June 19th, CARROLLTON, Ohio — A Carroll County family farm has filed a $1 million lawsuit against Chesapeake Exploration and is seeking a temporary restraining order and injunction against the company.
Robert, Carolyn, James L. and Bruce R. Starkey, all of Mechanicstown, filed the lawsuit June 11 against Patriot Energy, Buckeye Oil Products, Bass Energy and Chesapeake Exploration.
They are accusing Chesapeake of using a lease that is not valid and breach of contract.
The Starkeys signed a lease with Patriot Energy Partners in 2008. The lease was then sold to Buckeye Energy, Bass Energy, Wimsatt Family, LLC. and Sonata Investment Company.
The lawsuit also lists PEP Leasing LLC, of Lisbon; Andrew W. Blocksom, of Lisbon; Thomas R. Blocksom, of Columbiana; and Robert Dickey, of Lisbon. (They are listed as being part of Patriot Energy Partners and PEP.)
The lease was then sold to Chesapeake Exploration, LLC. for approximately $1,100 per acre and was given the “deep rights.”
Four percent royalty
In addition, court documents filed with the Carroll and Columbiana county recorders show that Patriot retains an overriding 4 percent royalty interest on all wells and leases they originally leased.
The lawsuit contends the lease was invalid because the leases were notarized by Andrew Blocksom, Thomas Blocksom and Robert Dickey despite each of them having an economic interest in the lease.
The lawsuit also states that the lease signed with Patriot Energy Partners does not have any protection in it for the landowners’ water sources or mention the hydraulic fracturing process.
The plaintiffs stated in the lawsuit they feel that Patriot Energy Partners knew about the hydraulic fracturing process when they signed the lease and did not tell them about it, which the plaintiffs are considering to be fraudulent concealment.
In addition, the Starkeys contend that all of the defendants, except Chesapeake, concealed facts to induce them to sign the initial lease.
The lawsuit states that in May and June 2010, they were told that Patriot was entering into a new phase for drilling. They were also told they were working with engineers to start designing drilling locations in order to get the Starkeys to extend their original lease agreements.
At odds over location. According to the lawsuit, Chesapeake is accused of not listening to the requests of Bruce and Caroline Starkey, when the couple asked Chesapeake to locate the well pad and site closer to Arbor Road. They asked that Chesapeake place the well pad and the location of the well, surface equipment, pipelines, access road and fencing material on adjacent land.
Chesapeake has disturbed 25 tillable acres on the farm parcel on Arbor Road. A packed earth and clay road complete with slag and gravel was constructed on the property to a well pad.
The couple claim the lease they signed with Patriot Energy Partners required Chesapeake to receive written approval from the Starkeys for the location of the well, well surface equipment, pipelines, access road and fencing material prior to beginning drilling operations.
The Starkeys also stated in the lawsuit that Chesapeake has been threatening them with large daily monetary fines if they do not sign another amendment and ratification to increase the drilling unit size to 1,280 acres.
Requesting from court
The Starkeys are asking the court to find the Patriot Energy Partners lease invalid and allow the family to negotiate for a more suitable lease.
In addition, the Starkeys are asking for a temporary restraining order and an injunction preventing Andrew W. Blocksom, William R. Blocksom and Andrew K. Dickey from notarizing any oil and gas leases where they have an economic interest.
The Starkeys are seeking in excess of $25,000 for compensatory damages and lost profits and for punitive damages in the amount of $1 million. In addition, they are asking for special damages for land restoration and cropland out of production.
Chesapeake Exploration was contacted, but could not comment because the issue is in litigation.
by Kristy Foster
Replicated only for posterity. All credit goes to Kristy Foster. Copyright 2012. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Original article found @http://www.farmanddairy.com/news/1-million-lawsuit-filed-by-carroll-county-farming-family-over-gas-lease/38480.html