Powers v. Equitable Production Company

Filing 80

OPINION. Signed by Judge James P. Jones on 3/31/12. (sc)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA
ABINGDON DIVISION
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TRULAH F. POWERS,
Plaintiff,
v.
EQUITABLE PRODUCTION
COMPANY,
Defendant.

Case No. 1:09CV00055
OPINION
By: James P. Jones
United States District Judge

Trulah F. Powers, Pro Se Plaintiff; Scott W. Mullins, Scott W. Mullins, P.C.,
Coeburn, Virginia, for Defendant.

In this civil action, I will grant the defendant’s Motion for Summary
Judgment.

I
Leonard O. Powers, now deceased, brought this case, pro se, against
Equitable Production Company, now named EQT Production Company (“EQT”)
in 2009.1 Soon after, EQT filed a motion to dismiss, and Leonard Powers filed a
motion for summary judgment. Both motions were denied. In February 2010,

1

The subject matter jurisdiction of this court is based on diversity of citizenship
and amount in controversy.

Leonard Powers again moved for summary judgment, which was denied. Leonard
Powers passed away in May 2010, and his widow, Trulah F. Powers, was
substituted as the plaintiff. 2 The basic claim in the lawsuit is that Mr. Powers and
now Mrs. Powers is the sole owner of certain coalbed methane (“CBM”), superior
to any claims of other putative owners, and that EQT, the lessee of the CBM, has
failed and refused to recognize that fact.
EQT has filed the current Motion for Summary Judgment. The plaintiff
opposes the motion, which has been briefed and is ripe for decision.

II
In 1990, the Virginia General Assembly enacted the Virginia Gas and Oil
Act, Va. Code §§ 45.1-361.1 through 44 (2002 & Supp. 2011) (“Gas Act”),
regulating methods by which CBM could be captured for commercial use.
Pursuant to the Gas Act, gas interests may be force pooled, and owners of the gas
interests are entitled to royalty payments for CBM that is captured from their
properties. See Va. Code Ann. § 45.1-361.21. When there are conflicting claims
of ownership over gas interests, the royalties are paid into escrow funds. See Va.
Code Ann. § 45.1-351.22.

2

For the remainder of this Opinion, “Powers” refers to Trulah F. Powers.
2

Powers’ claims arise from two tracts of land located in Dickenson County,
Virginia, in this judicial district, referred to as Tract #2 and Tract #3. The tracts
have been subject to forced pooling under the Gas Act to allow for exploration and
collection of CBM by EQT. Powers has received five-sixths of the CBM royalties
from Tract #2. The other one-sixth of the royalties has been deposited into escrow
because of a dispute between Powers and Sandra Powers Strickfadden over the
ownership of the one-sixth interest. There is also a dispute with the heirs of one
M.I. Kiser over the ownership of Tract #3. All royalties due to the owners of Tract
#3 have been escrowed by order of the Virginia Gas and Oil Board pending
resolution of the ownership dispute.
In the Complaint, Powers makes several allegations, which are outlined
below.
Powers alleges that EQT has incorrectly included other individuals,
including the Kiser heirs and Strickfadden, as persons who may have an ownership
interest in the tracts. Powers asserts that she has a 100 percent ownership interest
in each of the tracts.
Powers also alleges that EQT and the Gas and Oil Board failed to comply
with procedures for placing royalties in escrow and releasing the funds from
escrow when appropriate. Particularly, Powers alleges that EQT has not properly
escrowed royalties for Tract #2.
3

