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Brilinski v. Merit Energy Co. LLC

United States District Court, Eastern District of Michigan, Northern Division

January 30, 2015




This case was initiated when Plaintiff Richard Brilinski filed a complaint against Defendants Merit Energy Company, Petroleum Development Corporation, and Jet Exploration[1]in Alcona County Circuit Court. ECF No. 1. Defendants removed the case to this Court on January 2, 2014. Id. On October 10, 2014, Defendants filed a motion for summary judgment which they then amended on October 20, 2014. ECF Nos. 13, 16. Defendants claim that summary judgment should be entered against Brilinski because his claims are barred by the doctrine of laches or, in the alternative, the applicable statute of limitations. See ECF No. 16. Because the relevant statute of limitation governing Brilinski’s action applies, and has lapsed, his claim is barred and summary judgment is appropriate.


Plaintiff Brilinski brings this suit as the trustee of the Richard R. Brilinski Living Trust (“Trust”). ECF No. 1 at 10. The Trust, and Brilinski as trustee, “owns land situated in Caledonia Township, Alcona County, Michigan.” Id. Brilinski owns both the surface and mineral rights to his land, which covers 80 acres. ECF No. 16 at 16.


An Antrim Shale deposit lies under Brilinski’s land and the tracts surrounding his. In 1997, Jet Exploration began acquiring mineral leases from landholders in the area in order to create an Antrim drilling unit. Id. This unit eventually came to be known as the Timm Antrim Unit. ECF No. 1 at 11. The unit consists of 21 natural gas wells.[2] ECF No. 1 at 11.


When the unit was being formed, a representative of Jet approached landowners in the area in an attempt to secure mineral leases. One of the landowners approached was Brilinski. ECF No. 20 at 13. The royalty payment being offered by Jet was not satisfactory to Brilinski and so he “attempted in good faith to negotiate a higher royalty payment than was being offered[.] Id. An agreement could not be reached, however, and so Brilinski did not join the Antrim unit.[3] Id. According to Brilinski, when discussion regarding executing a lease fell through “[t]he landman . . . threatened . . . that [Jet] would drain his lands of the underlying oil and gas.” Id.; see also id., Ex. 1 at 60.


Because Brilinski declined to execute a lease to be a part of the soon-to-be-created Timm Antrim Unit, no wells were drilled on his land. Instead, three wells were drilled on adjacent parcels, near to Brilinski’s property line. Id. at 13. The three wells were drilled on the Gillard, Hansen, and Bushey properties to the west, north, and east of Brilinski’s land, respectively. ECF No. 20, Ex. 3.

The Michigan Supervisor of Wells has imposed a requirement that any wells drilled on a tract of land cannot be within 330 feet of the property line of an adjoining tract that is outside the drilling unit. Order of the Supervisor of Wells, Order No. (a) 14-9-94. Brilinski claims in his deposition that when the three wells were staked for drilling he had suspicions about whether they were drilled in conformity with the 330 foot setback. With respect to the Hansen well he stated that he “saw where the stake was and [he] walked over there and stepped it off, to make sure they were 330 feet from my line.” ECF No. 20, Ex 1 at 33. By utilizing this method of measurement—estimating that each of his steps was three feet long over the course of 100 steps—Brilinski decided he “didn’t have nothing [sic] to worry about; that the well was beyond the 330-foot mark.” Id.

At this time Brilinski also had suspicions about the other two wells, in particular the Gillard well, to the west of his property. See ECF No. 16, Ex. 1 at 51. Brilinski’s suspicions about the well were raised “because ther[e was] a 15-foot differential in the fence line and a new survey line that they had put in there.” Id. at 51-52. That is, Brilinski was concerned that the oil company surveyor staked the property line in a manner that was 15 feet inconsistent with his understanding of the property line. This occurred in 1998. Id. at 53. Brilinski, however, did not contact the state and begin inquiries on the discrepancy until 2012. Id. at 53-54. This was despite the fact that he “figured that if they were going by their survey rather than the fence line, that that well would be in violation.” Id. at 59.


During the period between 1998, and 2012 when Brilinski was informed by the Michigan Department of Environmental Quality (“MDEQ”) that the Hansen well violated the setback, Brilinski did little meaningful investigation into the location of the three wells. Brilinski testified that during that period he called his state representative and state senator about the possibility that the wells were improperly drilled. When he did not hear back, however, he did not further pursue the matter. According to Brilinski he “waited for them to call [him] back . . . but [he] wasn’t going to make it a priority[.]” ECF No. 20, Ex. 1 at 54-55. This is despite the fact that Brilinski “had suspicions” about “all three of those [wells] that border [his] land.” ECF No. 16, Ex. 1 at 96-97.

Eventually, Brilinski learned from a third party (his daughter, he believes) that the proper path for his inquiries was through the MDEQ. ECF No. 16, Ex. 1 at 53. This was in 2012. Id. It was at this point that he was able to learn from the MDEQ that the Gillard well, which he “just figured . . . would be in violation”, Id. at 59, was actually compliant with the setback, but the Hansen well was in violation of the setback. Id. at 58. After learning ...

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