Koch Oil Co. v. Wilber

KOCH OIL COMPANY and Tesoro Crude Company, Appellants,

Oil WILBER, Individuаlly B.E. Representative of a Certified Plaintiffs, Appellees. Class of No. 09-92-224 CV. Texas, Appeals Court of Beaumont. March

858 Hurst, Hurst, B. Mary-

David Caldwell & Bellatti, Sheinfeld, Maley Kay, Ann A. & J. MeConn, Philip Griffis-Hays, Rice & Picker- Houston, Fisher, ing, Orgain, David J. Bell & Tucker, Beaumont, appellants. Zukowski, Campbell,

John Zukowski & Bresenhan, Coats, Rose, Ryman, Chris E. Yale, Holm, Houston, Ryman, appellees. WALKER, C.J.,

Before and BURGESS and BROOKSHIRE JJ.

OPINION

BURGESS, Justice. Appellants, Company Tesoro Crude Oil (Tesoro) (Koch), Company and Koch Oil filed appeal judgment this from a in the amount of $125,488.36 against International Petroleum (International) Corporation and United Tex- (United) Corporation as Petroleum renamed (Clamont), Energy Corporation Clamont $80,093.61 jointly severally; against Koch; $24,653.54 Tesoro; and attor- ney’s against all fees defendants in the trial jointly severally court in the amount of $186,315.08, $25,000 plus if the matter $5,000 appealed Appeals, to the Court of if a Supreme sought, writ of error to the Court is $5,000 grant- and an additional if the writ is judgment ed. It fromis that Tesoro and appeal. Koch have filed their Trial was be- fore the The trial court. court entered its findings of fact and conclusions of law on findings June 1992. Additional of fact pertaining and conclusions of law to Koch separate findings of fact and conclusions Tesoro, relating of law were each filed on July 1992. Justice, Retired, Beaumont, 74.003(b) (Vernon 1988). Appeals, Court of Ann sitting by assignment pursuant to Code Tex.Gov't proceeds to Interna- 1967, lessors, paid percent of B.E. Wilber August

On Wilber, August 1984 and October Gеphart, A. tional for Maxine Helen and wife purchases. Gephart Myers, joined her and Luella oil, Myers, an husband Charles S. executed gathered paid for oil Before Tesoro gas mineral on a acre tract of lease lease, International executed from the Texas, County, in favor of land in Jefferson Liquid Hydrocarbon Indemnifying Oil and Norman, D.M. and John Walter Wallace Van this division By execution of Division Order. a three F. This lease contained Merrick. accurate order, agreed to make International continue as primary term and would all timely distribution oil, minerals long gas, or other thereafter agreed indemnify Te- interest owners quantities. paying B.E. produced any liability for such distribution soro from ( n ) subsequently assigned Wilber one-half proceeds. Testimony established such ownership his interest said lease C.C. industry. typical in oil division orders By through various mesne Wilber. assignments, jointly conveyed royalty lessors Attorney Charles On December to 82 interest owners. interests total suspend pay- Thanheiser demanded Tesoro individuals, plaintiffs, These named six lease, in a oil from the and stated ments for originally filed on October suit letter: against International and United. Wilber and Messrs. Van Norman and assigned the lease was lessees representing majority roy- others Goodale, Company, & Inc. Bertman On captioned have payable under lease alties 24,1984, working May said them for not to have monies due elected assigned At the lease was to International.2 produced liquids of oil and other the sale assignment, Corpo- time of this Permian through Pe- International disbursed designated gatherer ration on the Corporation Mr. Lance troleum and/or designated lease. International became the Dreyer. operator. royalties have received There been change ownership some since Statement Facts —Tesoro ago apparent termination months and began operat- Shortly after International purchaser, the former of the contract with lease, ing changed the International lease Permian. Gephart” name “Helen “Sharon Re- from to 1984, 1, July you pay- nee” and identified request suspend effective We initially gatherer. oil Tesoro as the Tesoro matter is off of this lease until the ments pay aware, to all interest owners we this set their accounts as resolved. Insofar authority any directly. operator from has no receipt for their funds. royalty owners to 21, 1984, requested Tesoro Inter- On June Opin- Title provide a Division Order national letter on Mr. Thanheiser’s Tesoro received royalty identify the ion which would various 18, 1984, re- suspended and December provide owners, but International failed Wilber, Betty payments for maining C.C. response opinion. In with such title Tesoro Wilber, Benny E. and Walter Van Wilber 14, request September International’s claim). (who subsequently his settled Norman 1984, making began pay- the total Tesoro paid remaining were credited All funds operator. ment to the The record reflects International. early original plaintiffs were aware gathered lease on four Tesoro 12,1984, 1984, royalty payments August December separate October occasions: 1985, 1984, being 1984, received. and March December peti- Energy filed Corporation. Clamont Dreyer president mont of Internation- Lance was Mr. al, bankruptcy September incorporat- was tion and Clamont. United United 5, 1984, Bankruptcy for the Eastern Court Dreyer amend- United States on December ed Division, No, Texas, Case Beaumont change District of its name to ed articles to Cla- 89-11943. Corporation and in 1988 United Texas 18, 1985, January analyst produced On from Te- all the oil from the United Texas Dreyer Company soro called Mr. at International and Farm. Petroleum Sharon Renee time, period April informed him about the communications with During this and until 22, 1985, January Mr. Thanheiser. Mr. working On intеr- International owned Dreyer signed in, an affidavit in which he swore operated est the lease. possessed signed that he division orders from 7, 1985, May pur- On Koch entered into a persons who owned interests. Teso- April agreement chase effective United ro discovered later that this affidavit was 1,1985 1,1985, May continuing month false. until cancelled to month and thereafter 8,1985, On March an amended sent days pur- party either with 30 notice. Koch division order to Mr. Thanheiser for C.C. produced from the chased all the crude oil Wilber, Betty Wilber and Bennie E. Wilber subject May through Au- lease from of 1985 (Benny) to execute. B.E. Wilber refused gust By agreement of 1986. this Koch was sign the order because it did not include and required pay percent of the United 100 specify the interests of his ex-wife Maxine purchase price “Special for all oil. The Pro- Wilber, Myers, andMr. Mrs. Charles agreement visions” section of the states Gephart. Helen Company pur- “Koch Oil will be the second chaser at the lease.” 19, 1985, Wilber, On March Mrs. Maxine ex-wife, Benny mailed a letter to Wilber’s April operator. On United became (United Tesoro and informed them that she had not Although companies these two signed International) division orders from International. lease, produced oil from the 25, 1985, McCall, Jr., LeRoy On Mаrch in- roy- they paid the interest owners the never that he had not formed Tesoro letter production. alties owed from that signed A a division order with International. A division order also contained United’s March notation on letter dated Koch, United, acknowledgment that analyst agreed shows that the Tesoro to sus- of oil from the lease. “First Purchaser” pend request International’s Agree- This dovetailed with the Purchase opinion. a title March Luella On ment which noted that Koch was the “Second Gephart Myers, Myers, and Helen Charles S. Purchaser”, no “hold harm- but there was they Gephart A. notified Tesoro that had'not language less” clause nor indemnification signed a division order from International warranty in either instrument. The clause they During to nor did intend do so. March purchaser.” was directed to “first shipment gathered Tesoro its last of oil (10) separate purchases of Koch made ten 9, 1985, April from the lease. On May 1985 and Au- oil from United between they suspending International were informed paid gust undisputed It that Koch 1986. is payment to International because of com- (100%) percent of the United one hundred plaint pro- interest owners. All letters from purchase price every barrel of oil it gathering were ceeds for the March 1985 pay- bought. Koch undеrtook to make never request- suspended Tesoro. Tesoro then any royalty ments to interest owners. opinion International so that ed a title from 2, 1987, September changed its On United orders to the Tesoro could circulate division Company, name to Texas and then on United owners, appropriate interest but none was 7,1988, January Corpora- from United Texas forthcoming. Energy Corporation. tion to After Clamont (a April Company Statement Facts —Koch Ada Crude Oil set- of co-defendant) purchased produc- tling the oil operator, International was the While subject lease. tion from buy oil from Koch contracted with United leases, including Gephart/Sharon several History Litigation 6, 1985, May exe- Renee lease. United On original The lessors filed suit on October a Division Order cuted and delivered document, alleging a failure International and guaranteed Koch. In that United produced from legal pay royalties for oil owner of United and warranted that it was us, Koch, reeord, then such purchasers as in the case before the lease. Tesoro and United, are findings fact the trial court not respectively, International and of joined v. Kawasaki Steel Defendants Plaintiffs’ Sec- conclusive. Middleton Corp., ond Amended Petition filed on March 687 S.W.2d - Houston curiam, 1985), per writ [14th Dist.] 1989. refused (Tex.1985). Findings of fact alleged right recovery Plaintiffs their always by the are reviewable for trial court express quasi-contract under theories of sufficiency legal and of the evidence. factual § and under 91.401- Tex.Nat.Res.Code Middleton, However, at 44. See S.W.2d 1987). (Vernon 91.406 Plaintiffs’ Petition probative force if there evidence of declaratory requested judgment further they controlling. support findings, such alleged security and asserted their to a (Tex. Bludworth, v. 715 S.W.2d 693 Mercer proceeds pursuant the oil and App. writ ref'd [1st Dist.] - Houston (Vernon to Tex.Bus. 9.319 & Com.Code n.r.e.). 1991). sufficiency legal reviewing of 12, 1990, February filed On Plaintiffs point, “no we evidence or a evidence” consid suggestion bankruptcy of of Defendant Cla- tending only evidence and inferences er United). (formerly mont findings support and we will the court’s On June Plaintiffs filed their disregard anything contrary. Best to the v. Original Third Amended Petition in which (Tex. Inc., Ryan Group Auto alleged bringing B.E. Wilber he was suit 1990). any probative If there is evidence of individually representative both and as findings, they will support such be force royalty class of mineral and interest owners Inc. Responsive Sys., Terminal upheld. subject in the lease. (Tex. Am., Boy Scouts court, September The trial on 1989). consisting certified class of Plaintiffs appellаnt complains of fac When the original plaintiffs remaining evidence, tually we review all insufficient will in the The interest owners lease. case was weight if the the evidence to determine April The during tried to Court findings supports of the trial record judgment against appel- Court entered its Plas-Tex, Corp., 772 court. Inc. v. U.S. Steel judgment lants on June did (Tex.1989). recovery specify grounds based, except findings it noted points “No evidence” will sus law as fact conclusions of filed. if one of tained the record demonstrates 1) following: complete absence evi

