Baldwin v. Kubetz
California Court of Appeal
307 P.2d 1005 (Cal. App. 1957)
Baldwin leased oil and gas rights to Sam Kubetz (defendant). The lease provided that Kubetz would “continuously drill additional wells, allowing not more than ninety (90) days between the completion of one well and the beginning of the next well,” until certain metrics were met. The lease also included a force majeure clause, stating that the drilling requirements would be suspended if Kubetz were unable to perform for reasons outside of his control. In order to drill wells on the property, Kubetz would have had to obtain zoning exceptions. Such exceptions could be obtained for drilling purposes if “it appears probable that there is oil underneath the property under consideration . . . .” Kubetz obtained an exception for a first well, and dug that well. However, he did not obtain any additional exceptions, and as a result, did not drill any additional wells. The trustees of Baldwin’s estate (plaintiffs) brought suit against Kubetz for a breach of the implied covenant to operate diligently and properly. The trial court found in favor of the plaintiffs. Kubetz appealed.
Rule of Law
Holding and Reasoning (Ashburn, J.)
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