The Honor able Thoma s L
. Ludington, United States District J udg e for the E astern D istrict * of Michig an, sitting by

desig nation. NO T R EC OM M EN DE D F OR F UL L- TEX T P UB LIC AT ION F ile Nam e: 10a0236n.06
No. 09-1158 UN ITED STA TES C OU RT OF AP P EA LS F OR THE SI XT H C IR CU IT
OMI MEX ENERGY I

NC., ET AL ., Pla int if fs -A pp e lla nts , v. JOYC E G . B L OH M, Def endant- Appellee
. ) ) ) ) ) ) ) ) ) ) ON APPEALFROM THE U NI TED S T ATES DI STRI CT COURT FOR THE WES TERN DI STRI CT OF MI CHI GAN

Be fore : MOORE and COOK, Circuit Judges; LUDI NGTON , District J udg e. *
L UDI NGTON , District J udg e. Def endant Joy ce G . Blohm, and he r now-de cea sed husband, Ho me r, g ra

nte d a min e ra l de e d to the Mil le r B ro the rs Oi l Co rp or a tio n in 19 83 fo r a te rm of tw e nty y ear s, or as long there afte r as g as or oil wer e “being produce d” or “ca pable of being produce d from wells drilled during the 20 y ear ter m . ” I t is undisput ed that no qualify ing w ell was drilled on the Blohms’ prope rty

during the twenty -y ear

term. Neve rtheless, Plaintiff O mimex Energ y , the Miller Br others’ suc cessor

in inte re s t , co n t ends that later ag ree ments betwee n the par ties modified the condition such t h at a we ll drilled in 1980, which beg an produc ing in 2002, satisfies the modified condition. J oy ce B lohm contends the dee d was n ev er modified, a nd the plain lang uag e of the condition was neve r satisfied.No 09-1158

Omimex Energy, I nc., et al. v. B lohm

-2- Th e dis tr ic t c ourt

ini tia lly de nie d B loh m’ s mo tio ns to d ism iss and fo r s umm ary jud g me nt, concludingthat later a g ree ments demonstrated the parties’ understa n d in g th a t the condition had bee n satisfied. Op. & Orde r, Sept. 19, 2006. The district cour t reve rsed c ourse one y ear later, how ever , and g rante d Blohm’s sec ond summary judgme nt m o t i o n b ased on the plain lang uag e of the condition. Op. & Orde r, Nov. 15, 2007. The district c ourt noted that Omimex had not advance d any evidenc e to support its positi on bey ond t h e deed itself and its interpre tation of sever al ambig uous ag ree ments that were later e ntere d into by the parties. Those ag ree ments, the district court held, we re insufficient to demo n s trate mutual a ssent to a modification of the de ed. F or the re asons stated below, the district cour

t’s decision will be af

firmed.
I
I n th e 19 70 s an d earl y 19 80 s, oil and natur a l g a s c omp anie s w e re be g inn ingto p ur c ha se mineral lea ses in wester

n Michig an’s Oce ana County , intending to e x ploit the ex tensive natura l ga s
rese rves unde rly ing the are a’s f orests and f

armlands. The gas i n Oc eana County was “ sour,”
me anin g it w a s c on tamin a te d w ithtoxic hydr og e n su lf ide , and ne e de d to be “ sw e e te ne d” be fo re it would be mar

ketable. T he swee tening proce ss r equire d transporting the sour g as by pipeline about fifty miles north to a plant near Manistee. At the t i me of the tra nsactions at issue in this case, the pipeline had not been ex tended into southern Oceana County , and the natura l g as i n the area w as not marke table.No 09-1158

Omimex Energy, I nc., et al. v. B lohm

The land ha d previously

been c lassified as two 80- acr e drilling u nits pursuant to Special 1 Orde r 1-73( Mar. 1, 1973) , av ail ab le at htt p : / / m i c h ig a n. g ov /do c ume nts / deq/og s-oilandg as-spa cing -1-73_258023_ 7 .pdf, which se t standardized drilling units for muc h of northern a

nd wester n L ower Michig an at 80 a cre s eac h.

-3- I n 1981, Amoco re newe d a miner al l ea s e, o ri g inally g rante d in 1976, for the oil, g as, and minerals under ly ing the Blohms’ 200-a cre far m in Clay banks Township. The pr imary term of the lease conclude d on Dec ember 7, 1983, but the lease would be automatica lly extended if mineral pr od uc tio n to ok

pla c e on the land duri ngthe pr ima

ry te rm . A moc o a lso he ld a le a se on the min e ra ls
un de rl y ingan a dja c e nt p ro pe rt y to t he so uth , w hic h w a s o wn e d by the B loh ms’ ne ig hb or s, the F oxe s. I n 1980, Amoco drilled a well known as the Miller-F ox 1-11 on an e ighty -ac re pa rce l owned by

