Stockport Mountain Corporation LLC v. NorcrossWildlife Foundation, Inc.
MEMORANDUM and ORDER granting 46 DFt's Motion for Summary Judgment ; Clerk of Court is directed to enter judgment in favor of dft ; Dft norcross request for resonable costs and atty fees is granted; dft shall have 14 days from date of this order to submit litigation costs; pltf shall have 14 days to respond; Clerk of Court is directed to CLOSE this case. Signed by Honorable James M. Munley on 8/27/13 (sm)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
Before the court is Defendant Norcross Wildlife Foundation, Inc.’s
motion for summary judgment. (Doc. 46). This motion is fully briefed and
ripe for disposition.
This case arises from a dispute over the interpretation of a
conservation easement that Defendant Norcross Wildlife Foundation, Inc.
(hereinafter “Norcross”) holds on land owned by Plaintiff Stockport
Mountain Corporation LLC (hereinafter “Stockport”). Stockport and
Norcross are entities controlled by individuals who were neighbors. These
individuals used the entities they controlled to purchase a neighboring tract
of land and place a conservation easement on it. In this action, Stockport
seeks a declaratory judgment that oil and natural gas exploration and
drilling via surface wells is permitted by the conservation easement.
Norcross counters with a request for a declaration that such natutral gas
activities are prohibited by the conservation easement. The relevant
undisputed material facts are as follows.1
A. Norcross’ Acquisition of the Nowicki Parcel
Allan and Diane Nowicki (collectively the “Nowickis”) formerly owned
a 1,937 acre plot of land in Buckingham Township, Wayne County,
Pennsylvania (hereinafter the “Nowicki Parcel”). (DSOF ¶¶ 21, 33). The
Nowickis used the Nowicki Parcel for timbering and quarrying. (Id. ¶ 24).
The Nowicki Parcel is located across the street from Donald
Rajoppi’s residence. (Id. ¶ 23). Rajoppi, an experienced businessman,2
testified as the designee for Stockport. (Id. ¶ 13). Richard Regan,
The foregoing background section relies upon the statements of
undisputed material facts submitted by both parties, (Doc. 47, Def.’s
Statement of Undisputed Material Facts (hereinafter “DSOF”); Doc. 53,
Pl.’s Resp. to Def.’s Statement of Undisputed Material Facts (hereinafter
“PSOF”)), as well as the complaint and answer, (Doc. 1, Compl.
(hereinafter “Compl.”); Doc. 36, Answer (hereinafter “Answer”)).
Rajoppi holds a bachelor’s degree in economics from the University
of Oklahoma and took post-graduate courses in accounting. (DSOF ¶ 14).
Rajoppi founded Capra Enterprises in 1980, which currently operates a
laundromat and car wash and formerly operated a movie theater and hotel.
(Id. ¶ 17; PSOF ¶ 17). Prior to founding Capra Enterprises, Rajoppi
worked for the Irving Trust Company in New York, New York, where he
held several offices, including that of Vice President. (DSOF ¶ 15). Also
prior to founding Capra Enterprises, Rajoppi served as the Executive Vice
President in charge of lending for the Third National Bank. (Id. ¶ 16).
Norcross’ former president and CEO, and Michael Leonard also own
residences that neighbor the Nowicki Parcel. (Id. ¶ 23; PSOF ¶ 23).
In 1991, Norcross became interested in purchasing the Nowicki
Parcel to preserve it. (DSOF ¶ 24). Norcross made an offer to purchase
the Nowicki Parcel directly from the Norwickis in 1998. (Id.) Rajoppi,
Leonard and Reagan intended that Norcross would purchase the Nowicki
Parcel to ensure that it would not be developed. (Id. ¶ 25). Rajoppi also
asserts that he did not want substandard housing built on the property, but
he expected that the property would still be used for timbering and hunting.
(PSOF ¶ 25).
Stockport Forest Preservation, Inc., a wholly owned subsidiary of
Norcross, purchased the Nowicki Parcel in a foreclosure sale in
approximately August 1999.3 (Answer ¶ 6; DSOF ¶¶ 2, 26). Norcross,
through its wholly owned subsidiary SFP, paid for the entire purchase price
of the Nowicki Parcel, including all sale costs and expenses. (DSOF ¶ 26).
Neither Rajoppi nor Leonard contributed to the payment of the purchase
Stockport Forest Preservation, Inc. converted to a limited liability
company in May 2001, after which time it was known as Stockport Forest
Preservation, LLC. (Answer ¶ 6). Both entities will hereinafter be referred
to as “SFP.”
B. Transfer of Property from SFP to Rajoppi
When SFP and Norcross first contemplated purchasing the Nowicki
Parcel, it was anticipated that SFP would ultimately convey part of the
parcel to Leonard and Rajoppi subject to a conservation easement.
(DSOF ¶ 27). During these early conversations about the conservation
easement, Reagan represented that the restrictions imposed by the
conservation easement would not be overly burdensome. (PSOF ¶ 27).
On September 15, 1999, both Rajoppi and Leonard signed a “letter
of understanding” prepared by Reagan. (DSOF ¶ 29). In this letter, the
parties agreed that SFP would sell the recently acquired Nowicki parcel to
Rajoppi and Leonard subject to a conservation easement. (Doc. 47-6,
Def.’s Dep. Ex. 6, Letter dated Sept. 15, 1999). The letter explained that
the conservation easement would include elements that limited
development, hunting, timbering and quarrying. (Id.) The letter also stated
that it was Norcross’ intent to prohibit the construction of new roads on the
property, “except as low-impact, temporary access to logging sites and
On December 21, 1999, Rajoppi and Leonard entered into a formal
agreement with SFP for the sale of land. (DSOF ¶ 30). This agreement of
sale provided that SFP would sell Rajoppi and Leonard 1,937 acres of real
property for a total of $360,000.00. (Doc. 47-6, Def.’s Dep. Ex. 7,
Agreement of Sale). This agreement provided, in part, as follows:
This Agreement is also contingent upon Buyers accepting the
terms of the Conservation Easement being placed upon the
property by Seller. . . . [I]f Buyer is unwilling to accept the terms
of the Conservation Easement, then Buyer shall have the right
to terminate this Agreement of Sale . . . . It is agreed by the
parties hereto that the general terms of the Conservation
Easement are outlined in a Letter Agreement dated 9/15/99
from Richard Reagan . . . [to] the buyers herein.
