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Overturff v. Read

Court of Appeals of Arkansas, Division III

September 17, 2014

TEDDY OVERTURFF, APPELLANT
v.
JAMES A. READ, MARY READ, CLARENCE A. CONWELL, JR., JANE CONWELL, PETROHAWK PROPERTIES, LP, and WESTERN LAND SERVICES, INC., APPELLEES

APPEAL FROM THE VAN BUREN COUNTY CIRCUIT COURT. NO. CV-09-66. HONORABLE MICHAEL A. MAGGIO, JUDGE.

Tester Law Firm, P.A., by: Kent Tester, for appellant.

Morgan Law Firm, P.A., by: M. Edward Morgan, for appellees.

WALMSLEY and VAUGHT, JJ., agree.

OPINION

Page 863

DAVID M. GLOVER, Judge.

On September 5, 2012, we dismissed this appeal because the order was not final and appealable. After our opinion was handed down, the trial court entered a new order on December 31, 2013, which specified the amount of damages appellees, as sellers, were ordered to pay and dismissed buyer Teddy Overturff's " claims for intentional tort of interference with a contract and fraud, as well as all cross-claims and counterclaims." The December 31 order corrected the finality problems noted in

Page 864

our first opinion; we now have jurisdiction to hear this appeal. We affirm in part and reverse and remand in part. The background information provided in our original opinion will be recounted here.

Factual Background

Appellant, Teddy Overturff, and appellees, James Read, Mary Read, Clarence Conwell, and Jane Conwell, entered into a real-estate contract for the sale of certain land on October 22, 2002. The term of the agreement was 180 months, at which time the warranty deed, which was held by an escrow agent, would be delivered to Overturff. In September 2005, the Reads and Conwells entered into an oil-and-gas lease with Western Land Services, Inc., that included the property covered by the real-estate contract. Overturff was making his payments, was in no way in default, had no knowledge of the lease, and did not give his consent to it. The terms of the lease provided in part that there would be an initial period of five years, with a one-sixth royalty payment, a one-time damages payment of $5,000 for each well drilled, and $10 per rod for all access roads and/or pipelines constructed on the leased property, with possible shut-in royalty payments. The lease also provided that, at Western's option, it could be extended for an additional five years with an extension payment of $250 per acre. Western Land eventually assigned the lease to Petrohawk Properties.

Procedural Background

Overturff filed a complaint against the Reads, Conwells, Western Land Services, and Petrohawk Properties in February 2009, alleging in part that the Reads and Conwells breached the real-estate contract and the deed warranties by encumbering the property with the execution of the oil-and-gas lease and limiting the damages for drill sites and pipelines, and that Western Land knew or should have known of the pending real-estate contract yet interfered with the contractual obligations by obtaining the lease, recording it, and thereby encumbering the title.

The Reads and Conwells answered Overturff's complaint and filed a cross-claim against Western Land, alleging basically that Western Land had represented to them that it would research the title of each property covered by the lease and exclude any property from it that was subject to a real-estate contract. Western Land answered the complaint, alleging that it was a bona-fide purchaser, that the lease should be upheld, and that it had priority over the real-estate contract. Petrohawk answered, asserting that the lease should be upheld and have priority over Overturff's interest because Petrohawk was a bona-fide purchaser and its receipt of the assignment of the lease had priority over Overturff's real-estate contract.

Overturff subsequently amended his complaint, incorporated the original complaint, and made the further allegations that he had suffered additional damages in the form of reduced royalties, that the Reads' and Conwells' lease breached the implied covenants of good faith and fair dealing, and that their leasing of the mineral rights and conscious disregard of his contractual rights was an intentional interference with his right to lease his mineral interests by impairing the title. He also alleged that the Reads and Conwells had committed fraud and usury. He provided proof that he had paid off the real-estate contract by attaching his recorded deed. With respect to Western Land and Petrohawk, Overturff ...


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