Court Opinion

ID: 4116573
Source: CourtListenerOpinion
Date Created: 2017-01-18 20:01:56.745729+00
Date Added: 2024-06-11T07:46:16.981622
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 15-2099

STATOIL USA ONSHORE PROPERTIES INC.,

                Plaintiff - Appellee,

           v.

PINE RESOURCES, LLC,

                Defendant - Appellant.

Appeal from the United States District Court for the Southern
District of West Virginia, at Charleston.    Irene C. Berger,
District Judge. (2:14-cv-21169)

Argued:   October 26, 2016                 Decided:   January 18, 2017

Before MOTZ, TRAXLER, and FLOYD, Circuit Judges.

Vacated and remanded by unpublished per curiam opinion.

ARGUED: David Allen Barnette, JACKSON KELLY, PLLC, Charleston,
West Virginia, for Appellant.   Constance Hankins Pfeiffer, BECK
REDDEN LLP, Houston, Texas, for Appellee.    ON BRIEF: Vivian H.
Basdekis, JACKSON KELLY, PLLC, Charleston, West Virginia, for
Appellant.   Fields Alexander, Joel T. Towner, BECK REDDEN LLP,
Houston, Texas; Bridget Furbee, Bridgeport, West Virginia, John
J. Meadows, STEPTOE & JOHNSON PLLC, Charleston, West Virginia,
for Appellee.

Unpublished opinions are not binding precedent in this circuit.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

      In     2008,   Appellant    Pine       Resources,       LLC    (“Pine”),      sold

certain      mineral   rights     to     non-party        PetroEdge      Energy,     LLC

(“PetroEdge”),       pursuant    to    the       terms   of   a   purchase    and   sale

agreement (the “Pine PSA”).            In 2012, PetroEdge sold its mineral

rights     to     Appellee     Statoil       USA     Onshore      Properties,       Inc.

(“Statoil”), pursuant to the terms of a second purchase and sale

agreement (the “Statoil PSA”).

      In 2014, Statoil sought a declaratory judgment that it was

not in breach of the Pine PSA, and had no obligations under that

agreement to Pine other than to pay certain royalty interests.

Pine filed a breach of contract counterclaim, seeking damages

for   Statoil’s      alleged    nonperformance           of   spudding    obligations

outlined in Section 5.7(b) of the Pine PSA.                       The parties filed

cross-motions for summary judgment.

      The district court granted summary judgment to Statoil, and

denied Pine’s motion for summary judgment on its counterclaim.

The court held that, under the unambiguous language of the Pine

PSA, the agreement’s spudding obligations extended only to the

“Purchaser,” which the court read to mean PetroEdge alone.

      This      holding,   however,     renders       effectively     meaningless      a

successors and assigns provision in the Pine PSA.                            It is our

duty to read a contract as a whole, giving meaning to every

provision whenever possible.             Because the district court failed

                                             2
to properly do so, we vacate its judgment and remand for further

proceedings.

                                           I.

                                           A.

      In    2001,     Pine   acquired   mineral         interests    in     a    565-acre

tract of land in Barbour County, West Virginia (the “Property”).

In 2008, at a price of $479,876, and pursuant to the terms of

the   Pine    PSA,     non-party    PetroEdge         purchased      from       Pine   the

Marcellus Mineral Rights on the Property. 1

      The Pine PSA--drafted by PetroEdge--contains the following

relevant provisions:

      •    Introduction: The Pine PSA states in its introductory

           paragraph that it is an agreement “by and between Pine

           Resources Inc., a West Virginia corporation (‘Seller’),

           and PetroEdge Energy LLC, a Delaware limited liability

           company (‘Purchaser’).”             J.A. 49.       The Pine PSA further

           provides     that     “Seller        and   Purchaser      are        sometimes

           referred     to     herein   together         as    the   ‘Parties’         and

           individually as a ‘Party’.”            Id.

      1 The Marcellus Mineral Rights include, inter alia,
hydrocarbon mineral interests of “those subsurface depths from
the base of the Elk formation to the base of (and including) the
Onondaga formation.” J.A. 50.

                                           3
    •   Article       5:    Article    5    outlines       the     covenants    of     the

        parties, and centers on their mineral production plans.

        Section 5.5 calls for quarterly meetings by the “Parties”

        to      discuss     drilling      plans    and     operations.         J.A.    56.

        Section 5.6 enjoins cooperation between the “Parties” in

        the      event     of    parallel       drilling    or     operations.         Id.

        Section 5.7(a) requires “Purchaser [to] apply for a meter

        tap      on   a    gas   transmission       line”        within   60   days     of

        executing the Pine PSA.                   J.A. 56–57.          Section 5.7(b)

        provides that the “Purchaser shall spud not less than one

        (1) well on the Contract Area” within a year of the

        installation of the meter tap; it further provides that

        the “Purchaser” shall have spudded at least three wells

        within five years of the meter tap’s installation.                            J.A.