Standards Review 2) fact; the court is dence of a vital barred giving analysis For rules law or of evidence from a brief standards prove only findings weight we at the evidence afforded review note outset 3) court, fact; prove in as case the evidence offered to fact a case tried the is the a vital scintilla; us, a dignity and vital is no more than mere before have the same force a fact 4) conclusively jury’s upon special City a the evidence establishes verdict issues. or of Jackson, City opposite a fact. Cal v. Lake of vital Robert W. Clute 559 S.W.2d of vert, “No Evi (Tex.Civ.App. [14th Dist.] 391 Evidence” and “Insufficient - Houston n.r.e.). Error, complete dence” Points 38 TexL.Rev. writ ref'd When of (1960). sufficiency A ehal- аppellate of is in the 362-63 factual statement facts filed percent- by damages tempt who owned certain Apparently 3. trial assessed establish court ages did incorporating expert’s in nor the witness allow Plaintiffs' calculations. 1984 paid royalties any proceeds for were expert Tesoro credit identified the value for Plaintiffs’ indemnifying pursuant purchases. expert to the This then to International on Tesoro’s four upon expert’s as- $200 class division order. Based minimum award each allocated $24,- sumptions, class equal or Tesoro owed the members did member whose share $200, accounting per- was many method though totaled 653.54. A similar exceed even shares by expert at- formed amounts received Koch. than dollar. This made no on less one curiam, only 1992), per lenge will be if the court denied sustained writ (Tex.1992). by finding determines that the fact of vital contrary great so the trial court is preponderance

weight and of the evidence Points Error of clearly wrong it found to is Tesoro, points of er- ‍‌‌​​‌‌‌​‌‌‌‌‌​‌‌​‌​‌‌‌​‌​‌​​​​​​​​‌​​‌‌​​​‌​‌‌‌​‍Appellant, brings 30 Estate, unjust. King’s In re 150 Tex. appeal. brings ror on Koch (1951). 244 S.W.2d 660 points relate to Tesoro’s first five of error determining appeal on the issues of limitations find- statute issues. Certain court, regarding of proof burden in the trial attaсked, by the to wit: ings of fact court are appellant challenges legal an who suffi 1) appellees ever notified of none were ciency supporting of evidence an issue any change operatorship, in ownership or appellant which the the burden did not have (and appellees any notice from received proof must demonstrate that there was no regarding International Tesoro support appellees’ finding. evidence 2) purchasers); did not change of Tesoro Constructors, Eng. v. Westech Clearwater notify any appellees suspend of its decision to (Tex.App. - Austin they did not so payments of (which 9, 1985, April learn until after was appellant challenges If the the factu by court to time found be a reasonable sufficiency supporting al an ad evidence 3) discovery); appellees, than for such other finding appellant verse and the did not have plaintiffs, original not know the six did proof, appellant must burden then the withheld Koch until payments Tesoro and demonstrate that there insufficient evi they September. certified as a class support finding. Raw dence to adverse to be a which the trial court found Exploration, Hide & Gas v. Oil Maxus 4) appel- discovery; time for their reasonаble S.W.2d 264 writ - Amarillo four lees’ cause of action is not barred denied). (also asserted limitations 5) error), point first Koch appel In the case in which the alleged enough give original petition facts proof has the burden in the trial lant (appellants) notice to the defendants court, legal sufficiency attack on of a possibility of a class action. wide finding must the evidence demonstrate that conclusively sup all vital facts establishes (in and Koch and third Tesoro its second port the issue. Oil Sterner v. Marathon error) challenge conclusions of points of (Tex.1989). Co., appellant If 1) court, the discov- law the trial to wit: proof attacking the burden of and is has (appel- ery applies regarding plaintiffs’ rule insufficiency, factual he must establish lees’) action against cause of Tesoro finding great the adverse 2) Koch, in- petition the third amended weight preponderance of the evidence. (seventy-six) certified cluding the class of Bain, (Tex.1986); Cain v. petition plaintiffs related back to the first Hide, 766 Raw S.W.2d at 275. (six) original plaintiffs. Tesoro filed 1) supports allege

