First Baptist Church of Roswell v. Yates Petroleum Corp.

The issue this case presented for the Supreme Court's review centered on whether payees who are entitled to interest on suspended oil and gas royalty payments could contract away their statutorily mandated interest payments. The district court awarded interest payments from Defendant Yates Petroleum Company to Petitioners on the basis that NMSA 1978, Section 70-10-4 (1991) mandated that payees be paid interest on funds to which they are entitled. The district court found that this provision of Yates’ form division order was unenforceable because it contravened Section 70-10-4, and therefore Yates owed the interest to Petitioners. Yates appealed and the Court of Appeals reversed, holding that the parties could contract around the provisions of the statute. According to Yates, its form division order allowed it to withhold payment of oil and gas royalties pending the resolution of title issues, and when it eventually disburses royalties, to pay the proceeds without interest. After review of the record, the Supreme Court reversed the Court of Appeals and affirmed the district court’s ruling. View "First Baptist Church of Roswell v. Yates Petroleum Corp." on Justia Law