J-A12007-19

2019 PA Super 258

SLT HOLDINGS, LLC, JACK E. 

MCLAUGHLIN AND ZUREYA 

MCLAUGHLIN,

IN THE SUPERIOR COURT

OF

PENNSYLVANIA

Appellees

v.

MITCH-WELL ENERGY, INC. AND 

WILLIAM E. MITCHELL, JR., AN 

INDIVIDUAL,

Appellants No. 542 WDA 2018

Appeal from the Order Entered March 13, 2018

In the Court of Common Pleas of Warren County

Civil Division at No(s): A.D. 626 of 2013

BEFORE: BENDER, P.J.E., DUBOW, J., and FORD ELLIOTT, P.J.E.

OPINION BY BENDER, P.J.E.: FILED AUGUST 23, 2019

Mitch-Well Energy, Inc. (“Mitch-Well”) and William E. Mitchell, Jr. (“Mr. 

Mitchell”), an individual, (collectively “Appellants”), appeal from the March 13, 

2018 order dismissing without prejudice count VI of the amended complaint 

in equity filed by SLT Holdings, LLC (“SLT”), Jack E. McLaughlin and Zureya 

McLaughlin (“the McLaughlins”) (collectively “Appellees”).1 After careful 

review, we affirm. 

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1 On January 9, 2018, summary judgment was entered in favor of Appellees 

on counts I, II, and V of Appellees’ amended complaint in equity. Appellees’

motion for voluntary dismissal of counts III and IV of its amended complaint 

was granted without prejudice by order of court dated February 1, 2018; 

however, said order was not entered on the docket until April 16, 2018 (four 

days after the filing of the notice of appeal). Thus, facially, the order from 
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The trial court summarized the factual background of this case as 

follows:

This action concerns certain leases granting oil, gas, and 

mineral (OGM) rights for two parcels. Both parcels are in Warren 

County. The parties have referred to the parcels according to how 

they are identified for tax/recording purposes. The one parcel is 

within Warrant 3010 and the other is within Lot 769. [SLT] came 

to own the OGM rights for Warrant 3010, which it leased to a 

company that subsequently assigned the lease to [Mitch-Well]. 

[See SLT Lease, 5/30/85.] [The McLaughlins] came to own the 

OGM rights for Lot 769, which they leased to a company that 

subsequently assigned the lease to Mitch-Well. [See McLaughlin 

Lease, 5/30/85.][2] Neither of the above-described leases were 

recorded[,] but appropriate memoranda concerning those leases 

were recorded, as were the assignments to Mitch-Well. 

The leases are similar in that they both contain provisions 

requiring Mitch-Well to drill a certain number of wells on the two 

parcels ... and to make specified minimum payments to 

lessors/[Appellees] each year if the royalties do not exceed said 

minimum payments.... Beginning around 1996 and ending around 

2013, the wells on Warrant 3010 and Lot 769 operated by MitchWell did not produce OGM in marketable quantities. Thus[,] 

Mitch-Well made no royalty payments to [Appellees] during this 

time. Mitch-Well also failed to make minimum payments as 

required under both leases. For approximately sixteen years, 

Mitch-Well violated the leases by failing to either pay royalties in 

excess of the minimum annual payments or to make said 

minimum payments. Although Mitch-Well did visit the wells in 

question during this period, it did so to ensure that the wells 

remained safe and in compliance with applicable law. Mitch-Well 

did not attempt to achieve marketable levels of OGM production 

____________________________________________

which this appeal is taken appears interlocutory and unreviewable. However, 

“[a] notice of appeal filed after the announcement of a determination but 

before the entry of an appealable order shall be treated as filed after such 

entry and on the day thereof.” Pa.R.A.P. 905(a)(5). Hence, no jurisdictional 

defects impede our review. 

2 The SLT Lease and the McLaughlin Lease are referred to collectively herein 

as “the leases.”
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between 1996 and 2013. It appears that the prevailing OGM 

prices hindered production in that it was not economical for MitchWell at that time. 

