KAUGER, J.:
¶ 1 This cause concerns another appeal in a litany of litigation regarding natural gas wells operated from 1978 to 1998 in Beckham County, Oklahoma.
¶ 2 We now address the issues of whether: 1) the settled-law-of-the-case doctrine precludes review of the issue of prejudgment interest; 2) the royalty owners' share of the proceeds was subject to the Production Revenue Standards Act, 52 O.S. 2011 § 570.1 et seq.
¶ 3 The facts preceding this cause are extensively detailed in Krug v. Helmerich & Payne, Inc., 2013 OK 104, 320 P.3d 1012. The plaintiff/appellants, H.B. Krug, Kathryn Krug, and Bobbie Ruth Eubanks (collectively the royalty owners/Krugs), represent a class of oil and gas royalty owners. The class consists of mineral owners underlying two 640-acre sections of land in Beckham County, Oklahoma. The royalty owners leased the two sections to the defendant/appellees, Helmerich & Payne, Inc., (H & P), which operated natural gas wells on those sections from 1978 to 1998, when H & P sold its interests to a third party.
¶ 4 On December 22, 1998, the royalty owners brought a class action lawsuit against H & P seeking actual and punitive damages in the district court in Tulsa County, Oklahoma. The claims related to payment for uncompensated drainage of natural gas
¶ 5 The trial court added additional damages for disgorgement of profits and set the total amount awarded to the royalty owners as $119,522,750. The court also awarded interest on $6,845,000 from November 21, 2008, and interest on the remaining $112,677,750 from January 8, 2009, until paid in full. The trial court also awarded the royalty owners costs and attorney fees. H & P filed an appeal on February 27, 2009, which culminated in our opinion in Krug v. Helmerich & Payne, Inc., 2013 OK 104, 320 P.3d 1012 (Krug 1).
¶ 6 In Krug 1, this Court reversed in part and remanded to the district court for further proceedings. We affirmed the jury's verdict of $3,650,000 in damages based on the implied covenant to protect against drainage which was based on the lease agreement. However, we reversed the $4,055,000 verdict and the judgment for $119,522,750, determining that the royalty owners were not entitled to pursue a claim for constructive fraud/unjust enrichment when they had an adequate remedy at law — breach of contract. Finally, we directed the trial court to revisit its order of costs, interests, and attorney fees in a manner consistent with our opinion. We said that "[i]f the court finds that prejudgment interest is due pursuant to a judgment for a breach of the implied duty in an oil and gas lease to protect against drainage, the court is directed to determine and award the appropriate interest rate or rates."
¶ 7 Accordingly, on June 24, 2014, the trial court held a hearing concerning the prejudgment interest, attorneys' fees, and costs. Subsequently, on July 2, 2014, the trial court filed an order determining that the Production Revenue Standards Act (the Act), 52 O.S. 2011 § 570.01.1 et seq. was inapplicable to this cause, and that the royalty owners were not entitled to attorneys' fees, costs, or expenses under it. The trial court also held that because the plaintiffs' claims were unliquidated, they were not entitled to prejudgment interest pursuant to 23 O.S. 2011 § 6.
¶ 8 H & P argues that because the trial court denied prejudgment interest in a 2008 order,
¶ 9 The settled-law-of-the-case doctrine bars from relitigation issues finally determined by an appellate court in the review process or those that the aggrieved party has failed to raise in the course of the appellate contest.
¶ 10 Here the cause was reversed and remanded by this Court with directions to proceed in accordance with our decision and the trial court did so. It would be incongruous and inconsistent to now preclude review of the trial court's denial of prejudgment interest based upon the interlocutory ruling in 2008. No appellate court has ruled on the issue of prejudgment interest in this cause. Additionally, we reversed substantial verdicts in Krug 1, and we expressly directed the trial court to re-consider the prejudgment issue. Accordingly, we determine that the settled-law-of-the-case doctrine is inapplicable under the circumstances of this cause.
¶ 11 The royalty owners argue that when H & P received a settlement payment from ANR Pipeline, H & P was obligated to pay a royalty share to them, pursuant to the Act. They also contend that: 1) when H & P failed to pay such royalties, the proceeds began to accrue interest under the Act as well; and 2) the Act was intended to discourage producers from wrongfully withholding proceeds attributable to royalty owners and that requiring prejudgment interest on such proceeds would comport with the Act's intent. H & P insists such prejudgment interest on the proceeds is not due because neither the Act nor its predecessor applies to claims which are premised drainage rather than actual oil and gas production. It also contends that a jury award for drainage is not an award of "royalty proceeds" under the Act.
¶ 12 Legislative intent controls statutory interpretation.
¶ 13 The Act regulates the marketing, sale, and production of hydrocarbons from Oklahoma wells.
