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Rule 23 order file d NO. 5-06-0321 April 2, 2007; Motion to publish gran

ted I N THE May 14, 2007. AP PE LLA TE C O U R T O F IL LIN O IS FI FTH DI STRI CT

________________________________________________________________________ GREG NYE, ) Appeal f rom the ) Circui t Court of Plaintiff

-Appell ee, ) Crawford County. ) v. ) No. 05-CH-15 ) EVA LOVENE LEAVEL L an d STANLEY ) LEAV ELL, ) ) Defendants-Appellants, ) ) and ) ) BI-PETRO , INC., and Unknow n Ow ners, ) Ho nora ble ) Da vid M . Co rrell, Defendants. ) Jud ge, p resid ing.

________________________________________________________________________ JUST ICE SP OM ER delivered the op inion o f the co urt: De fend ants Eva Lov ene Leav ell and Stanley Leavell (the L eavel ls) a ppeal an or der of the ci rcuit

court of Craw ford Co unty granting a summ ary judgmen t to the plaintiff, Greg Nye, on his compl aint in chancery f or the canc ellation o f his oil and g as leas e with the Leavell s. For the r easons that fol low , we rever se and remand f or furt her procee dings not inconsistent w ith this order. The facts n ecess ary to o ur disp osition of this a ppea l are de rived from the ma terials present ed in sup port of the pla inti ff' s moti on for a summar y judgment , and they ar e as follows. On or about M arch 20, 1981, Ch arles St antz, as l essor, ex ecuted an oi l and g as lease in favor o f Da niel R . Leavell, as les see, on l ands in Crawfor d County owned by M r. Stantz. The plaint iff

in thi s case i nherit ed thos e lan ds and is now the lessor . By vari ous assignments, defendant

Eva Lov ene Leav ell i s now the operator of the lease, and defendant2

Stanl ey Leav ell ( Stanl ey), who is t he son of DanielR. and Eva Lo vene Le avell, now owns
a w orking intere st in the le ase. P rodu ction o f oil from the w ells encompassed by t he lease ceasedin 2001. The Leavel ls cl aim that production cea sed be cause the State of I llinoi s, thro ugh t he Department of NaturalResources, prohibit ed the Leavel ls from operating the
we lls as a part

of a larger pr ohibition rel atedto abandonment proc eeding s pert aining to other
we lls owned by the Leav ells , but not encompassed by t

he lease with the pla inti ff. The Leavells clai m the prohibi tion was pursued illeg ally, without proper noti ce to the Leavel ls. The Leavells h ave pu rsued litig ation a gai nst the Sta te in a n umb er of ca ses in a n effo rt to
reverse the a dm inistr ative order pr ohibiting t he Leav ells from operatingthe wells. See, e.g. , In re Ab and onm ent of W ells Lo cated in Illinois by Eva Lov ene L eave ll , 343 Il l. App. 3d 303 (20 03) . Th ese cas es re main pen din g. On Februa ry 28, 200 5, the plaintiff filed in chanc ery the co mplain t to can cel the oil and gas lease that is the subject of this ap peal. In his com plaint, in four separat e counts, the plaintiff contended that the le ase in ques tion was ( 1) forf eite d by the expre ss ter ms of the lease, (2) for feit ed by the i mplied terms of the l ease, ( 3) forfe ited pur suant t o secti on 2 of the Mineral Lease Release of Record Act ( the Act) ( 765 IL CS 510/2 (West 2004) ), and/ or (4) abandoned. On M ay 31, 2 005, the Le avells, by attorney C hristopher H eid, ans wered the pl ai nt if f's complaint, de nying in pertinent pa rt the alle gat ions made t herein. On February 14, 2006, foll owing dis covery and other pr ocedural wrangling by the parti es notpertine nt to this appe al, the pla inti ff fi led a mot ion for a summary j udgment against th e Leave lls, and in support thereof

