Marsha Ellison D/B/A Ellison Lease Operating v. Samson Resources Co. Samson Lone Star Limited Partnership Samson Lone Star LLC Samson Exploration, LLC Three Rivers Acquisition LLC Three Rivers Operating Co. LLC Concho Resources, Inc. COG Operating, LLC, S/D Oil and Gas Corp.
13-17-00046-CV
| Tex. App. | Feb 10, 2022Background
- Dispute over a 154-acre parcel claimed by adjacent lessees in Irion County; title traces to a 1927 deed and a 1930 partition with ambiguous boundary descriptions.
- Pilon leases (1987) and subsequent assignments led Ellison to operate wells on the Northwest tract; Samson/Sugg parties claimed the disputed 154 acres as part of the Southeast tract.
- In 2008 Samson’s landman prepared a "Boundary Stipulation" and sent a letter to Jamie Ellison requesting acceptance of a revised 147-acre boundary (purportedly effective 1987); Jamie allegedly signed and returned the letter.
- Ellison sued for trespass-to-try-title alleging wells were drilled onto her lease; Concho (successor interests) asserted ratification/contract defenses based on the 2008 letter and obtained summary judgment on the boundary.
- At trial on Concho’s counterclaims a jury awarded lost profits and attorneys’ fees; the trial court granted JNOV as to lost profits and denied declaratory-judgment fees and appellate fees. On remand from the Texas Supreme Court, this Court considered Concho’s cross-appeal challenging those rulings.
Issues
| Issue | Plaintiff's Argument (Ellison) | Defendant's Argument (Concho) | Held |
|---|---|---|---|
| Lost profits: entitlement to $492,551.39 awarded by jury | Hunter’s reservoir/ profitability evidence was expert-level and inadmissible because he was not designated as an expert; Property Owner Rule does not cover mineral-reserve valuation | Hunter’s testimony (reservoir engineer analysis) provided competent proof of lost profits | JNOV upheld: no expert proof of mineral-reserve value, so lost-profits award set aside |
| Prejudgment interest on awarded damages | (Implicit) prejudgment interest not owed on amounts not properly awarded; limited request given JNOV | Prejudgment interest is mandatory on past contract damages under common-law principles; accrues from claim date | Trial court erred in denying prejudgment interest on the $1,030 award; modified to include 5% simple interest ($127.12 for 28 months); no interest awarded on set-aside lost-profits amount |
| Declaratory-judgment attorneys’ fees under Tex. Civ. Prac. & Rem. Code §37.009 | Concho’s DJA fees are improper because declaratory claim merely recasts contract/title claims to obtain fees | Concho contends its declaratory claim was separate and fees are equitable and just under the Act | Held: trial court did not abuse discretion in denying DJA fees—Concho’s declaratory claim overlapped contract/title claims and cannot be used to procure fees (fees would impermissibly circumvent the American Rule) |
| Appellate attorneys’ fees under Tex. Civ. Prac. & Rem. Code §38.001 | (Implicit) denial of appellate fees was proper because of partial success | Concho presented uncontroverted evidence of appellate fees and argues mandatory recovery under §38.001; fees should be awarded conditionally (if appeal unsuccessful) | Reversed in part: trial court’s $0 award vacated; remanded to determine reasonable appellate fees with segregation of recoverable vs. unrecoverable fees and contingency on unsuccessful appeal |
Key Cases Cited
- Arkoma Basin Exploration Co. v. FMF Assocs., 249 S.W.3d 380 (Tex. 2008) (value of mineral reserves requires expert proof)
- Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80 (Tex. 1992) (flexible proof standard for lost profits; opinions may rest on objective facts/data)
- Johnson & Higgins v. Kenneco Energy, Inc., 962 S.W.2d 507 (Tex. 1998) (prejudgment interest on contract damages governed by common-law principles; accrual rules)
- MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660 (Tex. 2009) (Declaratory Judgment Act cannot be used to obtain otherwise impermissible attorney’s fees)
- Bocquet v. Herring, 972 S.W.2d 19 (Tex. 1998) (abuse-of-discretion standard for fee awards)
- Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006) (fee claimant must segregate recoverable from nonrecoverable fees)
- Ventling v. Johnson, 466 S.W.3d 143 (Tex. 2015) (appellate fees follow from mandatory trial fee awards under §38.001)
- Ragsdale v. Progressive Voters League, 801 S.W.2d 880 (Tex. 1990) (attorney-fee testimony may be taken as true if clear, direct, uncontroverted)
- Wal–Mart Stores, Inc. v. Miller, 102 S.W.3d 706 (Tex. 2003) (no-evidence standard for reviewing JNOV)