Court Summaries, 1019 WYBJ, Vol. 42 No. 6. 32

AuthorAnna Reeves Olson, Park Street Law Offices Casper, Wyoming
PositionVol. 42 6 Pg. 32

Court Summaries

No. Vol. 42 No. 6 Pg. 32

Wyoming Bar Journal

October, 2019

Anna Reeves Olson, Park Street Law Offices Casper, Wyoming

Finley Resources, Inc. v. EP Energy E&P Co., L.P., d/b/a El Paso E&P Co., L.P.

2019 WY 65


June 24, 2019

In 2007, Finley Resources and EP Energy entered into a purchase and sale agreement for the sale of oil and gas leases. Finley’s principal place of business is in Fort Worth, Texas, and EP Energy’s principal place of business is in Houston, Texas. Both entities conduct oil and gas activities in Wyoming. The agreement required EP Energy to assign all of its interests under various leases to Finley. EP Energy, however, failed to do so. Finley filed suit against EP Energy in Wyoming asserting a number of claims, including breach of contract, quiet title, adverse possession and certain equitable claims. EP Energy filed a motion to dismiss seeking to enforce the choice-of-law and forum-selection clauses contained in the agreement, which provided that the agreement is governed by the law of Texas and that any cause of action arising out of the agreement shall be deemed to have arisen from a transaction in Texas.

The district court applied Texas law and concluded that because the non-contract claims implicated the terms of the contract, the claims fell within the scope of the forum selection clause and granted EP’s motion to dismiss.

On appeal, the Supreme Court affirmed and held that the parties agreed that the law of Texas applied and the case would be analyzed under Texas law. Here, the forum-selection clause applied to “any suit . . . based on any matter arising out of or in connection with, this agreement or the transaction contemplated.” Therefore, Texas law required that the clause be construed broadly.

Here, Finley’s legal claims stem from the agreement. Finley’s claims for adverse possession were also made pursuant to the agreement. Finley’s equitable claims were inextricably tied to the construction of the agreement and involved the same operative facts as a claim for breach of the agreement. As Finley’s equitable claims were not collateral but were “matter[s] . . . in connection with this agreement or the transaction contemplated hereby,” the Court held that dismissal was proper.

Rhonda Lea Gallagher v. Curtis Darrel Townsend 2019 WY 66 S-18-0211 June 25, 2019

The parties cohabitated from 2007 until 2009 and share a child together. In 2008, Townsend purchased a vacant lot for $25,014 with his own funds. The warranty deed conveyed the property to the parties as joint tenants with rights of survivorship. The parties each paid property taxes through the years—Gallagher paid $510 in property taxes and Townsend paid the remainder. In 2017, Gallagher filed suit seeking partition of the lot. The district court appointed partition commissioners who determined that the property should be sold. The district court agreed, ordered the sale of the lot, and valued the property at $33,500. Although the district court determined that each party owned a one-half interest in the lot, it ordered that the property be equitably instead of equally divided and that Townsend be paid the first $25,017.202—the amount he paid to purchase the property—from the sale and that any excess proceeds be divided equally between the parties. Gallagher appealed.

On appeal, the Supreme Court held that the district court properly determined that each party owned an undivided, one-half interest in the property because the parties had purchased the property with the intent to develop it jointly. However, the Supreme Court also held that W.S. § 1-32-114 limits a district court’s equitable powers to distribute partition proceeds after the court has determined the parties’ respective shares in the property. Once the district court decided the parties were entitled to equal shares, the fact that Townsend provided the entire purchase price was no longer relevant. The district court was...

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