B D Drilling v. State, Unpublished Decision (9-24-2002)
B D Drilling v. State, Unpublished Decision (9-24-2002)
Opinion of the Court
OPINION
{¶ 1} On September 9, 1999, the Chief of the Division of Oil and Gas of the Ohio Department of Natural Resources, now known as the Division of Mineral Resources Management ("division"), issued orders as to two oil and gas wells located in Washington County, Ohio. The chief found that B D Drilling Company ("B D") was the owner of the wells and that inspections performed in June 1999 showed that the wells were incapable of producing oil and/or gas in commercial quantities. Thus, and pursuant to R.C.{¶ 2} By way of brief background, the subject wells were, at the pertinent time, located on property owned by Cecil Brown and later by his daughter, Beverly Dowler. B D had obtained the rights to drill the wells by an assignment of an oil and gas lease on July 24, 1973.1 B D never produced gas or oil from these wells. Indeed, B D never entered upon the land where the wells were located.
{¶ 3} On September 7, 1979, Cecil Brown, the surface owner, filed an affidavit of forfeiture against B D pursuant to R.C.
{¶ 4} B D did not contest the affidavit of forfeiture. Approximately 20 years later, the inspections took place which led to the chief's September 9, 1999 orders which found B D was the owner of the subject wells. B D, the corporation, was legally dissolved in 1998.
{¶ 5} B D appealed the chief's orders to the Oil and Gas Commission ("commission"). The commission held a hearing. On January 5, 2001, the commission issued an order which included findings and conclusions. The commission found, in part, that by operation of the affidavit of forfeiture, Cecil Brown and his heirs became the owners of the subject wells. The commission concluded that after the filing of the affidavit of forfeiture, B D no longer had the right to produce the wells and, therefore, did not qualify as an "owner" of the wells. In addition, the commission found that the chief failed to produce adequate evidence of when the wells became incapable of producing oil and gas in commercial quantities. The commission stated that the duty to plug a nonproductive well only attaches to those who own a well at the time or after the well becomes unproductive. The commission found the evidence did not establish that the wells became unproductive during B D's ownership of the wells (between 1973 and 1979). Accordingly, the commission determined that the chief's orders were unlawful and unreasonable.
{¶ 6} The division appealed the commission's order to the Franklin County Court of Common Pleas. The parties filed briefs. On December 13, 2001, the common pleas court rendered a decision and judgment entry affirming the commission's order. The common pleas court found that although the commission was incorrect as to some of its findings of fact, its ultimate conclusion that B D was not responsible for plugging the wells was correct.
{¶ 7} The division (hereinafter "appellant") has appealed to this court, assigning the following errors for our consideration:
{¶ 8} "First Assignment of Error:
{¶ 9} "The Common Pleas Court erred when it held that a landowner's filing of an affidavit of forfeiture absolved an operator of its statutory duty to plug wells, and that a landowner's filing of an affidavit of forfeiture shifted an operator's duty to plug to the landowner.
{¶ 10} "Second Assignment of Error:
{¶ 11} "The Common Pleas Court erred by failing to apply Baldwin Producing Corporation, which supports the legal conclusion that the subject wells were incapable of commercial production, as set forth in R.C.
{¶ 12} We first address the standard of review. R.C.
{¶ 13} In its first assignment of error, appellant contends the common pleas court erred in finding that the filing of the affidavit of forfeiture in 1979 absolved B D (hereinafter "appellee") of its duty to plug the wells. The issue presented here involves essentially a question of law, which this court reviews de novo: when does the obligation to plug a well attach under R.C.
{¶ 14} "Unless written permission is granted by the chief, any well that is or becomes incapable of producing oil or gas in commercial quantities shall be plugged * * *. When the chief finds that a well should be plugged, the chief shall notify the owner to that effect by order in writing and shall specify in such order a reasonable time within which to comply. No owner shall fail or refuse to plug a well within the time specified in the order."