        57. 2     Section 5.8 discusses the scenario where a party

        abandons a well and the non-abandoning party gets the

        right to take over its operation.                        Id.   Section 5.9(a)

        discusses Pine’s 18% retained overriding royalty interest

        on      hydrocarbons       produced       from     the    Marcellus     Mineral

        Rights.           J.A.   57-58.         Section    5.9(b)      establishes      an

        arbitration procedure for disputes between the “Seller”

    2  After multiple delays and a purchased extension, PetroEdge
drilled one well, the Bumgardner 5-2H, in December 2011.

                                            4
    and the “Purchaser” over the occurrence of a “Production

    Termination Event.”   J.A. 58.

•   Article 7: Article 7 is the Pine PSA’s “Indemnification;

    Limitations” section.    J.A. 60-62.   As relevant here,

    Section 7.2(a), provides as follows:

      [1] The representations and warranties of the
      Parties in Articles 3 (except Section 3.7) and 4
      and the covenants and agreements of the Parties
      in Article 6 [sic] (except Sections 5.4 through
      5.9) shall survive the Execution Date for a
      period   of    two    (2)   years.       [2]  The
      representations,    warranties,    covenants  and
      agreements of Seller in Sections 3.7 and 5.4
      shall survive until the close of business 30 days
      after the expiration of the applicable statutes
      of limitation (including any extensions thereof)
      provided that any proceeding or indemnification
      claim pending on the date of any such termination
      shall survive until the final resolution thereof.
      [3] The remainder of this Agreement shall survive
      the Execution Date so long as Purchaser holds any
      interest in the Mineral Rights. Representations,
      warranties, covenants and agreements shall be of
      no further force and effect after the date of
      their expiration, provided that there shall be no
      termination of any bona fide claim asserted
      pursuant to this Agreement with respect to such a
      representation, warranty, covenant or agreement
      prior to its expiration date.

    J.A. 61.

•   Article 8: Article 8 contains the remaining miscellaneous

    provisions.   Section 8.5 instructs that the Pine PSA is

    to be construed in accordance with West Virginia law.

    J.A. 63.   Section 8.8 contains a successors and assigns

    provision, which in relevant part provides that “this

                             5
         Agreement shall be binding upon and inure to the benefit

         of the Parties hereto and their respective successors and

         assigns.”      Id.

     •   Deed: Pine’s deed to PetroEdge (the “Deed”) granting the

         latter      the     Marcellus   Mineral     Rights    is    an    exhibit

         attached to the Pine PSA.            (All exhibits to the Pina PSA

         were       expressly     incorporated     under   Section     8.9,     the

         integration clause of the Pine PSA.               J.A. 63.)       Article

         III    of     the      Deed   provides    that,     “[n]otwithstanding

         anything to the contrary,” Pine reserves an 18% retained

         overriding royalty interest on hydrocarbons produced from

         the Marcellus Mineral Rights.            J.A. 68.    Article III adds

         that if there is a dispute regarding the occurrence of

         “Production Termination Events,” it shall be settled in

         accordance with Section 5.9(b) of the Pine PSA.                  Id.

                                         B.

     By written assignment in 2012, PetroEdge sold its interest

in the Marcellus Mineral Rights to Statoil.                    That assignment

agreement      is    subject      to   and    incorporates     the   terms      and

conditions of a purchase and sale agreement--the Statoil PSA--

dated October 12, 2012, between Statoil and PetroEdge.

     Section 10.1(a) of the Statoil PSA provides that Statoil

shall assume responsibility for the “performance of all express

                                         6
and implied obligations” arising from “instruments in the chain

of title to the Assets, the Leases, the Contracts and all other

orders,     contracts     and     agreements         to    which   the      Assets      are

subject,    including      the    payment       of    royalties       and    overriding

royalties[.]”       J.A. 450.      The Statoil PSA lists the Pine PSA as

a “Contract[] included in the Assets” that were sold by the

Statoil     PSA.      J.A.      447,    453.         The    Statoil      PSA      further

acknowledges that the obligation to drill “at least two (2)”

wells     (in   addition     to    the     Bumgardner         5-2H     well)      is     an

unfulfilled drilling obligation dictated by the Pine PSA.                              J.A.

449, 451.

     By    letter    dated      December       19,    2012--one       day    after      the

transaction     contemplated      by    the    Statoil      PSA    closed--PetroEdge

notified    Pine    of    its     assignment         to    Statoil.         The    letter

specifically noted that “Statoil is now the Purchaser under the

[Pine] PSA.”       J.A.    459.        The letter made no reference to the

possibility that the duties of PetroEdge would not pass on to

its assign Statoil.

     After the assignment, Pine sought performance by Statoil on

the Pine PSA.       It is undisputed that Pine reached out multiple

times to Statoil to schedule quarterly meetings with it, and

that at least one such meeting took place.                    To date, however, no

well drilling beyond the Bumgardner 5-2H has occurred on the

Property.

