Mandate Issued: 08/15/2019
FROM THE DISTRICT COURT OF CREEK COUNTY, OKLAHOMA HONORABLE
LAWRENCE PARRISH, JUDGE.
Brent Blackstock, Tulsa, Oklahoma, for Plaintiff/Appellee,
McNern, Tulsa, Oklahoma, for Defendant/Appellant.
Kenneth L. Buettner, Judge.
Defendant/Appellant Pacer Energy Marketing, LLC, appeals
summary judgment granted to Plaintiff/Appellee Tim Abraham in
his suit for violation of the Production Revenue Standards
Act, conversion, and restitution. The material facts are
undisputed and they show Pacer's liability to Abraham was
discharged by Pacer's payment to the well operator,
Defendant Palm Operating, LLC. Pacer was entitled to judgment
as a matter of law and we therefore reverse.
In his February 2016 Petition, Abraham alleged that he owned
a Carried Working Interest in an oil lease covering the
Elias-Kerns No. 2 well, that Palm had been the operator of
the well since May 19, 2009, and that Pacer had been the
first purchaser of the well's production since January 1,
2010. Abraham alleged he had made demand for payment of
proceeds but Palm and Pacer had failed to pay. Abraham
alleged Palm and Pacer owed him interest on the unpaid
proceeds for violation of the Production Revenue Standards
Act (52 O.S.2011 §570.1 -§570.15,
"PRSA"), actual and punitive damages for
conversion, and restitution.
In its Answer, Pacer asserted it had purchased crude from the
well beginning December 12, 2010. Pacer denied it violated
the PRSA or owed interest to Abraham. Pacer also denied it
was liable to Abraham for conversion or that it owed
restitution. As affirmative defenses, Pacer asserted the
expiration of the limitations period, laches, and waiver.
Pacer further asserted it was unclear whether Abraham's
interest was marketable and that any failure to make payment
was due to Abraham's negligence or lack of diligence, as
well as error by Palm or prior operators.
The parties then filed motions for summary judgment. In a
journal entry filed January 11, 2018, the trial court granted
summary judgment in favor of Abraham for $22, 859.52 for
production through December 31, 2016 plus 12% interest from
January 1, 2017, as well as costs and fees. 
Pacer appeals. Summary judgment proceedings are governed by
Rule 13, Rules for District Courts, 12 O.S.2011, Ch. 2,
App.1. Summary judgment is appropriate where the record
establishes no substantial controversy of material fact and
the prevailing party is entitled to judgment as a matter of
law. Brown v. Alliance Real Estate Group, 1999 OK 7,
¶7, 976 P.2d 1043, 1045. Summary judgment is not proper
where reasonable minds could draw different inferences or
conclusions from the undisputed facts. Id. We review
the evidence de novo, in the light most favorable to
the party opposing summary judgment. Vance v. Fed. Natl.
Mortg. Assn., 1999 OK 73, ¶6, 988 P.2d 1275.
Because this is an appeal from summary judgment, it should
have proceeded under the accelerated procedure established in
Oklahoma Supreme Court Rule 1.36. That rule provides that in
such cases, "(u)nless otherwise ordered by the appellate
court, no briefs will be allowed on review." Although
the parties have filed briefs, we limit our review to the
designated trial court record to determine whether there is
any dispute of material fact.
The material facts which are not in dispute show that Abraham
owns a 1/32 carried working interest  in the production
from the Elias-Kerns #2 well, which has been producing since
1982. Palm became the operator of the well in May 2009 and
Pacer has been the first purchaser of production since
December 2010. Abraham sued both, asserting he had not been
paid for his interest.  Most important to this dispute is
that the parties agree that at Palm's direction, Pacer
paid to Palm the working interest proceeds for the production
it took from the well.
Abraham asserted he was entitled to interest from Pacer under
52 O.S.2011 §570.10 (E)(1), which provides:
Except as provided in paragraph 2 of this subsection, a first
purchaser or holder of proceeds who fails to remit proceeds
from the sale of oil or gas production to owners legally
entitled thereto within the time limitations set forth in
paragraph 1 of subsection B of this section shall be liable
to such owners for interest as provided in subsection D of
this section on that portion of the proceeds not timely paid.
When two or more persons fail to remit within such time
limitations, liability for such interest shall be shared by
those persons holding the proceeds in proportion to the time
each person held such proceeds.
exception provided for in paragraph 2 of that subsection
relates solely to royalty proceeds.  Pacer countered that
it had no liability for the proceeds after it paid them to
Palm, the producing ...