McCORMACK, J.
George John Vlasin and Betty L. Vlasin, husband and wife, leased the oil and gas rights to their land to Bellaire Oil Company and its affiliate, Ranch Oil Company (collectively Ranch Oil). Ranch Oil operated on one-half of the land described in the lease. Byron E. Hummon, Jr., owner of Hummon Corporation (collectively Hummon), operated on the other one-half of the lease. After the primary term of the lease expired and the wells stopped producing oil, George and Betty entered into a new lease agreement with Hummon which encompassed the entirety of their land. Upon learning of the agreement, Ranch Oil took action to revive one of its dormant wells by drilling out the plug and inserting pumping equipment. Ranch Oil relied on a savings provision of the lease, which stated that "this lease shall not terminate provided lessee commences operations for drilling a well within sixty (60) days from such cessation." George and Betty did not believe Ranch Oil's actions saved the lease and, joined by Hummon, brought suit against Ranch Oil in 2005 for declaratory judgment, trespass, and conversion. After George's death in October 2008, Marlene Bedore was appointed as personal representative of George's estate. We will collectively refer to George (later Bedore), Betty, and Hummon as "the plaintiffs." The court ruled in favor of the plaintiffs, but awarded only nominal damages. Ranch Oil appeals, and the plaintiffs cross-appeal.
In 1980, George and Betty entered into an oil and gas lease with Murphy Minerals Corporation for approximately 1,052 acres of their land in Hayes County, Nebraska (Murphy-George/Betty lease). The Murphy-George/Betty lease was for a term of 10 years,
Paragraph 12 states:
At the same time, George's brother, Joseph Peter Vlasin, and his wife, Doris M. Vlasin, entered into a similar lease agreement with Murphy Minerals Corporation for their adjoining land.
In 1986, Harvard Petroleum Corporation, successor in interest to Murphy Minerals Corporation, assigned its lease with Joseph and Doris to Hummon (Hummon-Joseph/Doris interest). Harvard Petroleum Corporation also assigned to Hummon approximately one-half of the 1980 Murphy-George/Betty lease (Hummon-George/Betty interest). The other one-half of the Murphy-George/Betty lease was retained by Harvard Petroleum Corporation. In 1999, this one-half interest of the Murphy-George/Betty lease was conveyed to Ranch Oil (Ranch Oil-George/Betty interest).
Hummon drilled and operated two wells on the Hummon-George/Betty interest: well No. 1, drilled in 1985, and well No. 2, drilled in 1987. Hummon drilled one well on the Hummon-Joseph/Doris interest, well No. 1-34, in 1987. Hummon also drilled and maintained other wells in the area under leases with neighboring landowners.
Ranch Oil operated three wells on the Ranch Oil-George/Betty interest. Well No. 34-22 was drilled in 1989. Well No. 34-23 was drilled in 1986. Well No. 34-31 was drilled in 1990. These wells were drilled by its predecessor in interest, Harvard Petroleum Corporation.
Before Hummon was able to drill well No. 1-34 in 1987, the Vlasin parties entered into a pooling agreement so that well No. 1-34 would be within a 40-acre legal subdivision, as required by the rules and regulations of the Nebraska Oil and Gas
Well No. 1-34 was drilled on land owned by Joseph and Doris and covered by the Hummon-Joseph/Doris interest. However, approximately 11 acres of the communitized area for well No. 1-34 was land described in the Hummon-George/Betty interest.
Ranch Oil's well No. 34-31 appears to have been the last of the Ranch Oil wells to produce oil on the Ranch Oil-George/Betty interest. It became inactive in 1997. Well No. 34-31 became the subject of the trespass and conversion action currently before us, when it was reopened by Ranch Oil in 2005.
