Nye v. Leavell

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Nye v. Leavell

State: Illinois

Court: 5th District Appellate

Docket No: 5-06-0321 Rel

Case Date: 05/14/2007

Preview:Rule 23 order filed April 2, 2007; Motion to publish granted May 14, 2007.

NO. 5-06-0321 IN THE APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT ________________________________________________________________________ GREG NYE, ) Appeal from the ) Circuit Court of Plaintiff-Appellee, ) Crawford County. ) v. ) No. 05-CH-15 ) EVA LOVENE LEAVELL and STANLEY ) LEAVELL, ) ) Defendants-Appellants, ) ) and ) ) BI-PETRO, INC., and Unknown Owners, ) Honorable ) David M. Correll, Defendants. ) Judge, presiding. ________________________________________________________________________ JUSTICE SPOM ER delivered the opinion of the court: Defendants Eva Lovene Leavell and Stanley Leavell (the Leavells) appeal an order of the circuit court of Crawford County granting a summary judgment to the plaintiff, Greg Nye, on his complaint in chancery for the cancellation o f his oil and gas lease with the Leavells. For the reasons that follow, we reverse and remand for further proceedings not inconsistent with this order. The facts necessary to our disposition of this appeal are derived from the materials presented in support of the plaintiff's motion for a summary judgment, and they are as follows. On or about March 20, 1981, Charles Stantz, as lessor, executed an oil and gas lease in favor of Daniel R. Leavell, as lessee, on lands in Crawford County owned by Mr. Stantz. The plaintiff in this case inherited those lands and is now the lessor. By various assignments, defendant Eva Lovene Leavell is now the operator of the lease, and defendant 1

Stanley Leavell (Stanley), who is the son of Daniel R. and Eva Lovene Leavell, now owns a working interest in the lease. Production of oil from the wells encompassed by the lease ceased in 2001. The Leavells claim that production ceased because the State of Illinois, through the Department of Natural Resources, prohibited the Leavells from operating the wells as a part of a larger prohibition related to abandonment proceedings pertaining to other wells owned by the Leavells, but not encompassed by the lease with the plaintiff. The Leavells claim the prohibition was pursued illegally, without proper notice to the Leavells. The Leavells have pursued litigation against the State in a number of cases in an effort to reverse the administrative order prohibiting the Leavells from operating the wells. See, e.g., In re Abandonment of W ells Located in Illinois by Eva Lovene Leavell, 343 Ill. App. 3d 303 (2003). These cases remain pending. On February 28, 2005, the plaintiff filed in chancery the complaint to cancel the oil and gas lease that is the subject of this appeal. In his complaint, in four separate counts, the plaintiff contended that the lease in question was (1) forfeited by the express terms of the lease, (2) forfeited by the implied terms of the lease, (3) forfeited pursuant to section 2 of the Mineral Lease Release of Record Act (the Act) (765 ILCS 510/2 (West 2004)), and/or (4) abandoned. On M ay 31, 2005, the Leavells, by attorney Christopher Heid, answered the plaintiff's complaint, denying in pertinent part the allegations made therein. On February 14, 2006, following discovery and other procedural wrangling by the parties not pertinent to this appeal, the plaintiff filed a motion for a summary judgment against the Leavells, and in support thereof he filed a memorandum of law, a transcript of the discovery deposition of Stanley, and an affidavit executed by the plaintiff. In the motion for a summary judgment, the plaintiff contended that in his discovery deposition Stanley "admitted that there had been no oil produced, nor production activities, upon the subject lease, since the year 2001," that no material fact was in dispute, and that the plaintiff was entitled to a judgment in his favor

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on all four counts of the complaint. In his memorandum in support of the motion for a summary judgment, the plaintiff argued that the "uncontroverted evidence" filed with the motion showed that the Leavells did not use "reasonable diligence" to continue the production of oil, because even though the Leavells claimed they were prohibited by the State of Illinois from operating the wells encompassed by the lease, Stanley "admitted [in his discovery deposition] that he could have become the operator of the lease and bonded the wells[] or could have employed a contract operator to do so, but in both instances declined." The plaintiff also requested "all attorney's fees and court costs" pursuant to section 2 of the Act. No evidentiary materials were attached to the motion describing the attorney fees and costs allegedly incurred as a result of the proceedings below. On February 23, 2006, the plaintiff's motion for a summary judgment was set for a hearing on March 14, 2006. The defendants did not respond in writing to the motion for a summary judgment. On March 14, 2006, for reasons that are disputed and that in any case are not germane to our disposition of this appeal, attorney Heid, who at the time still represented the Leavells, failed to appear at the hearing, as did the Leavells. Apparently, the hearing proceeded in the absence of attorney Heid and the Leavells, although no transcript of the hearing exists, nor does a bystander's report. On March 20, 2006, the circuit court granted the plaintiff's motion for a summary judgment in a written order, finding for the plaintiff on all four counts of the complaint. The extent of the court's legal analysis supporting its decision was that the lease in question had expired "due to lack of production and lack of due diligence" by the Leavells, "in that no production of oil or gas has been had from said lease since the year 2001." The court also ordered the Leavells to pay $5,175 in attorney fees and $624.20 in court costs, which the court, without further explanation or analysis, deemed reasonable and "necessarily incurred" by the plaintiff, despite the facts that, as explained above, no evidentiary materials were attached to the motion for a summary judgment describing the attorney fees and costs

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allegedly incurred as a result of the proceedings below and no evidentiary materials of that nature are included elsewhere in the record. On April 5, 2006, the Leavells, by attorney Heid, filed a motion to reconsider the summary judgment. On April 18, 2006, the Leavells, by the attorney they hired to replace Heid

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