J-A01023-17


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

PENNSYLVANIA GENERAL ENERGY                        IN THE SUPERIOR COURT OF
COMPANY, L.L.C., A PENNSYLVANIA                          PENNSYLVANIA
LIMITED LIABILITY COMPANY,

                            Appellee

                     v.

MELVIN B. HERSHEY,

                            Appellant                     No. 908 WDA 2016


                Appeal from the Order Entered June 1, 2016
               In the Court of Common Pleas of Potter County
                      Civil Division at No(s): 2015-135


BEFORE: BOWES, OLSON and STRASSBURGER,* JJ.

MEMORANDUM BY OLSON, J.:                           FILED FEBRUARY 13, 2017

      Appellant, Melvin B. Hershey, appeals from the order entered on June

1, 2016.    The subject order granted the motion for judgment on the

pleadings, which was filed by Pennsylvania General Energy Company, L.L.C.

(hereinafter “PGE”).      The order also entered judgment in PGE’s favor, and

against Appellant, in the amount of $238,551.19, plus interest. We affirm.

      PGE instituted the current action on May 8, 2015, by filing a complaint

against Appellant.     According to the complaint, PGE is “involved in oil and

gas   operations”    and,    on   October   25,   2014,    Appellant   “advised   a

representative of PGE . . . that he owned an undivided one-half interest in oil

and gas rights in Potter County[, Pennsylvania] that he would be interested

in leasing to PGE.” PGE Complaint, 5/8/15, at ¶¶ 1 and 3. On November 1,



*Retired Senior Judge assigned to the Superior Court.
J-A01023-17



2014, Appellant signed an Oil and Gas Lease (hereinafter “Oil and Gas

Lease” or “the Lease”) “covering tracts of land totaling 243.52 acres in

Bingham Township, Potter County. . . . The[] premises are the same that

were identified by [Appellant] as belonging to him on October 25, 2014.”

Id. at ¶¶ 4-5. Under the terms of the Lease, Appellant “specially warranted

the leased premises, agreed to defend title to the leased premises, and

covenanted that PGE would have quiet enjoyment under the lease.” Id. at

¶ 6 (some internal capitalization omitted).

      Also on November 1, 2014, Appellant signed an “Order of Payment,”

which declared that Appellant “was to receive $243,520.00 for a [one-half]

interest in the leased premises, which was identified as being a net of

121.76 acres.” Id. at ¶ 7 (some internal capitalization omitted). The Order

of Payment “provided that if PGE determined by record title search that

[Appellant’s] interest in the leased premises was either greater or less than

121.76 acres, the payment might be proportionally increased or reduced by

PGE to reflect the correct interest.” Id. at ¶ 8 (some internal capitalization

omitted).

      On February 19, 2015, PGE issued Appellant two checks, totaling

$243,520.00, for Appellant’s professed interest in the land. Id. at ¶ 9. PGE

issued the checks before PGE received a title opinion on the land “[b]ased on

[Appellant’s] representations to PGE that he owned the undivided interest in

the oil and gas underlying the leased premises.” Id. at ¶ 10 (some internal

capitalization omitted). Appellant then cashed the checks. Id. at ¶ 11.

                                     -2-
J-A01023-17



      On March 5, 2015, PGE received a title opinion from its attorney; as

the opinion revealed, essentially “the entire oil and gas estate . . . was held

by Melvin A. Yoder and Rosa D. Yoder, not [Appellant].”           Id. at ¶ 12.

Subsequent research revealed that, of the “undivided one-half interest in

[243.52 acres of] oil and gas rights in Potter County” that Appellant

originally claimed to own, Appellant only “had good title to 5.019 acres of oil

and gas rights.”   Id. at ¶ 21. Therefore, by letter dated March 10, 2015,

“PGE notified [Appellant] of the title failure and demanded reimbursement

pursuant to the terms of the parties[’] lease, informing [Appellant] that

while he had good title to 5.019 acres of oil and gas rights . . . and therefore

was entitled to $4,968.81 pursuant to the lease, the title failure on the

remaining acreage required him to return $238,551.19.” Id. (some internal

capitalization omitted).   Appellant refused to remit the payment and PGE

filed its three-count complaint against Appellant, claiming damages for

unjust enrichment, “breach of warranty of title and covenant[] of quiet

enjoyment,” and breach of contract. Id. at ¶¶ 24-44.

      PGE attached to the complaint:       evidence of two checks issued to

Appellant by PGE, that were dated February 19, 2015, and in the total

amount of $243,520.00; the relevant deeds demonstrating that Appellant

only “had good title to 5.019 acres of oil and gas rights” in the land; a letter

from PGE to Appellant, dated April 6, 2015; the Oil and Gas Lease; an

Addendum to the Lease; and, the Order of Payment.           We will quote the




                                     -3-
J-A01023-17



relevant portions of the April 6, 2015 letter, the Oil and Gas Lease, and the

Order of Payment.

