Tuesday, July 31, 2012

Summary 2012 WY 103

Summary of Decision July 31, 2012

Justice Golden delivered the opinion for the Court. Affirmed.

Case Name: BOWERS OIL AND GAS, INC., a Colorado corporation, v. DCP DOUGLAS, LLC, a Colorado limited liability company; and KINDER MORGAN OPERATING, L.P. “A”, a Delaware limited partnership

Docket Number: S-11-0233

URL: http://www.courts.state.wy.us/Opinions.aspx

Appeal from the District Court of Converse County, Honorable John C. Brooks, Judge.

Representing Appellant: Loyd E. Smith of Murane & Bostwick, LLC, Cheyenne, Wyoming

Representing Appellees: James R. Belcher & Boomgaarden, LLP, Cheyenne, Wyoming

Date of Decision: July 31, 2012

Facts: Bowers Oil and Gas, Inc. (BOG) entered into a Gas Purchase Contract with Kinder Morgan Operating, L.P. (Kinder Morgan), pursuant to which Kinder Morgan agreed to purchase coal bed methane gas from certain of BOG’s wells. Kinder Morgan transferred its interest in the Contract, and Kinder Morgan’s successor eventually terminated the Contract pursuant to a provision that allowed either party to terminate if in the terminating party’s sole opinion, the sale or purchase of the gas became unprofitable or uneconomical. BOG thereafter filed a complaint in district court asserting claims for breach of contract and breach of the covenant of good faith and fair dealing. Following a bench trial, the district court found no contract breach or covenant breach and ruled in favor of Kinder Morgan and its successor. The Court affirmed.

Issues: BOG presented the following issues on appeal:

1. Whether the trial court erred in ruling that Appellees did not breach the Gas Purchase Contract?

A) Whether the trial court erred in ruling that Appellees were excused from performance of the Gas Purchase Contract on the basis that the Contract became uneconomical pursuant to paragraph 4 of the Contract?

2. Whether the trial court erred in ruling that the Appellees did not breach the covenant of good faith and fair dealing.

Holdings: The Court found no breach of contract in MEG’s removal of the pipelines connecting BOG to the gas gathering system and that DCP properly terminated the Gas Purchase Contract for economic cause. The Court further found no clear error in the district court’s rejection of BOG’s claim for breach of the implied covenant and fair dealing. Affirmed.

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court

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