Replies to This Discussion

Permalink Reply by Max on February 11, 2014 at 15:44

Thomas, given what little I know about the issue concerning Cindy, I do know that the family is hesitant to hire an attorney and probably won't, so if you're not going to fight, move on. 

Skip mentioned the 80% rule and there's been detailed discussions here on GHS about that rule.  I think EXCO is in the clear.

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Permalink Reply by Skip Peel - Mineral Consultant on February 11, 2014 at 16:35

The 80% threshold is an integral part of a number of statutes concerning undivided ownership dealing with minerals

RS 31:166

A co-owner of land may grant a valid mineral lease or a valid lease or permit for geological surveys, by means of a torsion balance, seismographic explosions, mechanical device, or any other method as to his undivided interest in the land but the lessee or permittee may not exercise his rights there under without consent of co-owners owning at least an undivided eighty percent interest in the land, provided that he has made every effort to contact such co-owners and, if contacted, has offered to contract with them on substantially the same basis that he has contracted with another co-owner.  A co-owner of the land who does not consent to the exercise of such rights has no liability for the costs of development and operations or other costs, except out of his share of production.

Acts 1974, No. 50, §166, eff. Jan. 1, 1975; Acts 1986, No. 1047, §1; Acts 1988, No. 647, §1; Acts 1995, No. 479, §1, eff. June 17, 1995.

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Permalink Reply by 1kw6x71km1v37 on February 11, 2014 at 18:12

LOL The last sentence of the last post by Skip Peel above concerning LRS 31:166 is what the operator fears if ya'll don't sign.

Permalink Reply by Max on February 12, 2014 at 2:21

cheap shot, I think the last sentence is there to protect anyone found in this position from certain circumstances.

Say that EXCO set up the pad and drilled a well without those last few signatures and the well was a dry hole.

At that point, EXCO couldn't send those co-owners a bill for expenses.  If a well came in, then those co-owners would be subject to the cost of the well before they got their share of production.

Permalink Reply by 1kw6x71km1v37 on February 12, 2014 at 14:45

Well, obviously the only feasible way for EXCO to straighten this entanglement out from their point of view is to have everyone to sign off on a lease.

However, it would appear the subsurface lease you mention may well be invalid since the court did not grant approval to the executors. I suspect the same holds true for any surface rights leased at this point.

One wonders how things get to fouled up, but they do.

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Permalink Reply by Two Dogs, Pirate on February 12, 2014 at 15:12

It would depend on the way the lease reads, as you all signed it. Lease language may be in control of what goes on. You need to hire an oil & gas attorney to break down the language of the lease. You can go on trying to get free advice on the internet but that could sink you further into the hole that you are trying to climb out of.

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Permalink Reply by Max on February 12, 2014 at 16:24

Cindy, sounds like the executors of your mothers estate were not "Independent Executors".

A regular executor is supposed to ask the courts for permission to do things, like sale assets, lease assets, etc.  That doesn't mean that they always do.

With the estate closed and the executors excused, and given that no heirs brought suit while the estate was open to block a lease, then trying to get it blocked now will be costly and success would be in question. 

The executors could simply say that they discussed the issue with the other heirs and they didn't need to notify the court.  Everybody knew that EXCO had offered a surface lease and the executors signed it.  End of story.

The 80% rule may apply and EXCO would have that, given that the two executors and one other heir has signed.  I would think that EXCO would break it down into one share, divided by each parties interest.  The estate would have 75% of that share plus those who were willing to sign, putting them over 80%. 

What did the original lease say about surface rights? 

Personal, I think it' too late to change the picture very much.  The lease was signed by those authorized to do so and the other heirs learned a lesson.

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Permalink Reply by 1kw6x71km1v37 on February 12, 2014 at 17:07

Again, it reads like there may be no valid lease of any kind on any portion of the entire property if the executors did not consult the court beforehand. Then again, there may be, depending on how the wills were worded. See No.7 and No.8 in the link below:

7. Is court approval required to sell assets and pay debts?
 The Executor may not sell assets or pay debts or expenses without first obtaining Court approval. In most cases, the Executor must ask the Court for permission, publish a Notice in the paper of the proposed sale or payment of funds and give interested parties an opportunity to object. If no objection is made the Court will approve the sale or payment of funds. Notice of the proposed sale or payment is not automatically given to the heirs or legatees. You must specifically ask the Executor to receive a copy of the Notice by filing a request in the succession proceeding. Obtaining Court approval can sometimes be time consuming and costly.

8. Can the Succession be administered without Court supervision?
 Yes, you may provide that your Executor may act independently in your Will. If you have no Will, your spouse and your children can ask the Court that the Administrator act independently. In such case, your assets may be sold and your debts may be paid without first obtaining permission from the Court, thereby saving time and money. At the end of the Succession, the Executor will still have to provide all heirs with an accounting of the assets on hand at your death plus all monies collected, less all payments made, unless the heirs waive the formality of such an accounting.

http://www.ladouceurlaw.com/successions.html

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Permalink Reply by Max on February 13, 2014 at 3:14

Cheap shot, the rules for Executors are plainly written, and most of the time, they're followed, but not always.

Executors who happen to be family members enjoy more liberties, why?  Because decisions make are in the "family", and other family members are hesitant to question their actions, or, bring suit to stop them.    

A bank or an attorney acting as an Executor will follow the rules, they're professionals getting paid.  Their position comes with a lot more baggage and the expenses of asking the court will be paid by the estate, not out of their pocket.

An Independent Executor has a lot more power, and if the heirs and estate have problems, the heirs will have to make a decision to fight when the problem comes up, not after the succession has been closed.  Reversing an action made by an Independent Ex. is very hard and costly.  That Independent Ex. would have to screw up pretty bad for a court to raise eyebrows, and even then, the expenses would usually be much more than what the heirs are trying to gain back.