     The April 6, 2015 letter from PGE to Appellant reads:

                                April 6, 2015

                                     ...

        RE: Lease Agreement with [PGE] dated November 1, 2014

        Dear Mr. Hershey:

        I am writing in follow up to my letter of March 10. I spoke
        to your daughter, Connie, about this matter and understood
        that you were intending to seek the advice of counsel. I
        called Connie last week to obtain an update, and she has
        not returned my call. PGE has not received reimbursement
        or other communication from you regarding the amount
        that was erroneously paid to you. I can only assume that
        you are not intending to return the $238,551.19
        representing payment for oil and gas that you do not own.
        Please be advised that if PGE does not receive a check
        payable to [PGE] in the amount of $238,551.19 within 10
        days, we will pursue legal avenues to obtain repayment of
        the amounts to which you are not entitled.

                 Sincerely yours,

                 Pennsylvania General Electric Company, LLC

                 /s______________
                 Lisa C. McManus, Esq.
                 Vice President – Legal & General Counsel

Letter from PGE to Appellant, dated 4/6/15, at 1 (internal bolding omitted).

     The Oil and Gas Lease provides, in relevant part:

                            OIL AND GAS LEASE




                                    -4-
J-A01023-17


       THIS AGREEMENT (the “Lease”) is made this 1st day of
       November, 2014, between Melvin B. Hershey, a widower . .
       . Lessor . . . , and [PGE], Lessee.

                             WITNESSETH:

       1. LEASING CLAUSE – For and in consideration of the sum of
       [$10.00] and other good and valuable consideration, the
       receipt and sufficiency of which are hereby acknowledged,
       and the covenants contained in this Lease, Lessor hereby
       grants, leases, and lets exclusively to Lessee all those
       certain lands situate in Bingham Township(s), Potter
       County, Commonwealth of Pennsylvania, (the “Leased
       Premises”), further described as follows: Tax Map #’s . . .
       and containing a total of 243.52 acres, more or less, for the
       purpose     of    exploring   for,  developing,    producing,
       transporting, and marketing oil, gas and/or their
       constituents . . . together with such exclusive rights as may
       be necessary or convenient for Lessee, at its election, to
       explore for, develop, produce, measure, and market
       production from the Leased Premises and from any other
       lands . . .

       2. TERM OF LEASE. This lease shall be in force for a primary
       term of five [] years from 11-1-2014 (the “Effective Date”),
       and for as long thereafter as oil and gas, or either of them,
       or other substances covered by this Lease are produced in
       paying quantities from the Leased Premises or from lands
       pooled with the Leased Premises, or this Lease is otherwise
       maintained in effect pursuant to its provisions.

       3. PAYMENTS TO LESSOR – Lessee covenants to pay Lessor,
       proportionate to Lessor’s percentage of ownership, as
       follows:

       (A) DELAY RENTAL: . . .

       (B) ROYALTY: To pay Lessor as Royalty an amount equal to
       12.5 of the gross proceeds realized by Lessee for all oil, gas
       and/or their constituents produced and marketed from the
       Leased Premises. . . .

                                    ...


                                   -5-
J-A01023-17


       (G) TITLE: If Lessee receives evidence that Lessor does not
       have title to all or any part of the rights herein leased,
       Lessee may immediately withhold payments that would be
       otherwise due and payable hereunder to Lessor until the
       adverse claim is fully resolved.

                                    ...

       8. TITLE AND INTERESTS – Lessor hereby generally specially
       warrants and agrees to defend title to the Leased Premises.
       Lessor covenants that Lessee shall have quiet enjoyment
       hereunder. Should any person having title to the Leased
       Premises fail to execute this Lease, the Lease shall
       nevertheless be binding upon all persons who do execute it
       as Lessor.

                                    ...

       17. SURRENDER – Lessee may surrender and cancel this
       Lease as to all or any part of the Leased Premises by
       recording a Surrender of Lease, and if a partial surrender
       the Delay Rental set forth in Paragraph three [] of this lease
       shall be reduced in proportion to the acreage surrendered.

                                    ...

       21. ENTIRE CONTRACT – The entire agreement between
       Lessor and Lessee is embodied herein. No oral warranties,
       representations, or promises have been made or relied upon
       by either party as an inducement to or modification of this
       Lease. . . .

       Intending to be legally bound, Lessor hereunto sets hand
       and seal.

       Lessor:

       /s________________
       Melvin B. Hershey

                                    ...

       Approved by Lessee:


                                   -6-
J-A01023-17


        /s________________
        Robert L. Dean, III
        Vice President – Land

Oil and Gas Lease between Appellant and PGE, 11/1/14, at 1-4 (some

bolding omitted) (bolding and strikethrough in original).

