Court Opinion

ID: 4262250
Source: CourtListenerOpinion
Date Created: 2018-04-09 07:49:53.047664+00
Date Added: 2024-06-11T14:29:52.457924
License: Public Domain

NUMBER 13-17-00104-CV

                               COURT OF APPEALS

                      THIRTEENTH DISTRICT OF TEXAS

                         CORPUS CHRISTI - EDINBURG

KEVIN MARTIN, JAMIE MARTIN,
AND ASHLEY LUSK,                                                          Appellants,

                                           v.

NEWFIELD EXPLORATION COMPANY;
ROSETTA RESOURCES OPERATING, L.C.
AND DYNAMIC PRODUCTION, INC.,                                              Appellees.

                   On appeal from the 156th District Court
                            of Live Oak, Texas.

                        MEMORANDUM OPINION
            Before Justices Benavides, Longoria, and Hinojosa
               Memorandum Opinion by Justice Benavides

      This is an appeal from orders granting appellees Newfield Exploration Company

and Dynamic Production Inc.’s (collectively Newfield, unless otherwise noted) no-evidence

and traditional motions for summary judgment in an oil and gas dispute with appellants

Kevin Martin, Jamie Martin, and Ashley Lusk (collectively the Martins). By two issues,
which we treat as one, Martin asserts that the trial court erred by granting summary

judgment in favor of Newfield. We affirm.

                                        I.       BACKGROUND

        In 2001, the Martins entered into oil, gas, and mineral leases with Mesquite

Development (the Martin Leases) for a term of five years, concerning approximately 600

acres of land located on Block 84 of the Dr. Charles F. Simmons Nueces River Farm.1 In

2006, the Martins extended and amended those same lease agreements with Mesquite

Development. As provided by Newfield in its briefing, the Martin Leases are best illustrated

by the attached graphic to this opinion labeled “Appendix 1” and shaded in light gray.

        In 2007, Mesquite Development assigned the Martin Leases to Rosetta Resources

Operating, L.P.2       In October 2007, Rosetta, Newfield, and Dynamic agreed to a

“Designation of Pooled Unit” created by Block 76 and Block 84 of the Dr. Charles F.

Simmons Nueces River Valley Subdivision to form a “675-acre pooled unit” with the

purpose to explore, develop and produce gas (the Martin Unit). The Martin Unit is

composed of four tracts of land, which includes 315 acres of the Martin Leases and other

non-Martin properties.         Not all of the tracts composing the Martin Leases were

incorporated into the Martin Unit. As gathered from the record and provided by Newfield

in its brief, the Martin Unit is best illustrated by the attached graphic to this opinion labeled

“Appendix 2” and shaded in black. The non-unitized acreage from the Martin Leases

remains shaded in light gray.

        1More specifically, the total acreage was composed of Farm Tracts 3567, 3568, 3569, 3570, 3571,
3572, 3573, 3574, 3575, 3576, 3577, 3578, 3579, 3580, 3581, and 3583, Block 84, Dr. Charles F. Simmons
Nueces River Farm Subdivision.
        2  Although it was named as a party at the trial court, Rosetta Resources Operating, L.P. is not a
party to the present appeal.

                                                        2
       In 2008, Rosetta assigned a partial interest of: (1) fifty-five percent of all rights, title,

and interest in and to the oil, gas, and mineral leases to Newfield Exploration Company of

the Martin Leases that were included in the Martin Unit; and (2) five percent of all rights,

title, and interest in and to the oil, gas, and mineral leases to Dynamic Production, Inc. of

the Martin Leases that were included in the Martin Unit.

       In 2009, Newfield filed a designation of pooled unit on various other properties

totaling 570 acres located near the Martin Unit to establish Newfield Exploration Company-

Simmons Subdivision Unit No. 1 Well (the Simmons Unit). According to the record, the

Simmons Unit’s northwest corner was separated from the southwest corner of the Martin

Leases by one tract of land known as Farm Tract 3584. As provided by Newfield in its

briefing, the Simmons Unit’s location is best illustrated by the attached graphic to this

opinion labeled “Appendix 3.” The Simmons Unit is shaded in dark gray, the Martin Unit

remains shaded in black, and the non-unitized portion of the Martin Leases remains

shaded in light gray.

