 
 
            
2.  The leasehold estate 
created by the lease(s) upon which the Wells are located and/or pooled/unitized 
therewith ("Leases") and all licenses, permits and other agreements directly 
associated with the Wells and/or Leases;

 
 
            
3.  All the property and 
rights incident to the Wells, and the Leases, including, to the extent 
transferable, all agreements, surface leases, gas gathering contracts, salt 
water disposal leases and wells, equipment leases, permits, gathering lines, 
rights-of-way, easements, licenses and all other agreements directly relating 
thereto;  and

 
 
            
4.  All of the personal 
property, fixtures and improvements appurtenant to the Wells or used or obtained 
in connection with the operation of the Wells.  

 
 

Comet 
I, 
¶ 7, 185 P.3d  at 1262.  Exhibit A to 
the 1998 Assignment stated:

 
 
This 
Exhibit "A" contains the description of the wells/units with such description 
intended to incorporate all of Seller's/Assignor's interest in such wells/units 
and is not intended to be limited to Assignor's/Seller's interest in the 
geographic boundaries of the specific spaced/drillsite unit description 
therein.

 
 


State/County

Location

Well/Unit 
      Name

Field

Wyoming/Campbell

4-53N-75W

Federal 
      44-4

Black 
      Hill

 
 

Id.

 

[¶4]  Over six years later, in January 2005, 
Comet contacted Powder River to inquire about purchasing its interest under the 
1998 Assignment.  At some point 
during the discussions between Comet and Powder River concerning the sale, a 
question arose in Comet's view as to the nature and extent of the interest 
Forcenergy had conveyed to Powder River.  
Despite Powder River's position that it owned the lease and the well in 
full, Comet conducted additional investigation in an attempt to ascertain what 
interest Powder River held as a result of the 1998 Assignment. 

 
 
[¶5]  In June of 2005, Comet contacted 
Forcenergy to determine what interest it had conveyed to Powder River in the 
1998 Assignment.  Forcenergy advised 
Comet that it had no records of the lease or any ownership of it.  Comet did further checking with the 
Bureau of Land Management (BLM) and the county and then suggested to Forcenergy 
that it had conveyed only a wellbore interest and retained the balance of the 
760-acre lease.  Comet asked 
Forcenergy to quitclaim the remaining interest to Comet.  On August 2, 2005, on the basis of 
Comet's suggestion, Forcenergy conveyed to Comet any remaining interest it had 
in the lease without warranting title.  
In August of 2005, Comet recorded this assignment with the BLM and 
subsequently informed Powder River of the assignment.

 
 
[¶6]  On November 3, 2005, Powder River filed 
a declaratory judgment action seeking a determination that "as between Powder 
River and Comet, Powder River owns all right, title, and interest to the Subject 
Interest conveyed by [Forcenergy] and that Comet does not own any right, title 
or interest in the same."   On 
December 29, 2005, Comet filed its answer and a counterclaim seeking a 
counter-declaration that Powder River obtained only a wellbore interest under 
the 1998 Assignment, and that Comet acquired the balance of Forcenergy's 
interest in the lease in 2005.  
Powder River filed a motion for summary judgment on September 14, 
2006.  Comet responded to Powder 
River's motion and filed a cross-motion for summary judgment on November 1, 
2006.  The district court held a 
summary judgment hearing on November 6, 2006, and entered an order granting 
summary judgment in favor of Powder River on February 6, 2007.   

 
 
[¶7]  Comet appealed to this Court, claiming 
the district court incorrectly interpreted the 1998 Assignment as conveying all 
interest in the lease to Powder River.  
We concluded:

 
 
[T]he 
district court improperly determined that summary judgment was appropriate under 
the facts of this case.  The term 
"leasehold estate," as used in the 1998 Assignment, is ambiguous.  This ambiguity gives rise to a genuine 
issue of material fact concerning the intent of the parties to the 
assignment.   

 
 
We 
reversed the summary judgment order and sent the matter back to the district 
court for trial.  

 
 
[¶8]  Back in the district court, Powder River 
submitted evidence to show that Forcenergy intended the 1998 Assignment to 
convey all of its right, title and interest in the Federal 44-4 well and the 
federal lease on which it was located.  
Comet countered with evidence intended to show that Forcenergy only 
conveyed a wellbore/drilling unit and not the balance of the lease.  After considering all of the evidence, 
the district court found that Forcenergy intended to convey all of its interest 
in the well and the lease to Powder River and Comet had no remaining ownership 
interest in the lease.  The district 
court entered judgment for Powder River.  
Comet appealed.

