J-A04026-14

2014 PA Super 207 

NANCY M. LENAU AND DANIEL T. LENAU 

AND KATHLEEN TRIESCHOCK ON 

BEHALF OF THEMSELVES AND OTHERS 

SIMILARLY SITUATED 

IN THE SUPERIOR COURT OF 

PENNSYLVANIA 

 Appellants 

v.

CO-EXPRISE, INC. 

 Appellee No. 780 WDA 2013 

Appeal from the Order of May 1, 2013

In the Court of Common Pleas of Allegheny County 

Civil Division at No.: GD 12-022218 

BEFORE: BOWES, J., WECHT, J., and STABILE, J.

OPINION BY WECHT, J.: FILED SEPTEMBER 23, 2014 

 In this case involving subsurface mineral rights, Nancy M. Lenau, 

Daniel T. Lenau, and Kathleen Trishock (collectively, “Appellants”), appeal 

from the May 1, 2013 order that sustained the preliminary objections of CoeXprise, Inc. (“Co-eXprise”), and dismissed the Appellants’ complaint. For

the reasons that follow, we affirm. 

 The trial court summarized the factual history of this case as follows: 

This litigation arises out of the conduct of [Co-eXprise], which, 

acting as an intermediary, encouraged property owners in 

Beaver County, Pennsylvania to pool their interests by joining 

[Co-eXprise’s] “CX MarketPlace.” A property owner would join 

the CX MarketPlace by signing a form agreement prepared by 

[Co-eXprise] titled “MarketPlace Agreement.” The MarketPlace 

Agreement authorized Co-eXprise to competitively bid mineral 

rights on behalf of the aggregated group of property owners for 
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the purpose of obtaining the most favorable lease terms for each 

individual CX MarketPlace member. 

Property owners who entered into [Co-eXprise’s] MarketPlace 

Agreement were organized into groups with each group 

comprised of landowners within a defined geographical area. 

[Co-eXprise] then sought bids from energy companies on behalf 

of each group of landowners, who as a group could command 

superior bargaining power and obtain more favorable terms in 

leases of their subsurface mineral rights, thereby maximizing 

each property owner’s bonus and royalty payments.[1

] Under 

the terms of the MarketPlace Agreement, once Co-eXprise

obtained a bid from an energy company which contained lease 

terms that met or exceeded a predetermined threshold amount 

for bonus and royalty payments (outlined at [Section] 2(f) of the 

MarketPlace Agreement, [see Complaint, 11/21/12, Exhibit D, at 

1]), each property owner in the group was obligated to execute 

a mineral lease with that energy company, which lease would 

reflect the terms the energy company proposed during the 

bidding process. 

[Co-eXprise] initially promoted the MarketPlace program through 

mass[]advertising and by conducting meetings with groups of 

property owners during which Co-eXprise representatives

solicited participation in the CX MarketPlace by assuring 

landowners that MarketPlace participants would obtain the best 

available bonus and royalty payments through the competitive 

bidding process. Promotional materials were prepared by [CoeXprise] and provided to prospective MarketPlace members via 

____________________________________________ 

1

 The trial court explained such agreements as follows:

[I]n an effort to reap the gas located underground throughout 

Western Pennsylvania, a representative of an energy company 

will approach a landowner with an offer to lease the landowner’s 

mineral rights for a term of several years. In consideration for 

this mineral lease, the energy company offers an up-front bonus 

payment, usually based on the acreage of the leasehold, and 

ongoing royalty payments, which are generally calculated as a 

percentage of the market value of the extracted gas. 

Trial Court Opinion, 4/10/2013, at 1. 
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regular mail, the Internet, and by hand during promotional 

meetings. [See id. at Exhibits A-C]. Among the materials that 

[Co-eXprise] supplied [to Appellants], either directly or through 

[Co-eXprise’s] website, was a terms summary, which explained 

various terms commonly included in oil and gas leases based on 

[Co-eXprise’s] legal opinion. [See id. at Exhibit C, at 

unnumbered pages 1-3 (Lease Summary)]. [Co-eXprise] 

represented in the MarketPlace Agreement that any resulting 

lease agreement between the landowner and energy company 

would contain terms substantially similar to those contained 

within this [Lease Summary]. These terms were more favorable 

to the landowner than the terms of the standard lease 

agreements used by the energy companies. 

The MarketPlace Agreement provided for [Co-eXprise] to receive 

five percent of the up-front bonus in consideration for its 

services. The money would be paid as soon as the landowner 

and the highest[-]bidding energy company entered into a lease 

agreement reflecting the terms of the bid. 

On the basis of [Co-eXprise’s] representations, [Appellants] 

entered into MarketPlace Agreements with [Co-eXprise] in 

January 2011.1 [Co-eXprise] sought bids on behalf of 

[Appellants] and fellow MarketPlace participants, and, at the 

conclusion of the bidding process, identified Chesapeake 

Appalachia, LLC [(Chesapeake),] as the highest bidder. 

However, the Chesapeake bid for the Lenau[’s] group was lower 

than a bid that would be binding on the MarketPlace members 

under the provisions of the MarketPlace Agreement. A bid would 

be binding on the Lenau[’s] group only if it provided for no less 

than a $3,000 per acre bonus, a 17% royalty, and the 

substantial inclusion of the sample lease terms. The Chesapeake 

bid provided for a $2,350 per acre bonus and a 15% royalty. 

[See Complaint, at 9-10 ¶ 26]. 

1

 The Lenau [Appellants] signed the MartketPlace 

Agreement on or about January 24, 2011, and the 

Trieschock [Appellants] signed the MarketPlace 

Agreement on January 20, 2011. [See Co-eXprise’s 

Preliminary Objections, 1/04/2013, Exhibit 2 (Lenau 

Agreement) and Exhibit 3 (Trieschock Agreement)]. 

[Co-eXprise] notified the Lenau [Appellants] and the other 

members of their group of the offer from Chesapeake at a June 
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28, 2011 meeting, and represented that the terms reflected the 

best market terms available. These [Appellants] and the other 

members of the Lenau group received an email correspondence 

on July 15, 2011 encouraging them to accept the terms of the 

Chesapeake offer by signing an “Agreement to Accept Lease 

Offer from Chesapeake” [(Agreement to Accept)].2 The Lenau 

[Appellants] signed the Agreement to Accept on August 1, 

2011[.]3

2 [See Complaint, Exhibit F, at 1]. Trieschock received a 

similar email in September 2011 notifying her of an offer 

Chesapeake had tendered to landowners in Trieschock’s 

landowner group. 

3 [See Co-eXprise’s Preliminary Objections, 1/04/2013,] 

Exhibit 4. Trieschock, a member of a different group than 

the Lenau [Appellants], was presented with a different

offer and signed the Agreement to Accept that offer on

October 7, 2011. [Id. at] Exhibit 5. 

It appears from the record that [Co-eXprise] continued to recruit 

landowners into the CX MarketPlace and, pursuant to that 

recruitment effort, notified other landowners in the area that an 

offer had been tendered by “a major oil and gas exploration and 

production company,” which offer contained favorable lease 

terms and the best current market price available in the area. 

These prospective participants were warned that prices may 

decline, and, in order to take advantage of the offer, landowners 

should complete the CX MarketPlace and [Agreement to 

Accept].4 

4

 MarketPlace members and prospective members in the 

Lenau’s group were urged to sign the [Agreement to 

Accept] no later than August 4, 2011 in order to be eligible 

to attend the August 5, 2011 lease-signing event. 

Trieschock, again, a member of a different group, signed 

the Agreement to Accept on October 7, 2011. 

