Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Alford v. Collins-Mcgregor Operating Co.

Supreme Court of Ohio

January 3, 2018

Alford et al., Appellants,
v.
Collins-McGregor Operating Company et al., Appellees.

          Submitted September 26, 2017

         Appeal from the Court of Appeals for Washington County, No. 16CA9, 2016-Ohio-5082.

          Scullin & Cunning, L.L.C., and Sean R. Scullin, for appellants.

          Geiger, Teeple, Robinson & McElwee, P.L.L.C., and Bruce Smith, for appellees.

          Porter, Wright, Morris & Arthur, L.L.P., Christopher J. Baronzzi, L. Bradfield Hughes, and Ryan T. Steele, urging affirmance for amicus curiae American Petroleum Institute.

          Vorys, Sater, Seymour & Pease, L.L.P., Timothy B. McGranor, and Gregory D. Russell, urging affirmance for amici curiae Ohio Oil and Gas Association and Southeastern Ohio Oil and Gas Association.

          O'Connor, C.J.

         I. Introduction

         {¶ 1} Appellants, Linda Griffith Alford, George Alford Jr., Bershelle Alford Giambattista, Joseph Alford, Judith Hanlon Farnsworth, Donna R. Hanlon, and James C. Eutzler (collectively, the "Landowners"), sued appellees, Collins-McGregor Operating Company and Winston Oil Company (collectively, "Collins-McGregor"), seeking the partial termination of an oil and gas lease. The trial court granted Collins-McGregor's motion to dismiss for failure to state a claim and the Fourth District Court of Appeals affirmed.

         {¶ 2} This appeal requires us to consider whether the Landowners' claim for breach of the implied covenant to explore further is cognizable in Ohio, and if so, the availability of partial horizontal forfeiture as a remedy for such a breach. We conclude that Ohio does not recognize an implied covenant to explore further separate and apart from the implied covenant of reasonable development. We therefore need not reach the issue of remedy.

         II. Relevant Background

         {¶ 3} The Landowners hold interests in approximately 74 acres of land in Washington County, not far from the Ohio River. The land is subject to an oil and gas lease entered into on September 16, 1980, between the owners of the property at that time and Collins-McGregor.[1] "[T]he sole and only purpose" of the lease is to permit "mining and operating for oil and gas and laying pipe lines, and building tanks, powers, stations, and structures thereon, to produce, save and take care of said products." In return for permission to mine the land, Collins-McGregor committed to make royalty payments based on the amount of gas produced from the land and to deliver a portion of the oil produced from the land to the lessors.

         {¶ 4} The lease provides that it "shall remain in force for a term of One (1) years from [the effective] date, and as long thereafter as oil or gas, or either of them, is produced from said land by the lessee." It is silent as to certain aspects of drilling and production. For example, the lease does not require production from any specific number of wells or from any particular depth. The lease also does not disclaim the application of any implied covenants.

         {¶ 5} A well was drilled in 1981 and has produced oil and gas in paying quantities since then from a formation called the Gordon Sand. To date there has not been any production from the land at any depths below the Gordon Sand. The Landowners contend, however, that exploration and production of oil and gas have been occurring near their property from below the Gordon Sand-specifically, from the Marcellus and Utica formations-but Collins-McGregor has failed to explore whether ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.