 
 
STANDARD 
OF REVIEW

 
 
[¶9]  Our review of a district court's ruling 
after a bench trial is governed by the following 
standards:

 
 
            
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.  

 
 

Cook 
v. Eddy, 
2008 WY 111, ¶ 6, 193 P.3d 705, 708 (Wyo. 2008) 
(internal citations omitted).

 
 
[W]e 
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.  

 
 

Id.  The district court's conclusions of law, 
however, are subject to our de novo 
standard of review.  

 
 

Lieberman 
v. Mossbrook, 
2009 WY 65, ¶ 40, 208 P.3d 1296, 1308 (Wyo. 
2009).

 
 
[¶10]  We review the trial court's decisions 
concerning the admissibility of evidence for abuse of discretion.  Smyth v. Kaufman, 2003 WY 52, ¶ 13, 67 P.3d 1161, 
1165 (Wyo. 2003).  The ultimate 
question in determining whether an abuse of discretion has occurred is whether 
the trial court reasonably could have concluded as it did.  Id.    

 
 
[¶11]  Comet also challenges the district 
court's determination that the 1998 Assignment satisfied the statute of frauds 
and, in any event, the defense was not available to Comet. The determination of 
whether a given agreement is within the statute of frauds is a question of law 
which we review de novo.  Act I, LLC v. Davis, 2002 WY 183, ¶ 9, 60 P.3d 145, 148-149 (Wyo. 
2002).

 
 
DISCUSSION

 
 

1.    
Admissibility 
of the Evidence 

 
 
[¶12]  Comet contends the district court 
improperly considered inadmissible evidence in concluding that the 1998 
Assignment gave Powder River all right and title to the lease.  Specifically, Comet asserts the district 
court allowed testimony over its objection concerning the subjective intent of 
Forcenergy and Powder River when they entered into the assignment.  Powder River responds that the district 
court properly considered evidence of the circumstances surrounding the 
assignment, its purpose and the commercial setting at the 
time.

 
 
[¶13]  Assignments are contracts and are 
interpreted in accordance with the rules of contract interpretation.  Boley v. Greenough, 2001 WY 47, ¶ 11, 22 P.3d 854, 858 
(Wyo. 2001).  Our primary purpose is 
to determine the true intent and understanding of the parties at the time and 
place the agreement was made.  Stone v. Devon Energy Prod. Co., L.P., 
2008 WY 49 ¶ 18, 181 P.3d 936, 942 (Wyo. 2008). 
 We consider the language in the 
context in which it was written, looking to the surrounding circumstances, the 
subject matter, and the purpose of the agreement to ascertain the intent of the 
parties at the time the agreement was made.  Id.  Relevant circumstances considered in 
determining the parties' intent may include the relationship of the parties, the 
subject matter of the contract, and the parties' purpose in making the 
contract.  Ecosystem Res., L.C. v. Broadbent Land & 
Res., L.L.C, 2007 WY 87, ¶ 
10, 158 P.3d 685, 688 (Wyo. 
2007).  

 
 
[¶14]   If a contract term is ambiguous, we 
strive to ascertain its meaning from language in the contract as a whole.  Wunsch v. Pickering, 2008 WY 131, ¶ 17, 195 P.3d 1032, 1040 (Wyo. 
2008).  We look to the meaning of 
the term at the time of execution and ascertain the parties' intention by 
considering all of the contract provisions, as well as the situation of the 
parties.  Mullinnix LLC v. HKB Royalty Trust, 2006 
WY 14, ¶ 23, 126 P.3d 909, 919 
(Wyo. 2006).  The plain meaning of a 
contract's language is the meaning the language would convey to reasonable 
persons at the time and place of its use.  
Id.  A party's subjective intent, however, is 
not relevant or admissible in contract interpretation; rather, we use an 
objective approach to contract interpretation.  Omohundro v. Sullivan, 2009 WY 38, ¶ 24, 202 P.3d 1077, 1084 (Wyo. 
2009).  

