Denbury Onshore v. Christensen ( 2018 )


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  •                                                                                        FILED
    United States Court of Appeals
    UNITED STATES COURT OF APPEALS                             Tenth Circuit
    FOR THE TENTH CIRCUIT                              January 8, 2018
    _________________________________
    Elisabeth A. Shumaker
    Clerk of Court
    DENBURY ONSHORE, LLC, a Delaware
    Limited Liability Company,
    Plaintiff - Appellant,
    v.                                                             No. 15-8106
    (D.C. No. 2:14-CV-00019-ABJ)
    ROBERT F. CHRISTENSEN; JANET K.                                  (D. Wyo.)
    CHRISTENSEN,
    Defendants - Appellees.
    _________________________________
    ORDER
    _________________________________
    Before PHILLIPS, KELLY, and MORITZ, Circuit Judges.
    _________________________________
    This matter is before the court, sua sponte, to correct small clerical errors in the
    dissent filed with the Order and Judgment issued in this matter on January 5, 2018. The
    corrected dissent and the Order & Judgment are attached to this order. The Clerk is
    directed to file the corrected version of the dissent and the Order and Judgment nunc pro
    tunc to the original filing date.
    Entered for the Court
    ELISABETH A. SHUMAKER, Clerk
    FILED
    United States Court of Appeals
    UNITED STATES COURT OF APPEALS                         Tenth Circuit
    FOR THE TENTH CIRCUIT                         January 5, 2018
    _________________________________
    Elisabeth A. Shumaker
    Clerk of Court
    DENBURY ONSHORE, LLC, a Delaware
    Limited Liability Company,
    Plaintiff - Appellant,
    v.                                                         No. 15-8106
    (D.C. No. 2:14-CV-00019-ABJ)
    ROBERT F. CHRISTENSEN; JANET K.                              (D. Wyo.)
    CHRISTENSEN,
    Defendants - Appellees.
    _________________________________
    ORDER AND JUDGMENT*
    _________________________________
    Before PHILLIPS, KELLY, and MORITZ, Circuit Judges.
    _________________________________
    Denbury Onshore, LLC, the operator of an oil and gas recovery unit, brought
    this declaratory judgment action against Robert and Janet Christensen after the
    Christensens denied Denbury access to their land that overlies the unit. The
    Christensens asserted counterclaims for declaratory relief, trespass, and breach of the
    implied covenant of good faith and fair dealing. A jury ultimately found in the
    Christensens’ favor on all of their counterclaims and awarded the Christensens over
    $1.7 million in damages.
    Because Denbury was entitled to judgment as a matter of law on the
    Christensens’ implied-covenant claim, we reverse the district court’s denial of
    Denbury’s motion for summary judgment on that claim and remand with directions to
    *
    This order and judgment isn’t binding precedent, except under the doctrines
    of law of the case, res judicata, and collateral estoppel. But it may be cited for its
    persuasive value. See Fed. R. App. P. 32.1; 10th Cir. R. 32.1.
    vacate the judgment against Denbury as to that claim and the $1,751,991.00 contract
    damages award. Finding no other reversible errors, we affirm the remainder of the
    judgment.
    I
    Denbury operates the Hartzog Draw Unit, a state-approved, federally certified
    oil and gas secondary recovery unit in Wyoming. All of the mineral interests
    underlying the Unit—which are owned by the United States, Wyoming, or private
    individuals and entities—are committed to the Unit for development. Robert and
    Janet Christensen own the surface rights to about 16,000 acres of land overlying the
    Unit. Over 100 Unit wells and hundreds of miles of Unit roads are currently located
    on the Christensens’ land.
    Denbury’s right to access and use the Christensens’ land for Unit operations is
    governed by the Stock-Raising Homestead Act (SRHA) of 1916, 43 U.S.C. §§ 299,
    301, the Wyoming Split-Estate Act (WSEA), Wyo. Stat. Ann. §§ 30-5-401 to 30-5-
    410, and a federally approved unitization agreement (the Unit Agreement). Under
    federal and state law, Denbury has the right to enter upon and use as much of the
    Christensens’ land overlying the Unit as is reasonably incident to or reasonably
    necessary for Unit operations. See § 299(a) (providing that lessees of federal mineral
    interests reserved to the United States through patents issued under the SRHA “may
    reenter and occupy so much of the surface thereof as may be required for all purposes
    reasonably incident to the mining or removal of [those] minerals”); Wyo. Stat. Ann.
    § 30-5-402(a) (providing that “[a]ny oil and gas operator having the right to any oil
    or gas underlying the surface of land may locate and enter the land for all purposes
    2
    reasonable and necessary to conduct oil and gas operations to remove the oil or gas
    underlying the surface of that land”).
    The Unit Agreement similarly provides Denbury “the exclusive right,
    privilege, and duty of exercising any and all rights of the parties [to the Unit
    Agreement], including surface rights, which are necessary or convenient for [Unit
    operations].” App. vol. 1, 47-48. The Christensens joined the Unit Agreement in
    1980. And as parties to the Unit Agreement, the Christensens “grant[ed] [Denbury]
    the right to use as much of the surface of the land within the Unit Area as may be
    reasonably necessary for the operation and the development of the Unit Area.” 
    Id. at 49.1
    While it is clear that Denbury has rights to enter onto the Christensens’ land
    and use as much surface as reasonably necessary for Unit operations, the dispute in
    this case centers on whether Denbury properly exercised those rights. Before
    Denbury can exercise its rights to enter and use the Christensens’ land for Unit
    operations, it must meet certain preconditions. Under the SRHA, Denbury must first
    provide written notice of its intent to enter onto the land and it must (1) obtain the
    Christensens’ written consent or waiver, (2) pay for damages to their crops or other
    tangible improvements, or (3), in lieu of meeting either of these two requirements,
    1
    The United States is also a party to the Unit Agreement. By joining and
    certifying the Unit Agreement, the government dedicated all of its federal mineral
    interests underlying the Unit to the Unit for development. Thus, as we recently held,
    under the SRHA and federal unitization provisions incorporated into the Unit
    Agreement, Denbury has the right to “enter and occupy the surface above any
    leasehold in the [Unit] to the extent that surface access is reasonably incident to
    mining in any leasehold in the [Unit].” Entek GRB, LLC v. Stull Ranches, LLC, 
    763 F.3d 1252
    , 1256 (10th Cir. 2014).
    3
    post a federal bond. 43 U.S.C. § 299; 43 C.F.R. § 3814.1; see also 
    Entek, 763 F.3d at 1256
    n.1 (explaining that unit operator must satisfy SRHA preconditions before
    entry).
    Similarly, the WSEA requires that Denbury first provide written notice of its
    entry and the nature of its proposed operations, attempt good-faith negotiations to
    reach a surface use agreement, and (1) secure the Christensens’ written consent to
    entry or waiver of the consent requirement, (2) obtain an executed surface use
    agreement providing “compensation to [them] for damages to the land and
    improvements as provided in [Wyo. Stat. Ann. §] 30-5-405(a),” (3) secure a waiver
    as provided in Wyo. Stat. Ann. § 30-5-408, or (4) “[i]n lieu of” securing written
    consent or waiver or obtaining a surface use agreement, execute “a good and
    sufficient surety bond or other guaranty to the [Wyoming Oil and Gas Conservation
    Commission (WOGCC)] . . . to secure payment of damages.” Wyo. Stat. Ann. § 30-
    5-402(c).
    The parties have a surface use agreement for some Unit operations. In 1983,
    former Unit operator Cities Service Oil and Gas Corporation (Cities Service) and the
    Christensens entered into a surface damage agreement (SDA) for certain existing
    wells and roads. The parties intended the SDA to “supersede, cancel and replace
    certain agreements between [the Christensens] and previous operators of [the
    existing] wells as to annual payments on the properties described [in the SDA].” App.
    vol. 15, 2454-55. The SDA “addresses only annual payments due” for the rights-of-
    way, site payments, and easements described in the SDA. 
    Id. at 2454.
