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
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Confess … Confess!
When you prepare, review and/or sign settlement agreements you sometimes pay less attention than you should to the details of those “standard” releases! Acme Energy Services, d/b/a Big Dog Drilling v. Staley et al. says, Beware the “boilerplate”; before signing consider what you are actually trying to accomplish.
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Co-authors Niloufar Hafizi and Mauri Hinterlong
In resolving disputes among the mineral interest family, there is no bright-line rule delineating the duty of the executive right holder. In Texas Outfitters Limited v. Nicholson, the Texas Supreme Court explained why. The Court last addressed executive rights in 2015 in KCM Financial v. Bradshaw, where the executive allegedly colluded with a lessee for lease terms favoring itself at the expense of the non-executive. Texas Outfitters presented an oppportunity for the Court to apply the KCM guidelines to a different scenario: whether the executive breached the duty by refusing to lease.
(Spoiler alert: Yes.)
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Co-authors Ethan Wood and Chance Decker
Less than a year ago, we discussed the “Unanswered Questions” left in the wake of Devon Energy Prod. Co., LP v. Apache Corp. (which did answer the question, “Who is a ‘Payor’ Under the Texas Natural Resources Code?”). We asked:
“But if the non-participating working interest owner is not paying royalties—what is keeping the lease alive? Absent pooling of the leases or a JOA, the non-participating working interest owner cannot rely on the operator’s actions to perpetuate its leases. A sly operator can obtain top leases from the non-participating working interest lessors and run out the clock on those leases …”
In Cimarex Energy Co. v. Anadarko Petroleum Corp., the operator did just that …
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Co-author Chance DeckerBurlington Resources Oil & Gas Company, LP. v. Texas Crude Energy, LLC et al is another chapter in the back-and-forth over deduction of post-production costs from royalty payments. In “clarifying” (royalty owners might say “retreating from”) Chesapeake Exploration & Production, LLC v. Hyder, the Texas Supreme Court held that a royalty delivered into the pipeline or tanks is akin to a royalty delivered “at the wellhead.” The lessee was entitled to deduct post-production costs from its royalty calculation, notwithstanding that the calculation was based on the “amount realized” from downstream sales.
Don’t read too much into it?
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Marsha Ellison v. Three Rivers Acquisition, LLC, et al. reminds us what is required for an instrument to be a conveyance and what is required for a stipulation to be effective.
When J.D. Suggs died in 1925, his heirs agreed to swap land with the Noelkes, and executed the Suggs Deed conveying several tracts to the Noelkes. One tract was described as “all of … the lands located North and West of the public road which now runs across the corner of [the survey], containing 147 acres more or less.” There was a problem: There were actually 301 acres in the section northwest of the public road.
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We told you to “Beware of Strips and Gores” back in 2012 and today we bring you Green et al v. Chesapeake et al, the sequel. Unlike cinema’s greatest follow-ups, this entry feels more like an unneeded rehash of the original. Nevertheless, it is a good refresher on the topic.
Rules for the Genre
The strip-and-gore doctrine operates to pass title to lands in addition to the lands described in a conveyance when:
In a ruling that could benefit mineral owners who don’t regularly examine county deed records (to-wit, you?) the Supreme Court of Texas in Carl M. Archer Trust No. Three et al v. Tregellas held that the discovery rule delayed the running of the statute of limitations on behalf of the holder of a recorded right of first refusal to purchase mineral interests.
The trustees sued the Tregellases for buying the minerals without allowing the Trust to exercise its ROFR, contending that a contract was formed when they sued more than four years after the Tregellases’ purchase; the suit was their acceptance of the right to purchase the minerals, they said.
According to the Trellgases, the claim was barred by limitations because the suit was filed more than four years after the sale. The trustees responded that even if that were so, limitations should be delayed because they they had no obligation to search the county deed records.
The discovery rule described …
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Co-author Ethan WoodIn Texas losing a title dispute doesn’t mean you committed myriad heinous torts by asserting your rights in the first place. The test: Were you reasonable in bringing your colorable but not correct claim? So says Dorfman v. J P Morgan Chase Bank, NA.
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Co-author Lydia WebbQ: How many New York federal judges does it take to make a mess of Texas property law?
A: In In Re: Sabine Oil and Gas Corp., five. One to get it wrong, another to affirm the wrongness, and three more for reinforcement.
For the third time, a federal court in