Court Opinion

ID: 9790900
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:01:08.397221+00
Date Added: 2024-06-11T07:37:32.538800
License: Public Domain

THOMAS, Justice,
specially concurring, with whom URBIGKIT, J., joins.
I concur in the result reached in the majority opinion. There is no justification for invocation of the lien by Ruby Drilling Company in this instance. The conclusion that the parties are limited to their contractual remedies is eminently correct. That deduction is factually proper, but it is the function of the trial court to make factual conclusions. The propriety of that determination as a matter of law is essential to our disposition.
The legal justification for our ruling is found in the relationship of the parties as co-owners of the working interest in the lease. The effect of the May 18, 1984 agreement, in addition to limiting Lakota’s and Ruby’s contractual rights, was to establish a relationship “sufficiently similar to a partnership to constitute a joint venture.” Texas Oil & Gas Corporation v. Hawkins Oil & Gas, Inc., 282 Ark. 268, 668 S.W.2d 16, 17 (1984). The sharing of the income and expenses of a working interest in an oil and gas lease by the co-owners of the working interest in the same proportions as their ownership interests is the essence of a joint venture. The agreement outlined the respective rights of the parties in relation to their joint venture for developing and producing Lease No. 1.
Joint ventures are like partnerships, and they embody a reciprocal fiduciary duty of fair dealing among the members of the entity. Madrid v. Norton, 596 P.2d 1108 (Wyo.1979). According to recognized commentators, the fiduciary relationship is the most important characteristic of a joint venture. 2 H. Williams & C. Meyers, Oil and Gas Law § 437.1 (1988). The May 18, 1984 agreement does not recognize a right of either party to assert a lien against the joint venture property. In the absence of the reservation of such a right, the assertion of a lien against the joint venture property would amount to a violation of the fiduciary duty owed, and the assertion of the lien would be recognized as a breach of the joint venture agreement. Cf. Andrau v. Michigan Wisconsin Pipe Line Company, 712 P.2d 372 (Wyo.1986) (court holding no breach of a fiduciary duty resulted from the assertion of a lien because the agreement of the parties clearly provided for the assertion of a lien).
In the absence of a contractual provision that permits one joint adventurer to assert a lien against the other, sound policy reasons exist to limit the parties to the remedies provided in their contract or by the general law of partnerships. The court should not recognize an effort at self-help that violates' a fiduciary duty owed to the other party. Since that is the result reached by the majority opinion, I am pleased to concur in the disposition of this case.