                                                                          F I L E D
                                                                   United States Court of Appeals
                                                                           Tenth Circuit
                      UNITED STATES COURT OF APPEALS
                                                                           OCT 9 2001
                                 TENTH CIRCUIT
                                                                      PATRICK FISHER
                                                                                Clerk


RICKS EXPLORATION, INC.,

          Plaintiff-Appellant,
                                                 Nos. 99-6370 and 00-6075
v.                                             (Western District of Oklahoma)
                                                  (D.C. No. 98-CV-1470)
CROSS TIMBERS OIL COMPANY,

          Defendant-Appellee.




                             ORDER AND JUDGMENT *


Before LUCERO, McKAY, and MURPHY, Circuit Judges.


I. INTRODUCTION

      Ricks Exploration, Inc. (“Ricks”) brought suit against Cross Timbers Oil

Co. (“Cross Timbers”) in district court asserting, inter alia, various claims

sounding in both contract and tort. The district court granted summary judgment

in favor of Cross Timbers on each of the contract and tort claims and also

awarded it costs as the prevailing party under Federal Rule of Civil Procedure


      *
       This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
54(d)(1). Ricks appeals both orders. This court exercises jurisdiction over these

appeals pursuant to 28 U.S.C. § 1291 and Federal Rule of Civil Procedure 54(b) 1

and affirms.



II. BACKGROUND

      A. Factual Background

      Those facts necessary to provide context to this appeal, stated in the

manner most favorable to Ricks as the nonmoving party, are as follows. This

litigation centers upon the meaning of an Exploration Agreement entered into

between Ricks and Southland Royalty Co. (“Southland”). At the time of the



      1
        After Ricks filed its notice of appeal in No. 99-6370, this court noted a
potential jurisdictional issue and ordered the parties to file supplemental briefs
addressing this court’s jurisdiction. We noted the district court’s grant of
summary judgment did not resolve all claims set forth in Ricks’ first amended
complaint and that, instead, the parties jointly stipulated to the dismissal of the
remaining claims without prejudice. Parties may not confer appellate jurisdiction
on this court as to claims dismissed on the merits by voluntarily dismissing
remaining claims without prejudice. See Hennigh v. City of Shawnee, 155 F.3d
1249, 1252-53 (10th Cir. 1998); Heimann v. Snead, 133 F.3d 767, 769 (10th Cir.
1998). Both parties filed briefs noting that the district court’s Final Judgment and
Stipulation of Dismissal contained a Rule 54(b) certification directing entry of
final judgment as to the claims dismissed on the merits and finding that there was
no just reason for delaying entry of such final judgment. This court has reviewed
the record and finds that it fully supports the district court’s entry of a Rule 54(b)
certification. See McKibben v. Chubb, 840 F.2d 1525, 1528-29 (10th Cir. 1988).
Accordingly, this court has subject matter jurisdiction pursuant to 28 U.S.C. §
1291. See Matosantos Commercial Corp. v. Applebee’s Int’l, Inc., 245 F.3d 1203,
1205 (10th Cir. 2001).

                                         -2-
execution of the Exploration Agreement, Southland owned unproven oil and gas

leasehold interests covering large tracts of land in Texas County, Oklahoma.

Upon learning of Southland’s interests in the leaseholds, Ricks approached

Southland about the possibility of establishing a drilling program whereby Ricks

would drill for gas or oil and, if successful, earn the rights to certain acreage

within Southland’s leaseholds. In return, depending on whether Southland chose

to participate in the drilling of any particular well and the extent of its

participation, Southland would retain a twenty percent overriding royalty interest,

a fifty percent interest in the well itself, or something in between. After lengthy

negotiations and the exchange of numerous drafts, Ricks and Southland reached

the agreement embodied in the Exploration Agreement.

      The Exploration Agreement identified six different prospect areas,

denominated Prospect A through F, within which Ricks could initiate drilling

operations. The dispute in this case relates to the rights Ricks acquired based

upon its drilling operations in Prospect A. 2 Prospect A is comprised of sections

22, 26, 27, 34, and 35. 3 Under the Exploration Agreement, Ricks was to drill an




      2
       A pictorial depiction of Prospect A, along with sections 3 and 15, is
attached as an appendix to this opinion.
      3
       In Texas County, acreage is divided into 640 acre sections. Under the
terms of the Exploration Agreement, each section was further broken down into
spacing units of 80 acres for oil wells and 160 acres for gas wells.

                                           -3-
Initial Test 4 in section 27. 5 If the Initial Test were capable of producing oil or gas

in commercial quantities and Southland did not participate in the drilling, Ricks

would earn a full interest in section 27 and an assignment of fifty percent of

Southland’s rights in eight adjacent spacing units. The Exploration Agreement

provided that the parties were to reach “mutual consent” as to which eight

adjacent spacing units Ricks would earn.

