Appellant lessors appealed orders of the Superior Court, Kings County’s (California) sustaining respondent lessees’ demurrer to appellants’ claims seeking interpretation of a lease, breach of contract, and slander of title, granting summary judgment on appellants’ fraud and deceit claims, and sustaining respondents’ demurrer on appellant indispensable parities’ breach of covenant of good faith and fair dealing and breach of contract claims.
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Overview
Appellant lessors sued for declaratory relief, seeking interpretation of an oil and gas lease, breach of contract damages, and damages for slander of title and fraud. The lower court granted respondent lessees’ demurrer as to all appellants’ claims except fraud, holding that the lease terminated at the end of the primary term. Appellants amended their complaint to join appellant indispensable parties and alleged intentional misrepresentation, negligent misrepresentation, and suppression of facts. The lower court granted respondents’ summary judgment motion as to the fraud and deceit claims. The lower court granted respondents’ demurrer as to appellant indispensable parties’ complaint, which alleged breach of covenant of good faith and fair dealing and breach of contract. On appeal, the court concluded that the lower court should not have ruled on the lease provisions on the assumption that the plain meaning of the words and provisions in the lease prevailed. Looking alone to the language within the four corners of the lease and without the aid of extrinsic evidence, the lower court erred in holding the dry hole provision did not extend the lease beyond the primary term.
Outcome
The court vacated the order sustaining the demurrer to appellant lessors’ first three causes of action because the lower court should not have ruled on the lease provisions on the assumption that the plain meaning of the words and provisions in the lease prevailed. The court also vacated summary judgment in favor of respondents. The court vacated the order sustaining the demurrer to appellant indispensable parties’ claims.
