delivered the opinion of the Court
This oil and gas dispute involves a challenge to the validity of a mineral lease and requires that we once again examine the contours of the duty the executive-right holder (executive) owes to a non-participating royalty interest holder (non-executive). Here, the non-executive claims the executive procured a mineral lease in derogation of a duty of good faith owed to her. Although we recognize an executive has broad discretion in negotiating the terms of a mineral lease, we have long held that, in doing so, the executive owes the non-executive a duty of utmost good faith and fair dealing. Though we have rarely had occasion to explore the scope of this duty, we have explained that, unlike a typical fiduciary relationship, the executive is not required to wholly subordinate its interests in favor of the non-executive if their interests conflict. As we have articulated the duty, the executive has autonomy in negotiating the terms of a mineral lease but does not have absolute discretion to determine the value of the non-executive interest. In this way, the duty imposed on the executive strikes a balance between the parties’ bargained-for rights. Although the parameters of the duty are imprecise, at bottom, the executive is prohibited from engaging in acts of self-dealing that unfairly diminish the value of the non-executive interest.
In the present case, which involves an oil and gas lease on nearly two-thousand acres of land in north Texas, the non-executive contends that the executive breached its duty by executing a mineral lease on terms that included a sub-market royalty rate, which the executive and non-executive would share equally, in exchange for an above-market bonus payable only to the executive. The non-executive further alleges that the lessee acted in concert with the executive in facilitating the breach and that the executive’s ill-gotten gains were fraudulently transferred to third parties. The trial court granted a take-nothing summary judgment on all claims, but the court of appeals reversed the judgment in significant part based on the existence of fact issues.
On appeal to this Court, the parties seek a definitive articulation of the executive’s duty as it pertains to any obligation to maximize the royalty terms in a mineral lease. Given the relative rights and interests at play, no bright line rule can comprehensively or completely delineate the boundaries of the executive’s duty. Rather, in determining whether an executive has fulfilled its duty of utmost good faith and fair dealing in executing a mineral lease, the lease and the circumstances of its execution must be considered as a whole, and the failure to negotiate a market-rate royalty is but one relevant factor. Simply put, the executive’s failure to obtain a market-rate royalty does not conclusively establish a breach of duty, nor is it totally irrelevant. On the record before the Court, we hold that fact questions preclude summary judgment as to the non-executive’s breach-of-duty claim against the executive. We therefore affirm that portion of the court of appeals’ judgment and remand the breach-of-duty claim to
L Factual and Procedural Background
Betty Lou Bradshaw holds a nonparticipating royalty interest in approximately 1,773 acres of a nearly 2,000 acre parcel of land in Hood County, Texas known as the Mitchell Ranch. A nonparticipating royalty interest is
an interest in the gross production of oil, gas, and other minerals carved out of the mineral fee estate as a free royalty, which does not carry with it the right to participate in the execution of, the [b]onus payable for, or the delay rentals to accrue under oil, gas, and mineral leases executed by the owner of the mineral fee estate.
Lee Jones, Jr., Non-Participating Royalty, 26 Tex. L. Rev. 569, 569 (1948) (footnote omitted); see also Plainsman Trading Co. v. Crews,
Bradshaw inherited her royalty interest from her parents, JA. and Lota Fay Dris-kill, who had reserved the interest in two deeds that were executed in 1960 to convey the surface and all mineral interests, including leasing privileges, to third parties. The deeds described the reserved royalty interest as an undivided one-half of any future royalty and limited the executive right by mandating that any such royalty be “not less than” one-eighth.
A one-eighth royalty appears to have been commonplace in the general era in which the 1960 deeds were executed. As one commentator wrote in a well-regarded article, “The usual royalty is 1/8, and this
The common practice ... is to include an express provision in the grant or reservation of non-participating royalty to the effect that subsequent leases shall provide for a royalty of not less than the usual 1/8. Such a provision would seem to afford the non-participating owner ample protection and entitle him to a share in any royalty, as such, in excess of the usual 1/8.
Id. at 576. Thus, the language and structure employed in the 1960 deeds was neither unusual nor particularly idiosyncratic.
As it happens, Bradshaw alleges that, as a result of market trends and larger economic forces, the customary royalty had increased to one-fourth by July 2005. At that time, Wise Asset held the surface and mineral estate interests in the Mitchell Ranch but no development had commenced. Bradshaw claims that at least one company had approached her during that time period and offered to pay a one-fourth royalty to lease and develop the property. As a non-executive, Bradshaw had no authority to develop the property or negotiate the terms of a mineral lease, and the record does not disclose whether this putative offer was ultimately communicated to Wise Asset or what otherwise became of it.
