Court Opinion

ID: 9528539
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:41:52.148345+00
Date Added: 2024-06-11T13:26:58.297385
License: Public Domain

URBIGKIT, Chief Justice,
dissenting.
I join in the dissent of Retired Justice Rooney in agreement that the free ride given by the majority’s decision to M.J. Harvey, Jr. is not justified by permitting escape from an oil field unitization. Had the fates turned otherwise so that it would have been specifically for Harvey’s benefit to have an interest within the unit whether or not he originally consented, then certainly the claim would be inclusion, not exclusion.
I do not find either documentary requirement or general standards in oil production practice which justify the majority’s decision. An extraordinary additional cost for Wyoming oil and gas development will likely result from the veto power now provided to fractional overriding royalty interest holders. Properly analyzed, Harvey’s assignment ended his status under the lease as a lessee of state lands. Under no circumstances would I conclude that the base lease demonstrates intent within its proper construction for the assignor, who only retained a small overriding royalty interest, to remain independently able to determine his separate nonparticipation. Consequently, I join Retired Justice Rooney in his cogent analysis and conclusion.
Additionally, I dissent to the majority’s construction of the 1982 Royalty Payment Act, now the 1989 Royalty Payment and Reporting Act. Although the Act as finally presented received an overwhelmingly favorable vote in the legislature, it is hardly likely that the same result would have been achieved if the legislature had anticipated the provisions would extend beyond title dispute concepts providing a retention of proceeds requirement to move statutory penal provisions now into other broad issues of oil development contractual controversy and court litigation.1
The severest of penalty, incurred attorney’s fees and eighteen percent interest, was never reflected by phraseology within the Act to include application to participating general interest holders with direct disputes about their contractual rights. This decision broadly adds the Royalty Payment and Reporting Act as a term to general participation, partnership and production agreements now in usage in the industry. If the claim is developed to be underpayment of proportionate proceeds in value or amount, then this decision adds attorney’s fees and eighteen percent interest to the successful litigant’s prize. Nowhere else in law is such a heavy statutory penalty between contracting parties provided when an honest dispute might exist. The existence of an honest dispute here can be observed from the three to two decision by which the basic issue in contest will be decided in this court.
It is terribly unfortunate that legislative history is nearly totally unavailable for understanding the actions of the Wyoming State Legislature. Without direction of that history, the result and responsibilities of this court may well be result-oriented adjudication far removed from what the actual intent of the legislature initially was because no other informative basis for stat*112utory intent analysis exists.2 Cf. Allied-Signal, Inc. v. Wyoming State Board of Equalization, 813 P.2d 214 (Wyo.1991), Ur-bigkit, C.J., specially concurring.
Wyo.Sess.Laws, ch. 27 (1982) was significantly extended by Wyo.Sess.Laws, ch. 255 (1989) when the later enactment added comprehensive provisions for collection, reporting and remittance of royalties. The negative denigration of division orders and the affirmative detail for reporting and payment provide no further historical evidence that the royalty payment and reporting law was intended to extend to basic disputes such as the effect of unitization presented here. Substantively, I would concur with the decision of the United States District Court for the District of Wyoming in its Order on Motions for Summary Judgment in Prenalta Corpp. v. Colorado Interstate Gas Co., No. C89-1010-B, (D.Wyo. Aug. 11, 1989). By that order, United States District Judge Clarence A. Brimmer provided an accurate analysis of intent to apply the statute to “situations where there is difficulty determining a person legally entitled to the proceeds from production.” Id. at 13.
The Royalty Payment and Reporting Act, circa 1989, is punitive legislation providing penalties of both attorney’s fees and eighteen percent interest. The law is generally well settled and specifically in this jurisdiction that the scope of punitive legislation and its provisions should not be extended by implication. As Justice McClintock in Title Guaranty Co. of Wyoming, Inc. v. Belt, 539 P.2d 357 (Wyo.1975) appropriately recognized, where a statute is a penal one it must be strictly construed and
“cannot be extended by implication or construction to persons or things not expressly brought within its terms, nor to cases not within the letter of the statute; and also, that ‘all doubts as to the constructions are resolved in favor of the defendant.’ ”
