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Lisa K. Miller and Dean G. Miller v. Elexco Land Servs.

September 27, 2011

LISA K. MILLER AND DEAN G. MILLER PLAINTIFFS,
v.
ELEXCO LAND SERVS., INC.; ANSBRO PETROLEUM CO., LLC; ANSCHUTZ EXPLORATION CORP.; ANSCHUTZ CO.; AND THE ANSCHUTZ CORP., DEFENDANTS.
ANSBRO PETROLEUM CO., LLC;
ANSCHUTZ EXPLORATION CORP.; ANSCHUTZ CO.; AND
THE ANSCHUTZ CORP., CROSS-CLAIMANTS,
v.
ELEXCO LAND SERVS., INC. CROSS-DEFENDANT.



The opinion of the court was delivered by: Hon. Glenn T. Suddaby, United States District Judge

MEMORANDUM-DECISION and ORDER

Currently before the Court, in this torts-to-land action filed by Lisa K. Miller and Dean G. Miller ("Plaintiffs") against Elexco Land Services, Inc., Ansbro Petroleum Company, LLC, Anschutz Exploration Corporation, Anschutz Company, and Anschutz Corporation ("Defendants"), are the following: (1) Plaintiffs' motion for partial summary judgment against Defendant Elexco Land Services Inc. ("Defendant Elexco") on Plaintiffs' claim of trespass under New York State common law and their claim of "timber trespass" under N.Y. REAL PROP. ACTS. § 861(1) (Dkt. No. 66);*fn1 (2) Defendant Elexco's cross-motion for partial summary judgment on Plaintiffs' two aforementioned trespass claims (Dkt. No. 81);*fn2 (3) Anschutz Defendants' motion to (1) dismiss Plaintiffs' Complaint for failure to join an indispensable party under Fed. R. Civ. P. 19, and/or (2) obtain an order of common-law indemnification against Defendant Elexco (Dkt. No. 80);*fn3 (4) Defendant Elexco's appeal from that portion of the Decision and Order issued by United States Magistrate Judge David E. Peebles on September 29, 2010 ("September Order"), that directed Defendant Elexco to provide Plaintiffs with the statement of John Diescher taken under oath by counsel for Defendant Elexco on May 12, 2010 (Dkt. No. 77); (5) Plaintiffs' appeal from that portion of the Decision and Order issued Magistrate Judge Peebles on October 12, 2010 ("October Order"), that denied Plaintiffs' request to designate Robert Demeree as an expert at trial (Dkt. No. 79); and (6) Anschutz Defendants' and Defendant Elexco's motion for preclusion of the expert testimony and reports of Stephen E. Jaquith (Dkt. No. 80, Attach. 7; Dkt. No. 82, Attach. 9).

For the reasons set forth below, Plaintiffs' motion for partial summary judgment on their two trespass claims is granted; Defendant Elexco's cross-motion for partial summary judgment on those two trespass claims is denied; Anschutz Defendants' motion to dismiss Plaintiffs' Complaint for failure to join an indispensable party is denied; Anschutz Defendants' motion for an order of common-law indemnification against Defendant Elexco is denied without prejudice; Defendant Elexco's appeal from Magistrate Judge Peebles' September Order is denied; Plaintiffs' appeal from Magistrate Judge Peebles' October Order is denied; and Defendants' motions to preclude the expert testimony/reports of Stephen E. Jaquith is granted in part and denied in part.

No. 80, Attach. 1.) As an initial matter, to the extent that Anscutz Defendants' "motion" requests summary judgment on Plaintiffs' two trespass claims, that "motion" is really a "cross-motion." See, supra, note 2 of this Decision and Order. In any event, for these reasons set forth below in Part I.F.1. of this Decision and Order, the Court denies without prejudice that portion of Anschutz Defendants' motion/cross-motion that requests summary judgment on all of Plaintiffs' claims.

