John G. Pike Announces his Retirement.
John G. Pike announced his retirement from the practice of law on August 31, 2020. He will be greatly missed by his law partners and his many oil and gas clients. He will also be missed by many Registers of Deeds across the state. He has elected to choose an inactive status. However, he plans to continue to serve as a member of the Kansas Bar Association Title Standards Committee at the request of that Committee in recognition of his extensive experience in examining titles during his lengthy career spanning forty-two (42) years. John has been listed in Best Lawyers since 2010 in Mining Law and Oil and Gas Law. He has maintained an “AV” rating in Martindale Hubbell during his professional career. We will also miss his ability to recite famous movie lines to make his point in an entertaining way. Good luck to John in a well-deserved retirement.
Kansas Court of Appeals affirms the Board of Tax Appeals’ Decision to Order Barber County to Refund Ad Valorem Taxes to Woolsey Operating Company, LLC for the 2013 Tax Year—September 30, 2016.
By way of background, on September 14, 2015, the Board of Tax Appeals (“BOTA”) issued an Order directing Barber County to refund $350,000, plus interest, with respect to eight oil and gas leases that were over assessed for ad valorem taxes in the 2013 Tax Year. See, Order, In the Matter of the Equalization Appeals of Woolsey Operating Company LLC for the Tax Year 2013 in Barber County, Kansas, Case Nos. 2013-5718-EQ, et. al. Woolsey claimed that when Excess Expense Allowance (“EEA”) was properly applied pursuant to the 2013 Appraisal Guide and when the proper decline rate was determined pursuant to the 2013 Appraisal Guide, the EOG, and Bankoff cases, the valuation of Woolsey’s Leases was $4,094,449.00 rather than Barber County’s valuation of $14,826,038.00. BOTA found in favor of Woolsey after hearing evidence for three days. Barber County appealed from BOTA’s Order to the Kansas Court of Appeals. On September 30, 2016, the Kansas Court of Appeals affirmed BOTA’s Order by finding that substantial evidence supported BOTA’s findings and that BOTA correctly applied the law to the facts of the case. The case involved complex engineering testimony from expert witnesses concerning the proper decline curve that should be used to determine the fair market value of these eight leases (exponential decline versus hyperbolic decline). All eight leases produced from the Mississippian formation using a slick water frac completion technique. Both horizontal and vertical wells were involved. The Court of Appeals found that substantial evidence supported BOTA’s determination that Barber County’s engineer, Kenneth Hitt, made many appraisal errors and that Woolsey’s engineer, Gary Reed, provided a more accurate determination of fair market value on these eight leases. Steven D. Gough represented Woolsey both before BOTA and before the Court of Appeals.
Special Use Permit Granted to Kingman Wind Energy I, LLC in Kingman County – May 23, 2016.
The Kingman County Board of Zoning Appeals approved the application of Kingman Wind Energy I, LLC for a Special Use Permit to construct a 200 Megawatt wind project at its meeting on May 23, 2016. This is an important milestone in getting the project completed by December 2016.
Selection to the 2016 Missouri & Kansas Super Lawyers List in Business Litigation – May 18, 2016.
Steven D. Gough received notice that he was again selected in the category of Business Litigation for inclusion in the 2016 Missouri & Kansas Super Lawyer list. He has held this designation since 2008.
Summary Judgment Obtained in Premises Liability Case – April 25, 2016.
The plaintiff in this premises liability case tripped on a municipal sidewalk and sustained serious injuries to her leg. She sued the City of Wichita and the adjoining landowner, Maple Ridge Apartments, alleging that the sidewalk was defective. Maple Ridge filed a Motion for Summary Judgment alleging that it owed no legal duty to the plaintiff. After considering the briefs and arguments of counsel, the Court agreed, finding that any duty to the plaintiff fell only on the City. Summary Judgment in favor of Maple Ridge was granted. Maple Ridge was represented in the litigation by Alan R. Pfaff.
Summary Judgment Obtained in Products Liability Case – April 5, 2016.
