Opinion
June 2, 1971.
Editorial Note:
This case has been marked 'not for publication' by the court.
Page 457
Cole, Herbert, Hecox, Tolley & Edwards, Colorado Springs, McKelvey & McKelvey, Durango, Morrato, Gueck & Colantuno, P.C., Denver, for plaintiffs in error.
Emigh & Emigh, Durango, for defendant in error Alice S. Ferebee, as Administratrix, C.T.A., of Estate of D. M. Ferebee, Deceased.
Sutin, Thayer & Browne, Norman S. Thayer, Albuquerque, N.M., Blakemore McCarty, Colorado Springs, for defendants in error Marjorie C. Grantham, Executrix of Last Will and Testament of Everett M. Grantham, Deceased, substituted for Everett M. Grantham, and W. Wayne Jones.
DUFFORD, Judge.
This case was transferred from the Supreme Court pursuant to statute.
The parties are before us in their trial court positions. We shall refer to the plaintiffs as 'Feldt & Maytag' and to the defendants, all of whom claim under or through D. M. Ferebee, deceased, as 'Ferebee.'
This case concerns the rights and obligations between the parties which stem from the joint operation and development of certain oil and gas leasehold properties situated in Colorado. To a large extent their respective rights and obligations which are in dispute here are governed by the provisions of a standard 'Operating Agreement' relating to the properties involved and under which Feldt & Maytag was the 'Operator' and Ferebee was a 'Non-Operator.' Additionally, Ferebee, as a professional geologist, supplied professional services to the properties involved, and his right to compensation for those services is also an issue in this matter insofar as the damage awards of this case are concerned.
Under the provisions of the subject Operating Agreement, each party is responsible for his proportionate share of costs incurred in operating and developing the oil and gas properties. The agreement specifies that no well can be drilled on the properties committed to the agreement without the consent of all parties. Under its terms, if all parties cannot agree upon the drilling of a proposed well, the party or parties desiring to proceed with drilling operations may give the other party or parties notice of the proposed drilling plan, and those notified are given 15 days in which to elect whether they wish to participate in the drilling operations. Failure on the part of a notified party to reply affirmatively that he does elect to participate in the operations is deemed, under the terms of the agreement, to constitute an election not to participate.
By the further provisions of the Operating Agreement, a party who elects to participate in the proposed drilling operations is designated as a 'Consenting Party,' and a party who either expressly or impliedly elects not to participate in such drilling program is designated as a 'Non-Consenting Party.'
The Operating Agreement specifies that a party who becomes a Consenting Party becomes obligated for the direct payment of his share of the costs incurred in the drilling operation, and a Non-Consenting Party is deemed to have relinquished his interest in the well to the Consenting Parties until such time as there has been recovered from any possible production from that well 200 per cent of the Non-Consenting Party's share of the cost of drilling the well, as well as 100 per cent of the costs incurred in operating the well. After the recovery of such costs, the interest of the Non-Consenting Party in the well reverts to him.
Following execution of the Operating Agreement, Ferebee, in his capacity as a consulting geologist, submitted to Feldt & Maytag a well cost estimate for the proposed drilling of 19 wells on certain oil and gas properties which were committed to the terms of the Operating Agreement. Two of the wells described by Ferebee in his letter were drilled in the summer of 1962 and were abandoned as dry holes, and there is no issue as to the obligations of the parties with respect to these wells. By letter dated May 3, 1963, Feldt & Maytag advised Ferebee that, because of pending lease expiration dates, it was imperative to drill six wells on certain designated legal subdivisions set forth in the letter and requested Ferebee to waive the period of 15 days which was conferred by the Operating Agreement for his rendering a reply concerning his election to either participate or not participate in the drilling of a proposed well. This letter was returned unclaimed, and it is uncontroverted that Ferebee never expressly consented to the drilling of any of the wells which were drilled subsequent to May 3, 1963, on the oil and gas properties which were committed to the Operating Agreement.
The evidence at trial revealed that a total of seven wells were drilled on the jointly operated properties after the Feldt & Maytag letter of May 3, 1963. It was established that Ferebee, in his capacity as a consulting geologist, supervised certain operations in the field which pertained to the oil and gas properties committed to the Operating Agreement and was aware of the drilling of those seven oil and gas wells. There was some evidence supporting Feldt & Maytag's position that they made charges against Ferebee for his proportionate share of the costs of such seven wells on the basis that he had consented to the drilling thereof, and that Ferebee had not expressly objected to such charges. Primarily because of these facts, and also because Ferebee, as a consulting geologist, had previously recommended the drilling of 19 wells, Feldt & Maytag contend Ferebee impliedly consented to the drilling of the seven wells and should be deemed a Consenting Party as to such wells. At trial Ferebee's position was that he was a Non-Consenting Party as to the seven wells.
