Harrison, H & M v. Cabot Oil, Aplt

[J-95-2014]
IN THE SUPREME COURT OF PENNSYLVANIA
MIDDLE DISTRICT
SAYLOR, C.J., EAKIN, BAER, TODD, STEVENS, JJ.
WAYNE HARRISON AND MARY : No. 75 MAP 2014
HARRISON, :
: Appeal from the U.S. Court of Appeals,
Appellees : Third Circuit No. 12-3613, Granting
: Petition for Certification of Question of
v. : Law
:
CABOT OIL & GAS CORPORATION, :
:
Appellant : SUBMITTED: October 8, 2014
OPINION
MR. CHIEF JUSTICE SAYLOR DECIDED: February 17, 2015
We accepted certification from the United States Court of Appeals for the Third
Circuit to address whether the primary term of an oil-and-gas lease should be equitably
extended by the courts, where the lessor has pursued an unsuccessful lawsuit
challenging the validity of the lease.
The Third Circuit has related the material, undisputed facts along the following
lines. In August 2007, Appellee Wayne Harrison entered into a lease with Appellant
Cabot Oil & Gas Corporation, per which Cabot obtained the exclusive right to explore
oil-and-gas resources on Mr. Harrison’s property. In exchange, the company agreed to
pay an initial bonus plus a one-eighth royalty on oil or gas successfully produced from
the land. The instrument carried a “primary term” of five years, but it also provided for
an extended term “as long thereafter as oil or gas is produced . . . in paying quantities
from the premises[.]” See generally T.W. Phillips Gas & Oil Co. v. Jedlicka, 615 Pa.
199, 42 A.3d 261 (2012) (discussing the “paying quantities” convention frequently
utilized in oil-and-gas leases). Furthermore, Cabot was provided with an option to
extend the primary term for an additional five years.
Approximately halfway through the primary lease term, Mr. Harrison and his wife
commenced a civil action against Cabot in a federal district court, seeking a declaration
that the lease was invalid. Via an amended complaint, the Harrisons centered the
litigation upon their contention that the company had fraudulently induced Mr. Harrison
to enter into the lease via an agent’s representation that Mr. Harrison would never
receive any more than $100 per acre as a threshold bonus payment from a gas
producing company. The Harrisons asserted that they subsequently learned of other
landowner-lessors receiving higher payments.
Cabot denied the material allegations of the complaint and lodged a
counterclaim. In this pleading, the company sought a declaratory judgment that, in the
event the Harrisons’ suit failed, the primary term of the lease would be equitably tolled
during the period of time during which the suit was pending, and, concomitantly, the
lease would be extended for an equivalent period of time beyond what was provided by
its actual terms. In support of this request, Cabot alleged that the cloud upon the lease
created by the Harrisons’ suit had prevented the company from “prudently tak[ing] any
steps to develop or commence operations on [Harrison’s] leasehold as allowed by the
Lease.” Petition for Certification of Question of Law in Harrison v. Cabot Oil & Gas
Corp., No. 12-3613, at 3 (3d Cir. Apr. 7, 2014) (citation omitted; interlineations in
original).
In support of its counterclaim, Cabot pointed to cases from several other oil-and-
gas-producing jurisdictions holding that: 1) a lessor’s commencement of a lease-validity
[J-95-2014] - 2
challenge constitutes an effective repudiation of the agreement; 2) the lawsuit and
attending uncertainty renders it economically impractical for the lessee to proceed with
the costly development of production infrastructure on the property; 3) it would be unfair
to permit a meritless lease challenge to deprive the lessee of the benefit of its bargain,
namely, the opportunity to establish production during a limited “window of opportunity”
corresponding to the primary term of the lease (and thus to avoid defeasance of the
lessee’s corporeal interest in real property); and 4) it is therefore appropriate for the
courts to award an extension of the primary lease term, measured according to the
length of time the unsuccessful lawsuit was pending.1
Cabot sought summary judgment. Relative to its counterclaim, the company
submitted a declaration from one of its land managers indicating that the cost of drilling
1
See, e.g., Rougon v. Chevron, U.S.A. Inc., 575 F. Supp. 95, 100 (M.D. La. 1983)
(“[W]here a lessor questions the validity of a lease, the term of the lease is suspended,
the logic being that the lessee has been deprived of the exercise of the rights granted to
him by the lease by the act of the lessor and he is therefore granted an extension
beyond the primary term for the period during the primary term when the lease was
placed in jeopardy.” (quoting Hanszen v. Cocke, 246 So. 2d 200, 203 (La. Ct. App.