According to the director of NOGCC, before becoming inactive, well No. 34-31 was a "producing oil well from the Basal Sand from the openhole interval of 4,324 to 4,335 feet." Because of concerns that leaks from the well were invading and damaging the basal sand oil reservoir for the area, the operator of well No. 34-31 at that time positioned a sand plug in the well from 4,315 to 4,335 feet. The operator subsequently also placed a drillable cast iron bridge plug at a depth of 4,000 feet. In order to return well No. 34-31 to production following installation of the plugs, it would be necessary to drill out the cast iron plug at 4,000 feet and then drill out the sand plug from 4,315 to 4,335 feet.
Hummon's well No. 1-34, located on the Hummon-Joseph/Doris interest, but within the 40-acre communitized area covering land on the Hummon-George/Betty interest, was plugged and abandoned sometime around April 14, 2005. It is unclear when, prior to that time, well No. 1-34 had ceased production. Hummon's well No. 2 was the last working well located on the Hummon-George/Betty interest. It ceased production and, in December 2005, was plugged.
Upon closure of well No. 1-34 on April 14, 2005, George and Betty considered all interests conveyed under the Murphy-George/Betty lease to be expired. Although Ranch Oil did not expressly acknowledge the Ranch Oil-George/Betty interest had expired, Ranch Oil did attempt to negotiate a new lease during the first week of April. According to George and Betty, when Ranch Oil told them that it intended only to pump a pre-existing well and had no intention of drilling new wells
Hummon, having concluded that the Hummon-George/Betty interest had expired through nonproduction, attempted to negotiate a new lease with George and Betty around the same time. On April 14, 2005, George and Betty entered into a new lease agreement with Hummon which gave Hummon exclusive drilling and operating rights on all of George and Betty's land previously described in the Murphy-George/Betty lease. This included the part of the land that had been the subject of the Ranch Oil-George/Betty interest.
The new lease agreement between Hummon and George and Betty (hereinafter Hummon-George/Betty lease) was recorded in the office of the Hayes County clerk. George sent Ranch Oil correspondence on April 14, 2005, advising Ranch Oil of the Hummon-George/Betty lease and that Ranch Oil's rights as lessee had expired. On April 21, Hummon sent correspondence to the NOGCC explaining its understanding that Ranch Oil had failed to further extend its lease by production and that the Ranch Oil-George/Betty interest in George and Betty's land was null and void. Hummon advised the NOGCC that Hummon had negotiated the Hummon-George/Betty lease and that Hummon would be reporting to the NOGCC as the new lessee.
Ranch Oil immediately attempted to take action to preserve the Ranch Oil-George/Betty interest and to prevent the Hummon-George/Betty lease from going into effect. Ranch Oil sent correspondence to Hummon, as well as George and Betty, asserting that the Ranch Oil-George/Betty interest was still in full force and effect and that George and Betty could not lease that land to Hummon. Ranch Oil relied on paragraph 12 of the Murphy-George/Betty lease, which stated that it "shall not terminate provided lessee commences operations for drilling a well within sixty (60) days from such cessation." Ranch Oil claimed the relevant cessation of operations occurred on April 14, 2005, when Hummon plugged well No. 1-34 and that Ranch Oil was in the process of reestablishing production operations within 60 days from that date.
Without seeking permission to do so, on May 3, 2005, Ranch Oil moved a drilling rig to the location of well No. 34-31, with the intention of removing the cast iron and sand plugs and restoring well No. 34-31 to production. Hummon immediately sent Ranch Oil a letter, dated May 4, 2005, asserting that Ranch Oil was trespassing on the land.
Ranch Oil refused to vacate the property. On May 13, 2005, Ranch Oil began swabbing the well and recovered three barrels of swab oil. Ranch Oil recovered four barrels of swab oil on May 14. Ranch Oil filed reports with the NOGCC reflecting "production" as of May 13, 2005.
