Hess Bakken Investments II, LLC v. Whitetail Wave, No. 18-1734 (8th Cir. 2020)
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Pitchblack and Whitetail filed suit against Hess, alleging that their overriding royalty interests in a number of oil and gas leases should continue to burden various top leases that Hess acquired over the subject leases.
The Eighth Circuit affirmed the district court's grant of summary judgment for Hess, holding that Hess did not owe Pitchblack or Whitetail any fiduciary duty that would have required Hess to treat the top leases as extensions or renewals. Based on North Dakota law and the lack of any fiduciary duties expressed in the parties' agreement, the court held that Hess did not owe Pitchblack and Whitetail any fiduciary duty to extend or renew the subject leases. Consequently, Pitchblack and Whitetail's argument that the top leases were extensions or renewals of the subject leases based on a fiduciary duty fails. The court also held that the district court correctly concluded that the top leases were not extensions or renewals of the subject leases. Therefore, because the top leases were new leases, the extension or renewal clause did not attach the overriding royalty interests to the top leases. The court held that the top leases were thus not burdened by the overriding royalty interests.
Court Description: [Smith, Author, with Gruender and Benton, Circuit Judges] Civil case - Oil and Gas. The district court did not err in determining Hess did not owe defendants any fiduciary duty to extend or renew certain leases; as a result defendants' argument that certain top leases were extensions or renewals of the subject leases based on fiduciary duty fails; nor did the court err in determining that the top leases were not extensions or renewals of the original leases based on an argument that the top leases were extensions of renewals based on the provisions of the parties' contractual agreement; because the top leases were new leases, the extension or renewal clause did not attach to the overriding royalty interests to the top leases and did not burden them.
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