1971))); Sw. Energy Prod. Co. v. Elkins, 374 S.W.3d 678, 685 (Ark. 2010) (“Not to toll
Southwestern Energy’s obligation to drill as of [a particular] date would create an
impossible dilemma for [the company]: either use the contested lands and potentially
expose itself to more liability or refrain from using the lands and lose its investment and
the one-year window . . . for development”); Greer v. Carter Oil Co., 25 N.E.2d 805, 810
(Ill. 1940) (“The great weight of authority in other States holds that where the lessor
brings suit to avoid an oil and gas lease and the litigation ends after the grant has
expired, that the lessors are estopped to claim the lease is invalid because the term has
expired, and that an additional period of time may be fixed by a court of equity in which
to commence drilling operations.” (citations omitted)); cf. Kothmann v. Boley, 308
S.W.2d 1, 4 (Tex. 1957) (directing that oil-and-gas leases were to be extended on the
basis that “[l]essors who . . . wrongfully repudiate the lessees’ title by unqualified notice
that the leases are forfeited or have terminated cannot complain if the latter suspend
operations under the contract pending a determination of the controversy and will not be
allowed to profit by their own wrong”); Bingham v. Stevenson, 420 P.2d 839, 842 (Mont.
1966) (implementing an equitable lease extension based on actions by the lessors,
including the transmittal of letters denying the validity of the lease).
[J-95-2014] - 3
and completion of a specialized well generally required to produce gas from Marcellus
Shale in Pennsylvania is in the range of $4 to $7 million dollars. According to the land
manager, “[t]he expense associated with such drilling and completion makes it
particularly impractical for an oil-and-gas producer to invest in drilling, completing a well
when there is an ongoing lawsuit regarding the validity of the oil-and-gas lease.”
Declaration of Jeffrey Keim of Sept. 30, 2011, in Harrison v. Cabot Oil & Gas Corp., No.
10-312 (M.D. Pa.), at ¶5.
The district court awarded summary judgment in Cabot’s favor on the suit to
invalidate the lease. The court, however, resolved the counterclaim in the Harrisons’
favor, concluding that the law of this Commonwealth does not provide for equitable
extensions of oil and gas leases under the circumstances. See Harrison v. Cabot Oil &
Gas Corp., 887 F. Supp. 2d 588, 596-98 (M.D. Pa. 2012).
In reaching this conclusion, the district court relied primarily on Derrickheim Co.
v. Brown, 305 Pa. Super. 173, 451 A.2d 477 (1982), which prioritized the terms of a
lease over equitable considerations in a circumstance in which an oil producing
company forewent operation of a well until a defect in the lessor’s title was resolved.
See id. at 178, 451 A.2d at 480 (“The fact that it was ‘prudent’ for [a lessee] to suspend
operations upon learning of [a] cloud on the title does not justify disregarding the
express language of the lease.”). The district court took Derrickheim as a signal that
Pennsylvania courts would reject the equitable extension practice implemented
elsewhere. See Harrison, 887 F. Supp. 2d at 596-97. Further, the court reasoned that,
under Pennsylvania law, the mere filing of a declaratory judgment action challenging a
lease does not, in and of itself, comprise a repudiation of the lease such as would
implicate judicial redress. See id. at 597 (“Until the Pennsylvania courts say otherwise,
this Court will not find that a party’s filing of a lawsuit in federal court amounts to a
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repudiation of a lease between the parties, despite what courts in other jurisdictions
have held.”).
In this regard, and more broadly, the district court relied upon a recent decision
authored by a coordinate judge, Lauchle v. Keeton Group LLC, 768 F. Supp. 2d 757
(M.D. Pa. 2011). The Lauchle court additionally posited that “deeming these leases to
have been repudiated under the circumstances of this case is both bad law and even
worse public policy,” given the superior bargaining power of oil-and-gas-producing
companies relative to the drafting of leases, as well as the disincentive to the pursuit by
lessors of potentially meritorious actions. Id. at 762.
Cabot lodged an appeal in the federal intermediate appellate court, contending
that, if presented with the question, this Court “would recognize the rule that, where a
lessor repudiates a lease by initiating litigation seeking to invalidate the lease, the
lessee is entitled to an equitable extension of the lease term if the lessor’s claim is
denied.” Petition for Certification in Harrison, No. 12-3613, at 5. In support of this
position, the company pointed to other jurisdictions which have adopted such approach.
See supra note 1.
