Defendant buyers appealed a judgment from the Superior Court of Santa Barbara County (California), which ordered specific performance of the buyers’ contractual obligation to plug and abandon idle oil wells on properties purchased from plaintiff seller.
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Overview
The buyers began drilling operations but did not comply with the plugging and abandonment time schedules. After the seller filed a claim with the buyers’ bonding company, the buyers promised to provide a written proposal for amending the contracts. The seller deferred taking legal action while the parties discussed a resolution. The buyers did not submit the promised proposal. The trial court found that damages were an inadequate remedy for the breach of the agreement to plug and abandon the wells. The court stated that specific performance was generally appropriate for breaches of oil field cleanup agreements. Specific performance was the most direct means to remedy the breach and protect the environment. Although the seller did not allege monetary damage, that did not defeat its right to specific performance. The court further held that the action was not partially barred by the four-year statute of limitations in Code Civ. Proc., § 337, because the limitations period was tolled when the seller filed a claim and the buyers requested settlement negotiations. Moreover, the buyers were estopped from asserting limitations because they induced the seller not to sue pending settlement.
Outcome
The court affirmed the trial court’s judgment.
