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Zavanna v. Gadeco, et al.

Docket No. 20220265
Oral Argument: Monday, March 13, 2023 10:45 AM

Docket Info

Title
Zavanna, LLC, Plaintiff and Appellee
v.
GADECO, LLC; Continental Resources, Inc.; Defendants and Appellants
and
all other persons unknown claiming any estate
or interest in, or line or encumbrance upon,
the property described in the Complaint; Defendants
Case Type
CIVIL APPEAL : OIL, GAS AND MINERALS
Appeal From
Case No. 2019-CV-01678
Northwest Judicial District, Williams County
Joshua B. Rustad
2023 ND 142994 N.W.2d 133
Oral Argument 3/13/2023

Highlight

The plaintiff bears the burden of proof on its quiet title claim. Where the plaintiff owns a top lease and the defendant owns a bottom lease covering the same oil and gas leasehold interest, the plaintiff bears the burden to prove the bottom lease terminated by its own terms. If the bottom lease contains a cessation of production clause, the plaintiff must prove production ceased for the specified period.

Oil and gas leases are interpreted in the same manner as other contracts. When left undefined, “production” in a savings clause means production in paying quantities, which generally requires a court to consider whether the well yielded a profit over operating costs over a reasonable period of time. As a matter of law, a de minimis amount of production does not equate to production in paying quantities. Where profitability of the well is not at issue so as to affect when production in paying quantities ceased, cessation commences on the first day of no production and ends on the last day of no production. If a total cessation of production exceeds the time period established in the lease’s cessation of production clause, the lease terminates unless it provides conditions preventing termination. In this case, a total cessation of production, including de minimis amounts, triggered the cessation of production clause requiring the well operator to timely commence reworking operations.

Reworking operations must be intimately connected with resolving the physical difficulty that caused the well to cease production, and the well operator must exercise due diligence and make a bona fide effort to restore production as soon as possible. Minimal preparatory steps, such as diagnosing the failure and ordering parts, do not constitute commencement of reworking operations.

An express force majeure clause in a contract must be accompanied by proof that the failure to perform was proximately caused by a contingency and that, in spite of skill, diligence, and good faith on the promisor’s part, performance remains impossible or unreasonably expensive. The party relying on a force majeure clause to excuse performance bears the burden of proving that the event was beyond its control and without its fault or negligence. The party relying on the force majeure clause must show its performance was actually hindered or prevented by the force majeure event, not just potentially or hypothetically hindered or prevented.


Briefs

Filing Date Description
12/27/2022 APPELLANT BRIEF (CONTINENTAL) View
01/04/2023 AMENDED APPELLANT BRIEF (GADECO) View
02/10/2023 APPELLEE BRIEF View
02/24/2023 REPLY BRIEF (CONTINENTAL) View
02/24/2023 REPLY BRIEF (GADECO) View

Counsel

Party Type Name
APPELLANT PRIVATE PRACTICE Not Licensed in ND - 00002
APPELLEE PRIVATE PRACTICE Not Licensed in ND - 00002
APPELLEE PRIVATE PRACTICE Not Licensed in ND - 00002
APPELLANT PRIVATE PRACTICE Not Licensed in ND - 00002
APPELLANT PRIVATE PRACTICE Not Licensed in ND - 00002
APPELLANT PRIVATE PRACTICE Not Licensed in ND - 00002
APPELLANT PRIVATE PRACTICE Diane Marie Wehrman - 06421
APPELLANT PRIVATE PRACTICE James Espy Dallner - 07003
APPELLEE PRIVATE PRACTICE Nicholas C. Grant - 07102
APPELLANT PRIVATE PRACTICE Colleen E. McKnight - 09150
APPELLEE PRIVATE PRACTICE Amber Marie Moore - 09576

(Note: Attachments may not be available for recently filed cases and/or confidential documents.)