      The Order of Payment declares:

                     ORDER OF PAYMENT – PAID UP LEASE

        Conditioned on approval of the agreement associated
        herewith and on approval of title to same, Lessee will make
        payment as indicated herein by check within 60 business
        days of receipt of the agreement by Lessee at Lessee’s
        business office address noted above. No default shall be
        declared for failure to make payment until 30 days after
        receipt of written notice from payee of intention to declare
        such default.

                                     ...

        Pay To:               Melvin B. Hershey

        The amount of:        [$243,520.00]

                                     ...

        Consideration for 50% of 243.52 acres interest in Oil and
        Gas Lease dated 11/1/14 covering 121.76 net acres in the
        Twp/Dist(s) Bingham, County of Potter, State of
        Pennsylvania, and further described as: Tax Map Nos. . . .

        In the event Lessee determines by record title search that
        payee’s interest in the leased premises is either greater or
        less than stated above, this payment may be proportionally
        increased or reduced by Lessee to reflect the correct
        interest. In such event, payee shall be furnished copies of
        pertinent instruments evidencing the correct interest.

        The undersigned payee acknowledges that the said payment
        constitutes payment in full for the initial consideration for



                                     -7-
J-A01023-17


         the lease and for all delay rentals due for years 2 through 5
         of the lease.

                                           ...

         Landowner(s)

         /s_______________
         Melvin B. Hershey

         Date Signed: 11-1-2014

         Completed By: Chris Flatt________

         Approved By: /s________________
                      Robert L. Dean, III
                      Vice President - Land

Order of Payment, dated 11/1/14, at 1 (some internal bolding omitted).1

       On July 30, 2015, Appellant filed an answer and new matter.       As is

relevant to the current appeal, within Appellant’s answer, Appellant:

admitted that he signed the Oil and Gas Lease “covering tracts of land

totaling 243.52 acres in Bingham Township, Potter County;” admitted that

he signed the Order of Payment; admitted that he cashed the checks that

were issued by PGE, in the total amount of $243,520.00; and, admitted that

he “has not refunded the amount claimed by PGE.” Appellant’s Answer and

New Matter, 7/30/15, at ¶¶ 5, 7, 9, 11, and 24. Appellant also averred that:

“[a]t all material times, [Appellant] made it clear and any and all

representatives of PGE reinforced the understanding that PGE would
____________________________________________


1
   We will not restate the terms of the Addendum, as the Addendum is
irrelevant to the current appeal.




                                           -8-
J-A01023-17



independently search the title and determine for itself the ownership

interest, if any, of [Appellant]” in the land; “[Appellant] was told by

representatives of PGE that PGE would first determine title and only if it was

satisfied with the title would payment be made to [Appellant];” and, “[a]t all

material times, PGE voluntarily made the payments [] to [Appellant] and did

so at its own risk and responsibility and with the express understanding that

[Appellant] would not be required to account for any such monies and that

such monies received by [Appellant] were to be [Appellant’s] monies without

further responsibility on the part of [Appellant] to PGE.” Id. at ¶¶ 3, 5, and

10.

      Further,   Appellant   answered   that   he   was   “without   information

sufficient to determine the truth or falsity” of PGE’s averments that Melvin A.

Yoder and Rosa D. Yoder owned the bulk of the claimed 243.52 acres in

Bingham Township, Potter County and that Appellant only owned a 5.019

acre parcel of land. Id. at ¶¶ 12 and 21. Finally, Appellant denied that he

“has any duty to . . . refund[] the amount claimed by PGE” and Appellant

denied that PGE was entitled to relief on any of their claims. Id. at ¶¶ 24

and 27-44.

      On August 25, 2015, PGE filed a motion for judgment on the

pleadings. Within PGE’s brief in support of its motion for judgment on the

pleadings, PGE claimed that it was entitled to judgment in its favor because,

under the terms of the Oil and Gas Lease, Appellant specially warranted title

to the Leased Premises and, yet, Appellant did not have title to the vast

                                     -9-
J-A01023-17



majority of the premises. PGE’s Brief in Support, 8/25/15, at 13. According

to PGE, Appellant’s breach of the warranty of title permits PGE to recover

the money it paid to Appellant. Id. at 14. Further, PGE claimed, Appellant

“breached his agreement in the Order of Payment that provided that PGE

could proportionally reduce the amount owing to [Appellant] if PGE

determined that [Appellant] did not own all the rights that he claimed.” Id.