In 2013, storage tanks connected to the wells on Warrant 

3010 and Lot 769 had collected enough fluid to cause Mr. Mitchell 

to have them emptied[,] and their contents were transferred to 

two storage tanks located on a parcel referred to in this litigation 

as “Mitchell Farm[.”] Mitchell Farm is owned by the Mitchell 

family. One of the storage tanks on Mitchell Farm was connected 

to one of three wells on Mitchell Farm. These three wells are 

owned by Mr. Mitchell[,] individually[,] and not by Mitch-Well. Mr. 

Mitchell allowed the fluid to settle in the two tanks on the farm so 

that the brine separated from the oil. Mr. Mitchell had an 

agreement with a company called Ergon, which then came and 

collected the oil and marketed it. Ergon remitted payment for the 

entirety of the gross production to Mr. Mitchell. Mr. Mitchell 

attempted to distribute the royalties to [Appellees] out of Mr. 

Mitchell’s personal account. This attempt at payment was 

apparently not deposited. Mitch-Well did not have a bank account 

at the time[,] although it does now. Mitch-Well “probably” went 

five years without a bank account. 

[Mr. Mitchell] is currently the sole owner, shareholder, 

officer, and employee of Mitch-Well.... 

There is a controversy surrounding an unnumbered 

subparagraph under ¶17 of both leases. The language in each of 

the leases is identical. The subparagraph provides for the 

retention of certain land by lessee/Mitch-Well even after 

termination of the lease. However, there is limiting language in

the subparagraph. The subparagraph states that if Mitch-Well 

fails to meet its drilling obligations then the lease is terminated, 

but Mitch-Well shall retain 20 acres surrounding each well it drilled 

that is capable of producing oil and/or gas. This matter is further 

complicated by certain identical amendments to both leases. 

These amendments reduced the retained acreage from the 20 

acres referenced above to only 5 acres. The enforceability of the 

amendments is disputed by [Appellants]. The amendments were 

signed by [Mitch-Well’s] predecessor in interest rather than 

[Mitch-Well or Mr. Mitchell], and neither of the amendments was 

recorded nor was a memorandum recorded as with the leases 

themselves. 
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[Appellees] argue that because Mitch-Well has defaulted on 

the lease[s], the lease[s] ha[ve] terminated[,] or else [they have] 

been abandoned. [Appellants] argue[] that the leases do not 

allow for a finding of termination. [Appellants] rely on certain 

identical provisions in the two leases. Paragraph 2 of each lease 

purports to govern the length of the term of the lease. This 

paragraph provides in relevant part that each lease will continue 

in effect for so long as the lessee (Mitch-Well) determines that 

OGM can be produced in paying quantities. Thus, Mitch-Well has 

the exclusive power to end the term of the lease. Paragraph 12 

of each lease is also identical[,] and it governs default and 

remedies. Termination of each lease is the exclusive remedy for 

default, but [Appellees] must comply with certain prerequisites. 

[Appellees] must give written notice to Mitch-Well describing the 

default. Mitch-Well has thirty days from receipt of the notice to 

cure said default. If a court subsequently determines that the 

default has not been cured, then the lease is terminated under its 

own provisions. 

Trial Court Opinion (“TCO”), 1/9/18, at 1-5 (citations to record omitted). 

Appellees commenced this action on November 19, 2013, with the filing 

of a complaint in equity against Appellants, seeking injunctive relief (Count I), 

a declaratory judgment (Count II), an accounting (Count III), ejectment 

(Count IV), conversion (Count V), and tortious interference with contract 

(Count VI).3 On that same date, Appellees filed a petition for a preliminary 

injunction against Appellants, which was subsequently granted by the trial 

court on January 24, 2014. The preliminary injunction enjoined Appellants 

from physically entering upon Warrant 3010 and Lot 769, and from removing, 

selling, transferring or otherwise disposing of any material from either 

____________________________________________

3 An amended complaint was filed by Appellees on April 14, 2015.
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property, “including fixtures, whether oil, gas, or mineral.” Trial Court Order, 

2/14/14.4 

On July 26, 2017, Appellees filed a motion for partial summary judgment 

relating to counts I, II, and V, which was granted by the trial court on January 

8, 2018, after hearing argument thereon. A jury trial was scheduled on the 

remaining counts III, IV, and VI; however, the trial court subsequently

granted without prejudice Appellees’ motions for voluntary dismissal 

regarding these counts. On April 12, 2018, Appellants filed a timely notice of 

appeal. No order was issued by the trial court directing the filing of a Pa.R.A.P. 

