Arsenal Resources LLC v. Crim

Filing 13

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF'S MOTION FOR A PRELIMINARY INJUNCTION (ECF. NO. 2 ). Signed by District Judge Thomas S. Kleeh on 5/18/2020. (dk)

Case 1:20-cv-00084-TSK Document 13 Filed 05/18/20 Page 1 of 12 PageID #: 95

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
CLARKSBURG
ARSENAL RESOURCES LLC,
Plaintiff,
v.

Civ. Action No. 1:20-cv-84
(Kleeh)

JULIA CRIM,
Defendant.
MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF’S
MOTION FOR A PRELIMINARY INJUNCTION [ECF NO. 2]
Pending

before

the

Court

is

a

Motion

for

Preliminary

Injunction. For the reasons discussed here, the Court grants the
motion.
I.
On

May

1,

2020,

PROCEDURAL HISTORY
the

Plaintiff,

Arsenal

Resources

LLC

(“Arsenal”), filed a Complaint against the Defendant, Julia L.
Crim

(“Crim”).

On

May

4,

2020,

Arsenal

filed

a

Motion

for

Preliminary Injunction. United States District Judge Irene M.
Keeley

transferred

the

case

to

United

States

District

Judge

Thomas S. Kleeh on May 12, 2020. Crim has not responded to the
motion or made any appearance in this matter to date.
The Court held a hearing on the motion on May 18, 2020, via
video conference. Arsenal was represented by Matthew S. Casto
and

Tiffany

Marie

Arbaugh.

In-house

counsel

for

Arsenal

was

Case 1:20-cv-00084-TSK Document 13 Filed 05/18/20 Page 2 of 12 PageID #: 96

ARSENAL V. CRIM

1:20-CV-84

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF’S
MOTION FOR A PRELIMINARY INJUNCTION [ECF NO. 2]
present as well. Randy Nathaniel Skeen (“Skeen”), the current
Director of Land at Arsenal, testified. Crim did not appear or
participate in the hearing. The Court noted on the record that
Crim received notice of the verified complaint, the motion, and
the Court’s order scheduling the hearing. 1
II.
Based

on

the

FACTUAL BACKGROUND

pleadings

and

the

testimony

during

the

hearing, the Court finds the following set of facts. Crim owns
two tracts of real property in Harrison County (the “Property”)
that are involved in this dispute. Compl., ECF No. 1, at ¶ 9.
The Property is subject to an oil and gas lease (the “Lease”),
dated July 12, 1961, between Crim and Union Carbide Corporation
(“Union Carbide”). Id. at ¶ 10 (Ex. C, ECF No. 1-3). River Ridge
Energy,

LLC

(“River

Ridge”)

is

Union

Carbide’s

successor

in

interest and current holder of the Lease. Id. Crim also signed
an Amendment and Ratification of the Lease on August 14, 2012.
Id. ¶ 11 (Compl. Ex. D, ECF No. 1-4).

1

In the Court’s order scheduling the hearing, the Court included
the Zoom video conference link. The order also included a dialin phone number that participants could use. The Court ordered
counsel for Arsenal to provide Crim with a copy of the order
scheduling the hearing and to certify with the Court that it had
done so. Arsenal filed said notice on May 15, 2020, stating that
it had sent Crim notice by both email and Federal Express,
overnight delivery. See ECF No. 10.
2

Case 1:20-cv-00084-TSK Document 13 Filed 05/18/20 Page 3 of 12 PageID #: 97

ARSENAL V. CRIM

1:20-CV-84

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF’S
MOTION FOR A PRELIMINARY INJUNCTION [ECF NO. 2]
The Lease provides that River Ridge has the sole right to
enter the Property
for the purpose of searching for, exploring,
drilling and operating for, producing and
marketing
oil,
gas,
natural
gasoline,
casinghead gas, casinghead gasoline, and any
and all other products of any well located
on said land, and of laying pipe lines and
gathering
systems,
and
building
tanks,
stations, telephone, telegraph and electric
power lines, houses for gates, meters and
regulators with all other rights, rights of
way, privileges, appliances and structures
necessary, incident or convenient for the
operation of this land alone and conjointly
with neighboring lands . . . .
Compl. Ex. C, ECF No. 1-3. River Ridge authorized Arsenal to
obtain a Well Work Permit to drill and operate natural gas wells
(known as the “Pritt Wells”). See Compl., ECF No. 1, at ¶ 13.
Arsenal

and

Crim

also

entered

into

a

Surface

Use

and

Compensation Agreement (“SUCA”). Id. ¶ 14 (Ex. E, ECF No. 1-5).
As consideration for the execution of the SUCA, Arsenal paid
Crim $65,710.00, which Crim received and accepted. Id. ¶ 16.
Pursuant

to

the

SUCA,

Arsenal

constructed

a

well

road

and

staging area on Crim’s surface. 2 Id. ¶ 15. The staging area is
used for truck staging and offloading, and Skeen testified that
2

