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Equitable Gathering Equity LLC v Dynamic Energy Inc

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1) Case Name and Citation: Equitable Gathering Equity, LLC v. Dynamic Energy, Inc., 2009 WL 37186 (S.D.W.Va. 2009)

2) Facts: Equitable owns and operates two natural gas pipelines (a 12 inch pipeline and a 2 inch pipeline). Both these pipelines are operated pursuant to leases which provide that the coal estate is the dominate estate. The pipelines are located on a tract of land in Wyoming County referred to as Coal Mountain, where the defendant mines coal, transports the coal, and cuts timber. D contracted P regarding a crossing of the 12 inch pipeline, and as a result of this P erected a temporary crossing over the line. D then contacted P regarding the relocation of the 12 inch pipeline. In response P sent a proposed relocation agreement and a proposed shut in agreement. D did not execute either of these agreements and asserted that they were no longer concerned with the relocation and relocation would be taken at P’s own discretion. P became concerned with the amount of heavy traffic over the temporary crossing, and in the interest of safety relocated the 12 inch pipeline. A short time after, D again contacted P regarding the relocation of the 2 inch pipeline, P responded by sending a proposed pipeline relocation agreement to the D which the D never signed. D then hired a third party to timber the area, and the 2 inch pipeline was ruptured during the operations. Thereafter the P relocated the 2 inch pipeline. Defendant refused to pay the costs for the relocation of both pipelines.

3) Procedural History: Plaintiff filed an action to recoup the costs of the relocations and filed a MSJ.

4) Issue: Following the Quintain ruling, who should bear the costs of relocation?

5) Reasoning: The court found that the facts were nearly identical to those in the Quintain case and applied the Quintain rules to the case. Quintain held that when (1) a coal company knew of the existence of a pipeline when it acquired its right to mine the property and (2) benefited from the pipelines relocation, (3) it is the coal company who desires to alter the status quo to its benefit and it should therefore be obligated to pay for the relocation.
a) Evaluating the facts, the court found that the granting agreements did not specify who was to pay relocation costs and that D knew of the pipelines when it acquired the land.
b) The court also found that D benefited from the relocation, even though they stated that they no longer wished the 12 inch pipe moved, the initial request, combined with the fact that the P relocated due to safety concerns regarding the temporary crossing showed that D benefited. The safety hazard involved with the temporary crossing, which was removed by relocation, was a benefit to the D.
c) The D altered the status quo as it was clear that the gas lines had been in place for some time before the D’s activities required their relocation.

6) Holding: The D coal company was required to pay for relocation.

7) Additional Issues: The D presented several additional arguments to try to distinguish this case from Quintain.
a) D argued that language in the lease required P to maintain pipelines at a depth so as not to interfere with the coal estate. The court found this argument unpersuasive as the D admitted that it had removed material from the area before requesting the temporary crossing and thus created the danger. The court found no evidence to show that the pipeline was improperly buried before D began their operations.
b) D argued that clause in lease exempted them from any damages caused by lawful use of the surface. The court notes that Quintain the court found relocation of pipelines to not be applicable to these type of damage clauses and dismissed the D’s argument.

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Page last modified on Saturday 08 of May, 2010 23:03:57 GMT by jjacks.
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