Devon Energy Production Company, L.P. v. KCS Resources, LLC
450 S.W.3d 203
Tex. App.2014Background
- Devon Energy sued KCS for declaratory relief in Texas over ownership of Louisiana mineral interests described in PSA Exhibit A-3 and the DeSoto Deed.
- KCS counterclaimed for relief including attorney’s fees under the UDJA; many claims were later nonsuited/dismissed.
- The PSA included a forum-selection clause designating Texas law and Harris County, Texas courts for PSA-related actions.
- The DeSoto Deed at closing purportedly conveyed the referenced Louisiana properties, with the Deed recorded in DeSoto Parish.
- Devon argued the PSA’s terms governed the dispute and that Texas courts could interpret the PSA; KCS argued the DeSoto Deed merged the PSA, mooting the PSA claims.
- The trial court granted summary judgment for KCS on Devon’s declaratory-relief claims and later dismissed KCS’s UDJA attorney’s fees claim; on appeal, the court affirmed in part and reversed/remanded in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| merger/mooting effect on PSA claims | Devon: PSA not merged or mooted by DeSoto Deed | KCS: merger doctrine moots PSA and renders PSA-based declaratory relief advisory | PSA merged and mooted; declaration advisory; Devon loses |
| forum-clause effect on jurisdiction | Devon: PSA forum clause requires Harris County litigation | KCS: forum clause does not create subject-matter jurisdiction | Forum clause does not confer jurisdiction; TX court lacked subject-matter jurisdiction |
| adjudication of title in Louisiana | Devon seeks use of UDJA to interpret PSA for Louisiana properties | KCS: TX cannot adjudicate Louisiana land title; advisory risk | TX cannot adjudicate title to land in Louisiana; declaratory relief dismissed for lack of jurisdiction |
| attorney’s fees under UDJA | Devon: UDJA fees should be inappropriate given dismissal | KCS: fees permissible under UDJA even if declaratory action dismissed | UDJA fees may be awarded; remand to determine entitlement/amount |
Key Cases Cited
- Alvarado v. Bolton, 749 S.W.2d 47 (Tex. 1988) (merger of contract terms into deed; deed controls conveyance terms)
- Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440 (Tex. 1993) ( UDJA is procedural; must resolve justiciable controversy)
- Bonham State Bank v. Beadle, 907 S.W.2d 465 (Tex. 1995) (UDJA terminates uncertainty or controversy)
- Trutec Oil & Gas, Inc. v. Western Atlas Int’l, Inc., 194 S.W.3d 580 (Tex.App.-Hous. Dist. 14th 2006) (no subject-matter jurisdiction for naked title issue; focuses on pleadings)
- Hartman v. Sirgo Operating, Inc., 863 S.W.2d 764 (Tex.App.-El Paso 1993) (distinguishes naked title concept; order enforcing external property interests)
- Castro v. McNabb, 319 S.W.3d 721 (Tex.App.-El Paso 2009) (UDJA fee recovery when declaratory relief dismissed; feeable defense under UDJA)
- Zurita v. SVH-1 Partners, Ltd., 2011 WL 6118573 (Tex.App.-Austin 2011) (fee awards under UDJA when claims dismissed; persuasive authority (official reporter not available))
- Feldman v. KPMG LLP, 438 S.W.3d 678 (Tex.App.-Hous. Dist. 2014) (authority supporting fee awards under UDJA after dismissal of DJA claims)
- Lohec v. Galveston County Comm’rs Court, 814 S.W.2d 751 (Tex.App.-Houston 1991) (standing/subject-matter-jurisdiction and fee considerations under UDJA)