    Thus, under the
    terms of the SDA, Cities Service agreed to make annual payments to the Christensens
    4
    for damages caused by Unit operations related only to the existing wells and roads
    specifically identified in the SDA. As the current Unit operator and successor-in-
    interest to Cities Service, Denbury is bound by the terms of the SDA. And, since it
    began operating the Unit in 2012, Denbury has made annual payments to the
    Christensens for the wells and roads identified in the SDA.
    But Cities Service and the Christensens also agreed that the SDA “can be
    ammended [sic] so as to add rights-of-way, easements, and site payments” for future
    Unit operations by revising “Exhibit ‘A’ and Exhibit ‘B’ to the [parties’] mutual
    satisfaction.” 
    Id. at 2450;
    see also 
    id. at 2455
    (“Exhibits ‘A’ and ‘B’ may be amended
    by adding to or deleting roads or sites covered under their Agreement by written
    approval of both the Owners and Operator.”).
    Denbury’s troubles with the Christensens began when it adopted a new policy
    for negotiating future surface damage agreements with all Unit surface owners. In the
    summer of 2013, Denbury advised the Christensens that it would no longer seek
    easements or rights-of-way from them for planned roads, flow lines, or power lines
    because Denbury “owns the right of ingress and egress across the entire Hartzog
    Draw Unit” under the terms of the Unit Agreement. Supp. App. 1. Denbury further
    advised them that it would no longer make annual payments for such improvements.
    Denbury would instead “offer multiple times the fair market value” and make one-
    time, lump-sum payments for new Unit operations. 
    Id. In late
    2013 and early 2014, Denbury notified the Christensens in writing that
    it planned to drill five new wells and build a 1500-foot road on one particular section
    of their land—Section 3—to connect two existing roads. Consistent with its new
    5
    policy, Denbury offered the Christensens one-time, lump-sum payments for each well
    and the Section 3 road. Denbury advised the Christensens that if they accepted the
    offers, Denbury would consider their acceptance as their agreement to amend the
    SDA to add the new operations and to reflect the one-time payments as full
    compensation for the same. The Christensens refused Denbury’s offers and
    counteroffered, seeking $2,500/acre initial payments and $2,500/acre annual
    payments for each well and the road. Denbury rejected the counteroffers.
    Despite the failed negotiations and the absence of either a new surface use
    agreement or an agreement to amend the SDA with respect to damages payments for
    the new operations, and without posting a federal or state bond, Denbury began
    preliminary work on the Section 3 road on January 14, 2014.2 The next day, Robert
    Christensen ordered Denbury to cease road construction, threatened to charge
    Denbury with trespassing, and told Denbury not to return without a court order.
    On January 17, 2014, the WOGCC approved Denbury’s permit to drill one
    new well on Section 14 of the Christensens’ land. Denbury posted a bond with the
    WOGCC as security for damages, and the WOGCC approved the bond over the
    Christensens’ objection. Ten days later, Denbury informed Robert Christensen that it
    planned to enter onto Section 14 to begin work on the new well. Christensen told
    Denbury it had no right to enter Section 14 and again threatened to sue Denbury for
    trespass.
    2
    Denbury submitted a “Certification Statement” to the WOGCC in July or
    August 2014 indicating that it provided the Christensens notice, it attempted good-
    faith negotiations to reach a surface use agreement, and it would post “[a] good and
    sufficient bond” with respect to the Section 3 road. Supp. App. 2.
    6
    On January 29, 2014, Denbury brought this action against the Christensens,
    seeking (1) an injunction and damages related to the Christensens’ interference with
    Denbury’s work on the Section 14 well (first and second claims), (2) an injunction to
    prevent the Christensens from interfering with Denbury’s work on the Section 3 road
    (third claim), and (3) two declarations regarding the scope of Denbury’s rights to the
    reasonable use of the Christensens’ land within the Unit (fourth and fifth claims).
    The Christensens responded with four counterclaims. First, they sought a
    declaration that Denbury failed to comply with the WSEA’s good-faith negotiations
    requirement before entering onto the Christensens’ land to conduct operations
    relating to the five new wells. Second, they sought a declaration that the Section 3
    road was not reasonably necessary to development of the underlying lease or,
    alternatively, to any Unit operations. Third, the Christensens asserted a trespass
    claim. Specifically, they alleged (1) that Denbury’s entry onto their land to conduct
    operations relating to the five new wells was unlawful because Denbury failed to
    comply with the WSEA’s good-faith negotiations requirement, and (2) that
    Denbury’s entry onto Section 3 to construct the new road was unlawful because the
    road was not reasonably necessary for development of the Unit. Finally, the
    Christensens asserted a claim based on Denbury’s offer to amend the SDA. They
    alleged that Denbury breached the implied covenant of good faith and fair dealing
    “by failing to negotiate in good faith in adding new wells and roads as amendments
    to the [SDA], and by willfully seeking to avoid the terms of the [SDA].” App. vol. 3,
    485.
    7
    Denbury moved for summary judgment on its third and fourth claims and the
    Christensens’ implied-covenant and trespass claims. The district court denied the
    motion, concluding that genuine disputes as to material facts precluded summary
    judgment on those claims. The court dismissed Denbury’s fifth claim for lack of
    jurisdiction.3 The case proceeded to a jury trial only on the Christensens’ four
    counterclaims.4 At the close of the Christensens’ evidence, Denbury moved for
    judgment as a matter of law on the Christensens’ trespass and implied-covenant
    claims. See Fed. R. Civ. P. 50(a). The district court denied the motion.
    On the Christensens’ two claims for declaratory relief, the jury found that
    (1) Denbury failed to attempt good-faith negotiations to reach a surface use
    agreement before entering onto the Christensens’ land, as required by the WSEA; and
    (2) the Section 3 road wasn’t reasonable and necessary for Unit operations, as
    required by the WSEA. Regarding the Christensens’ two remaining claims, the jury
    found that Denbury (1) trespassed when it entered onto the Christensens’ land to
    begin or complete work on the new wells and the Section 3 road, and (2) breached
    the implied covenant of good faith and fair dealing by failing to negotiate in good
    3
    When Denbury moved for summary judgment, it advised the district court
    that it wasn’t pursuing its first and second claims because the Christensens had by
    then permitted Denbury’s access to Section 14. Denbury confirms in its opening brief
    that these claims were moot by the time Denbury sought summary judgment and that
    these claims are not at issue in this appeal.
    4
    Before trial, the parties stipulated that Denbury had no remaining issues of
    fact to submit on its third and fourth claims and that the only remaining factual issues
    arose under the Christensens’ counterclaims. The parties jointly moved the court for
    an order realigning the parties, and the court granted the motion. Thus, for trial
    purposes the Christensens were the plaintiffs and Denbury was the defendant.
    8
    faith when it offered to amend the SDA. The jury awarded the Christensens
    $1,751,991.00 in contract damages and $801.00 in trespass damages.
    After the district court entered final judgment, Denbury renewed its Rule 50
    motion, asking the court to vacate the jury’s findings and both damages awards. See
    Fed. R. Civ. P. 50(b). Denbury also moved for remittitur or, alternatively, for a new
    trial, arguing that the contract damages award was excessive. See Fed. R. Civ. P. 59.
    The district court denied both motions. Denbury appeals.5
    II
    Denbury primarily challenges the judgment against it on the implied-covenant
    claim and the contract damages award, asserting that the district court erroneously
    (1) denied its motion for summary judgment and its Rule 50 motions for judgment as
    a matter of law on the implied-covenant claim, (2) admitted certain evidence relating
    to the contract damages award, and (3) denied its motion for remittitur or a new trial
    based on an excessive contract damages award. Additionally, Denbury asserts that
    the district court erroneously (1) dismissed its fifth claim for lack of jurisdiction,
    (2) ruled that the Unit Agreement doesn’t satisfy the SRHA’s written-consent
    5
    After Denbury docketed its appeal, we issued a show cause order questioning
    our jurisdiction because it wasn’t clear whether the district court finally adjudicated
    all claims. We specifically questioned whether the district court finally resolved
    Denbury’s five claims because the final judgment referenced only the Christensens’
    four counterclaims. Denbury’s response clarified that the district court dismissed
    Denbury’s first and second claims as moot, dismissed its fifth claim as
    nonjusticiable, and disposed of its third claim by adopting the jury’s findings on the
    Christensens’ second counterclaim. And while Denbury incorrectly suggested in its
    response that the district court also dismissed its fourth claim as nonjusticiable, the
    record supports that the fourth claim too was resolved when the district court adopted
    the jury’s findings against Denbury on the Christensens’ second counterclaim. Thus,
    we are satisfied that the district court finally adjudicated all claims and that we have
    jurisdiction under 28 U.S.C. § 1291.