This personal injury case was filed in Neosho County, Kansas and arose out of a single vehicle accident. Plaintiff alleged that one of his front tires blew out on the vehicle that he was operating, causing him to lose control and leave the roadway. Claiming the tire was defective, he sued multiple parties, including the distributor of the tire, Becker Tire and Treading, Inc. After extensive discovery, Becker Tire filed a Motion for Summary Judgment arguing that the claim was barred by the Seller’s Defense set forth in the Kansas Product Liability Act, K.S.A. 60-3306(a). After considering the briefs and arguments of counsel, the Court granted the Motion and dismissed Becker Tire from the lawsuit. The Court found that the Seller’s Defense was applicable and barred the claim. Becker Tire, an insured of one of the firm’s insurance clients, was represented in the litigation by Alan R. Pfaff.
Barber County Refunds $316,709.45 in Ad Valorem Taxes for the 2014 Tax Year to Woolsey Operating Company, LLC – March 21, 2016.
On March 21, 2016, Woolsey Operating Company received a refund from Barber County, Kansas in the amount of $316,709.45 for ad valorem taxes paid in the 2014 Tax Year. Woolsey appealed the tax assessments on 23 oil and gas leases located in Barber County to the Board of Tax Appeals (BOTA) for the 2014 Tax Year. See, In the Matter of the Equalization Appeals of Woolsey Operating Company, LLC for the 2014 Tax Year in Barber County, Kansas, Case Nos. 2014-5946-EQ, et. al. Many of the issues in the appeal for the 2014 Tax Year were decided by BOTA by its Order issued on September 14, 2015, for the 2013 Tax Year in which BOTA ordered Barber County to refund $350,000, plus interest, with respect to eight oil and gas leases that were over assessed in the 2013 Tax Year. See, Order, In the Matter of the Equalization Appeals of Woolsey Operating Company LLC for the Tax Year 2013 in Barber County, Kansas, Case Nos. 2013-5718-EQ, et. al. (Order filed on 9-14-2015). Steven D. Gough represented Woolsey in both appeals.
Pratt County Grants Special Use to Ninnescah Wind Energy LLC to Develop a Commercial Wind Energy Project – February 22, 2016.
After holding public hearings on January 18, 20, 21 and 26, 2016 and on February 22, 2016, The Pratt County Commission accepted the recommendation of the Pratt County Zoning Board to grant a Special Use to Ninnescah Wind Energy, LLC to construct a 200 Megawatt commercial wind project involving 121 wind turbines in Pratt County, Kansas. This is the first wind project approved to be constructed in Pratt County, Kansas. Steven D. Gough represented Ninnescah Wind Energy, LLC in these proceedings.
Waste Connections of Kansas, Inc., Recovers Judgment in the Amount of $1,934,307.35 from Ritchie Corporation after Extensive Legal Battle – October 16, 2015.
The collection of this judgment was the culmination of eight years of litigation in a complex contract case involving a right of first refusal held by Waste Connections to purchase the Transfer Station located at 4300 W. 37th N., Wichita, Kansas. For the history of this case, see Waste Connections of Kansas, Inc., v Ritchie Corporation, 296 Kan. 943, 298 P. 3d 250 (2013). After a week-long jury trial in the summer of 2013, the jury found that Ritchie Corporation breached the duty of good faith and fair dealing involving the right of first refusal held by Waste Connections to acquire the Transfer Station. This verdict resulted in entry of judgment against Ritchie Corporation on October 16, 2013, in the amount of $1,659,113.27. The Kansas Court of Appeals affirmed this judgment on February 13, 2015. Waste Connections was able to recover its overpayment to Ritchie Corporation in the amount of $550,000, together with interest, and all of its attorneys’ fees. Steven D. Gough tried the case and argued the appeals.
Defense Verdict Obtained for Sedgwick County in Personal Injury Case – September 3, 2015.
This case involved a motor vehicle accident which a Sedgwick County Sheriff’s Office Deputy rear-ended the plaintiff at a stop light. The plaintiff claimed that she sustained a serious injury to her back in the accident and sought $750,000 in damages. Liability was admitted but the damages claims were hotly contested. After a 4-day Jury Trial in Sedgwick County, the jury returned a defense verdict, finding that the plaintiff sustained no damages in the accident. Sedgwick County was represented by Alan R. Pfaff.