1925(b) statement of errors complained of on appeal. Appellants now present

the following issues for our review, which we have renumbered for ease of 

disposition:

1. Did the trial court err in granting summary judgment in favor 

of [Appellees] and against [Appellants] on its claim for 

declaratory judgment?

2. Did the trial court err in granting summary judgment in favor 

of [Appellees] and against [Appellants] on its claim for 

permanent injunction?

3. Did the trial court err in granting summary judgment in favor 

of [Appellees] and against [Appellants] on its claim for 

conversion?

4. Did the trial court err in granting voluntary dismissal without 

prejudice and without hearing on [Appellees’] claim for 

accounting, ejectment, and tortious interference with contract?

Appellants’ Brief at 5 (unnecessary capitalization omitted). 

____________________________________________

4 The preliminary injunction was affirmed by this Court on appeal at no. 460 

WDA 2014. 
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Our standard of review with respect to a trial court’s decision to grant 

or deny a motion for summary judgment is well-settled:

A reviewing court may disturb the order of the trial court only 

where it is established that the court committed an error of law or 

abused its discretion. As with all questions of law, our review is 

plenary. 

In evaluating the trial court’s decision to enter summary 

judgment, we focus on the legal standard articulated in the 

summary judgment rule. Pa.R.C.P. 1035.2. The rule states that 

where there is no genuine issue of material fact and the moving 

party is entitled to relief as a matter of law, summary judgment 

may be entered. Where the non-moving party bears the burden 

of proof on an issue, he may not merely rely on his pleadings or 

answers in order to survive summary judgment. Failure of a nonmoving party to adduce sufficient evidence on an issue essential 

to his case and on which it bears the burden of proof establishes 

the entitlement of the moving party to judgment as a matter of 

law. Lastly, we will view the record in the light most favorable to 

the non-moving party, and all doubts as to the existence of a 

genuine issue of material fact must be resolved against the 

moving party. 

Thompson v. Ginkel, 95 A.3d 900, 904 (Pa. Super. 2014) (citations 

omitted). 

We further note:

[A] lease is in the nature of a contract and is controlled by 

principles of contract law. J.K. Willison v. Consol. Coal Co., 

536 Pa. 49, 54 637 A.2d 979, 982 (1944). It must be construed 

in accordance with the terms of the agreement as manifestly 

expressed, and “[t]he accepted and plain meaning of the language 

used, rather than the silent intentions of the contracting parties, 

determines the construction to be given the agreement.” Id.

(citations omitted). Further, a party seeking to terminate the 

lease bears the burden of proof. See Jefferson County Gas Co. 

v. United Natural Gas Co., 247 Pa. 283 286, 93 A. 340, 341 

(1915).

T.W. Phillips Gas and Oil Co. v. Jedlicka, 42 A.3d 261, 267 (Pa. 2012). 
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[Our] Supreme Court has aptly observed that “[t]he traditional oil 

and gas ‘lease’ is far from the simplest of property concepts.” 

Brown v. Haight, 435 Pa. 12, 255 A.2d 508, 510 (1969). In the 

context of oil and gas leases, the title conveyed is inchoate and 

initially for the purpose of exploration and development. Calhoon 

v. Neely, 201 Pa. 97, 50 A. 967, 968 (1902); accord Burgan v. 

South Penn Oil Co., 243 Pa. 128, 89 A. 823, 826 (1914) (“The 

title is inchoate, and for purposes of exploration only until oil is 

found.”). If development during the primary terms is 

unsuccessful, no estate vests in the lessee. Id. If oil or gas is 

produced, the right to produce becomes vested and the lessee has 

a property right to extract the oil or gas. Calhoon, 50 A. at 968.... 

In such circumstances[,] the lessee will be protected in 

accordance with the terms of the lease and will be required to 

operate the leasehold for the benefit of both parties. Venture Oil 

Co., 25 A. at 734; Calhoon, 50 A. at 968; Burgan, 89 A. at 826. 

Jacobs v. CNG Transmission Corp., 332 F.Supp.2d 759, 772-73 (W.D. Pa. 

2004). 

In Jedlicka, our Supreme Court further explained that, 

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 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.

