Court Opinion

ID: 9528540
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:41:52.152302+00
Date Added: 2024-06-11T13:26:58.299306
License: Public Domain

ROONEY, Justice, Retired,
dissenting.
I cannot agree with the district court and with the majority of this court in their determination that the consent to unitization by Harvey, as a holder of an overriding royalty interest in production of minerals from a lease of state lands, was necessary to make such interest subject to the unitization. Harvey had been a lessee of state land involved in the unitization, but he ceased to be a lessee when he assigned it to another. His retention of a royalty interest left him with only a non-possessory interest. The new lessee consented to uni-tization.
The majority of the court presents the issue before us as follows:
“ ‘The relevant portion of the state lease reads as follows:
“ ‘Section 3. The lessor [State of Wyoming] expressly reserves:
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“ ‘(c) The right, with consent of the lessee, to commit the herein leased lands in a unit or co-operative plan of development, and to establish, alter, change or revoke the drilling, producing, and royalty requirements of the lease to conform therewith.’ (emphasis added)
“ ‘The question presented is whether, by the phrase “consent of the lessee,” the State bound itself to obtain consent to unitization from a lessee who assigned the lease but retained an overriding royalty interest.’ ”
In addressing this issue, the majority of the court acknowledges that “[i]f a contract [lease] is in writing and the language is clear and unambiguous, the intention of the parties is found in the words of the contract.” But it then proceeds to disregard the words of the contract and attempts to ascertain that which the parties “may have had in mind” and by searching for that implied in the lease.
The majority of the court acknowledges the lease to be “clear and unambiguous.” The word “lessee” has a well recognized meaning. It is a word in regular usage in everyday activities. The parties do not contest the fact that Harvey is no longer the lessee under the state lease. This lease is plain in referring only to the “lessee’s” consent and not to that of others who have an incidental interest in the lease, such as the non-possessory interest of Harvey. After recognizing that the intention of the parties is to be found in the “words of the contract,” the majority of the court proceeds to do otherwise.
In reviewing the rules for construing contracts, Justice Thomas stated the following in Shepard v. Top Hat Land and *114Cattle Co., 560 P.2d 730, 732 (Wyo.1977) (emphasis added):
“If the language of the contract is plain and unequivocal that language is controlling and the interpretation of the contractual provisions is for the court to make as a matter of law. The meaning of the instrument is to be deduced only from its language if the terms are plain and unambiguous.
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“All the parts of and every word in the contract should, if possible, be given effect, avoiding a construction which renders a provision meaningless because the presumption is that a particular provision is placed there for a purpose. ”
There is no question but that the language of the lease is plain and unequivocal in limiting any required consent to unitization to the “lessee,” and there is no question that Harvey is no longer a “lessee.”
Although asserting otherwise, the majority opinion treats the lease as containing an ambiguity. “An ambiguous contract is an agreement which is obscure in its meaning because of indefiniteness of expression or because of a double meaning being present.” Farr v. Link, 746 P.2d 431, 433 (Wyo.1987). “An ‘ambiguous contract’ is one capable of being understood in more ways than one.” Bulis v. Wells, 565 P.2d 487, 490 (Wyo.1977). There is no double meaning in the word “lessee.” It cannot be understood in more ways than one. It says exactly what it says.
The foregoing is also true when applied to the statute authorizing the State through the Board of Land Commissioners to enter into a unitization agreement. W.S. 36-6-101(d) provides in pertinent part:
“The board, on behalf of the state, and its lessee or lessees in any such mineral lease are hereby further authorized to join, in the interest of conservation and greater ultimate recovery of oil and gas, in fair and equitable cooperative or unit plans of development or operation of oil and gas pools, with the United States government and its lessees[.]”
If there is any ambiguity in the statute, it is one making even the consent of the lessee or lessees unnecessary, i.e., reading it to authorize the board to act on behalf of the state and its lessee and lessees, to join, etc. And, of course, the Board cannot act by rule, contract, lease or otherwise beyond that authorized by statute, such as requiring consent to unitization beyond those designated by the statute.
Of immediate importance of the statute is its emphasis on “conservation and greater ultimate recovery of oil and gas” through such as “unit plans.” These objectives should not be thwarted by allowing an outsider, even one with a non-possesso-ry interest, to void or veto the “fair and equitable” operation of a unit. Harvey is receiving his fair share of the proceeds of the minerals removed from the pool underlying the lands of the unit (including the land covered by his former lease). If the well had been drilled on land adjacent to this lease, he certainly would accept the fair share now paid to him rather than nothing under the contention which he here puts forth. And, of course, the state would also receive nothing for its share of the oil drained from under this lease. Courts should do equity, and equity requires Harvey to be satisfied with that due him under the unit in return for his having done no more than obtain a lease of state land which he subsequently assigned to another before drilling was commenced.
Since the other issues on appeal are pertinent only if there is an affirmance on this issue, a reversal on this issue makes unnecessary consideration of the other issues. I would reverse on this issue, and remand the case with instructions to deny plaintiffs’ motions for summary judgment and to grant defendant’s motion for summary judgment.
For these reasons, I respectfully dissent.