February 19, 2014
ROBERT W. REED, Appellant
COLUMBIA GAS OF PENNSYLVANIA, INC., COLUMBIA NATURAL RESOURCES, INC., COLUMBIA GAS TRANSMISSION CORPORATION, AND PENNSYLVANIA LAND HOLDINGS COMPANY LLC., F/K/A PENNSYLVANIA LAND HOLDINGS CORPORATION
Appeal from the Judgment Entered May 17, 2012, in the Court of Common Pleas of Greene County Civil Division at No. 11 in Equity 2003
BEFORE: FORD ELLIOTT, P.J.E., OTT AND MUSMANNO, JJ.
FORD ELLIOTT, P.J.E.
This appeal arises from the granting of summary judgment below, in favor of the Columbia defendants-appellees, from the suit filed by plaintiff-appellant Reed ("Reed"), seeking injunctive relief to enforce an agreement to provide free gas to Reed's house. Finding no error, we affirm.
Reed's right to free gas traces from an ancient source. On April 20, 1900, Reed's predecessor, William Hoge, agreed to lease the gas interests underlying his farm to George E. Rice (recorded January 26, 1901). One of the terms of that lease provided that Hoge was entitled to have free gas for the use of his household from the well that was subsequently drilled.
On July 8, 1943, the free gas agreement was modified by William Hoge's successor, Samuel Hoge, and by Rice's successor, Manufacturers Light and Heat Company ("Manufacturers"). This new agreement limited the amount of free gas to 300, 000 cubic feet per year. The agreement also contemplated the construction of another well, but stipulated that the free gas would be provided "at present connection." At the time, gas was provided by a ten-inch gas transmission line owned by Manufacturers.
The Hoge property was subsequently subdivided such that the gas well was located on one 193-acre parcel of real estate and the Hoge house was on another 17-acre parcel. Robert and Lynn Hoover presently own the 193-acre parcel. Nonetheless, the right to free gas continued to be conveyed with the Hoge house. In 1995, Reed purchased the 17-acre parcel upon which the Hoge house existed, as well as the right to free gas.
In 1996, Columbia Natural Resources, Inc. ("CNR") was now the entity responsible for providing free gas to Reed, while Columbia Gas Transmission Corporation controlled the ten-inch gas line that supplied Reed. On August 20, 1996, CNR and Reed entered into a new agreement for the provision of free gas which included the following pertinent provisions:
(1) Applicant's right to receive gas is derived solely form [sic] the referenced lease, and the delivery of gas by Company to Applicant is not to be construed as a recognition of Applicant's right to be supplied with gas under any other condition or circumstance.
(3) Whether gas is delivered to Applicant hereunder directly from a gas well covered by the referenced lease, or in lieu thereof from a pipeline, Applicant hereby releases and discharges Company and Distribution Company from any and all claims arising in any way from the quality of the gas delivered hereunder, or from the use Applicant makes of the gas.
(6) Applicant hereby grants to Company an easement for a site, acceptable to Company, for the location of the company service line, meter set assembly, and building, as may be required, from which gas will be delivered hereunder.
AGREEMENT FOR DELIVERY OF FREE GAS AND OVERBURN GAS PROVIDED BY LEASE ("the 1996 Agreement"), 8/20/1996 at clauses 1, 3 (in pertinent part), and 6 (in pertinent part).
In 1999, CNR conveyed the gas lease to Nicole Energy. Although this agreement conveyed the obligation to provide free gas, the Columbia entities inadvertently continued to provide free gas to Reed. In the early 2000's, Nicole Energy conveyed its acquired gas leases and wells to Pennsylvania Land Holdings Corporation ("PLHC"), including that which affected Reed. In 2002, CNR notified PLHC that it was going to discontinue supplying free gas to Reed. The Columbia entities terminated gas service to Reed on September 25, 2003. These actions resulted in various lawsuits involving the Columbia entities, PLHC, the Hoovers, and Reed.
Of concern instantly, is a complaint in equity filed by Reed on October 6, 2003, against the Columbia entities and PLHC, seeking injunctive relief in the form of reconnecting a free gas supply and attendant damages.Following an evidentiary hearing, on October 15, 2003, the trial court granted Reed's requested relief as to PLHC directing PLHC to connect Reed to a source of free gas, but denying relief as to the Columbia entities. Reed appealed this decision, and on April 4, 2005, this court reversed. Reed v. Columbia Gas of PA, 876 A.2d 479 (Pa.Super. 2005) (unpublished memorandum), appeal denied, 586 Pa. 741, 891 A.2d 734 (2005). This court found that the order of October 15, 2003, only resolved the obligations of PLHC and the Columbia entities as to each other, but not as to Reed. This court found that because of the 1996 Agreement, Reed was in contractual privity with the Columbia entities. The court ruled that under the Restatement of Contracts (2d) § 318 (3) and comment d (1979), an obligor cannot assign its duties to another without the assent of the obligee. Thus, since Reed had not assented to the Columbia entities' assignment of its duties to others, Reed could compel them to provide free gas service. The court remanded for further proceedings to determine whether a preliminary injunction was proper as to the Columbia entities.
