SHR LIMITED PARTNERSHIP V NORTHERN LAKES PETROLEUM INC
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STATE OF MICHIGAN
COURT OF APPEALS
SHR LIMITED PARTNERSHIP,
UNPUBLISHED
September 24, 2002
Plaintiff-Appellee,
v
NORTHERN LAKES PETROLEUM, INC. and
O.I.L. ENERGY CORPORATION,
No. 225484
Charlevoix Circuit Court
LC No. 99-188818-CK
Defendants-Appellants.
Before: Jansen, P.J., and Smolenski and Wilder, JJ.
JANSEN, P.J. (dissenting).
I respectfully dissent and would affirm the trial court’s ruling.
The trial court did not err in focusing on “$5.00 per acre” in paragraph 17 of the lease,
nor did the trial court err in ruling that this language is clear and unambiguous. A contract is
ambiguous if its provisions may reasonably be understood in different ways. Universal
Underwriters Ins Co v Kneeland, 464 Mich 491, 496; 628 NW2d 491 (2001). Where no
ambiguity exists, the contract must be enforced as written. Farm Bureau Ins Co v Nikkel, 460
Mich 558, 566; 596 NW2d 915 (1999). The majority, by referring to paragraph 14, is creating
an ambiguity in paragraph 17 where no ambiguity exists. Moreover, paragraph 14 does not
operate such that the extension payment is to be effectively calculated on a net mineral acre
basis, as the majority concludes.
The language “$5.00 per acre” cannot be reasonably understood in different ways. The
language of paragraph 17 (“$5.00 per acre”) is clear and unambiguous and, therefore, must be
applied as written. Paragraph 14 simply states that if the lessor (plaintiff) has an ownership
interest less than stated, then the royalties and other payments would be reduced according to the
actual ownership interest. I fail to see how this leads to the conclusion that paragraph 14
operates such that the extension payment would be effectively calculated on a net mineral acre
basis. Paragraph 14 simply means that plaintiff would be paid according to the actual acreage
that it owned. Here, in applying the clear and unambiguous language of paragraph 17 (“$5.00
per acre) to the ownership interest (7,242 acres), plaintiff is entitled to $36,210 as a matter of
law. The trial court did not err in so ruling. If defendants wanted to pay five dollars for each net
mineral acre for the extension payment, they should have stated as such in the lease agreement.
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I would not address the other counts in plaintiff’s complaint because the trial court did
not rule on the merits of counts II and III.
I would affirm.
/s/ Kathleen Jansen
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