On May 16, 2005, Ranch Oil began using the drill rig to break up the bridge plug into small pieces. A bailer was then used to drill out the debris and remove the debris from the wellbore. At one point, the drilling was halted because the drill was unable to remove the hard fill at 4,315 feet. Ranch Oil eventually was able to use a "cutrite mill" to drill it out. The president of Ranch Oil described this as "the remaining 20 feet of fill." He stated that the "drilling operation" in well No. 34-31 "opened up the productive oil sand from 4324 to 4335 feet." According to the testimony of the director of the NOGCC, Ranch Oil's operations did not drill well No. 34-31 any deeper than it was before,
During June 2005, Ranch Oil continued swabbing oil from well No. 34-31. The swab oil initially contained small percentages of oil. It progressed to larger percentages until, by June 18, Ranch Oil swabbed 10 barrels of 100-percent oil. On June 29, Ranch Oil was able to place an insert pump in well No. 34-31. Ranch Oil started pumping the well on July 1.
Lease operating statements for the period from May 2005 to May 2006 show that Ranch Oil did not sell any oil extracted from well No. 34-31 until August 2005, when it sold 122 barrels for $7,149. No sales were recorded for September or October. In November, Ranch Oil sold 139 barrels for $7,421. After that, the next sale was not until May 2006, when Ranch Oil sold 128 barrels for $7,928. From those sales, Ranch Oil paid $2,812 in royalties, $472 in severance tax, and $5,334 in operating expenses, not including the investment involved in reopening the well.
From June to December 2006, lease operating statements show no oil revenue and show $18,622 in operating expenses. Lease operating statements appear to show production of 4 barrels of oil in July, 34 in August, 15 in September, 1 in October, 13 in November, and 1 in December.
In June 2005, affidavits were filed with the Hayes County clerk's office averring that no well had been drilled and that there had been no production of oil or gas since April 14, 2005, on the Murphy-George/Betty lease. On August 25, the plaintiffs filed suit against Ranch Oil seeking declaratory judgment that the Murphy-George/Betty lease and the Ranch Oil-George/Betty interest in the Murphy-George/Betty lease were null, void, and of no further force and effect. The plaintiffs also alleged damages from trespass and conversion.
Ranch Oil raised several affirmative defenses to the lawsuit, including waiver, laches, estoppel, unclean hands, consent, and accord and satisfaction. Ranch Oil counterclaimed for quiet title of their leasehold interest, injunctive relief, breach of contract, conspiracy to defraud, and tortious interference with contract rights.
George and Betty accepted a royalty payment from Ranch Oil on October 4, 2005, in the amount of $872.18 for production on well No. 34-31. On October 26, George and Betty's attorney advised Ranch Oil that George and Betty's acceptance of royalty payments was not to be construed as a ratification or endorsement of the validity of the Ranch Oil-George/Betty interest; it was simply acknowledgment of their right to be compensated for minerals severed from their land. Also on October 26, George and Betty's attorney requested that the distributor of the oil suspend the further payment of proceeds attributable to the working interest and overriding royalty interest in production from well No. 34-31, until the dispute concerning lease rights was resolved. George and Betty accepted two more royalty checks from Ranch Oil: $905.35 on January 19, 2006, and $967.24 on July 12.
Ranch Oil filed a motion for partial summary judgment asking the court to determine that the Ranch Oil-George/Betty interest had been held in production until April 15, 2005, by virtue of the operation of Hummon's well No. 1-34 and that well No. 34-31 began producing oil on May 13, within the 60-day period referred to by paragraph 12 of the Murphy-George/Betty lease. Ranch Oil asked that the court
The plaintiffs filed a general motion for summary judgment in their favor and against Ranch Oil as to all issues except for damages. The plaintiffs argued that Ranch Oil's commencement of operations was not for "`the drilling of a well'" and that, in any event, the cessation of production in well No. 1-34 did not inure to the benefit of Ranch Oil and did not provide the relevant date for the 60-day period described in paragraph 12. The plaintiffs also considered the small amounts of oil produced from well No. 34-31 to be insufficient "production" to maintain the Murphy-George/Betty lease, but they considered the facts of production contested and inappropriate for summary judgment. All parties agreed that there was no factual dispute as to most matters except damages and possibly the issue of whether Ranch Oil's operations of well No. 34-31 produced oil in paying quantities or were profitable in nature.
