J-A23021-14

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37 

RONALD K. TESKA, AND GIULIA 

MANNARINO, 

IN THE SUPERIOR COURT OF 

PENNSYLVANIA 

 Appellants 

v.

EQT CORPORATION, EQT PRODUCTION 

COMPANY, AND EQT MIDSTREAM 

(EQUITRANS) 

 Appellee No. 1839 WDA 2013 

Appeal from the Order entered October 22, 2013, 

in the Court of Common Pleas of Greene County, 

Civil Division, at No(s): 110-2013 

BEFORE: DONOHUE, ALLEN, and MUSMANNO, JJ. 

MEMORANDUM BY ALLEN, J.: FILED AUGUST 26, 2014 

Ronald K. Teska and Giulia Mannarino, (“Appellants”), appeal pro se

from the trial court’s order sustaining the preliminary objections in the 

nature of a demurrer of EQT Corporation, EQT Production Company, and 

EQT Midstream (EQUITRANS), (collectively “EQT”). After careful 

consideration, we affirm. 

 Our review of the record indicates that on February 11, 2013, 

Appellants initiated this action against EQT alleging trespass, theft of 

minerals, and fraud. On March 5, 2013, EQT filed preliminary objections in 

the nature of a demurrer. On March 22, 2013, Appellants filed an amended 

complaint in which they alleged only fraud and trespass. On April 5, 2013, 

EQT preliminarily objected to Appellant’s amended complaint. On April 23, 
J-A23021-14

- 2 - 

2013, Appellants answered EQT’s preliminary objections to Appellant’s 

amended complaint. On September 13, 2013, the trial court conducted oral 

arguments on EQT’s preliminary objections. On October 22, 2013, the trial 

court filed an order and memorandum sustaining EQT’s preliminary 

objections and explaining its order. 

In its October 22, 2013 memorandum, the trial court summarized the 

factual and procedural background: 

In 1913, G.E. Houston and Florence Houston leased to 

Carnegie Natural Gas Company a tract of land containing 22 

acres. The lease provided: "... this lease shall remain in force 

for the term of 5 years from this date and as long thereafter as 

oil and gas, or either of them, is produced from the said land by 

the said party of the second part, his successors and assigns." 

Ex. A-1 Amended Complaint. The lease further provided that in 

consideration for the right to produce oil and gas the lessors 

would be paid "Seventy five ($75.00) Dollars each three months 

in advance for the gas from each and every gas well drilled on 

the premises, the product from which is marketed and used off 

the premises, said payment to be made ... each three months 

thereafter while the gas from said well is so marketed and used". 

Id.

 By various conveyances and assignments[,] [Appellants] 

now stand in the shoes of the Houstons as lessors and [EQT] has 

succeeded Carnegie Natural Gas as lessee. In 2012, 

[Appellants] filed a Declaratory Judgment action asking that we 

declare that they were the rightful owners of Well 650456, 

drilled pursuant to the 1913 lease, based on the alleged lack of 

production from that well. By a document recorded October 13, 

2011, in the Recorder's Office of Greene County, Pennsylvania, 

[EQT] surrendered the lease. [Appellants] attempted to buy the 

well, but the parties could not agree on the terms, hence the 

lawsuit. EQT demurred and we sustained the demurrer, holding 

that the lease provided that the lessee had the right to move its 

fixtures, including the casing of the well. Furthermore, the Oil 

and Gas Act, 58 P.S. §601.101 et seq., provides that 

nonproducing gas wells must be plugged by the owner, and 
J-A23021-14

- 3 - 

[Appellants] were not the owners. [Appellants] appealed but 

Superior Court affirmed. 

 They have now taken a different tack. They filed a new 

Complaint alleging fraud by EQT. It is their theory in this 

proceeding that the tender to them of the flat rental amount by 

[EQT] was a misrepresentation that the well continued to 

produce when in fact it did not. According to the Amended 

Complaint, the well produced at least until 2001. From 2005 

through 2009, it did not produce, except for a minimal amount in 

2006 and 2007. [Appellants] have no information for 2010, but 

allege the well was shut in 2011. 

