Coyote Lake Ranch, LLC v. City of Lubbock
498 S.W.3d 53
Tex.2016Background
- Coyote Lake Ranch (26,600 acres) conveyed groundwater to the City of Lubbock in a 1963 deed that reserved limited surface water rights for the Ranch and gave the City broad express rights to drill "at any time and location" and to use the surface "necessary or incidental" to taking water, with some express limits.
- By 2012 the City planned a large expansion of extraction on the Ranch (dozens of new wells and access paths); the City began mowing paths and the Ranch sued for a temporary injunction to stop surface disturbance and require consultation.
- The trial court granted a temporary injunction broadly prohibiting mowing, further drilling without consultation, and erecting power lines; the City appealed and the court of appeals reversed, concluding the accommodation doctrine did not apply to groundwater owners.
- The central factual dispute is whether the City’s asserted surface activities (well locations, roads, power lines, vegetation removal) are authorized by the deed or must yield to the Ranch’s surface uses under the accommodation doctrine.
- The Supreme Court granted review to decide whether the accommodation doctrine (long applied to severed mineral estates) also applies to severed groundwater estates and whether the injunction was proper.
Issues
| Issue | Plaintiff's Argument (Ranch) | Defendant's Argument (City) | Held |
|---|---|---|---|
| Whether the accommodation doctrine applies to a severed groundwater estate | Accommodation doctrine should extend to groundwater because groundwater is owned in place like oil & gas and thus a groundwater owner must accommodate surface uses | The doctrine applies only to mineral estates; groundwater owners are not subject to the accommodation doctrine and the deed grants broad surface rights | The accommodation doctrine extends to severed groundwater estates when disputes are not governed by express contractual terms |
| Whether the deed’s language resolves the parties’ dispute over well locations and surface use | The deed is silent/ambiguous on whether City can locate wells anywhere regardless of surface harm; where ambiguous, accommodation doctrine governs | The deed expressly permits drilling “at any time and location” and broad surface uses; that express grant controls and bars doctrine-based restrictions | The deed does not fully resolve the dispute; where the deed is ambiguous, accommodation principles apply to conflicts not expressly covered |
| Standard/burden to obtain relief under accommodation doctrine | Ranch must show City’s use precludes or substantially impairs existing surface use and no reasonable alternative exists; then show City has reasonable alternatives | City contends doctrine inapplicable; alternatively, City argues its plan is reasonable and necessary under the deed | Court adopts Merriman test: surface owner must prove (1) complete preclusion or substantial impairment, (2) no reasonable alternative for surface owner, and (3) reasonable, customary alternatives exist for the groundwater owner |
| Whether the trial court’s temporary injunction was proper as issued | Ranch argued broad injunction necessary to prevent irreparable harm while dispute decided | City argued injunction was overbroad and improperly barred lawful exercise of its express rights under the deed | The injunction was overbroad (it effectively froze all surface activity, including express deed rights); appellate reversal and remand for further proceedings consistent with opinion affirmed |
Key Cases Cited
- Getty Oil Co. v. Jones, 470 S.W.2d 618 (Tex. 1971) (announcing the accommodation doctrine: lessee’s reasonable surface use must accommodate existing surface uses when alternatives exist)
- Sun Oil Co. v. Whitaker, 483 S.W.2d 808 (Tex. 1972) (discussing trend to reconcile surface and mineral uses and preserve viable servient estates)
- Humble Oil & Refining Co. v. West, 508 S.W.2d 812 (Tex. 1974) (applying accommodation principles to unique factual context and remanding for balancing of correlative rights)
- Tarrant County Water Control & Improvement Dist. No. One v. Haupt, 854 S.W.2d 909 (Tex. 1993) (applying accommodation doctrine to a government condemnor that acquired surface estate)
- Merriman v. XTO Energy, Inc., 407 S.W.3d 244 (Tex. 2013) (restating the burden and three-part test for accommodation claims)
- Edwards Aquifer Authority v. Day, 369 S.W.3d 814 (Tex. 2012) (holding groundwater may be owned in place and analogizing groundwater to oil and gas for common-law rules)