If the find that: the trial court erred the evidence fact, barring brought by appellees claims ing appellate then reviews in not court having proved determine their оn the basis of the conclusions law to Lehmann, limitations law that the statute of Polland matter of correctness. & Cook 2) bar; by appel- the (Tex.App. [1st 729 was a evidence adduced 832 S.W.2d - Houston Studs, denied); factually to legally Inc. v. insufficient writ NCL lees is Dist.] 3) claim; Jandl, of “rela- (Tex.App. support their the doctrine 792 S.W.2d 182 - Houston denied). incorrectly applied was because writ The conclu tion back” Dist.] [1st sup- legally are to by drawn trial court there was insufficient evidence sions of law the 4) same; legally insuf- En the always port as matter of law. evidence was reviewable a Hachar’s, Associates, discovery support application of the Inc. v. ficient to terprise-Laredo 5) rule, entering Inc., in (Tex.App. Antonio the trial court erred S.W.2d 822 839 - San

863 1986, writ); Cooley, App. v. findings its and conclusions the no Leeds because evi- - Dallas or, legally (Tex.App [1st insufficient in the alterna- 702 dence is S.W.2d 213 . -Houston n.r.e.). tive, factually We likewise insufficient. writ ref'd Dist.] purposes, hold that for statute of limitations The above issues outlined in Tesoro’s first remaining plaintiffs to the who were added points ques- five of error are also raised origi by plaintiffs’ amended the action third one, two, in by points tioned Koch error 15,1990, petition nal filed must use June three, (alleging and fifteen error the trial viability their claims. date to determine applying court in the two limitation statute), which attack the trial court's find- rule, a general As cause of a

ings legally factually conclusions as action accrues at the time when facts come supported by insufficiently evidence.

into existence which authorize a claimant Statute judicial remedy. Murray Limitations v. San seek Jacin (Tex.1990). Inc., Agency 800 S.W.2d 826 Relation Back Doctrine prevails regardless generally This rule Discovery Rule injury. learns of his Mor when the claimant Inc., Sterling Drug 348 eno v. undisputed It is the last date (Tex.1990). court in case The trial the before gathered on which Tesoro oil from the sub rule, discovery judicially employed us the ject gath lease was March 1985. Koch operates excep as an constructed test which August May ered 1985 until 1986. general tion rule when the claimant The first instance in which class action is injury brought was of his when it appellants unable know third Inc., 15,1990. Phillips original Riojas Properties, petition amended filed accrued. v. June thereby (Tex.App. Corpus The statute limitations was tolled Christi S.W.2d - denied). subsequent though to this date even class If the fraudu writ defendant was not certified the trial court until lently conceals the existence of cause of 17,1990. September Bridge v. Austin Grant injured party, action from the then the сlaim Co., (Tex.App Const. S.W.2d may discovery ant rule to toll the utilize the . -Hous ton [14th Dist.] The court Leeds, 702 at statute of limitations. particular entered two conclusions law of required 215. is to be under The defendant first, complain, which Tesoro and Koch disclose, duty otherwise rule does petition including the amended the certified Smith, apply. Nichols v. filing class relates back to the time of (Tex.1974). If claimant relies fraudu petition original plaintiffs first of limita lent concealment to toll “discovery applies secondly that the rule” in tions, offering then he has the burden of determining when the statute of limitations proof raising the fact of fraudulent issue running. started Id.; at For the most concealment. part, discovery rule has been limited The allows relation back doctrine giving in which the facts rise a cause cases pleading origi- amended to relate back to inherently of action undiscoverable pleading nal and its file date. Tex.Civ.PRAC. Abbey, claimant. Johnson (Vernon 1986). & Rem.Code Dist.] [14th clearly The statute states that the amended - Houston writ). Public from the railroad com records subject plea pleading would be court, in the mission introduced trial com new, distinct, if is limitation it based on Tesoro, testimony plaint letters sent to different transaction or occurrence. оwners were aware question amend- before this Court whether May early as payments had ceased as pleadings running prevent ed will discovery supports finding that rule our against parties who are statute of limitations us. See apply in the ease before does not pleadings after the added in amended Enterprises v. Bass Production question run. has Harrison statute has This been Co., (Tex.App. Corpus S.W.2d 532 negative cases. Kirk- answered two - (Tex. n.w.h.). 1994, Harris, Christi patrick S.W.2d right of the year contract between the owner We hold that the four (International) purchaser recovery produce and first applies actions for the limitations (Tesoro), proceeds payment of derived royalty payments. then Dvorken v. Lone Star Inc., by Interna the oil Tesoro to (Tex.App.- from the sale of Industries writ). tional, lastly assumption of the re by the Fort All claims Worth payees pay proceeds to the against sponsibility to original plaintiffs who filed suit six right pro 14,1989, by (appellees) are time the owner Tesoro and Koch on March (International). Co. arising prior to March Northern Nat. Gas barred as to all claims duce (Tex.App.- Vanderburg, 1985. All claims Koch and Teso- v. arising prior by remain the first ro to June We note Amarillo Tesoro, re ing appellees being are likewise barred.4 We met and third conditions ject year condition, appellants’ however, paying contention that the two that of the second apply in this statute of limitations should was proceeds by Tesoro to International all ease. funds were sus completely met because Vanderburg, 785 pended Tesoro. Payors as