However, a few months later, an individual named Gary Humphreys contracted with Wise Asset to purchase the entire Mitchell Ranch tract, including the mineral estate, for $18,943,000. No royalty appears to have been a part of that contract. The contract permitted Humphreys to extend the 90-day termination option three times by paying Wise Asset $100,000 for each 30-day extension.
On February 14, 2006, after having exercised all three extension opportunities, Humphreys assigned his interest in the Mitchell Ranch contract to Texas Shepco, LP, a limited partnership managed by R.J. Sikes. In an agreement dated the same day, Humphreys executed a contract with Peter Bennis, president of a bank in Keene, to jointly develop the Mitchell Ranch.
Sikes, for his part, was evidently uninterested in either re-assigning the contract to Humphreys or negotiating with Chesapeake Energy. As Bennis was pressing Humphreys, Sikes was negotiating a deal with Range Resources Corp. on behalf of Texas Shepco. Contemporaneously, Sikes entered into a partnership agreement with R. Crist Vial on April 10, 2006, for oil and gas development. On that same day, Sikes also formed Steadfast Financial LLC, and became its managing member.
In purchase documents for the Mitchell Ranch, Steadfast pledged to “honor and uphold any interest Betty Lou Bradshaw is determined to be entitled to in the Property.” However, the legal and financial implications of Bradshaw’s interest became of increasing concern. In an April 12, 2006, email to Humphreys, David Ship-man, an attorney for Steadfast, expressed uncertainty about “the interpretation of the Betty Lou Bradshaw deed” and the possibility that she could “bring suit” based on the deed’s language. Looking to avoid such litigation, Shipman wrote to Humphreys, “Steadfast is willing to enter into a lease agreement with yourself and honor a lease agreement for Bradshaw in the same amount in order for you to fulfill your fiduciary duty to Bradshaw as the executive mineral estate interest.” Continuing, Shipman suggested Steadfast’s “best alternative to avoid litigation regarding the Bradshaw interest” would be to attain a one-fourth royalty. As Shipman articulated the proposal, “Steadfast is willing to offer a 25% royalty interest lease agreement for your 1/16 mineral estate and two hundred thousand as a bonus payment payable upon closing.” Shipman also noted, however, that Bradshaw, as the non-executive interest holder, was entitled to “no Bonus Money” if the mineral estate is developed by a lessee. Sikes and Vial also acknowledged that Bradshaw would not share in a bonus.
Thereafter, a series of transactions and negotiations culminated in a mineral lease on terms that Bradshaw considered to be less than favorable, an event which precipitated the underlying lawsuit. On April 27, 2006, Steadfast closed on the Mitchell Ranch contract and, in quick succession, sold the surface estate to Range Resources
Under the mineral-lease terms, Steadfast reserved a one-eighth royalty and obtained a lease bonus of $7,505 per acre. Given the acreage involved, the lease bonus totaled more than $13 million for the portion of the property burdened by Bradshaw’s interest. In accordance with the terms of the 1960 deeds, Bradshaw was entitled to a one-sixteenth interest in the gross production (one-half of the one-eighth royalty reserved in the mineral lease), but did not share in any part of the bonus. The remaining half of the royalty reserved in the mineral lease belonged to Steadfast.
Steadfast immediately assigned part of its one-sixteenth royalty interest to Ben-nis, who in turn conveyed part of his interest to Ronny Korb, a bank colleague who reportedly .brokered Bennis’s introduction to Humphreys. Sometime later, Steadfast assigned parts of its remaining royalty interest to R.J. and Kathy Sikes, R. Crist Vial, Greg and Pam Louvier, Roger Sikes and Christy Rome, and Dacota Investment Holdings, L.L.P. (collectively, the Royalty Owners).
In January 2007, Bradshaw filed suit alleging that Steadfast, as executive, had violated its fiduciary duty to her, as a non-executivé interest holder, when it entered into the mineral lease with Range. Bradshaw further asserted that Range conspired with Steadfast and aided and abetted the breach.