at 16.2

       Appellant answered PGE’s motion and claimed that PGE was not

entitled to judgment in its favor because: PGE drafted the documents and,

within the documents, PGE did not explicitly declare that it had the right to a

refund of its payment in the event the lessor did not own the Leased

Premises; the special warranty provision in the Lease does not provide PGE

with an avenue for relief because “PGE has not alleged in its complaint that

any hostile claimant has appeared to evict PGE and has not alleged any facts

that PGE has purchased or leased any interest from such hostile third party

claimant;” PGE’s only remedy is to “surrender and cancel the Lease;” PGE

had “the exclusive duty to ascertain title” to the oil and gas and PGE’s

payment to Appellant, without PGE’s full knowledge of the facts, constituted


____________________________________________


2
  In PGE’s brief in support of its motion for judgment on the pleadings, PGE
declared that it was not moving for judgment on the pleadings with respect
to its unjust enrichment claim, as “unjust enrichment is an equitable theory
that necessarily involves a weighing of the equities as to the parties.” PGE’s
Brief in Support, 8/25/15, at 13 n.3.



                                          - 10 -
J-A01023-17



a “voluntary” payment that it is not entitled to recoup; PGE’s unjust

enrichment claim lacks merit because PGE had the duty to determine title

and failed to do so and because PGE “made the payment to [Appellant] in a

totally voluntary manner;” and, “public policy precludes equity from granting

PGE relief” because “no oil and gas company in the Commonwealth of

Pennsylvania . . . has ever asked a court to force a property owner to pay

back the ‘sign up’ money.” Appellant’s Answer to PGE’s Motion for Judgment

on the Pleadings, 11/24/15, at 7, 9, 10, 12, 17, and 21-22.        Moreover,

Appellant claimed that the trial court should enter judgment on the

pleadings in his favor because “the language of the Lease and most

especially the language of the Order of Payment expressly placed an

affirmative duty on PGE to make a diligent, searching and full title search

. . . before it approved the Lease and before it issued the payment.” Id. at

25-26. Appellant argued that, since PGE made the payment, “PGE cannot be

heard to complain that it did not fulfill the duty which it chose to assume by

drafting the documents the way it drafted them.” Id. at 26.

      On June 1, 2016, following oral argument, the trial court granted PGE’s

motion for judgment on the pleadings and entered judgment on behalf of

PGE and against Appellant, in the amount of $238,551.19, plus interest.

Trial Court Order, 6/1/16, at 1. Appellant filed a timely notice of appeal and

now raises four claims to this Court:

        [1.] Did the failure of PGE to complete a record title search
        prior to its claimed approval of the Lease and its voluntary
        payment to [Appellant] constitute a failure by PGE to

                                    - 11 -
J-A01023-17


        properly accept the offer of [Appellant] such that the Lease
        never became operative which meant that the trial court
        erred in granting judgment in favor of PGE?

        [2.] Alternatively to question [one] above, and assuming
        arguendo that PGE accepted the offer by [Appellant], did
        said failures by PGE, as above described, place PGE in
        material breach of its duties, conditions and conditions
        precedent such that the trial court erred in granting
        judgment to PGE and thus, violated the rule that a party
        that has breached a contract may not insist upon
        performance by [Appellant] the non-breaching party?

        [3.] Do the failures of PGE, as above described, and the
        pleadings as a whole show that PGE does not have any
        cause of action against [Appellant] and thus, the trial court
        erred when it failed to grant judgment against PGE and in
        favor of [Appellant]?

        [4.] Alternatively, did the trial court err in not providing
        [Appellant] with an opportunity to file amended responsive
        pleadings when it granted judgment to PGE on the motion
        for judgment on the pleadings filed by PGE?

Appellant’s Brief at 3 (some internal capitalization omitted).

      We have stated:

        Entry of judgment on the pleadings is permitted under
        Pennsylvania Rule of Civil Procedure 1034, which provides
        that “after the pleadings are closed, but within such time as
        not to unreasonably delay trial, any party may move for
        judgment on the pleadings.” Pa.R.C.P. 1034(a). A motion
        for judgment on the pleadings is similar to a demurrer. It
        may be entered when there are no disputed issues of fact
        and the moving party is entitled to judgment as a matter of
        law.

        Appellate review of an order granting a motion for judgment
        on the pleadings is plenary. The appellate court will apply
        the same standard employed by the trial court. A trial court
        must confine its consideration to the pleadings and relevant
        documents. The court must accept as true all well pleaded
        statements of fact, admissions, and any documents properly

                                     - 12 -
J-A01023-17


        attached to the pleadings presented by the party against
        whom the motion is filed, considering only those facts which
        were specifically admitted.

        We will affirm the grant of such a motion only when the
        moving party's right to succeed is certain and the case is so
        free from doubt that the trial would clearly be a fruitless
        exercise.

Rourke v. Pennsylvania Nat’l Mut. Cas. Ins. Co., 116 A.3d 87, 92 (Pa.