      As contemplated by the Exploration Agreement, Ricks ultimately drilled its

Initial Test on Prospect A in section 27. Because the Initial Test produced gas in

commercial quantities and because Southland had not participated in the drilling

of the initial test, Ricks earned 100% of Southland’s rights in section 27. In

addition, Ricks earned a fifty percent interest in the following eight 160-acre

quarter-sections (i.e. gas well spacing units): the southwestern and southeastern


      4
        Paragraph 2 of the Exploration Agreement set forth the following
definitions:

      A.     Initial Test - The first well, or substitute therefor (as
             hereinafter defined), drilled on a Prospect
      B.     Development Well - A well drilled on acreage earned by
             [Ricks] by the completion of an Initial Test
      C.     Extension Well - A well drilled on [Southland] acreage that is
             adjacent to acreage earned by [Ricks] pursuant to Paragraph
             8. C. below
      D.     Discovery Well - A Development Well or Extension Well that
             meets the criteria described in Paragraph 12. below
      5
       Prospect A is the only prospect in which the Exploration Agreement
specifically established where the Initial Test would be drilled.

                                          -4-
quarter-sections of section 22, the northwestern and southwestern quarter-sections

of section 26, the northwestern and northeastern quarter-sections of section 34,

and the northwestern and northeastern quarter-sections of section 35. 6

      The Exploration Agreement also contemplated that Ricks could earn

additional acreage by drilling Development Wells on land it earned through the

drilling of the Initial Test. 7 Under the provisions of the Exploration Agreement

relating to Development Wells, for every Development Well drilled which

produces the requisite amount of oil or gas, Ricks “shall have the right . . . to

extend the field beyond the limits of the acreage earned by the drilling of a

particular Initial Test, one drilling and spacing unit at a time (whether within or

outside the boundaries of a Prospect).” In 1997, after Cross Timbers succeeded to

Southland’s position in the Exploration Agreement, Ricks drilled or participated

in the drilling of conforming Development Wells in the northern half of Section

34 and the southern half of section 22. 8 Accordingly, pursuant to the terms of the




      6
       Section 27, along with each of these eight quarter-sections is shaded dark
grey in the pictorial representation of Prospect A attached to this opinion.
      7
          See supra note 4 (setting forth definition of Development Well).
      8
        These wells were conforming Development Wells because they were
drilled on lands earned by Ricks through the drilling of the Initial Test. They also
qualified as Discovery Wells because they produced the requisite amount of gas
during the first three months of production. See supra note 4 (defining Discovery
Wells).

                                          -5-
Exploration Agreement, Cross Timbers conveyed to Ricks a fifty percent interest

in the northern half of section 22 and the southern half of section 34. 9

      The trouble at the heart of this dispute began when Ricks asserted the right

to drill wells on section 3. Section 3 is outside of Prospect A, lying directly south

of Section 34. During a series of discussions in the fall of 1998, representatives

of Cross Timbers asserted that the Exploration Agreement prohibited the drilling

of wells on section 3 because any such well would not qualify as either a

Development Well or a Extension Well. 10 Cross Timbers further indicated that it

intended to drill its own well on section 3. For its part, Ricks asserted that

paragraph 12 of the Exploration Agreement, the paragraph relating to Extension

and Development Wells, gave it the absolute right to extend to the field to spacing


      9
       The acreage earned in sections 22 and 34 through the drilling of these
Development Wells is identified by the light grey shading in the pictorial
representation of Prospect A attached to this opinion.
      10
         Cross Timbers advanced the following interpretation of the Exploration
Agreement in support of its conclusion that Ricks was not entitled to drill on
section 3. The Exploration Agreement defines Development Well as “[a] well
drilled on acreage earned by [Ricks] by the completion of an Initial Test.”
Because none of the land in section 3 was earned by Ricks after the drilling of the
Initial Test, a well drilled on section 3 could not constitute a Development Well.
Furthermore, the Exploration Agreement defines Extension Well as “[a] well
drilled on [Cross Timbers] acreage that is adjacent to acreage earned by [Ricks]
pursuant to Paragraph 8. C. [i.e., those provisions of the Exploration Agreement
relating to the drilling of the Initial Test].” Cross Timbers asserted that wells
drilled on section 3 would not qualify as Extension Wells because no part of
section 3 was “adjacent” (i.e., contiguous) to any of the acreage Ricks earned
upon the drilling of the Initial Test.

                                          -6-
units both inside and outside of Prospect A as necessary to fully develop any gas

or oil field discovered through its drilling operations. 11

      B. Procedural Background

      On October 20, 1998, Ricks filed a complaint in district court seeking the

following two forms of declaratory relief: (1) a declaration that the Exploration

Agreement gave it the right to drill a well on section 3; and (2) a declaration that

Cross Timbers had elected not to participate in the drilling of the well in section 3

proposed by Ricks. Two days later, Ricks filed a motion for a preliminary

injunction, asking the district court to enjoin Cross Timbers from drilling its own

proposed well in section 3. After the district court denied Ricks’ request for a

preliminary injunction, Ricks filed an amended complaint asserting, inter alia,

two contract claims and four tort claims. 12 In its contract-based causes of action,

