## Facts

- Mike Ross, Inc. (Ross) and Dante Coal Company (Dante) held interests in the same West Virginia tract; Dante held the coal-mining lease.
- The lease (dated April 25, 1955) granted the lessee the right to mine coal and stated the lease continued until the coal was reasonably exhausted or the lease terminated under its provisions.
- The lease required the lessee to remove coal in an efficient manner and required payment of annual minimum royalties regardless of production.
- Dante (successor to the original lessee) initially mined coal from the tract, then ceased mining for more than 15 years.
- During the period of nonproduction, Dante continued paying the minimum royalties, maintained a physical presence on the premises, and kept necessary permits in place.
- Dante also conducted test drilling to evaluate future mining and the possibility of subleasing.
- Ross (successor to the original lessor) originally sought temporary and injunctive relief to stop Dante from removing mining facilities from the property; Ross later amended to add a claim that the lease had terminated “by operation of law” due to the long cessation of mining.
- By agreed order, the parties dissolved the preliminary injunction, allowed facility removal, dismissed other claims, and narrowed the case to a single declaratory-judgment claim seeking a declaration that the lease was void and unenforceable because Dante had abandoned or forfeited it.
- Ross and Dante disputed how much coal remained and whether mining the remaining coal would be profitable.

## Issues

1. Whether, under West Virginia law and the lease terms, Dante’s long cessation of coal production constituted abandonment or forfeiture terminating the lease “by operation of law.”
2. Whether Dante’s continued payment of minimum royalties and other acts showing ongoing claim to the leasehold barred a declaration that the lease had automatically terminated absent an express termination clause tied to nonproduction.

## Decision

- The court granted Dante’s motion for summary judgment and denied Ross’s cross-motion.
- The court held the lease had not terminated by operation of law and Dante had not abandoned the lease.
- The court concluded that extended nonproduction, without more, did not justify declaring a forfeiture where Dante continued paying minimum royalties and took other steps consistent with continuing the lease.

## Legal Principles

- Abandonment of a mineral lease under West Virginia law requires both nonuse and intent to relinquish the leasehold; forfeitures are disfavored and not found on ambiguous evidence.
- Where a coal lease includes a minimum-royalty obligation, the lessee’s ongoing payment of minimum royalties is strong evidence the lessee continues to claim the lease and lacks intent to abandon.
- Courts are reluctant to impose implied obligations (such as a duty to continuously mine) in a way that contradicts the parties’ express bargain, including a lease term tied to exhaustion of the coal and an agreed minimum-royalty structure that applies even when no coal is produced.
- On summary judgment, when material historical facts (nonproduction, royalty payments, permit maintenance, and site presence) are not genuinely disputed, the remaining question is whether those facts meet the legal standard for abandonment or termination.

## Conclusion

The court refused to declare the 1955 coal lease terminated based solely on more than 15 years of nonproduction because Dante kept the lease in force by paying minimum royalties and maintaining permits and a site presence, conduct inconsistent with any intent to abandon and insufficient to support forfeiture absent an express nonproduction termination provision.


Mike Ross, Inc. v. Dante Coal Co., 230 F. Supp. 2d 716 (2002)