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Heman v. Jefferson

OPINION FILED JULY 3, 1985.

JANE S. HEMAN, PLAINTIFF-APPELLEE,

v.

MARY ANNA JEFFERSON, A/K/A MARY ANN JEFFERSON, ET AL., DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of Clark County; the Hon. Caslon K. Bennett, Judge, presiding.

JUSTICE TRAPP DELIVERED THE OPINION OF THE COURT:

Rehearing denied October 18, 1985.

• 1 This is the second time this cause appears in the appellate court. Plaintiff seeks cancellation of an oil and gas lease. We reverse and remand, finding that plaintiff was not entitled to summary judgment. A default judgment entered against one set of defendants may not be used as an admission of a disputed evidentiary matter by the non-defaulting defendants. Plaintiff's summary judgment motion in effect used the defaulted defendants' admission of a failure to reasonably produce the disputed property as the basis of canceling the non-defaulting defendants' interests in the property.

A detailed summary of the history of the cause of action is necessary to an understanding of our disposition. In 1959, Vera Shaw leased 11 parcels of land, 438.5 acres, to John Jefferson for the production of oil and gas. The land is situated in Clark County. The primary term of the lease was for three years and as long thereafter as oil, gas, or casing head gas is produced or wells drilled on the property. Shaw reserved a one-eighth royalty interest.

On May 4, 1964, John Jefferson and his wife Mary Ann(a) Jefferson assigned their interest in the northeast quarter of section 4, township 11 north, range 14 west, Clark County to J.L. Cowan. The Jeffersons reserved an overriding royalty interest. On August 24, 1967, a corrected assignment was filed. The corrections dealt with the overriding royalty interest.

J.L. Cowan made 21 assignments equaling at least 67/64th fractional working interests in the northeast quarter of the northeast quarter of section 4, township 11 north, range 14 west, Clark County. The fractional working interests of two of the assignees were not listed. Cowan made 22 assignments totaling 50/64th fractional working interests in the south half of the northeast quarter of section 4, township 11 north, range 14 west, Clark County. None of the named assignees have interests in any other portion of the leasehold.

In 1980, Shaw filed a complaint seeking to cancel the lease as it pertained to a portion of the leasehold, 318.5 acres. Shaw alleged the named defendants, all of those who had or claimed an interest in the 318.5 acres, breached an implied covenant to develop the property. Shaw died. The court substituted Shubrick Kothe, executor of her estate, as plaintiff.

Plaintiff added John Ryan as a defendant. Ryan claimed a working interest in the leasehold through an assignment dated March 1980 from Jefferson's widow and his heirs.

Defendants claiming working interests through J.L. Cowan (Cowan heirs and assignees) defaulted. Subsequently, plaintiff moved for summary judgment as to the northeast quarter of the northeast quarter of section 4, and the south half of the northeast quarter of section 4, township 11 north, range 14 west, Clark County. The complaint did not seek cancellation of the lease as it pertained to the northwest quarter of the northeast quarter of section 4, township 11 north, range 14 west, Clark County.

Plaintiff moved for summary judgment on the section 4 land in question as to Jefferson's widow and his heirs (Jefferson heirs) and John Ryan. The trial court granted the motion. The Jefferson heirs, and Ryan appealed.

This court reversed, finding the complaint did not state a cause of action because the implied warranty to reasonably develop the leasehold was indivisible. (Kothe v. Jefferson (1982), 109 Ill. App.3d 247, 440 N.E.2d 415.) The supreme court affirmed. However, it remanded to allow plaintiff an opportunity to file an amended complaint alleging defendants failed to reasonably develop the entire 438.5 acres. Kothe v. Jefferson (1983), 97 Ill.2d 544, 455 N.E.2d 73.

After remand, the trial court substituted Jane Heman, Shaw's devisee, as plaintiff. Ryan petitioned for a change of venue on November 16, 1983. The trial court denied the motion as untimely.

On December 2, 1983, plaintiff filed an amended complaint seeking cancellation of the lease, except for two parcels which were in production. Plaintiff alleged defendants breached an implied covenant to reasonably develop and produce the 438.5 acres. Plaintiff also alleged defendants breached an implied covenant to prevent drainage.

Plaintiff named all those who "have or may claim a record interest" in the 438.5 acres as defendants. Therefore, the amended complaint named Mary Ann(a) Jefferson, individually and as executor of John Jefferson's estate; Pamela Baker Jefferson Powell, widow of Mary Ann(a) and John's son William; and Stuart and Elliott Jefferson Powell, sons of William Jefferson (Jefferson heirs). The amended complaint also named all the heirs and assignees of the Jeffersons' assignee J.L. Cowan (Cowan heirs and ...


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