Cabot also filed a motion requesting certification to this Court. See Supreme
Court Internal Operating Procedures §8. The Third Circuit granted this request and
applied for certification, which we accepted, recognizing that the issue was one of first
impression and of significant public importance, given that its resolution may affect a
large number of oil-and-gas leases in Pennsylvania.
Presently, Cabot grounds its position squarely on the principle that a party to a
contract is entitled to the benefit of its bargain. See, e.g., Ferrer v. Trs. of Univ. of Pa.,
573 Pa. 310, 340-41, 825 A.2d 591, 609 (2002). The company posits that, if one
[J-95-2014] - 5
contracting party deprives the other of a bargained-for benefit, the law should correct
the deprivation.
Cabot also explains that, in the last decade, with the discovery of the potentially
vast quantities of natural gas in the Marcellus Shale reserve in Pennsylvania, and with
the introduction of new means to make production of that natural gas more practical,
thousands of Pennsylvania landowners have leased their property to oil-and-gas
producers. Accord Brief for Amici Pa. Indep. Oil & Gas Ass’n, Marcellus Shale Coal.,
Chief Oil & Gas, LLC, and Sw. Energy Prod. Co. [hereinafter the “Industry Amici”] at 3
(“While Pennsylvania was home to the first oil well in the United States more than 150
years ago, advances in technology and discovery of the promise of the shale gas plays
have dramatically increased the impact of the oil-and-gas industry in Pennsylvania in
the last decade.”). According to the company, disparities in lease remunerations exist
due to various factors, often depending upon the timing of lease consummation
(particularly given the evolving knowledge relative to Marcellus Shale); the developing
state of the technology; and fluctuating market conditions. Cabot suggests that such
differences have incentivized some landowner-lessors to wrongfully contest the validity
of oil-and-gas leases in hopes of securing the freedom to pursue more lucrative
arrangements.
The problem facing oil-and-gas-producing companies, Cabot contends, is that
such lease-validity lawsuits forestall drilling and well development, given the multi-
million dollar investments attending such operations. See Brief for Appellant at 16 (“It
would be essentially impossible for a producer to place such an investment at risk while
there remains pending a lawsuit seeking to invalidate the producer’s interest in the
property.”); accord Brief for the Industry Amici at 6 (“[T]he expense of drilling generally,
and especially for wells in unconventional formations such as the Marcellus Shale, is
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too great for any reasonable production company to go forward with drilling while there
is a pending lease challenge.”). The result, the company indicates, is that producers
are deprived of the full benefit of their bargains by meritless lease challenges. For
these reasons, Cabot encourages this Court to follow the mainstream approach of other
jurisdictions which have treated a meritless lease challenge as a repudiation and
applied equitable remedial principles. See supra note 1. Indeed, the company
highlights, this principle has become essentially one of black-letter law, as reflected in
several prominent treatises in the field.2
Cabot recognizes that the issue is one of first impression in this Court. According
to the company, however, Pennsylvania already recognizes all legal predicates to the
equitable-extension principle. In particular, the company references the expectation
remedy available to redress contractual breaches. See, e.g., Ferrer, 573 Pa. at 340-41,
825 A.2d at 609. Additionally, Cabot contends, Pennsylvania law provides that a party
repudiates a contract, and thus effectuates an essential breach, when he makes an
unequivocal statement that he will not perform in accordance with his agreement. See,
e.g., Jonnet Dev. Corp. v. Dietrich Indus., Inc., 316 Pa. Super. 533, 543, 463 A.2d 1026,
1031 (1983). The company regards the Harrison’s commencement of an action as the
equivalent of such a statement.
2
See 3 PATRICK H. MARTIN & BRUCE M. KRAMER, W ILLIAMS & MEYERS, OIL AND GAS LAW
§604.7 (2009) (“[C]ourts have almost universally held that when the lessor has brought
a suit during the primary term claiming the termination of the lessee’s interest, the
lessee, should he prevail in such action, will be entitled to a period of time extending
beyond the expiration of the primary term to gain production.” (citations omitted)); 2
NANCY SAINT-PAUL, SUMMERS, OIL & GAS §14:36 (2014) (“Where a lessor has repudiated
a lease by notice or suit for cancellation for alleged breach by the lessee of his express
or implied covenants . . ., such act of the lessor relieves the lessee of the duty to
continue further operations until the controversy is settled and estops the lessor from
claiming such cessation of operations by the lessee as grounds for termination of the
lease.”).
[J-95-2014] - 7
In terms of the federal district courts’ reliance on Derrickheim, Cabot argues that
such decision is irrelevant, since in that case the lessor had not commenced a lawsuit.
