MRC Permian Company and Joe Foran v. Three Rivers Operating Company and Three Rivers Acquisition LLC
05-14-00353-CV
| Tex. App. | Aug 5, 2015Background
- May 2012 PSA sold ten Lea County, NM properties to COG for $14,243,424; JOA required preferential rights for MRC and Foran to buy; MRC/Foran owned interests in several Contract Area properties.
- JOA defines a Contract Area and provides a preferential purchase right (PPR) to buy interests on the same terms as a third-party sale, with a ten-day election period.
- May 21, 2012: Three Rivers offered five properties to Foran and three to MRC at $6,961,881 and $6,384,670 respectively, with steps to exercise the PPR.
- June 5, 2012: MRC and Foran sent a letter exercising PPR “to purchase 100%” of Three Rivers’ Contract Area interests on the COG terms, including interests not limited to Exhibit A; approval by both clients.
- June 12, 2012: Three Rivers withdrew the original May 21 letters and substituted a June 12 letter offering all ten properties for $14,243,424; required acceptance via the same method as the May letters but no election boxes were checked on June 12.
- June 25, 2012: MRC and Foran stated continued willingness to exercise under the June 5 letter; confusion about scope; no formal acceptance of the June 12 offer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a $14.2M contract for all ten properties existed | MRC/Foran accepted May 21 offer for five properties; June 5 letter was an unconditional acceptance; no reliance on later June 12 offer | PPR required offer of all ten properties; June 12 offer superseded May 21; acceptance of new terms formed a $14.2M contract | No enforceable $14.2M contract; failure to follow acceptance mode voids contract |
| Whether a $6.96M contract for five properties was enforceable | June 5 acceptance of May 21 offer bound to five properties for $6.96M | June 5 letter was a rejection/counteroffer; no meeting of minds on which properties; no valid acceptance | There was a valid $6,961,881 contract for five properties; trial court’s $14.2M grant reversed; judgment for MRC/Foran for five properties affirmed |
Key Cases Cited
- Navasota Res., L.P. v. First Source Tex., Inc., 249 S.W.3d 526 (Tex. App.—Waco 2008) (acceptance must comply with specified mode of acceptance; no contract otherwise)
- Abraham Inv. Co. v. Payne Ranch, Inc., 968 S.W.2d 518 (Tex. App.—Amarillo 1998) (specific mode of acceptance required; express assent to all terms)
- Corr v. Braasch, 639 P.2d 566 (N.M. 1981) (no contract without acceptance of all terms; counteroffers invalidates offer)
- Tatsch v. Hamilton–Erickson Mfg. Co., 418 P.2d 187 (N.M. 1966) (acceptance must be clear, positive, unambiguous; mode of acceptance controls)
- Northcutt v. McPherson, 473 P.2d 357 (N.M. 1970) (unequivocal and unqualified expression of intention to exercise an option)