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Hildebrand v. EQT Production Co.

Superior Court of Pennsylvania

June 8, 2017

JON C. HILDEBRAND AND ELLEN L. HILDEBRAND, HIS WIFE Appellants
v.
EQT PRODUCTION COMPANY; EQUITRANS, L.P., BRYAN A. LONG AND COURTNEY R. LONG, HIS WIFE, AND MAX W. SCHINKOVEC Appellees

         Appeal from the Order entered June 24, 2016 In the Court of Common Pleas of Greene County Civil Division at No: 922 AD 2012.

          BEFORE: OLSON, STABILE, and STRASSBURGER, JJ.[*]

          OPINION

          STABILE, J.

         Appellants, Jon C. Hildebrand and Ellen L. Hildebrand (together "Hildebrand" or "Appellants"), appeal from the order entered on June 24, 2016 in the Court of Common Pleas of Greene County, granting summary judgment in favor of Max Schinkovec ("Schinkovec") and EQT Production Company and Equitrans, L.P. (together "EQT") in this declaratory judgment action involving oil and gas leases. The trial court's June 24, 2016 order was based in significant part on two prior orders and opinions from the same court dated May 20, 2014 (denying Appellants' motion for summary judgment) and January 29, 2015 (granting summary judgment in favor of Schinkovec and EQT and dismissing Counts I and II of Appellants' three- count complaint).[1] The claims against Appellees, Bryan A. Long and Courtney R. Long (together "Long"), were also dismissed by virtue of the trial court's orders. Following considered review, we reverse and remand.

         In this appeal from the grant of summary judgment, Appellants present five issues for our consideration:

1. Did the Honorable Trial Judges err as a matter of law or abuse their discretion in concluding that the Lease Modifications amended and nullified the Non-Apportionment Language contained in the Hupp Lease, thereby essentially converting it into an "apportionment lease, " by in particular, failing to interpret Paragraph 5 of the Hildebrand Modification as a "lesser interest clause" and instead requiring that production royalties generated from the Hupp lease be paid to all owners of the oil and gas interests encumbered by the Hupp Lease in proportion of their interests?
2. Did the Honorable Trial Judges err as a matter of law or abuse their discretion by holding that the Lease Modifications nullified/amended the Non-Apportionment Language contained in the Hupp lease given that the Long and Schinkovec Modifications did not contain language similar to Paragraph 5 of the Hildebrand Modification?
3. Did the Honorable Trial Judges, particularly Judge Nalitz pursuant to his misunderstanding of the makeup of the Unit and the nature of the Hildebrands' claims, err as a matter of law or abuse their discretion in concluding that the Lease Modifications amended the Non-Apportionment Language contained in the Hupp Lease and required a share of the production royalties to be apportioned to Schinkovec, given that the Schinkovec oil and gas tract was not, and has not ever been "pooled" in the Unit?
4. Did the Honorable Trial Judges err as a matter of law or abuse their discretion in granting EQT and Schinkovec's Motions for Partial Summary Judgment on the basis of the law of the case doctrine and Judge Nalitz's flawed Opinion and Order of May 24, 2010?
5. Upon ruling that the Lease Modifications amended and nullified the Non-Apportionment Language contained in the Hupp Lease, did the Honorable Trial Judges err as a matter of law or abuse their discretion by applying Pennsylvania's "apportionment rule, " as stated in Wettengel v. Gormley, 28 A. 934 (Pa. 1894), to the subject horizontal wells drilled by EQT?

         Appellants' Brief at 8-10. Because Appellants' issues are interrelated, we shall consider them together.

         As this Court has recognized:

When reviewing a trial court's grant of summary judgment, our standard and scope of review are as follows:
Our scope of review is plenary, and our standard of review is the same as that applied by the trial court. Our Supreme Court has stated the applicable standard of review as follows: An appellate court may reverse the entry of a summary judgment only where it finds that the lower court erred in concluding that the matter presented no genuine issue as to any material fact and that it is clear that the moving party was entitled to a judgment as a matter of law. In making this assessment, we view the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. As our inquiry involves solely questions of law, our review is de novo.
Reinoso v. Heritage Warminster SPE, LLC, 108 A.3d 80, 84 (Pa. Super. 2015) (en banc) (additional citations omitted). With respect to the denial of summary judgment, "[w]e review the trial court's denial of summary judgment for an abuse of discretion or error of law." Ramsay v. Pierre, 822 A.2d 85, 90 (Pa. Super. 2003).

Birdie Associates, L.P. v. CNX Gas Company, LLC, 149 A.3d 367, 371 (Pa. Super. 2016) (quoting Bezjak v. Diamond, 135 A.2d 623, 627 (Pa. 2016)).

         The parties do not suggest that there are issues of material fact in dispute here. Rather, Appellants challenge the trial court's interpretation of various leases and lease modifications entered into between lessee EQT (and its predecessor[2]) and lessors Hildebrand, Schinkovec and Long. The three lessors own neighboring properties that were once owned by A.H. Hupp and Emma M. Hupp and were leased to EQT in 1928 ("Hupp Lease"). Ultimately, Hildebrand filed a declaratory judgment action asking the trial court to declare that EQT had wrongly paid royalties to Schinkovec. Hildebrand also requested an accounting to determine the sums improperly paid or placed in a suspense account pending resolution of the ...


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