 
 
[¶15]  In Omohundro, we were asked to interpret 
restrictive covenants.  One of the 
parties offered the affidavit of a member of the company that executed the 
covenants, in which he averred:

 
 
[I]t 
was always the express intent of the . . . owners at all times to burden only 
Tract Nos. 1-5 with the Covenants.  
To the extent that the Covenants otherwise identify or reference the 
Tract No. 6[] lands, it was always the express intent of the . . . owners . . . 
to provide additional protections for the Tract No. 6 parcel but not to burden 
the Tract No. 6 with the Covenants in any way . . . ."

 
 
We 
said:

 
 
            
If this averment was intended to be evidence of the declarant's 
subjective intent with regard to the effect of the covenants on Tract 6, it was 
not relevant and, therefore, was not admissible.  A party's subjective intent is not 
relevant in contract interpretation cases because we use an objective approach 
to interpret contracts.    

 
 

Id., 
¶¶ 23-24, 202 P.3d  at 1084.

 
 
[¶16]  Comet relies on Omohundro in asserting that the district 
court improperly considered evidence of Forcenergy's subjective intent in making 
the 1998 Assignment.  The testimony 
at issue was that of Melvin Baiamonte, Jr., the land manager for Forcenergy at 
the time of the assignment.  Stating 
that his testimony was "[m]ost indicative of what the surrounding circumstances 
were like at the time of conveyance," the district court quoted the following 
portions of Mr. Baiamonte's deposition testimony in its decision letter1:

 
 
            
[Q.   Now, if you go to 
Exhibit A, Exhibit A identifies a well.  
And in this case it's the Federal 44-4 well, which is listed as 
identified in Campbell County, Wyoming in Section 4  53 North  75 
West.

 
 
Can 
you tell the court why it is that Forcenergy used this particular means of 
identifying the properties rather than listing out the entire leasehold 
acreage?]

. 
. . .

A.           
Under 
normal circumstances, an assignment would have not only listed wells but it 
would have listed all leases and possible related contracts.  That's under ideal 
circumstances.

            
Forcenergy acquired so many properties via the two corporate mergers in 
1997 that came to Forcenergy without the luxury of assignment, of a recorded 
assignment in individual courthouses.  
All we had was merger documents.  
So we had to rely on well lists that the purchased company would provide 
us.  Some of their lease records 
were good in certain areas, some of them were very weak.

 
 
            
We took a shotgun approach at these auctions because we did not have a 
valid go-by, if you wish, a cheat sheet, if you wish, to tell us what leases 
applied to this particular well.  So 
it was our intention when we prepared the blank draft, . . . regardless of the 
purchaser, we took a shotgun approach in that it was our intention to give up 
whatever we had that applied to this particular well or any particular wells 
that we sold.

 
 
            
We did not know it, what leases were affected by this well. We did not 
know any contracts.  We didn't want 
to warrant anything.  So we took, as 
I said, a shotgun approach.  We did 
not want to spend any money to do title work that, at an EBCO sale, would not 
generate any more value for us.

. 
. . .

            
[Q.       
Now, can you tell me whether or not this [Exhibit A] is a wellbore 
assignment of 30 wells?] 

 
 
            
A.        As I 
mentioned earlier, this is the same shotgun approach we took on all of these 
assignments.  And that it was our 
intention to convey all of our interests, whatever interest we had in these 
wells and leases and any interests we had in units associated with these 
wells.

. 
. . . 

[Q.       Now, with 
regard to these 26 assignments that were executed in 1998 as a result of the 
EBCO auction, which has been identified as Exhibit 302, do you recall Forcenergy 
ever participating or being asked to participate in a well that would have been 
on any of these leases that were assigned here?

 
 
            
A.        I 
don't recall anything of that nature.]  
These properties, the low end properties, were treated as orphans within 
the company.  And I don't recall 
ever  If we would ever have gotten a proposal, we would have had to run around, 
scratch our heads and figure out what was our ownership.  And that was generally pretty 
bothersome.

. 
. . .

            
Q.        And after 1998, 
as land manager for Forcenergy . . . to your knowledge, did Forcenergy believe 
or take the position that it owned the balance of this lease outside of the 
spacing unit for the Federal 44-4 well?

 
 
            
A.        We had no further 
utility, we had no further right, we had no further interest in this 
lease.

. 
. . .

            
[Q.       
And it says here, sir, "This Exhibit A' contains the description of 
wells/units with such description intended to incorporate all of 
Seller's/Assignor's interest in such well/units and is not intended to be 
limited to Assignor's/Seller's interest in the geographic boundaries of a 
specific spaced/drillsite unit description therein."