Id. at 360 (quoting State v. Thompson, 15 Wyo. 136, 87 P. 433 (1906)). This standard and uniform rule had its initiation in the early cases of People ex rel. School Dist. No. 3 in Laramie County v. Dolan, 5 Wyo. 245, 39 P. 752 (1895) and Haines v. Territory, 3 Wyo. 167, 13 P. 8 (1887). Cogent restatement of their principle can be more recently found in Attletweedt v. State, 684 P.2d 812 (Wyo.1984) and Horn v. State, 556 P.2d 925 (Wyo.1976).
I would not extend the Royalty Payment and Reporting Act by construction to punish bona fide contract disputants who have basic differences about interest rights or royalty requirements as differentiated from admitted obligations with dispute only as to who is the proper party for an admitted payment.
In finding that the majority extends this punitive legislation by construction far beyond the initial legislative purpose or the clearly provided text of its provisions, I respectfully dissent. The expansive scope of this Act now provided by the majority’s decision reaches litigation far removed from a normal royalty owner’s protection enactment. See, for example, Prenalta Corp., No. C89-1010-B, which considers basic pricing and value questions. Likewise involved would be value disputes regarding royalty payments.
For an obvious reason, since I reject Royalty Payment and Reporting Act application in this case, I also dissent to the reversal of the trial court’s decision which did not apply the interest application rule. I neither agree nor disagree with the decision to adopt that principle for Wyoming usage when it may come up in a proper case as comprehensively briefed, but do not approve the present trial court reversal and consequent application here within the factual situation of a statutory construction *113determination. Not only has this court extended the royalty payment statute by construction far beyond what I perceive the original intent would have justified, Allied-Signal, Inc., 813 P.2d 214 (1991), but now further supplements and extends the statute by affixing upon it an interest attribution scheme which affords further penalty upon the producer or payment obligor who, in contested royalty rights cases, comes to litigative dispute. Mathematically, we add another element of penalty to the statutory result. Belt, 539 P.2d 357.
I would agree with Moncrief that this inclusion-exclusion unit agreement dispute did not create in itself an interest bearing debt and, consequently, the authorities cited of Southern Natural Gas Co. v. Pursue Energy, 781 F.2d 1079 (5th Cir.1986) and 45 Am.Jur.2d Interest and Usury § 99 (1969) do not control. Southern Natural Gas Co. related to a jurisdiction which provided a specific statutory interest-principal allocation provision which was found by the federal court to be controlling. Likewise is Jorgensen v. Aetna Cas. & Sur. Co., 769 P.2d 809 (Utah 1988), involving an interest bearing obligation, while Security Ins. Co. of Hartford v. Houser, 191 Colo. 189, 552 P.2d 308 (1976) and Landess v. State, 335 P.2d 1077 (Okl.1958) involve the distinguishable subject of post-judgment interest where partial payments on a judgment were made by the judgment debtor in presentation of a subject overtly different from a statutorily created penalty which is the subject of the present Royalty Payment and Reporting Act.

. When initially introduced as S.F. No. 8, 46th Leg., Budget Sess. (Wyo.1982) under the sponsorship of the Senate, the initial file included reference to unmerchantable title with determination to be made in accord with title standards accepted by the Wyoming State Bar. S.F. 8 was then significantly rewritten and sponsored by both Senate and House members as S.F. 8A, but retained its intrinsic character considering in essence stakeholder concepts when disputes about interest ownerships might develop. The obvious theory of the law was to foreclose economic benefit to the producer in delayed determination of recipients. See S.F. No. 8A, 46th Leg., Budget Sess., Digest of Senate and House Journals (Wyo.1982). This was the apparent reason for the escrow provision since, as a third-party transaction, the escrow was protection for the obligor but would eliminate economic benefit in fund retention arising as a perceived conflict in interest when title controversies developed which permitted money usage by obligor during delayed pay out period.

. For example, because of the nature of its sponsorship, it is possible that some written bill analysis statements providing information about the legislation were given for distribution on the legislative floor to the membership during debate. Committee session handouts may have and probably did exist to provide details and statement of purpose. None of this material is retained as a permanent legislative record and, consequently, the factual basis upon which passage was obtained can only be implied to determine intent as the adjudicatory construction of the statute later develops.