FR2 Wind Energy, LLC Obtains Favorable Settlement from Harper County, Kansas – June 9, 2015.
In 2012, FR2 constructed one of the largest Commercial Wind Energy Projects in the United States with a generating capacity of 470 Megawatts (MW) of electricity from a total of 294 wind turbines located in three Kansas counties: Harper, Kingman and Barber (hereafter referred to as the “FR2 Wind Project”). Soon after construction was completed in December 2012, two disputes arose with Harper County. The first concerned the repair of County Road 150 in which FR2 claimed that it had been overcharged by Harper County to build a far better road than what existed before. FR2 filed a lawsuit against Harper County seeking a refund of the amount spent in rebuilding County Road 150 in a case styled Flat Ridge 2 Wind Energy LLC v. Harper County Commission of Kansas, Case No. 14 cv 28, Harper County District Court, Harper County, Kansas (the “State Court Case”). The second dispute involved whether any further PILOT (Payment in Lieu of Taxes) Payments were owed by FR2 to Harper County when Harper County started taxing wind turbine pad sites and sought to collect both additional taxes on the reclassification of land to industrial use where wind turbines were constructed (amounting to approximately 1 acre of land) plus the PILOT Payment. This issue resulted in a second lawsuit styled Harper County Commission of Kansas v. Flat Ridge 2 Wind Energy, LLC, Case No. 6:14-cv-01190-RDR-KGS (“Federal Court Case”). On June 9, 2015, both cases were dismissed. Harper County refunded $1.2 million to FR2 in connection with the repair of County Road 150. Harper County agreed to give a credit against the PILOT Payment for the amount of taxes Harper County assessed against wind turbine pad sites. Steven D. Gough represented FR2 in both lawsuits.
The Kansas Corporation Commission Denys the Application of C-12 to Form a CO2 Tertiary Recovery Unit Covering Six Square Miles to the Detriment of Small Producers in Russell County, Kansas – May 7, 2015.
The KCC denied C-12’s Application to form a unit covering six square miles for a carbon dioxide (CO2) tertiary recovery project which at $40/barrel oil had a net present value of $190 million in incremental oil recovery along with a net present value cost of $142 million. Steven D. Gough represented four small producers—Russell Oil, Inc., Herman Krug Oil Operations, Elmer L. Karst Oil and Barton Exploration, Inc.—who opposed this Application on several grounds, including the cost that each would be required to pay on the proposed unit, which totaled in excess of $19 million. Each of our clients were able to prove that their leases had been operating at a profit during the last three years and that none of their wells were at imminent risk of abandonment under K.S.A. 55-1304. The KCC found that: (1) C-12 failed to prove that the leases of small producers within the proposed unit were at imminent risk of abandonment; (2) the estimated additional recovery did not substantially exceeded the additional cost; and (3) C-12’s proposed operation of the unit was not fair and equitable to other working interest owners.
The Best Lawyers in America® Recognizes Lawyers – 2014.
Three lawyers were selected by their peers for inclusion in The Best Lawyers in America® 2015 (Copyright 2014 by Woodward/White, Inc., of Aiken, SC):
- Steven Gough was recognized in the category of Legal Malpractice Law – Defendants
- John Pike was recognized in two categories: Oil & Gas Law and Mining Law
- Alan Pfaff: Personal Injury Litigation – Defense
Since it was first published in 1983, Best Lawyers has become regarded as an important guide to legal excellence. Because Best Lawyers is based on an exhaustive peer-review survey in which more than 36,000 leading attorneys cast almost 4.4 million votes on the legal abilities of other lawyers in their practice areas, and because lawyers are not required or allowed to pay a fee to be listed, inclusion in Best Lawyers is considered an honor. Corporate Counsel magazine has called Best Lawyers “the most respected referral list of attorneys in practice.”