    9
    requirement, and (3) denied its motion to stay the trial to allow the Bureau of Land
    Management (BLM), rather than a jury, to decide whether the Section 3 road was
    reasonable and necessary for Unit operations.
    A
    Denbury first argues that the district court erred in denying its motions for
    summary judgment and judgment as a matter of law on the implied-covenant claim.
    We review de novo the district court’s denial of Denbury’s motions for
    summary judgment and judgment as a matter of law, applying the same standards as
    the district court. Arnold Oil Props. LLC v. Schlumberger Tech. Corp., 
    672 F.3d 1202
    , 1206 (10th Cir. 2012). “We grant judgment as a matter of law ‘if there is no
    legally sufficient evidentiary basis with respect to a claim or defense under the
    controlling law.’” 
    Id. (quoting Bristol
    v. Bd. of Cty. Comm’rs, 
    312 F.3d 1213
    , 1216
    (10th Cir. 2002)). In a diversity action, “the substantive law of the forum state
    controls the analysis of the underlying claims.” Wolfgang v. Mid-Am. Motorsports,
    Inc., 
    111 F.3d 1515
    , 1522 (10th Cir. 1997).
    Wyoming law recognizes an implied covenant of good faith and fair dealing in
    all commercial contracts. Ultra Res., Inc. v. Hartman, 
    226 P.3d 889
    , 919 (Wyo.
    2010). The implied covenant “requires that neither party commit an act that would
    injure the rights of the other party to receive the benefit of their agreement.” Scherer
    Constr., LLC v. Hedquist Constr., Inc., 
    18 P.3d 645
    , 653 (Wyo. 2001). “Compliance
    with the obligation to perform a contract in good faith requires that a party’s actions
    be consistent with the agreed common purpose and justified expectations of the other
    party.” 
    Id. 10 But
    the benefit of the agreement, the agreed common purpose, and the parties’
    justified expectations are derived from the specific terms of the contract. See 
    id. (explaining that
    “[t]he implied obligation ‘must arise from the language used or it
    must be indispensable to effectuate the intention of the parties’” (quoting Garrett v.
    BankWest, Inc., 
    459 N.W.2d 833
    , 841 (S.D. 1990))). The implied covenant may not
    “be construed to establish new, independent rights or duties not agreed upon by the
    parties.” Id.; see also Nationwide Emerging Managers, LLC v. Northpointe Holdings,
    LLC, 
    112 A.3d 878
    , 881 (Del. 2015) (explaining that honoring express contract terms
    “prevents a party . . . from using the implied covenant of good faith and fair dealing
    to obtain in court what it could not get at the bargaining table”); Wilder v. Cody
    Country Chamber of Commerce, 
    868 P.2d 211
    , 221 (Wyo. 1994) (noting that the
    implied covenant can’t “create duties that supersede express provisions of written
    contracts”).
    Consequently, whether a party has breached the implied covenant “is a factual
    inquiry that focuses on the contract and what the parties agreed to.” 
    Scherer, 18 P.3d at 654
    (quoting Gilmore v. Duderstadt, 
    961 P.2d 175
    , 182 (N.M. Ct. App. 1998)); see
    also City of Gillette v. Hladky Constr., Inc., 
    196 P.3d 184
    , 196 (Wyo. 2008)
    (explaining that in determining whether breach occurred, one “focus[es] on the
    conduct alleged as constituting the breach within the context of the contract
    language, the parties’ course of conduct[,] and industry standards”).6 But “a party is
    6
    In arguing that there is a legally sufficient evidentiary basis for their implied-
    covenant claim, the Christensens assert that the jury properly considered the WSEA’s
    good-faith-negotiations requirement as “evidence of ‘industry standards’ that are
    applicable to oil and gas operators in the State of Wyoming.” Aplee. Br. 31. They
    11
    entitled to a judgment as a matter of law ‘if, under the facts in the record, the party’s
    actions alleged as [the] basis for the breach . . . were in conformity with the clear
    language of the contract.’” Ultra Res., 
    Inc., 226 P.3d at 920
    (quoting 
    Scherer, 18 P.3d at 654
    n.2).
    Denbury argues it was entitled to judgment as a matter of law on the implied-
    covenant claim because the plain language of the SDA permits either party to refuse
    to amend the SDA unless both parties agree to the terms of the amendment. Again,
    the parties expressly agreed that the SDA “can be ammended [sic] so as to add rights-
    of-way, easements, and site payments” for future Unit operations by revising
    “Exhibit ‘A’ and Exhibit ‘B’ to the [parties’] mutual satisfaction.” App. vol. 15, 2450
    (emphases added); see also 
    id. at 2455
    (“Exhibits ‘A’ and ‘B’ may be amended by
    adding to or deleting roads or sites covered under their Agreement by written
    approval of both the Owners and Operator.” (emphasis added)). In particular,
    Denbury argues that the language of the contract (1) providing that the parties “can”
    or “may” amend the SDA “to add rights-of-way, easements, and site payments” for
    also assert that the WSEA’s good-faith-negotiations requirement must be “read and
    construed as though it is part of the parties’ contract” because the “WSEA was
    enacted to address the situation in [their] case.” Aplee. Br. 32. But as Denbury points
    out, the WSEA was enacted in 2005 and doesn’t apply to the parties’ dealings under
    the SDA, which was executed in 1983. See 2005 Wyo. Sess. Laws. Ch. 81 Section 2
    (“Any written surface use agreement, consent, prior regulatory approval or judicial
    order or decree in effect prior to the effective date of this act shall not be subject to
    the provisions of this act.”). Although Section 2’s language doesn’t appear in Wyo.
    Stat. Ann. § 30-5-410, the Wyoming Legislature’s website explains that it publishes
    the final version of each bill enacted into law annually in its Session Laws. And its
    Session Laws are controlling because they “contain the entire enrolled act other than
    the signatures and certification,” including noncodified provisions that “are still part
    of the law but are not printed in the annotated statutes.” See
    http://legisweb.state.wy.us/leginfo/hiswylaw.htm, last visited August 1, 2017.
    12
    future Unit operations, 
    id. at 2450,
    2455, and (2) requiring that any such amendments
    be “to the [parties’] mutual satisfaction,” 
    id. at 2450
    (emphasis added), means that it
    had no duty to amend the SDA on the Christensens’ terms when Denbury didn’t
    agree to those terms.
    The Christensens counter that Denbury misframes the issue by focusing on a
    duty to amend rather than a duty to negotiate in good faith. They argue that because
    the SDA’s provisions contemplate amendments for new wells and roads, the implied
    covenant obligated Denbury to negotiate in good faith in seeking to amend the SDA.
    And, the Christensens argue, substantial evidence supports the jury’s finding that
    Denbury breached that duty when it sought to amend the SDA by offering one-time,
    lump-sum payments—rather than annual payments—for the new Unit operations.
    Despite the Christensens’ artful attempt to characterize the alleged breach of
    the implied covenant as one based on Denbury’s failure to negotiate in good faith in
    seeking to amend the SDA, rather than on its failure to amend the SDA, their request
    for damages belies that characterization.7 Moreover, their request supports Denbury’s
    argument—an argument the district court acknowledged but ultimately rejected—that
    the Christensens were essentially “asking the jury to write the contract between the[]
    parties.” App. vol. 7, 1388.
    7
    In closing arguments, the Christensens asked the jury to “put [them] back
    into the position they would have been [in] had there been good faith negotiations.”
    App. vol. 7, 1361. And according to the Christensens, that position was the one they
    would have been in had Denbury agreed to amend the SDA by accepting their
    counteroffer for surface damages of $2,500/acre initially and annual payments in the
    same amount. But even good-faith negotiations may not have yielded such an
    agreement. Thus, the Christensens’ request for damages was necessarily premised on
    Denbury’s failure to amend the SDA—not on its failure to negotiate in good faith.
