Cade v. South Coast Oil

Filed 5/18/06  Cade v. South Coast Oil CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b).  This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

                        Appeal from a judgment of the Superior Court of Orange County, Steven  L.  Perk, Judge.  Dismissed in part, affirmed in part.

                        Kaye, Rose & Partners, Frank C. Brucculeri and B. Otis Felder for Defendants and Appellants.

                        Haight Brown & Bonesteel and Rita Gunasekaran for Defendant and Appellant Energy Development Corporation.

                        Rodi, Pollock, Pettker, Galbraith & Cahill and Allan E. Ceran for Plaintiff and Respondent.

*                *                *

Introduction

South Coast Oil Corporation (South Coast) and Energy Development Company (EDC) appealed from a judgment terminating the lessee's interest in an oil and gas lease.[1]  At the time of trial and when judgment was entered, EDC was the lessee of the oil and gas lease.  South Coast was not a party to the lease, but operated the well on the leased premises. 

We dismiss the appeal as to South Coast because it lacks standing to challenge the judgment terminating the lease.  We affirm the judgment as to EDC because substantial evidence supported the trial court's implied finding the well on the leased property was not producing oil in paying quantities, as required by the lease's habendum clause, after the definite term had ended.

Facts

Merle E.  Cade is the successor in interest to the original lessor of an oil and gas lease (the Lease) entered into in December 1954.  The Lease was made with respect to real property located in Huntington Beach (the Property).

South Coast was the successor in interest to the original lessee of the Lease until May 2001, when South Coast assigned its interest as lessee to EDC.  South Coast continued to act as the operator of the oil well on Property, known as SCOC Well #15 (the Well).  The Well had been in existence and in operation since about March 1954.

The habendum clause[2] of the Lease states:  â€