In any event, the company stresses that an intermediate appellate court’s decision,
such as Derrickheim, is in no way binding upon this Court. See, e.g., Maloney v. Valley
Med. Facilities, Inc., 603 Pa. 399, 418–19, 984 A.2d 478, 490 (2009). Cabot also
proceeds to challenge the Lauchle court’s public policy perspective, arguing that the
equitable-extension principle only serves to restore an agreed-to equilibrium after a
disruption caused by meritless litigation. Accord Brief for the Industry Amici at 2 (“While
successful oil and gas development is inherently uncertain, [the equitable-extension
principle] would ensure that lessors do not profit from bringing challenges to the validity
of their leases that turn out to be without merit.”).3
In response to Cabot’s argumentation, the Harrisons point to the reasoning of the
federal district courts in Harrison and Lauchle. See, e.g., Brief for Appellees at 8 (“No
Pennsylvania law has required nor even suggested that primary terms may be extended
beyond their express period, especially given Derrickheim’s clear holding on the
subject.”). The Harrisons also note that oil-and-gas-producing companies frequently
enter into leases then delay drilling according to their own interests and timetables.
Moreover, according to the Harrisons, such companies are readily capable of
negotiating appropriate tolling provisions in connection with their leases to account for
the prospect of delay occasioned by lessor validity challenges. See, e.g., id. at 33
(“[G]as companies can anticipate and manage issues relating to the length of primary
terms within the context of their business relationships through the usual modes of
drafting and negotiation.”).
3
In addition to the noted amici submission, Cabot’s position is also supported by a
separate amicus brief by Professor Bruce M. Kramer, who also emphasizes the weight
of the authority supporting the equitable-extension principle.
[J-95-2014] - 8
Given such considerations, the Harrisons describe the equitable-extension
principle as nothing more than a “judicial affirmative action program” for oil-and-gas-
producing companies, which “abuses landowners who have done nothing other than
exercise their legal rights.” Id. at 8-9; see also id. at 26 (“Cabot effectively seeks a
judicially-run affirmative action program for the benefit of oil & gas companies where the
Pennsylvania courts do not enforce contractual rights but rewrite them in the
companies’ favor.”). Consistent with Lauchle, the Harrisons also highlight the disparate
bargaining power of landowner-lessors as compared to such companies. See, e.g., id.
at 16 (“Lauchle expresses significant policy considerations that further militate against
judicially extending a primary term, by highlighting the control that oil & gas companies
exercise over lease language and the chilling effect that an extension rule would have
on landowners’ willingness to bring meritorious challenges.”).
The Harrisons also differ with Cabot’s position that the mere filing of a
declaratory judgment action represents a repudiation of a lease. Again, the Harrisons
regard the implementation of a contrary approach in the setting of oil-and-gas leases as
an “upend[ing]” of Pennsylvania law for the “special benefit for gas companies.” Id. at
33.
Several landowner-lessors submitted an amici brief in support of the Harrisons’
essential position. See Brief for Amici Pauline Beck, Ronald J. Gulla, Margeret Henry,
Rebecca Roter, and Anagela and William Smith [hereinafter the “Landowner-Lessor
Amici”]. These amici also stress the differential bargaining position of oil-and-gas
production companies versus individual landowner-lessors. Moreover, as exemplified
by the following passage from their brief, the Landowner-Lessor Amici regard lease-
validity litigation as merely one of a number of risks encountered by oil-and-gas-
[J-95-2014] - 9
producing companies as a prerequisite to the rich rewards which may be attained by
those willing to accept them:
The speculative nature of oil and gas extraction inherently
requires the assumption of large risks . . ., and production
companies routinely absorb the cost of a wide variety of
unsuccessful investments. They may invest millions of
dollars in drilling and completing a well only to find that it is
defective or “dry” and therefore must be plugged and
abandoned. Companies may spend millions of dollars
acquiring gas leases that they later abandon because of
unfavorable market or regulatory conditions. They may
choose not to develop leased acreage because greater
profits are to be had by drilling somewhere else. They also
may choose not to invest in production while a lease
challenge proceeds, but such business judgments are
commonplace and do not warrant shifting the risk of litigation
from multimillion-dollar corporations to small landowners
such as Mr. Harrison.