he fil ed a memorandum of l aw, a trans cript of the di scover

y deposit ion of Stanl ey, and an affidavit executed by the plaintiff. In the motion for a summ ary jud gment, the plaintiff

contendedthat in his di scover y deposit ion St anley "admi tted t hat the re had been
no oil pr oduced, nor product ion acti vities, upon t he subject

lease, since t

he year 2001," that
no materi al fac t was in disput e, and that the pla inti ff was ent itl ed to a judgment in hi s fav or3

on all four counts o f the comp laint. In his memora ndum in suppo rt of the motion for a summary judgme nt, the p laintiff argue d that the "uncontr overt ed evi dence" fi led with t he motionshowed that t

he Leav ells did not u se "rea sonable di lig ence" to c ontinue t he product i on of oil , because ev en thoug h the Leav ells clai med they were prohibited by t he State of I lli nois from operati ng the wells encompas sed by the le ase, S tanle y "admitted[in his discovery deposit ion] t

hat he coul d have become t he operat or of the lease and bonded the wells[] or could have e mplo yed a contra ct ope rator to d o so, b ut in bo th instances dec lined." The plaintiff

also r equested " all attor ney' s fees and court c osts" pursuant to sect ion 2 of t

he Act. No evident iary mat erial s were att ached to the motion describingthe attor ney fees and costs alle ge dly incur

red as a r esult

of the pr oceeding s below. On February 23, 2006, the pl ai nt if f's motion f

or a summary j udgment was s et for a heari ng on March 14, 2006. The defen dants did n ot resp ond in w riting to the m otion fo r a sum mary judgme nt. On March 14, 2006, for re asons that are di sputed and t hat in any case are not ge rmane to our d ispositio n of th is appeal, attor ney Heid, who at the time s til l repr esented the Leavell s, fail ed to appear

at the hearing , as did t

he Leave lls . Apparent ly, the hear ing pr oceeded in t he absence of att orney Heid and the Leavells, although no trans cript of the hearingexist s, nor does a bystander 's report . On March 20, 2006, the ci rcuit court granted t

he pl ai nt if

f's motion fora summary j udgment in a writt en order, findi ng for the plaintiff on all f our counts of the
com plaint. The extent of the court 's leg al anal ysis s upporti ng its decisi on was that the lease in questi on had expire d "due to lac k of pr oduction and lack of due dil ige nce" by the Leavells , "in that no production of oil or gas has been had fr om said l ease si nce the year 2001." The court also ord ered the L eave lls to pay $5,175 in attorney fees and $624.20 in court costs, which the co urt, with out fu rther ex plana tion or a nalys is, dee med reaso nable and " nece ssarily incurr ed" by th e plain tiff, desp ite the fac ts that, as expla ined a bove, n o evide ntiary m aterials
were atta ched to the motion f or a summary j udgment de scri bing t he att orney fees and c osts4

allegedly incurr ed as a res ult of the proce eding s below and no evi dentiary materials of that nature are inc luded el sewhere in t he record. On April5, 2006, the Leave lls , by att orney Heid, fil ed a motionto reconsider the summary judgment. On April 18, 2006, the Leav ells, by the attorneythey hir ed to repl ace Heid–whom the Leav ells had discharged–fi led a mot ion to vacat e and for a r econsider ation. On June 20, 2006, the circuit cou rt held a hear ing on both motio ns an d de ni edth em , r ef us in g to a ll ow the Leavells ' new attorne y to argue the merits o f the su mma ry jud gment m otion. The Leavells filed a timely notice of ap peal. On appe al, the Leav ells rais e six ar guments , which we renumber and r estat e as follows: ( 1 ) a summary j udgment was not proper because ther e was a genui ne issue of materi al fact r egarding whether t he Leave lls could hav e conti nued producti on from th e w ells encompassedby the le ase orwere excused fr om doing s o because produc tionwas enjoined by the Stat e of Il linois, (2) a su mma ry jud gment w as no t prop er bec ause the pla intiff did not satisfy his burde n of proof to show appropri ate nonproduc tion under the le ase, (3) an aw ard of att orney fees and costs was not justifi ed pursuant to the A ct, ( 4) the amount of att orney fees and cos ts was not s upported by t he record, and no notic e was giv en that attor ney fees and costs would be adjudic ated at the hear ing on t

