Masciantonio et al v. SWEPI LP

Filing 34

ORDER ADOPTING report 31 of Magistrate Judge Mehalchick, DENYING defts' MTD 6 pltfs' complaint, & noting order setting matter for case mgmt conference shall issue forthwith. (See order for complete details.) Signed by Chief Judge Christopher C. Conner on 9/9/14 (ki)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

JANICE E. MASCIANTONIO, et al.,
Plaintiffs
v.
SWEPI LP,
Defendant

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CIVIL ACTION NO. 4:13-cv-0797
(Chief Judge Conner)

ORDER
AND NOW, this 9th day of September, 2014, upon consideration of the report
(Doc. 31) of Magistrate Judge Karoline Mehalchick (Doc. 20), recommending the court
deny the motion (Doc. 6) to dismiss filed by defendant SWEPI LP (“SWEPI”), seeking
dismissal of the complaint (Doc. 1) filed by plaintiffs Janet E. Masciantonio, Martin J.
Masciantonio, Paul R. Latshaw, and Paul B. Latshaw (collectively, “plaintiffs”), for
failure to state a claim for which relief can be granted, wherein Judge Mehalchick
concludes that the oil and gas lease agreements entered into between plaintiffs and
SWEPI are susceptible to multiple, reasonable interpretations and thus ambiguous,
(see Doc. 31 at 26), and, after an independent review of the record, the court noting that

SWEPI filed objections1 (Doc. 32) to the Magistrate Judge’s report, and a brief (Doc. 33)
in support of its objections, on August 7, 2014, and the court finding Judge Mehalchick’s
analysis to be thorough, well-reasoned, and fully supported by the record, and the court

1

When a party objects to a magistrate judge’s report and recommendation,
the district court performs a de novo review of the contested portions of the report.
See Behar v. Pa. Dep’t of Trans., 791 F. Supp. 2d 383, 389 (M.D. Pa. 2011) (citing
Sample v. Diecks, 885 F.2d 1099, 1106 n.3 (3d Cir. 1989); 28 U.S.C. § 636(b)(1)(c)).
In this regard, Local Rule of Court 72.3 requires written objections to “specifically
identify the portions of the proposed findings, recommendations or report to which
objection is made and the basis for those objections.” LOCAL RULE OF COURT 72.3;
also Behar, 791 F. Supp. 2d at 389 (citing Shields v. Astrue, Civ. No. 07-417, 2008
U.S. Dist. LEXIS 74519, at *6 (M.D. Pa. Sept. 8, 2008)).

further finding defendants’ objections to be without merit and squarely addressed by
Judge Mehalchick’s report,2 it is hereby ORDERED that:
1.

The report (Doc. 61) of Magistrate Judge Mehalchick is ADOPTED.

2.

Defendants’ motion (Doc. 6) to dismiss plaintiffs’ complaint is DENIED.

3.

An order setting this matter for a case management conference shall issue
forthwith.

/S/ CHRISTOPHER C. CONNER
Christopher C. Conner, Chief Judge
United States District Court
Middle District of Pennsylvania

2

In its objections, SWEPI reiterates many of the same arguments raised
before and rejected by the Magistrate Judge. Importantly, Judge Mehalchick does
not hold that SWEPI’s interpretation of the lease is unreasonable, or that plaintiffs’
interpretation controls as a matter of law. Judge Mehalchick merely holds that
SWEPI has failed to “demonstrate that its interpretation is the only reasonable
interpretation” at this preliminary stage. (Doc. 31 at 26 (emphasis in original)). At
this juncture, the court agrees with Judge Mehalchick’s ultimate conclusion that
the parties’ oil and gas lease agreements are susceptible to multiple, reasonable
interpretations. Moreover, the court notes that the bulk of SWEPI’s objections
turn on broad statements of industry custom and practice which are not yet
substantiated by a factual record. The vast majority of decisional law cited by
SWEPI presents in a summary judgment posture, with a fully developed record to
guide the courts’ respective analyses. See, e.g., Roe v. Chief Exploration & Dev.
LLC, Case Nos. 4:11-CV-816, 4:11-CV-697, 4:11-CV-579, 2013 U.S. Dist. LEXIS
113914 (M.D. Pa. Aug. 13, 2013) (rejecting lessor plaintiffs’ proposed interpretation
at Rule 56 stage); Martin v. Turner Oil & Gas Props., No. 1:11-CV-102, 2013 U.S.
Dist. LEXIS 39377 (D.N.D. Mar. 21, 2013) (same); also Green Meadow Oil & Gas
Corp. v. EOG Resources, Inc., 390 S.W.3d 625 (Tex. App. 2012). The court concludes
that resolution of the apparent ambiguities in the lease agreements, including the
consideration of extrinsic evidence and the impact of industry custom and practice,
necessarily must await summary judgment.