Tesoro and Koch suspended payments, As to those at 419. request response acted in Tesoro Tesoro, points error six with Wilber, Wilber, Wilber, Benny Betty E. nine, C.C. through and Koch its twelfth suspend pay all Norman to error, and Walter Van allege points of error on the thirteenth We International for their benefit. ments to part designating trial court in to hold those that Tesoro was entitled by the hold “payors” as defined and Koch as proper proof in the form of in funds until Natural Resources Code. The evidence provided to was en division order or otherwise the ease before us reveals that Tesoro paid. We defining the interests to be a contract International to Tesoro tered into hold, therefore, absolved of that Tesoro was International and Interna purchase oil from payees by responsibility payments for thereby responsible for mak tional would International, payment the оwner owners. At ing payments to the interest transaction, “Payor” right produce. the time of the defined Tex.Nat.Res.Code entered Although Koch and United 91.401(2) to be: calling for Koch to purchase into a contract purchaser pro- “Payor” means the first purchaser” we find be a “second well, gas gas from an oil or duction of oil or binding payees. language cannot be right produce but the owner of the may It well Vanderburg, at 419. gas pooling order under an oil or lease or United, but as Koch and be effective ‍‌‌​​‌‌‌​‌‌‌‌‌​‌‌​‌​‌‌‌​‌​‌​​​​​​​​‌​​‌‌​​​‌​‌‌‌​‍between payor if the owner of is deemed to be the language of section avoid the it cannot purchas- produce and the first 91.401(2)defining “payor.” as The evi arrangements provid- er have entered into Dreyer, Internation Lance dence shows that sale ing derived from the al, one and the and Clamont were United paid by the first gas of oil or have been attempt to es person. There was no same purchaser to the owner who assumes 91.401(2) in the section cape the terms of proceeds to responsibility paying those find and International. We case of Tesoro payee.5 ownership provision of the warranty of to be agreement to be insufficient designated purchase being For Tesoro to avoid pay royal assumption to construed as an being purchaser, Teso- payor in first view representation ty owners. Koch’s show that the conditions ro would have to prevents production also it owned all the above stat- exception as outlined therefore that First, We hold this construction. there must be were fulfilled. ute R.S., but it was provision was amended in 1991 Leg., 5. This 68th provisions of Acts of 4. The provision specifically provided the amended codified as ch. 1983 Tex.Gen. TexNat 91.401-91.405, only as to division orders applied would be effective §§ in con- Res.Code Ann. the effective date executed after transfer orders junction limitation statute with the four act, August specific viability claim. of each determine

865 points of er brings next two payor Tesoro purchaser and as de- Koch was first ror, 16, original plaintiffs’ 91.401(2). alleging the 15 and by fined section We over was insufficient. written demand 11, points 10 and Tesoro’s of error points 15 and 16 be rule of error Tesoro’s 14, allege point and Koch’s of error error had all that Tesoro of cause we find concluding plaintiffs in the trial court that necessary apprised of to be information payees by Tex. (appellees) were as defined original plaintiffs. See demands made 91.401(1) (Vernon § Naсogdoches Telecommunica Ann. Nat.Res.Code Star-Tel v. 1993), “Payee any per states: means tions, (Tex.App. S.W.2d 146 - Houston persons legally payment or son entitled writ). 1988, no [1st Dist.] proceeds from from sale of derived points error and 18 Tesoro’s in gas gas or an oil well located from or allege point and of error 16 error Koch’s except We find that for the state.” part by having trial found court limitations, ap- application of the statute of to a minimum appellees that were entitled generally pur for pellees payees were attorney’s and fees under sec damage award 91.401(1) pose of section and we overrule the Natural Resources Code. tion 91.406 of points these error. that this section violates Tesoro contends the effective date Texas because Constitution alleges points of Tesoro in error only a suit apply was to of said section in and the trial 14 that court erred award of the act filed on after the effective date or ing compounded lawful da maximum interest 1987). (August We note that Tesoro ily appellees insufficiency because brought into the in fact sued and evidence. Ann. Tex.Nat.Res.Code hold, there March 1989. We lawsuit on 91.403(a) (Vernon 1993) § provides for an fore, not thаt the Constitution was violated. prejudgment against interest assessment payors wrongfully who withhold funds. Ed error points in its Tesoro M. Oil Co. Pend Oreille Oil & win Jones 4, 6, 7, points Koch in its of error Co., (Tex.App. Corpus Gas - holding in trial erred allege and 9 court denied) (opinion on Christi writ rehear appellants of contract and hable breach ing). apply pay 91.403 does not if Section concluding such was created that contract suspended payor ments are withheld (Vernon § 2.107 Ann. TexJBus. & Com.Code of conditions enumerated because section 1994). agree appellants in that We provides pay 91.402. 91.402 Section prove the exis appellees had burden if may ments be without interest withheld See Howell v. tence a contract and failed. payee that the there is a reasonable doubt Kelly, 534 S.W.2d 737 - Houston has of its share of oil to authorized sale 1976, no find that the We [1st Dist.] purchaser. entitled to re Tesoro was agree conclusive that there record is signed payee division from the ceive order oral, contract, any be ment nor written payment as a for the condition appellant either at appellees tween the placed of oil. After Tesoro was the sale find Commercial time. We that Uniform problems payments that were оn notice of to the at apply 2 does not case Code Article International, it being made acted holding. in so hand the trial court erred payments suspending certain judiciously in points of error 21 and In Tesoro’s rights and the of the interest rights until its appellants point of error impera It was and in Koch’s be determined. owners could concluding allege trial erred that the court have executed division tive Tesoro implied cove already breached their appellants noted opinion. have order title We dealing sign good nant faith and fair Teso- and others refused that Wilber order, appellees under TexJBus. we therefore hold ro’s division & Com.Code (Vernon 1994). previously have We penalties should not assessed between the no contract existed found that under conditions. We these therefore, be no contractu parties, there can points of error sustain Tesoro’s dealing faith fair between duty good al 866 parties, give adoption security agreement

said this rise nor does situation of purposes chapter. ... for of this independent to an tort action. See Crim International, Truck & Tractor v. Navistar find that Tesoro or Koch made We neither (Tex.1992); 823 S.W.2d v. Tri-C 591 Crowder any agreement, any order division volun- Resources, Inc., (Tex.App.- 821 S.W.2d 393 any recog- tary appellee communication with 1991, writ). no im [1st Dist.] Houston nizing by appellee, the interest owned there- plied dealing good covenant of faith and fair apply not the case at fore this statute does to point has to been certain this limited to previously hand. We found that Tesoro have specific relationships none of contractual purchaser, not a therefore these was first are Nat. which before this Court. Arnold v. points of error as discussed are sustained. Co., County 165 Mut. Fire Ins. 725 S.W.2d points Tesoro’s of error (Tex.1987) (insurance contracts); Manges v. 23, point appel 27 and Koch’s error (breach Guerra, (Tex.1984) allege trial court erred lants fiduciary duty). appel findWe that neither concluding appellees were entitled to duty good lant owed the faith and fair of Tesoro’s and Koch’s status declarations dealing appellees. to the Declaratory Judgment Ap- Act. under the peti pellees eighth original in their amended Tesoro, Appellant, points in of error 23 and requested court declara tion the trial enter a 24, point in their of error number tory judgment establishing rights 11, finding appel- attack court the trial after further appellees lease termination and appellees quasi lants were liable to under a establishing “first that Tеsoro Koch were insufficiency theory because of contractual “payors” purchasers” production and/or find no nor does the evidence. We facts proceeds directly obligated pay production to provide trial court basis for its conclu- appel appellees. to the These issues of the appellants appellees sion that are to liable being payors purchasers lants first points and/or theory. under this sustain these We appellees’ central ease-in-chief appellants in of error favor of to the extent court, therefore, seeking declara before reject any recovery by appellees that we tory improper. relief Chezik John relationship theory quasi of a contractual Chevrolet, Friendly Buick v. 749 S.W.2d parties. between the denied). 1988, (Tex.App De writ . -Dallas point of error 25 judgment Tesoro’s claratory is not available to settle 19, 20, 21, points Koch’s of error rights parties pending in suit. issues and allege holding Co., the trial court erred v. AAA Ins. Redwine Life under a appellees are entitled recover Plaintiffs’ - Dallas security provided by interest as original fully suit covered these issues & Tex.Bus. 9.319(a) (Vernon 1991), § declaratory judgment request presented for Ann. Com.Code provides: which generally BHP new See controversies. Co., Millard, Petroleum Inc. v. (a) security inter- provides This section (Tex.1990). find the trial court to be We (as in interest secured