he motion f

or a summary j udgment, (5) the due proc ess rights of

the Leav ells were viol ated when the hearingwent forward wit hout the Leavell s, whose attor

ney was alle gedl y ill , havi ng an adequate oppor tunit y to be hear d, and (6) the due pro cess rights of the Leavells were violated w hen the h earing wen t forward withoutthe Leavell s having adequate noti ce, because the c lerk of court had infor

med the secretary for the att orney for the Leav ells that

the hear ing ha d been cancel led and would be reschedul ed. W ith regard to the L eavel ls'fir st ar gument on a ppea l, we agree tha t a summary judgment

was not proper b ecause there was a ge nuine is sue of mat erialfact r egarding wh ethe r the Leave lls co uld have continue d producti on from the wells enc ompassed by the5

lease or were excused from doing so because production w as enj oined by the Stat e of Ill inois, and we rever se the circuit court 's or der on that basis. A summary judgment i s a drastic mea ns o f disp osin g of litiga t ion and is only to be granted when pleadings, depositions, admissi ons on fil e, and aff idav its , if any, establ ish t hat the re is no genui ne issue of any materi al fac t and that the moving part

y is ent itl ed to a j udgme ntas a m atte r o f l aw. Morietta v. Reese Construction Co. , 347 I ll. App. 3d 107 7, 1080 (2004). The review of a grant of a summary j udgment is de novo

. Morietta , 347 Il l. App. 3d at 1080. In revi ewing
a summary judgment, t

his cour t const rues ev identi ary material stri ctly a gai nst the moving party and in the l ight

most favorabl e to the nonm oving party. Morietta , 347 I ll. App. 3d at 1080. A genuine issue o f material fact exists whe re there is a disput e on a mater ial f act or whe re the fac ts ar e undisput ed but rea sona ble minds might dif fer i n drawing inference s from the facts. Morietta , 347 I ll. App. 3d at 1080. In the case at bar, im plicit in the circuit court's award of a su mmary judgment to the plaintiff because the lease in quest ion hadexpired " due to la ck of pr oductionand lack of due dili gence" by th e Leave lls "in that no production of oi l orgas has been had from said lease since the year

2001" is t

he findi ng that no ge nuine is sue of material f act exi sted r egarding whether(1) no prod uction of oil or gas has been hadfrom the lease since t he year 2001 and (2) the Lea vells exe rcised "due diligence " in their management

of the well s encompassed by the lease. Even if

we assume, without

decidi ng, t

hat no producti on of oilor gas has been had from the lease since t

he year 2001–a poi nt that on appeal t

he Leave lls contend has not yet adeq uately been p roven by the p laintiff a nd th at accordingly pro vides another ba sis for a
rever sal of the s ummary judgment–we sti ll conc lude that when the ev identi ary material present ed by the pla inti ff thus far i s constr ued str ictly agai nst the plai ntif f, as t he moving party, and in the light most favorable to the Le avells, as the nonm oving party, a genui ne issue of mate rial fa ct ex ists re ga rdin g w hethe r the Lea vells exe rcised "due diligence " in the ir6

management

of the well s encompassed bythe lease a nd, th us, w hethe r the Lea vells cou ld have continue d producti on from the wells enc ompassed by the le ase or were excus ed from doing so because production was enjoined by the State of I llinoi s. In support of

