## In the Co urt of Appeals Second Appellate District of T exas at Fort Worth

___________________________ No. 02

- 22

- 00242

- CV

___________________________

On Appeal from the 97th District Court Archer County, Texas Trial Court N o. 2018

- 0090A -CV
Before Birdwell, Bassel, and Walker, JJ. M emorand um O pinion by Justice Birdwell 

### S OUTHERN 

### E NERGY 

### F UND 

### 2, L.P. ; W Y



### - V EL 

### C ORPORATION 

### ; AND 

### H IRA 

### C APITAL 

### , Appellants

V



### . I NDIO 

### R ESOURCES 

### , LLC F/K/A I NDIO 

### M INERALS 

### , LLC , Appellee2 MEMORANDUM OPINION
I. Introduction Appellee Indi o Resources, LLC f/ k/a Indio Minerals, LLC assigned to Appe llant Souther n Energy Fund 2 , L.P. (SEF2) a one

- h alf o verri ding royalty inte rest (ORRI) 1 in two we l l s locate d in Ar cher Co unty and assigned one

- quarte r ORRIs in
these wells to Ap pellant s HIRA Capi tal and Wy

- Vel Corporation after Appellants made the winning bid on an online a uction site

. Appellants subseq uently sued Indio
for fraudulent inducement an d fraud b y no ndisclosure based on the materials that
Indio had posted on the auction site

. The trial court granted su mm ary jud gment to Indio on Appellants ’ fraud claims and ordered them to pay Indio $26 4,018.62 in
attorney ’ s fees

. In two issues , Appellants challenge both rulings. 2 We a ffirm

. II. Ba ckground Robert Wallace, Indio ’ s man ag er, and Hunter Allen, owner of Over ton Park Oil & Gas, L.P. f /k /a B roman Oi l & Gas, L.P. , were college friends in the early

1 An ORRI is a non participating interest in oil an d gas produced at the surface, free of production expenses, carved out of a working interest under a mineral l ease. Piranh a Partners v. Neuh o ff

, 596 S.W.3d 740 , 742 n.2 (Te x. 2020)

. A bsent an ag reement otherwise, an ORRI t erminates when the lease terminates. Id.

2 Appellant s also comp lain that the trial cour t erred by granting summary judgment on their negl igen t

- m isrepresenta tion claim , b ut th e y neither plead ed this claim in the trial court nor brief ed it on appeal.3 2000 s . 3 Wallace and Allen partnered together in M arch 2013 to acquire the two Archer County wells at issue from Rogers Drilling using E nergyNet.com, I nc. (EnergyNet) , an on l ine a uction site for the sale of o i l

- and

- gas interests

. Thus, Indio
and Overton Pa rk be came the o wners of the two wells. These were the first we lls that
Wallace and Allen bought together

— one well on each unit of land

. They did no t ha ve

a geo logist an alyze the wells or perform any engine ering or reservoir studies b ef ore th ey paid roughly $ 600 ,000 for each well , a nd they had no written plan or projection
f

or how long they might own or operate the m . When t hey acquired the we lls, the net
revenue interes t (NRI) 4 wa s around 76 % to 80 % , a nd r o yalties a n d overrides
accounted fo r the remaining 2 0 % to 2 4 %

. Allen testified that “ there ’ s 100 diffe rent factors ” to look at when trying to
acq uire an oil

- and

- gas property ; the factors include cash flow and assumption of
liabilit y for plugging and environmental cleanup

. The Archer County wells had no liability a nd a strong c ash flow

. After acquirin g the well s , Wa llace and Allen obt ained from Rogers Drilling “ a slice of 3

- D s ei smic and evaluated it. ” Allen de scribed it as a one

- page sheet that they
had a sked Ro n Rogers about when they went to pick up the title files at Rogers

3 Wallace graduated with a d egree in econ omics in 2006 and then worked as a land man before partnering w ith Allen

. Allen had a degree in petroleum land management.

4 N RI i s th e righ t t o rec eive revenue from pro d uctio n ; i t is “ t he revenue si de of the interest in [a] well. ”4 D rilling. Roger s did not mention anythi ng to them about pressure issues or a wa ter

b oundary issue , and they did not ask him an y questions about those thi ngs . Acc ording to Allen, they learned about the water

- drive formation after they bought the wells and
thus de c ided not to use pu mp jacks beca use it did “ not make any se nse from a
reservoir standpoint to put pump jac ks on th e[ ] wells

. ”
Wallace put the 3

- D seismic info rmation int o Ar cG IS, a mapp ing sof twar e, “t o try to create a model ” of the r eserv oi r . He used the informati on from the well log s to

c a lculate volumetrics with regard to porosity an d water saturation. W allace stated that
the 3

- D seismic information that h e had looked at related to addit ional target zones in the Mississippi Lime fo r mation, where th e two wells were located. Wallace ’ s father, a reservoir eng ineer, advised him on how to calculate and look at volumetrics , which
can be used to determine whe ther one shoul d drill more wells or deepen a well

. I n M ay 2013, Wallace an d Allen decided t o sell some o f the revenue interests in
the Archer Count y wells b ecause they needed cash to acquire more properties.
Wallace stated that wh en they decided to sell the ORRI two months after purchasing the wells, the wells had be e n “ consistent , ” an d there had be en “ [n ]o issues. ” Th ey primarily used R ogers Drilling ’ s production history and mark eting materials

— “ t he
same materials tha t [Indio had] used to purchase ” the wells

— in their own EnergyNet
post
. H o wever, the y made in the exec utive summary two s tatements upon whi ch part of th e litigation is based and which are italicized below:5 Broman Oi l & Gas LP and Indi o Minerals LLC, propose to se ll a 2% [ORRI] in the Fri day Unit #1 and Livingston

- C o lgan Unit #1 wells and
asso ciate d leaseh old. The leases cons ist of 390.2 acres [,] and both wells are producing from the Mississippi Lime formation. The wells are loca ted approximat ely three miles Northwest of M egargel, TX.
The Fr iday Unit #1 well was drille d by Rogers Drilling Company , Inc. in August 2010 to a tot al dept h of 5144 ’ . The wel l encou ntered t he top of the Missi ssippi Lime at 5118 ’ [,] and casing was set to 512 1 ’ in the top of the pay. The well was completed by drilling out the casi ng shoe and complet ing the w ell open

- hole. Duri ng the past 28 months [,] oi l production rate and pres sures have stab i lized at 23 B OPD on a 4/64 ” choke with 680 psig flowing tubing pressur e and 720 psig casing pressure . The well has a cumulative produc tion of 2 1.5 M bo as of late March 2013. The Livingston

- Col g an Unit #1 well was drilled by Rogers Drilling Company, Inc. in August 2010 to a total dep th of 5102 ’ . The well encountered the top of the Miss issippi Lime at 510 0 ’ [,] and casing was set to 5101 ’ wit h a forma tio n pack

- off shoe in the top of the pay. The w e ll was completed by drilling out the casing sh oe and completi ng the well open

- hole. The formation was treated with 205 gallons of 15% H C l. The oil production rate an d pressures have stabilized at 22 B OPD
on a 4/64 ” choke with 6 80 psi g flowing tubing press u re and 700 psig casi ng pressure. The well has a cumulative pr oduction of 19.5 Mbo as of late March 2013. Both wells have produced cons istently over their past 26

– 28 months with no substantive change s in the flowing pressures. The only
v ariation in produc t ion has occurred whe n the wells have been sh ut

- in due to inab ility to get the oil p icked up from the tank batteries. Sellers intend to use the proceeds from the sal e of this [ ORRI ] to fund [ their ] ongoing ac quisition and devel opment program

. This part o f Ar ch er [C]ounty has a si gnificant amount of p roduction from the Mis s issippian, Gunsight, Stra wn, and Caddo formations [,] and the operator is currently analyzing 3D sei smic and well logs to locate additional tar get zones on the 39 0.2 acres held by these tw o wells