                                           7
                                           C.

       In 2014, Statoil sought a declaratory judgment confirming

that--except       for    a    duty     to       pay     royalty       interests     upon

production--its duties under the Pine PSA were expired, and it

was thus not in breach of the Pine PSA and owed no duties to

Pine   beyond   making     royalty      interest        payments.        Pine    filed    a

breach of contract counterclaim, seeking damages for Statoil’s

alleged nonperformance under Section 5.7(b) of the Pine PSA.

The parties filed cross-motions for summary judgment.

       The district court granted summary judgment to Statoil, and

denied Pine’s motion for summary judgment on its counterclaim.

Statoil USA Onshore Prop. Inc. v. Pine Res., LLC, No. 2:14-cv-

021169, 2015 WL 5304295 (S.D. W.Va. Sept. 9, 2015).                             The court

reasoned    that     because      the     introductory       paragraph        designated

PetroEdge as the “Purchaser,” and Section 5.7(b) only applied to

the    “Purchaser,”       Section       5.7(b)         unambiguously       applied       to

PetroEdge alone and not to its assign Statoil.                         Id. at *5.     The

court further held that by force of Section 7.2(a)’s residual

clause,     Section        5.7(b)       terminated         when        PetroEdge,        as

“Purchaser,”    no       longer    held    any     interest       in    the     Marcellus

Mineral Rights.          Id.      The court rejected the notion that the

successors and assigns provision in Section 8.8 modified the

definition of the term “Purchaser” anywhere in the Pine PSA.

Id.    This appeal followed.

                                             8
                                    II.

     We review a district court’s disposition of cross-motions

for summary judgment de novo.        Libertarian Party of Va. v. Judd,

718 F.3d 308, 312 (4th Cir. 2013).            “We view the facts and

inferences arising therefrom in the light most favorable to the

non-moving party to determine whether there exists any genuine

dispute of material fact or whether the movant is entitled to

judgment as a matter of law.”        Pender v. Bank of Am. Corp., 788
F.3d 354, 361 (4th Cir. 2015).

     We also review de novo a district court’s decision on an

issue of contract interpretation.          FindWhere Holdings, Inc. v.

Sys. Env’t Optimization, LLC, 626 F.3d 752, 755 (4th Cir. 2010).

“The interpretation of a written contract is a question of law

that turns upon a reading of the document itself, and a district

court is in no better position than an appellate court to decide

such an issue.”      Seabulk Offshore v. Am. Home Assurance, 377
F.3d 408, 418 (4th Cir. 2004).

                                    III.

     In our view, the district court read the successors and

assigns provision in Section 8.8 too narrowly.            That provision

extends the contractual rights and duties of Pine and PetroEdge

to their respective successors and assigns, in a contract whose

provisions   only   speak   about    the   rights   and   duties   of   the

                                     9
“Seller,” the “Purchaser,” and the “Parties.”                       Thus, if Section

8.8 is to have any meaning, it must have the effect of extending

the application of the rights and duties provisions of the Pine

PSA   from    beyond      Pine     and     PetroEdge,     and       to     the    parties’

respective successors and assigns in their stead (unless context

dictates otherwise).

      We read Section 8.8 to have such an effect, and therefore

hold that the spudding obligations that Section 5.7(b) places on

the    “Purchaser”        extend    to      PetroEdge’s       assign        Statoil     in

PetroEdge’s stead.         However, the meaning of the term “Purchaser”

in    Section   7.2(a)’s         residual       clause   is     a    more        difficult

question, because its context prevents us from concluding that

the term unambiguously encompasses PetroEdge, and in its place

its   successors     and    assigns.         We    instead      hold       that    Section

7.2(a)’s     residual      clause     is     ambiguous,       but        that    extrinsic

evidence clarifies that “Purchaser” in Section 7.2(a)’s residual

clause is intended to encompass PetroEdge’s assign Statoil.                            As

such, the district court’s conclusions that Section 5.7(b) is

inapplicable to Statoil and also terminated by Section 7.2(a)

are both erroneous.

                                           A.

      The    Pine   PSA    provides--and         no   party     disputes--that         the

agreement is to be construed in accordance with West Virginia

                                           10
law.     Under West Virginia law, “the function of a court is to

ascertain the intent of the parties as expressed in the language

used by them” in their contract.                  Zimmerer v. Romano, 679 S.E.2d
601, 610 (W. Va. 2009) (per curiam) (internal quotation marks

omitted).       In performing this task, courts must read contracts

“as a whole, taking and considering all the parts together[.]”

Id. (internal quotation marks omitted).

       Moreover, “specific words or clauses of an agreement are

not to be treated as meaningless, or to be discarded, if any

reasonable meaning can be given them consistent with the whole

contract.”       Dunbar Fraternal Order of Police, Lodge No. 119 v.

