### TEXA S C OU R T OF A PPEAL S, THIR D DIST R ICT , AT AU STIN

NO. 03- 08 -00 219 -CV

Senna H ills, L td. and HBH Developm ent Com pany, L LC , Appellan ts
v. Sonterra Energy C orporation , Appellee

F ROM THE DISTRICT CO URT OF TRAVIS COUNTY , 53RD JUDICIAL DISTRICT

NOS. D-1-G N-05 -0016 25 & D-1 -GN -05-00 1526 HO NORAB LE STEP HEN Y ELENOSK Y , JUDGE PRESIDI NG

D I S S E N T I N GO P I N I O N
I , too, believe that the l anguag e of the Propane Ser vice Ag ree ments is unambiguous and ca n be g iven a de finite leg al meaning . Howeve r, I believe that the t rial cour t’s rea ding of

the
c on tr a c tua l la

ngua g e wa s cor

re c t and dis a g re e wi th the ma jor ity ’s int e rp re tatio n of t he Ag re e me nts
. There fore , Irespe ctfully

dissent from the majority ’s opinion. B oth Ag re e me nts have the fo llo wi ngre le va nt p ro vis ion s:

• Th e pa

ra g ra phtit le d “ Ea se me nt U se Fe e ,” wh ic h s tate s, “Except as pro v i d ed below, D evelope r’s rig ht to rece ive an Easeme nt Use F ee s h al l continue for so longas the Propane Sy stem is a propane sy stem and the Propane Sy stem is owned by Southern Union,” a

nd

• Th e pa

ra g ra phtit le d “ As sig nme nts ,” wh ic h p ro vid e s, “ Southe rn

Un ion sh a ll h a ve the ri g ht t o tr ans fe r a nd a ssi g n, in whole or in pa

rt, all and e very

feature of its rig hts and obligations under t h i s L etter A g ree ment and in the Propane2 Sy stem . . . . I n such eve nt, Southern Union shall be re lease d from any further obligation under this L etter A g ree ment and Deve loper a g ree s to look solely t o Southern Union’s succe ssor for the perf

ormanc e of suc h obligations.” Sig nif ic antl y , the Janu ary

19 97 Ag re e me nt a lso ha s tw o o the r p ara g ra ph s th a t to uc h o n o r a dd

re ss the Ease ment Use F ees. U nder Par ag raph 6, titled “D evelope r B onus,” the De velop er s have the ri g ht t o r e c e ive a

“ De vel op er’s B onus ” if

the sy ste m w a s c on ve rt e d to a natur a l g a s sy ste m or

if S ou th ern Uni on so ld t

he sy ste m to an una ff

ili a te d c omp any . U nd e r p ara g ra ph7, tit le d “ Rig ht t o Con tin ue to R e c e ive Ea se me nt Us e F e e ,” if fo llo wi nga

sy ste m c on ve rs ion

the De ve lop e rs did not notify Southern Union that they wer e elec ting to rec eive a Deve loper’s B onus, the Deve lopers had the r ight to continue r ece iving Ea sement Use F ees f or two y ear s after

the conv er sion, fees that otherwise w ould hav e ce as ed upon the conversion of the sy stem to something other than a pr op ane sy ste m.

I g no ri ngthe c le ar a

nd un a mbi g uo us langua g e of the “ Ea se me nt U se F e e ” pa ra g ra ph s, which condition the De veloper s’ rig ht t o receive the fee upon Southern Union’s owne rship of the sy stem, the majority

deter mines that th e As signme nts parag raphs should be r ead a s transfe rring Southern Union’s obligation to pay Easeme nt Use F ees to Southern Union’ s succe ssor. What the majority fails to rec og nize or addre ss is that the releva nt portions of the Ag ree ments do not speak in t e rm s o f S ou the rn