. [Emphas es a dded.]6 Wallace testified that h e and Allen had added the first ital i cized sentence because they had seen other sellers state similar thin gs on EnergyNet and in other marketplaces a nd because buyers t ypically questioned why a property was being sold.
All en s tated that Ener gyNet had suggested incl uding the sale ’ s reason . Wallace stated that they did not specify which prop er ties they were planning to acquire and develop
because th e one they were looking at in Arkansas was in bankr uptcy and because the y did no t know if they would be the successful bidder. 5
Wallace c laimed tha t they had added the second it ali cized sentence abo ut the

“ 3 D sei smic ” beca use he and Allen had analyz ed that information wi th regard to his
volum etrics calcu lations

. But i n a mid

- May 2013 email, Allen told Wallace that he had
decided “ to be va gue on additional zones , ” and Wallace testi fied that he had been in agreement with th e vagueness becau se they “ didn ’ t have a particular zone that [t hey]
had ident ified. ” Allen also told Wa llace in an email that he was wary of overselling , stating, “ Since we ’ re pretty su re Roge rs [Drilli ng ] didn ’ t see much and [becau se] the
nearest great offset Caddo, S t raw n [,] and Gunsight are a decent ways off , I think w e ’ re

5 After acquiring the two Archer County wells, Wall a ce and Allen boug ht wells in Arkansas, Col orado, Wyoming, New Mexico, North Dakota, and M ontan a . Wall ace testified t hat he did what he said he would do regarding the “ ongoing acquis ition an d development p rogram ” sentence, stating , I went and acquired an asse t in Arkansas. I went and dev elop ed th at asset in Arkansas. I went and acquired an as set in We st Texas [] in Howa r d County. I went and worked over the wells in Howard County. I als o acquir ed another asset i n Yoak um Co unty.
. . . It ’ s exactl y what I said I wa s going to do, and I did it.7 best off d ropping the hint a bout 3

- D and do ing some re search without trying to

overs ell the additional pot ential thing. ” Wallace testif ied that he had agreed with this
because they “ didn ’ t want t o oversell anything to anybody ” but that he di d not kno w

“ one way or another ” about whether they had bee n sure Rogers Drilling had not seen

m uch in the area.
In emails exchanged bet ween May 15 and May 16 , 2013, Allen stat ed to Wal lace , “ [ P] e o ple will likely not notice [that] we sold a 1 [ % ORRI] in the se same

w ells five to six times

. ” H e also stated that 2 % was the perfect number : “ I ’ m thinking

we ’ ll be best off if we sell in 2 % incre ments 2% $2 k/m ont h x 60 = $120k s weet spot. If it goes higher, that ’ s awe so me, but I thi nk we should put a reserve floor around $90

- 100k (45

- 50 months). ” And he stated that he li ked Wallace ’ s father ’ s idea “ about selling down until people sto p paying a reasonabl e fig ure. ” Allen added, “ If we can
sell dow n to 6 5 [%] net r evenue and pull out $1 million, why not? I guess we ’ ll see , ”
and he follow ed this sentence with a “ smiley emoji a t the end

. ” Wallace tes tified that
the sell

- dow n had been h is ide a, not his fa ther ’ s , but he insisted that at that poi nt, they
had no t tested the market and did not know whether the first ORRI would sell

. Wallace claimed that any such plans were conting en t on whet her the first sale took place becaus e they were trying to use the money from t he sale for their ongoing acquis ition and development program. Wallace stated, “ [W]e didn ’ t know what that
program was going to enta il, and so we didn ’ t have, you k now, a set plan. If it didn ’ t sell, we o bv iously w eren ’ t going to sell anything. ” However, Al le n sent an email to an8 EnergyNet e mployee in May 2013 in which he stated, “ Let me know what we need to do next to get our land files up loaded. We ’ re looking at selling a 2 % [ORR I] in t hese

c ouple wells [ , ] thre e times or maybe more

. S o that once we have everyth ing set up in
your system [ , ] we ca n use mostly the same sales materials

. ” On May 17, 2013 , W alla ce ex ecuted EnergyNet ’ s S eller ’ s A greement , and I ndio posted the O RRI interest in the two Ar cher Cou nty wells for s ale as Lot 28134, with a

reserve price of $90,000

. Rupesh Shah , president of SEF2 and HIRA Cap ital, 6 had

e le ctronically signed the buyer ’ s re presentations and w ar ra nties that incor porated
E nergyNet ’ s B uyer ’ s A greement by ref erence two days before

. The B uy er ’ s A greement included an acknowledgment and agreement that the pur chase of
pr operties “ is su bject to terms and conditions o f the Seller ’ s Agre emen t and hereby
states that BUYER has read and understands the same . ” The Seller ’ s Agreement contains a reciprocal clause , s tating, “ SELLER a cknowledges and agrees that its sale of Proper ties is subject to terms and conditions of the BUYER ’ S AGR EEME NT TO PURCHASE PROPERTIES, attached hereto as Exhibit ‘ E, ’ and hereby stat es that
S ELLER has read and understand s the same. ” 7 Appellants submitted the winning bid

. A fter A ppellants won the bid , Gregory J. Petruska, the sole ma naging member
of Spectrum Resources, LLC , which la ter joined App ellants in th e lawsuit again st Indi o , contact ed Wallace to ask about buying an additional 2 % ORRI , which Allen

6 Ken Lemons , Shah ’ s business partner, owns W y
- Vel

.

7 W hen applic able, we refer to both agreements collectively as th e Agreement.9 and Wallace then sold to Spectrum

. Indio subs equ ently so ld ten to twelve additional
2 % O RRIs betwe en October 2013 and Dec ember 2014, obt aining betwee n $113,000 and $18 6,000 per sal e . Allen testified that he and Wallace had started looking at developing the wells around the same time that they had started selling the ORRIs
and that Wal lace ’ s fath er or someone W al la ce ’ s father knew had looked at the w ell logs and had told them that th e re was something there but not enough to move
forward an d that the 3

- D sei smic information w as inconclusive. Allen admitt ed in his deposition that they had ne ver put addition al cap ital into the two Archer County wells beyond paying Steve n Symank , the pump e r . The price of oil crashed in November 2014, and in 201 5 , Indio curtailed production

. Acc ording to Wallace, the oil p rice ca used the pro duc tion curtailment , while Allen stated that production had s howed a major drop

- off in spring 2015
bec ause of loss in pressure and choking b ack production

— from 550 barr els in January to 330 b arrels in February t o 34 barrels in May

. They stopped selling ORRIs because of the low oil price and because they “ didn ’ t want to giv e away [th eir] asset. ”
B etween March 2 015 and Ju n e 2016 , Petruska emailed a nd called Al len about production , and then Petr us ka c alled Shah an d asked him if he knew that the wells ’
operators “ h a[d] continued to sell down 2 [%] interest [s ] and [that] at the same time they ha [d] not done any work nor do the y have any intent to do any work on the
well s . ” Shah stated t hat he had no idea before Petruska called him

. Allen stated that
some of his phone conversations with Petruska were “ pretty heated ” an d10 “ acc usatory ” with regard to Indio ’ s operation of the we lls , but h e did not feel that way
abou t Sh ah, stating that Sh ah “ was really nice to work with

. ”
Wallace and Allen ’ s partnership ended in 2015. In 2018, Spectrum joined
A ppellants in suing Indio and Overton Park. Indio se cured Spect rum ’s dismissal o n a
Ru l e 91 a mo tion , and Spectrum was ordered to pay attorney ’s fees t o Indio

— $14,882
fo r t he Rul e 91a motion and th en $3,0 00 to cover Indi o ’s mo tion to compel payment
of the Rule 91 a attorney ’ s fees. Overton Park subsequently set tled with A ppellant s , lea ving In dio a nd Appellants as the only parties to the dis put e. The trial c ourt granted summary judgment on Ap p ellants ’ fraud c laims, found breach of contract and
entitlement to attorney ’ s fees in Indio ’ s f avor on a Rule 166(g) m otion, and entered judgment for $264 ,018. 62 in Indio ’ s favor after a jury trial on th e amount of attorney ’ s fees. This appeal followed. III. Summary Judgment
In their firs t issu e, Appellants complai n tha t the trial court e rred by granting summary judgment on their fraud claims

