ConocoPhillips, Burlington Resources Oil & Gas Co., L.P., and Lois Strieber, Individually and as of the Estate of Jerry Strieber v. Ralph Wade Koopmann, Karen Marie Koenig, and Lorene H. Koopmann, 13-14-00402-CV

Background

In 1996 Lois Strieber reserved a defeasible term non‑participating royalty interest (NPRI) in a deed to Gilbert and Lorene Koopmann that could terminate after 15 years or if production began by December 27, 2011.
Koopmanns leased the tract to Hawke/Burlington; Burlington acquired 60% of Strieber’s NPRI by a recorded Royalty Deed in 2011; parties disputed whether the NPRI expired December 27, 2011.
Burlington placed the royalties attributable to the disputed NPRI in suspense pending resolution; Burlington also made a shut‑in royalty payment in December 2011 which Koopmanns promptly returned.
Koopmanns sued for declaratory relief (seeking ownership of the NPRI) and, separately, breach of contract, unjust enrichment, conversion, negligence, negligence per se, and interest on withheld royalties. Strieber asserted a contingent cross‑claim for breach of an alleged 2011 oral contract.
The trial court granted declaratory relief to Koopmanns, granted a take‑nothing summary judgment on Koopmanns’ non‑declaratory claims, and severed Strieber’s cross‑claim. Appeal/cross‑appeals followed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Tex. Nat. Res. Code §91.402 bars claims for royalties withheld during a title dispute	Koopmanns: statute should not bar their contract, tort, and equitable claims or pre/post‑judgment interest	Burlington/Conoco: §91.402 permits a payor to withhold payments without interest when a title dispute affects distribution, so these claims fail	Court: Section 91.402 bars the non‑declaratory claims and interest on amounts lawfully withheld during a legitimate title dispute (statutory safe harbor)
Whether pre‑ and post‑judgment interest is recoverable on withheld NPRI royalties	Koopmanns: seek interest on withheld royalties	Burlington/Conoco: statute prohibits interest when payments are withheld under §91.402; Finance Code inapplicable	Court: interest barred where §91.402 applies; statute controls over claimed post‑judgment interest theory
Whether tort claims (conversion, negligence) and equitable claims can proceed despite a contract/lease governing payments	Koopmanns: assert conversion, negligence, unjust enrichment against payors/administrator	Burlington/Conoco: economic loss rule bars tort claims arising from contract; conversion inapplicable to withheld money; unjust enrichment precluded by express contract	Court: economic loss rule and contract principles bar the tort and equitable claims; conversion not available for ordinary withheld royalty payments
Whether severance of Strieber’s cross‑claim was improper/prejudicial	Strieber: cross‑claim (contingent on declaratory result) is so interwoven with declaratory action that severance was improper and prejudicial	Burlington/Conoco: cross‑claim alleges breach of a separate 2011 oral agreement among different parties and is severable; severance proper to permit appeal on threshold title question; Strieber invited proceeding	Court: severance was within trial court discretion; cross‑claim not so interwoven and severance not an abuse (lack of prejudice; Strieber asked court not to stay)

Key Cases Cited

Concord Oil Co. v. Pennzoil Exploration & Prod. Co., 966 S.W.2d 451 (Tex. 1998) (payor entitled to withhold disputed proceeds under §91.402 even if ultimately unsuccessful)
Cherokee Water Co. v. Forderhause, 641 S.W.2d 522 (Tex. 1982) (severance after summary adjudication of threshold issue not an abuse of discretion)
Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617 (Tex. 1986) (economic loss rule: contract remedies control when injury is economic loss to subject of contract)
S.W. Bell Tel. Co. v. DeLanney, 809 S.W.2d 493 (Tex. 1991) (no negligence recovery when duty springs solely from contract)
Headington Oil Co., L.P. v. White, 287 S.W.3d 204 (Tex. App.—Houston [14th Dist.] 2009) (§91.402 applies where parties dispute ownership percentage/title affecting distribution)
Edwin M. Jones Oil Co. v. Pend Oreille Oil & Gas Co., 794 S.W.2d 442 (Tex. App.—Corpus Christi 1990) (recognizing section 91.402 title‑dispute withholding rule)
Mitchell Energy Corp. v. Samson Resources Co., 80 F.3d 976 (5th Cir. 1996) (Texas law disfavors conversion claims based on withheld royalty payments)
Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671 (Tex. 2000) (equitable remedies barred where express contract governs the subject matter)