Angel v. Strulovich

No. 23-522, Francis Kaess v. BB Land, LLC FILED June 6, 2025 Walker, Justice, dissenting, and joined by Justice Bunn: released at 3:00 p.m. C. CASEY FORBES, CLERK SUPREME COURT OF APPEALS OF WEST VIRGINIA In this certified question proceeding, the majority opinion applies an implied duty to market to an oil and gas lease that contains an in-kind royalty provision. It goes on to hold that the requirements for the deductions of post-production expenses from Wellman1 and Tawney2 apply to the lease. With respect for my colleagues in the majority, I dissent. As explained below, the majority’s analysis does not withstand scrutiny primarily because it muddles the distinction between different types of leases. As a result, the majority effectively rewrites the leases to take money from the producers to give it to the royalty owners. But it is not the province of this Court to rewrite an oil and gas lease to 1 See Syl. Pt. 4, Wellman v. Energy Res., Inc., 210 W. Va. 200, 557 S.E.2d 254 (2001) (“If an oil and gas lease provides for a royalty based on proceeds received by the lessee, unless the lease provides otherwise, the lessee must bear all costs incurred in exploring for, producing, marketing, and transporting the product to the point of sale.”). 2 See Syl. Pt. 10, Estate of Tawney v. Columbia Natural Res., 219 W. Va. 266, 633 S.E.2d 22 (2006) (“Language in an oil and gas lease that is intended to allocate between the lessor and lessee the costs of marketing the product and transporting it to the point of sale must expressly provide that the lessor shall bear some part of the costs incurred between the wellhead and the point of sale, identify with particularity the specific deductions the lessee intends to take from the lessor’s royalty (usually 1/8), and indicate the method of calculating the amount to be deducted from the royalty for such post- production costs.”). 1 reflect the Court’s view of a fair bargain. We certainly would not go to such extreme measures to rewrite contracts in any other context.3 I would have held that for leases that contain an in-kind royalty provision, there is no implied duty to market arising from the lease/contract and the requirements of Wellman and Tawney for the deductions of post-production expenses are inapplicable. As explained below, an implied duty to market is only triggered when a royalty owner does not or cannot take physical possession of its royalty share of the production; when that occurs, the producer must market and sell the royalty owner’s share of the production to avoid waste and loss, and the producer may properly charge the royalty owner his share of any post-production costs. One of the most contentious legal issues in the oil and gas industry is the dispute concerning the deductibility of post-production costs from royalty payments owed to lessors.4 At the risk of oversimplification, most royalty clauses generally fall into one 3 When examining a contract in an employment dispute, this Court stated that: “Our task is not to rewrite the terms of contract between the parties; instead, we are to enforce it as written.” Fraternal Ord. of Police, Lodge No. 69 v. City of Fairmont, 196 W. Va. 97, 101, 468 S.E.2d 712, 716 (1996). In the same way, we have held parties to a contract dispute involving an insurance policy to the plain language in the policy and noted that: “‘We will not rewrite the terms of the policy; instead, we enforce it as written.’” Auto Club Prop. Cas. Ins. Co. v. Moser, 246 W. Va. 493, 500, 874 S.E.2d 295, 302 (2022) (quoting Payne v. Weston, 195 W. Va. 502, 507, 466 S.E.2d 161, 166 (1995)). 4 See William T. Silvia, Slouching Toward Babel: Oklahoma’s First Marketable Product Problem, 49 Tulsa L. Rev. 583 (Winter, 2013) (outlining the “minefield of judicial interpretations among the major oil and gas-bearing states[,]” including West Virginia); 2 of two broad categories: “proceeds” royalty provisions, which provide for the mineral owner to receive a royalty consisting of a monetary share of the proceeds the producer receives from the sale of the oil and gas produced under the lease, and “in-kind” royalty provisions, which provide for the mineral owner to receive a royalty consisting of a portion of the physical oil and gas produced, tendered at the wellhead. This Court has stated that

