Key Defensive Strategies to Common Law Claims (Surface Estate Owner and Neighboring Property Owner)

Michael Goldman
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An accomplished litigator representing his clients in complex environmental disputes throughout the country.

The duties owed by an oil and gas operator to the surface estate owner are much narrower than those owed to a neighboring property owner.  In Texas, when the mineral and surface estates are severed, the mineral estate is the dominant estate.[1]   The execution of a mineral lease typically not only severs the minerals from the surface but also creates dominant and servient estates.[2]  The entity that owns the minerals enjoys the dominant estate.[3]  Ownership of the dominant estate carries with it the right to enter and extract the minerals and all other rights as are necessary for getting and enjoying the minerals.[4]  Incident to the right to extract is the right to explore.[5]  If in pursuing these rights, the servient estate is susceptible to use in only one manner, then the owner of the dominant estate may pursue that use irrespective of whether it results in damage to the surface.[6]  In other words, if particular damage to the surface estate cannot reasonably be avoided in legitimately pursuing the rights of the dominant estate, the owner of the dominant estate is not liable for the damage.[7]

Start where you are. Use what you have. Do what you can.” Arthur Ashe

Thus, the mere fact of damage to the surface does not equate to unreasonable conduct.[8]  Instead, it is incumbent upon the surface owner to establish that the dominant estate owner failed to use reasonable care in pursuing its rights or that the rights could have been pursued through reasonable alternate means sufficient to achieve the goal desired but without the damage.[9]  Accordingly, the servient estate owner must prove that its opponent failed to act reasonably given the correlative rights and liabilities involved.[10]  However, these same standards are not applicable to neighboring property owners who also claim that their property has been impacted by an oil and gas operator.  Accordingly, the status of the plaintiff as either a surface estate owner or neighboring property owner could vastly change the duties owed to him.

In Teel v. Chesapeake Appalachia, LLC, the surface estate owner claimed that Chesapeake caused damage to plaintiffs’ land by depositing drilling waste and other material in pits on plaintiffs’ property.[11] The defendant moved for summary judgment, arguing that Chesapeake obtained broad rights to use the property through the lease, and that the West Virginia Department of Environmental Protection (“WVDEP”) permit recognized that its actions were reasonable and necessary.[12]

The court first noted that it is well settled in West Virginia that one who owns subsurface rights to a parcel of property has the right to use the surface of the land in such a manner and with such means as would be fairly necessary for the enjoyment of the subsurface estate.[13]  In addition, the court recognized that Chesapeake’s decision to fill the pits on the Teel’s property was an act contemplated by West Virginia law.[14] However, permits do not provide immunizations from common law standards.[15]  Nonetheless, the court stated that the WVDEP permits can, as they did in this case, serve to inform the court of the practices of the oil and gas industry in West Virginia.[16]  The court then relied upon earlier precedent and held that the mere fact that Chesapeake eventually migrated to a closed-loop system does not render its prior use of pits unreasonable, especially given the West Virginia law currently in place regulating the use of the pits.[17] Based upon West Virginia law and the facts in the case, the court then found that the plaintiffs’ trespass claim failed.[18]

Similarly, in Fiorentino v. Cabot Oil & Gas Corp., the defendant argued that under Pennsylvania law, it, as the owner of the dominant mineral estate, had the right to burden the servient surface estate in whatever manner reasonably necessary for the development of the minerals.[19]  In a related case, an operator sought a declaratory judgment that a lease granted it the right to use the surface for disposal of waste water produced by hydraulic fracturing by virtue of its subsurface rights and that the company had in essence an implied easement to do so.[20]   With respect to subsurface rights, the court held that pursuant to the deed the operator owned the rights to the oil and gas associated with the subject property, but had no rights to the space occupied once the oil and gas was depleted.[21]  With respect to surface rights, the operator argued that it had an implied right to use of the surface to utilize its disposal well.[22]  The court held that although the operator had an implied right to use the surface to take away the subterranean minerals, such implied right did not extend to perpetual use of the surface for purposes other than accessing those minerals.[23]   The court then granted summary judgment against the operator with respect to its claims for declaratory judgment.[24]

Key Points

  • The duties owed by an oil and gas operator to the surface estate owner are much narrower than those owed to a neighboring property owner. 
  • In Texas, when the mineral and surface estates are severed, the mineral estate is the dominant estate.   
  • Ownership of the dominant estate carries with it the right to enter and extract the minerals and all other rights as are necessary for getting and enjoying the minerals.  
  • If particular damage to the surface estate cannot reasonably be avoided in legitimately pursuing the rights of the dominant estate, the owner of the dominant estate is not liable for the damage.
  • Thus, the mere fact of damage to the surface does not equate to unreasonable conduct.
  • The servient estate owner must prove that its opponent failed to act reasonably given the correlative rights and liabilities involved.  
  • These same standards are not applicable to neighboring property owners who also claim that their property has been impacted by an oil and gas operator. 
  • Accordingly, the status of the plaintiff as either a surface estate owner or neighboring property owner could vastly change the duties owed to him.
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[1] Acker v. Guinn, 464 S.W.2d 348, 352 (Tex. 1971).

[2] H.B. Taylor v. Brigham Oil & Gas, L.P., No. 07-00-0225-CV, 2002 WL 58423 at *2 (Tex. App.—Amarillo 2002, no pet.) (not designated for publication).

[3] Tarrant Cnty. Water Control & Improvement Dist. No. One v. Haupt, Inc., 854 S.W.2d 909, 911 (Tex. 1993).

[4] Id.

[5] Id.

[6] Id.; Getty Oil Co. v. Jones, 470 S.W.2d 618, 622 (Tex. 1971).

[7] Haupt, Inc., 854 S.W.2d at 911; Getty Oil Co., 470 S.W.2d at 622.

[8] See Ball v. Dillard, 602 S.W.2d 521, 523 (Tex. 1980).

[9] Tarrant Cnty. Water Control & Improvement Dist. No. One v. Haupt, Inc., 854 S.W.2d 909, 911 (Tex. 1993).

[10] Id.

[11] Teel v. Chesapeake Appalachia, LLC, 906 F.Supp.2d 519 (N.D.W.Va. 2012).

[12] Id.

[13] Id.

[14] Id.

[15] Id. at *6 (citing FPL Farming Ltd. v. Envtl. Processing Sys., L.C., 351 S.W.3d 306, 310 (Tex. 2011)).

[16] Id.

[17] Kartch v. EOG Res., Inc., 845 F.Supp.2d 995 (D.N.D.2012) and Whiteman v. Chesapeake, 873 F.Supp.2d 767 (N.D.W.Va. 2012)).

[18] Id.

[19] Fiorentino v. Cabot Oil & Gas Corp., No. 09-CV-2284 (M.D. Pa., filed Nov. 19, 2009) (Doc. 346, page 12).

[20] EXCO Resources (PA), LLC v. New Forestry, LLC, 2012 WL 3043008, at * 1 (M.D. Pa. 2012).

[21] Id. at *4.

[22] Id. at *5.

[23] Id. at *6.

[24] Id. at *9.

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