Although the royalty provided in the mineral lease meets the minimum royalty required by the 1960 deeds, Bradshaw asserted that a one-eighth royalty was below market in Hood County and that a one-fourth royalty had become standard. According to Bradshaw, Steadfast engaged in self-dealing by obtaining an exorbitant bonus payment at the expense of securing a higher royalty. Because Bradshaw had no interest in the bonus payment, she contends the trade-off diminished the value of her interest.
As an initial matter, Bradshaw filed a motion for partial summary judgment, arguing that the deeds provided for a “fraction of a royalty” that entitled her to a minimum one-sixteenth royalty, rather than a fixed one-sixteenth “fractional royalty.” Stated more simply, Bradshaw argued that her interest established a minimum entitlement to whatever royalty was ultimately negotiated, as opposed to fixing a set royalty of one-half of a one-eighth royalty. The trial court agreed with Bradshaw, and the court of appeals affirmed in an agreed interlocutory appeal. See Range Res. Corp. v. Bradshaw,
In amended petitions filed some two years after the disposition of the interlocutory appeal, Bradshaw added fraudulent-transfer claims against the Royalty Owners, Bennis, and Korb, alleging that the transfers were made for less than reasonably equivalent value and Steadfast was insolvent or made insolvent by the transfers. See Tex. Bus. & Com. Code §§ 24.005(a)(2), .006. Bradshaw further sought a constructive trust on the proceeds of the royalty interests Steadfast had transferred to them.
In reversing the summary judgment, the court of appeals focused heavily on Steadfast’s duty to Bradshaw and the alleged breach, which undergirds all of Bradshaw’s claims. After an exhaustive discourse on the evolution of the pertinent case law, the court held: (1) Steadfast owes Bradshaw a fiduciary duty of “utmost good faith”; (2) a genuine issue of material fact exists as to whether Steadfast breached its duty to Bradshaw in negotiating the terms of the mineral lease with Range; and (3) the doctrine of estoppel by deed does not preclude Bradshaw from arguing that Steadfast breached its fiduciary duty. Id. at 370-371.
More summarily, the court found that Range was not entitled to summary judgment because (1) “the underlying tort— Steadfast’s alleged breach of duty — is the basis for Bradshaw’s civil conspiracy and aiding and abetting claims against Range” and (2) legal justification and privilege are affirmative defenses that Range did not conclusively establish. Id. at 372. The court likewise determined that the Royalty Owners were not entitled to summary judgment on Bradshaw’s constructive-trust and fraudulent-transfer claims because a fact question remained concerning whether Steadfast breached its duty to Bradshaw in the first instance. Id. at 375-76.
Bennis and Korb, however, fared better on appeal than the other defendants. The court affirmed summary judgment in their favor because: (1) Bennis obtained his royalty interest at the same time Steadfast executed its agreements with Range (the significance of which is not explained); (2) there is no evidence that Bennis engaged in fraud or that Bradshaw had any interest in his royalty, including the portion assigned to Korb; and (3) Bradshaw had abandoned her fraudulent-transfer claims against them. Id. at 376.
Although Steadfast, Range, and the Royalty Owners have petitioned this Court for review, the court of appeals’ judgment in favor of Bennis and Korb is unchallenged.
II. Discussion
A. Standard of Review
We review a grant of summary judgment de novo. Nall v. Plunkett,
B. Substantive Law on Duty
The threshold issue in this case is whether evidence exists from which a jury could conclude that Steadfast breached a
The relationship between an executive and a non-executive was first described in a 1937 commission of appeals decision adopted by this Court, Schlittler v. Smith,
Thirty years later, we specifically addressed the close and dependent nature of the relationship. In Andretta v. West, the executive had amended the mineral lease to permit a compensatory royalty, but neither notified the non-participating royalty interest holder about the amendment nor shared the proceeds.
The executive’s duty took center stage in Manges v. Guerra^ a case involving particularly egregious acts of self-dealing by the executive.
In HECI Exploration Co. v. Neel, we described Andretta as having recognized a type of fiduciary relationship between an executive and a non-executive.
Importantly, though the relationship between an executive and a non-executive has been described as fiduciary in nature, the executive is not required to grant priority to the non-executive’s interest. Although “[a] fiduciary duty often ... requires a [fiduciary] to place the interest of the other party before his own,” we have clarified that our precedent in Andretta, HECI, and Manges did not incorporate this requirement as part of the executive’s duty. Lesley v. Veterans Land Bd. of State,
In evaluating whether an executive has breached a duty owed to a non-executive, evidence of self-dealing can be pivotal. See, e.g., Lesley,
Self-dealing has most commonly been observed in situations where the executive employs a legal contrivance to benefit himself, a close familial relation, or both. This was most readily apparent in Manges, but it has also been a feature of a multitude of other Texas cases.