Id. at 7-8 (footnote and citations omitted). The Landowner-Lessor Amici also observe
that Cabot has never manifested any intention of drilling in the vicinity of the Harrisons’
property, and thus, they regard “Cabot’s counterclaim [as] an opportunistic and
exploitative attempt to extend the lease term until 2020, in the hope that market
conditions will improve at the end of the decade.” Id. at 13.
Preliminarily, we note that contractual remedies, including equitable ones,
generally flow from a breach of an agreement. See, e.g., McShea v. City of Phila., 606
Pa. 88, 97, 995 A.2d 334, 340 (2010) (stating the general rule that a contract-based
action seeking judicial redress requires the plaintiff to demonstrate a material breach).
Cabot appears to accept this principle as applicable in the present circumstances.
Accordingly, in this respect, the company asserts that the Harrisons’ conduct in seeking
a judicial declaration that the Cabot/Harrison lease was invalid amounted to an
“anticipatory repudiation” of the lease. See, e.g., Brief for Appellant at 27 (“Certainly a
[J-95-2014] - 10
lessor that files a lawsuit asking for a judicial declaration that the lease is not valid has
repudiated the contract.”). See generally 2401 Pa. Ave. Corp. v. Fed’n of Jewish
Agencies of Greater Phila., 507 Pa. 166, 174, 489 A.2d 733, 737 (1985) (discussing the
doctrine of anticipatory repudiation as giving rise to contract-based remedies, given that
repudiation of an agreement entails an essential declaration of an intention to breach).
The difficulty with Cabot’s position, however, is that this Court has required more
than the mere assertion of a challenge to the validity of an agreement to demonstrate
such repudiation. Under Pennsylvania law, anticipatory repudiation or breach requires
an “absolute and unequivocal refusal to perform or a distinct and positive statement of
an inability to do so.” Id. at 172, 489 A.2d at 736 (quoting McClelland v. New
Amsterdam Cas. Co., 322 Pa. 429, 433, 185 A. 198, 200 (1936)).
It is widely recognized, however, outside the oil-and-gas context at least, that the
filing of declaratory judgment action merely contesting the validity or scope of an
agreement does not entail such an unequivocal refusal to perform. See, e.g., Principal
Life Ins. Co. v. Lawrence Rucker 2007 Ins. Trust, 674 F. Supp. 2d 562, 568 (D. Del.
2009) (explaining that “an action for declaratory judgment does not indicate an
unconditional refusal to comply with contractual obligations” and joining a “chorus of
other jurisdictions in finding that . . . statements made in the context of a declaratory
judgment action are insufficient to establish repudiation as a matter of law”).4 As related
in the commentary to the Restatement Second of Contracts:
4
This principle is most frequently referenced in the context of insurance coverage
disputes. See, e.g., id.; see also Seneca Ins. Co. v. Shipping Boxes I, LLC, ___ F.
Supp. 2d ___, 2014 WL 2567158, *4 (E.D. Va. June 6, 2014) (explaining that the
purpose of the declaratory-judgment remedy is to “guide parties in their future conduct
in relation to each other, thereby relieving them from the risk of taking undirected action
incident to their rights” (quoting Charlottesville Area Fitness Club Operators Ass’n v.
Albemarle Cnty. Bd. of Sup’rs, 737 S.E.2d 1, 7 (Va. 2013))); Lincoln Nat’l Life Ins. Co. v.
Schwarz, Civ. No. 09-03361(FLW), slip op., 2011 WL 2357828, *3 (D.N.J. June 9,
(Scontinued)
[J-95-2014] - 11
Generally, a party acts at his peril if, insisting on what he
mistakenly believes to be his rights, he refuses to perform
his [contractual duties]. His statement is a repudiation if the
threatened breach would, without more, have given the
injured party a claim for damages for total breach. Modern
procedural devices, such as the declaratory judgment, may
be used to mitigate the harsh results that might otherwise
result from this rule.
Restatement (Second) of Contracts §250 cmt. d (1981) (emphasis added); accord
Landwehr, 734 F. Supp. 2d at 169 (explaining that “a declaratory judgment action
‘serves to set controversies at rest before they lead to repudiation of obligations’”
(quoting Babb v. Superior Court, 479 P.2d 379, 383 (Cal. 1971) (emphasis in original)).
Given the above, we view the controlling determination in this case as devolving
to whether this Court will adopt a special approach to repudiation pertaining to oil-and-
gas leases, as a substantial number other jurisdictions would appear to have done. See
supra note 1. We decline to do so, however.
In the first instance, for purposes of contract law in Pennsylvania, this Court
adamantly has reinforced the clear predicates of repudiation. See, e.g., 2401 Pa. Ave.