MarketPlace member landowners who elected to accept 

Chesapeake’s offer were directed to attend a lease-signing event 

where the landowners entered into individual oil and gas leases 

with Chesapeake.5 

5

 Lenau attended the lease[-]signing event on August 5,

2011; Trieschock on October 28, 2011. 
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Once a landowner signed a mineral lease with Chesapeake, [CoeXprise] collected its transaction fee—five percent of the 

landowner’s gross, up-front, bonus payment—directly from 

Chesapeake. 

Trial Court Opinion (“T.C.O.”), 4/10/2013, at 1-4.

On November 21, 2012, Appellants filed a “Complaint in Civil Act Class 

Action,” which asserted various causes of action against Co-eXprise, 

including: (1) breach of contract; (2) unauthorized practice of law; (3) 

violation of the Pennsylvania Unfair Trade Practices and Consumer Protection 

Law (“UTPCPL”)2

; (4) violation of the Pennsylvania Securities Act of 1972; 

(5) breach of fiduciary duty; and (6) unjust enrichment/disgorgement. See

Complaint, at 14-25. Specifically, Appellants asserted the foregoing claims 

as a class action: 

[Appellants] bring this action on behalf of themselves and the 

following Plaintiff Class: every citizen, or landowner, in the 

Commonwealth of Pennsylvania who has entered into a [CX 

MarketPlace Agreement] with [Co-eXprise] and paid [CoeXprise] a transaction fee pursuant to said agreement, which 

arose out of a negotiation and consummation of an oil and gas 

lease through the [CX MarketPlace p]rocess. 

Id. at 26 ¶ 88. Appellants sought certification of the class action, various 

forms of compensatory and restitutionary damages, disgorgement of CoeXprise’s transaction fee, and attorneys’ fees.

 On January 2, 2013, Co-eXprise filed a motion to assign the case to 

the Commerce and Complex Litigation Center of Allegheny County. That 

____________________________________________ 

2 See 73 P.S. § 201-1, et seq. 
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same day, the trial court granted Co-eXprise’s motion. On January 4, 2013, 

Co-eXprise filed preliminary objections in the nature of a demurrer to 

Appellants’ complaint and a brief in support of these objections. In relevant 

part, Co-eXprise argued that Appellants’ claims were legally insufficient, or 

otherwise meritless. See Co-eXprise’s Preliminary Objections, 1/04/2013, at 

8-18. On January 28, 2013, Appellants filed a brief in opposition to CoeXprise’s preliminary objections. On February 4, 2013, the trial court heard 

arguments on Co-eXprise’s preliminary objections. On April 13, 2013, the 

court filed a “Memorandum and Order of Court” sustaining Co-eXprise’s 

preliminary objections and dismissing all of Appellants’ claims. 

On April 19, 2013, Appellants filed a “Motion for Reconsideration and 

for Leave to File an Amended Brief.” On April 26, 2013, Co-eXprise filed a 

brief in opposition to reconsideration. On May 3, 2013, the trial court denied 

Appellants’ motion for reconsideration.

 On May 8, 2013, Appellants filed a timely notice of appeal. The trial 

court did not direct Appellants to file a concise statement of errors 

complained of on appeal pursuant to Pa.R.A.P. 1925(b). Consequently, 

Appellants did not elect to file such a statement. The trial court has not 

issued a separate opinion pursuant to Pa.R.A.P. 1925(a). 

 Appellants present the following issues for our consideration: 

I. Whether the trial [c]ourt erred as a matter of law by 

sustaining [Co-eXprise’s] preliminary objections to all [c]ounts of 

[Appellants’ c]omplaint:
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A. Where the [t]rial [c]ourt erred as a matter of law in its 

interpretation of ambiguous contract provisions, which 

otherwise support a breach of contract claim[] sufficient to 

overcome preliminary objections? 

B. By concluding as a matter of law that the allegations of 

the [c]omplaint and the [e]xhibits attached thereto 

including admissions during argument, do not raise a 

factual issue as to whether [Co-eXprise] have engaged in 

the unauthorized practice of law? and; 

C. By concluding as a matter [of law] that the lease of 

natural gas rights at issue is not a security as defined by 

the Pennsylvania Securities Act [of 1972]? 

D. By dismissing claims of breach of fiduciary duty and 

unjust enrichment? 

Appellants’ Brief at 4 (emphasis in original). All of Appellants’ claims relate 

to the trial court’s decision to sustain Co-eXprise’s preliminary objections in 

the nature of a demurrer. Our standard of review in this context is wellestablished: 

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. When considering preliminary 

objections, all material facts set forth in the challenged pleadings 

are admitted as true, as well as all inferences reasonably 

deducible therefrom. 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. 
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Feingold v. Hendrzak, 15 A.3d 937, 941 (Pa. Super. 2011) (quoting Haun 

v. Community Health Systems, Inc., 14 A.3d 120, 123 (Pa. Super. 

2011)). 

 In their first claim, Appellants argue that the terms of the MarketPlace 

Agreement regarding the payment of transaction fees to Co-eXprise are 

ambiguous and should be construed in favor of Appellants: 

Specifically, [Appellants] allege[,] and the [e]xhibits and 

documents support [a conclusion,] that [Co-eXprise] breached 

[the MarketPlace Agreement] by promising that the payment of 

the transaction fee will be a written obligation imposed on the 

successful bidder in the lease agreement, ([e]qual to 5 [percent] 

multiplied by the gross up[-]front bonus payment upon the 

completion of each negotiation event), but failed to ultimately 

impose the transaction fee upon the successful bidder, and 

binding the landowners to a similar renewal term (with the 

ultimate[ly] successful bidder[,] Chesapeake) at the expiration 

of the initial five[-]year lease term. In this regard, the [t]rial 

[c]ourt erred in its interpretation of the contract language as 

“unambiguous” and consistent with the interpretation advanced 

by Co-eXprise. 

Appellants’ Brief at 17 (emphasis in original). Thus, Appellants argue that 

the MarketPlace Agreement was ambiguous, such that the trial court should 

not have sustained Co-eXprise’s preliminary objections. Id. at 20, 22. We 

disagree. 

The legal standards governing our review of the trial court’s contract 

interpretation are axiomatic. “The interpretation of a contract is a matter of 

law and, as such, we need not defer to the trial court’s reading of the 

[a]greement.” Integrated Project Servs. v. HMS Interiors, Inc., 931 
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A.2d 724, 732 (Pa. Super. 2007) (quoting Welteroth v. Harvey, 912 A.2d 

863, 866 (Pa. Super. 2006)). 

It is also well[-]established that under the law of contracts, in 

interpreting an agreement, the court must ascertain the intent of 

the parties. 

In the cases of a written contract, the intent of the parties is the 

writing itself. If left undefined, the words of a contract are to be 

given their ordinary meaning. Pines Plaza Bowling, Inc. v. 

Rossview, Inc., 145 A.2d 672, 676 (Pa. 1958). When the 

terms of a contract are clear and unambiguous, the intent of the 

parties is to be ascertained from the document itself. 

Hutchison v. Sunbeam Coal Corp., 519 A.2d 385, 390 (Pa. 

1986). When, however, an ambiguity exists, parol evidence is 

admissible to explain or clarify or resolve the ambiguity, 

irrespective of whether the ambiguity is patent, created by the 

language of the instrument, or latent, created by extrinsic or 

collateral circumstances. Steuart v. McChesney, 444 A.2d 

659, 663 (Pa. 1982); Herr’s Estate, 161 A.2d 32, 34 (Pa. 

1960). 

Kripp v. Kripp, 849 A.2d 1159, 1163 (Pa. 2004) (citations modified). 