    13
    Significantly, the Christensens supported their theory that Denbury breached
    the implied covenant by presenting evidence showing that local surface owners were
    accustomed to receiving annual payments for surface damages and that Denbury
    adopted a new policy for surface damage with Unit surface owners that didn’t
    provide for annual payments.8 But the implied covenant protects contracting parties’
    rights to receive the “benefit of their agreement,” 
    Scherer, 18 P.3d at 653
    , not the
    benefit of unwritten local customs that purportedly “require” annual payments at the
    “going rate.” And while the scope of the implied obligation also takes into account
    “the agreed common purpose and justified expectations” of the non-breaching party,
    
    id., both the
    purpose and expectations must be tethered to “the language used” in the
    agreement and “must be indispensable to effectuate the intention of the parties,” 
    id. (quoting Garrett,
    459 N.W.2d at 841).
    Under the express terms of the SDA, the Christensens and Cities Service
    entered into the SDA to replace several existing surface damage agreements with a
    single agreement. And they agreed that the SDA “addresses only annual payments
    8
    For example, the Christensens cite Robert Christensen’s testimony that Cities
    Service and the Christensens twice agreed to amend the SDA to add new roads and
    well sites and both times they agreed to annual payments; that Denbury became the
    Unit operator in 2012 and continued to make annual payments to the Christensens for
    existing well sites and roads described in the SDA; and that in 2013 Denbury adopted
    a new policy that it would no longer pay annual payments to Unit surface owners.
    The Christensens also point to evidence that Denbury knew its new policy was
    inconsistent with the terms of the SDA and that Denbury had been told that payment
    agreements for surface damages “are done differently here in Wyoming.” App. vol.
    11, 1960. Finally, the jury heard opinion testimony from a professional landman that
    “annual payments are required in Campbell County, Wyoming” for surface damages,
    App. vol. 12, 2174, and testimony from a local landowner that the “going rates” for
    such damages were $2,500 per acre for both annual payments and initial payments,
    App. vol. 13, 2191.
    14
    due” for those rights-of-way, well-sites, and easements described in the SDA. App.
    vol. 15, 2454. Thus, the purpose of the SDA was to consolidate multiple surface
    damage agreements for existing Unit operations, and the benefit of the SDA was to
    ensure that Cities Service would continue to make annual payments for those
    operations.
    As Cities Service’s successor, Denbury is bound to honor the terms of the
    SDA for existing operations covered by the SDA. And, in compliance with its
    obligations under the SDA, Denbury continues to make annual payments to the
    Christensens at the rates that the Christensens and Cities Service agreed to in 1983.
    But the SDA’s provisions permitting amendment upon mutual agreement
    simply don’t support the Christensens’ assertion that they harbored justified
    expectations that for all future Unit operations Denbury would make any offer to
    amend the SDA—much less that it would ultimately agree to amend the SDA to
    provide annual payments for surface damages at the purported “going rate” for
    damages in Campbell County, Wyoming.
    As Denbury suggests, had the parties intended to impose specific obligations
    on Denbury requiring it to offer to amend, or in doing so to offer specific rates or
    methods of payments for future operations, they could have easily included those
    obligations in the SDA. See Whitlock Constr., Inc. v. S. Big Horn Cty. Water Supply
    Joint Powers Bd., 
    41 P.3d 1261
    , 1267-68 (Wyo. 2002) (suggesting that if parties
    intended to impose certain duties, they “were required to expressly state that
    intention in the contract itself”). But they did not do so. Instead, the SDA
    unambiguously provides that the parties “can” or “may” amend the SDA to add
    15
    payments for new operations if they mutually agree to do so. App. vol. 15, 2450,
    2455. And if Denbury offers to amend to add payments for future operations, the
    SDA is silent as to the method, type, or amount of any such payments—other than
    making clear that each party must be satisfied with the amended terms. Thus, the fact
    that both parties agreed that the SDA could be amended to add new Unit operations
    didn’t bind Denbury to offer or make annual payments for new operations any more
    than it could bind the Christensens to accept annual payments for new Unit
    operations at the same rates they agreed to in 1983.9 Instead, the SDA’s amendment
    provisions merely gave both parties the discretionary option to pursue amendments
    for future Unit operations, as well as the contractual right not to amend if the parties
    couldn’t mutually agree on the terms. And, as Denbury argues, it merely exercised its
    contractual right not to amend on the Christensens’ terms because it didn’t agree to
    those terms.
    9
    The dissent primarily asserts that any new roadways and well sites the parties
    agree to add to the SDA are subject to some automatic annual-payment requirement.
    See Dissent at 7 (“Because roadways and well sites later amended into the SDA are
    in fact ‘constructed’ or ‘used,’ I believe that [the language of the SDA] requires
    [Denbury] to pay annual payments for those roadways and well sites too.”). But even
    assuming this is the case, the dissent doesn’t suggest that the parties ever actually
    “amended into the SDA,” 
    id., the roadways
    and well sites at issue here. Instead, the
    dissent makes the curious assertion that the new roadways and well sites were
    somehow incorporated into the SDA—without any actual amendment—at the precise
    moment Denbury “beg[an] work on [them].” 
    Id. at 10.
    But not even the Christensens
    advance this argument. And with good reason: it finds no basis in law or in fact.
    What’s more, the dissent’s automatic-incorporation hypothesis is entirely at odds
    with the Christensens’ theory of relief. If the dissent is correct and the new roadways
    and well sites at issue here were (1) automatically added to the SDA and
    (2) henceforth subject to some express annual-payment requirement, then the
    Christensens would have simply sued for breach of the SDA’s express annual-
    payment provision; they would have had no need to invoke the implied duty of good
    faith and fair dealing.
    16
    Because Denbury’s actions—i.e., making an offer to amend that didn’t provide
    for annual payments and declining to amend when the parties’ didn’t agree to the
    terms of the amendment—conformed with the express provisions of the SDA,
    Denbury was entitled to judgment as a matter of law on the implied-covenant claim.
    
    Scherer, 18 P.3d at 654
    n.2. Consequently, we reverse the denial of Denbury’s
    motions for summary judgment and judgment as a matter of law with respect to the
    implied-covenant claim. And we remand with directions to vacate the judgment
    against Denbury on that claim and the corresponding contract damages award.10 But
    in doing so, we stress that our holding turns on the very specific language of this
    particular contract—language that is unambiguously permissive, rather than
    mandatory.
    And notably, this doesn’t leave the Christensens without any remedies. In fact,
    the WSEA provides a remedy for the very situation presented here.11 See Wyo. Stat.
    Ann. § 30-5-406 (providing surface owner with cause of action for compensation for
    surface damages “[i]f the oil and gas operator has commenced oil and gas operations
    in the absence of any agreement for compensation for all damages”);12 see also 43
    10
    Based on our disposition of the implied-covenant claim, we don’t address
    Denbury’s arguments that the district court erred (1) in admitting certain evidence
    relating to the contract damages award and (2) in denying Denbury’s motion for
    remittitur or a new trial based on an excessive contract damages award.
    11
    The dissent expresses confusion as to “how the majority applies the WSEA
    in view of its footnote 6.” Dissent at 14. Although the WSEA applies to the parties’
    current dealings, it cannot guide our interpretation of the SDA itself. That’s
    because—as we explain above, see supra note 6—the WSEA wasn’t enacted until
    more than two decades after the parties executed that agreement.
    12
    The Christensens pursued declaratory judgment claims under the WSEA
    arising from Denbury’s failure to comply with WSEA provisions. Thus, they didn’t
    seek surface and disruption damages as provided by the WSEA. See Wyo. Stat. Ann.
    17
    U.S.C. § 299(k) (permitting surface owner to seek damages for operator’s failure to
    comply with SHRA provisions); 
    id. § 299(l)
    (permitting surface owner to petition
    “for payment of all or any portion of a bond or other financial guarantee required
    under [§ 299(e)] as compensation for any permanent damages to crops and tangible
    improvements of the surface owner, or any permanent loss of income due to loss or
    impairment of grazing, or other uses of the land by the surface owner”).