       In 2014, Martin sued Newfield for failing to protect against drainage of the Martin

Unit as mandated by the 2006 lease agreements, and for failing to spud an offset well or

release Martin Unit within the time period required by the 2006 lease agreements. Martin

further alleged that in the event that Newfield was not liable under the 2006 lease

agreements, Newfield was liable under the 2001 lease agreements. In the alternative,

Martin pled that Newfield wrongfully pooled the Martin Unit, and that it “did not hold all of

the required acreage or have the authority to drill to the depth” of the Martin Well. In their

lawsuit for damages, Martin asserted causes of action for: (1) breach of contract, (2)

common-law fraud, (3) negligence, (4) negligent misrepresentation, (5) conversion, (6)

                                                    3
wrongful pooling and mineral trespass, (7) violations of the Texas Theft Liability Act, (8)

breach of fiduciary duty, and (9) breach of implied covenants.

      Subsequently, Newfield filed no-evidence and traditional motions for summary

judgment claiming that:

      (1) no evidence showed that: (a) the 2006 lease agreements were in effect at the

time of the lawsuit; or (b) Newfield has any interest in the 2006 lease agreements; and

      (2) Newfield established as a matter of law that: (a) it had no duty to fulfill the

drainage covenant relied upon by Martin because they were not assigned to them; and (b)

even if such a duty existed, because the Simmons Unit does not “adjoin” the Martin

Leases, Newfield’s duty to prevent drainage was never triggered.

      After response and hearing, the trial court granted Newfield’s summary judgment.

Newfield later moved for another no-evidence and traditional motion for summary

judgment on Martin’s added claims of wrongful pooling and mineral trespass. Those

motions were also granted.

      The orders granting summary judgment—neither of which specified the grounds on

which they were granted—were severed from the cause and were made into final

judgments. This appeal followed.

                               II.   SUMMARY JUDGMENTS

      By two issues, Martin asserts that the trial court erred by granting summary

judgment because: (1) the lease required Newfield to protect against drainage, and the

obligation to spud an offset well or release the Martin Lease was triggered; and (2) a fact

issue exists on whether Newfield has an obligation to spud an offset well or release the

Martin Lease because Newfield enjoyed the benefits of assignment of the Martin Lease.

                                                4
A.     Standard of Review

       1. No-Evidence Summary Judgment

       A motion for summary judgment may be brought on no-evidence or traditional

grounds. See TEX. R. CIV. P. 166a(c), (i). A motion for no-evidence summary judgment is

equivalent to a motion for pretrial directed verdict, and we apply the same legal sufficiency

standard on review. Nalle Plastics Fam. Ltd. P’ship v. Porter, Rogers, Dahlman & Gordon,

P.C., 406 S.W.3d 186, 199 (Tex. App.—Corpus Christi 2013, pet. denied). Such a motion

should be granted if there is no evidence of at least one essential element of the claimant’s

cause of action. Hamilton v. Wilson, 249 S.W.3d 425, 426 (Tex. 2008). After adequate

time for discovery, a party without presenting summary judgment evidence may move for

summary judgment on the ground that there is no evidence of one or more essential

elements of a claim or defense on which an adverse party would have the burden of proof

at trial. TEX. R. CIV. P. 166a(i). All that is required of the non-movant is to produce a

scintilla of probative evidence to raise a genuine issue of material fact on the

challenged element. Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 172

(Tex. 2003). Less than a scintilla of evidence exists when the evidence is so weak as

to do no more than create a mere surmise or suspicion of a fact. Id. More than a

scintilla of evidence exists if it would allow reasonable and fair-minded people to differ

in their conclusions. Id. In determining whether the non-movant has produced more

than a scintilla of evidence, we review the evidence in the light most favorable to the

non-movant, crediting such evidence if reasonable jurors could and disregarding

contrary evidence unless reasonable jurors could not. Nalle Plastics, 406 S.W.3d at

199.