{¶ 15} R.C.
{¶ 16} Appellant contends appellee is responsible under R.C.
{¶ 17} In Houser, an inspection of certain wells was performed on August 18, 1983. Id. at 358. At this time, the owner of the wells was Randy D. Brown. The inspection revealed that the wells were idle and incapable of producing oil or gas in commercial quantities. Id. at 358-359. On January 18, 1984, the chief issued an order to Mr. Brown to plug the wells or put them into production. The chief subsequently found out that Mr. Brown had cancelled his lease on September 18, 1983. Id. at 359. On April 12, 1984, the chief issued a second plug/produce order to the surface owner, Sharon Herold.
{¶ 18} Both Mr. Brown and Ms. Herold appealed to the commission (then known as the Oil and Gas Review Board). The commission found that Mr. Brown was not an owner at any relevant time and that Ms. Herold was the owner at the time the chief learned of the inability of the wells to produce and the necessity of plugging the wells. Id. On appeal, the common pleas court held that under R.C.
{¶ 19} On appeal to this court, we noted that the evidence established that the wells had not produced since 1973 and that the division had been aware of the dormant condition of the wells since 1973. Id. at 360. We stated that R.C.
{¶ 20} "Additionally, the duty created by R.C.
{¶ 21} We found that the chief correctly issued orders against both Mr. Brown and Ms. Herold as both had a statutory duty to plug the wells. Id. at 360-361. For the reasons that follow, we find that the Houser analysis does not apply to the facts herein, and we reject appellant's argument that Houser dictates that appellee has an obligation to plug the wells in question.
{¶ 22} First, the facts in Houser are distinguishable from the facts presented here. In Houser, the chief was aware that the wells should have been plugged (i.e., were incapable of production), at the earliest, in 1973, and the chief was certainly aware of this fact after the August 1983 inspection. Therefore, the chief was aware that the wells should be plugged at the time Mr. Brown became the owner in 1979 and, again, in August 1983 when Brown was still the owner. It is understandable why this court determined that Mr. Brown was responsible for plugging the well given that he was the owner of the wells at the time of the inspection, which gave rise to the chief's January 1984 order, but had cancelled his lease (and therefore his right to drill and produce the wells) a mere month after the inspection.
{¶ 23} R.C.
{¶ 24} Indeed, a plain reading of R.C.
{¶ 25} "When the chief finds that a well should be plugged, the chief shall notify the owner to that effect by order in writing and shall specify in such order a reasonable time within which to comply. No owner shall fail or refuse to plug a well within the time specified in the order."
{¶ 26} Clearly, it is the owner (the person who has the right to drill or produce the well) at the time the chief finds that a well should be plugged who may be made responsible under R.C.
{¶ 27} Appellant makes several policy arguments in support of its interpretation of R.C.
{¶ 28} We are sympathetic to appellant's concerns. However, if the legislature intended the result appellant wishes to impose, then it could have easily worded the statute to create such a continuing duty. It did not so word the statute, and this court cannot read a duty into a statute where no such duty is clearly set forth. This is certainly true in the case presently before the court.
{¶ 29} Here, appellee had not been an "owner" under R.C.
{¶ 30} Accordingly, appellant's first assignment of error is overruled.
{¶ 31} Given our disposition of the first assignment of error, it is unnecessary to address the arguments set forth in appellant's second assignment of error. Indeed, even if we accept that the wells at issue were incapable of commercial production when appellee obtained ownership of the wells and remained unproductive during appellee's ownership, the result does not change. Again, appellee was not an owner at the time the chief found that the wells were unproductive. Hence, the chief could not, pursuant to R.C.
{¶ 32} In summary, appellant's first assignment of error is overruled, and its second assignment of error is moot. The judgment of the Franklin County Court of Common Pleas is affirmed.
Judgment affirmed.
BRYANT and BOWMAN, JJ., concur.
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