Jedlicka, 42 A.3d at 267-68 (citations and footnote omitted). 
J-A12007-19

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Instantly, the habendum clause in each of the leases provides that the 

lease “shall be in force for a primary term of five (5) years from the effective 

date of this lease, and for as long thereafter as oil or gas or other substances 

covered hereby are or can be produced in paying quantities....” SLT Lease at 

1¶2; McLaughlin Lease at 1¶2. The leases further provide: 

5) Rental Payment – This Lease is made on the condition that it 

will become null and void and all rights hereunder shall cease and 

terminate unless work for the drilling of a well is commenced ... 

within ninety (90) days and prosecuted with due and reasonable 

diligence, or unless the Lessee shall pay to the Lessor, in advance, 

every twelve (12) months until work for the drilling of a well is 

commenced, the sum of Twelve Dollars ($12.00) per acre, that is 

Thirty-Six Hundred Dollars ($3,600.00) for each twelve (12) 

months during which the commencing of such work is delayed.[5] 

6) Continuing Operations – If, at the end of the primary term or 

any time thereafter, this lease is not being kept in force ... but 

[Mitch-Well] is then engaged in drilling, reworking or any other 

operation calculated to obtain production on the leased premises 

or lands pooled therewith, this lease shall remain in force as long 

as ... such operations are conducted in a reasonable, prudent 

manner and, if such operations result in production of oil or gas 

or other substance covered thereby, as long thereafter as 

production continues in paying quantities. 

***

8) Shut-In Gas Royalty – Notwithstanding anything herein to the 

contrary, if all wells on the leased premises are capable of 

producing gas in paying quantities but the wells are shut-in, such 

wells shall nevertheless be considered as though the wells are 

producing gas in paying quantities for the purpose of maintaining 

this lease in effect by Lessee on or before the end of each calendar 

____________________________________________

5 The SLT Lease requires the sum of “Five Dollars ($5.00) per acre” (or 

$4,950.00) to be paid to the lessor every twelve (12) months until work for 

the drilling of a well is commenced. SLT Lease at 2¶5. Aside from the 

difference in acreage and dollar amounts noted herein, the operative language 

of the SLT Lease is essentially the same as in the McLaughlin Lease. 
J-A12007-19

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year in which the wells are shut-in, pay Lessor a shut-in gas 

royalty equal to the delay rental provided for herein prorated by 

the number of days the wells were shut in. 

McLaughlin Lease at 2. 

Thus, by its own terms, paragraph 8 of the leases provides for the 

extension of each lease by allowing payment of shut-in gas royalties when the 

well(s) are capable of producing gas in paying quantities. See Trial Court 

Memorandum (“TCM”), 2/14/14, at 3. “It follows logically that if no shut-in 

gas royalties are paid and the wells are capable of production, then the lease 

terminates.” Id. Additionally, the trial court noted that in accordance with 

paragraph 6, the leases terminate whenever oil, gas or minerals are not 

produced in paying quantities. Id. Here, the record establishes that no shutin payments were paid to Appellees under either lease, nor were oil and gas 

produced in paying quantities from the land for over twenty-five years. See 

id.

In accordance with paragraph 17 of the leases, Appellants promised to 

drill one well during the first year and five additional wells each year 

thereafter, until a total of thirty (30) wells were drilled under the McLaughlin 

Lease, and a total of 20 wells drilled under the SLT Lease. See McLaughlin 

Lease at 3-4¶17; SLT Lease at 3-4¶17. Each lease also stated it would 

terminate if Appellants failed to perform this drilling commitment, with the 

exception that Appellants would retain the twenty (20) acres surrounding each 

well drilled which was capable of producing oil and/or gas pursuant to the 

lease. See id. On February 20, 1986, unrecorded amendments of each lease 
J-A12007-19

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were entered into, which reduced the lessee’s retained property rights from 

twenty (20) acres to five (5) acres of land surrounding each well for any wells 

drilled during the term and capable of producing oil and/or gas. 

The following additional findings of fact were set forth by the trial court:

[T]he initial term of one (1) year with which to drill [under ¶17 of]

both the SLT ... [L]ease and the McLaughlin [L]ease was extended 

for a period of thirty (30) days until June 30, 1986, giving lessee, 

Mitch-Well, more time to drill its first well on each of the two 

properties. Before the initial term expired, on or about May 15, 

1986, one well was drilled on both the SLT property and the 

McLaughlin property. No other wells were drilled on either 

property until approximately 2011 by Utica Resources, Inc.