the F oxe s’ that w a s a dja c e nt t o th e B loh ms’ fa rm . In e arl y

19 83 , a bo ut a y e ar b e fo re the 19 81 le a se would expire, Amoco petitioned the Michig an Supervisor of Wells to establish a 160-a cre “drilling
un it” fo r t he Mil le r- F ox 1- 11 , w hic h w ou ld i nc lud e the so uth e rnmos t e ig hty a c re s o f t he B loh ms’ far m and the adja cent e ighty -ac re parce l of t he Fox es’ property on which the Mil ler-F ox 1-11 had been dr illed.
A “dr illing unit” is “the maxi mum a rea that may

be ef ficiently and ec onomically

draine d by 1 well.” Mich. Comp. L aws § 324.61513(2) . To limit “wa ste,” only on e well m ay

be drilled pe r drilling unit. See Mic h
. C o m p . L aws §§ 324.61501(q) , .61502, .61513(3). Conseque ntly , if the B loh ms’ so uth e rnmos t e ig hty a c re s w e re po ole d w iththe F oxe s’ e ig hty -a cre p arc e l in to a sin g le dr ill ingun it, the B loh ms w ou ld b e pr oh ibited fr om d ri lli nga we ll o n th e po rt ion

of the ir pr op e rt y that w a s w ith in t

he dr ill ingun it. 1No 09-1158

Omimex Energy, I nc., et al. v. B lohm

The deed provides the foll owing leg al description of t he property “Section 11: N/2 of SW/4; 2 S/2 of NW/ 4; and NE/4 of NW/4.” The phra se “M i ller B rothers” is used to refe r to the Miller B rothers O il Corporation and 3 related entities. -4- The B lohms, however, r emained inter ested in deve loping a well on their own pr operty , and beg an negotiating development plans with the M iller Br others Oil Corporation, who held a similar interest, i n late 1 9 8 1
. B lo h m A f f
. ¶ 7
. O n A p r il 1 6 , 1 9 8 3 , th e B lo h ms a g r e e d to te r ms w ith the Mil le r B ro the rs , g ra

nti nga min e ra l de e d in te nd e d to fa c ili ta te de ve lop me nt o f a we ll on the ir fa rm . The de ed conve y ed, subjec t to the exi sting Amoc o lease , an undivi d ed o n e- h alf intere st in the minerals under ly ing the Blohms’ fa rm to the M iller Br others Oil Corporation “f or a te rm of 20 y ear s 2 or as long ther eaf

ter a s oil, ga s or other hydroca rbons ar e beingproduce d or ar e ca pable of being produce d from we lls drilled during the 20 y ear term.” The deed w as sig ned two-da y s befor e the Supervisor of Wells was sche duled to conduct a hear ing on Amoco’s proposed drilling unit for the Mil le r- F ox 1- 11 . I t g a ve the Mil le r B ro the rs , wh o pa id $25 0, 00 0 for the de e d an d w ante d to dr ill 3

a we ll on the Blohms’ fa

rm, a sig nificant intere st in the supervisor’s de cision.
On Ap ri l 18 , 1 98 3, the Sup e rv iso r o f We lls for th e Sta te of Mic hig an h e ld a

he ari ngto deter mine the appropriate drilli ng unit for the Miller- Fox 1-11. See Mich. Comp. L aws § 324.61507. Homer B lohm and the Miller Brothers traveled to L ansing , along with the neig hboring landowner , Mr. Fox, to oppose the expanded drill ing unit and the acc ompanying limi tations on drilling. B lohm Aff. ¶ 12. I f adopte d, the drilling unit would combine the minerals in the N 1/2 of t he S W 1/4 of Se c tio n 1 1, wh ic h th e B loh ms a nd Mil le r B ro the rs ow ne d, wi th t he min e ra ls i n S 1 /2 of the SW 1/4No 09-1158

Omimex Energy, I nc., et al. v. B lohm

-5- of Section 11, which the Foxes owned, int o a si ng le 160-acre drilling unit service d by the exist ing Mil le r- F ox 1- 11 we ll. Am oc o h e ld a min e ra l lea se cov eri ng a ll the min e ra ls i n th e un it a nd a lso
ow ne d th e we ll. I n a

May 9, 19 83 op ini on , th e Sup e rv iso r g ra nte d A moc o’ s r e qu e st, ru lin g a g a ins t the B loh ms an d M ill e r B ro the rs . T he Sup e rv iso r d e c ide d th a t th e e nti re 16 0 a c re s in the so uth we st qu art e r o f S e c tio n 1 1 c ou ld b e dr a ine d b y the Mil le r- F ox 1- 11 , and dr ill ing a dd iti on a l we lls wo uld be a “ waste.” Op. & Orde r of the S upervisor of Wells, No. (A) 6-3- 83. The de cision made it more difficult for the Blohms and Miller B rothers to drill a we ll on the Blohms proper ty , beca use it meant that only 120 acr es of the 200- acr e fa rm rema ined ava ilable for dr illing.
Neve rtheless, on May

13, 1983, four da

y s after the Supervisor’s opinion was issued, the Blohms and Miller B rothers sig ned an a mended letter

ag ree ment , specify

ing that the Blohms had be e n pa id in fu ll fo r the on e -h a lf min e ra l inte re st the y de e de d to th e Mil le r B ro the rs . T he B loh ms and Miller B rothers r ecor ded the de ed with the Oc eana County Reg ister of Dee ds the same da y . See Af f. of Joy c e B loh m ¶