The SUCA states that “Arsenal intends to construct a well
access road on the surface of real property described
herein . . . .” See Compl. Ex. E, ECF No. 1-5, at ¶ 1. The SUCA
describes property shown at Exhibit A to the SUCA, which depicts
where the staging area would be constructed.
3

Case 1:20-cv-00084-TSK Document 13 Filed 05/18/20 Page 4 of 12 PageID #: 98

ARSENAL V. CRIM

1:20-CV-84

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF’S
MOTION FOR A PRELIMINARY INJUNCTION [ECF NO. 2]
it is used for maintenance purposes. It is used to store and
move

equipment

—

drilling

rigs,

heavy

trucks,

bulldozers,

backhoes, pipe equipment, etc. — and to coordinate traffic that
moves along the access road. If the access road is congested,
the staging area can be used to park trucks until the road is
cleared. These areas are necessary for Arsenal’s operations.
In

mid-to-late

November

2019,

Arsenal

discovered

other

items on the access road and/or staging area: a recreational
vehicle

(a

“camper”),

two

or

three

other

vehicles,

a

few

trailers, and “random junk.” Water was flowing onto the staging
area from one of the vehicles. Skeen has been to the location
numerous

times.

A

representative

of

Arsenal

most

recently

visited the area on Friday, May 15, 2020. This representative
took a photograph, which was admitted into evidence as Hearing
Exhibit D (ECF No. 12-4). Skeen testified that the placement of
these items on the staging surface interferes with Arsenal’s
ability to use the space. He also testified that it is a safety
concern to have these items on Arsenal’s active site along with
Arsenal’s large equipment. He stated that Arsenal needs to use
these areas as soon as possible.
Arsenal has contacted Crim on several occasions regarding
these

items

—

by

phone

call,

certified

letter,

and

text

message — and Crim has refused to remove the items. Arsenal’s
4

Case 1:20-cv-00084-TSK Document 13 Filed 05/18/20 Page 5 of 12 PageID #: 99

ARSENAL V. CRIM

1:20-CV-84

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF’S
MOTION FOR A PRELIMINARY INJUNCTION [ECF NO. 2]
full use of these areas requires that these items be removed.
Based on these facts, Arsenal brings the following causes of
action:
(I)
Preliminary Injunction
(II) Permanent Injunction
(III) Breach of Contract
III. DISCUSSION
A preliminary injunction is “an extraordinary remedy that
may only be awarded upon a clear showing that the plaintiff is
entitled
Inc.,

to such relief.” Winter v.

555

U.S.

7,

22

(2008).

To

Nat.
succeed

Res.
on

Def. Council,
a

motion

for

preliminary injunction, a plaintiff “must establish that he is
likely to succeed on the merits, that he is likely to suffer
irreparable harm in the absence of preliminary relief, that the
balance of equities tips in his favor, and that an injunction is
in the public interest.” Id. at 20. Based on the complaint,
motion,

accompanying

memorandum,

exhibits,

and

hearing

testimony, Arsenal is entitled to a preliminary injunction.
A.

Likelihood of Success on the Merits

Arsenal has made a clear showing that it would likely be
successful on the merits. At issue is whether the Lease, the
amendment to it, and the SUCA provide Arsenal with the express
rights to use the land as proposed. “Under West Virginia law, an
oil and gas lease is both a conveyance and a contract.” SWN
5

Case 1:20-cv-00084-TSK Document 13 Filed 05/18/20 Page 6 of 12 PageID #: 100

ARSENAL V. CRIM

1:20-CV-84

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF’S
MOTION FOR A PRELIMINARY INJUNCTION [ECF NO. 2]
Prod. Co., LLC v. Edge, No. 5:15CV108, 2015 WL 5786739, at *4
(N.D.W. Va. Sept. 30, 2015) (citing Bryan v. Big Two Mile Gas
Co., 577 S.E.2d 258, 265 (W. Va. 2001)). Therefore, principles
of

contract

law

govern

their

interpretation.

See

Iafolla

v.

Douglas Pocahontas Coal Corp., 162 W. Va. 489, 250 S.E.2d 128
(1978) (applying contract principles to an oil and gas lease).
To form a valid, enforceable contract, there must be “competent
parties,

legal

subject-matter,

valuable

consideration,

and

mutual assent.” Syl. Pt. 5, Virginian Export Coal Co. v. Rowland
Land Co., 100 W. Va. 559, 131 S.E. 253 (1926). A prima facie
breach of contract claim under West Virginia law requires
(1) that there is a valid, enforceable
contract;
(2)
that
the
plaintiff
has
performed under the contract; (3) that the
defendant has breached or violated its
duties or obligations under the contract;
and (4) that the plaintiff has been injured
as a result.
Corder v. Antero Res. Corp., 322 F. Supp. 3d 710, 717 (N.D.W.
Va. 2018). “[A] valid written instrument which expresses the
intent of the parties in plain and unambiguous language is not
subject to judicial construction or interpretation but will be
applied and enforced according to such intent.” Syl.