his mot ion for

a summary j udgment, the pla inti ff ar gued that the Leav ells did n ot use "r easonable dili gence" to continue producti on of oilfrom the lease , because even th ough th e Leave lls clai med they were prohibited by the St ate of I lli nois from operating the w ells e nco mp asse d by the le ase , Stan ley " adm itted [in h is dis cove ry de posit ion] that he cou ld have beco me the op erator of the lease an d bond ed the w ells[] o r coul d ha ve employeda con tract op erator to do so, but in both instances decli ned." Althou gh the c ircuit
cou rt did not expl ain the basis f or it s conclus ions, pr esumably t he court r elie d u pon thi s argument

in fi nding f

or the pla intiff, for it is th e only argument that cou ld remotely sup port
a summ ary jud gment o n this p oint. Significantly, however, an ob je ct iv e r ea di ng of St an le y's deposit ion test imony does no t support a sum mary judgment , eit her on the ba sis of

a lack of "due dili gence" or

a lack of "rea sonable di lig ence" or under the expre ss orimpli ed terms of the lease a greem ent itself. First , St anley di d not "admi t" that he coul d have become t he operator of the l ease andbon ded the w ells, n or d id h e "a dm it" tha t he c oul d ha ve employed
a contrac t operat or to do so. Second, ev en if he ha d made those admi ssions , no showing was made by th e plain tiff that the failure o f the Lea vells to trans ferthe op eration of the le ase to Stanl ey or to empl oy a contra ct operator, ha d they been able t o do so, would have constitut ed
a lack of "due di lig en ce" o r "rea sonable di lig ence" or would hav e vi olate d the expre ss or implied terms o f the lea se agree men t. In his depo sition, Stan ley w as asked if he ha d ma de an y attem pts to lo cate a sub stitute operator to operat e the l ease. He answered t hat he had not, bec ause the S tate had declar ed the wells on the lease "abandoned." I n response t o a foll ow-up questi on on the subj ect, he stat ed that he belie ved i t would hav e been a violation of the Illino is Adm inistrative C ode to7

seek another party t o operate the le ase because he beli eved t he declar ation by t

he State that the wells were " abandoned" obli gat ed the Leav ells to comple tely c ease production from the
we lls "until the aband onmen t proceedings w ere decided ." Stanle y reit erate d this posit ion late r in the d epos ition, w hen h e w as asked yet again a que stion h e had alr eady r epea tedly answered: he was asked i f he had look ed for an alternative way to operat e the l ease, and he respondedthat i t was not his responsibili ty to l ook for an alte rnati ve becaus e the fut ure of the lease " was set i n stone" by t he State' s declar ation of a ba nd on m en t. T he pl ai nt if f's content ion to the c ontrar y notwiths tanding , thi s dep osition te sti mony is far from an admissi on by Stanl ey that he c oul d ha ve employed a cont ract ope rator

to operat e the l ease. To the contrary, S tanle y rep eate dly tes tif ied that he coul d not hav e employed a cont ract operator to op erate th e lease . W ith regard to whether he could hav e become the oper ator of the leas e and bonded the well s himsel f, St anley t esti fied t hat al though t

he State had g ive n him the opti on to operat e the l ease hims elf i f he post ed a $100,00 0 bon d, he wa s both "unable" and "unwill ing" to do that. He also tes tif ied that he w ould not h ave au tomatic ally been allow ed to assu me th e lea se b ut w oul d firs t have to be "a ppro ved as a n op erator. " Th is test imony, too, c an ha rdly be charact erize d as an a dm issio n by Stan ley th at he cou ld h ave become the operator of the le ase and bonded the wells hi mself . To the contrary, Stan ley test ifi ed unequiv ocall y that he was "unable" t o post a bond t o become the operatorof the lease himself. According ly, with regard to the two key po ints–th at Stanley Leavell "a dmitted " in his discovery deposi tion that he could hav e become the oper ator of the le ase and bonded the
we lls or th at he cou ld h ave employed a cont ract ope rator