. A. Standard of re view We review a summary judgment de novo. Tr avel er

s Ins. v. Joachim , 315 S.W.3d 860, 862 (Tex. 2010). We co nsid er the evid ence presented in the light most favorab le to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors
could , and disregarding evidence contrary to the n onm ov ant unless reason able jurors
could not. Mann Frankfort St ein & Lipp Advi sors, Inc. v. Fiel ding , 289 S.W.3 d 844, 8 4811 (Tex. 2009). We indulge every reasonable inference and resolve any doubts in the

nonm ova nt ’s favor. 20801, Inc. v. Parker , 249 S.W.3d 3 92 , 399 (Tex. 2008)

. A defendant that conclusively negates a t least one ess ential element of a plai ntiff’s cau se of ac tion is entitled to summary judgment on that claim. Frost Nat’l Bank v. Fernandez , 315 S .W.3d 494, 508 (Tex. 2010). Once the defendant pro duces sufficient ev idence to establish the right to summar y judgmen t, the burden shifts to the plai ntiff to co me forwa rd with competent controverting evidence that raises a fact issue. Van v. Peña , 990 S.W. 2d 75 1, 753 (Tex. 1999).
B. App ellants ’ claims
In their lawsuit, Ap pellants alleged that Indio had made a vari ety of misrepresentations in its E nerg y Net advert ising and that Appellants had submitted
their bid in reliance on those misrepresentations. They also complained that Indio ’ s scheme to deplete NRI to below 60 % and Indio ’ s refusal to pur chase pumps to
i ncrease p roduct ion showed In dio ’ s failure to act as a reasonably prudent op erat or . Appellants claimed t hat Indio had employed a scheme to sell ORRI s a nd ca pture up front all of the units ’ future values until it was uneconomical to produce oil from
the m, for cing them to b e shut in and res ulting in a wi ndfall of cash to Ind io. Appellants a sserted that In dio had concealed fro m them Indio ’ s kn owledge
abo ut prod uction issues, its lack of de velopment pla ns , and its sell

- do wn sc heme

— thus c reating a f al se impression about th e leases ’ value

— and that Indio ha d omitt ed material facts, includin g that (1) Indio had s ecretly planned to neve r de velop the12 l eases , (2) I ndio had secre tly p lanned to sell down hu ge interests in the l eases that would preve n t it from e co nomica lly operating the l eas es to Appellan ts ’ detrim ent , (3 ) Indi o ha d kn o wn the l eases wer e at the end of their production cycle based on communications from the l ease s ’ former operator , a nd (4) Indio ha d not been actually
examin ing seismic d at a or target zones for fu rther p roduction. Appellants claimed that
th ey never would have purchased their int erest s if Indio had disclosed these material
facts

. C. Indio ’ s summ ary - judgment motions on Appel lan ts ’ fraud claim s
I ndio moved f or partia l summary judgment on Appellants ’ fraud

- by

nond is cl osur e and f raudulent

- inducem ent claims. In its traditional and no

- evide nce motion for summary judgment on Appellants ’ fraud

- by

- no ndisc losure claim , Indio argued that it had no du ty to disclos e fut ure production or development plans to an
ORRI o wner; th at its evidence conclu s ively showed that it did not discover new
infor matio n that made an earlier r epresent ation untrue or misleading and that it d id

not make a partial d isclosure that c reated a false im pression or vo luntarily disclose
some information tha t created a d uty to disclose the whole truth; and that Appellants
had no ev idence that a ny alleged no n disclosures had caused an injur y , in cluding no
expert testimony that Indio ’ s opera t ing decisions were unreasonable or violated any
duties owe d to Appellants

. Speci fically, Indio p ointed out that there w as no fa ct

- witness
or expert

- witness testimo ny or other evidence (1) that it had “ des troye d ” the workin g

interest eco n omics by selling a dditional ORRIs ; (2) that Indio had ren dered the wells13 “ u neconomical t o produce oil ” based on mismanagement; or (3) that the sel l

- down had
oper ated in any way “ to the detriment of th e interest owners, like [ App ellants ]. ”
In it s t raditional motio n for summar y judgment on Appellants ’ fraudulent

induceme nt claim, Indio a rgu ed , among ot her things, that Appellants ’ reli ance w as unjustified as a matter of la w . To both motions, Indio attached the Agreement , t h e O RRI A ssignment , and deposition excerpts.
Indio ’ s s ummary

- judgmen t e vidence showed that t o part ici pate in an EnergyNet online auct ion, a buyer had to ag ree to the B uyer ’ s A greement ’ s terms and

con ditions and had to a cknow l edge and r e present that it wa s a so phist icated , accredited, and qualified inve stor
. The firs t page of t he B uyer ’s A gre ement state s that
“AN Y DECISIONS BASED UPON THE INFORM ATION CONTAINED IN
THIS WEBSITE ARE THE S OLE RESPONS IBI L ITY OF THE USE R.” B y

e xecuting th e B uyer ’s A greement to purchas e the properties, t he buyer a cknowle dged
and re present ed that
A. I t i s pr imarily engaged in the business of expl oring for or pr oducing oil or gas o r other minerals as a n o ngoing b usi n ess; B. By r eason of t his kn ow ledge or ex perience, the BUYER or its rep resen tative will ev aluate the merits and risks of the Prope rties t o be pu rchased on the Website and will form an opinion based so lely upon its knowledge and experi ence and not upo n a n y st atement, r epresentat ion, or printed mat erial provided or made by [ Ene rgyNe t ] and its repre sentati ves or SELL E R;
C. The BUYER , being of lega l age, has sufficient financial resources in o rder to bear the risk o f loss attendant to t he pu rch ase of14 t he P ropert y. “ Suffic ient Financial Reso urces ” are to be defined as follo ws . . . . Paragraph 3 of the B u yer ’ s A greement req uired the buyer to perform its own due diligen ce and i ndepend ent evaluation, stating that
B UYER hereby acknow l edges a nd ag ree s t hat it has the so le responsibility t o examine all information concerning ownershi p an d production of t he Properti es plac ed for sale on the Webs ite by the SE LLER. Further, B U YER a cknowledges and agrees that if it requires more information concern ing said Pr opertie s, BUYER m ust contact [ EnergyN et ] or the SELLE R to obtain requested in for m ation prior t o the beg in ning da te of the On line Auction.
BUYE R further agrees that it w i ll make an inde p endent evaluation of the Property and a ckno wledges t hat SEL LER and [ En ergy Net ] have made n o statements or representations concerning the pr esent or fut ure v alue of the future income, cos ts [,] or profit s, if any, t o be derived from the P roperty
. BU YE R further acknowledges that in making its BI D in the Onlin e Auction or an y subs e quent neg otiations, it has relie d solely upon its independent examin ation of the p re m ises and pu blic re cords, and B UYER ’ S BIDS and offers a re based solely on BUY ER ’ S indep enden t inspections, estimates, computa tions, eval uations , repor ts , studies [,] and know l e dge of the Properti es. Any and all information provided by SELLER or [ Ener gyNet ] in the Propert y Informatio n Sheet data pack ages as well as any other inf ormation provid ed by SELLER or [ EnergyNet ] as reque sted by BUYER ar e furnishe d t o BUYER at BU YER ’ S sol e ri sk. SELLER and [ EnergyNet ] do not warrant or represent as to the accu ra cy or completenes s of the data presented to the BUYER, and BUY E R agrees to ind emnify and hold [ EnergyNet ] and SELL ER harml ess from an y relia nce by BUY ER on d ata provided by the SELL ER and/or [ E nergyNet ]

