Walls v. Petrohawk Properties, LP, No. 14-2734 (8th Cir. 2015)
Annotate this CasePlaintiff, individually and as surviving spouse of Arlie Walls, filed suit against Petrohawk alleging claims related to an oil and gas lease. The court concluded that Petrohawk's failure to pay royalties in a timely manner did not substantially defeat the purpose of the contract and therefore does not constitute a material breach of contract; plaintiff waived the breaches with respect to all of the assignments except the Petrohawk-Exxon assignment; the district court did not err in concluding that plaintiff unreasonably withheld consent to the assignment from Petrohawk to Exxon; the language of the lease does not support plaintiff's argument that the lease holds Petrohawk liable for breaches of previous assignees, specifically Alta; and plaintiff is not entitled to statutory penalties because she failed to make factual allegations of Petrohawk's willfulness or bad faith. Accordingly, the court affirmed the district court's judgment.
Court Description: Smith, Author, with Murphy and Melloy, Circuit Judges] Civil case - Oil and Gas law. Failure to pay royalties on a timely basis was not a material breach of the oil and gas lease and would not support cancellation of the lease; plaintiff waived previous breaches of the lease; district court did not err in finding plaintiff unreasonably withheld consent to defendant's assignment of the lease; defendant was not responsible for the prior lessee's nonpayment of royalties; plaintiff failed to allege defendant's breaches were willful or made in bad faith, and she was not entitled to statutory penalties under Arkansas Code Annotated Sec. 15-74-602.
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