 
 
            
First of all, did you prepare that language?

. 
. . .

            
A.        I 
don't remember if I prepared it or one of our other staff members  prepared 
it.    Either way I was 
involved with it, reviewing the draft of it.  Either I prepared it or I reviewed the 
draft.

 
 
Q.        And 
what does that language mean to you?]

. 
. . .

A.           
It 
was our intention to sell whatever we had associated with the Federal 44-4, 
whatever we had, any leasehold, any interests we had associated with that 
particular well.

. 
. . .

            
[Q.       
And, to your knowledge, sir, from 1998 to, let's say, 2000 when you're 
still dealing with onshore assets, with regard to, first, Exhibit 300, did 
Forcenergy ever take the position that it still owned any interest in the 
Federal 44-4 well or the lease upon which it sat?]

. 
. . .

            
A.        
Forcenergy took no ownership interest regarding this well after the 
sale.

 
 
[¶17]  From this testimony, there is no 
question but that Mr. Baiamonte testified Forcenergy intended to sell everything 
it owned in relation to Federal 44-4 when it drafted the assignment.  Viewed in its entirety, in the context 
in which it was given, however, we are not persuaded that Mr. Baiamonte's 
testimony constituted irrelevant, inadmissible evidence of Forcenergy's 
subjective intent.   Rather, in 
its entirety and in the context in which it was given, the testimony was 
properly admissible evidence of the surrounding circumstances, subject matter 
and purpose of the assignment.   

 
 
[¶18]  Mr. Baiamonte testified that he had 
worked as a lease analyst, land man or land manager for over thirty years.  He worked for Forcenergy as land manager 
from 1991 until 2000 when it was acquired by another company.  In 1998, Forcenergy was interested in 
divesting itself of many of the oil and gas properties it owned in the Rocky 
Mountain region, "properties that were not in our core areas, properties that 
were on the low end value wise, properties that did not generate a lot of 
cash."  In August of 1998, 
Forcenergy offered for sale at auction numerous of those properties located in 
seven Rocky Mountain States, including Wyoming.  As Forcenergy's land manager at the 
time, Mr. Baiamonte was responsible for overseeing and directing the sale of 
these properties.  He executed the 
1998 Assignment and attested that Powder River had no role or involvement in 
drafting the terms of the assignment.  
Rather, it was one of approximately twenty-six identical form assignments 
drafted by Forcenergy.  The only 
differences in the forms were the assignee names and the well numbers and 
descriptions. 

 
 
[¶19]  Mr. Baiamonte testified that the 1998 
Assignment for which Powder River was the high bidder, like the other 
twenty-five assignments, conveyed the well, the leasehold estate created by the 
lease upon which the well was located, and all of Forcenergy's interest in the 
well and lease.  He stated it was 
not a wellbore assignment.  He 
testified that he has drafted and executed many wellbore assignments and there 
is nothing in the language used in the 1998 Assignment identifying it as a 
wellbore assignment.  He testified 
that under normal circumstances assignments like those Forcenergy prepared for 
the 1998 auction would have listed the well and the lease.  However, in 1997, Forcenergy acquired 
numerous properties as a result of corporate mergers that came without recorded 
assignments.  Forcenergy only had 
the merger documents and so it relied on the well lists the purchased company 
provided.  Because the properties 
were low end, Forcenergy did not want to spend money doing title work on 
properties that were going to auction and would not generate any more value to 
it.    

 
 
[¶20]  Mr. Baiamonte was actively involved in 
preparing the assignments and made the decision to identify the properties for 
auction by well number.  As was 
customary, Forcenergy provided the lease files for each of the properties to the 
auction house for review by potential purchasers.  The lease files were not returned to 
Forcenergy unless the particular property did not sell at auction.  Mr. Baiamonte testified that after the 
twenty-six assignments it offered at the 1998 auction were executed, he was not 
involved in managing the assigned properties and Forcenergy never drilled a well 
on any of the properties.  
Addressing specifically the assignment of Federal 44-4, Mr. Baiamonte 
testified that after the 1998 Assignment, Forcenergy had no further right, no 
further interest in the lease.  
Garth Berkeland, who went to work as a senior landman for Forcenergy's 
successor company in 2002, testified that the company had no records of the 
lease.      

