CHAPTER 10 COMMON EVIDENTIARY AND DAMAGE ISSUES
| Jurisdiction | United States |
(Apr 1993)
COMMON EVIDENTIARY AND DAMAGE ISSUES
Cornell & Tisdal
Clinton, Oklahoma
Index
Page
I. Introduction
II. Document Control
III. Use of Experts
IV. Demonstrative Aids
V. Parol Evidence
VI. Hearsay and Exceptions
VII. Admissibility of Information in Public Records
VIII. Statute of Frauds
IX. Damages/Remedies
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I. Introduction.
The proper preparation of a lawsuit arising out of the complex area of oil and gas law is an arduous task. This paper will, hopefully, provide some insight into common evidentiary problems; however, a little background should be introduced at this point. Before you have evidentiary issues, you must develop the issues and acquire the documents which will form the basis of your lawsuit. This is, generally speaking, not an easy task for the lawyer who primarily deals with plaintiffs in royalty owner litigation.
Our law firm is located deep in the heart of the Anadarko Basin in Western Oklahoma. We are exposed on a daily basis to royalty owner issues which may include anything from questions related to oil and gas lease preparation to cancellation. In between are a myriad of problems ranging from claims that oil and gas operations are polluting the family farm to claims of drainage and other implied covenant questions.
The most prevalent claim of the royalty owner, however, is that he has been improperly paid, or not paid at all, his share of royalties due on everything from oil, gas, condensate, flash gas, sulphur and liquefiable hydrocarbons to take or pay related settlements. The immediate problem is that the documents required to prove such claims are not within the control of the royalty owner. Generally speaking, the royalty owner may have in his possession an incomplete set of check details, a division order or two, and an unsigned copy of an oil and gas lease. Acquiring the necessary documents to begin to prove the case is paramount.
After acquiring documents, such as they are, from the royalty owner, counsel should seek out other sources of information. Dwight's Energydata is one source of information, and we have that capacity in our office. Data may also be obtained from Petroleum Information, a service similar to Dwight's. These reports, however, while containing relevant information concerning volumes produced, do not contain information relating to value. This we have to obtain elsewhere.
In Oklahoma, the first purchaser reports its volumes and values for each well to the Oklahoma Tax Commission. Occasionally, these reports will also contain some evidence of take or pay related settlements which the purchaser felt compelled to report. A production summary may be obtained from the Oklahoma Tax Commission upon request of the royalty owner. One such report is attached to this paper as Exhibit A. Once this data is obtained, we have a basis for comparison of values and volumes as reported by the Oklahoma Tax Commission, and the other sources mentioned above, to the royalty owner receipts as determined by his check details.
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We have developed our own computer program in that regard, and our spreadsheet is attached as Exhibit B. Should we determine that our client appears to be underpaid, we begin the task of communicating with the operator of the well in question and all lessees of the particular oil and gas lease covering our mineral interest. Requests for accounting are sent to each such producer. Ordinarily, we include our own accounting report with this initial communication.
In the case that we are unable to settle the issues on an amicable basis, litigation follows. Ordinarily, we seek damages for nonpayment, underpayment, or late payment of royalty plus interest, costs, and fees. Our petitions may include take or pay related claims, and our first set of interrogatories and request for production of documents may also pertain to that area. A form of petition and a form of preliminary discovery requests are attached as Exhibits C and D.
Follow up to discovery requests is essential. If the opposing party resists discovery, a Motion to Compel pursuant to Rule 37 Federal Rules of Civil Procedure, or similar state law, may be necessary. Local court rules may require specific attempts to resolve the discovery conflict. For example, the Western District of Oklahoma will not hear any motion to compel, or objection to discovery, unless movant advises the court in writing, that counsel for the parties have met and conferred in good faith, and have been unable to resolve the issue despite a sincere attempt. Rule 14(E) of the Local Rules of United States District Court for the Western District of Oklahoma. Counsel should not run to the court to resolve discovery squabbles unless it is substantially justified. If movant loses, he may be liable for attorneys fees. Fed. R. Civ. Proc. 37(a)(4).