est favor of owners judgment exercising declaratory in error parties) obligations to secure relief. purchaser gas production first of oil and (as debtor) points and 30 purchase price. A Tesoro’s of error pay correspond points of error signed writing giving the owner Koch’s interest to the award operates pertaining as a and 28 court’s right real estate law under attorney’s trial awarded security this fees. The court agreement created under appellees in amount purchaser attorney’s fees to the chapter. The act of the first $25,000 if $186,315.08 the matter is plus oil or signing agreement purchase an order, $5,000 Appeals, if a issuing appealed to production, in the Court gas a division sought Supreme Court is voluntary commu- of error to the making any other writ $5,000 grant- if the writ is any gov- and an additional nication interest owner or find sufficient evidence ed. there was agency recognizing the We ernmental justify an award of the trial court operates as authentication before owner’s re- so that the settling defendants attorney’s appelleеs Tex.Nat. under fees fees charged are not maining defendants Res.Code 91.406. responsible. they objec lodge and Koch each recognize at 10-11. We Sterling, 822 S.W.2d court for judgment tions to of the trial in cases claims rule exception jointly awarding attorney’s fees the above are transaction arising out of same which the severally among the defendants and various prosecution or defense interrelated that so making the We each liable for entire award. essentially the of proof denial against involves or litigation began in note that this 1986 facts, in us but find the case before Koch same we and United. Tesoro and International capable segre- are attorney’s two that the fees were not as defendants until about added relationship Regarding a the years gation. later. note that and one-half We also attorney’s fees defendant, versus Company, purchased fifth Ada Oil amounts recovered in at- subject April Sterling lease 1987 “what reasonable the after states that: purchased the case exceeding torney’s a total far fee be for entire amount would plaintiffs pursued segregated Koch. The amounts or what the indicates discovery litigated Ada active with and also at 12. be.” 822 S.W.2d should subject did not termination of the lease which to the trial court for remand the case We Tesoro, Ada, Appellees relate Koch. attorney’s fees. segregation of International bankruptcy proceedings against also filed Finch, Security v. Ins. Co. Life attorney’s note that Clamont. We certain (Tex.1973). 544 billing specifically and records concern fees against the action Ada. there must While brings points of error 30 overlapping, have been in that work certain insufficiency alleging generally 31 attorneys appellees’ apply to done would findings of support fact evidence time, any given more than defendant at one 25, 30, 32, and 59 conclusions attorney’s could never we find that the fees 14, 22, 27, authority No is cited and 34. law segregated theless have been in a realistic by specific record are we directed to the nor responsibility it be place fashion where points these for We overrule references. Sterling, longed. Stewart Title Guar. Co. v. Tex.R.App.P. 74(f). briefing deficiencies. (Tex.1991). (Tex. Crews, v. Baucom writ). App. - Waco rule, general party the seek

