Co-author Darien Harris

The Texas Civil Practices and Remedies Code, Chapter 95, limits a property owner’s liability when an independent contractor hired to construct, repair, renovate or modify an improvement to the owner’s property brings a negligence claim that arises “from the condition or use of the improvement.” The Texas Supreme Court has ruled that the property owner is free from liability when negligence elsewhere contributes to the plaintiff’s injuries. But the contributing negligence must involve the condition or use of the improvement on which the plaintiff was working.

If you’ve stayed with us this far you must be a lawyer.

The facts

In Energen Res. Corp. v. Wallace, Energen hired Nabors and New Prospect to drill an oil well in Pecos County. Energen contracted Dubose Drilling to complete a water well that would assist the oil well drilling operation.  Dubose subcontracted with Elite Drillers to complete the water well.  Elite’s president, Wallace, supervised the water well project. Because the wells were only 500 feet from each other, Energen and Elite more or less worked side-by-side.
Continue Reading Operator Escapes Liability For a Gas Kick and Resulting Fire

Author Ethan Wood

Louisiana’s compulsory pooling scheme seeks to balance the interests of individual landowners and oil and gas operators to promote responsible development of natural resources. Because of compulsory pooling, operators are not held hostage by individual landowners who refuse to lease, but landowners are afforded protections so as not to be taken for

Co-author Marcus Fettinger

Under the Fair Labor Standards Act, what is required for an employee to be exempt from overtime pay? Ordinarily, it’s a guaranteed minimum salary. As the Department of Labor has explained, being paid on a “salary basis” means an employee regularly receives a predetermined amount of compensation each pay period on a weekly, or less frequent, basis. The predetermined salary cannot be reduced because of variations in the quality or quantity of the employee’s work.

That seems straightforward, but it took the Fifth Circuit three rounds of deliberations to nail it down. The entire panel of the Court recently reconsidered a 2020 opinion in Hewitt v. Helix Energy Solutions Group, Inc. In its majority opinion, 12 of the 18 judges held that a daily rate can qualify as a salary if, and only if, the employer pays a minimum of $684 per week regardless of the amount that the employee works and a “reasonable relationship” exists between the minimum salary and the total amount paid.
Continue Reading Fifth Circuit Tells the Oil Patch That a Day Rate is Not a Salary

Most bills filed in each legislative session fail. For the most part we are thankful for that. But today we summarize a few that survived while you weren’t paying attention. As usual, there are winners, losers, and rainouts.

HB 2730 beefs up the “Landowners’ Bill of Rights” in eminent domain negotiations and proceedings. It amends

Co-author Rusty Tucker

Howard, et al. v. Matterhorn Energy, LLC, et al. [6th Dist.] May 4, 2021 considered the Texas Citizens Participation Act as amended, effective on September 1, 2019.

Background

The lessors leased their minerals in 1,100+ acres in Harrison County to Matterhorn. To induce the deal, Matterhorn several representations to the lessors and agreed to a continuous development program. The lease required lessors to give 60 days’ notice of a breach before filing suit. Before the primary term expired gas prices dropped and Matterhorn decided to sell the lease.

The lessors sued Matterhorn for damages and rescission based on several causes of action  and filed a notice of lis pendens. Matterhorn alleged it had contracted with EnergyNet to market its interest in the lease and that when lessors became aware they filed suit and a notice of lis pendens.

Testimony showed that the lessors made false misrepresentations about Matterhorn and Cherry to third parties (including prospective purchasers) prior to filing suit. Matterhorn claimed these discussions led to the termination of its sales agreement with EnergyNet. Matterhorn counterclaimed for tortious interference and business disparagement.

Lessors moved to dismiss Matterhorn’s claims under the TCPA because they were based on their petition and lis pendens and invoked their exercise of the right to petition the courts for relief. Lessors further argued they established an affirmative defense entitling them to judgment as matter of law because the counterclaims were barred by the judicial proceedings privilege.

Matterhorn responded that the communications forming the basis of their claims were among private parties, not the public, and occurred prior to the filing of the litigation. There was testimony about how lessors’ third party discussion and filing of the lawsuit and lis pendens caused Matterhorn to lose its ability to sell the lease. Plaintiff Howard admitted in a deposition that he filed the lawsuit before expiration of the primary term and before penalties under the lease were due to “put . . . a drain on” Matterhorn and affect its ability to “flip” the lease. The trial court denied lessors’ TCPA motion to dismiss.

The TCPA process

Resolving a TCPA claim occurs in three steps:
Continue Reading Texas Court Applies Amended Citizens Participation Act to a Lease Dispute

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

Larceny, that business enterprise with a knack for (fleeting) success regardless of the state of the economy, was busy last year. As Obi-Wan Kenobe would say it: You will never find a more wretched hive of scum and villainy as the bad guys of energy in 2020. Here we go.

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PdVSA

First up

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

The question in Cannisnia Plantation, LLC v. Cecil Blount Farms, LLC was whether a well was drilled in good faith in order to interrupt the running of prescription on a Louisiana mineral servitude.

The Mineral Servitude

If you conduct your business where they don’t have the Mardi Gras, the nutria, or the King of Zydeco, be mindful that in Louisiana there is no “mineral estate” that lives in perpetuity. Instead, there is the mineral servitude. See Mineral Code Article 21: “ … the right of enjoyment of land belonging to another for the purpose of exploring for and producing minerals and reducing them to possession and ownership.” Among the modes of extinction of mineral servitudes is prescription for nonuse for 10 years.

Continue Reading Louisiana Servitude Extended by Good Faith Drilling