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       2. Traditional Summary Judgment

       We review the trial court’s granting of a traditional motion for summary de novo.

Id. When reviewing a traditional summary judgment, we must determine whether the

movant met its burden to establish that no genuine issue of material fact exists and

that the movant is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c). The

movant bears the burden of proof, and all doubts about the existence of a genuine

issue of material fact are resolved against the movant. See Nalle Plastics, 406 S.W.3d

at 200. We take as true all evidence favorable to the non-movant, and we indulge

every reasonable inference and resolve any doubts in the non-movant’s favor. Id.

B.     Discussion

       1. Waiver

       As a preliminary matter, we must first set the parameters of what is presently before

us to review. Newfield argues in its briefing that Martin waived any arguments on appeal

that: (1) the duty to protect the non-unitized Martin Leases acres from drainage was

triggered when the Martin Unit well was drilled in 2008, or (2) the lease clause quoted

above is ambiguous, because neither argument was made to the trial court. We agree.

       Issues a non-movant contends avoid the movant’s entitlement to summary

judgment must be expressly presented by written answer to the motion or by other written

response to the motion and are not expressly presented by mere reference to summary

judgment. McConnell v. Southside Ind. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993); see

also TEX. R. CIV. P. 166a(c) (“Issues not expressly presented to the trial court by written

motion, answer or other response shall not be considered on appeal as grounds

for reversal.”).   Our review of Martin’s response to Newfield’s motions for summary

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judgment show that Martin focused their arguments on whether Newfield’s duty to protect

against drainage was triggered when Newfield began drilling the Simmons Unit, not the

Martin Unit. Furthermore, nothing in Martin’s response asserts that the clauses at issue

were ambiguous. Accordingly, without regard to their merits, we conclude that those

arguments are waived, and we will not consider them on appeal. See id.

        2. Summary Judgment Analysis

        Turning to the merits of the summary judgment, the lease provision at issue

between the parties states the following identical language in the 2001 lease agreements

and 2006 lease agreements:

        Notwithstanding anything contained herein to the contrary, it is further
        agreed that in the event a well is drilled on or in a unit containing part of this
        acreage or is drilled on acreage adjoining this Lease, the Lessor, or its
        agent(s) shall protect the Lessee’s undrilled acreage from drainage and in
        the opinions of reasonable and prudent operations, draining is occurring on
        the un-drilled acreage, even though the draining well is located over three
        hundred-thirty (330) feet from the un-drilled acreage, the Lessee shall spud
        an offset well on said un-drilled acreage or on a unit containing said acreage
        within twelve (12) months from the date the drainage began or release the
        acreage which is un-drilled or is not part of a unit which is held by production.

        Because it is dispositive, we will address Newfield’s alternative argument

supporting the trial court’s traditional summary judgment that: even assuming Newfield

owed Martin a duty to prevent drainage and spud an offset well, such a duty was not

triggered by Newfield’s drilling of the Simmons Unit.3 Stated another way, Newfield argues

that even if it had a duty to prevent drainage and spud an offset well under the lease-

agreements’ clauses, such a duty was not triggered because the Simmons Unit was not

        3 See State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 380 (Tex. 1993) (“When a trial court's

order granting summary judgment does not specify the ground or grounds relied on for the ruling, summary
judgment will be affirmed on appeal if any of the theories advanced are meritorious.”); see also TEX. R. APP.
P. 47.1 (“The court of appeals must hand down a written opinion that is as brief as practicable but that
addresses every issue raised and necessary to final disposition of the appeal.”).

                                                         7
“adjoining” the Martin Leases as a matter of law, according to the lease agreements. We

agree.