. The Buyer ’ s A greement al so ex p l icit ly state d that n o war rantie s were made as to the prope rty, s tating,15 N otwi thstanding any provision contained in t h is Agreement to the contra r y, BUYER acknowled ges and agrees that it is ac quiring the Properties, wells, equipm ent, or ot her prope rt y located there on from SELLE R wit hout warranty whatsoever, expres s , sta tutory, or implied as to description, title, conditi o n , quality, fitn ess for pu r pose, merchantabili ty, or otherwise. B UYER ac kn owled ges and agre es that neit h er SELL ER nor [ Ene rgyNet ] make s any representation or wa rrant y whatsoever as to the p hysica l condition of t he Pro perty nor any statements or re p resentation conc erning the present or future v alue of the anticipated inc ome, cost s, or profits , if any, to be derived fr om the Pr op erty. BUYE R ACKNOWLEDGES AND AGREES THAT ALL PROPERTY IS SOLD ON AN “ AS IS ” / “ WHERE IS ” CONDITION.
The B uyer ’ s A g r eement also prov ided that t he buyer “ a cknowled ges and agre es that its pur chase of Pro perties is subject to [th e] term s and cond itions of t he Sel ler ’ s Agreement and hereby states that BUYER has read and u nderst ands the s a me . ”
The B uy er ’ s A greement con c luded w ith a mer ger clause providing that the
agreem ent and “ all at tached Exhibits and the instruments d elivered o r requi red to be
d elivered pu rsuant hereto ” supersede all prior nego tiati ons, unde rstand ings , and

a greements between the parties “ relating to the subject matt er hereof and c onstitute
the entir e understanding a nd agreement be tween the parties with respect th ereto ” and
that n o alte r ations, modi fications, amendments , or chang es in the Agreem ent “ s hall
be e ffective or binding unless t he same shall be in writi ng and shall have been

execu ted by BUYER a nd [ En ergyNet ]

. ”
The ORRI A s signment specified that “ [n] o oblig a tions, exp ress o r implied, shall arise by reason of the assign ment o f t he Override whic h shall obliga te Assignors to maintain the Leases by any method , including payment of delay ren tals,16 co mpensat ory r oyalties , o ther paym ents, or by the drilling of any w e lls on the Lands subject to the Leases. ”
D. Appellants ’ consolidat e d su m mary - judgment response Appellants filed a consolidated response to I ndio ’ s partial summary

- ju dgment
motio ns on the fraud claims . In the ir response, Appellants argued t hat their sum mary

judgm ent evi dence showed that Indio had af f irmat ive ly misled them a nd h ad with held
critical kn own infor mation that had in duced them to buy th e ORRIs

. Appellant s asserted that the alleg ed dis claimers in the B uyer ’ s A greement were not effective to
def eat their claims , they objected to some of Indio ’ s summary

- judgment evi den ce , 8
and th ey asse rted that the F o rest Oil factors 9 weighed in their favor.
T o their consolid ated summary

- ju dgment response, Ap pellants attached a

8 The trial court ove rruled Appellants ’ objections t o I ndio ’ s summary

- judgme nt evi dence

. In an unn umbered issue , cf. Tex. R. App. P. 38.1(f), Appellants complain , “ Ap pellants ’ [s ic] object [ed ] to the unsigned Buyer ’ s Agreement submi tted in support of Appel lee s ’ M P S J

. ” However, this co mplaint ignores Sha h ’ s acknowledgment in his depositi on that he executed the Buyer ’ s Agreement on May 15, 2013 , and Appellants do not refer us to any authority to suppor t their arg ument , s ee Tex. R. App. P. 38 .1 (i) , or to e xplain how they w ere harmed in light of Shah ’s acknowledg ment , se e Tex. R. App. P. 44. 1

.
9 In Forest Oil C o rp. v. McAllen , the supreme court li st ed the following non

exclusive factors to consid er in dete rmining whe ther a disclaim er of reliance bars a fraudulent

- ind ucement claim: ( 1) wh ether the contract terms were negotiated r ather th an boil e rplate an d wh ether the parties spe cifically discussed the disputed issue during negotiations ; (2) whether th e compl ai ning part y was re presented by counsel; (3 ) whether the parties dealt with ea ch other in a n arm ’ s

- length transaction; (4) whether the parti e s were knowle dgeable i n busi ness m atters; and (5) whether the release language was clear. 268 S.W.3d 51 , 60 (Tex . 200 8) ; see I nt ’ l Bus. Mach s . Corp. v. Lufkin Indus., LLC , 573 S.W.3d 224, 229 (Tex. 2019)

.17 re dacted email between Walla ce and Allen and the full depositions of Wal lace , Allen , Sha h , Petrus ka , and Syma nk. Appellants also attached Indio ’s s ales

- pit ch e xcerpts and
incor porated by reference Petruska ’ s a n d Shah ’ s affida vits that were atta ched to their
summary

- judgment response to Indio ’ s summary

- judgme nt m otion on Indio ’ s

co unterclaim

. With the exception of Sh ah ’ s d eposition, none of th is evidence
addresses the reliance element of Appel lants ’ fraud claims

. 10
Shah , wh o testified as SEF2 ’ s co rporate representative, had degrees i n

econ omics and che mical engi neering

. He and Lemons, Wy

- Vel ’ s owner , had started a

c omp any i n 2010 to acqu ire royalt y a nd non

- op erator w o rking interest s . Before that,
Shah had als o started his own company in the oil

- and

- gas industry , HIRA Ca p ita l

. He agreed that SEF2 ’ s website explained t hat it had evaluat ed property int erest s to acquire wit h capi tal , th at SEF2 was funded entirely by royalties , and that the website

10 Appellants ’ evidence also did not support i ts fr a u d claim relat ed to Indio ’s alleg ed failure to act as a reasonabl y prudent operator. Petruska, a pe troleum en gineer who had wor ked for C hevro n before obtaining a mas ter ’ s degree in business adm in istrat ion , conceded in his deposi tion that as an ORRI owner, he c ould not tel l
an o perator what to do and agreed that he was not rendering an exp ert opi nion about whether Indio was a bad o perator. Shah also agreed in his depositi on that he was not an expert witness and was not o ffering any e xpert opin ions on I ndio ’ s alleg ed “ fa ilu re to act a s a reas onabl y prudent operator

. ”
I n contrast, Symank, a pumper with twenty

- five y ears’ experience i n the area who had over seen production from the two wells since the ir drill in g i n 2010 or 2011 , testified that wells in the Missi s sippi Lime formation were notorious for “ being finicky ” but that the se two wells had been “ exceptionally goo d

. ” S ymank , who ow ned
s ome Archer County wells in a different form ation , opine d that there wa s nothing he would have done differently from Indio if the two wells had be en his and that Indio had done a good job operating them.18 pr oclaimed SEF2 ’ s “ ex per tise ” in “ acq uiri ng royalty in terests and working interests i n currently producin g wells at an excellent price yielding great returns ” a nd “ inv est [in g ]
i n o il and gas interests that already ha [d] a positive cash fl ow and a well [

- ] established production hi s tory. ” SEF2 ’ s website further stated , “ Each well is car efully analy zed to
determi ne the re mainin g years of production available, f ollowin g which th e prod uct ion analysis is integrated with a finan cial model to come u p with a val uation
based on targeted inves tmen t return s , ” and i t listed its evalua tion process es as incorpor ating (but not being limited to) geology and rese rv oir formations, well
maintenance , d epl etion scenarios, completi on tech nology, cas ing type , p roduction analysis , revenue

- expen se s tatements, surve y plats, well t est reports , and of fset data.
S hah said thes e were just ex amples and a greed that “ state ments made by the
operator ” was n ot on t he l ist

. He did not recall ex amining offset d ata for Lot 28134 or recall if it was a water