Decision in Novy v Woolsey Energy Corporation, 50 Kan. App. 2d 714, 339 P. 3d 392 (2014) Clarifies Law on what is Required to Prove Breach of the Implied Covenant in Oil and Gas Leases to Further Explore and Develop – September 10, 2014.
This case was tried on July 23, 2013, on a landowner’s claim that Woolsey Energy Corporation breached the implied covenant to further explore and develop his lease by refusing to drill any additional wells on the lease since the drilling of a commercial well in 1977. The landowner argued that the only evidence needed to establish a breach was evidence of the lessee’s refusal to drill any additional wells based on the recent case, Sieker v. Faye M. Stephens Trust, 49 Kan. App. 2d 183, 309 P.3d 1 (2013). The trial court entered judgment in favor of Woolsey and held that the landowner failed to prove that a reasonably prudent operator would have drilled an additional well or that sufficient reserves existed to provide a reasonable profit to the lessee to pay for the cost to drill, equip and operate a new well on the lease. The landowner appealed. The Court of Appeals affirmed the District Court’s decision. The Novy decision is important because it clarifies existing law concerning what is required to prove a breach of the implied covenant in oil and gas leases to further explore and develop and eliminates confusion caused by the overly broad and incorrect statement of the law set forth in Sieker v. Faye M. Stephens Trust, 49 Kan. App. 2d 183, 309 P.3d 1 (2013). The Sieker court suggested that merely showing that the lessee has no intention to drill is sufficient to prove a breach of the implied covenant to develop and to receive automatic cancellation of the lease. The Novy decision reaffirmed the rules set forth in earlier Kansas cases that the mere refusal by a lessee to drill additional wells, without substantial evidence that a prudent operator would do so, is not sufficient to prove a breach of the implied covenant to develop. See, e.g., Fischer v. Magnolia Petroleum Co., 156 Kan. 367, 377, 133 P.2d 95 (1943). Steven D. Gough tried the case and argued the appeal.
KCC Rules that OXY USA, Inc., Violated the Correlative Rights of Abercrombie Energy, LLC by Producing its Well at the Rate of 400 Barrels/Day in Violation of the Statewide Allowable of 200 Barrels/Day – April 1, 2014.
In the matter of the application of OXY USA, Inc., for an exception to K.A.R. 82-3-203, Docket No 14-CONS-135-CEXC, the Kansas Corporation Commission (KCC) ruled in favor of Abercrombie Energy, LLC and found that OXY USA, Inc., had violated the KCC’s rules and regulation by producing the Cox Minerals A-1 well at the rate of 400 barrels/day in violation of the statewide allowable of 200 barrels/day. The KCC ordered that OXY to curtail production to 100 barrels/day until the well was brought back into balance. This action helped to protect Abercrombie’s adjoining lease where it had several oil wells that produced from the same formation. Abercrombie presented expert geological and engineering testimony to prove that OXY’s well was in communication with Abercrombie’s wells. Steven D. Gough represented Abercrombie.
The Best Lawyers in America® Recognizes Lawyers – 2013.
Three lawyers were selected by their peers for inclusion in The Best Lawyers in America® 2014 (Copyright 2013 by Woodward/White, Inc., of Aiken, SC):
- Steven Gough was named Best Lawyers’ 2014 Wichita Legal Malpractice Law – Defendants “Lawyer of the Year.”
- John Pike was recognized in two categories: Oil & Gas Law and Mining Law. He was named Best Lawyers’ 2014 Wichita Mining Law “Lawyer of the Year.”
- Alan Pfaff was recognized in the category of Personal Injury Litigation – Defendants.
Defense Verdict Obtained in Stafford County Jury Trial – December 11, 2013.
This case arose out of a fire originating from a swather operated by an insured of one of the firm’s insurance clients, Reggie Fisher. The fire spread to the plaintiff’s farm and damaged some of his farm equipment. The plaintiff sued for $289,325.30 alleging negligence. At the trial in St. John, Kansas, the jury returned a defense verdict. The jury found that no one was at fault. Mr. Fisher was represented in the litigation by Alan R. Pfaff.