After the agreement of sale was signed, Rajoppi and his attorney
were involved in discussions regarding the conservation easement to be
placed on the property, including whether it would permit the use of allterrain vehicles, timbering and hunting. (DSOF ¶¶ 34, 43). On November
9, 2000, Rajoppi’s attorney returned a marked-up version of a draft
conservation easement to Norcross. (PSOF ¶ 44). This draft conservation
easement included a prohibition on “[i]ndustrial or commercial uses of any
kind” in a provision that resembles the industrial and commercial uses
provision that was ultimately placed in the final conservation easement.
(See Doc. 47-9, Def.’s Dep. Ex. 43, Letter dated Nov. 9, 2000).
By letter dated January 11, 2002, Norcross’ counsel provided
Rajoppi’s counsel with a draft conservation easement. (DSOF ¶ 35). This
letter states that the revised conservation easement “reflects several
changes that are intended to restrict activities on the property.” (Doc. 47-6,
Def.’s Dep. Ex. 15, Letter dated Jan. 11, 2002). Rajoppi was concerned
about some of the restrictions to timbering and quarrying activities
contained in the revised conservation easement, and certain changes
requested by Rajoppi with respect to timbering and quarrying were
eventually incorporated into the easement. (DSOF ¶¶ 35, 43; PSOF ¶ 35).
SFP granted Norcross the conservation easement at issue on March
15, 2002, after Rajoppi and his attorney had a full opportunity to review it.
(DSOF ¶¶ 3, 39, 43; Doc. 47-7, Def.’s Dep. Ex. 18, Conservation
Easement (hereinafter “CE”)). The conservation easement was executed
on behalf of SFP by Reagan, as SFP’s manager, and on behalf of
Norcross by Reagan, as Norcross’ president. (DSOF ¶ 39). Despite his
involvement in crafting the conservation easement, Rajoppi did not sign the
conservation easement, which is devoid of any reference to Rajoppi. (Id.
¶¶ 39-41). In light of his role in shaping the conservation easement,
Rajoppi has admitted that there was nothing about the conservation
easement that he did not understand. (Id. ¶ 43).
In the spring of 2002, Rajoppi and his wife formed Stockport for the
sole purpose of assuming ownership of the property that Rajoppi agreed to
purchase from SFP. (Id. ¶ 19). Rajoppi is a member and owner of
Stockport and makes decisions for Stockport. (Id. ¶ 20). In a deed dated
April 22, 2002, SFP granted Stockport 900 acres of the Nowicki Parcel
(hereinafter the “Property”) in exchange for $180,000, or approximately
$200 per acre.4 (Id. ¶ 33). The deed bestows ownership of the surface
and subsurface rights of the Property to Stockport, and it does not reserve
mineral rights for SFP. (PSOF ¶ 11). However, the deed conveyed the
Property to Stockport “Under and Subject to all of the conditions of a
certain Conservation Easement from [SFP] to Norcross Wildlife
Foundation, Inc. . . .” (DSOF ¶ 12; Doc. 47-7, Def.’s Dep. Ex. 19, Deed).
Rajoppi understood from the beginning of his negotiations with
Norcross that it was an environmental organization. (Id. ¶ 31). Rajoppi
also understood that Norcross and SFP intended to impose a conservation
easement and that he had the ability to walk away from the sale if he
disagreed with the terms of the easement. (Id. ¶ 32).
C. Relevant Terms of the Conservation Easement
The conservation easement executed by SFP and Norcross on
March 15, 2002 begins with an explanation of its values and intent. (See
CE at 1-2). Moreover, section 1 of the conservation easement sets forth its
Stockport contends that, even though it is not included in the
agreement of sale or deed, it donated $20,000 to the organization Trout
Unlimited as part of the consideration paid for the property. (PSOF ¶ 33).
purpose to preserve biodiversity and the environment of the Property:
[SFP] hereby grants and conveys to [Norcross] a perpetual
conservation easement in gross which [Norcross] accepts for
the purpose of preserving the Conservation Values of the
Property; the protection of plant life and wildlife biodiversity and
the protection of wildlife habitats; and conserving and
protecting the Property from soil erosion, water pollution,
development, fragmentation, and other occurrences which
might interfere with the Property's Conservation Values, or with
the beauty and unique character of the Property as it exists in
its current state . . . .
(Id. at 2). The conservation easement provides that it “is constructed with
the intention of conforming with the requirements for conservation
easements under the Pennsylvania Conservation and Preservation
Easements Act, Act 29 of 2001.” (Id.)
The Conservation Easement accomplishes its stated purpose by
implementing a series of land use patterns and restrictions that Norcross
has the power to enforce in perpetuity. (See id.; DSOF ¶ 4). The
conservation easement prohibits the following activities on the Property:
4. Prohibited Uses. The following activities and uses are
a) All uses and activities in the Conservation Reserve Areas,
except as permitted under Section(s) 4(m) and 5(b).
c) Industrial or commercial uses of any kind, including
commercial recreation, except home occupations that do not
involve more than two outside employees, and do not involve
outside storage of materials or supplies, equipment or
products. . . . This is intended to also prohibit commercial
structures of any kind, including any commercial
communication devices, signs or billboards.
f) Depositing, dumping, abandoning, or release of any solid
waste or debris, or liquid wastes or chemical substances on the
Property except that fertilizers, herbicides and pesticides for the
purpose of maintaining or improving the growth of vegetation or
the conservation of natural resources . . . .
i) Temporary housing such as tents, mobile homes,
recreational vehicles, or other temporary dwelling structures or
vehicles for a period in excess of thirty (30) days.
l) New roads, except to provide low-impact temporary access
to logging. Such temporary roads shall be re-seeded within six
months of the cessation of such logging.
(CE at 4-5). Except when it is otherwise permitted, the conservation
easement also prohibits commercial mining and/or quarrying and timber
harvesting. (Id.) The easement is silent on the transfer of mineral rights or
the ability to engage in the exploration for natural gas. (See id. at 4-6).
The conservation easement also reserves rights for the landowner,
“including the right to engage in or permit or invite others to engage in, all
uses of the Property that are not expressly prohibited herein.” (Id. at 6).
The easement allows quarrying on the Property for the landowner’s
personal use (or the personal use of his family members), so long as the
quarrying is in compliance with all state regulations. (Id. at 4). The
easement also reserves for the landowner a limited right to engage in
timber harvesting. (Id. at 4-5). Rajoppi has opined that extensive timber
thinning has occurred on the property pursuant to Section 4(e) of the
conservation easement. (PSOF ¶ 10).
