Lona Hills Ranch, LLC v. Creative Oil & Gas Operating, LLC
549 S.W.3d 839
| Tex. App. | 2018Background
- Lona Hills Ranch (the Ranch), lessor under an oil-and-gas lease in Lee County, sued Creative Oil & Gas Operating, LLC (Operator) for trespass and trespass to try title, alleging the lease had terminated for lack of production; Creative Oil & Gas, LLC (Lessee) intervened as the lessee.
- Ranch filed a complaint with the Texas Railroad Commission asserting the lease expired; after a hearing the Commission dismissed the complaint, finding the Operator had a good-faith claim to operate.
- Operator (not a party to the lease) and Lessee asserted counterclaims for breach of the lease, alleging Ranch (a) told third parties the lease had terminated, (b) complained to the Railroad Commission, and (c) filed suit without giving notice and an opportunity to cure under §11 of the lease.
- Ranch filed a Texas Citizens Participation Act (TCPA) motion to dismiss those breach-of-contract counterclaims as based on its exercise of free speech and petition rights.
- Trial court failed to rule within 30 days, so the motion was denied by operation of law; Ranch appealed interlocutorily.
- The appellate court reviews TCPA applicability (movant’s initial burden) and then whether nonmovants established by clear and specific evidence a prima facie case for each element of their claims.
Issues
| Issue | Plaintiff's Argument (Ranch) | Defendant's Argument (Operator/Lessee) | Held |
|---|---|---|---|
| Whether counterclaims are "based on, relate to, or are in response to" Ranch's exercise of free speech/petition under the TCPA | Ranch: counterclaims arise from its communications to third parties, Railroad Commission complaint, and filing of suit; these are protected exercises | Operator/Lessee: counterclaims are grounded in an independent contractual violation—failure to provide §11 notice and cure—so not TCPA-covered | Court: Counterclaims are, in part, factually predicated on Ranch's communications and Commission complaint; Ranch met initial TCPA burden as to both defendants for certain claims |
| Whether Operator can meet TCPA step two (prove prima facie breach elements) | Ranch: Operator is not party to the lease and thus cannot establish a contract-based claim | Operator: asserts damages from Ranch's statements and complaints interfering with operations | Held: Operator failed to prove existence of a contract with Ranch; Operator's breach counterclaims dismissed in full |
| Whether Lessee can meet TCPA step two for claims based on Ranch's communications to third parties | Ranch: Lessee's claim premised on injury from Ranch's statements; such claims fall under TCPA and must be dismissed | Lessee: focuses on breach of §11 (failure to give notice/cure) as the true basis of its claim, not mere statements | Held: Lessee failed to present clear, specific evidence that the communications-to-third-parties claim satisfies breach elements; that counterclaim is dismissed |
| Whether Lessee's counterclaim based on Ranch's Railroad Commission complaint and filing suit is protected by TCPA | Ranch: those acts are petitioning and covered by TCPA | Lessee: lease §11 requires written notice and 90-day cure before litigation, so Ranch contractually limited its right to sue; claim is contractual, not TCPA-protected | Held: Because Ranch agreed in the lease to delay litigation (contractual limit on petitioning), the Lessee's claim based on the Commission complaint and filing suit is not TCPA-protected and survives dismissal; trial court's denial affirmed in this respect |
Key Cases Cited
- FKM P'ship, Ltd. v. Board of Regents of Univ. of Hous. Sys., 255 S.W.3d 619 (Tex. 2008) (amended petition that omits claims operates as nonsuit of omitted claims)
- BHP Petroleum Co. v. Millard, 800 S.W.2d 838 (Tex. 1990) (nonsuit does not extinguish an adverse party's independent counterclaim)
- CTL/Thompson Tex., LLC v. Starwood Homeowner's Ass'n, Inc., 390 S.W.3d 299 (Tex. 2013) (motions for sanctions are affirmative claims that survive nonsuit)
- Hersh v. Tatum, 526 S.W.3d 462 (Tex. 2017) (TCPA burdens and evidentiary framework; when pleadings clearly show TCPA coverage, movant need show only that)
- C.W. 100 Louis Henna, Ltd. v. El Chico Rests. of Tex., L.P., 295 S.W.3d 748 (Tex. App.–Austin 2009) (elements of breach-of-contract claim)
- In re Prudential Ins. Co. of Am., 148 S.W.3d 124 (Tex. 2004) (parties may contractually waive or limit rights, including procedural or constitutional rights)
- Cavin v. Abbott, 545 S.W.3d 47 (Tex. App.–Austin 2017) (definition of "is based on, relates to, or is in response to" for TCPA applicability)
- Serafine v. Blunt, 466 S.W.3d 352 (Tex. App.–Austin 2015) (discussion of TCPA coverage when challenged legal action seeks relief predicated on injury from protected communications)