Super. 2015) (some internal quotations and citations omitted).

     “The object in interpreting instruments relating to oil and gas

interests, like any written instrument, is to ascertain and effectuate the

intention of the parties.” Szymanowski v. Brace, 987 A.2d 717, 720 (Pa.

Super. 2009) (internal citations and quotations omitted).        Our Supreme

Court has held:

        The fundamental rule in interpreting the meaning of a
        contract is to ascertain and give effect to the intent of the
        contracting parties. The intent of the parties to a written
        agreement is to be regarded as being embodied in the
        writing itself. The whole instrument must be taken together
        in arriving at contractual intent. Courts do not assume that
        a contract’s language was chosen carelessly, nor do they
        assume that the parties were ignorant of the meaning of the
        language they employed. When a writing is clear and
        unequivocal, its meaning must be determined by its content
        alone.

        Only where a contract’s language is ambiguous may
        extrinsic or parol evidence be considered to determine the
        intent of the parties. A contract contains an ambiguity if it
        is reasonably susceptible of different constructions and
        capable of being understood in more than one sense. This
        question, however, is not reviewed in a vacuum. Instead,
        contractual terms are ambiguous if they are subject to more
        than one reasonable interpretation when applied to a
        particular set of facts.


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J-A01023-17



Murphy v. Duquesne Univ. of the Holy Ghost, 777 A.2d 418, 429-430

(Pa. 2001) (internal quotations and citations omitted). Moreover, “[i]t has

long been accepted in contract law that an ambiguous written instrument

presents a question of fact for resolution by the finder-of-fact, whereas the

meaning of an unambiguous written instrument presents a question of law

for resolution by the court.” Cmty. Coll. of Beaver County v. Cmty. Coll.

of Beaver County, Soc. of the Faculty (PSEA/NEA), 375 A.2d 1267,

1275 (Pa. 1977).

     Appellant first claims that “the Lease never became operative” and

that the trial court thus erred in granting judgment in favor of PGE.

Specifically, Appellant claims, PGE did not properly accept Appellant’s offer

to lease his property because PGE failed “to complete a record title search

prior to its claimed approval of the Lease” and PGE “voluntarily” tendered

payment to Appellant. Appellant’s Brief at 16-23. Appellant writes:

        PGE drafted and presented to [Appellant] three documents
        which were the Lease, the Addendum[,] and the Order of
        Payment.      When [Appellant] signed them, these three
        documents collectively constituted an offer by [Appellant,]
        which invited the acceptance of PGE. The Order of Payment
        specifically and exclusively controlled the manner, means[,]
        and mode by which a proper acceptance could take place.
        PGE did not properly accept the offer because it failed to
        perform required conditions. PGE failed to conduct a record
        title search of the oil and gas rights and failed to ascertain
        the “correct” title ownership of [Appellant].       Thus, the
        contract was never formed and the Lease never became
        operative before PGE made a voluntary payment to
        [Appellant] for which it has no legal basis to seek
        reimbursement.



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J-A01023-17



Appellant’s Brief at 9.

      Appellant’s claim fails.   Indeed, this Court rejected a substantively

identical argument in Cardinale v. R.E. Gas Dev., LLC, 74 A.3d 136 (Pa.

Super. 2013).    In the Cardinale case, Lucinda A. Cardinale (“Cardinale”)

and Iola Hugney (“Hugney”) filed a class action complaint against R.E. Gas

Development, LLC (“R.E. Gas”) and Rex Energy Corporation (“Rex Energy”)

(hereinafter, collectively, “the defendants”), on behalf of themselves and on

behalf of all those similarly situated. Within their complaint, Cardinale and

Hugney claimed that, in 2008, the defendants entered into Marcellus Shale

oil and gas leases with a number of individuals in Pennsylvania, including

with Cardinale and Hugney.

      Cardinale and Hugney claimed that they signed the oil and gas lease,

an addendum, and an order for payment, and then delivered the executed

documents either to R.E. Gas or to R.E. Gas’ agent and landman, Western

Land Services, Inc. R.E. Gas then “executed and accepted” the documents

from Cardinale on July 23, 2008 and from Hugney on August 6, 2008.

Cardinale and Hugney claimed:

        Under the terms of [] Cardinale’s Oil and Gas Lease, R.E.
        Gas had to pay [] Cardinale $105,875.00 within [60]
        banking days of its receipt of [] Cardinale’s order for
        payment and executed oil and gas lease, which occurred on
        or shortly after July 23, 2008. R.E. Gas’s obligation to pay
        was subject only “to its inspection, approval of the surface,
        geology and title” of the leased premises.

