KCM Financial LLC v. Bradshaw

This oil and gas dispute involves a challenge to the validity of a mineral lease and requires that we once again examine the contours of the duty the executive-right holder (executive) owes to a non-participating royalty interest holder (non-executive). Here, the non-executive claims the executive procured a mineral lease in derogation of a duty of good faith owed to her. Although we recognize an executive has broad discretion in negotiating the terms of a mineral lease, we have long held that, in doing so, the executive owes the non-executive a duty of utmost good faith and fair dealing.…