Following a full trial to the court of the disputed matters between Feldt & Maytag and Ferebee, the trial court concluded and found that Feldt & Maytag's letter of May 3, 1963, was a recognition that Ferebee had not previously consented to the drilling of the wells described in such letter; that there was no evidence that Ferebee had ever verbally consented to the drilling of the proposed wells; and that Ferebee was, in effect, a Non-Consenting Party as to those wells drilled after May 3, 1963. The trial court also made a determination as to the amounts which were owing from Ferebee to Feldt & Maytag for costs of administration and also for those costs incurred by virtue of operations to which Ferebee was a Consenting Party. Against this amount, the trial court credited the sums which it determined were owing by Feldt & Maytag to Ferebee on Ferebee's counterclaim for professional services and thereafter entered judgment in the amount of $62,218.85. This judgment was against Feldt & Maytag and in favor of Ferebee. It is from these conclusions of the trial court and the money judgment entered that Ferebee was a Consenting Party. Against
I.
Primarily Feldt & Maytag contend that, because Ferebee had knowledge of the proposed drilling of the seven wells which were commenced after May 3, 1963, and because he did not affirmatively object to charges made against him for this proportion of the costs of drilling such wells, it was error for the trial court to conclude that he had not consented to the drilling of such wells.
This argument overlooks the provision of the Operating Agreement between these parties specifying that if a party does not expressly consent to a proposed drilling program of which he is notified, it will be presumed that it was the election of such party Not to participate in that well program.
In the instant case, it is without contradiction that Ferebee never expressly consented to the drilling program outlined in the Feldt & Maytag letter of May 3, 1963. It follows that the initial legal effect of Ferebee's silence following the May 3, 1963, letter was to place him in a Non-Consenting status with respect to the well program outlined in that letter. Whether the actions or lack of action on the part of Ferebee after the letter of May 3, 1963, were sufficient to imply notice and an agreement on his part to participate in the drilling of such wells was a factual question which the trial court determined in favor of Ferebee's position, and against the contentions asserted by Feldt & Maytag. Our review of the record in this case reveals that there was evidence upon which the trial court could have resolved this question in either direction. Nonetheless, there was ample evidence from which the trial court could conclude that the actions of Ferebee following Feldt & Maytag's letter of May 3, 1963, were not tantamount to an implied consent on Ferebee's part to participate in the drilling program described in that letter. Where there is evidence to support the findings of fact made by a trial judge, they will not be disturbed on appellate review, Reilly v. Korholz, 137 Colo. 20, 320 P.2d 756, even if there is evidence which might support an opposite conclusion, Campbell v. Trate, 112 Colo. 265, 149 P.2d 380.
II.
Feldt & Maytag also assert that the trial court erred in the computation of damages. The arguments advanced by Feldt & Maytag in this respect are based upon the fact that certain ledger sheets from the Feldt & Maytag records pertaining to the Ferebee's account with them were accepted into evidence by the trial court, but largely disregarded by it in computing Ferebee's cash liability.
Our review of the ledge sheets reveals that they contain entries of charges and credits which are related, In some instances, to specific wells. The identification of charges and credits to specific wells include wells to which Ferebee was a consenting participant under the terms of the Operating Agreement and wells to which he was a Non-Consenting Party. However, not all entries on the ledger sheets are so identified. There are numerous and sometimes substantial charges within the ledger sheets which are not relatable to any given well or wells nor to any other cost as to which it can be concluded that Ferebee had a clear liability. In the trial of this matter, no attempt was made by Feldt & Maytag To prove which of the various charges appearing in the ledger sheets were for costs and expenses for which Ferebee would be liable in all events, or which were for costs and expenses for which he would be liable if his obligations were restricted to those wells drilled prior to May 3, 1963. Consequently, the ledger sheets by themselves and without interpretative evidence failed to furnish the trial court with any proof as to the expenses for which Ferebee was held to be obligated.
It is basic that Feldt & Maytag had the burden of proving their damages. See John v. United Advertising, Inc., 165 Colo. 193, 439 P.2d 53; and Lockwood Grader Corp. v. Bockhaus, 129 Colo. 339, 270 P.2d 193. Within the record as made, the only totally reliable evidence which exists for assessing Ferebee's cash obligations to Feldt & Maytag was contained within the unchallenged answers to certain interrogatories propounded by Ferebee and answered by Feldt & Maytag, and which identified on a well-by-well basis the various costs and expenses relating to wells within the area covered by the Operating Agreement. These interrogatory answers and other uncontested accounting information constituted precisely the evidence which the trial court looked to and upon which it relied in making the ultimate computation of the damage amounts entered in the judgment.
Basically, we agree with the contention made by Feldt & Maytag that the trial judge does have a duty to examine and analyze all evidence submitted in the trial of a case, but we cannot agree that such proposition required the trial court, nor that it permits this Court, to ground the liability of a party on evidence which is ambiguous and filled with uncertainty. Under the record made in this case, the monetary obligations between the parties are questions of fact as to which there is conflicting and ambiguous evidence. This case does not present a situation in which all of the essential evidence was contained in unambiguous documents as was the situation in the cases of Stephenson v. Stephenson, 134 Colo. 96, 299 P.2d 1095, and Conklin v. Shaw, 67 Colo. 169, 185 P. 661, which are relied on by Feldt & Maytag. The question being one of fact and having been resolved by the trial court on a basis which is entirely consistent wih the reliable evidence found within the record, the findings of the trial court will not be disturbed on review. Shrewsbury v. Reynolds-Morse Corp., 105 Colo. 30, 94 P.2d 686.
Judgment is affirmed.
COYTE and PIERCE, JJ., concur.