[(“Utica”)].[6] The total number of wells to be drilled remained 

unchanged at twenty (20) on the SLT property lease and thirty 

(30) on the McLaughlin property lease. 

Mr. McLaughlin stated in his affidavit that from at least 

January 17, 1991 through November 3, 2013, he received no 

payments of any kind, including royalty payments, delay rental 

payments or any other type of payments for the leases at issue. 

Similarly, Richard C. Cochran, manager of SLT Holdings, LLC, 

testified that neither SLT Holdings, nor its predecessor in interest, 

Sheffield Land and Timber Company, a company in which he was 

also involved, had ever received royalty payments, delay rental 

payments or any other type of payments. 

Furthermore, there was no physical indication at the 1986 

well sites that the wells were either producing or capable of 

producing oil and gas. Testimony indicated that no motor, brine

tank, power source, equipment or other indication that the wells 

were producing or capable of producing was observed at or near 

either well. In fact, testimony indicated that the post upon which 

the motor had once rested was rusty, indicating the motor had 

____________________________________________

6 Utica entered into an OGM lease with both SLT and the McLaughlins on March 

17, 2011. See TCM at 6. The trial court found that upon execution of its

leases, “Utica began performing its obligations thereunder, including 

preparing for drilling operations, and actually drilling five (5) wells in the first 

two years of the Utica leases.” Id. 
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not been there for some time. Additionally, no brine tank was 

found on site, and although testimony indicated that an oil and 

gas well need not necessarily have a brine tank nearby in order to 

be in production, the industry standard is for a brine tank to be 

placed nearby the well. Thus, the absence of a brine tank is rare. 

In fact, testimony indicated that the May 1986 Mitch-Well drill site 

was overgrown with weeds and undergrowth. The Affidavit of Jack 

E. McLaughlin indicated that fallen timber and logs blocked paths 

used to access the well site, and that said pathways were 

impassible for over two consecutive years. A report filed by the 

Pennsylvania Department of Environmental Protection indicated 

that as early as March 27, 1990, the well sites had been 

abandoned. 

On October 18, 2015, McLaughlin filed an Affidavit of NonProduction with respect to the McLaughlin [L]ease. Along the 

same lines, on February 6, 2012, Sheffield Land and Timber 

Company filed an Affidavit of Non-Production with respect to the 

SLT [L]ease. Each affidavit stated that there had been no 

production of oil and gas on the property at issue and that the 

1986 Lease had expired. 

TCM at 5-6.

As a result of Appellants’ failure to maintain their drilling commitment 

and/or otherwise remit delay rental payments, Appellees sought judgment in 

their favor declaring that Appellants have no rights with respect to either 

Warrant 3010 or Lot 769. See Complaint in Equity, 1/19/13, at 19-20. The 

trial court granted summary judgment on Appellees’ claim for declaratory 

judgment after concluding that the leases had been abandoned by Appellants. 

Herein, Appellants assert that the granting of summary judgment in favor of 

Appellees constituted an error as a matter of law by the trial court. Appellants’ 

Brief at 21. Appellants maintain that there are several issues of material fact, 

including whether or not abandonment occurred, which should have prevented 

the entry of summary judgment. Appellants also contend that the trial court’s 
J-A12007-19

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finding of abandonment was an error of law. After careful review, we deem 

Appellants’ claim to be meritless. 

In support of its finding of abandonment, the trial court opined:

The instant case is analogous in all relevant aspects to the 

seminal case of Jacobs..., 332 F.Supp.2d [at] 759...(interpreting 

Pennsylvania law).[7] Jacobs also involved a lawsuit over an oil 

and gas lease brought by plaintiffs/lessors against 

defendant/lessee. Id. Plaintiffs sought relief in the form of a 

judicial determination that the lease was terminated. Id. As in 

the instant case, the lease in Jacobs was a “drill or pay” lease, 

meaning that the lessee/defendant was required to pay a specified 

rental fee if it did not produce oil or gas and make royalty 

payments. The term of the lease in Jacobs was also divided 

between a primary term and an indefinite period thereafter, 

similar to the provisions in paragraph 2 of the leases under 

consideration in the instant case. Id. The Jacobs defendant had 

not produced oil or gas on the property in almost forty-eight years. 

