WHEELING – A federal judge has granted a motion to dismiss one count in two lawsuits alleging breach of contract against SWN Product Company and Chesapeake Appalachia.
Judge John Preston Bailey wrote that the plaintiffs failed to state a claim upon which relief could be granted because they did not allege any resulting injury.
The lease did not specify when any notice needed to be given and failure to provide the said notice was not a material breach, according to the Feb. 7 order.
“Accordingly, this court finds that even if the plaintiffs did intent to please this as a breach of contract, they have failed to state a claim upon which relief can be granted,” the order states.
Bailey dismissed the breach of contract claim in the suits.
Daniel Lucey, Colleen Lucey and Abel Lucey each entered into an oil, gas and coalbed methane lease with SWN with a primary term of five years in 2006, according to the suits.
The lease was set to expire on Aug. 21, 2011, but could be renewed by Chesapeake under certain conditions.
Chesapeake attempted to extend the lease, but the extension was rejected by the plaintiffs for various reasons.
Ultimately, the plaintiffs filed lawsuits against the defendants, seeking a declaration that the lease had been terminated. The matter was settled and dismissed by joint stipulation.
The terms of the settlement agreements were then brought before the court.
In the settlement agreements, Chesapeake agreed to pay an additional $500 per acre for 203.39 acres, totaling $101,695 if there is not a commencement of two wells within one year of the effective date of the agreement. The settlement agreements were signed on Oct. 29, 2012.
Chesapeake consolidated various properties, which included the properties owned by the Luceys, into a pooled unit and, in late 2012, applied for permits to drill four wells that would be located in the pooled unit, known as the Michael Dunn Southwest Unit.
In their lawsuits, the plaintiffs claimed the wells were not commenced within one year and that no notice of the unit declaration was provided to them, thereby making the declaration void.
The plaintiffs claimed the defendant breached their contracts with them and has trespassed on their land.
The Luceys are represented by David C. Hook of Hook & Hook.
U.S. District Court for the Northern District of West Virginia case number: 5:17-cv-00066, 5:17-cv-00126