Pt. 1,

Cotiga Dev. Co. v. United Fuel Gas Co., 147 W. Va. 484, 128
S.E.2d 626 (1962).

6

Case 1:20-cv-00084-TSK Document 13 Filed 05/18/20 Page 7 of 12 PageID #: 101

ARSENAL V. CRIM

1:20-CV-84

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF’S
MOTION FOR A PRELIMINARY INJUNCTION [ECF NO. 2]
The Lease, the modification to it, and the SUCA are valid,
enforceable

contracts.

They

expressly

provide

for

Arsenal’s

right to use the access road and staging area for its oil and
gas production. Crim has breached the contracts by preventing
Arsenal from utilizing the access road and staging area. Arsenal
has been damaged by this because it is prevented from exercising
its contractual rights for which is

has paid

a considerable

amount of money. For these reasons, Arsenal has made a clear
showing that it is likely to succeed on the merits in its breach
of contract claim.
B.

Irreparable Harm

Arsenal
injunctive

will

suffer

relief.

irreparable

Generally,

harm

in

economic

the

damages

absence
are

of
not

sufficient to establish irreparable harm. See Di Biase v. SPX
Corp.,

872

F.3d

224,

230

(4th

Cir.

2017)

(“Mere

injuries,

however substantial, in terms of money, time and energy expended
in the absence of [an injunction] are not enough.”).
The Court makes this finding based, in part, on the safety
issues that have arisen due

to Crim’s interference with the

access road and/or staging area. Skeen testified that due to
Crim’s placement of items on these areas, there is insufficient
room for Arsenal to move in and out. This Court has previously
considered safety as a factor supporting irreparable harm. See
7

Case 1:20-cv-00084-TSK Document 13 Filed 05/18/20 Page 8 of 12 PageID #: 102

ARSENAL V. CRIM

1:20-CV-84

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF’S
MOTION FOR A PRELIMINARY INJUNCTION [ECF NO. 2]
Dominion Energy Transmission, Inc. v. 0.11 Acres of Land, No.
1:19CV182, 2019 WL 4781872, at *6 (N.D.W. Va. Sept. 30, 2019)
(finding

that

Dominion

faced

irreparable

harm

without

an

injunction and noting that “if left unchecked, the slip will
threaten the safety of Dominion employees, who work in close
proximity to heavy machinery”).
Arsenal

is

also

being

denied

the

benefit

of

the

real

property rights expressly granted to it by terms of enforceable
contracts, and this is not correctable with monetary damages.
See id. (“[I]t is well-settled that unauthorized interference
with a real property interest constitutes irreparable harm as a
matter of law, given that a piece of property is considered a
unique commodity for which a monetary remedy for injury is an
inherently inadequate substitute.”). Further, the Supreme Court
of Appeals of West Virginia has held that “[i]njunction is a
proper

remedy

to

prevent

the

maintenance

of

a

wrongful

obstruction of a private way.” Syl. Pt. 2, Knotts v. Snyder
Enters., Inc., 170 W. Va. 727, 296 S.E.2d 849 (1983) (citing
Syl. Pt. 2, Flaherty v. Fleming, 58 W. Va. 669, 52 S.E. 857
(1906)). Moreover, the harm is actual and imminent. Therefore,
Arsenal

will

suffer

irreparable

injunction.

8

harm

in

the

absence

of

an

Case 1:20-cv-00084-TSK Document 13 Filed 05/18/20 Page 9 of 12 PageID #: 103

ARSENAL V. CRIM

1:20-CV-84

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF’S
MOTION FOR A PRELIMINARY INJUNCTION [ECF NO. 2]
C.

Balance of Equities

The balance of equities tips in Arsenal’s favor. This Court
has previously found:
When
weighing
the
parties’
respective
injuries and balancing the equities to
determine whether a preliminary injunction
should be issued, the court should consider
the following: (1) the relative importance
of the rights asserted and the act sought to
be enjoined; (2) the preservation of the
status quo; and (3) the balancing of damage
and convenience generally.
Edge, 2015 WL 5786739, at *6 (citing Sinclair Refining Co. v.
Midland Oil Co., 55 F.2d 42, 45 (4th Cir. 1932)). The agreements
in place — the Lease, modification, and SUCA — are enforceable.
Arsenal

is

merely

seeking

to

exercise

its

express

rights

pursuant to these valid contracts, where Crim is being asked to
remove personal belongings from a location at which she was not
entitled to place them. On this and all issues raised in the
motion, Crim has opted to make no argument on her behalf. In
granting a preliminary injunction for Arsenal, the benefit to
Arsenal would not be disproportionate to the injury for Crim.
Therefore, the balance of equities weighs in Arsenal’s favor.
D.

