542 S.W.3d 643
Tex. App.2016Background
- In 1996 Strieber conveyed a 120-acre tract to the Koopmanns but reserved a non‑participating royalty interest (NPRI) for 15 years (until Dec. 27, 2011) and "as long thereafter as there is production," with a savings clause preserving the NPRI when a lease is maintained by shut‑in royalties or "similar" payments while a well capable of producing is shut‑in.
- Burlington leased the land (2007) and in 2010 ConocoPhillips (parent) paid $24,000 to extend Burlington’s lease to Oct. 2012 (a paid‑up lease).
- No well produced by Dec. 27, 2011; actual production began Feb. 2012. Experts disputed whether a well was capable of producing before Dec. 27, 2011.
- Koopmanns sued for declaratory judgment that the NPRI terminated and vested in them; they also asserted non‑declaratory claims (breach of contract, unjust enrichment, conversion, negligence, negligence per se) against Burlington and ConocoPhillips for withholding royalties.
- Trial court granted summary judgment declaring the NPRI null and void as of Dec. 27, 2011 and dismissed Koopmanns’ non‑declaratory claims; it denied a Rule 91a dismissal and awarded Koopmanns attorney’s fees under Rule 91a.7. The court of appeals affirmed in part, reversed in part, and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the deed's savings clause preserved Strieber's NPRI beyond Dec. 27, 2011 (is a paid‑up lease payment “similar” to a shut‑in royalty?) | Koopmanns: the $24,000 paid to secure a paid‑up lease is not "similar" to a shut‑in royalty as a matter of law; savings clause therefore inapplicable. | Strieber/Burlington/Conoco: a paid‑up lease payment is similar because both payments maintain a lease in lieu of production, so savings clause applies. | Savings‑clause ambiguity exists ("similar" susceptible to reasonable differing meanings); fact issues preclude summary judgment—trial court erred to the extent it declared ownership on summary judgment. |
| Whether the Koopmanns’ future interest violates the rule against perpetuities | Koopmanns: interest vested in them (two‑grant theory) and does not violate perpetuities. | Strieber/Burlington/Conoco: reservation creates a springing executory interest that could violate perpetuities. | Court follows Bagby two‑grant reasoning: reservation creates a valid future interest (possibility of reverter) and does not violate the rule against perpetuities; Peveto distinguishable. |
| Whether §91.402(b) (Texas Natural Resources Code) bars non‑declaratory claims for unpaid royalties while title is disputed | Koopmanns: §91.402 does not make declaratory relief the exclusive remedy; non‑declaratory claims are permitted. | Burlington/Conoco: §91.402(b) permits withholding when title is disputed and thus bars non‑declaratory suits to recover royalties. | §91.402(b) does not bar non‑declaratory claims; statute does not impose a procedural exclusivity; trial court erred to dismiss breach‑of‑contract claim on that basis. |
| Whether tort and quasi‑contract claims (negligence, negligence per se, conversion, unjust enrichment) survive given the lease and economic‑loss rule | Koopmanns: tort and quasi‑contract theories viable against Burlington/Conoco. | Burlington/Conoco: economic‑loss rule bars tort claims; valid lease precludes unjust enrichment. | Unjust enrichment barred (valid contract governs); negligence, negligence per se, and conversion barred by economic‑loss rule (only contractual economic loss alleged). Trial court correctly dismissed those claims. |
| Whether defendants were prevailing parties under Rule 91a for attorney’s‑fee award reversal | Burlington/Conoco: should have prevailed under Rule 91a; fees award to Koopmanns improper. | Koopmanns: they prevailed on the Rule 91a motion and are entitled to fees. | Denied: trial court correctly denied the Rule 91a motion; defendants failed to show prevailing‑party status on the motion and do not prevail on appeal—attorney’s fees award stands. |
Key Cases Cited
- Bagby v. Bredthauer, 627 S.W.2d 190 (Tex. App.—Austin 1981) (two‑grant theory: reservation of royalty for term and "so long as" production does not violate perpetuities)
- Peveto v. Starkey, 645 S.W.2d 770 (Tex. 1982) (voided a springing executory interest created by a second deed conditioned on termination of a determinable fee)
- Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211 (Tex. 2003) (summary‑judgment standard; de novo review)
- DeLanney (Southwestern Bell Tel. Co. v. DeLanney), 809 S.W.2d 493 (Tex. 1991) (economic‑loss rule: tort barred when injury is solely contractual economic loss)
- Coker v. Coker, 650 S.W.2d 391 (Tex. 1983) (ambiguous contract defeats summary judgment; intent is fact question)