Kothe v. Jefferson
Illinois Supreme Court
455 N.E.2d 73 (Ill. 1983)
Vera Shaw signed an oil and gas lease with John Jefferson (defendant), who then assigned portions of the lease to various parties over time. While the leasehold was continuously developed on some portions, many of the specific portions Jefferson had assigned went undeveloped. Shaw, and later her estate's executor, Shubrick Kothe (plaintiff), sued to cancel the undeveloped assigned portions of the lease. The trial court granted Kothe summary judgment; Jefferson argued on appeal that the implied covenant to further develop is indivisible, and the court of appeals reversed the summary judgment. Kothe appealed.
Whether the implied covenant to further develop an oil and gas lease is divisible, such that a lessee's assignment of part of the leasehold creates a separate development obligation for the assigned portion alone.