- d r iven reservoir

. B e fore the inst a nt transaction , Shah had pu rchased five to ten p roperties on
Ener gyNet , and he understood that to make purchases on Energ yNet, a bu yer ha d to be a sophisticated investor who could assume the risk of biddin g . After his transacti on with Indio, he h ad bid on and had won at least twenty

- five other bids on EnergyNe t. In his deposition , Shah agreed that he had understood on May 15, 2013 , when
he had executed the Buye r ’ s Agreement to partic ipate in the Ene r gyNet marketplace , that there were cer tain re sponsibilities and obligations atta ched to his buyin g
proper ties on EnergyNet , including representations ab out conducting his own due19 dilig ence and no t relying on representati ons by Al len or Wallac e . Regarding the
B uyer ’ s A gre emen t, Shah agreed that he had waived reli ance on the seller ’ s representati ons , but he nonetheless c omplained that he h ad not known “ t h at [Wallace
and Allen] would be just strai ght up ma king up information , ” a nd he state d that Appellants wou ld not have mad e the purchase if they had known the truth.
E. Indio ’ s summary - j udgment reply and objecti ons Indio filed a single reply to A p pellants ’ consolidated summary

- judgment
response. In it s reply , Indio poi nted o ut anew that th e B u yer ’ s A greement expre s sly
disclaime d r eliance as to th e accuracy or comple t e ness of the da ta prov ided and that
there was no evidence of r elian ce. Indio also obj ected to s ome of Appellants ’
summary

- judgm en t ev ide nce , s pecifi cally port ions of Sha h ’ s and Petruska ’ s affida vits

. The trial court s ustai ned Indi o ’ s object ions to portions of the Petruska and Sha h
affidavits. 11 F. Analysis Like other fraud claims, f raudulent inducement and fraud by nondi s closu re share th e e l ement of rel iance

. F raudulent inducement i s a “ species o f common

- law
fraud ” th at “ arises only in t he context o f a contract. ” Int ’ l Bus. Mach s . , 57 3 S.W.3d at
228 (quoting An derson v. Durant , 550 S.W.3d 605, 614 (Tex. 20 18)). T o estab lish
fra udulent ind uce m ent , a plaintif f must show that (1) the defendant made a material

11 Because Appellants do not ap p eal th e trial cour t ’ s rulings on these ob jec tions, we hav e not considered th ese p ortions in o ur review of the summar y
- judgment evi dence.20 representa tion ; (2) the defendan t knew at the time that the represe ntation was f alse or
la cked knowledge of its t ruth; (3) the defendant inte nde d that the plain tiff sh ould rel y

or act on th e mi srepresentation; ( 4) the plaintiff re li ed on t he mi s re presentation ; and ( 5) the plaintiff ’ s rel iance on the misrepresentation caus ed injury. I d

. The plaintiff ’ s

“ re liance ” on the false promise “ in duces ” the plaintif f to agree to a contr ac t to which
he o r she would not have agreed if the defen dant had not m ade the false promise

. Id.
A clause that clearly and unequivo cally expresses the party ’ s int ent to disclaim
reliance on the specific misrepresentations at issue can preclude a fra udule nt

induc ement cla i m . Id. at 229 ( listing the Fore st Oil fa ctors) ; see It alian Cowboy Partners,
Ltd. v. Prudential Ins. Co. o f Am. , 34 1 S.W.3d 323, 332 (Tex. 2011 ) ( “ [W] hen sophisti cated parties represented by counsel disclaim reliance on representatio ns ab out a sp ecific ma t te r in dispute, such a disclaim er may be binding, conc lusively
neg ating the element of reliance in a suit for fraud ulent inducement

. ” ) ; see als o M ercedes

Benz USA , LLC v. Carduco, Inc. , 583 S.W.3d 553, 563 (Tex. 2019) (holding that r elian ce

was u njusti fie d a s a matter of law when the de fendant ’ s conduct and a ctions upon
which the plaintiff relied to establish its fraud ulent

- ind ucem ent claim were dir ectly
contrary t o the parties ’ contract ’ s unambiguous terms ) ; JPMorgan Chase Bank, N.A. v. Orca Assets G.P ., L .L.C. , 546 S.W.3d 648, 660 (Tex . 2018) ( noti ng that “ n o reasonable, sophisti cated entity could read [the negation

- of

- warranty clause] and plaus ibl y believe the [defendant ’ s prior representation ; ] they are in direct contradi ction ” ). N ot every discl aimer is effective, and w hether a party is liable in any partic ular case depends on21 t he contract ’ s language and the totality of the surrounding circumstanc es . Int ’ l Bus.
Mach s . , 573 S.W.3d at 226 , 229

. The question of whether an adequate di scl aimer o f
reliance ex i s ts is a matter of law. SSCP Mgmt. Inc. v. Sutherland /Palumbo, LLC , No. 02

- 19

- 00254

- CV, 2020 WL 7640150, at *8 (Tex. App.

— Fort Worth Dec. 23, 2020, pet. denied) (mem. op. on reh ’ g ) (quo ting Italian Cowboy Partners , 341 S.W.3d at 333).
Fraud by nondisc lo sur e is a su b category of fraud that o ccurs when a p arty has a
dut y to d isclose certain information and fails to dis close it. Bombardier Aerospace Cor p . v. SP EP Aircraft Holdings, LLC , 572 S.W .3d 213, 219 (Tex. 2 019) . To establish fraud by
nondi sclosure, th e p laintiff m ust show (1) the defenda nt d eliberatel y failed to di scl ose material facts; (2) the defendant had a duty to disclose such fa cts to the pl a intiff; (3 ) the plaintiff was i gnorant of the facts and did not have an equa l op portunity to
d iscover th em ; ( 4) the de f endant in tended the pla i ntiff to act o r refrain f rom acting
based on the n ondisclosure; and (5) the plaintiff relied on the nondis closu r e, which resulted in injury. Id. at 219

– 20

. Although Appellants complain that the Buyer ’ s Agre e ment did no t m eet the

re quired stan dard of clearly and express ly disclaiming reliance, a s set out above, t he
d iscl aimers of reliance in the A greement

— although boilerplate 12

— w ere comprehens iv e , were clear and unambiguous, were made at arm ’ s length, an d required

12 The Fores t Oil fa ctors do not require that every sentence in a contract be negotiated. I nt’l Bus. Mach s . , 573 S.W. 3d a t 2 2 9 n.4.22 th e buy er to represent that it was sufficiently kn owledgea ble to partici pate in the sa le

. See Forest Oil , 268 S.W.3d at 60.
Further , App ellants ’ summary

- judgment evidence did not raise a fact issue
ab out reliance. To the contrary , Shah ’ s depo sition testimon y est abl ished that h e was a sophisticated , exper i enced oil

- and

- gas investor who ha d u sed EnergyNet to make purchases both before and af ter the instant transaction and that he was aware of and had agr eed to the Buyer ’ s Agreement ’ s specific te rms that he wou ld no t r e ly on
any thing submitted by a seller

. See JPMorgan Chas e Bank , 546 S.W.3d at 65 4 ( n o t i n g

t h a t i n a n a r m ’ s

- l e n g t h transa ction, a failure to exercise reasonable di ligence “is not
excused by mere confide nce in the honesty and i ntegrity of the other party ” ).
W e co ncl ude that the trial court did not err by granting summary judgme nt on Ap pellants ’ fraud ulent

- inducement claim bec ause, as a matter of law, their relianc e

w as not justifia ble. Further more, because their reliance was not just ifiable as a matter
of law , thi s same ground bars their fraud

- by

- nondisclosure cla im. S ee Endeavor Energy Res., L.P. v. Cuevas , 593 S.W.3d 307, 31 2 (Tex. 2019) ; JP Morgan Chase Bank , 546 S

. W.3d at 660; se e also G & H Towing Co. v. Magee , 347 S.W. 3d 29 3, 297 (Tex. 2011) ( “ If the
d efe ndan t has conclu s ively disproved an ultimate fact or ele ment which is common to
all c auses of action alleged . . . the summary judgment may be affirmed

