Once our leases are freed up again, we will be leasing them to a different company with different terms in regards to how we are paid.
Unlike the Riemers, we have not been able to reach our lessee at all since the first part of July when we received his e-mail that contained his lie as to why we had not been paid yet. Also unlike the Riemers, we have not received one penny--nothing...so there is nothing to return.
According to what I have read regarding the AG filing "cease and desist" orders, those situations are just like ours...the MO's have signed and returned the leases to the lessee, the lessee has recorded them without paying the MO's, and the lessee continued to not pay them--prompting the AG's involvement. That is our case. We signed the leases and sent them back to the lessee, he recorded them, and he has yet to pay us anything. So, I look for the AG to file against him and our leases to be freed up some time soon.
Sandy, the referenced case, in essence, is a remedies case. It indicates what relief you can obtain on a specific cause of action. The specific cause of action was whether the failure of a bonus payment (regardless of the circumstances regarding why the bonus failed) would leave the lease unenforceable (total lack of consideration), or whether it would result in only a claim for damages (partial lack of consideration). The court said the lack of a bonus payment resulted in the latter -- a damages claim.
In other words, for this inquiry, either there was a breach of contact for failure to pay the bonus or there wasn't. In your case, you say the bonus was never tendered (therefore it sure looks like a breach), and in the other case, the bonus was tendered late (breach) and refused. No difference -- again, and this is important, for the specific inquiry as to the whether that breach will result in invalidation of the lease. It doesn't matter if your person is in a different country or hasn't answered you -- he made a promise to pay the bonus and allegedly didn't -- breach. In the other case, the company promised to pay the bonus and didn't -- breach. The Riemers could have forgiven the breach by accepting the late tender of the bonus, but didn't, so the breach was not discharged.
So, are you claiming that the failure to pay the bonus (again, the circumstances regarding why they were not paid are irrelevant here) renders the lease unenforceable? If so, it appears that you are bound by the holding of this case and are limited to damages for the breach of contract for the non-payment of the bonus, not invalidation of the lease. You may have other causes of action related to the circumstances as to why the bonus was not paid in your case, but then you would not be dealing with the specific issue as to whether the lease is unenforceable because of the non-payment of the bonus.
As to the involvement of the AG, yes, he can issue a cease and desist order, etc. (but unlikely if this is the only instance by this person), but only a court can determine whether your lease is enforceable, and the trial court would be bound by the holding in this case as to the specific cause of action referenced. The referenced decision by ND Sup. Ct. is the binding law in ND on this issue unless overruled with a law passed by the legislature. The AG has no authority on his own to determine whether any private contracts are enforceable. A cease and desist order will have nothing to do with whether you lease is enforceable, and will only prevent the person from doing further business. In other words, it would only prevent the person from breaching any further contracts.
Interesting thought that I will pass along to my other family members, Bert. Thanks for your thoughts. The ND AG may end up filing a cease and desist order againt them, too, which will also help our battle to free up our rights, as well.
bert vine said:
I believe there may be a legitimate argument relating to
“Failure of Consideration”. Any recitals of consideration
In the lease document may be voided by an affidavit of
Some Sort stating that consideration is lacking. I also think
That another company may lease your minerals, pay you for
The lease and be willing to fight the fight at their expense.
Sandy Brill, I had trusted landmen advise me to record an affidavit of non payment and I think it’s good advice. I think Dusty has a point also. The law very well may not void your lease on the basis of the bonus not being paid. I would be looking at the situation from all sides in contract law. I am thinking mainly of the oil co’s acceptance of the lease. Did the oil co record their acceptance of the lease or just your commitment to the lease? I think the oil co usually pays, signifying their acceptance, or they record a memorandum of lease to tell the world a deal has been struck. I’m not a lawyer, but you might ask your lawyer about acceptance. I think I may be farther down the road on a similar case than you are. Send me a friend request if you like.
Our lawyer is actually used by the State of ND for oil and mineral matters, so I am sure they are fairly well versed in the laws there. They plan to file a termination notice and send it to the person/company we leased with. It is not the company that would be drilling…the lessee was planning to “flip” our lease to someone else, which he has not done. The only two things that have been done is that the leases have been signed by me and my family members and returned to him, and he has recorded them. No money has been paid at all at this point. Our lawyer said it will not be difficult to get the leases terminated, but our lawyer also sent the information to the ND AG. The AG has issued cease and desist orders to an individual/company for a case identical to ours previously, and I look for him to do so in our case, as well. As far as the case with Irish Oil and the Reimers…theirs was, indeed, a remedies case…but they also had been sent at least a partial payment and then refused that payment because it was past the date it was due them. We have not received anything…we can’t even get this guy to respond to us…e-mail, phone, or snail mail…nothing.
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.
The ND Attorney General was able to get a response from the man who had "leased" our MR's and then recorded the leases without paying us, and he admitted that he was at fault and said that he would not contest the release of our leases. That was done this week, so we are now free and clear to lease them to another company and do not have to wait the 90 days. So glad that is over and will be even more happy once we have a lease in place and the money in the bank! :D Thanks for everyone's help, advice, and input.
Admitting he was at fault solves all kinds of problems. However, it sets no real precedent other than the weight of the Attorney General actually carries a big stick. That is wonderful news and congratulations to you for your obvious fortitude and doing what you need to do out of a clear sense of what is "right."
I have intimate knowledge of whats "REALLY" going on. You guys really should consider an alternative route to handle whats happening. There ARE ways to handle all of this.
Kevin B. Koonce said:
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
Actually, we already have our leases back in our names. The ND Attorney General stepped in, and that was pretty much all it took. Thanks for your advice, though.
I'm a lessor/landowner from West Virginia. My experience has been with Dominion Exploration since 1957 when they called themselves Hope Gas. I'm not sure what they're calling themselves now (CNX, I guess). To my knowledge, there is n way to get out of a lease. I just sued Dominion Exploration for everything that I could think of (breach of contract, attornment, estoppel, and adverse possession). I was told that once a lease is signed, the oil company has all the legal rights because they own the minerals, and the lessor is merely owed a royalty. Only the oil company can "contain" the oil and gas; therefore, only they can own the oil and gas. Only they have mineral rights to stop a lease or anything else. I am telling you the truth; if you don't believe me, look up Marie Gassaway v. Dominion. I lost my case on October 2011 with the West Virginia Supreme Court. That should give you an idea of lessors' and landowners' nonexistent rights. I hope things are better in your state. The oil companies OWN West Virginia.