Subsequent to the trial court's initial ruling, PLHC provided Reed with a temporary source of gas, but also sought a long-term solution. This involved installing a transmission line over the property of the Hoovers which involved litigation between PLHC and the Hoovers. On December 7, 2006, the trial court entered an order continuing Reed's complaint in equity against the Columbia entities pending resolution of the PLHC-Hoover matter. The PLHC-Hoover litigation settled in 2010, with the result being that Reed received, and continues to receive, free gas through a pipeline across the Hoover property, provided by PLHC.
Despite the fact that he was receiving gas, in January of 2011, Reed filed a motion seeking resolution of his rights as to the Columbia entities. Apparently, Reed was dissatisfied with the quality of the gas he was receiving from PLHC, which came directly from a well, as opposed to the residential grade gas he had been receiving from his former connection with the ten-inch transmission line controlled by Columbia Gas Transmission Corporation. On December 15, 2011, the Columbia entities filed a motion for summary judgment. The trial court found that Reed could no longer satisfy the requirements for injunctive relief and, on May 17, 2012, granted the Columbia entities summary judgment in their favor. This timely appeal followed.
Reed raises the following issues on appeal:
Did the trial court err in granting summary judgment determining:
(1) that lessor had no right to enforce the express contractual provisions of his oil and gas lease and lease amendment providing for free gas "at the present connection" at a company line near to his residence memorialized in a lease amendment in 1943 and confirmed by agreement in 1996, and
(2) that he [sic] matter was moot where the appellee gas company wrongfully cut off the homeowner's gas connection, the court without appellant having opportunity to be heard in a prior proceeding ordered the lessee's assignee to connect the homeowner directly to the well, then subsequently found that there was no right of way easement from the well to the Reed residence for such a pipeline connection compelling the assignee and adjacent landowner to reach an agreement without benefit to the homeowner?
Reed's brief at 7.
We begin by noting our well-settled standard of review. "[O]ur standard of review of an order granting summary judgment requires us to determine whether the trial court abused its discretion or committed an error of law[, ] and our scope of review is plenary." Petrina v. Allied Glove Corp., 46 A.3d 795, 797–798 (Pa.Super.2012) (citations omitted). "We view the record in the light most favorable to the nonmoving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party." Barnes v. Keller, 62 A.3d 382, 385 (Pa.Super.2012), citing Erie Ins. Exch. v. Larrimore, 987 A.2d 732, 736 (Pa.Super.2009) (citation omitted). "Only where there is no genuine issue as to any material fact and it is clear that the moving party is entitled to a judgment as a matter of law will summary judgment be entered." Id.
Cadena v. Latch, 78 A.3d 636, 638-639 (Pa.Super. 2013).
Although Reed's argument is couched as two issues, it appears that he is seeking but one objective on appeal: re-attachment of his residence to his original connection to the ten-inch transmission line controlled by the Columbia entities because he is unhappy with the quality of the gas he is receiving from the PLHC gas well line. We find that Reed has no right to connect to the ten-inch line.
The central basis for Reed's claim is the 1943 amendment to the original 1900 gas lease that provided that the house would be supplied gas "at present connection"; in other words, the ten-inch line. Reed, however, abrogated this right when he entered into the 1996 Agreement.
The 1996 Agreement references only the 1900 lease. Under clause 1 of the 1996 Agreement, Reed agreed that his right to receive gas was derived solely from the referenced 1900 lease. No mention is made of the 1943 amendment. More importantly, under clause 6, Reed gave an easement to CNR to locate his connection anywhere on his property, while under clause 3, he agreed to accept gas from either a pipeline or a well. Both of these provisions are in direct conflict with the 1943 amendment's provision that gas be supplied "at present connection, " and clearly indicate that Reed was intentionally abandoning any right for service "at present connection." Finally, under clause 3, Reed also surrendered any right to any quality of gas. Thus, even if the Columbia entities were directed to supply Reed with gas, they could fulfill their obligation under the 1996 Agreement merely by reimbursing PLHC for the gas it is presently supplying Reed, and Reed would receive the same gas at the same connection location as he is now.
Reed's complaint sought injunctive relief against either the Columbia entities or PLHC under the 1900 lease (as modified by the 1996 Agreement). Pursuant thereto, PLHC was directed to supply Reed with gas and PLHC has done so, connecting his house to a gas well. Reed's complaint has been satisfied because he has received the relief requested. Moreover, under the 1996 Agreement, Reed could obtain no greater relief from the Columbia entities. The trial court properly entered summary judgment because there is no longer any controversy at issue; Reed's complaint has been satisfied.
As a general rule, an actual case or controversy must exist at all stages of the judicial process, or a case will be dismissed as moot. An issue can become moot during the pendency of an appeal due to an intervening change in the facts of the case or due to an intervening change in the applicable law. In that case, an opinion of this Court is rendered advisory in nature. An issue before a court is moot if in ruling upon the issue the court cannot enter an order that has any legal force or effect.
