Case Name: CHAMPION VENTURES, INC., and Jack Bradley, Jr., Appellants (Some of Defendants below), v. Wayne H. DUNN, Appellee (Plaintiff below)
Court: Supreme Court of Wyoming
Jurisdiction: Wyoming
Decision Date: 1979-04-24
Citations: 593 P.2d 832
Docket Number: No. 5004
Parties: CHAMPION VENTURES, INC., and Jack Bradley, Jr., Appellants (Some of Defendants below), v. Wayne H. DUNN, Appellee (Plaintiff below).
Judges: Before RAPER, C. J., McCLINTOCK, THOMAS and ROSE, JJ., and GUTHRIE, J., Retired.
Reporter: Pacific Reporter 2d
Volume: 593
Pages: 832–837

Head Matter:
CHAMPION VENTURES, INC., and Jack Bradley, Jr., Appellants (Some of Defendants below), v. Wayne H. DUNN, Appellee (Plaintiff below).
No. 5004.
Supreme Court of Wyoming.
April 24, 1979.
Rehearing Denied June 8, 1979.
John J. Sampson, Newcastle, for appellants.
Richard S. Dumbrill of Jones, Dumbrill & Hansen, Newcastle, for appellee.
Before RAPER, C. J., McCLINTOCK, THOMAS and ROSE, JJ., and GUTHRIE, J., Retired.
Justice Guthrie, Ret., was assigned to sit for Rooney, J., who recused himself.

Opinion:
ROSE, Justice.
This appeal represents the second time that these parties have been before this court, requesting a determination of the rights that plaintiff-appellee Dunn has in certain oil well casing pipe. See, Champion Ventures, Inc. v. Dunn, Wyo., 567 P.2d 724 (1977). In our first decision on this matter, we reversed the trial court's judgment that found defendants guilty of conversion of the casing pipe and indicated "that there was, in any case, insufficient evidence of damages." 567 P.2d at 730. After our mandate was issued, the plaintiff moved the trial court to enter judgment in his favor on the plaintiff's alternate claim for the reasonable rental value of the casing. Defendant Bradley sought, but was denied, a writ of prohibition on the grounds that we had not instructed that the case be remanded for further proceedings, and that necessary and proper parties had been dismissed from the action (Supreme Court No. 4915). The district court proceeded to hold a hearing on the plaintiff's claim and subsequently entered a judgment declaring that a constructive lease existed between the parties and that plaintiff was entitled to rental monies dating from May 1,1974 and continuing thereafter for so long as the defendant's well is productive. We will affirm the district court judgment.
Defendants reassert that the trial court erred in assuming jurisdiction over plaintiff's alternate claim for relief, and further assert that the judgment entered is not supported by the evidence.
Defendants implicitly ask this court to reconsider our denial of their application for a writ of prohibition. We have no doubt but that we could reconsider the effect of that denial and that we could, furthermore, hold that the propriety of awarding plaintiff a reasonable rental for the well casing pipe has already been decided by virtue of our reversal in the first appeal. Due, however, to the confusion that may have been engendered by our first opinion, it is more appropriate to directly address the trial court's second judgment. Only in this way can we clarify the plaintiff's legal entitlement to reasonable compensation.
We noted in our first decision — when discussing the plaintiff's claim of conversion— that the Oklahoma Supreme Court has held that where a well was capable of producing in paying quantities the owner of well casing has no right to remove the casing, but to do equity the casing-owner may be entitled to a reasonable rent award. Okmulgee Supply Corporation v. Anthis, 189 Okl. 139, 114 P.2d 451 (1941). See, 4 Williams, Oil and Gas Law, § 674.2, at p. 216 (1977). Another court has held that where there is sufficient evidence that a well, when reentered and reworked, will be reasonably capable of producing and probably would produce oil in paying quantities, the owner of the well casing is entitled to be compensated for the reasonable value thereof and that upon payment of this amount, title to the casing would vest in the adverse party. Eubank v. Twin Mountain Oil Corporation, Tex.Civ.App., 406 S.W.2d 789, writ ref'd n.r.e. (1966). Reasonable compensation in such cases has been defined as the reasonable market value of the casing after deducting the costs of pulling, plugging and nonrecoverable casing. Patton v. Rogers, Tex.Civ.App., 417 S.W.2d 470 (1967).
Each of the cases where rent or other reasonable compensation has been awarded was concerned with a well that was producing in paying quantities, or a well that was reasonably capable of producing, or probably would produce, in paying quantities according to geological and engineering information. Only this makes sense, since if the casing-owner could prove that the well was not capable of producing in paying quantities, he would have the right to possession of the casing or the right to proceed with a claim of conversion. Champion Ventures, Inc. v. Dunn, supra, at 729.