 With specific reference to what constitutes “ambiguity” in the context 

of contract interpretation, our Supreme Court has opined as follows: 

Contractual language is ambiguous “if it is reasonably 

susceptible of different constructions and capable of being 

understood in more than one sense.” Hutchison, 519 A.2d at 

390. This is not a question to be resolved in a vacuum. Rather, 

contractual terms are ambiguous if they are subject to more 

than one reasonable interpretation when applied to a particular 

set of facts. See Gamble Farm Inn, Inc. v. Selective Ins. 

Co., 656 A.2d 142, 144 (Pa. Super. 1995); Techalloy Co., Inc. 

v. Reliance Ins. Co., 487 A.2d 820, 823 (Pa. Super. 1984). We 

will not, however, distort the meaning of the language or resort 

to a strained contrivance in order to find an ambiguity. Steuart, 

444 A.2d at 663. 

Madison Const. Co. v. Harleysville Mut. Ins. Co., 735 A.2d 100, 106 (Pa. 

1999) (citations modified). Additionally, “[i]t is axiomatic that contractual 
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clauses must be construed, whenever possible, in a manner that effectuates 

all of the clauses being considered.” Welteroth, 912 A.2d at 866 (citing 

Flatley by Flatley v. Penman, 632 A.2d 1342, 1344 (Pa. Super. 1993)). 

“It is fundamental that one part of a contract cannot be so interpreted as to 

annul another part and that writings which comprise an agreement must be 

interpreted as a whole.” Southwestern Energy Prod. Co. v. Forest Res., 

LLC, 83 A.3d 177, 187 (Pa. Super. 2013) (citing Shehadi v. Northeastern 

Nat’l Bank, 378 A.2d 304, 306 (Pa. 1977)). 

 In relevant part, the MarketPlace Agreement that is implicated by 

Appellants’ first claim provides as follows:

3. Transaction Fee. For the following addresses identified 

in Exhibit B, Owner[3

] shall pay a “Transaction Fee,” through the 

Lease Agreement with the successful Bidder,[4

] in an amount 

equal to 5% multiplied by the gross up front bonus payment 

upon the completion of each Negotiation Event. The payment of 

the Transaction Fee shall be a written obligation imposed on the 

successful Bidder in the Lease Agreement. In the event that 

while this MarketPlace Agreement is in effect, Owner breaches 

this MarketPlace Agreement and enters a Lease Agreement on 

any of the Parcels outside of the MarketPlace Agreement, Owner 

shall be responsible to pay the Transaction Fee pertaining to 

such Parcel. 

____________________________________________ 

3

 In the MarketPlace Agreement, the term “Owner” refers to “the owner 

of the mineral rights to the Parcels.” MarketPlace Agreement, at 1. In the 

instant context, “Owner” refers to Appellants.

4

 According to the language of the MarketPlace Agreement, the term 

“Bidder” refers to “oil and gas drillers and other interested lessees (e.g., gas 

companies, financial institutions, and others that may be interested in 

obtaining mineral rights in the [p]arcels . . .).” MarketPlace Agreement, at 

1. Here, “Bidder” refers to Chesapeake. 
J-A04026-14

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MarketPlace Agreement, at 1 ¶ 3. 

 Appellants argue that this language is ambiguous, in that it does not 

clearly delineate which party bears the burden of paying a “transaction fee”:

There is one sentence in Section 3 of the [MarketPlace 

Agreement] that is clear and unambiguous[,] which is as follows: 

“The payment of the transaction fee shall be a written obligation 

imposed on the successful bidder in a lease agreement.” There 

is nothing ambiguous about this sentence. It mandates that the 

“success[ful] bidder” (in this case[, Chesapeake]) will have the 

“obligation” for “payment of the transaction fee”.

The [t]rial [c]ourt, attempting to give effect to all of the words in 

Section 3, interprets the second sentence as reading[,] “the 

successful bidder will make the payment to Co-eXprise on behalf 

of the owner.” [T.C.O. at] 7 . . . . However, that is not the 

language Co-eXprise utilized in the contract. The language 

utilized does not clearly impose the obligation to pay the 

transaction fee on the owner. Section 3 is ambiguous in that it 

does not state who the transaction fee will be paid to[,] or whose 

services are being compensated. Finally, the last sentence of 

Section 3 states “in the event that while this MarketPlace 

Agreement is in effect, owner breaches this [M]arket[P]lace 

[A]greement and enters a lease agreement on any of the parcels 

outside of the [M]arket[P]lace [A]greement, owner will be 

responsible to pay the transaction fee pertaining to such 

parcel”, which creates ambiguity in relation to the first 

sentence. 

Appellants’ Brief at 18-19 (emphases in original). 

However, as the trial court explained, Appellants’ proposed 

interpretation of Section 3 of the MarketPlace Agreement is a selective 

reading that focuses upon the meaning of a single sentence, to the exclusion 

of the other relevant language: 

Section 3 clearly provides for the landowner to make the five 

percent bonus payment. The first sentence provides for 
J-A04026-14

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[Appellants] to pay a transaction fee of five percent of the gross 

up-front bonus payment. The second sentence provides that 

[Chesapeake] will make the five-percent payment to [CoeXprise] on behalf of [Appellants]. However, if [Appellants], in 

breach of [their] agreement with [Co-eXprise], enter[] into a 

contract that does not include a written obligation for 

[Chesapeake] to make the five-percent payment to [Co-eXprise] 

on behalf of [Appellants], [Appellants] will be responsible for 

transmitting the payment. 

T.C.O. at 5. We concur with the trial court’s cogent interpretation of the 

instant contract provision. The first sentence of Section 3 unambiguously 

states that the landowners—in this case, Appellants—bear the financial 

responsibility of paying Co-eXprise’s transaction fee out of the proceeds of 

their initial bonus payment. The second sentence of Section 3, which places 

the obligation of actually transmitting those funds upon Chesapeake, does 

not obviate the Appellants’ responsibility to pay, but merely specifies the 

manner in which payment shall be effected. Contrary to Appellants’ claims, 

the third sentence of Section 3 does not create ambiguity, but merely 

provides for a contingency in which a landowner breaches the MarketPlace 

Agreement by entering into a lease agreement that does not expressly 

provide for the payment of a transaction fee. 

 By focusing solely upon the meaning of the second sentence of Section 

3, Appellants’ argument engages in the exact type of limited interpretation 

that our governing precedent forbids. See Southwestern Energy Prod., 

83 A.3d at 187. This Court’s consideration of contracts must seek to give 

full effect to an entire document, if possible, and not only those portions 
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supporting a specific conclusion. Id. “Mere disagreement between the 

parties on the meaning of language or the proper construction of contract 

terms does not constitute ambiguity.” Pappas v. UNUM Life Ins. Co. of 

America, 856 A.2d 183, 187 (Pa. Super. 2004). Instantly, Appellants argue 

that the second sentence of Section 3 indicates that payment of the 

“transaction fee” is the sole responsibility of a “successful bidder”— in this 

case, Chesapeake. However, Appellants’ interpretation of the contract flatly 

ignores the first sentence of Section 3, which clearly indicates that the 

financial responsibility of payment is upon the landowner. See T.C.O. at 5 

(“Under [Appellants’] reading of Section 3, the words ‘Owner shall pay a 

“Transaction Fee”’ have no meaning. [Co-eXprise’s] construction, on the 

other hand, gives meaning to each provision within Section 3.”).

 Based upon the foregoing discussion, we conclude that the contract 

terms of Section 3 of the MarketPlace Agreement are not ambiguous. 

Consequently, the trial court did not err in sustaining Co-eXprise’s 

preliminary objections on this ground, and Appellants’ first claim fails.