¶ 16 This Court first discussed the genesis and intent of the Act in Seal v. Corporation Com'n, 1986 OK 34, ¶8, 725 P.2d 278. Seal involved constitutional challenge of the Act in effect at that time and the rules created by the Corporation Commission thereunder. The Court noted that:
The Court also noted the history and problems of the gas industry in the State of Oklahoma leading up to the passage of the Act, including: 1) discriminatory practices; 2) burdensome contractual obligations which were ignored; and 3) deferral of payments under industry employed gas balancing contracts.
¶ 17 Three years later, in Hull v. Sun Refining and Marketing Co., 1989 OK 168, ¶9, 789 P.2d 1272, in addressing whether a division order was a necessary prerequisite to being legally entitled to payment under the Act, the Court also noted that another purpose of the Act was to avoid needless litigation arising from suspended payments. Prejudgment interest under the Act should not be characterized as a penalty but, rather, an integral part of a contractual claim.
¶ 18 Regardless, in Goodall v. Trigg Drilling Co., Inc., 1997 OK 74, ¶¶ 10-11, 944 P.2d 292, a case involving whether an operator had a duty to inform the royalty owner of production, we recognized that an integral part of the contract also includes a well operator's duty to hold revenue or proceeds from the sale of production for the benefit of the legal owners. We also noted that operators are liable for failing properly to pay royalty owners as a result of their own omission or errors.
¶ 19 In Roye Realty & Developing, Inc. v. Watson, 1996 OK 93, ¶32, 2 P.3d 320, the Court addressed whether royalty owners
¶ 20 The Legislature in clear and unambiguous terms required timely payment when revenue was derived from or attributable to any production of natural gas. The obvious overriding purpose of the Act is to ensure that royalty owners are timely paid their share of the proceeds. The Legislature has followed a path of strengthening mineral owners rights since the Act's inception.
¶ 21 While this precise scenario may not have been contemplated by the Legislature, the plain and ordinary terms of the Act apply to production with no indication that the Legislature intended the Act to also apply to uncompensated drainage. If the Legislature chooses to change the language of the statute, it may do so. However, we hold that the Act's prejudgment interest provisions are inapplicable to this cause.
¶ 22 The royalty owner's alternatively argue that even if they are not entitled to prejudgment interest under the Act, they should be allowed to recover it pursuant to 23 O.S. 2011 § 6. Section 6 provides:
H & P insists that because the damages were unliquidated, they are not recoverable. We agree.
¶ 23 Prejudgment interest serves to compensate for the loss of use of money due as damages from the time the claim accrues until judgment is entered, thereby achieving full compensation for the injury those damages are intended to redress.
¶ 24 Liquidated damages are generally defined as an amount contractually stipulated as a reasonable estimation of actual damages to be recovered by one party if the other party breaches.
¶ 25 In the present case, the royalty owners' recovery of damages from uncompensated drainage was not for a sum certain or a sum capable of being made certain by calculation or by reference to some fixed standards set forth in the oil and gas lease. Rather, the claim required that a jury determine, from conflicting evidence and experts' opinions, the estimated amount of loss of production from the wells in controversy and the consequent damages therefrom. Therefore, the award of interest on such damages is not within the contemplation of § 6 and the Court may not judicially create an allowance of prejudgement interest when the Legislature has not seen fit to do so.
¶ 26 The settled-law-of-the-case doctrine bars from relitigation issues finally determined by an appellate court in the review process.
¶ 27 The Act defines "royalty proceeds" as the share of proceeds or other revenue derived from or attributable to any production of oil and gas attributable to the royalty share.
REIF, C.J., COMBS, V.C.J., KAUGER, WINCHESTER, TAYLOR, COLBERT, JJ., concur.
WATT, J., concurs in part, dissents in part.
EDMONDSON, GURICH, JJ., disqualified.
Sections 1 through 15 of this act shall be known and may be cited as the "Production Revenue Standards Act".
The Act, was passed in Senate Bill 168 which codified the Production Revenue Standards Act, 52 O.S. Supp. 1992 §§ 570.1-15 and the Natural Gas Marketing Share Act 52 O.S. Supp. 1992 §§ 581.1-10. The bill also renumbered previous statutes on the subject. For example 52 O.S. 1991 § 540 became § 570.10. Prior to 1992, the statutes only imposed affirmative obligations to pay proceeds and in 1992, Legislature substantially strengthened and expanded its scope and obligations by setting forth time restraints and penalties. Section 540 was originally enacted in 1980 for the purpose of limiting the amount of time during which royalty payments and working interest payments can be withheld by the first purchaser following the first sale of production on a new well. See, 1981 OK AG 6. It has come to be known as the "Sweetheart Gas Bill." Maxwell v. Samson Resources Co., 1993 OK 23, ¶ 14, 848 P.2d 1166. References in this opinion are to the current statutory decennial 2011, unless an older provision is controlling, differs significantly, and is otherwise noted.
The Act also delineates certain accounting functions and the rights and duties tied to such functions. 52 O.S. 2011 § 570.5.