As ing attorney’s always carries to recover fees find point of error we Regarding Koch Fox, proof. Kimbrough the burden of court not abuse its discretion the trial did 1982, no S.W.2d 606 Worth ap- certifying plaintiffs the class - Fort writ). may only fees court award those representative. B.E. as class pointing Wilber the necessary” for “reasonable point Koch in agree appellant with We Accep prosecution the suit. Green Tree finding that the division order of error 33 (Tex. tance, Pierce, 768 Inc. v. Koch was not null and given from United to making this App. Tyler - pertains Koch inception as it from its void showing, required prove plaintiff have, however, held and United. We particular fees that incurred purchaser” provision of said divi- “second said sought charged to be defendant binding payees. on was not order sion In the Sterling, S.W.2d at 10. fees. us, portion Ada settled their case before Summary seg lawsuit, directly bears on which attorney’s fees. regation mainly governed case is find that the We § 91.401-91.406 attor- recover Tex.Nat.Res.Code plaintiff seeks to' When 1987) (Vernon provisions that all are multi- ney’s where there fees cases ‍‌‌​​‌‌‌​‌‌‌‌‌​‌‌​‌​‌‌‌​‌​‌​​​​​​​​‌​​‌‌​​​‌​‌‌‌​‍penalties, pre- damages, defendants, for all of those thereunder ple and one or more interest, settlements, attorney’s all fees judgment made defendants have appellees (including attorney’s fees for segregate fees owed plaintiff must remand) and awarded be determined owed the remaining from those defendants material, provided of limitations under all appellees. We find that at times 16.003(a) provides: purchaser that term Tesoro was not a first statute, but became a stake- is defined suit, trespass bring for person A must suspending holder in certain monies and as injury property to the estate or payees for whom such such is liable to another, property, personal conversion plus pre-judgment are held full inter- funds property taking detaining personal owed. We find that said est on the amounts another, entry injury, forcible personal required employ legal counsel payees were detainer, not la- and forcible detainer funds, suspended to retrieve the therefore day the cause years after the ter than two payees are entitled to recover reasonable of action accrues. attorney’s past fees for and future services below, sought Appellees, plaintiffs substan- by the trial court. be determined Texas by, through, and under the tive relief limi- year that the four statute of We hold there exists Natural Resources Code. Since applies against filed tations to the actions dealing with this no abundance of case law and Koch. We hold that claims Tesoro legislative histo- particular legislation, a brief by against original and Koch the Tesoro helpful. ry appropriate and to be prior plaintiffs arising to March 1983, Legislature enacted In our Texas against that all claims time barred. We hold through the Texas 91.405 of Sections 91.401 joined by plaintiffs the Tesoro and Koch 1983, Acts 68th Natural Resources Code. 15, arising prior the action suit to June class § Leg. p. ch. 1986,. We have are likewise time barred. topic hold that Koch was a first intro- concerning found so were Four bills the purchaser as that term is defined bills HB and identical duced: SB 12,1983, the April Natural Resources Code. 731. On HB 1266 and SB HB Energy considered House Committee necessary and a new A new trial is hearing. together public at 1775and HB 1226 the have to be made because award will Study Group reported on the bill The House recovery against and Koch will be Tesoro Study Group April 1983. The House particular application of the reduced bill, arguments against the reported for and also hold that of limitations. We statute summarizing of the bills that had been each have attorney’s appellees will fees awarded subject. HB 1775 on the When introduced segregated to be redetermined April floor on reached the House goes without responsible party. But it each language new amended to include same was attorney’s saying fees for that the reasonable (House 91.403(a) § 91.405 § and to add by the remand are appellees necessitated 21,1983). Report April House dated Journal awarded below. recoverable and to be amended, Sep- effective Bill became the trial court for remand this cause to We legislation was effec- 1983. This tember opin- with this proceedings consistent further purchased crude Tesoro and Koch tive when ion. under the lease. oil AND REMANDED. REVERSED enactment, specific Prior to the 1983 inten- royalty owners from protected laws Justice, WALKER, dissenting. Chief royalty delay their checks. practices to tional majority’s disagree respectfully I accepted great generally it was While of limita- four holding that the legitimate delays stem from of these deal applies. tions recognized problems, it was also title and should delays intentional affirmatively be con- some and Tesoro Both Koch Legislature. It was controversy addressed subject matter that the tend should, compel Legislature to intent of our & admirable by Tex.Civ.PRAC. governed be (Vernon royalty inter- timely payment proceeds to §§ 16.003and Ann. Rem.Code persons or entities occu- by those 1986) § 2.725 est owners Ann. Tex.Bus. & Com.Code “payor.” Tex.Nat.Res. 1994). pying the of a status (Vernon Koch and Tesoro Both 91.401(2)(Vernon 1993) defines 2- of the application strongly contend for Code right pro- owner of the ters parties those this cause of between whom prior payees. may brought. “Payor” gas to the and its action be duce oil 1991 amendment meant: statutory histoiy, it is clear that In view purchaser production of oil or [T]he first gave consideration to overall Legislature our well, gas gas an oil or but the owner utility prior to its enactment economic right produce gas under an oil or Obviously, our statutes. pertinent these pooling lease or order is deemed pro- Legislature’s concern foremost produce payor if owner of royalty payees enti- tection those purchaser into and the first have entered payment. address better tled to What proceeds arrangements providing that the free-flowing utility of a serves the economic gas from the sale oil or have derived pro- industry, placing than the burden to purchaser paid been first directly in upon party most payees tect responsibility owner assumes the who so, i.e., producer of well line to do (em- payee, paying those with its lessors. operates who under contract added)1 phasis though Legislature’s our concern Even statutory foregoing defini- view certainly it was protection payees, was the “payor,” precise status of tion the term indis- payees be allowed intended relationship Interna- Certainly, the targets. criminate selection must tional and those interest owners just Legislature orderly, fair had a more and question, Tesoro be determined. Without gas purchasers faith of oil and intent. Good purchaser” was a oil from “first Interna- unpaid from producers, from without notice tional, Koch, by agreement written while duty to payees, imposed not be with a should United, purchaser,” with was a how- “second performance. producer’s audit a contractual ever, automatically propel this fact does not idly by sit payees allowed to Nor should be payor. Tesoro and Koch to the status of producers the purchasers pay the while first Why? the in Because statute determines punish pur- purchase price, full then these that the the to language right clear owner of non-paying pro- for the sins of their chasers produce an or gas pooling under oil or lease ” ducer. (International/United) is to order “deemed agreement the payor be where there is percent hundred paid Koch United one (Koch Tesoro) purchaser between first and (100%) price during purchase oil its of the (Interna- right produce and the owner of to relationship with United. Tesoro contractual tional/United), right the to said owner of likewise, except did for the December produce responsibility of then assumes the only very alleged payment few the when paying payees. complained of non- royalty interest owners Furthermore, major- payment. I believe the 91.401(2) I unto believe that creates ity in the untena- cast Koch and Tesoro has duty posture Koch as to and Tesoro no duty position becoming grantors of the ble no- payees unless Koch and Tesoro received payees. It to its flowing from International any particular pur- prior payment tice to to Legislature’s intent confound was not our chase, International/United, had payor, with industry in the Texas the oil State obligation payees. To its fulfilled potentially devastat- and such a burdensome require a state otherwise would harsh if ma- Devastating, ing because upon purchasers to inves- result. undue first burden correct, oil jority purchasers all first mat- tigate intervene in contractual and then well, right produce gas the owner of the provides the unless follow- 1. The 1991 amendment now ing: gas pooling ordеr an oil or lease or under arrange- purchaser entered into "Payor” party have who undertakes to first means gas payee, proceeds from proceeds providing that the derived oil distribute ments production purchaser of oil gas paid as the of the first whether to be of oil or sale gas proceeds operator generating such or right or produce purchaser to the owner of production was of the well from which such having payor thereby who deemed to be is lessee the lease on which obtained or as under proceeds paying those re- responsibility of purchaser royalty payor the first due. The is is payee. purchaser to the the first ceived from gas or production of from an oil of such gas paid who have the owner of fails to Texas Natural Resources Code produce provision, gas, pay such oil and include limitations thus we must now statutory again purchased. simply guidelines. for each unit must seek other No This yet interpreted Legislature cannot be case law has a limitations what our State had question mind. Texas Resources under our Natural Code, thus, guidance we should focus on us, paid In the case before one hun- 16.003(a) of the Practice Section Texas Civil (100%) percent required purchase dred previously set Remedies Code price paid of the oil to International. Tesoro forth verbatim. (100%) percent required one hundred personalty Severed oil becomes purchase price up to International until Teso- pay royalty proceeds failure constitutes ro received Mr. Thanheiser’s letter of De- personal agree I property. detainment of 18, 1984, cember at which time Tesoro sus- majority claim for where the pended payment to International on behalf of royalty payments is based on contractual royalty those interest owners named let- rights parties, the four between ter. The record reflects Tesoro sus- governs. Dvorken of limitations See Wilber, Wilber, pended funds Betty for C.C. Inc., Industries, v. Lone Star Benny E. and Walter Wilber Van Norman. Worth Tesoro, then investigate in an effort - Fort However, here we have direct contractual making whether International was fact relationship appellees Koch or between payment to payees, Dreyer, contacted Mr. viability Tesoro. comment Without as to notify him of Mr. Thanheiser’s letter. On substance, claim plaintiffs’ against Koch and January signed Dreyer affi- false nature of con Tesoro are a claim for stating possessed signed davit that he divi- version. A or a con conversion persons orders sion who owned version of oil itself after severance from the interests. personal prop land a conversion of would be suspend payment Did Tesoro’s decision to erty. Corp., v. 707 See Bodin Oil Gulf Tesoro’s International recast role to that 875, F.Supp. (E.D.Tex.1988), citing 877 W.B. I payor? Upon receiving of think not. no- Drilling Company Lacy, Johnson v. 336 suspend payment tice to for certain named 230, (Tex.Civ.App. S.W.2d 233 - Eastland owners, royalty interest Tesoro became writ). plaintiffs remu Since seek trustee the benefit of those inter- neration Koch and for the est owners named. already production proceeds value of once Having respective defined the roles of paid purchasers, plaintiffs’ I these view Koch and that of Tesoro as innocent wrongful claim of domin as that of exercise good purchasers faith of oil Internation- oil. either a ion and control over Absent al/United, unpaid royalty without notice obligation statutory duty and contractual or claims, (excepting interest Tesoro, December requirement I am as to Koch and Tesoro), period purchase which limitation compelled apply year thе two statute of i.e., apply, year year? or should the two four § provided in 16.003 of period limitation as Code. Practice Remedies Texas Civil below, Appellees, proceeded to plaintiffs prob- In an Eighth their Amended The effort to overcome limitations trial on Petition. lems, plaintiffs con- urged in the trial court to plaintiffs’ basis of claims rests substantive back” doctrine and the Natural sider the “relation Sections 91.401-91.406 Texas “discovery year If the two limitation sought Plaintiffs also rule.” Resources Code. controls, period the “relation doctrine perfect security a back” appellees trial court purchase through of oil is of no avail to and the from the sale and (Vernon finding. § The “relation back” 9.319 erred so & Ann. Tex.Bus. Com.Code 1991). Further, pleading to re- sought doctrine allows an amended plaintiffs the recov- original pleading in limited late back to the ery attorneys under Tex.Civ.Prac. & fees (Vernon doctrine, having its ori- §§ and 38.001 circumstances. This 37.009 Rem.Code law, 1986). as gin in was later enacted common