As the foregoing discussion alludes, the value of a non-participating royalty interest is not left exclusively to the whims of the executive. Lesley,
If the semantics surrounding the nature of this duty have shifted subtly over the years, this much is clear: An executive owes a non-executive a duty that prohibits self-dealing but does not require the executive to subjugate its interests to those of the non-executive. Thus, in ascertaining whether the executive breached its duty to the non-executive, the controlling inquiry is whether the executive engaged in acts of self-dealing that unfairly diminished the value of the non-executive interest. Although the contours of the duty remain somewhat indistinct, these tenets guide our analysis of the claims before us.
C. Breach of Fiduciary Duty
The crux of Bradshaw’s claim is that Steadfast engaged in self-dealing at her expense. While the parties agree that Steadfast owes Bradshaw a duty of utmost good faith and fair dealing, they suggest that the availability of a higher royalty rate can be categorically included in or excluded' from the scope of that duty. We disagree.
When an executive negotiates a mineral lease, myriad components of any given arrangement can affect the overall value of a mineral lease, including the rights to receive royalties, delay rentals and bonuses, and other provisions like the number and placement of wells. Non-executive interest holders may benefit from some but not all of these potential terms. The interests of the executive and the non-executive may therefore be aligned in some respects but not others. Knowing that to be the case, we have long held that the executive may discharge its duty to the non-executive without yielding entirely to the non-executive’s best interests. To hold that the executive must obtain the highest royalty available would not only contravene our precedent, it would also unduly impinge the executive’s right to make and amend leases.
Be that as it may, the going rate for a royalty interest is not altogether immaterial. When an executive has discretion to negotiate the terms of a mineral lease, and thus affect the value of the nonparticipating royalty interest, the executive’s discretion is tempered by the duty of utmost good faith and fair dealing. As previously discussed, we have described
In the present case, it appears, at least superficially, that the executive’s duty has been satisfied because Bradshaw and Steadfast enjoy exactly the same royalty under the terms of the mineral lease Steadfast negotiated with Range (one-half of a one-eighth royalty). However, the issue is more complicated than it appears at first blush because the non-executive interest is not fixed in the 1960 deeds and, instead, a minimum royalty is specified. Accordingly, (1) the executive has no discretion to negotiate a lease for less than a one-eighth royalty, which must be shared equally between the executive and non-, executive; (2) the non-executive has some expectation of benefitting from improved market conditions;
Obviously, obtaining the same royalty in a mineral lease does not automatically equate to acquiring the same benefit from the mineral lease. On the other hand, the executive here indisputably holds the right to obtain benefits, such as bonuses and delay rentals, in which the non-executive has absolutely no interest. This situation thus presents a conundrum that requires balancing the bundle of rights that comprise a mineral estate. See Altman v. Blake,
When a reserved royalty is to be shared equally, as it is here, we cannot conclude that the executive’s duty can be satisfied merely by obtaining some royalty or even no royalty. In either case, the royalty would be the “same” for both the executive and non-executive, but that has no mean
Moreover, because the parties here bargained for an unfixed royalty with a floor and no cap, we cannot conclude that merely obtaining the minimally acceptable royalty discharges, as a matter of law, the executive’s duty. Rather, the subject transaction must be viewed as a whole in determining whether the terms of a mineral lease, including the negotiated royalty, reflect the executive’s utmost good faith and fair dealing vis-a-vis the non-executive. Although in many cases this will be a fact question, we do not foreclose the possibility that breach of duty may be determined as a matter of law, depending on the evidence in a particular case. However, we are unable to make such a determination here.
Reviewing the record in the light most favorable to Bradshaw, as we must, there is some evidence in the summary-judgment record to create a fact issue on Bradshaw’s claim that the one-eighth royalty Steadfast negotiated was artificially low, the bonus Steadfast received was unusually high, and Steadfast intended to minimize the benefit shared with Bradshaw.