D. Hydraulic Fracture Drilling for Natural Gas
By the early 1990’s, hydraulic fracturing techniques were developed
to stimulate shale gas bearing zones. (DSOF ¶ 82) “Slick water” fracture
treatment is the most commonly used technique to stimulate Marcellus
Shale gas wells. (Id.) Water-based hydraulic fracturing includes the
injection of water and chemicals more than 5,000 feet below the earth’s
surface inside of a cement sheathed steel casing. (PSOF ¶ 82). The
“slick-water” treatment techniques use a large volume of water, typically
several million gallons per well. (DSOF ¶ 83). Depending on the particular
well, sand may be added to the water as a proppant. (DSOF ¶ 83; PSOF ¶
Fluids used in the water-based hydraulic fracturing process consist of
extremely low levels and concentrations of certain chemicals, most of
which remain in the Marcellus gas reservoir after injection. (PSOF ¶ 82).
Some Marcellus shale drillers mix chemical additives to the water at the
drill site. (Id. ¶ 83; DSOF ¶ 83). The use of water-based hydraulic
fracturing fluid does not impact any lakes, rivers, streams, creeks, pools,
wetlands or other natural body of water. (PSOF ¶ 82). Additionally, drilling
pads have environmental protection in multiple layers, laid down to secure
the containment of any substance. (Id.) There are also containment walls
and all the associated protections in government regulations, including
approved erosion and sediment control plans. (Id.)
Marcellus Shale drilling sites typically affect five to ten acres per
square mile with multi-well pads for temporary activities lasting about two
months. (Id. ¶ 84). Well construction involves extensive earth
disturbances, including the placement of roads, drilling pads and
pipelines.5 (DSOF ¶ 84). Moreover, once the drilling and well-stimulation
phases are completed, the only well pad surface structures typically visible
are a well head, a gas meter in the gas line, a unit to separate gas from
water, water tanks and occasionally a container of antifreeze. (PSOF ¶¶
59, 84). The gas meter and unit to separate gas from water are typically
the size of a mid-sized car; while, at a maximum, typical water tanks are
During the drilling and completion of the well, natural gas drillers
use the following equipment: drilling rig; hydraulic fracturing equipment;
well logging units; mud tanks; drill mud; drill cuttings; waste impoundments;
drill pipe and well casing; cement and drilling mud mixing units; diesel and
gasoline storage tanks; chemical tanks; water supply piping; equipment
and impoundments. (PSOF ¶ 59). The above-listed equipment is removed
after the drilling and completion phase is completed. (Id.)
the size of an elephant. (Id. ¶ 84) Furthermore, a pipeline connecting the
well to the other pipelines would be buried, typically three feet below
ground, resulting in little post-construction surface disturbance. (Id.)
To a certain extent, property owners have control of the surface
activity through negotiation of their leases. (Id. ¶¶ 49, 51, 59, 84). For
example, many leases contain statements requiring the drillers to minimize
disturbances to the surface of the land. (Id. ¶ 84).
Upon depletion of the gas reservoir, the well is plugged, abandoned
and the surface equipment is dismantled, leaving the land in its original
condition. (Id.) Only a thin three foot steel post would mark the well’s
location. (Id.) Surface disturbances from well-drilling and completion
would be considerably less invasive, and persist for less time, than typical
stone quarrying or timbering operations. (Id.) Furthermore, the extraction
of natural gas requires little maintenance when compared to the extraction
or mining of other natural resources. (Id.)
E. Proposed Natural Gas Drilling on the Property
Except for a possible disagreement between Stockport and Norcross
regarding access to the Property, there were no disputes between
Stockport and Norcross relating to the conservation easement from March
2002 to December 2007. (Id. ¶ 45; DSOF ¶ 45). This relative harmony,
however, was disrupted in 2007. During this year, Stockport learned that
natural gas may be located under the property, and Stockport was
approached by Chesapeake Appalachia, LLC as well as Hess Corporation
in connection with leasing the Property for natural gas operations. (PSOF
¶¶ 46-47; DSOF ¶¶ 46-47, Compl. ¶ 14).
On December 19, 2007, Stockport advised Norcross of
Chesapeake’s offer to lease the Property.6 (PSOF ¶ 46; Doc. 47-7, Def.’s
Dep. Ex. 20, Letter dated Dec. 19, 2007). Stockport sought to enter a
lease with Chesapeake to obtain rental payments and royalties on gas
extracted and sold from the Property. (DSOF ¶¶ 47-48).
Norcross, through its executive director Karen Outlaw, responded to
Stockport’s letter on January 16, 2008 and stated that “gas mining is
prohibited under the terms of the Conservation Easement for several
reasons.” (Doc. 47-7, Def.’s Dep. Ex. 21, Letter dated Jan. 16, 2008).
Specifically, Outlaw stated that such conduct is forbidden by the
easement’s prohibition of industrial or commercial uses and its prohibition
of mining and certain quarrying activities. (Id.) Additionally, she expressed
In his letter dated December 19, 2007, Rajoppi, on behalf of
Stockport, stated that the lease with Chesapeake would have a duration of
ten years and that the Property would have to be restored upon completion
of natural gas activities. (Doc. 47-7, Def.’s Dep. Ex. 20, Letter dated Dec.
Norcross’ belief that the extraction of natural gas would interfere with the
stated goals and values of the Conservation Easement. (Id.)
On March 5, 2008, Stockport’s counsel contacted Norcross’ counsel,
expressing disagreement with Norcross’ interpretation of the conservation
easement.7 (PSOF ¶ 46). On March 25, 2008, Norcross, through its
counsel, again responded that it believes the easement prevents Stockport
from entering into a natural gas lease. (Id.) On April 21, 2008, Norcross’
counsel sent further correspondence, stating that “[i]t is also the Norcross
position that it would be a violation of Section 4(d) of the [Easement],
although it is acknowledged that oil and gas drilling are not specifically
mentioned in this section.” (Id.)
Even though they exchanged drafts and negotiated terms,
Chesapeake and Stockport did not agree with respect to any drill sites,
road access plans, or final lease terms prior to the cessation of
negotiations. (DSOF ¶¶ 46, 66-67). Stockport also received a draft lease
from Hess Corporation; however, Stockport never responded to Hess with
regard to this draft lease, nor did Stockport negotiate a lease with Hess.
In its March 5, 2008 letter, Stockport acknowledged that, after the
completion of the well drilling process, natural gas operators would need
“periodic access to the well head to check pressure, etc.” and that well
equipment would be evident on the surface of the Property. (DSOF ¶ 86).
(Id. ¶ 63). Presently, Stockport possesses no technically-specific plans
concerning well construction, well drilling, roads, development or
rededication activities relevant to the proposed natural gas operations at
issue. (Id. ¶ 60).