 The Amended Complaint raises counts of fraud and 

trespass. The count of fraud is premised on the tender of 

royalty checks year after year when [EQT] knew that the well 

was not producing. To [Appellants,] these tenders were a willful 

misrepresentation. The count of trespass is based on entries 

onto the land at times when [EQT] knew there was no valid 

lease. [EQT] filed Preliminary Objections in the nature of a 

demurrer. 

Trial Court Memorandum, 10/22/13, at 1 - 3. 

The trial court sustained EQT’s preliminary objections and Appellants 

filed a timely notice of appeal. The trial court did not order compliance with 

Pa.R.A.P. 1925. 

 Appellants present the following issues for our review:

[1.] Whether the [trial] court committed an error or abused its 

discretion in making the determination that continued 

payment of flat rate royalty by lessees on a nonproductive 

well, whose lease was held by production and where 

lessors were not informed that production had ceased, was

not a representation but merely a “contractual obligation”.

[2.] Whether the [trial] court committed an error or abused its 

discretion in making the determination that continued 

payment of flat rate royalty by lessees on a nonproductive 

well, whose lease was held by production and where 

lessors were not informed that production had ceased, 
J-A23021-14

- 4 - 

established a tenancy at will without the knowledge and 

mutual consent of lessors. 

Appellants’ Brief at 4. 

 We recognize: 

 As a trial court's decision to grant or deny a demurrer 

involves a matter of law, our standard for reviewing that 

decision is plenary. Preliminary objections in the nature of 

demurrers are proper when the law is clear that a plaintiff 

is not entitled to recovery based on the facts alleged in the 

complaint. Moreover, when considering a motion for a 

demurrer, the trial court must accept as true all wellpleaded material facts set forth in the complaint and all 

inferences fairly deducible from those facts. 

Yocca v. Pittsburgh Steelers Sports, Inc., 578 Pa. 479, 854 A.2d 

425, 436 (2004) (citations and internal quotation marks 

omitted). Accord, Friedman v. Corbett, ––– Pa. ––––, 72 A.3d 

255, 257 n. 2 (2013). Furthermore, 

Our standard of review of an order of the trial court

overruling or granting preliminary objections is to 

determine whether the trial court committed an error of 

law. When considering the appropriateness of a ruling on 

preliminary objections, the appellate court must apply the 

same standard as the trial court. 

Preliminary objections in the nature of a demurrer test the 

legal sufficiency of the complaint ... Preliminary objections 

which seek the dismissal of a cause of action should be 

sustained only in cases in which it is clear and free from

doubt that the pleader will be unable to prove facts legally 

sufficient to establish the right to relief. If any doubt 

exists as to whether a demurrer should be sustained, it 

should be resolved in favor of overruling the preliminary 

objections. 

Joyce v. Erie Ins. Exch., 74 A.3d 157, 162 (Pa. Super.2013) 

(citation omitted). 

Little Mountain Community Ass’n, Inc. v. Southern Columbia Corp., —
J-A23021-14

- 5 - 

A.3d — at 3 (Pa. Super. 2014), 2014 WL 1717029 at 3 (May 1, 2014). 

Initially, we note that Appellants’ instant fraud and trespass action 

may be barred by res judicata and collateral estoppel as averred by EQT in 

their preliminary objections. See generally EQT’s Preliminary Objections to 

[Appellants’] Amended Complaint, 4/5/13.1

 Appellants previously instituted 

a declaratory judgment action against EQT. As the trial court observed, in 

the 2012 declaratory judgment action, Appellants “ask[ed] that we declare 

that [Appellants] were the rightful owners of Well 650456, drilled pursuant 

to the 1913 lease, based on the alleged lack of production from that well.” 

Trial Court Memorandum, 10/22/13, at 1. In resolving the ensuing appeal, 

this Court expressed that “[e]ven if [EQT] ‘abandoned’ the gas well at some 

point, the lease itself did not terminate until October 13, 2011, when 

EQT Production Company filed a Release and Surrender of Oil and Gas Lease 

in the Greene County Recorder of Deeds.” Teska, et al. v. EQT 

Corporation, et al., 82 A.3d 463 (Pa. Super. 2013) (unpublished 

memorandum), appeal denied 85 A.3d 484 (Pa. 2014). 