The district court denied Ranch Oil's motions and granted partial summary judgment in favor of the plaintiffs, concluding that the plaintiffs were entitled to a judgment declaring that the Murphy-George/Betty lease and Ranch Oil's interest therein were no longer in effect and that the new Hummon-George/Betty lease was valid and in effect. The court explained that there was no material issue of fact as to the activities conducted on well No. 34-31. Even assuming that April 14, 2005, was the relevant date from which the 60-day period began, under the plain meaning of the contract, the reworking operations conducted in this case did not qualify as "`operations for the drilling of a well.'" Because "`operations for the drilling of a well'" did not occur within 60 days from April 14, Ranch Oil failed to hold the Ranch Oil-George/Betty interest through the savings clause of paragraph 12, and the Murphy-George/Betty lease had expired.
The court denied Ranch Oil's motions for summary judgment based on waiver and estoppel and denied the plaintiffs' motion for summary judgment as to their trespass and conversion claims. Various subsequent motions by Ranch Oil relating to the order for summary judgment were overruled, and the matter was set for a bench trial on the plaintiffs' claims for trespass and conversion. The record fails to demonstrate that, at any time, the plaintiffs sought to bifurcate their damages and attorney fees claims.
At the trial on the plaintiffs' action for trespass and conversion, the plaintiffs presented expert and lay witness testimony as to surface damage surrounding well No. 34-31 and the estimated cost of remedying that damage. They also testified as to the cost of ripping up a roadway to the well and lost revenue over the course of 3 years of $195 from 5 acres of land not able to be grazed as a result of the damage surrounding the well.
On cross-examination, the plaintiffs' witnesses admitted that they were unable to identify when the alleged surface damage occurred. Ranch Oil presented testimony disputing the estimated price of restoring the land. Ranch Oil also presented testimony from the director of the NOGCC,
Hummon presented evidence, over Ranch Oil's objection, of interest income that it would have made had it been able to drill a well on the land occupied by Ranch Oil. The calculations were made by Tyler Sanders, a petroleum geologist who works for Hummon. Sanders admitted there would have been no profits because any well drilled on the land would have operated at a loss. Sanders also admitted that the oil from the undrilled well is still in place, producible, and not lost. Nevertheless, Sanders sought to demonstrate damages using monthly posted oil prices from May 2005 to the time of trial, adding a 5-percent annual percentage rate, deducting estimated expenses, and assuming production of 11 barrels a day with no decline. Sanders' calculations resulted in an asserted loss of $18,179.77. In essence, this amount represented the estimated interest value of the estimated sales of oil from a well Hummon would have drilled on the land occupied by Ranch Oil.
The estimate of 11 barrels a day was based on what Sanders asserted were similar wells to the south, which share production from a common reservoir—although Sanders admitted on cross-examination that those wells had a higher cumulative production than wells located on land under the Murphy-George/Betty lease. The president of Bellaire Oil Company testified that the wells to the south are structurally different due to thicker sands and more water. They produce oil more efficiently than wells on George and Betty's land. He also noted that it would be impossible to estimate the production output without knowing the exact location of the well. It was undisputed that Hummon had not yet applied for a permit to drill on George and Betty's land.
The 5-percent annual percentage rate was described by Sanders as a simple annual interest. During cross-examination, Sanders conceded he did not know the average interest rate for deposits in Hayes County, either presently or during the time which Hummon would have operated a well. And the president of Bellaire Oil Company contested the methodology Hummon presented on lost interest income, asserting that the calculations omitted royalties and taxes and that they were based on noncomparable lease expenses.
Hummon also presented evidence of how much it would cost to plug Ranch Oil's wells, while Ranch Oil presented evidence that the figures presented by Hummon were inflated. Hummon had not been ordered to plug the wells that had been operated by Ranch Oil, nor was any evidence presented that Hummon would need to plug the wells to effectively operate on the Hummon-George/Betty lease. But Hummon was concerned about future liability for this cost. Ranch Oil presented the testimony of the director of the NOGCC who explained that, in accordance with law and policy, the NOGCC would hold the current bonded operator of the wells in question, Ranch Oil, responsible for any cleanup and plugging costs to the NOGCC's satisfaction. Hummon conceded that it would not have a claim for damages relating to the cost of plugging the wells if the NOGCC determined that plugging the wells was Ranch Oil's responsibility.