Although Stockport never reached a final agreement with a natural
gas drilling company, three aspects of the potential lease agreements are
pertinent to the instant motion: (1) the use and construction of new roads;
(2) the construction and use of commercial structures at drill sites and (3)
the storage and removal of debris.
1. Use of and Construction of Roads
During discussions regarding a possible lease, Chesapeake advised
Stockport that new roads may need to be installed on the property and that
such roads would be traversed by commercial vehicle traffic. (Id. ¶¶ 4950). In fact, a draft lease between Chesapeake and Stockport granted
Chesapeake the right “to use or install roads,” among other rights.8 (DSOF
In a subsequent lease exchanged between Stockport and
Chesapeake, this exact language (“to use or install new roads”) was not
included. Rather, in this subsequent draft lease, Chesapeake is granted
the right “to use portions of the Leasehold acreage as designated and
approved by Lessor in writing to access drilling sites on the Leasehold or
on acreage unitized with acreage from the Leasehold for the construction
and maintenance of roads, electric power and telephone facilities, pipelines
with appurtenant facilities . . . .” (DSOF ¶¶ 51-53; Doc. 47-8, Def.’s Dep.
Ex. 35, Paid-Up Oil and Gas Lease).
¶¶ 51, 53; Doc. 47-7, Def.’s Dep. Ex. 22, Paid-Up Oil and Gas Lease).
2. Construction and Use of Commercial Structures
In August 2008, Chesapeake informed Stockport via email that it
interpreted the “Conservation Restrictions, Item (G)” to prohibit
Chesapeake from erecting or occupying any temporary dwelling structures
on the leasehold. (DSOF ¶ 57). Chesapeake could not agree to this
condition because, “[d]uring drilling operations, temporary facilities are on
site, as drilling is a 24 hour operation and there is personnel on site at all
times.” (Id.) Moreover, in an August 10, 2008 email from Leonard in which
Rajoppi was copied, Leonard stated that Chesapeake “will need language
that will allow temporary structures during the drilling and fracking process
and we’ll need [Norcross] to sign off on that.” (Doc. 47-7, Def.’s Dep. Ex.
30, Email dated Aug. 10, 2008).
Rajoppi and Stockport understood that it was a concern of Norcross
that there not be any temporary housing units on the Property, and Rajoppi
assumed that Norcross would not sign off on temporary commercial
structures. (DSOF ¶ 56; PSOF ¶ 56). In addition to acknowledging the
possibility that temporary structures are necessary for natural gas
operations, both Stockport and Norcross accept the fact that natural gas
operations require a substantial amount of industrial and commercial
equipment to be brought on the property. (DSOF ¶ 59; PSOF ¶ 59).
3. Storage and Removal of Debris
Both the Chesapeake and Hess proposed leases contained
provisions that contemplated and accounted for the presence of debris
during the exploration and production operations. (DSOF ¶¶ 62, 64; PSOF
¶¶ 62, 64). Condition No. 26 to Chesapeake’s Oil and Gas Lease
Addendum states that Chesapeake will remove “all debris” at the cessation
of operations. (DSOF ¶ 62). Condition 18.4 of the Hess form lease
similarly provides that “debris created from Lessee’s operations will be
moved to a mutually acceptable location in accordance with all applicable
laws” and that debris shall be removed from the property at the conclusion
of the operations. (Id. ¶ 64; Doc. 47-8, Def.’s Dep. Ex. 40, Hess Lease).
F. Procedural History
On March 18, 2011, Stockport filed a one count complaint against
Norcross seeking a declaratory judgment pursuant to 28 U.S.C. § 2201, et
seq., the Declaratory Judgment Act. (See Compl.). Stockport contends
that the conservation easement does not prohibit natural gas drilling, which
Stockport argues is treated differently from coal mining under Pennsylvania
law. (See id. ¶¶ 29-39). Stockport further avers that the parties to the
conservation easement did not intend for its provisions to prohibit natural
gas exploration. (See id. ¶¶ 44, 46).
Norcross responded to the complaint with a Rule 12(b)(6) motion to
dismiss on the grounds that a natural gas lease is obviously inconsistent
with the conservation easement. (Doc. 4, Mot. to Dismiss). Stockport
opposed Norcross’ motion to dismiss and asserted that the court should
treat Norcross’ motion to dismiss as a motion for summary judgment
pursuant to Federal Rule of Civil Procedure 12(d). (Doc. 10, Cross-Mot.
for Summ. J.). The court denied Norcross’ motion to dismiss and
Stockport’s cross motion for summary judgment. (Doc. 35, Mem. & Order
dated Mar. 1, 2012).
On March 15, 2012, defendant filed an answer to the complaint in
which it asserted a counterclaim against plaintiff for a declaration that the
conservation easement prohibits natural gas extraction via surface drilling.
(Answer ¶ 75). The parties engaged in discovery for the next eight
months, and, at the close of discovery, defendant filed a motion for
summary judgment. (Doc. 46, Mot. For Summ. J.). The parties fully
briefed this motion and the court held oral argument, bringing this case to
its current posture.
This court has jurisdiction pursuant to the diversity statute, 28 U.S.C.
§ 1332. Plaintiff Stockport Mountain Corporation LLC is a Pennsylvania
limited liability company with a place of business in Pennsylvania.
Defendant Norcross Wildlife Foundation, Inc. is a Massachusetts
corporation with a place of business in New York. Although this action is
one for declaratory relief pursuant to 28 U.S.C. § 2201, the amount in
controversy is nevertheless in excess of $75,000 as the potential value of
the ten-year lease on the Land is in excess of this amount. See Columbia
Gas Transmission Corp. v. Tarbuck, 62 F.3d 538, 541 (3d Cir.1995)
(“Where the plaintiff in a diversity action seeks injunctive or declaratory
relief, the amount in controversy . . . . is determined by the value of the
object of the litigation.” (internal quotation omitted)). Because complete
diversity of citizenship exists between the parties and the amount in
controversy exceeds $75,000.00, the court has jurisdiction over the case.
See 28 U.S.C. § 1332.
Because we sit in diversity, the substantive law of Pennsylvania shall
apply to the instant case.9 Chamberlain v. Giampapa, 210 F.3d 154, 158
The court notes that neither party disputes the application of
substantive Pennsylvania state law and that the choice of law provision of
the conservation easement provides that the “Easement shall be governed
(3d Cir. 2000) (citing Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938)).