 
 
[¶21] 
In addition to the foregoing testimony, Powder River presented the 1998 auction 
brochure.  The brochure includes an 
"Explanation of Terms" which sets out the abbreviations used in the property 
descriptions and their meaning.  The 
first abbreviation in the "Explanation of Terms" is "WBO/PDZ" which is stated to 
mean "WELL BORE / PROD ZONE ONLY."  
Some of the property descriptions include the abbreviation WBO; the 
property description for Federal 44-4 does not.  Mr. Baiamonte testified Federal 44-4 did 
not include the abbreviation because Forcenergy never conveyed any wellbore 
assignments at auction.       

 
 
[¶22]  Powder River also presented the 
testimony of Stephen Barnes, the owner of an oil and gas exploration and 
production company with twenty-six years of experience in the oil and gas 
industry, including the acquisition of oil and gas leases.  Mr. Barnes, like Powder River, attended 
the 1998 auction and purchased property from Forcenergy.  As with Powder River's purchase, the 
property Mr. Barnes purchased was described in the auction brochure by the well 
name and number and did not include any of the abbreviations set out in the 
"Explanation of Terms."  The form of 
assignment by which Forcenergy conveyed its interest to Mr. Barnes was identical 
to the one involved in the present case.  
Mr. Barnes testified that he understood from the listing and the 
assignment that he was getting all of Forcenergy's interests, right and title in 
the area, including the wellbore and the lease on which it was located.  When asked to look at the Federal 44-4 
brochure description, he testified there was nothing in the description 
indicating that the interest conveyed was limited to the wellbore or the 
production zone. 

     

[¶23]  Considered in context, this evidence is 
precisely the sort of evidence courts may properly consider in determining the 
parties' intent and understanding at the time and place an agreement was 
made.  Mr. Baiamonte's testimony 
explaining Forcenergy's reason for offering the twenty-six assignments at the 
1998 auction, the process by which the assignments were drafted and why the 
property descriptions were limited to well descriptions, rather than well and 
lease descriptions, was the sort of evidence this Court contemplated when we 
remanded the case for resolution of the meaning of the term "leasehold 
estate".  

 
 
[¶24]  The record is clear that along with his 
other testimony, Mr. Baiamonte testified that "it was our intention to give up 
whatever we had that applied to this particular well," "it was our intention to 
convey all of our interests," and "it was our intention to sell whatever we had 
associated with the Federal 44-4."  Viewed in isolation, these statements 
might be construed, as similar statements were in Omohundro, as evidence of Forcenergy's 
subjective intent.  However, when 
considered in the context of Mr. Baiamonte's entire testimony, the auction 
brochure and Mr. Barnes' testimony, they are not the sort of evidence we found 
improper in Omohundro.  The district court did not abuse its 
discretion in considering them.   

 
 

2.    
Statute 
of Frauds

 
 
[¶25]  In its second issue, Comet contends the 
district court's holding that the assignment satisfied the statute of frauds 
constitutes reversible error.  Comet 
asserts the assignment did not satisfy the statute of frauds because it did not 
describe the land with sufficient definiteness "to locate it without recourse to 
oral testimony" and there was no other instrument referenced in the assignment 
containing a sufficient description.  
Comet argues that, to satisfy the statute of frauds, Wyoming law requires 
either the assignment itself or another writing referenced in the assignment to 
provide a more definite description than that contained in the 1998 Assignment 
or Exhibit A.  

 
 
[¶26]  Powder River's response is 
threefold.  First, it asserts the 
assignment did not violate the statute of frauds because it identified the well 
and its location and with that information interested parties could reference 
the federal lease, which contains an exact description of the property.  Citing Flygare v. Brundage, 302 P.2d 759, 761-63 (Wyo. 1956), 
Powder River contends the fact that the property description could be determined 
by looking to an extrinsic source, i.e. the federal lease, satisfies the statute 
of frauds.  Second, Powder River 
contends the statute of frauds defense is not available to Comet because Comet 
wrongly interfered in Powder River's agreement with Forcenergy.  Third, it asserts the defense is 
unavailable to Comet because it was not a party to the 1998 
Assignment.

