Krug v. Helmerich & Payne, Inc.

Helmerich & Payne, Inc. (H&P) appeals a judgment in favor of the plaintiffs, who are a class of oil and gas royalty owners. The class alleged that the defendant breached contractual and fiduciary duties by allowing uncompensated drainage of natural gas to occur from the leases and that the defendant engaged in constructive fraud and was unjustly enriched by failing to pay royalty amounts that the class alleged were included in a settlement between the defendant and ANR Pipeline. The jury returned verdicts on three alternative theories of recovery. The trial court judge granted judgment that included disgorgement of profits based on a sum the trial court found unjustly enriched H&P. On appeal, the Court of Civil Appeals affirmed in part and reversed in part, and remanded with instructions. H&P argued on appeal to the Supreme Court that: (1) the trial court erred in its jury instructions for uncompensated drainage that barred consideration of counterdrainage; (2) the appellate court erred by allowing a breach of contract claim to be recast as an equitable unjust enrichment claim; (3) the appellate court erred in affirming a "mathematically impossible" jury verdict on plaintiffs' constructive fraud claims; and (4) the appellate court erred in affirming the constructive fraud damage award notwithstanding that no fraud claim was ever certified. After review, the Supreme Court found: (1) the trial court committed no reversible error; (2) the jury found that plaintiffs did not prove by clear and convincing evidence that H&P acted in reckless disregard for the rights of others, nor that H&P acted intentionally and with malice toward others; (3) because the Court reversed the judgment based on equity, the third reason for granting certiorari was answered; and (4) having reversed the constructive fraud damage award, the Court held this issue was moot. View "Krug v. Helmerich & Payne, Inc." on Justia Law