      11
        Paragraph 12 of the Exploration Agreement provides, in relevant part, as
follows:

      As to any Development Well or Extension Well (as defined below)
      drilled pursuant hereto that averages 50 BOPD and/or 200 MCFPD
      during the first three (3) months of production (a “Discovery Well”),
      [Ricks] shall have the right, but not the obligation, to extend the field
      beyond the limits of the acreage earned by the drilling of a particular
      Initial Test, one drilling and spacing unit at a time (whether within or
      outside the boundaries of a Prospect). [Southland] shall have the
      right to participate in any well drilled on the extended acreage (an
      “Extension Well”) with up to 50% of its interest in the extended
      acreage. . . .
      12
        For the first time in its amended complaint, Ricks asserted that an
identical dispute existed between the parties as to the rights to drill in section 15,

                                           -7-
Ricks asserted as follows: (1) Cross Timbers had breached the Exploration

Agreement by refusing to recognize Ricks’ exclusive right to drill in sections 3

and 15; and (2) assuming the Exploration Agreement as drafted did not give Ricks

the exclusive right to drill in sections 3 and 15, the contract should be reformed

on the ground that it contained a mutual mistake. Ricks further alleged the

following four tort-based causes of action: (1) Cross Timbers had breached its

fiduciary duty to Ricks by hindering Ricks’ ability to earn additional acreage

under the Exploration Agreement; (2) Cross Timbers’ drilling activities in section

15 amounted to a bad faith trespass; (3) Cross Timbers’ conduct with regard to

sections 3 and 15 violated the implied covenant of good faith and fair dealing;

and (4) Cross Timbers had tortiously interfered with Ricks’ prospective economic

relationships.

      After Ricks filed its amended complaint, both parties filed cross motions

for summary judgment. In their respective motions for summary judgment, each

party asserted that the Exploration Agreement was unambiguous. For its part,

Ricks asserted paragraph 12 of the Exploration Agreement established its own

definition of an Extension Well, independent of the definition set out in paragraph

2(c), and that the definition in paragraph 12 did not contain an adjacency



the section immediately to the north of section 22. In fact, at the time of the
filing of the amended complaint, Cross Timbers had already drilled two gas wells
in section 15.

                                         -8-
limitation. Ricks further asserted that its reading of paragraph 12 was supported

by the circumstances surrounding the formation of the Exploration Agreement. In

any event, Ricks asserted that even assuming the adjacency limitation set out in

paragraph 2(c) did apply to paragraph 12, adjacent does not necessarily mean

contiguous or touching. 13 In its separate motion for summary judgment, Cross

Timbers asserted that unless the definition of Extension Well in paragraph 2(c) of

the Exploration Agreement applied to paragraph 12, it would not apply anywhere

in the agreement because paragraph 12 was the only portion of the Exploration

Agreement dealing with Extension Wells. Cross Timbers further asserted that the

four corners of the Exploration Agreement and the circumstances surrounding its

formation, considered either singly or in combination, demonstrated that the

adjacency requirement set out in paragraph 2(c) required that Extension Wells

only be drilled on land contiguous to acreage earned by the drilling of the Initial

Test. Finally, Cross Timbers asserted that Ricks’ mutual mistake claim failed

because the Exploration Agreement was unambiguous and that each of Ricks’ tort

claims failed because the agreement did not create a fiduciary relationship and did

not provide Ricks any rights in sections 3 and 15.



      13
        Although Ricks did assert in its summary judgment motion that the
Exploration Agreement was unambiguous, it did hedge that assertion in a footnote
where it stated as follows: “If the Court finds Cross Timbers’ interpretation
reasonable . . . then the agreement is ambiguous.”

                                         -9-
      Upon consideration of the parties’ submissions, the district court granted

summary judgment in favor of Cross Timbers. As to the contract claim, the

district court concluded that language of the Exploration Agreement, considered

in light of the circumstances surrounding its execution, unambiguously required

that Extension Wells be drilled on lands contiguous to lands earned through the

drilling of the Initial Test. Because it concluded that the Exploration Agreement

was unambiguous, the district court concluded that the doctrine of mutual mistake

was inapplicable as a matter of law. Finally, as to Ricks’ four tort-based causes

of action, the district court concluded as follows: (1) Ricks’ claims of breach of

fiduciary duty failed because the Exploration Agreement did not create a joint

venture so as to give rise to any fiduciary duties on the part of Cross Timbers;

(2) Ricks’ trespass claim failed because Ricks had no rights to sections 3 and 15

under the Exploration Agreement; (3) Ricks’ claim regarding the covenant of

good faith and fair dealing failed because Oklahoma courts would not extend the

duty of good faith to commercial contracts and, in any event, the conduct at issue

here amounted to no more than a simple breach of contract insufficient to support

to support a claim for breach of the implied covenant 14; and (4) Ricks’ claim of



      14
        In so concluding, the district court noted that its ruling did not preclude
Ricks from pursuing a “breach of contract claim arising from these asserted facts;
the Court’s decision in connection with Claim Five is limited solely to Ricks’ tort
claim for breach of the implied covenant of good faith and fair dealing.”