 In their second claim, Appellants allege that the trial court erred in 

dismissing Appellants’ claim that Co-eXprise engaged in the unauthorized 

practice of law. See Appellants’ Brief at 22-23. The trial court has provided 

an excellent summary of the conduct referenced by Appellants in support of 

their position: 
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In support of their position that [Co-eXprise] is practicing law, 

[Appellants] refer to the following activities: [Co-eXprise] 

solicited landowners requesting they participate in its bidding 

scheme; [Co-eXprise] presented an agreement for the 

landowners to execute in order for them to receive [CoeXprise’s] services; [Co-eXprise] delivered to the landowners an 

explanation of the terms of a lease that the winning bidder will 

be required to use; [Co-eXprise] described to the landowners the 

terms of the highest bid and recommended that they accept the 

bid; [Co-eXprise] furnished information to the landowners who 

accepted the bid as to documents that would need to be brought 

to the mass signing and other relevant information; and the 

bidder and the landowner[s] were required to sign the lease 

agreement provided by [Co-eXprise] which included protections 

to the landowners that are not typically included in the form 

leases of the energy company. 

T.C.O. at 6-7 (footnote omitted). Thus, Appellants allege that Co-eXprise 

engaged in the unauthorized practice of law. We disagree. 

 The unauthorized practice of law is prohibited in Pennsylvania, and 

such conduct is criminalized. See 42 Pa.C.S.A. § 2524(a). Additionally, 

Section 2524(c) creates a private civil cause of action in connection with the 

unauthorized practice of law. Id. at § 2524(c). In pertinent part, the 

statute reads as follows: 

(c) Injunction.—In addition to criminal prosecution, 

unauthorized practice of law may be enjoined in any county 

court of common pleas having personal jurisdiction over the 

defendant. The party obtaining such an injunction may be 

awarded costs and expenses incurred, including reasonable 

attorney fees, against the enjoined party. A violation of 

subsection (a) is also a violation of the act of December 17, 

1968 (P.L. 1224, No. 387), known as the Unfair Trade Practices 

and Consumer Protection Law. 

Id. 
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 The Supreme Court of Pennsylvania has thoroughly discussed what 

constitutes “the practice of law”:

The Pennsylvania Constitution vests with our [Supreme] Court 

the exclusive authority to regulate the practice of law, which 

includes the power to define what constitutes the practice of law. 

Pa. Const. Art. V, § 10(c); Dauphin County Bar Association v. 

Mazzacaro, 351 A.2d 229, 233 (Pa. 1976). What constitutes 

the practice of law, however, is not capable of a comprehensive 

definition. For this reason, [the Supreme] Court has not 

attempted to provide an all-encompassing statement of what 

activities comprise the practice of law. Office of Disciplinary 

Counsel v. Marcone, 855 A.2d 654, 660 (Pa. 2004); Shortz 

et. al. v. Farrell, 193 A. 20, 21 (Pa. 1937). Thus, we have 

determined what constitutes the practice of law on a case-bycase basis. 

While our Court has addressed the question of what constitutes 

the practice of law on an individualized basis, we have made 

clear that paramount to the inquiry is consideration of the public 

interest. Marcone, 855 A.2d at 658; Dauphin County, 351 

A.2d at 233. Consideration of the public interest has two related 

aspects: protection of the public and prudent regulation so as 

not to overburden the public good. 

Regarding the protection of the public, then Justice, later Chief 

Justice Stern perhaps best summarized this aspect of the Court’s 

concern in Shortz[:]

While in order to acquire the education necessary to gain 

admission to the bar and thereby become eligible to 

practice law, one is obliged to “scorn delights, and live 

laborious days,” the object of the legislation forbidding 

practice to laymen is not to secure lawyers a monopoly, 

however deserved, but, by preventing the intrusion of 

inexpert and unlearned persons in the practice of law, to 

assure to the public adequate protection in the pursuit of 

justice, than which society knows no loftier aim. 

Shortz, 193 A. at 24. 

* * * 
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When considering the public interest, our [Supreme] Court has 

focused on the character of the activities at issue. In Shortz, 

our [Supreme] Court set forth three broad categories of 

activities that may constitute the practice of law: (1) the 

instruction and advising of clients in regard to the law so that 

they may pursue their affairs and be informed as to their rights 

and obligations; (2) the preparation of documents for clients 

requiring familiarity with legal principles beyond the ken of 

ordinary laypersons; and (3) the appearance on behalf of clients 

before public tribunals in order that the attorney may assist the 

deciding official in the proper interpretation and enforcement of 

the law. Shortz, 193 A. at 21. More recently, our [Supreme] 

Court expressed that the practice of law is implicated by the 

holding out of oneself to the public as competent to exercise 

legal judgment and the implication that he or she has the 

technical competence to analyze legal problems and the requisite 

character qualifications to act in a representative capacity. 

Dauphin County, 351 A.2d at 232-33 (considering whether 

licensed casualty adjuster’s representation of third parties 

constituted the unauthorized practice of law). Thus, the 

character of the actions taken by the individual in question is a 

significant factor in the determination of what constitutes the 

practice of law. 

Harkness v. Unemployment Comp. Bd. of Review, 920 A.2d 162, 166-

67 (Pa. 2007) (footnotes omitted). “Cognizant that a determination of the 

practice of law is made on a case-by-case basis, focusing primarily on 

protection of the public and the public weal, and in doing so, considering the 

character of the activities . . . , we turn to the facts at issue in this appeal.” 

Id. at 167. 

 Appellants argue that Co-eXprise’s actions “directly satisf[y] our 

Supreme Court’s definition of the practice of law because this conduct

require[d] abstract understanding of legal principals [sic] and refined skill for 
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their concrete application.” Appellants’ Brief at 23. Specifically, Appellants 

allege that Co-eXprise’s actions:

required an understanding of each landowner’s property rights, 

encumbrances on the property, liens, easements, and certain 

environmental issues. The transactions contemplated require[d] 

an understanding of the legal principals [sic] implicated by 

contract law and real property law. Oil, gas and mineral rights 

law is itself a specialty in Pennsylvania. There are a variety of 

concepts including surface rights for drilling, surface rights for 

pipelines, rights to natural gas storage, concerns related to 

environmental pollution, just to name a few. 

Id. at 24. While Appellants urge that Co-eXprise’s actions constitute the 

practice of law, we agree with the trial court’s apt assertion that the mere 

fact that a company utilizes documents prepared by lawyers, and relies upon 

the opinions of lawyers in conducting its business, does not, ipso facto, 

indicate that a company is practicing law: 

[W]hat [Appellants] describe is a bidding company conducting its 

business. There is no explanation by [Appellants] as to which of 

the activities described above constitute the practice of law. 

Lawyers are frequently involved in drafting the writings that the 

more sophisticated party to a transaction will use. The drafting

of the writings may be the practice of law. But the use of those 

writings has nothing to do with the practice of law. 

T.C.O. at 7 (emphases added). 

 Assuming, arguendo, that Co-eXprise’s actions touched upon matters 

that are typically handled by lawyers, our Supreme Court has specifically 

endorsed such actions in the limited context of business transactions: 

There can be no objection to the preparation of deeds and 

mortgages or other contracts by such brokers so long as the 

papers involved pertain to and grow out of their business 
J-A04026-14

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transactions and are intimately connected therewith. The 

drafting and execution of legal instruments is a necessary 

concomitant of many businesses, and cannot be considered 

unlawful. Such practice only falls within the prohibition . . . 

when the documents are drawn in relation to matters in no 

matter connected with the immediate business of the person 

preparing them, and when the person so drafting them is not a 

member of the bar and holds himself out as specially qualified 

and competent to do that type of work. 

Childs v. Smeltzer, 171 A. 883, 885-86 (Pa. 1934) (emphasis added). 