. ” (q uotin g Timothy Patton , Summary Judgments in Te xas : Practice, Pr ocedu re and Review § 3.06[3] at 3

– 20 (3d ed. 2010)) )

. We overrule Ap pellants ’ first issue wit hout reaching their remaining arguments
. Se e Tex. R. App . P. 47.1.23 IV. Attorney ’ s F e e s
In thei r sec ond issue, A ppel la nts complain (1) tha t T exas law d oes not al low the recovery of at torn ey ’ s fees on a defensive motion for summary judg ment on tort claims ; (2) that Texa s law does not allow for th e fee recovery pu rsuant to the Agreement ’ s “ l egal proceeding s to enforce the A greement ” lan guage because that language does not apply to fraud and tort clai ms b etween parties to th e agre ement ; and (3) that Indio was not a party to the Buyer ’s Agreement and therefore could no t rely on it to support its at tor n ey ’s

- fee claim. We begin with the procedur al background of the parties ’ att orney ’ s

- fee dispute.
A. Bac kgrou nd
T he attorney ’ s

- fee issue initially ar ose after Indio counterclaimed for b reach of
contract, a llegin g that by filing sui t, Appellants had breach ed Paragraph 3 of the Buyer ’ s Ag reement
. Paragra ph 3 provides, in per tinent part, that “ BUYE R agrees to
in dem nify an d hold [ EnergyNet ] and SEL LER harmless from any reliance by BUYER on data provided by the SELLER and/or [ En ergyNet ]

. ” Ind io complained t hat Appellants sought to effectively rewrite the Agreement and to obtain damages from
In dio in breach of App ellan ts ’ pro mise to hold Indio harmless from any reliance. Indio sought “ dir ect damages, i n cluding costs, attorney ’ s fees, and e xpenses [,] which
I ndio would not have incurred ” but for Appellants ’ “ failure

. . . to honor the
ag reeme nt. ”24 1. Indio ’ s s ummary - judg ment motion on its counterclaim
Indi o moved for partial summary judg ment on it s bre ach

- of

- contract

counte rclaim , arguing th at the Agreeme nt ’ s in demnification paragraph a llowed its legal expenses to b e treated as the da mage s resulting from t he breach and th at by filing suit, Appellants had judicially admitted to breaching t he Agreement by failing to
hold Indio “ har mless from an y reliance by [ Appellants ] on data provided by [Indio]

. ” That is, “ by fili ng [ Appellants ’ ] lawsuit in which they judicially admit tha t the y relied upon representations conc erning the valu e of the subject property allegedly made b y [Indio], [ Appellants ] ha ve b reached numerous promises contained in the B uyer ’ s Agreement, inc luding their promise to hold [ Indio] harmless from any such relia nce. ” To its motion, Indio attached Appe l lants ’ first amended petition, the ORRI
Ass ignment , and the Buyer ’ s Agreement

. 2. Appellants ’ summary - judgment r esponse and Indio ’ s re ply Appell ants respo nded tha t there could be no ind e m ni fication for Indio ’ s own

tort s , th at Indio was not a party to the B uyer ’ s A greement , t hat Indio had f ailed to
p resent c ompetent summary

- ju dgment evidence to support its c ountercla im , and tha t fact issues as to Indi o ’ s a llegedly fra udule nt conduct negated the cou n ter claim.
In dio replied th a t th e Bu yer ’ s a nd S eller ’ s A greement s operated together and incorporated each other by refer ence , that Indio wa s a third

- pa rty be nefic iary o f the
B uyer ’ s A greeme nt with standing to asse rt breach , and that only if Appellants wer e25 able to prove

— not mere ly a llege

— fraudulent inducement could th ey potentially defend against their b reach of the B uyer ’ s A greement.
3. Trial court ’ s ru ling
The trial court denied Indio ’ s partial summary

- judgm ent motion on its breach

of

- contract counter claim

. 4. Indio ’ s fee applic ation
A ft er the trial court denied In dio ’ s partial summary

- judgm ent motion on it s brea ch

- of

- contract counter claim and granted Indio ’ s su mmary

- judgment motions on Appellants ’ fraud claims, Indio s ought to recover $135, 136

. 92 i n attorney ’ s f ees , plus
condition al ap pe llate attorn ey ’ s fees , under the A greement ’ s prevaili n g

- party clau se . 13 Indio argued that becau se it had prevailed o n the summary

- judgment motions that

“ sought to enf o r ce the terms, limi tations, and waivers of the Buyer ’ s and S e ller ’ s Agreements again st [ Ap pellant s ’ ] claims for fra u dul ent inducement and f raud by nondisclosure, ” it should receive its “ cost s and reasonabl e attorney s ’ fees incurred in
connection with this liti gation. ” I ndio incorporated by reference its summary

judgment motion s and reply to s up port its argument that it had “ resort [ ed ] to this legal proceed ing to enforce the ter ms o f the Buyer ’ s and S e ller ’ s Agreements as a bar against [ Appellants ’ ] claims. ”

13 Secti on 24.1 of the S eller ’ s A greement and S ection 2 3.1 of the B u yer ’ s A greement

— b oth labeled “ Go verning Law and L itigation Costs ”

— s ta t e , “ I n the even t that any party to thi s Agreement resorts to legal proceeding s to enforce this Agreement , th e preva iling party in such proceedings shal l b e entitled to recov er all costs incurred by such party, including reasonable attorney fees. ”26 5. Appellants ’ response Appellants responded by arg uing that the fe e clai m was based on d ef ending against non c ontractual to rt claims, not to e nforce the A greeme n t ; that Indio was not a party to the con tract ; that Indio could not recover fees on a defens i ve motion for summary judgment ; and that the trial co urt had already denied Indio ’ s partial

s umma ry

- judgment m otion fo r breach of contract in which Indio soug ht t h e recovery of attorney ’ s fees under a breach

- of

- contract theory

. 6. Letter rul ing #1
In a le tter ruling, the tr ial court found that t he provisions of the A g reement

“ relating to the recove ry of costs and attor neys ’ fees in proceedings by a par t y to enforce t he Agreement ” did not authorize the r ecovery of attorney ’ s fees under these

c ircumstances and that Indio ’ s actions i n relation to Ap pellants ’ fraud claims were

“ not proceedings to enforc e the contract, ” and it denied Indio ’ s request
. Indio then
moved t o re align the parties based on the trial cour t ’ s having granted sum mary judgment on Appellants ’ fraud claims , and the t r ial cou rt granted th at motion

. 7. Indio ’ s n ew theories and Rule 166 (g) mo ti on In its new posi t ion as plainti ff, in a mo tion for determination of issues of law,

see Te x. R. Civ. P. 166(g ) , Indio sought attorney ’ s fees based on (1) i ts br each

- of

contract c la im on A ppellants ’ failure to indemnify In dio and h old it harmless for th e claims and causes o f action contai ned in Appellants ’ original and first amend ed27 petitions , 14 and (2) “ pursuant t o the attorney [

- ] fee provisions in the governing

contra cts in what is now indisp utably a proceeding by Indio to aff irma tively enforce the subj e ct agreements
. ”

14

An ind emnity agreement “provides the indemnitee with a cause of action to recover against the ind emnitor.” Audubo n Indem. Co. v. Cust om Site

-Pre p, Inc. , 358 S.W.3d 309, 319 (Tex. App.

— Houston [1st Dist.] 2011, pet. denied) (citing Dresser Indus., Inc. v. Page Pe troleum, Inc. , 853 S.W.2d 505, 508 (Tex. 1993)). While a n indemnity agreement generally do es not apply t o cl aims between the p arties to a n agreement , Nat ’ l City Mortg. Co. v. Adams , 310 S.W.3d 139, 144 (Tex. App.

— Fort Worth 2010, no pet.) (op. on r eh ’ g) , it may expressly include language indicating that it also applies to direct claims between the indemnitor and the indemnitee , S am Rayburn Mun. Power Agen cy v. Gillis , No. 09

- 16

- 00339

- CV, 2 01 8 WL 3580159, at *18 (Tex. App.

