Court Opinion

ID: 1042923
Source: CourtListenerOpinion
Date Created: 2013-10-02 18:43:17.775245+00
Date Added: 2024-06-11T13:01:21.404498
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                               No. 13-1311

JOSEPH E. ENNIS, SR.; MARJORIE G. ENNIS,

                Plaintiffs – Appellants,

          v.

CHESAPEAKE APPALACHIA, LLC, an Oklahoma limited liability
company; STATOIL USA ONSHORE PROPERTIES, INC., a Delaware
corporation; RANGE RESOURCES-APPALACHIA, LLC, a Delaware
limited liability company,

                Defendants – Appellees.

Appeal from the United States District Court for the Northern
District of West Virginia, at Wheeling.   John Preston Bailey,
Chief District Judge. (5:12-cv-00105-JPB)

Submitted:   August 20, 2013                 Decided:   October 2, 2013

Before KING, KEENAN, and DIAZ, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Michael C. Harris, HARRIS WELSH & LUKMANN, Chesterton, Indiana;
Eric M. Gordon, BERRY, KESSLER, CRUTCHFIELD, TAYLOR & GORDON,
Moundsville, West Virginia, for Appellants.     Kevin C. Abbott,
REED SMITH LLP, Pittsburgh, Pennsylvania, for Appellees.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

       In this diversity action, plaintiffs Joseph E. Ennis, Sr.,

and Marjorie G. Ennis, owners of an eighty-eight-acre parcel in

Ohio County, West Virginia, seek a declaration that (1) they did

not    enter    into    a   binding    “oil,   gas    and   coalbed   methane    gas

lease” with defendant Range Resources-Appalachia, LLC (nee Great

Lakes Energy Partners, LLC), and (2) Range thus did not validly

assign any lease to defendants Chesapeake Appalachia, LLC, and

Statoil USA Onshore Properties, Inc.                   The Ennises also allege

that they are entitled to compensatory and punitive damages for

the    loss    of   income    and     diminished     property   value   that    have

resulted from the defendants’ illegal claim on the Ennises’ oil

and gas.

       Concluding that a fully enforceable lease exists between

the Ennises and Range, the district court granted a motion, made

by    Range    solely    on   its   own   behalf,     to    dismiss   the   Ennises’

complaint pursuant to Federal Rule of Civil Procedure 12(b)(6).

See Ennis v. Chesapeake Appalachia, LLC, No. 5:12-cv-00105 (N.D.

W. Va. Feb. 8, 2013) (the “Dismissal Order”).                     That same day,

the court issued an order for the Ennises to show cause why the

complaint should not be dismissed as to Chesapeake and Statoil,

in that the Ennises’ claims against those two defendants seem to

hinge on the lack of a binding lease with Range.                      In response,

rather than contending that their claims against Chesapeake and

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Statoil       are   independent         of    their      claims     against      Range,     the

Ennises       filed   a    Rule       59(e)    motion       to    alter     or     amend    the

Dismissal         Order    on     the     ground         that     the   court      erred     in

pronouncing a binding lease.                   Adhering to its earlier ruling,

the court denied the Ennises’ Rule 59(e) motion and dismissed

the     complaint     in     its      entirety.            See    Ennis     v.     Chesapeake

Appalachia, LLC, No. 5:12-cv-00105 (N.D. W. Va. Mar. 1, 2013)

(the “Rule 59(e) Order”).                The Ennises timely noted this appeal

from the final judgment, contesting both the Dismissal Order and

the Rule 59(e) Order.

        The Ennises maintain that they made an offer to enter into

a lease when, on August 1, 2006, they signed and tendered a

lease form that had been provided to them by Range that June;

the form contained a commencement date of “this __ day of June,

2006.”        On    August      28,    2006,    the      form     bearing    the     Ennises’

signatures — now altered by Range to reflect a commencement date

of August 1, 2006 — was executed on Range’s behalf.                                        Range

promptly recorded a memorandum of lease commencing on August 1,

2006,       and   conveyed      its     interest      in    the    lease    to     Chesapeake

(73.12%) and Statoil (26.88%) effective July 1, 2010.                               According

to    the    Ennises,     they     believed        for     four   years     that    they    had

entered into a binding lease with Range that had commenced on an

unspecified day in June 2006, but were disabused of that belief

sometime in 2010 when they discovered Range’s alteration of the

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commencement date to August 1, 2006.                                The Ennises now insist

that such alteration constituted a counter-offer by Range that

the Ennises never accepted, so that there was no “meeting of the

minds” necessary for the formation of a valid contract.

       In     pertinent          part,   the   district         court        agreed        with    the

Ennises that “[t]he start date on the oil and gas lease is,

indeed, an essential term as it in turn affects the termination

date     of       the        [five-year]       lease.”               Dismissal          Order          5.

Nevertheless, the court expressed no “difficulty in supplying

that date in an effort to remove any uncertainty as to the

rights      and     responsibilities               of     the       parties.”           Id.;       see

Restatement        (Second)         of    Contracts           § 204     (1981)       (“When        the

parties to a bargain sufficiently defined to be a contract have

not    agreed     with       respect      to   a       term   which     is      essential         to    a

determination           of    their      rights        and    duties,       a    term      which       is

reasonable in the circumstances is supplied by the court.”).

The court declined “to enforce a date of ‘this __ day of June,

2006,’” because to do so would not “serve any party’s interest

in    establishing           a   clear    start         or    end    date       to   the    lease.”

Dismissal Order 5.                Rather, the court deemed August 1, 2006 —

the day the lease was signed by the Ennises, as well as the date

designated by Range — to be the proper lease commencement date.

See id. at 8 (noting that, “had the contract remained in its

original form with the language ‘this __ day of June, 2006,’ the

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Court would have nevertheless supplied the August 1, 2006, date

as the most reasonable term”).

      In   supplying     a    reasonable     commencement   date   rather    than

deeming    the   lease       wholly   unenforceable,      the   district    court

observed that the choice of August 1, 2006, was harmless to the

Ennises.    That is, approximately one year remained on the five-

year lease when development of the Ennises’ oil and gas was

attempted, “regardless of whether the June, 2006, or August 1,

2006, dates were used.”          See Dismissal Order 7-8 (distinguishing

Southern v. S. Penn Oil Co., 81 S.E. 981 (W. Va. 1914), where

defendant endeavored to use fraudulently altered lease to drill

on plaintiff’s land after expiration of unaltered version of

lease).    Because we agree with the foregoing analysis, we affirm

the   judgment   of    the    district     court.    We   dispense   with    oral

argument because the facts and legal contentions are adequately

presented in the materials before the Court and argument would

not aid the decisional process.

                                                                       AFFIRMED

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