J-A14006-19

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

JON C. HILDEBRAND AND ELLEN L.

HILDEBRAND, HIS WIFE

Appellants

v.

EQT PRODUCTION COMPANY;

EQUITRANS, L.P.; BRYAN A. LONG

AND COURTNEY R. LONG, HIS WIFE,

AND MAXX W. SCHINKOVEC

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IN THE SUPERIOR COURT OF

PENNSYLVANIA

No. 1524 WDA 2018

Appeal from the Order Entered September 24, 2018

In the Court of Common Pleas of Greene County

Civil Division at No(s): No. 922 AD 2012

BEFORE: OTT, J., KUNSELMAN, J., and MUSMANNO, J.

MEMORANDUM BY OTT, J.: FILED OCTOBER 02, 2019

Jon C. Hildebrand and Ellen L. Hildebrand, husband and wife, appeal

from the order entered on September 24, 2018, denying their motion to

compel defendants, EQT Production Company, L.P. and Equitrans, L.P. (EQT,

collectively), to tender past due royalty payments. The denial of this motion

represents a final order in that it concluded all issues before the trial court.1

In this timely appeal, the Hildebrands claim: 1) the trial court’s order was

fatally inconsistent with and contrary to the Superior Court’s June 8, 2017,

decision reversing the trial court and remanding the matter for payment of ____________________________________________

1 By denying the instant motion, the trial court terminated the Hildebrands’ efforts to obtain relief in this action, and, if affirmed, would require the

Hildebrands to file a new action to attempt to obtain relief from EQT.
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royalties, and 2) the trial court erred in determining royalties erroneously paid

to defendant, Max W. Schinkovec, were to be treated differently from royalty

payments that had been placed in a suspense account. After a thorough

review of the submissions by the parties, relevant law, and the certified

record, we reverse and remand to the trial court for payment of the disputed

royalties to the Hildebrands.

Before we begin our analysis, we note the resolution of this matter

requires an interpretation of both the complaint for declaratory judgment that

underlies this appeal as well as the prior opinion of our Court. Accordingly, as

these are matters of law, and “our standard of review is de novo and our scope

of review is plenary.” S & H Transport, Inc. v. City of York, 210 A.3d 1028,

1038 (Pa. 2019) (citation omitted).

A brief history of this matter is required to understand the current

dispute. In September, 2012, the Hildebrands filed a declaratory judgment

action seeking an accounting and declaration that oil and gas royalties for a

certain parcel of land should be paid to the Hildebrands and that EQT had been

improperly splitting the royalty payments with some of the funds being

delivered to Max W. Schinkovec. The trial court found against the Hildebrands.

While the dispute was pending, the royalty payments were deposited in a

suspense account. Royalty payments made to Schinkovec were not returned

nor were they placed in the suspense account. As noted above, the trial court

determined that EQT had properly paid royalties and denied the Hildebrands

relief. An appeal followed and a panel of our Court reversed the trial court’s
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decision, finding the payments to Schinkovec had been improper. The matter

was remanded to the trial court with specific instructions to grant relief under

Counts I and II of the Complaint for Declaratory Judgment. See Hildebrand

v. EQT Production Co. et al, 165 A.3d 969 (Pa. Super. 2017).

Upon remand, the trial court ordered EQT to pay the Hildebrands the

money that had been deposited in the suspense account, but did not order

EQT to pay the Hildebrands the royalties EQT had improperly paid to

Schinkovec. EQT refused to pay Hildebrand those royalties and has suggested

the Hildebrands seek those funds directly from Schinkovec. The Hildebrands

filed a motion to compel payment by EQT of the improperly tendered royalty

payments. The trial court denied the motion after determining that remedy

had not been sought in the declaratory judgment action, and that the

Hildebrands would have to file another lawsuit to attempt to obtain those

funds.

We believe, based on the complaint for declaratory judgment and the

prior decision by our Court, that it is within the trial court’s current power and

duty to order EQT to pay the currently disputed sum to the Hildebrands just

as the trial court ordered EQT to pay the royalties that had been deposited

into the suspense account.

In the declaratory judgment action, the Hildebrands asked the trial court

to define their rights pursuant to their contract with EQT. Count I asked for a

declaration of rights that included all interested parties, including Bryan and
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Courtney Long,2 Schinkovec, and EQT. Count II of the Complaint asks for an

accounting of all royalties paid, including those paid to Schinkovec. Count III

asks for declaratory judgment between the Hildebrands and EQT. In each

count, the Hildebrands also requested any such relief as the court deemed

appropriate under the circumstances. See Complaint, Requests for Relief

Count I (b), Count II (d), and Count III (b).

The disposition of the prior appeal of this matter states, in toto:

Order reversed. Case remanded for proceedings consistent with

this Opinion, including grant of the relief requested in Counts I

and II of Appellants’ [the Hildenbrands] Declaratory Judgment

Complaint. Jurisdiction relinquished.

Hildebrand v. EQT Production Company, 165 A.3d 969, 976 (Pa. Super.

2017).

Reading the Complaint for Declaratory Judgment in tandem with the

disposition of the prior appeal, we believe the Hildebrands sought a declaration

of their rights under the contract with EQT. That contract not only provided

who, as between Schinkovec and the Hildebrands, was entitled to royalty

payments, but also the underlying requirement that the payments be made.

The previous Superior Court decision determined the payments to

Schinkovec were improper and that Schinkovec was not entitled to those

funds. Our Court’s prior decision specifically granted the relief sought in

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2 There appears to be no dispute that the Longs were entitled to a nominal

royalty payment from EQT and that they received that payment. As an

interested party to the contract, they were required to be included in the

declaratory judgment action. The Longs have not appealed.
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Counts I and II which included the funds paid to Schinkovec and an accounting

of those funds. If the Schinkovec royalty payments were not to be included

in the relief sought by the Hildebrands, our Court’s prior decision would not

have included them in the disposition of the previous appeal. Accordingly,

there is no legal reason why the payments improperly made to Schinkovec

should be treated any differently than those payments placed in the suspense

account and paid to the Hildebrands in accordance with the Order docketed in

this action on September 25, 2018. Pursuant to the prior decision by our

Court, there is no longer any dispute that it is the Hildebrands who are entitled

to those funds and that EQT, not Schinkovec, owes those funds to the

Hildebrands. EQT is required to perform its contractual duty to pay all

royalties to the Hildebrands, not just those placed in the suspense account.

The Hildebrands were not responsible for EQT making payments to an

improper party. The Hildebrands have no privity of contract with Schinkovec. EQT has provided no legal theory under which Schinkovec owes the

Hildebrands any compensation. Rather, the prior decision of our Court

determined it is EQT that owes the Hildebrands all the disputed royalty

payments and EQT owes those payments pursuant to its contract with the

Hildebrands.

Moreover, although we determine that the Hildebrands are entitled to

payment from EQT of the royalties erroneously paid to Schinkovec, the

Complaint for Declaratory Judgment sought an accounting to determine the

amount paid to Schinkovec. See Complaint, Count II. The prior opinion by
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our Court specifically granted the relief sought by the Hildebrands in Count II.

See Hildebrand v. EQT, 165 A.2d at 976 (disposition). We see no evidence

in the certified record that any such accounting has taken place.3 Therefore, we remand for the accounting as well as the payment, by EQT, of the amount

so determined.

Order vacated. This matter is remanded to the trial court for action

consistent with this decision. Accounting shall take place within 30 days of

the return of the certified record to the trial court. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 10/2/2019

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3 Given the trial court’s resolution of the motion, it seems unlikely that an

accounting would have taken place.