    But Wyoming law doesn’t permit the Christensens to do what they did here—
    i.e., use the implied covenant of good faith and fair dealing in an existing surface use
    agreement to impose a new duty that neither arises from the contract language nor is
    indispensable to effectuate the parties’ purpose in entering into that agreement. See
    
    Scherer, 18 P.3d at 653
    ; Nationwide Emerging Managers, 
    LLC, 112 A.3d at 881
    .
    B
    Next, Denbury argues the district court erroneously dismissed its fifth claim
    for lack of jurisdiction. In that claim, Denbury sought a declaration that it is entitled
    to the reasonable use of all of the Christensens’ surface land overlying the Unit. The
    district court concluded the claim didn’t present a justiciable controversy under the
    Declaratory Judgment Act, 28 U.S.C. § 2201, and dismissed it for lack of
    jurisdiction.
    § 30-5-405 (requiring oil and gas operator to compensate surface owner for “loss of
    production and income, loss of land value and loss of value of improvements,” but
    expressly providing that payments contemplated by this provision “shall only cover
    land directly affected by oil and gas operations”). Instead, they chose to pursue the
    more comprehensive compensatory damages available under their breach of contract
    claim.
    18
    We review questions regarding justiciability and jurisdiction de novo. COPE v.
    Kan. State Bd. of Educ., 
    821 F.3d 1215
    , 1220 (10th Cir. 2016); Awad v. Ziriax, 
    670 F.3d 1111
    , 1119-20 (10th Cir. 2012). In determining whether a court has jurisdiction
    to grant declaratory relief, the primary question is “whether the facts alleged, under
    all the circumstances, show that there is a substantial controversy, between parties
    having adverse legal interests, of sufficient immediacy and reality to warrant the
    issuance of a declaratory judgment.” Columbian Fin. Corp. v. BancInsure, Inc., 
    650 F.3d 1372
    , 1376 (10th Cir. 2011) (quoting MedImmune, Inc. v. Genentech, Inc., 
    549 U.S. 118
    , 127 (2007)). “[E]ven if all the relevant facts regarding a particular legal
    issue are known or knowable, a court does not have jurisdiction to resolve the issue
    unless that issue arises in a specific dispute having real-world consequences.” 
    Id. at 1379.
    Here, the district court determined that Denbury’s request for a declaration that
    it is entitled to the reasonable use of all of the Christensens’ surface land within the
    Unit was overly broad. The court reasoned that by the time Denbury moved for
    summary judgment, the parties’ dispute centered on Denbury’s right to access
    Section 3, not its right to access all of the Christensens’ land within the Unit.
    We acknowledge that the Christensens’ counterclaims weren’t strictly limited
    to Denbury’s attempt to build the Section 3 road. For example, the Christensens also
    alleged that Denbury had no right to access Section 14 to drill a new well. And their
    trespass claim alleged unlawful entry onto Section 14 as well as onto Section 3.
    But we agree with the district court’s ultimate conclusion. As the district court
    reasoned, by the time Denbury moved for summary judgment, the Christensens had
    19
    permitted Denbury access to Section 14, and Denbury had completed work on the
    Section 14 well. Moreover, the claims the Christensens ultimately presented to the
    jury focused on whether Denbury complied with the WSEA, as opposed to the
    SRHA, before entering onto their land to conduct new Unit operations. Specifically,
    with respect to their declaratory judgment claims, the Christensens asked the jury to
    decide (1) whether Denbury failed to attempt good-faith negotiations as required by
    the WSEA, and (2) whether the Section 3 road was reasonable and necessary to oil
    and gas operations as required under the WSEA.
    Granting Denbury’s broad request for a declaration that Denbury has a right to
    the reasonable use of all of the Christensens’ surface land within the Unit wouldn’t
    have resolved these disputes. Thus, the “specific dispute having real-world
    consequences” wasn’t whether Denbury has the right to reasonably use the entirety of
    the Christensens’ land within the Unit. See Columbian Fin. 
    Corp., 650 F.3d at 1379
    .
    Rather, the specific dispute was whether Denbury complied with the WSEA’s
    preconditions to entry before it exercised that right. For these reasons, we affirm the
    district court’s dismissal of Denbury’s fifth claim.
    C
    Next, Denbury argues that the district court erred as a matter of law in ruling
    that the Unit Agreement failed to satisfy the SRHA’s written-consent requirement.
    Denbury asks us to reverse the district court’s ruling on this point and conclude that
    Denbury complied with the SRHA’s written-consent requirement.
    But we decline to address Denbury’s argument. The district court made this
    ruling in addressing Denbury’s motion for summary judgment on Denbury’s fourth
    20
    claim.13 In that claim, Denbury sought a declaration that it “is entitled to use all
    contiguous surface of the Christensen Land that overlies Federal minerals in the
    Unit.” App. vol. 2, 282. Denbury argued, in part, that it was entitled to summary
    judgment on it fourth claim because the Unit Agreement satisfied Denbury’s federal
    obligation to obtain written consent before entering onto the Christensens’ land. See
    43 U.S.C. § 299(a) (requiring oil and gas operator to provide written notice of its
    intent to enter onto land and (1) obtain landowner’s written consent or waiver,
    (2) pay for damages to their crops or other tangible improvements, or (3) in lieu of
    meeting either of these two requirements, post a federal bond); see also 
    Entek, 763 F.3d at 1256
    , n.1 (explaining that unit operator must satisfy SRHA preconditions
    before entry). But Denbury also suggested that it might be required to, and did,
    comply with the WSEA’s preconditions for entry.14
    In denying Denbury’s motion for summary judgment, the district court first
    determined that Denbury’s fourth claim, like its nonjusticiable fifth claim, was overly
    broad. The court reasoned, again, that the parties’ dispute centered on whether
    13
    We also note that it’s not at all clear what relief Denbury seeks with this
    argument. After arguing that the district court committed legal error by ruling that the
    Christensens didn’t grant Denbury written consent to enter onto their land by joining
    the Unit Agreement, Denbury asserts that this error “requir[es] that the District Order
    be reversed and the judgment against Denbury for trespass be vacated.” Aplt. Br. 58.
    But the Christensens’ trespass claim was predicated on Denbury’s failure to comply
    with the WSEA, not the SRHA. Moreover, Denbury expressly stated at oral argument
    that the trespass damage award was “not at issue” and “hasn’t been appealed.” Thus,
    it appears that Denbury is asking us to conclude that the district court committed a
    legal error that doesn’t entitle Denbury to any specific relief.
    14
    Denbury specifically stated in its summary judgment motion, “Although it
    has not been legally decided that Denbury is also required to comply with the
    [WSEA], Denbury has done so.” App. vol. 2, 286. Denbury asserted that it complied
    by giving the Christensens notice and by posting a bond with the WOGCC.
    21
    Denbury had the right to access the Christensens’ land to construct the Section 3
    road. So, the district court narrowed Denbury’s claim to focus on that dispute and
    then considered whether Denbury had, in fact, complied with both federal law and
    state law. In addressing Denbury’s compliance with federal law, the court concluded
    that the Unit Agreement didn’t satisfy the SRHA’s written-consent requirement.
    The court then turned to Denbury’s compliance with state law. At the outset,
    the court noted Denbury’s acknowledgment that an open question exists as to
    whether the SRHA preempts the WSEA. But the court further noted that Denbury’s
    counsel expressly stated at oral argument on the summary judgment motion that
    Denbury “did not want to litigate the issue of preemption.” App. vol. 5, 853. And the
    court ultimately concluded that factual disputes regarding whether Denbury complied
    with the WSEA’s preconditions to entry precluded summary judgment on Denbury’s
    fourth claim.
    Denbury’s decision below not to argue preemption effectively operated as a
    concession that it must satisfy preconditions to entry under both the SRHA and the
    WSEA. That concession, coupled with its failure on appeal to challenge the district
    court’s alternative basis for denying summary judgment on Denbury’s fourth claim,
    i.e., the court’s ruling that factual disputes regarding Denbury’s compliance with the
    WSEA precluded summary judgment, makes it unnecessary for us to decide this
    issue. See Shook v. Bd. of Cty. Comm'rs, 
    543 F.3d 597
    , 613 n.7 (10th Cir. 2008)
    (“Indeed, we have gone so far as to hold that where a district court’s disposition rests
    on alternative and adequate grounds, a party who, in challenging that disposition,
    only argues that one alternative is erroneous necessarily loses because the second
    22
    alternative stands as an independent and adequate basis, regardless of the correctness
    of the first alternative.”).
