Co-author Brittany Blakey

The lesson from In re First River Energy LLC:  Even though Texas lien law does not require the filing of a financing statement for perfection, file one anyway. It will be helpful in the event a dispute is decided under the laws of another state.

The transactions

Texas and Oklahoma producers sold oil and condensate to First River Energy, a midstream service provider, which was expected to pay the producers by the 20th of the month following delivery. First River was organized under Delaware law and headquartered in Texas. First River filed Chapter 11 bankruptcy in Delaware, by which time it had resold the producers’ oil to downstream purchasers and had $27.6 million+/- in accounts receivable, while the producers’ invoices were outstanding.

The producers from the two states asserted statutory perfected purchase money security interests in the proceeds of the oil and condensate under two statutes: Texas UCC §9.343, or the Oklahoma Lien Act, (Okla Stat. Ann. Tit. 52 §549), respectively. First River’s bank had a competing security interest in the debtor’s funds on deposit and other assets, including accounts and proceeds thereof, by virtue of security agreements executed under Delaware law. The bank’s interest was undisputed.
Continue Reading Red River Statutory Rivalry: Texas Lien Statute is Fatal to Texas Producers’ Security Interests

Co-author David Leonard

In a precursor of disputes sure to come, in Lyle v. Midway Solar, LLC, a Texas court of appeals delivered a win for solar energy by applying the accommodation doctrine in favor of a solar developer’s actual use of the surface of the land over speculative future development of the mineral estate.

The lesson for mineral and surface owners

Mineral owners: This decision should remind you to diligently monitor surface use and, as appropriate, intervene in the development process with informed feedback about your actual or potential surface use needs.

Surface users: Conversely, you should be willing to incorporate informed feedback from mineral owners into the design of surface projects. An arbitrary and unilateral designation of drilling areas is unlikely to suffice under many circumstances.
Continue Reading Solar Beats Minerals in a Texas Accommodation Doctrine Battle

Co-author Rusty Tucker

In re Plains Pipeline, L.P., is a suit to adjudicate title to groundwater. Did the trial court err in allowing a party to drill seven test holes on a tank farm? (Spoiler alert: It didn’t.) This decision evaluates an order in a unique civil discovery situation, and the underlying claims exemplify approaches to disputes over groundwater rights.
Continue Reading A Unique Discovery Request in a Texas Water Rights Fight

Co-author Rusty Tucker

In a suit to foreclose a property tax lien, if the taxing authority does not exercise due diligence to support service of citation by a method other than by personal service can the owners, as a matter of due process, raise that defect for the first time after expiration of the statute of limitations? Heidelberg v. DOH Oil Company says “no”.


Continue Reading Challenge to a Tax Sale Comes Too Late

Co-author Rusty Tucker

Estate of Trickett was a dispute over heirship of Claralyn Trickett, possibly the wife of Robert Bowerman (who must have forgotten to divorce his previous wife).

The descendents of Claralyn brought a quiet title action and an heirship proceeding against the heirs of Robert, who claimed an interest in his estate by virtue of his marriage to Claralyn. The trial court abated the quiet title suit while the parties fought over Claralyn’s heirship,

The result

The court agreed with the descendents of Robert that the general four year statute of limitations applied and that Claralyn’s heirs’ cause of action began to accrue in 1972 when she died. The claim was barred by limitations because they did not file suit until 2015, 42 years after she died and 38 years too late.

This was not an action to recover real property. If it were, the cause of action would not have been barred by limitations.  The real property issue was not presently before the court. The only requested relief was to have the court declare the identity of Claralyn’s heirs and the respective shares and interest of each in her estate.
Continue Reading Limitations Bars an Heirship Proceeding

Let’s begin with a quiz:

What is a “Labor” ? Assuming you met one face to face, how big is would you expect it to be?*

From Great Western. Drilling, Ltd. v. Pathfinder Oil & Gas, Inc. we learn that if you want one agreement to be conditioned on execution of another one, you’d better say so … in writing … in the first one. Texas courts look for ways to avoid conditions precedent.
Continue Reading Offer to Acquire Leases Could Not be Conditioned on a JOA