Instantly, Co-eXprise’s actions were limited solely to the subject matter of 

securing leases for natural gas exploitation on Appellants’ respective 

properties. Appellants have not alleged that Co-eXprise held itself out as a 

legal actor in any way beyond Co-eXprise’s immediate business interests.5

____________________________________________ 

5

 Moreover, in Childs, the Supreme Court specifically held that “[a] real 

estate broker is not prohibited from drawing a deed of conveyance or other 

appropriate instrument relating to property of which he or his associates 

have negotiated a sale or lease.” Childs, 171 A. at 886. Although the trial 

court does not cite Childs, its discussion certainly alludes to the many 

parallels between Co-eXprise’s business practices, and those endorsed by 

Childs: 

There is not a great deal of difference between the activities 

performed by [Co-eXprise] in this case and the activities 

performed by a real estate agent for a seller of residential 

property. The agent solicits the general public; the agent follows 

up on leads; the agent is retained by having the seller sign a 

form agreement prepared by the agent’s company; the sales 

agent explains the terms of the form agreement to the seller 

before it is signed; there may be bargaining between the sales 

agent and the seller; the agent makes recommendations to the 

seller regarding the value of the seller’s property and how to 

respond to offers; unless the buyer is represented by counsel, 

the agent will have the buyer sign the form sales agreement 

used by the agent’s company; there may be negotiations

(Footnote Continued Next Page) 
J-A04026-14

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Ultimately, we agree with the trial court’s conclusion that Appellants 

have failed to allege any facts that, if proved at trial, would lead to a 

conclusion that Co-eXprise was engaged in the unauthorized practice of law. 

While our Supreme Court has clearly stated that we should guard against 

unauthorized legal practice, that Court also has cautioned against 

unnecessarily expanding our definition of what constitutes such practice: 

While the public interest is certainly served by the protection of 

the public, it is also achieved by not burdening the public by too 

broad a definition of the practice of law, resulting in the 

overregulation of the public’s affairs. As stated by our 

[Supreme] Court in Dauphin County[:]

The threads of legal consequences often weave their way 

through even casual contemporary interactions. There are 

times, of course, when it is clearly within the ken of lay 

persons to appreciate the legal problems and 

consequences involved in a given situation and the factors 

which should influence necessary decisions. No public 

interest would be advanced by requiring these lay 

judgments to be made exclusively by lawyers . . . . 

Dauphin County, 351 A.2d at 233. 

(Footnote Continued) _______________________ 

between the agent for the seller and the buyer and/or the 

buyer’s agent resulting in modifications to the sales agreement; 

and if the buyer has an attorney, the attorney will negotiate 

directly with the agent for the seller. 

Also consider the typical transaction involving mineral rights: a 

representative of the energy company solicits the landowner; the 

representative furnishes a copy of its form lease for the 

landowner to sign; the representative explains and/or responds 

to questions of the landowner about its contents; and the 

representative assumes responsibility for all of the paperwork. 

T.C.O. at 7. 
J-A04026-14

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Harkness, 920 A.2d at 167.6 

 Based upon the foregoing discussion, we conclude that the trial court 

did not err in dismissing Appellants’ claim that Co-eXprise engaged in the 

unauthorized practice of law. Appellants were not pursuing legal 

representation through Co-eXprise. Rather, Appellants engaged in contract 

negotiations regarding their mineral rights with Co-eXprise, negotiations 

which Co-eXprise is authorized to undertake as a matter of Pennsylvania 

law. See Childs, 171 A. at 886. Consequently, Appellants’ second claim

fails. 

 In their third issue before this Court, Appellants assert that Co-eXprise 

has violated the Pennsylvania Securities Act of 1972: 

[Appellants’ c]omplaint alleges that Co-eXprise violated the 

Pennsylvania Securities Act of 1972 by providing investment 

advice as defined by the Act to [Appellants] and other 

____________________________________________ 

6 Moreover, as the trial court points out, endorsing Appellants’ definition 

of what constitutes the “unauthorized practice of law” would have serious 

commercial consequences: 

The landowners did not look to [Co-eXprise] for legal

representation. Except for those landowners who consulted with 

counsel, the landowners would have viewed themselves as

unrepresented persons deciding whether to contract with [CoeXprise]. . . . Thus, if the courts were to agree with

[Appellants’] contention that a complicated, proposed 

transaction described to a consumer by a more sophisticated

party constitutes the unauthorized practice of law, many

businesses would be put out of business. 

T.C.O. at 6. 
J-A04026-14

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landowners. [Appellants] have alleged that Co-eXprise ha[s] not 

properly registered with the Pennsylvania Securities Commission 

as required by Section 301 of the Securities Act. The touchstone 

of [Appellants’ c]omplaint is the allegation that the Pennsylvania 

Securities Act of 1972 defines participation in an oil, gas or 

mining title or lease (or in payments out of production under 

such a lease or title) to be a security subject to the Act. 

Appellants’ Brief at 28-29 (citing 70 P.S. § 1-102(t)). Thus, Appellants 

argue that Co-eXprise improperly acted as an “investment adviser” while “in 

the business of advising others . . . as to the value of securities or as to the 

advisability of investing, purchasing, or selling securities[.]” 70 P.S. § 1-

102(j). 

Appellants’ claim calls upon us to interpret the meaning of the 

Pennsylvania Securities Act of 1972. “Because statutory interpretation is a 

question of law, our standard of review is de novo, and our scope of review 

is plenary.” Commonwealth v. Hacker, 15 A.3d 333, 334 (Pa. 2011) 

(citing Snead v. SPCA of Pennsylvania, 985 A.2d 909, 912 (Pa. 2009)). 

“In matters of statutory interpretation, the General Assembly’s intent is 

paramount.” Id. (citing 1 Pa.C.S.A. § 1921(a) (“The object of all 

interpretation and construction of statutes is to ascertain and effectuate the 

intention of the General Assembly. Every statute shall be construed, if 

possible, to give effect to all its provisions.”)). This Court previously has 

identified this underlying intent: 

The Pennsylvania Securities Act is remedial legislation. Its 

primary purpose is to protect the investing public. The Act 

contemplates an investigation to determine whether the

securities are being offered to the public honestly and in good 
J-A04026-14

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faith without any intent to deceive or defraud. Commonwealth 

v. Summons, 41 A.2d 697, 699 (Pa. Super. 1945). That part of

the Securities Act[,] therefore[,] which specifies classes of 

investments which are within the contemplation of the 

legislation, is to be liberally construed. And the clear intent of 

the Act is not to be defeated by a too literal reading of words 

without regard to their context and the evils which the Act 

clearly was designed to correct. 

Commonwealth v. Yaste, 70 A.2d 685, 687 (Pa. Super. 1950); see also 

Commonwealth v. Bomersbach, 393 A.2d 995, 998 (Pa. Super. 1978) 

(“[T]he section of the [Pennsylvania Securities] Act which delineates the 

classes of investments that are to be protected must be liberally 

construed.”) (citing Yaste, 70 A.2d at 687). 

The Pennsylvania Securities Act of 1972 defines “security” as follows:

(t) “Security” means any note; stock; treasury stock; bond; 

debenture; evidence of indebtedness; share of beneficial interest 

in a business trust; certificate of interest or participation in any 

profit-sharing agreement; collateral trust certificate;

preorganization certificate or subscription; transferable share; 

investment contract; voting trust certificate; certificate of 

deposit for a security; limited partnership interest; fractional 

undivided interest in oil, gas or other mineral rights; put, 

call, straddle, option or privilege on a security, certificate of 

deposit of a security or group or index of securities, including 

any interest in the securities or based upon the value of the 

securities, or any put, call, straddle, option or privilege entered 

into on a national securities exchange relating to foreign 

currency; membership interest in a limited liability company of 

any class or series, including any fractional or other interest in 

such interest, unless excluded by clause (v); or, in general, any 

interest or instrument commonly known as a “security”; or any 

certificate of interest or participation in, temporary or interim 

certificate for, receipt for, guarantee of, or warrant or right to 

subscribe to or purchase, any of the foregoing. All of the 

foregoing are securities whether or not evidenced by written 

document. 
J-A04026-14

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70 P.S. § 1-102(t) (emphasis added). As noted above, Pennsylvania’s 

definition of a “security” includes the “fractional undivided interest in oil, 

gas, or other mineral rights.” Id. 