11 ; Mi ne ra l De e d. Th e de e d g ra nte d th e Mil le r B ro the rs an o wn e rs hip int e re st in the minerals, subjec t to the twenty -y ear production conting ency

and the 1981 lea se to Amoco.
B e g inn ingin M arc h 1 98 4, the Mil le r B ro the rs and B loh ms co mme nc e d ef fo rt s to te rm inate the Am oc o le a se and re mov e the B loh ms’ e ig hty -a c re pa rc e l f ro m th e Mil le r- F ox 1- 11 dr ill ingun it. B loh m A ff

. ¶ ¶ 1 6– 17 . F ir st, on Marc h 9, the B loh ms le a se d the re ma ini ng min e ra l inte re sts in t he ir proper ty to the Miller Br others for a primar y term of one y ear , and as long therea fter as the Miller B ro the rs e ng a g e d in

dr ill ingor

min e ra l pr od

uc tio n o n th e land . T he lea se was sig ne d d e sp ite appar ent ambig uity

about whethe r the 1981 lease to Amoco was still effe ctive. The primary termNo 09-1158

Omimex Energy, I nc., et al. v. B lohm

-6- of the 1981 lea se had e x pired in De cembe r of 1983, but questions about whe ther its production
re qu ir e me nt h a d b e e n s a tis fi e d b y the po oli ng of the B loh m and F ox tr a c ts into a sin g le dr ill ingun it
rema ined. Next, on March 12, the B lohms filed a dec laration asserti ng that the terms of the 1981 Amoco lea se had be en broke n, and as a result, Amoco’ s leasehold inter est had be en for feited. Amoco disputed the B lohms’ d ec l aration in a Marc h 29 response . The Mar ch dec larations were followed by

an August 21, 1984 lawsuit, in which the Blohms and Miller B rothers a sserted that the lease had ex p i red. Complaint, Blohm v. Amoc o Prod. Co. , N o. 84 -2 54 2 ( Cir . Ct . O c e ana County Aug . 21, 1984). The la

wsuit was filed by

the Miller Brothers on behalf of the B lohms and the Miller Br others Oil Corporation, and asser ted that the Amoco le ase had expired following completion of t h e p ri m ar y

term on De cembe r 7, 1983. Id. ¶ 6
. A mo c o , h o w e v e r , d is a g r e e d , a s s e rti n g th at the combination of the Blohms’ southernmost eig hty acr es with the F ox es’ nor thernmost eig hty

acr es into the Mill er- Fox 1-11 drilling unit cons t i t u t ed production of g as fr om the lease d land and automatically

rene wed the le ase. Id. ¶ 7; Amoco De cl. (Mar . 29, 1984).
The Miller Br others and the Blohms wer e both na med plaintiffs in the 1984 suit, a s they eac h owned a n undivided one-ha lf interest in the miner al s u n d er l y ing the Blohms fa rm. The c ase, howeve r, wa s prosec uted only by the Miller B rothers on both pa rties’ be half. Pursuant to an ag ree ment dated F ebrua

ry 15, 1985, the Miller Br others ag ree d to pa y all the expenses re lated to the
c a se , and the B loh ms a g re e d to make the mse lve s ava ila ble to a ssi st w iththe lit ig a tio n. Th e B loh ms also ag ree d to e x tend the primary term of the 1984 lease to six months bey ond the completion of the suit.No 09-1158

Omimex Energy, I nc., et al. v. B lohm

J oy ce B lohm asserts in her a ffidavit that the Miller B rothers infor med the B lohms that they 4
“ los t th e c a se .” B loh m A ff . ¶ 17
. Al tho ug h th e re may

have be e n a

de c isi on a dv e rs e to t

he B loh ms’ interest at some point, it is not part of the re cord in this case
. -7- The suit was settled in Oc tober 1986. Stipul ation and Order f or Dismissal, Blohm v. Amoc o 4 Prod. Co. , No. 84-2542 (Cir. Ct. Oce ana County Oct. 23, 1986). A lthough the prec ise terms of the
se ttl e me nt a

re no t di sc los e d in

the sti pu la tio n for di smissa l, A moc o c on ve y e d a ll o f i ts l e a se ho ld interests in the B lohms’ property , the Foxes’ prope rty , and sev era l near by proper ties to the Miller Br others in a quit claim deed dated October 7, 1986. The deed w as conve y ed “in c onsideration of the s u m o f

