Those who continue to be horrified by Broadway National Bank, Trustee v. Yates Energy Corp. should be relieved that the result in Endeavor Energy Resources, LP v. Anderson was more equitable. In Yates, the Texas Supreme Court held that Texas Property Code Section 5.029 permitted original parties to a conveyance to execute a
Texas Court Addresses MSA Indemnity Obligations
At issue in RKI Exploration and Production LLC v. AmeriFlow Energy Services LLC and Crescent Services, LLC. were two Master Service Agreements. RKI was the operator of a well in Loving County; AmeriFlow and Crescent were contractors. A sand separator exploded at the well site injuring or killing three workers who worked for another subcontractor. The result was three suits in New Mexico and a mazelike series of indemnity demands, denials, settlements, and judgments, including settlement of one death case for $9.1 million.
To preserve your patience, and mine, let’s focus on the takeaways from this 72-page behemoth of an opinion based on a 10,000-page record.
Grammar lessons
The court defined a phrase common to Master Service Agreements: “arising in connection herewith”. Indemnitees AmeriFlow and Crescent argued that the phrase “encompasses all activities reasonably incident to or anticipated by the principal activity of the MSA, which was oil well operation”. No, it doesn’t. The court determined that the phrase requires a causal connection between the MSA and the claims for which the indemnitee sought indemnity. The scope of work envisioned in the MSA was defined by work orders, and the indemnity could go no further than the scope of work.
Continue Reading Texas Court Addresses MSA Indemnity Obligations
Court Finds Declaratory Judgment Action, Not Trespass to Try Title
Co-author Trevor Lawhorn
SM Energy Co. v. Union Pac. R.R. Co. considers a question frequently asked in Texas suits affecting title: When is a suit a trespass to try title action and not a declaratory judgment action?
The dispute
SM Energy and Union Pacific are parties to three oil and gas leases covering lands in
Exculpatory Clause Does Not Save Operator From Liability
Co-author Trevor Lawhorn
Non-operators under the 1989 Model Form JOA have been hoping to drive a stake through the dark heart of Reeder v. Wood County Energy, LLC. Bachtell Enterprises, LLC v. Ankor E&P Holdings Corp might be a start. The question was whether the Article V.A. exculpatory clause exonerated the operator who intentionally
Were the Mineral Deeds a Gift or a Sale? It Made a Difference.
Co-author Carolina Cuppitelli*
The question presented in Aaron v. Fisher et al: Did mineral deeds bestow separate property upon the grantees by gift, or did they convey a community property interest to the grantees and their spouses by sale for consideration?
Why was the question important? A gift is the grantee’s separate property; a
Pipeline Prevails Over Governmental Entity in Condemnation Dispute
Author Ethan Wood
A pipeline company condemning property of a governmental entity? That’s something you don’t see every day. Score a win for “big pipe” against “big government”. In Harris County Fresh Water Supply District No. 61 v. Magellan Pipeline Company, LP and V-Tex Logistics, LLC, a special purpose district unsuccessfully argued that it
Texas Supreme Court Reverses Judgment Because of Lack of Written Notice
If you administer or advise on master service agreements, or for that matter any other contract that requires written notice, this post by my Gray Reed partner Joe Virene is essential reading:
Texas Supreme Court: Actual Notice Does Not Satisfy Written Notice Requirement
In short, the Supreme Court of Texas reversed a jury verdict in
Royalty Obligations on Free-Use Gas Redux
Co-author Brittany Blakey
Recall our recent post on Carl v. Hilcorp Energy Company from the U.S. District Court for the Southern District of Texas discussing the lessee’s royalty obligations on gas used off the premises in a market-value lease. See now, Fitzgerald v. Apache Corporation: Different judge; same district; similar facts, lease provisions
California Climate Change Suit Returns to State Court
Co-author Brittany Blakey
In City of San Mateo, et al v. Chevron Corporation, et al, six California jurisdictions sued 13 energy company defendants for global warming-related claims.
The question in this round was whether the federal district court was wrong in remanding the suit to state court after it had been removed to federal
No Off-Lease Gas Use Recovery For Royalty Owners
Co-author Brittany Blakey
The question is presented again but in a different format: In Texas is a lessee allowed to deduct post-production costs (PPC’s) from the lessor’s gas royalty? In Carl v. Hilcorp, the answer was “yes” based on the language in the oil and gas lease at issue. The question was for gas