— Beaumont July 26, 2018, pet . denie d) (mem. op.)

. S ee Ganske v. Spence , 129 S.W.3d 701, 708 (Tex. App.

— Waco 2004, no pet.) ( “ [W] e should not be heard to say that an indemnity pr ovision can not be writte n such that the partie s indemnify each other against claims they later assert again st the other. ” ) ; see also Osprin II, LLC v. TX 1111 Rusk GP LLC , No. 06

- 21

- 00085

- CV, 2022 WL 2541932, at *10 (Tex . A pp.

— Texarkana July 8, 2022, pet s . filed ) (mem . op.) (stati ng tha t plaintiff must s how “ that the ind emnity agreement contains language indic a ting th at it applies to claims between the parties ” ).
T he i ndemnity clause here expressly addresses indemnity aga in st the buyer ’ s rel iance , stating, SELLER and [ EnergyNet ] d o not warrant or repre sent as to the
accu racy or completenes s of the data presente d to th e BUYER, and BUYE R agrees to ind emnify and hold [ EnergyNet ] and SELL ER harml ess from
an

y re liance by BUY ER on data provided by the SELLER and/or [ Ene rgyNe t ]

. [Empha sis added .]
S ee , e. g. , GE Oil & Gas Pressure Control, L.P. v. Carrizo Oil & Gas, Inc. , No. 0 1

- 21

- 00285

- CV, 2023 WL 3513141, at *24 (Tex. App.

— Houston [1st Dist.] May 18, 202 3, no pet. h.) (mem. op.) ( “ The statement

— whet her asserted dire ctly by Custo mer or by a third part y

— e x pres ses an intent for Car rizo to provide G E with first

- p arty indemnificat ion. ” ). In hi s deposition, Shah replied, “ Y es, ” when asked whether he28 8. Appellan ts ’ response and Rule 166(g ) m ot ion Ap pellants res ponded that attorney ’ s fees were not “ damages ” for br each of

contract a nd that Indio had no real underlying “ cla im ” against it because it was “ re ally asserting an af fi rmative de fen se of a waiver of reliance under the gui se of a ‘ breach o f

contract
. ’ ” Appellants also filed their own Rule 166(g ) motion, to seek dismiss al of
Indio ’ s attorney ’ s

- fees claims based on the Agree ment ’ s language with regard t o “ le gal
procee dings to enforce th e Agreement

. ”
9. Indio ’ s response to Appellant s ’ Rule 166(g) motion
In it s response to Ap pellants ’ Rule 166(g) motion, Indio complained that Ap pellants had ignored the new bases that it ha d raised for recover ing its atto rne y ’ s fees and costs

. In dio specifica ll y pointed out that Appellants ’ Rule 166(g) motion did

not “ address the alternat ive arguments that Indio is en titled to a n award of its
attorneys ’ fees because

. . . in f i ling the instant litigat ion, [ Appellant s ] breache d thei r indemnity and hold [

- ] harm le ss obligations s et forth in the Contrac t
. ”
In dio then a dded a third alternative basis under Civil Practi c e and Remedies
Code Section 38 .001 against Wy

- Vel

. Alth ough Indio stated that it was not reurging
the earlier theories that it had presented based o n i ts successful summary

- jud gment

mot ions , Indio nonetheless also incorporated those earlier arguments by reference

.

unde rstood that the Agreement ’ s indemni ty paragraph meant that he was resp onsible for p aying Indio ’ s legal fe es if he relied on their data.29 Indio also incorpora ted by referenc e its own Rule 166(g) moti on and requested the
denial of A ppellants ’ Rule 166(g) motion.
10. Letter ruling #2
I n a July 9, 2021 letter ruling, t he trial court to ok judicial notice of all of t he pleadings on file , denied Appellants ’ Ru le 166(g) motio n, and fo u n d that Indio ’ s Rule 166(g) motion “ should be granted in all things. ” The trial court also made the
f

ollo win g affirmative findings:

• the subject tr ansactions were governed by th e Agreeme nt ;

• Indio was a par ty to the Agre eme nt and entit led to enforce it against Appellants;

• the filing of Appellants ’ claims again st Indio viol ated the Agreement ’ s indem nity
o blig ati on s and the “ Go verning Law and Lit igati on Costs provisions in Sec. 23 .1 of the Buyer ’ s Agreeme nt ” ;

• the filing of such claims against Indio in violation of these provisions was a “ direct cause of Indio [ ’ s ] sustaining dam age s in the form of attorn e ys ’ f ees a nd litigation expenses ” ; and

• Indio was entitled to re cover d amages “ i n the form of attorney [ ’ s ] fees, court costs [,] and li tigation expense [s] associated wit h the present lawsuit, in an amount to be determined at a later hear ing. ”
11. S ub sequen t proceedin gs Two months after the trial court granted I ndio ’ s Rule 166(g) m otion , on September 3, 2021, Ap p el lants filed a l etter with the trial court in whic h they asserted
that the trial court ’ s letter ruling had determin ed the legal issue of re cove r y o f fees if
I nd io prevailed on its underlying cl aim , an d they asked for a jury trial on the issu e s of30 the all eged breach of contract a nd indemnity in addition to reasonab leness of fees. Four days later, Ind io filed its own letter in which it complained that Appellants ha d
misconstrue d the letter r uling because th e trial court had made specific findings that
left only the a mount of attorney ’ s fees, court cost s, and litigation expenses to be
determined

. On September 7, the t rial court held a hearing, noting that it had r ec eived both parties ’ letters. At the hearing, Appe lla nts insisted that fact issues remained , arguing,

“ Even i f Your Honor had found as a matter of law a breach of cont r act or an indemnificati on o blig ation, there ’ s still a fact issue of what ’ s th e amount o f
i nde btedness to that [,] and we would like that to be tried to th e jury. ” Indio ’ s co unsel

re plied that the liability

- as

- to

- contractual

- indemnification issue h ad a lready been
resol ved in Indi o ’ s favor. The trial court asked Ind io ’ s counsel if , by having fo un d that
attorney ’ s fees woul d b e recoverabl e on the f a c e o f t h e c o n t r a c t , i t h a d e s s e n t i a ll y l a i d

t o r e s t t h e u n d e r l y i n g breach

- of

- contract issue , l eaving before it the factual
det ermination of the amount of attorney ’ s fees. Indio ’ s counsel replied affirm at ively, stating , My unders tandin g of the [c] ourt ’ s ruling was that in the [c] ourt [ ’ s ] determining that the indemnification rights would apply , . . . the [c] ourt found that

. . . a proper claim for all fees and costs incurr ed could be properly submitted t o the [c] ourt for determination o n whether or not that satisfied the standard as set forth by the co ntract
. . . . Appell ants ’ counsel then arg ued that the trial court had ma d e , “ out of
effi ciency, ” a ruli ng that “ if the claim is found in the plaintiff ’ s f avor, the fe es are31 recovera ble ” and then the question became the recoverable amount. [Empha sis added.] Appellants ’ counsel asked for a “ simple one

- day jury trial on those remaining
claims and is s ues with t he fees being a part of that if the jury finds in t he plaintiff ’ s fa vor. ” He insisted that the breach

- of

- contr act claim was still outstanding. The trial

court stated t hat its rulin g had been a ruling on the law bu t expressed its concern about ruling on the ac tual amount of attorney ’ s fees requested. At t he conclusion of the hearing, the trial court ordered that Appellants were “ entitled to a jury trial on the

amou nt ” of att orney ’ s fees.
Nine months later, a one

- day j ury trial was held

. During op ening statements , Indio ’ s couns el told the jury that after r ev iewing the contract , his legal strategy had
been to become “ a prevailing part y under t he contract [ and] to enforce [ Indio ’ s ] rights
under the cont ract ” and that the $ 214 ,000 that Wallace had incurred had been

r easonable to de fend his company and his repu ta tion

. Appellants ’ counsel then told the jurors that their task w as to deci de “ what is reasonable and necessary in fees in
this case f or [Indio] ” and t hat over $200,0 00 was not a rea sonable amount o n a claim
invol ving the purchase of an oil

- and

- gas intere st for $187,000.