Un ion ’s obligation t o paythe fees
. T h e Agr eeme nts provide instead that the Deve lopers’ right to receivethe pay ments continued only

for so long as Southern Union owned the sy stem. Thus, when Southern Union sold the sy stem to ONEOK in 200 3 , t h e Developer s no lon g e r h a d th e ri g ht t o lo ok to a nyon e fo r p ay

me nt o f t he fe e s. I n o the r words , th e Ag re e me ntsNo t ab l y , the September 1998 Austin’s Colony

contra ct makes no pr ovision for a 1 c on tin uatio n o f t

he fe e s b e y on d th e sa le or c on ve rs ion

of the sy ste m. 3 un a mbi g uo us ly

pr ov ide d that up on Southe rn Un ion ’s sa le of the sy ste m, t

he “ De ve lop e r’ s r ig ht t o
rec eive a n Easeme nt Use F ee” cea sed and w as not assig ned to Southern Union’s succ essor. Th e ma jor ity , w hil e it d oe s n ot e xpre ssl y sa y so , a pp are ntl y a tta c he s si g nif

ic anc e to the ph ra se “ [e]xc e pt a s p ro vid e d b e low ,” fo r i t is on ly thr ou g h r e fe re nc e to th is q ua lif yingph ra se that it may ov e rl oo k th e pla in l angua g e te rm inatin g the De ve lop e rs ’ r ig ht t o r e c e ive the e a se me nt u se fee upon the sale of

the sy stem. I

do not, however , rea d the “[ e]x cept as provided below” portion of the Ease ment Us e Fe es p ara g raphs a s ref err ing to the A ssignment pa rag raphs. Instead, I

believe that “ [e]xc e pt a s pr ov ide d be low ” is g e ne ra l bo ile rp late langua g e and e sse nti a lly

surp lus a g e un le ss the par ties supplied additional t er m s an d co n d itions related to the fe es, as they did in the J anuar

y 19 97 Ag re e me nt, wh e re in p ara g ra ph s 6 and 7 pr ov ide c ir c ums tanc e s un de r wh ic h th e De ve lop e rs ’ rig ht to rece ive the fe es could c ontinue for a nother two y ear s rather

than termina t i n g if Southern Un ion c on ve rt e d th e sy ste m to natur a l g a s. 1 Whil e the As sig nme nt p ro vis ion s d o s tate that So uth e rn Un ion wo uld requi re its
succe ssor to assume Southern Union’s contra ctual obligations, the Easeme nt U se F ees pa rag raphs pla inl y state tha t Southe rn Un ion ’s ob lig a tio n to pa y the fe e s and , mo re imp or tantl y , th e De ve lop e rs ’ “rig ht to rece ive” the f

ees te rminated onc e the sy stem was sold to an unaf filiated compa

n y . The Assignme nt para g raphs would not, ther efor e, tra nsfer an oblig ation to pay

the fe es to the sy stem’s purc ha se r s imp ly

be c a us e the purc ha se wo uld have e nd e d the De ve lop e rs ’ ri g ht t o r e c e ive su c h f e e s.4 Iwoul d hold that the plain lang uag e of the Ag ree ments provides that the Deve lopers no long er ha d a rig ht to rece ive the Ea sement Use F ees onc e Southern Union sold the sy stem t o ON E OK
. The languag e is clea r, def inite, and unambig uous, and under my rea ding of t h e A gre em en t s , i t i s p o s s i b l e t o en fo rc e t h e c o n t ra ct s ex ac t l y as wr i t t en , wi t h o u td i s re gar d i n g, overlooking , or finessing any of the contra ctual provisions. S ee J.M. D avidson, Inc. v . W ebster , 128 S.W .3d 223, 229 (Tex. 2003). Be cause Idisagre e wi th the majority ’s conc lusion that the obligation to pay

the fe es survived the sale a nd was a ssigne d to Souther n Union’s succ essors along wi th S ou the rn

Un ion ’s oth e r c on tr a c tua l ob lig a tio ns , I re sp e c tf ull y dis se nt.

__________________________________________ David Pury ear , J ustice Be fore Chief J ustice Jones, J ustices Pury ear and He nson Filed: Jul y

3, 2009