United States Court of Appeals For the Seventh Circuit Chicago, Illinois 60604 May 23, 2025 Before ILANA DIAMOND ROVNER, Circuit Judge MICHAEL B. BRENNAN, Circuit Judge JOSHUA P. KOLAR, Circuit Judge No. 24-1524 CITIZENS INSURANCE COMPANY Appeal from the United States District Court OF AMERICA, for the Northern District of Illinois, Plaintiff-Appellee, Eastern Division. v. No. 1:22-cv-01334 MULLINS FOOD PRODUCTS, INC., Jorge L. Alonso, Defendant-Appellant. Judge. ORDER Plaintiff-Appellee, Citizens Insurance Company of America, filed a Petition for Rehearing on May 16, 2025. All members of the panel have voted to deny rehearing but to amend the opinion dated May 2, 2025, as follows: At page 2, first full paragraph, three lines from the bottom of the paragraph, immediately before the word “indemnify,” insert the words “potentially to”; At page 14, last paragraph, fourth line, again insert the words “potentially to” immediately before “indemnify”; At page 21, in the first and only paragraph of the main text, lines 5-6, replace “must also” with “may potentially be required to”; No. 24-1524 Page 2 At page 21, at the end of the same paragraph, insert the following sentence: “The duty to indemnify Mullins has not been briefed in this appeal and remains to be sorted out on remand.” At page 32, four lines from the bottom of the paragraph, insert the following sentence immediately prior to the sentence beginning “We therefore VACATE . . .”: “Also in the event the district court determines that timely notice was given to Citizens, the district court must resolve whether Citizens has a duty to indemnify Mullins.” The Petition for Rehearing is DENIED

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUN 9 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT NATIONWIDE LEGAL, LLC, No. 24-3059 D.C. No. Plaintiff - Appellant, 2:23-cv-00599-MEMF-MRW v. MEMORANDUM* JPMORGAN CHASE BANK, N.A., a Nationally Chartered Bank, Defendant - Appellee. Appeal from the United States District Court for the Central District of California Maame Ewusi-Mensah Frimpong, District Judge, Presiding Submitted May 12, 2025** Pasadena, California Before: IKUTA, R. NELSON, and LEE, Circuit Judges. Nationwide Legal, LLC appeals the district court’s order dismissing its negligence claim against JPMorgan Chase Bank, N.A. Nationwide sued Chase after one of Nationwide’s employees stole company funds by changing the payee on * This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). company checks and depositing the checks into personal checking accounts at Chase. Nationwide alleges that Chase acted negligently when it permitted Nationwide’s employee to deposit the checks.1 The district court dismissed Nationwide’s claim against Chase after finding that it was barred by the one-year statute of limitations under Section 340(c) of the California Code of Civil Procedure. We have jurisdiction under 28 U.S.C. § 1291, and we review de novo a district court’s dismissal based on statutes of limitations. Williamson v. Gen. Dynamics Corp., 208 F.3d 1144, 1149 (9th Cir. 2000). We affirm. California state law governs this diversity action, and the California Supreme Court “is the final arbiter of what is state law.” West v. Am. Tel. & Tel. Co., 311 U.S. 223, 236 (1940). We “follow a published intermediate state court decision . . . unless we are convinced that the California Supreme Court would reject it.” Muniz v. United Parcel Serv., Inc., 738 F.3d 214, 219 (9th Cir. 2013). 1. The plain language of Section 340(c) covers Nationwide’s claim. In California, an action “by a depositor against a bank for payment of a forged or raised check” must be filed within one year. Cal. Civ. Proc. Code § 340(c). First, the 1 The district court also dismissed Nationwide’s other two claims against Chase: (1) violation of Section 4401 of the California Commercial Code and (2) breach of contract. Nationwide did not address either of those claims in its opening brief, so we conclude that Nationwide forfeited any arguments regarding those claims. See Ind. Towers of Wash. v. Washington, 350 F.3d 925, 929 (9th Cir. 2003). 2 24-3059 district court correctly found that the checks at issue in this case were “forged” such that Section 340(c) may apply, see Union Tool Co. v. Farmers’ & Merchs.’ Nat’l Bank of Los Angeles, 218 P. 424, 429 (Cal. 1923), and Nationwide does not challenge that finding on appeal. Second, Nationwide’s claim is an action “by a depositor against a bank.” Cal. Civ. Proc. Code § 340(c). We must give the statutory language its “plain and commonsense meaning.” Smith v. LoanMe, Inc., 483 P.3d 869, 872 (Cal. 2021). The plain language of Section 340(c) covers an action brought by a depositor against the bank where the depositor deposits its funds. Nationwide is a depositor with Chase, so Section 340(c) applies to its claim against Chase for “payment of a forged or raised check.” Nationwide points us to a footnote in Roy Supply, Inc. v. Wells Fargo Bank that states Section 340(c) “applies only to an action by a depositor against a payor bank.” 46 Cal. Rptr. 2d 309, 321 n.20 (Ct. App. 1995). Here, Nationwide does not allege that Chase acted negligently in its role as “payor” bank by paying the forged checks. Rather, Nationwide claims Chase negligently accepted the checks from the employee for deposit as the “depositary” bank. But the footnote in Roy Supply stating that Section 340(c) applies only in actions against payor banks is dicta, see 46 Cal. Rptr. at 323 n.25 (explaining that “the statute of limitations issue was not resolved in the trial court and is not at issue 3 24-3059 in this appeal”), and a different lower court

Case: 24-20386 Document: 102-1 Page: 1 Date Filed: 06/10/2025 United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit ____________ FILED June 10, 2025 No. 24-20386 Lyle W. Cayce ____________ Clerk In the Matter of National CineMedia, L.L.C. Debtor, Cinemark Media Incorporated; Cinemark USA, Incorporated, Appellants, versus National CineMedia, L.L.C., Appellee, __________________________________________________ In the Matter of National CineMedia, L.L.C. Debtor, Cinemark USA, Incorporated, Appellant, versus National CineMedia, L.L.C., Case: 24-20386 Document: 102-1 Page: 2 Date Filed: 06/10/2025 Appellee. ______________________________ Appeal from the United States District Court for the Southern District of Texas USDC Nos. 4:23-CV-2414, 4:23-CV-2485 ______________________________ Before Jones, Southwick, and Oldham, Circuit Judges. Per Curiam: * This court has carefully considered this appeal in light of the briefs, oral argument, and pertinent portions of the record. Having done so, we substantially adopt the analysis of the district court’s opinion, which affirmed the bankruptcy court’s rulings. 1 Accordingly, the Most Favored Nations (“MFN”) clause in Cinemark’s Exhibitor Services Agreements (“ESA”) with the debtor National CineMedia LLC (“NCM”) was not triggered by Regal’s entry into a Network Affiliate Transaction Agreement (“NATA”) with NCM. The MFN clause in Cinemark’s ESA provided it the right to match the terms of an “agreement, amendment or extension” between Regal and NCM “which amends any term” of Regal’s ESA. Regal, while itself a debtor in bankruptcy, terminated its ESA with NCM through a Termination Settlement Agreement (“TSA”). Regal then entered into the NATA with NCM. The TSA did not amend any term of Regal’s ESA because it _____________________ * Pursuant to 5th Circuit Rule 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5th Circuit Rule 47.5.4. 1 This court reviews the NCM bankruptcy court’s “Settlement Order” under Bankruptcy Rule 9019 for abuse of discretion. In re Moore, 608 F.3d 253, 257 (5th Cir. 2010). No abuse occurs unless the court made an error of law or clear error of fact. In re Yorkshire, LLC, 540 F.3d 328, 331 (5th Cir. 2008). Case: 24-20386 Document: 102-1 Page: 3 Date Filed: 06/10/2025 terminated the ESA, whereas “amend” contemplates modification of an ESA’s term that nevertheless preserves the agreement’s existence. The NATA did not amend any term of Regal’s ESA because the TSA had terminated Regal’s ESA, and the ESA must exist for the NATA to amend any of its terms. The MFN clause in Cinemark’s ESA was not triggered. 2 The judgments of the bankruptcy and district courts are AFFIRMED. _____________________ 2 NCM and AMC, the other party to the appeal, agreed to dismiss the appeal as to AMC by a joint motion for dismissal.