This Court will decide questions that otherwise have been rendered moot when one or more of the following exceptions to the mootness doctrine apply: 1) the case involves a question of great public importance, 2) the question presented is capable of repetition and apt to elude appellate review, or 3) a party to the controversy will suffer some detriment due to the decision of the trial court.
Orfield v. Weindel, 52 A.3d 275, 277-278 (Pa.Super. 2012), quoting Warmkessel v. Heffner, 17 A.3d 408, 412-413 (Pa.Super. 2011), appeal denied, 613 Pa. 671, 34 A.3d 833 (2011).
Reed asserts that certain controversies still exist. First:
Robert Reed does not know, if there is a disruption in the pipeline due to some disputed [sic] between Hoover and PLHC, an act of god, or an accident damaging the pipeline that runs from the well through Hoover to his residence, whether he has a connection at the Columbia pipeline. There has been no legal determination that Reed has an easement or right to keep his house connected to the well through the Hoover properties.
Reed's brief at 21. Reed's complaint did not raise these issues. It sought solely for a determination whether the Columbia entities and/or PLHC was obligated to provide him gas, and if so, to direct them to do so. If service is disrupted, it is the obligation of PLHC to cure the disruption. Reed does not have an alternative connection to the Columbia pipeline, and it is irrelevant how PLHC obtained its connection to Reed over the Hoovers' land. These are not controversies raised by Reed's complaint.
Robert Reed does not know if the assignment of the lease to Pennsylvania Land Holdings Corporation of all of the oil and gas above the he [sic] Devonian Onondaga limestone deep gas formations reserves some interest to Columbia Natural Resources, Inc. If Columbia claims an interest then it cannot pick and choose what portions of the lease it wants to keep in effect.
Reed's brief at 21. Simply stated, Reed's lawsuit did not ask the court to make this determination. Reed sought only to determine whether he was entitled to a free gas connection and by which entity.
Reed had, and should have now, the unique and valuable privilege and asset. A "present connection" with a quality of gas maintained at the connection serving him and others so long as there is a producing well on the land held by the lease. He should have the same without the burden of a pipeline through his property and through his neighbor's property and the burden of the maintenance of such pipeline.
Reed's brief at 21-22. Reed gave up all these rights under the 1996 Agreement. Reed surrendered his former "present connection" and gave an easement to lay transmission lines anywhere on his property. More importantly, Reed's complaint did not request a determination of these matters.
Reed demanded in his complaint damages for the wrongful disconnection of the gas and should have a remedy even if there is no injunctive relief.
Reed's brief at 22. When Reed was asked during his deposition what damages he was seeking under his lawsuit, he stated that they arose from the difference in the quality of the gas he was now receiving, as opposed to the quality of the "residential grade" gas he had previously been receiving from the Columbia pipeline. (Deposition, 8/12/11 at 15-18.) As previously noted, Reed surrendered any right to damages arising from the quality of the gas under clause 3 of the 1996 Agreement. Thus, Reed is entitled to no such damages and no controversy exists.
Finally, Reed argues:
Morevoer [sic], the question involved is capable of repetition but likely to evade review. That question is whether the lessee by assignment of the lease may modify the terms of the lease benefitting the landowner without the landowner's assent. If Columbia can do so for this group of one, ten, twenty or forty landowners in Greene County, it will do so for the same number or more in other Pennsylvania counties. There is a substantial question as to whether the original lessee by assignment of the lease can avoid mandatory injunctive relief or assessment of damages for its willful breach of contract. That corporations such as Columbia Natural Resources, Inc. and coal company affiliated Pennsylvania Land Holdings Company can set up disparagement of the rights of residential homeowners to the utility of the free gas connection contracted under their lease should not be protected by this the Superior Court.
Reed's brief at 22 (bolding emphasis in original, underlining emphasis added). We have underlined the predicate of Reed's argument because it is manifestly incorrectly framed. Reed's rights under his lease were not altered in the least by the assignment of the lease by the Columbia entities to Nicole Energy, and then to PLHC. Rather, Reed's rights under his lease were modified, with his full consent, in the 1996 Agreement with CNR. Therein, Reed gave up any right under the 1943 amendment to have gas supplied "at present connection, " but instead gave an easement to have the connection established anywhere. Therein, Reed also agreed to accept well gas and gave up any claim as to the quality of the gas received. Reed cannot claim that a controversy exists here because his underlying predicate is false.
In sum, as per this court's prior decision in this case, the court below could have directed either the Columbia entities or PLHC to reconnect Reed to a supply of free gas. The court chose to impose that duty on PLHC, presumably because it is the current assignee of the lease. PLHC has reconnected Reed to a free gas supply, and the available relief requested by his complaint has been satisfied. Reed is not entitled to anything more from either the Columbia entities or PLHC, and nothing remains in controversy. The trial court properly granted summary judgment.
Order entering summary judgment affirmed.