        Under the terms of [] Hugney’s Oil and Gas Lease, R.E. Gas
        had to pay [] Hugney $71,925.00 within [60] banking days


                                    - 15 -
J-A01023-17


        of its receipt of [] Hugney’s order for payment and executed
        oil and gas lease, which occurred on or shortly after August
        6, 2008. R.E. Gas’s obligation to pay was subject only “to
        its inspection, approval of the surface, geology and title” of
        the leased premises.

Cardinale and Hugney Complaint, 10/25/11, at ¶¶ 25-26 (paragraph

numbering omitted).

      According to the complaint, after the 60-day time period expired, the

defendants “den[ied] that any contract or lease interest exist[ed] between

[the defendants and Cardinale, Hugney,] or those similarly situated to

[Cardinale and Hugney]” and the defendants failed to pay the bonuses or

rents due to the landowners. Id. at ¶¶ 28-29. The Cardinale and Hugney

Complaint contained three counts:     breach of contract against R.E. Gas;

tortious interference with contract against Rex Energy; and, civil conspiracy

against both defendants.

      In relevant part, the oil and gas lease between Hugney and R.E. Gas

read as follows:

                           OIL AND GAS LEASE
                               (PAID UP)

        Project: Skywalker III
        THIS AGREEMENT is made as of the 6th day of AUGUST,
        2008, by and between Iola Hugney . . . as Lessor, and R.E.
        Gas Development, LLC, . . . as Lessee.

            1. Lessor, for and in consideration of One Dollar ($1.00),
        and other good and valuable consideration, the receipt of
        which is hereby acknowledged, and the covenants and
        agreements of the Lessee hereinafter contained, does
        hereby grant, lease and let unto Lessee the land described
        below, including all interests therein Lessor may acquire by
        operation of law, reversion or otherwise, (herein called the

                                    - 16 -
J-A01023-17


       “Leasehold Estate”), exclusively, for the purposes of
       exploring by geophysical and other methods, drilling,
       operating for and producing oil and/or gas from any strata
       and any depth . . . together with all rights, privileges and
       easements . . . useful or convenient in connection with the
       foregoing and in connection with treating, storing, caring
       for, transporting and removing oil and/or gas produced from
       the Leasehold Estate. . . .

           2. It is agreed that this lease shall remain in force for a
       primary term of five (5) years from the date of this lease,
       and as long thereafter as operations are conducted upon the
       Leasehold Estate or on lands pooled or unitized therewith
       with no cessation for more than 90 consecutive days. . . .

           3. Within sixty (60) days from the date of execution of
       this lease, Lessee agrees to pay to the Lessor the sum of
       [$71,925.00] as full and complete bonus payment for this
       lease for the entire primary term of this lease. This is a
       paid-up lease and no delay rentals shall be due. The bonus
       paid hereunder is consideration for this lease and shall not
       be allocated as mere rental for a period.

          4. Lessee covenants and agrees to pay the following
       royalties: [stating the computation of royalties]. . . .

                                    ...

       /s______________
       Iola Hugney

                                    ...

       This instrument was prepared by Timothy J. Kotzman, agent
       for R.E. Gas Development LLC. . .

Oil and Gas Lease between Hugney and R.E. Gas, 8/6/08, at 1-4.

     The order for payment then declared:

                         ORDER FOR PAYMENT

       Lessee shall, subject to its inspection, approval of the
       surface, geology and title, make payment to Lessor as

                                   - 17 -
J-A01023-17


        indicated herein by check within 60 banking days of
        Lessee’s receipt of this Order For Payment and the executed
        Oil and Gas Lease associated herewith. No default shall be
        declared for failure to make payment until 20 days after
        written notice from Lessor of intention to declare such
        default. . . .

        For collection, the original copy herein must be submitted
        directly to Lessee at the address below along with an
        executed original Oil and Gas Lease.

        PAYEE (Lessor):            Iola Hugney

        Address:                   ...

        Phone:                     ...

        The amount of:             ($71,925.00) Dollars

        This payment represents full consideration for a Five (5)
        year paid-up Oil and Gas Lease dated August 6, 2008
        covering the following described lands: [stating a
        description of the land].

                                    ...

        Issued on behalf of Lessee by:

        /s_______________________
        Timothy J. Kotzman, Agent


        R.E. Gas Development LLC

                                    ...

            This Order for Payment expires one year from date of
        issuance, unless paid sooner, terminated or replaced by
        Lessee.

                                    ...

Order for Payment, 8/6/08, at 1.



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      The defendants filed preliminary objections to the Cardinale and

Hugney Complaint.       As this Court explained, within their preliminary

objections, the defendants claimed that “the parties never entered into a

binding lease/contract” because the following, highlighted language in the

“Order for Payment” created a condition precedent to contract formation:

        Lessee[, i.e., R.E. Gas,] shall, subject to its inspection,
        approval of the surface, geology and title, make
        payment to Lessor[, i.e., the Cardinale and Hugney
        plaintiffs] as indicated herein by check within 60 days of
        Lessee's receipt of this Order For Payment and the executed
        Oil and Gas Lease associated herewith.