USCA4 Appeal: 23-1733 Doc: 46 Filed: 08/08/2025 Pg: 1 of 14 UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 23-1733 J.H., by and through their Guardian Ad Litem, Erica Chambers; E.H., by and through their Guardian Ad Litem, Erica Chambers; ERICA CHAMBERS, individually, Plaintiff - Appellees, v. HARFORD MUTUAL INSURANCE GROUP, INC., Defendant - Appellant. Appeal from the United States District Court for the Middle District of North Carolina, at Greensboro. Thomas D. Schroeder, District Judge. (1:21-cv-00856-LPA) Argued: March 18, 2025 Decided: August 8, 2025 Before HEYTENS and BERNER, Circuit Judges, and John A. GIBNEY, JR., Senior United States District Judge for the Eastern District of Virginia, sitting by designation. Affirmed by unpublished per curiam opinion. ARGUED: William A. Bulfer, Asheville, North Carolina, Daniel Thomas Strong, TEAGUE CAMPBELL DENNIS & GORHAM, LLP, Raleigh, North Carolina, for Appellants. Coleman Cowan, LAW OFFICES OF JAMES SCOTT FARRIN, Durham, North Carolina, for Appellees. ON BRIEF: Kaitelyn E. Fudge, LAW OFFICES OF JAMES SCOTT FARRIN, Durham, North Carolina, for Appellees. Unpublished opinions are not binding precedent in this circuit. USCA4 Appeal: 23-1733 Doc: 46 Filed: 08/08/2025 Pg: 2 of 14 PER CURIAM: Erica Chambers was driving with her two minor children on the highway in North Carolina when they were hit by a truck owned by Big Boss Construction, Inc. After bringing suit against Big Boss and several other parties involved in the accident, Chambers filed a declaratory judgment action to establish that Big Boss’s $2 million commercial excess insurance policy—issued by Harford Mutual Insurance Group, Inc.—provided coverage for the accident. The district court sided with Chambers and concluded that the accident fell within the scope of the policy’s coverage. The district court further determined that Chambers and her children were entitled to pre- and post-judgment interest under the policy. We affirm both rulings. I. Background 1 On October 27, 2018, Erica Chambers and her children were severely injured in an automobile accident as they drove south on North Carolina Highway 49. A truck owned by Big Boss Construction, Inc. crossed the center of the highway and struck Chambers head on. The driver of the truck was unauthorized to operate a motor vehicle, as he lacked a valid driver’s license. The parties agree that at the time of the accident, the driver was an agent of Big Boss acting within the scope of his employment. The driver was on his way 1 In the litigation agreement discussed infra, the parties “agree[d] that all facts and conclusions of law pled in the Second Amended Complaint in the Underlying Litigation are deemed admitted” for the purpose of this declaratory judgment action. J.A. 207. We thus recite the facts as alleged in that complaint. 2 USCA4 Appeal: 23-1733 Doc: 46 Filed: 08/08/2025 Pg: 3 of 14 to complete a job for a different company, NC Champions Construction, Inc., which was using the truck with Big Boss’s permission. Chambers and her children incurred astronomical medical bills as a result of the accident. Chambers spent 34 days in the hospital recovering from broken bones throughout her body. She endured multiple surgeries and remains under medical care for her injuries, some of which are permanent. One of Chambers’s children suffered a head injury and continues to experience memory problems. Her other child suffered a broken leg. In total, the family’s medical bills have exceeded $500,000. Chambers and her children (collectively, Chambers 2) filed suit in North Carolina state court against the driver, Big Boss, and NC Champions. The suit alleged, among other claims, that Big Boss was liable for negligently entrusting its truck to the driver. At the time of the accident, Big Boss carried multiple insurance policies, including a commercial excess umbrella policy (the Excess Policy) issued by Harford Mutual Insurance Group, Inc. The Excess Policy had a liability limit of $2 million. It co