Opinion ID: 2829261
Heading Depth: 3
Heading Rank: 2

Heading: Royalty Owners’ Testimony Concerning

Text: Emerald’s June 1994 Report of Problems in the Field The June 1994 report establishes that Emerald and the royalty owners were made aware of problems caused by Exxon. Emerald prepared the report and sent it to the royalty owners. The trial testimony of the royalty owners concerning this document confirms their knowledge by June 1994 of problems in Exxon’s capping of the wells. Three royalty owners testified at trial—T. Michael O’Connor, Morgan Dunn O’Connor, and Laurie T. Miesch . T. Michael O’Connor and Morgan Dunn O’Connor discussed the June 1994 report. Laurie Miesch did not. Royalty owner T. Michael O’Connor was a key representative for the royalty owners. At trial he testified: Question: So, would you agree with me now, Mr. O’Connor, that at least for chronology[’s] sake, that in June of ’94, you were advised by Mr. Taylor [of Emerald] of problems they were having reentering the wells because of cut casing and junk in the hole ? O’Connor: Right here from what I saw from this [June 1994] report that I’ve seen—I don’t remember it, of course, but—yes, they reported that they had some problems with some wells . Question: You don’t—you’re not suggesting that you didn’t receive this letter, are you? O’Connor: No, I apparently did if it was in my deposition in my file. (Emphasis added.) O’Connor explained that Emerald advised in the June 1994 report that it encountered problems re-entering the wellbores due to cut casing and “junk in the hole.” Emerald contends in its post-submission brief that “T. Michael O’Connor [quoted above] did not understand the [June 1994] letter to mean that Exxon had done anything to deviate from industry standards or had damaged the wells.” O’Connor did not state that the report was insignificant or that it did not make him aware of any problems with plugging in the Field. He testified, as cited above, that the report advised of problems with re-entering the wells. He also testified that he was aware of “problems” in Exxon’s abandonment of the field, “but I figured it was not necessarily showing some kind of trend of a problem until they came to us in January ’95,” referring to Emerald’s meeting with the royalty owners to explain the extent of damage to wells in the Field. Knowledge of damage to interests need not rise to the level of a “trend” before claimants are charged under the law with notice of its occurrence. As PPG Industries states, knowledge of “actual causes and possible cures” or “the full extent of the injury” is not necessary to preclude application of the discovery rule. 146 S.W.3d at 93–94. Knowledge of injury initiates the accrual of the cause of action and triggers the putative claimant’s duty to exercise reasonable diligence to investigate the problem, even if the claimant does not know the specific cause of the injury or the full extent of it. Id. Not having oil and gas expertise, Morgan Dunn O’Connor, a “spokesperson [and] organizational person” for the royalty owners, explained that she “had no idea what the significance of shifting casing was,” in reference to a November 1994 letter from Emerald employee Johnny Yocham mentioning the term. Lynch had testified that cutting production casing without pulling it from the well in capping operations may allow the casing to shift such that re-entering a well with offset casing in the well would be difficult if not impossible. Notwithstanding the limits of her technical knowledge, Morgan Dunn O’Connor affirmed that she knew from the June 1994 report that Exxon had cut casing, which had shifted and collapsed in wells it capped in the Field, and also knew of junk left in a well Exxon had capped. The Miesches claim that these actions by Exxon were intentional acts of sabotage, violated the law, and caused them substantial damages. Although it is not within the scope of our review to determine whether these assertions are true or not, we cannot escape the significance of the documents in the record or these statements by and to the Miesches in light of the question we answer—whether the royalty owners were on notice more than two years before filing suit of Exxon’s alleged conduct that they claim caused the damages. The inescapable conclusion is that the royalty owners were aware no later than June 1994 from undisputed facts of conduct they suspected or knew allegedly injured their property interests. See City of Keller v. Wilson , 168 S.W.3d 802, 814–17 (Tex. 2005) (explaining that courts conducting a no-evidence review cannot ignore evidence that has one logical conclusion). We therefore conclude that the assertion of fraudulent concealment to toll limitations and of the discovery rule to postpone accrual of the limitations period are unavailing here. Irrespective of the potential effect of fraudulent concealment or the discovery rule on limitations, actual knowledge of alleged injury-causing conduct starts the clock on the limitations period. See KPMG , 988 S.W.2d at 750 . Emerald’s claims for negligent misrepresentation and tortious interference with business opportunity are barred by limitations. The royalty owners’ claims for statutory and common law waste are barred by limitations.