Corp., 507 Pa. at 174, 489 A.2d at 737 (“[W]e reject any argument suggesting a dilution
of our long recognized standard of an ‘absolute and unequivocal refusal to perform.’”).
We acknowledge the high stakes involved in oil-and-gas exploration and production, as
(continuedS)
2011); Landwehr v. FDIC, 734 F. Supp. 2d 161, 169 (D.D.C. 2010) (“[N]umerous courts
have concluded that neither the filing of a declaratory judgment action nor the
allegations made in support of such an action can form the basis of a claim for
anticipatory repudiation.”). The precept nonetheless flows from the clear prerequisites
to a repudiation, see 2401 Pa. Ave. Corp., 507 Pa. at 172, 489 A.2d at 736, and thus, it
applies more broadly. Cf. Lanyon Zinc. Co. v. Burtiss, 83 P. 989, 989-90 (Kan. 1905)
(holding that the mere assertion of a lease-validity challenge, in the absence of an
injunction or other interference with the operations of the lessee, was insufficient to
justify the assertion of a court’s equitable powers to extend the lease).
[J-95-2014] - 12
well as the incentive to lessor-landowners to maximize payments attending the use of
their properties. Nevertheless, we agree with the Harrisons and their amici that such
factors do not justify a diminution of extant legal requirements or, concomitantly, a
curtailment of the rights of landowner-lessors to obtain a judicial declaration concerning
their rights and interests.
Significantly, in promulgating the Declaratory Judgment Act,5 the Pennsylvania
General Assembly implemented a remedial regime designed to “settle and to afford
relief from uncertainty and insecurity with respect to rights, status, and other legal
relations.” 42 Pa.C.S. §7541(a). Furthermore, the Legislature prescribed that the
enactment was to be “liberally construed and administered,” id., in furtherance of such
remedial aims. In our view, it would disserve the legislative objectives to treat recourse
to such procedure, alone, as a basis for altering material provisions of the agreement in
controversy (i.e., the lease term). Our reluctance, in this respect, is bolstered by the
Harrisons’ observation that oil-and-gas-producing companies are free to proceed
according to their own devices to negotiate express tolling provisions for inclusion in
their leases. Notably, neither Cabot nor its amici offer any direct response on this point.
Certainly, in light of the voluminous decisional law, such companies are on sufficient
notice of the prospect for validity challenges to warrant their consideration of such
protective measures.
We do not foreclose that equitable relief may be available to oil-and-gas-
producing companies -- subject to applicable requirements governing recourse to equity
-- where there is an affirmative repudiation of a lease.6 Our determination is only that,
5
Act of July 9, 1976, P.L. 586, No. 142, §2 (as amended 42 Pa.C.S. §§7531-7541).
6
Notably, several of the decisions cited by Cabot did involve some actual refusal by
lessors to surrender possession of leasehold premises. See, e.g., Bingham, 420 P.2d
(Scontinued)
[J-95-2014] - 13
consistent with the prevailing substantive law of this Commonwealth, the mere pursuit of
declaratory relief challenging the validity of a lease does not amount to such.
Having answered the certified question, this matter is returned to the Third
Circuit.
Messrs. Justice Eakin and Baer, Madame Justice Todd and Mr. Justice Stevens
join the opinion.
(continuedS)
at 841-42 (explaining that lessors had refused rentals and were unwilling to accept
drilling by the lessee pursuing an equitable extension and concluding that the lessors
therefore had “repudiated the lease by their various actions”), cited in Brief for Appellant
at 24; Muller v. Leyendecker, 697 S.W.2d 668, 672 (Tex. Ct. App. 1985) (“[P]laintiff on
several occasions peaceably demanded entry into and rightful possession of his lease
premises. However, defendants refused plaintiffs’ possession of the leased premises.”),
cited in Brief for Appellant at 22, 38. Certainly, this is not true of all (or even perhaps
the majority) of the cases cited by Appellant. See, e.g., Greer, 25 N.E.2d at 810 (“It has
been suggested that [the lessee] could have proceeded to drill without regard to the suit
and should not be permitted to claim the benefit of an estoppel unless it was actually
prevented by court order or otherwise. In the cases from foreign jurisdictions this was
not required, and when the great loss the lessee might suffer by successfully drilling a
well and then losing title to the land is considered, we do not think that it should be
required.”). Our point here is that the cases, factually at least, are not homogenous,
and that some of the factual scenarios presented may reflect a repudiation and, thus,
could yield the potential for redress upon the application of Pennsylvania law.
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