Id. at [] 793. Plaintiffs asked the Jacobs court to find that the 

lease had terminated notwithstanding the rental payments in lieu 

of production, and the court did so for the reasons discussed 

below. Id. at [] 783-96. The instant case differs only insofar as 

neither [Appellant] paid [Appellees] the minimum annual payment 

required by ¶ 18 of both leases during the period of no production. 

The Jacobs court offered multiple, independent rationales 

for its decision. One rationale offered by the court was based on 

an analysis of the lease and a concomitant finding that the term 

of the lease had expired. Id. at [] 783-96. A second, independent 

rationale given by the Jacobs court was that the defendant had

abandoned the lease. The proposition that an oil and gas lease 

____________________________________________

7 We disregard Appellants’ assertion that the trial court improperly followed 

Jacobs, rather than Jedlicka. The trial court’s reliance on Jacobs was 

proper, as the facts in Jacobs are analogous to the instant case and the 

Jacobs Court applied relevant Pennsylvania law. Jedlicka, on the other 

hand, is distinguishable because, unlike in the present matter, the crux of the 

dispute in Jedlicka was the meaning of the term “in paying quantities” under 

the lease and the focus of the Court was on determining the proper test for 

evaluating whether oil or gas has been produced “in paying quantities.” See 

Jedlicka, 42 A.3d at 267-68.
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may be abandoned arises from the implied covenant to produce 

that is read into oil and gas leases. Id. The court found that “the 

clear purpose of an oil and gas lease providing for production 

royalties ... is to develop the property for the mutual benefit of 

both parties, regardless of whether the lease contains an 

expressed provision obligating the lessee to do so.” Id. at 789 

(citing Ray v. Western Pennsylvania Nat’l Gas Co., 138 Pa. 

576, 20 A. 1065 (Pa. 1891)). An obligation to make payments in 

lieu of production royalties is only intended to spur the lessee 

toward development and compensate the lessor for the delay. Id. 

The Jacobs court expressly rejected the proposition that the 

defendant could indefinitely postpone development of the 

property by paying rental fees in place of royalties. Id. at 790. 

This proposition would render the lease “a mere option[.”] Id.

The doctrine of abandonment was first applied to an oil and 

gas lease in the case of Aye v. Philadelphia Co., 193 Pa. 451, 

44 A. 555 (1899), which was approvingly cited by the Jacobs

court. The Aye court found that the lessee in an oil and gas lease 

has an obligation to diligently develop the leased property and a 

failure to do so constitutes abandonment. Id. The question of 

whether or not abandonment has occurred is one of fact and the 

[c]ourt must analyze the acts and intentions of the parties to the 

lease. Id. The Aye court specifically found that four years of 

inaction by a lessee gives rise to a presumption of abandonment. 

Id. If the lessee fails to present a valid explanation for the 

inaction then judgment as a matter of law is appropriate. Id. 

In the instant case, there was a prolonged period of 

inactivity by [Appellants] concerning production at the relevant 

wells. This period was approximately sixteen years long, which is 

far longer than the four year period contemplated by the Aye

court. Mr. Mitchell’s deposition testimony suggests that his 

explanation for this inactivity is that the price of OGM had fallen 

so dramatically that [Appellants] could not make money by 

producing at the wells in question. Transcript of Deposition of 

William Mitchell[, 5/19/17,] at [] 75-76, 84. The [c]ourt does not 

find this to be a valid explanation that will defeat the presumption 

of abandonment. If the [c]ourt found otherwise, then the leases 

would be reduced to mere options and the implied covenant to 

produce would be practically insignificant. 
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TCO at 5-7 (emphasis added). We discern no genuine issue of material fact, 

and we deem the trial court’s finding of abandonment to be adequately 

supported by the record. 

Appellants further assert that the granting of a permanent injunction 

barring Mitch-Well from entering onto Warrant 3010 and Lot 769 to produce 

oil and gas from the wells drilled by Mitch-Well thereon is inappropriate. 

