Our family leased our mineral rights recently and after waiting the accepted period of time for our bonus payments without receiving them, several of us attempted to contact the leasee. After not getting any response (voice mail messages and e-mail messages left), we finally received an e-mail from a family member stating that the leasee was out of the country but was due back on July 10th. It went on to state that our money was ready to be sent out–that the leasee just needed to know if we wanted it wired or overnighted. We sent the leasee the info that we all wanted our money sent overnight. Then we waited. By the end of the week we had been told he was due back, we began attempting to contact him again…which we did over the next one to two weeks to no avail. During that time, we also discovered that he had already recorded our leases over a month earlier on June 3rd. We then contacted our attorney in ND and their office attempted to contact him, notifying him that they would begin the process of having our leases terminated if they did not hear from him within one week. They did not hear from him either. They have now turned everything over to the ND AG’s office, and our lawyers are preparing to file the paperwork to terminate our leases so that we can lease them with someone else. My question (after all of that :D) is if other people have had a similar situation, how long did it take for them to complete the process of freeing up their leases to re-lease. I don’t want to share the name of the leasee (or the land man who referred him to us), as I don’t want him to try to delay or in some way hold up our ability to terminate our leases, however, if he does try to hold them up in any way, I will be back on here to share his name, his company’s name, and the land man’s name so that I can warn anyone else from dealing with either of them and going through this mess that we are going through.
Sandy:
I'm sorry to hear about your leasing misfortunes but yours is a classic case of being "cold drafted". Fortuanately, this has never happened to me but on my last couple of leases, I became worried since the alloted time was drawing near before my draft arrived. One idea is to advise the lessee that you will mail the notorized paperwork to your attorney and let him collect a company check on your behalf. Also, when you lease again, you can post the lessee information on this forum prior to settlement and be advised if others have had problems with that individual or company. There are several posts on this forum addressing "cold drafting" situations and several ways to avoid falling victim to this scam. The problem you now face is attorney fees in order to straighten out this ordeal. When you can, please advise what the name(s) of these individuals are in order that others might be aware of their practices. I hope everything works out for you and your family.
Aubrey McClendon, Chesapeake Energy; Rick Dawson, Joe McFerron & Adam White, RedSky Land
How are you going to terminate the lease? Under ND law since early this year, the non-payment of a promised bonus allows you to only collect damages for the breach of the promise to pay, not termination of the lease. The ND Sup. Ct. says that the promise of future royalties in the lease’s royalty clause provide partial consideration, which allow the lease to “survive” without any bonus payment. Terminating a lease requires a court action and the judge will be bound by this law and as such, will determine what damages are due you for the breach of non-payment.
Dusty, would you care to cite the case? I’d like to read it. I wonder what happened with all the leases Bakken Exploration recorded before the AG’s office filed the cease and desist order?
Chesapeake has delayed or refused to complete other purchases in that region as well, the lawsuit states.
“Chesapeake has convinced numerous leasehold owners in Michigan to sell leases to Chesapeake instead of other prospective purchasers, and then manufactured alleged title defects or other alleged justification not to close the agreements after discovering negative information concerning the zones within the Collingwood range,” according to the lawsuit
I, too, hope everything works out. The only thing we may have going for us is that this person actually falsified information that was given to us regarding the reasons for the delay in our getting our money…he lied about his whereabouts, as well as the reason for his whereabouts. All that information has been given to the ND AG. We have received no bonus money whatsoever, even though it states that we have been given some money in the lease (although the amount stated in the lease is unspecified). Again…I would rather not post the names (they are not any of the names or companies posted by Mr. Koonce) unless they try to either block or delay our ability to terminate our leases…if they do that, I will be posting that information here and on several other sites to warn others to stay away from them.
charles s mallory said:
Sandy:
I'm sorry to hear about your leasing misfortunes but yours is a classic case of being "cold drafted". Fortuanately, this has never happened to me but on my last couple of leases, I became worried since the alloted time was drawing near before my draft arrived. One idea is to advise the lessee that you will mail the notorized paperwork to your attorney and let him collect a company check on your behalf. Also, when you lease again, you can post the lessee information on this forum prior to settlement and be advised if others have had problems with that individual or company. There are several posts on this forum addressing "cold drafting" situations and several ways to avoid falling victim to this scam. The problem you now face is attorney fees in order to straighten out this ordeal. When you can, please advise what the name(s) of these individuals are in order that others might be aware of their practices. I hope everything works out for you and your family.