The court, as the trier of fact, ruled that the plaintiffs had failed to show that any damage to the property was caused during the time of Ranch Oil's trespass and conversion. The court explained that the plaintiffs failed to show when the damage occurred and who caused the damage. The court also concluded that pursuant to Neb.Rev.Stat. § 57-905 (Reissue 2010), the NOGCC had exclusive authority to compel any cleanup of the well site. Thus, while Ranch Oil is legally required to restore the premises, the plaintiffs failed to prove their claim for damages for restoration of the premises. The court similarly found that the NOGCC had the exclusive authority to require Ranch Oil to plug the wells and that this was not a matter for which the plaintiffs were entitled to damages.
The court found that the plaintiffs failed to prove their claim for lost profits. The court noted that Sanders assumed production and interest rates that were not based in fact and concluded that Sanders' methodology for determining lost profits was not valid. In addition, the court noted that Neb.Rev.Stat. § 57-205 (Reissue 2010) allows only the owner of the leased premises to recover damages and that there was no evidence of lost profits suffered by the landowners.
The court found that the plaintiffs failed to meet their burden of proof on the issue of attorney fees, because no evidence was submitted to the court on attorney fees. Because of the failure to prove any damages, the court issued an order dismissing the plaintiffs' claims for trespass and conversion and Ranch Oil's counterclaim. The court awarded George and Betty costs and nominal damages in the amount of $100, pursuant to § 57-205.
The plaintiffs filed a motion to alter or amend the judgment, or, in the alternative, for new trial. The plaintiffs principally took issue with the district court's failure to award the amount of damages to which their witnesses attested. The plaintiffs also asserted that the issue of attorney fees was whether they were recoverable, not their amount, since the fees were ongoing. The court overruled the motion for new trial, and the parties filed the present appeal and cross-appeal.
Ranch Oil assigns that the district court erred in failing to find that (1) the plaintiffs were required to give notice to Ranch Oil of any alleged breach of the Murphy-George/Betty lease with a demand that the terms of the implied covenant of production be complied with within a reasonable time as a condition precedent to the filing of the subject lawsuit demanding forfeiture of the Murphy-George/Betty lease; (2) all that was required under the Murphy-George/Betty lease was commencement of drilling operations and that Ranch Oil's activities had, in fact, been a commencement of drilling operations within 60 days of April 14, 2005; and (3) the plaintiffs' acceptance of royalty payments from the production of the well waived any alleged breach of the Murphy-George/Betty lease and estopped the plaintiffs from asserting such claims and bringing this lawsuit.
On cross-appeal, the plaintiffs assign that the district court erred in failing to (1) find liability for trespass and conversion, (2) award sufficient damages, (3) award Hummon damages for the cost of plugging abandoned wells, and (4) award costs and attorney fees.
An appellate court will affirm a lower court's grant of summary judgment if the pleadings and admitted evidence
The meaning of a contract is a question of law, in connection with which an appellate court has an obligation to reach its conclusions independently of the determinations made by the court below.
With respect to damages, an appellate court reviews the trial court's factual findings under a clearly erroneous standard of review.
The standard of review for an award of costs is whether an abuse of discretion occurred.
Generally, an oil and gas lease consists of a definite term and an indefinite term beyond which the definite term of the lease may be extended.
When such continuous production ceases, the lease automatically terminates unless there is some other provision which would prevent termination.
The Murphy-George/Betty lease contained a primary definite term of 10 years, with a provision for extension by continuous production.
Where the parties have bargained for and agreed on a time period for a temporary cessation clause, the agreed-on time period will control over the common-law doctrine of temporary cessation allowing a "reasonable time" for resumption of drilling operations.
In interpreting a contract, a court must first determine, as a matter of law, whether the contract is ambiguous.