 The Pennsylvania Securities Act of 1972 also states the following with 

regard to “investment advisers”:

§ 1-301. Registration requirement. 

* * * 

(c) It is unlawful for any person to transact business in this 

State as an investment adviser unless he is so registered or 

registered as a broker-dealer under this act or unless he is 

exempted from registration. It is unlawful for any person to 

transact business in this State as an investment adviser 

representative unless he is so registered or exempted from 

registration. 

Id. at § 1-301(c). In the light of the foregoing, our task is clear. We must 

ascertain whether the leasing of mineral rights in this context constitutes a 

“fractional undivided interest in oil, gas, or other mineral rights” and thus a 

“security,” see id. at § 1-102(t), such that Co-eXprise must be registered as 

an “investment adviser” to engage in its present business practices. 

 Our Court adjudicated a question very similar to this in Yaste, 70 A.2d 

at 686, albeit under the Pennsylvania Securities Act of 1939.7

 In Yaste, this 

____________________________________________ 

7

 The terms of the Pennsylvania Securities Act of 1939 that defined what 

constitutes a “security” have since been repealed. See 70 P.S. § 32. 

However, the language used in the earlier iteration of this statute that is 

relevant to our present inquiry is identical to the current language. 

Compare Yaste, at 686 (“70 P.S. § 32, defines a security in this language: 

(Footnote Continued Next Page) 
J-A04026-14

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Court concluded that a “working interest in and to the net proceeds from the 

sale of . . . oil and gas” constituted a “security” because “sale of oil rights in 

a variety of forms were intended to be made subject to the regulatory 

powers of the Commonwealth in our Securities Act.” Id. at 688. However, 

in so holding, we specifically exempted the type of royalty agreements 

implicated by the instant case. Specifically, we relied upon an earlier 

holding of the U.S. Supreme Court: 

It may be noted that a royalty interest in an oil lease, as the 

subject matter of sale, ha[s] been held not to be a security 

within the definition of the Act and therefore not within its 

purview. . . . [A] royalty interest in an oil lease, as the subject 

matter of sale, ha[s] been held not to be a security for the very 

reason that it was [considered] real property under the

Securities Act of April 13, 1927, P.L. 273, 70 P.S. § 1, et seq., 

which included “oil, gas, or mining lease or certificate of any 

interest in or under the same” within the definition of a security. 

The precise question was before the Supreme Court of the 

United States in Securities and Exchange Comm. v. C.M. 

Joiner Leasing Corp., 320 U.S. 344 (1943). In that case[,] the 

[U.S. Court of Appeals for the Fifth Circuit] had adopted a 

construction of the Federal Securities Act of 1933[,] which 

excluded from its operation all trading in oil and gas leases. The 

definition of “security” under section 2(1) of the Federal Act of 

May 27, 1933, as amended, 15 U.S.C. § 77(b)(1), is 

substantially the same as that of the Pennsylvania Act and 

includes “fractional undivided interest in oil, gas, or other 

mineral rights” in the identical language of our Act. In that 

case[,] the defendants held leases on a large tract of land in 

Texas which they had obtained in consideration of their

(Footnote Continued) _______________________ 

. . . . The term ‘security’ means any . . . fractional undivided interest in 

oil, gas, or other mineral rights.”) (emphasis in original), with 70 P.S. 

§ 1-102 (“‘Security’ means any . . . fractional undivided interest in oil, gas or 

other mineral rights.”) (emphasis omitted). Thus, despite the relative age of 

our opinion in Yaste, we conclude that its interpretation remains relevant. 
J-A04026-14

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agreement to drill a test well. On the inducement of the 

proposed exploration well[,] they sold small subdivisions of their 

leasehold to about fifty purchasers on an acreage basis. The 

sales literature assured the prospect that the drilling of a well, so 

located as to test the oil producing possibilities of the offered 

leaseholds, would be pushed to completion. Other language in 

the advertising literature emphasized the character of the 

purchase as an investment and as a participation in an 

enterprise. In disposing of the question whether the sales of 

leasehold acreage were sales of “securities[,]” the [C]ourt said: 

It is urged that because the definition mentions “fractional 

undivided interest in oil, gas, or other mineral rights,” it 

excludes sales of leasehold subdivision by parcels. Oil and 

gas rights posed a difficult problem to the legislative

draftsman. Such rights were notorious subjects of 

speculation and fraud, but leases and assignments were 

also indispensable instruments of legitimate oil exploration 

and production. To include leases and assignments by 

name might easily burden the oil industry by controls that 

were designed only for traffic in securities. This was 

avoided by including specifically only that form of splitting 

up of mineral interests which had been most utilized for 

speculative purposes. We do not think the draftsmen 

thereby immunized other forms of contracts and offerings 

which are proved as matter of fact to answer to such 

descriptive terms as “investment contracts” and 

“securities.”

Joiner, 320 U.S. at 352. 

Yaste, 70 A.2d at 687-88 (footnote omitted). Thus, in Yaste, the Court 

determined that arrangements which constituted “[a] form of splitting up of 

mineral interests . . . utilized for speculative purposes” were sales of 

securities, but that other transfers of gas rights were not so burdened. See 

id. 

Our case law on the subject of which mineral rights leaseholds 

constitute a “fractional undivided interest in oil and gas” is limited. In 
J-A04026-14

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Martin v. ITM International Trading & Marketing, 494 A.2d 451, 453 

(Pa. Super. 1985), our Court derived some guidance from federal case law, 

inasmuch as the relevant language in the federal Securities Act of 1933 is 

identical to the Pennsylvania Securities Act of 1972. See Martin, 494 A.2d 

at 453; compare 15 U.S.C.S. § 77b(a)(1), with 70 P.S. § 1-102(t). Like 

the Martin panel, we turn to the federal courts for assistance in determining 

whether the instant royalty agreements constitute regulated securities. See 

id.; see also Yaste, 70 A.2d at 687-88.

Our own Third Circuit has explained the meaning of a fractional 

undivided interest as follows: 

[A]n interest arises when a lessee of mineral rights sells parts of 

its interest in the rights in order to finance the development of 

the minerals. These are fractionalized undivided working 

interests because they give the investor rights to a percentage of 

the actual minerals “worked” from the lease or the proceeds 

therefrom and are subject to at least part of the expense of 

development, operation, or maintenance. 

Penturelli v. Spector, Cohen, Gadon & Rosen, Attorneys at Law, P.C., 

779 F.2d 160, 165 (3d Cir. 1985). 

Furthermore, many federal courts8

 have approved of the analysis set 

forth in Woodward v. Wright, 266 F.2d 108, 112 (10th Cir. 1959), which 

explained: 

____________________________________________ 

8 See, e.g., Nolfi v. Ohio Ky. Oil Corp., 675 F.3d 538, 547 (6th Cir. 2012); 

Pacific Dunlop Holdings v. Allen & Co., 993 F.2d 578, 581 (7th Cir. 

1993); Adena Exploration, Inc. v. Sylvan, 860 F.2d 1242, 1244 (5th Cir. 