Finally, Powers claims that EQT engaged in a conspiracy to shift tax liability
to her property so that it could purchase the property at a tax sale. According to
Powers, a note found on an official map indicated that liability for back taxes was
shifted from property owned by the Kiser heirs to Tract #3, which Powers alleges
she owns. The note read in essence, “Powell to Baker, move taxes.” According to
Powers, Powell and Baker were employees of EQT or its predecessor. Powers
further alleges that EQT representatives incorrectly testified to the Gas and Oil
Board that the Kiser heirs were paying taxes on one of the tracts identified with the
tax number 18771. She alleges that property was listed for sale for back taxes
several times even though she and her husband had been paying the taxes and none
were due.
Powers requests that this court (1) order EQT to remove Strickfadden and
others as potential owners of the tracts, leaving Powers as the owner of 100 percent
of the property; (2) order EQT to release all royalties held in escrow, plus interest
and costs, and pay a regular direct royalty payment to her; (3) order EQT to pay
$5000 per acre, plus a 12.5 percent royalty for the CBM; and (4) award her
$10,000,000 in punitive damages.
EQT maintains that it is entitled to summary judgment. First, it argues that
no facts alleged by the plaintiff support a recognized cause of action. It asserts that
Powers has not provided any evidence showing who wrote the note found on the
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property map and has not linked the note or the tax sales to EQT. The note cannot
be found.
Second, it argues that Powers settled her claim as to Tract #2 with EQT.
EQT has presented a settlement agreement between Powers, EQT, and Pine
Mountain providing that Pine Mountain would pay Powers a sum of money in
exchange for Pine Mountain’s consent for the Gas and Oil Board to release the
Tract #2 royalties from escrow. Because of the agreement, Powers has received
five-sixths of the Tract #2 royalties. Relatedly, EQT argues that the claim is barred
by res judicata due to a state court finding that Powers had settled her claim with
EQT.
Third, EQT argues that Powers’ disputes with Strickfadden and the Kiser
heirs cannot be properly adjudicated in this action because those individuals have
not been joined as parties. 3
Fourth, EQT argues that the plaintiff’s tort claims are barred by the statute of
limitations.
Both Trulah Powers and Leonard Powers were deposed by EQT, and EQT
has provided an affidavit from Rita McGlothlin-Barrett, the Regional Land
Manager for EQT, as well as other evidence in support of its Motion for Summary
3

Early on in this case, the magistrate judge pointed out to Powers the absence of
the proper parties. (Order, Aug. 16, 2010, ECF No. 60). Of course, a federal court may
not have subject-matter jurisdiction if any additional parties were not of diverse
citizenship.
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Judgment. Along with the Complaint, the plaintiff provided exhibits, including
portions of testimony before the Gas and Oil Board, a report of the Gas and Oil
Board, various maps and deeds, and excerpts from books and articles. After the
defendant’s Motion for Summary Judgment was filed, the court advised Powers of
her right to file sworn affidavits, unsworn declarations made under penalty of
perjury, or other evidence. However, Powers has not filed any further evidence
with her brief in opposition to the defendant’s motion.

III
A party is entitled to summary judgment only when there are no genuine
issues of material fact. Fed. R. Civ. P. 56(a). To determine whether genuine issues
of material fact exist, the court should consider the pleadings, discovery materials
on file, and any affidavits. Fed. R. Civ. P. 56(c)(1)(A). For a dispute to be
genuine, there must be evidence such that a reasonable jury could return a verdict
for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). Summary judgment may be granted when an issue of material fact “is
merely colorable.” Id. at 249. The nonmoving party must present affidavits,
depositions, or other evidence to show that there is a genuine issue for trial.
Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). If a party “fails to make a
showing sufficient to establish the existence of an element essential to that party’s
6

case, and on which that party will bear the burden of proof at trial,” summary
judgment should be granted. Id. at 322.
I find that there are no genuine issues of material fact about any of Powers’
claims, and summary judgment for the defendant is appropriate.
Powers makes several allegations regarding the ownership of Tracts #2 and
#3 and requests that the amounts in escrow be released to her. However, she has
not shown, or even alleged with any specificity, that EQT, in its determination that
the ownership of one-sixth of Tract #2 and all of Tract #3 are in dispute, has acted
in a way that is inconsistent with state procedures and the orders of the Gas and Oil
Board.
The facts on which the defendant and plaintiff agree show that EQT is
correct that the ownership of the tracts is unsettled. With regard to Tract #2, there
is a 1975 deed naming Strickfadden as a record owner of a portion of the property.
(ECF No. 68, Attach. 11.) In 2009, upon receiving a letter from Leonard Powers,
EQT conducted a title search to confirm the Powers’ share in the property, and
EQT adjusted the Powers’ share upward to five-sixths. EQT maintains that the
1975 deed of one-sixth of the property to Strickfadden remains in effect. In her
deposition, Powers agreed that the ownership dispute over the one-sixth interest in
Tract #2 existed but was “not something that [she] and EQT are going to be
fighting about.” (T. Powers Dep. 17.)
7