871 (now a to seek which authorize claimant art. codi- existence 5539b Tex.Rev.Civ.Stat.Ann. Murray v. judicial remedy. Jacinto of the Tex.Civ.Prac. & a San fied Rem. (Tex.1990). Inc., law, petition At common amended 828 Agency, Code). original filing regard- generally relatеd back to accrues A cause of action alleged, injury. petition though even new were plaintiff facts a learned of an less of when Inc., provided remained Drug, that the cause action Sterling 787 S.W.2d Moreno v. Chen, (Tex.1990). the same. v. Chien 759 S.W.2d (Tex.App. Com- —Austin discovery judicially a construct The rule is provided law four in determin- mon elements when used to determine ed test which is pleading up a ing whether an amended sets accrued. Id. at 351. plaintiffs cause of action 1) action: a recov- different cause of Would discovery applied to situations The rule is upon ery original pleading had bar his unable know of a claimant was where 2) recovery pleading? under the amended actual Rio injury at the time of the accrual. support evidence Would same both Inc., Phillips Properties, 828 S.W.2d jas v. 3) damages pleadings? the measure of Is 18, 21 Christi writ (Tex.App. Corpus - 4) allega- the same each case? Are the denied). effectively applied, the dis When each, subject tions same defenses? running covery rule of the statute tolls Id. at 493. discovers, plaintiff limitations until expressly provided Article that an 5539b care and through exercise reasonable subject pleading amendment shall to a not be discover, the nature of diligence should is not to limitations where amendment Maverick, injury. v. 760 S.W.2d See Willis new, wholly grows on or of a based out (Tex.1988). discovery The rule has been occur- distinct different transaction or properly to matters characterized limited rence. inherently Rose Baker & v. undiscoverable. Botts, (Tex.App The trial use of the “relation back” court’s . -Hous denied). seventy-five Dist.] doctrine to resurrect claims for ton writ [1st newly plaintiffs, added should error even yet apply discov- Texas courts have period apply. four limitation involving ery non-payment to a rale case purport does “relation back” doctrine not oil. royalties purchaser parties. deal with which add amendments us, royalty case before owners Beaumont, Lake, Stokes Sour & Western purchased unaware that Koch and Tesoro Co., Railway 161 Tex. fact, plain In oil from International/United. (1960); Chien, supra, at An amended 493. the Rail produced public records from tiffs pleading party unless is relates back a new Tesoro as which identified road Commission Harris, Kirkpatrick v. 716 S.W.2d added. ran began Limitations to gatherer. writ), 124, 1986, (Tex.App. 125 no - Dallas known, injury fact is not when of when 213, Cooley, 702 215 see also Leeds v. S.W.2d Rus alleged wrongdoers identified. 1985, (Tex.App. wilt [1st Dist.] - Houston Co., ‍‌‌​​‌‌‌​‌‌‌‌‌​‌‌​‌​‌‌‌​‌​‌​​​​​​​​‌​​‌‌​​​‌​‌‌‌​‍343, Ingersoll-Rand sell v. n.r.e.) de (tolling party occurs when a refd (Tex.1992). Our record shows 344 n. 3 not when brought fendant is into suit and Te persons complaint letters to sent several filed). original plain a pleading is When indicating obvious awareness soro their of a after the statute tiff is added to suit payments when International ceased run, limitations has that action is barred assignment. received Gulf, party plaintiff. new Baker v. C. to that (Tex.Civ. Co., 257, Ry. 184 S.W. 260 & S.F. below, B.E. testified During trial Wilber writ). 1916, City also App. See otherwise, - Austin is le- regarding discovery, there Zane-Cetti, 29 Fort Worth v. S.W.2d of factually insufficient evidence gally (Tex.Comm’n holding ap App.1930, remaining class finding to the a sustain proved). County v. See Lubbock members. Greenhaw (5th Ass’n, “discovery Beverage 721 F.2d 1029-30 Regarding applicability Cir.1983), grounds by In- other rule,” overruled on speaking, a of action generally cause Champion In- v. into Woodworkers at when facts come ternational accrues the time (5th tern., Cir.1986). (Testi- precedent payment. specifical- F.2d 1174 tions More mony by ly required member regarding sign one class discov- it Mr. Wilber to a division ery support fully rule Mr. im- could not be used to a order. Wilber understood the whole). finding port beckoning by regard to the a Tesoro’s his statement class as order, “if I proving The executed a division the funds applicability burden of they discovery holding being paid, would start upon plaintiffs rule rested I paid.” and the other would be legally factually there is insufficient evi- by view this as an Mr. admission Wilber judgment. dence to the trial sustain court’s comply. failure to Mercer, Inc., his See Woods v. M. William (Tex.1988). S.W.2d 515 Appellees Worthy v. Fab cite Friedman rics, (Tex.Civ.App. Paso S.W.2d 639 Appellees further seek to avoid limitation - El Friedman, 1960, no In the court dealt by as to ac positioning that Tesoro with a letter written a debtor clear knowledged a debt letter dated March acknowledged ly a debt. Such is not the case 1985. To revive a barred claim acknowl- regarding the of March sent letter debt, edgement plaintiff prove of a a must a sufficiency by Tesoro. acknowl- an promise pay assumption or an of an obli edgement question debt is a of law to 1) 2) gation writing; be in which must con I determined the court. Id. at 640. an unequivocal acknowledgement tain plaintiffs hold matter of would that as a law justness particular or existence of the prove a acknowledgement failed to 3) claim; and, obligation express willing limita debt which would defeat statute of obligation ness to honor or claim. West tions. Gathering Corp., Texas v. Co. Exxon Appellees delay 777-78 Paso seek further to accrual of - El 1992), by claiming limitations that the Re grounds, Corp. other v. Natural rev’d on Exxon Co., (statutоry Gathering provision) sources Code notice West Texas 868 S.W.2d 299 (Tex.1993). Cohen, integral constitutes demand which an Andrews v. part prece of a cause action or a condition (Tex.Ap p .Tyler 828-29 writ ref 'd n.r.e.). cite Appellees dent to sue. & Tex.Civ.PRAC. Rem.Code (Tex. Graham, (Vernon 1986). Foreman 1962, writ), Civ.App. claiming - Beaumont plaintiffs identify Our failed class writ- begin the statute of limitations does promise ten acknowledgement of a debt. plaintiffs copies run until sent Tesoro of their Thanheiser, The letter addressed to Charles September demand International prior representation, written to class-wide cannot claims all other revive asserted Foreman, condition a demand became a prove class Plaintiffs members. failed precedent of a the accrual cause of action unequivocal acknowledgement justness debt, upon unwritten because based any plaintiff. of a “debt” owed to The letter loans, period was for an indefinite made request March simply only upon expressed and was de time due sign a Thanheiser’s client order veri- division Generally, mand. a note without a time for fying ownership interest. did Teso- Neither repayment is note action a demand and is acknowledgement ro make unconditional an however, “If, is immediately. able a demand acknowledgement of debt. “If an of the exis- action, integral part a an of a cause or qualified tence of indebtedness a is sue, precedent limi condition to to promise pay, promise to a differ- conditional begin does to run a tations not until demand expressed from will not be ent the one so made, is un is unless demand waived or is implied the creditor must fulfill the and Ford, reasonably delayed.” Martin prerequisite a named condition as to (Tex.App S.W.2d . -Texarkana liability promise.” on the An- debtor’s new denied). writ drews, argument at 829. For statutory provision, if letter The purposes, the March notice Section even 91.404(a), acknowledgement requires “payee” give of in- general contained a debtedness, make “payor” condi- written notice of failure to it also contained certain us conclusive that begin- The before is timely payment prerequisite a record as “a contract, any agreement or there never judicial payor for was ning against action oral, plaintiffs and either or between delay the written It not accrual nonpayment.” does upon agreed Koch This fact was or Tesoro. a of the cause of action because cause witness, Wilbеr, plaintiffs’ expert by Mr. judicial prior must arise action. action representa- trial Dupont, and Koch’s Gerald Statutory prerequi requirements notice tive, Wyman. Steve judicial sites to action are reasonable efforts no breach It is can be a truism there encourage discourage litigation and to fact, was, in unless a of a contract there non-litigious settling disputes. For exam trial court’s The contract to be breached. (Tex. Hash, ple, in Hines v. finding a contract was an existence of 1992), require court the notice dealt with other erro- precipitated error numerous and Deceptive Act. ment in the Trade Practices findings neous conclusions. provision requires That notice also written prerequisite filing a notice “as a suit seek reality there was with the When faced damage.” ing See Tex.Büs. & Com.Code Ann. agreement expressed between contract (Vernon 17.505(a) pur § Supp.1995). The Koch/Tesoro, then plaintiffs plaintiffs re- pose provision of this DTPA notice is the argument provi- course of direct their Liability same as that the Medical §§ sions of Tex.Bus. & Com.Code Improvement Act Insurance (Vernon 1994), con- plaintiffs and 2.107 4.01) § art. 4590i (Tex.Rev.Civ.Stat.Ann. obligation running tend a contractual created (Vernon Supp. give Pamph.1995). Failurе to plaintiffs. from Tesoro to the The Koch and require does proper notice not dismissal that, pursuant trial determined court action but does a defendant to seek allow 2.107, agreement § with the appellants’ requisite for notice. a de abatement Since plaintiffs contract the sale of min- was a for notice, integral can waive it is not an fendant gas), (including like oil and erals or the part cause of action. purchasers privity these first between to invoke plaintiffs required was not overreach, if plaintiffs, appellees, Here liability under statute. statutory provision notice became an inte- 2.107(a) reads, gral part plaintiff of a cause of action then & Com.Code Tex.Bus. pertinent part: delay indefinitely sending before no- could Clearly, purpose not the tice. is A the sale minerals contract for provision it statutory notice since would ren- gas) a contract (including like oil and ... is der statute of limitations unavailable. goods chapter if within this for the sale of but they the seller are to severed plaintiffs’ one element of cause Since purported present sale until severance is action to recover not as a transfer which is effective thereof theory, it in breach of cоntract based only as in land of an interest is effective viability I compelling that of this address contract to sell. may extending claim as same relate to years period two to four the limitations create a This intended statute years. no contract existed. contract where existing con- simply declares that an Eighth Petition al- Plaintiffs’ Amended gas, in certain tract sale of for the placed leged that Koch and Tesoro’s actions circumstances, for the is deemed a “contract “in and violation of entities default those under code. goods” sale of quasi-contractual obli- express or their below, plead- Appellees, plaintiffs had The found that there gations.” trial court recovery under fact, ings was, supporting agreement between “an Code Business Commerce and plaintiffs regard and the Kocb/Tesoro impose lease,” court to and it error for trial Gephart of oil from the purchase pursuant liability upon Koch Tesoro perform under appellants failed to that statute. “‘agreement’”. stated, For reasons I would hold that the year applicable

