Laurie A. Abell, f/k/a Laurie A. Evans, individually and as Trustee of the DDM Real Estate Trust, Plaintiff and Appellee
GADECO, LLC, Defendant and Appellant
from the District Court of Williams County, Northwest
Judicial District, the Honorable David W. Nelson, Judge.
Kaitlin A. DeCrescente (argued) and Peter H. Furuseth (on
brief), Williston, ND, for plaintiff and appellee.
L. Rogneby (argued) and Diane M. Wehrman (appeared),
Bismarck, ND, for defendant and appellant.
VandeWalle, Chief Justice.
1] GADECO, LLC, appealed from a judgment and orders declaring
its oil and gas lease with Laurie Abell was terminated,
dismissing its counterclaim against Abell, and awarding Abell
her costs and attorney fees. We reverse and remand because
there are genuine issues of material fact precluding summary
2] On January 9, 2007, Abell entered into an oil and gas
lease with GADECO. The lease gave GADECO the right to develop
Abell's mineral interests on the subject property and:
[T]he right to store, treat, manufacture, refine, transport
and market substances produced hereunder, and to lay pipe
lines, build tanks, treating and manufacturing plants,
gasoline recycling and repressuring plants, power houses and
stations, telegraph and telephone lines, roads, canals,
ditches, houses for employees and all other structures and
facilities on the [Subject Property] necessary or convenient
in the exercise of Lessee's rights hereunder.
sThe lease further provided:
[T]his lease shall remain in force for a term of five (5)
years from [January 9, 2007, ] called "Primary
Term", and as long thereafter as either (1) oil, gas, or
other minerals are produced... from the leased premises, or
(2) operations are conducted on the leased premises, or (3)
there is a well or wells on the leased premises which,
although capable of producing oil, gas or other minerals in
paying quantities hereunder is shut in for lack of a market
Operations as used herein means all operations for the
drilling of a well for oil or gas, including building of
roads, preparation of the drill site, moving in for drilling,
drilling, deepening, plugging back, reworking or recompleting
and also secondary recovery operations benefitting the leased
3] The Industrial Commission designated the subject property
as part of a spacing unit in February 2011, and GADECO began
planning wells for the spacing unit. GADECO entered into
discussions with Abell about surface access to her property
and she gave GADECO permission to survey and stake a portion
of the property for a well location. GADECO did so on
December 5, 2011, but Abell wanted GADECO to relocate the
well site and it surveyed a new location and placed markers
at the new site on December 15, 2011.
4] GADECO and Abell began negotiating a surface use and
damage agreement in mid-November 2011. GADECO sent Abell a
proposed agreement on December 26, 2011, and later attempted
to contact Abell about the agreement, but she refused to
execute it. GADECO applied to the Industrial Commission for a
well permit on January 6, 2012, shortly before the primary
term of the lease was set to expire, and the permit was
approved on January 23, 2012. On January 25, 2012, Abell
leased the same mineral interests to Kodiak Oil & Gas.
Unable to secure a surface use and damage agreement from
Abell, GADECO relocated the well off the subject property but
within the spacing unit, and a producing oil and gas well was
completed on May 23, 2013.
5] After giving notice of termination, Abell brought this
lawsuit seeking a determination that GADECO's lease had
terminated and an award of costs and attorney fees under
N.D.C.C. § 47-16-37. GADECO counterclaimed for breach of
contract and damages. Through a series of summary judgment
orders and a judgment not all of which are relevant to this
appeal, the district court ruled the ...