However, “federal courts are to apply state substantive law and federal
procedural law.” Hanna v. Plumer, 380 U.S. 460, 465 (1965). The instant
case is before the court in the form of a declaratory judgment action, and
Federal Courts have concluded that declaratory judgment actions are
procedural rather than substantive. See Munich Welding, Inc. v. Great Am.
Ins., Co., 415 F. Supp. 2d 571, 574 (W.D. Pa. 2006) (citing Fed. Kemper
Ins. Co. v. Rauscher, 807 F.2d 345, 352 (3d Cir. 1986)). As a result, the
court will apply substantive Pennsylvania law in interpreting the
conservation easement in addition to the procedural strictures of the
federal Declaratory Judgment Act, 28 U.S.C. § 2201.
Standard of Review
Granting summary judgment is proper “‘if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact
and that the moving party is entitled to judgment as a matter of law.’”
Knabe v. Boury Corp., 114 F.3d 407, 410 n.4 (3d Cir. 1997) (quoting FED.
R. CIV. P. 56(c)). “[T]his standard provides that the mere existence of
some alleged factual dispute between the parties will not defeat an
by the laws of the State of Pennsylvania.” (C.E. at 11).
otherwise properly supported motion for summary judgment; the
requirement is that there be no genuine issue of material fact.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original).
In considering a motion for summary judgment, the court must
examine the facts in the light most favorable to the party opposing the
motion. Int’l Raw Materials, Ltd. v. Stauffer Chem. Co., 898 F.2d 946, 949
(3d Cir. 1990). The burden is on the moving party to demonstrate that the
evidence is such that a reasonable jury could not return a verdict for the
non-moving party. See Anderson, 477 U.S. at 248. A fact is material
when it might affect the outcome of the suit under the governing law. Id.
Where the non-moving party will bear the burden of proof at trial, the party
moving for summary judgment may meet its burden by establishing that the
evidentiary materials of record, if reduced to admissible evidence, would be
insufficient to carry the nonmovant’s burden of proof at trial. Celotex Corp.
v. Catrett, 477 U.S. 317, 322 (1986). Once the moving party satisfies its
burden, the burden shifts to the non-moving party, who must go beyond its
pleadings, and designate specific facts by the use of affidavits,
depositions, admissions, or answers to interrogatories demonstrating a
genuine issue for trial. Id. at 324; see also Goode v. Nash, 241 F. App’x
868 (3d Cir. 2007) (“[A]lthough the party opposing summary judgment is
entitled to ‘the benefit of all factual inferences in the court’s consideration
of a motion for summary judgment, the nonmoving party must point to
some evidence in the record that creates a genuine issue of material fact,’
and ‘cannot rest solely on assertions made in the pleadings, legal
memorandum, or oral argument.’” (quoting Berckeley Inv. Grp., Ltd. v.
Colkitt, 455 F.3d 195, 201 (3d Cir. 2006))).
At the close of discovery, Norcross filed a motion for summary
judgment. Norcross’ motion does not ask the court to consider whether
natural gas drilling is generally harmful to the environment or whether
natural gas drillers can restore explored properties to pristine conditions.
Nor is the court placed in a position where it must decide the validity of the
conservation easement; the parties largely agree that it is valid and legally
enforceable. Rather, the court must decide if genuine issues of material
fact exist with respect to the permissibility of surface drilling for natural gas
under the conservation easement.
The court will first assess whether a genuine issue of material fact
exists with respect to the permissibility of surface drilling for natural gas
under the conservation easement. Then, the court will decide whether
Norcross is entitled to attorneys’ fees and costs pursuant to section 7.2 of
the conservation easement.
I. No Genuine Issue of Material Fact Exists Regarding the
Impermissibility of Surface Natural Gas Drilling on the Property
Norcross contends that Stockport fails to satisfy its burden to
demonstrate the permissibility of surface natural gas drilling activities under
the conservation easement. Specifically, Norcross asserts that such
activities are prohibited by section 4 of the conservation easement.
Stockport disagrees with Norcross’ assertion and maintains that, even after
discovery has been completed, the terms of the conservation easement
remain ambiguous. Given these alleged ambiguities, Stockport contends
that the analysis in our motion to dismiss opinion remains undisturbed.
After careful consideration, the court agrees with Norcross that Stockport
has failed to meet its burden to demonstrate the permissibility of natural
gas activities under the conservation easement.
In Pennsylvania, courts will first look to the language of a contract
when attempting to determine the parties’ intent, and when the language of
the contract is unambiguous, courts will enforce the express language of
the contract as it embodies the intent of the parties. See Steuart v.
McChesney, 444 A.2d 659, 661 (Pa. 1982); see also Crawford Cent. Sch.
Dist. v. Commonwealth, 888 A.2d 616, 623 (Pa. 2005) (noting that “[w]hen
contractual language is clear and unequivocal, its meaning must be
determined by its contents alone.”). Courts apply the same rules of
construction to easement grants as they do to contracts. See Zettlemoyer
v. Transcon. Gas Pipeline Corp., 657 A.2d 920, 924 (Pa. 1995) (citations
omitted). Thus, as is the case with any contract, “the rights conferred by
the grant of an express easement must be ascertained solely from the
language of the deed, provided that the deed language is unambiguous.”
PARC Holdings, Inc. v. Killian, 785 A.2d 106, 112 (Pa. Super. Ct. 2001).
In this case, Stockport contends that trial is necessary to resolve
ambiguities in the language of the easement. The court disagrees.
Whether a contract is ambiguous is a question of law and the burden rests
on the party claiming that ambiguity exists to show the necessary
indefiniteness of meaning. See Baldwin v. Univ. of Pittsburgh Med. Ctr.,
636 F.3d 69, 76 (3d Cir. 2011) (“Courts have the responsibility to determine
as a matter of law whether contract terms are clear or ambiguous.” (citing
Mellon Bank, N.A. v. Aetna Bus.Credit, Inc., 619 F.2d 1001, 1011 (3d Cir.
1980)); Int’l Union United Auto., Aerospace & Agric. Implement Workers of
Am. v. Skinner Engine Co., 188 F.3d 130, 145 (3d Cir. 1999) (“‘The party
claiming that a contract is ambiguous must first convince the judge this is
the case . . . .’” (quoting Murphy v. Keystone Steel & Wire Co., 61 F.3d
560, 565 (7th Cir. 1995))).