                                         -10-
tortious interference with prospective economic advantage failed because it did

not come forward with any evidence of actual loss of economic opportunities and

because Cross Timbers merely engaged in conduct to further its own legitimate

business and financial interests.



III. STANDARD OF REVIEW

      This court reviews a grant of summary judgment de novo, applying the

same legal standard utilized by the district court. See Commercial Union Ins. Co.

v. Sea Harvest Seafood Co., 251 F.3d 1294, 1297-98 (10th Cir. 2001). We also

review de novo the district court’s interpretation of the law of Texas, which

governs Ricks’ contract claims, and the law of Oklahoma, which governs Ricks’

tort claims. See Salve Regina Coll. v. Russell, 499 U.S. 225, 231 (1991) (“[A]

court of appeals should review de novo a district court’s determination of state

law.”). Summary judgment is appropriate “if the pleadings, depositions, answers

to interrogatories, and admissions on file, together with the affidavits, if any,

show that there is no genuine issue as to any material fact and that the moving

party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). This

standard requires that we view the evidence and draw all reasonable inferences

therefrom in the light most favorable to the nonmoving party. See Commercial

Union, 251 F.3d at 1298.


                                         -11-
IV. DISCUSSION

      A. Contract Claims 15

             1. Contract Interpretation

      On appeal, Ricks presents a two-pronged attack on the district court’s grant

of summary judgment in favor of Cross Timbers on the question of whether the

adjacency requirement in paragraph 2(c) applied to paragraph 12. 16 First, Ricks

asserts that paragraph 12 of the Exploration Agreement incorporates its own

definition of Extension Well, wholly independent of the definition of Extension

Well in paragraph 2(c), and that the definition of Extension Well in paragraph 12

does not contain an adjacency limitation. According to Ricks, its interpretation of

the Exploration Agreement is borne out by an analysis of the circumstances

surrounding the formation of the Exploration Agreement, particularly the

numerous draft agreements and letter of intent exchanged by the parties before the

Exploration Agreement was finally executed. Second, Ricks asserts that to the




      15
         The Exploration Agreement contains a clause providing that it “shall be
governed by and construed in accordance with the laws of the State of Texas.” In
light of this provisions, the parties have agreed throughout this litigation that
Texas law governs the resolution of the contract claims.
      16
        Ricks does not contend on appeal that the district court erred in setting
forth the relevant Texas law with regard to the construction of contracts. In fact,
throughout this litigation, the parties have agreed in all material respects as to the
contours of the law of Texas but have simply disagreed as to the proper
interpretation of the Exploration Agreement in light of applicable Texas law.

                                          -12-
extent that its interpretation of the Exploration Agreement is not the only

reasonable interpretation, the Exploration Agreement is ambiguous. 17

      Upon conducting a de novo review of the district court’s order, the parties’

briefs and contentions, and the entire record on appeal, we are in substantial

agreement with the district court’s analysis of the Exploration Agreement and see

no need to repeat that analysis. Accordingly, this court affirms the district court’s

grant of summary judgment in favor of Cross Timbers on the contract

interpretation claim for substantially those reasons set out in the district court’s

order. In so doing, we specifically note that the Exploration Agreement cannot

reasonably be read as setting forth two separate definitions of Extension Well.

Like the district court, this court concludes that Ricks’ interpretation of paragraph

12 reads paragraph 2(c) out of the Exploration Agreement. Finally, the

circumstances surrounding the formation of the Exploration Agreement, including


      17
         Before the district court, Ricks’ ambiguity argument took the following
two forms: (1) Ricks’ primary argument was that its interpretation of the
Exploration Agreement as setting forth two complementary definitions of
Extension Well was a reasonable interpretation and that, assuming Cross Timbers’
contrary interpretation of the Exploration Agreement was also reasonable, the
agreement was ambiguous; and (2) secondarily, Ricks asserted that the meaning
of the term “adjacent” in paragraph 2(c) was ambiguous in that it could mean
either “contiguous” or “near to.” Ricks did not, however, reassert the second
ambiguity argument in its brief on appeal. Furthermore, during oral argument
Ricks’ counsel conceded that the extrinsic evidence in this case indicates that the
parties viewed the term “adjacent” as meaning “contiguous” or “abutting.”
Accordingly, we do not consider this second aspect of Ricks’s ambiguity
argument in resolving this appeal.

                                         -13-
the numerous drafts exchanged by the parties, do not alter our conclusion that the

definition of Extension Well set out in paragraph 2(c) applies to paragraph 12.

             2. Mutual Mistake

      The district court rejected Ricks’ claim of mutual mistake, ruling as a

matter of Texas law that the doctrine of mutual mistake is unavailable when the

agreement at issue is unambiguous. In reaching that conclusion, the district court

relied on the opinion of the Court of Appeals of Texas in Baldwin v. New, 736

S.W.2d 148, 153 (Tex. App. 1987) (“[W]hen an agreement is unambiguous, the

defense of mutual mistake as to the meaning of the terms used is unavailable as a

matter of law.”). On appeal, Ricks argues that the district court erred in relying

on Baldwin because Baldwin is contrary to the subsequent decision of the Texas

Supreme Court in Williams v. Glash, 789 S.W.2d 261 (Tex. 1990).