    Thus, regardless of whether the Unit Agreement satisfied the SRHA’s written-
    consent requirement, and regardless of whether Denbury may have therefore
    complied with the SRHA, the district court’s denial of summary judgment with
    respect to Denbury’s fourth claim stands.
    D
    Finally, Denbury argues that the district court abused its discretion in denying
    Denbury’s motion to stay the trial to allow the BLM to exercise primary jurisdiction
    and decide whether the Section 3 road is reasonable and necessary to Unit operations.
    Denbury argues that the BLM regulates nearly every aspect of onshore operations
    overlying federal oil and gas leases and is in the best position to determine whether
    the Section 3 road is reasonable and necessary to Unit operations.
    We review a district court’s decision denying a stay under the primary
    jurisdiction doctrine for abuse of discretion. S. Utah Wilderness All. v. Bureau of
    Land Mgmt., 
    425 F.3d 735
    , 750 (10th Cir. 2005). And we find no abuse of discretion
    here. The doctrine of primary jurisdiction ordinarily applies in cases “involving
    technical and intricate questions of fact and policy that Congress has assigned to a
    specific agency.” Williams Pipe Line Co. v. Empire Gas Corp., 
    76 F.3d 1491
    , 1496
    (10th Cir. 1996) (quoting Nat’l Commc’ns Ass’n, Inc. v. AT&T, 
    46 F.3d 220
    , 223 (2d
    Cir. 1995)). We agree with the district court that the question of “whether a dirt road
    connecting two existing dirt roads is reasonable and necessary” is not that kind of
    23
    question. App. vol. 6, 1031. Thus, we affirm the district court’s denial of the motion
    to stay the trial.
    *   *      *
    We reverse the district court’s denial of Denbury’s motion for summary
    judgment on the implied-covenant claim and remand with directions to vacate the
    judgment against Denbury as to that claim and the $1,751,991.00 contract damages
    award. We affirm the remainder of the judgment and the trespass award, the court’s
    order denying the motion to stay the trial, and the court’s order dismissing Denbury’s
    fifth claim for lack of jurisdiction.
    Entered for the Court
    Nancy L. Moritz
    Circuit Judge
    24
    15-8106, Denbury Onshore v. Christensen, et al.
    PHILLIPS, Circuit Judge, concurring and dissenting
    I concur in the majority’s opinion, except for its conclusion that Denbury is
    entitled to a judgment as a matter of law on the Christensens’ claim for breach of the
    implied covenant of good faith and fair dealing. I join in the majority’s recitation of the
    underlying facts and procedural history.
    This case is the tale of a longtime Wyoming ranch family, the Christensens, and its
    experiences with two different unit operators over the past 34 years. All went well for the
    first 30 years. The unit operator during that time, Cities Service, was a good neighbor,
    entering a Surface Damage Agreement (SDA) with the Christensens in 1983, and paying
    agreed-upon sums annually for damages caused by its oil and gas operations on their
    land. Things took a dramatic turn for the worse in 2013, when Denbury became the unit
    operator. Where before, all had been good-faith negotiations and fair treatment, Denbury
    arrived with a different mindset. No longer would both sides sit down to set a price for
    damages done—no, under Denbury’s new policy it could run roughshod, offering the
    Christensens a relatively meager, take-it-or-leave-it damages payment, despite estimating
    that the impact would last for 30 years, and all while not even bothering to consider the
    SDA in formulating its new policy.
    The majority opinion does a good job setting out the procedural history of this
    case and the parties’ claims in the district court and on appeal. The primary issue before
    us concerns the more-than $1.7 million dollar verdict in favor of the Christensens on their
    claim that Denbury breached the implied covenant of good faith and fair dealing, which
    in Wyoming attaches to all commercial contracts, including the SDA between Cities
    Service and the Christensens (and binding their successors, including Denbury).
    In its thorough order denying summary judgment to Denbury on the Christensens’
    implied-covenant claim, the district court set out the Wyoming law governing that claim.
    Under this law, the district court concluded that the question whether a party has
    breached the implied covenant of good faith and fair dealing “is ordinarily one of fact,
    focusing on the conduct alleged as constituting the breach within the context of the
    contract language, the parties’ course of conduct and industry standards.” Appellant App.
    vol. 5 at 863 (citing City of Gillette v. Hladky Constr., Inc., 
    196 P.3d 184
    , 196-97 (Wyo.
    2008)). The court also noted that “[a] party is entitled to judgment as a matter of law on
    the claim [for breach of the implied covenant of good faith and fair dealing] only where
    the actions alleged to have breached the covenant were in conformity with the clear
    contract language.” 
    Id. After considering
    the parties’ competing arguments, the court
    concluded “that the evidence establishes a material dispute as to whether Denbury’s
    alleged conduct ‘went beyond the exercise of contract rights and amounted to self-dealing
    or a violation of community standards of decency, fairness or reasonableness.’” 
    Id. (citing Hladky,
    196 P.3d at 197). The court found the factual dispute genuine “because a
    reasonable juror could resolve the question in favor of either side.” 
    Id. After a
    weeklong jury trial, the jury returned a verdict in favor of the Christensens.
    In its Judgment in a Civil Case, the court reviewed the jury’s findings, two of which were
    (1) that “Denbury Onshore, LLC failed to negotiate in good faith in attempting to reach a
    surface use agreement prior to entry on Robert F. Christensen and Janet K. Christensen’s
    2
    surface estate for conducting operations as required by the Wyoming Split Estate Act[.]1;
    and (2) that “Denbury Onshore, LLC, breached the implied covenant of good faith and
    fair dealing in its dealings with Robert F. Christensen and Janet K. Christensen under the
    Surface Damage Agreement[.]”2 Appellant’s App. vol. 7 at 1377–78. For the implied-
    covenant claim, the jury made three specific findings: (1) that Denbury had breached the
    implied covenant of good faith and fair dealing under the SDA in its dealings with the
    Christensens; (2) that Denbury’s breach had caused the Christensens damage; and (3) that
    the amount of money to reasonably compensate for the breach was $1,751,991. 
    Id. at 1379.
    Soon after trial, Denbury filed a motion under Rule 50(b) of the Federal Rules of
    Civil Procedure. Under this rule, the district court reviewed whether a reasonable jury
    could return the same verdict based on legally sufficient evidence. In evaluating that
    question, the district court noted that it must draw all reasonable inferences in favor of the
    Christensens. The court then turned to Denbury’s argument for relief—the same one now
    on appeal, namely, that it had no duty to amend the SDA when it was unsatisfied with a
    proposed amendment. In opposition, the Christensens argued that the jury’s verdict was
    sound, based on the common purpose of the SDA and on their justified expectations, and
    that Denbury had deprived them of the benefit of their bargain.
    1
    The jury’s finding that Denbury had not attempted good-faith negotiations as
    required by the WSEA helps inform the jury’s finding that Denbury breached the implied
    covenant of good faith and fair dealing.
    2
    In addition, the jury found that Denbury’s proposed connecting road was not
    reasonable and necessary to the conduct of oil and gas operations under the WSEA, and
    that Denbury has trespassed on the Christensens’ land.
    3
    After considering the arguments, the district court concluded that “[d]uring the
    trial, the jury heard evidence that Denbury’s actions were not in conformity with the
    language of the SDA.” Appellant’s App. vol. 9 at 1703. The court determined that the
    jury had a legally sufficient evidentiary basis to find that Denbury had breached the
    implied covenant of good faith and fair dealing. The court summarized some of the
    supporting evidence, specifically referring to the testimony of Denbury employee, Vern
    Johnson, who had told Denbury that its new damages policy was not in accordance with
    the historical and expected payments customary in the region; to Denbury’s new policy
    having disregarded the SDA’s provisions on conditions to the unit operator’s seeking
    easements or rights of way on the land;3 to Denbury’s offering to pay a one-time, lump-
    sum damage payment rather than the annual damages found in the SDA; and to
    Denbury’s paying other landowners in the region annual damages.