T e nD o ll ar s ( $ 1 0
. 0 0 ) an d o th e r g o o d an d v a lu a b le c o n s id e r a ti o np a id

b y Miller Br others[.] ” Pursuant to the 1986 dee d, the Miller B rothers ow ned the Mil ler-F ox 1-11 we ll, and a lea sehold or fe e intere st in all the minerals underly ing both the Blohm and F ox proper ties. At the time the suit was terminated, the Blohms m inera l interests we re pote ntially subject to two lease s: the 1984 lease to the Miller Br others and the 1981 lease to Amoco. Altho u gh i t i s n o t clea r fr om the
rec ord if it was e ver de termined whic h lease was effe ctive, the 1986 quit claim deed mea nt that the Miller Br other s co n t ro l led both lease s, and conse quently the rig hts to the minerals underly ing the Blohm s ’ f

ar m, r e g ar d le s s o f

w h ic h w a s e f

f e c ti v e . I mp o rta

n tl y , b y O c to b e r o f 1 9 8 6 , th e M il le r B ro the rs no lon g e r h a d a

n ec on omi c inc e nti ve to re ve rs e the Sup e rv iso r’ s p oo lin g de c isi on and dr ill
a we ll on the Blohms’ southernmost eig hty -ac res be cause a new well would only compete with the
e xistin g we ll o n th e po ole d tr a c t of land , a nd the Mil le r B ro the rs c on tr oll e d a ll the ri g hts to t hat w e ll. During the next fifteen y ear s, the Miller Br others and the ir succe ssors enter ed into severa l
a g re e me nts wi th the B loh ms, bu t a su c c e ssf ul we ll wa s n e ve r d

ri lle d o n th e pr op e rt

y . A mon g tho seNo 09-1158

Omimex Energy, I nc., et al. v. B lohm

The 1984 lea se wa s terminated by ag ree ment of the pa

rties b efor e the 1987 lea se wa s 5 completed, potentially

cre ating a g ap betwe en the 1984 lea s e an d the 1987 lease . Howeve r, the Mil le r B ro the rs ha d al so pu rchase d th e 19 81 le a se fr om A moc o, wh ic h w a s p ote nti a lly sti ll v a lid until the 1987 lea se was a g ree d upon. The 1981 a nd 1984 lease s cover ed the B lohms’ entire 200- acr e fa rm. The 1987 lease cover ed just the southernmost eig hty acr es that wer e part of the MillerFox 1-11 drilling unit. -8- ag ree ments was a 1987 le ase, which in eff ect renew ed the 1981 and 1984 lea ses. Also in 1987, the 5 Miller Br others, the Foxes, and the B lohms entered into a “ Dec laration of Pooli ng ” (“ 1987 pooling
a g re e me nt” ), wh ic h is a

c o nt r a c t u a l a g re e me nt d ivi din g the g a s p ro du c e d b y the Mil le r- F ox 1- 11 we ll based on the mineral rig hts controlled by eac h party

in the drilling unit. The 1987 pooling ag ree ment listed the names of the Foxes, Blohms, and Miller B rothers’ investors in its heading , and provide d: WHEREAS, t he above are the Owne rs of the f ollowing de scribed O i l an d Gas L e a se s:
1. [le a se to Joh n T . St oli ke r c ov e ri ngthe F oxe s’ e ig hty -a c re pa rc e l]
2. Oil and Gas L ease Date Marc h 9, 1984, rec orded in L iber 841, Pag e 151, fr om Ho me r E. and Joy c e G. B loh m, L e sso rs to Mil le r B ro thers Oil Corporation, L essee , cover ing N /2 o f S W / 4, S/2 of NW/ 4; and NE/4 of NW/4, S ection 11, T13N, R18W, Ocea na County ,

or ow n a min e ra l in te re st i n th e fo llo wi ngland s: Southwest Quarter

(SW 1/ 4), Section 11, T13N- R 1 8W, Oceana County , Michig an[.]

. . .No 09-1158

Omimex Energy, I nc., et al. v. B lohm

-9- NO W TH ERE F OR E, Th e Part ie s h e re to a g re e a s f oll ow s:
1. All interest of the pa rties her eto in the [oil and g as] underlying [the Mi llerFox 1-11 drilling unit] are her eby pooled, consolidated a

nd unitiz ed into a single pooled unit for the operation for and the de velopment and pr oduction of the [oil and ga s from the drilling unit]
. 2. An y well drilled on any part of the [drill ing unit] for the discove ry and production of [oi l a

nd g as], whe ther now drilling or here tofore or he re af t er drilled, and all operations with respe ct to a ny such we ll, shall be considere d for a ll p u r

p o s e s , e xc e p t th e p ay

me n t o f r o y a lt

y , to b e a w e ll dr il le d

and operations conducted unde r the terms of ea ch of the lease s descr ibed above
. 1987 Pool i n g Agr eement at 1–2. The a g ree ment was sig ned by the B lohms, Fox es, and va rious par ti e s r e p r e s e n ti n g th e M il le r B r o th e r s , b u t it is n o t c le ar f r o m th e r e c o r d e xa c tl y w h en the ag ree ment was c ompleted, nor if it was e ver r ecor ded. Id.
A later document, titled “Amen d m ent to Dec laration of Pooli ng ,” wa s rec orded by the Oce ana County