City of Dunbar, 624 S.E.2d 586, 591 (W. Va. 2005) (per curiam)

(internal quotation marks omitted).                  Additionally, West Virginia

courts “will not interpret a contract in a manner that creates

an absurd result.”            Id.

       Generally,       “[a]    valid   written      instrument   which   expresses

the    intent    of     the   parties   in    plain   and   unambiguous    language

. . . will be applied and enforced according to such intent.”

Arnold v. Palmer, 686 S.E.2d 725, 733 (W. Va. 2009) (internal

quotation       marks    omitted).       “Extrinsic      evidence   will    not   be

admitted to explain or alter the terms of a written contract

which is clear and unambiguous.”                  Faith United Methodist Church

& Cemetery of Terra Alta v. Morgan, 745 S.E.2d 461, 481 (W. Va.

2013) (internal quotation marks omitted).

                                             11
      By contrast, language is ambiguous when it is “reasonably

susceptible of two different meanings,” or is of “such doubtful

meaning that reasonable minds might be uncertain or disagree as

to its meaning.”          Estate of Tawney v. Columbia Nat. Res., LLC,

633 S.E.2d 22,       28    (W.       Va.   2006)      (internal    quotation          marks

omitted).          “The       question         as    to    whether     a        contract    is

ambiguous is a question of law to be determined by the court.”

Fraternal Order of Police v. City of Fairmont, 468 S.E.2d 712,

717–18 (W. Va. 1996) (internal quotation marks omitted).                                  Where

contract     language         is     ambiguous,        extrinsic      evidence       may     be

consulted     to   aid    in       its    construction.         Yoho       v.    Borg-Warner

Chems., 406 S.E.2d 696, 697 (W. Va. 1991) (per curiam).

                                               B.

      The    introductory           paragraph        identifies      PetroEdge       as    the

“Purchaser” under the Pine PSA, and Section 5.7(b) of the Pine

PSA imposes a spudding obligation on the “Purchaser.”                               Based on

these points, the district court concluded that the spudding

obligation of Section 5.7(b) extends to PetroEdge alone, and not

to its assign Statoil.

      We disagree with this conclusion, in light of Section 8.8

of the Pine PSA, which contains the agreement’s successors and

assigns     provision.             Section     8.8   provides      that     the    Pine     PSA

“shall be binding upon and inure to the benefit of the Parties

                                               12
hereto and their respective successors and assigns.”                                 J.A. 63.

We read Section 8.8 to extend the application of the rights and

duties       provisions        of    the      Pine        PSA--unless    context     dictates

otherwise--from            beyond         Pine      and     PetroEdge,      and     to   their

respective successors and assigns in their stead. 3                            Thus, reading

the Pine PSA “as a whole,” Zimmerer, 679 S.E.2d at 610, we hold

that       the    spudding       obligation          of    Section    5.7(b)      extends   to

Statoil, in its capacity as PetroEdge’s assign.

       The district court rejected this reading of Section 8.8,

concluding that “Section 8.8 does not modify the remainder of

the contract; it simply provides that successors and assigns are

to be bound by the contract terms.”                           Statoil, 2015 WL 5304295,

at *5.           Those two conclusions, however, are inconsistent with

one another.            The Pine PSA is structured in terms of benefits

for    and       burdens    to      the    “Purchaser,”         the     “Seller,”    and    the

“Parties;” thus, if those terms are not broadened to include

those      parties’      successors           and    assigns,    then     it   makes     little

sense      to     say   that     such     a   contract       binds    and   benefits     those

       3
       In contrast, provisions of the Pine PSA that discuss the
parties as parties, rather than as promisors and promisees under
the agreement, are sensibly read to exclude the parties’
successors and assigns.        See J.A. 49 (the introductory
paragraph); see also J.A. 51 (Section 3.1-describing the
“Seller” as a West Virginia corporation) J.A. 54 (Section 4.1-
describing the “Buyer” as a Delaware limited liability company);
J.A. 62 (Section 8.2-listing the addresses of “Seller” Pine and
“Purchaser” PetroEdge); J.A. 65-66 (signature page for the
“Seller” and the “Purchaser”).

                                                    13
parties’ successors and assigns.                See J.A. 57 (Section 5.7(b)-

imposing a spudding obligation on the “Purchaser”); see also

J.A. 56 (Section 5.4-allocating tax responsibilities between the

“Seller”     and    the    “Purchaser”);        id.    (Section      5.5-outlining

quarterly    meetings      for    the   “Parties”).         Indeed,    by    reading

Section 8.8 to bind successors and assigns to a contract that

does not speak to them, the district court in effect “treated

[Section 8.8] as meaningless.”              Dunbar, 624 S.E.2d at 591.              As

such, the more natural reading of “Purchaser” in the rights and

duties provisions of the Pine PSA--in light of Section 8.8--is a

reading that generally encompasses PetroEdge, and in its place

its successors and assigns.