____________________________________________ 

1 The trial court’s order did not “specify or discuss” this objection “in light of 

[its] disposition of the case[.]” Trial Court Memorandum, 10/22/13, at 3. 

However, “[i]t is well settled that this Court may affirm the decision of the 

trial court if it is correct on any grounds.” Liberty Mut. Ins. Co. v. Domtar 

Paper, Co., 77 A.3d 1282, 1286, citing Lilliquist v. Copes–Vulcan, Inc.,

21 A.3d 1233, 1235 (Pa. Super. 2011) (stating that an appellate court may 

affirm a trial court's decision on any grounds supported by the record on 

appeal). 
J-A23021-14

- 6 - 

 In BuyFigure.com, Inc. v. Autotrader.com, Inc., 76 A.3d 554, 560 

(Pa. Super. 2013), we determined that “res judicata and collateral estoppel 

applied to bar [a]ppellant's claims, because the claims and issues in both the 

federal and state courts had identical characteristics, and the parties were 

either identical or had privity with one another, so as to be bound in state 

court by the decisions and rulings of the federal court.” We explained: 

As [the Pennsylvania Commonwealth] Court recently 

decided in Callowhill Center Associates, [LLC v. Zoning 

Board of Adjustment, 2 A.3d 802 (Pa. Cmwlth. 2010)], the 

doctrine of res judicata/collateral estoppel applies not only 

to matters decided, but also to matters that could 

have, or should have, been raised and decided in an 

earlier action. Our decision in Callowhill Center 

Associates recognized well-settled precedent that collateral 

estoppel applies if there was adequate opportunity to raise 

issues in the previous action. Stevenson v. Silverman, 417 

Pa. 187, 208 A.2d 786 (1965); Hochman v. Mortgage 

Finance Corporation, 289 Pa. 260, 137 A. 252 (1927). 

Bell v. Township of Spring Brook, 30 A.3d 554, 558 (Pa. Cmwlth. 

2011) (emphasis supplied). 

Significantly, as emphasized by our Pennsylvania Supreme 

Court: 

As pertinently stated in Hochman v. Mortgage Fin. Corp., 

289 Pa. 260, 263, 137 A. 252, 253 (1927); ‘The [doctrine 

of res judicata] should not be defeated by minor 

differences of form, parties, or allegations, when these are 

contrived only to obscure the real purpose,-a second trial 

on the same cause between the same parties. The thing 

which the court will consider is whether the ultimate and 

controlling issues have been decided in a prior proceeding 

in which the present parties actually had an opportunity to 

appear and assert their rights. If this be the fact, then the 

matter ought not to be litigated again, nor should the 

parties, by a shuffling of plaintiffs on the record, or by 

change in the character of the relief sought, be permitted 

to nullify the rule.’ (Emphasis supplied.)
J-A23021-14

- 7 - 

Stevenson v. Silverman, 208 A.2d 786, 788 (Pa. 1965). 

Buyfigure.com, Inc., 76 A.3d at 561. 

In addressing EQT’s res judicata and collateral estoppel preliminary 

objections, Appellants conceded that “[a]lthough the parties, in some 

instances, are the same and the facts may be similar it is because

the claims all center around the same lease and the same gas 

well[.]” Appellants’ Memorandum in Opposition to [EQT’s] Preliminary 

Objections to [Appellants’] Amended Complaint, 4/23/13, at 11 

(unnumbered) (emphasis supplied). Significantly, Appellants acknowledged 

that their prior action “was a request for a declaratory judgment due to the 

controversy that arose regarding the parties’ rights to this abandoned 

well.” Id. at 12 (unnumbered) (emphasis supplied). 

Instantly, Appellants’ claims of fraud involve the payments they 

received from EQT, which was a party in the prior action. See Appellants’ 

Brief at 7-8. Further, Appellants’ trespass count relates to the same 

property, and could have been raised in the prior action. Appellants had an 

“adequate opportunity” to raise their fraud and trespass issues, and to 

“appear and assert their rights.” Buyfigure, supra, at 561. Therefore, 

Appellants’ claims and issues in the present action “had identical 

characteristics, and the parties were either identical or had privity with one 

another, so as to be bound” by the prior determination that the lease did not 

terminate until October 13, 2011, thereby precluding any finding of fraud 
J-A23021-14

- 8 - 

against EQT for continued payments, or for trespass for EQT’s prior entries 

onto Appellants’ land. 