Sandy:
I feel certain that everything will work out fine after the dust all settles but it will take some time and cost you some attorney's fees to get this cleared up. The above post by Dusty stated that the law in ND has changed in regards to actions involving "cold drafting". I know nothing about this change of law and it is unusual that this matter would not have been the subject of a post on the various forums dealing with the Bakken. You proceed as planned with your attorney and get your lease cleared from these records via the courts. If the law has been changed, you and your attorney will find out and thus take the neccessary actions to resolve your matter.
Sandy Brill said:
I, too, hope everything works out. The only thing we may have going for us is that this person actually falsified information that was given to us regarding the reasons for the delay in our getting our money...he lied about his whereabouts, as well as the reason for his whereabouts. All that information has been given to the ND AG. We have received no bonus money whatsoever, even though it states that we have been given some money in the lease (although the amount stated in the lease is unspecified). Again...I would rather not post the names (they are not any of the names or companies posted by Mr. Koonce) unless they try to either block or delay our ability to terminate our leases...if they do that, I will be posting that information here and on several other sites to warn others to stay away from them.
charles s mallory said:Sandy:
I'm sorry to hear about your leasing misfortunes but yours is a classic case of being "cold drafted". Fortuanately, this has never happened to me but on my last couple of leases, I became worried since the alloted time was drawing near before my draft arrived. One idea is to advise the lessee that you will mail the notorized paperwork to your attorney and let him collect a company check on your behalf. Also, when you lease again, you can post the lessee information on this forum prior to settlement and be advised if others have had problems with that individual or company. There are several posts on this forum addressing "cold drafting" situations and several ways to avoid falling victim to this scam. The problem you now face is attorney fees in order to straighten out this ordeal. When you can, please advise what the name(s) of these individuals are in order that others might be aware of their practices. I hope everything works out for you and your family.
Would you have your high school cousin take out your appendix or eat off the floor of a dirty kitchen? No. You are certain to pick a disease you don't want. With all the sob stories about accepting drafts on the MRF, I'm surprised anyone does it at all after reading the posts. Do you think your are bulletproof and won't get hurt when so many are damaged? Landmen feed off your attitudes. Swallow your ego and accept the advise of professionals like your doctor, known operators in your area, attorneys who know the business, and the "esteemed Buddy Cotton" in your case.
Since you are in a hot area, there are other ways to get out of your predicament but all involve the use of reputable professionals. I hope your attorney isn't a divorce lawyer.
So that you have your information straight, Mr. Hutchinson, our attorney is a very well known and highly expected barrister who has been practicing law in Stanley, ND for years. He is VERY knowledgeable in the areas of mineral rights and all matters thereof. He is one of the attorneys that the State of ND uses. He has been involved from the word go on this, as we had another lease offer prior to this one that we had him look over before deciding to go with this offer. We made EVERY effort to make sure we were doing this in our family’s best interest and had the lawyer go over and make changes to the lease before we signed it, as well as to advise us on what was best in regard to payment. We most certainly did not approach it in a manner of total ignorance, as you so rudely insinuated. We checked out the leasee as best we could, and the land man who refered him not only knows our attorney, but he also knows some of our family members. We do not, as you stated, think we are bulletproof–we trusted people that we thought we somewhat knew and apparently did not. As for our ego…there is none and no need to swallow it. As previously stated, we have had our lawyers involved from the word go…as they still are. We will get out of this, and we will lease our rights to someone else. And this time we will follow through with what we intended to do in the first place…have our laywer hold the leases until we receive payment and the payment has cleared before the leases are released from our lawyer to the leasee. As to your reference to “Buddy Cotton” and your statement that you hope our lawyer is not a divorce lawyer…rest assured the answer is no to either of those assumptions.
I admire you Sandy! There are very few people left, who will speak up, and stand up for what is right!
Applause to Sandy, I wish you all the luck in righting the wrongs this company has pulled.