      In Williams, the Texas Supreme Court held that a litigant could seek to

rescind a personal injury release on the ground of mutual mistake, despite the

unequivocal and unambiguous nature of the release. See id. at 264-65.

According to the Williams court,

      When mutual mistake is alleged, the task of the court is not to
      interpret the language contained in the release, but to determine
      whether or not the release itself is valid. We overrule [one of our
      own decisions] and disapprove [a decision of the court of appeals] to
      the extent that they give controlling weight to the language of the
      release to defeat a claim of mutual mistake.



                                         -14-
Id. at 265. The Williams court was careful, however, to note the very narrow

nature of the doctrine of mutual mistake:

       The doctrine of mutual mistake must not routinely be available to
       avoid the results of an unhappy bargain. Parties should be able to
       rely on the finality of freely bargained agreements. However, in
       narrow circumstances a party may raise a fact issue for the trier of
       fact to set aside a release under the doctrine of mutual mistake.

Id. at 265; see also Matlock v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA., 925

F. Supp. 468, 474 n.4 (E.D. Tex. 1996) (noting that, following the decision in

Williams, Texas courts have applied the doctrine of mutual mistake narrowly).

Furthermore, “[t]he question of mutual mistake is determined not by self-serving

subjective statements of the parties’ intent, which would necessitate trial to a jury

in all such cases” but, instead, by objective manifestations of the parties’ intent.

Id. at 264, 265. 18


       18
         In that regard, the facts of the case are particularly telling.
              Margaret Williams (“Williams”) was a passenger in her family
       car when it was struck from behind by a car driven by . . . Stephen
       Glash. While damage to [Williams’] car was apparent at the time of
       the accident, there were no observable injuries. Williams
       immediately contacted State Farm Mutual Automobile Insurance
       Company, Glash’s insurer, who advised Williams to bring the car to
       its local office for an appraisal of the property damage claims. State
       Farm estimated the cost of repairs at $889.46 and provided Williams
       a check payable for that precise amount.
              At the State Farm office, Williams was asked to complete a
       claim form containing a question as to whether anyone had been
       injured by the accident. She checked “No” in response. There was
       no negotiating or bargaining for release of a personal injury claim;
       only property damage to the car was discussed. Nonetheless, the

                                         -15-
      On appeal, Cross Timbers asserts that the decision in Williams is

inapplicable to this case because Williams involved an attempt to rescind a

contract, while in this case Ricks attempts to reform a narrow term of the

Exploration Agreement in a manner consistent with its litigation position. This

court concludes that it need not decide whether Williams applies outside of the

recision context because, even assuming it does apply, the district court’s grant of

summary judgment in favor of Cross Timbers on Ricks’ mutual mistake claim is

still proper. See Mallinson-Montague v. Pocrnick, 224 F.3d 1224, 1233 (10th Cir.

2000) (“[T]his court can affirm the district court for any reason that finds support

in the record.”).




      back of the check contained language purporting to release personal
      injury claims, providing that:
             The undersigned payee accepts the amount of this
             payment in full settlement of all claims for damages to
             property and for bodily injury whether known or
             unknown . . . .
             This release language was never explained to nor discussed
      with Williams or her husband. The face of the check contained a
      State Farm code, “200-1,” denoting the settlement of a property
      claim, rather than a separate code used by the insurer for personal
      injury claims. [Williams] subsequently endorsed the check over to
      the garage that repaired [her] car.
             Williams was later diagnosed as having temporomandibular
      joint syndrome (“TMJ”), causing head and neck pain, as a result of
      the accident. Both the trial court and the court of appeals found that
      suit for this injury was barred by execution of the release.
Williams v. Glash, 789 S.W.2d 261, 263 (Tex. 1990).

                                         -16-
      In support of its claim of mutual mistake, Ricks relies on testimony it

adduced from the negotiators of the Exploration Agreement as well as the various

proposals exchanged by the parties and the letter of intent. The opinion in

Williams makes clear, however, that “subjective statements of the parties’ intent”

will not be considered by the court in determining whether sufficient evidence of

mutual mistake exists to send the case to a jury. 789 S.W.2d at 264.

Accordingly, the only relevant evidence identified by Ricks is the various

proposals and the letter of intent exchanged by the parties. This court has closely

reviewed the contents of the various proposals and the letter of intent and

concludes that evidence is not sufficient to send the case to a jury under Texas’

“narrow” doctrine of mutual mistake. Williams, 789 S.W.2d at 265. Unlike the

situation in Williams, where there had not been any discussion at all as to the

question of personal injuries, the various proposals exchanged by the parties here

demonstrate ongoing negotiations over the breadth of Ricks’ right to drill.

