You might recall this post on Broadway National Bank, Trustee v. Yates Energy Corporation. We now have Yates Energy Corporation et al v. Broadway National Bank, Trustee, the court of appeals’ ruling after remand. Recall the result from the Supreme Court: Execution of the 2013 Amended Correction Mineral Deed by the parties to the original 2005 Mineral Deed and the 2006 Correction Mineral Deed, without joinder of the current owners of the minerals, complied with Texas Property Code §5.029. The question remaining was whether the current owners were bona fide purchases for value without notice. Skipping all sorts of rulings on side issues, the result is that current owner Yates was not a BFP. Other appellants survived to fight another day.
Continue Reading Texas Correction Deed Statute Revisited … Again
Price is Paid for Failure to Timely Probate a Texas Will
Co-author Brittany Blakey
In re: Estate of Robert Scott Masters, Deceased reveals the price to be paid for failing to timely admit a will to probate or as a muniment of title.
Know this about Texas probate law
The Estates Code requires that a will be submitted for probate (or as a muniment of title)
Texas Correction Deed Statute Revisited
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
Operator Escapes Liability For a Gas Kick and Resulting Fire
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
Louisiana Operator Slapped by Appellate Court
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
Fifth Circuit Tells the Oil Patch That a Day Rate is Not a Salary
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
Who Won and Who Didn’t: The 2021 Texas Legislature and Energy
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
Texas Court Applies Amended Citizens Participation Act to a Lease Dispute
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
Texas Supreme Court Rules on Correction Deeds in a Case of First Impression
Co-author Rusty Tucker
What if you pay good money for a mineral interest and record the deed in the official public records, thereby securing your title? What if your predecessors-in-title decide among themselves they made a material mistake in a conveyance way back in the chain of title, fix the alleged error, and record the
Red River Statutory Rivalry: Texas Lien Statute is Fatal to Texas Producers’ Security Interests
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