Justia West Virginia Supreme Court of Appeals Opinion Summaries

The Supreme Court affirmed the order of the circuit court affirming the determination of the Board of Equalization and Review that Petitioners Murray Energy Corporation and Consolidation Coal Company's coal interests were properly valued and assessed by Defendants, holding that the circuit court properly concluded that the method of valuing coal properties violated neither the statutory requirement of assessment at "true and actual value" nor the constitutional equality requirements of the West Virginia Constitution and the equal protection provisions of the United States and West Virginia Constitutions.Specifically, the Court held (1) the methodology of valuing Petitioners' coal properties for ad valorem tax valuation purposes, as set forth in West Virginia Code of State Rules 110-1I-1 et seq., does not violate the requirement set forth in W. Va. Code 11-6K-1(a) that natural resources property be assessed based upon its "true and actual value"; and (2) the valuation methodology contained in the Code of State Rules does not violate the equality provision of W. Va. Const. art. X, 1 or the equal protection provisions of the United States and West Virginia Constitutions. View "Murray Energy Corp. v. Steager" on Justia Law

The Supreme Court affirmed the judgment of the circuit court granting summary judgment against Petitioners in their action against Respondents based upon a coal lease agreement between the parties and granting summary judgment against Respondents’ counterclaim, holding that there was no error to the dismissal of the parties’ respective claims.In granting summary judgment against Petitioners, the circuit court concluded that Respondents had no obligation to diligently mine coal and did not have to make royalty payments based upon comparable sales by other mining companies. The circuit court also granted summary judgment against Respondents’ counterclaim seeking damages for Petitioners’ refusal to consent to an assignment or sublease of the coal lease and for alleged tortious interference with an asset agreement Respondents had with another company. The Supreme Court affirmed, holding that there was no error in the circuit court’s judgment. View "Bruce McDonald Holding Co. v. Addington Inc." on Justia Law

In this action alleging claims under the West Virginia Surface Coal Mining and Reclamation Act, W. Va. Code 22-31 to 22-3-38, the Supreme Court answered several questions of law certified to it by the federal court. The Court answered, inter alia, that (1) a 1902 deed provision transferring the right to mine coal “without leaving any support for the overlying strata and without liability for any injury which may result to the surface from the breaking of said strata” prohibits a surface owner from pursuing a common law claim for loss of support arising from subsidence caused by the extraction of the coal from below the surface; (2) assuming the surface lands and residence of a landowner have been materially damaged from subsidence that is a natural result of underground mining, the surface owner is limited to the remedies provided for in the West Virginia Code of State Rules 38-2-16.2.c to 38-2-16.2.c.2; and (3) if a surface owner proves that his or her person or property was injured through a coal operator’s violation of a rule, order, or permit, the surface owner can receive monetary compensation for such injury pursuant to W. Va. Code 22-3-25(f). View "McElroy Coal Co. v. Schoene" on Justia Law

The Supreme Court reversed the circuit court’s order invaliding the arbitration provision at issue in this case involving an oil and gas lease and remanded with directions that the case be dismissed and referred to arbitration.Petitioner and Respondents were parties to an oil and gas lease that included an arbitration provision. Respondents sued Petitioner, seeking to recover payments to which they claimed to be entitled under the lease and various other damages. Petitioner filed a motion to compel arbitration, relying on the arbitration provision in the lease. The circuit court denied Petitioner’s motion to compel arbitration, finding ambiguity in the lease’s arbitration provision. The Supreme Court reversed, holding (1) the circuit court erred in going outside of the provisions in the arbitration clause to find language to create an ambiguity; and (2) the arbitration provision was not ambiguous and therefore should be enforced. View "SWN Production Co. v. Long" on Justia Law

The 1977 deed at issue in this case was ambiguous and of such doubtful meaning that reasonable minds disagreed as to the deed’s intent, and therefore, the circuit court erred in finding the deed was clear and in finding that the grantors did not convey one-half interest in oil and gas beneath a tract of land in Marshall County to the grantee.In 2013, Plaintiffs filed a complaint against Defendants asserting that, in the 1977 deed, Plaintiffs retained ownership of the one-half undivided interest in the oil and gas and, therefore, Defendants trespassed on their oil and gas interest and engaged in conversion. Plaintiffs then amended the complaint to request a declaratory judgment interpreting the 1977 deed. The circuit court determined that the deed was clear and unambiguous and declared that Plaintiffs kept for themselves the one-half interest in the oil and gas. The Supreme Court reversed, holding that the circuit court erred in finding that the 1977 deed was unambiguous and in granting a declaratory judgment in favor of Plaintiffs. View "Gastar Exploration Inc. v. Rine" on Justia Law

