Articles Posted in Real Estate & Property Law

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In this case involving competing claims to mineral-lease interests in two tracts of land, the Supreme Court affirmed the judgments of the trial court and court of appeals that the acreage Endeavor Energy Resources, LP and Endeavor Petroleum, LLC (collectively, Endeavor) retained under “retained-acreage clauses” in expired leases did not include the two tracts at issue. Discovery Operating, Inc., which drilled producing wells on the two subject tracts, claimed the mineral-lease interests based on leases acquired directly from the mineral-estate owners. Endeavor based its claim on prior leases with the same owners covering land that included the two subject tracts. Endeavor never drilled on the tracts, and Endeavor’s leases’ terms had expired. However, the leases included “retained-acreage clauses” providing that the leases would continue after they expired as to a certain number of acres associated with each of the wells Endeavor drilled on adjacent tracts. Supreme Court affirmed the judgment of the lower courts, holding that “a governmental proration unit assigned to a well” refers to acreage assigned by the operator, not by field rules. View "Endeavor Energy Resources, LP v. Discovery Operating, Inc." on Justia Law

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The Supreme Court affirmed the judgment of the court of appeals in this case requiring interpretation of retained-acreage provisions in oil-and-gas lease instruments, holding that acreage “included within the proration unit for each well…prescribed by field rules” refers to acreage set by the field rules, not acreage assigned by the operator. XOG Operating, LLC conveyed to Chesapeake Exploration Limited Partnership and Chesapeake Exploration, LLC (collectively, Chesapeake) its rights as lessee under four oil-and-gas leases in three sections of land. Under a retained-acreage provision, the assigned interest would revert to XOG after the primary term. As relevant to appeal, Chesapeake would retain for each well drilled the acreage “included within the proration…unit” “prescribed by field rules.” The acreage not retained by Chesapeake would revert to XOG on termination of the assignment. Chesapeake completed six wells during the primary term of the assignment, five of which were located in an area for which the Railroad Commission had promulgated field rules. The sixth well was located in an area for which there were no field rules. In Chesapeake’s view, it retained all of the assigned acreage. XOG sued Chesapeake to construe the retained-acreage provision. The Supreme Court affirmed the trial court's decision that the none of the land at issue reverted to XOG under the retained-acreage provision. View "XOG Operating, LLC v. Chesapeake Exploration Limited Partnership" on Justia Law

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The Supreme Court reversed the decision of the court of appeals affirming the judgment of the trial court ruling that a will bequest of a tract of land unambiguously devised a fee-simple interest, rather than a life-estate interest, to the testator’s son, entitling the son to summary judgment. The Supreme Court reversed and rendered judgment that the will granted the son a life estate and Petitioners the remainder interest in the property at issue, holding that the contested provision unambiguously conveyed a life estate. View "Knopf v. Gray" on Justia Law

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The common law rule against perpetuities does not invalidate a grantee’s future interest in the grantor’s reserved non-participating royalty interest (NPRI). In addition, section 91.402 of the Texas Natural Resources Code does not preclude a lessor’s common law claim for breach of contract. The court of appeals concluded that the rule did not bar the grantees’ future interest in the NPRI. The court, however, found that the reservation’s savings clause was ambiguous and remanded the case for a jury to determine the proper interpretation. The court held that section 91.402 does not bar a claim for breach of contract. Finally, while determining that several of the grantees’ claims failed as a matter of law, the court of appeals upheld the trial court’s award of attorney’s fees against the grantor pursuant to Tex. R. Civ. P. 91a. The Supreme Court affirmed. View "ConocoPhillips Co. v. Koopmann" on Justia Law

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The Supreme Court affirmed in part and reversed and remanded in part the decisions of the trial court and court of appeals agreeing with Plaintiffs that a local water district owned an open-space area at Medina Lake the community had long considered public space for recreation and access to the lake. Plaintiffs, three families who owned lots on a peninsula at Medina Lake, filed suit after new neighbors, who claimed that they owned the open-space area and that the community members had no easements or other rights to use it, denied Plaintiffs access to the disputed area. The trial court declared that the new neighbors did not own the open-space. The Supreme Court agreed, holding (1) the new neighbors did not own the disputed area, and therefore, they had no standing to challenge Plaintiffs’ alleged easement over that area or authority to exclude Plaintiffs from the area; but (2) the court of appeals erred in upholding the award of attorney’s fees to the water district. View "Lance v. Robinson" on Justia Law