Furthermore, when Southland proposed adding the adjacency limitation set out in

paragraph 2(c) of the Exploration Agreement, it specifically brought the

definitions to the attention of Ricks’ and asked Ricks’ negotiator to look over the

definitions and determine whether they accurately reflected the parties’

agreement. Without any objection from Ricks, the adjacency limitation was

incorporated into the executed Exploration Agreement. Finally, it is clear and


                                        -17-
undisputed from the record that the negotiations between the parties were

extensive and that the Exploration Agreement was not reached in haste. See

Williams, 789 S.W.2d at 264 (noting that the extent of negotiations and the haste

or lack thereof in reaching the agreement are among the objective factors to be

considered in determining whether a claim of mutual mistake should proceed to

trial).

          Because Ricks has not come forward with any objective evidence indicating

that the adjacency requirement was added to the Exploration Agreement by the

mutual mistake of the parties, the district court correctly granted summary

judgment to Cross Timbers on this claim.

          B. Tort Claims 19

                1. Trespass

          In its first amended complaint, Ricks alleged that under the Exploration

Agreement it had the exclusive right to drill wells in Sections 3 and 15. It further

alleged that by drilling its own wells in those two section, Cross Timbers had

engaged in a tortious, bad faith trespass. In granting summary judgment in favor

of Cross Timbers on this claim, the district court concluded that because the




       In contrast to the contract claims discussed above, Ricks’ tort claims are
          19

governed by Oklahoma law.

                                           -18-
Exploration Agreement did not bestow on Ricks any right to drill in Sections 3

and 15, Ricks’ trespass claim must necessarily fail.

      On appeal, Ricks asserts that “the district court simply failed to recognize

that, under the Exploration Agreement, only Ricks had the right to drill wells.”

Accordingly, Ricks asserts that if this court reverses the district court’s resolution

of its contract claims, we should also reverse the district court’s grant of summary

judgment in favor of Cross Timbers on the trespass claim. As this court has

affirmed the district court’s resolution of Ricks’ contract claims, we likewise

affirm the district court’s resolution of Ricks’ trespass claim.

             2. Fiduciary Duty

      Paragraphs 44 and 45 of Ricks’ first amended complaint provide as follows:

             44. By virtue of the special relationship between the parties
      arising from their joint venture, their [co-tenancy] and/or their
      operator/non-operator relationship, Cross Timbers owed Ricks
      fiduciary duties to cooperate with Ricks in its efforts to drill wells
      and earn acreage under the Exploration Agreement.

            45. By its intentional and malicious actions designed to limit
      Ricks’ ability to earn further acreage, Cross Timbers has damaged
      Ricks and is liable to Ricks for all actual damages caused by Cross
      Timbers’ breach of fiduciary duty, and for punitive damages.

In granting summary judgment in favor of Cross Timbers on this claim, the

district court first noted that the explicit language of both the Exploration

Agreement and the Model Form Operating Agreement, attached to and made a

part of the Exploration Agreement, specifically negated the existence of a joint

                                         -19-
venture. Citing controlling Oklahoma law, the district court further concluded

that neither the parties’ status as co-tenants as to certain leases nor Cross

Timbers’ status as operator of certain wells on sections 3, 15, and 22 imposed

upon Cross Timbers a fiduciary duty to help Ricks drill as many wells as possible

under the Exploration Agreement, the only breach of fiduciary duty claim set

forth in the first amended complaint. See Uptegraft v. Dome Petroleum Corp.,

764 P.2d 1350, 1353 (Okla. 1988) (recognizing that although joint tenants cannot

actively mislead each other regarding matters relating to the joint estate, the

relationship between joint tenants is not fiduciary); Leck v. Cont’l Oil Co., 800

P.2d 224, 228-29 (Okla. 1989) (recognizing the existence of a fiduciary-type

relationship between unit operators on the one hand and royalty owners and

lessees on the other hand, but noting that the fiduciary obligation of the unit

operator was limited to the duty to conduct operations in a prudent manner).

      In light of this court’s conclusion that the Exploration Agreement did not

grant Ricks the right to drill additional extension wells on lands that did not abut

lands earned through the drilling of the Initial Test, Ricks’ claim that Cross

Timbers was under a fiduciary duty to help it drill wells on sections 3 and 15

necessarily fails. Ricks nevertheless argues on appeal that the district court erred

“in apparently concluding that Ricks’ claim did not involve correlative rights and

prudent operations, the limited fiduciary duties Oklahoma law imposes upon


                                          -20-
operators.” Cf. Leck, 800 P.2d at 228-29. We disagree and conclude that the

district court properly avoided resolution of such claim because it is not set forth

in Ricks’ first amended complaint.