    At trial, the district court instructed the jury on Wyoming law governing the
    implied covenant of good faith and fair dealing. Included in this was direction to consider
    the contract language (in the SDA), the course of conduct of the parties, and industry
    3
    In 1980, the Wyoming Oil and Gas Commission approved the Hartzog Draw
    Unit, and the Christensens signed the Unit Agreement that year. In 1983, the Christensens
    and Cities Service (Denbury’s predecessor as Unit Operator from 1983 to 2013) entered
    into the Surface Damages Agreement. In paragraphs 3 and 4 of the SDA, the
    Christensens granted right-of-way easements to Cities Service’s employees to enter their
    property “for the purpose of conducting production operations of the below described
    wells and facilities under lease or leases.” Appellant’s App. vol. 15 at 2449. But upon
    becoming unit operator, Denbury declared in its new policy that it would no longer seek
    easements or rights of way from the Christensens, saying that the Unit Agreement already
    gave it that right.
    4
    standards. In examining the SDA, I look to see whether Denbury is correct that its actions
    conformed to clear contract language, entitling it to judgment as a matter of law.
    As the majority recounts, Cities Service and the Christensens signed the SDA in
    1983, three years after the Wyoming Oil and Gas Commission established the Hartzog
    Draw Unit. With unitization came some restructuring of earlier agreements. For instance,
    Paragraph 18 of the SDA lists 69 well-site agreements “to be superseded, cancelled and
    replaced[.]” Appellant’s App. vol. 15 at 2454–55. Paragraph 19 lists multiple “roads, well
    sites, and battery sites” made a part of the agreement, referring to the listings in Exhibits
    “A” and “B”. 
    Id. at 2455.
    So consolidating the scattered agreements was obviously one
    purpose of the SDA. But I believe that the majority goes too far in asserting that “the
    purpose of the SDA was to consolidate multiple surface damage agreements for existing
    Unit operations, and the benefit of the SDA was to ensure that Cities Service would
    continue to make annual payments for those operations.”4 Maj. op. at 15 (emphasis
    added).
    To understand why, we need to read the SDA as a whole. Under the SDA, the
    roadways and well sites listed in Exhibits “A” and “B” are not static. As Paragraph 19
    says, “Exhibits ‘A’ and ‘B’ may be amended by adding to or, deleting roads or sites
    covered under their Agreement by written approval of both the Owners and Operator.”
    4
    In this regard, the majority declares that “[u]nder the express terms of
    the SDA, the Christensens and Cities Service entered into the SDA to replace
    several existing surface damage agreements with a single agreement. And they
    agreed that the SDA ‘addresses only annual payments due’ for those rights-of-
    way, well-sites, and easements described in the SDA.” 
    Id. at 14-15
    (quoting
    Appellant’s App. vol. 15, 2454).
    5
    Appellant’s App. vol. 15 at 2455. Because understanding Exhibits “A” and “B” is key to
    understanding the SDA, I turn to them.
    Under Exhibit “A”, paragraph A, the SDA lists 78 “roadways covered by this
    Agreement.” 
    Id. at 2459.
    It identifies the HDU well names (e.g., #5182), the former
    operators’ names, the trunk roads (107,872 rods before September 1, 1980, and 14,872
    rods after that until September 1, 1983), and the branch roads (rods) (34,768 rods before
    September 1, 1980, and 2,140 after that until September 1, 1983).” 
    Id. at 2459–60.
    Paragraph B provides that “[t]he annual payments to be paid Owner by Operator for
    rights-of-way and easements as to roadways are as follows:” and lists annual dollar
    figures for all 78 roads. 
    Id. at 2460–62.
    Under Exhibit “B”, the SDA lists 80 well and battery sites, each with a specific
    annual payment. Then for the “Exhibit A-1 Ammendment [sic],” dated September 1,
    1983, and signed by the Christensens on December 5, 1985, the SDA lists 46 additional
    roadways, again all with associated annual payments. 
    Id. at 2465–67.
    What stands out is
    that for every single one of the 204 listed well sites and roadways, Cities Service agreed
    to pay annual payments.
    This takes us back to Denbury’s offers to the Christensens. For the well sites and
    the connector road, Denbury sought to amend the SDA to include its new well sites and
    new connector road under Exhibits “A” and “B”.5 And under SDA paragraph 19, those
    5
    The November 6, 2013 letter from Denbury to the Christensens concerned
    “HDU-5144H Well” and gave notice of Denbury’s planned entry under paragraph 8 of
    the SDA. Appellant’s App. vol. 15 at 2473. The November 27, 2013 letter from Denbury
    6
    proposed amendments “shall be a part of this agreement in all respects.” Appellant’s
    App. vol. 15 at 2455. As I read it, this means that the SDA’s terms also govern newly
    added roadways and well sites to Exhibits “A” and “B” just as they govern the roadways
    and well sites originally listed in the two exhibits. On this point, one important part of the
    SDA is found at paragraph 9:
    For all roads constructed or used under or across the lands of Owners in
    connection with Operator’s drilling, production or other rights hereunder,
    for the described wells, Operator agrees to pay annual payments in advance
    as described in Exhibit “A” of this Agreement for each successive or
    additional year Operator shall be engaged in or using the same. The annual
    payment shall allow Operator rights-of-way and easements to be used by
    Operator, its agents, servants, employees and successors in interest as long
    as the annual payments are made and the described wells and its incident
    leases are in production and valid.
    
    Id. at 2450–51.
    Because roadways and well sites later amended into the SDA are in fact
    “constructed” or “used,” I believe that this language requires the Operator to pay annual
    payments for those roadways and well sites too. We know that Denbury offered no such
    thing. Thus, the jury was justified in its finding that Denbury didn’t attempt good faith
    negotiations and that it breached the implied covenant of good faith and fair dealing.
    But Denbury sidesteps any such analysis by arguing that it could not breach the
    implied covenant when it had no duty to reach an agreement with the Christensens under
    the SDA. As I understand it, Denbury contends that the SDA is optional—a mere
    permissive, first-try method of reaching agreement for surface damages caused by oil and
    gas operations. And that it is even free to disregard the SDA and not make an offer under
    to the Christensens about the connector road referenced the SDA and also gave notice of
    paragraph 8 of the SDA.
    7
    it, or to make a take-it-or-leave it offer and disregard the SDA after the offer is refused.
    In support of this power, undiscovered by Cities Service apparently, Denbury relies
    primarily on two paragraphs of the SDA:
    7. It is agreed that this Agreement can be ammended [sic] so as to
    add rights-of-way, easements, and site payments by the revision of
    Exhibit “A” and Exhibit “B” to the mutual satisfaction of Owners
    and Operator.
    …
    19. Exhibits “A” and “B” attached hereto describing said roads, well
    sites, and battery sites are made a part of this Agreement. Exhibits
    “A” and “B” may be amended by adding to or deleting roads or sites
    covered under their Agreement by written approval of both the
    Owners and Operator. Such amendments to Exhibits “A” and “B”
    shall be a part of this agreement in all respects.
    Appellant’s App. vol. 15 at 2450, 2455.
    Denbury stresses the permissive “can” and “may.”
    The majority agrees with Denbury’s reading, saying that “[i]nstead, the SDA’s
    amendment provisions merely gave both parties the discretionary option to pursue
    amendments for future Unit operations, as well as the contractual right not to amend if
    the parties couldn’t mutually agree on the terms.” Maj. op. at 16. From this, the majority
    asserts that Denbury “conformed with the express provisions of the SDA” by its
    actions—“making an offer to amend that didn’t provide for annual payments and
    declining to amend when the parties didn’t agree to the terms of the amendment[.]” 
    Id. at 17.
    Thus, the majority overturns the jury’s verdict by relying on “the very specific
    language of this particular contract—language that is unambiguously permissive, rather
    than mandatory.” 
    Id. 8 I
    agree that the Christensens cannot force Denbury to amend the SDA. But I don’t
    agree that Denbury can proceed with the roadway and well sites without negotiating in
    good faith for surface damages under the SDA. Otherwise stated, I see nothing in the
    SDA allowing Denbury to unilaterally disregard the SDA, or to allow Denbury to
    demand terms contrary to the SDA, when seeking and beginning new roadways or well
    sites that will cause surface damages. If future damages under the SDA are undeserved in
    a given situation, the parties are free to agree to a more limited agreement for that
    situation. But the jury was within its rights to find that Denbury had not negotiated in
    good faith with the Christensens by making its meager take-it-or-leave-it offer and then
    abandoning any attempt to negotiate under the SDA.
