Holly Creek Production Corp. v. Banks
2008-CA-001851 9/25/09 2009 WL 3047857 Rehearing pending
Opinion by Senior Judge Lambert; Judges Acree and VanMeter concurred.
The Court affirmed in part and reversed in part a default judgment terminating an oil and gas lease and awarding compensatory and punitive damages. The Court first held that the trial court erred in allowing appellees to amend their complaint to include additional compensatory and punitive damages, pursuant to CR 15, at a CR 55.02 hearing on damages and other relief. The complaint filed by appellees, and upon which the default judgment was entered, was not sufficiently broad to support additional claims for nonpayment of royalties and punitive damages without additional process. The demand for accounting in the ad damnum clause was not sufficiently broad to support a judgment in compensatory damages for a term pre-dating any date identified in the complaint or a punitive damage judgment where there was no hint that punitive damages were sought or justified. However, the Court held that, applying the liberal pleading standards of CR 8.02, evidence presented at the CR 55.02 hearing was sufficient to justify the trial court’s determination that the lease between the parties should be terminated.