Court Opinion

ID: 8944045
Source: CourtListenerOpinion
Date Created: 2022-11-27 08:12:39.295194+00
Date Added: 2024-06-11T17:09:48.287372
License: Public Domain

EDITH GRADY JOLLY,
dissenting:
My brothers now claim, after reading several sets of briefs, listening to oral argument,,» reading several sets of additional briefs, discoursing among ourselves over several months, examining and reexamining the very few key words of the contract over several months, and after decisions and revisions to decisions, that they have seen the light. I do not question that they have seen the light, but it seems appropriate to observe that the light has been a long time coming if the contract is as unambiguous as they belatedly contend that it is.
As far as I can tell, and certainly as far the majority opinion reveals, we have no information before us revealing the economic consequences of choosing between subsections 3(b)(1) and 3(b)(2), or for that matter, between subsection 3(b) or 3(c). This factor seems important in understanding the proper application of the contract terms. The majority appears to assume that the substance removed from the ground is neither gas nor casinghead gas, but rather is a gaseous substance. That gaseous substance, however, does not have any “market value,” as that term is used in subsection 3(b), because that subsection applies only to payment for “such gas” at the “mouth of the well,” not to payment for the manufactured products. On the majority’s assumption that the gaseous substance is neither gas nor casinghead gas, it has no market value, precluding application of subsection 3(b)(2).
The majority appears to argue that clause (b)(2) applies because the sour gas is “used by lessee ... in the manufacture of ... other products....” Apparently, the “other products” is elemental sulphur. The lease, however, is ambiguous on whether the process of making sulphur from sour gas is what is contemplated by the clause “manufacture of other products.” Indeed, it would seem under the majority’s construction of the contract terms that both gas and sulphur are “manufactured” from a gaseous substance, which is a plausible view. If this is the case, however, subsection 3(b)(2) expressly would not be applicable since no “gas” would be produced at the mouth of the well.
I concede that the majority’s argument supporting application of 3(b) is plausible; unfortunately, I also find plausible the producer’s arguments that subsection 3(c) applies. The question that the parties have asked this court to decide is not how to pay for the sour gas extracted from the land, *155but rather how to pay for the sulphur extracted from the sour gas. Since the product to be paid for is sulphur, and subsection 3(c) explicitly provides for the payment of sulphur, I see no basis on its face for holding that the contract unambiguously requires that sulphur be paid for under subsection 3(b).
It seems clear to me that this contract does not contemplate payment for sour gas, or otherwise it would have been clear as to how such payment would be made. Contract terms that do not contemplate a given event, but rather specifically apply to situations that are not present, are unlikely to evince an unambiguous intent that does not require further explanation such as industry practice and industry definition and understanding of terms. Nonetheless, the majority seems determined to make assumptions (with substantial economic consequences) on a bare record.
In addition, the majority, without citation, without explanation, indeed, without “notation,” proclaims, contrary to the Tenth Circuit in Amoco Production Co. v. Guild Trust, 636 F.2d 261 (10th Cir.1980) (applying Wyoming law), that sulphur removed from gas is not mined. An issue of this import, especially one that is controlled by state law and one on which many states differ, deserves more consideration than the majority gives.
Once we move beyond the ambiguous language of this contract, there is substantial evidence that numerous lessors have renegotiated their contracts to achieve the result desired by the majority, i.e., that subsection 3(b) applies. We should not, however, by judicial interpretation, effect a modification of the intended and negotiated economic benefits of the contract.
I therefore respectfully dissent on the grounds that this contract has been ambiguous to me since I first picked it up many months ago. As I read it at this moment, it remains ambiguous. The clairvoyance that has suddenly descended upon my brethren after eight months’ cogitation has somehow eluded me. While the majority’s arguments are certainly plausible, it seems unwise to affirm on summary judgment when this court does not have a certain picture of the economic and other consequences of its decision. The majority rejects the road to such enlightenment. I believe that a decision enlightened by a fully developed record would render a wiser, surer result. Thus, I continue to adhere to the panel’s original position that the contract does not unambiguously require either subsection 3(b) or 3(c) to be applied in the instant case, that summary judgment was improperly granted, and that the case should be remanded for trial.