Merle E. Cade v. South Coast Oil Corporation and Energy Development Corporation
Published: Nov. 30, 2004 | Result Date: Sep. 29, 2004 | Filing Date: Jan. 1, 1900 |Case number: 02CC12708 Bench Decision – $0
Judge
Court
Orange Superior
Attorneys
Plaintiff
Allan E. Ceran
(Burke Williams & Sorensen LLP)
Experts
Plaintiff
Richard J. Miller
(technical)
Defendant
Sherwin D. Yoelin
(technical)
Facts
In the subject suit, the plaintiff sought an order of the court declaring that the oil and gas lease that encumbered his property had terminated because the defendant operators had failed to pay royalties after having received notice that the royalties were past due and because the oil had ceased to produce oil in "paying quantities." The oil and gas lease required the defendants to pay royalties once every month for the preceding month. By March 21, 2000, the defendants had not made any royalty payments since December 2000. The plaintiff gave the defendants written notice to cure their default within 90 days, as provided by the lease. They did not do so. In addition, an oil and gas lease had been entered into in 1954. It had a 20-year initial term which was to extend so long as oil was produced in paying quantities. In January 2001, the casing of the oil well broke and the defendants' efforts to repair the well were unsuccessful. By the time of the trial, the well had not been in operation for over three and a half years. The defendants had not received any revenue from the well during that time and had incurred considerable expenditure.
Settlement Discussions
The plaintiff offered to pay the defendants a small sum to quit claim their interest to the plaintiff. The defendants did not respond.
Result
The court found for the plaintiff. It held that the lease had terminated for two independent reasons - the failure to cure the default in the payment of royalties and the failure to produce oil in paying quantities. It issued its decision from the bench on Sep. 7, 2004 and it entered judgment in favor of the plaintiff on Sep. 29, 2004.
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