      Furthermore, the Deed granted by Pine to PetroEdge, which

was attached to and expressly made part of the Pine PSA, makes

sense only if the term “Purchaser” in the Pine PSA is generally

not   limited      to   PetroEdge    alone.       To   elaborate,      the    Deed’s

Article III outlines an overriding royalty interest due to Pine

--an interest that even Statoil concedes it will be responsible

for paying Pine whenever mineral production takes place.                            See

Appellee’s Br. 17; see also J.A. 386 (establishing a royalty

interest scheme “[n]otwithstanding anything to the contrary”).

Article    III,    in   turn,    instructs      that   if   a   certain      type    of

royalty     dispute     arises,     that    dispute    will     be    “settled       in

accordance with Section 5.9(b) of the [Pine PSA].”                        J.A. 386.

                                           14
Section       5.9(b),      however,       speaks     in       terms     of      “Seller”   and

“Purchaser”--meaning that if Section 5.9(b) is to be of any use

in     resolving    a      Statoil-Pine           dispute,        the   term      “Purchaser”

therein will have to be read to include PetroEdge’s assigns.

This reading avoids the “absurd result” of a senseless Article

III in the Deed.           Dunbar, 624 S.E.2d at 591.

       Moreover,       a    broad       reading     of    the      term      “Purchaser”     is

consistent with the Pine PSA’s apparent objective of promoting

mineral production.            In addition to spudding obligations, the

Pine PSA’s Article 5 sets forth meetings to discuss drilling

plans, cooperation details in the event of parallel drilling or

well        maintenance      operations,           abandonment            and     restoration

procedures in the event that a well ceases to produce, and a

mineral       royalty       compensation           structure.              This     elaborate

production scheme would be frustrated if PetroEdge could simply

assign its interest to a party that would in no way be subject

to    the    scheme.       Admittedly,        a    contract        need    not    pursue   its

objectives at all costs, and so the Pine PSA’s use of the term

“Purchaser”        could      be    conceived            as   a     limitation        on   the

agreement’s effort to promote mineral production.                                Nonetheless,

in light of Section 8.8’s directive, we are satisfied reading

the    term    “Purchaser”         to    be   consistent          with,      rather   than    a

limitation on, the Pine PSA’s objectives.

                                              15
       Our approach is also consistent with relevant federal and

state     authorities    within    this       Circuit.     Those    authorities

confirm the general rule that a successors and assigns provision

places a successor or assign in the shoes of its predecessor or

assignor with respect to the rights and duties given to the

latter under the relevant contract.              See, e.g., Horvath v. Bank

of N.Y., N.A., 641 F.3d 617 (4th Cir. 2011) (applying Virginia

law); Cotiga Dev. Co. v. United Fuel Gas Co., 128 S.E.2d 626 (W.

Va. 1962); see also Cook v. E. Gas & Fuel Assocs., 39 S.E.2d
321, 326-27 (W. Va. 1946) (“Ordinarily the assignee acquires no

greater right than that possessed by his assignor, and he stands

in his shoes.”).

       Cotiga, a decision from the Supreme Court of Appeals of

West    Virginia,   is   instructive.          There,    “Cotiga,   as    lessor,

entered into an oil and gas lease with [Woods Oil], as lessee.”

Cotiga, 128 S.E.2d at 630.           The court in Cotiga quoted three

obligations that the lease agreement imposed on lessee Woods

Oil, and all three did so using only the term “Lessee” (i.e.,

not “Lessee, its successors and assigns”).                Id. at 630-31.       The

lease agreement, however, contained the following successors and

assigns    provision:      “All    the    terms,    grants,   conditions       and

provisions of this lease shall extend to and be binding upon the

successors    and   assigns   of   the    parties    hereto.”       Id.   at   633

(emphasis added in Cotiga).

                                         16
      One day after the lease was signed, Woods Oil assigned the

lease to United Fuel.                Id. at 630.             Relying on the successors

and assigns provision, the court in Cotiga had no difficulty

holding assign United Fuel responsible for the above-described

obligations       that      the     lease     agreement           by   its     literal         terms

imposed    only       on    the    “Lessee.”        “As       a    result      of    the       lease

assignment,” the court observed, “United Fuel succeeded to only

such rights as accrued to Woods Oil by the terms of the lease

and thereby became burdened by all restrictions and obligations

thereby    imposed         upon    Woods    Oil.    .    .    .        To    all   intents          and

purposes, United Fuel became the lessee in the place and stead

of Woods Oil[.]”            Id. at 633–34.          In reaching this conclusion,

the   Supreme     Court      of     Appeals    of    West         Virginia      adhered        to     a

practical     approach         with       respect       to    successors           and     assigns

provisions, which we adhere to in this case as well.