Seq. # Filing Date Description Attachment
1 09/08/2022 NOTICE OF APPEAL : 09/08/2022 View
2 09/08/2022 ORDER FOR TRANSCRIPT : 09/12/2022 View
3 09/12/2022 Filing fee rec'd
4 09/12/2022 ANNOUNCED DISQUALIFICATION : VandeWalle, Gerald W.
5 09/12/2022 NOT. OF FILING NOT. OF APPEAL AND PROOF OF SERV. View
6 09/12/2022 Notice Servied on Colleen E. McKnight, Charles M. Seely, Robert T. Slovak, Steven C. Lockhart,
7 09/12/2022 Diane M. Wehrman, James E. Dallner, Phillip S. Lorenzo, Nicholas C. Grant, David R. Little,
8 09/12/2022 Deva A. Solomon & Amber M. Moore
9 09/29/2022 Affidavit of Steven C. Lockhart in support of Admission to Practice Pro Hac Vice View
10 09/29/2022 Affidavit of Phillip S. Lorenzo in support of Admission to Practice Pro Hac Vice View
11 09/29/2022 Affidavit of Charles M. Seeley in support of Admission to Practice Pro Hac Vice View
12 09/29/2022 Affidavit of Robert T. Slovak in support of Admission to Practice Pro Hac Vice View
13 09/30/2022 Affidavit of Deva A. Solomon in support of Admission to Practice Pro Hac Vice View
14 09/30/2022 Affidavit of David R. Little in support of Admission to Practice Pro Hac Vice View
15 09/30/2022 Notice of Appearance of Amber M. Moore as in State Counsel View
16 10/06/2022 ELEC. RECORD ON APPEAL DATED OCTOBER 5, 2022 (ENTRY NOS.1-847, 850-869; NOT SENT. 848 & 849) View
17 11/04/2022 All Transcripts Filed in Record
18 11/14/2022 1ST ELEC. SUPP. RECORD ON APPEAL DATED NOVEMBER 12, 2022 (ENTRY NOS. 870-876) View
19 11/29/2022 MOT. EXT/TIME APPELLANT BRIEF View
20 11/29/2022 MOT. EXT/TIME APPELLEE BRIEF
21 11/29/2022 MOT. EXT/TIME REPLY BRIEF
22 12/02/2022 ACTION BY CLERK (MAT) - Granted : 12/28/2022
23 12/02/2022 ACTION BY CLERK (MAE) - Granted : 02/10/2023
24 12/02/2022 ACTION BY CLERK (MRY) - Granted : 02/24/2023
25 12/02/2022 MOTION FOR ADDITIONAL PAGES (CONTAINED IN MOTION FOR EXTENSION OF TIME)
26 12/02/2022 ACTION BY CLERK (principle briefs granted 45 pages, reply brief 15 pages) - Granted
27 12/27/2022 APPELLANT BRIEF (CONTINENTAL) View
28 12/27/2022 Oral Argument Request by Appellant (Continental)
29 12/29/2022 Non-compliant ATB-Gadeco rec'd; given until 01/06/23
30 01/04/2023 AMENDED APPELLANT BRIEF (GADECO) View
31 01/04/2023 Oral Argument Request by Appellant (Gadeco)
32 01/04/2023 Rec'd compliant Gadeco brief
33 01/04/2023 Rec'd corrections to ATB (Continental) (spacing and reference)
34 01/06/2023 Rec'd 3 copies of ATB - Gadeco from CSD
35 01/06/2023 Rec'd 3 copies of ATB - Continental from CSD
36 02/10/2023 APPELLEE BRIEF View
37 02/15/2023 Rec'd corrections to AEB (font size and footnotes)
38 02/17/2023 Rec'd 4 copies of AEB from CSD
39 02/23/2023 NOTICE OF ORAL ARGUMENT SENT
40 02/23/2023 Intent to Particpate in Oral Argument by Appellee View
41 02/24/2023 REPLY BRIEF (CONTINENTAL) View
42 02/24/2023 REPLY BRIEF (GADECO) View
43 02/28/2023 Rec'd 4 copies of RYB (Continental) from CSD
44 03/06/2023 Rec'd 4 copies of RYB (Gadeco) from CSD
45 03/13/2023 APPEARANCES: Colleen E. McKnight; Steven C. Lockhart; James E. Dallner; Deva A. Solomon;
46 03/13/2023 Nicholas C. Grant
47 03/13/2023 ARGUED: James E. Dallner; Colleen E. McKnight; Deva A. Solomon;
48 03/13/2023 ORAL ARGUMENT WEBCAST
49 08/02/2023 DISPOSITION
50 08/02/2023 UNANIMOUS OPINION : Tufte, Jerod E. View
51 08/02/2023 Judgment View
52 08/02/2023 Costs on appeal taxed in favor of Appellee
53 08/24/2023 MANDATE