KCM Financial LLC v. Bradshaw, 457 S.W.3d 70

Bradshaw holds a 1,773-acre nonparticipating royalty interest on the Mitchell Ranch in Hood County, Texas, with an express minimum royalty under the 1960 deeds.
Wise Asset and Steadfast/Fiduciary chain acquired mineral rights; Steadfast negotiated a Range lease with a one-eighth royalty and a large bonus, while Bradshaw’s share remained a fraction of that royalty.
Bradshaw alleged Steadfast breached its duty of utmost good faith by self-dealing to secure a high bonus for Steadfast and a below-market royalty for Bradshaw's interest.
Evidence suggested offers of higher (one-quarter) royalties existed and that the bonus was unusually large, with internal communications acknowledging Bradshaw’s lack of share in the bonus.
The trial court granted take-nothing; the court of appeals reversed as to Bradshaw’s breach claim but dismissed other theories; the Supreme Court granted review.
The Court held that the executive’s duty is not to maximize the royalty rate per se but to act with utmost good faith, considering the lease as a whole; summary judgment on some claims was improper, while others could be resolved as a matter of law.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Did Steadfast breach its duty to Bradshaw by self-dealing in the Range lease?	Bradshaw: Steadfast underpaid Bradshaw’s share to inflate its own benefits.	Steadfast: no per se obligation to maximize royalty; duties are balanced with executive discretion.	Fact questions preclude summary judgment on breach.
Can Range be held liable for Steadfast’s breach via conspiracy or aiding and abetting?	Bradshaw: Range aided/abetted self-dealing and should be liable.	Range had an arm’s-length interest with no fiduciary duty to Bradshaw; no liability for derivative claims.	Range not liable; no derivative fiduciary duty established.
Are the Royalty Owners liable for constructive trust or fraudulent transfer given Steadfast’s alleged breach?	Bradshaw seeks constructive trust on proceeds to equalize losses and TUFTA-based transfers.	Royalty Owners lack control; transfers not insolvent or fraudulent per TUFTA; no trust traceable to Bradshaw’s interest.	Constructive-trust and TUFTA claims fail; relief denied.
What is the proper standard for evaluating an executive’s duty to a non-executive in mineral leasing?	Bradshaw: duty requires market-rate terms or equivalent benefit-sharing.	Executive must balance interests; no absolute requirement to obtain market-rate royalties.	Duty requires utmost good faith, not automatic market-rate royalty; record shows possible breach but not per se.

Schlittler v. Smith, 128 Tex. 628, 101 S.W.2d 543 (Tex.Com.App.1937) (self-interest in royalty with utmost fair dealing; fiduciary-like duties acknowledged)
Andretta v. West, 415 S.W.2d 638 (Tex.1967) (confidential relationship; executive power to amend leases creates fiduciary-like duties)
Manges v. Guerra, 673 S.W.2d 180 (Tex.1984) (strict duty to acquire for non-executive every benefit the executive exacts for himself)
HECI Exploration Co. v. Neel, 982 S.W.2d 881 (Tex.1998) (recognizes fiduciary-type relationship between executive and non-executive)
In re Bass, 113 S.W.3d 735 (Tex.2003) (fiduciary duty framework; extreme caution with self-dealing or conflicts)
Lesley v. Veterans Land Bd. of State, 352 S.W.3d 479 (Tex.2011) (executes that fiduciary duty does not require subjugation of own interests; limits on self-dealing)
Portwood v. Buckalew, 521 S.W.2d 904 (Tex.Civ.App.-Tyler 1975) (self-dealing in surface damages example; limits on non-executive claims)