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Houck v. Hold Oil Corp.12/21/1993
CERTIORARI PREVIOUSLY GRANTED; COURT OF APPEALS' OPINION VACATED IN PART; JUDGMENT OF TRIAL COURT AFFIRMED IN PART; REVERSED IN PART; REMANDED FOR NEW TRIAL
The opinion of the court was delivered by: LAVENDER, Vice Chief Justice.
Appellants/counter-appellees, J.C. Houck and Ruth O. Houck (Houcks) purchased the surface estate to eighty acres of undeveloped lakefront property near Lake Eufaula. The tract was subject to an oil and gas lease subsequently assigned to appellee/counter-appellant, Hold Oil Corporation (Hold).
In March 1982, the Houcks discovered Hold had excavated a reserve pit and destroyed trees, timber and underwood in the process of building an access road to its first gas well site. This well was drilled in March 1982 prior to the effective date (July 1, 1982) of the Surface Damage Act (Act), 52 O.S.Supp. 1982 § 318.2 et seq. Subsequently, an employee of the Houcks negotiated with Hold to settle damages to the surface estate. Hold later notified Houck of its intent to drill a second gas well, which was commenced in September 1982. However, no settlement was finalized between the parties.
The Houcks sued Hold for injuries to the property caused by the drilling of the wells. Observing that Hold that a legitimate property right to enter and start drilling operations under the lease and finding Hold had not acted arbitrarily, capriciously or maliciously with respect to the Houcks' property rights, the trial court declined to submit any issue of punitive damages to the jury. He also ruled Hold was not a trespasser in exercising its property rights, and was not liable for treble damages under 23 O.S. 1981 § 72 , a statute concerning injury to trees.
The trial court further took the position that from the commencement of the drilling of the first well (March 1982) to the completion of the second well in September 1982 the drilling activities on the property were one continuous operation. On this basis he ruled the damage provisions of the Act retroactively applied to both wells. He also noted neither party presented evidence to clearly distinguish damages caused by the drilling of the first and second gas wells, but we note the trial court's ruling as to recovery of damages under the Act came at the beginning of trial; in other words, prior to the parties presenting any evidence on the issue. Although the trial court repeated his pre-trial ruling after the Houcks' case in chief and again prior to instructing the jury on the law, the parties were told at the start of trial the matter would be tried under the damage provisions of the Act and not the common law rules as to the standard of liability for the recovery of damages in effect prior to the effective date of the Act. Contrary to his ruling as to the standard of liability for recovery of damages, the trial court decided the treble damage provision of the Act [52 O.S.Supp. 1982 § 318.9 ] did not apply because when Hold initiated operations in March 1982 and drilled the first well the Act was not yet effective and it would have been impossible for Hold to have complied with the notice, settlement agreement or appraiser provisions of the Act prior to such effective date.
The jury returned a verdict for the Houcks for both permanent ($5,600.00) and temporary ($24,400.00) damages. After trial, Hold's motion for judgment notwithstanding the verdict was partially granted. Its motion for new trial was denied. The temporary damage award was reduced from $24,400.00 to $5,600.00, and consequently, the jury's verdict was reduced from $30,000.00 to $11,200.00. Hold had sought to lower the total award to $5,600.00. The Houcks were also awa
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