Waste Connections of Kansas, Inc., Obtains Judgment against Ritchie Corporation in the Amount of $1,659,113.27 After Week-Long Jury Trial – October 16, 2013.
After a week-long jury trial from July 23 through July 30, 2013, the jury found that Ritchie Corporation breached the duty of good faith and fair dealing involving the right of first refusal held by Waste Connections to acquire the Transfer Station located at 4300 W. 37th North, Wichita, Kansas. This verdict resulted in entry of judgment against Ritchie Corporation on October 16, 2013, in the amount of $1,659,113.27. Steven D. Gough tried the case for Waste Connections of Kansas, Inc.
The Best Lawyers in America® Recognizes Lawyers – 2012.
Three lawyers were selected by their peers for inclusion in The Best Lawyers in America® 2013 (Copyright 2012 by Woodward/White, Inc., of Aiken, SC):
- Steven Gough was recognized in two categories: Mining Law and Legal Malpractice Law – Defendants.
- John Pike was recognized in two categories: Oil & Gas Law and Mining Law.
- Alan Pfaff was recognized in the category of Personal Injury Litigation – Defendants.
Alan Pfaff Obtains Defense Verdict in Wrongful Death Case – 2012.
In June of 2012, Alan Pfaff obtained a 100% defense verdict in a wrongful death case following a two-day jury trial in Larned, Kansas. The case involved an unfortunate automobile accident that occurred in Pawnee County. Mr. Pfaff represented the defendants – a Garden City company and its employee, who was involved in the accident. The plaintiff sought almost $300,000 in damages at trial. But the jury placed 100% of the fault on the decedent and, accordingly, awarded no damages.
LR Energy, Inc. and LR Pipeline LLC Acquire 800 Oil and Gas Leases and a Pipeline Gathering System Located in Seven Counties in Southeast Kansas – October 1, 2012.
Steven D. Gough represented LR Energy, Inc., and LR Pipeline LLC in this transaction in the purchase of assets from Layne Energy Operating, Inc., and affiliated companies.
Woolsey Operating Company, LLC Receives Ad Valorem Tax Refund from Barber County of $400,000 – April 24, 2012.
In the Matter of the Equalization Appeal of Woolsey Operating Company LLC for the Tax Year 2009 in Barber County, Kansas, Docket Nos. 2009-8890-EQ, the Court of Tax Appeals found in favor of Woolsey Operating Company, LLC that Barber County did not allow excess expense allowance (“EEA”) on 28 of Woolsey’s leases in Barber County, Kansas. Each of these leases involved slick water fracs in the Mississippian formation which involved more water handling and chemical expenses than what is typical with respect to the average well in Kansas. By refusing to recognize the higher operating expenses on Woolsey’s leases, Barber County over-taxed each lease by a significant amount. Steven D. Gough represented Woolsey Operating Company, LLC in connection with this appeal.
American Pipeline Company LLC Sells Pipeline Gas Gathering System to Atlas Pipeline Mid-Continent Westok, LLC – December 22, 2011.
Steven D. Gough assisted American Pipeline Company to sell its pipeline gas gathering system and a processing plant located in Barber County, Kansas to Atlas Pipeline. A gas purchase agreement was also entered into as part of this transaction with Woolsey Operating Company, LLC.
$1.5 Million Personal Injury Verdict – 2010.
After a jury trial lasting seven days, the jury in the case of Dennis D. Gay v. Unified School District 435, et al., Case No. 09 CV24, Dickinson County, Kansas awarded damages in the amount of $1.5 million. Mr. Gay received numerous injuries including a traumatic brain injury, which occurred when a school bus ran a stop sign and collided with a pickup truck operated by Mr. Gay. The defendants contested liability and the nature and extent of the injuries suffered by Mr. Gay. Several expert witnesses testified, including two neuropsychologists, three treating physicians, a vocational expert, a life care planner, an economist, and two auto accident reconstruction experts. The case was tried by Steven D. Gough. On May 17, 2010, defendants dismissed their pending appeal of the award and paid the judgment in full.