TABLE OF CONTENTS

I. RELEVANT BACKGROUND...............................................................................................5

A. Plaintiffs' Claims.........................................................................................................5

B. Undisputed Material Facts.........................................................................................8

C. Plaintiffs' Motion, and Defendant Elexco's Cross-Motion, for Partial Summary Judgment on Plaintiffs' Two Trespass Claims.....................................10

D. Anschutz Defendants' Motion to Dismiss for Failure to Join an Indispensable Party..................................................................................................11

E. Anschutz Defendants' Motion for Common-Law Indemnification Against Defendant Elexco........................................................................................12

F. Other Motions...........................................................................................................13

1. Plaintiffs' Motion for Partial Summary Judgment Against Anschutz Defendants on Plaintiffs' Trespass Claims, and Anschutz Defendants' Motion/Cross-Motion for Summary Judgment Against Plaintiffs on All of Their Claims.................................13

2. Defendant Elexco's Motion for Partial Summary Judgment on Plaintiffs' Conversion Claim..................................................................14

G. Appeals from the Magistrate Judge's Orders...................................................15

1. Defendant Elexco's Appeal from the September Order...........................15

2. Plaintiffs' Appeal from the October Order................................................16

H. Defendants' Motions to Preclude or Limit Expert Testimony.............................17

II. RELEVANT LEGAL STANDARDS...................................................................................18

A. Legal Standard Governing Motion for Summary Judgment...............................18

B. Legal Standard Governing Motion to Dismiss for Failure to Join Indispensable Party...................................................................................................18

C. Legal Standard Governing Appeal from Non-Dispositive Order Issued by Magistrate Judge.......................................................................................20

D. Legal Standard Governing Motion to Preclude or Limit

Expert Testimony.....................................................................................................20

III. ANALYSIS.............................................................................................................................21

A. Plaintiffs' Motion, and Defendant Elexco's Cross-Motion, for Partial Summary Judgment on Plaintiffs' Two Trespass Claims....................................21

1. Plaintiffs' Trespass Claim Under New York State Common Law..........21

2. Plaintiffs' "Timber Trespass" Claim Under N.Y. REAL PROP. ACTS. § 861(1)..................................................................26

B. Anschutz Defendants' Motion to Dismiss Plaintiffs' Complaint for Failure to Join an Indispensable Party...................................................................27

C. Anschutz Defendants' Motion for Common-Law Indemnification Against Defendant Elexco........................................................................................28

D. Magistrate Appeals...................................................................................................30

1. Defendant Elexco's Appeal..........................................................................30

2. Plaintiffs' Appeal..........................................................................................32

E. Defendants' Motions to Preclude or Limit Expert Testimony.............................33

I. RELEVANT BACKGROUND

A. Plaintiffs' Claims

Generally, liberally construed, Plaintiffs' Complaint alleges as follows. "[P]laintiffs were and still are owners in fee and possessors of certain partially agricultural and partially forested land in the Towns of Solon, Truxton, and Homer, New York." (Dkt. No. 1 at ¶ 2 [Compl.].) "Upon information and belief," throughout the time period mentioned in the Complaint, "and prior to January 20, 2008, Anschutz Corporation was actively involved in oil and gas lease acquisition transactions in Cortland County, including oil and gas lease acquisition transactions regarding lands neighboring and bordering lands owned by Plaintiffs." (Id. at ¶ 12.) "Upon information and belief," before January 20, 2008, Elexco, Ansbro Petroleum Company, LLC, and Reserve Energy Exploration Company (hereinafter "Reserve Energy") "obtained numerous oil and gas leases from various landowners in Cortland County, New York." (Id. at ¶¶ 15-17.) "Upon information and belief, prior to January 20, 2008, Elexco and Reserve Energy assigned various oil and gas leases from various landowners in the Towns of Solon, Truxton, and Homer to Ansbro and/or Anschutz Exploration," who, as a result, became the owners of these oil and gas leases, several of which "pertain[ed] to lands bordering on lands of . . . [P]laintiffs." (Id. at ¶¶ 18, 19.)

