United States District Court, N.D. West Virginia, Wheeling
DANIEL M. LUCEY, COLLEEN S. LUCEY, and ABEL LUCEY, Plaintiffs,
SWN PRODUCTION COMPANY, LLC, and CHESAPEAKE APPALACHIA, LLC, Defendants.
ORDER GRANTING DEFENDANT'S MOTION TO
PRESTON BAILEY, UNITED STATES DISTRICT JUDGE
matter is before this Court for consideration of Defendant
Chesapeake Appalachia, LLC's Motion to Dismiss Pursuant
to Fed.R.Civ.P. 12(b)(6) [Doc. 18], filed November 30, 2017.
The matter is fully briefed and ripe for review.
action involves the interpretation of an oil and gas lease.
On August 22, 2006, Daniel and Colleen Lucey ("the
Luceys") and Abel Lucey (collectively, "the
plaintiffs") each entered into an Oil, Gas and Coalbed
Methane Lease with SWN Production Company, LLC
("SWN") and/or its successor in interest,
Chesapeake Appalachia ("Chesapeake"), with a
primary term of five years [No. 5:12-CV-39, Doc. 1; No.
5:12-CV-40, Doc. 1]. The lease was set to expire on August
21, 2011, but could be renewed by Chesapeake under certain
conditions. Chesapeake attempted to extend the lease, but the
extension was rejected by the plaintiffs for various reasons.
Ultimately, the plaintiffs filed actions in this Court, which
were subsequently consolidated, seeking a declaration that
the lease had terminated. The matter was settled and
dismissed by joint stipulation.
terms of the resulting settlement agreements[1" name="FN1" id="FN1">1] are now at issue.
The settlement agreements state, in relevant part, that:
In addition, Chesapeake agreed to pay Releasors an additional
$500.00/acre for 203.39 acres, totaling $101, 695.00
("Additional Consideration") if there is not a
commencement of two (2) wells within one (1) year of the
effective date of this agreement. Forthe purposes of this
agreement, commencement of a well is defined consistent with
the terms of the Lease.
[Doc. 14-3, ¶1]. The lease provides that, "[a] well
shall be deemed commenced when preparations for drilling have
been commenced." [Doc. 14-1, ¶2]. The lease also
grants Chesapeake the right to "consolidate the leased
premises or any part thereof... for the purpose of drilling a
well thereon." [Doc. 14-1, ¶3]. The settlement
agreements were signed on October 29, 2012.
consolidated various properties, including the
plaintiffs', into a pooled unit. Pursuant to the terms of
the lease agreement, Chesapeake recorded a Declaration and
Notice of Pooled Unit-Michael Dunn Southwest Unit ("Dunn
Unit") on January 3, 2013, which identified the
plaintiffs' property as part of the unit. In late 2012,
Chesapeake applied for permits to drill four wells that would
be located in the Dunn Unit, and received the permits shortly
after. The permits were applied for prior to the signing of
the settlement agreement, although subsequent activity on the
permits, including the spud date and revisions, occurred
after the agreement was signed. See WVDEP Oil and
Gas-Permit Search, West Virginia Department of Environmental
Protection, Office of Oil and Gas,
(last visited Feb. 5, 2018).
17, 2017, the Lucey plaintiffs filed a complaint against SWN
in the Northern District of West Virginia [No. 5:17-CV-66,
Doc. 1]. The Lucey plaintiffs alleged four counts against
SWN: (1) breach of contract, (2) declaratory judgment, (3)
trespass, and (4) private nuisance. On September 29, 2017,
they filed an Amended Complaint [Id., Doc. 14], in
which Chesapeake was named as a defendant, as SWN's
successor in interest.
August 10, 2017, Abel Lucey filed a complaint against SWN in
the Northern District of West Virginia [No. 5:17-CV-126, Doc.
1]. The complaint was substantially the same as that of the
Lucey plaintiffs, and alleged the same four counts. Abel
Lucey filed an amended complaint on September 29, 2017
[Id., Doc. 3], and named Chesapeake as a defendant,
as SWN's successor in interest.
November 30, 2017, Chesapeake filed a Motion to Dismiss for
Failure to State a Claim [No. 5:17-CV-66, Doc. 18; No.
5:17-CV-126, Doc. 9] in both actions. On December 6, 2017,
the plaintiffs filed a motion to consolidate the two civil
actions because they present identical legal issues. This
Court granted the motion on December 11, 2017, and ordered
the actions consolidated and designated the first-filed
action, No. 5:17-CV-66, as the lead case [Doc.
reviewing the sufficiency of a complaint under Fed.R.Civ.P.
12(b)(6), a district court must accept the factual
allegations in the complaint as true. Zak v. Chelsea
Therapeutics Int'l, Ltd., 780 F.3d 597, 601 (4th
Cir. 2015) (citing Matrix Capital Mgmt Fund, LP v.
BearingPoint, Inc., 172');">576 F.3d 172, 176 (4th Cir. 2009)).
While a complaint does not need detailed factual allegations,
a plaintiffs obligation to provide the grounds of his
entitlement to relief requires more than labels and
conclusions, and a formulaic recitation of the elements of a
cause of action will not do. Bell Atl, Corp. v.
Twombly, 550 U.S. 544, 555 (2007). Indeed, courts
"are not bound to accept as true a legal conclusion
couched as a factual allegation." Papasan v.
Allain, 478 U.S. 265, 286 (1986).
complaint must be dismissed if it does not allege
"enough facts to state a claim to relief that is
plausible on its face." Twombly, 550 U.S. at
555. "A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged." Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009). This requires "more than a sheer
possibility that a defendant has acted unlawfully."
Id. However, when reviewing the sufficiency of a
complaint, a court may also consider "documents
incorporated into the complaint by reference, and matters of
which a court may take judicial notice." Tellabs,
Inc. v. Makor Issues & Rights, Ltd.,1 U.S. 308');">551 U.S. 308,
322 (2007); see also Marsh v. United States, 2016 WL
247563, at *2 (D.Md. 2016) (considering public records on
government website on motion to dismiss). A court may
consider documents attached to a motion to dismiss when they