 The applicability of res judicata and collateral estoppel 

notwithstanding, we find that Appellants’ challenge to the trial court’s order 

sustaining EQT’s preliminary objections is without merit. Appellants contend 

that “[c]ontinued payments by [EQT] of the flat rate royalty on the nonproductive gas well ... [was] a fraudulent misrepresentation that production 

continued,” and that the payments “did not establish a tenancy at will[.]” 

Appellants’ Brief at 9. 

In rebutting Appellants’ arguments, the trial court explained:

Here, [Appellants] allege that the well did not produce, 

that [EQT] knew it was not producing, that [EQT] nonetheless 

tendered the royalty payment, thereby inducing [Appellants] to 

believe that the lease was still in effect. Does the tender of 

continued royalty payments on a nonproductive well constitute 

fraud, or can it? 

The elements of fraud are: (1) a misrepresentation; (2) 

which is material to the transaction at hand; (3) made falsely 

with knowledge of its falsity; (4) with the intent of misleading 

another into relying on it; (5) justifiable reliance on the 

misrepresentation; and (6) a resulting injury which was caused 

by the reliance. Gibbs v. Ernst, 647 A.2d 802 (Pa. 1994). 

Furthermore, these elements must be stated with particularity. 

McGinn v. Vallotti, 525 A.2d 732 (Pa. Super 1987). 

Here, the alleged misrepresentation is the "continued 

remuneration to [Appellants] ... that gave rise to their 

presumption as required to maintain the lease, as compensation 

was dependent on the act of production." Amended Complaint 

Par. 28. There is no allegation of a more direct deception, such 

as a statement by [EQT] that "Your well continues to produce" or 

words to that effect. That being the case, the issue is whether 

the tender of a flat royalty payment by Lessee for a 
J-A23021-14

- 9 - 

nonproducing well is a misrepresentation. It is not. It is merely 

the tender of a royalty payment. 

 The question of what such a payment represents was 

answered in the recent case of Heasley v. KAS Energy Inc., 52 

A.3d 341 (Pa. Super 2012). In Heasley, the defendant was the 

holder of a nonproductive lease who continued to tender flat 

royalty payments even in the absence of any production. 

Defendant argued that so long as those payments were made, 

the lease stayed in effect regardless of production. Our Superior 

Court held that the duration of the Heasley lease was according 

to its terms for the primary term and "so long thereafter as oil or 

gas, or either of them, is produced therefrom". [Id. at 347.] 

This is identical to the language found in the lease before us. 

The Court further held that "[w]hen production ceased, the lease 

became an at-will tenancy subject to termination by the Lessor 

at any time". [Id.] 

The tender of a contracted for rent payment is not a

representation, but a contractual obligation. The cessation of 

production may have marked the end of the extended term of 

the lease so as to permit legal enforcement, but it did not mark 

the termination of the lease. That event occurred when 

[Appellants] returned the royalty check and filed an Affidavit of 

Non-Production. Until then, the lease was in effect and its terms 

required payment of royalties to [Appellants]. [Appellants] 

argue that the creation of a tenancy at will requires "mutual 

knowledge and consent". Memorandum In Opposition 

(unnumbered) pg. 6. On the contrary, a tenancy at will occurs 

when production ceases but payments continue. 

 For the reason that [Appellants] have not stated a cause of 

action for fraud, their count in trespass must also fail because 

during the term of the tenancy at will [EQT] still had all rights 

granted by the original lease. 

Trial Court Memorandum, 10/22/13, at 3-5. We agree. 

We have explained: 

Within the oil and gas industry, oil and gas leases 

generally contain several key provisions, including the 

granting clause, which initially conveys to the lessee the

right to drill for and produce oil or gas from the property; 

the habendum clause, which is used to fix the ultimate 
J-A23021-14

- 10 - 

duration of the lease; the royalty clause; and the terms of 

surrender....

