Bezilla v. Tug Hill Operating, LLC

Filing 16

MEMORANDUM OPINION AND ORDER GRANTING AS FRAMED 4 DEFENDANT'S MOTION TO DISMISS COMPLAINT, without prejudice to refiling with cotenant consent. It is ORDERED that this case be DSMISSED and STRICKEN from the active docket of this Court. The Clerk is DIRECTED to enter judgment on this matter. Signed by Senior Judge Frederick P. Stamp, Jr. on 11/13/2017. (copy to counsel via CM/ECF) (nmm)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
DANIEL BEZILLA,
Plaintiff,
v.

Civil Action No. 5:17CV123
(STAMP)

TUG HILL OPERATING, LLC,
Defendant.
MEMORANDUM OPINION AND ORDER
GRANTING AS FRAMED DEFENDANT’S MOTION TO DISMISS COMPLAINT
I.

Background

The defendant, Tug Hill Operating, LLC, removed this civil
action to this Court from the Circuit Court of Wetzel County, West
Virginia.

The plaintiff, Daniel Bezilla, commenced the civil

action in state court seeking to terminate the defendant’s oil and
gas lease covering property in Green District, Wetzel County, West
Virginia.

The plaintiff alleges that he is the owner of the 182

net acres of oil and gas rights on and under a 182-acre tract of
real estate, and that the defendant is the successor, lessee,
and/or assignee of the working interest rights in the oil and gas
lease.

In the alterative, the plaintiff seeks compensatory,

expectation, and punitive money damages for claims for alleged
breach of the oil and gas lease and for trespass on the subject
property.
The defendant filed a motion to dismiss the plaintiff’s
complaint for failure to state a claim.

The defendant contends

that the entire complaint should be dismissed because the plaintiff

cannot state a claim for termination of the lease without the
consent of his mineral-interest cotenants.
contends

that

the

plaintiff’s

claims

The defendant further

for

forfeiture

must

dismissed because legal remedies exist for the claims.

be
The

defendant also argues that the claim for abandonment should be
dismissed because the plaintiff’s own allegations show that the
defendant

took

affirmative

steps

to

operate

the

lease.

Additionally, the defendant argues that Count I, which alleges a
claim

for

breach

of

an

implied

duty

to

develop,

is

legally

deficient because such a claim is not recognized as an independent
cause of action under West Virginia law. The defendant argues that
Counts VI and VII, which allege damages related to the surface
estate, cannot stand because the plaintiff does not own the surface
estate.

Thus, the defendant asks that either the complaint be

dismissed in its entirety for lack of consent of the cotenants or,
alternatively, that specific Counts I, VI, and VII be dismissed as
well as the requested relief of forfeiture and the claim for
abandonment.
The plaintiff did not originally file a response to the
defendant’s motion.

The Court then scheduled a status conference

and

on

oral

argument

the

motion

to

dismiss

after

finding

discrepancies between the complaint and the motion to dismiss
regarding the ownership of the subject property and the appropriate
lease governing that ownership.

In the complaint, the plaintiff

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refers to a lease filed in Wetzel County Deed Book 180 at page 325,
dated November 24, 2007, but does not attach the lease to the
complaint.

In the motion to dismiss, the defendant attaches a

lease that begins on page 234 of Volume 90A.

The lease is dated

November 14, with no year included, but the notary’s signature
indicates that the lease was notarized on November 14, 2007.

The

lease lists Jeremy Sutton as the lessor, and plaintiff Daniel
Bezilla and others as the lessees.

The defendant also attaches a

deed from Slim Chance, Ltd., to James W. Yoho, dated February 20,
1986, and recorded in Wetzel County, West Virginia.

To resolve

these discrepancies, the Court extended the plaintiff’s time to
respond to the motion to dismiss.

Also, the Court cannot grant a

dispositive motion by default, but rather must consider the motion
on the merits.

See Custer v. Pan Am. Life Ins. Co., 12 F.3d 410,

416 (4th Cir. 1993) (“Although the failure of a party to respond to
a summary judgment motion may leave uncontroverted those facts
established by the motion, the moving party must still show that
the uncontroverted facts entitle the party to ‘a judgment as a
matter of law.’”).

The Court indicated that the plaintiff’s

response should, at a minimum, (1) identify all owners of the
subject property, (2) explain why the other owners’ joinder or
consent is not necessary, and (3) attach any documents necessary to
fully show the ownership of the subject property.

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The defendant’s motion to dismiss is now fully briefed and
ripe for decision.

For the following reasons, the motion to

dismiss must be granted as framed.
II.

Applicable Law

In assessing a motion to dismiss for failure to state a claim
under Rule 12(b)(6), a court must accept all well-pled facts
contained in the complaint as true.

Nemet Chevrolet, Ltd v.

Consumeraffairs.com, Inc, 591 F.3d 250, 255 (4th Cir. 2009).
However, “legal conclusions, elements of a cause of action, and
bare assertions devoid of further factual enhancement fail to
constitute well-pled facts for Rule 12(b)(6) purposes.”

Id.

(citing Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)).

This

Court

also

declines

to

consider

“unwarranted

unreasonable conclusions, or arguments.”

inferences,

Wahi v. Charleston Area

Med. Ctr., Inc., 562 F.3d 599, 615 n.26 (4th Cir. 2009).
The purpose of a motion under Rule 12(b)(6) is to test the
formal sufficiency of the statement of the claim for relief; it is
not a procedure for resolving a contest about the facts or the
merits of the case.

5B Charles Alan Wright & Arthur R. Miller,

Federal Practice and Procedure § 1356 (3d ed. 1998).