Public Interest

The

public

interest

weighs

in

favor

of

granting

a

preliminary injunction. Both by statute and by court decision,
the

public

policy

in

West

Virginia
9

is

to

encourage

the

Case 1:20-cv-00084-TSK Document 13 Filed 05/18/20 Page 10 of 12 PageID #: 104

ARSENAL V. CRIM

1:20-CV-84

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF’S
MOTION FOR A PRELIMINARY INJUNCTION [ECF NO. 2]
exploration and development of natural resource interests. The
West Virginia Legislature has explicitly stated that “[a]llowing
the responsible development of our state’s natural gas resources
will enhance the economy of our state and the quality of life
for our citizens while assuring the long term protection of our
environment.” W. Va. Code § 22-6A-2(a)(8). The Legislature has
further declared that “[e]xploration for and development of oil
and

gas

reserves

in

this

state

must

coexist

with

the

use,

agricultural or otherwise, of the surface of certain land and
that each constitutes a right equal to the other.” Id. § 22-71(a)(1). This interest has been recognized by this Court. See
Edge,

2015

WL

5786739,

at

*6

(citing

the

same

statutory

provisions).
The

public

also

has

an

interest

in

the

enforcement

of

contracts. See Western Sur. Co. v. Rock Branch Mech., Inc., No.
5:16-cv-09550,
2016);

see

2016

also

WL

Edge,

6462100,

at

2015

5786739,

WL

*3

(S.D.W.
at

*6

Va.

Oct.

(“The

31,

public

certainly has an interest in enforcing valid leases and ensuring
that parties to those leases comply with their terms. The public
also has an interest in respecting the valid property rights of
others.”).
As this Court has noted, “[t]he public does not, however,
have an interest in condoning the violation of . . . leases or
10

Case 1:20-cv-00084-TSK Document 13 Filed 05/18/20 Page 11 of 12 PageID #: 105

ARSENAL V. CRIM

1:20-CV-84

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF’S
MOTION FOR A PRELIMINARY INJUNCTION [ECF NO. 2]
similar

agreements,

or

refraining

to

respect

the

agreed-to

rights of the parties.” Edge, 2015 WL 5786739, at *6. Here, Crim
is

interfering

Property

to

with

engage

Arsenal’s
in

oil

contractual

and

gas

rights

operations.

to

use

The

the

public

interest weighs in favor of Arsenal.
This Court may issue a preliminary injunction “only if the
movant gives security in an

amount that the court considers

proper to pay the costs and damages sustained by any party found
to have been wrongfully enjoined or restrained.” Fed. R. Civ. P.
65(c). The Fourth Circuit has made it clear that “[f]ailure to
require a bond before granting preliminary injunctive relief is
reversible error.” Md. Dep’t of Human Res. v. U.S. Dep’t of
Agric., 976 F.2d 1462, 1483 (4th Cir. 1992). Therefore, pursuant
to Rule 65(c), Arsenal is ORDERED to post a security bond in the
amount

of

$5,000.00.

The

relief

provided

by

this

Memorandum

Opinion and Order shall not commence until the appropriate bond
has been posted.
IV.

CONCLUSION

For the reasons discussed above, the Court GRANTS Arsenal’s
motion for a preliminary injunction [ECF No. 2]. Crim is hereby
ORDERED

to

remove

the

items

depicted

in

the

May

15,

2020,

photograph (Hearing Exhibit D (ECF No. 12-4)), along with any
other items that may be in the access road or staging area, on
11

Case 1:20-cv-00084-TSK Document 13 Filed 05/18/20 Page 12 of 12 PageID #: 106

ARSENAL V. CRIM

1:20-CV-84

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF’S
MOTION FOR A PRELIMINARY INJUNCTION [ECF NO. 2]
or before 5:00 p.m. on Friday, May 22, 2020. Crim is hereby
ENJOINED from placing any other items in the staging area or
access road. Counsel for Arsenal is ORDERED to provide Crim with
a copy of this Memorandum Opinion and Order, along with a copy
of the photograph from May 15, 2020 (Hearing Exhibit D), and
shall certify via written notice filed with the Court that these
documents have been served upon her.
It is so ORDERED.
The Clerk is directed to transmit copies of this Order to
counsel of record.
DATED: May 18, 2020
/s/ Thomas S. Kleeh
THOMAS S. KLEEH
UNITED STATES DISTRICT JUDGE

12