PANHANDLE OIL AND GAS, INC. APPELLANT
BHP BILLITON PETROLEUM (FAYETTEVILLE) LLC APPELLEE
FROM THE FAULKNER COUNTY CIRCUIT COURT [NO. 23CV-13-50]
HONORABLE MIKE MURPHY, JUDGE
Law Firm, P.A., by: M. Edward Morgan; and Fellers Snider
Blankenship Bailey & Tippens, P.C., by: Mark K.
Stonecipher, pro hac vice, and C. Eric Shephard, pro hac
vice, for appellant.
Law, PLLC, by: Julie DeWoody Greathouse and Kimberly D.
Logue, for appellee.
RAYMOND R. ABRAMSON, JUDGE
appeal involves three dismissals of appellant Panhandle Oil
and Gas's (Panhandle) claims against appellee BHP
Billiton Petroleum Fayetteville (BHP). Panhandle argues that
the circuit court erred by granting two of the motions to
dismiss pursuant to Arkansas Rule of Civil Procedure 12(b)(6)
in an unexplained fashion; specifically contending that the
circuit court did not explain why Panhandle's pleadings
were deficient. Panhandle also argues that the circuit court
erred by dismissing its claims against BHP in its third
amended complaint under Arkansas Rule of Civil Procedure
41(b). Before we reach the merits of Panhandle's appeal,
we must first address a jurisdictional issue.
2(a)(1) of the Arkansas Rules of Appellate Procedure-Civil
provides that an appeal may be taken only from a final
judgment or decree entered by the trial court. Although the
parties did not raise the issue, the question of whether an
order is final and subject to appeal is a jurisdictional
question that the appellate court will raise on its own.
Kowalski v. Rose Drugs of Dardanelle, Inc., 2009
Ark. 524, 357 S.W.3d 482. The requirement of a final judgment
is the cornerstone of appellate jurisdiction; this court
reviews only final orders. Ark. R. App. P.-Civ (2)(a);
Bayird v. Floyd, 2009 Ark. 455, 344 S.W.3d 80.
procedural history of this case is, at best, convoluted.
However, the procedural history is germane to the conclusion
of this court and therefore is recited in some detail. In
recent years, Panhandle had acquired oil and gas rights in
numerous tracts in the Fayetteville shale play. In May 2005,
Panhandle and separate defendant Chesapeake Exploration, LLC
(Chesapeake) entered into a written agreement (the "May
2005 Agreement"), which stated that Chesapeake would
provide wellbore proposals to Panhandle for oil and gas wells
in certain identified sections of land in Arkansas where
Panhandle owns forty or more net mineral acres and Chesapeake
desires to drill a well. Upon receiving a wellbore proposal,
Panhandle would then decide if it wanted to participate in
the well. Panhandle argues that the obligations of Chesapeake
(and its assigns) included two things: (1) submit a well
proposal in the event a well was to be drilled; and (2) in
the event Panhandle elected to participate in a well, execute
a wellbore assignment of any "Retained Interest, "
which was a defined term. The contract was designed to allow
Panhandle to participate in the development of its minerals
even though Panhandle would not drill the well itself.
in 2009, Panhandle claims that it began experiencing
significant delays in receiving well proposals and other
pertinent information. In an effort to remedy this, Panhandle
and Chesapeake entered into another agreement, which is
referred to as "the August 2010
Agreement." On January 1,
2011, Chesapeake assigned its remaining interest in the
Panhandle Leases to BHP.
January 14, 2013, Panhandle filed suit against Chesapeake
based on Chesapeake's alleged breaches of the May 2005
Agreement and also named BHP as a defendant. In its first
amended complaint, filed on June 21, 2013, Panhandle asserted
causes of action against BHP for breach of the May 2005
Agreement, specific performance of the same, an equitable
accounting, and unjust enrichment.
