The First Baptist Church of Roswell, et al v. Yates Petroleum Corp., 2014 WL 4495200 (2014)

The New Mexico Supreme Court held that the provision of New Mexico Section 70-10-3 of the Oil and Gas Proceeds Payment Act requiring the payment of interest on suspended royalty payments could not be abrogated by contract.

After production was established in August of 2002, Yates sent its form division order to the Lessors in which it was stated that Yates was authorized to suspend funds beyond the six-month statutory deadline if there was a question of title.  Yates did not distribute the royalties to the Lessors for approximately 3 years.  The New Mexico Supreme Court held that the royalty owners had not contracted away their right to interest by signing Yates division order.