The accounting of assets (Detailed Descriptive List) is another requirement that is sometimes not done properly.  But again, the courts don't put much into that unless the estate was worth a lot of money.  The court figures that an attorney is handling the process and the attorney will take care of making sure everything is done.  If that attorney doesn't, and other heirs don't complain to the court, then nothing is done. 

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Permalink Reply by Max on February 13, 2014 at 7:12

 Cindy,

The original lease may have contained an “iron clad” agreement about not leasing the surface rights, but that doesn’t stop the oil company from asking.  If your mother was still living and they asked her, she would say NO, right?

But that’s not the case.  EXCO either knew your mother passed, or they didn’t, it doesn’t matter.  They needed a surface lease and they wanted your six acres, so they contacted who controlled the property.  That contact was the executors, and, no matter what your mother wanted, they have the right to wave the attachment to the original lease. 

When the estate attorney wrote everyone a letter and sent it out, that put everyone on notice that the executors wanted to do something, and in order to do what they wanted to do, they would have to ask permission from the court. 

Does that mean that they did?  No.  Since they didn’t do that, and no one filed a complaint with the Court about it, you can say, “they got away with it”.  You could head to court with that fact today, and when you get there with your “ton” of evidence to place on the blind woman’s scales, I’m sure the executors will have their own “ton” of evidence to balance out the scales for leasing the property.  The fact that they didn't ask the court in the first place wouldn't be a issue now, all of you are there asking those questions now.

The place being an “eyesore” now is part of it.  I think I remember a thread where Henry related how important it was to know what you’re getting into before you sign papers on surface rights.  That same surface could still be in use 50 years from now. 

“EXCO SAID”?  If it’s not in the lease, don’t depend on what someone said.  (He said, she said, they said....!  SAID is the most common used word in the English language that gets folks in trouble) 

Folks do all kinds of things for money, and with each person, what constitutes a “rightful entitlement” would be left up to their own beliefs.  I don’t thing the big oil guys are so much at fought, I would point fingers elsewhere. 

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Permalink Reply by 1kw6x71km1v37 on February 14, 2014 at 7:06

The executors did not control the six acres undivided of the whole tract, nor do they have control of any of the surface rights of the entire tract if there was an exclusion clause executed by Mom in the original lease.  Anything the executors did with respect to those rights, or anything they did with respect to transactions requiring court approval during succession, remains legally invalid. At this point, the clearing of a long-cherished family site should be of particular interest to an attorney specializing in emotional damage. If I'm not mistaken here, some family members are having trouble dealing the site prep results on childhood memories.

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Permalink Reply by Max on February 14, 2014 at 9:11

 

Cindy,

It would take a little effort, and expense ($150-$400, divided that by those who will help pay), to correctly answer all the questions you’re asking.  One hour with an attorney would answer all your questions; and give you some advice on how to proceed. 

You want your attorney’s hour to be cost productive, so prepare a data packet.  You need an introduction of your concerns, and writing a short descriptive reason of why you’re there, along with a list of questions will commute faster to the attorney than you verbally telling the story from the beginning (Unless you’re skilled at making people listen to what you say.  And remember, this person you’re communicating with doesn’t know anything about what’s happened; folks tend to leave out important facts when recalling memories while verbally expressing thoughts).  People also have a tendency to fall prey to sidetracking, or outright forgetting to ask important questions. 

You should keep the report brief and to the point.  Don’t put things like; Momma never intended for that property to be used for _________, or they didn’t get enough money for what the property was worth to us, etc.  You’re there to find answers about the lease, don’t muddy things up with questions that can’t be answered. 

You will want to provide copies of the original lease with all signature pages, the 6-acre surface lease, the estate attorney’s letter, and the succession records.  Your “report” could brief the property’s ownership and how it came to you (Father and Mother purchased/inherited property.  They had seven children.  Father died on _____.  Property passed to mother & children along with mother’s usufruct.  One child died on ______ and left four heirs.  Mother died on ________.  Estate attorney was _______.  Two (Independent?)Executors _______ & ________.  Mother’s succession was completed on ___________.  Original lease signed on _______, by everyone (have copies of all signatures).  Six-acre surface lease signed on _________, by estate executors & one heir.

Questions should follow and be to the point.  Don’t ask “What If’s”, they led to nowhere.  1. The executors did not receive permission from the court to enter into a lease, does that void the lease? (You’ll need to know if they were “Independent Executors”, or not).  2. If lease is upheld, does the 80% rule apply?  3.  Can we expect more negotiations with EXCO about the lease, or is it too late?,  4.  Etc. 

The attorney can spend several minuets looking over the documents and reading your statement, so give him time and don’t look at your watch (leave you phone in the car). 

If you decide to do this and meet with an attorney, take only one person with you in the meeting.  Before you get there, decide who will do most of the talking and who will be taking notes.  This will keep confusion down and remember, time is important; you have a job to do.  By the end of the hour or sooner, the attorney should be able to tell you your chances of obtaining what you’re seeking.  He may tell you it’s too late to act, or, EXCO has already struck out twice and the batter up has two strikes, you have the last pitch.  I would let the professional throw the ball for me. 

If EXCO did have the upper hand, then a real challenge for them would be to know that the other heirs are planning to take the lease to court because the signatures were not correctly obtained, and start all over.  This will only happen when EXCO’s council receives an invitation to court for reason X, from an attorney.  If that happened, they may be open to negotiations.  You really don’t have to go all the way to court; just having your attorney file for a hearing will be proof enough to let EXCO know a court process has been initiated and they will have to act.  They may not like going to court and be willing to make everyone happy…Max

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