11, 2013, BHP moved to dismiss the first amended
complaint's cause of action against it under Arkansas
Rule of Civil Procedure 12(b)(6) for failure to adequately
state a claim. BHP argued that the first amended complaint
sought to extend the May 2005 Agreement beyond its written
terms, failed to allege sufficient facts-including an
adequate basis to support successor liability-and failed to
allege claims for an equitable accounting or unjust
enrichment. After Panhandle responded on July 25, 2013, the
circuit court heard oral arguments on the issues raised in
the motion and response. On October 31, 2013, the circuit
court dismissed BHP from the case.
November 21, 2013, Panhandle filed its second amended
complaint, pursuant to Rule 15(a) of the Arkansas Rules of
Civil Procedure, asserting claims against both BHP and
defendant Chesapeake. The claims in the second amended
complaint were nearly identical to the claims made in the
first amended complaint. The only changes were to include
various argumentative and conclusory allegations in response
to BHP's previous motion to dismiss and to state new
claims for reformation in which Panhandle specifically
requested that the terms of the May 2005 Agreement and the
August 2010 Agreement be expanded in order to impose new
contractual obligations on BHP. On December 23, 2013, BHP filed a motion
to dismiss Panhandle's second amended complaint for the
same reasons previously argued to the circuit court.
Panhandle filed a written response to the motion, and the
court held a hearing on February 24, 2014. On March 17, 2014,
the circuit court granted BHP's motion to dismiss the
second amended complaint because it failed to state facts
upon which relief could be granted as to BHP.
April 9, 2014, Panhandle filed its third amended complaint.
On May 16, 2014, BHP moved to dismiss or strike this third
iteration of Panhandle's claims against it because Rule
41(b) of the Arkansas Rules of Civil Procedure directs that
the circuit court's second order of dismissal should be
deemed to operate as an adjudication on the merits and is a
dismissal with prejudice. Therefore, BHP argued that the
circuit court was barred from taking up Panhandle's
reasserted allegations. On June 5, 2014, Panhandle filed a
response to BHP's motion; within its response was a
request that the circuit court reconsider and vacate the
March 17, 2014 dismissal.
a unique scenario, a new circuit judge granted BHP's
motion in a letter opinion dated December 29,
2014. In the letter opinion, the court
also denied the request for reconsideration of the dismissal
of the second amended complaint that was included in
Panhandle's response to the motion to dismiss the third
August 21, 2015, after a settlement, an agreed order of
dismissal was entered regarding Panhandle's claims
against Chesapeake. A notice of appeal filed on September 18,
2015, indicates that Panhandle is appealing the following
orders: "(1) Order granting motion to dismiss of
Defendant, BHP Billiton Petroleum (Fayetteville) LLC
("BHP") filed on October 31, 2013; (2) Order
Granting BHP's Motion to Dismiss, filed on March 17,
2013; and (3) Letter Order dated December 29, 2014, denying
Plaintiff's motion to vacate and dismissing
Plaintiff's Third Amended Complaint."
noted above, the question of whether an order is final and
appealable is jurisdictional, and we are obligated to
consider the issue on our own even if the parties do not
raise it. Advanced Envtl. Recycling Techs., Inc. v.
Advanced Control Sols., Inc., 372 Ark. 286, 275 S.W.3d
162 (2008). We have previously held that a ruling is not the
equivalent of a written order for the purpose of determining
finality on appeal; neither are letter opinions that have not
been incorporated into the judgment. See Clark v. Ark.
Dep't of Human Servs., 2016 Ark. 286; Wilkinson
v. Smith, 2012 Ark.App. 604. To give effect to an
unincorporated letter opinion would violate the requirement
that a judgment or decree must be set out in a separate
document in order to be effective. Ark. R. Civ. P. 58. The
decisions, opinions, and findings of a court-including those
expressed in a letter opinion-do not constitute a judgment or
decree; they merely form the basis upon which the judgment or
decree is subsequently to be ...