Motion to dismiss affirmed in oil and gas rights case

By Nathan Bass | Nov 21, 2012

CHARLESTON – The state Supreme Court on Nov. 16 upheld the Lewis County Circuit Court’s dismissal of an oil and gas rights dispute between heirs of a 200-acre tract in Lewis County.

Robert Cawthon, who asserted he had either leased or purchased 93 percent of the oil and gas rights of the 67 Tierney heirs and also that he is attorney-in-fact of 27 of the heirs, sought to invalidate the lease to the tract held by Dominion Transmission, Inc.

The remaining Tierney heirs, who did not agree with Cawthon’s position, joined the defendants, Dominion Transmission, Inc. and CNX Gas Company, LLC. One of the heirs, John Tierney, appeared in opposition to the plaintiffs, both in the circuit court and on appeal.

Cawthon sought to invalidate the lease under various theories including that DTI had underdeveloped the lease. He wanted to get control of the land so he could develop the oil and gas interests underlying the property.

However, the circuit court “found that West Virginia law requires all co-tenants to seek invalidation or forfeiture of a lease.” Since some of the Tierney heirs had agreed to seek an invalidation of the DTI lease but others were opposed, the court dismissed six of the seven counts for “failure to state a claim.”

The other somewhat unrelated claim was dismissed for failure to appeal the order in question in the time allowed.

In its ruling, the circuit court suggested that when mineral owners cannot agree on how to develop a mineral estate, the proper procedure is for the owners to seek partition.

In affirming the circuit courts decision, the Supreme Court echoed the circuit court’s advice on a solution to the dilemma, stating, “We also note that the circuit court stated in its dismissal order that where mineral owners cannot agree on how to develop the mineral estate, the proper procedure is to seek partition.

While petitioners argue that partition would not be feasible, essentially due to the complications associated with the fluid nature of oil and gas, a partition can be achieved through a sale.”

The Court affirmed the circuit court’s “Order Granting Motion to Dismiss of Defendants Dominion Transmission, Inc., CNX Gas Company, LLC, and John Tierney.”

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