 
 
[¶27]  The district court held that the 1998 
Assignment satisfied the statute of frauds because it was a written agreement to 
which Forcenergy and Powder River subscribed as required by Wyo. Stat. Ann. § 
1-23-105 (LexisNexis 2009).  The 
district court concluded the statute of frauds does not require the written 
agreement to be so detailed as to leave out any ambiguity.  The district court further concluded the 
statute of frauds defense was not available to Comet because it was not a party 
to the assignment.  Additionally, 
the district court found that the defense was not available to Comet 
because:

 
 
The 
evidence indicates that Comet, knowing Powder River believed they had full 
ownership interest in the lease, and even indicating themselves that they 
believed Powder River had full ownership interest in the lease, went to 
Forcenergy and had Forcenergy execute a quitclaim deed.  Comet then asserted to Powder River that 
the rights in the lease belonged to Comet.  

 
 
From 
this evidence, the district court concluded Comet interfered with the agreement 
between Powder River and Forcenergy and was not allowed to assert the statute of 
frauds as a defense.  See Laverents v. Gattis, 60 Wyo. 285, 150 P.2d 867, 871 (Wyo. 1944), stating that "one who wrongfully seizes and retains 
goods claimed by another under a contract, unenforceable against the previous 
owner on account of the statute, cannot, according to the better view set up the 
defense that the contract was within the statute."    

 
 
[¶28]  Section 1-23-105 provides in pertinent 
part as follows:

 
 
            
(a)   In the following cases every agreement 
shall be void unless such agreement, or some note or memorandum thereof be in 
writing, and subscribed by the party to be charged 
therewith:

 
 
. 
. . .

      (v)  Every agreement or contract for the sale 
of real estate, or the lease thereof, for more than one (1) 
year[.]

 
 
[¶29]  In order to satisfy this 
provision,

 
 
A 
valid contract to convey land must expressly contain a description of the land, 
certain in itself or capable of being rendered certain by reference to an 
extrinsic source which the writing itself designates. . . .  The writing's essential provisions may 
not be supplied by inferences or presumptions deduced from oral testimony.  Parol evidence is admissible to identify 
described property, but parol evidence may not supply a portion of the 
description.

 
 

Pullar 
v. Huelle, 
2003 WY 90, ¶ 10, 73 P.3d 1038, 1040 (Wyo. 
2003).  It has long been the rule 
that in order to satisfy the statute, the writing "must contain the substantial 
terms of the contract, expressed with such certainty that they may be understood 
from the contract itself, or some other writing to which it refers, without 
resorting to parol evidence. . . .  
And when reference is made in the memorandum to another writing, it must 
be so clear as to prevent the possibility of one paper being substituted for 
another."  

Noland 
v. Haywood, 
46 Wyo. 101, 23 P.2d 845, 846 
(1933).

 
 
[¶30]  The 1998 Assignment and Exhibit A 
clearly identified the well, Federal 44-4, and its specific location, Section 
4-T53N-R75W.  Comet knew Federal 
44-4 was located on BLM Lease #WYW 0309256A.  Even if it had not, the identity of the 
lease, which contains an exact description of the land, was readily determinable 
by knowing the identity of the well.  
Thus, by referencing the well, the assignment referenced an extrinsic 
source from which the precise property description could be easily 
obtained.

 
 
[¶31]  Additionally, as between the parties to 
the 1998 Assignment, Forcenergy and Powder River, there was no misunderstanding 
or uncertainty about the property being assigned.  Forcenergy intended to convey, and 
Powder River intended to receive, all of Forcenergy's right, title and interest 
in the well and the lease upon which the well was located.  The alleged uncertainty arose over six 
years later when Comet, then a stranger to the 1998 Assignment, proposed to 
Forcenergy that it had conveyed only a wellbore interest and asked Forcenergy to 
quitclaim the balance of the lease to Comet.  

 
 
[¶32]  The district court found that prior to 
approaching Forcenergy, Comet knew Powder River believed it owned the well and 
the lease in full, and that Comet itself had indicated Powder River had full 
ownership of the lease and well.  
When Comet approached Forcenergy about the Federal 44-4 lease, Forcenergy 
checked its records and found nothing relating to the lease.  Forcenergy advised Comet that it had no 
records of the lease or any ownership of it.  Forcenergy told Comet if, after doing 
its own records check, Comet was convinced Forcenergy owned an interest in the 
lease, Forcenergy would convey it to Comet but would not warrant title.           