Reg ister of Dee ds on May 24, 1989 (“1989 A mendment”) . The 1989 Ame ndment is also signe d by

the Bl o h m s an d a re prese ntative of Conoco, Inc., the suc cessor to the Miller Br others’ interests in the M iller-F ox 1-11 drill ing unit. The 1989 Amendment shows that C onoco had ac quired minera l lease inter ests in the Fox es’ eighty -ac re parce l and the B lohms’ remaining halfint e re st i n th e ir

e ig hty -a c re pa

rc e l, a s w e ll a s th e tit le to the ha lf -i nte re st the B lohms ha d de e de d to Miller Br others in 1983. The 1989 A mendment also purpor ts to s u b s t i tute the 1987 lease for the 1984 lease in the 1987 pooling ag ree ment, and to specific ally add C onoco’s f ee inter est, arising from the 1983 dee d, to the pooling a g ree ment. I t provides that “it is de emed nece ssary and advisable, a ndNo 09-1158

Omimex Energy, I nc., et al. v. B lohm

-10- is the de sir e of

Con oc o a nd the Part ie s to ame nd the De c laratio n o f P oo lin g to p oo l and c omb ine sa id L ease s and the fe e minera l interest to form a unit for the proper development and oper ations of the same for the produc tion of oil and/or g as[.] ”
A l t h o u g h t h e 1 9 8 7 P o o l i n g a g r e e m e n t p r o v i d e s t h a t an y w e l l l o c a t e d o n t h e dr i l l i ng un it, including the Miller-F ox 1-11 well, shall satisfy drilling and production require ments in the various “lea ses,” it does not spe cifica lly state that the Miller-F ox 1-11 shall satisfy the drilling r equire ment in the 19 83 de e d. Simi larl y , the 19 89 a me ndme nt s pe c if ic a lly inc or po rate s th e de e de d in te re st i nto t h e p o o l , b u t it does not provide that the Miller-F ox 1-11 satisfies the dr illing re quirement in the deed. Sometime in 2002, the pipeline to Manistee was completed and the M iller-F ox 1-11 beg an
o p era ting. See Blohm Aff . ¶ 18. The B lohms rece ived their fir st roy alty chec ks from their one

quarte r interest in the Miller-F ox 1-11 drilling unit that y ear . Id. I n the s ummer of 2002, Pl aintiff Omimex Energ y acquir ed the Mil ler-F ox 1-11 we ll, and also ac quired the 1983 de ed. Omimex, li ke their pre dece ssors in interest, the Miller B rothers and Conoco, also had no incentive to drill on the Bl o h m s fa rm b ec au s e it h el d a le as eh o l d i n t er es ti nt h e m i n er al s u n d er l y i n g b o t h fa rm s . Dr i l l i n g a second w ell would be an unnece ssary expense beca use it would sim ply

compete w ith an operating well Omimex owned.
I n 2002, near

the time period whe n Omimex acquir ed i t s interests in the B lohm and Fox pr op e rt ie s and

the op e ratio na l Mil le r- F ox 1- 11 we ll, it o bta ine d a tit le op ini on

fr om L oo mis , E we rt ,No 09-1158

Omimex Energy, I nc., et al. v. B lohm

-11- Pars le y , D a vis & Go tti ng , c on c e rn ingthe de e de d ha lf int e re st or ig ina lly c on ve y e d b y

the B loh ms t o the Miller Br others in 1983. The title opinion urg ed Omimex to “ confirm that the t er m m i n era l interest wa s intended t o be held by production from a well on lands other than lands cover ed by the deed . . . . I

n this re g ard it is essential that y ou rec ord a proper of [si c] Pooling Dec laration f or the Miller-F ox # 1-11 Well prior to April 16, 2003.” L oomis Titl e Op., Oc t. 10, 2002. Severa l simi lar title opinions had bee n issued to Omimex and its prede cessor s in the y ear s betwee n the 1987 pooling ag ree ment and the e x piration of the twe nty -y ear term. See, e .g. , L oomis Titl e Op., De c. 26, 2001. Omimex did not act on the rec ommendation of the title opinion, nor had any of its prede cessor s acte d
on sim ila r r e c omm e nd a tio ns . Ane w de c lara tio n of poo lin g makin g c le ar t hat th e dr ill ingc la

us e in the 1983 dee d was satisfied by the now-ope rational Miller-F ox 1-11 wa s never rec orded. April 16, 2003 marke d the 20-y ear anniver sary

of the 1983 de ed, and the Blohms asser ted that the dee ded one-half mineral interest in t heir fa rm had re verte d back to them. B lohm Aff

. ¶ 20. Omimex , howeve r, disag ree d, and neg otiations commenced conce rning termination of the de ed. Id. ¶ 22. On May

1, 2006 Omimex filed this suit, s ee k i n g a d ecla ration of the pa

rties’ re spective interests in reg ard to the 1983 de ed, and a decla ration “( i) that the Minera l Deed ha s been e x tended
a s a re su lt o f c e rt a in e ve nts ; and (i i) that Plai nti ff

s ar e the ow ne rs of the 10 0/2 00 oil and g a s in te re st in t he pr op e rt

y .” Op . & Or de r, No v. 15 , 200 7. I n N ov e mbe r 2 00 7, the Ho no ra ble Go rd on