(Footnote Continued Next Page) 
J-A04026-14

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the sale or offering for sale of an oil and gas lease, or an 

undivided interest therein, may be the sale of an “investment 

contract”, hence a security, when the transaction carries with it 

something more than the assignment of a “naked leasehold 

right”, as where the purchasers look entirely to the efforts of 

other persons to make their investment a profitable venture. 

Woodward, 266 F.2d at 112. Under Woodward, “if a fractional undivided 

interest is created for the purpose of sale, the conveyance of the interest is 

the sale of the security.” Adena Exploration, Inc. v. Sylvan, 860 F.2d 

1242, 1246 (5th Cir. 1988). 

The statutory definition of a security includes both relatively 

specific categories, composed of “instruments whose names 

alone carry well-settled meaning,” and “more variable” 

categories, composed of instruments referenced by “descriptive 

terms.” . . . In Penturelli v. Spector, Cohen, Gadon & 

Rosen, . . . [t]he court noted that a “fractional undivided

working interest” in a mineral lease arises “when a lessee of 

mineral rights sells parts of its interest in the rights in order to 

finance the development of the minerals.” The court stressed 

that the 1933 Act specifically enumerates these fractional 

interests as securities, stating: 

Congress chose not to include leases and assignments 

because they were indispensable instruments of legitimate

oil exploration and production and it wanted to avoid 

burdening the oil industry by controls that were designed 

only for traffic in securities. On the other hand, Congress 

did specifically mention in the Acts the fractional undivided 

interest, which was “that form of splitting up mineral 

interests which had been most utilized for speculative 

purposes.”

(Footnote Continued) _______________________ 

1988); Penturelli, 779 F.2d 160 at 166; Gilbert v. Nixon, 429 F.2d 348, 

354 (10th Cir. 1970); Shimer v. Webster, 225 A.2d 880, 883 (D.C. 1967); 

Fund of Funds, Ltd. v. Arthur Andersen & Co., 545 F. Supp. 1314, 1346 

(S.D.N.Y. 1982). 
J-A04026-14

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Adena, 860 F.2d at 1247-1248 (footnotes omitted).9

 

Thus, in Adena, the Fifth Circuit held that general leases and 

assignments of oil and mineral rights do not constitute securities. The Court 

addressed the language of the federal securities statutes and determined 

that “Congress, in other words, did not leave judges the difficult task of 

balancing the need for regulation against the burdens to the oil industry. 

Rather, Congress singled out ‘fractional undivided interests in oil and gas’ as 

a form of oil and gas rights subject to securities regulation.” Id. at 1245;

see also Commonwealth v. Frye, 853 A.2d 1062, 1066 (Pa. Super. 2004) 

(“The principle of statutory construction known as ‘expressio unius est 

exclusio alterius’ holds that the mention of a specific matter in a general 

statute implies the exclusion of other matters not mentioned therein.”) 

(citing Pane v. Commonwealth Dep’t of Highways, 222 A.2d 913 (Pa. 

1966)). 

Similarly, the Sixth Circuit held that, when determining whether a 

transaction is a “fractional undivided interest[] in oil and gas” and therefore 

____________________________________________ 

9

 Interpreting the same language, the United States District Court for 

the Central District of Illinois observed that Congress intended “to 

specifically include as securities ‘only that form of splitting up of mineral 

interests which had been most utilized for speculative purposes.’” 

Fearneyhough v. McElvain, 598 F. Supp. 905, 907 (C.D. Ill. 1984) 

(holding that “the sale of the entire leasehold interest in the oil and gas 

rights in plaintiffs’ land does not constitute the sale of a security within the 

meaning of the 1933 and 1934 Acts, notwithstanding the fact that the 

plaintiffs retained an overriding one-eighth (1/8) royalty interest.”). 
J-A04026-14

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a security subject to regulation, “[a] direct purchase of an oil lease, with the 

purchase guaranteed by oil production, is distinct from partnership and jointventure investments in speculative oil wells.” Nolfi v. Ohio Ky. Oil Corp., 

675 F.3d 538, 546 n.5 (6th Cir. 2012) (citing Graham v. Clark, 332 F.2d 

155, 156 (6th Cir. 1964) (“[T]he transfer of all of one’s interest in and to a 

specific oil and gas lease is not a security within the meaning of the Act.”)). 

In Nolfi, the Sixth Circuit specifically distinguished between “a working 

interest in a well,” which it determined was a “fractional undivided interest,” 

and “an assignment of a lease on mineral rights,” which was not a security 

under 15 U.S.C.S. § 77b(a)(1). Id. at 546. 

In the instant case, Appellants argue that their involvement with CoeXprise created a security interest because they “invest[ed] money in a 

common enterprise and [were] lead [sic] to expect profits solely from the 

efforts of the promoter or a third party.” Appellants’ Brief at 31 (citing 

Martin, 494 A.2d at 451). Specifically, Appellants claim that “each 

landowner made the ‘investment’ when they made the initial purchase of 

their tract of land, and based on [Co-eXprise]’s market place bidding process 

conveyed a lease interest based on the expectation of realizing profits, in the 

form of royalty payments, solely from the efforts of [Co-eXprise] or a third 

party, Chesapeake[.]” Id. at 32. We disagree. 

Preliminarily, Appellants’ reliance upon Martin is misplaced. 

Appellants cite Martin for the “classic definition of an ‘investment contract’” 

originally set forth in S.E.C. v. Howey, 328 U.S. 293 (1946), which provides 
J-A04026-14

- 30 - 

that “[A]n investment contract for purposes of the Securities Act means a 

contract, transaction or scheme whereby a person invests his money in a 

common enterprise and is led to expect profits solely from the efforts of the 

promoter or a third party . . . .” Martin, 494 A.2d at 453 (citing Howey, 

328 U.S. at 298-99). 

First, Appellants’ claim that they purchased their individual tracts of 

land as an investment in the “common enterprise” of the leasehold 

agreements offered by Co-eXprise is contradicted by their own pleading, in 

which they acknowledge that they were already landowners when they were 

first approached by Co-eXprise. (See Complaint, at 5 ¶¶ 11-12). Therefore, 

Appellants’ claim that the security at interest is an investment contract is 

belied by the record. See Howey, 328 U.S. at 298-99.

Second, the United States Supreme Court has held: “the Howey

economic reality test was designed to determine whether a particular 

instrument is an ‘investment contract,’ not whether it fits within any of the 

examples listed in the statutory definition of ‘security.’” Landreth Timber 

Co. v. Landreth, 471 U.S. 681, 691 (1985). Thus, where the question is 

whether the contested instrument is another type of security pursuant to 70 

P.S. § 1-102(t), specifically, a fractional undivided interest in oil, gas or 

other mineral rights, the Howey test, as described in Martin, does not 

apply. 

Here, with the assistance of Co-eXprise, Appellants entered into an 

agreement to lease their mineral rights to Chesapeake, while retaining the 
J-A04026-14

- 31 - 

right to royalty payments. Cf. Fearneyhough v. McElvain, 598 F. Supp. 

905, 907 (C.D. Ill. 1984). The agreement with Chesapeake does not split up 

the interest in the leasehold for speculative purposes or to finance the 

development of wells, but simply contracts for a “direct purchase of an oil 

lease, with the purchase guaranteed by oil production[.]” Nolfi, 675 F.3d at 

546 n.5. Thus, under federal precedent, it would not constitute a fractional 

undivided interest in the mineral rights, and would not be a security. See 

Adena, 860 F.2d at 1245. We believe this approach is consistent with our 

own case law, which emphasizes that “a royalty interest in an oil lease, as 

the subject matter of sale, ha[s] been held not to be a security within the 

definition of the Act[.]” Yaste, 70 A.2d at 687. Accordingly, the 

agreements at issue here are not securities, and therefore are not regulated 

by the Pennsylvania Securities Act, 70 P.S. §§ 1-101, et seq. Appellants’ 

claims under the Act therefore would not merit relief, and the trial court did 

not err in granting Co-eXprise’s preliminary objections on this ground. The 

third issue lacks merit. 

