Title: PLANO PETROLEUM, LLC v. GHK EXPLORATION, L.P.
Citation: 2011 OK 18, 250 P.3d 328
Docket Number: 
State: Oklahoma
Issuer: Oklahoma Supreme Court
Date: March 8, 2011

PLANO PETROLEUM, LLC v. GHK EXPLORATION, L.P. Annotate this Case PLANO PETROLEUM, LLC v. GHK EXPLORATION, L.P. 2011 OK 18 Case Number: 108174 Decided: 03/08/2011 THE SUPREME COURT OF THE STATE OF OKLAHOMA NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL. Plano Petroleum, LLC, Appellee, v. GHK Exploration, L.P., Appellant. CERTIORARI TO THE COURT OF CIVIL APPEALS Division IV ¶0 This is a quiet title action between competing assignees of interests in oil and gas. The trial court, Honorable Charles L. Goodwin, granted summary judgment and the Court of Civil Appeals affirmed. CERTIORARI PREVIOUSLY GRANTED; OPINION OF COURT OF CIVIL APPEALS VACATED; TRIAL COURT REVERSED; CAUSE REMANDED. Sharon T. Thomas, Michael E. Smith, Ralph E. Seals, HALL, ESTILL, HARDWICK, GABLE, GOLDEN & NELSON, Oklahoma City, for Appellee. Robert H. Gilliland, Jr., MCAFEE & TAFT P.C., Oklahoma City, and Thomas B. Goodwin, Cheyenne, Oklahoma, for Appellant. COLBERT, V.C.J. ¶1 The issue is the intent of the parties to an assignment of an interest in oil and gas. The lower courts attempted to construe the ambiguous conveyance as a matter of law and, in doing so, supplied a legal description of the interest conveyed. Thus, the lower courts speculated impermissibly as to the parties' intent which cannot be determined from the four corners of the instrument. The matter must be remanded to the trial court for extrinsic evidence of the parties' intent. ¶2 Plaintiff, Plano Petroleum, L.L.C. (Plano) maintains that it owns an entire oil and gas lease by virtue of a 2002 assignment made to its predecessor in interest. Defendant, GHK Exploration, L.P. (GHK) asserts that the 2002 Assignment was a "wellbore only" assignment whereby Plano acquired leasehold rights only insofar as the well it describes. ¶3 The "Newell" oil and gas lease was executed in 1956 and covered 320 acres in Roger Mills County. In 2002, the joint owners of the lease, The Ann Eldridge Trust and Bill Weems Oil, Inc. (Eldridge and Weems), made an assignment to Clydesdale Energy, LLC, (Clydesdale) by an instrument which was filed of record in 2003. The granting clause provided: [Assignors] do hereby sell, assign, transfer and set over unto Clydesdale Energy, LLC, . . . all right, title and interest in and to that certain wellbore, all leasehold, limited in depth from the surface of the earth to the base of the Tonkawa Formation, and all surface and subsurface equipment and materials thereon and therein, more particularly described as the Claude E. Newell #1 well. Said leases and well located in the northwest quarter of Section 23-17N-25W, Roger Mills County, Oklahoma, which wellbore, leases and associated equipment and materials so specified are hereinafter referred to as "SAID WELL." What the parties intended by this language is the subject of this dispute. ¶4 In 2008, Clydesdale assigned its interest to Plano using the same language but adding an exhibit to its "Assignment and Bill of Sale" which provided a legal description of the entire Newell Lease. all of Assignor's rights, titles, and interest in to and under, and which might be derived from that certain Oil and Gas Lease by and between Claude F. Newell . . . and J. W. Collins . . . dated September 20, 1956 . . . and covering the following described lands: Section 23-17N-25W: NE/4 & E/2 NW/4 & N/2 SE/4 Insofar and only insofar as it covers rights from the surface of the earth to 100' below the stratigraphic equivalent of the base of the Tonkawa formation. Less and except ¶5 Plano filed this action seeking to quiet title to the entire 320 acre mineral interest comprising the Newell Lease. GHK counterclaimed contending its title should prevail. Each party assured the trial court that there was no factual dispute and that it could therefore interpret the contract as a matter of law. The trial court granted summary judgment and quieted title to the entire Newell Lease in Plano holding essentially that the 2002 Assignment left nothing for GHK to receive from Eldridge and Weems. A divided Court of Civil Appeals affirmed by unpublished opinion and the dissenting judge authored a vigorous dissent. This Court granted certiorari review. STANDARD OF REVIEW ¶6 Summary judgment is proper only "[i]f it appears to the court that there is no substantial controversy as to the material facts and that one of the parties is entitled to judgment as a matter of law." Rules for Dist. Cts., Okla. Stat. tit.12, ch. 2, app., Rule 13(e) (Supp. 2007). "Only when the evidentiary materials eliminate all factual disputes relative to a question of law is summary judgment appropriate on that issue." In re Assessment of Real Prop. of Integris Realty Corp., ANALYSIS ¶7 The 2002 Assignment is a contract and a conveyance. When presented with a dispute concerning a conveyance, the trial court's duty is clear. "[T]he court's first priority is to ascertain the true intent of the parties, particularly that of the grantor, as gathered from the four corners of the instrument itself, considering each part and viewed in light of the circumstances attending and leading up to its execution . . .." Messner v. Moorehead, ¶8 The lower courts became occupied in construing the language of the 2002 Assignment ¶9 The error was compounded by a willingness to quiet title based on an instrument which contains absolutely no legal description of the leased premises. There is a long-standing black letter rule of law that "the description of the premises conveyed must be so certain and definite as to enable the land to be identified." Arbuckle Realty Trust v. Southern Rock Asphalt Co., ¶10 Here, it is apparent from the face of the instrument that the legal description of "all leasehold" is completely absent. Nevertheless, the lower courts, in essence, reformed the conveyance by inferring that "all leasehold" somehow refers to the entire 320 acre Newell Lease although the instrument describes the Newell #1 well only. To arrive at that result, the lower courts have journeyed beyond the four corners of the instrument to resolve the ambiguity through judicial speculation rather than requiring extrinsic evidence to determine the true intent of the parties. ¶ 11 Extrinsic evidence of the parties' intent would have prevented the lower courts from supplying a speculative conclusion as to the scope of the leasehold conveyed by the ambiguous instrument. Instead, what may have been intended as a wellbore only assignment has been construed to include the entire Newell Lease. CERTIORARI PREVIOUSLY GRANTED; OPINION OF COURT OF CIVIL APPEALS VACATED; TRIAL COURT REVERSED; CAUSE REMANDED. CONCUR: Taylor, C.J.; Colbert, V.C.J.; Kauger, Watt, Edmondson, Reif, Gurich, JJ. CONCUR IN RESULT: Winchester, Combs, JJ. FOOT