How Even the Humblest of Drafting Glitches Can Spur Litigation

Today’s case is Mary J. Baker Revocable Trust v. Cenex Harvest States, Coops., Inc., 2007 MT 159 (Mont. 2007). (Click here for a copy.)

In order to build a crude-oil pipeline in Montana, Cenex acquired easements from landowners by entering into right-of-way agreements with them. The agreements contained the following provision:

[Grantors] do hereby grant, sell and convey unto [Cenex] … its successors and assigns, hereinafter referred to as Grantee, the right to construct, maintain, inspect, operate, protect, repair, replace, change the size of or remove a pipeline or pipelines or other appurtenances, for the transportation of oil, liquids and/or gases and the products thereof, together with a buried fiber optic communications cable, in, on, under or upon and along a strip of land Fifty Feet (50 ft.) in width to be selected by Grantee on, in, over and through the following described lands …

During this same period, Cenex entered into an agreement with a fiber-optics company in which the fiber-optics company agreed to install a fiber-optic cable in the trench opened by Cenex for the pipeline and to maintain the cable. The pipeline project was completed in late 1995 and the fiber-optic cable became operational in mid 1996. In 1999 Cenex assigned its rights in the pipeline and fiber-optic cable to Front Range Pipeline, L.L.C.

In 2003 two landowners sued Cenex and Front Range, alleging that the right-of-way agreements permitted Cenex to use the fiber-optic cable only for purposes of operating and monitoring the pipeline rather than as an entirely separate means of transmitting data. The district court granted summary judgment; the landowners appealed.

The landowners’ claim was based on their assertion that the granting language confirmed that the fiber-optic cable was incidental or subservient to the dominant grant of a petroleum pipeline easement and so could only be used for operating and monitoring the pipeline. To support their claim, the landowners stated that the words “together with” in the granting language meant “in connection with”—that the fiber-optic cable was to be used “in connection with” the pipeline.

The district court rejected this argument, stating that the words “together with” meant nothing more than “and” in the context of the granting language. The Montana Supreme Court agreed, describing the landowners’ interpretation as “strained.” It affirmed the district court’s ruling.

I agree that it was outlandish for the landowners to claim that they had granted Cenex the right to install the fiber-optic cable along with the pipeline but hadn’t intended that Cenex would actually put it to productive use. But to my mind, what’s interesting about this case is that awkward drafting—use of “together with”—gave the landowners just enough wiggle room to file their unlikely lawsuit and take it to the Montana Supreme Court. The wages of even modest drafting sin are litigation.

Here’s how I might have drafted the provision in question while largely sticking with the original language:

[Grantors] hereby grant [Cenex] the right to construct, maintain, inspect, operate, protect, repair, replace, change the size of, and remove, on or under or along a strip of land 50 ft. wide selected by Grantee through the following described lands, one or both of (1) one or more pipelines and other appurtenances for transporting any combination of oil, liquids, and gases and related products and (2) a buried fiber-optic communications cable …

Note that my redraft reflects some mildly paranoid tinkering with and and or. In particular, although in this context it’s not particularly elegant, I added one or both to preclude any argument—admittedly a strained one—that the grant permitted construction of both a pipeline and a fiber-optic cable, not one or the other.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.

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