      Notably,        this        Court    recently          followed         this       practical

approach    in    Horvath.           In    that    case,      a    borrower        argued       that

because a deed of trust defined the term “Lender” as company

“AWL,” a deed provision that vested foreclosure powers in the

“Lender”     empowered            AWL     alone     to       foreclose--and              not        any

subsequent purchasers of the deed of trust.                                 Horvath, 641 F.3d

at 624–25.       This Court rejected that narrow reading for several

reasons:         it    would       bring    about       the       “absurd      result”         of    a

subsequent purchaser “paying for a worthless document” that the

                                              17
purchaser would have “no power to administer or enforce;” it

would contradict a provision stating that “[t]he covenants and

agreements           of    this   Security        Instrument            shall   bind . . . and

benefit the successors and assigns of Lender;” and it would go

against     “good          sense,”    because          “[i]f      AWL    were    to    sell    its

interest        in    the    deed     of    trust,      it     would      no    longer    be   the

‘Lender’ in any meaningful sense.”                         Id. at 625 (emphasis added

in Horvath); see also id. (citing with approval the maxim that

contracts must be construed “as a whole”).                               Instead, this Court

broadly construed the term “‘Lender’ as applying not only to AWL

but to any subsequent purchaser of the deed of trust.”                                 Id.

     For        similar       reasons,      a     broad      construction        of     the    term

“Purchaser”--one encompassing PetroEdge, and in its place its

successors           and    assigns--is         likewise       appropriate        for     Section

5.7(b)     of    the       Pine   PSA.       Such      a   construction         complies       with

Section     8.8’s          successors       and    assigns         provision,      avoids      the

absurd result of a senseless Pine PSA and Deed, and respects the

reality     that          PetroEdge    is    no    longer      the       “Purchaser”      in   any

meaningful sense for purposes of the Pine PSA or the achievement

of   the        agreement’s          objectives.             In     reaching       a     contrary

conclusion, the district court erred.

                                                  18
                                          C.

     Having decided that Section 5.7(b) applies to PetroEdge’s

assign    Statoil,    we   must    next      decide   whether    that     provision

retains    any   force     or   effect.         Section   7.2(a)   contains     two

clauses that set deadlines for certain provisions of the Pine

PSA, with the first one expressly excepting Sections 5.4 through

5.9 from its scope.             Additionally, Section 7.2(a) contains a

residual clause, which provides, “The remainder of [the Pine

PSA] shall survive the Execution Date so long as Purchaser holds

any interest in the [Marcellus] Mineral Rights.”                   J.A. 61.      We

hold that the residual clause applies to Section 5.7(b).                         We

also hold that the residual clause is ambiguous as to whether

Section 5.7(b) survives so long as PetroEdge alone holds any

interest in the Marcellus Mineral Rights, or so long as any such

interest is held by PetroEdge, its successors or assigns.                       The

subsequent conduct of Pine and PetroEdge nonetheless clarifies

that the latter reading is the correct one.

                                          1.

     Before exploring the meaning of Section 7.2(a)’s residual

clause, we must address whether that clause even governs Section

5.7(b).     Section      5.7(b)   is   not     governed   by    Section    7.2(a)’s

second clause, and it is specifically excepted from the scope of

Section 7.2(a)’s first clause.                 Because Section 5.7(b) is not

                                          19
governed by either clause, it is sensible to place it within the

scope of Section 7.2(a)’s residual clause (which governs the

“remainder” of the Pine PSA).

       Pine resists this conclusion.                    According to Pine, because

Section      7.2(a)’s        residual       clause   is   a    general   catch-all,     it

cannot      govern        Section    5.7(b),    which     is   specifically      excepted

from the scope of Section 7.2(a)’s first clause.                           Pine supports

this argument with a reference to the interpretive principle

that       general    language        must    usually     yield    to    more    specific

language when the two conflict.

       Unfortunately for Pine, its reliance on this principle is

misplaced.           In    this     case,    there   is   no    conflict    between    the

specific      exception        in    Section    7.2(a)’s       first    clause   and   the

general language in Section 7.2(a)’s residual clause.                            Rather,

the latter clause simply picks up, inter alia, the provisions

specifically dropped out of the former clause. 4                       Thus, we have no

difficulty reading Section 7.2(a)’s residual clause to govern

Section 5.7(b).

       4
       Cf. Shannondale, Inc. v. Jefferson Cty. Planning & Zoning
Comm’n, 485 S.E.2d 438, 498 (W. Va. 1997) (per curiam)
(rejecting the argument that a general ordinance provision was
superseded by a specific ordinance provision, because the two
could be reconciled).

                                               20
                                               2.