T h e jury awarded to Indio $26 4,018.6 2 i n attorney ’ s fees in a nonunan imous
verdict u pon consideri ng the sol e issue of the amount of attorney ’ s fees

. 15 The judgment re cites that after the summary judgment s on Appellants ’ fraud claims, “ the

15 We note that $50, 000 of that amount was requ ested as conditional appellate attorney ’s fees but that the ju ry verdict and t he judgment merely state a lump sum .32 o nl y claim remaining ” was the claim that Appellants had “ violated the Buyer ’ s Agreement and the Governing Law and Litigation Costs provisions in S ection 23.1 b y wrongfully filing claims against [Indio] ” and that “ [o]n July 9, 202 1 [ ,] the [c] ourt rule d as

a ma t ter of law that [Appellant s] were in direct viola tion of the contractual provisions referenced and directly caused [Indio] to sustain damage s in the f orm o f attorney s ’ fees, court costs, and litigation expense[s] associate d wit h the present lawsuit. ”
B
. Analysis
In thei r second issue, A ppel la nts complain tha t Indio cannot recover at torn ey ’ s fees on a defensive motion for summary ju dgment on tort claims or under the Agreement ’ s “ legal proceeding s to enforce the A greement ” lan guage based on tort claim s and t hat Indio was not a party to the Buyer ’s Agreement and therefore cannot rely on it to support its at tor n ey ’s

- fee claim. We begin with Appel lants ’ last ar gument , as it is the only portion of the trial court ’ s Rul e 166 (g) ruling that they expressly challeng e . S epar ate cont racts may be part of a “ single, unified instrument ” if each
inst rument is a nec essary part of the same tr ansacti o n, even if the parties executed the
instruments at different t imes. Se e Riede r v. W o ods , 603 S.W.3d 8 6, 94

– 95 ( Tex. 2020)

. Here , the tr ansaction could not have occurred without the parties ’ execution and complianc e wit h the B uye r ’ s a n d Se ller ’ s A greements, which inco r porated each other

. Further, the Buyer ’s Agreement contains specific a c knowledg ments of the Buyer ’s
duties an d re pr e sentati ons t o the Seller , as well as the Buyer ’s acknowledgment of33 choic e of law and ve nue for any action by the Buyer or the Seller arising under the
A greement. Bo th the Buyer ’s and Seller ’s Agreemen ts include d a merger clause that acknowledge d that each agreement and the attached exhibits (which include d the

rec iprocal inc orporated agreements) constituted “ the entire understanding an d agreement betwe en the parties. ” Under the plain language of these documents, 16 w e conclude that the B uyer ’ s and S ell er ’ s A g ree ments were a single , unified i nstru ment ,

s ee id. , and we overrule this portion of Appellants ’ second issue.
The record ref lects that the parties brought com p eting Rule 1 66( g) motions with regard to Indio ’ s ri ght to attorney ’ s fees. Rule 166(g) authoriz e s a trial cour t to decide matters that , althou gh ordi narily fact questions, have become questions of law
because reasonable minds cannot differ on the outcome. JPMorgan Chase Bank , 546
S.W.3d at 653 . When a Rul e 166(g) order dis poses of claims in this fa s h ion, the order
is akin to a summ ary ju dgment or direc ted verdict , and review is de novo. Id. ; cf. Soefje v. Jones , 270 S.W.3d 617, 625 (Tex . Ap p.

— San Antonio 2 008, no pet.) (noting that summary judgment is the preferred method for pre trial disposal of a c a se in its

ent irety ); Unitrust, Inc. v. Jet Fleet Corp

. , 673 S.W.2d 619, 623 (Tex. App.

— Dallas 1984, no writ) (noting that when issues are disp ute d, “ the appro p riate procedu re for

16 Under t r ad i t i on a l con t r act

- cons t ruction p r inciples, a co n trac t ’ s pl ain language
c on trol s, it s wo rds mu st be co nst rued in co ntex t , and the en tire writ ing must be
exa mi ned an d c onsid ere d in an effort to harm oni ze and give effe ct t o all of the cont ract ua l pr ovisio n s so t h at none w i ll be re n dered m ea n ingless. I n r e What aburge r Rest s . LLC , 6 45 S .W. 3d 188 , 19 4

– 95 (T e x. 20 22) ( orig. pro ce eding). C ont ract con struction ’ s primary g o al is to effectua t e the parties ’ intent as ex pr essed in th e co n t r act. M o nroe Gu ar . Ins. v. BI T CO Ge n. Ins. , 640 S.W.3d 1 95 , 19 8

– 9 9 (Tex . 20 22 )

.34 summarily disposing of a case is by a sum mary [

- ] judgment hearing . . . in wh i ch both parties have the o pportun ity t o present affid avits, admissions, and depositions [] and to fully present their claims ” ). As pointe d out by I ndio , Appell an ts do not chall enge the a ctual g round

— breach of the Agreement ’ s indemnity clause

— upon which the trial court awarded the

“ prevaili ng p arty ” fees in i ts Rule 166(g) order and in its final judgment

. Appellants
likewise do not challe nge the trial court ’ s affirmative findings in th e R ul e 166(g) order
that support Indio ’ s breach

- of

- contract claim o r raise an y argument s about the
pr o cedure used to secure the rul ing

. See Tex. R. Civ. P. 166(g) (stating that to assist in
the case ’ s disposi tion without undue expense or burden to the parties , the court may
i n its discretion direct the parties to appear for a co n fer ence to co nside r “ [t]he
i dentification of legal matters to be ruled on or decided by the court ” ) ; Pr ovident Life &
Acc ident Ins. Co. v. Hazlitt , 216 S.W.2d 805, 807 ( Tex. 1949) (noting that although

c on troverted fact issues could not be adjudicated und e r R ule 1 66( g) , “ o rders co uld be entered disposing of issues [that] are founded upon admitted or undisputed fact s ” ). Appel lants do no t challenge the trial court ’ s recitation in the j udgment that Indio ’ s breach

- of

- contract claim was resolved in its Rule 166 ( g) order on July 9, 20 21 , and they do not c hallenge the sufficiency of the evidence to support the j ury ’ s fee award.
Beca use a Rule 166(g) disposition i s treated like a summary judgment for purposes of appeal, JP Mo rgan Chase Bank , 546 S.W .3d at 653, we wi ll appl y th e rule that

“ [w] hen an argument is not made challe nging every ground on which the summary35 judgment could be bas ed, we are required to affirm the summary judgment, re gardless
of t he merits of the unchallenged ground.” Rollins v. Denton C n ty. , No. 02

- 14

- 0031 2

- CV,
2015 WL 7817357, at *2 (Te x. App.

— Fort Worth Dec. 3, 2015, no pet.) (mem. op.) ; see also Cano v. N . Tex. Nephrology Assocs., P.A. , 99 S.W.3d 330, 339 (Tex. App

. — Fort Worth 2003, no pet.) ( stating that the appellate court must af firm a dire c ted ve rdic t even thou gh the trial court ’ s rationale was erro neous if the dir ected verdict can be supported
on another bas is). Beca use Ap pellants have not challenge d the bas is or procedure for
the trial court ’ s Rule 166(g) ruling and most of its findings i n that order, as well as in the judgment , we overrule their s e con d issue without reaching the ir remaining arguments

. See T ex. R. App. P. 47.1; Rollins , 20 1 5 WL 781735 7, at *2.
V. Conclusion
Havi n g overruled both of Appellants ’ issue s , we affirm th e trial c ourt ’ s j udgment

. /s/ Wade Birdwell
Wa de Birdwell Justi ce Delivered: June 29, 2023