    The majority’s view (and Denbury’s) is that the SDA permits Denbury to offer a
    one-time damage award not even based on actual damages over 30 years—all as an
    amendment to Exhibit “A” and “B” of the SDA. As mentioned, the two SDA exhibits
    provide annual damages for all 80 well and battery sites, and for all 124 roadways (46 of
    which were later amended into the SDA). For me, that hardly established a clear contract
    right to insist on non-annual damages payments. In fact, as discussed with paragraph 9
    above, it is reasonable to conclude that good-faith negotiations under the SDA would
    result in payment of annual damages.6 And in my view other language in the SDA
    6
    The Christensens assert that “[t]he SDA language unambiguously
    states that the parties to the agreement agreed to annual payments.” Appellee’s
    Br. at 20 (emphasis in original). And they also point out that “[t]he jury also
    correctly found that Denbury breached its implied covenant when it
    unilaterally refused to pay any annual surface damage payments for the new
    wells and associated roads located on the Christensens’ property.” 
    Id. at 12.
                                                  9
    supports that position. For instance, take a look at neighboring paragraphs to Denbury’s
    oft-cited paragraph 7:
    5. Roadways covered by this Agreement and annual payments relative to
    these roadways, rights-of-way, and easements are agreed to be as shown in
    Exhibit “A” of this Agreement.
    6. Well sites and tank battery sites covered by this Agreement and annual
    payments relative to said sites are agreed to be as shown in Exhibit “B” of
    this Agreement.
    
    Id. at 2450.
    I believe that once Denbury begins work on a road or new well sites, the road
    and well sites are “covered by this agreement.” They are the very things giving rise to the
    SDA. And because they are covered—absent a separate agreement by the parties—
    Denbury must honor the implied covenant of good faith and fair dealing under the SDA
    and undertake good-faith negotiations. Then paragraph 9 requires annual payments. Even
    if one disagrees on any or all of these steps, hasn’t Denbury failed to show that its actions
    are within the clear language of the SDA? I’d say yes.
    As for paragraphs 7 and 19, I see them as fitting nicely into the whole SDA
    scheme—advising how to add new well sites and roadways to Exhibits “A” and “B” of
    the SDA. Cities Service and the Christensens had done exactly that. Obviously, before
    the parties could add any new roadways or well sites to the SDA’s exhibits, the parties
    would need once again to agree on some terms, for example, the size of the well and
    battery sites, the length of the roads, and the amount of annual payments necessary to
    account for the annual damages from oil and gas operations.
    So I disagree with the majority that the jury somehow was barred from finding that
    Denbury had no unilateral powers inside or outside the SDA to dictate historically
    10
    unreasonable terms as part of supposedly trying to amend Exhibits “A” and “B”. I believe
    that the jury acted well within the court’s instruction directing it to determine the
    “purpose, intentions, and expectations of the parties” by “considering the contract
    language, the parties’ course of conduct, and industry standards.” Here is Instruction 35
    on this subject:
    Every contract includes an implied covenant of good faith and fair dealing.
    The implied covenant of good faith and fair dealing requires that neither
    party commit an act that would injure the rights of the other party to receive
    the benefit of their agreement. Compliance with the obligation to perform a
    contract in good faith requires that a party’s actions be consistent with the
    agreed common purpose and justified expectations of the other party. A
    breach of the covenant of good faith and fair dealing occurs when a party
    interferes or fails to cooperate in the other party’s performance. The
    purpose, intentions, and expectations of the parties should be determined by
    considering the contract language, the parties’ course of conduct and
    industry standards.
    The implied covenant of good faith and fair dealing may not be used to
    create new, independent rights or duties beyond those agreed to by the
    parties. The concept of good faith and fair dealing is not a limitless one.
    Rather, it must arise from the language used or be indispensable to
    effectuate the intention of the parties as determined by the contract
    language, the parties’ conduct and their course of dealing. In the absence of
    evidence of self-dealing or breach of community standards of decency,
    fairness and reasonableness, the exercise of contractual rights alone will not
    be considered a breach of the covenant.
    Appellant’s App. vol. 6 at 1095; vol. 14 at 2347.
    I disagree with the majority that the jury “use[d] the implied covenant of good
    faith and fair dealing in an existing surface use agreement to impose a new duty that
    neither arises from the contract language nor is indispensable to effectuate the parties
    purpose in entering into that agreement.” Maj. op. at 18 (citations omitted). As for the
    purpose of the agreement and the parties’ intentions, we need look no further than the 30-
    11
    year history between Cities Service and the Christensens. Never did Cities Service claim
    the unilateral powers that Denbury claims. Instead, it amended the SDA under Exhibits
    “A” and “B” and paid the landowners damages caused by the oil and gas operations.
    The district court did not abuse its discretion in allowing evidence on all those
    subjects. As samplers from what the jury heard, I just highlight a few. The jury heard
    testimony that Denbury’s newly established damages policy was based on a report by its
    employee, Dennis Pathroff. Based on the evidence, the jury could believe that Mr.
    Pathroff lacked sufficient experience or training even to know what a good-faith offer to
    the Christensens would involve. The jury heard Mr. Pathroff testify about his lack of
    experience appraising land, including pasture land; about his being untrained in
    measuring the impact of oil and gas operations on it; about his not having contacted the
    Christensens or other landowners in the HDU; about his not having visited the HDU; and
    about his not having been informed of the SDA or reviewed it before preparing his report.
    In addition, the jury heard testimony from Paul Hayden, Denbury’s regional land
    manager, that the new policy was intended to compensate landowners only for the dirt
    disturbances on their property. Mr. Hayden acknowledged that the new policy did not
    account for Denbury’s continued use of the land surface by truck traffic and other
    activities. And importantly, Mr. Hayden testified that he did not consider the SDA in
    formulating Denbury’s damages policy, because he felt Denbury was not compelled to
    “amend or comply with, with any of the provisions as it relates to future operations,
    future proposed operations.” Appellant’s App. vol. 13 at 2244–45.
    12
    I would also affirm the jury’s verdict on damages. The jury acted in accordance
    with the law given in the jury instruction:
    If you find that Denbury breached the covenant of good faith and fair
    dealing then the non-breaching party is permitted to recover those
    reasonably foreseeable damages that directly resulted from the breach. The
    non-breaching party is entitled to recover such an amount as would place it
    in the condition it would have been if the other party had not breached the
    covenant, less that which was saved by the non-breaching party.
    Appellant’s App. vol. 6 at 1096. Here, the jury had a substantial evidentiary basis to
    include the amounts it did to place the Christensens in the condition they would have
    been absent Denbury’s breach. Had Denbury chosen not to pursue the well sites and
    connecting road after its “offer” was refused, the Christensens would not face 30 years of
    damages caused by Denbury’s increased oil and gas operations on their land. The jury
    applied the evidence to the law. It weighed the evidence, assessed the conduct of the
    parties, considered the SDA, and followed the jury instructions. It found the facts, one of
    which, the law instructs, is whether Denbury breached the implied covenant of good faith
    and fair dealing.
    The majority says that it has not left the Christensens without remedy. It cites
    Wyo. Stat. Ann. § 30-5-406 of the Wyoming Split Estate Act (WSEA) as “providing [a]
    surface owner with [a] cause of action for compensation for surface damages ‘[i]f the oil
    and gas operator has commenced oil and gas operations in the absence of any agreement
    for compensation for all damages.” Maj. Op. at 17. First, I dispute that Denbury
    commenced operations without a damages agreement. The SDA qualifies as such.
    Second, this Wyoming statute speaks more to single episodes of damage rather than
    13
    recurring damages over months and years. And third, I am uncertain how the majority
    applies the WSEA in view of its footnote 6. There, the majority declares that the WSEA
    “doesn’t apply to the parties’ dealings under the SDA[.].” Maj. op. at 12 n.6.
    For all these reasons, I would affirm the jury’s verdict.
    14