Coughlin & Gerhart, LLP clients win Force Majeure case against Inflection Energy, Victory Energy and MegaEnergy
Coughlin & Gerhart, LLP won a lawsuit brought in United States District Court on behalf of 35 property owners who all signed oil and gas leases with defendant Victory Energy. All of the properties subject to the leases are located in Tioga County, New York. The leases paid either two ($2) or five ($5) dollars per acre, per year. All of the leases expired in 2011 by their terms.
The reason for the lawsuit was because Defendant Inflection Energy sent letters to Coughlin & Gerhart's clients in August 2010 asserting that the leases were extended. Inflection claimed that the leases were extended due to an alleged force majeure event in New York that occurred in July 2008, when then Gov. Paterson issued a moratorium on high volume hydraulic fracturing in New York. By doing so, Inflection encumbered the landowners' properties, effectively preventing them from selling, refinancing or leasing their property.
In a case of first impression, United State District Court Judge, Hon. David N. Hurd, issued a Decision dated Nov. 15, 2012 which ruled in favor of the landowners because there was no "force majeure" event. Judge Hurd ruled that that the leases were not extended for any reason, and he declared those leases expired by their own terms. Now, Coughlin & Gerhart's clients are free of these oil & gas leases, which were very unfavorable to the landowners.
This decision is of great importance to the landowners in the Southern Tier and elsewhere. It is estimated that hundreds, if not thousands of other property owners have been similarly impacted by gas drilling companies who have invoked "force majeure" provisions to extend oil and gas leases which had extremely small yearly lease payments. Coughlin & Gerhart, LLP has been asked by hundreds of other landowners in Southern Tier to get rid of expired oil & gas leases, and they are looking at the options, including the filing similar lawsuits, in the near future.
A copy of Judge Hurd's Decision can be found online at www.cglawoffices.com.
Robert R. Jones, Peter Bouman and Kristen Luce were the Coughlin & Gerhart attorneys principally involved in the case.
Coughlin & Gerhart's main office is currently located at The Huron Campus, 1701 North St., Endicott. Serving the Southern Tier since the 1890s, they currently have branch offices in Ithaca, Owego, Bainbridge, Hancock and Montrose.
Submitted by Coughlin & Gerhart, LLP