Tuesday, October 16, 2012

10th Circuit Court of Appeals Rules Against Surface Owner in Trespass Case; Awards Attorneys Fees to Defendant

Yesterday, the 10th Circuit Court of Appeals affirmed a district's court's decision denying Plaintiffs' complaint for trespass caused by Defendant's seismic exploration in Kimzey v. Flamingo, 2012 U.S. App. Lexis 21360.  In Kimzey, the Plaintiffs owned surface only interests in Roger Mills County, Oklahoma. The Defendant, Flamingo, was an exploration company that was hired to engage in geophysical services.  
Plaintiffs alleged that Flamingo had no right to access the surface.  Flamingo asserted that it had a right to access the surface estate by and through oil and gas leases and assignments it had received from the owners of the mineral estate and owners of the leasehold rights.  The district court and the 10th Circuit Court of Appeals agreed with Flamingo and denied Plaintiffs' claim for trespass.  
In Oklahoma, as well as elsewhere, owners of the mineral estate have an implied right of access to the surface estate.   The mineral estate owners can also assign this right to oil and gas exploration companies.  The reason for this is obvious--without the implied right of access, surface owners could forever prevent the marketability of the mineral estate, rendering it valueless.  The right of surface access is not unfettered, however, as the mineral estate owner only has a right to occupy the surface to the extent "reasonably necessary for exploring and marketing oil and gas."  Oklahoma courts have also previously held that a mineral owner may sever and assign the surface easement even for the limited purpose of conducting geophysical exploration, which was essentially what Flamingo had conducted. Enron Oil & Gas Co. v. Worth, 1997 OK CIV APP 60, 947 P.2d 610 (Okla Civ. App. 1997).   
The loss to Plaintiffs came at an even greater cost, as the Court of Appeals also affirmed the district court's award of attorney's fees of $71,560 to Flamingo.  Pursuant to Title 12, Section 940(A) of the Oklahoma Code, the prevailing party in a property damage lawsuit may recover its attorney's fees. The Court of Appeals not only held that the trespass lawsuit fell within the province of the statute, but also found that the $71,560 fee award was reasonable.
The full case is available on Lexis, and also Justicia

C. Michael Daily is an attorney with the long-established law firm of Daily & Woods, P.L.L.C.  Mr. Daily can be contacted by telephone at 479-242-3953, by email at mdaily@dailywoods.com, or by regular post at 58 South 6th Street, Fort Smith, Arkansas 72902.  You can follow Mr. Daily via social network using any of the social network links in the right hand column of the page.  Disclaimer:  This blog is for informational purposesis certainly not to be considered legal advice and is absolutely not substitute for any of the benefits that are associated with the attorney-client relationship.