     Having arrived at this determination, we now turn to the

issue of how Section 7.2(a)’s residual clause impacts Section

5.7(b)    following      PetroEdge’s           assignment    to    Statoil.           If   the

residual clause carries a terminating effect when PetroEdge, as

“Purchaser,”         ceases    to    have      any   interest      in       the    Marcellus

Mineral Rights, then PetroEdge’s assignment would give rise to a

termination of Section 5.7(b); if the residual clause carries a

preservation effect so long as PetroEdge, or its successors and

assigns,       has    interest      in   the    Marcellus    Mineral         Rights,       then

Section 5.7(b) is preserved even after PetroEdge’s assignment.

We acknowledge that there are persuasive arguments on both sides

of this issue.

     According to Statoil, when the residual clause instructs

that it preserves the provisions within its scope “so long as

Purchaser holds any interest in the [Marcellus] Mineral Rights,”

J.A. 61, the clause sets as a deadline the date that PetroEdge

ceases    to    hold    any   mineral       interests.       For    support,         Statoil

references       the     introductory           paragraph’s       identification            of

PetroEdge as the Pine PSA “Purchaser.”

     Statoil rejects the notion that the term “Purchaser” in

Section    7.2(a)’s          residual       clause     can    include             PetroEdge’s

successors       and    assigns,         because     under   such       a    reading       the

deadline       that    the    residual      clause     purports      to       set    becomes

                                               21
illusory.         They    argue    that      if    “Purchaser”        in    Section    7.2(a)

includes successors and assigns, then none of the provisions to

which the residual clause is applicable will ever expire and

will last into perpetuity.

       Meanwhile,        there    are      also    arguments     favoring       a     broader

reading      of    the     residual          clause--one        that        preserves      the

provisions within its scope so long as PetroEdge, or in its

place    its   successors         or    assigns,       holds    any    interest       in   the

Marcellus Mineral Rights.                  Although the residual clause refers

only    to   “Purchaser,”        to    the    extent     that    the       residual    clause

shapes the rights and duties of the parties, Section 8.8 seems

to   broaden      “Purchaser”         to   include     PetroEdge’s         successors      and

assigns.

       This broad construction may impair the residual clause’s

utility as a deadline clause, but, one may argue, there is no

need for the residual clause to serve such a function.                                Whereas

Section 7.2(a)’s first two clauses set specific deadlines for

the provisions they govern, its residual clause could be read as

a clause intended to attach a longer effect to the provisions it

governs.          Although        this       reading     would    allow        PetroEdge’s

successor or assign to participate in the Pine PSA’s mineral

production scheme in PetroEdge’s place, there is no indication

in the Pine PSA that PetroEdge was irreplaceable in this scheme.

                                              22
       In our view, both sides present reasonable constructions of

Section 7.2(a)’s residual clause.                   “The meaning of a word is to

be considered in the context in which it is employed.”                               Legg v.

Johnson,        Simmerman     &     Broughton,      L.C.,      576 S.E.2d 532,      537

(W. Va. 2002) (per curiam) (internal quotation marks omitted);

see     also     Torres      v.    Lynch,     136   S.    Ct.     1619,      1625     (2016)

(explaining that “many words” can “take[] on different meanings

in    different       contexts”).           Although     the     term      “Purchaser”--in

conjunction           with        Section      8.8--unambiguously             encompasses

PetroEdge’s successors and assigns in the context of rights and

duties provisions, it is difficult to conclude that such a broad

construction          is   unambiguously       proper       in    the      context    of    a

residual clause of a limitations provision.                          On the other hand,

in light of the traditional rule that an assign stands in the

shoes      of   the   assignor,      the    residual     clause       is    inadequate     to

indicate a clear intent by the parties to in large part depart

from this rule. 5            Because the term “Purchaser” is “reasonably

susceptible of two different meanings,” we hold that the term is

ambiguous in Section 7.2(a).                Tawney, 633 S.E.2d at 28.

       5
       Cf. Tawney, 633 S.E.2d at 28 (finding an ambiguity where,
“in light of [West Virginia’s] traditional rule that lessors are
to receive a royalty of the sale price of gas, the general
language at issue simply [was] inadequate to indicate an intent
by the parties to agree to a contrary rule”).

                                              23
     Having identified an ambiguity in Section 7.2(a)’s residual

clause, we now resort to extrinsic evidence for clarification.

Yoho, 406 S.E.2d at 697.               In this case, we are guided by the

“practical construction given to the contract by the parties

themselves . . . subsequent[]”              to     its     execution.          Kelley,

Gidley, Blair & Wolfe, Inc. v. City of Parkersburg, 438 S.E.2d
586, 589 (W. Va. 1993) (per curiam) (internal quotation marks

omitted).     As “Lord Sugden once said: ‘Tell me what the parties

have done under a contract and I will tell you what the contract

means.’”    Watson v. Buckhannon River Coal Co., 120 S.E. 390, 394

(W. Va. 1923).

