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Hogue v. Whitacre

Court of Appeals of Ohio, Seventh District, Monroe

December 22, 2017


         Civil Appeal from the Court of Common Pleas of Monroe County, Ohio Case No. 2015-204

          For Plaintiffs-Appellants: Atty. Timothy B. Pettorini Atty. Sara E. Fanning Atty. J. Benjamin Fraifogl

          For Defendants-Appellees Koy L. Whitacre, KLJ, Inc., Buckeye Oil Co., Clearfork Oil Co., Whitacre Oil Co., and Whitacre Enterprises, Inc.: Atty. Richard A. Yoss Atty. Ryan M. Regel Atty. Todd J. Abbott

          For Defendant-Appellee AR OHIO LLC: Atty. Peter A Lusenhop Atty. Steven A. Chang Vorys, Sater, Seymour and Pease LLP

          For Defendant-Appellee American Atty. Kevin L. Colosimo Energy - Utica Minerals, LLC: Atty. Christopher W. Rogers Frost Brown Todd LLC

          JUDGES: Hon. Cheryl L. Waite Hon. Mary DeGenaro Hon. Carol Ann Robb


          WAITE, J.

         {¶1} Appellants Donald V. and Julie A. Hogue appeal a November 17, 2016 decision of the Monroe County Common Pleas Court to grant summary judgment in favor of Appellees Roy L. Whitacre, K.L.J., Inc. ("KLJ"), Buckeye Oil Company ("Buckeye"), Clearfork Oil Company ("Clearfork"), Whitacre Oil Company ("Whitacre Oil"), Whitacre Enterprises, Inc. ("Whitacre Enterprises"), AR Ohio L.L.C. ("AR"), and American Energy. Appellants argue that the trial court erroneously determined that a well located on their property produced in paying quantities during a three-year time span. For the reasons provided, Appellants' arguments are without merit and the judgment of the trial court is affirmed.

         Factual and Procedural History

         {¶2} Appellants own 78.5 acres of land in Franklin Township, Monroe County. On January 16, 2006, Appellants entered into an oil and gas lease with Whitacre Enterprises. On July 7, 2006, a single well was drilled on the property. The well produced significant amounts of oil and gas for several years until construction began on a compression station used to produce gas from the well. The details are not clear from the record, but at some point KLJ, Buckeye, and Clearfork obtained an interest in the oil and gas rights.

         {¶3} On June 2, 2011, Whitacre Enterprises, KLJ, Buckeye, Clearfork, and Whitacre Oil subleased the oil and gas rights to HG Energy. HG Energy then assigned the rights to Hall and Ross Resources. Hall and Ross Resources later merged with AR.

         {¶4} All gas produced from Appellants' land was transported to a compression station through a pipeline called the "PPP line." The compression station is owned by Dominion Oil and Gas ("Dominion"). Sometime in 2014, Dominion informed Whitacre Enterprises that it was planning to construct a new compression station. In August of 2014, Dominion told Whitacre Enterprises that the compression station would be completed in thirty to forty days. However, Dominion did not begin construction until March of 2015 and the project was not completed until mid-September of 2015. Appellees were finally able to use the compression station in October of 2015. As a result of these issues, Whitacre Enterprises decided to construct a compression station on Appellants' property, which was completed in November of 2015.

         {¶5} According to production records, Appellees profited by more than $1, 000 each year from 2006 until 2012. In 2013, the year before the Whitacre Enterprises' construction began, Appellees received $687.01 in profits. In 2014 and 2015, the construction period, Appellees were left with a loss of -$328.95 and -$231.38. In the following two quarters after construction was completed, Appellees received $1, 326.49 in profits.

         {¶6} On July 13, 2015, Appellants filed a complaint against Appellees, collectively, seeking a declaratory judgment that the lease had terminated on its own terms due to the lack of production and seeking quiet title to Appellees' oil and gas rights. On September 2, 2016, the parties filed competing motions for summary judgment. On September 23, 2016, Appellants filed a motion to strike certain exhibits, however, the trial court did not rule on the motion. On October 7, 2016, Appellees filed a motion for leave to supplement or amend their response to Appellants' discovery. The court also failed to rule on this motion. On November 17, 2016, the trial court granted summary judgment in favor of Appellees. This timely appeal followed.

         Summary Judgment

         {¶7} An appellate court conducts a de novo review of a trial court's decision to grant summary judgment, using the same standards as the trial court set forth in Civ.R. 56(C). Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). Before summary judgment can be granted, the trial court must determine that: (1) no genuine issue as to any material fact remains to be litigated, (2) the moving party is entitled to judgment as a matter of law, (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing the evidence most favorably in favor of the party against whom the motion for summary judgment is made, the conclusion is adverse to that party. Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327, 364 N.E.2d 267 (1977). Whether a fact is "material" depends on the substantive law of the claim being litigated. Hoyt, Inc. v. Gordon & Assoc, Inc., 104 Ohio App.3d 598, 603, 662 N.E.2d 1088 (8th Dist.1995).

         {¶8} "[T]he moving party bears the initial responsibility of informing the trial court of the basis for the motion, and identifying those portions of the record which demonstrate the absence of a genuine issue of fact on a material element of the nonmoving party's claim." (Emphasis deleted.) Dresher v. Burt, 75 Ohio St.3d 280, 296, 662 N.E.2d 264 (1996). If the moving party carries its burden, the nonmoving party has a reciprocal burden of setting forth specific facts showing that there is a genuine issue for trial. Id. at 293. In other words, when presented with a properly supported motion for summary judgment, the nonmoving party must produce some evidence to suggest that a reasonable factfinder could rule in that party's favor. Brewer v. Cleveland Bd. of Edn., 122 Ohio App.3d 378, 386, 701 N.E.2d 1023 (8th Dist.1997).

         {¶9} The evidentiary materials to support a motion for summary judgment are listed in Civ.R. 56(C) and include the pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence, and written stipulations of fact that have been filed in the case. In resolving the motion, the court views the evidence in a light most favorable to the nonmoving party. Temple, 50 Ohio St.2d at 327.

         Exhibits B and C

         {¶10} Much of the following analysis involves two exhibits attached to Appellees' motion for summary judgment, exhibits B and C. The exhibits are charts that summarize Appellees' expenses and profits for the relevant years and were prepared by an accountant, Lisa A. Jones. Appellants argue that these documents should not have been considered by the trial court as they amount to hearsay. Appellees respond by arguing that these exhibits are appropriate in summary judgment pursuant to Evid.R. 1006, because they represent summaries of voluminous records.

         {¶11} On September 23, 2016, Appellants filed a motion to strike exhibits B and C. As noted by Appellants, the trial court did not rule on this motion. If a trial court has failed to rule on a motion at the time the case is disposed, an appellate court will presume that the motion was overruled. State v. Labiaux, 7th Dist. No. 16 HA 0016, 2017-Ohio ...

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