Superior Court upholds nonsuit ruling in Equitrans royalty dispute case

By Dee Thompson | Dec 21, 2017

HARRISBURG – The Superior Court of Pennsylvania has affirmed the lower court’s dismissal of a case in which a couple accused Equitrans of failing to abide by the terms of an oil and gas lease.

Gregory A. Niverth and Mary Lou Niverth appealed their case against Equitrans L.P., which was originally filed in the Court of Common Pleas of Greene County. Equitrans had filed a motion for nonsuit that was granted by the trial court.

The Superior Court of Pennsylvania concluded that “after reviewing the record, the Niverths failed to show that the amount they received was reduced in any impermissible fashion by Equitrans. Accordingly, we agree with the trial court that nonsuit was correctly granted,” according to the Dec. 8 order.

According to the order, Equitable gas company entered into an oil and gas lease in 1969 with the Hoge family. In 1981, the Niverths bought the land and became successors-in-interest to the Hoge lease. In 2010, the Niverths signed a new lease with an amendment and filed it in the court. It basically ratified the terms of the Hoge lease. 

In 2014, the Niverths sued Equitrans alleging breach of contract and fraud. They alleged Equitrans was improperly making deductions from the royalty payments to them. 

In October 2016, a trial by jury was held. After the Niverths presented their case, the lower court judge non-suited the lawsuit, granting Equitrans’ motion.

According to the appellate court’s order, “while we agree with the Niverths that they were not parties to the Hoge lease, by executing the amendment, they assented to and ratified the terms of the Hoge lease.” 

It also points out that, “There is no evidence that the amount received by the Niverths was less than one-eighth of the sale price of the gas minus one-eighth of the post-production costs of bringing the gas to market. This net-back method of calculation complies with (Kilmer v. Elexco Land Services Inc.), and the Niverths have failed to present any evidence that revealed Equitrans was improperly making deductions from the Niverths’ royalties.”

The case was heard before justices John Bender, Jacqueline Shogan and John Musmanno. The memorandum was written by Shogan.

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