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Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 

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PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

WILLIAM H. DAVIS, ) 

) 

Plaintiff-Appellant, ) 

) 

v. ) No. 

) 

TXO PRODUCTION CORP., ) 

) 

Defendant-Appellee. ) 

APR ll19Q1 

ROBERT L HOECKER 

Oerk 

90-6019 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF OKLAHOMA 

(D.C. No. CIV-88-1678-R) 

Submitted on the briefs: 

H. B. Watson, Jr., Stephen R. Pitcock, and Sharon Taylor Thomas of 

Watson & McKenzie, Oklahoma City, Oklahoma, for PlaintiffAppellant. 

Robert D. Nelon and Babette Patton of Andrews, Davis, Legg, Bixler, Milsten & Price, Oklahoma City, Oklahoma, for DefendantAppellee. 

Before McKAY, SEYMOUR, and EBEL, Circuit Judges. 

McKAY, Circuit Judge. 

After examining the briefs and appellate record, this panel 

has deter.mined unanimously that oral argument would not materially 

assist the deter.mination of this appeal. See Fed. R. App. P. 

Appellate Case: 90-6019 Document: 01019298966 Date Filed: 04/11/1991 Page: 1 
34(a); lOth Cir. R. 34.1.9. The case is therefore ordered submitted without oral argument. 

Appellant William H. Davis appeals the Rule 12(b)(6) dismissal by the District Court for the Western District of Oklahoma 

of one count of his three-count amended complaint against appellee 

TXO Production Corporation. The district court concluded that 

appellant's allegation that appellee breached an implied covenant 

of good faith and fair dealing to appellant did not state a claim 

for which relief could be granted. See Fed. R. Civ. P. 12(b)(6). 

I. 

Before we address the merits of appellant's claim, we note 

that appellee challenges the right of appellant to appeal the district court's dismissal of this cause of action. In addition to 

the breach of an implied covenant of good faith claim at issue 

here, appellant's first amended complaint contained theories based 

upon tortious interference with a business relation and champerty 

and maintenance. The district court dismissed the breach of an 

implied covenant of good faith claim for failure to state a claim 

for which relief could be granted. It similarly dismissed appellant's tortious interference claim but denied the motion to dismiss on the count alleging maintenance. Appellant then sought and 

was granted leave to file a second amended complaint, which contained only counts alleging tortious interference and maintenance. 

Appellant did not adopt or incorporate any portion of his first 

amended complaint into his second amended complaint. Nor did he 

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Appellate Case: 90-6019 Document: 01019298966 Date Filed: 04/11/1991 Page: 2 
make reference to a claim based upon a breach of an implied 

covenant of good faith. Two weeks later, appellant moved to dismiss voluntarily his second amended complaint pursuant to Fed. R. 

Civ. P. 41(a)(2), which the district court granted. 

Appellant now seeks to appeal the district court's dismissal 

of the breach of an implied covenant claim contained in his first 

amended complaint but not included in his second amended complaint. Because appellant's second amended complaint did not 

allege a breach of an implied covenant of good faith and fair 

dealing, appellee argues that appellant waived his right to raise 

this argument on appeal. 

As appellee notes, "[i]t is well established that an amended 

complaint ordinarily supersedes the original and renders it of no 

legal effect." International Controls Corp. v. Vesco, 556 F.2d 

665 (2d Cir. 1977), cert. denied, 434 u.s. 1014 (1978); see also 

Fed. R. Civ. P. 15(a); Washer v. Bullit County, 110 U.S. 558, 562 

(1884); Varnes v. Local 91, Glass Bottle Blowers Ass'n, 674 F.2d 

1365, 1370 n.6 (11th Cir. 1981); Dussouy v. Gulf Coast Inv. Corp., 

660 F.2d 594, 601 (5th Cir. 1981); 3 J. Moore, Moore's Federal 

Practice, 15.08[7] (2d ed. 1990). Such a rule establishes to 

which complaint opposing parties should direct any subsequent 

motion. 6 C. Wright, A. Miller & M. Kane, Federal Practice and 

Procedure, 1476, at 556-57 (2d ed. 1990). 

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We are presented here with a unique situation, however, 

because the cause of action not incorporated in the second amended 

complaint had already been subjected to a 12(b)(6) ruling. The 

opposing party could not therefore direct a further motion at that 

cause of action. Appellee nevertheless cites this court's decisions in Leggett v. Montgomery Ward & Co., 178 F.2d 436 (lOth Cir. 

1949), and Aetna Life Ins. Co. v. Phillips, 69 F.2d 901 (lOth Cir. 