In response to the summary-judgment motions, Bradshaw produced evidence that, in an April 2006 email, legal counsel for Steadfast offered Humphreys a one-quarter royalty interest during negotiations for the Mitchell Ranch assignment. Moreover, the summary-judgment evidence suggests that a royalty of one-fourth was not uncommon in the area. Bennis, the bank president, testified during his deposition that royalty rates in the area had been as high as one-quarter. Bradshaw also testified via affidavit that, in July 2005, she received an offer to lease the Mitchell Ranch mineral estate for a one-fourth royalty. Bradshaw further produced five leases in which operators had agreed to pay a one-quarter royalty to landowners in Hood County near the time of the Range lease. Two of these leases with a one-quarter rate involved Range Production.
Regarding the bonus, Bradshaw produced the affidavit of a landman in Hood County who averred that the bonus was “excessive and many times higher than the lease bonuses which were usually and customarily being paid in the Barnett Shale during this time period in Hood County and the surrounding area.” The landman also stated: “It is apparent that the artificially low royalty was in exchange for the artificially inflated bonus.” Furthermore, during negotiations, various parties openly acknowledged that proceeds from the lease
As I mentioned on the phone, there are numerous advantages to converting the l/16th undivided mineral interest into a royalty interest. First, this interest is burdened by the Betty Bradshaw interest. Likely lawsuit if you don’t lease it. Second, if no lease, then no bonus of $250,000.00 in hand. (Note: None of which goes to Bradshaw).
(Emphasis added.)
There is thus some evidence that a one-quarter rate was at least attainable, if not ubiquitous, and that the deal may have been deliberately structured to reduce the royalty in favor of benefits that would not be shared with Bradshaw. To be fair, there is also evidence supporting contrary conclusions and inferences, but none that we are permitted to consider in light of the applicable standard of review. Because some evidence supports Bradshaw’s allegation that the mineral lease was the product of self-dealing on Steadfast’s part, Steadfast was not entitled to summary judgment. We therefore affirm that portion of the court of appeals’ judgment.
D. Conspiracy and Aiding and Abetting
Range and Steadfast are not affiliated with one another except as adverse parties in an arm’s-length transaction.
We conclude that Bradshaw’s derivative-liability claim against Range is untenable as a matter of law. Whether a jury ultimately determines Steadfast breached a duty to Bradshaw, we fail to discern any evidence raising a fact issue that Range was complicit in the alleged underlying tort. Rather, the uncontro-verted evidence reflects that Range merely secured a mineral-lease agreement on mutually acceptable terms. In fact, Range’s interests in negotiating the mineral lease were adverse to both Steadfast and Bradshaw in that Range sought to extract the best deal it could on the most favorable terms. Evidence that Range knew the
There is also no evidence of an imbalance in the mineral-lease terms that substantially favored Range, but even if there were, that is not evidence that it acted improperly. Indeed, in a broad sense, almost any bargained-for commercial exchange might be construed as benefitting one party at the expense of another. See Wal-Mart Stores, Inc. v. Sturges,
Finally, while our determination here is guided by law and extant precedent, we are not unmindful of the considerable burdens that a contrary holding would impose on the energy industry in Texas. The Texas Oil & Gas Association argues in an amicus brief that a lessee should not be tasked — directly or derivatively — with policing the executive’s duty to non-executive interest holders. Nor shoukLa lessee be expected to give weight to a non-participating royalty interest holder’s economic interests; as we have held, that is the executive’s responsibility. We agree with the Association that “in negotiating with the executive, a lessee should not fear liability for doing nothing more than getting a good deal closed.”
Range conclusively established that it did not owe. a duty to Bradshaw in connection with its arms-length transaction with Steadfast, and Bradshaw failed to produce controverting evidence. Given the dearth of evidence to raise a material fact issue, there is no justification for extending Steadfast’s fiduciary duty to Range via theories of derivative liability. Accordingly, Bradshaw’s claims against Range fail as a matter of law.
E. Constructive Trust and Fraudulent Transfer
Under the terms of the 1960 deeds, Bradshaw presently holds a one-sixteenth non-participating royalty interest because the deeds reserve one-half of the royalty provided in the mineral lease, which is one-eighth.
Bradshaw seeks a constructive trust on Range’s royalty payments to the Royalty Owners so that she may be placed in essentially the same position she would have occupied but for Steadfast’s alleged breach. Bradshaw also claims, in the alternative, that the royalty-interest transfers should be set aside as fraudulent transfers. See Tex. Bus. & Com. Code §§ 24.001-.013 (Texas Uniform Fraudulent Transfer Act or TUFTA). We address these claims in turn.