     PetroEdge’s        conduct    shows    that    it   read     the   Pine   PSA   as

carrying    no     provision      that     terminates      Section      5.7(b)      upon

assignment.        In its post-assignment letter to Pine, PetroEdge

noted that Statoil was now the “Purchaser” under the Pine PSA,

but made no suggestion that Section 7.2(a)’s residual clause

freed Statoil of any of PetroEdge’s duties under the agreement.

On   the    contrary,       in   the     Statoil    PSA,     PetroEdge      expressly

communicated       to    Statoil       that      the     latter     was     acquiring

PetroEdge’s       duties.        The   Statoil     PSA     expressly      noted     that

Statoil     was     taking       the   assigned        assets     subject      to    the

obligations arising from the Pine PSA, and it specifically cited

                                           24
the “unfulfilled drilling obligations,” J.A. 449, of “two (2)

additional wells,” J.A. 451, as arising from the Pine PSA. 6

      Pine’s conduct is likewise consistent with a broad reading

of   Section   7.2(a)’s   residual     clause.     Following     PetroEdge’s

assignment, Pine sought Statoil’s performance under the Pine PSA

(and under Section 5.7(b) in particular) through multiple reach-

out efforts and litigation with Statoil.            This conduct comports

with the notion that Section 7.2(a) did not, post-assignment,

terminate Section 5.7(b).

      In light of this conduct by Pine and PetroEdge, we conclude

that Section 7.2(a)’s residual clause was intended to preserve

the provisions within its scope so long as PetroEdge--or its

successors or assigns--possessed any interest in the Marcellus

Mineral Rights.     Because Statoil, in its capacity as PetroEdge’s

assign,   possesses    such   interest,    we    hold   that    the   spudding

obligations    of   Section   5.7(b)    retain    force   and   continue   to

      6Statoil insists that, through this language, PetroEdge was
simply citing its own drilling obligations under the Pine PSA.
We disagree.    If PetroEdge truly believed that its drilling
obligations were not being passed down to Statoil, then
presumably PetroEdge would have either omitted reference to
those obligations altogether, or would have at least appended to
its citation of those obligations in the Statoil PSA the crucial
detail that those obligations were not being passed down to
Statoil.   PetroEdge did not do so, and so we reject Statoil’s
creative reasoning.

                                     25
govern Statoil.          Again, we reject the district court’s contrary

conclusions. 7

                                         IV.

        Statoil presents an alternative ground for affirming the

district court’s decision to rule against Pine on its breach of

contract      counterclaim.       Statoil      asserts   that   even   if   it   was

obligated to spud, its failure to do so caused Pine no injury,

because      spudding    is   only   a   preliminary     development    procedure

that       would   not     necessarily      lead    to    the    production      of

hydrocarbons and resulting royalty payments.                    Pine, meanwhile,

contends that Statoil understates both the requirements of the

spudding obligation, and the extent to which non-compliance with

those      requirements       impaired   Pine’s     prospects     of   ultimately

receiving royalty payments.

       7
       Although we rule in favor of Pine, we do so without
reliance on the contra proferentem rule that Pine urges upon us.
That rule dictates that residual ambiguity be construed against
drafter PetroEdge and in Pine’s favor, Evans v. Bayles, 787
S.E.2d 540, 541 n.1 (W. Va. 2016); however, in this case
PetroEdge and Pine do not disagree on the definition of
“Purchaser.” We acknowledge Pine’s citation to cases suggesting
that contra proferentem applies even to assigns, see Appellant’s
Br. at 56-57, but note that those cases do not deal with a
scenario where the assign’s construction conflicts with the
construction shared by both the drafter-assignor and the non-
drafting party.   This case presents such a scenario, and so in
light of our ability to resolve this case otherwise, we do not
rely on contra proferentem.

                                         26
      We    acknowledge      our    discretion     to   affirm     on     any   ground

supported by the record, even if it was never relied upon by the

district court.           See Drager v. PLIVA USA, Inc., 741 F.3d 470,

474 (4th Cir. 2014).              Nonetheless, we decline to engage in a

complex injury analysis here based on short passages from the

parties’ briefs.          Instead, we leave the issue of injury for the

district court to address on remand in the first instance.                         See

Singleton v. Wulff, 428 U.S. 106, 120 (1976) (“It is the general

rule,      of   course,    that    a    federal   appellate       court    does   not

consider an issue not passed upon below.”); Goldfarb v. Mayor &

City Council of Baltimore, 791 F.3d 500, 515 (4th Cir. 2015)

(“The district court is in a better position to consider the

parties’ arguments in the first instance, which can be presented

at   length     rather     than    being    discussed      in    appellate      briefs

centered on the issues the district court did decide.”).

                                           V.

      For the foregoing reasons, we vacate the judgment of the

district court.           We remand this case with instructions to the

district court to grant summary judgment in favor of Pine on

Statoil’s declaratory judgment claims, and to consider in the

first   instance     Statoil’s         injury   argument    in    connection      with

Pine’s breach of contract counterclaim.

                                                            VACATED AND REMANDED

                                           27