         An oil and gas lease is a contract, and its terms are interpreted as such. Exxon

Corp. v. Emerald Oil & Gas Co., L.C., 348 S.W.3d 194, 210–11 (Tex. 2011). In construing

an unambiguous oil and gas lease, we seek to enforce the intention of the parties as it is

expressed in the lease. Id. Contract terms are given their plain, ordinary, and generally

accepted meanings unless the contract itself shows them to be used in a technical or

different sense. Valence Op. Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex. 2005); Kingsley

Props., LP v. San Jacinto Title Servs. of Corpus Christi, LLC, 501 S.W.3d 344, 348 (Tex.

App.—2016, no pet.).

         The duty-triggering language in the relevant lease-agreement clauses at issue in

this case states that “in the event a well is drilled on or in a unit containing part of this

acreage or is drilled on acreage adjoining this Lease . . .” the party shall protect the

undrilled acreage from drainage and spud an offset well within twelve months from the

date the drainage began. (emphasis added). For reasons discussed above, we will focus

solely on whether the duty was triggered in this case because the Simmons Well was

“drilled on acreage adjoining” the Martin Leases. See TEX. R. CIV. P. 166a(c). To answer

this question, we look to the definition of “adjoining.”

         Nearly one-hundred years ago, the Amarillo Court of Appeals defined “adjoining”

as “lying next to, adjoining to, uniting, being in contact.” Curlee v. Phelps, 242 S.W. 517,

520 (Tex. Civ. App.—Amarillo 1922, no writ). In 1934, the Beaumont Court of Appeals

upheld a no-evidence challenge to a jury verdict that two tracts of land separated by an

80-acre tract of land were not “adjoining lands.” More recently, the Fort Worth Court of

                                                  8
Appeals utilized the Black’s Law Dictionary definition of adjoining as “‘touching’ or ‘sharing

a common boundary.’”       Titan Op., LLC v. Marsden, No. 02-14-00303-CV, 2015 WL
5727573, at *8 n.19 (Tex. App.—Fort Worth Aug. 27, 2015, pet. denied) (quoting BLACK’S

LAW DICTIONARY 49 (10th ed.)). Because the lease agreements in this case do not provide

contrary definitions, we give “adjoining” its plain, ordinary, and general meaning, and

hereby adopt the definitions provided by our sister courts.

       Utilizing the definition of “adjoining” and examining the record in this case, we

conclude as a matter of law that the Simmons Unit is not “acreage adjoining” the Martin

Leases because Tract 3584 separates the two pieces of acreage. Therefore, assuming

that a duty to prevent drainage and spud an offset well existed in this case, such a duty

was not triggered as a matter of law because the Simmons Unit does not adjoin the Martin

Leases as required by the lease agreements. We conclude that the trial court did not err

in granting Newfield’s traditional motion for summary judgment on this ground, which is

fatal to all of Martin’s causes of action against Newfield.

       We overrule Martin’s issues.

                                     III.   CONCLUSION

       We affirm the trial court’s judgment.

                                                                GINA M. BENAVIDES,
                                                                Justice

Delivered and filed the
5th day of April, 2018.

                                                  9
       Appendix 1

3569                    3568
3570
3571
3572                Martin Family
3573                  Leases
3574
3575
3576
3577                    3567
3578
3579
3580
3581
3582
3583
3584

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       Appendix 2

3461   3476                3487
3462   3475
3463   3474
3464   3473
3465   3472
3466   3471
3467   3470
3468   3469
3569            3568
3570
3571
3572          The Martin
3573             Unit
3574
3575
3576
3577            3567
3578
3579
3580
3581
3582
3583
3584

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                       Appendix 3

              3461           3476             3487
              3462           3475
              3463           3474
              3464           3473
              3465           3472
              3466           3471
              3467           3470
              3468           3469
              3569                  3568
              3570
              3571
              3572               The Martin
              3573                  Unit
              3574
              3575
              3576
              3577                  3567
              3578
              3579
              3580
              3581
              3582
              3583
              3584
              3813   3842
The Simmons   3814   3841
    Unit      3815   3840
              3816   3839
              3817   3838
              3818   3837
              3819   3836
              3820   3835

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