1934), and argues that an amended complaint filed after the dismissal of the original complaint waives any error in the dismissal 

of the original. Because appellant did not replead the claim 

alleging a breach of a covenant of good faith and fair dealing, 

appellee contends, appellant waived any error in the district 

court's dismissal of that cause of action. As appellee notes, the 

court in Aetna appears to have addressed the very same issue when 

it stated: "Where a demurrer has been sustained to a party's 

pleading and he elects to plead over, he waives any error in the 

ruling on the demurrer." Id. at 903. 

This court revisited the issue, however, in Blazer v. Black, 

196 F.2d 139 (lOth Cir. 1952). There the court in dictum noted: 

It has long been the rule of Federal practice • . • that 

while the pleader who amends or pleads over, waives his 

objections to the ruling of the court on indefiniteness, 

incompleteness or insufficiency, or more technical 

defects in pleadings, he does not waive his exception to 

the ruling which strikes "a vital blow to a substantial 

part" of his cause of action. 

Id. at 143-44. 

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Although the court's recitation in Blazer was only dictum, we 

believe it to be the better rule. Scholars have commented: 

A rule that a party waives all objections to the 

court's dismissal if he elects to amend is too mechanical and seems to be a rigid application of the concept 

that a Rule 15(a) amendment completely replaces the 

pleading it amends. Without more, the action of the 

amending party should not result in completely denying 

the right to appeal the court's ruling. 

6 c. Wright, A. Miller & M. Kane, Federal Practice & Procedure § 

1476 at 560-61 (2d ed. 1990) (footnotes omitted). They further 

concluded that the opinion in Blazer presents a reasonable standard to determine when a party should be allowed to assert the 

trial court's original alleged error on appeal. 

Although we are aware that at least one circuit clings to the 

formalistic rule advanced by this circuit in Aetna and Legaett, 

see King v. Atiyeh, 814 F.2d 565, 567 (9th Cir. 1987); London v. 

Coopers & Lybrand, 644 F.2d 811, 814 (9th Cir. 1981), 1 another has 

adhered to the rule set forth in Blazer. See Wilson v. First 

Houston Inv. Corp., 566 F.2d 1235, 1238 (5th Cir. 1978), vacated 

on other grounds, 444 u.s. 959 (1979). We believe that a rule 

requiring plaintiffs who file amended complaints to replead claims 

1 In London, the court stated: 

It has long been the rule in this circuit that a 

plaintiff waives all causes of action alleged in the 

original complaint which are not alleged in the amended 

complaint. We are well aware that other circuits do not 

look with favor upon this rule, but we as a panel are 

not at liberty to re-examine its validity. 

Id. (citations omitted). 

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previously dismissed on their merits in order to preserve those 

claims merely sets a trap for unsuspecting plaintiffs2 with no 

concomitant benefit to the opposing party. So far as the decisions in Leagett and Aetna set forth a rule inconsistent with that 

stated here, they are overruled. 3 

When addressing appellee's 12(b)(6) motion to dismiss appel-

!ant's first amended complaint, the district court reached the 

merits of appellant's claim alleging an implied covenant of good 

faith and fair dealing. The district court's dismissal of the 

claim made clear that any attempt by appellant to reallege that 

claim would be futile. Because we do not require a party to 

reallege a cause of action ·on which the district court has conclusively ruled, we conclude that appellant has not waived his claim 

of a breach of an implied covenant of good faith and fair dealing. 

Appellee's motion to dismiss for lack of jurisdiction is denied. 

We therefore reach the merits of this appea1. 4 

2 A party unfamiliar with this rule may be reticent to raise a 

claim in an amended complaint that had been previously dismissed 

for failure to state a claim for which relief could be granted. 

The party may, perhaps realistically, fear imposition of a Rule 11 

sanction. See Fed. R. Civ. P. 11. 

3 Because we overrule prior precedent of this circuit, we have 

circulated this opinion to the en bane court pursuant to our 

rules. Each member has concurred. 

4 By order of the court, the parties also submitted memoranda 

addressing whether this action is ripe for appeal. We agree with 

the judgment of both parties that the journal entry of judgment by 

the district court on January 8, 1990, was a final appealable 

order pursuant to 28 u.s.c. § 1291 (1988). See Arrow v. Dow, 636 

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II. 

We review de novo a dismissal pursuant to Fed. R. Civ. P. 

12(b)(6). We accept as true all well-pleaded factual allegations 

and make all reasonable inferences in favor of the plaintiff. 

