Today is a two-fer. The questions: When does the “merger doctrine” not work in Texas, and how do courts treat technological developments created after a contract becomes effective?

In Murphy Land Group LLC v. Atmos Energy Corporation, Atmos constructed and operated pipelines under three easements from the ‘50’s and ‘60’s and the parties had a 2012 Roadway Lease granting Atmos a 40 foot roadway lease, which expired under his own terms in 2015.

The merger doctrine

Atmos conducted a smart pig gas flaring operation in order to inspect and maintain the pipelines.  Murphy objected and sued for declaratory judgment that the easements had terminated and for trespass, invoking the merger doctrine, alleging that when the parties entered into the second contract (the Roadway Lease) dealing with the same subject matter as the first contract (the three easements) without stating whether the second operated to discharge or substitute for the first, the two contracts must be interpreted together and the latter prevails to the extent they are inconsistent.

 According to Murphy, the parties would not have executed the Roadway Lease when Atmos already had a right of ingress and egress. Thus, the parties intended for the doctrine to apply. The result would be that the easements ceased to exist as independent interests in the land and Atmos could no longer utilize the pipelines.

Wrong, said the court. The Roadway Lease and pipeline easements are separate transactions covering different subject matter.

The purpose of the easements was to construct, operate and maintain gas pipelines with the incidental right to access the property for those purposes. On the other hand, the Roadway Lease gave Atmos the right to construct a new road of specific width wherever it desired on the property, that it could use for any purpose. That right was distinct from the already existing right of ingress and egress.

Whether the doctrine applies in any case is primarily a question of intent. The court sidestepped Murphy’s argument that intent is a question of fact by ruling as a matter of law that the easements and Roadway Lease were separate transactions having different purposes and subject matter and were not inconsistent with one another. The merger doctrine failed as a matter of law.

The pigging operation and technological advances

Murphy asserted that the pigging procedure was not within the scope of Atmos’ rights under the easements. The court observed that no rights pass to an easement holder by implication except those that are reasonably necessary to enjoy the rights that the easement expressly grants. Technological advances, to be allowed, must fall within the purposes for which the easement was created as determined by the grant’s terms. An express easement encompasses only those technological developments for which the easement was granted.

Each easement authorized Atmos to “ … maintain … and operate a pipeline and appurtenances thereto, … along with ingress to and egress from the premises, for the purpose of … maintaining … [the pipelines]”. The court gave the term “maintain” its ordinary meaning. (Grab your Funk and Wagnalls and look it up).

The court interpreted the easements’ unambiguous language to provide the greatest interest possible to the dominant estate (the Atmos easements) to maintain its pipelines and construed the language against the servient estate burdened by the easements (Murphy’s property).

Considering those standards, the easements could be given a definite, unambiguous legal meaning based on the plain and ordinary meaning of the undefined term “maintain”, which includes within its scope maintenance via the smart pig gas flaring procedure.

The procedure was a technological development that fell within Atmos’ authority to maintain the pipeline.

After a chatty discussion of porcine activities, your musical interlude goes downright stygian with Nick Cave and the Bad Seeds.