 
 
[¶33]  In Laverents, 150 P.2d  at 871, this Court 
said:

 
 
The 
statute [of frauds] cannot be raised by those who were neither parties nor 
privies to the agreement.  When the 
vendor admits the truth of the  agreement to sell his land, and is willing to 
perform it, and where the purchaser is also willing, the purpose which requires 
such agreement be in writing is served . . . .

 
 

See 
also 
Joseph M. Perillo, Calamari and Perillo 
on Contracts § 1935 (6th ed. 2009) ("the general rule is that the 
statute of frauds is personal to the party to the contract and those in privity; 
a third party may not assert its invalidity") and 10 Richard A. Lord, Williston on Contracts § 27:12 
(4th ed. 1999) ("It is the intent and purpose of the statute of 
frauds to give to the party to a  contract, against whom the enforcement of the 
contract is sought by the other party, the right to assert the statute as a 
defense to his or her own liability.  
A third party should not be able to assert the invalidity of such 
transaction unless he or she is an assignee or successor to a party to the 
contract.")

 
 
[¶34]  As applied to the facts of this case, in 
the event Powder River sought to enforce the assignment against Forcenergy, or 
vice versa, the statute of frauds was intended to give "the party to be charged" 
the right to assert the statute as a defense to liability.  Neither Powder River nor Forcenergy 
sought to enforce the assignment against the other.  Rather, in an action against Comet, 
Powder River sought a declaratory judgment that by virtue of the 1998 Assignment 
it acquired full ownership in the well and lease, leaving nothing for Forcenergy 
to convey to Comet.  Because 
Forcenergy agreed that it intended to assign all of its interest in the well and 
lease to Powder River, it has no need to assert the protection the statute 
affords.  

 
 
[¶35]  Comet asserts the statute is available 
to it as a defense because as a subsequent purchaser from Forcenergy, it is a 
privy of Forcenergy entitled to assert the statute to the same extent Forcenergy 
would have been.  A "privy" is "a 
person who is in privity with another."  
Black's Law Dictionary 1200 
(6th ed. 1992).  Privity means a "connection or 
relationship between two parties, each having a legally recognized interest in 
the same subject matter (such as a transaction, proceeding, or piece of 
property) . . . . "  Osborn v. Kilts, 2006 WY 142, ¶ 10 n.4, 145 P.3d 1264, 1267 n.4 (Wyo. 
2006), quoting Black's Law Dictionary 
1237 (8th ed. 2004).  

 
 
[¶36]  As a privy of Forcenergy, Comet had the 
same legally recognized interest in the Federal 44-4 well and the lease upon 
which it was located as Forcenergy had.  
Comet also had the same legally recognized interest in asserting the 
statute of frauds defense as Forcenergy would have had in a proceeding between 
Forcenergy and Powder River to enforce the assignment.  Having taken the position that it 
assigned all of its ownership interest in the well and the lease to Powder River 
in 1998, Forcenergy had no interest in the Federal 44-4 well or lease.  The vendor, Forcenergy, having admitted 
the truth of the assignment to convey all of its ownership in the well and lease 
to Powder River, and having fully performed, and the purchaser, Powder River, 
having likewise fully performed, the purpose of the statute of frauds was 
served.  Laverents, 150 P.2d  at 871.  Under these circumstances, the statute 
of frauds defense was not available to Comet. 

 
 
[¶37]  Citing a number of cases from other 
jurisdictions, Comet argues otherwise.  
The cases cited involved vendors who entered into oral agreements to sell 
property to one person and then repudiated the earlier oral agreement and sold 
the property to someone else, thereby treating the oral agreement as 
unenforceable.  Brought v. Howard, 249 P. 76, 80 (Ariz. 
1926); Gibson v. Stalnaker, 106 S.E. 243 (W.Va. 1921).  Under those 
circumstances, courts have held that the statute of frauds is available to the 
subsequent purchaser just as it would have been to the vendor.  None of the cases cited involved the 
situation we have here in which a vendor of property entered into a written 
assignment to sell all of its interest in property to another and never 
repudiated that assignment.  The 
cases Comet cites also do not involve a vendor who consistently maintained the 
position that it conveyed all that it had in the first transaction, leaving 
nothing to convey in a second transaction.  

 
 
[¶38]  Affirmed.

 
 
FOOTNOTES

 
 

1For the sake of completeness and clarity, we have added, in brackets, the 
questions and in some cases more of the answers to the portions of the 
deposition testimony quoted by the district court in its decision 
letter.