To determine whether a contract is ambiguous, courts applying
Pennsylvania law must “consider ‘the words of the contract, the alternative
meaning suggested by counsel, and the nature of the objective evidence to
be offered in support of the meaning.’” Baldwin, 636 F.3d at 76 (quoting
Mellon Bank, N.A., 619 F.2d at 1011). The objective, extrinsic evidence
courts may use to assess whether an ambiguity exists includes “the
structure of the contract, the bargaining history, and the conduct of the
parties that reflects their understanding of the contract’s meaning.” In re
New Valley, 89 F.3d 143, 150 (3d Cir. 1996) (citing Teamsters Indus.
Emps. Welfare Fund v. Rolls-Royce Motor Cars, Inc., 989 F.2d 132, 135
(3d Cir. 1993)). “Extrinsic evidence notwithstanding, the parties remain
bound by the appropriate objective definition of the words they use to
express their intent.” Baldwin, 636 F.3d at 76 (quoting Mellon Bank, N.A.,
619 F.2d at 1013); see also Seven Springs Farm, Inc. v. Croker, 748 A.2d
740, 750 (Pa. Super. Ct. 2000) (holding that in the absence of technical
terminology, the words of a contract are to be construed according to their
plain and ordinary meaning); Stewart v. McChesney, 444 A.2d 659, 661
(Pa. 1982) (“The accepted and plain meaning of the language used, rather
than the silent intentions of the contracting parties, determines the
construction to be given [to] the agreement.”).
Moreover, the Pennsylvania General Assembly recognized “the
importance and significant public and economic benefit of conservation
and preservation easements” and enacted the Pennsylvania Conservation
and Preservation Easement Act (hereinafter the “Act”). 32 PA. CONS. STAT.
ANN. § 5052. The Act instructs courts interpreting conservation easements
to construe the terms of those easements liberally. See 32 PA. CONS.
STAT. ANN. § 5055(c)(2). More specifically, the Act provides that “[a]ny
general rule of construction to the contrary notwithstanding, conservation
or preservation easements shall be liberally construed in favor of the
grants contained therein to effect the purposes of those easements and
the policy and purpose of this act.” Id. The Act also addresses
Pennsylvania law’s historical prejudice against negative easements and
provides that “[a] conservation or preservation easement is valid even
though . . . it imposes a negative burden.” 32 PA. CONS. STAT. ANN. §
5056. Thus, the court will first liberally construe and examine the words
within the conservation easement and then turn its attention to any
objective, extrinsic evidence.10
Stockport contends that the court should narrowly construe the
easement against Norcross because it is a negative restriction. Stockport
maintains that the Act does not apply because Norcross was not registered
with the Pennsylvania Department of State at the time the conservation
easement was executed. Stockport asserts that Norcross does not have
A. Section 4 of the Conservation Easement
The words constituting the conservation easement are susceptible to
only one reasonable interpretation with respect to the instant issue; that
surface natural gas drilling on the property is prohibited. To reach this
conclusion, the court did not need to look beyond section 4(c) of the
easement, which prohibits “industrial or commercial uses of any kind.”11
(CE at 4). “Industrial” and “commercial” are not defined in the conservation
easement, as such, the court will give these words their ordinary
standing to challenge the conservation easement as “[a] holder of the
easement” under the Act because such holders, by definition, must be
registered with the Department of State. See 32 PA. CONS. STAT. ANN. §§
5053, 5055(a)(4). The court, however, does not find merit with this
technical argument. It is undisputed that Norcross is currently registered
with the Department of State. (Doc. 52, Br. in Opp’n to Def.’s Mot. for
Summ. J. at 20 n.5). The Act does not specify when such a charitable
organization must register with the Department of State to qualify as a
“holder.” See 32 PA. CONS. STAT. ANN. § 5053. Additionally, given the
undisputed validity of the conservation easement, the court finds that, at a
minimum, Norcross qualifies as a third-party with the right of enforcement.
See 32 PA. CONS. STAT. ANN. § 5055(a)(5). Thus, the court will construe
the conservation easement liberally, as courts are instructed by the Act.
Although the prohibitions on the construction of new roads, the
dumping of debris and the construction of new structures potentially impact
the proposed natural gas drilling operations, the court need not examine
these other provisions because natural gas drilling falls under the industrial
and commercial prohibition.
meaning.12 See Kripp v. Kripp, 849 A.2d 1159, 1163 (Pa. 2004).
“Commercial” is defined as “occupied with or engaged in commerce
or work intended for commerce.” Commercial, MERRIAM-WEBSTER
DICTIONARY ONLINE, http://www.merriamwebster.com/dictionary/commercial (last visited Aug. 22, 2013).
“Commerce” is defined as “the exchange or buying and selling of
commodities on a large scale involving transportation from place to place.”
Commerce, MERRIAM-WEBSTER DICTIONARY ONLINE, http://www.merriamwebster.com/dictionary/commerce (last visited Aug. 22, 2013). “Industrial”
is defined as “of or relating to industry,” and “industry” is defined as
“systematic labor especially for some useful purpose or the creation of
something of value,” or, industry is alternatively defined as “a distinct group
of productive or profit-making enterprises.” Industrial, MERRIAM-WEBSTER
DICTIONARY ONLINE, http://www.merriam-webster.com/dictionary/industrial
(last visited Aug. 22, 2013); Industry, MERRIAM-WEBSTER DICTIONARY
ONLINE, http://www.merriam-webster.com/dictionary/industry (last visited
Aug. 22, 2013).
To help shed light on the common meaning of “commercial” and
“industrial,” both Stockport and Norcross rely upon the Merriam-Webster
Online Dictionary. The court finds this resource illustrative and will use it to
shed light on the common definitions of “commercial” and “industrial.”
Here, Stockport seeks to enter into a lease with a natural gas driller
to obtain rental payments and royalties on gas extracted and sold from the
Property. Because the proposed natural gas activities necessarily involves
the division of proceeds from the sale and transportation of a commodity,
such activities fall under the common meanings of “commerce” and are
“commercial” in nature. Such activity would also be “commercial” in nature
because drilling would require the use of commercial traffic and the
erection of temporary commercial structures.
Moreover, all parties agree that the drilling process involves the use
of machinery in a systematic effort to generate marketable natural gas.
Accordingly, the proposed natural gas activities fall under the common
meaning of “industry” and are “industrial” in nature given the fact that any
natural gas would be produced via the systematic efforts of employees
operating machinery.13 As such, when the conservation easement at issue
The court notes that Federal regulations recognize mineral mining
and “oil and gas exploration, production, processing, or treatment
operations” as one of the eleven categories of industrial activities that
require NPDES permits for stormwater discharge. See 40 C.F.R. §
122.26(b)(14)(iii). Moreover, the North American Industry Classification
System, the standard used by statistics agencies in classifying businesses,
classifies drilling oil and gas wells as an industry. (Doc. 47-11, Harvey
Decl. Ex. B, NAISC Code 213111). Although such sources are not
dispositive with respect to the definitions of words used in the conservation
easement, the court finds that these sources inform our decision that
is liberally construed, the proposed natural gas activity falls under section
4(c)’s prohibition of “commercial” or “industrial” activity.