Cruz v. Beto, 405 u.s. 319, 322 (1972). "[A] complaint should not 

be dismissed for failure to state a claim unless it appears beyond 

doubt that the plaintiff can prove no set of facts in support of 

his claim which would entitle him to relief." Conley v. Gibson, 

355 u.s. 41, 45-46 (1957). 

The dispute is based on actions by appellee concerning two 

joint operating agreements covering two oil and gas units. 

Appellant is the operator o-f both units and appellee is a nonoperating interest owner. Appellant's complaint alleges that two 

officials of appellee met with Grant Feely, the lessor of 

appellee's lease interest in one of the two units, and made false 

and malicious statements concerning appellant's operation of both 

units. Similar statements were made concerning appellant's operation of a third unit. The ostensible purpose of this meeting was 

to convince Mr. Feely to withdraw his consent to a proposed unitization plan filed by appellant. According to the complaint, these 

statements led to two suits, one brought by Mr. Feely and another 

brought by the lessors of appellant's interest in the third unit, 

the Georges. Appellant alleges that appellee provided technical 

F.2d 287, 289 (lOth Cir. 1980); Allied Air Freight, Inc. v. Pan 

American World Airways, Inc., 393 F.2d 441, 444 (2d Cir.), cert. 

denied, 393 u.s. 846 (1968). 

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expertise and information to assist in both of the legal actions 

against hLm. 5 The statements also led to the withdrawal by 

Mr. Feely and the Georges of their consent to the proposed 

unitization plan. 

Appellant brought this suit seeking, as special damages, the 

attorney fees he incurred in his defense of the two suits brought 

against hLm. In addition, he seeks punitive damages. Appellant 

argues that appellee's false allegations concerning his operation 

of the units and subsequent assistance to the plaintiffs in both 

actions constituted a breach of an implied covenant of good faith 

and fair dealing. 

The district court analyzed appellant's claim alleging a 

breach of an implied covenant of good faith and fair dealing as 

arising from a recognized fiduciary duty between co-tenants of an 

oil and gas lease. See Teel v. Public Serv. Co., 767 P.2d 391, 

396 (Okla. 1985). It concluded that under Oklahoma law there can 

be no breach of an implied duty of good faith to perform under a 

joint operating agreement in the circumstances presented here, 

absent a breach of a specific contractual provision. See 

Frankfort Oil Co. v. Snakard, 279 F.2d 436 (lOth Cir.), cert. 

denied, 364 u.s. 920 (1960). The parties do not dispute that 

appellee's actions did not constitute a breach of an express provision contained in the joint operating agreement. After 

5 Appellant prevailed at trial in one action and the other was 

voluntarily dismissed. 

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reviewing the cases cited by appellant, we do not find the 

district court's interpretation of Oklahoma law to be in error. 

Appellant also argues here the existence of an implied duty 

of good faith independent of the fiduciary duty between cotenants. He bottoms his argument in the general principle of contract law that neither party of a contract may do anything to 

destroy or injure the other party's right to receive the fruits of 

the contract. See Western Natural Gas Co. v. Cities Service Gas 

Co., 507 P.2d 1236, 1241 (Okla.), cert. denied, 409 u.s. 1052 

(1972); 5 H. Williams & c. Meyers, Oil & Gas Law§§ 802, 802.1 

(1989). 

We are not presented here, however, with one party's destruction of another party's right to receive the benefit of the contract. Compare Western Natural Gas Co., 507 P.2d at 1236 (defendant denied plaintiff the fruits of the contract by its failure to 

disclose relevant facts to the Federal Power Commission upon the 

contract's completion). The joint operating agreement did not 

provide for a plan for unitization or require appellee's cooperation in such a scheme. Nor does it prohibit appellee from communicating its opinions to its lessors. In sum, appellant did not 

sufficiently allege that appellee's actions injured the joint 

estate or otherwise deprived appellant of any fruits of the contract. Absent any authority to the contrary, we decline to extend 

the duty of co-tenants of an oil and gas lease beyond the express 

provisions contained in the joint operating agreement. Compare 

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Spaeth v. Union Oil Co. of California, 710 F.2d 1455, 1458 (lOth 

Cir. 1983) (recognized Oklahoma authority that clearly established 

an implied covenant to protect against drainage). Even if we were 

to extend the duty of good faith and fair dealing beyond existing 

case law, however, we note that the attorney fees which appellant 

seeks were not expended as a consequence of the failure by appellant to procure approval for unitization. 

For the foregoing reasons, the judgment of the district court 

is AFFIRMED. 

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