A constructive trust is an equitable, court-created remedy designed to prevent unjust enrichment. Meadows v. Bierschwale,
In weighing the imposition of a constructive trust, a court will identify whether a wrongful taking has occurred. See, e.g., Wheeler v. Blacklands Prod. Credit Ass’n,
Bradshaw’s constructive-trust claim fails because the undisputed summary-judgment evidence affirmatively negates at least one element required for the imposition of a constructive trust. Although Bradshaw asserts otherwise, the Royalty Owners’ interests originate in the one-half royalty interest transferred to the mineral-interest owner by the Driskills as part of the bundle of property rights conveyed by the 1960 deeds. The later execution of the mineral lease with Range, even if wrongful, did not convert the unreserved one-half interest into Bradshaw’s property.
A constructive trust is not merely a vehicle for collecting assets as a form of damages. “Unless the tracing requirement is observed with reasonable strictness, any suit on a debt or obligation could be used to impress a constructive trust on the assets of the defendant.” Peirce v. Sheldon Petroleum Co.,
As an alternative claim for relief, Bradshaw asserted in her live petition that
The Act is designed to protect creditors from being defrauded or left without recourse due to the actions of unscrupulous debtors.
III. Conclusion
Our decision today reaffirms a principle that has existed in our jurisprudence for eighty years: An executive owes a duty of utmost good faith and fair dealing to a non-executive and is prohibited from engaging in self-dealing in connection with the formation of a mineral-lease agreement. However, the failure to obtain a market-rate royalty does not, in and of itself, constitute a breach of that duty. Texas law imposes no such obligation, and given the relative rights and interests that are implicated in negotiating the terms of a mineral lease, such a requirement would have the effect of depriving the executive of its exclusive right to make and amend leases.
In like manner, when a royalty reservation imbues the executive with some discretion to negotiate the royalty rate, as is the case here, the going rate for a royalty interest should be considered by the executive in exercising its discretion. To hold that prevailing royalty rates are immaterial as a matter of law would deprive the non-executive of adequate pro-
However, even if Steadfast were found to have breached a duty owed to Bradshaw, on the record before the Court its liability cannot be imputed to Range under civil-conspiracy and aiding-and-abetting theories as a matter of law. Furthermore, the Royalty Owners are entitled to summary judgment because (1) they have conclusively negated at least one element of Bradshaw’s constructive-trust claim and (2) there is no evidence of insolvency, as Bradshaw has alleged in her fraudulent-transfer claim.
Accordingly, we reverse the court of appeals’ judgment as to the claims against Range and the Royalty Owners and render judgment that Bradshaw take nothing on those claims. We affirm the court of appeals’ judgment as to the breach-of-duty claim against Steadfast and remand to the trial court for further proceedings consistent with this opinion.
Notes
. See In re Bass,
. The three applicable provisions of the 1960 deeds read as follows:
"The Grantors herein reserve unto themselves, their heirs and assigns, and except from this conveyance an undivided one-half (1/2) Royalty (being equal to not less than an undivided one-sixteenty [sic] (1/16)[) ] of all the oil, gas and/or other minerals in, to and under or that may be produced....” "Said interest hereby reserved is a NonParticipating Royalty.... Grantee herein, his heirs and assigns, shall have the right to lease said land for oil, gas and other minerals provided, however, that all such leases shall provide for Royalty of not less than one-eight [sic] (1/8).”
"In the event oil, gas or other minerals are produced from said land, then said Grantors, their heirs and assigns, shall receive not less than one-sixteenth (1/16) portion (being equal to one-half (1/2) of the customary one-eighth (1/8) Royalty) of the entire gross production and/or such net proceeds as hereinabove provided.”
. The agreement read, in part: "Gary Hum-phreys and Peter G. Bennis hereby agree to participate in the development of the Mitchell Ranch project. Gary Humphreys agrees to pay Peter G. Bennis 40% of any royalty interests, ORRI [overriding royalty interests] or contract interests for negotiating this Ranch surface and mineral estate. GH will execute or cause to be executed appropriate documents to transfer such 40% interest in the amounts retained by GH in any dealing on the Ranch project.”
. Steadfast has notified the Court that its name has changed to "KCM Financial, LLC.” For consistency with the naming conventions employed in the lower courts, and to avoid confusion, we will continue to refer to KCM Financial as Steadfast for purposes of our analysis.
