TIMOTHY D. DEGIUSTI, District Judge.
Before the Court is Pintail's Motion in Limine to Limit Testimony and Evidence to Wells at Issue and Brief in Support [Doc. No. 56]. The matter is fully briefed and ready for disposition.
In this action, Plaintiff, Chesapeake Operating, Inc. (Chesapeake), seeks to recover from Defendant, Pintail Production Co., Inc. (Pintail), damages for unpaid expenses Pintail allegedly owes pursuant to the parties' Joint Operating Agreement and covering the drilling of two oil and/or gas wells identified as the Lowry 1-7H well and the Lowry 2-7H well (the Lowry Wells). Pintail has filed a counterclaim pursuant to which it seeks an accounting against Chesapeake for production from the Lowry Wells "and for numerous other wells." See Counterclaims [Doc. No. 19-1] (Wells Operated by Chesapeake — listing 46 wells).
In the motion in limine, Pintail contends that any determination of its net obligations to Chesapeake must be based solely on revenue and expenses related to the Lowry Wells because only those wells are the subject of Chesapeake's claims in the complaint. Further, Pintail contends that it has limited the scope of its counterclaims for an accounting to the Lowry Wells and 14 additional wells. Therefore, Pintail contends only 16 wells are at issue in this lawsuit. Relying in part on standards governing amendment of pleadings, Pintail seeks to exclude evidence concerning 84 other wells referenced in the report of Chesapeake's expert, Melissa Gruenewald.
In response, Chesapeake contends that throughout the litigation, the parties have proceeded with the understanding that its claim for "netting" of expenses and revenues, in accordance with "customary accounting practices in the industry," has entailed all 100 Chesapeake-operated wells in which Pintail owns an interest and has not been limited to the 16 wells identified in Pintail's motion in limine.
In moving for exclusion of the evidence, Pintail does not challenge Chesapeake's right to application of the equitable doctrines of recoupment and/or setoff. See generally Nelson v. Linn Midcontinent Exploration, L.L.C., 228 P.3d 533, 535 (Okla. Civ. App. 2009) ("The equitable doctrine of set-off permits the set-off of an obligation under one contract against the obligation of any other contract between the same parties, so that Defendant could properly recover overpayments on one well against the amounts due Plaintiff from the other."). Instead, Pintail challenges the scope of that right and seeks to exclude evidence of Chesapeake's netting of expenses and revenues as to the 84 wells identified in Ms. Gruenewald's expert report.
A review of the complaint, the parties' Rule 26 disclosures and the discovery attached to the parties' respective briefing on the motion in limine persuades the Court that Chesapeake's claims incorporate a request for netting of expenses and revenues as to all 100 Chesapeake-operated wells in which Pintail owns an interest and that Pintail has been apprised of Chesapeake's claims. While the allegations of the complaint only identify the Lowry Wells, the allegations reference the right to set-off and/or recoupment and expressly state that Pintail's unpaid share of expenses owed to Chesapeake is $805,245.82 "[a]fter netting of proceeds of production owed by Chesapeake to Pintail." Complaint at ¶ 14.
Pintail's motion in limine is focused upon undue surprise and resulting prejudice and the premise that amendment of the complaint is required before evidence can be considered as to revenue and expenses on the 84 wells not identified in its motion in limine. Pintail does little to address relevancy issues and has not challenged Chesapeake's claim that a right to recoupment and/or setoff exists. Amendment of the complaint is not an issue presently before the Court and the record presented on the motion in limine indicates Pintail has had sufficient notice of Chesapeake's application of "global netting" to determine the obligations allegedly owed by Pintail. Accordingly, at this time the Court finds the evidence Pintail seeks to exclude is relevant under Fed. R. Evid. 402 and DENIES Pintail's Motion in Limine.
However, the Court bases its denial, in part, on the fact that this is a non-jury trial and that the admissibility of the challenged evidence may be subject to further evaluation in the context of the trial evidence. Accordingly, the denial of Pintail's motion in limine is without prejudice to its right to reassert the evidentiary challenge at trial, if appropriate.
IT IS SO ORDERED.