J. Qu ist , U.S. Di s t ri ct J udg e for

the Western District of Michig an, g rante d summary judgme nt in favor of J oy ce B lohm, concluding that Omimex had not pre sented suff icient evidenc e to ra ise a g enuine issueNo 09-1158

Omimex Energy, I nc., et al. v. B lohm

-12- of fa ct as to whe ther the 1983 de ed had been modified by subsequent ag ree ments such that it did not
reve rt to the Blohms in 2003 due to the lack of a producing well on the B lohms’ property . Omimex filed a timely

notice of a

ppeal.
II
Omimex raises two arguments on appea l. First, it contends that the 1987 pooling ag ree ment and 1989 ame ndment actua lly modified the 1983 deed, and that the docume nts, taken tog ether , show t h e p ar t i es ’ i n t en t i o n t o o v erri d e t h e co n d i t i o n t o t h e e x t en tt h at i tre qu i re d a w el l dri l l ed“du ri n g” the twenty -y ear

term. Second, it conte nds that the di s t ri ct co u rt ’s re consideration of its ini tial opinion violates the law of the c ase doc trine.
A
The district cour

t’s decision to gr ant B lohm’s motion for summary judgme nt is reviewe d de
novo. Bukowski v. City of Akron , 326 F.3d 702, 707 ( 6th Cir. 2003). Summ ary judgme nt is proper if “the ple ading s, the discover y and disclosure materia ls on file, and any aff idavits show that there is no ge nuine issue as to any materia l fac t and that the movant is entitled to judgment as a matter of law.” Fe d. R. Civ. P. 56( c)( 2). When making the deter mination, all facts and inf

ere nces dr awn f

rom the evidence in the record must be viewed i n the l ight most favor able to the nonm ovant. Bukowski , 3 2 6 F. 3 d at 7 0 7 (q u o t i n g Ewolski v. City of Brunswi ck, 287 F.3d 492, 500 ( 6th Cir. 2002)).No 09-1158

Omimex Energy, I nc., et al. v. B lohm

-13- Un de r M ic hig an la

w, an unambi g uo us de e d or c on tr a c t is int e rp re te d a c c or din g to t he pla in meaningof its lang uag e. Taylor v . Taylor , 17 N.W.2d 745, 746 (Mich. 1945). I nterpre tation of an unambig uous deed is a que stion of law. Port Huron Educ. Ass’n, M EA/NEA v. Port Huron Area Sc h. Di st. , 5 5 0 N
. W. 2 d

2 2 8 , 2 3 7 ( M ic h
. 1 9 9 6 )
. “ I f , h o w e v e r , th e r e is an a mb igu it y , o r if th e d e e d [] fa il[s] to e xpre ss the ob vio us int e nti on of the pa rt ie s . . . the c ourt s w ill c on sid e r t he sit uatio n, a c ts, conduct[,] and dealing s of the par ties” in an e ffor

t to arrive at their intentions. Farabaugh v. Rhode , 9 N.W.2d 562, 565 (Mich. 1943). Stil l, the focus r emains at a ll tim es on ar riving at the intent of the parties a s expressed by the plain lang uag e of the whole instrument, a nd the “only

purpose of

the rules of construc tion of convey ance s is to enable the c ourt to rea ch the pr obable intent of the parties whe n it is not otherwise asce rtainable .” See M ich. Dep’ t of Nat ural Res. v. Carmody- Lahti Real Estat e, Inc. , 6 9 9 N. W
. 2 d

2 7 2 , 2 7 9 (M i ch
. 2 0 0 5 ) ( qu o t i n g Purlo Corp. v. 3925 W oodward Ave., Inc

. , 67 N.W.2d 684, 686–87 ( Mich. 1954) (citations omitted)). “[N]o lang uag e in the instrument may be needle ssly

reje cted a s meaning less, but, if possible, all the lang uag e of a deed must be ha

rmonized and construe d so as to make a ll of it meaning ful . . . .” Id. Although Mic higa

n courts have rec og nized that oil and gas le ases, a nd by implication other oil and g as contra cts, are “tec hnical contr act[s] ” to be re ad in ac corda nce w ith the “purpose of

[t heir] clause s,” t hey will not ignor e the plain lang uag e of the contract terms. Mich. W is. Pipe line Co. v. Mich. Nat’l Bank, 3 2 4 N. W
. 2 d 5 4 1 , 5 4 4 (M i ch
. C t
. Ap p . 1 9 8 2 ) ( qu o t i n g J.J. Fagan & Co. v. Burns , 226 N.W. 653, 654 (Mich. 1929)). Ac cording ly , in construi n g a re quirement that the le ssee “produc e[] ” oil or g as from the lea sed land in orde r to extend a lease term, the Michig an Court ofNo 09-1158