to do so–that appear t o underli e the circuit court' s otherwise unexplained conclusi on tha t the L eavel ls fa iled to exerci se "due dili gence" in their manage ment of t he wells enc ompassed by the l eas e, the evidentiary materi al presented b y the plaintiff thus far, c onstrue d stri ctly a gai nst t he plai ntif

f, as t he8

movingparty, and in the light most fa vorable to the Leav ells , as the nonmovingparty, demonstr ates that a

genui ne issue of

materi al fact e xist s reg ardingthose poi nts. Whether t he Leavells cou ld h ave continued production from the wells encompassed by the lease or were excused from doing so because producti on was enjoined by t he Stat e of I lli nois i s a quest ion of factthat is pivotalto the plaint iff' s complaint for t he cancellation of his oi l and gas lease with the L eavells , as is the questi on of what st eps the L eavel ls were r equired t o tak e–and whetherthey took

those steps–to s atisfy the approp riate legal standard in this case, w hether,
as the circuit co urt w ill need to d etermine on re mand, tha t is a "due diligence" stand ard, a "reaso nable dili gence" s tandard, or a st andard defined by the expre ss or i mplied t erms of t he lease agre em ent. Without defini tiv e answers t o these ques tions , the ci rcuit court cannot determine whether the lease ha s been for feit ed or abandoned. At this point i n the litigation, there are no definitive a nsw ers to these d isputed ques tions o f fact, an d the c ircuit court er red in granting a summary judgment for the p laintiff. Because we rever se the circuit court' s order on t

he basis of the L eavel ls'fir st ar gument on appeal, we need not

consider the remainder of the Leavells' arguments. W ith regard to attor ney fees and c osts, however, we note t hat we pass no judgment on whether thos e fees or cost s will be avai lable at some point in this litig ation; our ruling is only that a su mmary judgment

was not appropr iate and that accordi ngly t

he award of att orney fees and costs was not appropr iate eithe r at t his st age of t

he litigation. For the foregoing reasons, w e reverse the order o f t he ci rcuit court of C rawford Co unty gran ting a summ ary jud gment to the p laint iff, a nd w e rem and for fu rthe r pro cee din gs not inconsisten t with this order.
Reversed; cause remande d.9

GO LDE NH ER SH and CH APM AN, JJ., c oncur.NO. 5-06-0321 I N THE AP PE LLA TE C O U R T O F IL LIN O IS

FI FTH DI STRI CT

___________________________________________________________________________________ GREG NYE, ) Appeal f rom the ) Circui t Court of Plaintiff

-Appell ee, ) Crawford County. ) v. ) No. 05-CH-15 ) EVA LOVENE LEAVEL L an d STANLEY ) LEAV ELL, ) ) Defendants-Appellants, ) ) and ) ) BI-PETRO , INC., and Unknow n Ow ners, ) Ho nora ble ) Da vid M . Co rrell, Defendants. ) Jud ge, p resid ing.

___________________________________________________________________________________ Rule 2 3 O rder F iled: April2, 2007 M otion to Publish Gra nted: May 14, 2007 Opini on Fi led : May 14, 2007

___________________________________________________________________________________ Justi ces : Honorable Stephen L. Spomer, J.

Honorable Richar d P. Goldenhersh, J., and Hon orable M elissa A. Cha pman, J., Concur

___________________________________________________________________________________ Attorn eys Thom as G. M aag, W endler Law , P.C., 9 00 H illsboro, Suite 10, Ed wards ville, I L for 620 25 (a ttorney for E va Loven e Leave ll and Sta nley L eavell) Appellants David Fo reman, 20 4 E. M ain, Salem, IL 62881 (attorney for B i-Petro, Inc.)

___________________________________________________________________________________ Attorn eys Christ opher L. Weber, Frank J. W eber, Cox , Phillips, W eber, Te dford & H eap, P.C ., for 216 South Cros s Street, P.O. Box 250, Robinson, I L 62454 Appell ee

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