. In an email to Wayne Gifford of EXCO Resources, Bennis wrote: "It’s been a fiasco. Gary signed a document that fouled my deal and I was on the brink of litigation.... Bottom line is that Range Resources is buying the whole deal land [sic] and taking a lease — they will put three wells down within the first 12 months. I was hoping for the Chesapeake deal to make but Gary screwed up a perfectly great opportunity for us all.” Whatever Ben-nis’s grievances had been, he appears to have been placated by a stipulation and amendment of contract executed on April 18, 2006, in which he acknowledged the assignment to Steadfast and accepted an amendment of the assignment contract that allowed him to participate in the proceeds of any subsequent sale or, if no sale closed, escrow funds.
. At this point in the litigation, there does not appear to be any dispute that the non-participating royalty interest reserved in the 1960 deeds is a fraction of a royalty that may float above the floor specified in the lease.
. See, e.g., Dearing, Inc. v. Spiller,
. We have acknowledged that a precise, all-encompassing definition of "fiduciary duty” has proven elusive:
Fiduciary duties are imposed by courts on some relationships because of their special nature. We recounted in Kinzbach Tool Co. v. Corbett-Wallace Corp. that the "term ‘fiduciary’ is derived from the civil law.” We recognized that it "is impossible to give a definition of the term that is comprehensive enough to cover all cases.” We said, "[glenerally speaking, it applies to any person who occupies a position of peculiar confidence towards another. It refers to integrity and fidelity. It contemplates fair dealing and good faith, rather than legal obligation, as the basis of the transaction.”
Johnson v. Brewer & Pritchard, P.C.,
. See Jones, 26 Tex L. Rev. at 576 (observing that the "common practice” of requiring "a royalty of not less than the usual 1/8" protects a non-participating royalty interest owner and "entitle[s] him to a share in any royalty, as such, in excess of the usual 1/8”).
. This point is illustrated by the facts of Portwood v. Buckalew,
. In her appellate brief, Bradshaw acknowledges that Range “was not a related party.” By definition, an arm’s-length transaction refers to "[a] transaction between two unrelated and unaffiliated parties” and may also include a transaction between closely related parties “conducted as if the parties were strangers, so that no conflict of interest arises.” Black's Law Dictionary 1726 (10th ed. 2014).
. Federal courts have shown a similar unwillingness to extend fiduciary duties to adverse parties in arm’s-length transactions. See, e.g., Weinberger v. Kendrick,
. In the deeds, the grantor reserved “an undivided one-half (1/2) Royalty” of “not less than an undivided one sixteenty [sic] (1/16)” and authorized the grantee, his heirs and assigns "to lease said land for oil, gas and other minerals provided, however, that all such leases shall provide for Royalty of not less than one-eight [sic] (1/8)."
. Bradshaw initially claimed an interest in the portion of Steadfast's royalty interest that was transferred to Bennis and Korb, but has since abandoned that claim. Accordingly, she now seeks something less than an additional one-sixteenth interest, but the precise figures are not germane to our analysis.
. The court of appeals reversed summary judgment on Bradshaw’s constructive-trust and fraudulent-transfer claims as follows: "As we have concluded that Steadfast owed a fiduciary duty to Bradshaw and that there is a genuine issue of material fact with regard to whether Steadfast breached that duty by engaging in self-dealing and conspiring with others to Bradshaw’s detriment- — one of the bases for Bradshaw’s constructive trust and UFTA claims against the Royalty Holders — we cannot say that they were entitled to summary judgment as a matter of law. Therefore we sustain Bradshaw’s third issue in part, and we sustain her fourth issue. On remand, if the factfinder concludes that no breach occurred, then these constructive trust and UFTA issues will be moot.”
. Bennis made this point before the trial court during the summary-judgment hearing: “As a matter of convenience, [Bradshaw] wants an additional one-sixteenth, and she would like that one-sixteenth out of what Steadfast had left over, which would necessarily include Mr. Bennis'[s] interest, but that is, again, just a mere math issue where she would be basically using a constructive trust like a—like a writ of attachment to satisfy a judgment claim she has.”
. Insolvency is not required to sustain a claim under section 24.005(a)(1) of TUFTA, which prohibits a transfer made "with actual intent to hinder, delay, or defraud any creditor of the debtor"; however, Bradshaw did not allege a fraudulent-transfer claim on that basis in the trial court.
. The Act operates to prevent or mitigate fraudulent transfers that place a debtor's property outside of a creditor’s reach. Flores v. Robinson Roofing & Constr. Co., Inc.,