CHARLEVOIX — A Charlevoix County District Court judge dismissed a landowner lawsuit that sought payment for an oil and gas lease that was rejected.
Last week, District Court Judge Richard May dismissed the case that involved a proposed lease that covered approximately 15 acres in Charlevoix County’s South Arm Township.
The lease between the landowner and Western Land Services, Inc., was rejected when Western Land Services learned the landowner had multiple mortgages on the property.
“We welcome the court’s ruling and believe it correctly reflects our position that civil lawsuits filed over rejected oil and gas lease agreements are without merit,” said Kevin Roragen, an attorney with the Lansing law firm, Loomis, Ewert, Parsley, Davis and Gotting.
The law firm represents oil and gas companies.
Roragen further said, “The court recognized that these lease transactions were subject to title approval by our clients in this case, Western Land Services, Inc. of Ludington, Mich. When liens or mortgages are discovered, the oil and gas company has a clear right under the agreement to reject the proposed lease.”
The landowner in the case argued that Western Land Services had a duty to give them an opportunity to clear up or remove the mortgages before rejecting the proposed lease, but Judge May ruled the written agreement between the landowner and Western Land Services contained no such requirement.
This is not the first case regarding mineral rights leases that is expected to be heard in court.
A year ago, several oil and gas companies offered contracts with landowners throughout the state, including many in Charlevoix and Emmet counties.
In the months that followed, several who signed mineral rights leases filed lawsuits against the companies when they had their leases terminated before bonus payments were received.
Susan Topp and Bill Rolinski, two attorneys based in Gaylord, are now representing more than 130 plaintiffs from area counties in a lawsuit against many of those oil and gas companies.
A handful of other attorneys from across the state are also moving forward with similar lawsuits, citing leases that were wrongfully terminated.
Companies involved in the lawsuit, in addition to Western Land Services, include Chesapeake Energy Corporation, Northern Michigan Exploration, LLC, Red Sky Land, LLC, O.I.L. Niagran, LLC and Silver Lake Energy.