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The lessee of certain mineral interests could not justifiably rely on extra-contractual representations by the lessor’s agent despite “red flags” and a negation-of-warranty clause in the sales documents explicitly placing the risk of title failure on the lessee. In its complaint, the lessee alleged breach of contract, fraud, and negligent misrepresentation. Following a pre-trial conference, the trial court issued an order under Tex. R. Civ. P. 166(g) disposing of all of the lessee’s claims, concluding (1) the unambiguous terms of the letter of intent and leases precluded the lessee’s contract claim; and (2) as a matter of law, the lessee could not establish the justifiable-reliance element of its fraud and negligent-misrepresentation claims. The court of appeals affirmed the trial court's ruling regarding the contract claim but reversed on fraud and negligent misrepresentation. The Supreme Court reversed the court of appeals and reinstated the trial court’s judgment, holding (1) justifiable reliance was an essential element of the lessee’s remaining causes of action; and (2) as a matter of law, the lessee could not show justifiable reliance. View "JPMorgan Chase Bank, N.A. v. Orca Assets G.P., LLC" on Justia Law

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The pro-forma provision in the tariff in this case, which set the rates and terms for a utility’s relationship with its retail customers, did not conflict with a prior franchise agreement, which reflected the common law rule requiring utilities to pay public right-of-way relocation costs, or the common law, and the franchise agreement controlled as to the relocation costs at issue. At issue was whether the City of Richardson or Oncor Electric Delivery Company must pay relocation costs to accommodate changes to public rights-of-way. The City negotiated a franchise agreement with Oncor requiring Oncor to bear the costs of relocating its equipment and facilities to accommodate changes to public rights-of-way, but Oncor refused to pay such costs. While the relocation dispute was pending, Oncor filed a case with the Public Utility Commission (PUC) seeking to alter its rates. The case was settled, and the resulting rate change was filed as a tariff with the PUC. The City enacted an ordinance consistent with the tariff, which included the pro-forma provision at issue. The Supreme Court held that the provision in the tariff did not conflict with the franchise contract’s requirement that Oncor pay the right-of-way relocation costs at issue. View "City of Richardson v. Oncor Electric Delivery Co." on Justia Law

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At issue in this appeal from a slander-of-title judgment was how the special or economic damages should be measured. When Marc Pieroni and Bonnie Allen-Pieroni divorced, Bonnie was awarded $500,000, which Marc paid in monthly installments. Thereafter, Marc purchased a new home, and Bonnie recorded in the county property record an abstract of judgment reflecting Marc’s $500,000 debt from the divorce decree, thus creating an ostensible lien on Marc’s property. When Marc was preparing to close on the sale of his property years later, the sale fell through because Bonnie refused to release her lien. Marc sued Bonnie to quiet title and for damages, asserting an equitable action to remove her lien and a tort action for slander of title. The trial court rendered judgment for Marc and awarded damages of $98,438. The court awarded damages based in part on the difference between the disparaged property’s contract price and the owner’s mortgage balance - the amount the property owner would have received from the property’s sale but for the defendant’s disparagement of his title. The court of appeals affirmed. The Supreme Court reversed, holding that the damages awarded for slander of title were based in part on an erroneous measure and unsupported by the evidence. Remanded. View "Allen-Pieroni v. Pieroni" on Justia Law

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The Supreme Court affirmed the decision of the court of appeals reversing the trial court’s judgment awarding a constructive trust to Longview Energy Company on certain mineral leases and related property and requiring the disgorgement of money derived from past lease production revenues. Longview sued two of its directors and entities associated with them after discovering that one of the entities had purchased mineral leases in an area where Longview had been investigating the possibility of buying leases. The jury found (1) the directors breached their fiduciary duties to Longview by usurping a corporate opportunity and by competing with the corporation without disclosing the competition, and (2) the entity as issue acquired leases as a result of the breaches. The court of appeals reversed. The Supreme Court affirmed, holding (1) there was no evidence tracing the entity’s acquisition of any specific leases to any assumed breaches, and therefore, the trial court erred by imposing the constructive trust on and requiring the transfer of leases and properties to Longview; and (2) there was no evidence to support the trial court’s damages award. View "Longview Energy Co. v. Huff Energy Fund LP" on Justia Law

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The Supreme Court reversed in part the judgment of the court of appeals, which dismissed Petitioners’ appeal for lack of jurisdiction, holding that Petitioners timely filed their interlocutory appeal. Respondent filed suit against several parties, including Petitioners - municipal development corporations (MDCs) - alleging that negligent construction of a municipal hiking and walking path caused damming, resulting in damage to his property. Petitioners filed a motion to dismiss and plea to the jurisdiction, arguing that Respondent’s claims lacked a jurisdictional basis. The trial court granted the motion to dismiss as to some claims but denied relief as to all other claims. The MDCs subsequently filed a motion for summary judgment on the remaining claims for injunctive relief, arguing that Respondent’s claims lacked a jurisdictional basis and evidentiary merit. The trial court denied the motion, and the MDCs appealed. The court of appeals dismissed the MDCs’ appeal for lack of appellate jurisdiction. The Supreme Court reversed in part, holding that the MDCs’ hybrid motion for summary judgment was not a mere motion for reconsideration but, rather, a distinct motion that merited an independent twenty-day interlocutory appeal period. View "City of Magnolia 4A Economic Development Corp. v. Smedley" on Justia Law