Cardinale, 74 A.3d at 139 (emphasis in original).

      The defendants claimed that:

            the provision of the Proposed Leases and the Orders for
            Payment was merely an invitation to bargain on the part
            of R.E. Gas. Then [the Cardinale and Hugney plaintiffs],
            by signing and returning the Proposed Leases and
            Orders for Payment, made offers to R.E. Gas to enter
            into the Proposed Leases and Orders for Payment under
            the terms and conditions contained in those documents.

Cardinale, 74 A.3d at 138-139.

      According to the defendants in Cardinale, since R.E. Gas “explicitly

rejected [the Cardinale and Hugney plaintiffs’] offers in Rejection Letters . . .

no contracts that include Bonus Payments were ever formed.” Id.

      The trial court sustained the defendants’ preliminary objections and

dismissed the Cardinale and Hugney Complaint. Cardinale and Hugney filed

a notice of appeal and we vacated the trial court’s order. Within this Court’s




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J-A01023-17



opinion, we held that the trial court erred when it concluded that “the parties

never entered into contracts/leases.” Id. at 140.

       The Cardinale Court held:       “the language utilized in the lease

agreement documents strongly indicates that the parties manifested an

intent to be bound by the terms of the documents[;] that the terms of the

documents were sufficiently definite[, and,] that consideration existed.”

Cardinale, 74 A.3d at 141. Further, we held that “[n]o language contained

in the ‘Order for Payment’ alter[ed] [our] conclusion” that a valid contract

between the Cardinale and Hugney plaintiffs and R.E. Gas existed.          Id.

First, we cited to the following language in the Order for Payment:

         Lessee[, i.e., R.E. Gas,] shall, subject to its inspection,
         approval of the surface, geology and title, make payment to
         Lessor[, i.e. Hugney,] as indicated herein by check within
         60 banking days of Lessee’s receipt of this Order For
         Payment and the executed Oil and Gas Lease associated
         herewith.

Hugney’s Order for Payment, 8/6/08, at 1; see also Cardinale, 74 A.3d at

141.

       On appeal in Cardinale, the defendants claimed that the above

language “created a condition precedent to the formation of an agreement.”

Cardinale, 74 A.3d at 141. We disagreed with the defendants and held:

         The conditional language in the “Order for Payment” does
         not directly relate to the existence of an agreement
         between R.E. Gas and [Hugney]. Rather, the language
         deals with R.E. Gas's duty of performance. R.E. Gas is
         required to perform by paying [Hugney] as indicated in the
         “Order for Payment,” subject to the conditions stated
         therein. Consequently, this provision in the “Order for

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J-A01023-17


        Payment” does not render the parties' lease agreements
        invalid.

Id. at 141-142.

      In the case at bar, Appellant repeats the very argument that this Court

rejected in Cardinale. In particular, as in Cardinale, Appellant claims that

no contract was ever formed because the lessee did not properly accept the

landowner’s offer. See Appellant’s Brief at 22; Cardinale, 74 A.3d at 139.

Further, as was also true in Cardinale, Appellant claims that the terms in

the Order of Payment “created a condition precedent to the formation of an

agreement.” See Appellant’s Brief at 17; Cardinale, 74 A.3d at 138-139.

In this case, Appellant claims that, since PGE “failed to conduct a record title

search of the oil and gas rights,” as required under the Order of Payment,

PGE “did not properly accept [Appellant’s] offer” to lease the land.

Appellant’s Brief at 9 and 20.    Our reasoning in Cardinale applies to the

argument Appellant currently brings to this Court.       Thus, we paraphrase

Cardinale and hold, as to Appellant:

        the language utilized in the lease agreement documents []
        indicates that [PGE and Appellant] manifested an intent to
        be bound by the terms of the documents[;] that the terms
        of the documents were sufficiently definite[, and,] that
        consideration existed. . . . No language contained in the
        “Order [of] Payment” alters this conclusion.

                                      ...

        The conditional language in the “Order [of] Payment” does
        not directly relate to the existence of an agreement
        between [PGE and Appellant]. Rather, the language deals
        with [PGE’s] duty of performance. [PGE] is required to
        perform by paying [Appellant] as indicated in the “Order

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J-A01023-17


         [of] Payment,” subject to the conditions stated therein.
         Consequently, this provision in the “Order [of] Payment”
         does not render the parties' lease agreements invalid.

Cardinale, 74 A.3d at 141-142.

      Appellant’s claim on appeal thus fails.

