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Moore v. Adams

Court of Appeals of Ohio, Fifth Appellate District, Tuscarawas County

November 17, 2008, Date of Judgment Entry

Case No. 2007AP090066

Opinion

Delaney, J.

 [*P1]  This is an appeal from a judgment of the Tuscarawas County Common Pleas Court that granted judgment in favor of plaintiffs-appellees Kathy and Randy Moore on their complaint against defendant-appellant James M. Adams in regards to an oil and gas lease encumbering appellees' property.

Statement of Case and Facts

 [*P2]  On September 6, 1980, Thomas M. Gardner and Nancy M. Gardner entered into an oil and gas lease with Alsid Oil and Gas Development Company, Inc., covering 101.5 acres in Washington Township, Tuscarawas County, Ohio. The relevant provisions of the lease are as follows:

 [*P3]  The habendum clause of the lease provides that the lease shall be "…for a term of two (2) years and so much longer thereafter as oil, gas or their constituents are produced in paying quantities thereon  [**2] or operations are maintained on all or part of that certain tract of land…" (Joint Exhibit 1).

 [*P4]  The lease also included a shut-in clause in paragraph 7 which states:

 [*P5]  "Notwithstanding anything herein to the contrary, this lease shall continue in full force for so long as there is a well or wells on the leased premises capable of producing oil or gas, but in the event all such wells are shut-in for any reason, then on or before the end of each calendar year during which the well or wells are shut-in, Lessee shall pay to Lessor a shut-in royalty equal to the delay rental provided herein." 1 

 [*P6]  In 1991, appellee Kathy Moore purchased the real estate owned by the Gardners and appellees are now the owners of the acreage. The real estate was encumbered by the above referenced oil and gas lease. There was one well on the property which was producing commercial quantities of gas.

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2008-Ohio-5953 *; 2008 Ohio App. LEXIS 4998 **; 2008 WL 4907590

KATHY A. MOORE, et al., Plaintiffs-Appellees -vs- JAMES M. ADAMS, Defendant-Appellant

Prior History:  [**1] CHARACTER OF PROCEEDING: Appeal from the Tuscarawas County Court of Common Pleas Court. Case No. 2006 CV 06 0376.

Disposition: Affirmed.

CORE TERMS

lease, shut-in, oil and gas lease, trial court, royalties, lessee, implied covenant, forfeiture, abandoned, Oil, forfeiture of lease, lessor, express terms, covenant, damages, paying quantities, assigned error, due diligence, six years, terminated, oil and gas, breached, drill

Civil Procedure, Trials, Bench Trials, Jury Trials, Province of Court & Jury, Appeals, Standards of Review, De Novo Review, Questions of Fact & Law, Contracts Law, Contract Interpretation, General Overview, Energy & Utilities Law, Leases & Licenses, Oil, Gas & Mineral Interests, Business & Corporate Compliance, Breach, Breach of Contract Actions, Elements of Contract Claims, Federal Oil & Gas Leases, Extensions & Terminations, Abandonment & Termination, Administrative Proceedings, Judicial Review, Standards of Review, Judicial Officers, Judges, Discretionary Powers, Preliminary Considerations, Equity, Relief, Lease Cancellation, Implied Covenants, Reasonable Care & Diligence, Administration & Marketing, Drilling Agreements, Further Exploration, Shut In Royalty Clauses, Oil & Petroleum Products