      It is quite true that Ricks’ first amended complaint does contain numerous

allegations relating to Cross Timbers’ operation of two wells in the southwest

quarter section of section 22. All of those allegations, however, related to Ricks’

claim that Cross Timbers had manipulated production from the wells it operated

in section 22 in an effort to prevent Ricks from learning that the Tarrant 2-22 well

was a Discovery Well, thereby entitling Ricks to extend the field into section 15. 20


      20
        Paragraphs 17 and 23 through 30 of the first amended complaint allege as
follows:

             17. Since filing the original Complaint, Ricks has learned that
      Cross Timbers has been and is intentionally and maliciously
      undertaking numerous improper and unprivileged efforts directed
      toward the internally-admitted purposes of [a] forcing Ricks to
      modify the Exploration Agreement and [b] delaying Ricks’
      development efforts in order to limit Ricks’ ability to earn acreage
      under the Exploration Agreement.
             ....
             23. Under the Exploration Agreement, if one of the wells
      drilled under the Exploration Agreement - the Tarrant 2-22 well -
      qualified as a discovery well, then Ricks would earn the right to drill
      in acreage including Section 15, Township 6N, Range 15E, Texas
      County, Oklahoma (“Section 15”).
             24. As operator of the Tarrant 2-22 well, a “Development
      Well” under the Exploration Agreement, Cross Timbers refused to
      timely commingle production from two formations in the well so that
      the well’s status as a “Discovery Well” would not be apparent.
             25. At the same time, Cross Timbers also failed to give Ricks

                                         -21-
Both the district court and this court have resolved this claim by concluding that

because the Exploration Agreement did not give Ricks any rights to section 15,

Cross Timbers was under no fiduciary obligation to help Ricks’ drill in that



      complete production information from the Tarrant 2-22 well so that
      Ricks was unaware that the well qualified as a Discovery Well. The
      incomplete information given Ricks by Cross Timbers’ affiliate made
      it appear that the Tarrant 2-22 well was not a Discovery Well.
             26. Before Ricks discovered that the Tarrant 2-22 well was a
      “Discovery Well,” Cross Timbers drilled two wells in Section 15
      without seeking Ricks’ consent to drill the wells and without offering
      Ricks an opportunity to participate in the wells.
             27. Before first drilling in Section 15, Cross Timbers falsely
      reported that its targeted depth was a depth in which Ricks had no
      interest under the Exploration Agreement.
             28. The Tarrant 2-22 well’s status as a “Discovery Well” gave
      Ricks’ rights to drill and earn acreage in particular formations,
      including the Council Grove, in certain sections including Section
      15.
             29. Discovery has revealed that, long before reporting the
      false depth in Section 15, and contemporaneously with learning that
      the Council Grove formation was promising in the Tarrant 2-22,
      Cross Timbers decided to drill to the Council Grove formation in
      Section 15 without recognizing Ricks’ rights in the unit.
             30. Also in relation to the Tarrant 2-22 well drilled in the
      SW/4 of Section 22, Cross Timbers proposed and drilled a second
      gas well in the same quarter section. Cross Timbers decided not to
      pursue the natural development into the N/2 of Section 22
      intentionally, imprudently and maliciously in an effort to preserve an
      argument that its tortured construction of the Exploration Agreement
      would allow it to claim that Ricks still had no rights in Section 15
      even if this increased density well was a “Discovery Well.”

When these allegations are read in concert with paragraphs 44 and 45 set forth in
the text of this opinion, it becomes absolutely clear that the first amended
complaint does not set forth a claim of breach of fiduciary duties flowing from
Cross Timbers’ failure to protect Ricks’ correlative rights in section 22.

                                        -22-
section. Although Ricks’ motion and brief in opposition to Cross Timbers’

motion for summary judgment do appear to hint at the possible existence of

fiduciary duty claim of the type discussed in Leck, Ricks cannot rightfully

complain that the district court failed to resolve a claim never set forth in the first

amended complaint.

             3. Implied Covenant of Good Faith

      Relying on many of the same allegations set out above with regard to its

fiduciary duty claim, Ricks alleged in its first amended complaint that “Cross

Timbers’ actions to limit Ricks’ right to earn acreage under the Exploration

Agreement have been undertaken intentionally, maliciously[,] and in reckless and

wanton disregard of” Cross Timbers’ duty of good faith and fair dealing. In

resolving this claim, the district court first expressed doubt as to whether the

Oklahoma courts would extend the duty of good faith and fair dealing to these

types of contractual relationships. See Dist. Ct. Order at 17 (citing Davis v. TXO

Prod. Corp., 929 F.2d 1515, 1519 (10th Cir. 1991) (refusing to impose non-

contract-based duty of good faith and fair dealing upon co-tenants of an oil and

gas lease)). Even assuming the duty would extend to the circumstances present in

this case, the district court concluded that the actions complained of here

amounted to nothing more than alleged breaches of the Exploration Agreement




                                          -23-
and that something more was necessary to support a claim of tortious breach of

the implied covenant.

      On appeal, Ricks asserts that the Oklahoma Supreme Court recently

extended the reach of the tort to cover all contractual breaches that are malicious,

intentional, or grossly negligent. See Beshara v. S. Nat’l Bank, 928 P.2d 280, 288

(Okla. 1996). It further alleged that it had come forward with sufficient evidence

to create a question of fact as to whether Cross Timbers had acted intentionally

and maliciously to deny Ricks the fruits of the Exploration Agreement. We need

not, however, resolve the scope of the duty of good faith and fair dealing in

Oklahoma. This claim is premised on many of the same allegations as the breach

of fiduciary duty claim and suffers from the same infirmities. We therefore

affirm the district court’s grant of summary judgment for the same reasons set out

above in resolving Ricks’ fiduciary duty claim.

