02/07/2017

Appellate Team Secures Reversal of $31 Million Judgment

In a dramatic conclusion to a six year saga in Wyoming courts, last week the Wyoming Supreme Court reversed a $31 million jury verdict against QEP Energy Company and Wexpro Company and sent the case back to the trial court to dismiss all claims. Holland & Hart represented QEP and Wexpro throughout the entire case.

In 2011, Rocky Mountain Resources, LLC, sued QEP and Wexpro claiming to own a four percent overriding royalty interest in 119 gas wells near Pinedale, Wyoming operated by QEP and Wexpro. The complex lawsuit involved dozens of lease transactions, lost documents, and lease development activities reaching back to the early 1950s. A key issue in the case was whether a lease assignment form contained an “anti-washout” clause that extended the overriding royalty to a lease purchased in 1979.

Despite multiple attempts to have the case dismissed on motions for summary judgment and petitions for interlocutory review, the case proceeded through a five-day trial in 2015. The jury awarded Rocky Mountain $31 million for unpaid royalties, plus ongoing liability for a four percent overriding royalty going forward.

QEP and Wexpro appealed to challenge the trial court’s decisions on summary judgment and the jury verdict.  After a hearing before the Wyoming Supreme Court in October 2016, the Wyoming Supreme Court’s February 1, 2017 decision held that the trial court erred in its initial contract interpretation on summary judgment and remanded the case for entry of full summary judgment in favor of QEP and Wexpro.

Holland & Hart’s trial team was led by Salt Lake partner Shawn Welch and Jackson partner Trey Overdyke, with appellate assistance provided by Denver partner Christina Gomez, Cheyenne associate Jeff Pope, and invaluable assistance from several other members of the firm’s oil and gas litigation team.

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