* * * 

Typically, ... the habendum clause in an oil and gas lease 

provides that a lease will remain in effect for as long as oil 

or gas is produced “in paying quantities.” Traditionally, 

use of the term “in paying quantities” in a habendum 

clause of an oil or gas lease was regarded as for the 

benefit of the lessee, as a lessee would not want to be

obligated to pay rent for premises which have ceased to be 

productive, or for which the operating expenses exceed the 

income. More recently, however, and as demonstrated by 

the instant case, these clauses are relied on by landowners 

to terminate a lease. 

[T.W. Phillips Gas & Oil Co. v. Jedlicka, 42 A.3d 261,] 267-268 

[(Pa. 2012)]. 

Our Supreme Court has long held that “[w]here a lessor's 

compensation is subject to the volume of production, the period 

of active production of oil or gas is the measure of the duration 

of the lease.” Clark v. Wright, 311 Pa. 69, 166 A. 775, 776 

(1933). By contrast, 

[w]here [a] lessor's compensation is a definite and fixed

amount unrelated to the volume of production, the 

duration of the lease is not measured by the length of time 

the mineral is actually extracted and marketed; but by the 

time during which the lease provides that the lessor shall 

receive the fixed rental. Under these latter circumstances, 

it can make no difference to lessor whether 100 or 

1,000,000 cubic feet of gas is produced. 

Id.

Heasley v. KSM Energy, Inc. 52 A.3d 341, 344-345 (Pa. Super. 2012). 

In Heasley, we determined that the language of the gas lease 

prescribed the lease term by production, which created a tenancy at will that 

could be terminated by the landowner lessor. Specifically, we observed: 
J-A23021-14

- 11 - 

[T]he Lease Agreement in the instant case set the duration of 

the lease for twenty years, and “as long thereafter as oil or gas, 

or either of them, is produced therefrom by the party of the 

second part[.]” Lease Agreement, at p. 1 (emphasis added). 

Likewise, the Lease Agreement required [appellant] to tender 

payments only “while the gas from said well is so used[.]” Lease 

Agreement at p. 2 (Paragraph Second and Paragraph Third). By 

this language, the Lease Agreement is similar to the production 

agreement described in Cassell [v. Crothers, 44 A 446 (Pa. 

1899)]. []. The Lease Agreement, by its terms, remained in 

effect only so long as production continued. When production 

ceased, the lease became an at-will tenancy, subject to 

termination by the lessor at any time. See [T.W.] Phillips [Gas 

and Oil Co. v. Komar,] 227 A.2d [163,] 165 [(Pa. 1967)] 

(recognizing that when production ceased, the lease lapsed into 

a tenancy at-will). 

Id. at 346-347. Based on the foregoing, we approved the trial court’s 

recognition that: 

[T]he leaseholds in this case became tenancies in the nature of 

tenancies at will at the time production ceased. They thus 

became subject to termination by either party. See Cassell, 

supra. Heasley elected to terminate them, first by ceasing to 

accept KSM's payments after 2009, and second and more 

definitively, by filing suit asking the court to deem the leases to 

be terminated. That was his right under the law. 

Id. at 347 (citation omitted). 

Applying Heasley to the lease language in this case, and consonant 

with the rationale espoused by our Supreme Court in Clark, supra, as cited 

in Heasley, we find that there was a tenancy at will between the parties 

which continued until Appellants “ceas[ed] to accept” additional payments 

from EQT, and “more definitively,” after EQT filed a Release and Surrender 

of Oil and Gas Lease in the Greene County Recorder of Deeds on October 13, 

2011. Heasley, 52 A.3d at 347. Because the lease was in effect at the 
J-A23021-14

- 12 - 

time EQT proferred the lease payments, EQT did not commit fraud in issuing 

the payments, nor did EQT’s entry onto Appellants’ property constitute 

trespass. Accordingly, “it is clear and free from doubt” that Appellants “will 

be unable to prove facts legally sufficient to establish the right to relief.” 

Little Mountain, supra. We therefore affirm the trial court’s order 

sustaining EQT’s preliminary objections in the nature of a demurrer. 

 Order affirmed. 

Judgment Entered. 

Joseph D. Seletyn, Esq. 

Prothonotary 

Date: 8/26/2014