two statute of limitations is plaintiffs against appel- all claims made all lants, If Koch and Tesoro. the two applies, limitations all claims

plaintiffs against Tesoro would be not,

effectively extinguished. should This however, funds affect those which were vol-

untarily for held the benefit of those interest owners named. judgment I would reverse of the trial judgment plaintiffs court render nothing appellants, have recover Koch and Tesoro. Sorenson, Dallas,

Timothy appel- for W. lant. IV, ‍‌‌​​‌‌‌​‌‌‌‌‌​‌‌​‌​‌‌‌​‌​‌​​​​​​​​‌​​‌‌​​​‌​‌‌‌​‍Long, Arlington, appel- for

John Clark lee. DAY, Before DAUPHINOT and

Gerry HAIRGROVE, Appellant, Means RICHARDS, JJ. OPINION GROUP, CRAMER FINANCIAL DAY, Justice. INC., Appellee. Gerry (Hairgrove) ap- Hairgrove Means

No. 2-94-196-CV. peals summary judgment granted in from a Group, Financial Inc. favor Cramer Texas, Appeals Court of (Cramer) judicial in a suit for foreclosure Fort Worth. Hairgrove’s arising from default on note March 1995. held Cramer. We affirm. 30,1986, January Hairgrove executed a On Rehearing May Overruled $75,000 promissory amount note MBank-Houston, N.A., pledging certain se- purchased curities with the loan funds. La- ter, sold took over MBank and FDIC rights its in the collateral assigned loan and Texas, BankOne then sold to BankOne N.A. assigned rights in the collat- the loan and its to Cramer.1 eral note, Hairgrove on her defaulted judicial sought a foreclosure on the Cramer remaining trial court indebtedness. granted summary judgment for Cramer plus outstanding the note in- balance of Publishers, Directory Telephone v. Five D's ed Inc. 1. When BankOne sold its interest in loan Co., assigned rights (Tex.App.- Publishing in the collateral under the Cramer, security longer agreement had it no Austin any right in the loan or collateral. See Associat-

Case Details

Case Name: Koch Oil Co. v. Wilber

Court Name: Court of Appeals of Texas

Date Published: Mar 16, 1995

Citation: 895 S.W.2d 854

Docket Number: 09-92-224 CV

Court Abbreviation: Tex. App.