Appellants’ Brief at 35. Appellants maintain that, pursuant to ¶17 of the 

leases, Mitch-Well owns twenty acres surrounding the well it drilled on each 

lot. See id. at 39. However, contrary to Appellants’ assertion, the trial court 

succinctly determined that “[b]ecause the [c]ourt finds that [Appellants] 

abandoned the leases, the provisions at ¶17 of both leases which allow for the 

retention of acreage around wells by lessee are nullities.” TCO at 7.

Considering our determination that the trial court properly found that 

Appellants abandoned the leases, we agree with the trial court’s decision that 

Appellants’ right to enter upon either property has also extinguished. 

Next, we address Appellants’ claim regarding conversion. Appellees 

claim that Appellants’ removal of oil from the tanks on Warrant 3010 and Lot 

769 in 2013 and the marketing of the oil through Ergon constituted 

conversion. Appellants admit that Mitch-Well entered onto the SLT and 

McLaughlin properties, pumped a total of 88.53 barrels of oil from the tanks 

and sold the oil for a total of $9,069.53 (or $100.1987 per barrel). Appellants’ 

Brief at 32. Appellants argue, however, that there could be no conversion 

because Mitch-Well was the owner of the oil at the time. Id. at 33. 
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The tort of conversion involves interference with another’s 

property rights in a chattel, such as by possession without consent 

or justification. Stevenson v. Economy Bank of Ambridge, 

413 Pa. 442, 451, 197 A.2d 721, 726 (1964); Bank of 

Landisburg v. Burruss, 362 Pa. Super. 317, 524 A.2d 896 

(1987).... A conversion takes place when a party: acquires 

possession of goods, with an intent to assert a right to them which 

is in fact adverse to that of the owner; transfers the goods in a 

manner which deprives the owner of control; unreasonably 

withholds possession from the one who has the right to it; and

seriously damages the chattel in defiance of the owner’s rights. 

[Norriton East Realty Corp. v. Central-Penn National Bank, 

245 A.2d 637, 638 (Pa. 1967)]. Thus[,] it is sufficient where a 

party takes possession of another’s goods to the detriment of the 

owner and keeps and disposes of them in a way that gives rise to 

damages. 

TCO at 7-8. Appellants’ argument that the sale of oil through Ergon did not 

constitute conversion is based on the faulty conclusion that Mitch-Well 

maintained the rights to the oil at the time it was marketed to Ergon. 

Applying the foregoing principles of conversion to the instant matter, 

the trial court stated:

[Appellants] argue that they owned the oil in question and thus 

there was no conversion. The [c]ourt is convinced that 

[Appellants] sincerely believed that they owned the oil at the time, 

but that is irrelevant to the court’s analysis. The tort of conversion 

does not rest on proof of specific intent to commit a wrong. 

[Norriton East Realty Corp., 245 A.2d at 638]. The [c]ourt 

must apply an objective standard and in light of the above finding 

of abandonment the [c]ourt finds that [Appellants] were not the 

owners of the oil. Upon [Appellants’] abandonment, the 

McLaughlins re-entered onto the previously-leased property. The 

fact of re-entry is evidenced by the signing of a new lease between 

the McLaughlins and another business (“Utica”) for the OGM rights 

to Lot 769 in 2009 or 2010. Transcript of Deposition of [Mr.] 

Mitchell at p. 102. [Mr.] Mitchell also alleges that the McLaughlins 

produced oil from “his” well in 2011, marketed it themselves and 

kept the revenue. [Id. at] 95-99. For these reasons, the [c]ourt

finds that [Appellants’] actions in 2013 did amount to conversion. 
J-A12007-19

- 16 -

TCO at 8. Based on the trial court’s finding of abandonment and Appellants’ 

own admissions, we conclude that Appellants have failed to establish any 

material issue of fact. We discern no error of law in the trial court’s finding of 

conversion. 

Lastly, Appellants withdraw their claim regarding whether the trial court 

erred in granting voluntary dismissal; thus, we need not reach the merits of 

this issue. 

For the reasons stated above, we conclude that Appellants failed to 

establish any genuine issue of material fact. Accordingly, we discern that the 

trial court did not commit an error of law or abuse its discretion when it 

granted Appellees’ motion for summary judgment on counts I, II, and V of its 

amended complaint. We affirm the March 13, 2018 order dismissing count VI 

without prejudice.

Order affirmed. 

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 8/23/2019