PA Case Highlights Risk in Using Non-Lawyer to Negotiate Lease

In August 2013 an extensive investigative article about a then-director for the Pennsylvania Game Commission, William A. Capouillez, appeared in the Philadelphia Inquirer (see PA Director of Game Commission Double-Dipping with Gas Leases?). The article spotlighted a potential conflict of interest between Capouillez’s day job and his moonlighting side job as an agent for property owners who lease their land for oil and gas development. The issue? He was signing private deals with the same companies that often work with his state agency. The State Ethics Commission did a lengthy investigation and three years later, the Commission levied a $75,000 fine, which Capouillez agreed to pay (see Former PA Game Commissioner Fined $75K for Lease Moonlighting). Although he paid the fine, Capouillez remained defiant and said the fine is a tiny fraction of the original fine sought--an indication of his vindication. There is new litigation involving Capouillez. One of the leases he negotiated was on behalf of the Laurel Hill Game and Forestry Club with Range Resources. The way Capouillez constructed his leases was that he would get a cut, a percentage, of any lease signing bonus and ongoing royalty payments, in return for the leases he brokered. Range never drilled on Laurel Hill's property, but they did start to push dirt around a few hours before the lease expired as a way of holding the acreage (some would call their action a less-than-honorable practice). Laurel Hill sued Range and the lawsuit was later settled by drafting up a new lease with new terms. The new lease/terms were not brokered by Capouillez and he was cut out of the deal--so Capouillez sued both Laurel Hill and Range. The moral of the story, according to lawyers writing about the case, is to never use non-lawyers to represent you in lease negotiations...

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