Stockport contends that genuine issues of material fact preclude
summary judgment because the easement contains three related
ambiguities pertaining to proposed natural gas activity. First, Stockport
points to section 5 of the easement, which reserves for the landowner the
“right to engage in or permit or invite others to engage in, all uses of the
Property not expressly prohibited herein.” (CE at 6). Stockport exclaims
that sections and 5, when read together, create an ambiguity regarding the
permissibility of natural gas activity. Second, Stockport argues that the
easement is ambiguous because some commercial and industrial
activities, such as limited timbering and quarrying, are allowed. Third,
Stockport asserts than an ambiguity is created in the easement by the
absence of an explicitly prohibition against natural gas drilling. The court
addresses Stockport’s arguments in seriatim.
The court is not convinced by Stockport’s arguments with respect to
ambiguities existing in the text of the conservation easement. As the court
discussed above, the proposed natural gas activities fall under the
natural gas drilling falls under the common meaning of the word
common meaning of commercial and industrial activity, and such activity is
categorically prohibited in section 4(c) of the easement. Thus, the
proposed natural gas drilling activity cannot be reserved for Stockport
under section 5 because such activity is already proscribed in section 4(c).
Additionally, the court is compelled by Pennsylvania law to liberally
construe the terms of the conservation easement. As such, the court
cannot read section 5 so broadly as to crowd out section 4(c)’s prohibition
against commercial or industrial activity of any kind.
The court is also unswayed by Stockport’s argument that section 4 is
ambiguous because it permits limited exceptions to the prohibition on
commercial and industrial activity. Stockport ignores the structure of
section 4, which contains a general prohibition on commercial and
industrial activity while exempting certain home occupations, limited
timbering and limited quarrying. Rather than creating ambiguity, the
exemption of certain activities from section 4’s prohibitions indicate that the
easement’s drafters intended to prohibit all commercial or industrial
activities not specifically exempted. See Koken v. Reliance Ins. Co., 893
A.2d 70, 82 (Pa. 2006) (finding, in the context of statutory interpretation,
that “[w]here mandatory language is employed, there is no need to engage
in the redundancy of disapproving individual exceptions.”); Dep’t of Transp.
v. Mosites Constr. Co., 494 A.2d 41, 43-44 (Pa. 1985) (applying the maxim
of expressio unius est exclusio alterius, which “translates into the
proposition that the mention of particular items implies the purposeful
exclusion of other items of the same general character.”).
Finally, the court rejects Stockport’s assertion that an ambiguity is
created by the absence of an “explicit prohibition against drilling for natural
gas in the Easement.” (Doc. 52, Br. in Opp’n to Def.’s Mot. for Summ. J. at
18). It would be unreasonable of the court to require conservation
easements to enumerate every conceivable prohibited activity. Stockport’s
interpretation of the easement would render section 4(c) meaningless, and
the tenants of Pennsylvania contract law prevent the court from construing
the easement in such a way. See Flynn v. Fed. Express, No. 07-2455,
2008 WL 2188549, at *2 (E.D. Pa. May 23, 2008) (“In construing a
contract, the court adopts the most reasonable and probable interpretation
while bearing in mind what the parties intended to accomplish through the
agreement. . . . Effect must be given to all provisions in the contract.”
Accordingly, the court finds that section 4(c) of the conservation
easement prohibits the proposed natural gas activities, and that this
section is not susceptible to a reasonable alternative interpretation. See
John Wyeth & Bros. Ltd. v. Cigna Int’l Corp., 119 F.3d 1070, 1073-74 (3d
Cir. 1997). Thus, Stockport has failed to carry its burden to establish an
ambiguity with respect to the words actually used in the conservation
B. Objective, Extrinsic Evidence Reveals Section 4 of the
Conservation Easement to be Unambiguous
In addition to examining the words actually used in the contract or
easement, Pennsylvania courts examine objective, extrinsic evidence when
assessing such documents for ambiguities. See Baldwin, 636 F.3d at 76.
When the instant case was before the court at the motion to dismiss stage,
the court lacked the benefit of a clearly developed record. The court held
in its motion to dismiss opinion that ambiguities could exist in the easement
if Stockport’s allegations were revealed to be true during discovery. In
particular, the court held that it was premature to rule that the proposed
natural gas activities violated section 4(c) in light of Stockport’s allegations
that the parties to the conservation easement intended to allow such
activities. (See Doc. 35, Mem. & Order dated March 1, 2012 at 15-17). A
review of the present, developed record reveals that Stockport’s
allegations, regarding the parties’ intent, are unsubstantiated.
Stockport attempts to rely on external evidence and presents several
arguments it believes create a genuine issue of material fact with respect
to ambiguities in the easement; however, it can point to no piece of
objective, extrinsic evidence to support its contention that an ambiguity
exists. Stockport asserts, without citation to the facts, that the easement
contains a balancing test. In particular, Stockport states that the
conservation easement “seeks to balance the desires to conserve certain
ecological values of the Property with the rights of the landholder to use
the Property for any purpose not expressly prohibited by the Conservation
Easement, including various industrial and commercial activities, at least
some of which are far more inherently damaging to the environment than
well-managed natural gas extraction.” (Doc. 52, Br. in Opp’n to Def.’s Mot.
for Summ. J. at 12-13). This balancing test is not supported by the text of
the easement or any other piece of external evidence. Rather, this
interpretation of the easement appears to be founded in nothing more than
Stockport’s allegations in support of this theory. Such allegations are not
given the presumption of truth at this stage in the litigation and, without
more, no reasonable jury could find for Stockport on this point.
Additionally, it is not the function of the court to alter the parties’
agreement or rewrite what has been agreed to. Nw. Savings Bank & Fin.
Servs. v. NS First St. LLC, 802 F. Supp. 2d 580, 588 (M.D. Pa. 2011)
(citing Steuart, 444 A.2d at 662). Although Stockport’s approach to the
conservation easement may be ecologically more sensible, the court is not
tasked with amending the easement to allow for the most environmentally
friendly approach. Instead, the court must enforce the intent of the parties
as manifested through the written agreement.
