United States District Court, M.D. Pennsylvania
WILLIAM A. CHAMBERS, et al., Plaintiffs,
CHESAPEAKE APPALACHIA, L.L.C. and STATOIL USA ONSHORE PROPERTIES INC., Defendants.
Richard Caputo, United States District Judge
before me are a Motion to Dismiss (Doc. 10) filed by
Defendant Statoil USA Onshore Properties Inc. (“Statoil
Properties”) and a Motion to Dismiss (Doc. 11) filed by
Defendant Chesapeake Appalachia, L.L.C.
(“CALLC”). Plaintiffs commenced this action
alleging that Statoil Properties and CALLC violated the terms
of the parties' oil and gas leases. Statoil Properties
and CALLC have moved to dismiss Plaintiffs' claims for,
inter alia, failing to comply with the condition
precedent in the leases requiring Plaintiffs to provide
Defendants with written notice and an opportunity to cure any
alleged breaches prior to commencing litigation. For the
reasons that follow, the motions to dismiss will be granted
in this action are William A. Chambers, Joseph B. Chambers,
Jeanne C. Faux, Barbara C. Henning, Loren Day, Lori A. Day,
Samantha Scholz, John D. Witter, and Richard W. Witter
(collectively, “Plaintiffs”). (See
Compl., ¶¶ 12-21). Plaintiffs are all Lessors of
properties pursuant to the terms of Oil and Gas Leases (the
“Leases”). (See id. at ¶¶
22-27). CALLC and Statoil Properties are now the Lessees
under the terms of the Leases. (See id.).
filed their Complaint in the Court of Common Pleas of Wyoming
County, Pennsylvania against Statoil Properties and CALLC on
January 24, 2018. (See Doc. 1-1). The Complaint sets
forth the following causes of action: (1) Breach of Contract
- 160 Acre Well Density Clause Violation (Count I); (2)
Breach of Contract - Specific Performance or Termination
(Count II); (3) Breach of Contract (In the Alternative) - Bad
Faith Pooling (Count III); (4) Breach of Contract - Habendum
Clause Violation (Count IV); (5) Breach of Contract -
Post-Production Cost Deduction Violation against CALLC only
(Count V); (6) Breach of Contract - Affiliate Transfer
Violation against Statoil Properties only (Count VI); and (7)
Breach of Implied Covenants to Develop and Operate Lesehold
for the Mutual Benefit of the Lessor and Lessee and Duty to
Market against Statoil Properties only (Count VII).
February 21, 2018, CALLC, with the consent of Statoil
Properties, removed the action to this Court. (See
Doc. 1, ¶ 30; see also id.,
and Statoil Properties both moved to dismiss the Complaint on
March 21, 2018. (See Docs. 10-11,
generally). Among other grounds for dismissal, CALLC
and Statoil Properties both contend that Plaintiffs'
claims should be dismissed because Plaintiffs failed to plead
that they satisfied the written notice requirements of the
Leases, which Defendants characterize as a condition
precedent to the commencement of litigation. (See
timely filed a brief in opposition to the motions to dismiss.
(See Doc. 20, generally). Therein,
Plaintiffs dispute that the Complaint is subject to dismissal
for failure to comply with the notice provision of the
Leases. (See Doc. 20, 9-13). CALLC and Statoil
Properties timely filed replies thereto. (See Docs.
23-24, generally). The motions to dismiss are thus
fully briefed and ripe for disposition.
Rule of Civil Procedure 12(b)(6) provides for the dismissal
of a complaint, in whole or in part, for failure to state a
claim upon which relief can be granted. See Fed. R.
Civ. P. 12(b)(6). “Under the ‘notice
pleading' standard embodied in Rule 8 of the Federal
Rules of Civil Procedure, a plaintiff must come forward with
‘a short and plain statement of the claim showing that
the pleader is entitled to relief.'” Thompson
v. Real Estate Mortg. Network, 748 F.3d 142, 147 (3d
Cir. 2014) (quoting Fed.R.Civ.P. 8(a)(2)).
resolving a Rule 12(b)(6) motion, “a court must
consider no more than whether the complaint establishes
‘enough facts to raise a reasonable expectation that
discovery will reveal evidence of the necessary elements'
of the cause of action.” Trzaska v. L'Oreal
USA, Inc., 865 F.3d 155, 162 (3d Cir. 2017) (quoting
Connelly v. Lane Constr. Corp., 809 F.3d 780, 789
(3d Cir. 2016)). In reviewing the sufficiency of a complaint,
a court must take three steps: (1) identify the elements of
the claim; (2) identify conclusions that are not entitled to
the assumption of truth; and (3) assume the veracity of the
well-pleaded factual allegations and determine whether they
plausibly give rise to an entitlement to relief. See
Connelly, 809 F.3d at 787 (citations omitted). “To
survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d
and Statoil Properties move for dismissal of claims based on
Plaintiffs' failure to provide written notice and an
opportunity to cure the alleged breaches of the Leases prior
to commencing this action. Paragraph 16 of the Leases
In the event Lessor considers that Lessee has not complied
with any of its obligations hereunder, either express or
implied, Lessor shall notify Lessee in writing setting out
specifically in what respects Lessee has breached this
contract. Lessee shall then have thirty (30) days after
receipt of said notice within which to meet or commence to
meet all or any part of the breaches alleged by Lessor. The
service of said notice shall be precedent to the bringing of
any action by Lessor on said lease for any cause, and no such
action shall be brought until the lapse of thirty (30) days
after service of such notice on Lessee. Neither the service
of said notice nor the doing of any acts by ...