Finally, Appellants combine their fourth and fifth issues and assert that 

the trial court “erred by dismissing claims of breach of fiduciary duty and 

unjust enrichment.” Appellants’ Brief at 36. However, Appellants 

forthrightly “concede that if this Honorable Court affirms the Trial Court with 

regard to dismissal of counts alleging unauthorized practice of law, and 

breach of the Securities Act, the equitable disgorgement/unjust enrichment 

claim also fails.” Id. (emphasis omitted). Appellants having done so, we 
J-A04026-14

- 32 - 

need only address their claim that Co-eXprise breached an alleged fiduciary 

duty. 

Regarding this claim, Appellants assert: 

that Co-eXprise assumed a fiduciary duty to [them] in three 

distinct manners, (1) by agreeing to undertake to represent 

[Appellants’] interest in dealing with the potential bidders which 

duty arose [by] virtue of the Market[P]lace Agreement, (2) by 

engaging in the unauthorized practice of law, and (3) by acting 

as an investment advisor. 

Specifically, [Appellants] contend that a breach of fiduciary duty 

claim arises by virtue of the Market[P]lace Agreement which 

contemplated that Co-eXprise would be vetting potential bidders 

to make sure they are “approved bidders” in order to have 

access to the Co-[eX]prise Market[P]lace and a “negotiation 

event.”

Appellants’ Brief at 36-37 (record citation omitted). Because Appellants 

have failed to identify any breach of duty owed to them by Co-eXprise, we 

disagree. 

 In their complaint, Appellants contend the following:

78. By entering into the [Co-eXprise] Market[P]lace 

Agreement, [Co-eXprise] assumed a fiduciary duty toward 

[Appellants] because it was given the exclusive right and control 

over [Appellants’] property, oil, gas and mineral rights to try and 

lease them through the [Co-eXprise] Market[P]lace process 

which [Co-eXprise] maintained complete exclusive control over. 

The [Co-eXprise] Market[P]lace Agreement provided that if 

[Appellants] leased their oil and gas rights outside of the [CoeXprise] Market[P]lace Agreement then [Appellants] would still 

be obligated to pay [Co-eXprise] the transaction fee. A fiduciary 

relationship arises whenever the relative position of the parties is 

such that one has the power and means to take advantage of 

the other or where there is a dependence or justifiable trust on 

the other. It also arises because [Co-eXprise] assumed a 

relationship of trust and confidence toward [Appellants]. 
J-A04026-14

- 33 - 

79. A fiduciary duty arose on behalf of [Co-eXprise] 

toward [Appellants], also, by virtue of the fact that it, through its 

authorized employees, [Co-eXprise] was engaging in the practice 

of law (although unauthorized) and performing investment 

advisory services. 

80. [Co-eXprise] breached this fiduciary duty owed 

toward [Appellants], and as a result of said breach, [Appellants] 

were collectively damaged in an amount totaling $31,246.39, 

which were the total fees paid collectively by [Appellants] to [CoeXprise]. 

Complaint, at 23-24 ¶¶ 78-80. 

The trial court observed that there are “no factual allegations which 

would support a finding that [Co-eXprise] breached any duties owed to 

[Appellants]. Second, the only harm described in the [c]omplaint is [CoeXprise]’s receipt of $31,246.39 in transaction fees. [Appellants] were 

obligated to pay these fees pursuant to the terms of the contract between 

[them].” T.C.O. at 11. We agree with the trial court’s assessment. 

Appellants’ bald claim that a breach of fiduciary duty occurred, without 

explanation, failed to plead any material facts regarding what the alleged 

breach was. See id. at 24 ¶ 80. Even giving Appellants the benefit of “all 

inferences reasonably deducible” from the allegations in the complaint, 

Appellants failed to identify the manner in which Co-eXprise breached a duty 

to them. See Feingold, 15 A.3d at 941. Although Appellants contended 

that “if [Appellants] leased their oil and gas rights outside of the [CoeXprise] Market[P]lace Agreement then [Appellants] would still be obligated 

to pay [Co-eXprise] the transaction fee,” id. at 23 ¶ 78, by their own 

admission, Appellants signed leases with Chesapeake and did not lease their 
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oil and gas rights outside of the agreement. See id. at 11 ¶ 29. Further, as 

previously discussed, Co-eXprise was not engaged in the practice of law or 

investment advisory services, and therefore breached no duty upon these 

grounds. See id. at 23-24 ¶ 79. 

Accordingly, Appellants’ general allegation of breach is insufficient to 

support this element of the claim, and Appellants therefore failed to state a 

claim for breach of a fiduciary duty. See Grose v. P&G Paper Prods. (In 

re Grose), 866 A.2d 437, 442 (Pa. Super. 2005). 

Moreover, “[i]t is a truism that Appellant[s] can establish a jury 

question regarding the alleged breach of a fiduciary duty only if [they] first 

establish[] a jury question that such a duty attaches to [an a]ppellee[] in the 

first instance.” Rock v. Meakem, 61 A.3d 239, 257 (Pa. Super. 2013). 

“There is a crucial distinction between surrendering control of one’s affairs to 

a fiduciary or confidant or party in a position to exercise undue influence and 

entering an arms[-]length commercial agreement, however important its 

performance may be to the success of one’s business.” eToll, Inc. v. 

Elias/Savion Adver., 811 A.2d 10, 23 (Pa. Super. 2002) (citing Valley 

Forge Convention & Visitors Bureau v. Visitor’s Servs., Inc., 28 F. 

Supp. 2d 947, 952-953 (E.D. Pa. 1998)). 

Most commercial contracts for professional services involve one 

party relying on the other party’s superior skill or expertise in 

providing that particular service. Indeed, if a party did not 

believe that the professional possessed specialized expertise 

worthy of trust, the contract would most likely never take place. 
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This does not mean, however, that a fiduciary relationship arises 

merely because one party relies on and pays for the 

specialized skill or expertise of the other party. Otherwise, 

a fiduciary relationship would arise whenever one party had any 

marginally greater level of skill and expertise in a particular area 

than another party. Rather, the critical question is whether the 

relationship goes beyond mere reliance on superior skill, and into 

a relationship characterized by “overmastering influence” on one 

side or “weakness, dependence, or trust, justifiably reposed” on 

the other side. A confidential relationship is marked by such a 

disparity in position that the inferior party places complete trust 

in the superior party’s advice and seeks no other counsel, so as 

to give rise to a potential abuse of power. 

Id. at 23 (citations omitted, emphasis added). 

Here, Appellants simply alleged the existence of a contract and “a 

relationship of trust and confidence” with Co-eXprise. Complaint, at 23-24 

¶ 78. The complaint did not allege any “overmastering influence” or 

“weakness, dependence, or trust, justifiably reposed” in Appellants’ 

contractual relationship with Co-eXprise. See eToll, Inc., 811 A.2d at 23 

(citations omitted). Thus, Appellants have failed to plead sufficient facts to 

state a claim that the relationship with Co-eXprise was fiduciary, and not 

merely contractual. Rock, 61 A.3d 239 at 257. Appellants have failed to 

state a claim for breach of fiduciary duty, and the trial court did not commit 

an error of law in granting Co-eXprise’s preliminary objection to this count. 

See Feingold, 15 A.3d at 941. Appellants’ final issue does not merit relief, 

and the trial court properly dismissed the complaint. 

Order affirmed. 
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Judgment Entered. 

Joseph D. Seletyn, Esq. 

Prothonotary 

Date: 9/23/2014