With regard to Tract #3, a 1911 deed purports to convey the tract to M.I.
Kiser. (ECF No. 68, Attach. 14.) Powers maintains that Kiser and heirs did not
take possession or ownership of the property. Upon discovering the 1911 deed,
Leonard Powers and his sister, Bonnie Powers, executed a quitclaim deed to
themselves for the property, and in Trulah Powers’ deposition, she argued that she
owned the property because it was abandoned or subject to adverse possession.
Powers may believe she has a strong legal argument to establish her
ownership, but her ownership-related claims against EQT have no merit. There is
no evidence that EQT has misled the Gas and Oil Board to avoid paying royalties
directly to Powers rather than to the escrow accounts, and EQT has presented
documents (ECF No. 18, Attach. 3 and 4) outlining its internal review of the
ownership disputes. Although ownership is disputed, Powers has not added any of
the potential owners as defendants in this suit. The royalties in escrow cannot be
released until these ownership disputes are resolved. Va. Code Ann. § 45.1361.22(5). When the disputes are resolved, the Gas and Oil Board will order EQT
to pay the principal amount in the account and accrued interest, less escrow
account fees. Id.
Additionally, to the extent Powers argues that Pine Mountain wrongfully
claims ownership in the CBM rights, it appears the dispute was settled. Powers did

8

not join Pine Mountain as a party in this suit and has not alleged any wrongdoing
by EQT that would relate to her disagreement with Pine Mountain.
Powers makes two specific claims of wrongdoing by EQT in the Complaint.
Powers first claims that EQT conspired with others to force a tax sale of Powers’
property.

With regard to this allegation, Powers has presented insufficient

evidence to overcome summary judgment. Powers describes a note, written on a
map in the Commissioner of Revenue’s Office, which she alleges was used to
transfer tax liability that led to attempted tax sales of her property in 1998 and
2000. The note allegedly said “Powell to Baker, move taxes.” Bob Powell and
Dennis Baker were EQT employees. The note was allegedly seen by Leonard
Powers, now deceased, and his neice’s husband, Rick Edwards. Powers has not
produced any evidence of the note. In Powers’ deposition, she stated that Leonard
Powers returned to the Commissioner of Revenue’s Office but could not find the
note and was told by office employees that there never was a map with a note
written on it.
Powers has not provided evidence from any of the individuals she claims
were involved in the conspiracy, including Shelby Willis, a former employee of the
Commissioner of Revenue’s Office; Henry Vanover, who conducted tax sales for
the county; and Freddie Mullins, who worked for Henry Vanover and allegedly
acted defensive when confronted by Leonard Powers. Powers has failed to present
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any evidence that would show how EQT was involved in any tax sale relating to
her property. Furthermore, the tax sales were never completed, and Powers was
not required to pay any money to the County to stop the tax sales. Therefore, no
genuine issue of fact exists.
Powers also alleges that EQT failed to comply with its obligations to deposit
royalties in escrow. The Complaint states, “According to Bob Wilson and Diane
Davis in 2008, EPC or et al had not Escrowed any money from Tract # 2, Well #
V-536721.” (Compl. at 5.) However, Powers has not presented any evidence that
EQT has failed to escrow any money for Tract #2, and EQT asserts that it has
escrowed one-sixth of the royalty payments due on Tract #2.

IV
For the foregoing reasons, it will be necessary to grant the defendant’s
Motion for Summary Judgment and enter judgment in its favor. 4

DATED: March 31, 2012
/s/ James P. Jones
United States District Judge

4

There is pending in this court a class action suit, Adair v. EQT Production Co.,
et al., Case No. 1:10CV00037, in which claims are made against EQT on behalf of
forced-pooled CBM lessors, which may include Powers. I do not consider or resolve any
claims made in the Adair case in this opinion.
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