As a result, before the plaintiff is entitled to compensation for the casing, as a matter of law, he must prove by sufficient evidence: (1) The well is producing or is reasonably capable of producing, and probably will produce, in paying quantities. (2) The reasonable market value of the casing, after deducting the costs of pulling, plugging and nonrecoverable casing.
The trial court found that plaintiff was entitled to reasonable compensation, and that such compensation was equal to a return of plaintiff's original $12,000.00 investment in the casing over a period of six years. The return on investment was calculated by taking one-sixth of the $12,-000.00 investment, or $2,000.00 per year, or $166.66 per month, and assessing that amount against defendants as of May 1, 1974 — the approximate date when plaintiff first demanded possession of the casing. Since this judgment was entered in March, 1978, defendants were found to owe $7,800.00 in back rental. Additional monthly payments were to commence on April 1, 1978.
PRODUCTION IN PAYING QUANTITIES
Plaintiff's entitlement to reasonable compensation is necessarily premised on the presence of sufficient evidence that the well is producing, or is reasonably capable of producing, in paying quantities. We noted in our first decision that the record in this case was unclear as to whether the well was capable of producing in paying quantities. 567 P.2d at 730.
A reconsideration of the evidence presented at the first trial, along with the evidence presented at the second proceeding, reveals the following: Defendant Bradley testified that during the period beginning in May, 1974, and ending in February, 1976, he had realized a net operating profit of $866.40. (Record in Case No. 4709). Since the first trial in April, 1976, Bradley has only produced the well enough to maintain its "held by production" status. Bradley testified at the first trial that it was his opinion — based on discussions with geologists and his own experience in oil production — that the well would initially pump 25 to 30 barrels a day and then would level off, over a period of 12 or 15 years, to 10 barrels a day. Depending on crude prices, the end result would be a marginally commercial well (Record in Case No. 4709). At the second hearing on this matter, Bradley testified that, based on swabbing tests, it was evident that the well was a small, high-pressure well — a "stripper well" which he hoped would produce something in the ten-barrels-per-day range.
Although the above-mentioned evidence is slim, we hold that the trial court was justified in implicitly finding that the well was reasonably capable of producing, and probably would produce, in paying quantities.
REASONABLE COMPENSATION
The trial court premised its award of reasonable compensation on a witness' testimony that "if a value could be placed on that casing it would seem no more than fair to me that at least within a period of five to seven years they should at least receive back the value of that casing, what it's determined to be." The same witness, on cross-examination, testified that in estab lishing the value of casing he would start with the market value and then deduct the costs of recovery. This method of valuation approximates that used in the Texas cases cited previously. It appears, however, that the trial court placed the value of the casing at the amount of plaintiff's investment in the casing.
Where there cannot be a fixed amount of damages, triers-of-fact must of necessity be given broad discretion in deciding what award is fair and just. Chittim v. Armco Steel Corporation, Wyo., 407 P.2d 1015, 1018 (1965). For this reason, we are not inclined to disturb the trial court's use of the plaintiff's investment as a base-value figure. Nor are we inclined, in this case, to modify the judgment and order an award to the plaintiff consistent with the Texas decisions — even though the market-value approach, with a deduction for salvage costs, would seem to be more desirable.
The trial court may have used this return-on-investment approach because of this court's intimation in our first decision that we would be hard-pressed to find that plaintiff had shown nonspeculative damages for conversion — given the difficulty in predicting the amount of damage that could result during removal operations. 567 P.2d at 730.
Our observations in the first decision with regard to damages were not, of course, necessary to the disposition of that appeal— since we had already held that the plaintiff had failed to prove a right to immediate possession which was necessary to the success of his conversion action. Upon reconsideration of that observation, it is realized that if we were to require a party seeking compensation in these types of cases to prove the exact condition of the casing after pulling, we would be asking the impossible. It is sufficient if the party seeking compensation proves, with a reasonable degree of probability, the anticipated amount and quality of removable casing.
While other relief may have been preferable, we hold that the trial court's attempt to do equity in this case resulted in reasonable compensation to the plaintiff and is sustained by the evidence.
The judgment of the trial court is affirmed in all respects.
. With regard to defendants' reassertion of their contention that indispensable parties were dismissed from the case, resulting in inequity to the defendants, we simply note that these other parties — owners of a 35% working interest in the leasehold — were dismissed from the original action and no appeal was taken from that decision. Persons, not parties to an appeal, are not affected or concluded thereby. Western National Bank of Casper v. Harrison, Wyo., 577 P.2d 635, 642 (1978). We find no reason, in this case, to adjust the plaintiffs recovery because of this circumstance, nor is there a need, therefore, to discuss the indispensable-party issue.