With regard to the parties’ intent to prohibit natural gas drilling,
Stockport asserts that the parties did not know of the feasibility of shale
gas production when they executed the conservation easement, thus they
could not have intended for its prohibition. To support this proposition,
Stockport relies upon Reagan’s deposition testimony that gas drilling
“wasn’t an issue” when he executed the conservation easement in 2002.
(Doc. 52, Br. in Opp’n to Def.’s Mot. for Summ. J. at 19).
The external evidence Stockport points to, however, does not
reasonably establish that the parties to the conservation easement
intended to permit surface natural gas activities. The law does not require
that parties to a conservation easement consider every possible use of
property before it can be prohibited. Rather, the law requires that the court
accept the plain meaning of the easement language used, and not “the
silent intentions of the contracting parties, [to] determine the construction
to be given [to] the agreement.” Willison v. Consol. Coal Co., 637 A.2d
979, 982 (Pa. 1994). The court cannot overlook the categorical prohibition
in section 4(c) simply because the parties did not envision a boom in
natural gas drilling.
Stockport also turns to the negotiations leading up to the execution of
the conservation easement as external evidence that an ambiguity exists.
Stockport asserts that the easement is ambiguous because Reagan
executed the easement on behalf of both SFP and Norcross. Stockport
cites no law indicating that such a situation creates an ambiguity, and the
court fails to see how a reasonable jury could infer ambiguities from the
fact that Reagan executed the easement for both entities.
Moreover, the objective, extrinsic evidence revealed during discovery
indicates that Norcross, SFP and Rajoppi understood that section 4(c)
would prohibit commercial and industrial activities such as surface natural
gas drilling. For instance, Rajoppi and his attorney commented on drafts of
the conservation easement and specifically requested that certain
commercial and industrial activities, such as timbering and quarrying, be
allowed under the easement. Additionally, as early as 1999, Rajoppi and
SFP entered into an agreement which recognized that a conservation
easement would be placed on the property to limit the development and
use of the land. In fact, Rajoppi admitted in his deposition, contrary to
Stockport’s position, that there was nothing about the conservation
easement he did not understand. With respect to the parties conduct
under the lease, the court notes that Stockport sought Norcross’
permission to enter into a gas lease; indicating that it suspected such
conduct was not permitted under the easement. Thus, no reasonable jury
could find that ambiguities arise given the objective external evidence
revealed during discovery.
Accordingly, a review of Stockport’s arguments with respect to
objective external evidence does not reveal the existence of ambiguities in
the easement.14 Although Stockport contends that the court must rule as it
did in our March 1, 2012 motion to dismiss opinion, the court disagrees.
The allegations the court assumed to be true at the motion to dismiss
stage in the proceedings have not been established during discovery. The
summary judgment standard of review forbids the court from presuming
Stockport’s allegations to be true, and the court must consider only those
The court also notes that, in an attempt to create a genuine issue
of material fact, Stockport advances a policy argument premised on the
common law “Rule of Capture.” (Doc. 52, Br. in Opp’n to Def.’s Mot. for
Summ. J. at 13). While interesting, the “Rule of Capture” does not create
an ambiguity in the easement, nor does it create a genuine issue of
material fact that must be resolved by the jury. Pennsylvania law does not
require the invalidation of easements and contracts which result in the
restriction of mineral rights access. Thus, without a factual or legal basis
to invalidate the prohibition on commercial or industrial activities, the court
finds Stockport’s argument on this point unconvincing.
facts established in the record. As such, the court will grant Norcross
summary judgment as the record reveals that the easement is
II. Attorneys’ Fees and Costs
In addition to seeking declaratory relief, Norcross requests the court
to enter judgment in its favor with respect to attorneys’ fees and costs.
Section 7.2 of the conservation easement addresses the cost of
enforcement and specifically provides:
Any costs incurred by Grantee in enforcing the terms of this
Easement against Grantor, including, without limitation, costs of
suit, except witness fees and attorneys’ fees, . . . shall be borne
by Grantor. If Grantor prevails in any action to enforce the
terms of this Easement, Grantor’s costs of suit, including
without limitations, attorneys’ fees, shall be borne by Grantee.
(CE at 8).
As the court explained above, Stockport succeeded SFP, the grantor
under the easement, and agreed to be bound by the easement’s terms.
(Doc. 47-7, Def.’s Dep. Ex. 19, Deed). Also, as the court explained above,
Norcross engaged Stockport in this action to prevent Stockport from
receiving permission from this court to engage in activity that would violate
the conservation easement. The court agrees with Norcross that its
interpretation of the conservation easement is correct, as such, the court
will award Norcross attorneys’ fees and costs associated with defending
this action and enforcing the conservation easement. Norcross will have
fourteen days to submit evidence of its reasonable costs and attorneys’
After careful consideration, the court finds that Stockport has failed to
carry its burden to point to evidence in the record establishing that the
proposed activities are permitted by the conservation easement.
Moreover, the court finds that Stockport has failed to demonstrate that the
conservation easement is ambiguous. The words actually used in the
conservation easement are “[i]ndustrial or commercial uses of any kind.”
When liberally construed, these words can only be interpreted as
prohibitive of surface natural gas drilling. Additionally, the extrinsic
evidence presented does not create a genuine issue of material fact as to
whether an ambiguity exists in the easement. Accordingly, the court finds
that Stockport cannot prevail if this case were to proceed to trial. Norcross’
motion for summary judgment will be granted and the court will enter
judgment in Norcross’ favor. An appropriate order follows.
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
AND NOW, to wit, this 27th day of August 2013, it is hereby
ORDERED as follows:
1) Defendant Norcross Wildlife Foundation, Inc.’s motion for
summary judgment (Doc. 46) is GRANTED;
2) The Clerk of Court is directed to enter judgment in favor of
Defendant Norcross Wildlife Foundation pursuant to 28 U.S.C. §
2201, and it is DECLARED that Section 4(c) of the Conservation
Easement prohibits the extraction of oil and natural gas by surface
methods through the drilling of wells.
3) Defendant Norcross Wildlife’s request for reasonable costs and
attorneys’ fees pursuant to section 7.2 of the Conservation Easement
is GRANTED. Defendant shall have fourteen (14) days from the date
of this order to submit their litigation costs and an itemized list of
attorneys’ fees. Plaintiff shall then have fourteen (14) days from the
date of Defendants’ filing to lodge objections; and
4) The Clerk of Court is directed to CLOSE this case.
BY THE COURT:
s/ James M. Munley
JUDGE JAMES M. MUNLEY
United States District Court
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