Omimex Energy, I nc., et al. v. B lohm

-14- A p p e a l s h e l d

t h a tp r o d u c t i o ni np ayi n g qu an t i t i e s t o t h e l e s s e e i s n o tr e qu i r e d , b u t n o r w o u l d “ a n y” production suffic e. Id. at 544–45. Rather, the production l evel required to extend the lease w as the level an ope rator a cting in a “r easonable and pr udent manner ” would ordina rily produce in like circ umstances. Id. at 545–46.
Her e, the 1983 de ed is unambig uous; the intentions of its sig nors ar e cle ar f rom the fa ce of the document. The deed require d that at least one well ca pable of producingoil or g as be dr illed on the B lohms’ farm or a parc el proper ly pooled with the B lohms’ farm dur ing the twenty y ear term or the de e de d in te re st w ou ld r e ve rt to t he g ra nto rs . No we ll w a s d

ri lle d d ur ingthe tw e nty -y e ar t e rm . Acc ording ly , the dee ded intere st reve rted to the Blohms in 2003 unless the condition was modified by a later ag ree ment betwee n the par ties. This conclusion is supported both by the plain lang uag e of the deed a nd the circ umstances
surro unding its execution. The timing of the conve y ance makes c lear that when the de ed wa s executed both par

ties believed a

second w ell—a we ll drille d d u ri ng the twenty -y ear term—wa s
re qu ir e d to e xten d the le a se . Th e de e d w a s c on ve y e d s ho rt ly be fo re the Mil le r- F ox 1- 11 dr ill ingun it hear ing in or der to a dvance the mutual inter est of the g rantor and g rante e in opposing the expanded drilling unit. I ndeed, both the M i l l er Brothers and the Blohms continued to oppose the expanded dr ill ingun it unti l O c tob e r 1 98 6. B e fo re that time , both pa rt ie s soug ht an op po rt

un ity to dr ill a

we ll on the B lohms property
. After that time, the M iller Br others held a controlling intere st in the Mill erFox 1-11 and the ince ntive to drill a second we ll evaporated.No 09-1158

Omimex Energy, I nc., et al. v. B lohm

-15- Omimex contends that the 1987 pooling ag ree ment and the 1989 amendment to the pooling ag ree ment demonstrate the parti es’ intent to modify the ag ree ment. A par

ty asser ting that a condition in a dee d has bee n modified bea rs the burden of proving mut ual assent to modification by clea r and convincingevidenc e. See Q uality Prods. & Concepts Co. v. Nagel Prec ision, Inc. , 666 N.W.2d 251, 257–58 (Mich. 2003).
Th e 19 87 po oli nga g re e me nt and the 19 89 a me ndme nt c le arl y po ol the va ri ou s f e e int e re sts and lea se intere sts—including the 1983 miner al deed—in the 160-ac re drilling unit, a nd divide the proce eds fr om the g as produc ed propor tionately to the acr eag e contr olled by eac h party . The 1987 ag ree ment also provides that a well drilled or pr oducing any wher e in the 160-a cre uni t “shall be considere d for a ll purposes . . . a well drilled and opera tions conducted unde r the ter ms of eac h of the le a se s . . . .” 19 87 a g re e me nt ¶ 2. Ac c or din g ly , th e Mil le r- F ox 1- 11 we ll s a tis fi e d, “ fo r a ll purposes,” any

drilling re quirements in ea ch of the pooled lease s. Ho we v er , n eit her the 1987
a g re e me nt n or

the 19 89 a me ndme nt pr ov ide that the Mil le r- F ox 1- 11 satis fi e s d ri lli ngc on dit ion s in the pooled fe e intere sts or that the parties intended to waive the re quirement in the 1983 de ed that
a we ll be drilled “during ” the twe nty -y ear term.
Whil e Pla int if

fs ’ a rgume nt c on cern in g m od if ic a tio n o f t

he de e d h a s so me fo rc e , it is
u l t i m ately

unpersua sive bec ause of its ex clusive re liance on a single provision in the 1987 ag ree ment. That provision a lone cannot provide clea r and unambig uous proof that th e parties mutually ag ree d to modify

the condition. The Plaintiffs have not produce d a sing le document that expli citly memorializes the Blohms intent or belief that the Miller-F ox 1-11 well would satisfy theNo 09-1158

Omimex Energy, I nc., et al. v. B lohm

-16- drilling r e qu ir e me n t in th e 1 9 8 3 d e e d
. N o r h a v e th e y p r o d u c e d an a f

f id a v it f r o m o n e of the signatories to the pooling a g ree ments or 1989 am en dment, explaining that the par ties to the ag ree ments understood that the Miller-F ox 1-11 would satisfy the drilling r equire ment. I ndeed, Omimex obtained a title opinion in 2002, which emphasiz ed the ambig uity conce rning whether the Miller-F ox 1-11 well satisfied the drilling require ment, and re commended a n expli cit modification to the 1983 deed. O mimex did not act on the re commendation.
Moreove r, whe n the dee d was ne g otiated in 1983, the Mille r-F ox 1-11 had a lrea dy been completed and was rea dy for operation, pe nding extension of the sour g as pipeline. I t is clea r fr om the langua g e of

the de e d, a s we ll a s the surr ound ingc ir c ums tanc e s, tha t bo th p art ie s b e lie ve d at le a st one oper ational well would nee d to be drilled on the B lohms’ property in order to satisfy

