Smith, et al. v. David H. Arrington Oil & Gas, Inc.; Foster, Jr., et al. v. Arrington Oil & Gas, Inc.; Hall, et al. v. Arrington Oil & Gas, Inc., No. 10-3423 (8th Cir. 2012)
Annotate this CaseIn this consolidated appeal, three sets of landowners asserted claims against Arrington for breach of contract, promissory estoppel, and unjust enrichment relating to Arrington's failure to pay cash bonuses under oil and gas leases. The district court granted summary judgment to the landowners on the breach of contract claims and thereafter dismissed the landowners' other claims with prejudice on the landowners' motions. The court rejected the landowners' assertion that the lease agreements could be construed without considering the language of the bank drafts; the drafts' no-liability clause did not prevent enforcement of the lease agreements; Arrington entered into a binding contract with each respective landowner despite the drafts' no-liability clause; the lease approval language of the drafts was satisfied by Arrington's acceptance of the lease agreements in exchange for the signed bank drafts and as such, did not bar enforcement of the contracts; Arrington's admitted renunciation of the lease agreement for reasons unrelated to title precluded its defense to the enforceability of its contracts; Arrington's admission that it decided to dishonor all lease agreements in Phillips County for unrelated business reasons entitled the landowners to summary judgment; there was no genuine issue of material fact as to whether Arrington disapproved of the landowner's titles in good faith. Accordingly, the district court did not err in granting summary judgment on the breach of contract claims.
Court Description: Civil Case - oil and gas. Grant of summary judgment to landowners in suit against Arrington Oil & Gas, Inc. for failure to pay cash bonuses under oil and gas leases is affirmed. Lease agreements, together with bank draft, constituted enforceable contract. Bank draft's no-liability clause does not negate the mutuality of the obligation in the underlying lease agreement. The acceptance of the executed lease agreements constituted an approval and satisfied the lease approval language of the drafts. Renunciation of lease agreement for reasons unrelated to title precludes defense to the enforceability. Only good faith disapproval of title would justify invocation of condition precedent. Judge Colloton concurs.
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