"Upon information and belief, at a time or times presently unknown to [P]aintiffs, and prior to January 20, 2008, Ansbro and/or Anschutz Exploration entered into one or more business contracts and/or agreements, for good consideration[,]" with Elexco, pursuant to which "Elexco contracted to enter upon land as to which Ansbro and/or Anschutz Exploration owned oil and gas leases . . . to perform or subcontract to perform certain land services for Ansbro and/or Anschutz Exploration." (Id. at ¶¶ 20, 21.) These land services included "seismic and other geological studies seeking to determine the existence of certain mineral and natural gas and energy deposits within and below such lands, and the creation of certain crude roads on and removal of trees from certain lands, . . . including lands in the Towns of Solon, Truxton, and Homer, NY, . . . that bordered the lands of . . . [P]laintiffs. (Id. at ¶ 21.) "Elexco, acting on behalf of Ansbro and/or Anschutz Exploration, pursuant to said contract or contracts, . . . Ansbro and/or Anschutz Exploration, acting on its own behalf, and Reserve Energy[,] did not enter into and obtain any oil and gas lease, easement, right of way or permit from . . . [P]laintiffs to enter upon any of their lands. . . ." (Id. at ¶ 22.)

Before entering Plaintiffs' lands, Elexco, Ansbro and/or Anschutz Exploration had actual and constructive notice of Plaintiffs' ownership in their land based on (1) Plaintiffs' "recorded fee ownership interest" in the land, (2) "recorded tax records, tax maps, and other maps and records of Cortland County, NY," and (3) "in person and telephone discussions with . . .

[P]laintiff Lisa K. Miller in which requests that she and . . . [P]laintiff Dean G. Miller enter into oil and gas leases pertaining to said lands had been refused." (Id. at ¶¶ 23-25.)*fn4 "Despite such actual and constructive notice, in the month of January 2008, and concluding on January 20, 2008, Elexco, acting on behalf of Ansbro and/or Anschutz Exploration, for good consideration, and/or Ansbro and/or Anschutz Exploration, acting individually, intentionally trespassed upon and entered upon [Plaintiffs'] the land . . . [and] created crude roads, cut down and removed trees, and damaged existing trees." (Id. at ¶ 26.)*fn5 "The[se] acts . . . caused various losses to . . .

[P]laintiffs, primarily the loss of thousands of trees . . . , damage to trees that were not cut down and removed, and irreparable and reparable damage to significant portions of . . . [P]laintiffs' forested and unforested land." (Id. at ¶ 27.) "In [addition, during] the course of [their] intentional trespass upon . . . [P]laintiffs' lands, Elexco, Ansbro and/or Anschutz Exploration, also obtained geological and seismic information . . . , which [they] recorded and shared with Ansbro and/or Anschutz Exploration, and/or others." (Id. at ¶ 36.)*fn6

Based on these allegations, Plaintiffs' Complaint may be liberally construed as asserting the following three claims: (1) a claim of trespass under New York State common law; (2) a claim of conversion under New York State common law; and (3) a claim of "timber trespass" under N.Y. REAL PROP. ACTS. § 861(1). (See generally Dkt. No. 1.) As relief, Plaintiffs seek compensatory and punitive damages and an additional four million dollars in punitive damages in the amount of up to six million dollars. (Id. at 9.)

B. Undisputed Material Facts

The following is a summary of material facts that are undisputed by the parties. (Compare Dkt. No. 68, Attach. 11 [Plfs.' Rule 7.1 Statement] with Dkt. No. 83, Attach. 15 [Elexco Def.'s Rule 7.1 Response to Plfs.' Rule 7.1 Statement].)

Part of Defendant Elexco's business involves obtaining oil and gas leases and seismic permits from property owners for its clients. Defendant Elexco utilizes employees and independent contractors to attempt to obtain oil and gas leases and/or seismic permits for its clients who, as lessees, have exclusive rights to conduct seismic operations under the terms of certain oil and gas leases. Defendant Elexco was hired by the Anschutz Defendants to obtain seismic permits for a project called the "Homer 3D project," which encompassed the property that is the subject of this action (i.e., Plaintiffs' property).

In or about the fall of 2007, one of Defendant Elexco's leasing agents attempted to obtain an oil and gas lease from John Diescher, the former owner of Plaintiffs' property. The information used by Defendant Elexco to identify Mr. Diescher as the property owner was 2003 county tax roll information. Mr. Diescher informed the ...


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