The Rule

12(b)(6) motion also must be distinguished from a motion for
summary judgment under Federal Rule of Civil Procedure 56, which
goes to the merits of the claim and is designed to test whether
there is a genuine issue of material fact.

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Id.

For purposes of

the motion to dismiss, the complaint is construed in the light most
favorable to the party making the claim and essentially the court’s
inquiry

is

directed

to

whether

the

allegations

constitute

a

statement of a claim under Federal Rule of Civil Procedure 8(a).
Id. § 1357.
A complaint should be dismissed “if it does not allege ‘enough
facts to state a claim to relief that is plausible on is face.’”
Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

“Facial

plausibility is established once the factual content of a complaint
‘allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.’” Nemet Chevrolet,
591 F.3d at 256 (quoting Iqbal, 129 S. Ct. at 1949).

Detailed

factual allegations are not required, but the facts alleged must be
sufficient “to raise a right to relief above the speculative
level.”

Twombly, 550 U.S. at 555.
III.

Discussion

As directed by the Court, the plaintiff addresses in his
response the ownership of the subject property.

The plaintiff

states that the property is owned by the plaintiff, J. Wells Eakin,
James W. Yoho, and Judith A. Yoho, who all entered into a lease
with Sutton Exploration and Production Co. on November 14, 2007.
The plaintiff states that the same parties modified the lease on
July 20, 2009, to correct the formations the leases affected and to

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correct the fact that the lessors have been listed as lessees and
vice versa on the original lease.
The plaintiff has not obtained the cotenants’ consent to this
litigation.

However, the plaintiff argues that their consent is

not required based on his interpretation of Fredeking v. Grimmett,
86 S.E.2d 554 (W. Va. 1955), which held that “there can be no
forfeiture of the lease by less than all the tenants in common who
own undivided interests in the property.”

86 S.E.2d at 564.

Specifically, the plaintiff contends that, while the lease in
Fredeking was entered into by one original lessor who then died and
left both the real property and the existing lease to his heirs,
the real property in this case was divided before the current
leases were created.

The plaintiff also notes that the Fredeking

court attempted to understand and apply the intent of the original
lessor and lessee, and argues that, in this case, the intent of the
leasing

parties

has

not

been

implemented

companies that have held the lease.

by

the

development

Additionally, the plaintiff

points out that mineral rights on and under the same tract of land
are regularly treated as individual and separate real property
interests by the oil and gas industry, the government, and the
legal profession.
The plaintiff further argues that there is an exception to the
general rule that “equity abhors a forfeiture.”

The plaintiff

cites Doddridge County Oil and Gas Co. v. Smith, 154 F. 970 (N.D.

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W. Va. 1907), which states that “forfeiture is favored, when,
instead of working a loss or injury contrary to equity, it promotes
justice and equity and protects the owner against the indifference,
laches, and injurious conduct of the lessee.”

154 F. at 978.

The

plaintiff argues that the exception should apply in this case
because the defendant has produced gas from only one vertical well
on the 182-acre tract. Lastly, as to the breach of contract claim,
the plaintiff argues that, while it is true that he does not own
the surface rights, the lessors negotiated for the right to control
the surface.
This

Court

finds,

however,

that

distinguish Fredeking from this case.

the

plaintiff

fails

to

It is clear to this Court

that, under Fredeking, a lessor cannot unilaterally terminate a
lessee’s ability to develop acreage properly under lease without
the consent of all of the cotenants.

See Fredeking, 86 S.E.2d at

564 (finding that doing so places the lessee “in [an] inequitable
position” because the lessee “is still liable as a lessee to some
of the tenants in common, although he cannot enjoy any of the
benefit of his lease without becoming a trespasser”). Furthermore,
the Court agrees with the defendant that the plaintiff has taken
the Fredeking court’s discussion of lessor intent out of context.
As the defendant points out, the relevant discussion in Fredeking
actually stands for the proposition that West Virginia law does not
See id. (finding that partial

allow for partial forfeiture.

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forfeiture “leav[es] the lessee bound to part of the heirs but
denied all practical benefits under the lease,” creating a “sort of
tenancy which . . . it would be unreasonable to hold that the
lessor and lessee intended or contemplated”).
Additionally, the plaintiff’s argument that “mineral rights on
and

under

the

individual

and

same

tract

separate

of

real

land

are

property

reconciled with the holding in Fredeking.

regularly

treated

as

interests”

cannot

be

ECF No. 11-1 at 3.

The

fact remains that the mineral interest is leased jointly with the
other owners of minerals underlying the same tract.

Thus, the

plaintiff cannot seek to unilaterally terminate the lease without
the consent of his cotenants.
Accordingly, this Court must grant the defendant’s motion to
dismiss based solely on lack of consent from the cotenants.
However, the motion to dismiss is granted without prejudice to a
refiling with proper cotenant consent.

Should the plaintiff file

a new complaint with cotenant consent, the Court notes that any
issue of forfeiture or implied duty to develop raised in the new
complaint would then be dealt with under West Virginia law.

For

those reasons, the defendant’s motion to dismiss the complaint is
granted, as framed.
IV.

Conclusion

For the reasons set forth above, the defendant’s motion to
dismiss the complaint (ECF No. 4) is GRANTED AS FRAMED, without

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prejudice to refiling with cotenant consent.

Accordingly, it is

ORDERED that this case be DISMISSED and STRICKEN from the active
docket of this Court.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein. Pursuant to Federal
Rule of Civil Procedure 58, the Clerk is DIRECTED to enter judgment
on this matter.
DATED:

November 13, 2017

/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE

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