Where a lessee designates tracts of land for pooling regarding horizontal drilling and production of oil and gas from the Marcellus Shale Formation, which includes nonparticipating royalty interests (NPRI), consent or ratification by the holders of the nonparticipating royalty interests is not required where the holders of the NPRIs have conveyed the oil and gas in place and the executive leasing rights thereto to the lessor.At issue was a voluntary pooling and unionization lease provision regarding horizontal drilling and production of oil and gas from the Marcellus Shale Formation. PPG Industries, Inc., the lessor, and Gastar Exploration USA, Inc., the lessee, signed a lease under which 700 acres were designated by Gastar as the Wayne/Lily Unit for purposes of pooling the oil and gas interests held by various individuals and entities. PPG and Gastar challenged the circuit court’s entry of partial summary judgment in favor of Plaintiffs, who collectively held a nonparticipating royalty interest in the oil and gas underlying a parcel included within the Wayne/Lily Unit. The Supreme Court reversed, holding that the circuit court erred in ruling that the validity of the pooling provision in the PPG-Gastar lease and the designated Wayne/Lily Unit were void until such time as pooling was consented to and ratified by Plaintiffs. View "Gastar Exploration Inc. v. Contraguerro" on Justia Law

Both the legislative intent and language utilized in W. Va. Code 22-6-8 permits allocation or deduction of reasonable post-production expenses actually incurred by the lessee of an oil and/or gas lease and, more specifically, permits use of the “net-back” or “work-back” method of royalty calculation.Here the Supreme Court answered certified questions presented by the United States District Court for the Northern District of West Virginia regarding whether the Supreme Court’s decision in Tawney v. Columbia Natural Resources, LLC, 633 S.E.2d 22 (2006), has any effect upon whether a lessee subject to section 22-6-8 may deduct post-production expenses from the lessor’s royalty. Upon rehearing, the court concluded that royalty payments pursuant to an oil or gas lease governed by the statute may be subject to pro-rata deduction or allocation of all reasonable post-production expenses incurred by the lessee, and therefore, an oil or gas lessee may utilize the “net-back” or “work-back” method to calculate royalties owed to a lessor pursuant to a lease governed by section 22-6-8(e). View "Leggett v. EQT Production Co." on Justia Law

DWG Oil & Gas Acquisitions, LLC (DWG) contended that it was the current owner of the oil and gas underlying a parcel of land in Marshall County. The circuit court determined that the oil and gas underlying the parcel was conveyed by a 1913 deed to A.B. Campbell, a predecessor in title of Southern County Farms, Inc., Harlan and Barbara Kittle, and Lori Carpenter (collectively, Defendants). Consequently, title to the oil and gas was vested in Defendants rather than DWG. DWG appealed, arguing that it was the current owner of the oil and gas at issue by virtue of a competing chain of title arising from a 1908 deed executed by P. P. Campbell, Sr. The Supreme Court affirmed, holding that the circuit court correctly applied the law and properly found that title to the oil and gas underlying the parcel of land is currently vested in Defendants. View "DWG Oil & Gas Acquistions, LLC v. Southern Country Farms" on Justia Law

Plaintiffs sued EQT Production Company and five related entities alleging that Plaintiffs were underpaid royalties with respect to their ownership of oil and gas interests that EQT was contracted to exploit. A federal district court granted summary judgment to the related entities and partial summary judgment EQT. The court reserved its ruling on the remaining aspects of Plaintiff’s claims against EQT pending the disposition of questions certified to the Supreme Court relevant to the claims’ resolution. The Supreme Court declined to answer the second certified question and answered the first certified question as follows: When the lessee-owner of a working interest in an oil or gas well must tender to the lessor-owner of the oil or gas a royalty not less than one-eighth of the total amount paid to or received by or allowed to the lessee, W. Va. Code 22-6-8(e) requires in addition that the lessee not deduct from that amount any expenses that have been incurred in gathering, transporting, or treating the oil or gas after it has been initially extracted any sums attributable to a loss or beneficial use of volume beyond that initially measured or any other costs that may be characterized as post-production. View "Leggett v. EQT Production Co." on Justia Law

This proceeding consisted of four consolidated appeals. The issue in two of the appeals was whether the alternative-energy infrastructures installed by Petitioners for their businesses met the statutory definition of “qualified alternative fuel vehicle refueling infrastructure” for the purpose of receiving an alternative-fuel infrastructure tax credit. The issue in the other two appeals was whether the alternative-energy infrastructures installed by Petitioners for their residences met the statutory definition of “qualified alternative fuel vehicle home refueling infrastructure” for the purpose of receiving an alternative fuel-infrastructure tax credit. The circuit court affirmed the final orders of the West Virginia Office of Tax Appeals that denied Petitioners’ requests for alternative-fuel infrastructure tax credits under W. Va. Code 11-6d-4(c). The Supreme Court affirmed, holding that the circuit court did not err in its judgment. View "Martin Distributing Co. v. Matkovich" on Justia Law