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David and Donna Schell, and v. Oxy Usa Inc

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS


March 26, 2013

DAVID AND DONNA SCHELL, AND RON OLIVER, INDIVIDUALLY, AND AS REPRESENTATIVE PARTIES ON BEHALF OF SURFACE OWNERS, PLAINTIFFS,
v.
OXY USA INC., DEFENDANT.

The opinion of the court was delivered by: J. Thomas Marten, Judge

MEMORANDUM AND ORDER

The court has before it the plaintiffs' Motion for Summary Judgment (Dkt. 143). The court grants plaintiffs' Motion for the following reasons.

In its Order dated September 29, 2011 (Dkt. 110), the court granted the plaintiff class summary judgment. The court first determined that the leases providing for "free gas" are ambiguous as to what quality of gas plaintiffs are entitled to receive. But then the court noted that the leases provided that the gas is to be used "for stoves and inside lights in the principal dwelling house." Ultimately, because of this specification or restriction, the court concluded that the free gas provided by OXY must "be of such a nature that it is suitable for domestic use." The court entered judgment on behalf of the plaintiffs. See Dkt. 111.

On October 27, 2011, OXY filed its Motion to Alter Judgment (Dkt. 116), arguing that this court improperly granted summary judgment to the plaintiffs after determining that the free gas clauses at issue were ambiguous. The court vacated its prior Order on September 10, 2012, acknowledging that because it had found the free gas clauses to be ambiguous, the court should have provided OXY an opportunity to discover extrinsic evidence. See Dkt. 132. The court's Order granted the parties time to discover "any extrinsic evidence regarding the contracting parties' intentions concerning what quality of gas plaintiffs are entitled to receive under the leases."*fn1 As the court noted, "it is doubtful that any such evidence exists. Many of the leases were entered 70 years ago and the individual parties to those leases are likely deceased." Dkt. 132, p. 6 n 2. The court also stated that evidence of rural homeowners' use or expectation of the free gas would only be "helpful if it was evidence concerning the specific homeowners who entered the leases, not 'rural homeowners' in general. Id.

The court allowed the parties to resubmit motions for summary judgment, stating that "[i]f the court finds that the extrinsic evidence does not alter its previous conclusion, or that no extrinsic evidence exists, it will reinstate its initial finding as provided in Dkt. No. 110." Id. The plaintiffs timely re-filed their Motion for Summary Judgment on January 15, 2013.

Summary judgment is appropriate to resolve an ambiguous contract only when extrinsic evidence supports only one conclusion or if no extrinsic evidence exists. See In re Universal Serv. Fund Tel. Billing Practices Litig., No. 02-1468, 2008 WL 3850695, at *3 (D. Kan. Aug. 15, 2008). The parties have not submitted any extrinsic evidence surrounding the contracting parties' intentions.*fn2 There is no extrinsic evidence regarding the contracting parties' intentions concerning what quality of gas plaintiffs are entitled to receive under the leases. Accordingly, the court reinstates its initial finding as provided in its Order dated September 29, 2011 (Dkt. 110).

IT IS THEREFORE ORDERED this 26th day of March, 2013, that the plaintiffs' Motion for Summary Judgment (Dkt. 143) is granted.

IT IS ALSO ORDERED that OXY's Motion to Decertify Class Action (Dkt. 145) and plaintiff's Motion to Strike (Dkt. 146) are denied as moot.

J. Thomas Marten


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