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Eisenberger v. Chesapeake Appalachia

May 5, 2010

DEAN N. EISENBERGER, SR. AND THERESA EISENBERGER, PLAINTIFFS,
v.
CHESAPEAKE APPALACHIA, LLC AND STATOILHYDRO USA ONSHORE PROPERTIES, INC., DEFENDANTS.



The opinion of the court was delivered by: Judge Caputo

MEMORANDUM

Presently before the Court is Defendants' Motion to Stay and Renewed Motion to Compel Arbitration or in the Alternative Certify Order for Interlocutory Appeal. (Doc. 17) For the reasons discussed more fully below, this Court will deny in part and grant in part the Defendants' motion.

BACKGROUND

The facts as alleged in Plaintiff's Complaint are as follows. Plaintiffs are the owners of a parcel of land comprising approximately 58.1 acres in Windham Township, Wyoming County, Pennsylvania, which is believed to be located over a "subsurface geologic formation" containing natural gas known as the Marcellus Shale. (Compl. ¶ 4-5.) Plaintiffs received an unsolicited communication from Premier Land Services, LLC ("Premier"), which is a leasing agent for Defendant Chesapeake Appalachia, LLC ("Chesapeake"). (Id. at ¶ 7.)

On February 22, 2008, Plaintiffs notified premier of their desire to negotiate a lease with Chesapeake. (Id. at ¶ 8.) On March 3, 2008, Premier forwarded an unsigned document entitled "Paid Up Oil and Gas Lease" ("the Lease") that listed Chesapeake as the lessee and Mr. Eisenberger as the lessor of the Property; Mr. Eisenberger's wife, Plaintiff Theresa Eisenberger, was not listed on the lease. (Id. at ¶ 10.) Mr. Eisenberger signed the lease and returned it to Premier on or about March 10, 2008. (Id. at ¶ 12.)

On March 28, 2008, Ms. Eisenberger reviewed the Lease, noticed that it incorrectly identified her husband as a single man and did not list her as a co-owner of the property; Mr. Eisenberger then contacted Premier to alert them to the situation. (Id. at ¶¶ 13-15.) On March 29, 2009, Mr. Eisenberger sent a letter to Premier via mail and fax advising Premier to "void all current paperwork and forward me a revised and updated agreement for review." (Id. at ¶ 16.) Later that day, Mr. Eisenberger received a telephone call from a Premier employee acknowledging receipt of the letter sent by Plaintiffs and stating that the matter would be forwarded to the Premier's main office. (Id. at ¶ 17.) On April 8, 2008, John Corcoran, who identified himself as the president of Premier, contacted Mr. Eisenberger and explained that he would contact Chesapeake's legal department, who would in turn respond to Plaintiff's letter. (Id. at ¶ 18.) On April 17, 2008, Corcoran called Mr. Eisenberger, explained that Chesapeake's position was that the Lease "was still good" and offered an increase in the bonus contemplated in the Lease. (Id. at ¶ 19.)

On May 12, 2008, Plaintiffs sent a letter via certified mail entitled "Revocation of Initial Lease Offer," notifying Premier that Plaintiffs were revoking the offer and demanding the return of all documents. (Id. at ¶ 22.) On June 20, 2008, Mr. Eisenberger received a copy of the Lease and a bank note from Premier in the amount of twenty-nine thousand, fifty dollars ($29,050.00), which represented the Bonus Consideration and money for "delay rental" under the Lease; Plaintiffs have not cashed this note. (Id. at ¶ 23.) On August 18, 2008, the lease was recorded in the chain of title by the Wyoming County Recorder of Deeds. (Id. at ¶ 24.)

Plaintiffs filed a Complaint in the Court of Common Pleas of Wyoming County on June 17, 2009. In that Complaint, Plaintiff sought a declaratory judgment finding that the lease signed by Mr. Eisenberger was an offer, not a valid and enforceable contract, which was revoked by Plaintiffs on March 28, 2008 (Count I). Plaintiffs also brought a claim to quiet title on the property (Count II). The case was removed to this Court by joint notice on July 21, 2009. (Doc. 1.) On December 7, 2009, Defendants filed a motion to compel arbitration. (Doc. 8.) On February 4, 2010, this Court issued a Memorandum and Order denying Defendants' Motion to Compel Arbitration. (Doc. 16.)

Defendants filed the instant motion on March 29, 2010, arguing that 1) this Court should stay the proceedings in the case at bar because the Supreme Court is likely to imminently issue a ruling on Granite Rock v. Int'l Brotherhood of Teamsters that will affect the outcome of this case, 2) "renew" its motion to compel arbitration because the Federal Arbitration Act ("FAA") should apply to the instant case, and 3) seeking an interlocutory appeal of the February 4, 2010 Order to the Third Circuit Court of Appeals. This motion has been fully briefed and is currently ripe for disposition.

DISCUSSION

1. Stay Pending the Supreme Court's Ruling in Granite Rock

The Supreme Court heard oral argument on the case of Granite Rock v. Int'l Brotherhood of Teamsters on January 19, 2010. (Doc. 17, Ex. C.) A reading of the transcript makes it clear that the issue of contract formation was not before the Supreme Court in that case and that both parties agreed that a valid contract had been formed. See Granite Rock Co. v. Int'l Brotherhood of Teamsters, No. 08-1214, 2010 WL 1716664, at *13-15 (Jan. 19, 2010).*fn1

In this Court's February 4, 2010 Order, the main issue regarding whether or not the case would be subject to arbitration was contract formation. The fact that Plaintiffs allege that there was never a contract formed is precisely why the Motion to Compel Arbitration was denied. The case before the Supreme Court will not resolve the issue regarding the proper forum for cases revolving around contract formation because both parties in Granite Rock have accepted that a valid contract was, in fact, formed. As such, it would be inappropriate to stay the proceedings in the case at bar to wait for the ...


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