More likely than not, a defendant will claim confidentiality as to some of the requested documents, and move for a protective order pursuant to Fed. R. Civ. Proc. 26(c), or other similar state rule. One judge in our area of Western Oklahoma has taken the position that the form of protective order attached at Exhibit E to this paper is the only form which he will allow. This form protects any "confidential" information, and, yet, allows the royalty owner to discover the terms of take or pay settlements and related information. Note that Exhibit E requires a signature of the lawyer actually handling the case on any document claimed to be confidential to insure that a lawyer may be held accountable if the claim of confidentiality is unfounded.
II. Document Control.
The Plaintiff's request for documents will trigger a flood of documents which the attorney must be prepared to assimilate. Discovery is essential for gathering raw materials; however, document control is vital for refining the case. The attorney must know every document which has been received, and be able to locate individual documents
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easily and quickly. The best way to control this multitude of documents is through tedious document inspection and indexing.
As the documents come in, each document should receive a document number and be filed accordingly. A computer generated index describing each document is effective to map this information. Our format includes the following information:
DATE:
DOCUMENT NUMBER:
AUTHOR:
ADDRESSEE:
CONFIDENTIAL:
PRIVILEGED:
SOURCE:
ORIGIN (letterhead):
EVIDENCE TYPE:
COMMENTS:
An example of our index is attached hereto as Exhibit F. A staff member can initially enter the document information into the computer; however, the attorney should then review all documents to approve the descriptions and add comments as needed, thereby increasing his or her familiarity with the documents, as well as facilitating access to the information.
Indexing is a time consuming process, but it is time well spent. Once the documents are indexed, a sorting program can create lists according to any one or more of the above mentioned criteria. Important documents are marked "Special", and a separate list of these documents is generated for use as an exhibit list at trial. Our system will sort documents according to date to create a chronological sequence of events. Most importantly, we can also sort by name and generate a list of all documents a deposition witness has created or received.
This method of document control has enabled our law firm of three (3) attorneys, one legal assistant, and two (2) support personnel to handle complex cases, several of which have involved over 20,000 documents and twenty to thirty defendants.
Documents and other exhibits which are to be used at trial should always be premarked with an identification number, properly listed on the pretrial order and copies should be given to opposing counsel prior to trial. You may want to consider the preparation of an evidence book containing copies of the premarked exhibits. Your oil and gas case may be boring enough to a jury without unnecessary fumbling with documents or undue delay in the trial caused thereby.
You may want to consider enlarging those special documents which contain statements key to your case. I have
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found that in almost all litigation involving numerous documents, and large corporate defendants, there are a few little gems that must be given greater exposure.
Also, it is wise to use the same designation for a document which was given to it during deposition. Of course, this requires that all deposition exhibits be recorded sequentially. This should foreclose the problem of reidentification for these documents at trial and the attendant confusion often caused thereby which may include changing the document designation in depositions, and other discovery material, so that only the trial designations are used.
Generally, pretrial procedure will require advance disclosure of documents and exhibits and opposing counsel will be required to make their objections to such documents or exhibits prior to trial. The common pretrial order in our area allows for admissibility of such documents or exhibits to which no objection has been made, automatically, without the necessity for a formal offer and ruling by the court. In addition to expediting matters at trial in the voluminous document case, it can also bring some peace of mind to counsel offering such evidence at trial. Often, all such documents ruled to be admissible under the terms made a part of the evidence of the pretrial order may be made a part of the evidentiary record at the very beginning of the trial. Thereafter important documents and exhibits can be used effectively by counsel during the opening statement.
Obviously, the mere production of documents usually does not provide the foundation required for admissibility of the documents for trial. Often, therefore, we will make effective use of...
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