When the terms of the contract are clear, a court may not resort to rules of construction, and the terms are to be accorded their plain and ordinary meaning as the ordinary or reasonable person would understand them.
Ranch Oil argues that any operations preparatory to restoring an old well to production would constitute "commenc[ing] operations for drilling a well." The plaintiffs read the phrase more narrowly and argue that the end result of the operations must be the making of a new hole in the ground. The meaning of "commence[ ] operations for drilling a well" is a question of first impression for our court.
In its reading of the Murphy-George/Betty lease, Ranch Oil first relies on the fact that the term "commencement" has been held to encompass preparatory activity, such as making and clearing a location and delivering equipment to the well site. We agree that it is the general rule that activities preparatory to the specified operation are sufficient to satisfy commencement clauses.
Thus, if the clause specifically provides for the resumption or commencement of drilling, no other operation will satisfy the clause.
Ranch Oil also relies on general definitions of "operations."
The terms "commence" and "operations," as used in the Murphy-George/Betty lease, plainly refer to the act of "drilling a well." The phrase "drilling a well" is not defined in the Murphy-George/Betty lease itself. The Oil and Gas Lien Act
The Concise Oxford American Dictionary defines the verb "drill" as to "produce (a hole) in something by or as if by boring with a drill," to "make a hole in (something) by boring with a drill," and to "make a hole in or through something by using a drill."
The word "well" is defined as "a shaft sunk into the ground to obtain water, oil, or gas."
The weight of authority agrees that general reworking operations, which do not involve making a new hole, are not "operations for drilling a well." One commentator states that "reworking operations will not satisfy a clause that requires the resumption of `operations for drilling a well.'"
Ranch Oil points out that one court has considered "reworking or redrilling" an old well to be "drilling" a well, as that term was used in an oil and gas
While the parties to the Murphy-George/Betty lease could have written the savings provision of paragraph 12 to include both the "commenc[ing] of operations for drilling a well" and reworking— or even general "drilling operations"—they did not. A court is not free to rewrite a contract or to speculate as to terms of the contract which the parties have not seen fit to include.
Even if its actions did not satisfy the terms of the savings clause, Ranch Oil argues that we should reverse the district court's grant of declaratory judgment for the plaintiffs, because George and Betty accepted royalty payments and have thereby waived the breach. Ranch Oil relies on landlord-tenant case law addressing the acceptance of rent after a lessee's default. But, in oil and gas leases, it is well established that the acceptance of royalties by a lessor after the expiration of the primary term does not waive expiration of the lease or estop the landowner from claiming the lease is no longer valid.
Ranch Oil's assignment of error regarding the district court's failure to find that George and Betty were required to give notice of any alleged breach of the Murphy-George/Betty lease does not appear to have been argued in its brief. In order to be considered by an appellate court, the alleged error must be both specifically assigned and specifically argued in the brief of the party asserting the error.
We conclude that the district court properly denied Ranch Oil's affirmative defenses. Because Ranch Oil failed to satisfy the savings clause of the Murphy-George/Betty lease as a matter of law and failed to raise any issue of material fact as to its affirmative defenses of waiver and estoppel, we affirm the partial summary judgment of the district court declaring the Murphy-George/Betty lease to no longer be in force and effect. We turn now to the plaintiffs' counterclaims.
We next address the plaintiffs' cross-appeal, asserting that the district court erred in failing to award Hummon the cost of plugging Ranch Oil's wells, and in failing to award the plaintiffs damages resulting from trespass and conversion, costs and attorney fees, and deposition expenses. With respect to damages, an appellate court reviews the trial court's factual findings under a clearly erroneous standard of review.
Damages, like any other element of a plaintiff's cause of action, must be pled and proved, and the burden is on the plaintiff to offer evidence sufficient to prove the plaintiff's alleged damages.
Moreover, claims for restoration of surface damage sustained through reasonable use of the surface estate do not sound in tort, but are instead recoverable in an action in contract for breach of express covenants in the lease—and sometimes, under implied covenants of the lease.
