Case Solutions Archive
Saunders Law Retained by Family to Resolve Mineral Rights Dispute and Obtain Lease
A large parcel of land located in Bradford County was owned by 13 family members who lived throughout the United States. The clients owned the surface of the land and 50% of the oil and gas rights. The owners of the other 50% interest, also a large family, inherited their interests from a prior owner who attempted to reserve half of the oil and gas rights while conveying the land to other members of the clients’ family. The heirs of the former owner signed a lease for their oil and gas interest with the largest leasehold developer in the northern tier of Pennsylvania.
The property was in the heart of the Marcellus Shale “sweet spot” in the most prolific natural gas-producing County in Pennsylvania. The same lessee had secured leases on nearly all of the surrounding acreage, but the clients’ parcel was essential to the developer’s drilling program. Saunders Law was hired to evaluate the ownership interest of the former owner’s heirs and discovered that the deed reserving a portion of the oil and gas rights did not entitle the heirs to enter into a lease. Saunders Law notified the lessee that its lease with the heirs was therefore void and that the property could not be developed unless its clients leased their rights to the developer.
The developer initially refused to negotiate with our clients, but after nearly 12 months and threats of litigation if drilling commenced under the heirs’ lease, it agreed to a no surface use lease with our clients including monetary terms that we believe were as high as had been signed in Bradford County for any such lease.
Saunders Law Assists Clients with Enforcement of Oil & Gas Lease and Negotiates Retroactive Commercial Lease After Clients Discovered Gas Industry Squatters Using Land as Trailer Park
Clients owning several hundred acres that formerly served as a dairy farm hired Saunders Law initially to evaluate the terms of a lease they had previously entered into and the subsequent conduct of the lessee with regard to the development of their property for three separate well pads. We determined that the developer was not operating in compliance with the terms of its lease and was not seeking the clients’ approval its development plan and the timetable for completion and restoration. The clients maintained a primary residence elsewhere and were unaware of the extent of disturbance which threatened to alter their plans for building a house and a horse farm on the land. Eventually, Saunders Law was able to obtain all of the information required by the clients and negotiated the removal of equipment from the property opening channels of communication in order to prevent future problems.
The same clients subsequently contacted us when they found that their property was being used by drill riggers as a trailer park. Saunders Law negotiated a retroactive lease with the offending parties which insured that the land would be restored and that the clients would be indemnified for any damage to persons or property. The squatters offered $2,000 per month for the past and future use of the property, but Saunders Law secured a lease for monthly rent of $9,000 as well as payment of the clients’ legal fees. At the conclusion of the lease, the property was fully restored.
Philadelphia Business Owner Hires Saunders Law to Litigate Oil & Gas Lease Dispute – Client Achieves Desired Result
Our client purchased a large parcel of land in Wyoming County and constructed a 10,000 square foot home with several associated structures to house an extensive car collection. The client negotiated a lease directly with a gas company, but decided after signing he did not want to complete the transaction. The potential lessee sought to hold the client to the lease he signed and tendered the bonus payment in accordance with the lease. Saunders Law filed suit in Federal District Court and succeeded in obtaining a decision from the court that the lease was not enforceable against the client.
The lessee appealed the ruling to the U. S. Court of Appeals for the Third Circuit and before a decision could be reached on the appeal, Saunders Law negotiated a new agreement with the lessee which included an increased bonus payment to the client and additional protections for the property. Excludng the non-monetary concessions obtained by the new lease, the client’s monetary recovery was nearly six times the legal fees he incurred.
Hunting Club Hires Saunders Law to Evaluate Mineral Rights And Respond to Claim of Competing Owners
Our client owns the surface of over 1000 acres of land used for recreational and hunting purposes for many decades. The client received an offer from a natural gas company to lease the oil and gas rights for development. An ancient deed from a previous owner reserved one half of the oil and gas rights and was the basis for a claim of the former owner’s heirs that they were cotenants with the client in the oil and gas beneath the land and therefore entitled to be apprised of and consulted regarding any offer to develop the resources. The client was not inclined to enter into a lease on the terms offered as they would permit extensive use and disturbance of the surface which would potentially eliminate its utility as a hunting club. After several demands by the heirs to meet with the client to discuss the proposed lease and the solicitation of other potential offers, the client retained Saunders Law to evaluate its mineral rights and investigate the heirs’ contention that the client owed them a duty to disclose the details of the proposed lease and that the cotenants could seek their own lease if the client would not cooperate.
We advised our client that while under the circumstances it was not obligated to share information or consult with their cotenants, Pennsylvania law also generally permits either cotenant to lease their mineral interest without the consent of the other. However, Saunders Law discovered a clause in the deed which would arguably prevent the heirs from entering into a lease over our client’s objection. Eventually the heirs withdrew their demands and the client was able to maintain its property for the benefit of its members.
Saunders Hired as Special Environmental Counsel to Joint Municipal Authority
When the Clarks Summit South Abington Joint Sewer Authority was issued a renewal of its NPDES permit by the Department of Environmental Protection (PADEP) which contained discharge limits that would have required costly upgrades to its system and was cited for numerous alleged violations of its permit, it turned to Steve Saunders to represent its interest and assist with a resolution. Acting as the Authority’s Special Environmental Counsel, Saunders developed and led a coordinated legal effort spanning nearly two years which included an appeal of the NPDES permit to the Pennsylvania Environmental Hearing Board. Ultimately, a settlement was achieved resulting in the issuance of an NPDES permit with reasonable discharge limitations and no monetary penalties which the Authority’s outside engineering consultant conservatively estimated saved the client and the customers it serves over $5,000,000. Steve has counseled and continues to represent municipal sewer and water authorities in navigating the in the often complex labyrinth of environmental regulations associated with this industry.