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Can a Lis Pendens be Imposed Against Oil and Gas Rights?

By Paul R. Yagelski, Esq.

 

A lis pendens, pending legal action, is notice to the world that a cloud over the title to real property exists.  Janus Management Services, Inc. v. Schlessinger, 810 A.2d 637 (2002).  A lis pendens may be imposed when a specific piece of real property is subject to litigation.  Vintage Homes v. Levin, 382 Pa. Super. 146, 554 A.2d 989, 994 (1989) (citing Psaki v. Ferrari, 377 Pa. Super. 1, 546 A.2d 1127, 1128 (1988)).  A lis pendens does not establish an actual lien on the affected real property.  McCahill v. Roberts, 421 Pa. 233, 219 A.2d 306, 308 (1966).  Its purpose is merely to give notice to third persons that the real estate is subject to litigation and that any interest which they may acquire in the real estate will be subject to the result of the action.  Psaki, 546 A.2d at 1128.

If title to real estate is not subject to the result of the litigation, then there is no reason to provide notice to a third party about the litigation.  See Vintage Homes, 554 A.2d at 994 (citing Psaki, 546 A.2d at 1128).  Lis pendens has no application except in cases involving the adjudication of rights in specific property.  Thus, a party is not entitled to have his case indexed as a lis pendens unless title to real estate is involved in litigation.  A lis pendens may not be predicated upon an action seeking to recover a personal demand.  Where a title to real estate is not involved, then a lis pendens has no application.  See In re Foremost Industries, Inc., 156 A.3d 318 (Pa. Super. 2017).

As oil and gas are real property, see Duquesne Natural Gas Co. v. Fefolt, 203 Pa. Super. 102, 198 A.2d 608, 610 (1964), a lis pendens can be asserted against oil and gas rights.  Such a lis pendens would indicate that there is a cloud over the title to such oil and gas rights.  It would indicate that the oil and gas rights are subject to litigation and that any interest acquired by a third party would be subject to the result of the litigation.  It is important to note, however, that a lis pendens cannot, as indicated above, be utilized unless title to real estate is involved in litigation.  Accordingly, if the legal action seeks to recover a personal demand; e.g., a real estate brokerage commission, or attorney’s fees, a lis pendens would have no application and should not be indexed against oil and gas rights.

Conclusion:  a lis pendens may be asserted against oil and gas rights; however, it is important to determine whether the lis pendens is predicated upon an action seeking to recover a personal demand.  If it is, a lis pendens is not appropriate. If you have an oil and gas issue, contact an oil and gas attorney.

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