The duty to plug abandoned or disused oil and gas wells is most often found to be a creature of statutory or regulatory enactment.
We need not determine whether the NOGCC's jurisdiction over these matters is exclusive to conclude that the district court did not err in denying damages to the plaintiffs. "[U]nder any theory of action the plaintiff will have the burden of proving that the alleged damage was, in fact, caused by the failure of the defendant to plug."
The district court likewise did not clearly err in concluding that the evidence of lost interest income was speculative. Hummon admitted that the oil itself was still there to be extracted. Hummon's representative explained that any well Hummon would have operated on the land would have operated at a loss once expenses were considered. The plaintiffs sought only the interest on the investment of gross production from a well Hummon would have allegedly drilled, based on hypothetical production rates and on an assumed interest rate that admittedly had no correspondence to any known interest rate. The plaintiffs sought to demonstrate these lost "profits" through the testimony of Sanders, the petroleum geologist who worked for Hummon.
A plaintiff's burden to prove the nature and amount of its damages cannot be sustained by evidence which is speculative and conjectural.
Hummon further argues on appeal that the district court erred in granting Ranch Oil's pretrial motion to exclude lease extension costs as an element of damages in their trespass and conversion claim. Hummon allegedly paid $5,260 for the Hummon-George/Betty lease for another 5 years. According to Hummon, this payment should be recoverable as a necessary expenditure to protect Hummon's rights as lessee, given Ranch Oil's occupation of the land and the protracted nature of the litigation. The district court concluded that Hummon, as lessee, did not have any right to recover damages under § 57-205.
For reasons different from those articulated by the district court, we affirm its ruling.
The standard of review for an award of costs is whether an abuse of discretion occurred.
Although the plaintiffs suggest they did not present evidence of attorney fees because they believed they would have an opportunity to provide proof of attorney fees at some later date, the trial was for the plaintiffs' remaining claims relating to trespass and conversion and there was no reasonable basis for the plaintiffs' silent assumption. The plaintiffs did not request, nor did the district court suggest, that the trial would be bifurcated so as to consider attorney fees at a later time. Thus, the plaintiffs' failure of proof is decisive of this issue.
Finally, the plaintiffs assert that the district court erred in failing to order that Ranch Oil pay for the costs and fees of depositions called by Ranch Oil. The plaintiffs had filed a motion to compel payment of witness fees and expenses, to which they attached an invoice reflecting those costs. The district court never expressly ruled on the motion; it was implicitly denied by the final judgment which failed to award these costs.
The plaintiffs' motion sought payment of witness fees and expenses under Neb. Ct. R. Disc. § 6-326(b)(4)(C)(i) and
The plaintiffs' deposition witnesses appeared despite Ranch Oil's failure to pay for traveling fees, and there is no provision in § 25-1228 for a court to compel a postdeposition reimbursement of fees.
Section 6-326(b)(4)(C)(i) states that unless manifest injustice would result, the court shall require that the party seeking discovery pay the expert a reasonable fee for time spent in responding to discovery. However, payment of discovery fees under § 6-326 is limited to discovery obtained under subdivisions (b)(4)(A)(ii) and (b)(4)(B). Subdivision (b)(4)(A)(ii) states: "Upon motion, the court may order further discovery by other means, subject to such restrictions as to scope and such provisions, pursuant to subdivisions (b)(4)(C) of this rule, concerning fees and expenses as the court may deem appropriate." Subdivision (b)(4)(B) states:
A ruling under § 6-326(b)(4)(C)(i) is reviewed for an abuse of discretion.
We affirm the district court's determination, as a matter of law, that Ranch Oil's activities on George and Betty's land did not operate so as to extend the Ranch Oil-George/Betty interest in the Murphy-George/Betty lease. We also affirm the district court's determination that the plaintiffs had failed to prove they were entitled to damages under common-law trespass and conversion claims and that George and Betty were entitled only to the nominal amount of $100, as specified in § 57-205. Finally, we affirm the denial of the plaintiffs' motions for attorney fees and expert witness fees and expenses.
AFFIRMED.