      Second, Appellant claims that, even if a contract existed between PGE

and Appellant, PGE breached the contract by failing to “do a title search and

[] ascertain the percentage ownership of [Appellant] prior to making any

payment.”      Appellant’s Brief at 30.      Appellant claims that, since PGE

breached the contract, “it cannot now try to sue the non-breaching party,

[Appellant], when the very act which gives rise to the claim and to the

existence of the lessor and lessee relationship was inexorably connected to

that which PGE failed to do.”     Id. (internal capitalization omitted).   This

claim fails.

      Again, the Order of Payment declares:

         Conditioned on approval of the agreement associated
         herewith and on approval of title to same, Lessee will make
         payment as indicated herein by check within 60 business
         days of receipt of the agreement by Lessee at Lessee’s
         business office address noted above. No default shall be
         declared for failure to make payment until 30 days after
         receipt of written notice from payee of intention to declare
         such default.

                                      ...

         In the event Lessee determines by record title search that
         payee’s interest in the leased premises is either greater or
         less than stated above, this payment may be proportionally
         increased or reduced by Lessee to reflect the correct
         interest. In such event, payee shall be furnished copies of
         pertinent instruments evidencing the correct interest.

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J-A01023-17




Order of Payment, dated 11/1/14, at 1 (some internal bolding omitted).

      According to Appellant, the above language constitutes “a promise and

covenant” on PGE’s part, that PGE would “perform a title search before it

made payment.”      Appellant’s Brief at 30.      Appellant claims that PGE

breached this duty and, as a result of the breach, PGE “may not insist on

performance of the contract by the non-breaching party.” Id. at 25, quoting

McCausland v. Wagner, 78 A.3d 1093, 1101 (Pa. Super. 2013).

      To establish a breach of contract, a party must establish:      “(1) the

existence of a contract, including its essential terms[;] (2) a breach of a

duty imposed by the contract[; and,] resultant damages.” Hart v. Arnold,

884 A.2d 316, 332 (Pa. Super. 2005).

      Appellant’s claim on appeal fails because PGE did not have a “duty” to

Appellant to perform the title search.   Rather, the provision regarding the

title search constituted a contractual condition on PGE’s duty to pay

Appellant the contractual bonus.    See Restatement (Second) of Contracts

§ 224 (“[a] condition is an event, not certain to occur, which must occur,

unless its non-occurrence is excused, before performance under a contract

becomes due”).    Indeed, the provision explicitly declared that payment of

the bonus was “conditioned on . . . [PGE’s] approval of title to” the property.

Order of Payment, dated 11/1/14, at 1. Thus, the provision declared that,

prior to payment, PGE was entitled to “approv[e] title” to its own

satisfaction. Simply stated, PGE’s failure to approve title prior to payment


                                    - 23 -
J-A01023-17



did not “breach” any “duty” PGE owed to Appellant. Appellant’s claim to the

contrary fails.

      Third, Appellant claims that PGE “failed to state a cause of action

under Count 1 of the complaint (Unjust Enrichment)” since:         “it made a

voluntary payment to [Appellant]” and “unfairly sought to shift attention to

the daughter of [Appellant and] drafted the Order of Payment which created

an extended period of time for it to properly act.” Appellant’s Brief at 34-49.

This claim immediately fails because PGE did not move for judgment on the

pleadings with respect to its unjust enrichment claim – and the trial court did

not grant PGE’s motion on such a claim.         See PGE’s Brief in Support of

Motion for Judgment on the Pleadings, 8/25/15, at 13 n.3 (PGE declared that

it was not moving for judgment on the pleadings on its unjust enrichment

claim, as “unjust enrichment is an equitable theory that necessarily involves

a weighing of the equities as to the parties”); Trial Court Opinion, 6/1/16, at

3-4 (“[a] title search[] showed [Appellant] did not in fact own the oil, gas,

and mineral rights to a substantial amount of the leased premises and that

he himself had previously conveyed his interest. This is a clear breach of the

terms of the lease by [Appellant]”).

      Finally, Appellant claims that the trial court erred in granting PGE

judgment on the pleadings without providing him with an opportunity to

amend his pleadings. This claim fails because Appellant did not request that

the trial court provide him with leave to amend and Appellant did not file an

amended pleading on his own behalf. Pa.R.A.P. 302(a) (“[i]ssues not raised

                                       - 24 -
J-A01023-17



in the lower court are waived and cannot be raised for the first time on

appeal”); Capobianchi v. BIC Corp., 666 A.2d 344, 346 (Pa. Super. 1995)

(“[p]leadings may be amended at the discretion of the trial court after

pleadings are closed, while a motion for judgment on the pleadings is

pending, at trial, after judgment, or after an award has been made and an

appeal taken therefrom”) (internal quotations and citations omitted).

     Order affirmed. Jurisdiction relinquished.



Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 2/13/2017




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