the dee d’s condition. Such a well wa s never drilled. Although settlement of t he 1984 lawsuit and c onvey ance of the 19 86 qu it c la im deed fro m Amoc o to the Mil le r B ro the rs dis so lve d th e Mil le r B ro the rs ’
e c on omi c inc e nti ve to d ri ll a we ll o n th e B loh ms p ro pe rt y , it di d no t a lte r t

he B loh ms’ circ umstances. The rec ord does not demonstrate that the B lohms vol u n t ar i l y rele ased the Miller Br others fr om their obligation to drill a well on the Blohms’ proper ty , despite the fac t that the Miller Br others and the ir succe ssors had nea rly sevente en y ear s to neg otiate such a rele ase.
Omimex has relied exclusively on a pair of ambig uous documents to suppor t its contention that the dee d was modified. B y contra st, Blohm has produce d a clearly worde d, unambig uous deed and esta blished that the orig inal g rantor a nd g rante e intended f

or i t t o b e enfor ced a s written. Be cause no well was dr illed on the Blohms’ fa rm during the twenty -y ear term, the c ondition in theNo 09-1158

Omimex Energy, I nc., et al. v. B lohm

-17- deed w as not sati s fied. Ac cording ly , the dee ded minera l interest re verte d to the g rantors, the Blohms, on April 16, 2003.
B
Om ime x ne xt co nte nd s th a t th e dis tr ic t c ourt vio la te d the law of th e c a se do c tr ine wh e n it chan gedco u rs e a n d

gra n t edBl o h m ’s m o t i o nfo r s u m m ary j u d gm en ti n2 0 0 7 , n o t wi t h s t an d ing a 2006 decision to the contra

ry . A district c ourt’s application of the law of the case doctrine to that c ourt’s
ow n r uli ng s is re vie we d fo r a

bu se of dis c re tio n b e c a

us e it i s a “ dis c re tio na

ry too l” me ant t o p ro mot e judicial eff

iciency and not a limit on the court’s pow er. United States v. Todd , 920 F.2d 399, 403 (6th Cir. 1990). Pursuant to the doctrine , “a de cision on an issue made by a cour t at one stag e of a
case should be g iven ef

fec t in successive stag es of the sa me litigation.” Id. (c i t i n g Christ ianson v. Colt Indus. Operating Corp. , 486 U.S. 800, 816 (1 9 8 8 ))
. A district court may disreg ard its own
ear lier dec ision only

under “ extraordinary

condi t ions” wher e some “ cog ent re ason” makes that de c isi on ina pp lic a ble , s uc h a s if

the pr ior de c isi on wa s “ c le arl y e rr on e ou s, ” ba se d o n s ub sta nti a lly differ ent evidenc e, or w as followed by a contr ary

decision fr om a controlling authority
. In re Ke nn e th A lle n Kn igh t Tru st , 303 F.3d 671, 677–78 (6th Cir. 2002) (c itations and quotation marks omi tte d) ; see also In re U.S. St eel Corp. , 479 F.2d 489, 494 (6th Cir. 1973)
. Stil l, the doctrine is not an “ine x orable command,” a nd the dec ision to disreg ard an ear lier ruling is left to the cour t’s “g ood sense.” In re U.S. Ste el Corp. , 479 F.2d at 494.No 09-1158

Omimex Energy, I nc., et al. v. B lohm

-18- The district cour

t rec og nized that its decision to g rant Blohm’s summary judgme nt motion in 2007 was contra

ry to its earlier de cision to deny Blohm’s mo tions to di smiss and for summary judgme nt. Com

pa re Op. & Orde r, Sept. 19, 2006, with Op. & Orde r, Nov. 15, 2007. The court
no te d, ho we ve r, that it s f ir st r uli ngwa s is su e d w ith ou t the ben e fi t of dis c ov e ry , a

nd that it s understandingof the case had chang ed as the evidenc e was better develope d. At the ea rlier stag e, Omimex had pre sented sufficie nt e vidence to de feat B lohm’s motions. After discovery , howeve r, t h e c o u rtr e a s s e s s e d

w h e t h e r t h e e v i d e n c e p r e s e n t e d j u s t i f i e d a t r i a l an d c o n c l u d e d

t o t h e c o n t r a r

y.
The district cour

t’s decision wa s not an abuse of discretion. Nothing pre vented the tr ial court from re assessing the evidenc e, following discovery and additional brie fing from the pa rties, and
c on c lud ingtha

t th e e vid e nc e pr ov ide d to su pp or t O mi mex’s po sit ion

did no t w arr ant a

tr ia l. Particularly

wher e the parties had prese nted complex arg uments based on diff eringinterpre tations of a se ries of doc uments, it was not unrea sonable for the trial judg e’s unde rstanding to chang e. The trial judg e re cog nized that the law of the case doctrine was available as a “discr etionary tool” that could be employ ed to a void r evisiting the issue, but de cided inst ea d t h at “ex traordina ry circ umstances” merited re considera tion in thi s circumstanc e. See Todd , 920 F.2d at 403.

III
The district court’s judgme nt that the m inera l interest conve y ed by the 1983 dee d reve rted to t he B loh ms o n Apr il 1 6, 20 03 is AF F IR M ED
.