             4. Interference With Prospective Economic Advantage

      In its first amended complaint, Ricks alleged that “[b]y its intentional and

malicious interference with Ricks’ prospective contracts to sell gas produced from

extended acreage, Cross Timbers has damaged Ricks.” In an effort to resist Cross

Timbers’ motion for summary judgment on this claim, Ricks cited to paragraph

seventeen of the affidavit of Art Swanson, Ricks’ president, for the proposition

that it had adduced evidence creating a material issue of fact as to whether the


                                         -24-
actions of Cross Timbers had caused it to lose the opportunity to sell gas to its gas

purchaser. The cited portion of Swanson’s affidavit reads as follows:

              17. Had Cross Timbers allowed Ricks to participate in the
      three wells now producing from the Council Grove formation in
      Sections 15 and 3, Ricks would be selling a substantial amount of gas
      from these wells to its gas purchaser. Ricks has lost the profit it
      would be earning on these gas contracts as a result of Cross Timbers’
      actions. By not allowing Ricks to develop acreage it rightfully owns
      under the Exploration Agreement, Cross Timbers’ actions have
      reduced the volume of gas flowing through Ricks’ system, thus
      diminishing the economic return to Ricks for the costs it has incurred
      for exploration activities, line expenses, compression and treating
      facilities.

      The district court concluded that this evidence was insufficient to carry

Ricks’ burden of coming forward with evidence sufficient to create a material

issue of fact as to whether Cross Timbers tortiously interfered with Ricks’

prospective economic relations. According to the district court,

             Ricks’ claim of commercial interference is mere speculation.
      Ricks does not provide the details of the gas purchase arrangement
      with which it claims Cross Timbers interfered and has not provided
      the information necessary to compute any damages. Further, Ricks
      has failed to connect Cross Timbers’ conduct to any interference.
      The law allows a contracting party to engage in conduct to further its
      own legitimate business or financial interests. Haynes v. South
      Community Hosp. Mgmt., Inc., 793 P.2d 303, 307 (Okla. App. 1990).
      The Court has examined Cross Timbers’ conduct and finds in this
      case, this is exactly what occurred.

      Ricks challenges on appeal the district court’s grant of summary judgment

in favor of Cross Timbers and asserts that “it is certain” that it was damaged

when Cross Timbers refused to allow it to participate in the wells drilled in

                                         -25-
sections 3 and 15. Unfortunately, there is not a single citation to the record in

this section of Ricks’ brief to support its assertion that material issues of fact

exist precluding summary judgment on this claim. This failure is reason enough

to affirm the district court. See Fed. R. App. P. 28(a)(9)(A) (providing that an

appellant’s opening brief “must contain[] appellant’s contentions and the reasons

for them, with citations to the . . . parts of the record on which appellant relies”);

Koch v. Koch Indus., Inc., 203 F.3d 1202, 1213 (10th Cir. 2000).

      In it reply brief, however, Ricks for the first time on appeal cites to

paragraph 17 of Swanson’s affidavit as the sole support for its contention that

material issues of fact exist as to whether it was damaged by Cross Timbers’

conduct with regard to sections 3 and 15. In light of this court’s conclusion

above that the Exploration Agreement provided Ricks with no rights to drill in

sections 3 or 15, it is clear that Ricks cannot prove that it was damaged by Cross

Timbers’ refusal to allow it to participate in the drilling activities as regards those

two sections. See generally Gaylord v. Entm’t Co. v.




                                          -26-
Thompson, 958 P.2d 128, 149-150 nn.96-97 (Okla. 1998) (citing with approval to

Michigan cases which set out the elements of tort of intentional interference with

prospective economic relations; those cases hold that damages resulting from the

allegedly unfair or unlawful activity is one such element); see also Koch, 203

F.3d at 1212 (“This court has held that failure of proof of an essential element

renders all other facts immaterial.”). Accordingly, the district court properly

granted summary judgment in favor of Cross Timbers on Ricks’ claim of

intentional interference with prospective economic advantage.

      C. Costs

      In appeal number 00-6075, Ricks notes that Cross Timbers was awarded

costs as a prevailing party under Federal Rule of Civil Procedure 54(b). Ricks

further asserts that if this court were to reverse the district court in appeal number

99-6370, the order taxing costs must also be reversed because Cross Timbers will

no longer be the prevailing party. As this court has affirmed the district court’s

grant of summary judgment in favor of Cross Timbers in the underlying appeal,

the district court’s order taxing costs is also affirmed.




                                         -27-
V. CONCLUSION

      For the reasons stated above, the district court’s orders granting summary

judgment in favor of Cross Timbers and awarding it costs as a prevailing party are

hereby AFFIRMED.

                                     ENTERED FOR THE COURT



                                     Michael R. Murphy
                                     Circuit Judge




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