I would think a call from your lawyer, to Bismarck, about this company, may help future people from being burned by them.
Our lawyers have already forwarded all of the information regarding our situation to the office of the ND AG. Thank you for your well wishes. We are truly hoping this will be resolved fairly quickly, but we also understand that may not be the case.
Sandy:
I have always been an advocate of additional laws that would severely punish the company or individual that is found guilty of this type of business practice. By severely punish, I mean a sizeable settlement to the lessor in all cases where these guilty verdicts are decided. If laws such as this was in place, I believe that an individual or company would think twice before engaging in such practices.
Especially since this ‘gentleman’ (term used loosely) also lied to us in regard to why there was a delay in getting us the bonus money, inferring that his son was injured while on active duty in Afghanistan when he was actually in the Phillipines. That lie and his other lies may come into play in this as, as well, as we go forward with our lawyers. And, the fact that he said that our bonus money was ready would, to me, signify as to his stated intent to pay us the bonus which I would think should hold up in court. We will see.
charles s mallory said:
I know nothing about this change of law and it is unusual that this matter would not have been the subject of a post on the various forums dealing with the Bakken.
So if something isn't posted on the "various forums dealing with the Bakken." i.e., folks who a year or two ago didn't even know what an oil well was but now are armchair experts, it's immediately suspect? Interesting. Well, I can do without "the various forums dealing with the Bakken," but I guess others are apparently held hostage.
As for the following link to the case I referred to earlier, before clicking on it you may want to verify that the link isn't sending you to China or somewhere in the etherland (or just wait for it to show up on one of the Bakken forums you seem to trust for reliable info), as everyone knows that I certainly have nothing better to do than make things up lease breach remedies and post such on forums all day.
* * * * * * * * * *
We recognize a bonus payment generally is an important part of the consideration supporting leasing of the premises. However, we cannot conclude as a matter of law that Irish Oil's failure to timely pay the bonus leaves the leases with a total failure of consideration that excuses the Riemers' performance. To do so would require a conclusion that the remaining consideration is, as a matter of law, insubstantial and unimportant to the contract.
We cannot conclude as a matter of law that the possibility of future production and future royalties is so speculative as to provide no consideration supporting the existence of a fact issue on the question of failure of consideration.
Because both executed and executory consideration can support a contract, the district court erred by concluding that the production royalty failed as a matter of law to support the leases in this case.
The remedy for a total failure of consideration is to excuse the non-breaching party from performance of its obligations under the agreement. . . . [and] [w]here a partial failure of consideration has occurred the proper remedy is to grant appropriate damages to the non-breaching party.
Anyone can correct me if I am wrong but I think Irish Oil didn’t retain that lease or recover from the Riemers. Irish Oil was late accepting the agreement and paying the agreed bonus ? If I’m correct, I bet they wish they’d paid.
It’s a good deal they don’t do drug test here cause I think that guy is on drugs after reading a couple of their post where they are in a rude and delusional way trying to promote their business.
Dusty ~
Thanks for sharing the link. I read through the situation involving Irish Oil and the Riemers, however, their situation is a little different than ours. Irish Oil was in continual contact with the Riemers. The man we have been deaing with stopped corresponding in any way, shape, or form with us other than the one e-mail purporting that he was in another country with his critically injured son (found to be a lie). After that, he ceased answering any of our or our lawyer's attempts to contact him...and that was approximately 1 1/2 months ago. He recorded our leases approximately 2 1/2 months ago. We have not attempted to lease with another company, although we are already lining some up who are interested once our lawyers have completed the process of terminating our leases with him. Another difference between our situation and the Riemers is that they actually finally received half of their payment...we have not recieved one dime from the man/company we leased with. Our lawyers have sent all our information to the AG, including the information about all of the lies and deceit perpetrated by the lessee as well as the complete lack of responding to our attempts to contact him coupled with the lack of payment of any portion of the bonus, and I am looking for the AG to file a "cease and desist" order against this man and his company, as he has in the past in cases exactly like ours. Again, thank you for sharing the court case info...it was most interesting!!
Ms. Brill, I believe that the Riemers returned the checks, because they had already leased the acres to a “legitimate” lessee who would actually pay.